Britain's got creative talent, but no backslapping please

Creative industries have been one of the economy's fastest-growing sectors recently. But we must temper our exuberance with realism about the rise of competitors and our own weaknesses

Two cheers for Britain's creative industries. Sometimes it takes an outsider to recognise something's true value and Claire Enders, the American-born Brit who runs Enders Analysis, has done more than most to champion the UK's creative and media sector – from television and film to books and music.

Her London-based research firm has teamed up with the consulting firm Bain to produce a report, Creative UK, that brims over with enthusiasm about British dominance when it comes to the business of selling entertainment and content to the world in the digital age. Sir Peter Bazalgette, the Arts Council chairman and former boss of the Big Brother TV production company Endemol, who was master of ceremonies at this week's launch, quipped that Ms Enders has produced a "love letter to our creative sector", but she has plenty of hard numbers to back up her case.

UK creative industries account for £71bn a year, or 5.2 per cent of GDP, and have grown 19 per cent since 2010, much faster than the economy as a whole, says Ms Enders.

Three of the four most successful movie franchises, Harry Potter, James Bond and Lord of the Rings, are British and have their origins in British books. UK films such as Gravity, the space epic made entirely in Britain, earn £1 in every £7 at the global box office. British music does even better, as stars such as Adele and One Direction have topped the global bestseller charts in six of the last seven years. TV formats such as X Factor and Strictly Come Dancing and dramas such as Downton Abbey and War Horse have also conquered the world.

Britons are "digitally ready" too. They spend nearly twice as much per person online as Americans, and super-fast broadband penetration is ahead of all other major European countries. The internet accounts for a higher proportion of advertising spend in the UK than in any other major global economy. Britain has also had higher levels of new business formation than America, Australia, Germany and Italy since 2007, particularly in the creative-tech sector.

"The full value of the creative industries to British society goes far beyond their monetisable aspects," adds the report, as it talks about the "soft power" that Britain gains.

A rich cultural and scientific heritage, the benign support of the state (through organisations such as the BBC), robust copyright law, tax breaks and even the time zone have combined to make the UK and London a global hub of creative innovation and flair. And, with the opening and closing ceremonies at the 2012 Olympics and Paralympics, there was a "lightbulb" moment as people around the world realised what a cultural powerhouse the UK is, says Ms Enders.

She was able to woo a high-powered cast of speakers to the launch of Creativity UK. They included WPP advertising chief Sir Martin Sorrell, Warner Bros UK movie boss Josh Berger, Penguin Random House chair Dame Gail Rebuck, BBC strategy director James Purnell, Culture minister Ed Vaizey, and Alex Mahon, chief executive of the TV firm Shine, which makes Broadchurch and Masterchef.

However, the danger with such cheerleading is that it turns into back-slapping. It took globe-trotting Sir Martin to warn that no one should assume that Britain can rest on its laurels. China is becoming a serious creative force, he said, pointing to the rise of giants such as Alibaba and Ten Cent. Other emerging markets such as Argentina are producing the most creative advertising work for some of his global clients, added the WPP boss.

The talent pipeline is another worry. Britain's art schools and universities may be a wellspring of talent, attracting growing numbers of international students, but many prospective British undergraduates are daunted by the cost of higher education, Natalie Brett, pro-vice-chancellor of the University of the Arts London, told the conference. Getting a foot on the jobs ladder in the creative sector is also difficult when so many of the internships are unpaid, she added.

People from disadvantaged backgrounds and ethnic minorities are finding it especailly hard to get into the creative sector, as Robin Wight, co-founder of the WCRS advertising agency and chairman of the educational charity Ideas Foundation, pointed out. Shocking recent figures show the number of black, Asian and minority ethnic people working in British TV have fallen by almost a third since 2006 and now make up just 5.4 per cent of the workforce – a situation that the comedian Lenny Henry described this week as "appalling" in a speech at Bafta.

Britain's prowess in tech also leaves much to be desired. The Enders-Bain report may trumpet how Britain is "in the vanguard" of digital but the lack of tech skills being taught in British schools is a problem that has only now begun to dawn on politicians. Sir Martin said he and the Mayor of London, Boris Johnson, have been mulling the idea of schools ditching a foreign language in favour of making computer coding compulsory.

Corporate tax avoidance by the big US technology players such as Google, Amazon, Apple and Facebook also casts a dark shadow over the UK creative sector. They make billions from selling digital advertising and media, but keep most of the profits offshore and have a less than stellar record of helping to enforce copyright. Dame Gail, representing the world's biggest book publisher, said it still doesn't know the full extent of book piracy, as she hinted that the search giant Google could be more co-operative.

The power of the new tech giants raises a wider point. British creative content may travel the world, but the UK has been singularly less successful in building digital businesses and platforms with the ability to broadcast and distribute that content globally. The BBC is a notable exception.

All of which suggests that it would be wise to temper some of the exuberance about the state of British media and entertainment. Sir Peter Bazalgette noted that the whole notion of "creative industries" – a sector that unites all different branches of the arts –only dates back to the 1990s. He is working on the idea of launching a "CBI for the creative industries", a trade body like the Confederation for British Industry, which "can speak with one voice".

The good news, as Ms Enders would be the first to say, is Britain's creative industries have got plenty to shout about.

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