NCI09: Creative Economy Conference Bulletin

National Creative Industries Conference 2009 Creativeconomy Conference Bulletin

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Foreword Welcome to the NCI09: Creative Economy Conference Bulletin.

This year’s Conference took place over two days at the BFI Southbank on the 24th and 25th November 2009. Our return to London after four years did us no harm in terms of attracting truly new audiences and high-profile speakers, helped no doubt by the looming election. We were lucky enough to hear from the likes of Siôn Simon, Jeremy Hunt, Don Foster, Caroline Thomson, Alan Davey, Dinah Caine, Jonathan Kestenbaum and Matthew Taylor. We now have real momentum towards our next conference in 2010.

As the conference producer, Civic Agenda’s main change this year was to extend the event to two days, which meant committing to extra costs in the teeth of a public spending storm. However, as you will see in the following reports in this bulletin, with our supporters’ help and guidance we brought together a very senior audience and exceptional speaker line-up to discuss the challenges of the year ahead. I would like to thank all this year’s speakers and sponsors, as well as the 250 delegates who came along and contributed to such lively and thought-provoking debates.

Without wishing to make this sound too much like an Oscar speech, I also have to thank in particular my team at Civic Agenda and the chairs of the workstreams – Patrick Towell, Tom Fleming and Dinah Caine. Unreserved thanks are also given to our chair, Jo Burns, for once again keeping the Conference to its themes, disciplining our speakers to keep to time, and, crucially, making space to encourage debate and participation with the audience.

Jo’s company, BOP Consulting, have written up our two days in this bulletin. A formal Conference report is yet another of this year’s innovations, along with a Ning site and the use by delegates of Twitter throughout. I should point out, in time-honoured fashion, that the views given in this bulletin are those of BOP Consulting and should not be taken as representing those of Civic Agenda.

Enough, then, from me. Words of wisdom follow from Jo, who I am pleased to say has agreed to chair for us all once again next year. This is followed in turn by articles authored by BOP and responding to the main themes of the conference.

The State of the creative nation “We won’t call it piracy in five years, we’ll call it distribution”: Reflections on the Digital and Media workstream Where is the creative economy? Reflections on the Places workstream Learning to learn: Reflections on the Skills and Talent workstream

Robin Knowles, Conference Director

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Note from Josephine Burns Change and all that….

Five years of the National Creative Industries conference, eleven years since the first Creative Industries mapping document. There’s now a back-story and all sorts of new possibilities. This conference was pregnant with a sense of both.

From the current Minister, Siôn Simon, and the shadow Secretary of State, Jeremy Hunt, there were warm words about the importance of the sector to the economy. It would seem then that the creative industries – this ragbag assemblage of disparate parts – have established themselves on the political agenda. And one of the striking messages of the conference was the degree to which all, or anyway most, parts of the sector identify with the term, from architects to the BBC, opera houses to commercial galleries.

“The creative industries – this ragbag assemblage of disparate parts – have established themselves on the political agenda.”

Indeed, boundaries of all sorts are blurring – as Mark Selby from Nokia said, “consumers are now creators”. However different the practice or production chain, there is a growing awareness of the things that are shared, and this was developed in the three conference workstreams: how creativity relates to place; the impact of the digital shift and how technology is transforming all areas of production and consumption; and the critical importance of skills and education in fostering existing as well as new talent and developing new consumers.

So far, so good. But, the cry went up, where oh where will the investment in content come from in the face of a depleted public sector, a highly risk-averse investment climate and consumers with a good deal less disposable income?

“We need the active support of government through policies based on informed and continuing discussion with the sector.”

We didn’t find the answer exactly but speakers and audiences were united in recognising that the sector itself could do much through new forms of partnership and the development of new business models. But equally we need the active support of government through policies based on informed and continuing discussion with the sector. In particular, as Jonathan Kestenbaum pointed out, the need for investment from both private and public sectors in R&D is crucial to maintaining competitiveness. This was echoed by Jeremy Hunt, who recognised that innovation is at the heart of economic recovery.

