With the campaign continuing to save Gwdihw, the independent music venue in Cardiff which remains under threat of closure at the end of this month, perhaps it is time for a reminder of the importance of the creative industries sector – which includes music, performing and visual arts – to the UK economy.
One in eight UK businesses are creative enterprises in areas that range from advertising to fashion to film to museums. More relevantly, they are together responsible for generating £102 billion of gross value added (GVA) to the UK economy which, believe it or not, is a larger contribution than the automotive, aerospace, life sciences and the oil and gas industries put together.
What is remarkable about the continuing success of the sector is that it is driven by entrepreneurial individuals. Not only are the majority of creative enterprises employing less than 10 people (i.e. microbusinesses) but a third of the workforce are self-employed freelancers.
And, according to a recent report from the Creative Industries Federation, the sector is set to develop even further with 81 per cent of creative enterprises reporting that they aim to grow over the next three years.
But this growth is very different to what we find in other key sectors of the economy, with growth ambitions in creative firms being driven by collaboration and partnerships as the nature of creative services and products require businesses to work closely with one another.
In terms of barriers to growth, creative firms have many of the same problems faced by other businesses such as lack of time to focus on growth, access to talent and a lack of funding and business support. However, these are more acute in the creative industries due to the high volume of self-employed workers, the micro size of creative enterprises, and the dependence on intellectual property (IP) for their competitive advantage.
And this is where the challenge lies as many creative firms report that banks, business support agencies and other bodies simply do not understand how the industry works, especially the fact that by being dependent on intangible assets such as IP, this often makes the business difficult to assess for investment. As a result, many business support mechanisms are simply not tailored to how creative firms work.
Unlike many businesses, reputation and profile is seen as the main metric for growth by over half of creative enterprises and the importance of investing in these factors to attract new clients, projects and audiences was seen as being particularly important when the business is first established.
In addition, they emphasised that, unlike many growth businesses, their development tended to be dependent on projects such as films, music festivals or advertising campaigns. As a result, there could be fluctuations in income as growth is not always linear.
On the other hand, the study found that many micro-businesses and freelancers were not doing enough to protect or maximise their IP and were unaware of the growth opportunities that exporting their services and/or products might deliver. They also found the business support landscape difficult to understand arguing that most of it was geared towards businesses in more ‘traditional’ industries.
But perhaps the biggest weakness identified by creative firms is the lack of skills needed to run a business.
Whilst they recognise that they have the creative talent, they recognised that they lacked the right level and mix of business skills to ensure the growth and sustainability of their venture.
That could be a particular issue for many universities which are developing highly creative students but are not providing them with the right entrepreneurial training to succeed in business.
So what can policymakers do to support the sector better?
With Brexit looming, there must be a continuing commitment to ensure the growth of the creative industries through public investment and fiscal incentives at a time of potential economic downturn.
There must also be a recognition that creative businesses are different to the vast majority of firms and business support needs to be tailored accordingly, especially in terms of finance and funding. In particular, there needs to be better recognition and understanding of creative firms by those who currently provide business support.
Finally, and most importantly, the development of creative education and skills must be at the centre for the growth of the sector going forward, especially by ensuring that universities are properly resourced to deliver creative courses.
Therefore, whilst creative businesses face certain challenges to grow, they need to nurtured and supported to continue to make the impact they have on the UK and Welsh economies.
And in Cardiff – seen as key cluster for the creative industries - that message will resonate more if independent businesses within the sector are not abandoned when they have the chance to offer so much more to the city and beyond.