MAKING BRITAIN THE WORLD'S CREATIVE HUB
By James Purnell, Minister for Creative Industries, Keynote Speaker at IPPR London.

 

It’s eight years, almost to the day, since Chris Smith launched the Creative Industries Task Force.  I was at the first meeting and sat there slightly star-struck to be in the same room as the likes of Paul Smith and Alan McGee.  At the end of the meeting, I turned to Alan, the founder of Creation Records, explained that I worked at Number 10 and asked if I could come and pick his brains at some point.

A few weeks later, I found myself at his Primrose Hill office, surrounded by pop memorabilia from my youth.  The meeting started half an hour late, and after ten minutes we’d run out of things to say.  I suddenly realised that he had no idea who I was or why I was there.  So, instead of trying to prolong the meeting, as I had been doing, I decided to try to bring it to an end as quickly as possible.  I mumbled something about “if there was ever anything I could do, or if he had any other ideas, then to get in touch”.  He looked at me confused and said: “Well, I suppose so, but really most of this stuff is personal.”  To my horror, I realised he had misunderstood me and thought I was after a souvenir.

He searched around, and hit upon an Oasis gold disc and said “I could give you this, but, ah, no, sorry, it’s signed by Liam and Noel, really, I’d like to keep it.”

Unfortunately, that’s slightly what happened to the Creative Industries Task Force.  It got lost in showbiz.  It became caught up in the whirlwind of Cool Britannia.  Some of this was our fault – we allowed the impression to be created that we were more interested in parties than in policy.   Despite our best efforts, people thought the creative industries were all about a London elite, rather than about jobs and manufacturing in every region of the country.

The creative industries dropped out of our core script.  But underneath the radar, local and national government continued to have faith in these sectors, and continued to invest in them. In fact, your industries have contributed to a quiet revolution in the shape of our economy.

Look at the way the creative industries have helped to transform Manchester, Gateshead or Glasgow.  Over the last decade, your sectors have grown twice as fast as the overall economy.   Today, they employ 2 million people – and account for a twelfth of our economy, more than in any other country.

Once we were known as the workshop of the world; but many of those industries have shrunk or disappeared.  It would be a terrible day if in twenty or thirty years time, people were saying the same about our creative industries.  If they were saying, remember when we used to have the world’s best advertising agencies.  Or remember when Britain’s television or design were the envy of the world?

That is a genuine threat. In terms of sheer volume, Bollywood is the biggest film industry in the world.  China turned out over 2 million graduates last year.  South Korea has one of the best on-line content industries in the world and a digital infrastructure of which most Western countries can only dream. 

But the UK’s current strength in creative industries is also a real opportunity.  The UN estimates that creative industries account for 7% of global GDP and are growing at 10% a year.  As people grow richer and become better educated, they spend more of their income on leisure activities.

So, the opportunity is clear – these markets will continue to grow, and Britain is good at them.  Tessa Jowell and I therefore want to set an ambitious but achievable goal today: to make Britain the world’s creative hub.

 

To meet that goal, there are two questions we need to answer: what makes Britain creative, and how can we turn that creativity into industrial success.   In other words, how can we turn talent into hits and hits into profits.

We invited you here to get your help to answer those questions.  In parallel, we want to make this a national priority for DCMS  bringing together stakeholders to ensure that we address these problems as a whole, rather than in fragmented initiatives.  Our aim is to give the Department a genuine economic edge.

In doing so, we aim to support the review which George Cox, the chair of the Design Council is carrying out for the Chancellor into how all businesses can make better use of creativity.

The Cox review reminds us that all industries are creative.  Inventing a new drug is a creative process as much as recording a new album.  70% of the value of a new car comes from its design and technology.

DCMS is therefore not the only creative department.  However, I hope you’ll forgive me if today I use the term creative industries to talk about the sectors in which you work.
 

The World’s Most Creative Nation?

Britain is arguably the world’s most creative nation.  America may have bigger creative industries, but we punch well above our weight.

At the time of writing, Coldplay is the number one album on the i-Tunes store in the US. Britain pens more hits than anyone other than the US. In 2004 we won 6 out of 7 of the International Emmy Awards.

