This report presents the results of major new research into the role of the creative industries in stimulating and supporting innovation in the UK.

Foreword

Since the pioneering work of the Department for Culture, Media and Sport in the late 1990s, we have been aware of the size of the UK’s creative industries. However, size on its own indicates only part of the economic importance of a sector.

A crucial question is to what extent it is embedded within the economy – not just an island of talent and economic power, but an intrinsic part of the entire system. NESTA is particularly interested in how creativity that runs through the thirteen ‘creative industries’ generates innovation elsewhere.

Until now, these questions have been difficult to answer. However, beginning in Spring 2007, NESTA embarked on a research programme designed to uncover the reality of these linkages. This research report (produced in partnership with Experian and Oxford Brookes University) examines the function of creative businesses in providing products and services to other businesses, and relates that to what we know of the innovative potential of those businesses.

Importantly, we have found that linkages with creative industries appear to support innovation. This finding has deep implications for innovation policy: no longer is it sufficient to support the creative industries alone and for their own sake – policy should encourage and embed linkages between them and the wider economy.

As always, NESTA seeks to convert research insights into practical solutions and as such, our Innovation Programmes team will be taking the messages from this report and testing them in practice. Only then will we uncover the full story behind the importance of the creative industries – and we’ll be sure to report back.

As always, we welcome your input and your comments.

Jonathan Kestenbaum
CEO, NESTA
March, 2008

NESTA is the National Endowment for Science, Technology and the Arts. Our aim is to transform the UK’s capacity for innovation. We invest in early-stage companies, inform innovation policy and encourage a culture that helps innovation to flourish.

Visit Creating Innovation: Do the creative industries support innovation in the wider economy? Download Page

Creating Innovation
Do the creative industries support innovation in the wider economy?
Hasan Bakhshi, Eric McVittie and James Simmie

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Executive summary

The economic importance of the creative industries

Nobody can doubt that the creative industries make important contributions to the UK’s cultural and aesthetic life. Their products are central to our wellbeing: they give pleasure, they stimulate ideas and they convey meaning. Human beings need to express themselves or to experience others doing so; the quality of our lives is all the better for vibrant creative industries which enable this to happen.

Some – though not all – of these benefits are reflected in commercial value. A growing body of research has attempted to measure the contribution that the creative industries and arts make to the economy and employmen (Andari et al., 2007; OECD, 2007). There is also extensive research on the sources and impacts of types of innovation in the economy (DTI, 2006). While the innovation literature has often emphasised technical research and development activities, policymakers and academics increasingly recognise the importance of creativity and design to the process of innovation (Cox, 2005; DTI, 2005).

There is also a widespread belief that the ‘creative economy’, as a focal point for creativity, has a particularly important role to play in innovation throughout the economy (Potts, 2007). But as yet there is little quantitative evidence for this.

This report presents the results of major new research into the role of the creative industries in stimulating and supporting innovation in the United Kingdom. Specifically, our research investigates and quantifies for the first time how artistic and creative activities link into the wider economy.

We do so using data from the UK’s Input-Output accounts.1 The resulting measures are then brought together with quantitative data on innovation performance from the fourth UK Community Innovation Survey (CIS4) enabling us systematically to explore the relationships between the creative industries and innovation.

Our approach aims to understand the links between the creative industries and other sectors in the wider economy; to examine which firms and industries are most ‘innovative’; and to bring these together to identify the extent to which strong businessto-business (B2B) linkages to the creative industries are associated with high levels of innovative activity and performance. ...

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