Joint memorandum submitted by DCMS/DTI
INTRODUCTION
The Importance of the Creative Industries to the
UK Economy
The UN estimates that Creative Industries account
for 7% of global GDP and are growing at 10% a year. It is important
that the UK can build on that success nationally and internationally.
The Creative Industries are an important and
dynamic sector of the UK's economy. See Annex A. It is instructive
to compare the situation set out in DCMS's 1998 Creative Industries
Mapping Document with the situation today. In 1998 Creative employment
stood at around one and a half million people. Today it's over
1.8 million. In 1998 the Creative Industries contributed 4% of
the domestic economy. According to the latest research the Creative
Industries made up 8% of GVA in 2003. The software industry alone
achieved a net export value of £3.9 billion in 2004, more
than double its exports in 1997. Between 1997 and 2004 the Creative
Industries as a whole averaged 6% growth. That's around twice
that of the economy as a whole.i
Technological innovation, particularly the transition
to digital technologies, has opened up further opportunities for
the Creative Industries. In the last 10 years mobile phone ownership
has gone from below 10% of the UK population to near ubiquity.
In the last six years the penetration of digital television has
gone from a standing start to over two-thirds of homes. And the
pace of change is accelerating. More than 250,000 households are
switching to digital television every month. Most dramatic of
all has been the growth of broadband. The number of new broadband
connections per week has increased almost 15-fold in three years—from
5,500 a week in 2001 to over 70,000 in 2004. Over a third of homes
now have broadband and it's getting faster and cheaper.ii
Consumers are currently undertaking a greater
range of leisure activities, more intensely, demanding greater
levels of innovation and faster product development cycles from
producers than ever before. But it's not just that consumers are
buying more, they are also buying a wider range of products. The
long tail is an entirely new economic model for the media and
entertainment industries which moves away from hit driven sales
to niche markets associated with online retail. This means a greater
diversity of products can reach larger potential markets, and
the proliferation of digital content devices from Play Station
Portables (PSPs) to DVDs is increasing the shelf-space available
for content.
Technological change is helping to release the
creativity of more and more people by putting the means of creation
and distribution in the hands of the citizen. We are moving from
a one-to-many broadcast model (traditional analogue broadcasting)
to one-to-many, one-to-one (phone, email), one-to-many (blogs)
and even many-to-many models (Wiki). This shift has been facilitated
by the internet and is growing exponentially as the cost of broadband
connections, software and hardware declines, and the speed increases.
OPPORTUNITIES AND
CHALLENGES PROVIDED
BY NEW
MEDIA TECHNOLOGIES
"Consumers are increasingly calling the
shots in a converged media world. They use Apple iPods to make
their own music playlists. Personal Video Recorders allow them
to customise television line-ups. These consumers pull stock-market
updates, text messages, wallpaper ringtones and short-form video
into their mobile phones. They come together in online communities,
generate their own content, mix it and share it on a growing number
of social networks. No longer a captive, mass media audience,
today's media consumer is unique, demanding and engaged."
The Rise of Lifestyle Media—Achieving Success
in the Digital Convergence Era—PricewaterhouseCoopers ©2006iii
These new lifestyle patterns demonstrate that,
at the same time as convergence has gone from being a prediction
to a reality, what the consumer notices is increasing convenience
rather than the technologies involved. Convergence, associated
with digital technologies, is enabling content to be delivered
over a variety of different carriers to a growing array of platforms.
These digital technologies have removed many of the prior bottlenecks
in the creation, duplication and dissemination of content. By
2010 industry analysts anticipate that 90% of all Internet connected
households in the UK will have a broadband connection, which would
represent 60% of all households. All this opens up substantial
opportunities for new media, leading to more consumption. It also
creates real uncertainty in a world of rapid technology change.
For the Creative Industries to exploit the opportunities
and challenges of rapid technological change and consumer choice,
the regulatory and economic climate needs to be right. Convergence
is pulling together several industry sectors that have had very
different regulatory regimes: broadcasting—traditionally
heavily regulated for content; traditional telecoms—regulated
for price, availability and technical standards; Internet services—very
little statutory regulation, essentially through existing general
law and self regulation rather than industry-specific legislation.
