Birmingham Creative Economy research 2009

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Why the Creative Industries Matter

to Birmingham: an analysis of thecitys creative economy

Draft Final Report

October 2009

Creative Birmingham Partnership Board

www.bop.co.uk


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Contents

Why the Creative Industries Matter to Birmingham i

BOP Consulting 2009

1 REPORT OVERVIEW ...................................................................................................1

1.1 Main Findings .................................................................................................................................11.2 Observations and Recommendations ............................................................................................31.3 Data Analysis .................................................................................................................................4

2 INTRODUCTION...........................................................................................................8

2.1 The Creative Sector .......................................................................................................................8

3 REVIEW OF EARLIER REPORTS .............................................................................10

3.1 National Trends............................................................................................................................103.2 City and Regional Trends: Birmingham reports ...........................................................................113.3 City and Regional Trends: West Midlands reports.......................................................................123.4 Screen, Image and Sound ...........................................................................................................133.5 Impact of the Recession...............................................................................................................14

4 DATA ANALYSIS FINDINGS .....................................................................................15

4.1 Data Evidence Toolkit ..................................................................................................................154.2 Creative Business Numbers.........................................................................................................164.3 Creative Employment Numbers ...................................................................................................184.4 Gross Value Added ......................................................................................................................194.5 Location of Birminghams Creative Businesses...........................................................................214.6 Creative Industries Share of the Whole Economy ......................................................................22

4.7 Other Sectors of Birminghams Economy ....................................................................................234.8 Creative Business and Employment Numbers by Size Band ......................................................234.9 Micro Firms .................................................................................................................................25

5 WIDER COMPARISONS ............................................................................................26

5.1 Birmingham and the West Midlands Region................................................................................265.2 Birmingham and the English Core Cities .....................................................................................275.3 Experians National Business Database ......................................................................................285.4 Creative Industries and Innovation...............................................................................................30

6 PLACE-MAKING AND IDENTITY...............................................................................31

6.1 Glasgow .......................................................................................................................................326.2 Dortmund......................................................................................................................................33

6.3 Philadelphia..................................................................................................................................346.4 Observations ................................................................................................................................35

7 SUMMARY OF PHONE SURVEY OF BUSINESSES .................................................36

7.1 Type and Location of Business ....................................................................................................367.2 Employment and Financial Performance .....................................................................................377.3 Birmingham ..................................................................................................................................37

8 FOCUS GROUP AND INTERVIEWS ..........................................................................39

8.1 Observations ................................................................................................................................40

9 APPENDIX 1: METHODOLOGY.................................................................................41

9.1 Business Size Bands....................................................................................................................419.2 Sources of Data............................................................................................................................41


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10 APPENDIX 2: TABLE OF DET WEIGHTINGS ...........................................................43

11 APPENDIX 3: CREATIVE BUSINESS CONSULTEES...............................................45


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Why the Creative Industries Matter to Birmingham 1

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1 Report Overview

Cities live or die by their creativity Charles Leadbeater1

The current recession has posed severe challenges for Birmingham. Two of the cityseconomic pillars, manufacturing and financial services, have been hit hard, while publicspending faces tough constraints over the next few years. In this climate, it is importantthat policy-makers are able to use the resources they control wisely.

This report sets out the case for continuing and building on the start Birmingham hasmade in developing its creative economy. The city started to be seriously interested in thecreative industries relatively recently, but it is making some progress. It has a wide rangeof creative and cultural organisations, from high-profile performing arts companies,

including the Birmingham Royal Ballet and the CBSO to established media firms likeMaverick to award-winning design agencies such as Clusta and Substrakt, accounting fora significant slice of employment and business numbers. Public-sector bodies involved inthis sector have developed strong working relationships with other, which bodes well forfuture co-operation. The creative businesses we spoke to in the course of this researchwere cautiously optimistic about their prospects over the next few years, and the image ofBirmingham was perceived to be improving, suggesting the efforts of the likes ofMarketing Birmingham are bearing fruit.

However, much remains to be done. Birmingham City Council and its partners now needto ensure that the good start is not wasted, and that the economic and cultural benefitsthe creative industries bring, not just in their own right, but to the wider economy and the

city, are sustained. This is of particular relevance given the uncertainties around thepowers of regional and local governance structures after the general election.

1.1 Main Findings

We found that the creative industries2 have become an important part of Birminghamseconomy in recent years.

They account for around 20,000 jobs four per cent of the citys workforce.

The 3,450 creative businesses make up ten per cent of the citys total numberof firms. Business numbers have grown by almost 20 per cent since 2003.

Creative industries employ more people than either construction or themanufacture, sale and repair of cars, and similar numbers to the legal,accountancy and management consultancy professions combined.

1Blackaby, A. (2009) Create or die, business guru Charles Leadbeater tells Birmingham bosses,

Birmingham Post, 21 Sept2

Advertising; Architecture; Arts and Antiques; Crafts; Design; Designer Fashion; Video, Film andPhotography; Music and the Visual & Performing Arts; Publishing; Software, Computer Games and

Electronic Publishing; Radio and TV


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93 per cent of creative firms in the city are micro-businesses, employing ten orfewer people.

The creative industries produce more than 660m of GVA.

The creative industries effects extend beyond these direct economic impacts, though.

The increasing importance of design, advertising and branding for almost all productsand services means that the creative industries are a key source of innovation for firms inother parts of the economy: NESTA has found a positive link between spending oncreative services and product innovation. Birminghams dominant economic role in itsregion means that its creative industries are thus a central part of the widercompetitiveness of the West Midlands.

The creative industries are also helping to breathe new life into old industrialneighbourhoods in the city centre, such as the Jewellery Quarter and Digbeth. In sodoing, they are helping the city (particularly the city centre) to improve its image. RichardFlorida and other academics have argued that, in the modern knowledge economy, placeis an increasingly important factor in attracting inward investment, as firms need to go to

locations in which their workers will feel comfortable and stimulated. The creativeindustries are a key part of such an environment.

However, BOPs research suggests that the creative industries in Birmingham are findingthemselves under pressure. This is partly a consequence of wider (indeed global) trendsin the sector associated with the transformation of business models by the internet anddigital revolutions, but it may also reflect issues in Birmingham itself. Our analysissuggests that although the city is home to a wide variety of creative industries a faintecho of the city of a thousand trades the citys performance is solid rather thanspectacular when compared with the other English core cities.

More detailed analysis of the employment figures indicates that what growth there hasbeen in Birmingham is concentrated in micro-businesses (those with ten or fewerstaff) in the Audio-visual and Visual Arts & Design fields. In all, micro businessesaccount for 93 per cent of all creative firms, and a third of creative jobs.

Comments made during the interviews we conducted suggested that, despite someimprovement, Birmingham still has a relatively poor image, and that this is as much anissue for residents as for outsiders. Birminghams creative and cultural sector has a lowprofile among locals, but this is undeserved: one interviewee, born and bred in Liverpool,said that he thought there was more going on in Birmingham than in his home city.Making the citys people more aware of Birminghams own strengths could help improvethe negative perceptions of the city, and act as a basis for changing its image in Britain

more widely. As Leadbeater argues in his newspaper interview, the really important thingis to have a distinctive story about where you come from and what youre particularlygood at to create lasting change you need to connect with what is rooted in yourculture. The city is a young and diverse one, and its cultural offer needs to reflect that. Itwas suggested in the research that commercial culture has picked up on the size andwealth of the youth market in the city in the last few years companies such as Beckshave become involved in promoting or sponsoring events but the city councils offerseemed to be focused more on traditional forms of culture, aimed at least in part at thebusiness visitor market.

The creative industries also have much to contribute to some of the citys wider goalsaround culture and place-making. Building up the creative industries presence in

Birmingham is an explicit goal of the Big City Plan. There are a number of city-centreclusters of creative industries, in buildings like the Custard Factory and Fazeley Studios.


