Creative industries

Creative industries are an engine for economic growth and in the top 5 government priority growth mission.

The UK creative industries sector contributed £124.6 billion of Gross Value Added to the UK economy in 2022. The sector accounted for 5.7 per cent of UK gross valued added and it has seen a 6 per cent growth since 2019. The sector employed 2.4 million people in the UK in 2023, signifying the ongoing development in the industry.

Opportunity highlights

Video game production

The Entertainment Retailers Association reported UK video game retail sales of £4.7 billion in 2023, with digital sales accounting for 90 per cent of the total.

The Department for Culture, Media and Sport (DCMS) reported that IT, Software and Computer Services, which includes video games, generated £53.4 billion of gross value added to the UK economy in 2022, 43 per cent of the total.

UK video games trade body ‘The Independent Games Developers Association’ records the UK video games sector as the largest in Europe and 95 per cent of UK games development studios have global markets. There are 3,400 companies in the UK across all games sectors - PC, console, mobile, VR/AR, and e-sports.

Generative AI has significant potential across many sectors for investment, with the UK pioneering AI development. The UK is home to over 3,100 AI companies, contributing £3.7 billion to the economy. Generative AI is having a transformative impact, especially in the games sector.

Advertising and marketing

In 2022, UK advertising market research and opinion polling services exports totalled £15.2 billion. The figures represent a 32.5 per cent increase in year-on-year growth – the highest seen since the Advertising Association began tracking the industry’s export figures in 2018.

These new figures make the UK first for exports worldwide.

Research by PwC, commissioned by the Advertising Association and the UK Advertising Exports Group (UKAEG), identified that the UK’s success in advertising exports was driven by creativity, talent and global reputation. According to the UKAEG, since 2005, the UK has won 1500 Cannes Lions awards, the most prestigious in the industry. This is more than any other European country.

The UK is the number one source of international advertising and marketing talent in New York, Paris and Amsterdam and has provided more than a third of recent workers to Sydney’s advertising sector. These figures show an unmatched level of talent and technical skill in the UK.

Television and film production

The UK is the largest film and high-end TV production location outside the USA, with the UK attracting £3.1 billion of film and high-end TV inward investment in 2023. This is driven by the availability of corporation tax reliefs and world-class production talent ranging from visual effects, virtual production, sound and make-up to line production and cinematography.

Major UK studios make some of the biggest box office hits, including Warner Brothers in Leavesden, Pinewood that has signed long-term production deals with Netflix and Amazon MGM Studios.

Sky Studios in Elstree is hosting productions from the Wicked and Jurassic Park franchises. Bridgerton locations, including Bath where much of the production was shot, is attracting many film tourists.

The UK international TV programme exports were £1.85 billion in 2022 and 2023, with 60 per cent of exports finished programming and Video on Demand accounting for 53 per cent of finished programme sales and North America importing 38 per cent of the market.

Commercial maturity

UK creative industries exports were worth £17.9 billion in 2019. Oxford Economics estimates that the sector could grow by over 26% by 2025, contributing £132.1 billion in GVA to the economy.

Creative industries are considered a driving force in the post-pandemic economic recovery of the UK. Increased investment in the sector aims to generate an extra £28 billion for the economy by 2025 and create 300,000 more jobs.

Creative clusters

In 2022, DCMS commissioned research carried out by Frontier Economics, that identified 55 creative clusters across the UK. There was also another study by Frontier Economics and the Official for National Statistics found that over 90 per cent of creative industries turnover was generated within these clusters.

Manchester

Manchester is rich in specialist talent, with 86,000 professionals within the workforce that stems from a steady flow of graduates from the city’s 5 universities, with 25,000 of them currently enrolled in creative, digital and technology courses.

In 2022, PwC analysis indicated that an expected 5 per cent increase in the BBC’s footprint in Greater Manchester would lead to 120 new creative businesses within a year.

A significant media and elite sport concentration makes Manchester the UK’s second largest major entertainment market, which has attracted global advertising firms including WPP, McCann Worldwide and Dentsu to establish headquarters in the city.

Leeds and West Yorkshire

Channel 4, the UK commercial broadcaster and TV programme maker, has its national headquarters in Leeds. The region is also developing a centre for TV, film, major events production design, services and talent.

