Money for Creatives Part 2: Specific Creative Work

As part of BCre8ive’s work on developing support for creatives in the UK this is the second in a new series of blogs  linked to our series on local creative cluster development. Each of us tends to work in one part of the creative industries, and often it is difficult to find money which is specific to our needs. This blog sets out the main sources of finance for a range of creative activities. We do not claim it is comprehensive, and please write to us if you know of other sources, beyond competitions that is, which we cover in our Facebook and Newsletter postings.

 

There exists a heavy bias towards the screen-based industries e.g. TV, Film & Games within the existing grants and funding structures. However, changes in the Arts Council’ s grant system and the funding of fashion initiatives within the AHRC Clusters programme has created some new opportunities in the last twelve month.

This blog is broken down into the following key sectors,  in the hope it will help you find new sources of support :-

  • screen,
  • games,
  • music,
  • arts,
  • fashion, and
  • crafts

plus the important regional/national funding options.

Screen

This sector is dominated by government backed organisations, who seek to support the distinctive cultural role of screen narratives. The significance of this sector can be seen by the additional £60m made available in April 2019, from government, to support the creation of UK content for children’s programming, and its prominence in the AHRC Cluster Funding decisions.

BFI Film Fund 

The BFI aims to use National Lottery funds to develop and support original UK filmmakers and films, and to increase the audiences who can enjoy them.

Funding for feature film development and production, which includes international co-productions and completion funding.  In addition to the development and production support, the bfi aims to support UK distributors, sales agents and exhibitors in order to increase the diversity of films made available to UK and international audiences.

Screen Scotland, a recently dedicated part of Creative Scotland, which has seen an increase from £10m to £20m in the last two years.

Screen Scotland Funding includes a range of funds including:- Broadcast Content Fund: Cinema Equipment Fund: Film Development and Production FundDistribution and Exhibition Fund: to support distribution of Scottish films. Production Growth Fund; Professional Development Fund:

https://www.screen.scot/news/2018/08/3million-fund-to-boost-television-production-announced

Northern Ireland Screen provides support in the form of grants and investments/loans in much the same ways as the other national UK bodies. These include the following:- development funding ;production funding ;short films schemes;  and skills fund .

Ffilm Cymru Wales provides support for welsh filmmakers and for projects which reflect Welsh culture including :- Development funding ; Production funding; Company support; and  new film entrepreneurs awards of up to £6,000 to go toward mentorship and/or specialist consultancy.

Games

The richest part of the UK creative landscape, worth £5.7b in 2018.

The UK Games Fund  is a community interest company(CIC) that has been set up to help develop the UK games development sector, particularly at the early stage. The UK Games Fund will provide grants up to £25,000 to help new and young games development businesses create working prototype games.

In addition it supports talent entering the games industry by running Tranzfuser each year aimed at final year university and college students.

UKIE is the major source of information with respect to the UK games industry. Its guide to finance though over a year old is still the most comprehensive with respect to games development and production.

Note: Abertay University is the recipient of an AHRC Cluster Fund for games.

Northern Ireland Screen is one of the few national screen funds to also support games directly, see games funding – including project development and project production funding

Music

This sector is seen to have a high public profile and a very established eco-system for developing new talent from local venues to BBC’s Radio 6 music, and indie record labels to say nothing of the online opportunities.

The most comprehensive introduction to funding for musician is at the Musician’s Union website .

A major source of financing for new talent is the PRS for Music Foundation who offer support to creators. Note: they only support people who write their own music! They also support organisations.

The ‘Do It Different Fund’ gives £500-£3,000 to music creators who need financial, support having established themselves  in some way at the start of their career.

The Rattle is a new London based initiative, which provides a physical base(studio etc.), business and marketing support, and a community on a  subscription basis(£250per month). Planning to open in LA and other major cities over the coming year. This accelerator approach is proving effective for some musicians.

Arts

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This is a hugely successful sector with regard to  global sales value, far out reaching film and games. However, the need to support individual artists, exhibition spaces and marketing activities remain key to future development.

Obviously, the most comprehensive summary of funding for the arts are the various UK Arts Councils – Arts Council England; Creative Scotland;  Arts Council of Wales; Arts Council of Northern Ireland.

The Paul Hamlyn Foundation provides an up-to-date list of not only the Arts Councils but also major competitions and prizes including for visual arts, photography,film, musicians,and experimental art.

There are a number of foundations specifically  offering support to artists. These include – The Eaton Fund (wide range of arts, incl. film); Aziz Foundation (focused on supporting organisations);  Foyle Foundation( for charities and state schools in UK); Esmee Fairburn Foundation (individuals and organisations)

NOTE: Many of these Foundations have specific deadlines for applications so check their websites as soon as you know what funding you require.

There are also numerous competitions and awards which operate on an annual or regular basis these can be found in BCre8ive’s Competitions listing. One new quarterly example is for visual artists and photographers, Innovate Artists Grants.

Fashion

British fashion designers have been a major part of the world’s fashion business now for some time, but this is a fast changing environment, and new innovations are key to success. In order to support this some new government monies have been made available but many small designers still need support especially outside London.

The British Fashion Council support several initiatives including BFC/Vogue Fashion Fund.   Newgen has become the overall BFC support structure(previously Rock Vault and Headonism) for new emerging designers including those making all accessories e.g. bags, hats etc..

There is also a grants list at Start Grants.

Fashion Angel is the source of start up loans for fashion designers in the UK.

For teenage designers at school, etc. there is the Young Fashion Designer UK awards.

The 2018 AHRC Cluster Programme also provided over £10m for new fashion initiatives at University of the Arts and Leeds University. creating new opportunities for designers and makers over the next three years.

Crafts

This is currently the least supported of the various creator sectors within the creative industries. Many makers are located in rural areas, and away from the South East, which restricts their access to funding and support.

The Crafts Council provides a list of competitions and awards, which  also covers some visual arts and photography awards. They also provide a talent support scheme including course, mentoring and business support.

Individual grants may be possible from some foundations and Arts Councils, but it will depend on the specific project/work you wish to undertake.

Overall, the funding available is in investment terms seed monies i.e. small amounts which are designed to help creatives but not large enough to support them. the few exceptions to this are some a major competitions.

In the list of this BCre8ive is working on new ways of increasing support for creatives in the UK in particular the creation of local creative networks/clusters and increasing the role of local authorities and Angel funding. These funding opportunities will be covered in the next two blogs

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Money for Creatives: Part 1 – Where to find the Information?

As part of BCre8ive’s work on developing support for creatives in the UK this is the first in a new series of blogs  linked to our series on local creative cluster development. In an online world,  with digital connectivity a central plank of government initiatives, it might be assumed that small companies and freelancers would find it easy to discover information to help them in their work. Unfortunately, recent surveys and research reports suggest the contrary is true.

In ‘How to Support Creatives’ we highlighted the need for a new online service for creatives, and some examples of practice that work. In this series of blogs we will provide a summary of current online access points to finance – grants and loans, marketing and business support. Inevitably new sources come online , and current sources close or change but this is the latest information we have and we hope it helps you develop your creative work.

The blogs will focus on the following types of finances and support

  1. National Organisations/Websites – signposts to other sources of finance
  2. National and Regional Sources of finance
  3. Private Equity Sources

This first blog will concentrate on national sources of information, and the growth in online and bank loans being made available to small companies and freelancers.. These websites and organisations act as signposts to more local and specific contacts etc., which may help you find what you need to expand your creative work, and succeed in creative spaces.

