Capitalising on creativity

Introduction

On 8 September, the Smith Institute, with the support of EMI, convened a round-table discussion on how Britain might capitalise on its creativity. Creative industries account for one-twelfth of the economy, but for Britain to become the world's creative hub, the government needs to engage seriously with issues of education, copyright and value.

DAVID ARNOLD Composer, producer and songwriter
MATTHEW EVANS Goverment whip, House of Lords
PETER JAMIESON Chairman, British Phonographic Industry
SARA JOHN Vice-president, government affairs, EMI
DEBORAH LINCOLN Head of public affairs, Pearson plc
IAN LIVINGSTONE Creative director, Eidos. Chairman, Bright Things
ARLENE McCARTHY MEP, North West Region, UK
DOMINIC McGONIGAL Director, government relations, Phonographic Performance Ltd
ANGELA MILLS-WADE Chair, Digital Content Forum and the European Publishers Council
FRAN NEVRKLA Chairman and CEO, Phonographic Performance Ltd
ERIC NICOLI Chairman, EMI group
EMMA PIKE Director-general, British Music Rights
JAMES PURNELL Minister for Creative Industries and Tourism
FEARGAL SHARKEY Music consultant
ADAM SINGER Group chief executive, MCPS-PRS Alliance Ltd
JOHN SORRELL Chairman, Commission for Architecture and the Built Environment
WILF STEVENSON (chair) Director, Smith Institute
ANTONY WALKER Chief executive of broadband stakeholder group, Intellect
ALISON WENHAM Chief executive, Association of Independent Music
JOHN WOODWARD Chief executive, UK Film Council

Wilf Stevenson I think the key questions for us to think about today are those posed by the minister for Creative Industries and Tourism in his speech to the IPPR in June, which were: "What makes Britain creative and how can we turn that creativity into industrial success?"

James Purnell In that speech, I was really trying to start a debate about what we could do to capitalise on the huge advantages that Britain has in the creative sectors. As you all know, this is an area which accounts for about one-twelfth of the economy and employs, depending on how you count them, two million people. And, more importantly, it will continue to grow as a global market, and there is no reason why Britain could not maintain or increase its share as that market grows. So when people ask "Where are the jobs in future going to come from?", these sectors are an absolutely key part of that.

I think that this is an excellent time to be having this discussion, because it is an area in which the Chancellor and the Prime Minister are very interested. It is something which the Labour Party tried to major on at the beginning of its term, with the creation of the Creative Industries Task Force, but that all got slightly lost in the myth of "Cool Britannia". Although a huge amount of work happened under the radar, it is something which the government was, I think, sensitive about engaging with in a major way. We want to return to this area now and do it seriously, but with an absolutely clear focus on the economic importance.

Having set out the policy questions, we are now looking forward to having your help in generating those answers. In saying that, I do not want to minimise in any way the huge amount of work that has gone on, perhaps under the radar of national policy, during the past few years. Across the country, whether it is in Liverpool, Gateshead or Birmingham, the creative industries have been a key source of jobs. That has been very often helped and encouraged by the RDAs, by local government and by lots of people in the sector. What we want to know now is what we can learn from that experience.

What I said in the speech to the IPPR is that I wanted to see what we could do to make Britain the world's creative hub. I do not see this as a fight between us and China, us and India or us and America. I see this as an area in which we can co-operate with them and capitalise on the advantages that we have, while remaining an open economy that attracts a wide range of people. You only need to look at the Mercury Music prize to see the importance of diversity in supporting creative energy in the UK. It is also a matter of seeing what the government can do in terms of setting the framework. We do not want to micro-manage these areas. We do not want to pick winners. What we want to do is to try and see what we can do to help set a framework.

So some questions you might like to think about are: what is it about Britain's schools that helps to generate creative people? Some people say that the only thing that John Lennon got from going to school was meeting Paul McCartney at a school fete. But there must be something that is happening in schools to explain young people's development and why it is that Britain appears to be particularly good at it. What can we do around our higher education institutions? We have many of the best places in the world to study fashion, film and the whole range of creative industries. How can we maintain and build on that? How can we help people to make the transition from excellent graduates to excellent entrepreneurs? What can we do in terms of business support? Does the business support which the government provides fit the traditional manufacturing sectors better than it fits the creative industries? I see it all as manufacturing, but is there something more that we could be doing to help people get access to business support? Is there something around venture capital and access to finance that we could be doing more effectively? What can we do to help spread design skills around the rest of industry? How can we use the strength of our creative sectors to help support the rest of our manufacturing base? What do we need to do about intellectual property? Should we be doing anything around infrastructure? When I talk to people from Europe, there seems to be a common appreciation of the fact that the UK is managing to provide successful broadband penetration, while at the same time having a digital TV market that has significant penetration but also good content creation. Are there specific issues in the film, music, design, fashion, games, exhibition, television and radio sectors that we should be addressing, but that we are not doing right now?

