Creative industries have growth potential across UK
The creative industries are powering creation of jobs and businesses across the UK and could accelerate future local growth, according to a new report.
The ‘Creative Nation’ analysis by Nesta, the innovation charity, in partnership with the Creative Industries Council, uses a combination of official, open and web data to map the economic impact of creative industries across the UK.
It estimates that the creative industries in the median UK local economy grew by 11 per cent between 2011-2014 and 2015-16 – twice as fast as the rest of the UK economy. It highlights the potential for further growth in creative industries based across the UK, including by international trade and partnerships.
The recent growth took place in areas beyond London and the South East, with cities such as Birmingham, Sheffield, Newcastle, Edinburgh and Cardiff on track to become important nodes on the UK’s creative network.
The top 10 Travel to Work Areas (TTWAs - the locations where people live and work), which experienced the highest growth from 2011-2014 to 2015-2016 include:
(Above: Analysis of growth in travel to work areas. Source: Creative Nation press release)
Overall, almost nine in 10 local economies across the UK grew their creative business population, with 83 per cent growing creative industries faster than other sectors.
Creative businesses are also on average more productive than other similar-sized non-creative businesses.
However, Nesta calculates that 94 per cent of creative businesses are micro-companies with fewer than 10 employees, which limits their ability to lift productivity levels in their regions.
It argues that the sector could provide a bigger boost to the UK’s productivity figures if more creative businesses increased in scale.
In addition, Nesta modelled the impact of creative industries growth on regional productivity under different scenarios.
These potential scenarios included a future growth in the number of creative businesses in a region and a rise in productivity by creative businesses in a location, without any increase in the number of local creative businesses.
It argues that greater benefits would arise from increasing the productivity of creative businesses, particularly creative micro-businesses with fewer than 10 employees, rather than simply increasing the number of businesses.
The report’s authors also encourage different regions to work together to grow creative businesses to their mutual benefit.
They say that growth is not a zero sum game, and one area can expand its creative economy without it being at another area’s expense.
For example, Nesta’s analysis shows that if a location’s neighbouring areas grew their technology jobs, the first location was itself 65 per cent more likely also to increase its jobs in the same sector.
This finding has implications for policymakers, who may need to co-ordinate initiatives to support growth of creative businesses across several locations.
The research was welcomed by Matt Hancock, Secretary of State for Digital, Culture, Media and Sport, who vowed the Government would do all it can, through its industrial strategy, to help the creative industries maintain their momentum.
Hasan Bakhshi, Executive Director of Creative Economy and Data Analytics at Nesta, said: “Nesta’s research confirms that high entrepreneurship rates are boosting growth in creative industries like software and advertising right across the UK, not just in London and the South East.
“However, it also shows that if cities can increase the number of higher growth, scale-up creative businesses, the creative industries could make a dent in the UK’s productivity problem too. Providing the climate for such businesses to grow should be a top priority for local economic policymakers.”
Nicola Mendelsohn, Industry Chair of the Creative Industry Council, said: “What makes British creative industries unique is the diversity of the people that make it. And indeed, it’s thrilling to see that towns like Milton Keynes, Birmingham, Luton and Manchester are driving growth, entrepreneurship and innovation across the UK. These creative powerhouses are creating new jobs weekly and helping pave the way to reach one million new creative jobs by 2030.”
The report also covers:
● Segmentation of the UK’s creative clusters into five types
● Evidence that locations which develop a creative specialism tend to embed that creativity in the location’s other non-creative sectors
● Discussion of universities’ role in supporting past and future growth in creative businesses
● Data showing how creative communities within locations are becoming more inter-connected, which bodes well for the potential to develop unexpected crossover innovations
You can download ‘Creative Nation’ by Juan Mateos Garcia, Joel Klinger & Konstantinos Stathoulopoulos, Nesta, February 2018, here.
Use Nesta’s data visualisation of the 'Creative Nation' analysis here.
Download Creative Nation press release