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Ian Brinkley
Economic Advisor
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Ian Brinkley

Rebalancing the creative economy

Authors: Ian Brinkley

30 June 2014

The creative economy in the UK is booming – at least that is what the latest job figures from DCMS seem to be telling us. Between 2011 and 2013 total employment went up by nearly 9 per cent against a national average for all jobs of 2.5 per cent. For those who fear the robots are coming for our jobs there may be some comfort that creativity is still a big source of new employment opportunities.

The creative economy estimates are especially interesting because they cut across the conventional industrial classifications. This is because some creative activities are widely spread across many different industries.  The official definition of the creative industries is, “those industries which have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property”. This includes the arts, media, publishing, architecture, design, and IT services and software. The creative economy adds in what the DCMS terms, “embedded” creative jobs and activities in the rest of the economy.

The creative economy now accounts for about 9.5 per cent of total employment. It would be tempting, but misleading, to say the creative economy sector is now bigger than finance and manufacturing because we would not be comparing like with like. The more directly comparative definition of the creative industries accounts for 5.6 per cent of total employment. The rest of this blog focuses on the wider concept of the creative economy.

Two features of the creative economy are distinctive. The first is that it is hugely tilted towards Southern England, mainly, but not exclusively, because of very high concentrations in London. Over 50 per cent of all jobs are in London and the South East and Eastern regions. London alone has 28 per cent of the UK total.

The second is that it has a very large share of graduates – nearly 60 per cent of the people who work in the creative economy have a degree. And this is going up – all of the expansion in employment since 2011 has been in jobs with a degree or equivalent. It is of course another question as to whether all of the new jobs required a degree. There are still significant numbers of jobs held by those with no or lower level qualifications, and it would be wrong to assume that lack of qualifications is always a block to doing well in some creative sector occupations. Even so, it is clearly a very high skill part of the economy and becoming even more so.

What is clear is that overall the Southern tilt has become more pronounced. In 2011 the three regions of Southern England accounted for 52.9 per cent of the creative economy and in 2013 the share had increased to 53.2 per cent. This is partly explained by very rapid growth in the Eastern region of over 20 per cent. The picture elsewhere is very mixed. There was above average growth across the Midlands, Yorkshire and Humberside and the North East. Growth was below average in the North West and South West and almost non-existent across Wales, Scotland, and Northern Ireland.

There are of course many vibrant pockets of creative activity outside Southern England. The importance of the creative economy has grown in most regions. However, taken together it has not yet been enough to tilt the creative economy away from its Southern heartland. The Chancellor’s vision of a “Northern powerhouse” of connected cities linked by high speed rail and road links is an attractive one. Should we also be asking what could be done to create a Northern powerhouse around the creative economy and secure a bigger share of high skill job growth in the future for the rest of the UK?