Developing growth in the creative industries

World-leading research from the University of Sussex Business School has led to substantial government investment and support for the creative industries.

Photo by Jason Goodman on Unsplash

A series of research projects, led by Dr Josh Siepel and Dr Roberto Camerani from the University of Sussex Business School, are helping to boost the economic success of creative, digital, and IT (CDIT) companies across the UK. The projects were the focus of one of the impact case studies that formed part of the Business School’s successful REF 2021 submission.

Brighton Fuse

Brighton Fuse, the initial project, focused on Brighton & Hove – with its successful CDIT cluster – to gain a deep understanding of the factors that shape the success of the creative industries, gathering valuable information to support skills and economic development both locally and across the UK. 

The two-year project (2011-2013) was an AHRC-funded collaboration between the University of Sussex and Brighton University, together with industry partner Wired Sussex. Alongside a survey of 500 companies, the researchers conducted interviews with stakeholders – including managing directors, festival co-ordinators, artists, programmers and academics – as well as observational research of relevant events.

The importance of combining creative and technical skills

One of the project’s key findings was that the combination – or fusion – of artistic and creative skills with technical expertise was a major factor in business success. The project identified that ‘fused’ companies – which combined arts and humanities skills with science, technology, engineering and mathematics (STEM) skills – grew at more than twice the speed of ‘unfused’ firms and ten times faster than the British economy overall.

A second project found that, like the firms studied in the original Fuse project, many freelancers working in the creative industries combine creative and technical skills in their work. This demonstrated that the concept of fusion can be applied at an individual as well as a group level.

The Fusion Effect: a UK-wide perspective

The Fuse research was followed by the Fusion Effect project, commissioned by UK innovation charity Nesta, which analysed the arts and science fusion effect at a national level and beyond the creative industries. Using official UK data on innovation and firm capability, the researchers studied companies across the UK and found that ‘fused’ firms play a major role in the UK economy. These companies make up only 11% of non-micro firms but generate 22% of employment and 22% of turnover. Other things being equal, they grow 6% faster in terms of employment, demonstrate 8% higher sales growth than STEM-only firms, and are 3% more likely to bring radical innovations to market.

The researchers’ insights have brought new subtleties to the knowledge and skills agenda, which can often be oversimplified by focusing on the need for more STEM graduates. Together, the projects demonstrated how fusing arts, humanities and design with digital technology skills can help to achieve growth and innovation and outlined a business model that could be further developed nationwide.

Micro clusters: pointing the way to economic recovery

As a partner in the Creative Industries Policy and Evidence Centre (PEC), Dr Siepel led the Creative Radar project which developed the Brighton Fuse methodology to explore the characteristics and challenges facing creative industries around the UK.  While creative business communities are typically thought to only exist in the UK’s bustling urban centres, this research identified 709 ‘micro clusters’ (areas with at least 50 creative organisations within walking distance of each other) across the UK. They can be found in places like Carmarthen in Wales and Louth in Lincolnshire, illustrating the diversity and dispersal of the UK’s creative industries.  

The research used data scraped from the websites of 200,000 creative businesses to identify the micro clusters. Researchers then surveyed 1,000 of these businesses in early 2020 to find out how they operate, the challenges they face, and how they differ from firms located in larger creative clusters.  The researchers found that companies in micro clusters outside of larger established areas were more likely to have grown and to want to grow in the future.

The findings are significant as the sector plots its post-Covid future, as Dr Siepel explains: “Companies in these micro creative clusters wanted to grow, but the disruption of Covid and the uncertainty of Brexit and the cost-of-living crisis put them at enormous risk. These small clusters represent a real opportunity for building economic resilience across the UK, but also need to be supported as the government seeks to ‘level up’ the UK’s regions.”

Further research, led by Dr Jorge Velez Ospina and Dr Siepel with the support of the National Innovation Centre for the Rural Economy, has also identified that these micro clusters also exist in rural settings as well.  Dr Velez Ospina explains, “While we often think of clusters as being seen in cities and towns, this research also shows that clustering happens in rural areas as well.  This means that rural areas should not be overlooked as sources of growth in the creative industries and should be included in plans to support these sectors."

On the government radar

The Creative Radar study called for the UK government to extend the DCMS Creative Scale-up (CSU) programme, based on the findings about growth ambitions outside large clusters. The government responded to these recommendations and announced approximately £40m for scale-up support for the creative industries in 2021’s autumn budget. The Creative Radar project was also cited in the government’s recent Levelling Up White Paper, and Siepel is now working with DCMS to help build the evidence base around the creative industries and the benefits of further investment in the sector.

AHRC award to research Covid impact

To better understand the impact of Covid on the UK’s creative industries, Dr Siepel and the research team at Sussex were awarded funding from the AHRC to re-survey the companies from the Creative Radar study.

“Our evidence has demonstrated that creative industries were unevenly affected by the Covid pandemic.  Some sectors, such as performing arts, suffered tremendously, while others, such as gaming, have gone from strength to strength,” says Siepel. 

“The challenge we face post-Covid is how creative businesses and creative clusters, and micro clusters more broadly can remain resilient in the face of a challenging and dynamic macroenvironment where trading conditions are likely to remain challenging.  Appropriate support for businesses, such as the government’s Creative Scale-Up scheme, can help to ensure that the creative industries in the UK grow back in a more resilient way.”