This report demonstrates that the Creative Industries account for almost a tenth of UK firms classified as having ‘high-growth potential’, higher than 5.1% and 2.4% respectively for Life Sciences and Advanced Manufacturing.
Produced by Creative PEC in partnership with Beauhurst, a leading source of data on businesses, the report reveals the scale of the investment opportunity not only in areas such as Application Software, whose scalable models have attracted equity investors, but also in areas like Advertising, Films and TV, Video Content and Video Games, where considerable numbers of Creative Industries firms are already enjoying high-growth performance.
Report authors: Hasan Bakhshi, Callum Newton, Maarya Omar, Justin Tsui and Henry Whorwood.
Key findings
- Scale: There are almost 6,000 High-Growth Potential Firms (HGPFs) operating across the Creative Industries, accounting for almost a tenth (9.7%) of the UK’s total HGPF. This compares with 5.1% and 2.4% respectively in Life Sciences and Advanced Manufacturing.
- Sub-sectors: Over two-thirds (3,981) of Creative Industries HGPFs operate in Application Software, with significant numbers too working in Marketing, Branding and Advertising, Films & TV and Video games (which correspond to three of the four “frontier industries” within the Creative Industries identified in the Industrial Strategy).
- Regional variations: Creative Industries HGPFs are disproportionately concentrated in London and England’s major cities compared with Life Sciences and Advanced Manufacturing. London accounts for half of Creative Industries HGPFs (2,942), with regions such as the North West (378), South West (362) and East (354) also hosting significant numbers.
- Equity-gap: The number of equity deals for Creative Industries HGPFs fell by 16.5% between 2021 and 2024 (compared to drops of 6.0% for Life Sciences, 14.0% for Advanced Manufacturing HGPFs and 30.6% for the economy as a whole). This helps explain why previous estimates published by the Creative PEC suggest there is a significant shortfall in funding in the Creative Industries – an equity gap – of as much as £1.4bn in potentially unmet demand.
- Debt finance: Creative Industries HGPFs face structural challenges in relation to debt finance. Creative Industries firms more generally are more likely to have asset bases that are made up of intellectual property, brands and other forms of intangible capital which banks and lenders are less likely to accept as collateral. Consistent with this, only 4% of Creative Industries HGPFs have secured debt finance compared with 6.1% and 6.2% of Life Sciences and Advanced Manufacturing HGPFs respectively.
