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Prioritising the creative economy, reframing the national economic policy debate

The “forecasts show growth in productivity is still too low”…”too many of our young people lack the skills to fill” new jobs that are being created…”exports are too low and we must address that”. The words of the Labour opposition or of other critics of the UK government’s economic policy, perhaps? Not so. They are taken from the Chancellor’s Autumn Statement speech delivered last week. While everyone agrees that the UK’s economy has picked up from the darkest days of recession – with the Office for Budget Responsibility now forecasting 2.4% growth next year – policymakers remain undecided on what is the right strategy for long-term growth. With just eighteen months to go before the general election, now is the time for them to get their priorities straight.

Nesta’s A Manifesto for the Creative Economy which we published this year, used new estimates to tell the story of what is perhaps the UK’s greatest untold economic success story, namely the creative economy – a term we use to describe “those economic activities which involve the use of creative talent for commercial purposes”. In other words, those where jobs involve a high degree of creative activity. We showed that the creative economy employed 2.5 million in 2010, or 8.7% of the UK workforce, and had grown at four times the rate of the workforce as a whole. In Gross Value Added terms, we estimated that it accounted for at least 9.7% of the economy, suggesting that productivity in the creative economy was over one-tenth higher than in the UK as a whole.  

A central component of this creative economy is the creative industries. Defined as ”those sectors which specialise in the use of creative talent for commercial purposes”, they are a bellwether for creativity and innovation in the wider economy. They accounted for a massive 5.3% of UK Gross Value Added in 2010, higher than Financial Services, Advanced Manufacturing and Construction.

The Department for Media, Culture and Sport, which has been publicly consulting on the use of our methodology for producing the official statistics, will shortly be releasing its updated estimates. While there will inevitably be some differences in detail (not least that the estimates will be produced using the updated SOC 2010 occupational classification) the big picture is certain: (1) the UK’s creative economy is significant, and (2) it is growing very fast. Policymakers should do what they can to expand its reach – that is, to make more of the UK’s economy creative.

How must the education system be changed to achieve this? What role should the UK’s other great asset – its world-renowned cultural institutions – play? How can the UK ensure that its digital infrastructure – not just broadband, critical though that is, but also its internet platforms – meets the needs of the creative economy? What can policymakers do to support clusters? What can other sectors, such as manufacturing, engineering and professional services learn from our creative industries, and how can policy maximise these wider economic benefits?

The timing could not be better in the UK to consider these questions. With Facebook’s Nicola Mendelsohn as co-chair, the Creative Industries Council has a markedly renewed sense of energy, and there is a commitment to publish a Strategy paper for the Creative Industries in the New Year. In Ed Vaizey we have a Creative Industries Minister who, vitally, also has digital infrastructure in his brief, and who has seven years’ unbroken experience under his belt – important in a sector where continuity, track record and expertise are highly valued. And, the DCMS is publishing statistics which will for the first time tell the fundamental truth about what binds together the creative industries – that they are built on creative talent – and will put within our sights the prospect of internationally comparable statistics, an essential requirement for effective policymaking.

The statistics are likely to confirm another key message from Nesta’s Manifesto, which is that the economic stakes are a lot higher than simply supporting ‘another’ growth industry (in addition to the eleven sectors that make up the government’s Industrial Strategy). Policymakers should set their sights much higher – nothing less than the UK’s long-term structural challenges related to productivity, job creation and exports. They must recognise the creative economy’s role in addressing these challenges, and prioritise it accordingly.   


Hasan Bakhshi

Hasan Bakhshi

Hasan Bakhshi

Director, Creative Industries Policy and Evidence Centre

Hasan oversaw Nesta's creative economy policy, research and practical work.

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