A future blog will also look at Business Support Services ranging from financial, and legal to marketing

UK Wide

The following three links will help you find the key sources of finance for major creative work in your chosen creative activity. There are more than you might think. Equally, many finance options which are available to businesses – are in fact accessible to creatives, who often do not define themselves as businesses.

CIF:  Routes to Finance 2015:  Though nearly four years old this is still the most comprehensive source of information for finance contacts.  Designed to cover all the following creative activities:- Film – fine arts – design – music – video games – fashion – TV – performing arts – interactive entertainment – crafts – publishing – photography – radio. This downloadable document provides a good starting point to discover what is out there. Some links do not work but the information is solid, and most of the organisations and websites are still active.

http://www.thecreativeindustries.co.uk/media/322389/creative-industries-routes-to-finance.pdf

Creative Finance Network: This is a comprehensive overview of the sources of finance for creative companies with an industry breakdown for Music, Publishing, Fashion, Film&Tv, Design and Games. Aimed predominantly at existing companies with significant turnover. It is fairly honest about the prospects of creatives obtaining finance form traditional sources.

http://creativefinancenetwork.co.uk/

Creative England and CREATe: A joint initiative from two government backed creative organisations, which provides a short list of key finance sources available after the launch of the government’s Industrial Strategy. Aimed at larger Small to Medium Enterprises(SMEs) this covers the higher end of support and the major government agencies.

 http://www.betterbusinessfinance.co.uk/find-sector-help/post/creative-sector

In addition to these sources there are the four national art/creative bodies who provide grants and signposts to other sources of information.

Arts Council England

Funding Finder is the major source of information for artists in the UK.

Arts Council of Wales / Cyngor Celfyddydou Cymru

This is the overarching creative organisation for Wales. It provides a funding directory for creative professionals, and organisations, with some capital grants also available.

Arts Council Northern Ireland

This is the overarching creative organisation for Northern Ireland. It provides a funding search facility for creatives which lists all their current grants etc, and future deadlines.

Creative Scotland

The major government backed organisation for creative activity in Scotland. It provides a funding listing and an enquiries service.

Loans on the Move

Over the last ten years there has been a growth in lending operations aimed at small businesses who are not able to obtain loans from traditional banks etc. These have often been linked to the government backed Start-Up Loan Fund, but new socially orientated and community loan funds are also growing in this pace. These can be perfect where your creative work is linked to social benefits and disadvantaged groups etc..

Finding Finance: this is a website, which works along with your post code to find you loans from under £100 to at least £1m, which are available to you in your area.   This is part of the Responsible Finance (https://responsiblefinance.org.uk/) network, which focuses on social value and community benefits for its investors, and loan providers.

http://www.findingfinance.org.uk/

Creative England Investments:  Loans (£50k – £250k) to established creative, digital businesses at competitive rates (5%-10%) – not for start-ups. Criteria: Need to be an established SME working in the creative, digital sector (registered in England outside Greater London) and generating revenues with an intention to grow and create jobs. NOTE: 50/50 match funding required plus a  5% up front admin fee is payable.  Loans to be repaid in 3-36 months.

http://www.creativeengland.co.uk/investment/investments

Better Business Finance

Set up by Barclays, HSBC, RBS, Lloyds and Santander in 2011 and this networking site is managed by UK Finance in collaboration with its business and finance partners. Better Business Finance provides impartial information and support to businesses/entrepreneurs looking to develop & grow. As might be expected from a network created by large high street banks this is a very traditional route to finance.  As a result it focusses on assets e.g. equipment purchases; invoice financing i.e. providing you with finance while you wait for large invoice payments, and loans against capital e.g. Building, stock etc.

http://www.betterbusinessfinance.co.uk/

Co-operative and Community Finance:

Business Loans, Social Enterprise and Charity Loans of £10k – £200k to Co-operative and social enterprise sector “to help people take control of their economic lives and create social benefit.” This could be a source of finance for many arts groups, who work with disadvantaged groups of people, or seek to create social benefit through their work.

www.coopfinance.coop

Fair Business Loans:

Business Loans, Social Enterprise and Charity Loans of £5k – £50k to businesses across the UK which have been trading for 21 months or longer. Loans are available to sole traders, partnerships and limited companies. It considers businesses from all sectors with funding available for most purposes. Its support is targeted at businesses that have been unable to obtain finance from a mainstream provider.

www.fairbusinessloans.org.uk

Newable: 

Newable Business Finance is a joint venture between Newable and Liberis and offers Business Loans of between £26,000 – £100,000 in order to support growing businesses across the UK. Newable Business Finance delivers a package of high-tech loan management with business mentoring all adhering to the Responsible Finance principles. Loans repayable from 1-5 years.

www.newable.co.uk/lending

As you will have noticed much of the lending is still asset based,  and requires substantial financial ability to use. However, the smaller loans may provide the key door opener for many freelancers and micro-companies. £5000 can make all the difference and double your annual income, and even potentially lead to new employees/partners as well as new sales of your work.

However, there is still clearly a need to review the opportunities and online finance services for freelancers and micro-companies working in the creative industries.

In the next bog we will review the grants, and regional/national funds created to support your creative work.

 

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How to Support Creatives?

In this third blog of the series on developing local creative micro-companies and freelancers we look at the various existing resources available to support creatives and what needs to be created to improve the situation. Why is this so important?

“….many creative enterprises reported that those offering finance and support were either lacking in their understanding of the way the creative industries work, or could not tailor their product or service to their specific needs.”  – Growing the UK’s Creative Industries’ CIF December 2018

In this context there is a need to review and develop new business support systems covering not only accountancy but also business planning, financial management and creative skills.  However, the problems do not stop there.

“Many – particularly micro-businesses and self-employed workers – were also not undertaking enough measures to protect and maximise the value of their Intellectual Property ( IP ), and were unaware of the growth opportunities that exporting their services and/or products might deliver.” – Growing the UK’s Creative Industries’ CIF December 2018

The significance of this aspect of new support structures is that without this ability to protect their Intellectual Property and market it to the widest possible audience the creative enterprises remain uninvestible.  The result being that without the investment the creatives are not in a position to protect their IP, and thus are trapped in a cycle of client dependency and no real growth.

 

Increasing the Earnings for Creatives

The majority of small creative enterprises traditionally work with a small client base or market place.  These range from a handful of broadcasters for indie TV companies to weekly markets for makers.  This approach to selling your work has been impacted by YouTube and Netflix developments at one end of the spectrum and e-commerce sites e.g. etsy at the other. However, the vast majority of creatives as explained in – Five Questions for any Creative Cluster  – are too limited by their working time and resources to easily exploit these new opportunities.

The answer to this scenario to date has been either grants e.g. ACE lottery, and Esme Fairburn  or loans . However, as anyone who has been involved with creative activity will know the lack of stable cashflow, the freelance nature of employment, and the reluctance of traditional lenders to give without capital assets makes this approach to growth very limited.

The only effective answer to growth in this scenario is the provision of equity investment.

Investors have proven very reluctant to become involved with creative activity, especially when over the last decade ‘tech’ based companies have been seen as the way to make the most from investment.  However, the failure of many ‘tech’ investments has now shown that this area is just as risky as any creative enterprise.

“67% of the Creative Businesses thought that lenders
find their sector hard to understand and 61% that  their sector struggles more than others to get funding”. Access to Finance. CIC 2017

The need for equity investment in creative enterprise will, obviously, not be solved just by the failure of other investments.  There is a need for micro-companies and freelancers to become more attractive to investors. This can be achieved by a number of new business support services , which are tailored to creative activity, and focus on those creatives who see the potential to grow.

