UK creative industries: making a pig’s ear of their value

Winston Churchill once touted Britain’s shipping industry as the envy of the civilised world. Self-styled Churchillian Boris Johnson offered up pink cartoon pig Peppa as a modern equivalent in a rambling speech to the CBI on Monday.

The value of mesmerising small children into quiet bliss is hard to quantify. But the prime minister made a valid point about the contribution of the UK’s creative industries.

Even so, Johnson’s quip lacks accuracy. Though born in the UK, Peppa Pig now resides in the US. Hasbro bought her owner Entertainment One in 2019. The purchaser is one of the largest toymakers in the world. That is a clue to the origin of most of Peppa’s revenues — before the pandemic these were expected to hit $2bn annually.

Valuing the creative industries has never been easy — exports bolster a country’s image as well as its finances and the data themselves are a muddy puddle.

Official statistics show creative industries such as film, TV and music contributed £116bn or about 6 per cent of UK economic output in 2019. That is a decent figure and growth is rapid. The sector contributes about half as much again as it did a decade ago.

Chart showing the contribution of creative industries to the UK economy

Much of that success has come from software production used in the industry. Yet not all of the digitalisation of film, television and music is properly accounted for. “One of the biggest challenges for our creative industries is recognition of its growing importance to the economy. A good first step would be making official metrics fit for purpose,” said Professor Andy Pratt of City University.

Statisticians who track cross-border trade face similar problems to tax officials in dealing with international technology business. According to government figures, creative industry service exports were £39bn in 2019 or 12 per cent of total. Revenues such as advertising generated by UK streamers but watched by foreign audiences do not show up in the official data.

Government figures may be underestimating the creative sector’s contribution to trade by as much as half, according to research by the Centre for Economics and Business Research in 2018. The greatest discrepancy was in advertising and marketing services. The subsector’s contribution to exports doubled after adjustments were made.

Churchill said he only trusted the statistics he had faked himself. Fairer and more reliable accounting would push Britain’s creative sector into the spotlight it deserves.

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