Support for the creative economy

Written evidence submitted by the Crafts Council [SCE 028]

The Crafts Council is England’s national development agency for contemporary craft. It aims to build a strong economy and infrastructure for contemporary craft, to increase and diversify the audience for contemporary craft and to champion high quality contemporary craft practice nationally and internationally.

As the national development agency, the Crafts Council works to raise the profile of contemporary craft through critical debate and by building an evidence base demonstrating the nature and value of craft. It supports makers’ professional development, builds the market for contemporary craft by running fairs and promoting export, and works to encourage participation and learning, promoting opportunities for interaction and informal engagement with craft.

The Crafts Council welcomes the opportunity to contribute evidence to the Committee for Culture, Media and Sport’s inquiry into support for the creative industries. Our comments are specific to craft and cover value, skills and employment in the contemporary craft sector through responses to relevant questions posed by the committee. Our response draws on evidence from our Continuing Professional Development [1] (CPD) and education programmes as well as extensive Crafts Council research [2] investigating patterns of work and education, skills and training issues in the contemporary craft sector.

Introduction

Craft holds a strong position within the creative industries. In 2010, estimated income for UK craft businesses was £457 million, comparable to income of £512 million for London’s West End theatres and £316 million for music downloads. The combined Gross Value Added of craft (defined as how much value makers add by transforming their raw materials into finished products) was £220 million in 2010. [1]

Craft is also amongst the most entrepreneurial of the creative industries sectors. With 88% of all makers running their own businesses, [3] self-employment is almost three times more common in craft than across the creative industries as a whole, [4] and over six times more common than in the overall UK working population. [5] The growth of online retailing and digital manufacturing opportunities, combined with latent export potential, mean there is still considerable scope for entrepreneurial expansion.

Looking outwards, craft makers make a far greater contribution to other creative industry sectors than is widely realised, from supplying bespoke fabrics and accessories for the couture and film & television industries, to designing more realistic virtual materials for use in online gaming environments. In the wider economy, by partnering with industry they help to unlock innovation in biotechnology, healthcare, manufacturing [6] and tourism amongst other sectors. [2]

Despite its strengths, as a sector comprised mainly of sole traders, craft faces specific challenges. For example, there is little capacity at the individual business level for R&D, for investment in new technologies, or for developing the industry partnerships that are so crucial to innovation. Similarly, finance can be difficult to obtain.

The craft sector is also remarkably diverse-ranging from small-scale manufacturers to individual makers-for its relatively small overall size (23,000 businesses in 2010, compared to 232,000 businesses that define themselves as "design"). The sector also includes makers such as Tom Dixon [7] and Thomas Heatherwick [8] , both supported in their development by the Crafts Council, who progressed to embrace new disciplines in their work. Whilst this diversity gives the sector its vibrancy, it also inhibits sector cohesion and network building.

Consultation Issues

1. How best to develop the legacy from the Olympics and Paralympics of the display of UK talent in the creative industries in both Opening and Closing ceremonies and more generally in the design of the Games

The London 2012 medals created by craft makers Lin Cheung and David Watkins were key to the visual identity of the Games, but contemporary craft also played several other important roles at London 2012, including being highly visible at the British Business Embassy which included a showcase of 21 pieces of exceptional contemporary craft. BBE hosted over 3000 business leaders over the course of the Games, generating international trade and inward investment deals valued at £11 billion overall. The event was certainly successful in strengthening the profile of craft makers within the international marketplace, and in helping to sell their work-we would welcome similar events being hosted again in future.

Speaking at Assemble 2012: the Crafts Council conference, Arts Council England, London’s Executive Director Moira Sinclair highlighted the importance of craft to the Games. Ms Sinclair’s address connected the role of makers in the industrial revolution-as celebrated in the London 2012 opening ceremony-with those whose work featured in the Cultural Olympiad celebrating personal endeavour and collective skill. The success of these large scale contemporary works highlights the benefits of including craft in future programmes designed to showcase the UK"s creative industries. As she said, ‘Craft has played a pivotal role in celebrating UK plc, our talent and creativity, our skilled workforce and our unique way of seeing the world.’

2. Barriers to growth in the creative industries-such as difficulties in accessing private finance-and the ways in which Government policy should address them. Whether lack of co-ordination between government departments inhibits this sector

In many ways, the challenges faced by craft businesses in fulfilling their innovation potential and contributing to UK competitiveness are similar to those of other creative micro-enterprises.