What type of business support – financial?

As is the case with most small companies creatives have access to specialist accounts packages ranging from Freeagent , designed for sole traders at £9.50 pcm to larger packages such as Sage at £10-22pcm. In addition, there are emerging several specialist accountants, again ranging from larger firms such as Ward Williams Creative and Bishop Fleming through to providers who have emerged from specific creative sector need. In this latter group two examples Lime Green from music and AJN Accounting from photography  offer potential models for other service providers, or an expansion of existing services.

The emergence of new challenger banks may provide some new opportunities, for example Coconut, but their charges may prove prohibitive, and the old problem of creative activity being seen as too risky to support could easily strangle any developments in this area.

Each of these firms etc., offer a limited range, and scale, compared with the potential need across the whole creative sector in the UK. An online solution may meet some of this need e.g. Crunch- Online Accounting but ensuring a low cost affordable service is critical to micro enterprises being able to develop a sound financial base.

The major issue with regards to this type of business support is clearly not the management of money, but more how to develop a business plan and ensure solid financial projections going forward.

In  ‘Five Questions for Any Creative Cluster ‘,we identified the ‘Prosper’ model as having established some clear parameters that will work in this sector. Unfortunately, this was a time limited project restricted to the Arts Council’s remit, and though the Creative United team is now funded until 2021, they, on their own, will not be able to meet all the needs across the UK.

In addition, to this work there are several short courses run by organisations from the Creative Industries Federation and Creative Entrepreneurs to the two-year programme of ‘Boosting Resilience’.  Again the issue is one of scale there are only 26 participants on the latter programme, and the short courses tend to be focused in the South East, and run for very small numbers compared with overall need.

The only potential solution to this is not only an expansion of online support, but crucially the development of local creative support systems. Services which could be met by University/college business schools/media departments/accelerators in conjunction with Local Authority economic development units or LEP Growth Hubs.

What Type of business Support – Skills?

One of the major challenges of the whole of the creative sector is the lack of business and creative skills identified within various reports and by the receipt of new funding under the government Industrial Strategy. Despite these initiatives there is the ongoing problem of a range of skills development for individuals working as freelancers, and within the small micro-companies, who do not have enough money/time to take time off for training, or access training  at all when it is focused in large metropolitan areas only.

These creatives need cost-effective flexible training, which can only be delivered by local providers and online services. There is a significant lack of skilled local providers throughout the UK, a deficiency which will not be overcome overnight. This points to an online service, which needs to be easily accessed. Many of the creative skills training/information in this space does exist, e.g. screenskills but needs clearer sign posting, and a local contact point to saves time and duplication of effort.

Building a network of business skills provision and adapting existing provision, especially for graduates, specifically for the different creative sectors is a priority that realistically can only be undertaken by a combination of local and national activities.

What Type of Business Support – Marketing?

This is the weakest part of the current provision for creatives apart from those associated with indie music. Though everyone is aware at a very basic level of the need for a website, and Facebook, or Instagram, presence, the vast majority of freelancers and micro-companies still rely on word of mouth and tender applications for expanding work opportunities. The degree to which this is overlooked in many discussions is a reflection that small enterprises are so bound up in surviving that looking up and planning a marketing strategy appears to be a luxury.

Though this may be the case it is clearly something which has been tackled within the music businesses in the UK. Apart from the now long history of indie labels and the recent successes of BBC 6 Music and The Rattle accelerator there exists a growing marketing support structure for musicians.

Sine Digital, which grew out of Lime Green Records, provides a digital marketing service for musicians, while at the other end of the spectrum Quite Great Music has grown into a substantial PR/branding outfit from its base in Cambridge.

“our approach to marketing for the creative industries and creative businesses means that by freeing you from your desk, you can be more hands on in the areas of your business that you love, whilst we are hands on with your marketing!” Gingerfizz website.

Another example of specific marketing support is GingerFizz based in Huddersfield, which provides a service designed for artists, designers and makers.  With these examples it is possible to envisage a more comprehensive eco-system, where creatives have access to marketing support services that would ensure they are in a more competitive position to exploit their IP.

Therefore, developing a new strategy for marketing creative outputs for micro-companies and freelancers, though a critical factor, is currently missing from the landscape for future investments and growth within the creative industries as a whole, but it is nonetheless achievable.

Academia could potentially play a major part in this with courses such as those provided at the University of Leicester  and the University of the Creative Arts business schools. It is early days for all these ventures and the question of scale compared with the overall needs indicates an urgent need to expand such activity. There is the potential for this within the AHRC  Policy and Evidence Centre (PEC) research programme where Newcastle University are linking with the Department of International Trade.

The aim of support

The needs have been identified, there are some models for expanding services and there is the potential based upon local cluster research to develop a new infra-structure for creative micro-companies and freelancers.

The aim of all this is to help make these creative enterprises ready for investment and crucially to link them with local angel investors with the support of the new British Business Bank Regional Angels funds, which are being launched in January 2019.

It is this link which will be addressed in the last of these blogs on how to build a local creative cluster and thus help sustain creative activity and grow creative enterprises.

 

 

 

Posted in Creative Education, Creative industries, Creative Policy, Education, freelancers, Funding, micro-companies, Uncategorized | Comments Off on How to Support Creatives?

Five Questions for Any Creative Cluster

This is the second blog in the series looking at how to build and support effective local creative clusters. In particular, how to help micro-companies or freelancers succeed in your area. Having identified the number, type and range of creative enterprises in an area, based on the initial research, there are some key questions which need to be addressed on developing creative clusters.

  • Diversity – how to manage the fragmented, and diverse, creative activities within your area?
  • Development – what skills and resources are needed to improve the opportunities for growth within your area?
  • Inclusivity – how to engage communities, cultures and individuals who are currently excluded or under-represented within the cluster?
  • Quality – how to ensure the quality of new work is high enough to compete in a global market place?
  • Relevance – how to match support to individual enterprises in ways that are effective and relevant to their development?

This blog sets out some of the main points to be borne in mind when answering these questions, and highlights the successful approaches already adopted in some creative cluster projects. In so doing the aim is to help creatives, Universities, Local Authorities, LEPs, plus regional and national arts and media bodies to be more effective in supporting local creative clusters.

The question of diversity – how to manage the fragmented, and diverse, creative activities within your area?

It would make life so much easier if creativity really was clustered in uniform groups e.g. games in one place, visual artists in another etc., as providing support structures and engagement would be simpler. However, the reality of any area is that it will have a very fragmented and mixed creative economy.  So having identified all the various creatives in your area, be it a city, town or rural district, what do you do next?

The first step is to ascertain what each of the different groups of creatives see as the major barriers to developing new work, growing and sustaining their business, and collaborating with other creative enterprises. It is worth bearing in mind at this point the findings of the AHRC’s FUSE work, where some creative enterprises were seen to benefit substantially by being linked to digital enterprises.

Once the key barriers to development have been identified the next step is to look at how these barriers may be overcome in the short, medium and long term.

The fastest way of progressing things is to bring creatives together into practice focused groups and meetings.  This will help to ensure the use of limited resources are best utilised. During this process it will be possible to identify priorities, and those potential leaders who can take the strategy forward within your particular local creative area. This collaborative approach is a major step in solving the fragmented and diverse nature of demands being made on resources.

