Perth’s Creative Industries - An Analysis EXECUTIVE & REPORT SUMMARY City of Perth Department of Culture and the Arts Department of Industry and Resources Department of the Premier and Cabinet Geographical Mapping and Qualitative Analysis – Creative Industries 2007 This report has been prepared by: Telesis Consulting SGS Economics and Planning Pty. Ltd ARC Centre of Excellence for Creative Industries and Innovation Designer Futures ABN 61 164 522 568 Publication Notice The employment and business profi le sections of this report have drawn on data and analysis developed as part of an Australian Research Council Partnership project between the Australian Government Department of Communications, Information Technology and the Arts, the Australian Film Commission and the Queensland University of Technology. This publication is available from the City of Perth in alternative formats on request. Table of Contents Economic Impact .....................................4 8 The Creativeativee Industry in the Glossary ...................................................2 Exports………….. ....................................4 City of Perth .............................16 Key Findings ............................................3 Employment Growth ................................4 9 Creative Conversations .............18 Creative Industry Segments ......................4 10 Approaches for State and Local Executive Summary ..............................4 Metropolitan Perth’s CIs Performance .......5 Government Agencies ..............18 Introduction .............................................4 Geographical Concentrations ...................5 10.1 Guiding Principles .....................18 Employment ............................................4 Summary of Key Policy Challenges ...........5 10.2 Program Suggestions ................19 Report Summary ...................................6 Tables 1 The Creative Industries ...............6 1. Perth’s 2001 Creative Economy 1.1 The Creative Industry Segments ..6 employment across the 1.2 Characteristics of the Creative Creative Trident ....................................9 Industries ...................................6 2. Metropolitan Perth’s Creative 1.3 Characteristics of Metropolitan Industry concentrations and Perth’s Creative Industries ...........7 growth centres ..................................14 2 The Contribution of Metropolitan 3. Metropolitan Perth’s Employment, Perth’s Creative Industries ...........8 Density and Creative Industry 3 Creative Industry Employment ....9 segment growth ................................15 3.1 Within the Creative Industry Segments ...................................9 Figures 4 The Growth in Perth’s Creative 1. Creative Industry segments’ Economy ..................................10 initial and fl ow-on effects ................... 8 5 Whole of Economy Impact .......10 2. Bigger Cities have Higher 6 Comparing Metropolitan Perth Density of creative employment .........12 with other Cities .......................12 3. Creative Industries employment, 7 Creative Industry Hotspots in City of Perth LGA 2001 ......................16 Metropolitan Perth ...................13 1 Les Corbeaux, Spring Summer 08 Collection, We Need the Eggs. Photographer Penny Lane Perth’s Creative Industries - An Analysis Glossary of Acronyms and Terms ABN: Australian Business Number Density: the number of workers or fi rms ABR: Australian Business Register per 100,000 of the total number of workers or fi rms. Density is similar to percentage but ABS: Australian Bureau of Statistics in 1,000’s. CAGR: Cumulative Annual Growth Rate GST: Goods and Services Tax or the compounding rate of growth LGA: Local Government Authority CI: Creative Industry Metropolitan Perth: CIs: Creative Industries The entire Perth region including, but not The most widely accepted defi nition is confi ned to, the City of Perth LGA. “activities that focus on creating and Micro Businesses: exploiting intellectual property products. Very small businesses with one or two CO: Creative Occupations workers, generally the owner(s). Used to describe individuals working in Sectors: positions which utilise creative skills and are In this report a distinction has employed in industry classifi cations other been made between the major industry than Creative Industries. sectors (e.g. manufacturing, retail etc.) and Creative Economy: segments within the Creative Industries. Overarching term used to describe all the Segments: The activity areas within the activity within the creative and cultural defi nitions of the Creative Industries industries as well as creative skilled workers examined in the report. employed in non-creative sectors. Value Chain: Originally to describe the Cultural Industries: value-adding activities of an organisation. Public-supported not-for-profi t creative The concept has been extended beyond activities. individual organisations to include whole supply chains and distribution networks. 