What barriers prevent small businesses in the Creative Industries from becoming larger?

The UK has a world-class reputation for creative output and creative people. In every sector of the Creative Industries we have businesses and people that excel internationally in terms of recognition for creative ability and commercial success. The wider creative sector accounts for more than 8% of total UK Gross Value Added. But average productivity in the creative industries is low, driven by a very heavily skewed distribution of firm size in the sector: 90% of creative businesses have no more than five employees, 80% have no more than two, and 60% have just one.

This report explores what the barriers are in the Creative Industries that prevent micro-businesses from growing into small ones, small businesses becoming medium-sized ones, and medium-sized ones becoming large. In particular, it looks at how absorptive capacity – the ability of creative businesses to take new ideas and turn them into commercial success – can be boosted in the Creative Industries.

As part of a cross-industry project to look at productivity across the economy as a whole, Frontier has worked with David Abraham, Channel 4 and a group of Creative Industry leaders to understand more about the challenges to productivity in the Creative Industries. Building on the statistical evidence and academic literature we conducted interviews with a group of Creative Industry leaders who were selected for their experience across companies, sectors and markets, and who had worked with different types of people and organisations at different stages in their development. The aim was to identify not just what works, but what might be missing from the UK and how we compare to the best in the world.

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