Statistics on the UK's creative industries released by DCMS in December have provoked negative reactions.

The creative industries account for only 2.9% of Gross Value Added (GVA), far lower than previous estimates have suggested, following the removal of two 'standard industrial codes' from the definition of the Software sector and a 'scaling adjustment' that the DCMS used to apply to the estimate of whole economy GVA.

Identifying the real problems

In this blog, we respond to some misconceptions that the negative reactions betray, in order to identify the real problems and suggest a roadmap for improvement.

They do show that hype without proper evidence is a risky game. Governments, marketing agencies, and business leaders have been happy to ride a creative industry wave that reflects genuine British leadership and a decisive new growth sector.

Now we need to get real, correcting a woeful lack of attention to decent creative statistics. Until recently, we have got evidence on the cheap, because we were there first.

Now we have to put real resources into getting the numbers right - so that the minuscule band of under-resourced statisticians can react to the direct experience of industry, of experts in the field, and to countries like China, the US and Germany who are rapidly catching up and who, unlike Britain, take their statistics seriously.

Statistical Silliness

First, let's deal with some silliness:

In 2010, DCMS said the creative industries produced 5.6% of GVA; in 2011 they said it was 2.9%.

The first figure makes us look good because it's bigger than the European and US figures we use when we like the comparisons.

Does this mean the UK's lead never existed?

No, it means that these other estimates have not been adjusted like ours have. If similar methodological changes were applied to these estimates, their figures would fall too.

There is no 'collapse' in Britain's standing.

UNCTAD's authoritative work[1] reports the UK creative share of GVA as 5.8% compared to France's 2.8% and the USA's 3.3%, and its export figures - the most reliable and long-running - confirm the UK's strength.

It does show that our competitors are catching up, which is a cause for concern.

The fact that DCMS has chosen to revise its own estimates, whilst the other estimates remain fixed, has no bearing whatsoever on these comparisons.

Outdated Studies

This highlights a much more serious problem.

The real scandal is that no proper international study of creative industries GDP in different countries has been done since John Gordon and Helen Beilby-Orrin's[2] study of 2003 (and older) data from which most GDP comparisons (including UNCTAD's) are drawn.

The truth is not that DCMS has misled us, but that it can't actually tell us if the comparisons are still good, because successive governments have been happy to quote eight-year old statistics without putting any work into checking if it's still sound.

Just as silly is any notion that the creative industries are 'really' only 2.9% of the economy or that the creative industry hype is based on pure conjecture.

Jeremy Silver rightly notes the crux of the problem: "If we took into account the warp and weft of micro-companies and the convergence with Digital Industries - it would not be surprising if the numbers leapt back up and then exceeded previous estimates of the UK's Creative Industries economic contribution."

Across the board, DCMS estimates are based on outdated definitions.

Fashion Output Discrepencies

Another 'unnoticed quirk' is the output of Designer Fashion at £120 million - a minuscule 0.01% of the economy. A report from the British Fashion Council (BFC)[3] estimates this at £20.9 billion - 200 times greater, and more than twice the size of chemical manufacturing and automotive manufacturing.

A single adjustment accounts for this vast discrepancy: DCMS divides all its fashion numbers by 200! It is diligently executing the 13-year-old definition fashion leaders gave it when seeking to distinguish 'Haute Couture' from tawdry mass production.

Reality has moved on and the BFC study, combining extensive industry consultation with scrupulous statistical methodology, is more accurate.

A War Without Intelligence

Yet the scandal is not some kind of 'geeks' revenge' but that the DCMS and ONS were not at the table when the report was prepared - because they are not given the resources to do so.

This is like a war without intelligence.

The lines of communication between industry and the statisticians have been cut off by the quartermasters.

Now let's get down to the real problem.

There is no agreement on a single definition of the creative industries.

UNCTAD makes the problem clear on page 6 where at least four different conceptions are used to define the 'creative industries': the DCMS model which still leads the pack; the 'symbolic texts' model; the 'concentric circles' or value-chain model, and the 'copyright model' used by WIPO.

These simply produce different results, which is why countries and industries diverge so widely about their own importance. The French want to include Cooking, the Italians Religion - both on the (unexpected) grounds that they are part of the visitor economy.

Naturally, pecking orders change dramatically if a sector is added or deleted. With UNCTAD's definition of 'design', a portmanteau extending from furniture to high-street jewellery, Italy becomes Europe's top exporter.

Without it, the UK comes out top

Diversity

There is a genuine reason for this babel-like diversity; culture itself is diverse.

Furthermore, the creative industries are changing rapidly as digitisation is systematically reshaping one industry after another, cutting swathes through music, film, video, books, live performance and creating entirely new products like online games and social networking.

Bold measures are needed.

Instead of blaming the statisticians, we should empower them to talk to industry and experts.

We should explore new ways to produce high-quality data in the digital age - responding to diversity and change with new partnerships between data providers, data-users and data-creators.

This requires, above all, genuine resources to be allocated to evidence provision for what remains a decisive industrial sector for Britain's future.

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[1] http://www.unctad.org/en/docs/ditctab20103_en.pdf

[2] Gordon and Beilby-Orrin, International Measurement of the Economic and Social Importance of Culture, OECD (2006) http://www.oecd.org/dataoecd/26/51/37257281.pdf

[3] The Value of Fashion, http://www.britishfashioncouncil.com/uploads/media/62/16356.pdf