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However, these are sometimes islands of creativity. Parts of the city, notably Digbeth,lack the soft infrastructure bars, cafes, and transport links that can allow creativeworkers to have a wider impact on their neighbourhood in the way that has happened inthe Jewellery Quarter. Planning, design, regeneration and the arts need to be morejoined up to allow this to happen the absence of a cashpoint in the vicinity of the

Custard Factory was cited as an example of a small but real inconvenience forbusinesses in the area.

1.2 Observations and Recommendations

Our observations fall into two categories, one revolving around the economic analysis,the other around the concerns about Birminghams image. Looking at the economic datafirst:

Our data findings, we would suggest it makes sense to focus business support

on micro firms, especially in the Audio-visual and Visual Art & Design fields.They have been performing well, at least until the credit crunch and recession hit,and are well-suited to the current internet-driven trend for project- and partnership-based collaborations in business. In fact, the Business Support for CreativeIndustries (BSCI) scheme often helped firms of this size and type. Given that publicsector organisations are facing an extended period of financial constraint, there is aneed for greater coordination and integration of future funding streams, and for agreater focus on the areas of relative strength.

However, the partners might also wish to consider how they encourage the moredynamic micro-businesses to grow and become the successful SMEs of the future.Detailed recommendations on policies and structures to do this fall outside the scope

of this report, but targeted initiatives in this area that have had some success usuallyfocus on mentoring, help with business strategies, assessing financial readiness andencouraging and funding innovative activity. Digital Central, a scheme thatBirmingham City University and Screen West Midlands ran in conjunction withPembridge Partners, provided such support and is a useful template.

Many of the concerns expressed in our consultations revolved around the image of thecity in one form or another. The city and region have undertaken several studies andinitiatives in the last few years, but there is now a need for the city council, its partnersand the creative industries to work together much more closely to realise some of theirshared ambitions for changing the profile of the city and regenerating parts of the citycentre. In this, the council will be able to build on the strong relationships that alreadyexist between public-sector organisations like Screen West Midlands, Arts Council WM,

Business Link, the Learning and Skills Council, Advantage West Midlands and theuniversities. Such co-operation will place demands on all sides much of this work isfairly mundane: extending networks and appropriate support structures, for instance.

Birmingham City Council needs to take a more strategic view and instead work with thecreative sector to develop a clear message about what the city stands for. This needs toreflect the citys distinctive strengths. Birmingham is a young, ethnically diverse city, yetits cultural offer often tends to emphasise more traditional art forms, often aimed atbusiness travellers. There was a strong sense in the interviews and focus group thatBirmingham is selling itself short, and not making the most of the assets it does have.Delivery of services should be left more to the creative sector itself.


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Developing a more joined-up sense of the city including tackling the gap that isperceived to exist between the councils arts department and planning and regeneration

will help make the city more attractive to its own residents. This in turn can be used asa platform on which the city can build to engage people outside the city. Evidence fromother places points to the importance of sustained cross-departmental and multi-agency

working in support of a long-term vision. Glasgow offers an encouraging example of this:its 25-year strategic focus on culture has helped to transform the image of the city andgive it a more positive identity, yet at the same time it is an identity that reflects thehistory of the city.

At this more strategic level, Birmingham City Council needs to narrow its focus to try anddo a few things well. This leads us to suggest the council and its partners could focus onworking with the creative industries in two areas:

Festivals and events. These are a good way to show the great and growingdiversity of the citys people and cultural life and to raise the profile of artistic activity.Birmingham City Council has recently commissioned a festivals strategy for 2008-

2012, but it could involve the creative industries much more in deciding which eventsto support and in their delivery, to more accurately reflect the grassroots creativestrengths of the city.

As an example of what could be done to raise the profile of the city outsideBirmingham, the council might consider the possibility of a Best of Birminghamweek, to be held in London (or in other large cities). This would involve both the bigcultural organisations and the creative industries in presenting a series of linkedconcerts, performances and showcases celebrating the creative work being done inBirmingham.

Digbeth/Eastside. This area is promoted as a creative hub just outside the citycentre witness the recent Digital Districtplan yet to an outsiders eyes it appearsshabby and uninviting. The wider ambitions for Eastside are unlikely to be realised ifDigbeth fails to achieve its full potential. The council needs to sit down with thosecreative industries that have established themselves in the neighbourhood to exploreways in which the infrastructure of the area can be improved to join up creativeactivity and build a buzzy neighbourhood.

We hope that this report, while acknowledging the challenges the sector faces,demonstrates that continuing support to the creative industries makes sense forBirmingham. The remainder of this extended Overview describes our data findings inmore detail. It is followed by the main body of our report.

1.3 Data Analysis

BOP conducted an analysis of Annual Business Inquiry data for the years 2003 to 2007,the five most recent years for which data is available. There are several models forassessing the size and scope of the creative industries. We have adopted theDepartment of Culture, Media and Sports Data Evidence Toolkit (DET), which is thenearest thing the sector has to a standard approach. It groups creative industries into fourbroader classes, or domains: Audio-visual, Books & Press, Performance and VisualArts & Design.


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Business numbers grew by some 20 per cent over the five years to 3,450 businesses(see figure 1). All this growth occurred in two domains: Audio-visual and Visual Arts &Design.

Figure 1: Creative business numbers by year, 2003-07

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500

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1500

2000

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3500

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2003 2004 2005 2006 2007

Year

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berofbusinesses

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Source: ONS ABI/BOP Consulting (2009)

Employment numbers showed a different pattern (fig. 2). They fell by six per cent over thefive years, and stood at 18,720 in 2007. The total peaked in 2004. Audio-visual jobsaccount for the largest share of creative industry jobs.

Figure 2: Numbers employed in creative businesses by year, 2003-07

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2003 2004 2005 2006 2007

Year

Numberofempl

oyees

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The total number of creative jobs amounts to around 4 per cent of total workforceemployment in the city.

Figure 3: Creative industries share of overall employment in Birmingham, 2003-07

Year 2003 2004 2005 2006 2007DET creative industr y jobs 19,920 21,150 20,010 19,770 18,720

All jobs in Birmingham 488,262 492,107 496,150 482,178 479,821

% of total 4.1% 4.3% 4.0% 4.1% 3.9%


Creative industries are thus a significant employer, as the following table shows. In 2007they employed more people than construction of the car industry, and have broadlytracked the figures for legal, accountancy, auditing and consultancy services.

Figure 4: Employment in selected economic sectors, Birmingham, 2003-07


More detailed analysis showed that, despite the small decline in the number of jobsoverall, employment in micro-businesses (those employing 1-10 staff) grew by 12 percent over the five years. Small and medium sized businesses, by contrast (thoseemploying 11-200 staff), saw a fall in job numbers. Further interrogation of the figuresshows that there was sustained jobs growth in micro-businesses in the Audio-visual andVisual arts & Design field in particular.

Figure 5: Numbers employed in micro businesses by domain, 2003-07


Year 2003 2004 2005 2006 2007

Industry

Hotels, restaurants, bars and catering 22,320 29,380 27,160 35,220 34,240

Legal, accountancy, auditing and consultancy 15,800 16,660 17,540 18,230 20,230

Creative industries 19,920 21,150 20,010 19,770 18,720

Construction 18,490 16,780 18,760 17,250 17,660

Manufacture, sale and repair of motor vehicles 22,760 20,520 20,530 15,420 14,800

Financial intermediation 15,550 16,080 14,770 14,640 13,110

Real estate activities 6,070 6,420 6,850 5,690 6,610

Year 2003 2004 2005 2006 2007 % change

DomainAudio Visual 2,210 2,110 2,090 2,400 2,430 10.0%

Books & Press 1,380 1,420 1,380 1,200 1,220 -11.6%

Performance 370 260 360 390 330 -10.8%

Visual Arts & Design 1,670 1,870 2,060 2,190 2,340 40.1%

Total 5,630 5,660 5,890 6,180 6,320 12.3%


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Mapping of the creative industries shows that they are spread widely across the built-upareas of the city (shaded grey), though with a concentration in central areas.