Note: many creative people like working alone, or in very small teams, so the goal in terms of developing companies, etc. may not be about increasing the size of an enterprise but more about increasing productivity and profitability.

The question of development – what skills and resources are needed to improve the opportunities for growth within your area?

Numerous reports and surveys have identified key skills shortages within the creative industries, some of which have been, and potentially will be, affected by changes in the migration and work relationships determined by UK government policy.  However, at a local level it is the relationships between local colleges, universities, local authorities, and creative enterprises which are critical to meeting skills and resource issues.

Having identified key needs within the local creative economy developing a strategy using existing resources, and planning for increasing support for education, training and resource development, is critical to any potential growth in the cluster.

The danger is thinking one approach will benefit all, the classic example being the creation of large accelerator type projects by converting or building substantial ‘creative hub’ buildings.  Such buildings can benefit some creative areas e.g. music with the provision of cheap studios, etc., or crafts with the provision of collective studios and potential gallery sales space.  However, this type of provision does not suit all creative enterprises. For many enterprises it is much more about access to content development and production finance, or marketing, which will prove key to growth and success.

In all contexts the provision of up to date information on funding support, market news, and access to under-used resources in the area will substantially benefit all the creatives involved.

The promotion of collaborative working, and collective activity has proven to be a major growth factor in the creative industries, and should be considered in any development process and resource provision.

“If you give a good idea to a mediocre team, they will screw it up. If you give a mediocre idea to a brilliant team, they will either fix it or throw it away and come up with something better.”   Ed Catmull : Pixar/ Disney

The question of inclusivity – how to engage communities, cultures and individuals, who are currently excluded or under-represented within your cluster?

There is currently a new awareness, and substantial national lobbying around the issues of inclusivity.  As a result, there are numerous initiatives and programmes being undertaken in an attempt to address the obvious lack of representation within areas of creative activity.

Previous blogs have outlined ways in which organisations can improve access, and recruitment to programmes. Therefore, in this context it is perhaps only worth emphasising that many culturally specific activities may have audiences and buyers beyond not just the local area but also outside the UK. This is particularly true of narrative driven content and craft-based activities.  Inclusivity is not just about the person, it is also about visions and outputs.

The question of quality – how to ensure the quality of new work is high enough to compete in a global market place?

There have been many initiatives and in some cases millions of pounds spent on developing new creative outputs only for them to fail in the relevant market. In any discussion with potential investors in the creative sectors it does not take long for the ‘risky’ nature of creative enterprises and the ‘artsy’ nature of creatives to be raised. In this context that the question of quality becomes paramount in developing a successful creative cluster.

There is not long enough in this blog to address all the myths, mis-conceptions, and degrees of ignorance, which need to be overcome in this area from all the potential partners in creative success (see 4 Phrases which limit creativity).  However, one thing which can be addressed is the use of successful creative mentors in the development process. The inclusion of successful creative mentors in the designing of programmes, the supporting of new talent, and the assessing of outputs is critical, not only to credibility, but also to the actual quality of outputs.

Mentors also play a vital role in the final question to be addressed.

The question of relevance – how to match support to individual enterprises in ways that are effective and relevant to their development?

Small creative enterprise often exist in a hand-to-mouth relationship with their buyers be they individual customers, or major corporate companies. This leads to a narrow focus on obtaining and maintaining the few contracts which are essential for the business to survive. In addition, the scale of the enterprises often means they feel they are in a very weak position to bargain any serious head room on the prices they charge, thus margins are very tight. This in turn leads to little time and no resources to address new skills, new marketing, or new product development and its exploitation. It is in this context any business support has to be highly tailored and specific to the needs of creatives.

There have been numerous attempts from the AHRC, national Arts and Media bodies, Government and a number of Universities to provide  such a support structure for creative entrepreneurs over the last decade.

Too often creatives have been asked to attend generic courses, been advised by people who have only a limited knowledge of the creative industries or lectured by individuals who have been successful in other areas e.g. tech or retail. Given this level of mis-match between providers and the creatives it is perhaps not surprising that many past activities have failed. As a result several people have concluded that creatives do not want business support.

This might be the case if it were not for both FUSE 2, and the CIF Freelancers’ survey, indicating that this is not the creatives’ point of view, leading to the conclusion that it is not the issue about the need/desire for business support but more how it is delivered that is the question.

Providing relevant and effective business support to micro-companies and freelancers is critical to any plan to improve the market for creative outputs and the investment climate for creatives. One project ’Prosper’, run by Creative United and funded by the Arts Council England, ran for a very short time in 2017-18, but brought to light one or two ways in which such support could be provided.

‘Prosper’, based upon various offerings of support to a diversity of arts organisations, concluded that a credit system which allowed creatives to access mentors specific to their needs at a time convenient to them was the most desired and the most used.  Though this is only one piece of research it suggests that using creative sector industry mentors, combined with a flexible legal and financial support system designed for small creative enterprise will be a critical factor in developing your local creative cluster.

One final issue which needs addressing is language. It is one thing to talk about a business plan to a techie who aims to build an app and sell on its success within a short time, it is completely other to discuss with a creative how their current work may be exploited on other platforms, or in new markets. The former is focused on potential sales from the outset, the latter only focuses on potential sales after the bulk of development, or even completion, has been achieved. The processes may in fact be very similar with respect to outputs e.g. an app or a creative piece of work, but the language around them are radically different and this has to be recognised in providing any support services to creatives.

Supporting Creative Micro-companies and Freelancers

For any creative cluster to grow, and the creative sector as a whole to become sustainable, as opposed to a few individuals, or companies, becoming ‘stars’/’unicorns’ the process of identifying the needs of creative enterprises in your area is critical. It is equally important to then provide relevant and effective support and resources to meet their needs.

Once this has been achieved then creative enterprises that initially may have seemed very limited in their commercial potential, and un-investable in traditional terms, will now be seen in a new light.

 

 

 

 

 

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Finding Your Local Creatives

Over 90% of the creatives industries in the UK are micro-companies under four people or freelancers.  Many do not show up in government statistics, many are University graduates from the numerous Arts and Media courses, most are struggling to survive, and most are engaged in servicing other parts of the UK, and global, economies.  This points to a major talent wastage and a loss of Intellectual Property rights, but also a golden economic opportunity, if these creative people can be better supported and helped to not only survive, but grow.

The question is how do you support such a diverse, and fragmented, group of people? And in the first instance how do you find them?

In this blog we set out some answers to the latter question as the basis of answering the first.  You cannot support and develop creative work if you do not know who in your area is doing it, and what type of support they need.

Creative Clusters Research to date

NESTA’s Creative Nation map gives a good overview of the level of creative companies and individuals, who are working in each area of the the UK. However. it is only an overview culled from government statistics and meet-up groups etc. To engage with creatives in your area a much more detailed and specific piece of research needs to be undertaken. The new AHRC backed creative clusters may undertake some of this work, but as was indicated in ‘Where Are the AHRC Creative Clusters?’ these are often sector specific e.g. fashion, and in many cases, not even located in one geographical area.

The AHRC’s FUSE programmes looked at how local creative businesses worked and grew, and highlighted the unmet needs of freelancers and micro-companies. Though focussed on Brighton and Newcastle the FUSE insights were supported by the national CIF Freelance Survey in 2017. Both pieces of research highlighted the needs of the creatives but were urban-centric, and neither provided a model for local research, which reaches out across the whole sector from makers and visual artists to designers and VR creators.

