The Big Idea | Creative Disruption: The Sector Inventing The New Economy

The Big Idea | Creative Disruption: The Sector Inventing The New Economy

January 19, 2016
  • Why we need to wake up to the power and techniques of Creative Entrepreneurs

    The numbers tell a persuasive story. According to the latest DCMS stats, the creative entrepreneur sector, which spans a diverse range of disciplines from fashion, architecture and marketing to film, videogames and publishing, grew through the recession and is now worth nearly £77 billion. Jobs increased by 5.5% between 2013 and 2014, double the rate of the economy as a whole, and nearly 16% since 2011. Creative service exports totaled £17.3 billion, soaring by 34.2%, between 2011 and 2013 and outperforming the rest of the UK economy by nearly 15%.

    By some estimates, the creative industries account for as much as 10% of jobs in the UK, and up to a third of jobs in London. Intellectual property, the ideas and content that fuel the sector, can be an elusive concept for policymakers. “Government agencies are fifty years out of date on this, used to collecting data on physical things“, says Andy Pratt, Professor of Cultural Economy at City University London. “They don’t measure the stuff that really earns money these days. Immaterial things.” Whether it’s “Grand Theft Auto,” Harry Potter Books or music by Coldplay, products that come straight from the human imagination are generating revenues that often dwarf those of “serious” industries like manufacturing.

    Government agencies don't measure the stuff that really earns money these days. Immaterial things.

    Even the most sanguine stats underestimate the sector’s full impact. For instance, industrial companies are starting to move from mass production to flexible production, something moviemakers have been doing for years. In standard industry, there is a slow turnover of product, whereas creative companies often create several new products a week.“ Economists have been saying for years that the creative economy is somehow wrong,” says Pratt. “Now they have come to realise it’s the old economy that wasn’t responding to reality. Part of the DNA of the creative sector is to manage risk and innovate in response to the massive uncertainties of today’s economy. They are children of the current age.”  

    Structurally, the sector is remarkable for having a ‘triangle shape’ - a handful of giants on top, almost no middle-sized companies and scores of small companies with fewer than ten employees, and self-employed people. Creative entrepreneurs work intensely on contracts and projects that often have a short life and reconfigure regularly, hiring contractors depending on current needs. “Being ambitious is not the same as wanting to grow”, argues Dr. Chris Bilton, Reader in Cultural Policy Studies at the University of Warwick and an expert on management in the creative sector. “For many creative entrepreneurs, ambition is directed towards innovating new products or improving quality rather than becoming larger.“

    For many creative entrepreneurs, ambition is directed towards innovating new products or improving quality rather than becoming larger.

    Whether in fast fashion or online publishing, employees in the sector are comfortable switching hats, free of the rigid hierarchies of traditional firms. “In reality, creative thinkers can contribute new ways of thinking beyond the immediate, operational tasks of management,” says Bilton. “Thinking strategically about the future or empathising with customers and competitors are creative tasks as much as they are management tasks. The really important contribution might be the evolution of new forms of organization and new ways of thinking which can spill over into all sectors of the economy.”

    The fusion of what’s created and how it’s made and distributed, is a salient feature of the sector. In the UK, as long ago as the nineteenth century or earlier, says Bilton, impresarios, actor-managers, and writer-editors were all combining creative with entrepreneurial roles.  A musician, for instance, will now envision how he connects his work with his audience, a possibility transformed by new technology. “Most creative people I speak to - writers, filmmakers, artists - want their work to be experienced by an audience,” he says. “They might not see themselves as marketers or market-driven, but they will usually have a fairly shrewd idea of how others perceive them and their work, and what their relative strengths are in a competitive market. Creative entrepreneurship can also be a source of 'good work' that is autonomous, intrinsically motivated and culturally valuable.”

    • Christopher Kane Resort 2015
      Christopher Kane Resort 2015
    Creative entrepreneurship can also be a source of 'good work' that is autonomous, intrinsically motivated and culturally valuable.

    In this winner-take-all environment, there’s a race for the exceptional. The creative sector is famously a ‘hit business,’ where the proportion of hits to misses is daunting. Taste, judgment, intuition about what people want or what they will want in the future, and how it should look, feel, sound or be thought about, are the sector’s lifeblood. “Just because you can’t be certain of outcome doesn’t mean you can’t be better than other people,” says Pratt. “That’s where skill and passion come in. It’s really very, very extreme, that drive for excellence; to do something totally out of the box that everybody wants. Quality is the thing that makes or breaks you.” Something as specific as an aspect of computer animation, like how to animate hair, the way hair falls against a face, says Pratt, becomes the must-have skill at a given time.

    The British public sector arts have traditionally provided the space for experimentation and innovation where new talent and ideas could develop. With government funding of the arts shrinking, that means rethinking how to spur innovation and training activity and focus on interventions that are thoughtful and emphasize process. Large-scale solutions to problems that fit other industries miss small, but critical players. “Creativity cannot be sprinkled like fairy dust,” says Pratt. “It’s impossible to pick winners because it’s risky and unpredictable so you have to feed the ecosystem as a whole so it then produces more winners than losers.”

    Rather than focusing funding on glamorous buildings or giving tax breaks to a handful of mega-projects, he suggests that government develop social networks, provide skills training for creative workers, improve the transfer of strategic information and advice between agencies and creative firms and educate bankers about longterm investing in the creative industries.

    Large-scale solutions to problems that fit other industries miss small, but critical players.

    Creative entrepreneurs often lack traditional trade organizations and can profit from banding together, not merely in their specific fields, but as a sector so they can lobby government, exchange ideas and fight for change and their share of government resources. “Networking has a creative benefit”, says BIlton. “We do not create alone and collaboration and interaction with others feeds the creative process.”



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