Transcript of a speech by Professor Andrew Chitty, Creative Economy Champion for the AHRC and Challenge Director for Audience of the Future and the Creative Industries Clusters Programme, to a face-to-face lunch in London on 20 July 2021
Welcome and thanks for coming. Lovely to see you.
The main objective of the event today is for everyone to get together face-to-face after such a long time and enjoy each other’s company. So, I’m not going to stand in the way of that for too long but thought I might say a few words to animate your conversations because here we are again in anticipation of another, hopefully Comprehensive, Spending Review – looking to make a case for increased investment in Creative Industries as part of a post-pandemic recovery; not only what for what we can do for the economy but to restore a sense of hope and imagination to places across the UK.
An experiment
Just about three years ago we started an experiment – an experiment in Creative Research and Development – or Creative Research and Innovation if you prefer – with funding from the then government’s Industrial Strategy. We were testing two ideas:
- That, if we could support UK Creative Businesses to accelerate their adoption of a potentially disruptive technology – immersive/VR/AR/XR Haptics – in areas of opportunity for the Creative Industries, they would develop a completely new range of creative products, services and experiences that are the lifeblood of the sector and bring them to market. That’s the core purpose of the Audience of the Future Challenge.
- And that, by investing in additional R&D through university/business partnerships in already strong creative clusters, we could significantly improve economic performance, company growth, productivity and skills in that cluster. Thus our programme of place-based interventions that are the nine clusters in our Creative Industries Clusters Programme.
Let’s take a look at some of the results of this £100m experiment and then I’ll talk a little more about what we think we have learned…
So, what have we learned?
I think the evidence and insight we’ve generated from this unprecedented programme of activity comes under four broad headings.
1. Creative R&D is a concrete set of activities including multiple disciplines.
Businesses and Research Organisations have developed ways of working together to rapidly address technology challenges and develop new commercially viable products services and experiences.
That may seem obvious – it happens in other sectors of the economy from Life Sciences to Engineering – but it’s a first in the Creative Industries. What’s new is that we now know a lot more about the best way for creative companies and researchers to work together to serve industry outcomes rather than research outputs. We have evidence of big companies, SMEs and researchers coming together to innovate across the supply chain and bringing the multiple disciplines needed to solve innovation challenges for the sector – from psychology to computer science, engineering to informatics – and on the skills we need to develop.
The key message for policymakers here is that we’re increasing the capacity of the sector to absorb Research and Development inputs from multiple disciplines. What’s next? We need to extend this activity to every creative sector.
2. We have evidence of what works
We also have solid evidence of ways of doing R&D that deliver specific outcomes – of what works. And by work I don’t mean just that good things happen, I mean measurable impacts as gathered and analysed by our own impact and performance team led by Graham Hitchen, by our evaluators, BOP, Frontier Economics and Technopolis, by the Creative Industries PEC and by the Clusters themselves.
To give two examples:
- Companies successful in our Design Foundations programme, which uses the Design Council double diamond method for early-stage design feasibility studies, saw a direct impact on their commercial trading of grant-funded companies of 150% compared with unsuccessful applicants, with all companies advancing their products’ TRLs (Technology Readiness Levels) by 1 point, and many advancing TRL by 4points on a 9 point scale. All from a short, but structured, collaborative design process and small grants programme.
- We’ve also got evidence of what’s necessary to create large demonstrator projects that can accelerate technology-driven changes applicable to many businesses – such as our performance demonstrator, which shows how to drive outcomes from ambitious missions to tackle sector-wide challenges, what IP confidentiality and IP agreements are needed to underpin that, and how diffusion across sectors can work.
3. Generating Leverage and creating a landing strip for money
The third thing we’ve identified is how successful Creative Research and Development Partnerships can be at orchestrating and catalysing other funding. We set an original leverage target for our £100m experiment of leveraging £50m of additional funds. R&D match funding is new for our sector and this seemed a very ambitious target. For instance, in a sector dominated by SMEs, the InnovateUK funding model has struggled to reach 30% of match. But across our programmes we have already passed our £50m target with a year of Audience and two years of Clusters to go. We are now projecting to almost triple our target by the end of the programme.
The main driver for this performance which has far exceeded expectations has been the Clusters R&D partnerships. By identifying a clear strategy for place-based, industry relevant, creative R&D the clusters have catalysed other funders. In the words of one of our advisory group created we have ‘created a landing strip for other people’s money’ which has greatly increased our ROI on the original investment.
Our initial £100m experiment has become a £250m experiment in the process.