Figure 6: Location of creative businesses, Birmingham local authority district, 2009

Source: Experian/BOP Consulting (2009)

Birmingham is the regional creative industry centre for the West Midlands. Its particularstrengths lie in Radio and TV activities, newspaper printing, the operation of arts facilities

and advertising. However, when compared with the other English core cities, the majorityof which are also regional capitals, its performance is unremarkable. Although it has more

jobs than any other local authority except Leeds, its percentage share is middling. Theprofile of its creative industries is broadly similar to these other cities.


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2 Introduction

BOP Consulting was commissioned in May 2009 by the Creative Birmingham PartnershipBoard to take a fresh look at the creative sector in the city. In particular, we were asked toapply a locally specific weighting for the creative industries to government data, the firsttime this has been done in Birmingham. The results give a more accurate and nuancedpicture of the citys strengths and provide an evidence base for future work.

Gauging the size and range of the creative industries is an inexact science, due to theirrelatively small scale and arguments about definitions. For the purposes of this report,BOP has adopted a version of the Department for Culture, Media and Sports DataEvidence Toolkit (DET). This is perhaps the most widely used method of assessing thecreative industries, and has the advantage of having the weight of a governmentdepartment behind it. It is the nearest thing to a standard approach for the sector. The

methodology is described in more detail in section 4.1.

2.1 The Creative Sector

The creative industries as a collective entity became the focus of serious governmentattention in the late 1990s. They were identified as a fast-growing and productive sectorof the British economy, constituting a small but significant slice of employment: a recentWork Foundation report estimated that they directly accounted for 1 million jobs in Britainwith a further 800,000 people working in creative occupations in non-creativeindustries3.

As well as being a significant employer in its own right, the creative and cultural sector isalso closely linked to the tourism and leisure sectors. It helps brings people (and theirspending power) into a locality, so boosting its economy and raising its profile. It also hasan important role to play in establishing and confirming the identity and character of aplace. This place-shaping aspect may help not just to attract tourists but also toencourage more permanent residents to settle in an area and to feel more attached totheir neighbourhood. This idea resonates with Richard Floridas highly influential creativeclass thesis, which draws attention to the role of culture in attracting workers andinvestors to an area4.

It should be noted that this report only considers the creative industries. It does not

include the considerable proportion of creative professionals (such as designers oradvertising people) who work in non-creative businesses, such as manufacturing orfinancial services. The Labour Force Survey, the source for estimates of the number ofsuch people, is only broken down by government region, not local authority, so wecannot provide an estimate for Birmingham. However, figures from the London regionsuggest that just over half the creative workforce in the capital is employed in non-creative businesses. The DCMSs own estimates for the country as a whole in 20075

give a figure of 831,000 in creative occupations but in non-creative businesses,compared with 1.15m working in the creative industries in 2007. In other words, on the

3Work Foundation (2007) Staying ahead: the economic performance of the UKs creative industries, London

4See e.g. Florida, R. (2002) The Rise of the Creative Class, Basic Books, New York

5 DCMS (2009) Creative Industries Economic Estimates Statistical Bulletin 2009


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3 Review of earlier reports

As part of this project, BOP was asked to carry out a selective literature and data reviewof national and locally sourced material relating to the creative industries. It should benoted that much of this research has been conducted at the regional (West Midlands)level. Although Birmingham is the largest single local authority within the region, with thebiggest economy, not all the trends reported will therefore apply to the city. It should alsobe noted that much of the data work in these reports predates the recession. In addition,the definitions of the cultural and creative sectors vary from report to report, hence therather different estimates of their size.

3.1 National Trends

The most detailed regular study of trends in the creative industries comes from theDepartment of Culture, Media and Sports Creative Industries Economic Estimatesbulletins, which are published every year. The DCMS notes that because officialclassifications do not accurately reflect the structure of the creative industries its figuresare estimates not National Statistics.

The figures indicate that total creative employment (in other words, those employed inthe creative industries and in creative occupations outside the creative industries)totalled almost 2 million in September 2007. Of these, 1.15 million worked in the creativeindustries themselves. Software and computer games accounted for the largest share ofthe 2 million: 360,000 jobs. Music, visual and the performing arts businesses employed

220,000 while publishing provided work for 215,000.

Creative employment in Great Britain has grown by 26 per cent between 1997 and 2007,slightly faster than the rate of growth seen in the economy as a whole, though much ofthis growth took place in the late 90s. Two sub-sectors have grown faster than theoverall average for creative industries. Design (which includes the small sub-sector ofdesigner fashion) has grown by 62 per cent while jobs in software and computer gameshave expanded by 69 per cent. Only one sub-sector, publishing, has seen employmentnumbers fall while video, film and photography has remained virtually static.

The number of businesses in the creative industries in the UK (not just Great Britain) hasalso grown. From 1997 to 2008 the number rose by 39 per cent. However, almost 70 per

cent of this growth is the result of a change in the coverage of the Inter-DepartmentalBusiness Register in 2008. The largest numbers of businesses are to be found in thesoftware and computer games sector (75,000). Other important sub-sectors were music,visual and performing arts, with 31,200, and advertising, with 13,200.

The Work Foundations Staying Ahead report6 declared that the UK has probably thelargest creative sector in the EU, and relative to GDP probably the largest in the world(p16). They account for 7.3 per cent of national GVA and 2.7 per cent of employment onits calculations. However, it noted that although the industries on average had grownfaster than the wider economy, there was considerable volatility around the average,with some industries starting to struggle. It observed that the digital and internet

6 Work Foundation (2007) Staying ahead: the economic performance of the UKs creative industries, London


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revolutions were disrupting business models in film, music and publishing in particular. Italso pointed out that some sub-sectors were pro-cyclical: rising with economic goodtimes and declining sharply in recessions (it mentioned advertising, design, architectureand software as examples).

3.2 City and Regional Trends: Birmingham reports

The first full account of the Birmingham creative economic sector was published byBirmingham City Council in 2002. The creative and cultural sector was already receivingincreasing recognition nationally as a major contributor to economic and employmentgrowth. The Creative Cityreport7 established baseline figures for the contribution of thecreative sector to Birminghams GDP, and set out a strategy for maximising sectorgrowth over the coming years. Some of the citys key competitive strengths werehighlighted as follows:

Six million visitors a year, generating some 750 million a year

40% of all UK conference business

Produces 50% of the UKs jewellery and 40% of total employment in the sector

Nearly two thirds of all media activity in the West Midlands, 60% of craftorganisations, 40% of literature and drama and major broadcasters all operate fromthe city.

The document also recognised that Birmingham had much scope for growth, especiallyin the screen-based digital media sub-sector, and indentified five areas requiringstrategic planning:

The creation of small and medium sized companies in these industries to create areal scale of activity on a par with London.

The focused development of product innovation and the technical ability to support itwithin the city

The growth of Birmingham as a learning city with an intensive stream of learningdirected into these industries, particularly in ICT and business skills

To change the city to become a UK focus for international quality creative design andheritage

Bridging programmes which offer the opportunity to come into these mainstreamindustries to individuals and communities who are disadvantaged

The report also noted trends that would have implications for the future. It pointed outthat an increasing percentage of the creative workforce is self-employed or employed bymicro-businesses (less than 10 employees). This presents challenges to thesustainability of the sector, as such businesses may be unable (or unwilling) to developthe training and skills base needed to support the industry.

7Birmingham City Council (2002) Birmingham Creative City: Analysis of Creative Industries in the City of

Birmingham


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The Creative Cityreport led to a major focus on the creative sector in the city, andultimately resulted in the Business Support for the Creative Industries (BSCI) programmeto foster the development of small creative businesses.

