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.