25 November 2009
7.5% of the UK's creative businesses hold the key
to employment and economic growth in the sector,
according to new research released today by NESTA
(National Endowment for Science, Technology and
the Arts) in conjunction with Aston University and
the Economic Research Institute of Northern Ireland.
In a speech at the National Creative Industries
Conference, Jonathan Kestenbaum, Chief Executive
of NESTA, painted a picture of great economic growth
potential but also outlined the serious challenges
facing the UK's creative industries in the digital
Jonathan Kestenbaum said:
'Just a handful of creative businesses were responsible
for the expansion of Creative Britain between
2005 and 2008. Without them, we would be telling
a story of economic loss not gain.' He also outlined
the challenges facing creative sectors - they
include the need to develop new business models
fit for an increasingly digital world and having
access to finance for innovation and growth.
He continued: 'Creative
businesses have learned that traditional revenue
sources can dry up, in some cases very rapidly,
as a consequence of overseas competition and ever-faster
technological change. If we don't face up to this
threat, then we risk not just the loss of a world-class
creative community, but also damaging our cultural
The analysis of creative
firms, with ten or more employees operating between
2005 and 2008, published today by NESTA, follows
the methodology of the NESTA 'Vital 6% report'
published in October. It also reveals:
- Whilst 6 per cent of all
UK companies above 10 employees are classed
as high-growth2, the creative industries boast
7.5 per cent.
- 15.7 per cent of Architecture
businesses are classed as high-growth. This
is above average for the sector overall although
this may have been driven by a surge in the
construction sector between 2005 and 2008.
- 8.4 per cent of Software,
Computer Games and Electronic Publishing businesses
above 10 employees are classed as high-growth.
45.3% of all high growth creative firms are
in this sector.
- The Publishing sub-sector
showed a smaller share of high-growth firms,
with only 4.9 per cent.
- London and the South East
are home to the majority of high-growth creative
firms (66.2 per cent of all high-growth creative
firms are located in these two regions).
- London, Scotland and Yorkshire
and Humber present above average proportions
of high-growth firms as a share of their total
number of creative firms above 10 employees
(the respective percentages are 9 per cent,
8.5 per cent and 8.5 per cent).
NESTA is the largest independent
endowment in the UK. Its mission is to support
innovation to drive economic recovery and solve
some of the UK's major social challenges. NESTA
is a world leader in its field and is in a unique
position to support and promote innovation through
a blend of practical programmes, policy and research
and investment in early-stage companies.
About the creative industries
- The creative industries
currently make up 6.4% of the economy and has
been growing at 4% a year (the UK has the largest
creative sector in the world relative to GDP).
- Including those working
in related creative occupations, the creative
economy employs just under 2 million people
in the UK. Within this, just over 1.1 million
are employed in the creative industries themselves.
- Earlier this year NESTA
forecast that the creative industries in the
UK will grow on average by 4% over the next
5 years (more than double the rate of the rest
of the economy), generating £85bn in Gross
Value Added (up from £59 billion). By
2013, the sector is expected to employ 1.3million
people, likely to be more than the financial
- By 2013, there may be
as many as 180,000 creative businesses in the
sector, compared to the current 148,000.