It is crucial to have converged regulation that can apply the
same principles to different situations and the flexibility to
allow markets and consumers to devise and choose products, not
to shape those products through pre-emptive regulation. The policy
challenge is therefore to establish firm principles that regulators,
such as Ofcom, are able to apply in different situations in a
rapidly changing world.
New digital technologies are having a disruptive
impact on established value chains across the Creative Industries.
The traditional business models of organisations as seemingly
diverse as the record industry, voice telephony and newspapers
have been subject to similar challenge. The record industry is
adapting to meet the challenge of digital rather than physical
distribution of content. The newspaper industry and the local
press in particular is having to adapt as advertising (in particular
classified) moves online. For broadcasters, the shift from an
analogue to a digital world allows spectrum to be used much more
efficiently and enables convergence with other digital devices
for production and access. For example, consumers can now see
television over their mobile phones. The growth in Personal Video
Recorders has resulted in viewers being able to time-shift programming.
Audience fragmentation and the ability to avoid advertising are
real issues for traditional broadcasters funded by advertising.
All these changes represent both a challenge
and an opportunity for the Creative Industries. The proliferation
of new business models is challenging companies across the Creative
Industries which are characterised by a small number of very large
firms with global reach alongside a large number of small to medium
sized enterprises (SMEs).iv These large firms need to be able
to raise venture capital finance to meet capitalisation requirements
to compete effectively in global markets where size is becoming
increasingly important.v For their part, SMEs require access to
start-up and second stage finance from banks, debt and public
sources. In these increasingly competitive markets, the creative
sector is adapting to these challenges by pooling resources and
banding together: into networks, clusters, and forming new partnerships,
including with consumers who are now using and creating content.
For the first time since the early printing
press, technology is putting the means of media production and
mass distribution in the hands of consumers and citizens. Consumers
are becoming increasingly proactive in terms of their relationship
with content rather than simply taking a passive role. More than
half of American teenagers online are creating their own content.vi
The Internet is facilitating new forms of innovation, interactivity
and creativity as individuals are co-operating across time and
space. The success of Wikipedia and Linux are just two examples.
The challenge is for the Creative Industries to work with this
new behaviour and adapt. The BBC Creative Archivevii is a potentially
interesting development in this area enabling people within the
UK not only to watch and download content but also to edit clips
and programming as long as it is for non-commercial purposes.
Channel 4 is also developing an on-line interactive archive for
personal programme making.
Raising awareness among both creators and consumers
of the value of intellectual property in this increasingly digital
world is essential. A digital world makes it more important that
intellectual property is respected and enforced. But there must
also be flexibility to create an environment in which people can
make the most of legitimate opportunities to access content in
new ways (including, eg for wider social purposes such as education
and for new business models to develop). For thriving Creative
Industries to be maintained, a robust legal framework is therefore
required that provides appropriate protection for rights owners
whilst making proper allowances for the requirements of consumers.
Digital Rights Management (DRM) is an essential tool for enabling
a Creative Economy to function in a digital world.
Annex B provides more detail on the opportunities
and challenges for the Creative Industries resulting from new
media business models and converging media platforms, together
with the legal and technology challenges for Intellectual Property
in an increasingly digital world.
THE GOVERNMENT'S
ROLE
Whitehall Responsibilities
DCMS sponsors the film, broadcasting, music
and designer fashion industries, and jointly with DTI sponsors
the advertising, computer games, design and publishing industries.
The DTI works closely with DCMS on the Creative Industries and
has specific responsibility for competition, innovation, consumer
policy, the science base and ICT sector; it also supports small
businesses (through the Small Business Service), Intellectual
Property (though the Patent Office), and trade (through UK Trade
and Investment, which also is accountable to the Foreign and Commonwealth
Office).
Coordination with Key Stakeholders
DCMS and DTI work in close partnership on Creative
Industries policy and engage with all other Government Departments
which have an interest, such as DfES, DCA, Home Office, FCO, ODPM,
HMT and the Devolved Administrations. In addition, we work with
a wide range of public bodies including Ofcom, Regional Development
Agencies (RDAs) and our Non Departmental Public Bodies (NDPBs)
such as NESTA, the UK Film Council and the Design Council. We
also work in close partnership with industry and consumer representatives.