The Local Approach

Several local authorities have declared their intention to support the creative industries e.g. West Midlands Combined Authority, and the success of Hull’s ‘City of Culture’, etc., has shown the impact of an arts focus in growing local economies.  However some have gone one stage further and undertaken very local research.  One of the most recent was Lambeth Council, in London. Lambeth’s ‘A Creative Way to Grow’ includes a description of how they surveyed their local creative community, and thus arrived at a targeted local strategy. Westminster City council, another London Council, who had also undertaken a creative review ten years earlier, recently held a Media Forum looking at the next steps they will take following this research. So what lessons can we take from their approach to discovering the creatives on your doorstep?

Initial Research

This screen/desk-based period concentrates on a literature review covering everything from the NESTA type publications to government economic publications e.g Nomis, Creative Industry Council, Creative Industries Federation and TechUK material plus Local Enterprise Partnership (LEP ) and City Council information.  However, input from the Arts Councils, Screen Agencies and the Design and Crafts Councils also need to be factored in. Though there is still an artificial divide in some quarters between Arts, Media and Digital, to know what is happening near you, you need to search for all sectors of the creative industries.

The danger in this early stage is to prejudge what is happening. Your area may be well known for games, tech companies or visual arts, but is very unlikely this is all that is happening, and focusing on what is already known will miss many opportunities.

The Scale of the Research

The quantitative element of the research will depend very much on how thorough you are with the follow up to this initial survey of what is happening.  The key is not to stop with web and the recognised networks.  It is very unlikely that most creative freelancers are members of the Chambers of Commerce or are registered with a LEP.  Therefore, reaching out to informal networks e.g. meet-up groups, theatre supporters networks, and commercial hubs e.g. local galleries and craft shops is an essential first step to increasing the database on which the overall strategy will be based.

In Lambeth this involved over 100 organisations, while in Westminster they identified 4,079 business.  This latter group were approached, of which 3355 formed the initial base for their research.

Contact

The next stage is all about contacting people. The scale of this will obviously depend on the level of resources available to the research team or individual. It may involve a number of different approaches from telephone surveys, online questionnaires, focus groups, the creation of advisory groups and face-to-face interviews.

One interesting approach to gathering creatives together given the pressures on their time, their lack of money and network opportunities, is the idea of creative breakfasts, or suppers, held in local cafes and restaurants. This not only provides an informal and local meeting point for the people concerned, but also acts as an extra trading opportunity for the venues involved. A more focused Meet-Up style gathering with a key speaker, and funding opportunity announcements can be attractive to creatives with little free time.

The important element of this stage, with regard to future action, is to ascertain what help/resources the creatives need to grow, develop new work, or be more successful?

This is qualitative research at its best. In Lambeth it involved in depth interviews with 40 stakeholders and workshops involving businesses, sector-focused business support bodies, property developers, and education providers. In Westminster, it involved 34 semi-structured face to face interviews, and 600 structured telephone interviews using open and closed questions.

Both research teams used advisory groups from different creative sectors to help devise questionnaires etc.

A Policy Review

Once this level of research has been undertaken it is the right moment to step back and review existing policy in your area. This will range from local planning issues to LEP priorities, from the range of business support offered to existing funding available to creatives. The point is to see how far existing plans etc match up with the requirements stated by the freelancers and micros in your area.

In particular, how do they address the different needs of the four main types of creative enterprise.

1.Creative Services – those companies and individuals who service bigger companies and organisations e.g. web agencies, app developers

2. Creative Content Providers – the creators of videos, animation, illustrations and text for companies and brands.

3. Creative Experiences – companies who provide experiences from galleries to VR and pop-up theatre, from performance venues to hackathons.

4. Creative Originals – those micros and freelancers who produce the one-off products creating unique works, and potential IP revenues from jewellers to authors, from games designers to screen productions.

The Next Steps

The aim of good research is to provide the basis for the next series of actions.

This obviously depends on who you are, and what resources you ave available to follow up on the research.  You may be a local authority.

‘BIDs, universities and other sector support bodies can work with the council to build the strength of creative and technology business networks; compete for business support funding, and attract accelerator programmes to the borough’
Lambeth CDI Study 2017

You may be a government supported city or cluster.

“Coventry’s arts and heritage organisations will be helping to tell the stories of Coventry to all the people who visit, live or work here. A key ingredient is collaboration, with new partnerships, new ideas and new events, inspired by the great places and people in Coventry.” – Coventry City of Culture 2021

You may be University or College

“We are proud of our historic industry links, and
valued reputation for developing professional skills
for modern industry across many specialisms, with
our 50 international partners.” City of Glasgow College

Or a Meet-up Group/local arts group or micro-company 0r freelancer

“SMart is a Belgian-based cooperative that provides a one stop shop support service for freelancers, including an innovative salary guarantee fund to ease the problem of late payments.” RSA ‘The Self-Organising Self-Employed’

Having completed the research, the point is to collaborate with others to improve the support and resources available to creative micro-companies and freelancers in your area.

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Where are the AHRC Creative Clusters?

Over a year ago the AHRC launched its call for a Creative Clusters programme designed to help the creative industries develop new research and development projects. In response over 40 proposals were submitted. Early this summer these were shortlisted and eventually nine proposals  have been chosen to help improve the productivity and growth of the creative sector in the UK, as part of the government’s Industrial Strategy.

Interestingly, UK Universities have formed their own clusters to participate in this programme. In total, over 25 Universities are included within the final nine projects.  Their partners range from the BBC and Burberry to Codebase and Duck Soup Films.

The proposals are dominated by programmes in which Universities, with the resources of over 180 staff, students, spin-offs, and Lab facilities will undertake research on behalf of:

Public bodies are also part of the mix with Digital Catapult, the V&A, Creative Scotland, the Welsh Government all contributing to the match financing required to unlock the government-backed Creative Clusters’ money.

The nine proposals can be grouped into five distinct areas of creative activity.

  • Fashion
  • Immersive
  • Infomatics
  • Games and
  • Creative Industries, as a whole, within a region.

These are as follows:-

Fashion

University of the Arts London;University College London;University of Cambridge;  plus Loughborough and Leeds Universities and Queen Mary’s College.

Headed up by the London College of Fashion(UAL)  This £7m. proposal is centered on Sustainable Products – tech, materials and design, and have two key objectives – Business Innovation and Technology Adoption.

University of Leeds; Royal College of Art and University of Huddersfield.

Focuses on creating new approach to design – ‘right first time’ – the goal is to  cut development time for new fashion products from 9 to 3 months . The £6.9m proposal aims to achieve this via a combination of Digitally Connected and Sustainable Processes; Digital Communication and Data Analytics, and Creating a new apprenticeship programme.

Immersive

University of York; British Film Institute; Screen Yorkshire  and independent consultant Kate o’Connor.

A £6.9m set of activities focused on skills development, in particular, story telling within an immersive environment. This work to be carried out by the  Creative Media Lab partnership and involve the extensive use of research students.

Royal Holloway – University of London; Brunel University; University of Creative Arts; National Film and Television School and Pinewood Studios.

The creation of a Story Lab which combines  cross company innovation; data management and next generation training are part of this £7m project. The goal is to produce 155 R&D projects, a 20% increase in funding success, plus 55 jobs and aims to reach over 1m in audiences.

The important connections for both of these proposals are the links with Audiences of the Future and the AHRC’s own VR  Demonstrators.

Infomatics

Two capital cities are the focus for infomatic research projects.

