The value of the cultural and creative industries

In summary

The Covid-19 pandemic threw into sharp relief just how intrinsically important the arts and culture are to us as humans.

During the darkest days of lockdown, how many of us wondered when we might be able to return to a cinema, theatre or museum? At the same time, how many of us trapped in our homes were grateful for our video games consoles and streaming services?

“We all realised what life was like without many aspects of culture during the pandemic,” says Andy Pratt, Professor of Cultural Economy at City, University of London and UNESCO Chair of Global Creative Economy.

“Culture is important in and of itself – it is part of our social identity and makes us who we are.”

The cultural and creative industries are also massively important from an economic perspective.

In the UK, they make up around 6 per cent of our whole economy and account for over 10 per cent of all jobs – larger than the chemical and automotive industries combined.

Yet despite the social and monetary value, there is often a sense that culture is somehow not as important as other sectors. There are a few reasons for this.

Social and economic value

Firstly, defining what is a cultural or creative industry is not straightforward. Most would probably think of traditional arts such as music and film, but the sector also overlaps with others, such as fashion and architecture.

Secondly, the products of the cultural and creative sector are often viewed as frivolous or less tangibly valuable than, for example, cars or bridges or jet engines.

Third, beyond the economic output – which is substantial – it is hard to measure the importance of culture and creativity to people’s lives. How do you quantify what it means to someone to stand in front of a famous painting or get lost in the moment as they listen to their favourite band play live?

All of these elements contribute to governments not historically considering cultural and creative industries as an area of great importance. Take video games.

Today, Montreal is a thriving city for the video game industry – an industry bigger than the music and movie business combined.

Twenty years ago most politicians did not even know what a computer game was, let alone why the industry is so important!

As a result, the UK saw a lot of talent go to France, which in turn lost companies to Canada, which offered tax breaks.

What did we explore and how?

Over the past few years there has been something of a shift in thinking, as local and national governments wake up to the importance of attracting cultural and creative businesses to their cities. It is a change that Professor Pratt has spearheaded, playing an influential role at all levels.

His early academic career was in the field of geography and urban planning before his interests grew and morphed into studying the creative industries.

At Kings College London, he set up the world’s first academic Centre for Culture, Media and the Creative Industries, before moving to City in 2013 and building on his reputation.

He is currently Director of the Centre for Culture and Creative Industries and one of the world’s foremost experts in this area.

Professor Pratt’s research sits at an important nexus between cultural and creative industries and governments – helping to bridge the gap between two camps that have traditionally misunderstood each other.

On the one hand, he helps the industries measure and gather the economic evidence they need to put their case forward, raising their visibility and status.

On the other, he provides advice and research to policymakers and city leaders, helping them understand the importance of these industries: how to attract and promote them and how to create a nurturing environment in which they can thrive.

London, Hong Kong, Barcelona, Bilbao and Shanghai are a few of the cities he’s advised on cultural strategy.

Because these industries historically have not been taken seriously, the people in them did not bother to collect the data, but if you want to survive in a political world, you need numbers.

My work helped produce some of the very first measures on how large and important the cultural economy is for the UK, Europe and internationally.

In this country, we have seen that the cultural economy is now worth more than what politicians thought. In fact, for the past 20 years it has been growing faster than the rest of the economy.

People who run cities are now recognising how cultural and creative industries add to their bottom line and bring in jobs. So when politicians look around for the next big thing, this is it.

Benefits and influence of this research

A key strand of Professor Pratt’s work looks at the complex social and economic dynamics of creative hubs and clusters; how they function, the infrastructure and support required to help them survive, their importance for bringing in jobs and diversity and how they have a huge knock-on effect for other areas of the economy, such as tourism.

His work on creative hubs has been used by the British Council all over the world and he’s co-led a multimillion-pound project for the development of a creative economy hub in London (Creative Works London).

Working with the Mayor of London’s office, he also produced the first ever ‘cultural audit’ for the world’s top 50 cities – designed to share best practice among cities wanting to develop their cultural economies.

Similarly, Professor Pratt is part of a major EU interdisciplinary research project called CICERONE, which is helping member states better understand how creative industries actually work, how they can overcome challenges and can improve cross-national production chains.

Another project - CICRE - on the impact of social and cultural diversity on the creative economy in Europe is funded as part of wider research supported by the German Government on the vibrancy and challenges to the creative economy (in social, economic and cultural terms).

On a wider scale, his definitions for what the cultural sector is are used by UNCTAD (the UN’s Conference on Trade and Development) and UNESCO, which recently appointed him as its first Creative Economy Chair.

Professor Pratt recently contributed to the G20 discussions on the creative economy (hosted by India); and participated in the UNESCO ‘Conference of the Parties’ (CoP) meeting on the 2005 Convention on the diversity of cultural expressions.

Tackling the difficult questions

Another aspect of Professor Pratt’s work looks at some of the thorny issues faced by the cultural and creative industries.

Many involved in these industries are low paid or part of the gig economy. How do they afford to live in the very cities that want a thriving creative sector? And what can those cities do to support them?

His most recent area of research is exploring the overlap between the environment and the cultural economy.

As the cultural and creative industries further establish themselves as crucial to our societies and economies worldwide, no doubt there will be many more difficult questions for Professor Pratt to help them tackle.

We want to have a thriving cultural sector, but there are issues such as the environmental costs of bands touring, the energy consumption involved when streaming music and films, the disposal of vast amounts of electrical products and the impact of fast fashion to name a few.

The environment is the next big thing for these industries to tackle, so it is important to ask the difficult questions.