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Cultural and Creative Economy (Culture, State of the South West 2011)

11.5.1 The cultural sector’s economic importance to the South West, and notably digital and creative industries, is recognised in key regional economic and cultural documents including the Regional Economic Strategy (SW RDA, 2006), the regional cultural strategy - A better place to be - (Culture South West, September 2008b) and the regional cultural infrastructure development strategy - People, Places and Spaces - (Culture South West, September 2008a). There are concentrations of economic activity in Bristol and Bath, specifically identified as creative Growth Hubs in National Endowment for Science, Technology and the Arts (NESTA) reports (Chapain et al, November 2010) and in the Growth Review (HM Treasury and BIS, December 2010). Given the region’s cultural strengths and the ‘spillover’ effects to other high-growth industries, such as tourism and knowledge-intensive industries, there are considerable opportunities for business start-ups, new jobs and increased inward investment. This section summarises the economic aspects of culture and creative activity across South West England.

11.5.1.1 According to CASE analysis, employment across all culture and sport sub-sectors, between 2006 and 2008, decreased by 1% from 190,112 to 188,856. This was one of the lowest changes outside of London and the
South East (where employment increased). Outside of London and the South East, the South West has the highest regional employment in heritage of all English regions (in 2008 of 7,880) and the second highest for the creative sector at 137,848. The number of VAT-registered businesses in the culture and sport sector increased by 17% from 13,221 to 15,491, with the highest increase in creative businesses at 18% (CASE, September 2010).

11.5.1.2 Cultural and creative businesses are mainly small and owner manager enterprises, many not registered for VAT or operating PAYE, and hence statistically ‘invisible’ (that is, not included in official data sources such as the Inter-Departmental Business Register (IDBR) and Annual Business Survey (ABS). Although official economic counts of, for example, employment and businesses, are under-estimations, they serve as useful indicators of size and growth patterns.

11.5.1.3 Looking at the creative industries, CASE analysis found 13,086 VAT-registered creative businesses in the South West (CASE, September 2010), employment of 137,848, and a 7% increase in GVA between 2005/6 and
2007/8. Comparison with previously cited counts is not possible because CASE’s data are based on a narrower definition than previously used by DCMS in the Creative Industries Economic Estimates Bulletins, and do not take account of non-VAT registered companies and freelance workers, and nor do they include those working in creative occupations outside of the ‘core’ creative sector. Putting methodological issues aside, CASE base data allows comparison between regions and annual tracked changes.

11.5.1.4 Business models in the cultural sector vary considerably, from public-funded organisations and agencies, through social enterprises and charities, to large and small private companies. Outside of London and the South East, the South West remains one of the most economically successful regions for cultural enterprise, with strengths in creative industries (particularly crafts, publishing, software computer games and electronic publishing), heritage and cultural tourism. CASE analysis, shows variations between local authorities, with high concentrations of employment and businesses in Bristol, Bath and North East Somerset, Wiltshire, Bournemouth and Poole. Although there are caveats concerning data reliability at local level, as well as definitional accuracy, data show culture and sport enterprise is widely dispersed across the region’s urban and rural areas.

11.5.2.1 Creative industries’ is an industrially defined grouping and referred to as ‘creative’ within CASE’s categorisation. The subject of much academic and independent research, creative industries is a priority high-growth sector within Government’s Growth Review, and important driver of the UK and South West economy. With the announcement of a new strategic body, Creative England, by DCMS (Ed Vaizey MP, Minister for Culture, Communications and Creative Industries, 29 November 2010), and Bristol identified as the creative ‘hub’ for southern England, this sector offers considerable scope for new business start ups and employment growth.

11.5.2.2 The term ‘creative industries’ refers (DCMS, 2001: 4) to 'those industries which have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property'. Thus, the core sector incorporates: advertising, architecture, craft,
design, dressing/making, literature, publishing, radio & TV, software computer games & electronic publishing, video film photography, art & antiques, designer fashion, music visual & performing arts. A wider notion is that of the ‘creative economy’, embracing those indirectly engaged in creative occupations but that lie outside the core creative industries.