What of the atmosphere of the conference? We’re all sceptics about such events; we all say, well, the networking was good. While this was as true as ever (well done the BFI), the quality of the speakers and their responses to the excellent questions from delegates was outstanding – unusually so. Civic Agenda has already asked me to get involved again next year. By then we’ll be, say, six months into a new term of government, two years on from the crash and twenty months away from the Olympics. I want to be in a place with the widest possible representation from the sector to take the story of the creative industries into these new policy spaces and see what happens. I hope you’ll join me.

Josephine Burns, Conference Chair

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The state of the creative nation As revealed by NCI09…

After a decade in the sun – one speaker suggested we would soon look back on the last few years as halcyon days – NCI09 found some creative industries representatives seeming shell-shocked and uncertain about the future. The recession, the pace of technological change, rampant piracy, political uncertainty and the prospect of deep cuts in public spending left some speakers searching for suitably apocalyptic metaphors to describe the current state of play. Greg Dyke called it a “train crash”; Lyndon Sly of City of Westminster College (referring to creative education in particular) talked of a coming “perfect storm”. Yet others were decidedly upbeat: Mark Selby of Nokia reckoned we were on the verge of a new cultural revolution, while Jonathan Kestenbaum of NESTA argued that the creative economy is an important part of Britain’s wider capacity for innovation.

Nevertheless, by the standards of previous creative industries conferences the tone was sober. Our old friends from the Department of Dodgy Statistics put in only fleeting appearances (though it was a surprise to be told that Bradford and Leeds have the largest digital cluster in Europe).

Which way is forward?

If delegates’ comments were anything to go by, most creative industries are feeling under pressure and uncertain at the moment. It is clear that the creative sector is still grappling with the rapidly changing economic landscape. Above all, it is preoccupied with the search for business models that will allow it to make money from the digital revolution. A number of ideas were discussed at the conference – subscriptions, micropayments, clubs, ‘freemium’ services – but as yet none have been shown to be widely applicable. Despite this, there was some optimism in the digital media workstream that workable models would be found. In this respect, Rupert Murdoch’s introduction of charging for online news may prove instructive.

The more traditional art forms seem more optimistic. Catherine Large of Creative and Cultural Skills suggested that businesses in the fields covered by her skills council were returning to pre-recession levels of activity, while live performance was also thought to be holding up reasonably well. (One of the few disappointing aspects of the conference was the lack of people from these art forms, although Donna Renney from Cheltenham Festivals and Yasmin Sidhwa of Pegasus Theatre were eloquent spokeswomen for them from the conference floor.)

“After a decade of generous funding support, the subsidised sector is in pretty good shape.”

Furthermore after a decade of generous funding support under Labour, not just for cultural organisations but for workspace, venture capital, skills and training programmes, the subsidised sector as a whole is in pretty good shape. London’s museums, galleries and theatres are world leaders, Britain’s film industry is attracting substantial inward investment, and our cultural achievements are internationally recognised: Bradford has just become UNESCO’s first World City of Film, for instance. Derek Wyatt MP argued that this ‘soft’ power has become more and more important to Britain’s economy and image as a whole.

The big fish in the media pond The BBC too is still expanding while commercial broadcasting and newsprint shrink, establishing a huge web presence to go alongside its TV and radio activities. While BBC services are valued by most Britons, the corporation’s dominance poses challenges both for itself and its rivals. Caroline Thomson, its Chief Operating Officer, and Anne Morrison, the director of the BBC Academy, argued that BBC activities support the rest of the sector in a number of ways, from encouraging regional NCI09 Conference Bulletin BOP Consulting 2009

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creative clusters to being a source of high-quality training. But it is perhaps no wonder that its funding privileges and behaviour are receiving such attention. Suggestions from the conference included scrapping the BBC Trust; setting aside a percentage of licence fee revenue for publicsector cultural organisations to bid into; and opening up the iPlayer platform.

