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Economy / Jobs

Do “the creative industries” really matter for city economies?

Creative industries have long held a special place in economic development. But recent discussions that I’ve been party to in relation to the industrial strategy have underlined to me how confused the thinking on the creative industries is. Here are three areas where this is particularly apparent.

The definition of the creative industries itself is a source of confusion. According to DCMS, it is a combination of nine different industries ranging from architecture to fashion design, and including crafts, libraries and museums in between. This creates confusion on two counts.

The first is the mixing of highly productive industries like computer programming with much less productive activities like artistic performance. One sells to international markets, while the other is much more likely to rely on public subsidy to make ends meet. For a policymaker concerned about increasing productivity, one is much more relevant than the other.

The second is the mixing of industries (e.g. architecture, computer programming) with employment in cultural amenities, such as museums. By grouping cultural amenities in with businesses, we very quickly get into boosterist language about the supposed economic impact of such institutions in order to justify their grouping with the industries.

This is positively encouraged by the government, which requests that bids for things like City of Culture status set out the economic impact they will have. So in order to get funding, bidding bodies need to play the game. The result? We get grand proclamations on the economic impact of a City of Culture programme, no doubt sourced from the pages of a report written by a handsomely-paid consultant (the same is true of lower productivity industries in the definition too).

But this sadly distorts objectives and unfairly expects cultural institutions or activities to do something that they just aren’t able to deliver. Investment in a library is not done for any direct economic benefit, while investment in a museum should not be expected to bring about culture-led regeneration. Yet all these things are all too regularly confused, with April’s House of Lords report on seaside towns being the latest example.


Crucially, playing on these terms means that this is an argument that advocates of culture, in particular, are likely to lose. There’s no way we should expect libraries, crafts or museums to be making a direct contribution to improving the UK’s productivity. The data shows that not only do these activities have below average productivity, it’s actually lower today than in 1990 (as we should expect). And yet strangely exactly these arguments are being made about activities that are simultaneously reliant on public sector subsidy to make ends meet.

Losing this argument is a shame because cultural investment is important – it is likely to have impacts on things like civic pride and it exposes people to new ideas and experiences, for example. These are worthy aims that all policymakers should be attempting to achieve. But we should be clear about the reasons that we are making such investment, and be reasonable regarding the impacts we expect it to achieve. In terms of the industrial strategy, increasing productivity is not one of them.

A final source of confusion is the conflation of creative industries and creativity.

In response to the critiques above, the conversation usually then segues into the importance of creativity in the economy. This is exactly right. Creativity and new ideas are what drive innovation, which in turn drives long-run productivity growth. And policy should look to support this.

But let’s be clear. Despite being similar in name, the creative industries have no exclusivity over creativity. And it is not clear that supporting these specific industries through a sector deal, for example, improves the creative capacity of a local or national economy. Instead, improving education across the country would seem like a much more direct way to do so.

I don’t say this to be unkind or because I have any particular issue with the creative industries; although I’m sure there are many that will take umbrage with the above. I instead say this in the hope that we can bring clarity to what it is that we’re trying to achieve with different policy interventions – be that productivity, cultural engagement or civic pride. Because if we don’t have this clarity of thought, we’re all just going to end up disappointed when our expectations don’t get met.

You can hear more on this topic on our latest podcast.

Paul Swinney is head of policy & research at the Centre for Cities, on whose blog this article first appeared.
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