Creative freelancers must urgently become more ‘business savvy’ if the UK is to avoid losing its title as the innovation hub of the world.
Self-employed Brits specialising in sectors ranging from art & design, software, publishing, music, advertising, film and fashion must embrace commercialism - not ignore it.
Such is the warning from NESTA, which yesterday told Freelance UK that freelancers, start-ups and sole traders must fuse their creative experience with business acumen.
Only then can the UK creative sector remain among the nation’s most powerful, and offset rival creative industries abroad, said Jonathan Kestenbaum, chief executive of the National Endowment for Science, Technology and the Arts (NESTA).
“Issues such as digitisation and globalisation will affect everyone working in the creative industries including sole traders and freelancers,” Mr Kestenbaum said in an interview with Freelance UK.
“[These] growth areas in the sector should be seen as opportunities that all creative workers need to understand. Creative businesses, small or large, ¬need to combine creative excellence with commercial growth.”
Currently the UK’s creative businesses, which include freelance consultants, small to mid-sized firms and entrepreneurs, account for 8 per cent of GDP (£56.5bn).
They employ more than one million people in over 110,000 businesses, making the industry a bigger employer than the Finance sector.
By the end of the decade, NESTA predicts creative companies will rise to account for 10 per cent of UK GDP, but the advance of creative forces overseas means policymakers and freelancers alike have ‘no room for complacency’
“Creative industries contribute a phenomenal amount of wealth to the UK economy and our creative businesses are the envy of most of the world,” Mr Kestenbaum said.
“But we are in danger of becoming complacent and losing out to new creative centres that are pursuing aggressive strategies to develop their markets. Creative industries need a step-change where creative excellence and commercial success are recognised equally as the key to a successful creative business. And it is the job of government and organisations like NESTA to help bring this about.”
Key to the challenge is helping small businesses, including freelance consultants; envisage their venture on more of “world-class scale.”
In the past, the creative sector appears to have been reluctant to accept commercialism or business development, amid fears of diluting creativity.
Many creative owner-managers were found to take an “organic” approach to the growth of their businesses, by adding slowly to their clientele through the distinctiveness of their work, NESTA said.
The group’s probe into creative types found such a lack of focus on growing their business was the key reason holding back the venture’s profitability and potential for ‘world-class’ success.
Among start-ups and freelance business owners the main barrier emerged as gaining access to market. These micro businesses are also the most likely to be unaware of innovation and networks designed to exploit new business models.
According to the study, company directors’ lack of commercial awareness - or their disinterest in growing from a one-man band, is creating cracks in UK productivity.
Cracks could expand into fissures NESTA hinted, by warning that the UK’s creative industries could “lose out” to emerging nations over the next 10 years, if steps are not immediately taken.
In the UK design industry, agency turnover has plummeted 31 per cent, and earnings from commissions overseas have halved since 2001.
Elsewhere, film production is nearly a third lower, visual and performing arts have slumped since 2000, while in the music sector, exports from the UK have dropped 20 per cent.
The situation is compounded as international rivals, particularly India and China, are driving policies to foster homegrown commercial creativity which “are often more ambitious than those in the UK,” NESTA said.
Freelance consultants, sole traders, small to mid-sized firms and tomorrow’s start-up therefore need to urgently assess their business and decide how to innovate.
This includes “moving into new markets; reaching new customers by exploiting skills and resources, using digital technology to bypass traditional distribution, and moving from producing to owning intellectual property.”
Longer-term solutions involve the state, NESTA and small business groups providing a coherent infrastructure to “identify, develop and support creative businesses”, so they have a better chance to become world-class.
In the meantime, NESTA is to lobby for a more coordinated national agenda to bind the creative industries and the different company structures that its practitioners adopt.
Freelance copywriters and illustrators recently told Freelance UK that they hesitate to identify themselves as a ‘small business,’ and therefore feel excluded from government dialogue about supporting start-ups and entrepreneurs.
Responding to the worrying trend, NESTA said, “We would encourage a policy framework that creates a climate for all creative businesses, regardless of size, to operate effectively within.
“At the same time, the rules that apply to small businesses also apply to freelance and contractor communities: combine your creativity and skills with commercialism; look for and access new markets to grow and be aware of the global opportunities that the creative sectors will face over the next 10 years.”
In an exclusive statement, the group added that new start-ups and individuals thinking about ‘making the jump’ to freelancing should be encouraged for collective prosperity.
“We welcome start-ups in the creative sector and in many cases; they will provide new ways of working, new market penetration and a new impetus to the sector. These new entrants and individuals starting their own businesses are the lifeblood of any industry.”
Apr 27, 2006
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