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The Geography of the UK’s Creative and High-Tech Economies (A Preview)

The creative and high-tech economies are central to the UK’s economic future. However, a lack of clarity in how they are defined has made it difficult to formulate coherent public policy on these sectors, at both a national and local level.

We address the need for systematic and comparable data on these sectors across the UK in our forthcoming report 'The Geography of the UK’s Creative and High-Tech Economies', co-authored with Alan Freeman and Peter Higgs, which this post previews.

The boundaries of the creative and high-tech economies

Discussions about the creative industries have traditionally been plagued by fuzzy definitions. Seemingly which industries were classified as ‘creative’ and which were not was a political judgement – not something informed by data. However, our 2013 report 'A Dynamic Mapping of the UK’s Creative Industries' identified in the data a distinguishing characteristic of the creative industries, namely that workers doing ‘creative’ jobs (defined as satisfying a set of explicit criteria) account for a high proportion of their workforce ( their ‘creative intensity’).[1]

This approach to identifying a set of industries as creative has the additional attraction of providing a clear definition of the ‘creative economy’ within which the creative industries sit – namely, the sum of creative jobs outside the creative industries and all jobs (creative and non-creative) in the creative industries. The Department for Culture, Media and Sport (DCMS) adopted this methodology for classifying specific occupations and industries as creative for the official Creative Industries Economic Estimates in January 2014.

'The Geography of the UK’s Creative and High-tech Economies' (forthcoming) applies the dynamic mapping approach to classify the high-tech industries on a similar basis. Specifically, it looks at the distribution of STEM (Science, Technology, Engineering and Mathematics) occupations across the UK’s industries to identify a set of industries as ‘high-tech’.[2]

The growth and distribution of the UK’s creative and high-tech economies

Using the resulting occupational and industrial classifications, the report analyses the size of the UK’s creative and high-tech economies, the rates at which they have been growing in recent years, and their geographical distribution at the regional and sub-regional levels.[3] Among the main findings are that:

The creative and high-tech economies are fast growing

Employment in both the creative and high-tech economies is growing faster than the UK workforce as a whole in recent years:

  • Creative, and to a lesser extent, high-tech employment has been growing particularly rapidly - employment in the UK's creative economy has been growing over 3 times faster than the UK workforce between 2011 and 2013. The high-tech economy has also been growing rapidly in this period, although at a slower rate.
  • The intersection of the high-tech and creative economies  has been growing exceptionally quickly - employment in the parts of the UK's creative economy that also fall within the high-tech economy (a small group of ICT-related occupations and  industries) has been growing much faster than overall creative economy employment between 2011 and 2013.

Further details of the growth of the UK’s creative and high-tech economy and their components will be provided in the research report which will be published in early December.

The creative and high-tech economies are unevenly distributed across the country

The darker colours in the pictures below[4] show the areas where creative (high-tech) economy employment accounts for a higher proportion of an area’s workforce than the creative (high-tech) economy’s share of the UK workforce.[5]

Note: A number greater than (less than) one indicates that the creative or high-tech economy is a higher (lower) proportion of an area’s workforce than it is of the UK’s workforce.

The maps confirm that the UK’s creative economy is more unevenly distributed than the high-tech economy, although both have high concentrations in and around the counties to the south, west and north of London. As much as 43 per cent of creative economy jobs are in London and the South-East of England, compared with 31 per cent of the high-tech economy and 28 per cent of the workforce as a whole.

By way of comparison with other sectors, the figures below show the geographic spread of some of the UK’s other industries/sectors: Distribution, transport & hospitality, and Government, health and education are much more evenly distributed around the country, as one might expect.[6] Agriculture is naturally concentrated outside the main urban areas. Financial and insurance industries are highly concentrated in central London in particular, the surrounding counties, Edinburgh and some other urban areas.

We will publish more details in our research report this December, including the regional distribution of creative and high-tech employment, their growth rates in recent years, and a detailed sub-regional analysis. This report will provide policy makers with the first systematic overview of both sectors, their geography, growth and interaction.

The report’s release will be accompanied by a set of interactive visualisations of some of the data used in the report, allowing people to visually explore the data for themselves.

 


[1]  In order to be identified as creative an occupation had to score at least four out of five of the following criteria – the occupation had to: 1. Involve a novel process, 2. be mechanisation resistant 3. be non-repetitive or perform a non-uniform function 4. make a ‘creative’ contribution to the value chain irrespective of context and 5. Involve interpretation, and not mere transformation.

[2] Technically, the distribution of STEM jobs is used with other indicators of an industry’s ‘high-tech’ nature to identify ‘high-tech’ industries.

[3] The analysis in the report, and this post, is based on the Office for National Statistics’ UK’s Annual Population Survey (2011-2013).

[4] The maps show the European NUTS3 2003 geographies. They are constructed using the NUT3 2006 geographies and the transposition between the two classifications available on the Eurostat website (see http://epp.eurostat.ec.europa.eu/portal/page/portal/nuts_nomenclature/history_nuts). The Northern Ireland data is only available at a Northern Ireland level (i.e. NUTS1) in the dataset uses, so this analysis cannot reveal concentrations of creative and high-tech activity at smaller geographical units.

[5] This form of measure is known as a Location Quotient (LQ). Formally, it is defined as the ratio of the proportion of an area’s workforce that does the activity of interest divided by the proportion of the national workforce that does the activity. An LQ > 1 means the area’s workforce is more concentrated than the national one, an LQ = 1 means that the concentration is the same and an LQ < 1 means that it is less concentrated.

[6] These classifications are a selection of the broad industrial sectors used by the Office of National Statistics, and therefore aggregate a number of industries within them. See chapter 2 of the 2014 Blue book for more information.

 

Author

Hasan Bakhshi

Hasan Bakhshi

Hasan Bakhshi

Centre Director, Creative Industries Policy and Evidence Centre (PEC); and Executive Director, Creative Economy and Data Analytics, Nesta

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

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John Davies

John Davies

John Davies

Economic Research Fellow, Creative Economy & Data Analytics

John is a research fellow focusing on the digital and creative economy. He is interested in the interface of economics, digital technology and data.

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