The importance of the Creative Economy has been
recognised at European level. The i2010 Strategy, which was adopted
by all Member States at the end of last year, clearly seeks to
address the opportunities provided by the increased convergence
between traditional information society and new media services.
The UK actively influences EU regulations to meet the needs of
the Creative Industries. The UK hosted a Creative Economy Conference
during our Presidency of the EU last year, which was attended
by the representatives of the public and private sectors from
across Europe. Information about engagement with stakeholders
is expanded in Annex C.
The remainder of the evidence focuses on the
programmes and initiatives that the Government is taking to support
the growth of the Creative Industries.
What is the Government doing?
1. Making Britain the World's Creative Hub.
2. Promoting the protection and exploitation
of Intellectual Property.
3. Influencing appropriate regulation of
content on non-traditional platforms.
4. Stimulating technology and innovation.
5. Achieving balance between the BBC's role
as a Public Service Broadcaster and innovation in the Private
Sector.
6. Government as an intelligent buyer.
7. Promoting Education and Skills.
8. Promoting Trade and Investment.
1. MAKING BRITAIN
THE WORLD'S
CREATIVE HUB
In July 2005, the Government announced its ambition
to make Britain the world's creative hub and in November DCMS
announced the Creative Economy Programme (CEP) to drive forward
that ambition. This Programme, working in close partnership with
DTI, will join together cultural institutions, government policy
makers and funding organisations to support the growth and productivity
of the Creative Industries.
The Creative Economy Programme has the following
aims:
— Developing a strategic vision for
the Creative Industries that can be shared at national, regional
and local level.
— Developing new policy for the Creative
Industries, generating ideas from a wider range of contributors,
NDPBs, industry and other stakeholders.
— Creating better coherence for current
policies, funding programmes and workstreams.
— Creating new projects between NDPBs
and across sectors.
We have developed a structure for the Creative
Economy Programme, which revolves around seven issues that we
believe are the key productivity levers in the Creative Industries:
4. Business support and access to finance.
7. Evidence—(underpins work—not
a driver of productivity).
This work will be overseen by a steering group
made up of senior members of the private and public sectors. Two
separate branches will feed into this steering group. First, there
will be consultation with the private sector and other stakeholders.
This will be achieved through a series of seminars—some
of these will look at the issues faced by an individual sector
(eg on music or fashion); others will look at how the productivity
levers cut across different sectors. In tandem to this private
sector consultation, there will be an exercise to look at the
effectiveness of our public support for the Creative Industries.
This will be led by seven investigatory groups made up of members
of our NDPB's as well as Government Departments and RDAs. They
will look at the coherence of current schemes and policies, as
well as come up with new proposals.
2. PROMOTING
THE PROTECTION
AND EXPLOITATION
OF INTELLECTUAL
PROPERTY
Legislation
Intellectual Property is at the heart of the
economic value of the creative economy. Protection of IP through
copyright regulation and enforcement as well as Digital Rights
Management (DRM) will be crucial to the exploitation of content.
We are well placed in terms of modern copyright legislation that
is up to date, and strikes a balance between the need for the
right holders to be able to extract economic value from creativity
and the legitimate expectations of others. These expectations
centre on a combination of flexibility, interoperability, accessibility,
choice, and the chance to enhance personal creative output exploiting
a variety of user-generated media. But the pace of technological
change is such that we need to ensure that the legislation remains
fit for new market realities. It must not become a barrier to
innovation and the development of new business models. That is
why we are reviewing the appropriateness of our copyright legislation.
Manifesto Commitment and New Review
The Labour Party Manifesto in 2005 included
a commitment to "modernise copyright and other forms of intellectual
property so that they are appropriate for the digital age".
The Chancellor of the Exchequer announced as part of the Pre Budget
Report in December 2005 that a review led by Andrew Gowers would
look at these issues and report in Autumn 2006. While the Government
considers the present intellectual property regime broadly strikes
the right balance between consumers and right holders, the review
will examine whether improvements could be made within the context
of promoting competitiveness and innovation. Mr Gowers and his
team will be actively consulting stakeholders throughout the duration
of the review. A copy of the Terms of Reference can be found at
Annex D.
