DCMS plays up creative industries with report findings

It’s official. The creative industries are now the joint, most-important ‘sector’ of the UK economy, along with the banking, insurance and pension fund activity that comprises the financial services sector. Both account for 7.3 per cent of annual GDP according to the latest data, double that of tourism. If you buy into it, this is mighty stuff.

The news emerged last week, when the Department for Culture, Media and Sport got itself into a bit of a tizzy, deciding hastily to publish the consolidated findings of the Creative Economy Programme, shortly before Gordon Brown’s reshuffle. Quite why, and what this means for the CEP, is not yet clear, but the mammoth tome published by The Work Foundation last week merits serious scrutiny, even if many are unkind about the department’s general aptitude for producing economic analysis of any intrinsic value.

Staying Ahead, the report printed at short notice last week for the DCMS, has crunched the latest data from the Organisation for Economic Co-operation and Development and the Office for National Statistics in an attempt to identify the commonalities between the UK’s 13 industry sectors. By acting in concert, the hot 13 should be able to engage better with Government, so the thinking goes. It makes good sense on the surface, even if the reality is that they are very different beasts in practice.

The stated objective was to identify the ‘drivers’ of the creative sector, in order to get to grips with the opportunities and challenges that face it. Since the Cox Review in 2005, there has been a willingness from Government to recognise there is untapped potential here, and the TWF report reinforces this view.

We now learn that there are 1.8 million people working in the sector, and the proportion of UK citizens who work in it is growing all the time. The TWF report highlights the creative industries as being a ‘pioneer sector’ in as much as it ‘trailblazes approaches’ that the rest of the economy picks up later.

The report fails to make robust growth comparisons between the 13 industry sectors, and makes do with the assertion that the creative services sector has tended to grow faster than the average growth rates across the economy. Past Treasury definitions have put the sector’s growth rate at double the average.

According to the TWF, the UK has ‘probably’ the largest creative sector in the world relative to GDP, and the largest creative sector outright in the EU. Its report claims this is partly down to English being ‘the international language’, as well as the fact that London is ‘a global creative powerhouse’.

The report rightly identifies several of the creative industries, such as design, architecture and advertising, as being pro-cyclical – growing faster than average in an upturn and receding more quickly in a downturn. Each industry has its own core business model common to itself.

In terms of parallels, the report finds that there are eight broad drivers (see box) which have an impact on economic performance. Some of these can be influenced by Government and some need to be self-managed by industry, it says.

THE EIGHT DRIVERS OF THE CREATIVE INDUSTRIES SECTOR
1 Demand for, and exposure to, culture
2 Diversity and interdisciplinary interplay
3 A level playing field
4 Fostering education and skills to maintain the supply of talent
5 Harnessing capacity and networking
6 Public sector funding
7 Protecting intellectual property
8 Building greater business capacity