Govt advised to encourage more R&D investment to grow creative economy

The Council for Science and Technology (CST) has written to the UK Prime Minister to advise on how the government can harness research and development across the UK’s creative economy. This work aims to support the delivery of the UK government’s Creative Industries Sector Vision, developed in partnership with the Creative Industries Council.

The Council report said that in recent years the UK creative industries have delivered more economic value than the life sciences, aerospace, and automotive sectors combined. It estimates that in 2020, UK creative businesses spent £3.3 billion on R&D, equivalent to 3.2 per cent of the total gross value added (GVA) of the creative industries and a greater proportion than the UK economy average of 2.3 per cent.

R&D in the creative industries has produced spillover benefits in diverse areas such as defence, agriculture, healthcare, and education, and the creative industries have significant growth potential in sub-sectors that combine science and technology with the arts and humanities.

The report's authors write that "Investment in R&D is crucial to the future success of the UK’s creative businesses and to our wider creative economy. However, we have consistently heard that the creative industries continue to be seen as a lower priority for investment than traditional STEM sectors, despite their economic value."

They lay out six recommendations:

• Using the National Science and Technology Council to ensure public investment in R&D in the creative industries reflects the size, economic contribution, and future growth potential of the sector

• The Chancellor and Culture Secretary should commission research from the Creative Industries Policy and Evidence Centre into the requirements and availability of scale-up finance for creative businesses

• HM Treasury should work with the Office for National Statistics to prioritise improvements to data collection on creative industries R&D. This should support a future broadening of the definition of R&D eligible for tax relief to include arts, humanities, and social sciences research

• The Department for Culture, Media and Sport should continue to undertake research to conserve the UK’s cultural assets in museums, collections, and galleries, and work with the Department for Science, Innovation and Technology to capitalise on opportunities to value and digitise UK national collections

• The Intellectual Property Office should, as a matter of urgency, clearly set out guidance on what standards or regulations AI companies need to adhere to with respect to copyright of creative content

• The Department for Culture, Media and Sport and the Department for Education should work with Research England and the Office for Students to review the performance, geographical distribution, and financial support for small specialist creative institutions

In response to the Council’s advice, Sir Peter Bazalgette, Industry Co-Chair of the Creative Industries Council, said:

"I warmly welcome this advice and recommendations. The creative industries can deliver significant economic growth and cultural value to UK PLC in the next decade. Recognising the sector’s potential for R&D-led innovation and backing it with public and private investment will yield huge dividends."

Professor Christopher Smith, Executive Chair of the Arts and Humanities Research Council, said:

‍"The creative industries are an outstanding example of where human imagination and innovation drives technological advance and economic growth. Arts and humanities are not simply beneficiaries of R&D, they are the fertile ground in which invention, design and application come together. This welcome report sets the arts and humanities disciplines at the heart of science, as the indispensable ground from which can flow innovation for the good of all in our society."

Professor Hasan Bakhshi, Director of the Creative Industries Policy and Evidence Centre, said:

"The creative industries rightly now feature as a key plank in the UK’s growth strategy. But when it comes to public investment in R&D and innovation – the engines of growth – they remain under-represented. CRAIC research suggests the sector is the focus of only around 1% of overall UKRI spending, which is very significantly below the sector’s share in Gross Value Added. This CST review led by Professor Julia Black, and the recommendations contained within it to boost investment in creative industries R&D, pave the way for a welcome and urgent corrective."

Caroline Norbury, CEO of Creative UK, said:

"As one of the fastest growing sectors in the UK economy, the creative industries need the Prime Minister to lead the way in making the UK the best place in the world to build a creative business. By swiftly acting on expert recommendations from the Council for Science and Technology, the Prime Minister can smash barriers to innovation, productivity and strengthen the UKs global position."

Download the report in full.

Read about the Sector Vision.