DCMS downgrades value of Creative Industries?

If you were a beady-eyed Treasury wonk in the first week of December last year, then the Creative Industries might just have become 30% less important to you than they were a couple of months previously.

In the dying days of 2011, the UK government apparently reduced its view of the value of the Creative Industries. DCMS published a new statistical estimate of the economic contribution and size of the UK’s Creative Industries for 2009,  lowering it from 5.6% of GVA to 2.9% or from £59.1bn to £36.3bn.

Maybe creative industries workers and policy makers were too eagerly focussed on end of year festivities, but this significant change seems to have passed without notice.

Have bit torrent and unauthorised file-sharing finally taken things over a cliff? Has the the complexity of music licensing and the level of commercial friction become so intense as to kill off  more than a third of the value? Did TV advertising suffer a massive subliminal relapse? Did eBooks decimate publishing values? Did social media revenues evaporate in a bubble? Did all this happen without our noticing?

Not really. It’s more a revenge of the statistics nerds type scenario. Apparently, the reasoning for this massive downgrading,  is that in previous years, the “sub-sectors” of  software programming and consulting have been included in the estimates and these have been removed in the interests of accuracy. It’s certainly true that including companies who produce applications for business software products within Creative Industries seemed a bit of a stretch. Equally,  it has been noted for at least ten years that web-companies and social media companies are part of the Creative Industries and still do not figure in the statistics at all. Presumably they get claimed by ICT or Telecommunications. Maybe the statistical nerds are too afraid of an industry lobby group more alert to the value of metrics than the less numerate Creative Industries lobbyists.

Another statistical quirk has contributed to degrading the numbers. A weighting had previously been applied to Office of National Statistics Annual Business Survey information to take into account its lack of full coverage. Allegedly that coverage has now been extended to all parts of the economy. So the weighting has simply been removed. Kerdunk – the economic contribution plumets 30%. But the Annual Business Survey is quite capable of not noticing thousands of micro-businesses and sole operators who make up the warp and weft of Creative Industries. In fact the DCMS report notes (p26 as in previous years) that the majority of crafts business are too small to be picked up by the Inter-Departmental Business Register and so the category is ignored.

Elsewhere in the DCMS report there are a couple of other  contradictory comments. On the one hand, the report observes that last year, analysis methods were changed and therefore tagged “experimental” although the results didn’t differ dramatically from the previous year. This year it has been deemed unnecessary to term these numbers “experimental” and so the term is dropped, suggesting an apparent commitment to this formulation – even though its make up has been radically transformed.  On the other hand, the report also observes that Digital and Creative Industries are increasingly converging on one another and that if the numbers were combined then the figures would be considerably upgraded.

All of this leaves more than a little room for confusion and ambiguity in what should be the “authoritative”, “official” statistics that public spending and policy decisions are based on.

The term Creative Industries is an unwieldy phrase, to which hardly anyone feels much loyalty. It is a flag of convenience that has heritage and continuity on its side, but needs better definition fast.  If we took into account the warp and weft of micro-companies and the convergence with Digital Industries – it would  not be surprising if the numbers leapt back up and then exceeded previous estimates of the UK’s Creative Industries economic contribution.

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6 responses to “DCMS downgrades value of Creative Industries?

  1. Interesting stuff, thanks Jeremy. I certainly feel “part” of the creative industries (I run events for CI companies, consult to Welsh Government etc on it, sit on board of Welsh Music Foundation…), but wonder whether my company is a CI company. We’re an ecommerce service for the creative industries, but I think we definitely feel aligned to what appears to be a new sub-sector: scalable web startups. As they continue to grow in prominence and importance, it’ll be even more important to decide whether they are in or out of the CIs. I wonder whether the US considers Tumblr, Twitter, 37signals etc as CIs.

  2. BOP Consulting noticed, Jeremy! We blogged on it in December – see here: http://bopconsulting.typepad.com/bop-consultings-culture/2011/12/dcms-publishes-creative-industries-economic-estimates-for-2011-.html. (The comments from Martin Smith and Anamaria Wills are worth reading too.)
    We share your reservations about the work. In particular, while there is a case to be made for the changes to the computer software sector definition and the GVA calculation, the DCMS needs to explain the reasons for its change of heart in these areas much more thoroughly than this report does.

  3. I suppose the question is whether this change of heart is a part of a larger pattern of thinking or even some strategy – or whether it is merely another proof of the cock-up theory of politics.
    Interestingly the DCMS website says that the Minister and a few named civil servants were given notice of the report only 24 hours before it was published. It seems quite possible, no one has really given this much thought other than hoping it will go away…

    As to loyalty to the Creative Industries. Policy folk who work across all the creative industries are a worthy and illustrious minority who probably do have some feeling for the term. But it is a contradictory expression: Industry is about the mechanistic replication and reproduction at scale – creativity is more in the realm of individuals…

    Time for a new label?

  4. Thanks Jeremy – a really good, pointedly clear piece. I heard about this ‘recounting’ when it happened and am still astonished by the fact of it as well as by the way they ‘slipped it out’. At the time, BOP did a coruscating blog about DCMS incompetence! (http://tinyurl.com/6rb5q6j) Despite all the rhetoric of economists and commentators, we still need to fight for our place in the big conversations across govt and the economy (recent lack of culture perspective in well being consultation is one example!). It would be good to know that there is at least one govt dept that really understands and champions this crazy (but useful) hybrid that are the creative industries. In a sector characterised by micros and sole traders, how is it possible even to pretend that this audit of the sector has any validity? The rest of the world still watches the UK as a world leader in this field, even if we know we are hanging on by a thread to the role! – you’d think the DCMS at least would be doing what it can to sustain our reputation. Remember in the old days, when we used to fight to have sector representation at Cabinet level because we wanted our voice heard? With representation like this…….

  5. I don’t think there’s anything sinister in either the 24-hour rule, which I think is standard these days (an anti-‘spinning’ measure) or the timing – the annual estimates are usually released in December. And as I said in my earlier comment, there is a case to be made for these changes (though we have to trust that the DCMS has compiled the data with more care than it has written the text of the report).

    The concern is more that these major changes have been made without much explanation or consultation. It makes those of us who have quoted the DCMS’s previous estimates in good faith look pretty silly. It also doesn’t help with the government’s own identification of the digital and creative industries as a key growth sector in ‘rebalancing’ the economy away from financial services.

  6. Pingback: How big are the UK’s creative industries? — nacue/create

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