British reality TV formats have taken over the US. The big summer hits in the US right now include the American Strictly Come Dancing, Hit Me Baby One More Time, and Hell’s Kitchen.  British creatives have no doubt done more for the profits of US telephone voting lines than anyone in the world.

We regularly dominate the Tony awards and British plays jostle with each other for space on Broadway.  The trailblazing Guardian website just won a Webby, the prestigious Oscars of the Internet world.  The Economist and the Financial Times are read around the world – as are our magazines, so often the gold standard of the magazine industry.

Or take literature - the new Harry Potter book already has record advance sales, despite not being released until the 16th of July.  It is eagerly anticipated by children and parents everywhere.  Personally, I’m lobbying inside government to have July16th declared a new public holiday so it can be world ‘you can actually have a day off because the kids are reading day’.

 

Why is Britain creative?

Is all that talent a coincidence, or is there something that makes Britons particularly creative?  It’s worth asking ourselves that question, because some of the causes of our creativity may be open to Government influence – for better or worse. 

Much isn’t – our creativity has its roots in our history as an island nation, open to travellers and trends from overseas.  Our culture is inquisitive and sceptical.  Our society has been fluid, despite the class system, allowing people with new ideas to reach positions where they could express them – Shakespeare had such humble roots that plenty of people have tried to find evidence that he was an aristocrat in disguise.
 
But some aspects of creativity are influenced by government.  At the very least, thoughtless government action could undermine Britain’s creativity. At our best, we could create conditions in which it will flourish.

 

Schools

Creativity starts at school.   Of course, many stars turned to music or film because they hated school.  For example, some people say that all John Lennon got from school was meeting Paul McCartney at the Woolton School fete.

But there may also be something about our educational system that does foster creativity.

We’re not starting from scratch here.  There are already over 300 Specialist Arts Colleges in England, doing better at GCSE than the national average.  Creative Partnerships is a great unsung success – a £150 million programme run by the Arts Council to raise creativity across the curriculum.   The Brits School in Croydon has turned out stars like Katie Melua and Amy Winehouse.

We should build our policies on that success, so Andrew Adonis, David Lammy and I have asked Paul Roberts, one of our most successful chief education officers, to look at what more we can do to nurture young creative talent. We are looking for a clear set of assumptions which will help to inform the basis of our future policy on creativity.

 

Higher education

Our art colleges are the incubators of Britain’s creativity –  and not just for the arts and fashion.  The top designers at BMW and Apple are British and went to British art schools.

Both Jarvis Cocker and Matthew Williamson came out of Central St Martin’s.  Anish Kapoor and Steve McQueen out of Chelsea.  Franz Ferdinand and Jaguar designer Ian Callum went to the Glasgow School of Art.  Not to mention Jimmy Choo or Linda Bennett, the shoe business sensations.

I want to pay tribute to the leadership of people like Seona Reid, Michael Bichard and Christopher Frayling who have pioneered thinking about how we can marry creativity and entrepreneurship.

I want to scream whenever I hear a commentator saying that artists don’t know how to be business-like.  I was on the Board of the Young Vic for a few years, and I know that running an arts organisation is as challenging as running a business.  People like Antony Gormley or Sam Mendes, Vivienne Westwood or Nitin Sawhney have plenty to teach those commentators about how to be entrepreneurial.

My impression after a month in this job is that Britain’s creative universities are living up to the challenge of teaching creativity and business.  Over the next few months, I’d be interested in what more we can do to build on their strengths.  Does the way that Research Councils measure our creative universities accurately reflect the work that they do?  Could we do more to spin-off businesses from our creative universities?  Can companies offer fellowships to help arts school graduates make the transition in to industry, as already happens in science?

And there are fascinating programmes starting up around the country to train creative professionals in mid-career – the University for the Arts are teaming up with the London Business School.  The Clore Fellows are developing the next generation of leaders in the arts.  And NESTA is looked at enviously around the world as a pioneering way to support innovators in the arts and science.

So, I look forward to working with the sectors skills councils and the Higher Education Creative Industries Forum to build on their success.

