The Return of Creative Clusters

Tom Campbell

When it comes to economic policy, there can be few concepts more redolent of a particular time and political context than that of ‘creative clusters’. Ten years ago, it seemed that creative industries commentators could talk of little else. In many ways this was understandable: geographical concentrations of fast-growing creative businesses seemed to promise not only economic growth, but also a means of revitalizing cities and providing jobs for the socially marginalized. As a result, the regional development agencies were investing significant sums, with all of them identifying the creative industries as a priority sector. Across the country a new type of organisation, cluster development agencies, were established such as CIDS in Manchester, CIQA in Sheffield, CIDA in Tower Hamlets and Interactive Tayside, to name just a few. Academic superstars such as Michael Porter or Richard Florida, were invited (usually at considerable expense) to advise on how it should be done, and there was even a dedicated conference, Creative Clusters, founded in 2002 and which took place in a different UK city every year.

It didn’t last. Regional agencies struggled with the granularity and complexity of localised clusters, some of which crossed regional borders, others of which were confined to highly localised neighbourhoods. Concerns over duplication, confusion and a post code lottery in support led to national government re-imposing control through the Business Support Simplification Programme, a tortuous process by which Whitehall attempted to restrict all public funding for business support to a handful of generalised, centrally approved ‘products’. At the same time, others criticized the simplistic manner in which models associated with North America’s high-tech clusters, specifically Silicon Valley, were being mindlessly applied to places as varied as Derbyshire and Dundee. The last Creative Clusters conference took place in 2008, and failed to find a host sponsor thereafter.

With the onset of the financial crash and austerity government, the concept of clusters became further marginalized as investment in the regions came to a halt, European funding reduced and development agencies were closed down, with the LEPs unable to provide the same levels of support. Economic policy discussions moved to deficit reduction or, on the more expansionist side, to rebalancing the national economy through fiscal measures, such as tax breaks for film production and video games.

But recently, it seems as if things might be changing again. Following the Scottish Independence referendum, devolution to cities and regions is firmly on the political agenda, and this includes economic powers. The government’s national innovation agency, Innovate UK, has begun to run ‘Launchpad‘ Competitions, with R+D funding targeted at businesses located in specific areas. In its 2013 ‘Creative Manifesto’, NESTA made only passing reference to regional development or clusters, but recently called for a £200m government fund to develop creative clusters across the UK. Meanwhile, of course, arguably the government’s single most high-profile business support project is Tech City, an intervention focused around East London’s digital and creative cluster.

Creative clusters have helped to sustain business and employment during a period of recession, and could form an important source of growth in some of the cities now being targeted by government. But policy makers should think carefully about how to get it right. A huge amount of knowledge and insight has been gleaned from the last ten years and from the previous wave of cluster development. Whether it is evaluation reports, regional strategies or academic studies, there is a rich literature that needs to be absorbed. But in the spirit of initiating the debate, here are some immediate recommendations, which would all help to improve support for creative clusters in the years ahead:

  • Local authorities should be given more powers to pro-actively support their clusters, and provide the right infrastructure and conditions for growth. This means halting change-of-use planning deregulations: authorities need to be able to maintain sufficient commercial space, and resist the rush to residential development.
  • Government should encourage, and resource, the establishment of dedicated cluster support agencies, but these should be answerable to local government rather than regional or national funding agencies. Based on the success of initiatives such as Creative Islington, they would tackle a range of different issues (workspace, skills, regeneration, inward investment), while at the same time being as responsive and fast-moving as the businesses they aim to support.
  • Innovate UK should expand its Launchpad programme, with dedicated funds set aside for R+D investment in clusters. This should be accompanied by greater study of the impacts and benefits, so that future Launchpad competitions can be better rationalised and targeted.

Tom Campbell is an independent consultant and writer. His latest novel is The Planner.

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5 thoughts on “The Return of Creative Clusters

  1. Nice piece, Tom, and an intriguing development. I think that the return of the creative cluster approach is probably broadly a good thing, although I agree with you entirely that their should be more local – even hyper-local accountability. And yes, that Innovate UK should roll out its Launchpad initiative.

    A couple of thoughts specifically. “… revitalizing cities and providing jobs for the socially marginalized… ” I was always sceptical about a couple of things here.

    First, I wondered whether Richard Florida wasn’t committing the kind of correlation-not-causation mistake Naseem Taleb so loves to poke fun at. That is, did the creative clusters lead to re-gen or did re-gen that was taking place naturally drive the clusters? I’m not sure either way, but I think Florida’s case was far from iron-clad. (Taleb spots a similar one with the relationship between a country’s GDP and the proportion of its population with a tertiary education.)