The next major report into the creative industries in Birmingham8 in 2007 found that the

city had a large creative sector, with almost 26,000 jobs in 2005. Three sub-sectors artand antiques, architecture, and software accounted for the bulk of both business andjob numbers. However, the trends over time were mixed. While arts and antiques,architecture and music, visual and performing arts had seen employment growth, othersub-sectors were static, while fashion design was in decline.

3.3 City and Regional Trends: West Midlands reports

There have been a number of significant studies at the regional level. In 2007, CultureWest Midlands (CWM) published Growing the Cultural Economy9 (looking at data from2004 to 2005). This analysis was followed in 2009 by Culture & Prosperity: TheEconomic Role of Culture in the West Midlands10 from the same organisation, whichreviewed data from 2004 to 2007. It included some of the data from the earlier report. Itsmain findings were that:

The level of GVA per employee in the West Midlands cultural sector is significantlyhigher than has been previously assumed and considerably exceeds the regionalaverage for all economic sectors.

Growth in the number of cultural firms based in the region exceeded the nationalaverage for the cultural sector and the regional average for all sectors.

Employment in the regions cultural sector increased between 2004 and 2007 at a

rate that was in line with the average for the cultural sector in England but slightlybelow the average for the West Midlands economy as a whole. This modest level ofgrowth contrasts with the previous period of high growth between 2003 and 2004,reported in Growing the Cultural Economy in the West Midlands.

Growth in the level of turnover within the regions creative industries was significantlyhigher than the national average for creative industries and the regional average forall sectors, pointing to the growing national importance of the West Midlands as abase for creative industries.

According to the 2009 report, turnover in the West Midlands creative industries stood at7 billion in 2007. This marks a 36 per cent increase since 2004. The level of growth in

the West Midlands was significantly higher than the national rate of growth (+13%) or thegrowth seen across all sectors in the West Midlands (+19%) over the same period.

Perhaps surprisingly, while turnover was found to have increased, employment increative industries in the region was found to have fallen over the same period. Thereport speculated that merger activity and large companies increasing their turnover andout-competing smaller companies might provide an explanation for this.

8Lutz, J., Chapain, C., Collinge, C., Barber, A., and Tice A. (2007) Making the Business Case: Baseline and

Growth Study of the Creative Industries in Birmingham, University of Birmingham9

Culture West Midlands (2007) Growing the Cultural Economy in the West Midlands10 Culture West Midlands (2009) Culture & Prosperity: The Economic Role of Culture in the West Midlands


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The relative strengths of the creative industry subsectors, in terms of total turnover, werefound to be:

Figure 6: Share of total creative sector turnover by sub-sector, 2005

Sub-sector % share of total CIturnover

Software and computer games 45%

Architecture 31%

Designer fashion 6%

Advertising 4%

Arts, antiques and crafts 4%

Publishing 3%

Design 3%

Music and performing arts 3%

Video, film and photography 1%

Total 100%

In 2009, Creative & Cultural Skills (CCS) published their Creative Blueprint WestMidlands11, as part of a wider national plan. The main focus of the programme is toexpose skills gaps in the learning (creative) economy, and propose strategic priorities forclosing those gaps. Its figures differ from those in other reports, but are more up-to-date.They report signs of a downturn in employment. The key statistics highlighted are:

The total number of people employed in creative and cultural industries in the WestMidlands is 43,320 (6% of the national total)

Design is the largest (in terms of workforce and GVA) of the creative and cultural

industries, both regionally and nationally

Prior to the recession, productivity in the creative and cultural industries in the WestMidlands had decreased by 8 per cent; this is compared to a decline across the UKcreative and cultural industries of 7per cent.

Prior to the recession, the number of people employed in the creative and culturalindustries in the West Midlands had also declined, by 6 per cent since 2006. Acrossthe UK, growth was 9 per cent in the creative and cultural industries over the sameperiod.

78 per cent of businesses are micro businesses (employing 1-5 people), comparedwith 77 per cent across all UK industries.

3.4 Screen, Image and Sound

Among particular sub-sectors, the screen, image and sound cluster was identified someyears ago as a priority for the region. A report by BOP Consulting12 found the cluster wasa dynamic sector, exhibiting strong growth in business formation, a skilled and highlyeducated workforce, and high levels of innovation particularly around the emergence of

11Creative and Cultural Skills (2009) Creative Blueprint West Midlands

12 BOP Consulting (2007) Screen, Image and Sound Cluster: Preliminary Impact Study


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new digital technologies (p1). Data from the Skillset employment census of 2006 (themost recent) suggests the region has a particular strength in computer games, where itaccounts for 18 per cent of the national total. In most other forms of creative media toanimation or web and internet the regions share of UK employment is much lower:below 5 per cent in almost all cases.

A Screen, Image and Sound Cluster Plan has been developed for 2008-11. It fundsprogrammes of activities in three fields: screen media, audio and music, and (digital)business futures. There are also a number of other initiatives in this area, such as theAnimation Forum West Midlands. However, there may be dangers in this proliferation ofinitiatives. A report from the West Midlands Learning and Skills Council13 identified twomajor challenges. For providers, it observed that there was an oversupply of a myriad ofcourses. This needs to be focused down, simplified and greater attention [paid] toindustry and enterprise. (p3) For employers on the other hand, the LSC thought therewas a dearth of work-based and related learning opportunities.

3.5 Impact of the Recession

Clearly, the credit crunch and recession are having a significant impact on the creativeand cultural sector, as indeed they have on almost all industries. Some research hasalready been published on its effects, though these reports often rely on relatively smallsamples of businesses. In February 2009, Tourism West Midlands was able to see somesigns of hope14: the cultural sector continues to hold up comparatively well compared tomost sectors (p4). This was thought to be due to the irregular treat characteristic ofattendance at cultural events. However, retail was struggling, while the manufacturing

and service sectors were seeing confidence dip. By April 2009 the picture was gloomier.The West Midlands Regional Observatory15 recorded, amongst other things, that thenumber of regional cultural sector vacancies advertised through Jobcentre Plus was atits lowest level since records began in 2003. It noted the fear among arts organisationsthat local authority culture budgets would be squeezed in future years. The report alsoquoted work carried out by Screen West Midlands that suggested that many of theregions creative media organisations are being adversely affected by the recession(p3).

If Birminghams creative sector is to be able to survive the recession and benefit from areturn to growth, it is important that it uses the resources available to it wisely. The nextseveral sections of this report explore the size and character of the citys creative

industries to provide a platform for identifying potential growth opportunities.

13West Midlands LSC (2008) Talent 2 Market: Review of Education and Training in the Creative and Media

Sector14

Tourism West Midlands (2009) Visitor Economy: Trading Conditions Summary of Discussions atFebruary 2009 TWM Board Meeting15 West Midlands Regional Observatory (2009) West Midlands Cultural Sector Economic Snapshot, April


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4 Data analysis findings

4.1 Data Evidence Toolkit

Perhaps the most important effort to measure the creative industries came from theDepartment for Culture, Media and Sport (DCMS), which produced a list of the sub-sectors it considers make up the creative industries in 2001 16. It is this definition whichhas become the default position for government policy nationally, regionally and locally.(It has also influenced international thinking on the creative economy.) However, theDCMS is careful to point out that the data it produces for its annual Creative IndustriesEconomic Estimates are, even at the national level, not to be treated as equivalent toNational Statistics, due to problems with small sample sizes and a lack of statistical

robustness in the data. Clearly, these issues are even more acute in smallergeographies, such as local authority areas.

A common response to this problem has been to group the creative industries together,to improve the reliability of the data. The DCMS itself has put its weight behind a methodknown as the Data Evidence Toolkit (DET), to which BOP contributed in the developmentstage. This groups the activities for which the DCMS is responsible into seven broaderclasses, or domains: Four of these refer to the creative industries: Audio-visual, Books& Press, Performance and Visual Arts & Design. (The other three are heritage, sportand tourism.) Aggregating data into domains allows us greater confidence in our resultsdue to larger sample sizes. The DET creative industry domains include 43 StandardIndustrial Classification (SIC) codes.