Innovation and risk taking One thing the conference reinforced was the degree to which the commercial and subsidised parts of Britain’s creative economy are intertwined. While the benefits of these interdependencies have been recognised by all political parties, and were reaffirmed by Jeremy Hunt in his speech – he cited the example of Danny Boyle’s journey from the Royal Court theatre to Oscar night glory – it implies that the public spending squeeze that will happen irrespective of the election result will also affect the commercial creative industries. The woes of the financial services sector mean that the sharp falls in venture capital and risk finance funding availability seen this year are unlikely to be reversed soon, cutting off another source of support. The small size and precarious finances of many creative businesses puts them in a vulnerable position, and when combined with the rapid shifts in the market for creative products, may even lead to them being overwhelmed by the pace of change.

How could this fate be avoided? Matthew Taylor of the RSA observed in the Question Time debate that in other areas of life, such as social care, policies and practices were beginning to be radically rethought – so where are the radical ideas within the creative industries? Perhaps the imminence of the election means that it is unrealistic to expect really bold thinking at this time, although some interesting smaller-scale ideas were floated, such as a new version of the Enterprise Allowance Scheme being worked on by the Arts Council and the New Deal of the Mind. All the same, the current political focus on regulatory and structural issues (as seen in the Digital Economy Bill) and broadband rollout to isolated communities seems curious. The first of these risks destabilising some of the institutions that underpin the UK’s success at a particularly difficult time; the latter requires major investment for uncertain returns.

“The political focus on regulatory and structural issues and broadband rollout to isolated communities seems curious.”

Perhaps the last word should go to Jeremy Hunt, the Shadow Secretary of State for Culture. He spoke of the way in which failure is ruthlessly punished in politics, leading to government becoming an exercise in avoiding mistakes. Yet in his business life, his first three enterprises failed; the fourth was a great success. His remarks implied that if the creative industries and the public bodies which support them are to meet the challenges they face, innovation and risk-taking, sometimes with public money, will be essential but may result in failure. In 2010, then, the sector needs both to open itself up to fresh, bold thinking and to start making the case for the investment it will need to explore those ideas.

Chris Gibbon: chris@bop.co.uk

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“We won’t call it piracy in five years, we’ll call it distribution” Reflections on the Digital and Media workstream Morgan Holt, of the marketing group Engine, characterises the creative industries approach to entrepreneurship as being that of the starving artist: creating art is enough, who cares about money?

But rather than shivering in their garrets, many creative entrepreneurs are developing dynamic new approaches that generate real profits and underpin sustainable businesses. They are heeding the call that Siôn Simon, the Minister for Creative Industries, made at NCI09 when he asked them to “be more agile, listen to the consumer and work harder on doing new things in new ways”.

The Minister was aiming his comments at music, film and television producers who are considering how they can survive new challenges to Intellectual Property rights. They are not just experiencing a shift towards a digital culture, but towards an instantly replicable digital culture. Music labels and film and TV producers now have major worries about capturing revenue – how can they persuade (or coerce) people into paying for something they can easily download for free?

In theory, new business models will demonstrate that innovation can be as productive a response as punishment. In support of innovation, the ‘Freemiums’ Spotify.com and We7.com have together gained at least five million new UK users in their first year, and 2009 has been the most successful in the UK's history for singles sales (more than 117 million have been sold). Restriction also seems to work – music sales rose in Sweden after anti-piracy laws were implemented – but at NCI09 it was the case for innovation that was most up-beat and engaging.

New ideas for the new economy Liz Rozenthal of Power to the Pixel, gave a sign of this new optimism in her talk about new business models in film production. She cited Robert Greenwald, a Democrat filmmaker who uses crowdfunding to pay for his productions, getting a large group of people to contribute a small amount each. That is an overtly political use of a model that could work in different contexts.

