Risky Business
There is increasing attention on both the current size of the creative industries contribution to the UK’s economy (generally agreed to be the DCMS figure of 6.2 per cent of GVA) and their potential to drive growth (the NESTA prediction of 4 per cent growth is often cited), yet the view from both inside and outside the industry is that the creative industries are risky, and importantly, riskier than other new businesses. This perception underpins a significant issue for the sector: access to finance.
The research will attempt to bring together existing national information and compare this with more anecdotal and partial information from, for example, the Princes Trust Enterprise Programme, the banking and venture capital sector to form an evidence-based view on the risk profile and failure rates of the creative as opposed to other industries. It aims to evaluate the extent to which there is a difference in the business model of an industry that we call ‘creative’ as opposed to other sectors, and identify the core components of company success in the creative industries to better understand the path to growth.
Once we determine what it is that is common to those firms that have succeeded, the report will explore the implications for UK plc of having an environment where small companies in this sector can grow into big ones, as opposed to an environment where bigger companies flourish by seeking out nascent talent.
As well as looking at how to grow current creative businesses and encourage new ones, and exploit new ideas for commercial advantage, the project will also seek to ensure that we are gaining maximum economic advantage from already successful UK creative businesses and the IP they own.
With the creative industries clearly defined; the nature and different aspects of risk in the creative industries properly understood; and the funding gap for new businesses and it’s implication for long term British revenues from the creative industries described, we will be in a position to make effective policy recommendations.
The research will be led by Helen Burrows, former policy advisor to the Culture and Creative Industries Minister Ed Vaizey.
The project is managed by the director of Demos, Kitty Ussher.