Culture, Media and Sport CommitteeSupplementary written evidence submitted by Martin Smith, Special Adviser, Ingenious This Supplementary Memorandum is written in a personal capacity .

1. The purpose of this Supplementary Memorandum is primarily to respond to a suggestion made by Mr Bradshaw during the oral evidence session on 18 December 2012 that the Committee be provided with a note on creative economy initiatives launched by government in recent years. What follows is a selected list of the principal policy initiatives, consultations, publications and other activities in which government was the author, the commissioner, the underwriting party, or acted in some combination of these roles. I have only listed initiatives and activities that relate to the creative industries generally, not activities particular to one sub-sector or another, eg games or music industry roundtables, of which there have been many. The time frame is 2005–12. I have also added a short note on the role of the Creative Industries Council (CIC) following questioning by members of the Committee.

2. The Labour government’s Creative Economy Programme (CEP) was launched in November 2005 with the purpose of creating “the best framework to support the innovation, growth and productivity of the creative industries”. It was closely associated with Secretary of State Tessa Jowell and especially with creative industries’ minister and, subsequently, Culture Secretary James Purnell. Its substantial work programme was organised in seven thematic strands under the headings of education and skills, infrastructure, competition and intellectual property, access to finance and business support, diversity, technology, and evidence and analysis. Numerous experts and industry representatives were engaged to sit on advisory working parties, each of which had produced its own report by the end of 2007. The CEP in its larger form continued formally until early 2008 when Creative Britain was published (see below), but beyond that at official level only.

3. In late 2006 the DCMS commissioned The Work Foundation to undertake an analysis of the nature of the creative industries—their size, the factors that had shaped their recent success, and the challenges that lay ahead. The resulting report, Staying Ahead: the Economic Performance of the UK’s Creative Industries, was written by Will Hutton and colleagues at the Work Foundation, with significant input from NESTA, the DCMS itself, the former DTI and HM Treasury, and published in June 2007. It remains an impressive piece of analysis. Not everyone agreed with it, then or now, and its focus on eight “drivers” of the creative economy is challengeable, but Staying Ahead carried indisputable intellectual authority and generated considerable excitement in the sector as a whole. For arguably the first time in the UK, the creative industries were firmly and squarely on the economicmap.

4. In April 2007 in association with the DCMS and the former DTI, Ingenious convened a Roundtable discussion under the title of Sustainable Investment for the Creative Industries? This six hour event brought together 40 specially invited experts—bankers, venture capitalists, academics, accountants, think tankers, officials, “creatives”, content industry managers and others—to consider the creative industries’ investment agenda from multiple perspectives but with a clear focus on building commercial business capacity. The then Minister for Creative Industries and Tourism, Shaun Woodward MP, attended throughout and was an active participant. A transcript of the Roundtable’s proceedings was published in June 2007 under the same title and can be accessed here http://www.wbceurope.com/downloads/CreativeInds.pdf . This attempt to begin building bridges between the financial and the creative communities was the first of its kind. It was organised and financed by Ingenious. Although the initiative was welcomed by all the participants, some of whom stressed that there was a need for it to be replicated many times over, it has not been followed up by government—or anyone else.

5. Staying Ahead was published in the expectation that it would closely be followed by a Green Paper. Following much delay this finally appeared, replete with 26 “Commitments”, under the title of Creative Britain: New talents for the New Economy in February 2008. It was a considerable disappointment. More of a marketing document than a Green Paper, it largely focused on supply side issues. There was little or no demand side analysis, no attempt to assess the UK’s competitive strengths and weaknesses on a global basis, and no attempt to address any of the issues being thrown up by the challenging economics of media business under the impact of digitalisation. Much of the best work done by the CEP working parties, for example on competition and IP, simply disappeared from view.

