UK trade body UKIE and think-tank DEMOS have issued a report that claims starting a businesses in the creative industries is a significantly less risky investment than doing so in the majority of other business sectors.
The report, titled Risky Business, finds that start-ups in the creative industries enjoy average survival rates of 49.7 per cent five years from birth, whereas businesses in other areas of the economy see only 46.9 per cent.
According to the report, there were 182,100 UK companies which fell under the governments definition of creative industries in 2010, employing an estimated 2.3 million staff – a figure that accounted for 7.8 per cent of the nation's work force. Though the report also warns that the governments definition is currently a confusing one, and in danger "of distorting the true worth of the sector".
Despite the fact that the sector is growing at twice the rate of the rest of the economy, the report warns of a continued prejudice towards the creative industries meaning that creditors and investors are turning down good business propositions based on perceived, not actual, risk.
“Interactive entertainment businesses are too often seen as a risky investment, and this report will debunk some of those perceptions," says UKIE chairman Andy Payne. "It will also raise awareness of the growth potential of interactive entertainment and the creative sector generally, as well as being a key driver to help improve access to finance for innovative games businesses in the UK.”?
Among other recommendations, the report calls on the government to review its definition of the creative industries with a view to widening it considerably (for example, retail and manufacturing activity is not currently considered), boost its own capacity to advise relevant ministers appropriately, and routinely publish economic data on the sector.
"The UK has a deep competitive advantage in the creative industries," the report concludes. "With better reporting and analysis of the sector from Government, combined with a coordinated effort to build business skills, fund businesses appropriately and champion the sector with investors, the sector itself can deliver on its promise of significant economic growth."