Specific barriers to growth we believe can be addressed by Government policy include the following:

Access to finance:

Because they lack financial backing, sole traders can find it difficult to access bank loans and other sources of private finance. Creative sole traders suffer from the mis-perception that the commercial success of their work cannot be predicted from past performance [3] . Sub-contracting rather than employing others-and operating from home rather than from dedicated business premises (as 21% of makers do)-can further raise perceived risk for smaller businesses. The relatively slow growth trajectory typical of many creative businesses in their early years is also a perceived issue for investors.

Improving access to finance significantly increases makers’ capacity to invest in the equipment, training and R&D that creates growth. We can say this with confidence because craft businesses already have a track record in making the most of financial investment. [4]

Some measures are in place, notably Arts Council England’s pilot Creative Industry Finance scheme in which the Crafts Council is a promotional partner. This scheme will deliver business development support to around 100 creative enterprises and loan finance to an estimated 35 – 40 businesses in Yorkshire and Humber and the Greater London area. It represents a significant step forward, but requires a commitment to expansion, informed by its year-long pilot phase, if it is to achieve its aims of enabling sustainable business growth and supporting talent development.

Government could take a leadership role on addressing access to finance amongst creative content producing businesses-including creative enterprises-by supporting and expanding this scheme beyond its pilot phase. In particular, we would recommend that Government and the sector work together to bring a wide range of funding and investment partners into the scheme and use findings from the pilot to improve the visibility and appreciation of the sector’s business successes with these partners as well as with analysts and business journalists.

Accessibility of growth schemes and incentives:

Certain growth schemes are not open to sole traders. The Regional Growth Fund, for example, is open to sole proprietors for projects valued at £1m or more, a scale of project that would inhibit most craft makers from applying. It is also open to consortia of SMEs-including micro- enterprises-but requires a level of investment in management and co-ordination time that most sole traders are unable to commit. We would suggest that Government policy is adjusted to enable individual SMEs to contribute to the success of such schemes.

Other schemes are open to SMEs but have low visibility amongst ‘arts’ based businesses, who are less likely than businesses operating in more commercially-oriented sectors to engage with business support networks. These schemes include the Make it in Great Britain Challenge, the relented Manufacturing Advisory Service and the new Catapult innovation centres, as well as the Department of Business, Innovation and Skills’ business mentoring for companies moving into new markets, and UK Trade & Investment’s online peer-to-peer self- help community for exporters.

The challenge here lies in marketing these schemes in ways that genuinely engage a wide range of businesses. While sector support agencies including the Crafts Council are active in ‘getting the message out,’ many makers and other independent creative businesses still assume these schemes are ‘not for them’.

We recommend that Government works with sector support agencies to establish the most effective way of collaborating, in order to address this barrier to growth. These agencies, if well connected with the businesses in their sector, can act as trusted intermediaries and brokers here as the Crafts Council is currently doing with the Creative Industries Finance pilot. We also recommend that Government departments ensure that appropriate sectoral expertise is embedded in the work of departments originating growth policies and schemes.

The evolution of Business Link into an online service provides a good opportunity for this approach to be tested, with content being developed and positioned in a way that meets a range of different sector needs.

Unfulfilled export potential:

Online selling has created a global export market that, according to research, may offer stronger growth opportunity for makers than UK domestic sales. [5] The UAE and the BRIC countries are seen as being particularly strong emerging markets for British craft.

Wide disparities in export rates across the UK suggest that there is significant latent growth potential in this area. In England, whilst exporting makers currently generate an average of 20% of their business revenues from international sales, only around 30% of UK makers currently export. [6]

Again, there is a strong need for makers to be encouraged and supported in identifying and engaging with export opportunities. In addition, there is a need to build skills and confidence at the individual business level. UKTI’s new export support programme-incorporating trade show access and market research funding-is a great opportunity for makers that, like the growth schemes mentioned above, requires brokering from trusted sector agencies.

We recommend that Government works with these agencies on strategies for engaging creative sectors with this and other export-related programmes. On a strategic level, we recommend that it tasks UKTI with continuing to develop its work with creative industries sector trade bodies, to ensure rolling programmes of support that enable long-term strategic planning. We see the GREAT campaign-led by the DCMS but involving a range of other agencies-as a strong example of strategic collaboration at the departmental level.