4. Geography – we have a model and evidence for impact on place
Our final takeaway regards geography. We’ve recently completed a review of all UKRI funding related to the creative industries. Like the sector itself investment is weighted to London and Southern England, as is R&D funding more generally. But Audience of the Future and Clusters have bucked this trend – because we’ve tried hard to open access to creative companies across the UK nations and English regions. And perhaps the most radical things we’ve experimented with through the Clusters Programme is devolving R&D funding for creative businesses, and the decisions on where that funding goes, to the clusters partnerships and to local needs.
These two sides of geography – opening access and increasing participation in R&D across the UK and devolving funding decisions – are key components of the impacts that have been delivered and a step change from previous innovation funding. We haven’t shouted much about this because it was such a radical part of the experiment – but each Creative R&D Partnership (Cluster) is now capable of running challenge programmes, competitions and skills programmes for its cluster using our grant funding and multiplying it through leverage from companies and other public investors.
So, this is what we’ve learned from our experiment so far:
- how to increase access to and participation in R&D;
- how to draw in multiple disciplines to develop new products, services and experiences that impact the bottom line;
- place-based models that leverage significant additional investment.
And we’ve learned this by continually analysing the impacts of our funding. We’ve developed an evaluation and benefits framework based on delivering outcomes and impacts – *not* one based on monitoring activity and counting KPIs. Four years ago, our business case was based on a pitch rather than a logic model. Now we have evidence of what works and this evidence will serve us in good stead in discussions with policymakers. We’re not making things up or hitting-and-hoping anymore.
So where do we go next, now that we’ve evidence of the impact that investment in applied creative R&D can deliver?
What could build on Audience of the Future and the Clusters Programme without just being more of the same? There seem to us two clear opportunities in the context of the upcoming spending review: a new innovation infrastructure for the Creative Industries and an expanded R&D programme.
CoStar
On the Creative technology side there is a real opportunity (and also a challenge) in the area of Virtual Production. The convergence of production on real-time technologies is transforming how we make things across games, tv, film and performance and we need to provide a Research and Innovation infrastructure for these sectors:
1) to open up access to R&D and facilities for companies across the UK
2) to manage skills transition and the skills gaps that are already becoming obvious and
3) to create a space linking the commercial and research worlds where new companies can form.
This is the innovation need that the StudioUK group have identified and the skills pressures that StoryFutures and Screen Skills are exploring. We are building a 10 year, £100m business case as a response to these needs. CoStar forms a part of UKRI’s infrastructure roadmap and has just received its first development funding.
Clusters+
The other opportunity is for us to expand on the Clusters programme to deliver a creative places research and innovation mission that can further drive R&D participation and access to excellence. And contribute to levelling up and resilience across the UK.
This mission would build a Creative Research and Innovation Network with three components:
- Expanded research and innovation partnerships built out from our existing clusters that would reach into under-served geographies and places.
- New Creative R&D partnerships serving places and sectors beyond the current challenge programme.
- A distinct new intervention that draws on the evidence base we’ve built to meet the needs of dispersed and rural creative economies and businesses where the Clusters model doesn’t apply.
Each component of this Creative Research and Innovation Network will deliver R&D programmes, meet creative technology challenges or deliver technology demonstrators and partner with access to finance, skills and supply chain initiatives.
But they must be configurable to local contexts, drawing on the particular assets and needs of their places. We have the evidence for a range of effective interventions from demonstrators to R&D programmes, but the selection of which tools to use should be place-based. So should the focus of ambition and opportunity – it may be in a particular creative industries subsector (for instance we would welcome a major Creative R&D intervention in Advertising, Marketing, and Communication) or it might be the areas of huge opportunity where the Creative Industries and other sectors collide – Healthcare, Education, Manufacturing or Energy.
One principle that we would like to see carried forward is the devolution of creative R&D funding – hard though that may be for national agencies to reconcile to.
Bleedin’ obvious
Baz always reminds us to not be afraid of ‘stating the bleeding obvious’ when talking about our sector. So just to be clear, these two interventions – CoStar as infrastructure and an expanded ‘Clusters+’ network as revenue funding – will deliver high value and IP creating jobs across the UK …. and the huge cultural and social contribution of the Creative Industries in every place in which they’re active comes as free.
Measure of Success
I’ve always said that the only real measure of success for our ISCF funded programmes was if they were the first not the last at-scale programmes in Creative R&D. Now we’re at the point where that becomes reality. Given the evidence and impact that we’ve now generated from our original experiment, what we should be fighting for in the CSR is a significant scale-up of research and innovation funding – to a scale that our world class creative sector deserves.