East Midlands Creative Industries Report

East Midlands Urban and Regional Creative Industries Data Study

Final Report

March 2008

Contents

1 EXECUTIVE SUMMARY ................................................................................................1 2 INTRODUCTION.............................................................................................................3 2.1 Methodology...................................................................................................................................4 2.2 Creative Industries Domains ..........................................................................................................6 3 LARGE URBAN DISTRICTS..........................................................................................7 4 OTHER URBAN DISTRICTS..........................................................................................9 5 LARGEST SECTORS BY EXPERIAN YP CATEGORIES...........................................10 5.1 Large Urban districts ....................................................................................................................11 5.2 Other Urban districts ....................................................................................................................12 6 PRODUCTION CHAIN FUNCTIONS............................................................................14 7 COMPANY SIZE...........................................................................................................16 7.1 Sole traders ..................................................................................................................................18 8 CREATIVE INDUSTRIES GVA – URBAN DISTRICTS ...............................................20 8.1 Methodology.................................................................................................................................20 9 CREATIVE INDUSTRIES IN THE EAST MIDLANDS..................................................22 9.1 Summary ......................................................................................................................................22 9.2 Local Authority Districts by Urban/Rural Class ............................................................................22 9.3 Regional Creative Industries Employment and Businesses ........................................................24 9.4 Domains .......................................................................................................................................26 9.5 Growth Rates ...............................................................................................................................30 9.6 Regional Creative Industries GVA ...............................................................................................33 10 GEOGRAPHICAL DISTRIBUTION OF CREATIVE INDUSTRIES ..............................34 11 FINAL OBSERVATIONS..............................................................................................37 APPENDIX 1: SUB-REGIONAL CREATIVE INDUSTRIES.......................................................39 APPENDIX 2: REGIONAL CREATIVE INDUSTRIES EMPLOYMENT, 2000 AND 2004 .........42 APPENDIX 3: DEFINITIONS......................................................................................................44 APPENDIX 4: WEIGHTINGS FOR URBAN DISTRICTS...........................................................45

East Midlands Urban Creative Industries Data Study i BOP Consulting 2008

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East Midlands Urban Creative Industries Data Study 1 BOP Consulting 2008

ooks & Press sub-sector provided the largest number of creative industries jobs.

ses in Other Urban districts increased from

industries employment increased from 15,500 to 16,700 during the same

again the largest creative industries sub-sector in terms of

Books & Press again provided the largest number of creative industries jobs.

1 Executive Summary

In 2005, there were 5,500 creative industries businesses in the urban districts of the East Midlands. These businesses employed 33,900 people. (Urban districts are those local authorities defined as ‘Large Urban’ or ‘Other Urban’ by DEFRA1.)

The creative industries in urban districts of the East Midlands had mixed fortunes between 2001 and 2005. There was a small increase in the number of creative industry companies in Large Urban districts, but a decline in the overall level of employment. In Other Urban districts, there was an increase in both jobs and businesses.

The main findings of this study are that:

Large Urban Districts

The number of creative industries businesses in Large Urban districts rose from 2,900 to 3,200 between 2001 and 2005.

Creative Industries employment fell from 18,400 to 17,200 during the same period.

Visual Arts & Design was the largest creative industries sub-sector in terms of numbers of companies.

The B

Other Urban Districts

The number of creative industries busines2,000 to 2,400 between 2001 and 2005.

Creativeperiod.

Visual Arts & Design wasnumbers of businesses.

1 Department for Environment Food and Rural Affairs, Local Authority Districts And Unitary Authorities in England, 2005

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Creativ I

idlands

s increased by

gion

ts a marginal increase in

ere more creative industries

The Visual Arts & Design sub-sector accounted for the most creative industries businesses in the region in 2005 (6,300), followed by the Audio-visual sector (4,100), the Books & Press sector (2,300) and the Performance sector (700).

Between 2001 and 2005, Visual Arts & Design grew by a greater degree than any other sub-sector, in terms of both jobs and businesses. The Audio-visual sector also grew across the region as a whole, but the Performance sector remained static, and there was a small decline in the Books & Press sector.

e ndustries in the East Midlands

Collating the findings of this study of urban districts and those from the East MRural Creative Industries Study (completed in 2007) provides creative industries statistics for the whole of the East Midlands region:

In 2005, 62,500 people were employed in creative industries throughout the East Midlands

In 2005, there were 13,400 creative industries businesses in the region.

Between 2001 and 2005, creative industries jobs in the East Midland8.1%.

Over the same period, the number of creative industries businesses in the regrew by 19.0%.

In 2005, the creative industries accounted for around 3.4% of all employment in theregion, and around 8.3% of all businesses. (This representhe creative industries’ share of the regional economy since 2001.)

In absolute terms, the numbers of creative industries jobs was higher in urban districts2 than rural districts3. However, there wbusinesses in rural districts than in urban districts.

Overall, creative industries jobs and businesses grew by a greater degree in rural districts than in urban districts, between 2001 and 2005.

Across the region, the Books & Press sub-sector provided the most jobs (23,500 in 2005), followed by the Audio-visual sector (20,300), the Visual Arts & Design sector (16,400) and the Performance sector (2,300).

2 ‘Large Urban’ and ‘Other Urban’ local authority districts 3 ‘Significant Rural’, ‘Rural 50’ and ‘Rural 80’ local authority districts

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2 Introduction

The East Midlands Cultural Observatory, in partnership with EM Media and EMDA, has commissioned BOP Consulting to conduct a mapping exercise of creative industries in urban districts of the East Midlands. This work is designed to complement the study of creative industries in rural districts in the region, undertaken by BOP for Culture East Midlands in 2007.

This study has followed the classifications used by the Department for Environment, Food and Rural Affairs (DEFRA) to distinguish between urban and rural local authority districts4. This places all local authorities in England into one of six groups based on the patterns of settlement that characterise each district. The earlier report by BOP – East Midlands Rural Creative Industries Study: Regional Report – looked at the 26 authorities in the region which were classed in the ‘Significant Rural’, ‘Rural 50’ and ‘Rural 80’ categories. This study complements that report by adding statistics for the remaining 14 districts, all of which fall under two urban headings: ‘Large Urban’ and ‘Other Urban’.

The Large Urban districts are: Blaby, Broxtowe, Erewash, Gedling, Leicester City, Nottingham, Oadby and Wigston.

The Other Urban districts are: Ashfield, Chesterfield, Corby, Derby City, Lincoln, Mansfield and Northampton

These are indicated on Map 1 overleaf.

4 Department for Environment Food and Rural Affairs (2005), Classification of Local Authority Districts And Unitary Authorities in England, 2005.

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Map 1 – Large urban and other urban districts in the East Midlands

Source: BOP Consulting/Caliper Corporation/Collins Bartholomew

In this report, we first provide an analysis of creative industries employment and businesses in Large Urban and Other Urban areas of the East Midlands. Drawing on our earlier study of rural creative industries for Culture East Midlands, we then compare the region’s urban and rural districts, and provide creative industries statistics for the region as a whole.

2.1 Methodology This study of urban districts of the East Midlands was carried out using a variation of the DCMS Evidence Toolkit (DET). The DET was used to assess employment and business numbers in creative industries, based on Annual Business Inquiry workplace analysis data from the Office for National Statistics (ONS), obtained from Nomis5. The DET defines the creative industries in terms of 43 Standard Industrial Classification (SIC) codes (at 4-digit level). The problem is that some of these SIC codes (19 of them) measure a combination of creative industries and non-creative industries activities. In

5 www.nomisweb.co.uk

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order to accurately calculate the size of the creative industries, it is necessary to devise weightings to apply to these 19 codes.

To calculate the necessary weightings, we used a second data source – Experian’s National Business Database (NBD). The NBD is a commercially licensed database containing 4.2m records from a range of sources including Yellow Pages, Thomson and Companies House. Business records are classified according to SIC codes, but also by other classification frameworks that allow a more detailed, ‘finer-grained’ analysis. By cross referring between these different classifications, it is possible to calculate the proportion of creative and non-creative businesses represented by each SIC code in a particular geographic area.

The NBD also includes employment data for each company listed, so that different weightings can be calculated for a range of employment size bands. This also provides an indication of the number of sole traders in each sector – information that cannot be obtained from ABI.

Unlike the DET, we do not include Software Publishing (72.21) and Other Software Consultancy and Supply (72.22) in full. The Experian NBD database divides these codes into a number of sub-categories, and we did not include all of them when calculating weightings to apply to ABI. For example, ‘Internet Web Design’ is included in our weightings, and ‘Computer Software Sales’ is not. We also retain ‘Computer Software Development’, on the grounds that this includes games, interactive leisure software and educational software products (e.g. for schools). However, the category does also include other forms of software development, such as the production of business software packages, and so these are also included in our final data for the Audio Visual sector. This was the approach used in our study of creative industries in rural districts of the East Midlands, and we have used the same method here for consistency.

