17/09/2009
"A vibrant local economy will give renewed confidence to Manchester and place it firmly on the international map."
Manchester's thriving creative sector holds the key to realising the city's ambitions of becoming an internationally renowned city of innovation, according to new report published today by NESTA (National Endowment for Science, Technology and the Arts).
The report 'Original Modern: Manchester's journey to innovation and growth' says that Manchester is now the overwhelmingly dominant 'creative hub' outside the South East. In a wide range of important sectors from TV to software and from advertising to radio, Manchester has more creative businesses than all other Northern cities put together. Manchester punches well above its weight in these areas: it has 3% of the UK's businesses, but 7% of advertising firms, 6% of radio and television firms, 4% of software and video games companies and 4% of architecture firms. These are the sectors that have been independently shown to make strong contributions to the economy.
Manchester's financial services, which accounts for a sixth of employment in the city, and which until now was responsible for much of its growth in skilled jobs is contracting and its manufacturing and life sciences industries are facing intense overseas competition and lower growth. The report finds that its creative sector is now the source of six percent of jobs in Manchester, a figure that is set to grow.
Yet, two factors hold back Manchester's productivity and innovation. The first is a lack of aspiration by businesses to compete on an international scale, with less links to international markets than comparable city regions. Second, firms involved in engineering and textiles, creative and digital media and ICT, although well connected to other UK regions, are not adequately linked to the local economy limiting the potential of innovation spread across supply chains.
Commenting on the report, NESTA's Chief Executive Jonathan Kestenbaum says: 'Manchester's creative economy holds the best prospects for its future growth. But the city must remember that it is competing with the likes of Shanghai and Barcelona, not just Liverpool and London.'
Manchester boasts some of the UK's best sporting and cultural facilities, and the city has benefited from significant transformations over the past decade. However, the report says that the city is still being held back by its high unemployment rate which is creating not only a huge burden on public resources, but preventing swathes of people from participating in the economy. It is calling on Manchester's leadership to trailblaze new innovative approaches to providing cheaper and more efficient public services (which account for more than 40 per cent of the regional economy), to improving skills, devising new schemes that get people to work and finding new ways of engaging young people from disadvantaged backgrounds into work-related programmes.
The report also urges Manchester to be more alert to the potential for local business collaboration so that it can forge ahead with the production of new services and technologies. In response to this, NESTA is launching a world-first programme in Greater Manchester to link small and medium enterprises with creative businesses from the region. 'Creative Credits' will award 150 SMEs £4,000 to spend with external creative firms to match their own £1,000 investment, helping to develop ideas and collaborations which can help businesses to become more profitable.
Jonathan Kestenbaum continued: 'A vibrant local economy will give renewed confidence to Manchester and place it firmly on the international map. The Creative Credits programme comes at a time when it is critical that we find new ways of stimulating growth. There are real opportunities here'.
NESTA believes that the creative industries can improve the performance of other businesses for example in the development of new products and services and in devising platforms to help businesses reach new audiences, but many businesses are unaware of these benefits. It found that UK businesses that invest double the amount the average firm spends on creative services are 25% more likely to introduce product innovations.
For further information please contact Chani Hirsch in NESTA's Press Office on 020 7438 2601 or Chani.Hirsch@nesta.org.uk or Jan Singleton on 020 7438 2606 or Jan.Singleton@nesta.org.uk
NESTA is the largest independent endowment in the UK. Its mission is to support innovation to drive economic recovery and solve some of the UK's major social challenges.
NESTA is a world leader in its field and is in a unique position to support and promote innovation through a blend of practical programmes, policy and research and investment in early-stage companies.
Manchester's aspiration, set out by its civic leaders, is to be an internationally renowned city of innovation. Many argue that to achieve this, the city has to now become one of ideas and creativity, where it was once a home to cotton mills and warehouses. 'Original Modern: Manchester's journey to innovation and growth', takes Manchester at its word and examines what needs to be done over the next decade and beyond for the city to make good this claim to be a distinctive, socially inclusive, entrepreneurial city of innovation.
We argue that Manchester needs to build on the successes of the past decade, taking advantage of the confidence that has driven ten years of growth in the city. This new wave of innovation will, however, have to take new forms. Where much of Manchester's success from the late nineties onwards has been based on physical renewal, property development and the burgeoning retail sector, the next ten years will require innovative thinking in new areas.
The report highlights the importance of building economic and social networks within the city, and of taking advantage of Manchester's creative industries to encourage innovation across the economy. Manchester plays host to more businesses in the creative industries, in sectors from computer games and software to radio, television and advertising, than all northern cities put together. These businesses are a vital source of innovation for the whole of the economy. However, the report argues the case for using social innovation and new ways of delivering public services to tackle the challenges of education, skills and worklessness in the city. Manchester's forward-looking governance structure, bringing together the ten local authorities that cover the city-region offers a strong foundation for innovative social solutions.
Combining the power of networks and ambitious innovation in the social and public spheres with Manchester's inherent strengths offers a compelling and innovative vision for Manchester's future.
Creative Credits aims to demonstrate how the innovation capacity of SMEs in businesses outside the creative industries may be improved by stimulating business to business (B2B) knowledge transfer from the creative industries.
The programme is launched in Greater Manchester and targets SMEs. Only non-creative businesses can apply for a Creative Credit which must be spent on a project that will help them meet a business need or address a particular problem. Successful companies will need to contribute £1K which will be topped up with £4k. Credits can be spent with a creative business listed on NESTA's online gallery
NESTA recently highlighted the creative industries as one of the UK's most important growth sectors. It estimates that the creative industries will contribute £85bn to GDP and employ almost 1.3 million people by 2013.
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