Press Release: R&D should be at the heart of government thinking on the Creative Industries
14 February 2022
The government has rightly placed boosting R&D at the heart of its growth strategy for the UK and for levelling up its regions and nations. However, evidence published today by the AHRC-funded Creative Industries Policy and Evidence (PEC) shows a disconnect when it comes to R&D policy in the creative sector. With a new Sector Vision for the Creative Industries in the Pipeline, the PEC is this week leading a spotlight campaign on R&D with a new policy briefing, research and industry insight.
Austria, Denmark, France, Germany, Korea and Norway, all recognise that successful innovation is built on R&D in multiple fields, not just those in science and technology, and this is reflected in their tax relief policies. However, there is an anomaly in UK policy towards the creative industries. The HMRC dismisses the role of arts, humanities and social sciences in its definition of R&D expenditure eligible for tax relief.
It represents a huge loss in opportunity to incentivise innovation in emerging new markets such as: virtual, augmented and mixed-reality experiences, with wide-ranging applications beyond the creative industries into sectors like education and health; architecture practices that are designing the green homes of the future, and British fashion designers trialing eco-production methods to reduce the carbon footprint of the textiles industry - one of the world’s biggest polluters.
Today, the Creative Industries Policy & Evidence Centre is publishing new research and industry insight from innovation experts, as part of a week-long spotlight on R&D in the creative industries. It suggests there is an urgent need to support innovation in this growing sector, which contributes £115.9 billion to the UK economy (pre-pandemic figure). With a new Sector Vision expected before the summer, R&D should be at the heart of government thinking.
Hasan Bakhshi MBE, Director, AHRC-funded Creative Industries Policy and Evidence Centre, says:
“As the UK’s fastest growing sector the creative industries should be front of mind when the UK commits to increasing R&D investment towards 2.4% of GDP. From the UK’s multi-billion pound video games studios thrilling the public with their creativity to architects devising the green homes of the future and experience designers using virtual reality to improve the experience of patients, investing in R&D in the creative industries will sustain their place in pole position as well as enabling us all to reimagine how we live, work and play in the future.”
Sarah Ellis, Director of Digital Development, Royal Shakespeare Company, says:
“The UK government has the opportunity to innovate out of the pandemic and harness one of the UK’s competitive strengths to deliver a new age of ingenuity, that supports sustainable growth in the industries that will dominate the future”.
PEC research points to the need for:
An R&D tax relief that works better for the Creative Industries, and in particular use of an R&D definition which doesn’t disadvantage the UK sector, as other nations already have in place
Creative Industries to receive a share of UKRI R&D funding (Innovate UK funding) commensurate with their size and growth
R&D to be a core part of the new sector vision for the Creative Industries
New PEC research published today points to market failures in R&D in the creative industries - just as is the case in sectors like manufacturing - and that without intervention the markets will not provide sufficient funding for creative innovation.
This week we will share important lessons from UK Research and Innovation’s £95m investment in R&D via the Audience of the Future and Creative Industries Clusters Challenge (now matched by more than £200m of co-investment), together with £5m funding injected into creative business innovation by Innovate UK’s response to global disruption fund. We suggest that the lessons must be learnt in the design of both large and small-denomination R&D grants.
With a new Sector Vision for the Creative Industries expected before the summer, the government has an opportunity to spearhead a drive for innovation, make its mark on the UK’s fastest growing sector and play a critical role in supporting the cultural and social wellbeing of the nation.
Hasan Bakhsi, Director of the Creative Industries Policy and Evidence Centre (PEC), Eliza Easton, Head of Policy Unit at the PEC and Sarah Ellis Director of Digital Development, Royal Shakespeare Company are available for interview
2. About the Creative Industries Policy and Evidence Centre (PEC)
The Creative Industries Policy and Evidence Centre (PEC) works to support the growth of the UK’s Creative Industries through the production of independent and authoritative evidence and policy advice. Led by Nesta and funded by the Arts and Humanities Research Council as part of the UK Government’s Industrial Strategy, the Centre comprises of a consortium of universities from across the UK (Birmingham; Cardiff; Edinburgh; Glasgow; LSE; Manchester; Newcastle; Sussex; Ulster and Work Advance). The PEC works with a diverse range of industry partners including the Creative Industries Federation. To find out more, visit www.pec.ac.uk and @CreativePEC
3. The Creative Industries Policy and Evidence Centre (PEC) is part of the Creative Industries Clusters Programme, which is funded by the Industrial Strategy Challenge Fund and delivered by the Arts and Humanities Research Council on behalf of UK Research and Innovation.