3. The impact on the creative industries of the independent Hargreaves Review of Intellectual Property and Growth, and the Government’s Response to it. The impact of the failure, as yet, to implement the Digital Economy Act, which was intended to strengthen copyright enforcement. The impact of proposals to change copyright law without recourse to primary legislation (under the Enterprise and Regulatory Reform Bill currently before Parliament).

Overall, the level and complexity of Intellectual Property is lower than in other creative industry sectors. However, where makers collaborate with manufacturers or designers in other sectors, we would stress the importance of protecting the IP rights of those makers.

4. The extent to which taxation supports the growth of the creative economy, including whether it would be desirable to extend the tax reliefs targeted at certain sectors in the 2012 Budget.

The majority of available tax reliefs are not accessible to craft businesses.

For example, R&D tax credits-designed to catalyse innovation amongst small and medium enterprises (SMEs)-exclude sole traders as they are only available to companies liable for Corporation Tax. Business rate relief, meanwhile, is not available to the 21% of makers who work informally from home. We therefore recommend retaining the 2012 tax reliefs and extending them to allow home business premises to qualify for business rate relief, and R&D tax credits to be made accessible to businesses not registered for Corporation Tax. We also recommend continuing current tax relief for start-up SMEs and extending these for a further year.

Finally, we recommend that any tax reliefs designed to stimulate growth in the creative industries be made available to the entire sector. The current focus on tax relief for media companies disregards the established creative economy model in which the creative output of some sectors drives innovation and growth in others. [7]

5. Ways to establish a strong skills base to support the creative economy, including the role of further and higher education in this.

Work-readiness (university graduates):

Craft makers are a highly qualified group: just over 60% have a bachelors’ or post-graduate degree in craft, art or design.

Our research shows that the majority of graduates from undergraduate craft degree courses value their education in terms that relate to both their creative development and their capacity to run a business. These graduates value opportunities to learn in a real industry setting, through placements and through taking part in exhibitions and shows. They feel equipped as independent, self-motivated project managers, juggling multiple priorities.

Research shows that craft Higher Education produces highly entrepreneurial graduates, and as such is meeting BIS’s calls for graduates to overcome a ‘big firm mentality’ and move towards entrepreneurship. Our overall contention is that the priority for undergraduate students should be on developing an innovative practice that is aware of-and responsive to-relevant commercial social and cultural frameworks. Business awareness should be part of this process, but not to the exclusion of core creative and craft capabilities.

The study of craft at degree level is at risk within the current changes in Higher Education. Like other creative arts subjects, craft is typically hosted by the post 1992 universities / former polytechnics known as the Million+ group making the success of this group vital to continued innovation and development in the sector. These HEIs attract neither substantial research funding nor the levels of academically high-achieving students whose numbers are uncapped by Government and have in many cases been adversely affected by policy developments on ‘core and margin’ student recruitment policies, yet they can often produce the most creative graduates.

We would recommend that BIS recognises the threat posed to the creative industries by erosion of teaching within the Million+ group of universities, and takes steps to safeguard their future in its allocation and guidance to the Higher Education Funding Council for England (HEFCE).

Work readiness (school leavers):

Teaching in schools is an important driver for take-up at HE and ultimately for professional practice. The Crafts Council believes that at present schools-based education does not adequately equip young people with the requisite understanding and skills for a career in the creative industries in general and craft in particular.


We are concerned that recent education initiatives including the framework of the National Curriculum Review; the introduction of the E-Bacc; recommendations in the Wolf Review and declining numbers of arts teacher training places in 2011/12, threaten the provision of practical and cultural education in schools. Whilst we believe that all young people must be proficient in literacy and numeracy, they also require a broad range of opportunities to discover where their abilities may lead them to excel. Such craft skills may also contribute towards the growth of other sectors beyond craft.


The Crafts Council believes that practical skills, including craft skills, should form an integral part of the National Curriculum to Key Stage 3 as part of a cultural offer in the curriculum. Whilst we do not advocate compulsory craft teaching at Key Stage 4; when craft is taught at this level it should be as an independent subject accompanied by a recognised Programme of Study to provide proper guidance to schools.

Apprenticeships:

The issue for craft apprenticeships, in particular, is currently more about supply than demand. A sector composed of sole traders and micro-businesses does not have the capacity or resources to host apprenticeships and interns under current schemes. This is often due to space and time, rather than lack of ability to train or share knowledge. Most makers desire some form of assistance but are unable to afford the salary contributions to apprenticeships, and are deterred by the formal commitments to training under the scheme.


