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A Manifesto for the Creative Economy A MANIFESTO FOR THE CREATIVE ECONOMY Hasan Bakhshi, Ian Hargreaves and Juan Mateos-Garcia April 2013 About Nesta Nesta is the UK’s innovation foundation. An independent charity, we help people and organisations bring great ideas to life. We do this by providing investments and grants and mobilising research, networks and skills. Nesta Operating Company is a registered charity in England and Wales with company number 7706036 and charity number 1144091. Registered as a charity in Scotland number SCO42833. Registered office: 1 Plough Place, London, EC4A 1DE. www.nesta.org.uk © Nesta 2013. A MANIFESTO FOR THE CREATIVE ECONOMY About the authors A Manifesto for the Creative Economy is the work of Hasan Bakhshi, Ian Hargreaves and Juan Mateos-Garcia. Hasan Bakhshi is Director, Creative Economy in Nesta’s Policy & Research Unit and Research Fellow at the Queensland University of Technology. He has led Nesta’s creative economy policy and research work for the past six years. His recent work has included the Next Gen report with Ian Livingstone, Alex Hope and Juan Mateos-Garcia and the design and oversight of the Digital R&D Funds for the Arts. His earlier work at Nesta included co- authoring the Staying Ahead report with Will Hutton and Philippe Schneider. Ian Hargreaves was a Nesta Research Fellow in 2012/13. He is Professor of Digital Economy at Cardiff University and author of Digital Opportunity, A Review of Intellectual Property and Growth, commissioned by the UK Government and published in 2011. In 2009, the Welsh Government commissioned him to lead a review of the creative industries in Wales which led in 2010 to the publication of The Heart of Digital Wales: a review of creative industries. Most of Ian’s career has been spent in journalism: he was Deputy Editor of the FT; Editor of the Independent; Editor of the New Statesman and Director of BBC News and Current Affairs. Juan Mateos-Garcia is Creative Industries Research Fellow at Nesta and CENTRIM at the University of Brighton. His recent work has included the Next Gen report with Ian Livingstone, Alex Hope and Hasan Bakhshi, and the Creative Clusters and Innovation report with Caroline Chapain, Lisa de Propris, Stewart MacNeill, and Phil Cooke. He is currently working on the Brighton Fuse study of the Brighton Creative and Digital cluster funded by the Arts and Humanities Research Council. Acknowledgements We are grateful to the following individuals, who contributed encouragement, ideas, challenge and valuable disagreement: Lynne Brindley, Diane Coyle, Stuart Cunningham, Robin Foster, Andrew Gowers, John Hartley, Michael Keane, Jon Kingsbury, Charles Leadbeater, Brian McLaren, Geoff Mulgan, John Newbigin, Kate O’Connor, Mark Oliver, Mark Pearson, Rick Rylance, Nick Starr, Ed Steinmueller, Emily Thomas, Bill Thompson, Neil Watson and Stian Westlake. We are also grateful to Alan Freeman and Peter Higgs, co-authors with Hasan of A Dynamic Mapping of the UK’s Creative Industries on which Chapter Three of this manifesto heavily draws, to Jon Watts and Stephen Adshead for their work on the Assessment of Market and Technology Trends, and to Mark Spilsbury for his assistance in producing the GVA estimates. Carlos Gutierrez provided research assistance. CONTENTS FOREWORD 6 SUMMARY 7 1 WhY THIS MANIFESTO? WHY NOW? 10 2 hOW CREATIVE BRITAIN LOST ITS WAY 17 3 WhaT IS THE CREATIVE ECONOMY? 26 4 CREATIVE TECHNOLOGIES AND MARKETS 35 5 A POLICY agENDA FOR THE CREATIVE ECONOMY 43 6 RESEARCH AND DEVELOPMENT 51 7 ACCESS TO FINANCE 63 8 ARTS AND CULTURE 71 9 COMPETITION 79 10 COPYRIGHT WARS 90 11 SKILLS AND EDUCATION 96 12 A MANIFESTO FOR THE CREATIVE ECONOMY 107 ENDNOTES 110 6 A manifesto for THE creative economY Foreword FOREWORD These are exciting times for anyone in the creative economy. While much of the rest of the economy appears becalmed, it’s continuing to experience a heady mix of dynamic growth, a proliferation of new business models, as well as stunning new technologies that are making culture even more intense and engaging. At Nesta, we’re fascinated to see what happens next. Our interest derives partly from our practical work – which stretches from digital arts to games, mentoring to media. It also derives from our research, much of which aims to bring greater clarity and rigour to understanding the dynamics of these industries, part of a broader programme of work we’ve been doing on how policy can support innovation, and how, through what we call Plan I, the UK can follow a strategy for innovation-led growth. This manifesto shows very clearly both what’s possible – and what could go wrong. It sets out both analysis and prescription, and our hope is that people will engage seriously with both. For several decades there has been much talk about digital technologies, about convergence, and about the transformation of old art forms, from the book to the film. Some of the rhetoric was overheated, and some of the predictions were slow to materialise. That led many to make the opposite mistake