Each domains contains the following sub-sectors:

Figure 7: DCMS Evidence Toolkit (DET) creative industries domains

The data source we use for calculating the size of these domains is the Annual BusinessInquiry. This is a government survey which provides the most reliable figures on

16Advertising; Architecture; Arts and Antiques; Crafts; Design; Designer Fashion; Video, Film and

Photography; Music and the Visual & Performing Arts; Publishing; Software, Computer Games and

Electronic Publishing; Radio and TV

Audio-visual (AV) Books & Press (BP)

TV & radioFilm & videoPhotographyAdvertisingMusicInteractive digital media(games, web, mobile etc)Computer software

Publishing (books,magazines, newspapers)LiteraturePrinting

Performance (P) Visual Arts & Design (VA)TheatreDanceCircusCarnivalPuppetry

DesignArchitectureFine artsCraftsArt & Antiques


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workplace employment each year. It divides industries up according to StandardIndustrial Classification (SIC) codes.

However, a sizeable minority of the SIC codes that are counted as creative industrycodes include both creative and non-creative industrial activity. In order to accurately

calculate the size of the creative industries, it is therefore necessary to devise weightingsto apply to these problematic codes. BOP uses information from Experians NationalBusiness database to do this. Statistics for both business and employment number arethen calculated by applying the weightings to the Annual Business Inquirydata.Appendix 1 gives further details of the methodology BOP has adopted to prepare thisanalysis.

One particularly problematic area is computer software. The DET regards this as acreative industry, on the grounds that the two SIC codes under which it falls (72.21 and72.22), embrace computer games and web design. However, there is also a significantamount of conventional business software and sales in these SIC codes. We havefollowed the DETs logic and counted 100 per cent of the two codes as creative.

4.2 Creative Business Numbers

Business numbers have grown steadily over the last five years for which data isavailable. (All figures are rounded to the nearest ten.) Their number has increased bymore than a fifth between 2003 and 2007. The strongest growth has been seen in VisualArts & Design, where numbers have grown by almost two-thirds. This sub-sector hasnow overtaken Audio-Visual to be the largest domain. Nevertheless, the numbers ofAudio-Visual businesses also grew. By contrast, the smaller Books & Press andPerformance domains saw numbers fall a little.

These 3,450 businesses amounted to almost ten per cent of the citys 34,750 businessunits in 2007.

Figure 8: Creative business numbers by domain, 2003-07

Year 2003 2004 2005 2006 2007 % change

Domain

Audio Visual 1,200 1,120 1,150 1,250 1,280 6.7%

Books & Press 560 540 500 480 490 -12.5%

Performance 180 160 170 170 170 -5.6%

Visual Arts & Design 920 1,010 1,190 1,270 1,510 64.1%

Total 2,860 2,830 3,010 3,170 3,450 20.6%Source: ONS ABI/BOP Consulting (2009)


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Figures 9 and 10 show the changes in the domains over the five years more clearly.

Figure 9: Creative business numbers by year, 2003-07

0

500

1000

1500

2000

2500

3000

3500

4000

2003 2004 2005 2006 2007

Year

Numberofbusinesses

VA

P

BP

AV


Figure 10: Creative business numbers by year and domain, 2003-07

0

200

400

600

800

1000

1200

1400

1600

2003 2004 2005 2006 2007

Year

Number

ofbusinesses

AV

BP

P

VA



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4.3 Creative Employment Numbers

The patterns in the employment figures are rather different. Overall, job numbers havefallen a little over the five years to just under 20,000, having peaked in 2004. Audio-visual is the largest domain, accounting for just under half (49.4 per cent) of creative jobsin the city in 2007. However, the number of such jobs fell by 10 per cent over the period.Job numbers also fell in Books & Press, though this remains the second-largest domain.Visual Arts & Design is the third largest domain, but is the fastest growing, having added30 per cent more jobs over the period. Performance is the smallest domain of the four,but has seen some growth.

Figure 11: Numbers employed in creative businesses by domain, 2003-07


The graphs (figures 12 and 13) confirm that employment has hovered around the 20,000mark in Birmingham for most of this period.

Figure 12: Numbers employed in creative businesses by year, 2003-07

0

5000

10000

15000

20000

25000

2003 2004 2005 2006 2007

Year

Num

berofemployees

VA

P

BP

AV


Year 2003 2004 2005 2006 2007 % change

Domain

Audio Visual 10,280 11,330 9,850 9,810 9,250 -10.0%

Books & Press 5,540 5,610 5,430 4,800 4,290 -22.6%

Performance 900 700 1,060 1,300 1,000 11.1%Visual Arts & Design 3,200 3,510 3,670 3,860 4,180 30.6%

Total 19,920 21,150 20,010 19,770 18,720 -6.0%


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Figure 13: Numbers employed in creative businesses by year and domain, 2003-07

0

2000

4000

6000

8000

10000

12000

2003 2004 2005 2006 2007

Year

Numberofemployees

AV

BP

P

VA


The different patterns seen in business units and employment reflect the different sizesof firms in each domain. The (mean) average number of employees in 2007 was 7.2 for

Audio-visual businesses, 8.8 for Books & Press, 5.9 for Performance, and just 2.8 forVisual Arts & Design firms.

4.4 Gross Value Added

Gross Value Added (GVA) is a measure of the value added by firms to their inputs.Although the ONS supplies figures for GVA by SIC code at local authority level suchfigures are subject to considerable data suppression in order to protect confidentiality. Asa result, the reliability of GVA data at small geographies is questionable, and theseresults should be seen as indicative only.

GVA figures are supplied for the full SIC code. As only a proportion of some of thesecodes can be classed as creative, as explained earlier, we have weighted them using theweightings calculated for employment for the DET.


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Figure 14: GVA figures for Birminghams creative sector, 2003-07


The figures fluctuate considerably year by year, but these often reflect changes inindividual codes. The rise from 2003 and 2004 is driven largely by a 130m increase inother software consultancy and supply, which fell back the following year, while thedecline from 2005 to 2006 stems from a sharp fall in Radio and TV activities, which

recorded negative GVA in 2006.

Creative sector GVA

Year

2003 688.8m

2004 853.1m2005 753.1m

2006 631.3m

2007 663.8m


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4.5 Location of Birminghams Creative Businesses

Birminghams many creative businesses are scattered widely across the built-up areas ofthe city (shaded grey). However, much the largest concentrations are seen towards thecity centre.

Figure 15: Location of creative businesses, Birmingham local authority district, 2009



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Figure 16 confirms the clustering of creative industries at the heart of the city.

Figure 16: Location of creative businesses. Birmingham city centre, 2009


4.6 Creative Industries Share of the Whole Economy

The creative industries accounted for around 4 per cent of the citys employment over thefive years. It is worth noting that, according to the Annual Business Inquiry, totalworkplace employment for the citys economy as a whole peaked in 2005 and has since

edged downwards.

Figure 17: Creative industries share of overall employment in Birmingham, 2003-07

Year 2003 2004 2005 2006 2007

DET creative industr y jobs 19,920 21,150 20,010 19,770 18,720

All jobs 488,262 492,107 496,150 482,178 479,821

% of total 4.1% 4.3% 4.0% 4.1% 3.9%



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4.7 Other Sectors of Birminghams Economy

In order to get a sense of the relative size and importance of creative industries toBirmingham it is useful to compare its performance with some other parts of the cityseconomy. BOP has chosen a group of high-profile industrial sectors with which tocompare them.

In 2007, the creative industries directly employed more people than the motor vehicleindustry, construction or financial intermediation. Until 2006 creative industries also hadmore staff than legal, accountancy, auditing and consultancy services. Of the industrialsectors listed, only hotels, restaurants, bars and catering employ significantly morepeople.