Enforcement
Having the right legislative structure is only
a start; it must also be effectively enforced on the ground. The
digital world poses unprecedented threats because it potentially
enables perfect but illicit copies to be made available to millions
of others. The Government is determined to work with industry
to combat IP crime and online infringement. In 2004 it was estimated
that counterfeiting and piracy cost the UK computer games industry,
for instance, in excess of £2 billion at retail value.
The Government is working hard to tackle piracy.
In July 2004, DCMS in partnership with the DTI, established the
Creative Industries Forum on Intellectual Property. The Recommendations
from the Forum and the Government's response were published on
5 October 2005.
The Government is working on a range of initiatives
to take the Forum's recommendations forward. For example:
— The Patent Office's National IP Crime
Strategy has been established to deliver better enforcement action
across the UK. By bringing together all enforcement and intelligence
agencies with industry representatives for the first time, Government
has been better at targeting the counterfeiters. The first series
of raids took place before Christmas and over £1.5 million
of goods were seized. The new Creative Industries Focus Group,
which reports directly into the Patent Office's National IP Crime
Group, has already met twice and is looking specifically at the
recommendations of the IP Crime & On-Line Infringements group.
— From 1 April 2006, in England and
Wales, all asset recovery agencies, including the Trading Standards
Service, will be able to get back 50% of the assets they recover
under the Proceeds of Crime Act from action related to the confiscation
of pirated goods.
— In addition, the Forum pointed to
the importance of raising education and awareness. Tackling piracy
is vital and an essential part of the solution will be through
building respect for creators' rights. Failure to respect creators'
rights is ultimately self-defeating for consumers.
— The Patent Office has brought stakeholders
together in the IP Crime Group. Group members, including the police,
Trading Standards Agency and industry representatives, are working
together to ensure that criminal activity, from the large importers
to the small dealers, are dealt with in a co-ordinated way. This
collaborative approach is already producing results. We have put
in place a structure for pooling information and identifying priority
areas to target enforcement action. The Creative Industries have
their own Focus Group within the over-arching IP Crime Group work,
chaired by industry itself.
3. INFLUENCING
APPROPRIATE REGULATION
OF CONTENT
ON NON-TRADITIONAL
PLATFORMS
Audiovisual content and new channels for distribution
For over a decade, commentators have been discussing
convergence between broadcasting and ICT technologies. That convergence
has now become a market reality. It is changing consumer habits—through
Personal Video Recorders (PVRs) or MP3 players, such as iPods,
or downloads, they increasingly expect to be able to watch what
they want, when they want it, where they want it.
The potential growth of on-demand services could
also mean the erosion of simultaneity as a defining condition
of much television.
The implications of the disappearing distinctions
between delivery mechanisms, and the crossover with telecoms are
likely to affect ongoing regulation:
— growth in number of content sources;
— sources will become harder to identify,
and content may become less easily identified with particular
known sources; and
— regulating content at source will
become very difficult.
For example, Internet Protocol TV (IPTV) is
increasingly effective and important as a mode for conveying televisual
content on the Internet and elsewhere. Typical IPTV services provided
are the ability to freeze live TV, video on demand and multiplayer
video games. In-home networks will provide a range of services
to a range of devices with a large selection of such services
being made available on the large screen. Existing broadcasters
will increasingly move towards multi-platform delivery of personalised
and interactive services in response to Internet-based competition.
Content generation, distribution, storage and consumption are
likely to become increasingly participatory—impeding attempts
to structure regulation around control of content. Multiple delivery
options may impede attempts to structure regulation around specific
delivery "channels".
Although the distinctions between broadcasting
and other digital services are blurring, for the foreseeable future
the Government considers there still to be a clear case for regulation
of "broadcast" content. Nobody knows precisely how services
are going to develop in the medium to long term. Hence different
regulatory approaches, or indeed in some cases light touch or
no regulation, may be required for services accessible over these
digital platforms. This will prompt consideration of whether and
how to:
— regulate access to content that is
illegal or undesirable (for example in the context of consumption
by minors); and
— define public service provision in
the new environment.
The Government considers that consumers will
need to take a more active role in choosing themselves what digital
content they wish to watch, listen to and read, enabled by effective
labelling, including age banding, to suit groups of consumers.
Industry is strongly supportive of a co-regulatory approach of
voluntary labelling codes that the public know, understand and
can trust.