In summary, the data analysis for this study was carried out as follows:

1. Analysis of NBD data & calculation of Weightings

NBD data was obtained for all of the creative industries SIC codes specified in the DET. Weightings for relevant SIC codes were calculated by comparing YP classes for creative industries and non creative industries (BOP Consulting has developed its own framework for carrying out this process). Different weightings were generated for business numbers and for employment. NBD data was also used to analyse sole traders in the workforce, and to generate maps of employment and numbers of businesses.

2. Analysis of ONS ABI data (data units and employment)

ONS ABI workplace analysis data for all creative industries SIC codes was obtained from Nomis for 2001 and 2005. Weightings were applied to relevant SIC codes for businesses and employment, and the results aggregated into four domains (see below). Results were produced for Large Urban districts and Other Urban districts.

3. Analysis of GVA

Finally, we carried out an analysis of GVA figures for creative industries SIC codes, obtained from the ABI team at ONS. However, this stage was more

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problematic, and the results are less reliable than those for employment and number of businesses. See Section 8 for further details.

This approach was adopted on the grounds that it provides one of the most accurate methods of mapping the creative industries that is currently available. It can also be repeated as new ABI data is released each year, using the weightings calculated in step 1.

However, there is no perfect method of measuring creative industries, and it is necessary to highlight some ‘health warnings’ about the data presented in the report.

First, the Experian NBD dataset is not a complete record of all relevant businesses in an area. Some business records are suppressed if the companies have requested to be removed from the NBD, as is their right under data protection laws (the data is more commonly used for marketing). Levels of suppression are generally even across all creative sub-sectors, and so there is little risk of distortion in weightings. Note also that the Experian data used to calculate the weightings was issued in autumn 2007, but that these weightings were used to calculate data for 2001 and 2005.

Second, the use of ONS ABI data means that sole traders and micro businesses are under-represented in the analysis, although these comprise a large proportion of the creative industries sector. The ABI is based on a survey of businesses which are registered for PAYE or VAT. This excludes the smallest companies, with low revenues.

Third, ABI data is extrapolated from a national survey, and the margin of potential error increases as the area of focus becomes narrower (e.g. in terms of geography or industrial sub-sectors). It is most accurate at national and regional level, but becomes less so when examining smaller geographic areas. We have tried to mitigate these issues by aggregating the results of this urban study with those of the earlier rural study in the second part of this report, to provide regional statistics.

For similar reasons, the DET does not measure the 13 sub-sectors identified in the DCMS Creative Industries Mapping Documents, but divides the creative industries into four broad ‘domains’ (see below).

2.2 Creative Industries Domains The DET organises the creative industries into four broad sub-sectors, or ‘domains’: Audio-visual, Books & Press, Performance and Visual Arts & Design. Many creative industries sub-sectors are so small, that analysing data from individual 4-digit SIC codes could be unreliable and inaccurate. Aggregating data into the domains allows us greater confidence in our results.

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Each domain contains the following sectors:

Audio-visual (AV) Books & Press (BP) TV & radio Film & video Photography Advertising Music Interactive digital media (games, web, mobile etc) Computer software

Publishing (books, magazines, newspapers) Literature Printing

Performance (P) Visual Art & Design (VA) Theatre Dance Circus Carnival Puppetry

Design Architecture Fine arts Crafts Art & Antiques Designer fashion

3 Large Urban Districts

This section provides an analysis of the numbers of creative industries businesses, and employment levels, in Large Urban districts of the East Midlands. The Large Urban districts are: Blaby, Broxtowe, Erewash, Gedling, Leicester City, Nottingham, Oadby and Wigston.

Creative Industries Businesses

In 2005, there were 3,200 creative industries companies in the Large Urban districts of the East Midlands. These represented around 8.7% of all business units in these districts.

The number of creative industries businesses in Large Urban districts increased from 2,900 to 3,2006 between 2001 and 2005 – an increase of 10%. However, as Figure 1 below shows, this rise was driven by one domain: Visual Arts & Design. A 42% increase in the number of Visual Arts & Design companies more than offset small declines in the other three domains.

The number of businesses in the Audio-visual domain fell by 2%, in Books & Press by 6% and in Performance by 7%.

Visual Arts & Design firms are now the most numerous, having overtaken Audio-visual businesses. In 2005, Visual Arts & Design firms accounted for 39% of creative industries business units in Large Urban districts, Audiovisual businesses for 35%, Books & Press businesses for 21%, and Performance businesses for 5%.

6 Figures are rounded to the nearest 100

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Figure 1

Creative industries businesses - Large Urban

0

200

400

600

800

1000

1200

1400

AV BP P VA

No.

of d

ata

units

20012005

Source: BOP Consulting/ONS ABI

Creative Industries Employment

In 2005, there were 17,200 people employed in the creative industries in Large Urban districts of the East Midlands. This represented 3.3% of all jobs in these districts.

The Books & Press sector was the largest employer, accounting for 43% of all creative industries jobs. The Audio-visual sector provided 33% of creative industries jobs, Visual Arts & Design 21% and Performance 3%.

Between 2001 and 2005, the number of people employed in the creative industries in Large Urban districts declined by 7% – from 18,400 to 17,200. The largest decline took place in the Books & Press sector, in which jobs fell by 14%. Jobs in the Audio-visual sector also fell, by 9%, and in the Performance sector by 11%. The only sector to buck the trend was Visual Arts & Design, in which jobs grew by 17%.

Figure 2

Creative industries employment - Large Urban

0100020003000400050006000700080009000

AV BP P VA

Empl

oym

ent

20012005


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4 Other Urban Districts

This section provides an analysis of the numbers of creative industries businesses, and employment levels, in ‘Other Urban’ districts of the East Midlands. The Other Urban districts are: Ashfield, Chesterfield, Corby, Derby City, Lincoln, Mansfield and Northampton.

Creative Industries Businesses

In 2005, there were 2,400 creative industries businesses in the ‘Other Urban’ districts of the East Midlands. This represented 7.9% of all business units in these districts. Visual Arts & Design was the largest domain in 2005. It accounted for 45% of all creative industries business units. 31% of creative industries businesses were in the Audio-visual sector, 19% in the Books & Press sector and 5% in the Performance sector. Overall, the number of creative industries businesses in Other Urban areas grew by 19% between 2001 and 2005 – from 2,000 to 2,400. During this period, the number of Visual Arts & Design firms increased by 53%, and the sector replaced Audio-visual as the domain with the most business units. The Audio-visual sector also grew – by a more modest 3% – but the number of businesses in the Books & Press and Performance sectors declined slightly, by 4% and 1% respectively. Figure 3

Creative Industries businesses - Other Urban

0

200

400

600

800

1000

1200

AV BP P VA

No. o

f dat

a un

its

20012005


Creative Industries Employment

In 2005, 16,700 people were employed in the creative industries in Other Urban districts of the East Midlands, representing 3.7% of all jobs.

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Books & Press was the largest sector in terms of employment, providing 45% of creative industries jobs. The Audio-visual sector accounted for 31% of jobs, Visual Arts & Design for 20% and Performance for 4%.

Overall, creative industries employment grew by 8% between 2001 and 2005 in Other Urban districts – from 15,500 to 16,700. But growth was not uniform across all sectors. The number of Visual Arts & Design jobs increased significantly – by 44% – and Audio-visual jobs increased by 8%. However, Books & Press jobs declined by 2%, and Performance jobs by 7%. Figure 4

Creative Industries Employment - Other Urban

0100020003000400050006000700080009000

AV BP P VA

Empl

oym

ent

20012005


5 Largest Sectors by Experian YP Categories

In this study, we have used the Experian National Business Database (NBD) principally in order to calculate weightings to apply to our primary analysis of Annual Business Inquiry (ABI) data from the Office for National Statistics (ONS). However, the Experian data can also be used in its own right to carry out a secondary analysis of the largest creative industries sectors.

In addition to defining companies by SIC code, the NBD also uses a number of other classification systems, including Yellow Pages (YP) categories. This is what allows us to analyse the proportion of creative industries companies to non-creative companies under each SIC code, and thus develop weightings to apply to ONS data. But the NBD data also allows us to calculate the total employment in each YP category, and therefore produced a more detailed breakdown of the types of creative companies that employ the most people in Large Urban and Other Urban districts.

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5.1 Large Urban districts Table 1 below shows the creative industries YP categories in which 300 or more people in total are employed in Large Urban districts7. It shows that companies in the printing and publishing sector account for the highest levels of employment, and in particular those involved in general printing and lithography, and in newspaper and magazine publishing. This reflects our analysis of ABI (see section 3 above), in which the Books & Press domain was the largest employer.