Figure 18: Employment in selected economic sectors, Birmingham, 2003-07


4.8 Creative Business and Employment Numbers bySize Band

This section of the report considers the data from a different angle. As we have seen, thenumber of business units has risen steadily over the five years. However, a breakdownby size band shows that all this increase has been seen in the micro 1-10 employeeband. This band accounts for the overwhelming majority of creative businesses in thecity 93 per cent of them in 2007.

Figure 19: Creative business numbers by size band, 2003-07


Looking at the figures this way reveals that there has been considerable variation overthe time period between the size bands. The only band to see sustained growth in job

numbers is the micro business size band, employing 1-10 people. This size band nowaccounts for a third of creative jobs in the city.

Year 2003 2004 2005 2006 2007

Industry

Hotels, restaurants, bars and catering 22,320 29,380 27,160 35,220 34,240

Legal, accountancy, auditing and consultancy 15,800 16,660 17,540 18,230 20,230

Creative industries 19,920 21,150 20,010 19,770 18,720

Construction 18,490 16,780 18,760 17,250 17,660

Manufacture, sale and repair of motor vehicles 22,760 20,520 20,530 15,420 14,800

Financial intermediation 15,550 16,080 14,770 14,640 13,110

Real estate activities 6,070 6,420 6,850 5,690 6,610

Year 2003 2004 2005 2006 2007 % change

Size Band

1-10 employees 2,570 2,570 2,760 2,930 3,210 24.9%

11-49 employees 230 210 200 190 190 -17.4%

50-199 employees 50 50 50 40 40 -20.0%

200+ employees 10 10 10 10 10 0

Total 2,860 2,840 3,020 3,170 3,450 20.6%


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The middle two bands, covering firms that employ 11-199 staff have been steadilyshedding jobs. The largest band (200 or more employees) saw a surge in jobs in 2004 inthe software consultancy sub-sector, but this has since subsided back to its original level.

Figure 20: Numbers employed by creative businesses by size band, 2003-07


It is clear that it is the micro size firms which are driving most of the growth in the

creative sector in Birmingham. Their success has largely (if not quite) offset the loss ofjobs in the small and medium size bands (11-199 employees).

Micro businesses make up the vast majority of creative firms 93 per cent. Employmentis more evenly spread across the size bands, but micro firms have the largest share heretoo, with 34 per cent.

Figure 21: Share of creative business and employment numbers by size band, 2007

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1-10 employees 11-49 employees 50-199 employees 200+ employees

Businesses Employees


Year 2003 2004 2005 2006 2007 % change

Size Band

1-10 employees 5,630 5,660 5,880 6,180 6,320 12.3%

11-49 employees 4,820 4,500 4,130 3,950 4,120 -14.5%

50-199 employees 4,990 4,820 4,400 4,080 3,650 -26.9%

200+ employees 4,480 6,170 5,600 5,560 4,630 3.3%

Total 19,920 21,150 20,010 19,770 18,720 -6.0%


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4.9 Micro Firms

Given that micro firms are the key source of growth in Birmingham, it is worth examiningtheir make-up in more detail. Looking first at business numbers, two of the four domainshave seen increases over the five years. Business numbers have risen fastest in VisualArts & Design, which has seen an increase of more than two-thirds. It is now the largestdomain among micro businesses. It has overtaken Audio-visual, even though thenumbers of Audio-visual firms grew by 9 per cent. The numbers of micro-businesses inBooks & Press and Performance have fallen.

Figure 22: Number of micro businesses by domain, 2003-07


Employment growth within the size band is concentrated within two domains: the largest,Audio-Visual, which has grown by 10 per cent, and the second-largest, Visual Arts &Design, which has seen jobs in micro firms grow by 40 per cent.

Figure 23: Numbers employed in micro businesses by domain, 2003-07


Year 2003 2004 2005 2006 2007 % change

Domain

Audio Visual 1,070 1,000 1,040 1,150 1,170 9.3%

Books & Press 470 450 410 400 430 -8.5%

Performance 170 160 170 160 160 -5.9%

Visual Arts & Design 860 960 1,140 1,220 1,450 68.6%Total 2,570 2,570 2,760 2,930 3,210 24.9%

Year 2003 2004 2005 2006 2007 % change

DomainAudio Visual 2,210 2,110 2,090 2,400 2,430 10.0%

Books & Press 1,380 1,420 1,380 1,200 1,220 -11.6%

Performance 370 260 360 390 330 -10.8%

Visual Arts & Design 1,670 1,870 2,060 2,190 2,340 40.1%

Total 5,630 5,660 5,890 6,180 6,320 12.3%


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5 Wider Comparisons

This chapter of the report places these results in a wider context, by comparing themwith the West Midlands region and with the other English core cities. It helps to give amore nuanced picture of Birminghams performance.

5.1 Birmingham and the West Midlands Region

The section of the report looks at Birminghams creative industries within the wider WestMidlands region.

To carry out this analysis, we have applied the weightings developed for Birmingham tothe region as a whole. While this inevitably leads to some distortions in the results, it stillgives us a useful insight into the creative economy of the region.

By workplace employment, Birmingham accounts for 20.5 per cent of the regions jobs.Its share of the regions creative industries is only a little higher at 21.5 per cent.However, the profile of the creative industries in the city is rather different. The followingtable shows those SIC codes in which Birmingham has at least a quarter of the WestMidlands jobs.

Figure 24: Birminghams highest % share of regions economy by SIC code, 2007

SIC code category

Birminghams % shareof the regions employment

in this codeRadio and TV activities 57.9%

Manufacture of musical instruments 51.6%

Printing of newspapers 47.2%

Publishing of sound recordings 46.0%

Operation of arts facilities 44.3%

Bookbinding 35.5%

Advertising 28.2%

News agency activities 27.6%

Artistic and literary creation and interpretation 25.3%

Pre-press activities 25.2%Source: ONS ABI/BOP Consulting (2009)

This suggests that Birminghams strengths are in audio-visual categories, such as radioand TV, advertising, and music publishing; in specialist categories, such as themanufacture of musical instruments; and in fields in which its status as the capital of theWest Midlands helps: operation of arts facilities, for example. The city is relatively weakin computer software, though it is worth remembering that the DET approach includes allkinds of computer software activity, a significant percentage of which is likely to beconventional business software, often produced by companies located in suburbanbusiness parks. In the West Midlands, too, Warwickshire has a notable cluster of firms incomputer games software.


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5.2 Birmingham and the English Core Cities

Birmingham is one of the eight English core cities. Again, we applied the weightings forBirmingham to the ABI data for all the core cities local authority districts. In 2007Birmingham had the second largest number of creative industry jobs of any of them 18,720 just behind Leeds, which had 19,840. Birmingham has just under a fifth of allcreative employment in the core cities.

However, as a percentage of all employment Birmingham sits in the middle of the pack.Bristol leads the way, ahead of Manchester and Leeds. Birmingham does better thanSheffield and Liverpool, with Nottingham bringing up the rear. Liverpools example inparticular suggests that having high profile artists, musicians and writers doesntnecessarily mean that the economic contribution of the wider creative industries isparticularly strong.

Figure 25: Creative industry employment as a share of the total, Core Cities, 2007

Core CityCreativeIndustry

employment

Totalemployment

% of total

Bristol 12,070 227,020 5.3%

Manchester 15,090 309,440 4.9%

Leeds 19,840 407,190 4.9%

Newcastle 7,520 174,900 4.3%

Birmingham 18,720 479,820 3.9%

Sheffield 8,810 248,430 3.5%

Liverpool 7,930 226,430 3.5%

Nottingham 6,330 184,720 3.4%


BOP has also calculated location quotients for employment in the individual SIC codes.This allows us to compare Birminghams performance against those of the other corecities. Given that many of them Manchester, Leeds, Bristol and Nottingham are thecapitals of their regions, it enables us to get a sense of to what extent Birminghamsprofile is typical of a regional capital.

Analysing the results does suggest that Birmingham is a solid all-round performer in mostrespects, with shares that are close to the average in many industries (i.e. with a locationquotient that is close to 1.0). However, the following SIC codes have location quotients ofmore than 1.25 in other words, they are unusually strong in Birmingham compared with

the other core cities.


