If creative businesses and organisations are not made central to the government’s economic plans, the UK’s creative industries risk falling behind international competitors.  

That’s the conclusion of a report by the House of Lords Communications and Digital Committee.

Following an inquiry into the future of the UK’s creative sector amid increasing global competition and technology-related disruption, the committee said the government’s approach can be categorised as complacent, missing opportunities and failing to recognise the sector’s commercial potential.

All this, the report said, is despite the following statistics:

• the creative industries was worth more than £115bn to the UK economy before the pandemic, making up one in eight businesses.
• it contributed more to the economy in 2019 than the aerospace, life sciences and automotive industries combined.
• job growth in the creative industries between 2011 and 2019 that was three times that in the UK overall.

The UK is world leading in many specialisms within the creative industries, the committee said, but rapid technological advances are changing the nature of the sector, and international competition is rising.

“We heard mounting concern that the UK’s success was being taken for granted, and increasingly at risk,” the report warned.

Among the committee’s key concerns were the government allowing other countries to create more competitive tax incentives, proposals to relax intellectual property law which threaten creative sector business models and a “perception in government that DCMS [Department for Culture, Media and Sport] is the ‘ministry of fun’ rather than a key driver of economic growth”.

Julia Lopez MP, media and data minister within DCMS, referenced the “ministry of fun” description during the inquiry. She said:

“I want it to be understood as the ministry of a major economic growth area, future technologies … it is incredibly important that we do not try to diminish the public perception of what are fundamentally important industries and ones where the UK has a real competitive advantage.”

📢Out now: our report on the UK’s creative industries, covering
👉How technology is disrupting the sector
👉How the UK’s world-leading position is at risk
👉How Government policy can harness the sector’s potential to turn it into an engine of growth

📰:https://t.co/14Z8PfkQzO pic.twitter.com/S5GZu9CSdj

— Lords Communications and Digital Committee (@LordsCommsCom) January 17, 2023

Recommendations to support the UK’s creative industries

The committee made several recommendations including:

• The government’s definition of R&D for tax relief is narrow and restrictive, the report said, so it should be changed to include more of the creative sector. It also called for creative sector tax reliefs to be benchmarched against international competitors to address the UK’s declining competitiveness.
• Skills shortages in the creative industries should be a focus across government, the committe said. It said the Department for Education should encourage students to learn a blend of creative and digital skills, reverse the fall in children studying design and technology, and make apprenticeships work better for SMEs in the creative industries.
• The committee criticised the end of of the Creative Clusters Programme even though it is exceeding co-investment expectations by 600%. UK Research and Innovation should continue the most successful parts of the programme after March 2023, it said.
• The committee called for a better legal framework to help ensure artists and rights holders don’t lose out, while a plan is needed to help the sector adapt to technological disruption, with a particular focus on low-income workers.
• The Intellectual Property Office’s “misguided” proposals to change the text and data mining regime should be paused. Intended to support the development of AI, the committee warned the changes could enable international businesses to scrape content created by others and use this for commercial gain without payment to the original creator.

The recommendations mirror a report released last September by Bristol Creative Industries which also called for action on R&D tax relief and skills.

Baroness Stowell of Beeston, chair of the Communications and Digital Committee, said:

“The UK’s creative industries are an economic powerhouse and have been a huge success story. But the fundamentals that underpin our success are changing, and rivals are catching up. The government’s failure to grasp both the opportunities and risks is baffling.

“International competitors are championing their creative industries and seizing the opportunities of new technology. But in the UK we’re seeing muddled policies, barriers to success, and indifference to the sector’s potential. We acknowledge the government has introduced important programmes in recent years, but we are concerned past success has bred complacency.

“Our report sets out some immediate challenges that the government can address now.

“These include improving R&D tax policy to stop excluding innovation in the creative sector; abandoning plans to relax intellectual property rules which would undercut our creative businesses; making the Department for Education wake up to the reality that the future lies in blending creative and digital skills rather than perpetuating silos; and urging senior figures across government to take the creative sector’s economic potential more seriously.”

Related content:

A creative force: Unleashing the power of Bristol’s creative industries

What the government should do to support the creative industries

A guide to funding for creative businesses

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.