Companies in the audiovisual sector are also responsible for a large number of jobs, again mirroring our analysis of ABI, in which this domain was the second largest employer. However, the Experian data shows us that the YP categories that account for the highest levels of employment in this sector are computer software development and computer consultancy. While these activities are regarded as creative industries by the DCMS, they are not generally regarded as ‘creative’ in the same way that TV of film production would be.

Firms that the DET would place in the Visual Arts & Design domain account for significantly fewer jobs than printing, publishing or audiovisual companies. This is likely to be a reflection of the smaller average size of these types of firms. Nevertheless, design consultants and architects still employ more than 1,100 people in Large Urban areas.

Only one YP category in the performance sector accounts for more than 300 jobs, and that relates to venues: theatres and concert halls.

7 Please note that this does not represent the full Experian dataset, only those YP categories which employ 300 people or more. The results in Table 1 are rounded to the nearest 10.

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Table 1

Source: Experian NBD, Nov 07

Yellow Pages Category Overall number of employees

Printers & Lithographers 3740

Newspapers & Magazines 2010

Computer Software Development 1600

Computer Consultancy 1030

Broadcasting Services 630

Design Consultants 570

Booksellers 570

Label Printers 560

Architects 550

Publishers & Publications 550

Photographic Goods Retailers 510

Designers-Advertising & Graphic 430

Cinemas 390

Internet Web Design 390

Designers-Textile 380

Marketing & Advertising Consultants 370

Screen Printers 360

Print Finishers 350

Theatres & Concert Halls 320

TV, Film & Video Production Services 310

Advertising Agencies 300

5.2 Other Urban districts A similar analysis of Experian YP categories for Other Urban districts also shows that printing and publishing accounts for the highest levels of employment. Again, this reflects the findings of our analysis of ABI (see Section 4).

As in Large Urban districts, the YP categories responsible for the most jobs in the audiovisual domain were computer software development and computer consultancy. However, marketing and advertising consultants also accounted for nearly 1,000 jobs – more than in Large Urban districts.

There were fewer architecture and design jobs than in Large Urban districts, but more people were employed in theatres and concert halls (which was again the only YP category in the performance domain to provide more than 300 jobs).

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Table 2

Yellow Pages Category

Overall number of employees

Printers & Lithographers 3400

Newspapers & Magazines 1830

Computer Software Development 1300

Computer Consultancy 1060

Marketing & Advertising Consultants 960

Publishers & Publications 640

Cinemas 490

Booksellers 470

Theatres & Concert Halls 410

Architects 390

Internet Web Design 370

Designers-Advertising & Graphic 340 Source: Experian NBD, Nov 07

Analysing Experian’s YP categories in this way is informative, as it provides a more detailed picture of the types of companies found in each creative industries domain. It also provides a means of double-checking the main findings of the ABI analysis in Sections 3 and 4 (although since weightings for the ABI analysis were derived from Experian data, we would expect the findings to correspond).

However, the statistics presented above only provide an indication of the number of people employed in each category. Experian’s NBD generally includes most creative businesses in a given area, and can be regarded as an accurate reflection of the relative sizes of different sectors. However, it does not contain every business. The NBD is a commercially available database, which is often used for marketing. Consequently, some business request that their details are removed for reasons of confidentiality. Other creative practitioners (e.g. individual visual artists) are under-represented on the database, because they are not listed in business directories. Furthermore, the categorisation of companies is not always consistent across different geographical areas.

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6 Production Chain Functions

An analysis by ‘function’ within the production chain suggests that the majority of creative firms (75%) in urban areas of the East Midlands are involved in the ‘Creation’ and ‘Making’ stages of production. This is based on the DCMS DET methodology, which assigns a production function to each of the SIC classifications included in its definition of creative industries: Creation, Making, Dissemination, Exhibition/Reception, Education/Understanding and Archiving/Preservation. Inevitably this is an approximate measure, as individual businesses may undertake several functions within the production chain. Our analysis of functions uses the DET definitions, but is based on Experian data.

The distinction between Making and Creation is a fine one, and there is a degree of overlap between the two. ‘Making’ covers two types of business:

those responsible for the tools or the means of reproduction which aid an act of creation, such as printers or bookbinders’ suppliers;

those involved in realising a creative product without necessarily initiating it – many radio and TV activities, for instance.

‘Creation’ has a narrower definition, encompassing those firms which initiate creative products or generate intellectual property in the course of their activity. It includes obvious groups such as artists, musicians and authors, but also embraces categories like internet consultancy and art and antiques valuers.

Dissemination largely covers the retail of creative industries goods, while exhibition refers to venues, including cinemas, which show creative works. Education includes specialist establishments such as private dance or drama schools, but not teachers of creative subjects in the state education sector.

Figure 5 below shows the proportion of creative businesses that are primarily involved in each function. The largest proportion are involved in ‘Creation’ – 42%. ‘Making’ accounts for 33%, ‘Dissemination’ for 15%, ‘Exhibition’ for 6% and Education for 4%. (In rural districts, this pattern was broadly similar, with 44% of businesses mainly involved in ‘Creation’, and 29% in ‘Making’.)

In terms of employment (rather than businesses), the positions of Creation and Making are reversed, with Making accounting for 53% and Creation for 30% of creative jobs.

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Figure 5 – Creative industries businesses by function – Large Urban and Other Urban districts, East Midlands

Creation, 42%

Making, 33%

Dissemination, 15%

Exhibition, 6% Education, 4%

CreationMakingDisseminationExhibitionEducation

Source: BOP/Experian

It is worth noting that in many creative sectors, it is in the dissemination/distribution and exhibition stages of the production chain that the greatest value is often realised. In the computer games sector, for example, it is the companies that own the publishing rights that are the most powerful and profitable, rather than the production studios that create the games. A similar dynamic is at play in the film and music industries.

It is also true that, in a sector as fragmented and complex as the creative industries, it is not always possible to identify a clear, linear production chain. In any such analysis, questions must always be asked about where ‘creative’ activities end and more generic functions begin. The DET method used above represents just one attempt to understand how the sector is structured, but a number of alternative models have also been proposed. For example, BOP Consulting (with Pembridge Partners LLP) have developed a model that positions each of the creative sectors in relation to one of four market segments, based on business models and the types of products offered: ‘creative services’, ‘creative content’, ‘creative experiences’ and ‘creative originals’8. More recently, Frontier Economics has developed a supply-chain model based on 5 layers, with core creation and functions to support this activity at the centre, and the indirectly

8 See NESTA (2006), Creating Growth: How the UK Can Develop World-Class Creative Industries, p55

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esses in Large Urban and Other Urban areas employed 200 people or more

r Urban areas that employed more than 50 people than in Large Urban areas.

f

s

in

.

e

and sole trading, much of which is not visible in the data analysed here

related – but least creative – activities on the periphery, such as the manufacture and retail of games consoles and DVD players9.

7 Company Size

The majority of creative industry businesses in urban districts are small. As Figure 6 below illustrates:

around 90% of creative businesses in Large Urban and Other Urban areas employed between 1 and 10 people in 2005

around 8% of creative businesses in Large Urban and Other Urban areas employed between 11 and 49 people

less than 2% of creative businesses in Large Urban and Other Urban areas employed between 50 and 199 people

less than 0.5% of creative busin

there was a marginally higher proportion of creative businesses in Othe

It should be noted that this pattern of small and large companies – with a large number overy small companies and a small number of very large companies – is not exclusive to creative industries. Many other industrial sectors also exhibit similar profiles, particularly in largely service-based industries. (For example, more than 75% of catering businessein the East Midlands in 2005 employed 10 people or fewer, while only 0.1% employed 200 or more10.) However, the degree to which small companies predominate is high in the creative industries, even when compared to other industrial sectors. This becomes particularly apparent when you consider that of the 43 four-digit SIC codes includedthe DET definition of creative industries, only three SIC codes included companies employing 200 or more people in Large Urban areas of the East Midlands in 2005(These were: 22.12 – Publishing of newspapers; 22.22 – Printing not elsewhere classified; and 72.22 – Other software consultancy and supply.) In the majority of creative industries SIC categories, there are no companies that employ 50 or morpeople. Furthermore, ‘core’ creative activities are characterised by high levels of freelance working(see 7.1 below).

