A Dynamic Mapping of the UK’s Creative Industries – Hasan Bakhshi, Alan Freeman and Peter Higgs (Nesta) (2013)

Author(s): Hasan Bakhshi, Alan Freeman and Peter Higgs
Publisher: Nesta
Date: January 2013

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This paper argues that, despite its strengths, the UK Department of Culture, Media and Sport (DCMS) classification of the creative industries contains inconsistencies which need to be addressed to make it fully fit for purpose. It presents an improved methodology which retains the strengths of the DCMS’s approach while addressing its deficiencies. We focus on creative intensity: the proportion of total employment within an industry that is engaged in creative occupations.

Our analysis brings to light inconsistencies that undermine the strengths of the DCMS definition as a de facto world standard, and will detract from the understanding which it has brought to the study of the creative economy, above all under conditions of structural economic change, such as digitisation.

Using the list of occupations which DCMS treats as ‘creative’, the intensity of the industries it defines as creative falls within a narrow range – with only minor exceptions – that is on average over 25 times greater than in the rest of the economy. This is a defining characteristic of such industries. However, DCMS’s choice of industries excludes important codes with high creative intensity that account for large amounts of employment.
In addition, DCMS’s choice of occupations is itself open to question, because the criteria by which they are classified as ‘creative’ are not clear. We propose a rigorous method for determining which occupations are creative, scoring all occupations against a ‘grid’ of five theoretically grounded criteria. The grid score of those occupations that DCMS considers as creative also lies in a range significantly above the grid scores of other, non-creative occupations. However, as with its choice of industries, DCMS’s choice of occupations excludes codes that account for significant employment and which, on the strength of a rigorous classification, should be included. It also includes a small minority of codes which
should be excluded.

We then propose a fully consistent classification by using these occupations to identify, on grounds of creative intensity, those industries that appear inappropriately included and excluded in the DCMS industrial classification (our ‘baseline’). We conduct a sensitivity analysis to show that this classification lays the basis for a robust and consistent selection of industry codes. This accords with the reality, which should be squarely faced, that uncertainty is a defining feature of emergent areas subject to persistent structural change like the creative industries, and should be dealt with in a systematic way.

Our baseline classification suggests that the DCMS inappropriately excludes a large (and growing) software-related segment of the creative industries. We argue that significant numbers of new digital creative businesses in fact reside within this segment, reflecting an increasingly tight interconnection between content production and its digital interface.

Our baseline estimates suggest that in its 2011 Statistical Release, the DCMS understated the size of creative employment in the UK by 997,500 of which 460,000 falls within the creative industries and 537,500 outside the creative industries.

Our estimates, like the DCMS’s latest published estimates, are computed using the ONS’s SOC2000 classification of occupations. In 2013, the DCMS will adopt the Office for National Statistics’ new SOC2010 classification which, in general, permits an improved discrimination between which occupations are creative and which are not. We estimate that the transition to SOC2010 will produce lower estimates of employment in the creative
economy by about 15 per cent.

Our baseline estimates show that creative economy employment is now a highly significant and growing component of the workforce as a whole, accounting for 8.7 per cent of it by 2010 as compared with 8.4 per cent in 2004. Our estimates also confirm a feature of DCMS’s estimates which has been documented in previous Nesta research: the majority of creative workers are employed outside the creative industries in the wider creative economy; this part of the creative workforce has grown particularly strongly, rising by 10.6 per cent between 2004 and 2010.

Our work shows that the creative industries do not rely, either wholly or mainly, on traditional content or ICT activities alone. Rather, a new economic phenomenon has emerged characterised by a parallel application, within single industries, of ICT and other creative skills together. This strongly suggests that any attempt to separate ICT from other creative work or to reduce the creative industries either to an offshoot of content production, or for that matter a branch of the software industry, will not succeed. Thus our sensitivity analysis includes, among other possible variants, the impact of removing the main software occupation codes from the list considered to be creative occupations. Even after this is done, ICT industries employing large numbers of people emerge as intensive users of the remaining creative occupations. On this alternative scenario, the software-related industries still contribute 213,000 jobs to the creative industries. The non–software creative industries are also very important employers of ICT labour.

We describe our approach as a ‘dynamic’ mapping because a systematic method for identifying the ‘most creative’ industries produces a classification that does not over-react to small fluctuations in the underlying data, but can respond to structural economic changes. Intensity data can be used to compare like with like over time. We thus derive a reasonably robust estimate of growth of creative economy employment which, between 2004 and 2010, rose by 6.8 per cent – more than five times the growth rate of the non-creative workforce, measured on a comparable basis over the same period. In 2010, almost 2.5 million were employed in the UK’s creative economy, of which 1.3 million worked in the creative industries.