11.5.2.3 Of local creative units in South West England, directly engaged in the South West’s creative industries (excluding non-VAT registered businesses and the self-employed), 61% are found in urban areas (compared to an England average of 80%). This finding correlates with the South West’s rural geography and low number of large urban centres. As most businesses in the region are micro sized and employ less than 10 people (Creative & Cultural Skills, 2009), the counts are likely to be significant under-estimations.

11.5.2.4 Clusters of creative business are associated with urban centres, and particularly in Bristol and Bath that rank in the top nine creative ‘hubs’ outside London. While urban creative clusters have long been linked to economic development, innovation and urban regeneration, other factors are stimulating cluster development in more rural areas such as Cornwall and Dorset. Certainly, recent research of non-urban based clusters point to the effect of social and cultural motivations on clustering and networking patterns.

11.5.2.5 A blended ‘creative and cultural industries’ sector profile, compiled by Creative & Cultural Skills (2009), provides data on a specific Sector Skills Council ‘footprint’ that is different to the DET model. The ‘footprint’ comprises: design, music, craft, literary arts, performing arts, cultural heritage, visual arts and advertising. Thus, employment in this analysis, cites a workforce of 60,690 that grew by 19% between 2006 and 2008. A GVA per employee of £25,050 is reported, with certain sub-sectors, such as cultural heritage, contributing non-economic values - social capital, community cohesion and enhancements. Employment patterns vary with: self-employment rates of 76% in visual arts, down to 21% in advertising; 32% of the workforce are part-time workers and particularly in music; 98% are from White backgrounds; 59% are male; 46% are under the age of 40 years. Of the 21,620 businesses identified from a number of different sources, 88% employ less than five workers and 93% employ less than 50 workers.

11.5.2.6 Notwithstanding definitional debates and statistical disparities, economic mapping exercises consistently show growth across the value chain of origination, production, reproduction, marketing, distribution and sales. According to NESTA commissioned research, the creative industries account for 6.4% of the UK’s economy, and ‘…between 2009 and 2013, the UK's creative industries will grow (in terms of GVA), on average, by 4%, more than double the rate of the rest of the economy’. The South West has a national and international reputation for animation and factual and natural history television, publishing and crafts. Research reported on the IDea 'Creative Industries: a guide
for investing' website, shows regional specialisations in software, computer games and electronic publishing (Bristol and Bath area), architecture, music, visual arts and publishing.

11.5.2.7 Global recession and increased competitiveness are said to adversely and especially affect the cultural and creative industries. While there is limited robust evidence of the impact of these issues on the creative economy in South West England, findings from national studies are likely to apply (Leadbeater and Meadway, December 2008). The creative sector faces problems of: under capitalisation; access to finance; Intellectual Property rights issues, lower levels of corporate sponsorship; out-moded business models; competition from outside the region and UK; under investment in workforce training and apprenticeships. In addition, the sector’s high
number of micro-sized businesses, dispersed location, and reliance of some sub-sectors on public commissions and severely hit parts of the economy (for example, advertising, design, and architecture), are said to make the creative industries vulnerable to the present economic climate. However, the flourishing creative clusters in Bristol and Bath, and their known ‘spillover’ effects to other high-growth sectors including manufacturing and knowledge-intensive industries, indicate positive economic trends in certain parts of the South West (Chapain et al, November 2010, NESTA, October 2009).

11.5.2.8 The Arts & Business annual survey, Private Investment in Culture Survey 09/10, found that private investment in the South West increased by 25%, compared to an overall GB decrease of 3%. Of the £22.2 million invested, 32% was from corporate sources, 23% from private philanthropy and the remainder from Trusts and Foundation. Breakdown of investment in different artforms shows the major share (34%) was given to theatre and drama (compared to national average of 8%) and 3% to heritage (compared to a national average of
32%).

11.5.2.9 Location and crew services (for film, television and corporate film productions), generates considerable inward investment to local economies, particularly in rural and coastal areas. Production filming generated an estimated spend of £62 million in 2009/10 (South West Screen, 2010).