CreaTech: A lever for growth?

There is no shortage of articles exploring the combination of the creative industries and emerging technology – sometimes fractious, often thought provoking. As the UK government consults on proposals to give creative industries and AI developers clarity over copyright laws – deciding whether and how AI can scrape creative content – impassioned cries of “the government is selling the creative industries down the river” can be heard from one side and of the need to “turbocharge AI” at all costs on the other.

This suggests that people and organisations that create films, artworks or music are diametrically opposed to those creating cutting-edge software and initiating breakthroughs in emerging technologies. It seems the UK must back either emerging tech or those parts of the creative industries that create IP.

The truth – of course – is far more complicated. Many of the creative industries are already playing a critical role in the fourth industrial revolution. For example, tools like DALL·E, MidJourney and ChatGPT were heavily influenced by the needs of artists, writers and designers to generate high-quality, unique content and, in turn, use content from those artists to feed their algorithms. Entertainment platforms like Netflix and Spotify spurred initial advancements in recommendation systems, enabling AI to predict and cater to individual tastes.

A quiet revolution

The future of AI rests on creative content, just as the future of creative content rests on what happens with AI. And, already, many so-called CreaTech businesses recognise the power of combining emerging technologies with creative practice.

These are not just software and games companies using AI. The emerging technologies and creative subsectors involved in this quiet revolution are far broader than those headlines would have you believe. For example, 3D printing is making fashion more sustainable, and immersive technologies are redefining learning and audience experiences.

This means that – while the outcome of the current debate on legislation will matter hugely – to focus only on this one issue would be to miss some of the other investments the government needs to make to support this exciting, but nascent, part of the economy.

This would be a massive mistake for a government focussed on growth because, as in other areas of the economy, technological development is likely to be one of the key drivers of long-term productivity growth in the creative industries. And CreaTech may be one of the few levers the government can pull to support growth in the sector through its upcoming industrial strategy, at least in the short term.

Mixed methods approach

Our research, commissioned by the Department for Culture, Media and Sport (DCMS) and the Royal Anniversary Trust, used a mixed methods approach to consider how CreaTech skills, CreaTech businesses and CreaTech innovation projects could best be supported by the government beyond the issue of legislation.

In consultation with leading educators (Queen Elizabeth Prizes for Education winners), people working in the sector and policymakers, we identified where targeted investment, policy support and education reform are needed to ensure the UK remains at the forefront of this rapidly evolving sector.

We found evidence of the way that CreaTech is already transforming the UK’s creative industries, offering fresh opportunities for innovation, growth and global leadership. An analysis of firm and employment data helped us to identify CreaTech businesses, workforce demographics and investment trends.

We found around 14,000 creative businesses leveraging emerging tech, as well as 350,000 professionals working in CreaTech roles which already combine creative practice with use of emerging technologies. However, there are challenges facing this cohort:

• Skills

We found the UK’s education system is in need of bold transformation. Creativity and technology must both be embedded in the curriculum from the earliest years, ensuring students develop the interdisciplinary skills needed for the future. Colleges and universities must go beyond traditional models, forging dynamic partnerships with industry to anticipate and address emerging challenges.

Lifelong learning should be reimagined, equipping professionals to adapt, innovate and excel in evolving markets. And these opportunities must be accessible to everyone.

Our research found that while CreaTech roles are more gender-balanced than other tech positions, they remain significantly less diverse in terms of ethnicity, with a higher proportion of white professionals compared to the rest of the sector.

• Innovation

CreaTech must be recognised as a strategic growth sector for the UK – not just in DCMS but across government departments and arm’s length bodies. To accelerate its development, we need a dedicated strategy that boosts both public and private R&D investment, alongside smarter tax incentives to encourage innovation.

We suggest a CreaTech Catapult would serve as a national hub for experimentation, knowledge exchange and industry collaboration – positioning UK businesses at the forefront of global creative technology.

• Business

Many of the UK’s most promising CreaTech companies currently turn to international investors for late-stage funding. To retain intellectual property, talent and market leadership, we have suggested a government-backed Fund of Funds, to fill critical funding gaps, ensuring the UK remains a competitive and self-sustaining leader in the global CreaTech landscape.

Why does this matter now?

As global competition in creative technology intensifies, the UK has a unique opportunity to lead by fostering an ecosystem where creativity and emerging technologies fuel one another. But this will require us to look beyond the issues of legislation – and to be unusually bold at a time of risk aversion and economic stagnation.

The full report can be downloaded here.