Can the creative industries help restart the economy?

Our friends at Olsberg SPI – the creative industries strategy consultancy – have published a fascinating report which illustrates how the screen production industry could play an instrumental role in post-Covid economic recovery.

The argument is sound: direct economic benefit (effectively production costs) from the industry were $177bn globally in 2019. But that only accounts for around two fifths of the overall economic benefit, Olsberg estimates. Last year, the industry supported or indirectly contributed to 14m jobs, and $414bn into global coffers.

Our offices, when we can use them, are in Gray’s Inn in central London. It, and other nearby locations, are popular sites for filming: you’ll have seen them in everything from The Children Act to Oliver. When cast and crew descend, for some weeks at a time, cafes, barbers, supermarkets, and numerous other businesses benefit from the increased activity. A study on one (very high budget) film showed that an additional $10m per week was being spent in the locality. In now largely deserted city centres, their presence would be particularly keenly felt.

Amanda Nevill – CEO of the BFI for 17 years until stepping down this year, and now an adviser to Olsberg – talked in our Business People podcast this month about watching the credits at the end of a film: “all of those credits are individuals who have jobs, and what is so fantastic about our industry  is… there is a job for every skill imaginable: from marketing and finance, to nail technicians, hair, drivers, caterers, carpenters, plumbers, electricians.”

The magic of screen production is that it can be rapidly deployed and make its positive impact quickly. The UK government has talked about building our way out of the recession, but this will take three to five years to get rolling, by which time the damage may be irreversible. Governments need to think about ways to drive short-term economic improvement while planning for the longer term.

Olsberg makes a strong case for governments to actively offer benefits to production businesses – after all, look at the lasting positive impact on tourism for New Zealand form the Hobbit / Lord of the Rings franchise, or for Northern Ireland from Game of Thrones. But it made us wonder whether other creative industries could try to replicate some of that impact.

There are already signs that the theatre industry, almost KO’d in March, is starting to find its feet to a limited extent. The weather has helped: Glyndebourne is going ahead with limited garden performances, the ENO is planning a drive-in opera, Regent’s Park Open Air Theatre is reopening, and even the lovely Minack in Cornwall has started staging two-handers. Each of these will bring visitors, jobs for a multiplicity of skills sets, and additional economic benefit to their area. As Nevill said in the podcast, through every economic crisis, creative people have always found a way.

Similarly impactful is the exhibitions and events industry. Whether B2B or consumer, such as wedding shows, these bring huge numbers to local areas. The last Ideal Home show brought 230,000 visitors to West London over a two week period. If each of them could be persuaded to spend £5 on lunch or a pint, that is a million pounds into local pockets for that one event. And, like theatre and film, the events business provides work for numerous caterers, technicians, craftspeople and performers. Dubai World Trade Centre showed last month how these events might look in the future: let us hope they can inspire others to follow.

If we count sport as part of the entertainment industry (and we should) there are clear benefits to getting back to something like normality. The FA are hopeful of getting limited crowds back to football matches in October, and cricket’s governing body is talking about having 8,000 people at the T20 finals day. Sport in Australia has resumed with socially distanced crowds. It is a balance of risk and reward, but these are operating in outside spaces, and a 30% rule with sensible spacing makes sense. At the Melbourne Cricket Ground, for example, that 30% would bring 30,000 customers to local businesses – plus provide work for the numerous staff that keep a stadium running.

However, the output of most other creative industries is produced behind closed doors, and consumed behind them too. So while there will be economic benefits coming from the sectors that have actually had a good pandemic (games, business information, education technology, etc), the positive impact will take longer as more people get jobs and shareholders start to spend their dividends. Olsberg’s argument is that the screen production industry can act as a kind of Keynesian defibrillator to rapidly restart the stalled heart of the economy, bridging the gap until those slow-drip benefits can pick up the slack.

It makes sense. In fact, we have already seen this principal in action: the UK government’s Eat Out to Help Out policy this month is a really good indicator of how we can all aid economic recovery. Many thousands of us are working from home. We are saving money on commuting, shop-bought sandwiches, and numerous other small expenditures. We could all have a small local economic effect by spending more in our local community – and so stimulate micro-recoveries which will contribute to the wider bounceback.

Martin Tripp

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Martin Tripp Associates is a London-based executive search consultancy. While we are best-known for our work across the media, information, technology, communications and entertainment sectors, we have also worked with some of the world’s biggest brands on challenging senior positions. Feel free to contact us to discuss any of the issues raised in this blog.