creative economy

Cultural Instruments:Ceòlas Fiddle & Step~Dance Night, South Uist

There are eight references to culture in the Scottish Government’s Programme for 2011 -12 published yesterday, four refer to the role of the arts and culture in supporting the plan for economic growth.  The other four are used in the other sense of the word, referencing the drive to change performance or management culture in public services.  There are more references to creativity and, while some of these references are to the creative industries, the dominant use of the word in the document is to describe a core trait of the Scots character which can be harnessed to achieve, yes, economic growth.

Scotland is a country rich in economic potential. Our people are creative, ambitious and resilient …Our vision is for a nation where the skills and creativity of all our people contribute to a growing and sustainable economy in our communities, villages, towns and cities.

While its great to see the recognition of the power of creativity and culture in contributing towards economic success, there is a distinct lack of reference to the vital importance of participation in culture for the general and rounded success of Scotland.

The Programme sets the scene not only for the specific legislative programmes planned but also for the forthcoming budget.  Markers are being set down for spending priorities all within the headings of making Scotland Wealthier and Fairer, Healthier, Safer and Stronger , Smarter, Greener and which will be measured on their ability to meet the 15 national outcomes.  Culture is not specified as a national outcome and therefore a commitment to it is not explicitly required by public agencies or local government.

Reducing the value of culture to its impact on other public policy and primarily on the economy is becoming common practice.  The National Planning Policy Framework (NPPF)  for example, has been accused of being too narrowly focussed on using planning to support wealth generation.  In its response to the current parliamentary consultation on the draft  the Theatres’ Trust has highlighted the dangers of the NPPF which is ‘silent on culture’ while recognising the value to planning and community well being of sports and heritage, for example.

Recognising the value of culture as an instrument of economic growth is a positive outcome after five years of  research and influencing from bodies like NESTA .  Beyond Creative Industries in 2008 proposed measuring the ’embedded’ value of creativity in all aspects of work, for example. This is only one dimension of  an interconnected and interdependent creative economy which includes a rich mix of  creative experiences and creative products; the diverse grass-roots, high art, experimental, individual artists, writers and  designers, and subsidised arts venues and companies.  The ecology is dependent on the existence of all of these elements and all have value.

Some of that value can be measured in terms of its contribution to economic growth. Indeed all almost every study commissioned by cultural bodies over the last thirty years has set out to measure economic impact.  These piles of economic evidence are balanced neither by evidence of the intrinsic values of participation in culture nor by evidence of instrumental values beyond the monetary.  The unique benefits of participation in culture on individuals and communities have not been subject to a robust process of valuation.

So it’s no surprise that culture and participation in culture appears in government policy as simply a means to an end as opposed to being an essential element of a rounded and healthy society.  The Theatres Trust has suggested some redrafting  to the NPPF.  In Scotland, a national outcome which explicitly states that our arts and culture are enjoyed and valued would go a long way to recognising that culture and creativity are  more than instruments to achieve economic success.


The cancellation of tax breaks for the videogames industry announced in this week’s emergency budget is a loss and disappointment for the UK games industry. The successful case made by UK bodies TIGA and NESTA which evinced support from the Labour government holds no truck with the Coalition.  While this is a body blow for the UK industry, in Scotland it strikes at the heart.  For in Scotland, the games industry is more than just one of the Cool Britannia creative industries.  In a small nation, its an precious indigenous specialism with the potential to achieve exponential returns for Scotland. 

Dundee games companies are now reportedly considering upping sticks  Colin MacDonald, from Realtime Worlds

 We would hate to move away but we’re a business.When Canada is 40% cheaper and France has built-in tax credits, you’re looking at saving millions a year.

Its clear that the games industry in Dundee is a star which, with special support could deliver not only economic benefits  – jobs and wealth  but also enhance Scotland’s reputation in the world.  The video games industry in Dundee follows on the traditions of Scotland’s unique genetic trait of creative and canny innovation, from the telephone to the television. 

Despite raids on talent from Canada and Ireland, the core of the Dundee games industry has remained in the creative cluster of Tayside for reasons of loyalty, pragmatism and pride – and the expectation that fiscal support will come into play soon. 

Support for the Scottish games industry has been a political football for too long now.  While the Scottish games industry made a strong case for support, it was wrapped up in research by the well-endowed UK think tank NESTA and UK games advocacy body TIGA and its particular cultural significance diluted in a UK wide solution.  The Labour UK government planned tax breaks across the UK which Scotland could have enhanced with other financial support. The UK breaks cancelled, what will happen now?  Whilst recognising that it makes absolute sense, the SNP has declared for the last 12 months that its lack of fiscal autonomy prevents Scotland from fully supporting the games industry. The latest rumblings in the Scottish Parliament may herald a grand gesture of providing financial support from the budget underspend.  If that’s the goal the Scottish Government needs, shoot. But its no way to go on. Scotland needs fiscal autonomy to support our cultural and economic winners but until we get it, we need to find other mechanisms to provide steady support for growth.