As an alternative to sit alongside apprenticeships, we recommend building on the unaccredited work placements common in the craft sector-particularly post-degree. The formalisation of work placements would provide structure and recognition for existing training.

This type of skills system should prioritise gaining tangible skills over accreditation. The accreditation of qualifications through NVQs, for example, has been too focussed on gathering evidence of competencies rather than gaining relevant skills.


Also, many current schemes overlook the fact that entry into craft is often a second career and, by capping the joining age, exclude people wishing to bring manufacturing or service skills into the sector. At the same time, we would wish to see greater flexibility and capacity for transfer between apprenticeships and academic routes, thus increasing the opportunities to develop skills. Addressing this would increase the diversity of skills in the sector.

Continuing Professional Development (CPD):

Like other creative professionals, craft makers are lifelong learners and continue to develop professional and technical skills throughout their careers. However, they rarely allocate budget to CPD; relying instead on skills swaps, grants, awards and highly subsidised offers. [8] This tends to make CPD provision unsustainable, and means that makers are often reactive and opportunistic in their take up, undertaking inappropriate courses purely because they are available.

Partly as a result, makers at all career stages report a need to develop additional business skills-47% feel they need to develop new skills in this area, with 25% specifying a need for training in marketing (including web design) and 6% in book keeping or accountancy [9] . This is particularly significant, given that nearly 90% of makers meet all their business administration needs themselves, and that less than a third receive any business skills training whilst running their businesses.

Our view is that specific, timely and appropriate forms of CPD are crucial to the business and creative growth of the micro-enterprises prevalent across the creative industries. It is a concern that cuts to public expenditure and additional calls on philanthropy mean that these opportunities are currently contracting.

The work involved in enabling craft makers to develop capacity to collaborate and export, both online and offline, is intensive, expensive and important. The government is creating opportunities to fund it-through NESTA, the Research Councils and the Technology Strategy Board, as well as through business growth incentives administered by BIS. However, our experience shows that these schemes and incentives will succeed in the craft sector only when brokered by business representative bodies. Craft businesses themselves, as outlined above, are not only under-connected to business information sources, but also often lack the time or skills to assess the relevance of tax breaks, employment incentives and loan schemes to their business. Schemes such as the ACE Creative Industry Finance initiative-supported by the Crafts Council as a promotional partner-are appropriate models for engaging these businesses with business development tools and skills.

6. The importance of "clusters" and "hubs" in facilitating innovation and growth in the creative sector. Whether there is too much focus on hubs at the expense of encouraging a greater geographical spread of companies through effective universal communication.

Makers in England are located across the country, with many small clusters and larger discernable hubs in London, East Anglia and Cornwall, and there is no central Government funding for business-focused geographical clusters or hubs in craft.

We recommend prioritising effective universal communication over such investment, because craft is too small and diverse for geographical clustering to be effective. We would instead prioritise high speed broadband connectivity throughout the craft sector, including for businesses in remote areas.

The Crafts Council has recently become a steering group member of The University of the West of England’s AHRC hub, Research and Enterprise in Arts and Creative Technologies (REACT). Based at the Pervasive Media Studio at Watershed in Bristol, REACT works with the HEIs of Bristol, Exeter, Bath and Cardiff as well as the Watershed Media Centre and a range of other creative industry partners. This type of research hub is a new initiative, and we would recommend that the AHRC reports to BIS on its overall effectiveness, following the four year initial funding period.

7. The work of the Creative Industries Council (CIC) and other public bodies responsible for supporting the sector.

The CIC:

We agree with Vince Cable’s assessment that-after 18 months of operation-now is an appropriate time to consider the CIC’s future development.

We agree with Mr Cable that the CIC has undertaken some good work, but feel that it is limited by its focus on particular creative industry sectors, namely film, music, television, design and games. We, like the Work Foundation, [10] would argue that less commercially hard-hitting creative industries sectors also play a vital role in the creative economy, sustaining entrepreneurship, supplying other creative sectors with materials and ideas (or ‘expressive value’), and promoting UK plc.

Currently, only one of the CIC’s 35 members (Arts Council England) represents the arts. Creative Skillset (the sector skills council for the media and fashion industries) was invited to join the group this year; Creative & Cultural Skills (the SSC for craft, design, music, performing and visual arts, cultural heritage and literature) was not. We recommend refocusing the CIC’s membership, to enable the whole sector to join up and collaborate on meeting policy goals. Specifically, we suggest working with Arts Council England to identify and appoint representatives of the missing creative industries sectors to the Council.