    Secondly, I really do wonder about the ” jobs for the socially marginalized” phenomenon. I live very near London Road in Brighton, which, as anyone who knows the area will attest, has seen a thirty year decline from its heyday as a lower-middle class shopping area. It’s currently in the grip of a major re-gen process, with, at its epicentre, an open market where everything is organic and “artisinal”. Including the beard grooming oils (I’m not kidding). But the white working class who’ve previously frequented the area seem neither to be shopping in the new lovely emporia nor to be employed by them. I mean, it’s nice that the council has added a zero to the home value of anyone within walking distance – but I’m not sure of its social impact, other than frankly driving the working class even further from Brighton city centre.

    And you’re right about that hoary old “silicon (insert x)” nonsense. Silicon Valley is an area large enough to encompass London, Cambridge and everything in between, and in any case has a unique history and culture. We need a new cliché!

  2. Dear Tom

    Always good to read an analysis by someone who has, amongst other things, an informed historical perspective.

    I will just say this about Creative Clusters Mark One. I spoke at the last but one national conference at the Soho Theatre in London. It took place in November 2007 and I spoke for too long.

    What I mainly remember however is that I was the only person there from the private sector. I’m afraid that says it all.

    yours ever

    Martin

  3. Cluster research and implementation is incredibly sophisticated and advanced at a European level, if only we could bear to listen. Perhaps encouraging greater engagement with these institutions would give recommendation 3 a head start?

  4. An interesting piece but can’t help feeling a couple of key points may have been overlooked or passed over in the interests of brevity. So let me add a note or two from a related but different perspective. I set up CidaCo in January 2000. I think it’s significant that, unlike most of the cluster development agencies Tom Campbell refers to, we deliberately chose to be a completely independent company. We are limited against guarantee, non-profit-sharing, but we have no public funding. We are a creative business, run for creative entrepreneurs by creative entrepreneurs. A very small core team augmented and enhanced by a group of regular freelances with whom we grew the business – and the sector. In our first ten years, we brought over £35 million into Yorkshire’s creative economy. We helped set up 438 new businesses in the sector, both here and abroad. Based in Yorkshire, we competed for every contract, winning them from the public, private and voluntary sectors. Within 24 months of setting up, we found ourselves working across the UK and, later, in over 40 countries across the world. The international work was partly commissioned by or through the British Council, and partly secured in straightforward international competition. Our independent status allows us to go where the work is; we are not geographically constrained by funding. Our first such contract, (worth over £500,000 in 2006), was awarded by the Singapore government through an intensely and internationally competitive process as their first step to building their creative economy. By 2008, we employed 22 people full time and another 12 as our regular freelances; we had a network of partners and clients, public and private sector, across the world; we were at the heart of the major creative industries networks in Europe – the world was our oyster. Then the Conservatives won the election and dismantled regional governance, which also made working with Europe very difficult. Almost (!) overnight, we lost £3 million worth of contracts. Our market largely disappeared. Our peer organisations were all closed down by their respective public sector funders, one after the other. Much blood hit the floor but we kept going. Amoeba-like, we changed our shape, again and again, but without ever losing our commitment to our core purpose of helping creative people earn more from their creativity. Our market place changed from public sector to private sector, from institutions to independent businesses, from creative sector to a broader mix of businesses, ranging from UK Broadband to Engage Mutual (finance), allowing us to continue supporting creative clients. Our contracts changed from 3 years’ duration to 3 days’ duration. And all the time, we ‘innovated’. We pulled every trick we could, financial and operational, to enable us to maintain our commitment to artists and creative entrepreneurs – and, by the skin of our teeth, we’re still here.
    Finally – and I hold my breath as I write these words – last year, the wind started to blow in a new direction. As Tom points out, with devolution to cities and regions now on the agenda, new discussions and ambitions are afoot. But things in the sector have changed: there is a greater acknowledgement across the sector of the need for independence. One of our most successful partners is Duke Studios, http://duke-studios.com , an amazing example of a creative-led, non-funded, independent creative cluster. For our own part, amongst other contracts, we’re running a big Resilience programme for the Arts Council – another competitive tender – working with arts organisations in London and in Birmingham (http://cidaco.org/developing-cultural-sector-resilience). The lessons of the last 5 or 6 years are well learned and we pass them on, talking the very walk we’ve been on ourselves – Tom Peters would be proud of us! Innovation – and sheer bloody mindedness – lies at our core. Without them, we would have gone to the wall some years ago. So, whilst I warmly welcome the recommendations for local government investment and the support for new creative clusters, I would strongly warn against the ‘institutionalising’ of the delivery bodies. I’m with Martin Smith on this one – at the risk of “she would say that, wouldn’t she”, I suggest that intermediary organisations are important for this sector – but they serve the sector better if they too know the terror of managing the cash!

  5. Pingback: Creative clusters – Graham Hitchen

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