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Escape Velocity: Growing Salford's Digital and Creative Economy

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Escape Velocity: Growing Salford's Digital and Creative Economy December 2017 ESCAPE VELOCITY: Growing Salford’s Digital & Creative Economy Max Wind-Cowie RESPUBLICA RECOMMENDS Acknowlegements As part of the research for this report, ResPublica interviewed a wide range of third party, industry and Governmental stakeholders with relevant expertise in the digital, media and creative industries. The report recommendations have benefited from the collective insight of many of our interviewees. However, the content and views contained in this report are those of ResPublica and do not necessarily reflect the policy positions of wider stakeholders. We would like to thank the author of this report, Max Wind-Cowie, for providing the original content before his secondment to the National Infrastructure Commission in August 2017. Special thanks to Justin Bentham, Strategic Economic Growth Manager, Salford City Council for his research and analysis. We would also like to thank Mark Morrin, Principle Research Consultant, ResPublica, for his contributions to final drafting and editing. About ResPublica The ResPublica Trust (ResPublica) is an independent non-partisan think tank. Through our research, policy innovation and programmes, we seek to establish a new economic, social and cultural settlement. In order to heal the long-term rifts in our country, we aim to combat the concentration of wealth and power by distributing ownership and agency to all, and by re-instilling culture and virtue across our economy and society. Escape Velocity Contents Foreword 2 1. Introduction 5 2. The Salford Story 9 Anchor institutions and economic clusters 11 The BBC as a key anchor institution 14 Beyond the BBC 17 Beyond broadcast 19 Beyond MediaCityUK 20 A cluster with real impact 22 Achieving escape velocity 23 3. Threats and Opportunities 24 Opportunity one – many anchors make light work 25 Opportunity two – the creative supply chain 27 Opportunity three – The Salford model 28 Threat one – Identity issues 30 Threat two – Our work here is done 31 Threat three – Access to talent 33 Threat four – Everyone wants a bite of the cherry 35 4. Recommendations 37 5. Conclusion 46 1 Foreword Paul Dennett, Mayor of Salford The regeneration of Salford Quays has MediaCityUK produces more high-end TV been more than 30 years in the making programmes than anywhere else in the with iconic projects such as the Lowry UK. With the relocation and expansion Arts Centre and MediaCityUK at the of important anchor institutions like the centrepiece of the city’s ambitions. BBC, ITV and Salford University, we have created a unique community of highly In 2007, construction began to transform skilled creatives who are adding to the the former wasteland that once housed rich heritage of Salford and the Quays. Salford docks into what is now a thriving waterfront destination for the UK’s only MediaCityUK is making a hugely significant true digital, creative and media hub contribution to the economy of Salford, outside London. Today, MediaCityUK is Greater Manchester and the North West, the most connected place in the UK after particularly in the areas of innovation BT Tower. Firmly established as a major and digital skills where new ‘fused’ international media hub with leading companies are bringing together tech broadcasters and television facilities, and creative industries to generate fast 2 Escape Velocity growth. There are around 250 creative, Technical College are all based there now digital and technology businesses in to train young people for future jobs. MediaCityUK, employing approximately 7,000 people, and a further 600 businesses This report, by ResPublica, highlights in the wider Salford area, bringing total the threats and opportunities facing the employment in the sector up to 9,000. wider industry and how a continued focus on Salford’s burgeoning media But our work is not complete. For and digital cluster can help rebalance MediaCityUK and the wider Salford the UK’s economy as the Government’s area to develop and grow into a world Industrial Strategy seeks to do. The leading, self-sustaining hub for the digital, success of the Quays is the story of a media and broadcast industries, it must broader and deeper resurgence at the be able to compete with London and heart of the city, reflected by the sheer other global centres. That is why Salford scale of development now taking place. City Council has approved ambitious As well as the cluster at MCUK, Salford plans to double the size of MediaCityUK also has a substantial urban and city with a further £1 billion of investment. centre development plan to boost further waves of growth and innovation, The success of clusters such as Salford especially in the creative industries. relies on the agglomeration effect created by co-locating institutions and firms We now have the opportunity to push within the same industry. This report beyond the existing narrative of the demonstrates how MediaCityUK can North to re-imagine Salford and