We highlight below some of the key challenges
of regulating content on non-traditional media platforms.
(i) Television Without Frontiers Directive
The European Commission has been reviewing the
framework of EU broadcasting regulation—"Television
Without Frontiers" (TVWF)—and recently published its
formal proposal to amend TVWF. The TVWF directive is the main
EU instrument for the regulation of television broadcasting. It
contains rules about jurisdiction over TV services and about their
content, whilst ensuring the free movement of TV services within
the EU. The Government wants regulation that promotes varied and
innovative content and recognises that technology is shifting
editorial responsibility towards the consumer. TVWF has been and
will continue to be important in creating a single market in EU
television services and in ensuring harmonised minimum standards
in them, and it will continue to be important in the future since
broadcast TV is likely to remain an important mass medium for
years to come. However, there is a potentially serious negative
impact from imposing any new and complex rules on the emerging
digital content sectors while business models are still evolving.
It is vital to make sure that we do not regulate in a way that
is unnecessary, that will be unenforceable or that will discourage
the growth of e-services and technology developments in the EU.
So, we welcome the re-examination of this Directive, but we want
to see a Directive which is future proof, flexible and proportionate,
and which adheres to the better regulation principle, and which
does not counter the aims of the i2010 or the Lisbon Strategy.
This is not unfortunately what the Commission has proposed; especially
in their proposal to regulate (so-called) non-linear (ie pull)
services. UK stakeholders and Government are continuing to actively
engage with the Commission.
(ii) Undesirable and Illegal Content
The rule of law applies on-line as well as off-line.
There are effective steps that can be taken to remove content
from the Internet. For example, The Internet Watch Foundation
(IWF) enables members of the public, via a hotline, to report
illegal material, particularly child pornography, in a newsgroup
or website. If the material is considered illegal, the Foundation
passes details to the UK police to start action against the originators
and asks ISPs to deny access to the sites concerned.
(iii) Advertising
Where there are particular consumer issues with
on-line services such as advertising, the EU Electronic Commerce
Directive allows member states to remedy the situation by invoking
a derogation for consumer protection. Self-regulation remains
the most flexible approach to policing advertising in a fast-moving
environment. We advocate a system based on the British Advertising
Standards Authority (ASA) system.
4. STIMULATING
TECHNOLOGY AND
INNOVATION
The Government is stimulating technology innovation
by:
— creating the research infrastructure
to develop the high-level knowledge required for this diverse
set of sectors;
— encouraging exploitation of the research
base and technology transfer through the Technology Strategy and
promoting business R&D through R&D tax credits;
— raising awareness of technology developments
and best practice overseas through the Global Watch Service; and
— promoting confidence in new technology
and processes through a more forward looking standards policy.
Creating the Research Infrastructure
The Government has placed considerable emphasis
on developing a world leading capability in research which supplies
the creative industries with expertise both in technology and
the creative arts, for example, through the Arts and Humanities
Research Council (AHRC). The AHRC has launched its Designing for
the 21st Century programme in collaboration with the Engineering
and Physical Sciences Research Council (EPSRC).viii The Bristol
Creative Technologies Network (BCTN) is a strong example of an
effective and sustainable knowledge transfer relationship between
the Creative Industries and the Higher Education research base.ix
Technology Programme
The Government's Innovation Report of December
2003, "Competing in the Global Economy—The Innovation
Challenge", emphasised the need to combine creative strengths
with technology to generate whole new industries, such as digital
content. The report identified the need for a more strategic approach
and emphasised that in developing a technology programme it was
essential to have:
"close alignment with priority market applications
such as transport (including aerospace and automotive), health
care, construction (including sustainable buildings), digital
content, retail/logistics, and financial services." (Chapter
3 Summary and para 3.36)
To date, there have been four competitions on
collaborative R&D and the following technology areas have
been relevant to the interests of the digital content/media community.
The Creative Industries have had success in winning funding from
the competitions.
|
| April 2004: | Inter-Enterprise or Grid Computing.
|
| November 2004: | Design, Simulation and Modelling; Pervasive Computing.
|
| November 2005: | Data and Content Storage, Management, Retrieval and Analysis.
|
|
Such research on technologies around aggregation, search,
personalisation and navigation of online content will help make
digital content of all kinds more accessible and attractive both
to consumers and businesses.