Cardiff University; Cardiff Metropolitan University; University of South Wales and Town Square

Cardiff’s £6m project focuses on two area – Screen data,, especially TV, and News, a journalistic Lab. Using the existing media base in South Wales aims to build new broadcast content and platforms, while also developing new forms of news content and local news provision.

Edinburgh College of Art; University of Edinburgh; Edinburgh Napier University and Codebase

Edinburgh’s £7m budget aims to support the city’s Festivals with audience information to build wider and longer term engagement. The latter builds on the Arts Council’s digital programme and like Cardiff will involve the creation of a Lab.

Games

University of Abertay Dundee; University of St Andrews and University  of Dundee

A programme with a diverse focus on games development using a University based test Lab, combined with R&D fellows in companies and the use of PhD students to create a University-based talent pipeline.  The £7m proposal aims to create original IP and to stabilise the micro games company environment.

Creative Companies

Two of the Clusters spread a wide net embracing the complete range of creative companies in a region – Bristol-Bath, and Northern Ireland.

University of the West of England,;University of Bristol; University of Bath, and Bath Spa University

This £6.8m project is led by the Watershed in Bristol, which provides a firm basis for action. The overall aim is to embed R&D activity into the creative industries into the three Universities.

University of Ulster; Queen’s University Belfast; Northern Ireland Screen and RTE.

This £6.9m broad cluster will embrace many partners in Northern Ireland, including Techstart NI, Invest NI, and Belfast Harbour Commissioners. Encompassing  as it does the whole range of creative industry activities, it focuses on identifying ways of improving the situation for creative companies in N.I.

 

AHRC Creative Clusters and the 90%.

As indicated in previous blogs freelancers and micro-companies make up over 90% of the creative industries

The Creative Industries Federation research on freelancers, which reflected, in part, the conclusions of the AHRC’s own FUSE research, provides a background to this initiative.

In this research three key things were identified as being required to improve the productivity and day-today working of these vital players in the creative industries. These were :-

  1. Access to finance
  2. Legal Advice and support
  3. Access to workspace

None of the proposals explicitly seeks to address these three areas of development for freelancers.

Micro-companies are listed as potential partners/supporters of the big regional proposals but only the games proposal explicitly identifies a specific problem i.e. the stabilising of the micro-games company environment, as part of its aims.

It is Too Difficult

This lack of focus on the small players within the creative industries highlights a problem which often affects national  programmes. These are often aimed at bigger organisations, and dealing with small micro-companies and freelancers is seen as too difficult.  However, if the industrial strategy is to work in the creative industries sector this relationship must change.

This selection of Clusters is a good starting point but it also points to other major challenges within the Creative Cluster bids strategy. It will now be up to the various Universities, and their partners, to demonstrate how they will reach out to the vast majority of the sector, and ensure the innovation, increases in productivity, and economic growth that underpin the ambitions of the industrial strategy are achieved.

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The Future of Indie Film in UK & Ireland.

The last month has seen the UK’s bfi and Ireland’s Dept of Culture, Heritage and Gaeltacht (DCHG) both publish plans for the film industry’s future. The bfi’s Commission on UK Independent Film focuses exclusively on this sector, while the DCHG Audio Visual Action Plan looks at the wider creative sector. However, what is striking is the similarities of both reports views of the challenges faced by independent film, and in many respects the same conclusions as to action which needs to be undertaken.

This blog will focus on the key conclusions and, in particular, the actions both see as essential to improving the situation for independent films going forward.  Actions which address key challenges facing film-makers across Europe, but have particular resonances in the UK & Ireland.

NOTE: Most of the key challenges identified in both reports reflects the conclusions drawn by the the BCre8ive Investment Forum in March 2018 about the creative industries as a whole, and will be referenced where appropriate.

First a Definition

A quick definition of what is an independent film –

Film made by “independent companies – under the control of shareholders resident in the UK(Ireland) – where significant intellectual property rights in the films, with meaningful and continuing asset value, remain with those companies.” –  Commission on UK Independent film.

The Key Challenges Identified

  • The lack of risk taking with investment after the global financial crisis and the impact of digital disruption.
  • A sharp decline(50% in some cases) in traditional sources of finance and revenues, including some tax incentives.
  • An increase in theatrical films being screened – over 800 in 2017 in the UK.  These are often only for tax or financial reasons on limited releases, but they crowd the scene for audiences and make success for independent films more difficult.
  • The inability of production companies to retain rights, and thus being forced to focus merely on overheads and fees as their means of income.
  • The lack of development funding which leads to films being taken to market before they are ready.
  • The lack of marketing support and finance to promote films.

These issues are part of an overall set of similar challenges affecting games, and animation, as reflected in the DCHG Action Plan, but they also affect other sectors of the creative industries e.g. graphic novels.

The Solutions Suggested

  • Increase Funding for the Film Industry

Screen Ireland will see its funding increased, amounting to over €200m over the next ten years. bfi funding was set in in 2016 at nearly £500m for 2017- 2022.

Tax initiatives to funnel equity investment into film companies has always been part of governments’ policy. In Ireland this is section 481, which will see an increase in its upper ceiling to €100m.

In  the UK PACT’s recommendation for changes to the current Tax scheme were reviewed but not taken up  by the Commission. However, the bfi Commission identified a new approach to EIS investment, which could overcome the recent interpretations that effectively closed this avenue to independent film makers.  This new approach would involve the creation of an EIS based fund , supported but independent of the bfi, where “risk would be mitigated by supporting a diversified group of perhaps ten or more production companies.” – Commission on UK Independent Film

This portfolio/studio approach to investment was identified at BCre8ive’s March Investment Forum.

  • Improving the situation for co-productions

Both reports highlighted the need to improve the need for more co-productions to enhance the financing and distribution of independent films.

The Bfi Commission focused on two major elements to improve the climate for co-productions . First, changing the rule in the film tax relief so that the UK
co-producer can claim 100% of qualifying UK spend (up to a maximum of 80% of the total budget), rather than the current maximum of 80%. Secondly, rejoining Eurimage as part of an increased cooperation with European progammes, which includes staying as part of the Creative Europe programme as it goes forward.

Ireland already has these advantages and therefore it aims to increase the funds available to co-productions by €3m per annum.

  • Undertaking new marketing initiatives

This has two distinct foci. On the one hand reaching out to new audiences – part of the Commission’s approach to younger audiences, and improving the marketing activities of the film companies. The latter is the dominant approach of Screen Ireland going forward with “limited” support for attendance at trade events., while the bfi recommends supporting up to 6 UK Indie films a year in a new marketing strategy.

The interesting point here is that neither approach rcognises the potential for social media and global web marketing/distribution, while recognising that digital disruption is part of the challenge going forward. As one contributor said having a P&A i.e. marketing spend available improves a films marketability enormously.

  • Creating new Development Funds

Both plans aim to create new development funds. In Ireland this is a specific commitment of an additional €2m a year. While in the UK the aim is to create a new £5m+ Commercial Development Fund working on a portfolio basis  for investors. The objective of the fund would be “to provide financial support to producers to develop high value IP with the potential to reach a wide audience, have the potential to become franchises, or to deliver an outsized value to the UK independent film sector through its production/distribution impact.”(ConUKIF).

These ambitions however do not address the elephant in the room. This is that large development funds have been available in the past e.g. UK Film Council, without any increase in the success of indie films.

