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Nesta and CCI: Taking the Creative Economy Seriously. How to bolster the status of the creative industries as a serious economic force

While prepairing our next AMN newsletter about new developments and research in Cultural Entrepreneurship, we came across this article by Hasan Bakhshi, who is founding member of the British government’s Creative Industries Council, director for Creative Economy in Policy & Research at Nesta's, deviser of the Digital R&D Fund for the Arts in England, Scotland and Wales and much more. In 2013, he wrote a contribution for us about "Nesta and CCI: Taking the Creative Economy Seriously. How to bolster the status of the creative industries as a serious economic force" that hasn't lost any of it's relevance and can be transferred to a lot of countries at least in the western world. At Nesta's, he has also been one of the three makers of the Nesta/CCI study „A Dynamic Mapping of the UK's Creative Industries“. His "Manifesto for the Creative Industries" proposes ten system recommendations for a fresh policy that establishes the creative industries as a serious economic force throughout Europe and beyond.

It was the then Labour Secretary of State for Culture, Chris Smith who in 1998 first presented the vision of ‘Creative Britain’ in a collection of speeches published under that name. The Mapping Document that he commissioned presented what seemed like 13 disparate sectors as the ‘creative industries’, in alphabetical order: advertising, architecture, art and antiques, computer games, crafts, design, designer fashion, film, music, performing arts, publishing, software and television and radio.

The selection actually only loosely corresponded to the Department of Culture, Media and Sport’s (DCMS) own definition of the creative industries as “those industries which have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property.” It was not clear, for example, why designer fashion or advertising should be singled out over, say, scientific R&D for their potential to generate IP. But, as my collaborator Alan Freeman describes it, the DCMS-13 captured the “pragmatic reality” of an economy increasingly built on the creativity of its workforce, and this no doubt helps account for their longevity despite all of the technological and market change the sector has experienced since 1998. And yet, at the same time, as no systematic methodology was ever presented as to why these particular indus- tries were selected as corresponding to the DCMS definition over others, should we be surprised that policymakers have never updated the classifications (nor the definition itself)?

This is what we have set out to address in the research, of which A Dynamic Mapping is but the first output. This report proposes a three-step selection procedure for classifying some industries as more creative than others. Starting with a theory of creativity, we first develop a methodology for identifying creative occupations from the standard occupational classifications, as described by my co-author Peter Higgs; second, we look to see in which industries these workers are clustered, as outlined by Alan, and third, we use statistical techniques to partition the economy into those industries where creative talent makes up a large share of the workforce, and other industries where creative workers make up a small share.

This last step, for the UK at least, turns out to be quite straightforward: because in the data there are quite clearly a small number of industries (the ‘creative industries’) in which an exceptionally high proportion of the workforce is made up of creative occupations (with ‘creative intensities’ in some cases exceeding 85%), compared with the vast majority of others where creative talent accounts for low, single-digit proportions of the workforce. An important feature of this ‘bottom-up’ methodology for classifying the creative industries is that the industrial selection can change over time, as some industries become ‘more creative’ than others, reflecting structural changes in the demand for and supply of creative labour (hence a ‘dynamic’ mapping). As such, we wonder whether our methodology could have wider application in mapping other ‘industries’ where rapid structural change challenges the very notion of a static classification of the sort that industry analysts usually take for granted – something we are exploring in new research which attempts to map the UK’s ‘high-tech’ economy.

A figure from A Dynamic Mapping shows where creative talent was employed in the UK economy in 2010 by the importance of creative talent in the industrial workforce. So, for example, almost 400,000 creative workers were employed in sectors where between 55 and 65% of the workforce was in a creative occupation. Around 50,000 creative workers were occupied in industries where between 85 and 95% of the workforce was in creative roles. By contrast, over 300,000 creative workers were employed in industries where less than 5% of the workforce worked in a creative capacity.

What do we learn from this about the UK’s creative economy?

The first finding takes us into disputed territory, namely just how big are the UK’s creative industries? We have gone to enormous lengths to tackle this question in our work, not to create a lobbying resource for creative industries advocates, but because we believe the unscientific way in which this issue is often presented has contaminated the debate. It has lowered the status of the creative industries as an economic force in the eyes of mainstream policymakers such as Treasury economists. If we total up the columns in the figure to estimate the overall number of creative workers employed in the UK economy and then add those employed in the creative industries in non-creative tasks, we see that the UK’s creative economy is big, employing around 2.5 million workers (8.7% of the overall workforce), and fast-growing: in the 2004-2010 it grew at four times the rate of the workforce as a whole.

A second key result is the confirmation that it is their use of creative talent that truly sets apart the creative industries from other industries. And in par- ticular, that all of the creative industries share the common characteristic that they specialise in creative work, with 40%, 50%, 60%+ of their workforce employed in creative occupations.

Third, that despite their extraordinarily specialised use of creative talent, the majority of creative workers in the UK actually work outside the creative in- dustries in the wider creative economy (a result Peter Higgs, Stuart Cunningham and I first highlighted in Beyond the Creative Industries in 2008).

And last, but not least, that the creative industries count amongst them a number of hugely significant digital sectors which exhibit a variety of business models – not just intellectual property – but also advertising, subscription models and a range of innovative pricing models including freemium. In fact, and as stressed by Alan, we find that the very integrity of the creative industries as a coherent industries grouping is challenged if we drop the essential work of software and ICT-related workers from our creative intensity analysis, in that industries which in the digital age we take for granted as ‘creative’ drop out of the cluster of industries that emerge as creative on this analysis, and that others which are intuitively not so appear on
the intensity measure as relatively creative.

In the UK, much to its credit, the DCMS is currently consulting on adopting our methodology for the purposes of producing its annual Creative Industries Economic Estimates, and we would urge our colleagues in Europe with an expert opinion on this topic to respond to this consultation. But, the implications of our analysis for policymakers in fact go much further than this. In a new report A Manifesto for the Creative Economy that Nesta launched in London earlier this week, Professor Ian Hargreaves, Juan Mateos-Garcia and I propose a completely new definition of the creative industries that in our collective mind emerges from the Dynamic Mapping analysis, namely:
The creative industries are: “those sectors which specialise in the use of creative talent for commercial purposes”, and an allied definition of the creative economy as “those economic activities which involve the use of creative talent for commercial purposes”.

In the manifesto, as well as showing that the 8.7% of the workforce that is the UK’s creative economy contributes at least 9.7% of Gross Value Added, we propose a new framework for policy based on these definitions (what we call, borrowing from the work of scholars like Stuart Cunningham and others at the Centre for Excellence in Creative Industries and Innovation at the Queensland University of Technology, a ‘creative innovation system’). We make ten system recommendations for policy change in areas as wideranging as access to finance and R&D, through to copyright, regulation, and education and arts funding which in our view would help sustain the future success of the UK’s creative economy. We suggest that many of our recommendations make sense for wider Europe, not least because in areas like regulation and copyright policy is determined at the EU level. We look forward to debating our new definitions, our measurement methodology and our creative economy policy agenda with colleagues in Europe and beyond, and are keen to make contact with those in other countries who also feel strongly that a policy refresh is needed in this important area.

Author/Source: Author: Hasan Bakhshi
Management Topic: Policy & Research
Cultural Area: Creative Industries
Submitted by editor-in-chief on Sep 17, 2015