As Paula Le Dieu, Director of Digital at the BFI said, even if your product only interests one person in a million, there are still 1,100 people online who can access it. For example the Brazilian website Moviemobz assembles audiences who want to see a specific film. They set a time, and, when enough people sign up, the cinema shows the movie. This tends to benefit art house movies.

“Even if your product only interests one person in a million, there are still 1,100 people online who can access it.”

Morgan Holt drew on his experience working at the mobile network 3. Although they provided 20% of music downloads in the UK market they struggled to turn a profit. This was because Apple’s iTunes, the dominant player, had deliberately set the price too low – they make their money from selling the hardware.

Morgan’s advice for businesses struggling to transition to the digital world? Turn from content provider to service provider. Record companies will no longer only provide music; they will turn into fanclub facilitators, helping fans gain access to their artists, providing information, access and insider insight. This new model needs to be, as Mark Selby from Nokia put it, “simple, scalable, sustainable”.

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Fundamentally many of our speakers agreed that this change is about increasing interaction. The consumer is actively involved – something that Alastair Duncan, from the British Interactive Media Association, characterises in advertising as a movement “from getting attention to keeping attention”.

This links back to those who are less adversely affected by challenges to Intellectual Property.

Many organisations, particularly those who sell experiences rather than content, such as theatres or galleries, have welcomed digital media and use it to connect and engage with their audiences. The BFI shows off its collection through clips of its online archive while the National Gallery uses its website to add another layer of depth and knowledge to its collections.

What NCI09 taught us is that those creative industries who feel they have been affected negatively – music, film and television – can learn from both within themselves, and those from other organisations who feel they have benefitted. The visual and performing arts are using digital media to generate new revenue streams, develop audiences, and create stronger relationships with them.

How can the rest of the creative industries learn from these new ideas, new models and technologies? To end with another Morgan Holt quote: “We won’t call it piracy in five years, we’ll call it distribution”.

Callum Lee: callum@bop.co.uk

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Where is the creative economy?

Reflections on the Places workstream After 12 years of cheerleading for the creative industries, we are sometimes in danger of believing that everywhere is part of the creative economy. Tom Fleming, Chair of the Places workstream at NCI09, has counted 100 place-based creative programmes around the UK while BOP has uncovered 50 designated Cultural or Creative Quarters. In Tom’s polite words, “the creative dividend is over-stated in some places”.

So if the creative economy is not everywhere, where is it? According to the speakers within the Places workstream, the creative economy is…

1) In the South East Actually, this is so obvious that none of the speakers stated it. But London and the Greater South East host 58% of creative and digital jobs and are the UK’s gateway into global markets. 1 Their dominance will continue into the foreseeable future.

2) In places that really want it The workstream showcased several Northern cities’ energetic efforts to fill the holes left by dying industries: Manchester, Sheffield, Bradford and Gateshead.

One of the most striking aspects of Gateshead and Bradford’s success stories is their willingness to bid for every economic and skills development fund going, then to channel the proceeds into their creative economies. The number of initiatives running in Bradford is impressive – and yet how much more efficient to be able to bid to a single creative industries fund and to deliver one joinedup service!

Perhaps this will be possible in Scotland from next year, when Creative Scotland is established as a statutory public body. The juxtaposition of presentations on Gateshead and Creative Scotland invited some interesting comparisons. For Gateshead, backing culture and creative industries is a brave and apparently successful flight into the unknown. Meanwhile Scotland can claim a history of invention, but Creative Scotland is experiencing a difficult birth.

3) In places with exciting cultural venues Surprisingly, we are still getting to grips with how cultural venues can best service the creative economy. Are an arty ambience, wi-fi and good coffee enough to draw in and help network creative workers? They are for Manchester’s Cornerhouse and the proposed BFI National Film Centre, as both sit in city centre and creative locations.

By contrast the Ruhr’s investment in (one suspects, more traditional) cultural venues had a limited impact; hence the explicit economic focus of the Ruhr 2010 programme.