Creative Scotland is formally and finally launched next week with a full team and board ready to hit the ground running.  With a remit to champion the arts and creative industries in Scotland, and a specific role in leading the coordination of the Creative Industries Partnership – involving  the public agencies charged with supporting the games industry economically and culturally.  One of their first causes surely will be to champion the Scottish games industry, not only for their economic value but for their cultural significance in the success of Scotland’s creative economy.


One could be forgiven for equating the creative economy in Bizkaia with the iconic Frank Gehry Guggenheim museum, fabulous outside, famous internationally and generously accomodating great works of art of epic and primal scale, from the permanent steel  Matter of Time by Richard Serra  to the temporary and equally powerfully seductive and provocative Anish Kapoor.

The economic impact is over €200m each year with a further €25m to the Basque Treasury, the total impact since the Museum opened in 1997 is phenomenal, justifying the high level of risk and invesment made by the Basque administration.  As a tax raising government, with a nationalist administration at that time, the major investment of 100% funding and exclusive deal with the Guggenheim was part of a plan to regenerate the declining Bizkaia region at that time.  

It has firmly established Bilbao on the international cultural map and spearheaded growth in the creative economy. Gehry’s museum glitters and generates gold for state coffers.

But man cannot live on gold alone. The long term success of a nation or region’s creative economy is more complex and tied up with cultural identity and Bizkaia needs to complement its global offer with the local.  75% of businesses in the creative economy are small or micro businesses, bringing diversity and texture to a region’s creative offer and they need nuanced support to blossom.   

Bizkaia Creaktiva’s forum last week explored the possibilities for this, opening up ideas for supporting entrepreneurs in a country where a legacy of the Franco dictatorship is a guardedness from small municipalites and creative organisations –  a residual fear of sticking your neck out. 

Representatives of the spectrum of creative industries shared their perspectives of the global challenges of the web 2.0 world, much the same as in any other European city but truthfully, a bit more gloomy.  But two bright sparks glimmered.  One was the representative of the traditional craft makers connected through Arbaso where they have kept their heads down, ‘thinking with their hands’ creating Basque crafts throughout the changing times and which now could be opened up to the wider world..  The other, the sparky animator Alvaro Barrios who saw the opportunity for the local talent to band together to create a more diverse and textured Bizkaia creative economy.

Bravo Bizkaia Creaktiva!

Last week’s C&binet Forum was, on the surface, dominated by concerns about copyright from those with most to lose from filesharing. The agenda was framed to encourage the most fulsome arguments to be voiced by representatives of big players in music and publishing. And although all recognised the need for carrots to encourage consumers to pay for downloading content, and a campaign to raise awareness that filesharing is theft which could deny a livelihood to musicians and authors, most of the discussions were about the need for sticks. Today only 1 in 20 of downloaded music tracks is paid for.

C&binet is a not-for-profit network, created by the UK Government’s Department for Culture, Media and Sport to link the international creative and commercial communities to grow the global creative economy. At last week’s forum,  business leaders from across the creative and finance industries came together to debate access to finance for creative industries, new business models for online content, developing talent and securing creative rights.

Three cabinet ministers trailed the announcement made by Peter Mandelson on the final morning of the conference, that the Government proposed a new Copyright Strategy for rights management and licensing in the digital age, including the British version of ‘3 strikes and you’re out’, which is two notifications and then ‘proportionate’ action for those who violate copyright.

So with that all important stake in the ground,  other issues which were debated and discussed ..

Its all about the bandwidth, baby

In 5 years time the capacity of the internet will be enormous and with band widths and speeds on a completely different scale from today. So won’t the issue of downloading be redundant?

Mobile is more and more the future

Won’t our devices be ever more disposable as everything is kept in the cloud and as technology becomes embedded in our walls and cars? Notions of disposable Kindles were floated, looking down the evolutionary telescope.

Be Greater with Data

With the exponential extension of cyberspace, the amassing of meta data will form a content –aware network which will be pretty much able to know everything. This will generate multiple issues of licensing and privacy but will be able to be used for almost everything. People/consumers/customers/users will become more and more aware of the monetary value of their personal data as the transaction between users, suppliers and advertisers becomes ever more sophisticated.

Freemium is the business model for tomorrow- make that today

Although there were many references to the need to find new business models, that really was from those who only have old business models.