2 Key Findings • The total economic impact of the creative • The largest employing CI segment is industries is $10.6bn, comprising $4.6bn software, which is also very fast growing. direct and $6.0bn indirect or fl ow-on • Metropolitan Perth’s CIs have an average contribution. annual growth in excess of 5% with • Growth in CI earnings is 25% higher than particularly strong growth in Software, other industry areas. Advertising and Music. • With the current growth rate in CI wages • Assessed in terms of qualifi cations, of 5%, this fi gure is estimated to be at Perth has a wealth of creative talent and $1.92 bn, for 2006. qualifi ed people • The CI workforce has grown at more than • 2.3% of the mining industry’s workforce four times the rate (7.3%) of the state’s is made up of “embedded” creatives. total workforce (1.8%). • Metropolitan Perth is 90% of WA’s total • Perth’s CIs employed over 31,000 people, Creative Employment, compared with a or 5.2% of the total workforce in 2001. 74% share of all employment. • This comprised 9,348 CIs workers • The City of Perth has the highest number employed directly in the CIs and 19,328 of CI workers of any metropolitan LGA. working or “embedded” in other • The City of Subiaco has the highest industry areas. proportion of its workforce in the CIs. • The remaining 11,984 people were • The LGA with the fastest growth rate in employed in business and support roles CIs employment is the City of Belmont. in the CIs. • There are 11,000 CI businesses registered • The total employment in Metropolitan for GST in April 2006, or 6.6% of all Perth’s CIs was estimated at almost industries. 40,000 in 2006. • There are an additional 19,700 CI entities registered on the ABR that are not GST 3 registered. Guixot De 8, Awesome Arts Festival. Photographer Ken Drake. Perth’s Creative Industries - An Analysis Executive Summary Economic Impact 2001. This was substantially higher than the overall level of growth of Perth’s workforce Introduction Perth’s CIs account for 3.4% of the output of all industries in Metropolitan Perth. over this same period (1.8%). Creative Industries (CIs) are those businesses The value added (i.e. the total value added Total employment in the CIs is divided that turn creative ideas into commercial to the economy calculated by determining roughly equally between creatives working outcomes. fi rms’ total sales after deducting the cost of in CI organisations; non-creatives working The economic, social, industrial and cultural purchases from other fi rms) is $2.6bn. This in CI organisations and creatives working contributions of these industries are accounts for 56% of the direct output (of in non-creative industries e.g. Government increasingly being recognised as essential $4.6bn) from the CIs, signifi cantly higher Administration, Property and Business elements of an advanced and thriving than the average value-added of 44% in Services, and Manufacturing. In 2006 regional economy. non-creative sectors. the salaries of these CI workers were They are vital in determining the image of estimated to be worth $1.92bn. a region, retaining talent to that region and Exports providing positive, substantial benefi ts to Creative Industry Segments Exports from Metropolitan Perth’s CI other industry sectors. Software and Interactive Media segments to other parts of the state and development is the largest employer of overseas are also far higher than for other Employment the 11 CI segments examined in this report. industry sectors. In 2006 CIs generated It is also the fastest growing, followed by In 2006 Metropolitan Perth’s Creative $687 million in exports, or 20% of output, Advertising and Music. Industry (CI) segments employed almost compared to 16% average exports in non- In April 2006, there were 11,000 businesses 40,000 people and contributed $4.6bn to creative sectors. the local economy. The fl ow-on value was registered for GST in Perth’s Creative Economy, representing 6.6% of fi rms across an additional $6bn, bringing their total Employment Growth contribution to more than $10bn. all industries. The number of CI businesses Employment growth in Metropolitan Perth’s and sole operators having an Australian CIs was four times the rate of other industry Business Number (ABN), but which had sectors in the fi rst half of this decade. There not reached the revenue threshold to pay was a 7.3% cumulative annual growth rate GST, more than doubled in the fi ve years 4 (CAGR) between the censuses of 1996 and between 2001 and 2006. Metropolitan Perth’s CI Performance Summaryry of Key Policy Challenges The overall size