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Figure 26: Creative SIC codes with location quotients of 1.25 or higher in Birmingham

SIC code BirminghamLocation Quotient

Manufacture of musical instruments 2.89

Printing of newspapers 2.22

Retail sale of books and newspapers 1.38

Wholesale of electric household appliances17

1.31

Renting of personal and household goods18

1.28

Other business activities n.e.c.19

1.27

Music publishing 1.25


For many of the more high-profile classes within creative industries architecture,advertising, radio and TV, operation of arts facilities, and artistic and literary creation the location quotients are around 1.0. In other words, these categories are neither

especially strong nor weak in Birmingham compared with the other core cities. Thesefindings echo those of NESTAs recent Geography of Creativity report20.

5.3 Experians National Business Database

Although the Experian database was used to develop weightings for the Data EvidenceToolkit analysis, it provides useful information in its own right. It is a more up-to-datedataset than the Annual Business Inquiry it was issued in late spring of 2009 and ithas a more detailed classification system than the ABI. These Yellow Pages classes givea greater sense of which types of creative activities are particularly strong.

It should be stressed that this dataset does not correspond directly to the ABI and thefindings from it. The Experian data records different things in different ways. It is alsoworth noting that each business has to be classified under a single YP class, but itsactivities may fall under a number of headings its main activity serves as an umbrellafor all its work.

In all, there are 43 Yellow Pages classes in Birmingham which employ 100 or morepeople. For comparison, a recent BOP report in Cardiff, using a slightly broader definitionof the creative industries, found only 23 classes. Birmingham thus has an unusually widerange of different activities falling under the creative sector banner.

The list is headed by Broadcasting Services, which in turn is dominated by the BBC.Printers & Lithographers and Newspapers & Magazines are also large employers, whilecomputer software classes are prominent too. However, architecture, web design,advertising and other forms of design also do well. (Figures are again rounded to thenearest ten.)

17This weighted SIC code includes wholesale of DVD and hifi equipment

18This weighted SIC code includes TV/DVD/video rental

19This weighted SIC code includes various types of design

20 De Propris, L. et al (2009) The geography of creativity, NESTA, London


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Figure 27: Yellow Pages classes in which 100 or more people in Birmingham are employed,2009 (rounded to the nearest ten)

Yellow Pages class No. of employees

Broadcasting Services 1,470

Printers & Lithographers 1,200Newspapers & Magazines 910

Computer Software Development 820

Architects 770

Computer Software Sales 600

Marketing & Advertising Consultants 590

Theatres & Concert Halls 500

Book shops 470

TV, Film & Video Production Services 430

Cinemas 390

Internet Web Design & Development 340

Designers-Advertising & Graphic 330

Advertising Agencies 300Interior Designers 280

Architectural Services 280

Computer Consultancy 270

Directories 260

Theatrical Companies 250

Printers' Services 250

Architectural Metal Workers 240

Publishers & Publications 240

Dancing Schools 170

Music Studios & Practice Rooms 160

Telemarketing 160

Audio-Visual Equipment 150

Discos - Mobile 150

Photographers-General 150

Computer Games Retail 130

Arts Organisations 130

Design Consultants 130

Entertainers - General 130

Music Shops (CDs & DVDs) 130

Photographers-Commercial & Industrial 120

Screen Printers 120

Art Dealers & Publishers 120

Printing-Colour 110Engraving 110

Video & DVD Hire & Retail 100

Public Relations Consultants 100

Copying & Duplicating Services 100

Musical Instrument & Sheet Music Shops 100

Music Schools 100



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5.4 Creative Industries and Innovation

The creative industries are becoming an increasingly important source of innovation forthe wider economy. This takes two forms.

The Creative Industries and Individual Companies

Technological improvements are often not enough on their own to secure improvedmarket share any more; businesses increasingly have to be concerned with theexperience that surrounds a good or service. Innovations in design, branding, marketingand communications and the management of creativity increasingly make the differencebetween successful and unsuccessful firms: the power of the brand can largelydetermine the value of the product. Such expertise is the province of the creativeindustries, and as such, they are the most likely source of innovation for a companyoutside its own employees.

The Creative Industries and Regional Innovation Systems

The creative industries can also encourage innovation at the regional level. Researchinto business networks, such as the recent study by BOP and Volterra Consulting 21 in theManchester city-region, indicates that innovations spread through networks throughrelationships of trust between businesses (and individuals), usually ones that are not indirect competition with each other. In particular, innovations often spread along supplychains. Creative industries, due to the collaborative, people-centred nature of theirbusinesses, are usually heavily networked, and thus are well-placed to act astransmission mechanisms for new ideas.

Integrating creative industries into the supply chain of a business therefore offers that

business two ways of innovating. They can help directly by developing new ways ofselling that firms product experience, and indirectly by increasing awareness of othersinnovations by transmitting information along the supply chain. Empirical evidence (fromNESTA) backs up this argument: it found that other things being equal, a firm thatspends twice as much as the average firm does on creative inputs [as a proportion of itsgross output] is 25 per cent more likely to have introduced a new product innovation. 22

21Volterra Consulting and BOP Consulting (2009) Innovation, Trade and Connectivity, Manchester

Independent Economic Review, Manchester22 Quoted in Ibid., p6


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6 Place-making and Identity

The creative industries, together with the wider cultural sector, can have a significantrole in place-making helping to establish and strengthen the image and identity of aplace.

Birmingham has spent much time and money on revamping its city centre in the lasttwo decades. Cultural buildings such as Symphony Hall and the Ikon gallery have beena central part of this effort, as have the creative industries, most notably at the CustardFactory in Digbeth, which has become an important cluster of small creativebusinesses, and in the Jewellery Quarter. Although jewellery is not usually classed as acreative industry in Britain, the Quarter is being marketed in a broader cultural sense Birmingham City Council has submitted a bid to UNESCO for the Quarter to become aWorld Heritage Site, for instance. Eastside too is being branded at least in part as a

creative district.

Culture is an important strand of the Big City Plan, Birminghams masterplan for the citycentre for the next twenty years, running through a number of the Plans globalthemes. However, the Plan also makes explicit reference to the role creative industriescan play in the city centres future progress. One of the local ideas is Create Local,which states that Birmingham should become the focus of creative industries to rivalthose in other cities.

A major study funded by public bodies in London and Toronto, Strategies for CreativeSpaces23, set out through a combination of desk research and interviews to assesswhich strategies were most likely to help creative economies flourish in cities. It looked

in particular at creative clusters, economic development and regeneration. It found thatPolicy interventions, in the form of funding, legislation, support services andinfrastructure, can catalyse or even accelerate creative development (p9). However,policy interventions did not always work, especially if they were short-term in nature.Successful creative cities and organisational delivery was often underpinned by 10year strategies and cross-departmental and multi-sector working (p9).

The report identifies many themes of good practice. A number of them are of particularrelevance to Birminghams case. They include:

Creative industries business support is an essential component of building a citys

creative economy. Affordable space for creative activity and enterprise is an enduring issue.

Using built form, public and natural spaces to express a citys creativity is important.

When it cam be achieved, multi-level, multi-sector support of the creative economyagenda is a particular source of strength.

23 Evans, G. (2006) Strategies for Creative Spaces, London Development Agency, London


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This report will now go on to look at three cities which have tried to boost their creativeeconomies. The three Glasgow, Dortmund and Philadelphia represent a range ofdifferent experiences and approaches.

6.1 GlasgowIn the 1970s and 80s Glasgow suffered badly from the loss of its traditionalengineering and manufacturing industries. In the words of the city councils Steve InchGlasgow was regarded as the worst corner of Britain24. In the 80s, the city councilchose to give culture and creativity a prominent role in its regeneration efforts.