Carmody Groake’s Sheffield Festival Centre might offer a glimpse of the future. Combining a muchloved art cinema, the home of Doc/Fest, with creative workspace, the new Centre is designed for serendipitous encounters and crossover between its user groups. But it is not over-designed: the aim is to preserve the unselfconscious behaviour and spontaneity that converted industrial buildings seem to encourage.

1

Figures taken from: The Creative and Digital Industries in Yorkshire and the Humber 1998-2006 (BOP for Yorkshire Forward, 2008).

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4) In some surprising places One speaker referred to Dundee’s “accidental” creative cluster, meaning that it evolved independent of public policy. Anne Bonnar reminded us that most Britons live in the “unsexy hinterland” and that creative policies need to consider these places too.

In fact, BOP research has found some of our fastest growing creative economies to be in suburbs and rural areas with good access to London. As in Dundee, this growth is unrelated to public policy. It is driven by lifestyle choices and fast broadband that enables part time home working and part time commuting into London. Are the usual measures for supporting local creative economies – skills development, networking, venture capital and affordable workspace – relevant in these places?

“This growth is driven by lifestyle choices and fast broadband that enables part time home working.”

Conclusions The relationship between the creative economy and place is complex, multi-tiered and in a state of slow but constant change. The Places workstream offered illuminating glimpses of both success stories and work in progress around the UK. Much of this merits continued discussion. Clearly, at a time of reduced public funding, we need to be very clear about which location will best reward which type of public support.

Some further suggestions for NCI 2010, inspired by NCI09, include:

New approaches to understanding creative industry supply chains and locational decisions – does everything need to be centralised or co-located?

How to plan for creative economies across sub regions and new City Regions The arms race between countries and regions to maximise virtual connectivity How to design neighbourhoods and suburbs that support creative activity

Alex Homfray: alex@bop.co.uk

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Learning to learn Reflections on the Skills and Talent workstream Skills, training and talent have risen fast up the political agenda in the last decade or so. Dinah Caine, Chief Executive of Skillset and the chair of this workstream, observed that there was comparatively little interest in the skills agenda in the early 1990s. In this century’s globalised world, however, they are seen as central to maintaining Britain’s economic position. As the Leitch Review (itself evidence of this change) puts it, “skills are the key lever for prosperity”. Public policy for the creative sector has taken this on board: eight of the 26 recommendations in the Creative Britain report touch on skills or talent. Will Bridge of the University of the Arts pointed out that Britain’s creative education courses are a worldwide magnet for talent.

Yet it was clear from the workstream sessions that all is not well. There is a plethora of agencies and delivery bodies – too many to be effective. The creative industries have historically been sceptical of the benefit of formal qualifications, and their perceived glamour has enabled them to get away with treating their workforce in ways that would raise eyebrows in many other parts of the economy. The recession has compounded these problems: Caine noted that, in the creative media sector Skillset covers, businesses had already cut back on training. The higher education sector, which ought to be in a position to compensate for these deficiencies, finds it hard to engage with creative businesses for a myriad of reasons. The three workstream sessions offered an opportunity to explore these concerns through the prisms of Policy and Strategy, Best Practice and Vision.

Complacency The culture of the sector has often been suspicious of formal qualifications: the emphasis instead has been on experience, social contacts and personal attributes. There has long been a tradition of unpaid or low-paid work for new entrants to the industries (a code of conduct aimed at tackling this was announced in the week of the conference). Despite this, bright, committed people have always been willing to work in the sector, inducing a sense of complacency among creative businesses.

This has result in many creative industries being dominated by well-connected middle-class people, with consequent implications for workforce diversity.

Within the sector, the small size of firms and the project-based nature of much of their work means that there are limits to what they can do themselves with regard to skills. In this respect, one of the encouraging things to come out of the discussions was the recognition by the public service broadcasters of their wider responsibilities: the BBC’s new Academy, with its 200 staff and £40 million budget, intends to reach out beyond the corporation, while Channel Four’s smaller 4Talent programme aims to broaden the social make-up of its industry.

