Creative Nation uses official, open and web data to map the creative industries in the UK: their evolution, contribution to local economic development, the strength of their support ecosystems – including research and networking – and their connections with each other. The report presents eight key findings based on our analysis of the data, and is accompanied by an open dataset and interactive visualisations to help users explore the data.
Eight key findings
The creative industries are a motor of growth in local economies across the UK, and not just in London and the South East of England. Regions from the South West, to Yorkshire and the Humber, to the West Midlands are also experiencing the benefits. Between 2011- 2014 and 2015-2016, the creative industries in the average local economy increased by 11 per cent, twice as fast as in the rest of the economy. There has also been an explosion of creative entrepreneurship: almost nine in ten local economies grew their creative business population over this period, and 83 per cent grew it faster than in other sectors.
The creative industries concentrate in a small number of locations: 53 per cent of employment and 44 per cent of businesses are found in the top five locations (the equivalent percentages in other sectors are 32 per cent and 30 per cent respectively). Overall, creative industries employment has become more concentrated over time, mirroring developments in the wider economy. We detect a similar pattern when we look at the creative industries within UK regions and nations, showing that leading cities attract most of the activity, from Manchester in the North West of England to Bristol in the South West, Cardiff in Wales, and Glasgow and Edinburgh in Scotland.
Although creative businesses are more productive than comparably sized businesses, they will not materially contribute to addressing the UK’s productivity problems unless they scale-up significantly. When we control for size, creative businesses tend to be more productive than companies in other sectors in almost all parts of the country. For example, creative businesses with fewer than ten employees have a Gross Value Added (GVA) per worker of £46,000, 20 per cent higher than similarly sized businesses in other sectors. Ninety-four per cent of the companies in the sector are, however, micro-businesses (10 per cent more than in other sectors), which limits the sector’s ability to lift regional productivity. Growth in the sector will have the biggest economic impact if it is accompanied by an increase in the number of scale-up businesses with higher productivity growth.
Regional rivals should work together to grow their creative industries: Regional creative growth appears not to be a zero-sum game, particularly when it comes to business numbers. For example, locations that saw their neighbours become more specialised in IT, software and computer services were almost 80 per cent more likely to become more specialised in that sub-sector too. Local policymakers may need to coordinate their support actions to maximise their impact on the UK’s creative industries.
- Not all creative clusters grow in the same way: Creative business growth is not just about high-growth firms, and creative cluster development follows a variety of models. New firms, it turns out, are more important for net job creation in the creative industries than in other sectors. Although high-growth firms in the creative industries account for a larger share of businesses with more than ten employees than in other sectors (8.5 per cent versus 5 per cent), they tend to create proportionately fewer jobs, consistent with there being barriers to growth. When we segment creative clusters into different development models, we identify five types:
- Incipient clusters, such as Liverpool and Middlesbrough, with lots of new entrants, but low creative business survival rates.
- Creative Conurbations, such as Cambridge and Guildford, that are specialised in fewer sub-sectors and with more stable trajectories, including strong business creation by high-growth firms.
- Creative Districts, primarily in the South East of England, with many different sub-sectors and micro-businesses, high survival rates and fewer high-growth businesses.
- Creative capitals, some of the biggest creative cities in the UK including London, Manchester and Reading, with more large businesses and high-growth businesses.
- Creative challengers outside London and the South East, including large cities such as Birmingham, Sheffield, Newcastle, Edinburgh and Cardiff, which have experienced fast creative growth in recent years and are on track to become central nodes within the UK’s creative geography.
The wider creative economy is also stronger in creative clusters: Our analysis of website data scraped by GlassAI, a big data startup, suggests that companies in non-creative industry sectors operating in creative clusters tend to be more creative too. More than two thirds of the locations specialising in the creative industries also have a tendency to embed creativity more widely in other sectors. By contrast, only 13 per cent of places without a creative specialisation do the same. We find that Brighton is the creative cluster with the most widely embedded creativity in non-creative industries.
UK universities connect with creative industries locally and nationally: Research collaborations between universities and creative industries supported by Research Councils UK and Innovate UK are growing over time, with funding levels more than doubling between 2006 and 2017. Universities are collaborating with creative industries in their locality, in neighbouring areas and in other parts of the UK, suggesting that UK universities have a role not only in helping develop creative clusters around them, but also linking up others farther apart.
- Creative communities are interconnected and the diversity of connections increases over time: We have identified 1,700 creative meetups in the UK with participation of over 180,000 unique individuals. These communities interact locally and with those around them forming hubs of activity in Advertising and Marketing in the West Midlands, Crafts and Making in the North West, and Design across the South West and Wales. In general terms, creative communities in different sub-sectors are becoming more interconnected, something which bodes well for unexpected ‘crossover’ innovations.