Lord C-J outlines the opportunities and barriers for the Creative Industries

I recently took part in a panel at Policy Exchange, the think tank, to discuss “Brave new world: Is the UK prepared for the future global economy?”

I  focused on four very interconnected subjects:  sectors and skills, China and clusters all of which are tackled in the Policy Exchange paper ” The Global Economy: Prospects for Growth and assessing the UK’s position”. I also touched on finance for start ups, intellectual property protection and trade promotion.

The UK is described in the report as a star performer but the fact remains that to continue to thrive we have to make the best use of our national assets and identify and correct where there are barriers to deploying those assets.

The Creative/Digital/Tech Sector

The Korean fashion entrepreneur Sunjoo Kim in an inspirational speech in Westminster last year vividly talked of Britain’s future as a Creative Brain Centre, in terms of our creative skills and our archive and museum and gallery resources


The UK has the largest cultural economy in Europe. A combination of the need to rebalance our economy and the success of the 2012 London Olympic and Paralympic Games made it clear that our future in Britain lies with our imagination, creativity and invention.


With the growth of digital platforms and applications there is convergence of and a symbiotic relationship between the tech sector and creative content. In the UK we are in the vanguard in the use of digital technology in our creative economy and are experiencing a wave of business creation higher than any other major OECD economy.


  • The UK’s creative industries are now 5.2 per cent of the UK economy -higher if you include software as it will be again.

•        Sector growth of almost 10% in 2012, outperforms all other sectors of UK industry

•        8.0 per cent of total UK service exports in 2011 and 10.6% in 2013

•        They accounted for 1.68 million jobs in 2012 more again if software is included


Policy Exchange point out in their recent Technology Manifesto that E-commerce accounts for a greater percentage of GDP in the UK than in any other G20 country and our  internet economy will be 16% of GDP by 2016.


They say:


“The next government’s goal should be nothing less than to make Britain the fastest growing digital economy in the world.”


Last week London had its Technology Week, largely an upbeat affair apart from the Bloomberg/LSE report which criticized our broadband speeds.


But there are a great many challenges to overcome


Start ups and Finance


There is the key question of startups in this converged tech/creative sector and what we need to do to ensure their success

There have a record 15,600 startups in Tech City alone in each of the past two years

It seems that tech startups now have good access to early stage finance. With a variety of angel investors through the Government’s Seed Enterprise Investment schemes. These models in the UK are said now to be among the best in the world. The important thing is now promotion of these schemes.

Crowd funding is beginning to have a real impact, especially with the Government’s Business Bank investing in Funding Circle.

Debt financing via banks has not been so good in the sector to say the least although there some honourable exceptions among the banks.


It is the later stages where hundreds of million of pounds are required for investment or a V/C exit is needed where we are still behind Silicon Valley and Nasdaq in New York.  Are UK institutions too risk averse? If so there is a danger of business moving to the US at this funding stage.


As a result I very much welcome the moving of US institutions here who understand the potential of our emerging businesses. But there is some evidence from recent listings on the Stock Exchange that the creation of the new High Growth Segment to encourage companies to list here is having an impact.


Skills and education

The talent available however is far below what we need. Skills deficiencies have been exposed by digitization. We need 1 million tech jobs to be filled by 2020 to keep up with demand.


I welcome the inclusion in the curriculum of coding/computer science from this September for 5-16 year olds.

In the short and medium term however we will still be reliant on overseas undergraduates and post graduates.

We must ensure that our visa regime is fast and user friendly to attract them both into employment and our higher education institutions.


Although the creative industries are a key growth area there has been the danger that the future of creative education in schools is at risk as a result of the introduction of  EBACC , the performance measure for secondary schools.


The truth is we need students going to into the creative industries to be multidisciplinary. STEAM not STEM. Excluding these arts subjects poses a significant threat to the UK’s creative economy.

