UK creative industries ‘global success story’
June 28, 2018
UK trade body the Creative Industries Council has released a report which explores the challenges and opportunities of creative businesses in the UK as they look to grow and develop their business, focusing on their experience of accessing finance to support their ambitions.
The report finds that creative businesses have higher ambitions of growth and innovation compared to the rates for SMEs overall, yet rely on informal sources of funding more than businesses generally.
The report, commissioned by the Creative Industries Council and conducted by BDRC with support from Creative England suggests that the UK’s creative industries are a global success story, contributing £92 billion (€104bn) to the UK economy in 2016, accounting for an estimated 284,400 enterprises – almost one in eight of all UK firms – and almost 2 million UK jobs. This research outlines the opportunity for creative business to contribute even further, with the right access to finance being a key factor in their future growth.
Key findings from the research include:
- Creative businesses are ambitious with 73 per cent planning to grow in the next 12 months, compared to half of SMEs overall
- 80 per cent of business demonstrated innovation in the last 3 years, compared to 46 per cent of SMEs overall, with 75 per cent developing a new product or service
- Creative businesses show a significant reliance on informal sources of funding from friends and family, with 27 per cent of businesses using this source as opposed to 9 per cent of businesses generally
- 61 per cent are happy to use external finance to fuel business growth and development
- 67 per cent believe that financiers found their sector hard to understand, and only 15 per cent felt that they had always been able to access the funding they needed
- 67 per cent of creative SMEs would welcome more information about preparing to attract external finance and 55 per cent knew they needed to develop their management and financial skills in order to grow their business
The report also explains that creative businesses are often small and young, with 65 per cent trading for 5 years or less and half of those owning or running a creative business aged under 45, 29 per cent of which are run by women. Creative businesses are less likely to plan than SMEs generally – only 38 per cent had a business plan – but are keen to access advice and support.
“Britain’s creative industries are an economic and cultural powerhouse and it’s vital they can access the finance to allow them to grow and compete on the global stage,” commented Margot James, Minister for Digital and the Creative Industries. “Through our modern Industrial Strategy we are creating investment and trade opportunities to boost the number of businesses exporting so more people can enjoy our world-class artistic and cultural output.”
“This research makes an important contribution to the creative industries growth agenda,” suggested Tim Davie CBE, Industry Co-Chair of the Creative Industries Council and Co-Chief Executive of BBC Studios. “It shows we are a sector dominated by ambitious, innovative, international businesses with the potential to deliver even greater value for the UK. “As we work to implement the Creative Industries Sector Deal, industry, government and the finance community must continue to work in partnership to make sure barriers to investment are removed so creative businesses and entrepreneurs across the country can reach their full potential.”
“This report confirms what experience has taught those of us working day to day in support of creative business across the country – that businesses in our sector are undercapitalised,” added Caroline Norbury MBE, Chair of the Finance for Growth Group, Creative Industries Council and Chief Executive, Creative England. “Perhaps most powerfully, it demonstrates that creative businesses have something that no amount of support services can seek to instil – ambition. Industry, government and the financial sector need to work together better to make sure those ambitious businesses have the right skills to attract the right investment to support their ambitions for growth, and in doing so the UK’s ambitions for growth in creative clusters up and down the UK.”