We began to map the geographical spread and economic activities of the Creative Industries in the South East Scotland area and in Wales respectively in order to build a picture of our creative communities. However, it quickly became clear that there were substantial challenges in obtaining publicly available, complete and reliable data.
In this article we describe some of the issues that are creating barriers to full understanding of the Creative Industries workforce, especially the self-employed and freelancers, and we suggest some possible routes towards addressing this problem. This matters at both a local and national level for planning and providing appropriate support and allocation of resources.
Although the pandemic has highlighted the issue, this is not a new situation. Two decades ago DCMS attempted to measure the economic contribution of the Creative Industries to the UK economy, as reported in the Creative Industries Mapping Documents (2001). The reports recognised that the provision of robust data on these industries at both regional and sub-regional level was of utmost importance for informed policy making but that there were inconsistencies across the board. Since then, significant amounts of research have been undertaken and data collected for and by various industry stakeholders, including by Arts Council England, the British Council, the Crafts Council, DCMS, and Nesta.
Official data on freelancers is collected by theOffice for National Statistics Labour Force Survey, which uses Standard Occupational Classification (SOC) codes. This survey uses a sampling approach and so does not produce a full list of data points, but instead picks up on generic trends, for example the increase in self-employment in the period from 2015 to 2020, and the sharp decline in self-employment in the aftermath of the Covid-19 lockdown in the first half of 2020. This is likely to have impacted the Creative Industries disproportionally as they comprise a greater number of smaller scale businesses, as noted in Nesta’s Creative Nation report, which states that over 94% of creative companies are micro businesses (fewer than 10 employees) which is 11% more than in the rest of the economy.
Through compulsory registration mechanisms, Companies House collects data on certain categories of businesses, however many types of smaller businesses and self-employed workers are not represented in this data. One further issue that complicates the collection of standardised data is that the term “freelance” can mean different things in different sub-sectors of the Creative Industries, where it can refer to workers who are either self-employed, or employed on a short term or temporary basis, or indeed both. In addition, a freelancer or “independent worker” may also set up a Limited Company.
SICs and SOCs
Two key standardised data classification systems used for describing economic activity in the UK are theStandard Industrial Classification (SIC) codes and the Standard Occupational Classification (SOC) codes. SIC codes are used by both Companies House and the Labour Force Survey to classify businesses by the type of economic activity in which they are engaged. SIC codes are mandatory for companies registered with Companies House; a SIC code has to be supplied at the time of formation and up to four codes can be selected. SIC codes are also collected by HMRC as part of the VAT registration process, although many small enterprises do not meet the VAT registration threshold that requires this. SIC code data relies on self-identification and, as far as we know, the selection of SIC codes is not checked for accuracy.
Our own research into the local Creative Industries context in the South East of Scotland suggests that there may be substantial inconsistencies and inaccuracies in the way that the SIC codes are applied. The SOC system, on the other hand, is used to classify the occupation or job activities of individuals rather than businesses and is used by the Office for National Statistics (ONS). This data is collected through the annual Labour Force Survey and is currently not sufficiently detailed to provide adequate data on the workforce in the Creative Industries.
+ £250,000 turnover
£85,000 VAT threshold
Below £85,000 VAT threshold
SIC code collected
Route of SIC code collection
Points of collection of SIC codes
Even if freelancers and small businesses are captured through HMRC, data through HMRC is not available for research. The critical issue, however, is that many creative businesses do not meet the thresholds (of VAT and/or turnover) to warrant being counted. We argue that this is a fundamental problem in the data collection system, which has repercussions as we noted above.
Plugging the Data Gap
While more comprehensive and standardised data collection could help to inform better policy and decision making for the creative sector, all methods of data collection have their own characteristics, and one single solution is unlikely to fill all the data holes. In addition, it must be acknowledged that data about creative workers is data about individuals, and therefore privacy sensitivities and ethical practices must be considered. We also acknowledge that any systemised data collection will place administrative burdens on the organisations who become responsible for doing so and could place additional administrative burden on individuals (freelancers) required to provide the information. However, we consider that the benefits could outweigh the burden. Pragmatically, a multi-layered approach is likely to be the most useful to improve the situation and, as a way to further the debate, we present three options to consider:
1. A reform of the current official UK data collection system through widening the SIC and SOC code collection system, based on the current model applied to businesses when registering with Companies House. It may be possible to collect these codes annually through HMRC when creative freelancers and self-employed workers file their tax returns and filing tax returns with HMRC. It would also need to be ensured that this data can be accessed by researchers and institutions (in an aggregated and privacy-secured way). However, this would further centralise data held on individuals by state institutions.
2. Many sectors within the Creative Industries are represented by membership and advocacy organisations that gather data about their communities. Supporting and resourcing these specialist and local grassroots organisations to standardise and ethically share the data that they collect could enable aggregation leading to more substantial datasets for analysis. This would potentially place a burden on these organisations but might conversely be a means of creating value for their data. This might support a more decentralised, localised data collection system (but may also have privacy implications if not carried out ethically).
3. Collaborative, collective and dynamic mapping activities could enable individuals and small businesses to self-identify in order to be visible within a larger data set and be recognised for their contributions to the creative economy. Again, this may have privacy issues, and as a voluntary activity would be unlikely to lead to a fully complete collection.
For more about the Clwstwr and Creative Informatics activities so far see:
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