9 DCMS (2007), The Creative Economy Programme, A Summary of Projects Commissioned in 2006/07: Evidence and Analysis Unit 10 Based on ABI workplace analysis for 3-digit SIC codes: 553 (Restaurants), 554 (Bars) & 555 (Canteens & Catering)

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Figure 6 – Businesses and employment by size band: share of all creative industries

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Businesses (LU) Employment(LU)

Businesses(OU)

Employment(OU)

1-10 em ployees

11-49 em ployees

50-199 em ployees

200+ em ployees

Source: BOP/ONS ABI

Size Band

LU = Large Urban OU = Other Urban

Although few in number, larger companies do account for a significant share of all creative industries jobs:

In Large Urban areas, companies in the ‘50-199’ size band accounted for 20% of creative industries jobs in 2005, and companies in the ‘200+’ size band accounted for 12% of creative jobs

In Other Urban areas, companies in the ‘50-199’ size band accounted for 22% of creative industries jobs, and companies in the ‘200+’ size band also accounted for 22% of creative jobs

In Large Urban areas, companies in the ‘1-10’ size band accounted for 38% of creative industries jobs, and companies in the ‘11-49’ size band accounted for 30% of creative jobs

In Other Urban areas, companies in the ‘1-10’ size band accounted for 30% of creative industries jobs, and companies in the ‘11-49’ size band accounted for 27% of creative jobs

r anies favour central

locations – although this cannot be proven by this data analysis.

Larger companies are therefore responsible for a higher share of creative industries employment in Other Urban areas than in Large Urban areas. (Conversely, smaller companies provide a higher proportion of creative jobs in Large Urban areas than in Other Urban areas.) It is possible that larger firms which require larger premises – e.g. printing companies – are more likely to be located in non-city-centre locations, with lowecosts and better transport links, while smaller (often service) comp

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to realise that the creative industries are structured in such a way that only a e

l

s, in which relatively large ed in roles that support the core creative activity, such

and services companies, which are defined as

BBC.

the East Midlands, most large employers are in the printing, publishing and computer software & services sectors.

Compa

ority of companies are micro businesses, while less than 1% employ more than 200 people. However, there was a greater proportion of larger

grea

ut in only 4.5% of companies had more than 10 employees.

In urban districts, 37% of creative jobs were in companies with 50 or more employees, while in rural districts only 27% of creative jobs were in such large companies.

7.1 reative industries

traders

It is also clear that a small number of companies in a limited number of SIC categories account for a disproportionately high share of creative industries employment. It is importantlimited number of types of company that are likely to become large employers. Thesinc ude:

Large printing companies, which are involved in more industrial manufacturing activity than most creative companies.

Publishing, particularly of newspapers and magazinenumbers of people are employas advertising sales, distribution and subscriptions.

Computer games companies.

Other types of computer softwarecreative industries by the DCMS.

Broadcasters, such as the

In

rison with Rural Areas

Patterns of company size are broadly similar in urban and rural districts of the East Midlands: the vast maj

companies in urban districts than in rural districts in 2005, and these accounted for a ter share of jobs.

In urban districts, the average number of people employed by creative companies in 2005 was 6, while in rural districts the average number of employees was less than 4.

In urban districts, 10% of creative businesses employed more than 10 people, brural districts

Sole traders Sole traders and freelancers make up a significant proportion of the csector. However, measuring the number of people in this group is not straightforward, and the data sources used for this study do not adequately measure such workers. ABI data excludes most sole traders (those that are not VAT-registered)

Experian data can give us some insights into the number of sole traders in the creative industries in urban districts of the East Midlands. According to Experian, sole

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s in make up 29% of creative businesses in Large Urban districts and 33% of those in Other Urban districts. However, sole traders account for just 3% of creative industries jobLarge Urban districts and 4% in Other Urban districts. (See Figure 7 below.)

Figure 7: Sole traders as share of all creative industries businesses and employment

0.0%Large Urban Other Urban

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Share of bus inesses

Share of em ploym ent

Source: BOP/Experian

However, while Experian data does include sole traders, there are several reasons why it may not capture all freelance workers in creative sectors. Experian’s data is taken from business directories such as Yellow Pages and Thomson, and many creative workers are not listed in such directories – either because creative work is not their main source of income, or because they tend to find work through industry networks and specialist directories, rather than general business listings. For example, film production relies on

rge number of freelance workers, from actors to technicians, but most are not listed in the Yellow Pages. The actual number of freelance workers and sole traders is therefore likely to be higher than the Experian data suggests.

la

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8 Creative Industries GVA – Urban Districts

Gross value added (GVA) represents the amount that individual businesses, industries or sectors contribute to the economy. Broadly, this is measured by the income generated by the business, industry or sector less their intermediate consumption of goods and services used up in order to produce their output. GVA consists of labour costs (e.g. wages and salaries) and an operating surplus (or loss). The latter is a good approximation to profits. The cost of capital investment, financial charges and dividends to shareholders are met from the operating surplus.

Calculating GVA for the creative industries is more problematic than calculating the number of employees or businesses. Consequently, the statistics in this section are less robust than the other data presented in this report, and should be regarded as indicative only.

Bearing this in mind, we estimate that the average GVA per employee in the creative industries in Large Urban and Other Urban districts of the East Midlands was £39,700 in 2004. Analysis of the four creative domains shows that Books & Press had the highest GVA, followed by Audio-visual, Visual Arts & Design and Performance.

Average GVA per employee was higher in Large Urban districts in 2004 (at £41,400) than in Other Urban districts (where GVA was £38,000).

The creative industries GVA figures for 2004 appear to compare well with the regional GVA per workforce job across all industries, which was £33,100 in the same year11, and GVA per workforce job in the Services sector, which was £31,900. However, this is not a direct comparision. The regional GVA per workforce job statistics have been calculated using standard methods, which are more sophisticated than the method of estimating creative industries GVA from ONS ABI data used in this study. Data collected and published through the ONS ABI are used to produce an approximate estimate of GVA at basic prices. This measure is approximate because it does not allow fully for certain types of National Accounts concepts/issues such as taxes, subsidies or income earned-in-kind, which are taken into account in the regional GVA figures calculated using standard methods.

See Section 9.6 for a comparison of urban and rural creative industries GVA.

8.1 Methodology We based our calculations on custom data ordered from the ABI team at the ONS, who supplied GVA figures for the creative industries SIC codes for Large Urban districts (combined as one dataset) and Other Urban districts (combined as one dataset). Data was requested for 2004 rather than 2005, to allow comparison with the East Midlands

11 DTI/National Statistics (2007), Regional Competitiveness and the State of the Regions.

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Rural Creative Industries study12. However, GVA data is commercially sensitive, and ONS suppresses GVA statistics for selected SIC codes if there is any chance of identifying the performance of individual companies from the data. There were therefore some gaps in the dataset, and these were not consistent for the Large Urban and Other Urban classes of district.

The second challenge was that it is not possible to generate a specific set of weightings for GVA derived from Experian NBD data, as it is for employment and businesses. Consequently, it was necessary to use the weightings for employment to produce an estimate of GVA. Furthermore, the GVA data was not separated into company size bands (unlike ABI data for employment and businesses) in order to minimise the level of data suppression. It was therefore necessary to generate a simplified set of employment weightings, with no size bands.

Total GVA figures were calculated for the creative industries sector in Other Urban and Large Urban districts. Total creative industries employment figures were then calculated for 2004. The GVA figures were divided by total employment to produce an estimate of GVA per employee.

Note that we have not provided an estimate of the % change in creative industries GVA between 2000 and 2004, as it was not possible to adjust our figures for inflation.

12 Note that 2004 GVA data was analysed rather than 2005 to enable comparisons with the East Midlands Rural Creative Industries study. When the rural study was carried out, 2005 GVA data was not available.

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nal increase in

more creative industries

ural districts

00), the Visual Arts & Design sector

l sector (4,100),

r in io-visual sector also grew across the

region as a whole, but the Performance sector remained static, and there was a small decline in the Books & Press sector.

9.2 rding

lasses are

9 Creative Industries in the East Midlands

9.1 Summary Collating the findings of this study of urban districts and those of the East Midlands Rural Creative Industries Study (completed in 2007) provides creative industries statistics for the whole of the East Midlands region. In summary:

In 2005, 62,500 people were employed in creative industries throughout the East Midlands

In 2005, there were 13,400 creative industries businesses in the region.

Between 2001 and 2005, creative industries jobs in the East Midlands increased by 8.1%.

Over the same period, the number of creative industries businesses in the region grew by 19.0%.

In 2005, the creative industries accounted for around 3.4% of all employment in the region, and around 8.3% of all businesses. (This represents a margithe creative industries’ share of the regional economy since 2001.)

In absolute terms, the numbers of creative industries jobs was higher in urbandistricts13 than rural districts14. However, there werebusinesses in rural districts than in urban districts.

Overall, creative industries jobs and businesses grew at a faster rate in rthan in urban districts, between 2001 and 2005.

