Defining the Creative Industries
The creative industries are notoriously difficult to define, measure, and analyse, encompassing diverse sub-sectors that each face region-specific challenges and opportunities. In this blog post we will be focusing on how the UK government currently defines the sector, the historical and policy context that led to this definition, and the cultural, societal, and economic significance of the creative industries. We will also consider some of the challenges facing the creative industries; and the opportunities that UK universities have to help address these challenges through research and policy engagement at a national and regional level.
1. Definition and scope
The ‘creative industries’ are defined by the current UK Government as industries which “have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property“ (Department for Culture, Media & Sport, 2024).
The Department for Culture, Media and Sport (DCMS) divides the creative industries into the following nine sub-sectors:
- Advertising and Marketing
- Architecture
- Crafts
- Design and designer fashion
- Film, TV, radio and photography
- Museums, galleries and libraries
- Music, performing and visual arts
- Publishing
- IT, software and computer services (including video games).
One of the reasons the creative industries are so difficult to define is the diversity of the sectors they encompass. The nine sub-sectors identified by the UK government vary significantly in their activities, yet they are often grouped together by the UK and other governments around the world because it is well understood that work within each of these individual sub-sectors is often highly collaborative and dependent on work in many of the other creative industries sub-sectors for production, distribution and innovation (Virani, 2023).
Another reason that the creative industries are so difficult to define is that activity in many of the sub-sectors that form the creative industries frequently overlaps with other sectors such as Digital, Cultural, Tourism, and Civil as shown in Fig. 1, produced by DCMS.
(1) Publishing, computer games, software publishing, computer progamming, computer consultancy activities.
(2) Film, TV, Music, Radio
(3) Heritage, retail of music and video recordings, manufacture of musical instruments, reproduction of recorded media.
(4) Arts, Museum activities.
(5) Heritage
(6) Renting of sports goods, operation of sports facilities, other sports activities.
(7) Gambling
Note: Civil Society has not been depicted in this figure because it spans across all industries, both within DCMS sectors and outside. The overlap between Civil Society and other DCMS sectors is taken into account for All DCMS totals (mainly SIC 90 – Arts, which overlaps with Creative Industries, Cultural Sector and Tourism Sector).
Figure 1: Diagram produced by DCMS illustrating how select sub-sectors within the Creative Industries overlap with the Cultural, Digital, and Tourism sectors.
2. History and policy context
In the UK, the origins of the term the Creative Industries can be traced back to a specific moment in time, when in 1997 Tony Blair’s newly elected New Labour government formed the Creative Industries Task Force as part of the new Department of Culture, Media, and Sport. DCMS published the Mapping Document in 1998, a pivotal report that set out the vision for the creative industries as we know them today (Gross, 2020). Prior to this, the sub-sectors that we now refer to as the Creative Industries were, in various combinations, referred to as the Culture Industry, the Cultural Industries, the Knowledge Economy, and the Information Society (Gross, 2020). Other terms used by the New Labour government prior to the publishing of the Mapping Document included the Creative Economy and the Arts and Cultural Industries (Gross, 2020).
A further factor that complicates efforts to define the creative industries is that the context, and the geographies within which the industries are based, also play a large part in influencing how these sub-sectors are defined as a homogenous collective sector. The Creative and Cultural Industries, the Creative and Digital Industries, and the Creative Economy are frequently used in different contexts around the world. While the term Cultural Industries is prevalent in Europe, this sector is known as the Orange Economy in Latin America and the Caribbean (Restrepo & Márquez, 2013), and as Cool Japan in Japan (Kawashima, 2018).
3. Cultural, societal and economic significance
The creative outputs and intellectual property (IP) generated by the creative industries are almost certainly the most easily recognisable contribution of the creative industries to wider society. Whether it be through music, film, video games, or any number of other creative outputs, the creative industries have played, and continue to play, a huge part in contributing to the rich tapestry of ideas, media, and cultural artefacts that fuels the ongoing development of the UKs creative and cultural identity. The UK has a rich history, and remains a world leader, in the generation of new creative IP, with the UK being named as the third largest exporter of creative services in the world in 2021 (UK Government, 2024).
Less widely known, however, is the significant financial contribution that the creative industries make to the UK economy every year. The UK government has estimated that in 2022 the creative industries contributed £124.6 billion in gross value added (GVA) to the economy, accounting for 5.7% of total GVA in the UK economy (DCMS, 2024), and employing a total of 2.4 million people (UK Parliament, 2024). Figs. 2 and 3 illustrate these figures, showing the GVA that each sub-sector of the creative industries contributed to the UK economy, and the number of people estimated to be employed in each sub-sector in 2022 (House of Lords, 2023).
Gross value added (£bn) for each creative industry sub sector in the UK (2022)
Figure 2: Graph produced using data from a House of Lords report illustrating the GVA that each sub-sector of the Creative Industries provided to the UK economy.
Number of people estimated to be working in each creative industry sub-sector in the UK (2022)
Figure 3: Graph produced using data from a House of Lords report illustrating the number of people that were employed in each sub-sector of the Creative Industries in the UK economy.