of concluding that because the revolution didn’t materialise immediately, it had been postponed indefinitely. Instead, as this report shows, the digital revolution is now very much underway, and almost certainly accelerating. This has obvious implications for the UK, given the remarkable scale of the creative economy. It demands a radical rethink of policies far beyond the traditional boundaries of the arts, encompassing everything from schools to competition policy. But I hope the analysis set out here will also be of interest in many other parts of the world which also want to make more of a living out of creativity. A previous generation of ideas and policies – many of which spread across the world over the last two decades – has run its course. It’s now time for a refresh. This manifesto shows how. Geoff Mulgan Chief Executive of Nesta 7 A manifesto for THE creative economY SUMMARY SUMMARY The UK’s creative economy is one of its great national strengths, historically deeply rooted and accounting for around one–tenth of the whole economy. It provides jobs for 2.5 million people, more than in financial services, advanced manufacturing or construction. This creative workforce has in recent years grown four times faster than the workforce as a whole. Behind this success, however, lies much disruption and business uncertainty, associated with digital technologies. Previously profitable business models have been swept away, young companies from outside the UK have dominated new Internet markets, and some UK creative businesses have struggled to compete. UK policymakers too have failed to keep pace with developments in North America and parts of Asia. But it is not too late to refresh tired policies. As the web’s inventor, Sir Tim Berners–Lee puts it: “the Web as I envisaged it, we have not seen it yet. The future is still so much bigger than the past”. On many fronts, technology continues to evolve rapidly and radically, guaranteeing further disturbances to established players and opportunities for innovators. Big Data, the Internet of Things, Wearable Computers, Assisted Creativity and the Maker Movement provide examples of this continued dynamic. This manifesto sets out ten areas in which policy refreshment is urgent. The top priorities are: • To ensure that the next generation of the Internet is truly open. This calls for contestable creative economy markets, well supervised by competition authorities which have the information and authority to act speedily and effectively when there are concerns about market abuse. • All teenagers should have the opportunity to learn creative digital skills, such as designing apps and games, as part of a fusion in the curriculum covering technology and art, as well as maths, science and the humanities. • Policy tools designed to incentivise innovation, from tax relief to procurement rules, should be adapted to the needs of the creative economy. • The UK’s publicly funded creative powerhouses, from the BBC to universities, arts organisations and museums, should make the most of the next generation of digital technologies. 8 A manifesto for THE creative economY SUMMARY Our ten policy recommendations are, in full: PROPOSAL ONE The Government should adopt our proposed new definitions of the creative industries and the wider creative economy. These are simple, robust and recognise the central role of digital technologies. PROPOSAL TWO Policymakers should establish a ‘creative innovation system’ framework within which strategic priorities can be addressed in a coherent and effective manner. PROPOSAL THREE The Government should make R&D tax relief more accessible to creative businesses. Technology Strategy Board programmes should be further broadened to address the needs of the creative economy. Public procurement rules should be changed to open up opportunities for smaller digital firms. Cross–disciplinary Research Council knowledge exchange initiatives should be rigorously evaluated and the lessons applied in a further round of investment. More international collaborations with leading research centres should be encouraged. PROPOSAL FOUR Local policymakers should observe our seven–point guide for developing creative clusters. PROPOSAL FIVE Government should ensure that its generic business finance schemes do not discriminate against creative businesses, and that regulations help the development of financial Internet platforms (such as crowdfunding sites). Absent hard evidence on their efficacy, government should resist introducing new sector–specific finance programmes. A higher priority is to coordinate the collection and publication of investor–friendly data through the Creative Industries Council, thus supporting the development of a thicker market for risk finance. PROPOSAL SIX The Treasury and the DCMS should undertake a broad–based assessment of the value of public arts and cultural spending in the UK, drawing upon similar work on the natural environment and the Cultural Value Project of the Arts and Humanities Research Council.
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