 

Cities and society

We also need to think about how the tolerance and diversity of our society can support creativity  The work of academic Richard Florida, for example, suggests that there are common factors which make for creative cities.  His book The Rise of the Creative Class suggests that cities that are diverse, tolerant and have a high quality civic infrastructure are overwhelmingly those that have thriving creative sectors.  And he argues that creative companies cannot easily be shifted abroad, because they tend to stay where they were started, because that’s where their creators like to live.  

Richard Florida’s work may have real implications for policy.   Locally, it suggest that cities can regenerate themselves through creativity - we all may know about Gateshead and Manchester. But do we appreciate enough Dundee's electronic games quarter? Or Folkestone's strategy to regenerate itself through culture?

The creative industries are vital to regeneration and I will be asking the Regional Development Agencies to use their experience and delivery capability to advise us on our new national programme.

Richard Florida’s work suggests that an open society will be a prosperous society.  A society that is intolerant, afraid of change and uncomfortable with diversity will be a less creative society.  A society that shuts down economic migration risks strangling its creative industries.

National government can help by fostering a society that is open to new trends and talent, based on a free press that supports the free flow of ideas, with a tolerant attitude to different values and life-choices. 

Amartya Sen has made the case that democracy supports development –we need to spread the word that tolerance and diversity drive competitive advantage.

 

Creativity into competitive advantage

But having creative people isn’t a guarantee of economic success.  Arguably, Britain’s industrial disease has been that we are great at inventing, but much less good at exploiting those inventions.

Is the same true in the creative industries?  Some of our best fashion talent often prefers to show in New York or Paris.  Since Polygram was sold and Film Four scaled back, there’s less prospect of a British or European film company to rival the dominance of the US studios. In music, EMI are the last British major.

There’s clearly an issue – how we can be creative entrepreneurs, not just creative inventors.

I think the answer may be to avoid economic Darwinism.   It’s not us against China and India – their gain is not necessarily our loss.   Creative industries, like the rest of manufacturing, may be looking at conception in one place, refinement or testing in another, packaging and manufacture somewhere else, and distribution across the globe.  As John Kay says in The Truth About Markets, no one invented the computer, but it’s been commercialised all over the world

So, our goal shouldn’t be to beat other countries.  Our goal should be to be their best partner.  Our ambition is to network our creativity with that in other parts of the world. Britain has been at its best when it's been porous. sharing ideas and inventions. After all, Britain is an import/ export culture.

That why we want to help make Britain the world’s creative hub – a country with both world-beating British companies like WPP, EMAP, Pearson or Foster Associates, but also a country open to ideas, people and companies from around the world.

And to achieve that we need Britain to be the best environment for creative businesses in the world.  That means looking at issues that cut across these various sectors, as well as having strategies for each sector.

 

Cross cutting issues

We need to start by being clear about the role of government.  Some people think that government should do nothing but run a stable macroeconomic policy and let the invisible hand operate.  We disagree - we think that markets work best, but that government can do more than just balance the books.  What government does in education, regulation and other limited parts of the supply side can make Britain more competitive.
 
That is our basic approach to these industries as all others, but there is of course another dimension. What economists call the huge positive externalities these industries create – in other words, pleasure. Not every bit of the value created by Nick Hytner, JK Rowling or Gilles Peterson is captured by the economic transactions that relate to their work.  I believe in art for art’s sake, and creativity would still be central to our lives and the role of Government if it didn’t generate any revenue.

Once we accept there should be a role for government, how should it be defined? Our approach is to say that it is not about picking winners. That's a failure in any industry, but in the arts and media, it is a positively unhealthy thing for the government to do. We must be careful not to micro manage each issue, and make creative industries feel that the government holds all the answers to all their problems.   It doesn't. But it can help create the climate for success.

First, we need open and competitive markets.  Innovation isn’t just about talent.  It’s also about those with good ideas being able to reach their customers.  If our markets are dominated by oligopolistic companies, good businesses will be stifled at birth.  It’s vital therefore that OFCOM and the Competition Commission continue to ensure that Britain has the most effective competition regime in the world.

