UK


With the gradual acceptance of the term ‘creative industries’ and its increasing ubiquitous use to refer to any industry that might be ‘cool’, ‘creative’, or ‘cultural’, it is healthy to see some fresh criticism of the relevance not only as an industry, but as a key government policy.

In an article Making Monkeys of us all in Thisismoney.co.uk, Dan Atkinson questions the metrics and the logic behind the UK Government’s push to make the nation creative.

Atkinson attacks claims of increased job growth in the sector, quoting the National Endowment for Science, Technology, and the Arts the Government’s own publication, which stated jobs in advertising and games development have dropped and the number of feature films being released have fallen, all amid ‘increasing international competition’.

Atkinson also mentions an Ofsted (the UK education watchdog) statement about the education system failing students at the secondary school level. While he stops short of directly attributing the decline in ‘creative jobs’ to poor education, Atkinson has demonstrated, if implicitly, that a robust and relevant education is imperative in boosting a nation’s creativity.

Also in the firing line is the recent ‘snobbish’ disdain for manufactures in favour of copyright goods, arguing that ‘it is rather harder to copy an Audi than an Arctic Monkeys CD’.

A century ago, Britain ascribed all sorts of artiness to the mysterious Orient and prided itself on its hard-headed Western know-how. Now, we cheerfully let India and China make things while daydreaming about creativity.

While it’s consumers that copy CDs (other auto manufacturers are rather more likely to ‘copy’ an Audi than an aspiring owner), the article does question the limits of the economic value of intangible products, and the ability to claim ownership of and rents from ideas, information, and knowledge that are becoming increasingly detached from physical vessels that once contained them.

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In the UK, the Institute for Public Policy Research (IPPR) has released a report recommending that consumers should be allowed to copy/rip CDs they have purchased for use on music players such as iPods.

According to the BBC, the thinktank has called for a ‘private right to copy’, allowing people to copy for their own use CDs that they have purchased, stating that “it is not the music industry’s job to decide what rights consumers have – that is the role of the government” (the above article also has a link to the full report).

The author understands that the Australian Government has currently reviewed/amended copyright legislation. Most consumers tend to believe that they are within their rights to copy music for their own use – it is after all using the same music but simply changing the delivery mode or device. I am sure many consumers of music would be interested to learn just what their rights are when it comes to their use of purchased music, and whether the government is at all concerned with ensuring their rights are protected and preserved.

In a marked change from news about the music industry lobbying for tax incentives, several articles in the last week have trumpeted UK’s film and TV production sector as ‘the best in the world’ (see

The comment refers to independent producers, and the creative power that these agents have in coming up with original and innovative content.

A key point here is regulatory reform that enabled producers rather than broadcasters to maintain copyrights for content they produce. In broadcasting, the copyright holder wields significant market power, and with traditional broadcasters already imbued with a domineering role due to the oligopolistic nature of broadcast licences, control of copyright gives these firms excessive market power (see Caves and Nakamura (eds) 2006, Digital Broadcasting).

The case above is an example of how allowing ‘upstream’ content producers to retain copyrights has allowed the industry to develop further, enhancing its international competitiveness and differentiation from producers in other nations. This puts the incentive to innovate back on the producer, and prevents a situation where creative talents are simply consigned to produce content for commercial broadcasters, who are likely to make fairly conservation decisions about content (see Hotelling’s Law).

Reducing the potential abuse of market power and providing producers with more incentive to innovate appears to improve the competitiveness and sustainability of the industry rather than tax concessions and other financial incentives that benefit incumbents. (Notably, the UK Government did however provide funding to assist the independent producers)

Anyone could have seen it coming.
With the amount of attention some governments (such as the UK) have been paying to the economic potential of creative industries, it was only a matter of time before the traditional moneymakers came knocking on policymakers’ doors asking for handouts.

The UK music industry is now calling on its government to extend the research and development (R&D) tax-credit scheme to music companies.

Naturally, the industry lobby group appeals to the notion of keeping the local industry at the forefront of the global music scene – something that often appeals to politicians regardless of the industry – and a boost in VAT the government will collect from increased sales.

Government assistance to ailing and beleagured cultural and creative industries in small nations is something that most people would not take to task. But seriously. The UK is one of the largest exporters of cultural goods in the world, and is the UK music industry seriously under threat from lower cost or more innovative producers from foreign lands?

This attempt at lobbying fires a salvo across the bow of policymakers around the world looking to boost investment in R&D and in the creative industries in general: caution needs to be taken when formulating industrial policy and incentive packages. incumbents will always come knocking.

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