Glasgow has used major events as a way of stimulating investment in culturalproduction and capital infrastructure. These began with the Garden Festival in 1988,followed by the citys hugely successful year as European Capital of Culture in 1990. Itwas UK City of Architecture and Design in 1999, and has recently been declared a Cityof Music by UNESCO. In 2014, it will host the Commonwealth Games.

Glasgow has had perhaps the highest profile series of big cultural events of any Britishcity outside London. However, the city has maintained momentum with a programme ofits own festivals and events and new and redeveloped cultural facilities. This processhas received solid political support: Glasgow now has the highest per capita spend onculture and sport of any British city. Mark ONeill, Head of Arts and Museums at Cultureand Sport Glasgow, argues that arts institutions in the city work with the grain of thecitys artistic and political traditions and to the benefit of local residents 25. Projects overthe last 25 years have ranged from the St Mungo museum of religious life, to therevitalisation of the Merchant City district to the Lighthouse centre for architecture. Newdevelopments continue: current projects include Trongate 103, a large arts-led

regeneration project on the edge of the inner city, and the Riverside Museum, amuseum of transport. ONeill also notes that the citys economic developmentdepartment doesnt always look for direct economic benefits it sees quality of life asproviding important indirect benefits to the city.

However, Glasgow has had a twin-track approach, supporting both culturalconsumption and creative production. It has invested in workspace for companies of allsizes: examples range from the Briggait crafts and creative indsutries complex to theDigital Media Quarter to Pacific Quay, the site of the Garden festival and now home tothe Science Centre and BBC Scotland. Glasgow has also rebranded itself rather moresuccessfully than other cities, starting with the Glasgows Miles Better campaign whichaimed to change negative perceptions, to the current Scotland with Style approach.

Glasgow developed its strategic vision of culture-led regeneration early (in a Britishcontext) and has persevered with it for more than 25 years. It has also placed greatemphasis on working in partnership with the private and voluntary sectors, so buildinga coalition to support the vision. While it has refined its plans over the years, theobjectives have remained essentially unchanged. This has been a key reason for itssuccess.

24BOP Consulting (2009) Creative Clusters Conference Report 2009, Creative Clusters

25 Rose, C. (2009) Arts Professional, The Art of Politics 21 Sept


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6.2 Dortmund

Dortmund is the largest city in the eastern Ruhr in Germany, with a population ofaround 600,000. It has long been an important industrial centre, especially for coal-mining and steel production, and is a major transport hub. The Visioning Plan forBirmingham26 shows that Dortmunds economic profile closely resembles Birminghamsin many respects, such as GDP per capita, percentage of residents qualified to degreelevel (low in both cities) and employment rate.

The decline of the traditional industries in recent decades, however, has forced the cityto think about other approaches. One early scheme was the Dortmund TechnologyCentre, a technology park and business incubator set up in the mid-80s. Building onthe success of this, and the many scientific research institutes in the city, Dortmundlaunched a major initiative, the dortmund-project, in 2000. This was a partnershipbetween the city and ThyssenKrupp, the steelmaking firm, supported by theconsultants McKinsey. The projecthad support from all the political parties and thetrade associations in the city. It aimed to network the city, its businesses and itsscience institutions, and so provide good conditions for the establishment of newbusinesses, especially in promising high-tech sectors, such as e-commerce, softwareand biotech. Its approaches include mentoring and coaching, business competitionsand funding opportunities.

26Parkinson, M. (2007) The Birmingham City Centre Masterplan: The Visioning Study, Liverpool

John Moores University, Liverpool

Burrell Collectionopened 1983

GlasgowsMiles Better

launched1983

1980s 1990s 2000s

Glasgow

Garden Festival1988

European City ofCulture 1990

Royal Concert Hallopened 1990

St MungoMuseum opened

1993

Gallery ofModern Art

opened 1996

UK City of Art andDesign 1999, The

Lighthouse opened1999

Tramway re-opened

2000

GlasgowScience Centre

opened 2001

KelvingroveMuseumrefurbished 2006

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It also set out to improve the quality of life in Dortmund, by rehabilitating brownfieldsites for residential and recreational use. The projecthas helped the city establish areputation as a high-tech centre, and has recently begun to draw attention to theimportance of the creative industries as part of this shift to a knowledge economy.

The citys Economic Development Agency describes creative industries as an up-and-coming sector that inspires and invigorates the city and the region. According to thecity27 Dortmunds creative economy has 1,600 freelancers or businesses, with 5,000registered employees and 7,300 marginal ones. (In Germany, as in Britain, there isno standard definition of the creative economy.) Books & Press and computer softwareare the largest sub-sectors. The Agency notes that although many businesses have setup in the city centre, creative companies have been established in almost all of thecitys districts. It also argues that design companies, in particular, contribute to theinnovative capabilities of other economic sectors.

The city also has a number of cultural strengths, notably in museums and music, andhas recently built a new concert hall and a new library. Dortmund is also developing

creative hotspots across the city. One of the principal efforts is to convert a landmarkindustrial building, the old Union brewery, into a major centre for art and creativity. Nowknown as the U-Tower, the 80,000 m2 site will include a museum of art, mediaexhibitions and a creative bazaar. The tower sits in Dortmunds music quarter, and willbe a key component of the Ruhrs year as European City of Culture in 2010. The city isthus trying to use the creative industries to change the image of the city for the betterwhile acknowledging and preserving important elements of its industrial heritage.

6.3 Philadelphia

Philadelphia is a large industrial city on the east coast of the USA with a population of1.4m in 2008. It sits at the heart of the Greater Philadelphia region, which is home toalmost six million people. A traditional centre of manufacturing, it has seen both itspopulation and its industrial base decline in recent decades.

Philadelphia has strived to re-position its economy in the last few years. Tourism andfinancial services have been an important part of this, but culture and the creativeindustries have also been promoted heavily. The city is home to a number of importantcultural attractions, such as the Philadelphia Museum of Art and Independence Hall,where the Declaration of Independence was signed.

One prominent initiative that has been launched is Innovation Philadelphia (IP). This is

a non-profit economic development organisation which was originally set up in 2001 toboost the citys knowledge economy by encouraging innovation. It provides businesssupport, help to entrepreneurs and marketing, networking and educationalopportunities. It also leads on regional efforts to attract and retain young professionals.

While the for-profit creative economy was initially identified as an important part of itseffort, its significance has grown over time and in 2006 a new strategic plan was writtenfor IP which placed even more emphasis on the creative industries. Its missionstatement sets out three goals, the first of which is to establish Philadelphias creativeeconomy as a global hub for creative enterprises, services and talent. Interestingly, the

27 City of Dortmund Economic Development Agency Dortmund. The Creative City.


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organisation has stuck with the Innovation Philadelphia name it sees the creativeindustries as a central part of an innovative economy.

This approach seems to be bearing fruit. Philadelphia uses a fairly broad definition ofthe creative economy it includes communications and marketing, for instance, as well

as the more conventional categories found in British definitions but the figures itreports are impressive. According to its recent study28 the region has 56,000 creativebusinesses employing 306,000 people and generating turnover of $32.5bn.

6.4 Observations

Each of these three cities has adopted a different approach, reflecting their ownambitions for their creative sectors and their own histories. Glasgow has very muchemphasised the role of culture and its potential for regeneration, Dortmund sees thecreative industries as complementing its efforts to become a high-tech centre, whilePhiladelphia regards them as a spur to innovation and attracting young professionals.All three, though, feel that creative industries and culture have a significant role to playin their post-industrial futures. Indeed, it is hard to think of a major city that doesnt seecreative industries playing a part in its future economy. For this reason, if for no other,Birmingham needs to sustain its interest in its creative sector.

28Innovation Philadelphia (2008) Creative Footprint: The Economic Impact of the Philadelphia

Regions For-Profit Creative Economy


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7 Summary of Phone Survey of Businesses

A phone survey of 150 creative businesses in Birmingham was commissioned as partof this project (in f

Documents

Birmingham Creative Economy research 2009