Taking publishing, Gail Rebuck of Random House told us that within 24 hours of the publication of the latest Dan Brown novel, there were 70 pirate sites offering it for free.

Cory Doctorow, on the other hand, is developing the whole suite of Freemium services with his forthcoming collection of short stories, with free downloadable editions in a variety of formats, pay-per-use audio CD, opportunities for readers to enhance their product, from the $250 hand bound edition to the $10,000 bespoke edition with a unique chapter for the purchaser. These are in addition to buying from a bookseller and his ‘donate’ service where you can buy a book and donate it to a deserving school or library.

This business model nestles comfortably amongst Spotify and Playfish- both of whom use the upselling model as their framework.

Collaboration is king
All of the statistics show that the areas where there is major growth is where people can interact and get involved – games and social networking.

Some of the industry leaders from the games industry, from Spotify and Google were bemused by the focus on copyright and old business models. With a global perspective, they have an eye on what is happening in China, India and Brazil where the growth in creative industries and internet activity is faster than in the UK. The next billion mobiles are projected to be bought in China. And Australia has invested $43bn in fibre networks.

In the words of a games industry leader  “if we don’t get a move on, the UK will simply be trampled on in the gold rush”

But now, with Mandelson’s announcement, we can get beyond copyright. Other areas were aired and discussed at the Forum and with a wide range of leaders of all types and scales of creative businesses attending, this could be the beginning of an effective network in which to influence Government for the success of our creative economy.

from Andrew Niddrie's Craigmillar Flickr stream

Over the last few weeks governments in Scotland, Wales and Ireland have declared commitment to the value of the arts,  culture and creative industries in recovery from recession, whether as a tonic for dented spirits, an antidote to an unbalanced life, to strengthen  national cultural identity. ..or for international competitiveness.

The rallying call, particularly in Ireland, is expressed in the passionate tongues of art and culture more than in the lexicon of the more contemporary newspeak  of  the creative economy, smart economy and innovation on which many a paper has been written and on which a glut of autumn conferences will proclaim and chatter.

But winning the hearts and minds of national politicians is only one part of the equation, particularly in the UK where local authorities as a block represent the largest funders of the arts and culture, far larger than the arts councils, and are major providers as well of museums, libraries, theatres and art centres: owning buildings, supplying services and employing staff.

In Scotland, the arts community has been focussed on national structures of late, concerned to make sure  that the new single agency Creative Scotland will be better than the Scottish Arts Council without any loss of funding for specific art forms.

In the meantime, local authorities are having to deal with accelerating  and medium to  long term reductions in resources and having to make cuts  in services and reductions in staff.  The arts and culture are not a statutory function.  In Scotland, the Single Outcome Agreements with Scottish Government do not signpost arts and culture as first order services.  So champions for the arts – artists, creative enterprises and their supporters need to get vocal at local level.

There tends to be a clustering of creative professionals  in metropolitan areas, cities and some rural areas, as immortalised by Richard Florida and these are active, connected and articulate.  Dublin Central Arts workers are becoming more and more political in their campaigning.  In Glasgow, where Culture and Sport Glasgow has an annual budget of  £96m (compare this with maybe £60m for Creative Scotland), audiences and participants exceeding 13m and a commensurately expert team  to boot, the benefits of culture are being evidenced in terms of proven impact on health and wellbeing, demonstrating a politic approach to establishing local value.

But what is happening outside of creative cities and rural areas?  In great swathes of Scotland, the arts and creative community is ever changing and without a local focus.   Arts and creative people are natural nomads, moving to where the pastures are fertile.  I am as guilty as the next creative professional, living in Fife for the meantime but without any professional roots in my community.  Creative professionals who live in my area work in Edinburgh, Glasgow or Dundee running some of our major institutions, or write, make music and art all over the world.

We need creative hubs in all parts of Scotland, where there is a focus for the arts and creative communities. And we all need to get local.


Sir Gerry Robinson’s advice to the Global Irish Economic Forum is to take decisive action and target  4 or 5 games companies from Scotland to relocate to Ireland by providing a package of support including five years of tax incentives.   Ireland built up its film industry by taking action in this way and now boasts  a thriving audio visual sector which now contributes 557m to the economy.