This arose from two distinct reasons. One, large parts of the funds were spent in bidding wars for rights to existing works, and so money was lost from actual film development. Something which appears to be encouraged in the UK Commission’s report. Two, the production culture has created little incentive for understanding how a screen narrative works for audiences. It has focused instead on attracting actors, who can attract the finance. The result being that few producers, or writers, have the skills or knowledge to improve screenplays even if the money for development is there.

  • Creating new business support structures.

Though both action plans identified the need to improve support for film companies from identifying routes to finance to cheaper premises and skills development little is planned.. The bfi plan recommended no significant actions, while Screen Ireland has committed to an approach similar to the UK’s Creative Skillset in the coming years.

The lack of specific business support was highlighted as part of BCre8ive’s investment forums and as such is seen to be crucial to the success of any new investment/funding strategies, and the exploitation/retention of IP rights.

  • Maximising Rights

The impact of online platforms Facebook,Amazon,Apple, Netflix and Google (FAANG) is seen by both reports to have made revenue issues very difficult for independent films.  There is no ‘magic bullet’ suggested by either plan but both call for a coming together of the various players especially the Public Broadcasters and exhibitors to address how new models of revenue and IP rights exploitation can be developed for independent films.

The failure to really engage with this issue beyond the renewed call to fight piracy and to avoid inadvertently inhibiting producers/production companies from retaining rights is a clear weakness within both strategies.

Conclusions

There is clearly a crisis within independent film-making in the UK/Ireland. Lack of funding at various stages of the film production process, and the new distribution landscape pose major barriers to improving this. Both action plans suggest some new, and old, ways forward.

However, the failure to address how IP rights can be retained by production companies: how small micro companies and freelance operations can be supported in an increasingly monopolistic environment; and how returns can be created for investors, will unfortunately limit the impact of any actions undertaken.

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Do you need to build your own Creative Cluster?

Creative Clusters are now at the the heart of new funding for the Creative Industries in the UK. As was pointed out in the previous blog on opportunities for investors, there will be more money at seed level i.e. up to £50,000 for new creative projects in the coming three years. However, the vast majority of these funds will be focused on existing creative clusters as defined by NESTA research and the AHRC Creative Clusters Programme.

Therefore, the vast majority of the UK is not seen to have a creative cluster by current definitions.

This begs the questions what happens if you are not in a recognised cluster, and how will freelancers and micro-companies (over 90% of the Creative Industries) benefit from a programme, which largely excludes them by definition. This latter point stems from the lack of information in government statistics on creative freelancers and micr0-companies. 

The answer lies in a three tier approach for creatives, universities, local authorities and LEPs working up their own Creative Cluster.

Why build a creative Cluster?

Apart from a desire to join the likely recipients of new monies, the bigger argument rests on the need to create more local employment, boost the income of many small creative companies and participate in what is the fastest growing part of the UK economy. In addition, it is clear as automation hits transport, manufacturing, and distribution the creative industries is one of the key areas where work will still be dominated by human activity.

In this context it makes sense for everyone with a role to play in building creative clusters to play their part.

Local Knowledge

The key starting point is to discover the creatives on your doorstep. You may be in a local creative MeetUp. However, it is probably based on a particular skill or shared interest. This probably means you do not know about different creative groups, who meet in the same town/area and share the same issues/needs as you. Needs which could be met by an active creative cluster. So connecting up with other creatives means you could not only help each other but also ask for effective support.

Local government is hampered in having any effective creative cluster support owing to a general lack of information/statistics on creative activity in their area. This has been partially overcome by the recent Nesta interactive infographic.  This incorporates the latest government statistics (sometimes only as late as 2014) and their Creative Nation work also incorporates MeetUps and some other sources.

In 2007 Westminster City Council undertook a survey of their area and discovered a vast unrecognised creative economy, which they had to date not realised was so important to the area. A general awareness has now been created across the UK of the importance of the creative industries with some LEPs,  and Mayors, in particular, taking a lead. Despite this change the issue remains the invisible nature of creatives in local economies from craft creators to photographers, and indie games developers.

Therefore, there is an urgent need for local government organisations to undertake local creative economy surveys, and build a clear up to date picture of the  creative activity in their area. With this knowledge effective policy and investment plans can be made and a clear sense of the creative cluster developed.

 

Local Support

The CIF Freelance survey and the Brighton FUSE 2 report identified the fact that creatives need a number of specific business needs. These range from access to finance to legal advice, and workspaces. Creating these tailored services could be undertaken by Universities and local government or LEPs, thus ensuring that when new products and creative opportunities arise they do not flounder owing to a lack of basic business knowledge and support.

Note, that in some cases this may mean an active support structure not just expecting creatives to suddenly turn into pro-active entrepreneurs overnight. Remembering also being creative does not necessarily mean being able to pitch or work out a business plan.

In terms of sustaining the local creative clusters FE colleges and schools can play an active part in promoting creative skills, supporting new talent and networking with national and local skills services. This work is currently being focused on by the Creative Industries Federation(CIF) and Creative Skillset.

Local Investment

Much of freelance creative work, beyond service contracts, is self-financing. Access to finance for freelancers and micro-companies, who want to develop their own work and not just work from one commission to the next is very difficult as indicated in numerous research projects – see above. Therefore the creation of a local investment community focused on creative products and activity will play a vital part in growing local creative clusters. The problems  associated with this have been addressed in ‘New Funding for Creatives‘.

In this context the development of a Creative Investment Forum is critical to the long term sustainability of any creative cluster.  The aim of the Forum will be to educate local business angels in the investment opportunities provided by the creative industries in their area.

Opportunities which will be enhanced by the increase in public sector ‘seed’ funding, the local creative support network, the active participation of local organisations,  plus the predicted increase in growth, and value, of the sector over the next five years. Obviously there are the tax benefits of SEIS/EIS activity, and the increased R&D tax credits available to creative activity. However, in addition, as part of the government’s Creative Industries Sector Deal, there is a stated ambition to create a new Angels co-pro fund to match local investments outside of London.

Looking to the Future

It is clear that these three tiers of activity cannot be undertaken overnight. However, if organisations and creatives start on surveying the local creative activity, and build towards organising Investment Forums over a twelve month period a new local creative cluster could be active and successful.

The opportunities exist – the question now is which areas, cities, or towns will join the fastest growing part of the UK economy?

 

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What Will the Sector Deal Ever Do for You – Investors?

In this, the third of three blogs on The Creative Industries Sector Deal, which was published recently by the UK Government, we set out the opportunities and questions for Investors in the UK’s Creative Industries.  The Deal sets out a range of goals and actions designed to help the creative industries and its partners, as part of the UK Governments Industrial Strategy. However, in the light of the famous Monty Python line “What have the Romans ever done for us?” we have looked at what the Sector Deal might do for different people involved in creative work in the UK.

Those investors who might benefit range from regional Angel Funds to Creative Investment Funds and individual investors.

 

Creating Investment Opportunities

As illustrated in the two previous blogs – Freelancers and micro-companies and Universities and Major Companies/institutions – the Sector Deal creates a range of new creative and company investment opportunities. Opportunities, where Seed Funding is available to much of the sector,  and therefore the initial risk to investors is mitigated.

In the light of this, and the existing tax credits for film, high end TV, animation and games, the creative industries over the next two years is a real opportunity for investors to engage in a rapidly expanding market. A global market worth in excess of  £1,580bn, with a UK digital global reach alone, already worth an estimated £9bn in 2017. For a detailed look at games alone see https://www.broadbandsearch.net/blog/online-gaming-statistics

An Explosion in Seed Funding

The Creative Clusters due to come into operation in October 2018, joint ventures between universities and creative companies, are expected to create a number of local seed funding operations.  These will provide from £10-100,000 in seed capital to creative enterprises in cluster areas. The likely outcome of which, if managed well, will be numerous IP investment opportunities.