Across the region, the Books & Press sub-sector provided the most jobs (23,500 in 2005), followed by the Audio-visual sector (20,3(16,400) and the Performance sector (2,300).

The Visual Arts & Design sub-sector accounted for the most creative industries businesses in the region in 2005 (6,300), followed by the Audio-visuathe Books & Press sector (2,300) and the Performance sector (700).

Between 2001 and 2005, Visual Arts & Design was the fastest growing sub-sectoterms of both jobs and businesses. The Aud

Local Authority Districts by Urban/Rural Class Figure 9 below shows local authority districts in the East Midlands categorised accoto DEFRA’s Local Authority Districts And Unitary Authorities in England (2005), which provides an urban/rural classification for analysis at district level. Five c

13 ‘Large Urban’ and ‘Other Urban’ local authority districts 14 ‘Significant Rural’, ‘Rural 50’ and ‘Rural 80’ local authority districts

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ural present in the region: Large Urban, Other Urban, Significant Rural, Rural 50 and R80. (A sixth class – Major Urban – is not found in the East Midlands.)

Figure 9: Local authority districts in the East Midlands by DEFRA Urban/Rural class

on of a di pes of settlement:

Source: BOP Consulting/Caliper Corporation/Collins Bartholomew

The urban/rural classes are defined according to population density and the proportistrict’s population living in different ty

Large Urban. A minimum of 50,000 people, or 50% of the district’s population, resident within a major urban area.

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of

idered to be ‘larger market towns’.)

Rural 80. At least 80% of the district’s population in rural settlements and larger market towns.

9.3 Regional Creative Industries Employment and esses

Emplo

Combining the findings of this study with those of the East Midlands Rural Creative

the 14 urban districts of the region. Together, the Large Urban and Other Urban districts accounted for 54% of regional

workforce is largest in Other Urban districts, and smallest in Rural 80 districts – but the degree of variation between each class is relatively small. In the East Midlands as a whole, creative industries accounted for 3.2% of all employment (see Table 3 below).

Other Urban. Fewer than 37,000 people or less than 26% of the district’s population in rural settlements or larger market towns.

Significant Rural. More than 37,000 people, or more than 26% but less than 50%the district’s population, in rural settlements or larger market towns.

Rural 50. At least 50% but less than 80% of the district’s population in rural settlements or larger market towns. (Urban areas with population between 10,000and 30,000 cons

Busin

yment

Industries Study completed in 2007 reveals that 62,500 people were employed in the creative industries in the East Midlands in 2005.

The majority of creative industries jobs were based in

creative industries employment. Indeed, the more urban the class of district, the largerthe creative industries workforce in absolute terms.

This is partly related to the size of the overall workforce in each class of district. As a share of all employment in each class of district, the relative size of the creative industries

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Figure 10: Creative industries employment in the East Midlands, by urban/rural district class, 2005

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

Large urban Other urban Significant rural Rural 50 Rural 80

Source: BOP Consulting/ONS ABI (2005)

Table 3: Creative Industries Employment in the East Midlands (2005) Creative industries

employment Share of all employment in

class of district Share of regional creative industries

employment Large Urban 17,200 3.3% 27.5% Other Urban 16,700 3.7% 26.8% Significant Rural 10,400 3.1% 16.6% Rural 50 9,800 2.9% 15.7% Rural 80 8,400 2.6% 13.4% Total East Midlands 62,500 3.2%

Source: ABI (2005)

Businesses

In 2005, there were 13,400 creative industries businesses in the East Midlands.

The majority of creative industries businesses were based in the rural districts of the region – 59% of the total stock of creative businesses were in the Significant Rural, Rural 50 and Rural 80 districts. However, the average size of each business was larger in the urban districts. Creative businesses in Large Urban and Other Urban areas employed 6 people, on average, while those in Significant Rural, Rural 50 and Rural 80 districts employed less than 4. (This explains why more than half of the creative workforce was based in the most urban areas, even though these contained only 41% of the businesses.)

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As a share of all firms in each class of district, the relative size of the stock of creative industries businesses was largest in Large Urban and Rural 50 districts – but again the degree of variation between each class of district was small (less than 1%).

Figure 11: Creative Industries businesses in the East Midlands, by urban/rural district class (2005)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Large urban Other urban Significant rural Rural 50 Rural 80


Table 4: Creative Industries Businesses in the East Midlands (2005) Creative Industries

Businesses Share of all Businesses in

class of district Share of regional stock of creative

industries businesses Large Urban 3,200 8.7% 23.6% Other Urban 2,400 7.9% 17.8% Significant Rural 2,300 8.2% 16.8% Rural 50 2,800 8.6% 20.9% Rural 80 2,800 8.2% 20.9% Total East Midlands 13,400 8.3%

Source: ABI (2005)

9.4 Domains

Employment

In terms of employment, the largest creative industries domain in the East Midlands in 2005 was the Books & Press sector. This provided 23,500 jobs across the region, or 33% of all creative industries employment. By definition, Books & Press includes a high proportion of the kinds of companies that tend to have larger workforces (such as printing

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companies and newspaper offices), and this helps to explain the sector’s relatively large size. However, the number of jobs in this sector is declining, reflecting national trends.

20,300 people were employed in the Audio-visual sector in the East Midlands in 2005 – a third of the total creative industries workforce. (A large proportion of whom were employed in the computer software and consultancy sector.)

The third-largest domain, Visual Arts & Design, employed 16,400 people – around a quarter of regional creative industries jobs.

2,300 people were employed in the Performance domain – by far the smallest sector, with around 4% of creative industries jobs15. (Because of the way the DET defines the creative industries domains, Performance is much smaller than the other domains in all regions.)

Figure 12: Creative industries employment in the East Midlands by domain, 2005

0

5,000

10,000

15,000

20,000

25,000

Audio-visual Books & Press Performance Visual Arts & Design


Businesses

In terms of the number of businesses, the largest creative industries domain in the East Midlands was Visual Arts & Design. There were 6,300 businesses in this sector in 2005 – almost half (47%) of the total stock of creative businesses in the region. A particularly high proportion of businesses in this sector are very small, which explains the abundance of firms relative to employment.

15 This domain is small in all regions, as by definition it only includes a small number of relatively small industrial sectors – and excludes the music industry, which is instead counted as part of the Audio-visual domain.

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In contrast, the Books & Press domain accounts for only 17% of creative industries companies (2,300 business units), despite providing a third of the jobs, because the average size of each company is larger.

There were also 4,100 companies in the Audio-visual domain (30% of the regional stock of creative businesses) and 700 companies in the Performance sector (5% of businesses).

Figure 13: Creative industries businesses in the East Midlands by domain, 2005

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Audio-visual Books & Press Performance Visual Arts & Design


Creative Industries Domains by Urban/Rural District Class

The relative size of each domain was not consistent for every urban/rural district class, particularly in terms of employment. Figure 14 below shows the employment breakdown by domain for each of the five classes of district in the East Midlands. It shows us that there were more jobs in all domains in Large Urban and Other Urban districts, and also that the Books & Press sector was responsible for a larger share of employment in urban than in rural districts.

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Figure 14: Creative industries employment by domain and urban/rural district class (2005)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Large Urban Other Urban SignificantRural

Rural 50 Rural 80

Audio-visualBooks & PressPerformanceVisual Arts & Design


Looking now at the number of businesses, Figure 15 below shows that the domains are ranked in the same order in each class of district – with the largest number of businesses in Visual Arts & Design, followed by Audio-visual, then Books & Press and finally Performance. However, the number of Visual Arts & Design businesses was significantly higher in Rural 50 and Rural 80 districts – both in absolute terms and relative to the other domains.

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Figure 15: Creative industries businesses by domain and urban/rural district class (2005)

0

200

400

600

800

1,000

1,200

1,400

1,600

Large Urban Other Urban SignificantRural

Rural 50 Rural 80

Audio-visualBooks & PressPerformanceVisual Arts & Design


9.5 Growth Rates Between 2001 and 2005, creative industries employment in the East Midlands region grew by 8.1%, from 57,800 to 62,500. During the same period, the number of creative industries businesses increased by 19%, from 11,200 to 13,400.

Creative industries grew at a higher rate than the economy as a whole in the region. Between 2001 and 2005, overall employment in the region grew by 5.4% and the overall number of business units grew by 8.7%16.

The number of creative industries businesses grew at a higher rate than the number of jobs – indicating that the average number of employees per creative business declined (from 5.2 to 4.7 employees). This is a trend that we have observed in similar studies of other regions. Further research would be required to explain this trend in detail, but in broad terms it appears to indicate that growth is being driven by an increase in the number of small companies (such as design studios) more than by significant employment growth in existing firms. At the same time, certain types of larger company (such as printing firms) are declining in size.

