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R&D in the creative industries

The creative industries generate £87.4 billion in Gross Value Added, or 5.3 per cent of the UK’s economy. They are one of the UK's fastest growing sectors and their economic significance has been recognised in them being one of five sectors first invited to bid for ‘sector deals’ in the government’s Industrial Strategy Green Paper.

Driving this stellar growth is creative risk-taking and innovation. Think of Imaginarium Studio’s award-winning performance capture in films like The Hobbit and Star Wars: The Force Awakens, which has now been used to critical acclaim in the RSC’s theatre production of The Tempest. Or Rockstar’s Grand Theft Auto V , whose mindblowing creation of an entire living city helps account for it being the fastest grossing entertainment product of all time. Or Michael Morpugo’s War Horse, where Handspring Puppet Company’s genius puppetry behind Joey the war horse brought a children’s book to millions and gave rise to a record breaking play from the National Theatre, NT Live broadcast and movie by Stephen Spielberg.

The government’s Green Paper recognises the essential role of research and development (R&D) in driving innovations that “are the essence of economic growth". However, official definitions of R&D used by governments worldwide exclude the arts, humanities and social sciences. Consequentially, much R&D in the creative industries is not recognised and does not qualify for targeted R&D support. As the government seeks to increase the UK’s R&D investment through measures like the new Industrial Strategy Challenge Fund, new Innovate UK programmes and R&D tax relief, it should ensure its R&D definitions do not neglect the very areas where the UK has international strengths, like the creative industries.

This policy briefing is based on post-doctoral research spanning two years which explores the limitations of official definitions of R&D and proposes a new one to make it fit for purpose for policy across all knowledge domains. Drawing on information gathered from semi-structured interviews, questionnaires and workshops with academics, practitioners and policymakers, we propose the following more inclusive R&D definition, based on the influential – but restrictive – OECD definition:

Research and experimental development (R&D) comprise creative and systematic work undertaken in order to increase knowledge – including knowledge of humankind, culture and society – and to devise new applications of economic, cultural or social value of available knowledge:

  • Basic research is experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundations of phenomena, observable facts and behaviours, without any particular application or use in view.
  • Applied research is original investigation undertaken in order to acquire new knowledge. It is, however, directed primarily towards a specific intended aim or objective.
  • Experimental development is systematic work, drawing on knowledge gained from research and practical experience and producing additional knowledge, which is directed to producing new products, experiences or processes or to improving existing products, experiences or processes.

We suggest an urgent priority is to devise methods for measuring and evaluating the return on investment in R&D in the arts, humanities and social sciences so defined. These must be consistent with the existing survey-based methodologies that are used by policymakers to evaluate science and technology R&D across the world and endorsed by the OECD.  


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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