The sector is made up of small, micro and freelance companies, which are creative, flexible and responsive, able to manage uncertainty, innovation and sustainability in a volatile environment.
Research conducted in Manchester and elsewhere in the UK over the last five years has strongly indicated that creative industry SMEs are not being identified and included in their operations by mainstream economic development and business support agencies. On the one hand, because creative industries SMEs do not fit standard business models, there has been a tendency for mainstream business support agencies to regard this sector as not economically 'serious'. On the other hand, the creative industry SMEs tend to regard these agencies as not able to understand their specific requirements - the mix of cultural and business languages within which they operate.
The following factors need to be taken into account in establishing a specialist business support agency:
- 56 per cent of those in the creative industries sector work in companies of less than 25 or are self-employed. Self-employment represents 40 per cent of total creative industry employment. These businesses work in close, informal networks with other cultural businesses. They tend to be strongly independent and resist standard business expansion models - they don't necessarily want to grow in size but to stay small and flexible.
- The market for cultural goods is volatile and unpredictable, promoting business strategies which are 'emergent', provisional, highly responsive and based on 'intuitive' and 'emotional' knowledge as much as standard market research.
- Creative industry entrepreneurs are highly educated (in the UK 77 per cent of those aged 25-34 have a higher degree) but have a strong 'learning by doing' ethos (this is a key finding of the recent ICISS European research). While these SMEs are key elements in many reviving urban economies, the mix of business and cultural skills they require varies enormously in a way that makes it difficult for support and training agencies to respond.
- This sector requires multiple and a hybrid skill - cultural, business, technology - in a mix that evades the standard skills needs analyses of traditional industry. In rapid transformation they tend to trust their own networks for information and advice rather than 'business experts'.
However, research has also found that there is a real need for dedicated business support, especially in business start-up.
- Creative industry SMEs had little formal business training, which meant that many failures were due to elementary errors, such as cash flow failure; inadequate book-keeping; bad debt; ignorance of tax, health and safety, employment and other regulations.
- Creative industry SMEs needed specific information and advice about the structure of their own industries, including regulatory and representative bodies but mostly about the realities of who gets the profits and who controls access to distribution etc.
- Creative industry SMEs needed sector-specific information on a range of issues such as intellectual property and copyright; technology developments; legal requirements and protection; export regulations; pricing and costing etc.
- Creative industry SMEs also needed sector-specific advice on the construction of realistic business plans (not paper fictions for the bank manager) in order to effectively understand and plan for their businesses.
- Creative industry SMEs needed sector-specific marketing advice - a common failing was the emphasis on product-led development at the expense of the requirement to sell.
The mature cultural businesses required more specific and targeted information and advice about managing: growth, exports, customer service, product development, new technologies etc. However, a key research finding is that creative industry sector growth can be very erratic - many initially successful firms may find a need to return to basics; many new-start firms can be catapulted too fast and ill-prepared into new territory (especially in more global industries such as music and software). There is a need for a learning and support framework which is non-linear and flexible with multiple entry and exit points.
A creative industry SME support service therefore has to be: sector-specific; respected by the sector; closely linked to industry networks; flexible; and responsive. It has to act as an interface between the creative industries sector and the more formal economic development sector. Research in the UK and Western Europe has indicated that only through the development of a dedicated service can the local support infrastructure begin to connect adequately to the sector.
In creating such a service In Saint Petersburg it is crucial to begin with an extensive quantitative and qualitative mapping of the sector - its size and profile; its specific characteristics, needs and dynamics; its potential and strengths. Part of the purpose of the exercise is to raise awareness and understanding of the sector amongst other economic, social and cultural agencies; it is also to raise awareness and self-consciousness within the sector itself - only in that way can it begin to gain cohesiveness, to articulate need and to produce industry spokespeople and intermediaries crucial for support strategy implementation.
CIDS is a new agency
Cultural Industries Development Service (CIDS) (http://www.cids.co.uk) is a new agency created to assist the development of Independent cultural and creative business In Manchester.
CIDS services are free to creative enterprises In Manchester, Salford, Timeside and Trafford and include:
- comprehensive Information and signposting
- a personal business diagnostic service
- personalized and informed guidance to funding, business start-up and business development
- sector specific professional development programmes
- support for Industry networks
- Industry Marketing or Market Development Initiatives through market research, trade fairs, exhibitions and shows
- Business Expansion Scheme. Financial assistance (up to 50%) for business relocation business equipment and product development
- Export market research and development.
You can also find out more about CIDS through web site at www.cids.co.uk