16 ABI workplace analysis (2001 and 2005)

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Growth by urban/rural class

Growth in the creative industries was uneven across the region. As Figure 16 below illustrates, the number of creative industries businesses increased in every urban/rural district class between 2001 and 2005 – but grew at a higher rate in Significant Rural and Rural 50 districts.

Change in employment levels was even more uneven across the region. Although more people were employed in the creative industries in Large Urban districts than in any other type of district, the number of jobs declined between 2001 and 2005. By contrast, creative jobs in Significant Rural and Rural 50 districts increased by around 25%. In Rural 80 and Other Urban districts, the number of creative industries jobs increased at around the same rate as for the region as a whole.

Figure 16: Creative industries growth by urban/rural district class, 2001-2005

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

Large urban Other urban Significantrural

Rural 50 Rural 80 EastMidlands

Employment growth, 2001-2005 (%) Growth in businesses, 2001-2005 (%)


Growth by Domain

Creative industries growth in the region as a whole was also uneven across the domains and sub-sectors. As Figure 17 below shows, Visual Arts & Design jobs grew at the highest rate, increasing by 31% between 2001 and 2005. Audio-visual jobs also increased by a healthy 11%, but the number of Performance jobs was static, and Books & Press employment declined by 5% (but remained the largest employer in absolute terms).

Growth in the number of businesses also varied across the domains. Visual Arts & Design businesses again showed the highest growth, increasing by a very high 45%

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between 2001 and 2005 (see Figure 18 below). Over the same period the number of Audio-visual firms increased modestly, by 4%, while the number of Books & Press and Performance firms remained essentially static.

Figure 17: Creative industries employment by domain in the East Midlands, 2001-2005

0

5,000

10,000

15,000

20,000

25,000

30,000

Audio-visual Books & Press Performance Visual Arts &Design

20012005


Figure 18: Creative industries businesses by domain in the East Midlands, 2001-2005

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Audio-visual Books & Press Performance Visual Arts &Design

20012005


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9.6 Regional Creative Industries GVA As outlined in Section 8 above, calculating creative industries GVA is more problematic than calculating the number of employees or businesses. The statistics in this section should therefore be regarded as indicative only, as they are less robust than the other findings presented in the report. They are also not comparable with regional GVA statistics calculated using standard measures.

Taking these caveats into account, we estimate that, in 2004, the average GVA per employee in the creative industries in the East Midlands was £33,800.

The domain with the highest regional GVA in 2004 was Books & Press, followed by the Audio-visual sector, Visual Arts & Design and then Performance (with GVA per employee of less than half the overall average for creative industries).

As Figure 20 below shows, GVA per employee was higher in the more urban districts than in the rural districts in 2004. In Large Urban and Other Urban districts, the average GVA per employee was £39,700, compared to £26,300 in the rural district classes17. These figures suggest that a greater proportion of the most productive, high-value companies are based in larger towns and cities than in rural districts. However, the relative growth of creative industries GVA per employee was higher in rural districts than in urban districts between 2000 and 2004.

Figure 20: Average GVA per employee, East Midlands creative industries (2004)

£0

£5,000

£10,000

£15,000

£20,000

£25,000

£30,000

£35,000

£40,000

£45,000

Large Urban Other Urban Significant Rural Rural 50 Rural 80

Ave

rage

GVA

per

em

ploy

ee (2

004)

Source: BOP Consulting, based on ONS ABI data for GVA (2004)

Please note that the above GVA figures are not based on complete datasets, and as such should be regarded as estimates. To ensure confidentiality, ONS suppresses

17 Note that this is a revised figure for rural GVA, which supersedes the estimate provided in the East Midlands Rural Creative Industries report.

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selected GVA data if there is a possibility of identifying individual companies. The data used to calculate GVA for rural districts was subject to a greater degree of suppression than that used to calculate GVA in urban districts, and this may have exaggerated the disparity between urban and rural districts. See Section 8 above for a description of the methodology used to estimate GVA figures.

10 Geographical Distribution of Creative Industries

Figure 21 below shows levels of creative industries employment in each district of the East Midlands. It shows that the highest overall levels of creative industries employment are found in the main cities and towns: Nottingham, Leicester, Derby and also Northampton. While it may not be surprising that there are more creative industries jobs in the main cities of the region, not all of these are the most ‘urban’ areas. Both Derby and Northampton are classed as ‘Other Urban’ districts – while by comparison, Large Urban districts such as Erewash, Broxtowe, Gedling, Blaby and Oadby and Wigston have lower levels of creative industries employment. One reason for this is that there is likely to be a higher concentration of all businesses in city centre locations than in more residential suburbs. Many of the most commercial creative industries companies are service businesses, which benefit from proximity to potential clients. However, as this study has shown, creative industries employment is declining in Large Urban areas, as is the number of businesses in three out of four creative industries domains.

At the same time, there are relatively high levels of creative industries employment in some more rural districts – such as South Kesteven and Rushcliffe (both classed as ‘Rural 50’), or Wellingborough and Charnwood (both classed as ‘Significant Rural’). This is partly related to the overall size of the working population in these districts, and the buoyancy of local economies. But, as the East Midlands Rural Creative Industries study and other recent research has suggested, are we also seeing signs of a partial shift in the creative industries from city centres to more suburban, ‘out-of-town’ and rural locations? BOP Consulting has observed signs of similar trends in recent studies of other areas, including Westminster and Bristol & the West of England, and in Creative Countryside, a multi-client study completed in 2007 (with Experian Business Strategies).

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Figure 21: Creative industries employment by district (2005)

BOP Consulting/Caliper Corporation/Collins Bartholomew

Figure 22 below indicates levels of creative industries employment as a share of all employment in each district. The areas where creative industries account for the highest proportion of all jobs in a district are shaded darker red; lighter areas have lower relative levels of creative employment.

The map shows that the districts with the highest relative creative industries employment are mainly located in the south of the region – in Northamptonshire, Rutland and Harborough in Leicestershire. Relative creative industries employment is also high in South Kesteven in Lincolnshire, Rushcliffe and Ashfield in Nottinghamshire, and Bolsover in Derbyshire.

Note that as a share of all jobs, creative industries employment is lower in the districts containing the largest towns and cities – Nottingham, Derby and Leicester – than in many other districts. Thus in relative terms, creative industries may be more important as providers of employment outside the region’s cities (although creative sectors contribute more value to the economy in urban areas than in rural areas).

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The districts with the lowest relative levels of creative industries employment tend to be located in the north and east of the region, particularly in Lincolnshire (with the exception of South Kesteven), plus districts such as South Derbyshire and Bassetlaw in Nottinghamshire.

Figure 22: Creative industries’ share of all employment by district (2005)

BOP Consulting/Caliper Corporation/Collins Bartholomew

LU = Large Urban OU = Other Urban SR = Significant Rural R50 = Rural 50 R80 = Rural 80

Note that Figures 21 and 22 rely on the use of ABI workplace analysis data at local authority level, which increases the potential margin of error in the creative industries statistics. As such, they should be regarded as indicative.

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11 Final observations

This study was commissioned in order to address a gap in the evidence base, and we hope that we have been able to produce reliable statistics that will give a range of stakeholders a better understanding of the size and scope of the creative industries in the East Midlands. But research projects have a tendency to raise questions as well as to answer them. The findings of this study suggest a number of issues that may benefit from further investigation. Although it was not within the scope of this work to address these in detail, we highlight a number of key points below.

The first is why creative industries employment is declining in large urban districts of the region. Although (perhaps) surprising, this phenomenon is not unique to the region. BOP Consulting has observed similar trends in a number studies of other areas, including Bristol & the West of England and Westminster. One of the main drivers appears to be the availability and affordability of appropriate workspace. The cost of commercial premises has increased in recent years, and this may have motivated some creative businesses to move away from city centres. Many creative companies are currently facing challenging market pressures (for example, the disruptive effects of new technologies on business models), and moving to cheaper locations is one response. Another factor is likely to have been improvements in communications technologies combined with the increasing digitisation of creative production. For many creative producers, location is no longer as important as it once was, providing they have access to a good broadband connection.

This may also help to explain why the strongest creative industries growth is occurring in Significant Rural and Rural 50 districts. We cannot tell from our data analysis how much of the growth in these districts is organic and how much due to in-migration, but it is possible that there has been significant movement of businesses within the region from urban to more rural locations. Creative Countryside, a multi-client study produced by BOP and Experian Business Strategies in 2007, demonstrated that rural economies increasingly resemble urban economies, and that rural areas have driven much of the UK’s economic growth in the past decade. The districts that seem to have gained most are those that offer a mix of urban and rural: good quality of life and lower overheads, but relative proximity to larger urban centres, with good transport and communications links (rather than the most isolated and peripheral rural areas). The Rural Creative Industries Study of the East Midlands suggested that creative industries have been a significant part of this process in some districts.

