Bridging Imagination: Overcoming Financial Shortfalls in the Realm of Creative Professions
Finance Access Remains a Challenge for UK's Creative Industries
In a collaborative report by Creative UK and the Creative Industries Policy and Evidence Centre (Creative PEC), 896 creative firms across the UK have revealed increased challenges in accessing funding required for growth. The research indicates that creative organizations' appetite for growth outpaces other sectors (72% vs 59%), but also shows that they are over four times more likely to encounter obstacles in securing the necessary finance.
The survey, led by Professor Hasan Bakhshi, Director of Creative PEC, along with Dr Josh Siepel, Lara Carmona, and Amy Tarr, was benchmarked against the SME Finance Monitor survey. The findings come as the creative industries are named one of eight priority growth sectors for the forthcoming UK Government Industrial Strategy in 2025.
Despite the optimistic outlook, concerning trends have emerged. Over half (51%) of creative organizations believe funders view them as too risky to invest in, while 41% state there are no suitable financial products available on the market to cater to their unique needs. A clear gap in understanding between funders and creative industries organizations has also been identified.
Furthermore, the report exposed worrying data regarding equality, diversity, and inclusion. Female and ethnic minority-led creative organizations are more likely to report needing capital but face more barriers to access. Organizations with ethnic minority-led leadership are 17% more likely to have to provide their own capital and are more likely to perceive access to finance as a barrier.
The research also highlights issues related to market failures around financial information. Nearly one-third (30%) of survey respondents admit their lack of financial knowledge hampers their ability to make informed decisions, while 27% feel uncertainty about where to seek relevant finance-related information.
Commenting on the research findings, Professor Hasan Bakhshi said, "Our data shows that creative industries firms are more likely than firms in other sectors to identify access to finance as a hurdle to their growth. With deeper analysis, we find obstacles on both sides – lack of understanding by investors and lenders regarding the economics of the sector, and too many creative businesses not being investment-ready or fully aware of their available options."
To address these challenges, system-wide policy changes are required if the government intends to harness the creative industries' growth potential, as outlined by Professor Bakhshi. The report serves as a crucial guide for policymakers and stakeholders in fostering a more conducive environment for financing creative ventures, promoting growth and innovation within the industry.
- The report by Creative UK and the Creative Industries Policy and Evidence Centre (Creative PEC) reveals that creative industries in the UK face increased challenges in accessing the necessary funding for growth.
- The research indicates that creative organizations have a higher appetite for growth compared to other sectors, but they are over four times more likely to encounter obstacles in securing finance.
- The survey, led by Professor Hasan Bakhshi, showed that over half (51%) of creative organizations believe funders view them as too risky to invest in, and 41% state there are no suitable financial products available on the market.
- The report also exposed concerning trends regarding equality, diversity, and inclusion, as female and ethnic minority-led creative organizations face more barriers to accessing capital.
- In response to the research findings, system-wide policy changes are required to harness the creative industries' growth potential, as outlined by Professor Bakhshi.
- The report serves as a crucial guide for policymakers and stakeholders in fostering a more conducive environment for financing creative ventures, promoting growth and innovation within the industry, and bridging the gap in understanding between funders and creative industries organizations.
