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.

 
 
 
 

Home-working and uncertainty: How will coronavirus affect jobs around the country?

A quiet commute: the M8 motorway in Scotland. Image: Getty.

This week’s unprecedented announcement by the Prime Minister on how we need to live our lives over the coming weeks and months will have profound impacts up and down the country. The geography of this will vary depending on the structure of different local economies. This blog looks at three areas where this will play out – self-employment, the ability to work from home, and the rise of remote working.

Self-employed people in the North and Midlands are more likely to be in insecure, lower-paid roles at high risk from economic shocks

The economic impact of Coronavirus on self-employed people has received a lot of attention in recent weeks. And while the Chancellor stepped in to extend Statutory Sick Pay (SSP) to this group and people working on zero-hour contracts, they still stand to lose almost two-thirds of their current earnings.

Britain’s self-employed population is disproportionately located in London; of the almost 5 million self-employed people across the country, almost a million live in the capital. London accounts for just over 15 per cent of all workers in the UK, but for approximately 20 per cent of all self-employed people. Along with Worthing and Brighton, almost one in five people in work are self-employed in the capital. 

In contrast, self-employment is way less popular in other parts of the country: in Gloucester and Hull, for example, less than 7 per cent of people are self-employed.

But while cities in the North and Midlands might have lower rates of self-employment, those who are self-employed in these places are more likely to be in precarious situations. Of all the self-employed people in Burnley and Blackburn, only two in ten also have access to additional income as employees.

By contrast, four in ten do in Cambridge. In addition to that, they are also more likely to be in lower-skilled, lower-paid occupations, such as in the hospitality, personal care and transport sectors, meaning they are more vulnerable to economic shocks.

Share of self employed people that are self employed only. Image: Centre for Cities.

Cities in the Greater South East are more likely to be able to shift to working from home

The Prime Minister asked those who can work from home to do so. But how likely is this across the country?

The jobs that could be more easily done from home – such as consultants or finance – are concentrated in cities in the Greater South East (see the figure below). Assuming some sectors could completely shift to home working if necessary, up to one in two workers in London could shift to working from home. Meanwhile in Reading, Aldershot and Edinburgh over 40 per cent of workers could too.

On the other hand, less than 20 per cent of all workers in Barnsley, Burnley and Stoke could work from home, suggesting the economies of many northern cities are likely to be hardest hit by a complete lockdown. Manchester, Leeds, Warrington and Newcastle are the exceptions as they have a higher share of jobs that could shift to home-working, reflecting the slightly different structure of their economies compared to other northern cities.

Estimate of workers that could work from home 2018. Image: Centre for Cities.

Once Coronavirus has peaked, face-to-face interaction will continue to be more important than ever

The arrival of Coronavirus has sparked debate in the comment sections of newspapers about the benefits of home working.


This is nothing new. In the late nineties the death of distance was declared by many because of internet-driven improvements in communications. And yet, despite their further advancement since, jobs (particularly high-skilled ones) have continued to cluster in cities.

This is because of the benefits that cities offer – such as face-to-face interaction. While this might seem intangible, no doubt many readers who have been grappling with trying to communicate with colleagues working from home in recent days will now be all too aware of the benefits of being in the same room as their team. So, while technology no doubt makes this strange period a little easier than it would otherwise have been, by the end of it we are likely to be reminded of the value of face-to-face meetings to help us get things done.

Elena Magrini is a senior analyst at the Centre for Cities, on whose website this article originally appeared.

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