Creative Industries Advisory Group minutes: May 2018

Attendees and apologies

Present

Scottish Ministers

Fiona Hyslop – cabinet secretary for Culture, Tourism and External Affairs (Chair)

Paul Wheelhouse – Minister for Business, Innovation and Energy 

Creative Industries

Bob Last (Co Chair) – Film Producer

Colin Anderson – Earthbound games

Rachel Brown – Cultural Enterprise Office

Sarah Cameron – SENSCOT

Simon Cotton – Johnsons of Elgin

Philip Hannay – Cloch Solicitors

Chris Hunt – Scotland Re:designed

John Kampfner – Creative Industries Federation

Janice Kirkpatrick – Graven

Lorna Macaulay – The Harris Tweed Authority

Joanne Orr – Museums and Galleries

Dougal Perman – Scottish Music Industry Federation

Carol Sinclair – Carol Sinclair Ceramics

Jenny Todd – Previously Canongate Books

Pamela Tulloch – Scottish Library and Information Council

Willie Watt – Nicholl Russell Studios / Royal Incorporation of Architects in Scotland 

Scottish Government

Liz Ditchburn – Director General Economy

James Muldoon – Head of Entrepreneurship

Tom Craig – Entrepreneurship Policy Executive

Elinor Owe, Team Leader, Creative Industries, Screen and Media Policy

Heather Holmes – Strategic Policy Manager –Creative Industries, Screen and Media Policy

Sarah Simpson – Policy Officer, Creative Industries, Screen and Media Policy 

Observers

Clive Gillman – Director of Creative Industries, Creative Scotland

David Hartley – Creative Industries and Digital Markets manager, Scottish Enterprise

David Martin – Creative Industries Skills Manager, Skills Development Scotland

Philip McGuinness  – Scottish Funding Council 

Apologies

Brian Coane – The Leith Agency / Institute of Advertising Practitioners Scotland

Andrew Dobbie – MadeBrave

Claire Forsyth – Glasgow Print Studio

Cameron Fraser – Ko Lik Animated Films

John McLeish – Museums and Galleries

Lucy Mason – Arts manager/consultant (formerly National Theatre of Scotland)

Jane Muirhead – Raise the Roof Productions

Polly Purvis - ScotlandIS

Alex Smith – XpoNorth

Toby Webster – The Modern Institute

David Eustace – Chancellor of Edinburgh Napier University (transport difficulties  en route meant he was unable to attend)

 

Jonathan Pryce, SG Director for Culture, Tourism and Major Events

Diane McLafferty, SG Deputy Director, Culture and Historic Environment

Mary McAllan, SG Director for Economic Development

Carolyn Rae, Head of Creative Industries, Screen and Media Policy

Iain Hamilton – Creative Industries Manager, Highlands and Islands Enterprise

Hugh Lightbody – CosLA

 

Previous members (replacement to be identified)

Ciara Phillips – Artist 

Items and actions

1. Welcome and introductions 

1.1 The meeting was opened by the Cabinet Secretary. Ms Hyslop welcomed everyone to the third meeting of CIAG. She thanked the City of Glasgow College for hosting the meeting and noted a number of key developments including the College’s Creative Industries Symposium and Glasgow’s bid to host Channel 4’s National HQ. 

1.2       The Cabinet Secretary noted the agenda for the meeting, which was to continue the conversations on two emerging topics from the previous meeting in September 2017:

• investment and access to finance;
• and apprenticeships and new entrants.

1.3       She noted that for her the importance of CIAG was the advice that she receives from members that she can take action on. 

1.4       She provided a short update on activities she had been involved with in relation to the creative industries. She had discussions with the Glasgow School of Art and the Royal Conservatoire of Scotland (RCS) about protecting the creative space. She wanted to give a clear articulation of the special nature of these institutions and how the specialist aspect can be nurtured. She was to meet with the Deputy First Minister to discuss this issue. She also noted that there were key developments for the sector including the Creative Industries Sector Deal and initiatives for Creative Clusters through the Industrial Strategy Challenge Fund

1.5       One member gave thanks for her work regarding the RCS, considering it to be  hugely important. 

1.6       The Co-Chair proposed that we could ask a representative from the Scottish Funding Council to speak at a future meeting.

Action:  to explore the idea of  a representative from SFC to speak on any barriers to extending the protection of creative spaces for other university based arts institutions at a future meeting.