realise grow and develop to support the North a digital and creative economy of global West’s expansion into a world class centre significance - one which is once again of excellence, and act as an example central to the UK’s industrial future. to other regions that wish to develop their own clusters in other sectors. Post-Brexit, the UK will only face greater challenges in maintaining its competitive advantage in leading sectors and attracting and retaining talent. Investment in skills in Salford and across the North will be critical in meeting this challenge. The existence of Salford Quays benefits local people and the University of Salford, Salford City College and the University 3 Foreword Figure 1: Media City and The Quays – Digital Creative Super Cluster GREATER MANCHESTER Number of Digital & Creative Employees 5,000+ 2,000 - 5,000 1,000 - 2,000 500 - 1,000 0 - 500 Source: Regeneris, 2017 4 1. Introduction MediaCityUK in the City of Salford is that will support the growth of the already the largest broadcast and media existing industries in Salford Quays, in hub in the UK outside of London, as well addition to expanding their development as one of the biggest High Definition within the city, Greater Manchester, and studio complexes in Europe.1 MediaCity’s the North West region as a whole. vision takes it further, however, and it aims to become a world leading centre The concept of ‘cluster strategies’, for the digital and creative sectors. popularised by Michael Porter and others in the early 1990s, is to increase the The purpose of this report is to help realise productive and competitive advantage this ambitious vision. As well as providing of firms in related sectors through their important insight into the context, we mutual proximity and connections. In analyse the threats and opportunities recent years the development of industry involved in growing the digital and clusters, or spatial agglomeration, which creative sectors in the region. This allows groups large numbers of firms alongside us to make several key recommendations higher education and other anchor 5 Introduction institutions, has become a recognised to challenge London in any area of the driver of economic growth in the world’s high growth economy, let alone be a most developed urban economies.2 player on the global economic stage. The concentration of inter-related MediaCityUK exemplifies the kind of industries and sectors in specific locations industrial strategy the Government is is particularly evident in the development committed to pursuing because it is of global media clusters. This has been rooted in both sector specialisation and accompanied by a growing interest from place. It demonstrates how to enable a governments and regional development focussed approach to the formation of authorities worldwide.3 In the past two innovative clusters, which can develop decades, significant investments have competitive advantage and drive increased been made to develop media clusters. This productivity at the local level. Furthermore, is especially noticeable in Europe, where it shows how hubs can gather momentum policy makers and economic development and achieve ‘escape velocity’ – breaking practitioners have been working to away from London’s gravitational pull. A increase domestic content production.4 significant part of this report will study the strengths and weaknesses of clusters The UK Government’s Industrial Strategy such as MediaCityUK, so that we can seeks to identify a new framework for identify lessons for local government industrial planning and economic growth about the necessary institutional structure which focusses on sectors and places.5 As needed to create and support centres part of this, the Government has identified of specialisation and excellence. the need for cities and regions to develop Local Industrial Strategies and identify key This report is divided into three, interrelated strengths and opportunities that already sections. The first charts the development exist within their localities. This will allow of, and provides the context to, the media them to work with sectors to build upon and digital cluster that has developed these specialities to deliver growth, jobs, around Salford Quays. It utilises existing and the benefits of agglomeration. impact assessments and economic analyses produced by the Government, KPMG, It is vital that the UK achieves a more Ernst and Young, and Eksogen, amongst balanced economy across both sectors and others. It also draws upon extensive regions. This will require local government, engagement with key local institutions and national government and industry to individuals who have played a constitutive work together to develop clusters and role in the cluster’s development. hubs of excellence. This specialisation is essential for any region or city in the UK 6 Escape Velocity The second uses quantitative analysis neither city-deals nor an industrial strategy to outline the key themes and the will be sufficient in resolving the deep lessons to be learnt so far. It builds on regional inequalities that hold Britain back.
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