Do “the creative industries” really matter for city economies?

That bloody elephant in Nantes again. Image: Getty.

Creative industries have long held a special place in economic development. But recent discussions that I’ve been party to in relation to the industrial strategy have underlined to me how confused the thinking on the creative industries is. Here are three areas where this is particularly apparent.

The definition of the creative industries itself is a source of confusion. According to DCMS, it is a combination of nine different industries ranging from architecture to fashion design, and including crafts, libraries and museums in between. This creates confusion on two counts.

The first is the mixing of highly productive industries like computer programming with much less productive activities like artistic performance. One sells to international markets, while the other is much more likely to rely on public subsidy to make ends meet. For a policymaker concerned about increasing productivity, one is much more relevant than the other.

The second is the mixing of industries (e.g. architecture, computer programming) with employment in cultural amenities, such as museums. By grouping cultural amenities in with businesses, we very quickly get into boosterist language about the supposed economic impact of such institutions in order to justify their grouping with the industries.

This is positively encouraged by the government, which requests that bids for things like City of Culture status set out the economic impact they will have. So in order to get funding, bidding bodies need to play the game. The result? We get grand proclamations on the economic impact of a City of Culture programme, no doubt sourced from the pages of a report written by a handsomely-paid consultant (the same is true of lower productivity industries in the definition too).

But this sadly distorts objectives and unfairly expects cultural institutions or activities to do something that they just aren’t able to deliver. Investment in a library is not done for any direct economic benefit, while investment in a museum should not be expected to bring about culture-led regeneration. Yet all these things are all too regularly confused, with April’s House of Lords report on seaside towns being the latest example.


Crucially, playing on these terms means that this is an argument that advocates of culture, in particular, are likely to lose. There’s no way we should expect libraries, crafts or museums to be making a direct contribution to improving the UK’s productivity. The data shows that not only do these activities have below average productivity, it’s actually lower today than in 1990 (as we should expect). And yet strangely exactly these arguments are being made about activities that are simultaneously reliant on public sector subsidy to make ends meet.

Losing this argument is a shame because cultural investment is important – it is likely to have impacts on things like civic pride and it exposes people to new ideas and experiences, for example. These are worthy aims that all policymakers should be attempting to achieve. But we should be clear about the reasons that we are making such investment, and be reasonable regarding the impacts we expect it to achieve. In terms of the industrial strategy, increasing productivity is not one of them.

A final source of confusion is the conflation of creative industries and creativity.

In response to the critiques above, the conversation usually then segues into the importance of creativity in the economy. This is exactly right. Creativity and new ideas are what drive innovation, which in turn drives long-run productivity growth. And policy should look to support this.

But let’s be clear. Despite being similar in name, the creative industries have no exclusivity over creativity. And it is not clear that supporting these specific industries through a sector deal, for example, improves the creative capacity of a local or national economy. Instead, improving education across the country would seem like a much more direct way to do so.

I don’t say this to be unkind or because I have any particular issue with the creative industries; although I’m sure there are many that will take umbrage with the above. I instead say this in the hope that we can bring clarity to what it is that we’re trying to achieve with different policy interventions – be that productivity, cultural engagement or civic pride. Because if we don’t have this clarity of thought, we’re all just going to end up disappointed when our expectations don’t get met.

You can hear more on this topic on our latest podcast.

Paul Swinney is head of policy & research at the Centre for Cities, on whose blog this article first appeared.

 
 
 
 

What Citymapper’s business plan tells us about the future of Smart Cities

Some buses. Image: David Howard/Wikimedia Commons.

In late September, transport planning app Citymapper announced that it had accumulated £22m in losses, nearly doubling its total loss since the start of 2019. 

Like Uber and Lyft, Citymapper survives on investment funding rounds, hoping to stay around long enough to secure a monopoly. Since the start of 2019, the firm’s main tool for establishing that monopoly has been the “Citymapper Pass”, an attempt to undercut Transport for London’s Oyster Card. 

The Pass was teased early in the year and then rolled out in the spring, promising unlimited travel in zones 1-2 for £31 a week – cheaper than the TfL rate of £35.10. In effect, that means Citymapper itself is paying the difference for users to ride in zones 1-2. The firm is basically subsidising its customers’ travel on TfL in the hopes of getting people hooked on its app. 