Why, then, the apparent disparity in GVA between urban and rural districts? Based on our findings, creative industries employees in Large Urban and Other Urban districts are about 50% more productive than those in rural districts, on average. Again, it is not possible to draw firm conclusions from the data analysis alone (and there were methodological difficulties with the GVA analysis), but it is likely that a high proportion of the largest, most commercially focused creative companies are still based in city centres, where they benefit from access to clients, services and infrastructure. The converse is also likely to be true: that a high proportion of small-scale and less commercially focused companies (including ‘lifestyle’ type businesses) are based in rural towns.

Another issue that would benefit from further analysis is the role of the Books & Press sector. Publishing and printing are often over-looked in regional and local creative industries strategies, perhaps because both sectors have historically seemed able to

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look after themselves. The Books & Press sector still provides significantly more jobs in the East Midlands than any other creative domain, but employment is declining and both the printing and publishing industries face significant challenges.

In the printing sector, employment has been declining throughout the UK for a number of years. New and improved technologies, machinery and processes have made the industry more productive, but have also led to reductions in the workforce. At the same time, an increasing amount of large-run, non-time-sensitive print production is outsourced overseas, and is no longer economic to carry out in the UK. These developments will not be reversed, but what remains of the industry may need help to adapt to new circumstances. Printing is not in terminal decline, but the industry is changing, and many companies will need to adopt new technologies, develop new market specialisms or diversify into other, higher value services in order to survive.

Publishing is well represented in the East Midlands, particularly the newspaper and magazine industries. Like printing firms, publishing companies have traditionally been among the largest employers in the creative industries. But this industry is also facing challenges from new technologies, as readers and consumers migrate to online and digital media, and circulations and advertising revenues decline. Publishers are responding by moving into electronic publishing, and finding other ways of extracting value from their media brands – from conferences to radio stations – with significant implications for skills and workforce development.

The growth of the Visual Arts & Design domain in the East Midlands is also interesting. In both urban and rural districts there appears to have been very high levels of growth in this sector18. Growth in the number of businesses exceeds the growth in employment (although both are high), suggesting that the average size of firms in this sector is getting smaller. What kinds of companies are these, and what do they do? Unfortunately, analysis of ABI does not tell us as much as we would like. In fact, there are some doubts as to the reliability of the DET definition for this domain: Visual Arts & Design is derived from only four SIC codes, none of which measure visual arts or design activity exclusively (two of the codes include specialist retail activity). The design sector is not well-served by the SIC system, and is very difficult to isolate statistically.

However, there are possible explanations for the sector’s rapid growth. There is no doubt that the design sector has become more prominent in recent years. Consumption of design services is increasing, as more and more companies recognise the importance of good design to successful products. Government policy promotes the role of design in business. The number of applications for design has increased, as newer areas such as web design have become established, and consumer markets for services such as interior design and garden design have grown. There has also been a significant increase in the number of people studying design in UK colleges and universities. In addition, the Visual Arts & Design domain includes architecture and related services, and this sector is likely to have benefited from buoyant property markets, and the growth in investment in private and public sector building developments. If the number of businesses in these fields is growing as rapidly as our data suggests, then further research into the implications for the region – and other industrial sectors – may prove instructive.

18 Again, we have also observed similar trends in this sector in other regions.

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Appendix 1: Sub-Regional Creative Industries

It was not the aim of this study to examine the East Midlands’ creative industries at the sub-regional level. Instead, the focus was on urban districts, to complement the earlier East Midlands Rural Creative Industries study, and produce creative industries statistics for the whole region.

However, having produced data for the region, it is now possible to provide a snapshot of creative industries employment, numbers of businesses and levels of growth between 2001 and 2005 for each of the sub-regions.

Table 5 and Figure 23 below show that both creative industries employment and the numbers of businesses grew in every sub-region of the East Midlands between 2001 and 2005. However, levels of growth were uneven across the region. Creative industries growth was greatest in Derbyshire, where both jobs and businesses increased at the highest rate in the region. This appears to have been driven by very strong growth in the Visual Arts & Design sectors. Northamptonshire also displayed healthy growth in both jobs and businesses, and was the only sub-region in which jobs increased at a higher rate than businesses, with strong growth in both Audio-visual and Visual Arts & Design. Both Nottinghamshire and Lincolnshire displayed strong growth in businesses, but only modest growth in employment. In fact, both sub-regions recorded a greater absolute increase in businesses than jobs – suggesting that there were job losses in existing businesses between 2001 and 2005, despite the growth in companies. Leicestershire had one of the biggest creative industries sectors in the region, but net growth was modest between 2001 and 2005.

Table 5: Creative Industries in the East Midlands, 2001 - 2005(DCMS Evidence Toolkit definition)

Employment Data Units (businesses)Sub-Region 2001 2005 % change 2001 2005 % changeDerbyshire 11,100 13,100 17.5% 2,200 3,000 35.5%Leicestershire & Rutland 13,900 14,400 3.3% 2,900 3,100 8.5%Lincolnshire 6,600 6,800 2.7% 1,400 1,800 28.1%Northamptonshire 11,300 13,100 15.5% 2,200 2,500 11.9%Nottinghamshire 14,900 15,200 2.1% 2,600 3,000 17.9%

East Midlands 57,800 62,500 8.0% 11,200 13,400 19.0%Source: ONS ABI Workplace Analysis/BOP Consulting 2008

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Figure 23: Sub-regional creative industries growth, 2001-2005

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Derbyshire Leicestershire &Rutland

Lincolnshire Northamptonshire Nottinghamshire

Employment 2001 Employment 2005 Businesses 2001 Businesses 2005

Sub-regional creative industries data by DET domains

The data tables below show creative industries data for the East Midlands sub-regions by DET domain (Audio-visual, Books & Press, Performance, Visual Arts & Design). Note that figures are rounded to the nearest 100, but that percentages apply to un-rounded figures.

DERBYSHIRE CREATIVE INDUSTRIES employees data units ('businesses') by DET Domain 2001 2005 %

change by DET Domain 2001 2005 %

change Audio-visual 3,700 4,400 19.4% Audio-visual 700 800 13.7%Books & Press 4,500 4,100 -8.1% Books & Press 400 400 -2.4%Performance 500 400 -13.2% Performance 200 200 6.6%Visual Arts & Design

2,500 4,100 67.3% Visual Arts & Design

900 1,600 77.1%

TOTAL 11,100 13,100 17.5% TOTAL 2,200 3,000 35.5%Source: ONS ABI Workplace Analysis/BOP Consulting 2008

LEICESTERSHIRE & RUTLAND CREATIVE INDUSTRIES employees data units ('businesses') by DET Domain 2001 2005 %


change Audio-visual 4,100 4,700 16.4% Audio-visual 1,000 1,000 -4.3%Books & Press 6,000 5,000 -17.3% Books & Press 600 600 -2.4%Performance 400 400 16.0% Performance 200 100 -6.9%Visual Arts & Design


1,100 1,400 29.3%


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LINCOLNSHIRE CREATIVE INDUSTRIES employees data units ('businesses') by DET Domain 2001 2005 %


change Audio-visual 1,400 1,500 7.0% Audio-visual 400 500 16.5%Books & Press 3,300 3,200 -3.2% Books & Press 300 300 3.7%Performance 300 400 52.8% Performance 100 100 15.9%Visual Arts & Design


600 900 49.3%


NORTHAMPTONSHIRE CREATIVE INDUSTRIES employees data units ('businesses') by DET Domain 2001 2005 %


change Audio-visual 3,500 4,300 22.2% Audio-visual 800 700 -1.6%Books & Press 5,200 5,400 3.7% Books & Press 400 500 3.9%Performance 500 500 -11.7% Performance 100 100 -2.8%Visual Arts & Design


900 1,100 29.5%


NOTTINGHAMSHIRE CREATIVE INDUSTRIES employees data units ('businesses') by DET Domain 2001 2005 %


change Audio-visual 5,600 5,400 -4.1% Audio-visual 1,000 1,000 5.5%Books & Press 5,800 5,800 0.5% Books & Press 600 500 -3.5%Performance 500 500 -9.5% Performance 200 200 -1.1%Visual Arts & Design


900 1,300 46.7%


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Appendix 2: Regional Creative Industries Employment, 2000 and 2004

For this study, BOP Consulting was commissioned to produce creative industries statistics for 2001 and 2005, as presented in this report. However, in order to produce some of our statistics, such as creative industries GVA in 2004, it was also necessary to calculate overall creative industries employment figures for 2000 and 2004.