 

2. Summary of previous meeting and matters arising

2.1       Members had no comments to the minutes from the last meeting. 

 

3. Access to finance 

3.1       The Co-Chair introduced this discussion. He noted that investment was a subject that had been identified in previous meetings. He noted that he did not think that the landscape of support was operating efficiently. He asked the group to think about specific circumstances of why they needed financial support and to bring forward these reasons. He also asked members to outline their experiences rather than simply stating that the support was not good enough. 

3.2       In discussion, the following points were made by members: 

• The tension between the arts and a pure business perspective was discussed: it was important for the creative industries to be recognised for their value both as commercial and cultural businesses.
• Money and investment was needed in Scotland to attract and retain talent; London was a significant location, also with significant networks, and a concentration of wealth, which attracted creative talent as a result of it being able to pay higher salaries and provide better opportunities.
• In working freelance, a lot of time could be spent pro-bono to assist the sector (this was also important for bringing people through the ranks).
• It was felt that when businesses reached a certain size opportunities became thin on the ground. For businesses to grow they often had to go somewhere else. This was an issue even for ones that had won multiple awards.
• Procurement was an issue that had been previously raised by the group. Key
•   issues were (1) the scoring criteria failed to give adequate or appropriate weighting to creative and cultural quality (2) having a track record of similar projects in both type and scale(this could be a significant issue where businesses were working on large scale projects that took a long transaction period to complete). The relaxation of the key phrase about tenderers giving three examples of similar types of projects to the one that they were bidding for would greatly assist the sector. This specific criteria was also making it difficult for Scottish companies to compete against larger ones from other countries,. leading to a loss of opportunities for them. There was a need to encourage valuing cultural and creative activities within the procurement process and the delivery of projects . A lack of understanding of creativity was also seen in the procurement process. It was also noted that it has become much harder to be flexible in design and architectural specifications due to EU competition rules.
• The sector was a powerhouse of activity, growing organically from the grass roots, and contributing more than a number of the key sectors. However, its character, with  micro-businesses (many employing  fewer than 10 people) and freelance workers, as well as a small number of dominant multinational companies in some parts of the sector brought huge challenges for start-up, sustainability, scale up as well as for securing contracts.
• There was a need for more business support infrastructure and talent training, as well as for more funding to enable this to happen.
• There were different experiences for applying for funding from the public sector. One member considered that application schemes were more straightforward to apply for where they were based on a business planning process.
• Match funding from other sources (e.g public sector funding requires match funding from the private sector)) was not always easy to secure. It could make a significant difference when it was available.
• Some parts of the sector, such as gaming, used co-investment to support development.
• Some felt that Joined-up collaboration was not currently considered to be undertaken well in the creative industries, and there could be better collaboration. 
• There was a need to have a dedicated business support for creative industry businesses. The nature of the creative industries was not always recognised in business training.
• There was concern expressed at the different ways that the UK and Scottish Governments defined the creative industries sector. This led to challenges in how different groups, activities and data was captured.
• Some small businesses had significant turnovers. However, some that wanted to expand further by exporting could not as they did not know how to.
• There was a need for resources to retain talent, grow sales, realise potential, develop recruitment and career pathways, better tailor university courses to industry (e.g.  businesses go into university to talk about opportunities), and for the different parts of the eco-systems of sectors to more fully understand one another and work together (these could be complex, with even large players finding them difficult to navigate) and for training of staff (the skills gap in some areas was higher than ever).It was considered that the need for  of eco-systems to work together would be a good place for the Government to facilitate.
• There was recognition that Scotland had its own profile, showcase and agenda. There was a huge awareness of Scotland as a brand by overseas countries such as China.
• There were a lot of programmes available but few people had accessed funding. One  sector, textiles, had developed a joined up approach across innovation and skills.
• For small businesses, assistance with cash flow such as short term loans would be helpful.
• The Scottish Government recognised the importance of the south of Scotland as a region and the role of the creative industries within it. It was developing the South of Scotland Economic Agency, tailored to the needs of the area, which would operate from 2020. Proactive work was being undertaken in the area to find out what stakeholders needed and wanted.  Skills, skills development and the training of apprentices were areas of concern in this geographical area.

Action point: members were encouraged to participate in the consultation and to engage in the process of setting up the Agency

• Mr Wheelhouse noted and was apologetic that he and the Scottish Government only became involved when failures took place (e.g. on management side). There was an acknowledgement by him that he would like to help businesses to grow and to make modest investments. The Group assured r Wheelhouse that he need not apologise for making suggestions that reached beyond his departmental remit.
• He noted that he was keen to work with subsectors, such as fashion and textiles, to explore ways of improving the ecosystem between manufacturing, designers, and stylists, and to support skills development, funding, innovation and collaboration. It was recognised that if there were opportunities to focus on particular subsectors, approaches identified could then be applied to other sectors.

