Policy and Research

A comprehensive study of the UK's Creative and Hi-Tech industries employing the Dynamic Mapping methodology adopted by the UK Department of Culture, Media and Sport (DCMS) following the research team's 2013 report .

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From the executive summary:

The UK’s creative and high–tech economies are major employers. Between them, and without double counting, they account for 4.76 million jobs, or around 16 per cent of the UK workforce (average of 2011–2013). Within this, 2.52 million jobs are in the creative economy, 3.11 million are in the high–tech economy, and 0.87 million are in both.
Between 2011 and 2013, employment in the UK’s creative economy (jobs in the creative industries plus creative jobs elsewhere) grew by 4.3 per cent per annum (p.a.) on average, over three times faster than the workforce as a whole (1.2 per cent p.a.). This is also faster than employment growth in the high–tech economy – that is, jobs in the high–tech industries plus Science, Technology, Engineering and Mathematics (STEM) jobs outside the high–tech industries – which grew at 2.1 per cent p.a.
Similarly, employment in the UK’s creative industries grew at 5.0 per cent p.a., much faster than the 1.5 per cent p.a. growth of employment in the high–tech industries (which was dragged down by particularly slow growth in non–STEM occupations).
Echoing Nesta’s previous research findings using business registry data, we detect strong tendencies for creative and high–tech employment to co–locate. The creative economy is, however, less equally distributed across the UK, with London being more prominent than it is in the UK’s high–tech economy. There is some evidence though of a slight catch up since 2011 as London’s creative economy workforce has grown more slowly than most parts of the country.
How big are the UK’s creative and high–tech economies?
There were 2.52 million jobs in the UK’s creative economy (average 2011–2013), representing 8.3 per cent of the workforce. This consisted of 1.65 million jobs in the creative industries (866,000 of which were in creative occupations and 782,000 of which were in other roles) and 876,000 jobs in creative occupations outside of the creative industries (sometimes called ‘embedded creatives’). That is, there are slightly more creative jobs outside the UK’s creative industries than within.
There were 3.11 million jobs in the high–tech economy (average 2011–2013), around 10.3 per cent of the workforce. This consisted of 2.33 million jobs in high–tech industries (805,000 of which were in STEM occupations and approximately 1.53 million in other roles) and 782,000 STEM jobs outside the high–tech industries.
The extent to which STEM jobs are embedded in the wider UK economy is therefore similar in proportional terms to creative jobs. 0.87 million jobs fell within both the creative and high–tech economies (average 2011–2013, 2.8 per cent of the workforce); 0.46 million of these were at the same time both creative and STEM occupations. 0.54 million people worked in industries that we classify as both creative and high– tech.
That part of the UK workforce where the creative and high–tech economies meet has been particularly dynamic, growing faster than the workforce as a whole over the 2011–2013 period at 8.0 p.a. on average (with dual creative/high–tech occupations growing at 5.7 per cent p.a. and dual creative/high–tech industry employment growing especially rapidly at 9.6 per cent p.a.). Policymakers should therefore pay particular attention to this segment of the UK’s economy
What is the geographic spread of creative and high–tech employment and how is it changing?
Regions with the highest concentrations of creative economy employment tend also to be regions with high concentrations of high–tech economy employment (concentrations being defined in terms of the level of creative (high–tech) economy employment as a proportion of the area’s workforce). The creative economy is, however, more unequally distributed across the country than is the high–tech economy. In particular, it is even more highly concentrated in London (where it accounts for 15.5 per cent of the workforce) compared with the high–tech economy which employs 10.6 per cent of the workforce in London . At a sub–regional level the creative and high–tech economies are particularly concentrated in the counties to the north, south and west of London (Berkshire, Oxfordshire, Buckinghamshire, Surrey, Hertfordshire, Cambridgeshire) in Outer London (West and North West) and in Milton Keynes, Edinburgh and Bristol.
There are pockets of concentrated high–tech economy employment without correspondingly high concentrations of creative employment in areas including Aberdeen City & Aberdeenshire, Cheshire, Derby, West Cumbria, Swindon, Halton and Warrington, Bedfordshire, Hampshire and Warwickshire.
Sub–regional concentrations of the creative economy where there is no corresponding concentration of high–tech can be found in Inner London (East and West), and in Outer London (South). Brighton and Hove is also notable for its concentration of creative economy employment. This is not deny the existence of high–tech activity in Inner London, but as our definition is broader encompassing a range of different technological activities it does not pick these out in isolation.
Over the period 2011 to 2013 London’s creative economy grew on average by 2.9 per cent p.a., just under three–quarters of the rate of the UK’s creative economy as a whole (4.3 per cent p.a.). This is all the more striking given that London’s overall workforce grew almost twice as fast as the UK’s over this period. With the exception of Scotland, the creative economy grew more rapidly in all areas outside London, particularly the East of England (9.3 per cent p.a.), the West Midlands (8.2 per cent p.a.) and the North East (5.6 per cent p.a.). Employment in London’s high–tech economy grew more quickly than did its creative economy, at 4.5 per cent p.a., more than double the 2.1 per cent p.a. growth achieved in the UK as a whole. With the exception of the South West of England and Northern Ireland, all UK regions saw expansion in their high–tech economies.

