Kitcatt Nohr Digitas

Britain is seeking to re-balance its economy in the wake of the financial crash, and the creative industries are seen as a key part of the solution. But is the prognosis for the creative industries as rosy as some would have us believe? And if not, what can be done about it?

My brief for this column is to bang on in a more or less interesting way about some strand of recent thinking which may be of use to marketers. However, on this occasion, I’m going to do something dangerously off-piste. I’m going to talk about my own industry.

To be precise, I’m going to talk about the set of industries of which my own is part: the sector we’ve learnt to call ‘The Creative Industries’. A portmanteau phrase which includes everything from architecture to software design, via film, publishing and – yes – advertising.

The catalyst for this bout of introspection was an evening I spent in the company of returnees from the IPA’s recent mission to learn from California’s leading digital media and entertainment businesses.

It seems that everything and everyone over there is brighter, shinier and more exciting. They embrace failure. They are optimists. They are always in Beta. All this starry-eyed admiration prompted me to ask a puckish question.

The main thrust of the question was this: California is as much an Asian power as it is a Western one. It boasts the world’s eighth largest economy. It created the mythology of the 20th Century in Hollywood, and the operating system of the 21st in Silicon Valley. Faced with these overwhelming advantages, how on earth can the UK’s creative industries compete?

The IPA’s feisty president, Nicola Mendelsohn, gave a characteristically robust reply. Britain is a leading creative powerhouse. Its creative industries employ some 1.5m people and account for 10.6% of the UK’s service sector exports.

Impressive though such numbers are, I can’t help feeling there’s a sense of frantic boosterism around the sector, somewhat redolent of Cool Britannia, but with Lord Fellowes of Downton Abbey standing in a little awkwardly for Liam Gallagher. Derivative financial instruments have ruined the economy: let’s hope derivative screenplays can somehow tide us over. Or so the argument goes.

The boosters do have some impressive facts on their side. Apparently, there are no fewer than 80,000 Brits working in Hollywood and the Valley. But let’s remember, that’s 80,000 expensively British-educated brains helping grow the Gross Value Added of the USA, and not the UK.

Speaking of education, Britain is rightly famous for a school and university system which allows creativity to flourish, sometimes at the expense of science and technical skills. However, according to my friend and noted creativity expert Professor Jonathan Plucker, the Chinese educational system now devotes more curriculum hours to creativity than that of the US or the UK.

Such caveats aside, I can’t deny that Britain possesses a number of trump cards in the international creativity game. The English language. An unrivalled tradition of public broadcasting. And a degree of cultural diversity which constantly re-infuses the UK with new perspectives.

Yet there’s one vital thing missing from our creative industries which California and the rising Asian economies seem to have little shortage of. Something that no industry can grow without. I’m talking about capital.

Ideas are free. But developing them costs money. And as my bank manager keeps reminding me, money is in short supply at the moment. I therefore have three proposals to offer, which will form the backbone of my stump speech when I run for MP for Soho, Fitzrovia and Shoreditch.

The first is directed at the financial sector. Faced with a choice of investment options, a business with physical plant and a familiar business model is more understandable, and thus more attractive, than one where the principal assets go to the pub at lunchtime and sometimes don’t come back.

We need to help the financial sector to de-risk creative investment. Here’s one answer. Employ experienced creative industry professionals as your investment review panel. They have an eye for what works, and a nose for bullshit.

My next proposal is directed at creative innovators themselves. And it’s borrowed directly from the recent experience of the IPA’s emissaries to the Golden State.

One of the concepts the delegates brought back with them is called ‘pretendotyping’. It’s a way of de-risking innovation by using dirt cheap techniques such as keyword searches to assess the demand for creative properties such as books, movies, and even technologies.

It’s called what it is because it doesn’t even require the development of prototypes. And since it helps quantify the demand for things that don’t exist yet, rational people like investors love it.

The last of my prescriptions is directed at our lords and masters in Westminster and Whitehall. It is clearly unrealistic to demand direct subsidies for the creative industries. Even if it were fiscally or politically possible, it would not be healthy for the sector’s long-term competitiveness.

However, in pursuit of the central goal of de-risking creative enterprise, one thing HMG could do is offer a significantly increased number of credit guarantees targeted at new or expanding creative businesses in exchange for a nominal amount of equity participation.

Speaking as one of Thatcher’s children, putting such an interventionist thought down on paper makes me feel physically ill. However, compared with what we have done for the banks, it’s small beer indeed. And perhaps it’s high time that creative industry got as many guarantees from the taxpayer as creative accountancy.