“Bright, committed people have always been willing to work in the sector.”

These efforts, while significant, are on a much smaller scale than those of the higher and further education sector. However, while there was a clear desire here to engage much more with the creative sector, it was acknowledged that much had to change to make that possible. Bureaucracy and inflexible structures are holding education institutions back. Problems mentioned included rigid term-times and teaching arrangements; the length of time it takes to develop new courses; too many ‘top-down’ targets; a proliferation of over-theoretical courses and a lack of credibility with employers.

Breaking down the barriers The conference heard about a number of ways in which some of these barriers were being tackled.

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date. To remedy this, Bournemouth University, which has the largest media school in the country, has introduced tutor-practitioners, who have a foot in both academia and commercial practice. The Skillset Media Academies emphasise industry-facing courses, and while the universities in the scheme are rivals, they also belong to a network to encourage co-operation. They have, for example, improved credit transfer arrangements, to allow students to pick the best courses from across institutions. Many universities are developing flexible modular programmes and putting more emphasis on ‘real world’ components in courses. Efforts are being made to improve alumni support as well. Nevertheless, the challenges remain considerable. One particular issue that was raised is the distinction between short and long-term skills. It is one thing to train someone to use the latest version of Photoshop, quite another to develop the creative skills needed to ensure the long-term viability of the sector.

Outside the universities, the Creative Apprenticeships scheme was welcomed by a number of speakers as a ray of light, though the target of 5,000 set in Creative Britain was seen by Catherine Large of Creative and Cultural Skills, among others, as unrealistically high. Andrew Carmichael of Creative Process pointed out that the benefits were not just felt by the apprentice: he or she could help to professionalise the (small) firm they join, by making other staff more aware of the benefits that can ensue from training. The impact of this initiative should be well worth watching over the next few years.

So, given this generally rather gloomy outlook, were there any reasons to be cheerful? Anne Morrison of the BBC Academy suggested one – she “Businesses thought that people were increasingly recognising the career benefits of need help to find skills training, especially when, as now, pay is constrained. Dinah Caine ways through the suggested that the designation of the creative industries as a growth thicket of sector might be another. More importantly perhaps, she also stressed the initiatives and growing importance of partnerships and collaboration. Businesses need agencies.” help to find ways through the thicket of initiatives and agencies to get the training they want for their staff. Such brokering and partnership requires a generosity of spirit that some delegates worried may not survive the tougher financial climate of the next few years – forgoing students and revenue streams in the wider interests of the sector may be a step too far for some – but seem the likeliest way to develop coherence in a fragmented sector.

Chris Gibbon: chris@bop.co.uk

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About BOP Consulting BOP Consulting is a specialist research consultancy that focuses on how culture and creativity underpin social and economic development. The majority of our work is concerned with the development and implementation of public policy for the cultural and creative sectors, but we are increasingly also working in areas such as regeneration, innovation and education. Our clients include national and international agencies, such as UNESCO, the European Commission, DCMS, NESTA, UK Film Council, Arts Council, MLA Partnership, Heritage Lottery Fund, CABE, the Design Council and Skillset; departments of the devolved administrations; regional organisations such as the Regional Screen Agencies and all of the English Regional Development Agencies, as well as sub-regional bodies and local authorities in places as diverse as Tynedale, Cheshire and Peterborough. We also regularly undertake work for individual organisations, particularly in culture (e.g. Lyric Hammersmith, The Reader) and Higher Education (e.g. the universities of Falmouth, Ulster, Leeds).

The main areas of our work are:

Research on sectors, skills, innovation, economic and social impact Strategy development on a local, regional and national basis Evaluation and feasibility for projects and initiatives Business planning and organisational development Design and management of business support and knowledge transfer programmes

The company was established in 1997 and we currently have offices in both London and Leeds. www.bop.co.uk

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Tel: 020 7378 0422 Fax: 020 7357 8015 www.civicagenda.co.uk