Eric Nicoli This is a very important time for the creative industries. It is very good to see such a range of sectors represented here today. Although we hail from different disciplines, we all create something special and valuable, something that people want, and not just people in the UK. People throughout the world want our music, games, books, films, fashion, designs and television programmes. But this is not a cultural sideshow. It is not even a glitzy shop window. Creative industries are not trivial industries just because a large proportion of what we do relates to entertainment. The creative industry has become an economic powerhouse and it is right at the hub of the knowledge economy.

I want to remind you of what Alan Greenspan, chairman of the US Federal Reserve, said at a conference earlier this year: "Over the past half-century, the increase in the value of raw materials has accounted for only a fraction of the overall growth of US gross domestic product. The rest of that growth reflects the embodiment of ideas in products and services that consumers value. This trend has, of necessity, shifted the emphasis in asset valuation from physical property to intellectual property and to the legal rights inherent in intellectual property."

When Alan Greenspan says that there is value in intellectual property, he is talking about real value, and on a huge scale. Our own creative industries minister, James Purnell, used his first speech as minister to point out that these industries are now a key economic driver. How many of his colleagues appreciate that?

The title of this discussion will be of news to some. We decided to call it "c8" with the copyright c. Copyright industries make more than 8 per cent of GDP and they are growing twice as fast as the overall economy. Copyright is the economic driver of creativity and it is copyright that creates value. So how can we capitalise on this creative renaissance, this economic and cultural explosion, and how can we retain our competitive edge globally? What about fiscal policy? Does it really support creativity - one of our strongest assets? What about the climate for investment in creative products, things which you can see and hear but cannot always put on the balance sheet? Why is it so easy to steal these things we claim are worth so much? Should we be doing more to help individual citizens and consumers to understand the shift from physical to intangible assets?

Those are questions that I hope we will explore this morning, and even if we do not find answers to them all, I would like to think that we can start a new chapter where we really do appreciate the tremendous value of the creative industries. That will require a new mindset and one in which the government could, if they wanted to, take a lead. How about a copyright office, for example, to look after UK copyright plc? Or an intellectual property tsar to promote our creative assets overseas in international negotiations?

Wilf Stevenson James said that we ought to understand better what makes Britain creative, and he alluded to the idea that our schools and higher education institutions are doing a good job. Is that a shared feeling?

Alison Wenham I have often wondered whether we would profit by trying to analyse why Britain is as creative as it is. But some things come out of the soup of life in our country. We do have tremendously able and creative people here, well supported by the industries which are represented here. Sometimes the old expression, "If it ain't broke, don't fix it", is appropriate.

John Sorrell I started off when I was 16 by going to art school. I am really a product of Britain's postwar creative education system. What I have watched throughout the past 40 years is the growth of the creative industries. That is an expression which certainly was not used when I was studying at Hornsey College of Art, but it is a fact. Particularly because of the higher education system, we now have a very mature design sector. I would say that even 20 years ago it would have been difficult to identify 30 or 40 people who ran businesses in the design sector with more than 20 people. Today, it would be easy to find 300 to 400 people who run very big design businesses, which operate internationally as well. The growth and development of what used to be art schools, but are now universities with very good design courses, has made an absolutely enormous difference.

Secondly, there is something about the physical geography of this country. We are a small island and our creative hubs are based around the cities, particularly London. We also have a very international community, so running the London Design Festival for the past three years has meant that I have gone around the world talking about this subject and listening to people. Everyone in the world would like London status in terms of design, and I think that applies to other creative areas, too. So I would like to use the word "competitive" here, because I think we are in a competitive situation, and moving forward.

I think we need to safeguard our position, without being dog in the manger about it. We need to put things - not just copyright - into place, but we also need to ensure that our education system, from primary, through secondary and tertiary education into professional practice, is an absolutely seamless journey for those kids who are going to make a contribution, in whatever way. They do not necessarily have to work in design or music or what we define as the "creative industries", but I want to grow a new generation of kids for whom creativity is absolutely essential to whatever they do in their lives. In order to do that, we need to turn the coin over and look at it from their point of view. The project that I have been running for the past five years in schools teaches kids how to be clients, and we get designers to go and work for them. Those kids get life skills, which are creative skills to do with reasoning, negotiation, communication and presentation; thinking their way through problems. But they are not necessarily going to be designers. However, if they use those skills in whatever they do, we will have a very creative country.

