The creative industries account for almost a 10th of UK firms classified as having ‘high-growth potential’, and, in exciting news for our region, a lot of those businesses are in Bristol and the south west.

The report by the Creative Industries Policy and Evidence Centre (Creative PEC) and Beauhurst found there are almost 6,000 high-growth potential firms (HGPFs) operating across the creative industries. This is 9.7% of the UK’s total HGPFs and it compares to 5.1% and 2.4% respectively in life sciences and advanced manufacturing.

While London accounts for half of creative industries HGPFs with 2,942 firms, the report said other regions are home to significant numbers including 362 in the south west and, when looking at the top local authorities by number of creative industries HGPFs, Bristol is in 9th place with 129.

Over two-thirds (3,981) of creative industries HGPFs operate in application software, with significant numbers too working in marketing, branding and advertising, films and TV and video games.

‘Huge untapped investment potential’ for creative industries

The report said the figures show there is “huge untapped investment potential” for the UK’s creative industries, which currently face many challenges when it comes to funding.

The number of equity deals for creative industries HGPFs fell by 16.5% between 2021 and 2024, compared to drops of 6% for life sciences, 14% for advanced manufacturing HGPFs and 30.6% for the economy as a whole.

Creative PEC estimated there’s an equity gap of up to as much as £1.4 billion in potentially unmet demand in the creative industries.

Creative businesses also face structural challenges in relation to debt finance, the report said. They are more generally are more likely to have asset bases that are made up of intellectual property, brands and other forms of intangible capital which banks and lenders are less likely to accept as collateral.

This is shown by data which found that only 4% of creative industries HGPFs have secured debt finance compared with 6.1% and 6.2% of life sciences and advanced manufacturing HGPFs respectively.

The report highlighted Bristol Creative Industries member Watershed, which operates an independent cinema and supports creative technology, film, and media projects, as an example of how funding can work for the creative industries.

It said Watershed has received multiple grants from Arts Council England and Innovate UK, including £2.3 million grant from the Arts Council’s Grants for the Arts in 2022.

Its most recent Innovate UK grant was £1.2m in 2021 to support the MyWorld programme, led by the University of Bristol, which develops R&D infrastructure and new talent for immersive media in the Bristol and Bath region.

Additionally, MyWorld, also a Bristol Creative Industries member, is backed by a £30 million UKRI Strength in Places Fund award, which the report said illustrates how place-based UKRI funding and Innovate UK project grants specifically often work together.

Hasan Bakhshi, director of Creative PEC and report co-author, said:

“There are somewhere between 260,000 and 270,000 firms in the UK’s creative industries but not all of them have the same growth potential. Our research estimates that within this population are a vital group of almost 6,000 businesses that have especially high-growth potential.

“Given the UK’s well-known strengths in IT, it won’t be surprising to investors that the majority of these firms operate in software, but less well known will be that as many as 30% of creative industries high-growth potential firms working in software work in sub-sectors like advertising, films and TV, video content and video games too.

“This suggests that investors may identify significant new investment opportunities if they include the creative industries within the scope of their prospecting activities. Growth-focused policymakers for their part should consider the needs of high-growth potential creative industries firms in their regions.”

Baroness Shriti Vadera, co-chair of the Creative Industries Council, said:

“This research fills a critical gap in the evidence base, making clear that there are substantial untapped investment opportunities in the UK’s high-growth creative industries – across a wide range, from advertising, films and TV to video games and software.”

Tom Adeyoola, executive chair of Innovate UK, added:

“This is an important report as we aim to drive economic growth and ensure a thriving creative industries sector. This helps us understand who and where the high potential businesses are, the conditions for success and how to target the interventions needed to drive our breakthrough ideas to global greatness.”

For the latest available funding for creative businesses, read our guide.

Find lots of great creative industries businesses in our member directory.

About Bristol Creative Industries

Bristol Creative Industries is the membership network that supports the region's creative sector to learn, grow and connect, driven by the common belief that we can achieve more collectively than alone.