Other public bodies:

The contemporary craft sector is represented at a local level by various maker-led guilds and other member organisations, many dating back to the 1920s and focused on a particular county or material. These organisations are typically unconnected with each other, or with broader policy agendas, and operate idiosyncratic membership selection policies.

In addition, a small number of regional organisations-such as Craftspace in the West Midlands and Designed and Made in the North East-work in a more ambitious and strategic way, delivering regional sector support and education programmes.

The Crafts Council itself has developed substantial reach across the craft business community over a 40 year period since its inception in 1972.

Crafts Council’s COLLECTIVE programme, launched in 2009, offers makers choice and control about undertaking Continued Professional Development (CPD). The programme includes different types of support, all of which can be tailored within a structured framework and provide a strong emphasis on reflective learning and peer support. The programme includes:

· Hothouse, support for emerging makers, (within two years of setting up a craft practice) now entering its third intake. The scheme operates nationally working with partners including Higher Education Institutions (University of Hertfordshire/Liverpool Hope University/Plymouth University); galleries & retailers (Bluecoat Display Centre/Smiths Row); Studio groups & specialist support agencies (Yorkshire Artspace/Benchpeg). Applications have increased incrementally over the last three years in response to greater awareness, positive advocates in past participants and greater reach across the country.

· Portfolio, which provides opportunities for makers seeking to use their craft skills and material knowledge in collaboration with other sectors including, to date, focus on education, architecture and currently Internet of Things.

· Injection, which provides intensive business support to encourage and enable growth for makers who have already developed an established practice, but who are seeking particular assistance with an identified area of growth. This is being piloted this year (2012) in connection with Creative Industry Finance.

In addition, the Crafts Council’s e-newsletter reaches 25,000 people each month, many of whom are makers. Its social media presence connects it with 25,000 Twitter followers and 7,000 Facebook fans (as of October 2012). Through these communication routes, the Crafts Council ensures that craft businesses hear about new policy initiatives and government initiatives, that the relevance of these initiatives is made clear, and that ambition to take part is raised.

Conclusion

At a time when the creative industries in all their guises have contributed to an incredibly successful Olympic and Paralympic Games it is lamentable that Government policies seem to be working against the growth in development of the creative industries through the promotion of the E-Bacc and higher education funding policies. The creative industries have been a driving force for growth over the last two decades, but Government’s understanding and appreciation of the creative industries has faltered when under pressure. The creative industries provide and can continue to provide employment and economic growth for the UK.

November 2012


[1] www.craftscouncil.org.uk/professional-development/maker-development/crafts-council-collective/

[2] www.craftscouncil.org.uk/professional-development/research-and-information/r-and-i/

[3] Craft in an Age of Change

[4] DCMS Creative Industries Economic Estimates December 2010: www.culture.gov.uk/publications/7634.aspx

[5] Labour Market Statistical Bulletin, June 2011: www.statistics.gov.uk/StatBase/Product.asp?vlnk=1944

[6] www.assemble.org.uk/

[7] www.tomdixon.net/

[8] www.heatherwick.com/


[1] Burns Owen Partnership (2012): Craft in an Age of Change. London , Crafts Council.

[2] Morris Hargreaves McIntyre (2010): Crafting Capital. London , Crafts Council.

[3] Burrows, H and Ussher, K (2011): Risky Business. London , Demos.

[4] Cockpit Arts (2010): The Cockpit Effect 2011. London , Cockpit Arts.

[5] Morris Hargreaves McIntyre (2010): Crafting Capital. London , Crafts Council.

[6] Burns Owen Partnership (2012): Craft in an Age of Change. London , Crafts Council.

[7] Work Foundation (2007): Staying Ahead: the Economic Performance of the UK ’s Creative Industries. London , Work Foundation.

[8] Creative & Cultural Skills (2009): The Craft Blueprint: a Workforce Development Plan for the UK . London , Creative & Cultural Skills.

[9] Burns Owen Partnership (2012): Craft in an Age of Change. London , Crafts Council.

[10] Work Foundation (2007): Staying Ahead: the Economic Performance of the UK ’s Creative Industries. London , Work Foundation.

Prepared 17th November 2012