17 January 2023

Don’t let complacency jeopardise the UK’s creative industries

By Baroness Stowell

In October last year history was made when Ai-Da, the humanoid robot artist, gave evidence to the House of Lords Communications Committee. The day was insightful and bizarre in equal measure – at one point the old IT adage of ‘turning it off and on again’ had to be deployed to reboot Ai-Da as proceedings got too much for her.  What was clear was that technological change is having, and will continue to have, a profound and disruptive influence on the creative industries. 

It is also increasingly clear that international competition is hotting up. Governments around the world are looking at how they can make their countries an attractive base for creative sector companies, particularly in the sweet spot where creativity and technology come together. It is easy to see why, in the last 10 years, the global value of exports of creative services has more than doubled to $1.1tn.

So, the growth of creative industries is good news for the UK, right? Well, yes and no. The UK has long been seen as a world leader. But that position is slipping. As the sector becomes ever more lucrative, our rivals are getting ready to overtake us. 

In the Committee’s report published today we found that public policy toward the creative industries is characterised by complacency, incoherence and barriers to success. An area of the economy that should be a key driver of economic growth is too often overlooked by Government. The perception of DCMS as the ‘Ministry of Fun’ pervades across Whitehall – despite the creative industries contributing more to the UK economy in 2019 than the life sciences, aerospace and automotive industries combined. 

How can we ensure Britain’s reputation as a creative hotbed is translated into economic value for the whole country? 

Not shooting ourselves in the foot would be a good start. We should scrap the ill-thought-out proposal from the Intellectual Property Office to let international businesses scrape content created by others and commercialise it without paying the original creator. That would undercut creative sector business models and revenue streams. The move might support AI development, which is important, but we cannot throw our creative industries under the bus to support it. 

We also need to make the UK’s creative sector tax regime more competitive. We were an early pioneer of this but others have since copied and overtaken us. We should start by looking at the definition of Research and Design covered by tax relief. Currently a computer game developer might be allowed to claim some tax relief on employees writing the code for a new game, but not their colleagues writing its script. We’ve got ground-breaking UK businesses struggling to scale to meet demand for their goods and services coming from around the world. Making sensible changes to our tax regime will be vital, alongside a change in attitude by UK venture capital.

We also need to recognise that STEM skills aren’t the only game in town. With immersive reality, gaming and video industries booming, the modern world needs storytellers and artists who are digitally competent. We can’t allow lazy rhetoric about ‘low value’ arts degrees to deter students from the high-value ones that are essential – especially when combined with technical training. 

The UK was a world leader when we defined the concept of the creative industries over two decades ago. But people are increasingly whispering about complacency and decline. Now is not the time to be resting our creative laurels.

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Baroness Stowell is Chair of the House of Lords Communications Committee.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.