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Why creativity needs economists and economists need creativity

This summer the University of Brighton did me the honour of awarding me an Honorary Doctorate of Letters. In my speech I tried to convince the graduates that economics has a good deal more to say about creativity than is usually believed. Here's what I said:

Think of an economist. Any economist. One of the new graduates here today, perhaps. What is the first adjective that springs to your mind? Serious, perhaps? Conservative? Numerate, if you're being polite - boring, if you're not. But I am willing to bet my ceremonial robe that the word you thought of was not 'creative'. But that shouldn't be the case.

Economics can tell us a surprising amount not just about the financial value of the creative industries, the jobs they create, the exports they generate - but also about how they impact on the economy as a whole, and about the way that the creative process itself works.

The right economic tools can be applied to gain a deeper understanding of creativity: the realm of originality, imagination, experimentation and expressiveness, all values which are core to this institution. Thinking about it, perhaps that's not so surprising after all. The economy presents opportunities and also places constraints on the creative work of all individuals. And what we call the 'Creative Economy' is an (albeit complex) aggregation of interactions between these same individuals.

Putting valid structure on this complexity, devising ways of measuring economic and social value, and identifying cause and effect are the main contributions that economics can make to understanding creativity. Even creative endeavours that are seemingly purely open-ended are, at their root, regulated by physical and social technologies, even if that regulation is at times fuzzy, dynamic, and difficult to pin down.

Viewing economics, as famously said Lionel Robbins, as "a science which studies human behaviour as a relationship between ends and scarce means which have alternative uses", the potentially vast contribution that economics can make to understanding creativity should be clear.

The questions I've been considering over the past seven years include these. What educational practices nurture creativity? What is the relationship between the creativity of a country's population and its economic growth, and how does an individual's creativity contribute to that of others in society?

How does the knowledge base interact with creativity? Why does creativity cluster in certain geographies? Do some creative practices, say the expressive arts, play different roles to other parts of the creative economy?

It should not be surprising that with all this emphasis on the social context in which creativity happens, addressing these research agendas raises important questions for public policy. Here are a few examples my collaborators and I have considered.

  • First, there is the question of what is the macroeconomic contribution of creativity, where research undertaken with Peter Higgs and Alan Freeman at the Queensland University of Technology suggests that there are almost 2.5 million people employed in the UK's creative economy, accounting for around 10% of GDP, putting it ahead of financial services, advanced manufacturing and construction.
  • Second, how should the national curriculum be configured to support the development of creative skills in young people, where through Next Gen we campaigned for computer science to be included in the core curriculum.
  • Third, how can economics be used to develop methodologies for valuing culture in terms the Treasury can recognize but which cultural leaders can also relate to, which we are pursuing in multidisciplinary research with the Australian cultural economist, David Throsby.
  • Fourth, how can local policy support the growth of creative clusters? Our research suggests, for example, that there are strong tendencies for creative businesses to locate close by other knowledge-intensive businesses. Where cross-sector networks are underdeveloped, policymakers may achieve a step change in innovation by promoting cross-sector networking and innovation.
  • And last, but not least, what intellectual property regime strikes the right balance between incentivising creativity and enabling social sharing of ideas, where we have argued that the current regime in key ways acts against innovation and growth and prevents entrepreneurs from taking full advantage of the opportunities that digital technologies afford.

In a 2009 pamphlet on measuring cultural value, written with Alan Freeman and Graham Hitchen, we urged arts leaders to 'stop worrying and love economics'. We identified as a priority the need to attract more economists into researching creativity.

Nearly five years on, with the UK still reeling from the effects of an economic crisis, it¹s clear that it's not all about what economics can do for our understanding of creativity. Perhaps even more important is what the study of creativity can do for the development of economics as a discipline.

What better area than creativity to understand the deep contributions that economics can make to understanding human behaviour - but also its limits? To identify in what ways economics must work with other disciplines to provide a fuller, more rounded account of human behaviour. We all recognise that as people we develop when we take ourselves out of our comfort zones.

In my case this came seven years ago when I moved from the world of finance to the creative industries. Perhaps some of you, having graduated today, are also considering a leap. It is time for some creative thinking, and for economics to take itself out of its comfort zone too.


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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