Lastly, I think there is a very serious cultural issue, because creativity is still not really regarded in this country with the status that it should have. Because most of the people who go into the creative industries are people who, if you like, have vocational qualifications, they are often regarded as second-class citizens. I have seen that all my life. I hope it will change in the future, but I still see it now. I think we have to try and find a way of making the word "creative" into something which everybody values as an incredibly important part of the national make-up and also a contributor to the economy.

John Woodward It seems to me that one of the key things in terms of nurturing creativity is opportunity and giving people time and space to breath. I suppose it is what my generation used to call "pissing about". In film, we are finding that there seems to be a rush to commodify creativity, and it seems to be happening too fast and sometimes too early. What seems to come out at the other end is something that is not always new and exciting.

Alongside that - I am not sure that this fits, but it goes in the same box - the thing that I have learnt during the past five or six years is that very creative people are not lazy. Actually, they work incredibly hard. They are driven people. Another thing we are finding, in film, is that we are losing very bright and creative people to non-creative, if I can use that term, disciplines. We are finding that people who have quite a strong interest in film take an early career decision to go into law, finance or sales. That is partly to do with a lack of structures, it seems to me, but I think it is also to do with the lack of space. So I guess I am making a plea for space - an area where people can feel free to experiment and play around. It doesn't seem to exist any more.

Ian Livingstone I think we should happily accept that we are very good at creativity. That has been the position since time immemorial, in art, poetry and literature. Nowadays it is music, fashion, film, design and games. What we have not been very good at doing is capitalising on that creativity. From my own perspective, investors and innovators tend not to understand each other. I remember when we launched Games Workshop back in the 1970s. We went to the bank manager and said: "Look, we have a great new game. You are a hero, a wizard and you will have these fantastic adventures." It was like an Alsatian watching television. You saw the glaze wash over his confused face. As a result, we were forced to sleep in a van for three months while building up the company, because we had no finance.

Creative people do not get the backing they deserve. Investment is one problem and valuation is another. The accountants cannot get their heads around the intellectual property that we create. You can walk into a fund manager's office and say: "Great building this. How much do you think this is worth? £10m? £20m?" He would say: "£10m." "Can you put that on your balance sheet?" "Yes, we can."

But when you ask how much Lara Croft is worth, for example, even though it's probably the same, you can't put it on a balance sheet. What also saddens me in the games industry is that American companies in particular see the real value of our creative talent and intellectual property and are buying it up. Our government is happy to encourage this so-called inward investment because it keeps people in jobs. For now, perhaps. But the new owners can take their newly acquired intellectual property and transfer its development to anywhere in the world. Then it has gone. The long-term earnings and profit are gone and those government-cherished jobs are gone too. We are a nation of creatives and inventors, and we must reap the rewards ourselves.

Fran Nevrkla I would like to refer to the political aspect of this debate. While I do not doubt the minister's mindset - his warm and positive words were very encouraging and I am convinced that his priorities are genuine and that he is concerned and focused - I would say, having dealt for many years with parliamentarians of all parties, that there is an enormous gulf between the tiny handful of politicians who genuinely understand, and have the capacity and goodwill to support, help and see the national- interest aspect of this whole problem, and the rest who do not. I have so often been made to feel that I am being listened to under sufferance and that people are going through the motions. You can see the glazed look in their eyes. I have to say that the same applies in Brussels; unfortunately, we have an enormous job to do there.

Politicians have to get it purely in terms of self-interest, both for their political survival, but also because they have, in my view, an absolute duty to us, as a nation, to maintain our future prosperity, health and well-being. This is a great country and it has been so for centuries, and perhaps it is getting even more exciting, creative, richer and vibrant. We have a fantastic future before us, but only if we don't screw it up. We have every right to look to the politicians to get this crucial area right.

Matthew Evans When I worked at Faber, we published a book called Creative Britain which was pilloried. If you look at the back it includes many statistics. They were made up by me and the copy editor at Faber to get the book published. How can you identify an important area which you want government to support when there are no statistics?

Look at the papers over the past couple of weeks: the Financial Times says: "Service jobs rise as manual work declines", with the statistic that more than half the jobs in manufacturing have been lost since 1997. Yet nowhere is there a mention of the "new economy", and the jobs created since 1997 in the creative-owned cultural sectors.

I think the people who have been absolutely brilliant in pushing this agenda have been the chief executives in our big cities, such as Birmingham, Manchester and Gateshead, because they understand how important the creative industries are, particularly for kids. If you go and see what they have done, it is absolutely brilliant.

Antony Walker I absolutely support that position. But I think we have to take on board some of the responsibility for that because I do not think, as a group of converging industries, we have been particularly effective at communicating our vision of the new economy of the future to the politicians. I confirm that the statistics do not exist. We produced a report recently on convergence. We were really scraping the barrel to find some statistics that even describe the size and scale of the sector, never mind its potential for growth.