Combining these figures with the findings for 2001 and 2005 allows us to produce a simple time series diagram to compare the rates of creative industries employment growth in each class of urban and rural district, albeit without data for 2002 and 2003.

Figure 24: Creative industries employment, East Midlands

02,0004,0006,0008,000

10,00012,00014,00016,00018,00020,000

2000 2001 2004 2005

crea

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indu

strie

s em

ploy

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t

Large UrbanOther UrbanSignificant RuralRural 50Rural 80

Source: Bop Consulting

Table 6: Creative industries employment, East Midlands % change

2000 2001 2004 2005 2000-2005Large Urban 18,800 18,400 17,300 17,200 -8.9%Other Urban 15,300 15,500 17,500 16,700 9.2%Significant Rural 8,800 8,300 9,800 10,400 18.0%Rural 50 8,800 7,900 9,300 9,800 11.4%Rural 80 8,200 7,800 7,600 8,400 2.3%

60,000 57,800 61,400 62,500 4.2%

Source: ONS ABI

This shows us that creative industries growth has fluctuated to some extent in all types of district between 2000 and 2005. Only in Large Urban districts has the direction of growth been constant, as employment has declined each year. All rural districts experienced a slight decline in creative industries employment between 2000 and 2001 (perhaps related to the post-‘dotcom’ slump in 2000?), followed by an upturn in Significant Rural

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and Rural 50 districts (which may appear more pronounced than it actually was, due to the absence of data for 2002 and 2003), while Rural 80 districts took longer to recover, but did experience overall growth between 2000 and 2005. Other Urban districts grew strongly between 2001 and 2004, but may have peaked at that point. (Although apparent fluctuations may be partly due to statistical variations caused by the use of ABI at sub-regional level.)

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Appendix 3: Definitions

Terms used in this report are defined as follows:

Businesses – The statistics presented in this report for numbers of businesses are based on the Annual Business Inquiry (ABI) workplace analysis from the Office for National Statistics. Strictly speaking, this measures ‘data units’, which corresponds to workplaces. It is possible that some companies have several premises within the region, in which case each has been counted as a separate ‘business’ in the findings of the study. The high proportion of micro businesses and sole traders within the creative industries minimises distortion due to this.

All economy – Comparisons made to employment and numbers of businesses in the whole economy of the region, or of urban/rural district classes, are based on the sum of all broad industrial groups from ABI workplace analysis data.

Sole traders – For the purposes of this study, sole traders are defined as those companies included in the Experian NBD dataset for which ‘number of employees at site’ = 1.

GVA per employee – For creative industries, GVA per employee was estimated based on the sum of (weighted) GVA data from ABI divided by the number of people employed in creative industries (from weighted ABI data). It was not possible to calculate weightings for GVA, so weightings for employment were applied to GVA data.

Large Urban: Districts with either 50,000 people, or 50% of their population in one of 17 urban areas with a population between 250,000 and 750,000.

Other Urban: Districts with fewer than 37,000 people, or less than 26% of their population in rural settlements and larger market towns.

Significant Rural: Districts with more than 37,000 people or more than 26 percent of their population in rural settlements and larger market towns; there are 53 districts in this group in England. (Note that ‘Significant Rural’ should be regarded as a mixed urban/rural class.)

Rural 50: Districts with at least 50 percent but less than 80 percent of their population in rural settlements and larger market towns; there are 52 districts in this group in England.

Rural 80: Districts with at least 80 percent of their population in rural settlements and larger market towns; there are 73 districts in this group in England.

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Appendix 4: Weightings for Urban Districts

Table 7 below shows the weightings applied to creative industries SIC codes (as defined in the DET) in the current study. The weightings are derived from analysis of Experian NBD data. SIC codes for which weightings are required are listed in bold type. For relevant SIC codes, different weightings were calculated for each company size band (1-10 employees, 11-49 employees, 50-199 employees, 200 plus employees) for employment and for numbers of businesses. A single set of weightings was produced for Large Urban and Other Urban districts in order to maximise the size of the sample in each SIC code class from which ratios were calculated.

Table 7: Creative Industries Weightings (SIC 2003) for Large Urban and Other Urban districts of the East Midlands

2003 Data Units (%) Employment (%) SIC Code Description Domain 1-10 11-49 50-199 200+ 1-10 11-49 50-199 200+ 22.11 2211 Publishing of books BP 100 100 100 100 100 100 100 100 22.12 2212 Publishing of newspapers BP 100 100 100 100 100 100 100 100 22.13 2213 Publishing of journals and periodicals BP 100 100 100 100 100 100 100 100 22.14 2214 Publishing of sound recordings AV 100 100 100 100 100 100 100 100 22.15 2215 Other publishing BP 100 100 100 100 100 100 100 100 22.21 2221 Printing of newspapers BP 100 100 100 100 100 100 100 100 22.22 2222 Printing not elsewhere classified BP 100 100 100 100 100 100 100 100 22.23 2223 Bookbinding BP 100 100 100 100 100 100 100 100 22.24 2224 Pre-press activities BP 100 100 100 100 100 100 100 100 22.25 2225 Ancillary activities related to printing BP 100 100 100 100 100 100 100 100 22.31 2231 Reproduction of sound recording AV 100 100 100 100 100 100 100 100 22.32 2232 Reproduction of video recording AV 100 100 100 100 100 100 100 100 22.33 2233 Reproduction of computer media AV 0 0 0 0 0 0 0 0 24.30 2430 Manufacturing of paints and varnishes (inc. printing

ink) BP 0 0 0 0 4 0 0 0

24.64 2464 Manufacture of photographic chemical material AV 100 100 100 100 100 100 100 100 24.65 2465 Manufacture of prepared unrecorded media AV 0 0 0 0 0 0 0 0 32.10 3210 Manufacture of electronic valves and tubes (inc. TV

tubes) AV 0 0 0 0 0 0 0 0

32.20 3220 Manufacture of television and radio transmitters etc AV 3 0 0 0 2 0 0 0 32.30 3230 Manufacture of TV & radio receivers, sound or video

recording or reproducing apparatus & associated goods AV 89 100 100 0 85 100 100 0

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2003 Data Units (%) Employment (%) SIC Code Description Domain 1-10 11-49 50-199 200+ 1-10 11-49 50-199 200+ 33.40 3340 Manufacture of photographic equipment and optical

instruments AV 29 33 0 0 19 38 0 0

36.30 3630 Manufacture of musical instruments AV 100 100 100 100 100 100 100 100 51.43 5143 Wholesale of records, tapes, CDs and videos, and of

the playback equipment, and lighting AV 2 4 0 0 1 3 0 0

51.47 5147 Wholesale of photographic goods, musical instruments and other household goods

AV 1 0 0 0 1 0 0 0

52.45 5245 Retail sale of electrical household appliances and radio and television goods

AV 47 35 0 0 41 27 0 0

52.47 5247 Retail sale of books, newspapers and stationery BP 13 36 83 0 13 40 71 0 52.48 5248 Other retail sale in specialised stores (inc. commercial

art galleries) VA 6 7 0 17 5 7 0 15

52.50 5250 Retail sale of second-hand goods in stores (inc. art & antiques)

VA 70 67 100 0 64 71 100 0

71.40 7140 Renting of personal and household goods NEC (inc. CDs, videos, TVs)

AV 46 56 0 0 58 41 0 0

72.21 7221 Software publishing AV 69 70 71 60 68 69 70 35 72.22 7222 Other software consultancy and supply AV 69 70 71 60 68 69 70 35 74.20 7420 Architectural and engineering activities and related

technical consultancy VA 30 19 14 0 25 19 14 0

74.40 7440 Advertising AV 100 100 100 100 100 100 100 100 74.81 7481 Photographic activities AV 100 100 100 100 100 100 100 100 74.87 7487 Other business activities NEC (speciality design

activities) VA 56 56 40 0 53 58 30 0

92.11 9211 Motion picture production AV 100 100 100 100 100 100 100 100 92.12 9212 Motion picture & video distribution AV 100 100 100 100 100 100 100 100 92.13 9213 Motion picture projection AV 100 100 100 100 100 100 100 100 92.20 9220 Radio & TV activities AV 100 100 100 100 100 100 100 100 92.31 9231 Other artistic and literary creation and interpretation* P, VA, BP 100 100 100 100 100 100 100 100 92.32 9232 Operation of arts facilities P 100 100 100 100 100 100 100 100 92.34 9234 Other entertainment activities NEC (e.g. dance halls, dance

instructors, circus and puppet shows etc.) P 100 100 100 100 100 100 100 100

92.40 9240 News agency activities BP 100 100 100 100 100 100 100 100 92.72 9272 Other recreational activities NEC

(inc. theatrical casting/agents) P 11 0 0 0 9 0 0 0