The Technology Strategyx is being further developed during
2006 and DTI will continue to ensure that it meets the needs of
the Creative Industries.
Fiscal Incentives through R&D Tax Credits
The Creative Industries benefit from the existing R&D
tax credit scheme. The aim of the tax credits is to encourage
greater R&D spending in order to promote investment in innovation.
Between April 2000 and April 2005 around 17,000 claims for R&D
tax credits were made with around £1.3 billion of support
claimed. The R&D tax credit works by allowing companies to
deduct up to 150% of qualifying expenditure on R&D activities
when calculating their profit for tax purposes. Companies that
are SMEs can, in certain circumstances, surrender this tax relief
to claim payable tax credits in cash from the HM Revenue &
Customs.
Global Watch Service
The DTI's Global Watch Service provides support dedicated
to helping UK businesses improve their competitiveness by identifying
and accessing innovative technologies and practices from overseas.
In addition to the supply of comprehensive information to UK companies
in the form of research and business initiatives, collaborative
programmes and funding sources, there are three main areas of
activity benefiting the Creative Industries:
Missions—enabling teams of UK experts to investigate
innovation and its implementation at first hand. The technology-focused
missions allow UK sectors and individual organisations to gain
international insights to guide their own strategies for success.
Recent missions relevant to the Creative Industries include e-Learning
(US), radio (Singapore and Korea) and Broadband (Japan and Korea).
Secondments—helping SMEs to send employees abroad or
receive key people from another country. Secondments are an effective
way of acquiring the knowledge, skills, technology and connections
essential to developing a business strategically. The Creative
Industries have benefited from these.
Technology Partnering—providing free, expert support
to SMEs seeking partnerships with world-leading organisations
overseas, delivered by a network of 22 specialist International
Technology Promoters (ITPs); helping companies to identify overseas
technology partners, develop or transfer technologies, products,
processes or management practices, and gain entry to new industrial
and geographical markets. For example, one of the ITPs, specialising
in the digital content area, has generated 80 such collaborations
between January 2004 and January 2006. Another major partnering
initiative is Knowledge Transfer Partnerships (KTPs), which enable
Higher Education Institutions to apply their wealth of knowledge
and expertise to important business challenges. As of January
2006, 13 KTPs are active in the Creative Industries.
Forward Looking Standards
Standards play a key role in encouraging innovation, opening
markets and creating competitive opportunities. They can be developed
in open fora that are representative of all those with an interest
in the standard, for instance through collaboration between business,
government and users. They may also be developed privately by
businesses wishing to address an individual need, or by closed
alliances of businesses to address a strategic aim. All of these
types of standardisation create a platform for knowledge sharing
that in turn enhances research and development. Importantly, standards
establish best practice, increasing efficiency and protecting
consumers by ensuring the reliability, safety, accessibility and
quality of products and services. Standards are principally a
matter for industry in terms of their actual development.
Convergence will demand a major shift from an emphasis on
how the services are carried to how they are accessed and used
by consumers themselves. This has the advantage of making it easier
and quicker to release products, but leads to more standards and
a greater likelihood of an individual product failing. Major issues
in this area include the carriage of content and services across
disparate networks (interoperability); connectivity and interoperability
between digital devices; finding content from increasing large
libraries of available material (metadata, standardisation); harmonisation,
ease of use and technology neutrality.
5. ACHIEVING BALANCE
BETWEEN THE
BBC'S ROLE
AS A
PUBLIC SERVICE
BROADCASTER AND
INNOVATION IN
THE PRIVATE
SECTOR
The area of New Media cannot be looked at without considering
the role of the BBC which has a huge role in commissioning and
creating content both for the general public and schools, as part
of a wider Public Service Broadcasting (PSB) landscape. Government
has a responsibility to ensure that the interests of broadcasters,
consumers and industry are all respected in this regard.
Importance of the BBC
The BBC is one of the country's most powerful creative engines
with over a 50% share in radio and 35% of television audiences
in the UK. It stimulates creative activity and innovation in business.
It plays an important role in knowledge transfer and supporting
creative excellence, and in developing cultural partnerships with
other public bodies working in support of the creative sectors.