At the forefront of the region is the global live events company Production Park, based in Wakefield. Production Park work on building, developing and servicing some of the world’s biggest world tours including Madonna, Beyonce and Ariana Grande. They operate the Academy of Live Technology offering advanced degrees, short courses and apprenticeships.

It’s also been announced that the BRIT School North will be established in Bradford. The British Phonographic Industry also work closely with industry partners including Universal Music UK, Sony Music UK and Warner Music UK.

Northern Ireland

Northern Ireland is an attractive destination to film for sets shown on streaming platforms such as Netflix and HBO. Productions such as ‘Game of Thrones’ and ‘The Fall’ have been filmed on location across the country.

Other companies such as Netflix, Sony, Universal Pictures, BBC and Disney have also chosen Northern Ireland for recent productions and the Oscar winning short film ‘An Irish Goodbye’ was filmed on location in Northern Ireland.

Northern Ireland’s digital creativity sector is fast emerging as a growing cluster. Of note is a flourishing animation cluster, supported by undergraduate courses in the region’s university and college network.

Coventry and Warwickshire

Warwickshire has 80 video games studios. The area boasts 2 world-renowned universities with courses in games technology - Coventry University and the University of Warwick. Their cross-university Disruptive Media Learning Lab promotes exploration in creative technology.

London

Home to the finest art colleges, such as the Royal College of Art and University of the Arts London, the city produces some of the finest talents across the creative industries. Additionally, a new design district has been established in Greenwich, with 16 buildings housing up to 1,800 artists.

In 2022, London attracted the second biggest global tech inward investment with the tech ecosystem being worth over £600 billion.

Guildford

Guildford features a cluster of globally renowned creative content excellence with extensive capability in immersive technology. It offers more than 110 games development studios, including Hello Games, Media Molecule and Bullfrog Productions (now part of EA UK), and more than 1,800 creative tech professionals.

R&D capability

The UK Innovation Strategy, published in 2021, identified creative industries as critical to the government’s ambition to make the UK a global hub for innovation.

Creative firms are engaging in innovation and being supported to leverage the latest wave of digital technologies. The Digital Catapult is focusing on the creative industries to build the sector’s capabilities in areas such as AI and immersive technology.

Through the development of innovation and acceleration programmes, and the testing and trialling of new R&D capabilities, the Catapult is expanding the UK’s creative and advanced media production economy.

More broadly, the UK government is working in partnership with investors, universities and local authorities to encourage R&D across all creative businesses and to encourage creative entrepreneurship.

The UK Research and Innovation Creative Industries Clusters programme is investing £50 million to identify and support at least 6 new clusters specialising in creative sub-sectors, helping entrepreneurs and businesses in these areas innovate with new technologies, secure investment, and access global markets.

The Arts and Humanities Research Council launched the Convergent Screen Technologies and Performance in Realtime (CoSTAR) programme in 2023. This £75.6 million programme will be delivered in partnership with universities over 6 years and will provide a new national infrastructure to drive the next generation of R&D for building creative and digital economies.

The UK was home to 5 of the top 10 global performing arts institutions in 2024, according to QS World University Rankings, with the Royal College of Music ranked top and the same rankings featured the Royal College of Art and the University of the Arts London as the top 2 global art and design institutions.

Finally, the QS in 2024 ranked UCL as the top global architecture and built environment institution, with 2 other institutions, Manchester School of Architecture and the University of Cambridge, in the top 10.

Business and government support

Creative companies covering feature film, high-end TV programmes, animated TV programmes, children’s TV programmes and video games can claim expenditure credits. Film, high-end TV and video games will be eligible for a credit rate of 34 per cent and animation and children’s TV will be eligible for a rate of 39 per cent. Other creative companies can claim corporation tax reliefs for theatre, orchestra and museums and galleries.

The UK Games Fund supports talent through challenge-based competitions for graduates and students and grant support for new games businesses and prototypes. The fund consists of content and prototype separate funds and host an annual competition.

The UK Global Screen Fund film, TV, animation and video games companies to build and deepen international partnerships and sales through support for development, production and distribution.

There are 3 funding strands:

• international distribution
• international business development, which includes support for video games companies)
• international co-production

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