Creative Scotland, in partnership with Scottish Enterprise, today published a new and substantial piece of research undertaken by DC Research Ltd and partners (cogentsi and pirnielimited), Economic Contribution Study: An Assessment of the Arts and Creative Industries in Scotland. The study ‘shows how Scotland’s arts and creative industries sectors contribute more than £3.2 billion to the country’s economy’.
The study analyses what it terms the ‘Arts and Creative Industries (A&CI)’, compares across the UK and with other sectors and, in doing so, makes interesting reading. However not many in the sector will read beyond the headlines and already there have been some concerns about what is being said expressed on Twitter.
I am not an economist and do not pretend to have any formal background in that discipline but I have worked with others in this area and value the contribution this kind of analysis can make to the debate on the arts and creative industries. It is from the perspective of an informed person, not expert, I write.
What is the problem to which we are seeking a solution?
This is the starting point for any research project and in this study it is very clear:
Obtain a comprehensive and robust picture of the contribution of the Arts & Creative Industries (A&CI) to the wider Scottish economy; and,
- Develop a framework for Creative Scotland and partner organisations wishing to conduct their own economic impact assessments.
- The direct impacts of the A&CI (those within the sector)
- Indirect or supplier linkage effects
- Induced or income multiplier effects
- Economic activity generated by visitor activity induced by the A&CI
How is this to be done?
There are two questions to be addressed before data gathering in economic studies of this kind in A&CI—both of which are addressed in this report. First, what are we defining as the sector? Second, what sources are we using for our data?
On definitions, there has been a change in the classifications Government uses for gathering statistics which more accurately reflects the sector. Known as the Standard Industry Classification system (SIC), this was reviewed in 2007 and offers a better categorisation of the sector than previously. From this, the researchers selected the classifications which best reflected the sector. While broadly matching the classifications used by the Department of Culture Media and Sport (DCMS) in Whitehall, they made some additions and changes to reflect A&CI in Scotland—for example they included Crafts and drew on new data categories in Higher and Further Education. This resulted in sixteen sub sectors as opposed to the thirteen which DCMS uses.
Turning to the second question, where does this data come from? Again the team is very clear on this. All data are taken from published Government sources. Not only does this mean the whole thing is transparent quality controlled and accurate, it allows for the study to be replicated in the future. What is the source? The principal source is the Annual Business Survey and Business Register Employment Survey produced by the Office of National Statistics.
These statistics are gathered by the UK Government from returns made by businesses and covers two thirds of the UK economy. It is here we bump up against the problem which has been spotted by some on Twitter and acknowledged by the research team. The statistics are gathered only from companies registered for VAT and excludes those working as sole traders, portfolio and project based workers – which excludes most creative practitioners, although some who have their own company and are registered for VAT and/or employ others, will be included under the category ‘working proprietors’
So despite best efforts, the picture has a piece missing. Whether or not this has an impact on the overall outcome of the report, I can’t say. We can probably assume a large number of artists, writers, musicians and actors are excluded but we might also assume their economic activity is modest.
Could this be done differently?
There is another source of data which is more comprehensive and can provide a more accurate picture of jobs and employment in A&CI and that is the Population Census. An analysis of the 1991 Census provided a picture employment the arts and cultural industries in Scotland at that time.  However, the Census may provide a picture of the whole population but it does not provide any financial information which is central to an economic impact so it too can deliver only a partial picture.
The research team has comprehensively answered their brief and indeed a similar study could be replicated in, say, five years to show the growing or diminishing importance of the sector in economic terms. The question of definitions and measuring economic impact of the sector, whether it is called ‘creative industries’, ‘cultural industries’ or simply ‘the arts’ is a contested one in academic literature. The core of the argument is that the sector is ill-suited to the idea of being seen as an economic driver and public policy has gone astray when analysing it in these terms. For an interesting an accessible discussion on this, check out, A critique of definitions of the cultural and creative industries in public policy by Susan Galloway and Stewart Dunlop.
In the end, however, this is about providing the arguments to Government on the importance of the sector and positioning it within other industrial sectors. A study like this one is invaluable as an advocacy tool. In this respect there are similarities with the case for the social impact of arts and creative industries. In my view if you wanted to develop the economy or improve social cohesion you wouldn’t necessarily start with the arts and creative industries — but you might include them. There is both an economic and a social impact to be gained from the sector, but in the end it is the cultural impact which matters. As the song says, ‘Nobody does it Better’.
References to page numbers in report
 p 10