The BBC's work stimulates the Creative Economy through its investment
in original programming and commercial ventures. It also invigorates
the creative sectors, influencing our culture, inspiring creativity
and curiosity in business and consumers. Through its broadcasting,
commissioning and education functions the BBC is able to engage
with diverse and difficult-to-access consumers, opening up untapped
markets to the wider creative sectors. BBC R&D's leading role
in technological development and innovation promotes a pioneering
creative sector which keeps the UK's creative economy at the global
cutting edge of digital progress and drives growth and productivity
across the Creative Industries.
Balance with Private Sector
While the BBC should have the ability to adapt its range
of services in order to remain relevant to licence fee payers,
it should only do so following proper scrutiny of the proposals,
including consideration of market impact. As part of Charter Renewal,
proposals have been made for new public services and major changes
to existing services to be subject to a Public Value Test (PVT)
before they are approved, including a market impact assessment.
6. GOVERNMENT AS
AN INTELLIGENT
BUYER
One of the most important ways in which Government can support
the Creative Industries is by acting as an intelligent and demanding
buyer in its own right and by ensuring that all members of society
have access to the benefits of digital technology through digital
inclusion. It is achieving these objectives mainly through the
HMG Digital Strategy.
HMG Digital Strategy
Alun Michael acts as Ministerial champion across Whitehall
for HMG's Digital Strategy,xi which aims to stimulate take-up
and use of digital technologies and services across society. This
presents significant opportunities for the Creative Industries
to help Government exploit new technology. With 99.6% of all households
connected to a broadband-enabled exchange, there is a solid foundation
in place as we try and drive up usage beyond current levels.
Three key strands of the Digital Strategy are of particular
relevance to the Creative Industries:
(i) DTI is raising awareness across Government departments
of the potential of innovative broadband content, for example,
audiovisual media, delivered on multiple platforms to enhance
the delivery of public services. [Action 4 of the Strategy]. This
is being pursued in partnership with the creative and the wider
ICT industries. Government's goal here is to help industry, especially
SMEs, to sell more effectively to the public sector; and for the
public sector to get better products and value for money. Industry
makes a convincing case that the creative use of broadband content/rich
digital media can make a difference to the efficiency (by reducing
use of more expensive channels, eg telephone) and effectiveness
agendas (by engaging citizens across all socio-economic groupsxii)
across Government departments.
(ii) The "Transformational Government—Enabled
by Technology" strategy [Action 5 of the Strategy] looks
at transforming public services and demonstrating how technology
can improve Government services so more resources can be released
to deliver "frontline" services. In a similar vein,
the transformation of learning [Action 1 of the Strategy] will
enable ICT to facilitate better ways of learning, whilst offering
better school-parent, school-higher education institutes and school-school
collaborations.
(iii) Government and industry stakeholders have committed
a total of £9 million (£4 million public sector contribution)
worth of support to the Digital Challengexiii [Action 2 of the
Strategy], which is being coordinated by ODPM. Based on the city
of culture model, a competition judged by an independent panel
will allow local authorities to display new and innovative services
delivered digitally and that can be transferred elsewhere. The
Challenge will look to develop a truly innovative digital vision
for an area/region/city that identifies how they could combine,
expand and utilise digital technology to combat exclusion and
deprivation and demonstrate the benefits to local industry and
all their citizens. The competitive nature of the Challenge will
naturally lend itself to attracting innovative, groundbreaking
projects, pushing the boundaries of creative technologies and
multimedia content, and provide an exemplar for others to follow.
Serious games
DTI and other Government departments—most notably DfES
and MoD—are becoming increasingly interested in the potential
to use games technology and content in non-entertainment applications.
For example, the MoD is working with games developers on interactive
training simulations and visualisation tools, eg to assist with
the training of army medics and is working with another developer
on a simulation game for firefighters. DfES is looking at the
possibility of an investment fund to support the take up of educational
games in schools. We are looking towards promoting a more coordinated
approach across Government on the exploitation of games-type content
and technology in non-entertainment applications.
The Creative Industries have a key role in all of the above
projects. There is a real opportunity to change behavioural approaches
to learning and interaction with public services; something that
can be facilitated through engaging content.
Many of the skills needed to properly commission the above
projects and initiatives are currently in short supply within
the public sector and this is one of the areas where effective
action needs to be taken.