Action point: Mr Wheelhouse to meet with textiles and fashion sector on ecosystem development, in particular in the south of Scotland, with read across to other sectors.

• There were opportunities emerging through the investment programme for childcare, such as new childcare facilities, small projects and inspiring places. These could provide smaller projects for good design for Scotland.
• The question was raised how do we know what is already available in terms of business development support? Parallels were drawn to other sectors  where individuals had technical expertise but not the experience or knowledge to run a business and be successful at it. It was key for businesses in the creative industries to have the support so that they could be commercial and competitive.
• There were complex synergies between the two areas of creativity and business. However, not everyone in the business sector could or were able to understand creativity or to trust it. The challenge of how to change these perceptions was identified. Good experience in business was considered to be lacking. Financial directors could change and transform businesses. 
• It would be helpful to recast how we look at the sector and put it at the centre of policy and civil society and change their power relationship with the creative industries. 
• The Scottish National Investment Bank, which will operate on a commercial basis from 2020, will not look like every other bank and is likely to have a different approach to risk. It could have great potential for the creative industries. The members were asked to think about how the bank could help them. It was proposed that it would be good to keep discussions open and to engage with members to gather insights into how the bank can help. Current risk assessments were seen to be a barrier to accessing finance. The question was posed what does it mean to be a high IP, light asset, business?

Action point: members of the group should consider how the Scottish National Investment Bank could help them and engage with the development of the Bank.

Action point: The Co-Chair to set up a sub group to feed into the development of the Scottish National Investment Bank, making the case for how the bank can help overcome the specific challenges creative industries face.

• One issue that caused problems for creative industries was the term “high growth” and what it means – what does “growth” look like? Longevity, dedication and things taking time were important for the creative industries but often banks struggle to value these qualities.
• The ethical or social lenders were often better at valuing creative and cultural quality and were therefore better positioned to lend in some circumstances.

 

4. Apprenticeships and new entrants 

4.1       The Co-chair introduced this topic. 

4.2       Discussion followed, with points being made as follows:

• Apprenticeships for businesses could be transformational. However, there appeared to be lots of opportunities and small take up. A key issue was how accessible they were for businesses, and the availability of shared apprenticeships. Apprenticeships were a key aspect of growth.  Many young people had valuable digital skills to bring to creative businesses, such as craft businesses, which would help to develop the skills set of a business.
• One sector that was using apprenticeships noted that there were a few challenges in setting up an apprenticeship programme. A key issue was that businesses, especially small ones, did not feel that they were able to finance apprentices as  salaries had to be funded. However, the sector was short of trained workers (e.g. as a result of an ageing workforce).
• Historic Environment Scotland had provided salary support for its apprenticeships in stonemasonry. This had been made by a public sector organisation in recognition of the need to  develop a skillbase in the wider sector. It was suggested that we could look at new models for provision and payment of costs.
• Employers had to learn how to utilise an apprentice and develop them. For shared apprenticeships businesses had to learn how to fit in with other businesses. In the Western Isles the Council had created a scheme that allowed businesses to call on apprentices. Good skills and skill based systems were key in some sectors. It was important to be able to join up the dots when opportunities arose.

 

5. AOB and date of next meeting 

5.1       A question that arose was how do we showcase ourselves in London. Ministers noted that there were Scottish Government facilities, such as Scotland House, which creative industry members could use. 

5.2       Suggestions for the subject of the next meeting included “what does success look like’, a theme that may further tease out a variety of issues including growth patterns and aspirations and the degree to which intangible creative and cultural value is or is not part of businesses.

The Co-chair asked members to reflect on this for their businesses and practices. The Secretariat will collect these together and circulate a paper. 

5.3       The question of setting up subgroups was raised (other than the one relating to the SNIB), the Co-Chair noted that the breadth of the whole group had a particular value which should not be inadvertently undermined.  He did not want to segment the energy of the group between meetings. It was suggested that thought pieces could be developed between meetings (papers had been explanatory to date) and could be reflected back through the Secretariat.

5.4       The group will meet next on 26 September 2018. As Dundee was suggested as a location of the meeting. Action: A suitable location for the meeting will be identified by Creative Industries officials.

 

ENDS.