£16m will be invested in immersive demonstrators, which in themselves provide new investment opportunities. This combined with the £12m R&D funding, via three national competitions makes match funding and post-seed funding in immersive technologies very attractive over the coming years.

Extra money for the UKGames Fund, which provides seed funding for games developers means further opportunities to invest in the UK games sector, now worth over £5bn.

A £60m Contestable TV Fund will be launched by the bfi later this ear, which will provide opportunities for investors to match fund broadcasters and participate in the IP exploitation of new children’s TV programmes.

In addition, InnovateUK – now part of UK Research and Innovation – will be taking a new approach from 2018/19, so that all its competitions will be open to Creative Industry companies. The total budget for all of UK Research and Innovation’s work is £6bn p.a.. However, only 2.4% of InnovateUK’s budget in 2016 has been spent in the Creative Industries, and the appointment of Sir Peter Bazalgette to the board is aimed at improving this scenario.

These initiatives may also be supplemented by activities under the new £20m Creative Development Fund.

All of which are in addition to funds available through Creative England,bfi,Arts Council,Creative Scotland, Creative Wales, prsFoundation,Crafts Council and Northern Ireland Screen and numerous Lottery awards.

New Investment Funds

The British Business Bank will seek to improve access to finance for high-growth firms outside London – including creative businesses – via a commercial investment programme to support clusters of business angels.  The key here is to ensure that these new funds do not end up picking ‘low-hanging fruit’ and focus on the tech sector, which has been the case to date.

The problems identified by investors in creative industries are laid out HERE . Given these problems the Sector Deal seeks to improve the investment readiness of creative enterprises.

Investment Support

One of the key barriers to investment is a lack of awareness of the opportunities and contacts within the creative industries. Therefore, it is planned that a creative industries roadshow to introduce businesses and investors will be organised in 2018..

The government also aims to invest up to £4m (subject to a business case) in a programme of intensive business investment readiness support. This will need to be tailored specifically to creative enterprises, as past evidence has shown that generic business support does not work for freelancers and micro-companies.

This work is to be led by the industry, who will establish a Creative Champions initiative to offer tailored advice, mentoring and networking opportunities for creative entrepreneurs and businesses in order to help them become investment-ready, and to improve understanding between investors, financiers and creative businesses.

In order to facilitate these developments the government will convene a Creative Industries R&D Working Group from across the sector. Its focus being barriers to R&D funding, and opportunities to improve the take-up of existing support e.g. R&D tax credits.

The Keys to Major Successes

The fragmented nature of the creative industries with over 90% being freelancers or micro-companies(the majority under four people), and the ‘long-tail’ of revenue returns on many creative IP rights creates particular problems for successful investment.

In this context pro-active investors are critical to ensuring effective and high rewards. This means engaging with the intermediary bodies e.g. Universities, Arts Council England, who have information on thousands of creative start-ups and established artists. It means being prepared to work with collectives of freelancers, and groups of micro-companies with limited track records. Crucially, it means portfolio investment, rather than a ‘picking winners’ strategy.

In addition, patient capital needs to be available to extend beyond the limits of EIS, and 3-5 year returns on investment.   This could be achieved by either rolling over existing investments or providing new equity for companies and products/projects, which have already gone to market in some capacity. However, this latter position is likely to see new investors squeezed out by major media/arts companies.

For more on the Sector Deal and Freelancers and Micro-Companies please read HERE

For how the Sector Deal will help Universities and Major Companies please read HERE

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What Will the Sector Deal do for You – Universities and Major Companies/Institutions?

The Creative Industries Sector Deal, published recently by the UK Government, sets out a range of goals and actions designed to help the creative industries and its partners. However, in the light of the famous Monty Python line “What have the Romans ever done for us?” we look at what the Sector Deal might do for different people involved in creative work in the UK.

Those who might benefit range from the tens of thousands of freelancers and micro-companies who make up over 90% of the industry to regional investors and universities.  All are mentioned in the 71 page report, but in this second of three blogs we will review what the options are for universities and major companies/institution.

Universities are Major Gainers

£64m in an Arts and Humanities Research Council programme to deliver eight partnerships between universities and creative businesses across the UK. Announced last year the process of selecting the eight Creative Cluster centres is well under way.  The shortlist of possible centres is HERE and final decisions will be announced this summer.

25 Universities will also benefit from the new Institute for Coding which will receive £20m in funding within the Industrial Strategy funding programme. This was announced at Davos earlier this year.

The development of talent in the latter initiative is only one part of a general increase in funding and focus on the talent pipeline for the creative industries that will feed through into the universities. These include :-

  • £2m(dependent on  a business case) to ensure there is a larger and more diverse intake of talent and a broader range of routes into the creative industries;
  • DCMS support for a creative careers strategy;
  • a creative industries toolkit that will be made available on the web; and
  • a national campaign led by the Creative Industries Federation.

Major Company Opportunities

Creative exporters will benefit from a new programme and a new Creative Trade and Investment Board supported with at least £4m from Department of Trade budget. This will include continuing support for the Trade Access Programme and Music Export Growth Scheme.

The Creative Kickstart Programme aimed at creative companies in creative clusters with mentoring and advice on finance, exports and IP, including a creative industries roadshow to introduce businesses and investors.

£33m investment from the Industrial Strategy Challenge Fund into the Audiences of the Future Challenge that will be administered by the UK Research and Innovation. This is a new body created on April 1st 2018, bringing together UK Research Councils, Innovate UK and a new organisation, Research England.

An increase in the rate of R&D tax credit to 12 per cent from 11 per cent. Essential tax benefit for companies in the creative industries ,who undertake extensive Research and Development.

Developing Institutions

Creative Local Industry Partnerships will be created to enhance collaboration between creative industries consortia,including the Creative Industries Federation, Creative Industries Council, Local Enterprise Partnerships, Combined Authorities and partners in Devolved Nations.

A £10m Industry Centre of Excellence (supported by £5m from the AHRC’s clusters programme) to overcome silos in the key industries, ensuring the UK creative workforce is the most skilled in the world in the use of immersive technologies.

A £20m Cultural Development Fund open to bids from local partnerships. The fund will run over two years and will invest in areas of the country that can demonstrate high impact, robust plans for using investment in cultural and creative industries assets to further economic growth and support local communities.

Two Key Issue

Over 90% of the creative industries is made up of freelancers and micro-companies. In order for the Sector Deal to work it will need to reach out to this fragmented community to ensure that past mistakes are not repeated.

The control of large parts of the monies allocated to the Deal rest with major institutions and are geared towards major companies, who have staff available to participate in bid applications and the various committees required to run programmes. At one level this is understandable, but unless these bodies make a real effort to engage with the freelancers and micro-companies by offering effective support and simple, open-access to funds, much of the ambition stated within the Deal will be lost.

Much of the Deal focuses on start up and seed type investment funding. If match funding, and crucially follow on funding, is not provided good ideas and talent will be either lost or the exploitation left to non-UK companies. The engagement of investment groups, in particular Angel Funders, outside of London will be a critical factor in any future success.

On the latter point see ‘What will the Sector Deal Ever do for You – Investors?‘.

For possible implications for Freelancers and micro-companies see ‘What will the Creative Industries Sector Deal Ever do for You ?’.

 

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