Our research aims to address the evidence gap by applying two broad classes of valuation techniques – stated preference methods and the wellbeing valuation approach – to the work of two of the UK’s premier cultural institutions, the Natural History Museum (NHM) and Tate Liverpool (TL), and drawing conclusions on the strengths and weaknesses of these methodologies as applied to culture.1 It is important to note that our aim here is not to come up with a total value for these institutions as such, but to uncover the value of some of the key non-market services they provide. Moreover, our study is not designed to compare the values derived across the two institutions and hence the values obtained are not comparable. Firstly, the NHM and TL are two very different institutions offering a different array of cultural services and our study focuses ondifferent subsets of these services in each case. Secondly, the valuation methods used for the two institutions are different in many respects. As we will discuss, even within the contingent valuation survey, for example, different scenarios, value elicitation methods and payment vehicles are used, and different samples of the UK population are surveyed.
A comparative analysis of stated preference and wellbeing valuation methods is important for a number of reasons. First, the cultural sector has generally been hesitant towards traditional economic approaches to valuation. There are valid questions about whether monetary values should ever be applied to culture. However, as discussed, the benefit of attaching monetary value to non-market goods, like culture, is that it increases the likelihood that these values will be considered in economic decision-making. Both stated preference and wellbeing valuation are endorsed by HM Treasury’s Green Book on cost-benefit analysis. A detailed comparison of the methods therefore holds out the promise of a more fit-for-purpose approach to economic valuation in the cultural sector that is also recognised by policymakers.
Second, the research is the first comparison of stated preference and wellbeing valuation methods in the cultural sector and amongst the first ever conducted in any sector. It also provides the first monetary valuation estimates of access to and services provided by the NHM and TL.
Finally, the study offers the first comprehensive subjective wellbeing investigation and valuation of NHM and TL visitation using a number of complementary wellbeing approaches.

The cultural and creative industries are closely intertwined with government. This chapter reviews key economic rationales for public policy interventions for the arts, cultural and creative industries. Market failure justifications depend on the status of arts and culture as non-rival public goods, as ‘merit goods’, or the need to moderate the effects of up-front investment costs or monopoly, and the inherent uncertainty of creative production. ‘Systems failure’ too is a regular rationale for policy intervention. Using the United Kingdom as an example, the chapter shows how emphasis on these rationales has shifted over the last three decades, first in the context of industrial policies for traditional aims such as exports and job growth, which have been joined in recent years by the need for investment in intangibles, knowledge exchange, and spillover effects in the wider economy.