The creative industries have also been identified as possessing high growth potential relative to other industries, with the economic output of the creative industries having grown by 35% since 2010, compared to 22% for the overall UK economy (House of Commons Library, 2025). The nature of the workforce that makes up the creative industries also differs compared to the rest of the UK economy. Typically, a greater proportion of the creative industries workforce are self-employed, compared to employment in the broader economy. It was estimated that in 2022, 22% of people working in the UK creative industries were self-employed, versus 14.31% in the wider economy (Creative Industries Policy Evidence Centre, 2022).
The spillover benefits of the creative industries extend beyond their direct economic contributions. Spillovers are defined as “the process by which an activity in the arts, culture and creative industries has a subsequent broader impact on places, society or the economy through the overflow of concepts, ideas, skills, knowledge and different types of capital.” (European centre for creative economy, 2019).
These additional benefits are wide-ranging and can be categorised into industry, knowledge, and network spillovers, with industry spillovers broadly describing additional economic benefits to the wider economy, knowledge relating to various cultural and skills benefits to society, and network describing an array of social, health, and place centred benefits (Tom Fleming Creative Consultancy, 2015).
While the effects of these spillover benefits are often intangible and difficult to measure, recently the UK Government has commissioned research to increase understanding of their value to the UK economy. In 2022 DCMS commissioned two studies; Quantifying knowledge spillovers from the UK creative industries: a scoping study (Frontier Economics, 2022) and A Design Sprint for the Creative Industries Sector Vision: Maximising the spillover value of the creative industries to the wider economy (Design Council, 2022). The first study presented recommendations for best practice of how to quantify the economic impact of knowledge spillover from businesses in the creative industries to businesses in other sectors. The second study identified four types of economic focused spillover effects; industry, knowledge, supply-side, and innovation spillovers. The report also presented several recommendations around the themes of awareness, innovation, cross-sector collaboration, and education & skills. In 2023 the UK Interactive Entertainment Association (Ukie) published a report on the spillover effects of video game technology to other non-game sectors in the UK and Nordic economies. The report found that 10,000 jobs were supported by video game technology spillovers in the UK, accounting for a total of £1.3 billion in economic output (Ukie & FTI Consulting, 2023).
Economists at the DCMS have also been working to develop frameworks and methodologies designed to quantify the economic value of the impact the creative, cultural and heritage sectors have on the wellbeing, happiness, and quality of life of the communities who benefit from activity in those sectors. The Culture and Heritage Capital programme seeks to quantify the economic value of these positive spillover benefits to enable policymakers to be better informed about the true economic value that the creative, cultural and heritage industries bring to the UK economy. The latest version of the framework Embedding a Culture and Heritage Capital Approach was published in December 2024 and provides details on how researchers can incorporate the framework in their own work (Sagger & Bezzano, 2024). DCMS recommend that it is read alongside the accompanying Culture and Heritage Capital (CHC) ProtoTypology Report (Lawton et al., 2024) which outlines the theoretical basis of the framework.
4. Challenges for the UK Creative Industries
The UK’s creative industries face several challenges that impact their growth and sustainability. Skills shortages, regional imbalances, lack of diversity, and the rise of artificial intelligence (AI) all present obstacles to the sector’s development. This section explores these key challenges and their implications for the future of the creative industries, both nationally and regionally:
4.1). Skills
The Creative Industries are often seen as a high-skill, high-wage sector, with 83% of workers in professional or managerial roles and nearly three-quarters holding degree-level qualifications (Carey et al., 2023). Yet, despite the highly qualified workforce, there are significant skills gaps and mismatches at a national level. Research from Work Advance stresses the importance of regional skills strategies, employer engagement, and investment in skills delivery to ensure graduates can transition effectively into creative careers.
4.2). Regionality
The creative industries in the UK are heavily concentrated in London and the South East, as reflected in the 2022 DCMS sector GVA data and illustrated in Fig. 4. Yorkshire and The Humber, along with other regions outside the capital, account for a much smaller percentage of the sector’s economic output. This reflects the wider trend of creative industry activity being concentrated in specific urban centres, raising questions about access to funding, infrastructure, and industry networks across the UK. While this imbalance presents challenges for regional development, it also indicates potential areas for growth. Expanding support for creative industries outside London, through investment in skills, business development, and connectivity, could contribute to a more geographically distributed creative economy.
Figure. 4: Graph from DCMS illustrating the percentage of GVA for DCMS sectors and the wider UK economy, across the regions of the UK.
The Create Growth Programme, launched by DCMS in 2022 and expanded in 2023, is a recent effort to address the long-standing regional imbalance in the creative industries. With an initial £17.5 million investment and an additional £10.9 million in 2023, the programme now includes regions such as West Yorkshire and Hull & East Yorkshire (but currently not York and North Yorkshire). It provides targeted business support, investor capacity-building, and grants of £10,000 to £30,000 for SMEs to drive innovation and growth. In West Yorkshire, demand for the scheme has been high, highlighting both the region’s creative potential and its historic underinvestment—an estimated £261 million in lost investment over the past decade.