Countries across the world are investing in their creative industries to get out of the recession – even in Iceland

The Scottish and UK Governments are fully aware of the vital importance of the games industry to the Scottish economy. There have been several reports now making a strong economic argument for investment in the games industry throughout the Creative Britain process, the Digital Britain report  and, specifically,  by NESTA and by TIGA, the games industries association.  TIGA’s most recent report:

presents a robust argument for the introduction of a tax break for the UK video games industry, similar to the tax credit which already exists for the UK Film Industry. This report was submitted to the UK Government’s Department of Culture, Media and Sport on August 28, 2009.
Key report findings included:
  • Over 5 years the Games Tax Relief would create 1,400 new jobs in the studio sector
  • 60-80 UK developed titles would benefit per year
  • A tax credit would trigger growth in employment, new game development, innovation and investment, and more sustainable business models for British studios
  • By year 5, for every £100 of investment by government in the Games Tax Relief, the industry will invest £176.
  • Over 5 years the Games Tax Relief would increase investment by games studios by £146m, direct and indirect annual tax revenues by £133m and GDP contribution by £323m
Mike Russell, the Scottish Culture Minister, frequently refers to the importance of the games sector and it will be one where the Creative Industries Partnership will get involved beyond the work Scottish Enterprise already does, it if deems it necessary, which surely it must.  Scotland has watched while France and Canada have invested  in the games industry and stolen a march.
Mike Russell states that full fiscal autonomy is necessary to offer the right package of support.

A spokesman for the Scottish government said to the Herald in its coverage at the weekend:

There is a range of support available for the games industry in Scotland. Of course, our view is that Scotland should have control of key fiscal levers in order to do more. This is a clear example of the need for radical change which at least provides full fiscal autonomy for Scotland. Until we have those powers we’ll continue to make the UK government aware of the implications for the Scottish gaming industry. We’ll also work with the industry to provide evidence of the impact.

If the Conservatives win the next election we can expect progress in this area, if Ed Vaizey has has way.  Perhaps Ireland will wait patiently.  Perhaps its hot air. Perhaps a deal is being done with the games industry while the political points are being made.  Dundee MSPs are seeking action. All the evidence is there.  Its just the action we want now.

The news that Glasgow’s Lighthouse has gone into administration is sad but not surprising.  The Centre’s business model is one which worked a few years ago and which the Centre claimed to be a successful and transferable model.   But its dependency on generating substantial, but variable, income both from the Scottish government to deliver particular programmes and also from commercial retail and venue hires exposed it to risk.  And the model appears not to have been able to adapt to reduced income.

The Lighthouse was a bespoke model which has played an important role in promoting design and architecture in Scotland, and in delivering some programmes.  It also breathed life into Charles Rennie MacIntosh’s 1895 Herald Building and is just one of several Lottery funded capital projects where all the stakeholders held hands and took a leap of faith.    Feasibility studies and business plans at the turn of the century were optimistic.  In their  projections for income and attendance as well as the capital and running costs of new buildings, many of these plans turned out to be unrealistic.   Funders and organisations conspired to look only on the bright side, with no license for a more prudent view,  because no one would admit that many of these facilities required more public subsidy, an unpalatable truth which was swept under the carpet –  a microcosm of the high risk and optimistic approach taken in financial services.  High profile projects to hit the rocks early on were the National Centre for Popular Music in Sheffield and more recently the Public in West Bromwich has had to remodel and refinance its original plans to survive.

Three factors which have conspired to cause the crash are:

  1. Business Model: With a business model predicated on very little core subsidy, the crew of the Lighthouse would always have to box clever to survive.  This probably would mean a small core operation, to avoid the current situation when reportedly the permanent staff number 57 and cost £1.5m in 2008 according to the last published accounts.
  1. Role Definition: The Lighthouse has also struggled to define and assert its role in the changing context of devolved Scotland.   For the Lighthouse, there are two other recent or recently refined agencies which are closer to Government and which could be seen to occupy territory similar to that stated by the Lighthouse: “To be a leading body for the promotion of architecture, design and the creative industries, locally, nationally and internationally by engaging people of all ages through a creative exhibition, education and business programme.”  Or “the National Centre for Architecture, Design and the City.”   These are the long awaited Creative Scotland and its definition as “the national public body for the arts and culture embracing the creative industries” and the refocused Architecture and Design Scotland, ‘the national design champion’.
  1. Building block: The Lighthouse solved the problem of how to find a use for a building important to Glasgow’s and Scotland’s architectural heritage and presumably appeared the best option when an appraisal was undertaken.  But at around £.5m in the costs of running the venue before any activity, this could be the final nail in the coffin.

Although the situation is grave, there is light at the end of the tunnel.  People care about the Lighthouse and value its core activities and several are offering suggestions as to its future.  Culture Minister Mike Russell has stated in today’s Herald

The Scottish Government will enter into constructive discussions with the administrator and with Glasgow City Council to find a way to take forward the many good things that The Lighthouse has achieved and to ensure that it and its talented staff have a continuing influence on the quality of architecture and design in Scotland

But when the phoenix rises, it needs to be 21st century cultural organisation which has a clear role and mission complementary to others and with a business model which is able to adapt to our fast moving world.