Where we go next with the digital economy

Ian Hargreaves says the Welsh Government should be entrepreneurial rather than risk averse in engaging with the creative industries

Just over a year ago, I was commissioned by the Welsh Government to conduct a review of creative industries policy in Wales. The result The Heart of Digital Wales, was published in March this year. Its publication was accompanied by a statement from the two Ministers who did the commissioning: Ieuan Wyn Jones, the Deputy First Minister who also has responsibility for economic policy, and Alun Ffred Jones, the Heritage Minister, who both endorsed all the important recommendations of the review. Subsequently the Cabinet agreed to pursue the creation of a cross-cutting Digital Wales Board.

Since the review was published, quite a lot has happened:

  • In May, the UK General Election led to the formation of a Conservative-Liberal coalition Government which as a top priority has set cutting back dramatically the size of the public sector, including the arts and institutions that support film and broadcasting. The new Government also immediately cancelled plans to create and fund an independent news consortium for Wales, which looked like a promising step forward in a country bedevilled by an absence of strong news media competition.  Instead, the Culture Secretary Jeremy Hunt has said that he prefers to de-regulate cross-ownership restrictions in news, to promote the cause of local television and to re-assert the news obligations of ITV in Wales. Meanwhile, as the recession eases in terms of its private sector impacts, there is some patchy recovery in media advertising revenues.

  • In July, the Deputy First Minister published his Economic Renewal Plan, based upon establishing the best possible infrastructure for business in Wales, supported by a focus on six key sectors (rather than the previous 14) in which Wales has clear advantages for growth. The policy involves a deliberate step away from a culture of grant-giving. One of the six named priority sectors is Creative Industries.

  • In August, a crisis opened up at S4C, leading to the departure of S4C’s Chief Executive. It soon became clear that S4C, along with other public sector organisations (but not the BBC) faced a 30 to 40 per cent cut in its funding. Meanwhile, less dramatic tremors have also reached the board-rooms of the BBC Trust and Channel 4, where we are also witnessing a changing of the guard.

There are three questions I want to address here:

  1. What has happened to the creative industries strategy for Wales since March and where should we aim to go next?
  2. What are the implications for this strategy and for creative businesses in Wales of the assault on UK public spending and the emerging policy agenda from the coalition-controlled Department of Culture, Media and Sport? Where is this leading us in terms of public service broadcasting and the wider ‘creative Britain’ agenda, which in many respects bears the distinctive stamp of New Labour, a brand now officially discarded by Labour’s New Generation?
  3. Do the answers to these questions call into question the approach to creative industries adopted by Ministers in March?

Starting first, how is the promised implementation of the review’s recommendations going? The answer is: quite well. The review proposed a Creative Industries Board, under the chairmanship of a person with serious experience of commercial creative industries. The idea is that Ministers will be able to look to this board for ideas, challenge and as a clear point of accountability for civil service delivery of the policy. Appointments to this board are due to be announced shortly.

It is important to emphasise that this board will have oversight of the whole of the creative industries brief: all 14 sub-sectors as defined by DCMS, including design, fashion, craft, architecture, publishing, performing arts and crafts.  An ex-officio member of this board, the only one, will be Nick Capaldi, Chief Executive of the Arts Council of Wales.

The over-arching aim is to get the lion of the economy to lie down with the lamb of culture, to ensure that in future we do a much better job of nurturing and leveraging the economic impact of creative individuals and organisations. This is not a straightforward matter, but my experience of conducting the review has convinced me that Wales is now ready to stride forward in this regard.

By this time next year, this Creative Industries Board must be demonstrably making a real difference. The core job of the board is to be right on top of the economic and business issues and opportunities facing the creative sector.  That means ensuring that all 14 sub sectors are professionally mapped, that training and academic interfaces with creative businesses are healthy and thriving, and that an intense focus is being applied to growth sectors such as digital content.

It means making sure that each sub sector of the creative industries has a healthy peer to peer network through which Government can engage and ensure that assistance is well judged and well targeted. It means overseeing any direct financial support mechanisms in a way that is both entrepreneurial and transparent.

It can and should also lead to a more vivid narrative for Wales as a creative place to be. That is to say Wales, the small, clever country where it’s great to live, to visit and do business.

The second major piece of machinery recommended in my review was the creation of a cross-cutting board to oversee the progress of a digital communication strategy for Wales. This is an issue which extends well beyond creative industries. Digital communication is going to be of huge importance in the delivery of many public services, from transport to health. It will also play an increasing part in the design and delivery of educational services at all levels. Digital will shape the schools, universities and hospitals of the future, not to mention the country’s retailers and manufacturers. A well organised cross-Welsh Government approach to digital will bring huge benefits to Wales.

I’m pleased to report that the Government has been busy designing structures and filling posts in, it should be said, the demanding circumstances of a programme of cutting back the civil service. Announcements are not far away on names for this board, too. The chair of the Creative Industries Board will sit, as a matter of right, on the Digital Wales board, so that  policy makers and deliverers of policy in Wales can ensure that issues of content and infrastructure are discussed in a way that is mutually supportive.

Making this new machinery work will require an unprecedented level of commitment from politicians, civil servants and, above all, from the thousands of people in Wales whose livelihoods depend upon business creativity. The prize is for Wales to become a place of excellence and drive in what is likely to remain one of the UK’s top five business sectors. Creative industry needs to become a significant source of export income for Wales.