4.3). Equality, Diversity, and Inclusion
A lack of diversity is a recognised issue holding back the creative industries, with research showing that the sector does not reflect the diversity of the UK population. The Creative Majority report highlights that the most powerful positions in the creative economy remain some of the least diverse, and research with ScreenSkills confirms that the proportion of people from privileged backgrounds in the screen industry increased from 47% to 53% between 2014 and 2020. This lack of diversity has economic and societal consequences, limiting new audiences, business opportunities, and innovation. It also reinforces systemic inequalities, as creative products and services are shaped by a narrow segment of society. In response, the Arts and Humanities Research Council (AHRC) Policy and Evidence Centre’s (PEC) ten-year, ten-point plan offers recommendations for improving socio-economic diversity in the creative industries, with a focus on levelling up.
4.4). Artificial Intelligence
Finally, there is the potential risk that as artificial intelligence (AI) continues to become more and more integrated in creative production pipelines and workflows, that there will be a real threat to creatives’ intellectual property and to the livelihoods of those artists, producers, and engineers whose job it has always been to bring film, tv, and games to life. These, and other potential issues, were highlighted in a review of the use of AI in the creative industries (Anantrasirichai & Bull, 2021), with the authors recommending that an approach of human-centric AI be adopted by the creative industries. This is further exemplified by the more recent advances seen in generative AI and the UK government’s consultations on Scaling up AI and creative tech and Copyright and Artificial Intelligence. Despite this, it is important to highlight that if these challenges around productivity, ethics, and safety are addressed appropriately, then the rise of AI in the creative industries also offers many opportunities for positive impact around the creative application of new and existing convergent technologies.
5. Opportunities for universities
Universities have an important role in shaping policy at national, regional, and local levels. Many were founded on principles of civic responsibility and are rooted in their local economies and communities. By engaging directly with policymakers, they can address pressing societal challenges and fulfil their responsibility to serve the public good. Increasingly, universities have internal teams dedicated to helping researchers connect with policymakers, such as The York Policy Engine (TYPE) at the University of York, ensuring that academic expertise supports decision-making and benefits wider society.
5.1). Consultations and calls for Evidence from National Government
Departments and committees within the UK Government regularly run open consultations and calls for evidence submissions to inform policy development across all aspects of government business. Recent examples of such consultations relevant to the creative industries include consultations on Scaling up AI and creative tech in September 2024; the Invest 2035: the UK’s modern industrial strategy in October 2024; and the Copyright and Artificial Intelligence in December 2024. Examples of recent relevant inquiries include Innovation, growth and the regions and State of Play, both of which were launched in December 2024.
Engagement with consultations and inquiries such as those listed above offer universities the opportunity to directly contribute to, and potentially shape, government policy in areas that are of critical importance to the future of the UK creative industries. In 2024, the incoming UK government identified the creative industries as one of the eight key growth-driving sectors for the UK economy, citing it in the Invest 2035: The UK’s Modern Industrial Sector green paper. It is therefore of particular importance that universities are engaging with the government to inform policy at a time when the creative industries are a central part of the UK’s industrial strategy not least due to the influence this may have on the UK R&D and Innovation budget as devolved through UKRI, the primary funder of university led research
5.2). Engagement with local and regional government to influence policy
Across England and the wider United Kingdom, the ongoing process of devolution is bringing about the transfer of greater powers and control over budgets from central government to smaller areas and regions. The newly elected Mayor of the York and North Yorkshire Combined Authority, as founded in February 2024, has recently identified the Creative Industries as one priority sector of the regional economy that offers high potential for growth and investment, and key for the region’s Local Growth Plan (to be published Spring 2025). Groups of researchers at universities based within the electoral region can play an important role in influencing the development of local and regional policy through engagement with local and combined authorities, especially in the early stages of a newly formed combined authority, or an existing authority under the leadership of a newly elected mayor.
Check out these useful resources for more information on the Creative Industries
References
Anantrasirichai, N. A., & Bull, D. (2021). Artificial intelligence in the creative industries: a review. Artificial Intelligence Review, 55(2022), 589-656. https://link.springer.com/article/10.1007/s10462-021-10039-7
Carey, H., Giles, L., & O’Brien, D. (2023). Job quality in the Creative Industries: The final report from the Creative PEC’s Good Work Review. Job quality in the Creative Industries: The final report from the Creative PEC’s Good Work Review. https://pec.ac.uk/wp-content/uploads/2023/12/PEC-GWR-Job-quality-in-the-Creative-Industries-v7.pdf
Creative Industries Policy Evidence Centre. (2022, June 28). National Statistics on the Creative Industries. Creative Industries Policy Evidence Centre. https://pec.ac.uk/news_entries/national-statistics-on-the-creative-industries/
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Published on 25 February 2025
Filed under: Research, XR Stories