Second, technology.  Despite the crash, many of the predictions on which the dot.com bubble was built have come true.  Over the last ten years, over 25 million electronic games were sold in the UK. This is enough for every household in the land to have one. Three quarters of us have mobiles - 6 million have broadband.

In the next few years, the pace of change will be greater, if anything, and that technology presents sweeping challenges for the creative industries.  Sales of legal downloads of single tracks have now exceeded sales of single discs – and the on-line revolution is about to sweep through film too.  But it cuts both ways; it’s not good for Government or the industry that Batman Begins could be downloaded illegally even before the film’s premiere in this country.
 
Over the last few years, Britain has been a technology pioneer.  We were one of the first to make spectrum available for mobile telephony and pioneered a flexible framework for multi-channel television. And, as a result, Sky and Vodafone have gone from start-up to the FTSE 30 in record time.

Britain has combined pioneering technological standards with fostering competition.  By and large, we have followed Don Cruickshank’s advice to aim for a minimum of three competing networks.  In digital television,  for example, the consumer can choose between satellite, cable, terrestrial and broadband.   And over 60% of households now have digital TV.

The combination of technological leadership and competition between networks has meant that Britain has managed to turn first mover advantages into competitive advantages.

And we recognise that we must also have the quality content available for distribution by new technologies. Without the right content, the real value of new technology is unrealised – providing spin rather than substance, as one might say!

We need to continue to pull off that trick.  Labour’s manifesto committed Britain to switching over to digital television by 2012 – we now need to work out how to implement that commitment, including for vulnerable groups, while also being clear how we can use it as a way of generating industrial advantages.

Third, we need to modernise our intellectual property framework, and in places it may need to be strengthened.  IP is the bedrock of the creative economy.  The Labour Manifesto committed us to “modernise copyright and other forms of protection of intellectual property rights so that they are appropriate for the digital age.”

This is vital - to attract creative companies, they need to know that we have an IP regime that will allow them to make returns on their creativity – and to invest in innovation.  Bands like Coldplay will make enough money for their company to help them discover around 50 or 100 bands. At the same time, an information rich society needs an easy exchange of ideas – after all, creativity often comes from collaboration, from putting existing ideas together in new ways.  So, we need an IP framework that balances the needs of consumers, creators and businesses.

 

That means two things - first of all, enforcing existing property rights. The EU estimates that 7% of all world trade is in counterfeit goods, and that we’ve lost over 100,000 jobs over the last 10 years because of counterfeit and pirated products.  So, we will shortly announce how we will take forward the recommendations of the Creative Industries IP Forum on education and on tackling piracy. 

But we also need to think through whether our IP framework is right for this fast-changing technological environment.    I can announce today that DTI and DCMS will set up a joint project to implement our manifesto commitment, chaired by Lord Sainsbury and myself.   We will examine in the first place what issues need to be addressed, including the key issue of Digital Rights Management, and the interoperability of new technologies.  Obviously the primary role is for industry, which is why we have asked the Creative Industries IP Forum to advise us on this issue.

Fourth, business support and access to capital.  When I visited the London Fashion Forum, for example, I was told how vital it was that young designers could get access to advice about finance and marketing.  It’s not surprising that their website is getting 4 million hits per month – since it offers advice on just that.  But I was also told that there are 300 organisations offering business support to fashion companies – and that’s just in London.

We need to consider carefully whether we are offering the right kind of advice and making the most of the funding available.  It seems clear that creative industries want advice from people with experience of their sectors.

We need to think about how our business support can respond to their  needs – there is already good practice such as Culture Finance North West and the West Midlands Creative Advantage Fund .  But we need to be sure we’ve got the best model for business support, learning from examples here and abroad.

Finally, there is a particular challenge for DCMS to think about whether we are making the most of the potential links between our publicly funded institutions and business success.  For example, the BBC can play a key role in supporting British creative industries – without Radio 1 and now 1Extra, UK Garage might have remained an underground experiment, rather than becoming a world-wide musical hit.  Labels like NAXOS are helped by the exposure they get from Radio 3.