So what's the company’s gameplan? After a painful, two-year long attempt at a joint minibus and taxi service – known variously as Smartbus, SmartRide, and Ride – Citymapper killed off its plans at a bus fleet in July. Instead of brick and mortar, it’s taken a gamble on their mobile mapping service with Pass. It operates as a subscription-based prepaid mobile wallet, which is used in the app (or as a contactless card) and operates as a financial service through MasterCard. Crucially, the service offers fully integrated, unlimited travel, which gives the company vital information about how people are actually moving and travelling in the city.

“What Citymapper is doing is offering a door-to-door view of commuter journeys,” says King’s College London lecturer Jonathan Reades, who researches smart cities and the Oyster card. 

TfL can only glean so much data from your taps in and out, a fact which has been frustrating for smart city researchers studying transit data, as well as companies trying to make use of that data. “Neither Uber nor TfL know what you do once you leave their system. But Citymapper does, because it’s not tied to any one system and – because of geolocation and your search – it knows your real origin and destination.” 

In other words, linking ticketing directly with a mapping service means the company can get data not only about where riders hop on and off the tube, but also how they're planning their route, whether they follow that plan, and what their final destination is. The app is paying to discount users’ fares in order to gain more data.

Door-to-door destinations gives a lot more detailed information about a rider’s profile as well: “Citymapper can see that you’re also looking at high-profile restaurant as destinations, live in an address on a swanky street in Hammersmith, and regularly travel to the City.” Citymapper can gain insights into what kind of people are travelling, where they hang out, and how they cluster in transit systems. 

And on top of finding out data about how users move in a city, Citymapper is also gaining financial data about users through ticketing, which reflects a wider trend of tech companies entering into the financial services market – like Apple’s recent foray into the credit card business with Apple Card. Citymapper is willing to take a massive hit because the data related to how people actually travel, and how they spend their money, can do a lot more for them than help the company run a minibus service: by financialising its mapping service, it’s getting actual ticketing data that Google Maps doesn’t have, while simultaneously helping to build a routing platform that users never really have to leave


The integrated transit app, complete with ticket data, lets Citymapper get a sense of flows and transit corridors. As the Guardian points out, this gives Citymapper a lot of leverage to negotiate with smaller transit providers – scooter services, for example – who want to partner with it down the line. 

“You can start to look at ‘up-sell’ and ‘cross-sell’ opportunities,” explain Reades. “If they see that a particular journey or modal mix is attractive then they are in a position to act on that with their various mobility offerings or to sell that knowledge to others. 

“They might sell locational insights to retailers or network operators,” he goes on. “If you put a scooter bay here then we think that will be well-used since our data indicates X; or if you put a store here then you’ll be capturing more of that desirable scooter demographic.” With the rise of electric rideables, Citymapper can position itself as a platform operator that holds the key to user data – acting a lot like TfL, but for startup scooter companies and car-sharing companies.

The app’s origins tell us a lot about the direction of its monetisation strategy. Originally conceived as “Busmapper”, the app used publicly available transit data as the base for its own datasets, privileging transit data over Google Maps’ focus on walking and driving.  From there it was able to hone in on user data and extract that information to build a more efficient picture of the transit system. By collecting more data, it has better grounds for selling that for urban planning purposes, whether to government or elsewhere.

This kind of data-centred planning is what makes smart cities possible. It’s only become appealing to civic governments, Reades explains, since civic government has become more constrained by funding. “The reason its gaining traction with policy-makers is because the constraints of austerity mean that they’re trying to do more with less. They use data to measure more efficient services.”  

The question now is whether Citymapper’s plan to lure riders away from the Oyster card will be successful in the long term. Consolidated routing and ticketing data is likely only the first step. It may be too early to tell how it will affect public agencies like TfL – but right now Citymapper is establishing itself as a ticketing service - gaining valuable urban data, financialising its app, and running up those losses in the process.

When approached for comment, Citymapper claimed that Pass is not losing money but that it is a “growth startup which is developing its revenue streams”. The company stated that they have never sold data, but “regularly engage with transport authorities around the world to help improve open data and their systems”

Josh Gabert-Doyon tweets as @JoshGD.