If the opportunity is great, the price of failure would also be high. Wales would lose its standing in a sector of the knowledge economy in which it has track record and advantages built upon past public investment, for example in public service broadcasting in both the Welsh and English languages. Other countries and regions are also busily positioning themselves for success in this sector.

There is no doubt in my own mind that Wales has the potential to succeed in creative industries, based upon its historic strengths in areas such as music, performance culture, fashion and broadcast production. When the Welsh Government advertised for people to join the Creative Industries Board, it received over a hundred applications. A small handful of these were from people who lacked relevant experience, and a second handful was from people already prominent in the creative scene.

But most of the applications came from less well known individuals, located all over Wales, who have had some involvement in creative businesses, but who have mostly not been able to find a way of making a sustainable career or business out of their creativity. These are people that today’s digital communications can connect in a way that allows them to form effective business and creative partnerships.

The Welsh music sector, which earlier this month celebrated the tenth anniversary of the Welsh Music Foundation, provides a good example of the way that a sector of creative business can, with a little help from Government, mobilise its own network to improve opportunities for things such as education, training, defence of intellectual property and creation of shared rehearsal space. Networks of this kind can become a  public forum in which policy ideas and initiatives can be tested and business partnerships formed. This is vital in the creative industries, a sector characterised by small companies with no workable one-size-fits-all approach.

So we must aim high and be optimistic. But we must also recognise that success will not come easily. I was struck the other day by the Guardian’s list of the UK’s top one hundred digital media technology companies. Nearly all of them were based in London, and none of them in Wales.

Some of this may reflect self-reinforcing metropolitan myopia, but it also indicates an uncomfortable reality. Wales is weaker than Scotland and some English regions in terms of video games and other digital content businesses. It is also true, however, that Wales has a base in this vital and rapidly shifting sub-sector of creative industries. However, it is a base that has never been successfully engaged by economic development policy. This is something which we must now urgently change.  If it doesn’t the whole push on creative industries in Wales will founder.

From the point of view of creative industries policy, S4C represents the largest single point of public investment in the creative industries of Wales, with its more than £100 million a year in grant in aid from Government. My review noted in March that a time of vigorous debate in the UK about public service broadcasting and its regulation, the debate in Wales about S4C was:

“… subdued, tending to lurch between spasmodic interventions questioning the basis on which the channel operates and silence. The UK authorities involved (Ofcom and DCMS) lack the instinct and self-confidence to animate this uniquely Welsh debate and the Assembly Government lacks the formal mandate.”

I believe that S4C’s long, hot summer has demonstrated beyond doubt that this is an organisation which requires thorough strategic review and re-consideration within Wales if it is to build upon its success as a pillar of Welsh language and culture and an engine of the creative economy. Almost 30 years ago, those whose campaign led the Government of Margaret Thatcher to create S4C, asked, ‘What is the most effective way of intervening in today’s  media scene to strengthen the language and the culture that surrounds and supports it?’  It was a radical question then, it’s a radical question now and it’s still the right question.

At this summer’s National Eisteddfod, Ieuan Wyn Jones proposed devolution of powers over broadcasting to the National Assembly. There is important detail to be debated here, but I am certain that this is the right direction of travel. Those who have argued that keeping a low profile is the way to hang on to the S4C’s inflation-linked grant from Westminster must surely recognise that this tactic is exhausted.

The risk today is that S4C is regarded as just another quango and therefore subject to draconian cuts. Wales needs a more considered approach than this. In the language of Prime Minister Cameron, Welsh Big Society needs civic institutions well designed to support the country’s cultural and economic needs and ambitions. At the heart of any such design sits creativity, digital communication and strongly competing national and local media.

The strategy advocated in my review of creative industries is wholly compatible with the emerging policy approach of the new Government. In the creative industries Wales and the sub-regions of Wales need more freedom to design their own solutions, not more rules and regulations from Whitehall.

So to my final question: is the review WAG published in March still a decent template for the future? I think it is. Creative industries has been and will remain a highly fluid sector. It is a zone where mistakes can be made and learned from and where a single brilliant idea can transform the landscape. To succeed Wales needs shrewd but not overbearing support from Government to ensure that the country has a world-class broadband infrastructure; a highly competitive education sector; a smart approach to public procurement; and a fair share of resources in terms of public media, cultural and creative institutions.  But the hard graft takes place within the privately owned creative businesses which deliver jobs and economic added value.

No-one can question that we are living through hard times, but there is also an energy which arises in adversity. We need a governmental interface with the creative sector which is ambitious and entrepreneurial, not risk averse and timid. The re-shaping of the civil service here in the coming months needs to fix itself upon that purpose.

We need talent to flower in Welsh theatres, bands, galleries and software houses. We need our schools and universities to distinguish themselves as places of creativity and innovation, not slaves to a dull curriculum and out-dated structures. We need to be confident in bidding for big events, building upon the success of the Celtic Manor.

The new instruments about to become operational for our creative industries are not solutions in themselves. But they can bring the right people to the table in circumstances where they can have the right level of influence in setting the right level of ambition.

Ian Hargreaves, Professor of Digital Economy at Cardiff University, was formerly editor of the Independent and Director of Strategic Communications at the Foreign Office. This is an extract from the presentation he gave to the IWA’s Creativity in Hard Times conference at the Millennium Centre in Cardiff Bay on 1 October.

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