Government advertising
The shift towards new media for advertising is a significant
recent trend. The latest figures from the Advertising Association
suggest a 50% year-on-year increase for online advertising to
£266 million for Q3 2005. This is against a backdrop of decline
or slow growth for all other forms of advertising.xiv Government
is of course a big purchaser of advertising, and in recent years
there has been considerable interest in the migration to online
advertising for many public sector jobs. In their trading statement
of 27 September 2005, EMAP stated that the 14% decline in recruitment
revenues was due to their public sector titles.xv
There is clearly potential for Government to make considerable
efficiency savings through the move to e-recruitment—following
the practices already well established in the private sector.
But in order to maximise the possible benefits, and avoid the
pitfalls, it makes sense for public sector officials to act as
intelligent and informed customers. Dialogue between industry
players (including publishers) and officials can help with this
process, and also helps the private sector by keeping a level
playing field, and giving maximum advance warning so that companies
can plan the necessary changes to their business models. Officials
from DTI have brokered dialogue between industry representatives
and major projects (eg NHS Online), and have published best practice
guidance to help with setting up new public sector e-recruitment
projects.
7. PROMOTING EDUCATION
AND SKILLS
The changes taking place in the creative world require a
capability not only to stay abreast of rapid technological change
but also to understand and identify the organisational changes
which technological convergence make inevitable.
The UK's Creative Industries are competitive and innovative
and have a global reputation for excellence based on high-level
craft, technical and creative skills. It is essential that these
skills continue to be developed if this global position is to
be maintained. UK industry is working hand in hand with Government
to help make the UK the perfect environment by ensuring we have
the right skills base.
There are two Sector Skills Councils (SSCs), owned and managed
by their industries, covering the digital Creative Industries.
They act together with these industries and the Government to
identify and manage the skills and productivity requirements of
the Creative Industries throughout the UK.
— Skillset is the Sector Skills Council for the
audiovisual industries in the UK. Skillset's footprint covers
10 sectors: film, television, radio, interactive media, computer
games, animation, photo imaging, commercials, corporate production
and facilities.
— Creative and Cultural Skills is the newly licensed
SSC covering advertising, crafts, cultural heritage, design, music,
performing, visual and literary arts.
They are both currently developing skills strategies to ensure
fit-for-purpose provision and opportunities for progression for
all learners including pre-16 year olds, 16-19 year olds, graduates,
new entrants and the existing workforce (employees or freelancers).
Alongside and relating to the work of Skillset and Creative
Cultural Skills, e-Skills is the SSC for IT, telecoms and contact
centres looking to promote the IT user skills every person needs
to participate in the e-economy.
8. PROMOTING TRADE
AND INVESTMENT
To exploit the capabilities of the UK's creative industries
in a global environment, UK Trade & Investment (UKTI) supports
companies in the UK trading internationally and overseas enterprises
seeking to locate in the UK.
For those exporting for the first time or businesses experienced
in international trade expanding into new markets, the trade arm
of UKTI helps develop export capabilities and provides expert
advice, reliable data, and professional research. Music and design
are two sub-sectors that benefit from the support of expert help
from dedicated sector advisers and several case studies highlight
recent export successes.
UKTI also actively targets inward investment from key overseas
companies in the creative industries sectors. Working with the
DTI, RDAs, devolved administrations, trade associations and other
specialists, UKTI's key role is to project the UK's strengths
in these sectors to new potential investors. In the games sector,
for example, the work involves supporting existing US, Japanese,
Korean and European games and design sector companies including
Electronic Arts, Activision, Sega and Nintendo. Examples of projects
include: supporting and co-organising with DTI a games mission
to Asia to promote UK strengths in the games industry to generate
interest in further foreign direct investment into the UK; also,
co-sponsoring a UK pavilion and related events at E3 in Los Angeles,
the world's largest computer games show.
CONCLUSION
The UK's creative industries are well placed to move forward
and take advantge of opportunities offered by technological development.
But there are many challenges—from access to capital, to
traditional business models, to traditional regulatory models,
harnessing the research base, exploiting innovation between the
creative industries and other sectors, skills, and the relationship
between the creative industries and the consumer. Government is
actively involved in helping to address these challenges and assist
the UK's creative industries to maintain and improve their current
high standing.
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