I very much welcome Lord Young’s report on enterprise education: a degree or secondary school exams are not enough.

So it is pleasing that the news on growth of apprenticeships in the Creative industries is however good. Now BBC/BSkyB/Ch 4/ Channel 5/ITV/Sony, and many other in the creative industries now provide opportunities for paid internships and apprenticeships in many cases targeted at  under-represented  black, Asian and minority ethnic backgrounds.




And so to the issue of clusters


Clusters or Hubs are of huge importance to the Tech and Creative Industries and there are many more than just in London.


But this raises the whole question of whether our cities are of the right scale, especially when compared with cities in emerging markets and whether they have the necessary powers and control over their own finances. More than 90% of tax is collected by central government.


Michael Heseltine made the case in his paper “No Stone Unturned” he wrote in 2012 about cities and regeneration was that power needed to shift back to municipalities. We are too London centric.


We need to make our cities competitive in the global economy and strengthen our clusters especially with  universities as incubators


It is vital that we build on initiatives like the LEP, City Deals and the Regional Growth Fund .


I see that the Chancellor gets it to some extent. He announced yesterday plans to develop a northern “supercity” to rival London as a global hub by linking up Liverpool, Manchester, Leeds and Sheffield.” But it’s more than infrastructure.


The RSA get’s it too with the City Growth Commission underway chaired by Jim O’Neil which will report in October this year.



Then of course there is the trade and investment between China and the UK in the tech and creative industries. Whatever the pessimists say China still represents a huge opportunity for us.  Especially in the light of post 3rd plenum policies top encourage private enterprise and consumer spending. And not just in FDI which was the focus of much of last week’s visit by Li Keqiang.


Overseas there is an increasingly favourable perception of Britain as not only innovative and creative but crucially, especially for the Chinese, with a great heritage. So soft power and economic benefit.


The Chinese have been brilliant at devising new digital platforms. We are the people who can provide the content.


And we are getting there. At the recent Technology Innovators Forum in Qingdao, TIF-IN, Vince Cable launched the Global Digital Media and Entertainment Alliance with China which will promote long term relationships in the digital media and entertainment sectors and a useful vehicle for dialogue on IP and  copyright reform in China.


Shortly an international Creative Industries Industrial Strategy which has been developed by a working group of the CIC under Tim Davie of BBC Wordwide will be launched.


Intellectual Property


IP protection here and abroad is of crucial importance. Business models are changing rapidly but all to a greater or lesser extent depend on good IP Protection.


Here we need to ensure that penalties for online digital copyright infringement are consistent with those for physical copying and ensure better protection for metadata.


At TIF-In with an expert panel we looked at the environment for intellectual property development and protection applicable to the creative industries, internationally in China. In fact the IP protection regime there is is rapidly improving as Chinese homegrown IP grows in importance.


Addressing issues of piracy and criminality in key markets in particular in relation to the internet as is how we influence and change consumer attitudes to IP and the recent IP Enforcement Conference in London was useful in thids respect. In particular how we educate young people that creators have rights and there is fundamental value in IP


Trade Promotion


Then of course particularly in this sector we need to be realistic about the additional resource that UKTI needs to service SME’s. We have a terrific team of UKTI people in China with increasing sector specialism.


Creative industries accounted for almost a quarter of UKTI’s budget for the Trade Access Programme (TAP), which helped companies exhibit at overseas trade shows.


They have done an excellent job post Olympics in developing Britain through the GOOD campaign.


The FCO is also very supportive. We now have an expert IP attaché in Beijing and other major markets giving regular updates on the many welcome copyright developments in China and their respective countries .


But as the Policy Exchange Paper emphasizes UK companies, particularly SME’s need persuading to be bolder! We need to demonstrate the benefits of trade and investment with emerging markets more effectively.


We need a much bigger pipeline of SME’s lining up to do business in emerging markets. Professional firms play their part but we need more UKTI resource in the UK, especially in the English regions.



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