The knock-on effect on other industries is also well-documented. Galleries such as the Ben Uri Gallery at The London Jewish Museum of Art or the JW3 centre in Hampstead are growing tourist magnets, generating revenue for their local areas.
While in no doubt about the economic benefits of the creative industries, the CBI is concerned that one of the most important limiting factors for the sector is access to finance.
Despite all that proven potential, creative companies can still find it hard to raise the growth capital they need. The fact is that traditional investors remain suspicious of a sector they inaccurately perceive as too high-risk; while creative companies often baulk at the requirements of investors in terms of reporting, guarantees and returns on investment.
My own company, Edge Investments, is one of a handful of venture capital specialists addressing this gap in the market, developing businesses in the creative sector and directing capital where it is needed. Specialist Venture Capital Trusts (VCTs), for example, are a government-backed initiative which can offer attractive capital returns and downside protection. At a time when it is increasingly difficult for retail investors to make a decent return, specialist VCTs offer the opportunity for taxpayers to secure a stake in growing businesses at an effective 30 per cent discount, and dividends and gains are also tax-free.
We will continue to play our part and certainly welcome the CBI’s intervention, but it is clear that what is required is a greater mutual understanding between investors and the creative sector.
The opportunity is enormous: the PWC global entertainment and media outlook for 2013-2017 predicts that entertainment and media spending will grow at a 5.6 per cent compound annual rate to £1.35 trillion over the next four years.
The power of the creative arts to inspire and elevate and express our essential humanity is beyond question. It is an appreciation of that power which has led to the creation of organisations such as the Creative Community for Peace, for instance.
The organisation brings together prominent members of the entertainment industry to counter the cultural boycott against Israel, promote an accurate image of Israel, and support creatives who want to perform there.
The clear message from the CBI and increasingly the Government, is that the creative industries are set to play a more important element in the economy. But if they are to maximise their growth potential, we need to unblock the funding log-jam.
Investors and the public need to realise that the same creativity which delights and entertains also has the potential to power some of the most successful businesses of the future.