One clear piece of feedback from the response to the Green Paper on the BBC was the importance of its creative role.  Many respondents told us that in setting out clear purposes for the BBC, we must not forget that the reason the BBC is one of the world’s best brands is its creativity.  In preparing the White Paper, we need to think, about the BBC’s creativity, and in particular what the government can do to support it.  And of course, just as important is the role the BBC can play in supporting the creativity of British industry, whether by investing in British film or working with the independent production sectors in television, radio and on-line.

 

Sectoral

So, those are the cross-cutting themes that we are going to work on over the next few months: competition, technology, business support, intellectual property and the role of public institutions.  DCMS has recently been given sponsorship roles in design, advertising, fashion, publishing and computer games.  In those sectors, we are still learning, and are very much in listening mode to understand their economic drivers and to see what government’s role should be.

Today, I want to make announcements about our policies for film and music.

Despite the shallow scepticism of much comment on film, Britain’s film industry is now the third biggest in the world, and we remain a prime destination for inward investment.

Shaun of the Dead was Quentin Tarantino’s favourite film last year. We should build on that success and today I can announce that this government pledges at least 30% more gore and 40% more zombies in every British film by 2008.

Actually, I’m not announcing that.  But I am announcing that Tessa Jowell and I  have commissioned the UK Film Council to look at film policy to see if there is more that we can do to develop an integrated strategy for British film.  Think of it as an MOT for film policy.

The Film Council has been a great success – if it didn’t exist, it would have to be invented.  All film producers have flops, but the Film Council’s most successful films speak for themselves, whether it’s Gosford Park or Vera Drake, Touching the Void or Bloody Sunday.  For every pound invested, three have been generated at the box office.

But we cannot sit back – and John Woodward will therefore be leading a review to consider four key issues: how do we attract big budget films to the UK, how do we support UK production, how do we improve distribution and should we do more for cultural film.

The music industry is a big player in the national economy – contributing nearly £5bn annually and employing some 130,000 people.  The live music industry is worth at least half a billion pounds each year - up by 50% since 1997.   It’s an important and dynamic industry, but one which is at the sharp end of the challenges of on-line distribution.

Many people in the industry have been impressed by the work of the Film Council and believe there would be value in having a similar organisation for music, to act as a partner for government. This wouldn’t be a body handing out public funding to orchestras, for example, but one to help shape policy. Over the last few years, for example, it would have been useful to government and to the industry to have a body that could co-ordinate the response to issues like digital distribution or the future of live music.  So today, I can announce that DCMS and the music industry will carry out a feasibility study to examine the case for setting up a music council, how it might operate and how it might be funded.            
 
Conclusion: creative policy making

In conclusion, DCMS’s job is to create a framework that supports your creativity.  Over the next few months, we will look at these cross-cutting and sectoral issues.  We’re not starting from scratch – thanks to people Chris Smith and Estelle Morris, there have been real achievements in these areas, such as NESTA, Creative Partnerships or the Film Council.

But these are fast-changing sectors, constantly sprouting new questions.  We in government don’t have all the answers – Tessa Jowell, Lord Sainsbury, David Lammy and I hope you will get involved in this major project to support the creative industries, and help give DCMS’s work in this area real economic edge.

If creativity is important to every industry from engineering to fashion, then it is also vital to policy making.  To that end, we want this project to be open to outside ideas, encourage risk taking and be clear about what stakeholders want.

To make that possible, we are going to experiment with a new form of consultation – we are today launching a creative industries discussion forum on the DCMS website.

Visit our site and give us your advice – we can’t promise to respond to everything, but I can promise to read everything and participate regularly.

This speech will be the first posting on the site.  It raises two main questions.  How can we support Britain’s creativity?  And how can we turn that creativity into profits?

We want to return to the ideas behind Cool Britannia, but this time without the parties.  We want to do everything we can to support these vital sectors of our economy.  They are a key part of Britain’s manufacturing future.  They are growing markets.  We are good at them.

So, next time I ask you if I can pick your brains, I hope you won’t think I’m after a souvenir.  I don’t want a gold disc, what I do want is Britain to be the world’s creative hub, to be a golden circle for creativity.