6. Commitment 24 of Creative Britain was that “We will initiate the launch of the World Creative Business Conference” aspiring “to the scale of the Davos World Economic Forum” with the ambition of combining “the UK’s strength as a world-leader in the creative and financial sectors”.2 Organised by the DCMS with two private sector partners, such an event did reach fruition under the brand name of C&binet (Creativity and Business International Network) at the end of October 2009. Described in a BIS press release as part of “the government’s ongoing work to position the UK as the key place where creativity meets global finance, and to help the creative industries face the pressures that could threaten their future success”, C&binet took place over three days at a country hotel in Hertfordshire. It attracted some serious international interest, and was addressed by Jean-Bernard Levy, then Chairman of Vivendi, amongst other industry heavyweights. It was attended by some 200 guests, two Secretaries of State and several ministers. Attendance was initially by invitation only but this rule was subsequently relaxed to allow a number of British Council Young Creative Entrepreneurs to attend.

7. C&binet was the first government-backed initiative to attempt to focus on the international dimension of the growing global creative economy, and a clear expression of the last government’s ambition to make the UK “the world’s creative hub”. A keynote address by Lord Mandelson seemed to hint at a new approach to industrial policy, beginning with a more robust approach to copyright enforcement. The event enjoyed a reasonably high media profile. It was the first major, government-backed creative industries’ event to be streamed and tweeted about at scale. The quality of the conference sessions was predictably variable, but the ambition of the event was commendable. It generated much of approving press commentary, some of it abroad, and sparked a considerable “buzz” in the emerging digital creative sector. Notwithstanding this success, C&binet has not been reconvened. Initially it was believed that the private sector would take it over but with clear government backing. It is not clear whether in the event the DCMS decided to junk it on grounds of provenance, cost, or lack of private sector enthusiasm.

8. If the publication of Creative Britain was regarded as anti-climactic by many in the creative industries’ community (though not by the advertising industry, which was enthusiastic), the Digital Britain programme which followed it did much to put this right. Led by Lord (Stephen) Carter in his capacity as Minister for Communications, Technology and Broadcasting sitting in BERR/BIS and begun in October 2008, this work had a complementary but different focus in that it was concerned in Carter’s phrase with the “pipes” as well as the “poetry”—with infrastructure and technology as well as content. The emphasis was on providing a rigorous analysis of the consequences of the digital shift. Carter was not concerned with the creative industries per se, at least as represented by the already dated concept of the “DCMS 13”, but was focused on content industries subject to the shift from analogue to digital.

9. An interim report was published in January 2009 by DCMS and BERR (as it then was). Chapter Three dealt with the economics of digital content, including a section on investment. Following months of consultation and further research, the final report to emerge from the Digital Britain programme was published by DCMS and BIS (as it had become) in June 2009. Chapter Four of the final document, entitled “Creative Industries in the Digital World”, propelled by a stated ambition to “make the UK one of the world’s creative capitals”,3 focused primarily on copyright infringement and how to stop it, but did so within the framework of a broader discussion of the inter-connected issues of creativity, licensing and new business models. Chapter Four was itself informed by a research report on the creative content value chain commissioned from consultants Analysys Mason under the title of Fostering creative ambition in the UK digital economy. Published as a separate paper, the Analysys Mason report contained a flow of funds model of the UK content value chain valuing the sector as a whole at £55.6 billion. Again, both Digital Britain itself and the Analysys Mason report on which it is partly based have all but disappeared from view.

10. No significant research or large scale policy review exercises comparable to Creative Britain or Digital Britain have been undertaken by the coalition government. Almost all specialist, senior level creative industry staff resource within DCMS appears to have been cut or redeployed since 2010; in BIS there appear to be no senior officials with creative industries backgrounds. This implies that much “corporate memory” of the work done by government over the last five to ten years has already been lost, and exposes such officials as remain to the risk of trying to reinvent the wheel in future. There is a fundamental mismatch between the government’s loosely stated ambitions for the sector and the official resources committed to delivering them.

11. The most significant coalition initiative has been the establishment of the Creative Industries’ Council following lobbying by Feargal Sharkey and others. This has much support within the sector but its membership base is too diffuse and it commands no resources of its own. It is all being done on the cheap. One role that the CIC has not been given is that of building bridges with the City and the wider financial sector. Yet, arguably, the greatest need in terms of “support for the creative industries” in the UK is for such bridges to be developed and maintained at scale with government backing. The UK will not remain competitive in the rapidly changing global creative economy unless the alternative asset classes represented in the creative industries, and especially the content industries, are understood, supported and invested in by the wider financial sector.

January 2013