A Creative PEC State of the Nations Report
With the UK Government’s forthcoming industrial strategy highlighting the creative industries as a key sector for both investment and growth, this new report on ‘Foreign Direct Investment’ couldn’t be timelier. Our ‘State of the Nations’ report confirms the UK’s global position as a world-leading destination for FDI into the creative industries, yet points to a decline in creative sector FDI into the UK from a peak in 2019; suggesting the need for the Industrial Strategy to focus on initiatives for both attracting inward and generating outward FDI as a policy priority.
The report from our research team at Newcastle University finds:
- On average, 10% of all inward UK FDI projects between 2013 – 2023 are accounted for by the creative industries, highlighting the importance of the sector. A similar pattern is found for outward FDI.
- The UK is second only to the USA for the location and generation of FDI creative projects globally.
- Against the backdrop of an incoming Trump administration, it is noteworthy that the USA is the main source of investment, providing nearly 45% of all inward FDI in the UK.
- The creative industries share of inward FDI overall has fallen from a peak of 12% in 2021.
- Inward creative FDI is relatively concentrated in mergers and acquisitions (M&As) compared with new (or greenfield) projects, which contrasts with evidence on non-creative FDI.
- Regional variation: Advertising and marketing FDI is often found in the South East of England IT, whereas software and computer services FDI is mostly found in the main cities, and FDI in Architecture; Film, TV, radio and photography; and Publishing are spread across the UK, even allowing for the differing geographies of different creative sub-sectors.
- This suggests the regional forces that attract FDI location are different across creative sub-sectors and that the existence of regional creative clusters may have an important role in attracting FDI.
Commenting on the findings Christopher Smith, Executive Chair of the Arts and Humanities Research Council, who fund Creative PEC says:
“This report makes it clear that to unleash the potential of the creative industries – one of the UK’s industrial strengths – we have to invest at scale, strategically with a clear place-based agenda. The report uses ten-year’s worth of robust data to provide the evidence base to show there is regional, sub-sectoral variation in FDI activity across the UK. It is clear that regional creative clusters have an important role to play in attracting inward investment.”
View the launch event here:
State of the Nations
The Creative PEC’s ‘State of the Nations’ series analyses the latest data across four thematic areas to inform the development of policies relating to the creative industries. Their scope is the whole of the United Kingdom, and wherever possible data is presented for all the nations and regions. Regular reports on each area will be published biannually over the five yours of the Arts and Humanities Research Council (AHRC) funding. The themes and corresponding Research Consortium Partners are:
R&D, Innovation and Clusters (University of Sussex)
Internationalisation (Newcastle University)
Arts, Culture and Heritage (University of Sheffield)
Education, Skills and Talents (Work Advance)
The report is written by our consortium partners at Newcastle University:
Dr Jonathan Jones, Senior Lecturer in Economics at Newcastle Business School
Dr Daniel Simandjuntak, Research Associate at Newcastle University and Creative PEC
Dr Sara Maioli, Reader in Economics, Newcastle University Business School
Professor Giorgio Fazio, Research Director of Creative PEC and Chair of Macroeconomics at Newcastle University Business School
The report was designed by Mike Green at Green Doe. Thanks to Creative PEC policy, operations and communications teams for editing, proofing and other support.
Citation: If the information in this report is used in any subsequent research and/or publications, please cite as follows: Jones, J., Simandjuntak, D., Maioli, S. and Fazio, G. (2024) ‘Foreign Direct Investment and the UK’s Creative Industries’. DOI: 10.5281/zenodo.14045803.
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Credits
Report design by Mike Green/Green Doe Ltd
