Today I am speaking at a fringe event at the Conservative Party conference on the importance of the creative industries to growth in our economy. This event has been organised by the think tank Reform and is being held at the Radisson Hotel, in the Stanley Livingstone Suite at 6pm.
I have set out below some of my thoughts on creative growth.
We know that the creative economy is worth about 6% of UK GDP, employs over 2 million people and brings in over £17billion a year for its exports. This is not only an important sector but one of the most dynamic, with employment growing at twice the rate of the rest of the economy. It is also driving economic regeneration outside of London.
Manchester is now Europe’s second largest creative, digital and media hub and the industry is growing faster here than anywhere else in the UK. The establishment of Media City in Salford Quays and the movement of five BBC departments there have supported this along with considerable private investment. NESTA’s recent ‘Creative Clusters’ report noted the growth of the advertising industry in Manchester and the ‘Sharp Project’ has created 200,000 square feet of studio and incubator space for creative businesses, in the old Sharp Electronics works. In Birmingham the Custard Factory business incubator and Fazeley Studios have developed a new creative hub of hundreds of thousands of square feet, also helping to regenerate the Digbeth area of the city. And in my constituency former SAGA chairman Roger De Haan’s ‘Creative Foundation’ is leading a multi-million creative regeneration of Folkestone’s old town and harbour.
The UK film industry has not only enjoyed success at the Oscars with films like ‘The King’s Speech’ but studios like Pinewood and Shepperton are benefiting from the film tax relief to attract substantial international investment. This is in turn supporting the leading post production houses in Soho, which help sustain London as a leading centre for creative technology and innovation.
So we have an industry that is growing, important to the economy and highly attractive for young people to work in, but there are public policy considerations if we want to make the most of the potential that is clearly there. Firstly, creative businesses cluster, as NESTA’s recent report demonstrated and they locate in places where people want to work, as well as where the infrastructure exists to support them. The new local enterprise partnerships and councils should consider how they can develop plans to encourage the growth of creative clusters. Whilst the quality of life may be a consideration on where to locate, the main driver may be the proximity to other creative businesses; Silicon Valley being perhaps the greatest example of this. A recent study by the Workspace Group which runs over 100 business parks and incubators spaces for creative businesses in London showed that 55% of the sales in the creative industries are business to business. Market forces alone won’t necessarily create creative clusters, the need to be planned.
Secondly, because 94% of creative businesses employ less than 10 people they tend to be flexible and entrepreneurial. Tax incentives for investment, research and development can be highly effective, particularly in sectors where businesses can choose from a number of international locations. The film industry is currently benefiting from them in the UK, but our Video Games industry is losing market share to countries like Canada without them.
Finally, the internet is helping to drive growth in the creative sector, but new technology it also facilitating the copying and distribution of original work. The creators have the right to receive the rewards for their work, or else the incentives to produce new work and its quality will diminish. This requires action to be taken against people who seek continually to access and or make money from illegally obtained content. It also means that there should be a fair system for licensing the use of ‘orphan works’ should the original creator become known after the use of their material by a third party.