Cox Report: creative accounting

This morning (17 November) Sir George Cox holds a breakfast summit with design gurus like Terence Conran at No.11 Downing Street to publicise his report to UK chancellor Gordon Brown.

Once the head of the Institute of Directors, Sir George is now chairman of the Design Council, and he has been drafted in by the Treasury to put some vim into the British economy. The idea is that Britain’s much-trumpeted ‘creative industries’ can make up the innovative deficit that plagues manufacturing.

There is no doubt that there is a problem. The Department of Trade and Industry (DTI), in a recent report looking at Britain’s low level of new investment, decided that the UK remains ‘relatively risk averse’, frustrating the application of new technologies (1). It also found that the shift to (low productivity) service industries ‘actually [has]…the effect of lowering average measured productivity’.

The Design Council has lobbied hard to have the special contribution of design for industry recognised. It says that its National Survey of Firms ‘has shown for the first time the link between good design and growth’. Unfortunately, the relationship the report shows is that both are in decline. Over the three years 2000/2 firms questioned put less importance on design each year. And over the same period, share prices fell, and have continued to fall since.

According to the Design Council’s survey, most companies have a very low opinion of design: two thirds think it made no contribution at all to their turnover or their profitability. More than half made no use of design either with staff, or with consultants. This is the finding that gives the game away: a massive 58 per cent of all the firms surveyed in 2002 had neither developed nor introduced any new products or services in three years.

In commissioning the Cox Review, the Treasury is returning to a policy that has been tried not once, but twice before. The promotion of the creative industries’ exceptional contribution to economic growth began life as an arts policy, an attempt to deflect the criticism that the arts were a drain on the public purse.

In the early days of the first Blair administration, that looked a lot more exciting than the boring business of making things, so the DTI announced that Britain was a knowledge economy – or as DTI adviser Charles Leadbeater explained in his book Living on Thin Air, ‘we are all in the thin air business these days’. When industry complained about being ignored in favour of dotcoms, the DTI pretended that it had never said any such thing.

Now, conscious of a rapidly industrialising China, Gordon Brown is the latest Labour politician to be seduced by the mantra of creative Britain. To his credit, he has understood that annexing the creative industries off to one side in a cyber-geek ghetto only reinforces the idea that the rest of manufacturing is thoroughly uncreative.

The question remains whether the creative industries really have the dynamism to put the spark back into British manufacturing. The big-hitters, design and advertising, are both recovering from a precipitate drop in takings around 2002. And though their earnings are important, they tend to be parasitic upon the failing of industry, rather than contributing to its success. Most of the business this sector does is by preying upon CEOs’ fears that they are behind the loop – and promising that a new makeover or rebrand will secure market share (2).

George Cox might hold up the prospect of a creative solution to the problems of British industry, but it would be truer to say that there was an industry solution to the weakness of the creative sector. If manufacturers wove innovation into their business from the outset, the ‘creative industries’ would cease to be a specialised sector out on their own. That would take a lot of the mystique out of the idea of ‘creativity’, but it would lead to real creativity rather than a lot of hype.

The challenge of ridding British investors of their aversion to taking risks, though, is a lot greater than getting designers to visit factories.

James Heartfield is author of the Blueprint Broadside Creativity Gap.

(1) Competitiveness Indicators, Department of Trade and Industry, p68

(2) See Branding over the Cracks, Heartfield, Critique 35, June 2004