Measuring the Creative Industries in the UK
By Hasan Bakhshi, director of creative industries in the Policy & Research Unit of Nesta, an independent, London-based charity with a mission "to help people and organizations bring great ideas to life."
Hasan Bakhshi. Photo courtesy of Mr. Bakhshi
The British government’s Department of Culture, Media and Sport (DCMS) famously defines the creative industries as “those industries which have their origin in individual creativity, skill, and talent and which have the potential for wealth and job creation through the generation and exploitation of intellectual property."
Based on this, it proposes that 13 sub-sectors make up the creative industries: advertising, architecture, art and antiques, computer games, crafts, design, designer fashion, film, music, performing arts, publishing, software, and television and radio. The annual DCMS Creative Industries Economic Estimates have shown that Gross Value Added (GVA) in these creative industries has in recent years grown at twice the rate of other sectors, helping to raise their profile with policymakers. This seminal work has become the template for numerous other national studies throughout the world, in countries like Taiwan, New Zealand, Australia, Singapore, and Germany, and at the regional and city level too, e.g. London and Paris.
One of the great ironies is that despite their influence overseas, the status of these statistics in the UK has always been in some doubt. This is partly the result of the inherent limitations of the Standard Industrial Classification (SIC) codes on which they are based and which many believe do not capture industry realities. Many British trade bodies have reacted by producing their own sector-specific economic statistics. Inconsistent treatments of sectoral boundaries have led to an ever-increasing landscape of economic statistics that purport to measure similar things. The resulting lack of rigor no doubt helps explain why the work of key agencies like the Office for National Statistics---the UK’s equivalent of the U.S. Bureau of Economic Analysis---has remained disconnected from the creative industries. It also explains why the UK’s creative industries have struggled to be taken seriously by mainstream policymakers, and in particular Treasury economists.
The nub of the problem is that the DCMS has never published a transparent and rigorous methodology by which it classifies some industries as ‘creative’ and others not. In order to address this, Nesta has been working with researchers at the Queensland University of Technology to develop such a methodology. The first output from this collaboration is A Dynamic Mapping of the UK’s Creative Industries, which shows that a defining characteristic of the creative industries is their intensive use of creative talent.
The fundamental assumption we make is that creative talent is different from other types of labor because it helps to give the organizations that employ it the capacity to offer differentiation in their products. Core to our understanding of this talent is that it has an appreciation of what ‘kind’ of effect is desired, but it is not told how to produce that effect in the same way that, say, an assembly line worker or even skilled technician or engineer are instructed. The creativity consists in devising an original way of meeting a differentiated need that is not expressed in precise terms.
This confers an important quality on creative talent, namely that it is difficult, if not impossible, to mechanize the creative process and hence to substitute machines or devices for humans. Mere implementation of a creative decision is not in this sense a creative role, but making one is. Technology has largely done away with the need for the highly skilled roles of typesetters and photo touch-up artists, for example. The former is now subsumed into the page management applications and style guides applied by art directors and graphic designers. In hindsight these were not in fact creative occupations. Creative professionals adopt, adapt, and absorb new technologies in pursuit of creative excellence. They are seldom made redundant by it.
These considerations give rise to a definition of a ‘creative occupation’ as:
“a role within the creative process that brings cognitive skills to bear to bring about differentiation to yield either novel, or significantly enhanced products whose final form is not fully specified in advance.”
We use this definition to specify five creativity criteria with which to score all the Standard Occupational Classification (SOC) Codes in the UK workforce. These are:
- Novel process---does the role most commonly solve a problem or achieve a goal, even one that has been established by others, in novel ways?
- Mechanization-resistant---does the creative labor force contribute something for which there is no mechanical substitute?
- Non-repetitiveness or non-uniform function---does the work vary because of the interplay of factors, skills, creative impulse, and learning?
- Creative contribution to the value chain---is the outcome of the occupation novel or creative irrespective of the context in which it is produced?
- Interpretation, not mere transformation---does the role do more than merely ‘shift’ the service or artifact’s form, place, or time?
Each of these five criteria is problematic when considered in isolation, and for sure they do not offer hard and fast rules for determining when an occupation is or is not ‘creative.' Nonetheless, occupations which score positively on all or most of the indicators, we contend, are very likely to function as a resource that the ‘creative industries’ require.
We combine the occupational scores with micro data from the Labour Force Survey (it is preferable to use Household Census data but in the UK these are currently only available for 2001) to calculate the ‘creative intensity’ for each SIC code---that is, the percentage of the workforce in the SIC that is accounted for by workers in creative occupations.
When we inspect how this creative intensity varies across the UK economy, the first striking thing we find is how a small group of industries are distinguished by markedly higher tendencies to employ creative workers than other industries. These are the 'creative industries.' But we also show that very large numbers of creatively-occupied workers---the majority in fact---work outside these creative industries, highlighting the significance of the UK’s wider creative economy.
Importantly, our analysis also shows that there are serious misallocations in the DCMS classifications; this includes a definite group of industries, which DCMS does not currently treat as creative, but which have exceptionally high creative intensities, including ‘Computer programming activities’ (62.01) and ‘Computer consultancy activities’ (62.02), which between them account for over 400,000 people.
So, what does Nesta hope to achieve with this analysis?
Ultimately, we want the British government and the DCMS to adopt our methodology. Scholars have pointed out that the creative industries are complex, socially networked and “to a large extent an outgrowth of the previously non-market economy of cultural public goods and private imagination." But, our research shows that they can still be measured, insofar as occupational classifications permit us to track where creative people are employed, and on that basis a distinctive set of creative industries, set within a wider creative economy, can be identified in the data. This is important, as it holds out the promise that mainstream policymakers can turn their attention to the economic contributions that creative organizations make without having to jettison their statistical frameworks.
We are also keen to identify international research partners who we can work with to adapt our approach in other countries. As well as giving a more robust methodology this would enable policymakers to benchmark the economic performance of their creative industries with competitors in other countries, which will surely become a higher priority in the years to come.
Hasan Bakhshi is director of creative industries in the Policy & Research Unit of Nesta, an independent, London-based charity with a mission "to help people and organizations bring great ideas to life." He is also research fellow at the ARC Centre for Excellence in Creative Industries and Innovation at the Queensland University of Technology. This post refers extensively to joint research undertaken with Peter Higgs and Alan Freeman.