Angela Mills-Wade A number of us sitting around this table belong to a group in Brussels called the Creative and Media Business Alliance, and part of our task has been to try and map, chart and collect statistics - which has proved impossible. A second problem is that, having collected some basic data, the politicians then say: "Why should we help a sector who are making all this money? Why on earth do they want to strengthen the copyright framework?" It is really difficult.

Peter Jamieson I want to talk about the original theme of whether the government, industry or whatever should be nurturing creativity, or should they be nurturing post-creativity? I think it is just possible that, in the Sixties, people emerging from the education system in the musical area found jobs, found recording contracts, found opportunities and had aspirations. They felt that what they did at school led them forward in their musical career. However, since then, there has been a gradual reversal of musical opportunities, which has led to a diminishment in creativity, because there was nowhere for the emerging musician to go; there were not enough concert halls, not enough gig opportunities and not enough opportunity actually to make a living out of it. Perhaps people felt that being a musician was something you would like to do as a hobby but, as sure as hell, you had to be an accountant as well otherwise you had no chance in the world outside. That position, in my view, has gradually disappeared, and we now have pockets of hope. I am quite encouraged. I think we have a real opportunity to turn back these trends and restore the ability of creative young people to find their way within the creative industries world rather than reverting to something else.

Feargal Sharkey I think creativity is down to two elements. One is motivation: do you want to be creative in the first place? I think that situation has changed radically, though possibly not as positively as we would all like to think. Yesterday, I witnessed a video of a 16-year-old boy taking his GCSE in music and playing the guitar. With my 25 years of experience, I judged him to be an exceedingly talented young man, yet he got a C because the written element of his exam was based upon classical music, which he had no interest in. I suspect that in the next 12 months he will have a recording contract. So there are still things to be done out there.

The second point is more difficult, and is summed up by a conversation I had about six months ago with someone who is very influential in this world, who said, in essence: "Oh, creativity, yes . . . that fluffy stuff." That attitude still exists and I think all of us have a responsibility to change that mindset. We all know from present experience that that attitude is reflected subconsciously or otherwise through the government's finance structure. I have spent quite a lot of time in the past six months looking at things such as Regional Development Agencies. There are extraordinary amounts of money available and yet, in a recent conversation with a chief executive of an RDA, the question asked was: "Do we need to do this or would it be nice to do it?" I bet you can guess what the answer was.

I think there has been some leeway in terms of more support and money being available, but I am not sure that we, in the creative industries, are ensuring that it is being spent in the most supportive and productive long-term way. I think all of us share some responsibility and I think it is our job to ensure that we focus the government's attention on it to bring about some action.

David Arnold I think people have always been creative and talented in this country. People who are creative are extraordinarily passionate about it. They are driven and committed. I think, perhaps, that they are people who might have gone off into other areas: Tony Blair had a guitar. If at some point he'd thought he could have said: "Thank you, Wembley, and goodnight", then maybe history would have taken a different course.

I visit schools and colleges and talk about the reality of what it is like to be working in this industry. They are invariably packed to the gills with people who are committed to the idea of becoming a musician or a creative person in a way that those who want to be a dentist or a baker are not. I am not being disparaging about those industries. However, in the creative industries, all we have to do is to make sure that we do not get in their way.

Arlene McCarthy I feel, in the absence of James Purnell, that I have to take up the issue of whether politicians understand the needs of the creative industries. I have got involved with the creative industries in two ways. I was confronted with the Copyright Directive in the European Parliament's legal affairs committee. The lobbying was very strong - as you would expect of a sector that is due to grow within the European economy by 5.8 per cent and to a value of 350 billion euros by 2008 - helping to fulfil the objectives of the Lisbon Agenda. Yet the creative industries are not foremost in the minds of politicians. I would say that that is also the position in countries other than the UK. The creative industry is not considered to be an "industry". It is seen to be about culture, the arts, and sociocultural activities, but no one sees it as an industry in its own right. When I went to Rome to talk to the Italian minister about what we were going to do to deliver a better regulatory environment for this industry, I found that responsibility for this industry was divided between many different government departments, just as it is in the UK. But neither is it helpful to have the creative industries ghettoised into one particular department with an inadequate understanding of these issues and of the environments which are needed to grow and nurture the industry.

The second issue for me has been watching the transformation of my own region. I do not believe that the cultural and creative industries should be focused on London. I think there is tremendous potential in the regions. I have seen Manchester transform its urban derelict sites. It is now one of Europe's leading cities in terms of cultural industries. The investment was a partnership between local authorities and central government and that funding enabled massive change and improvement such that culture is now seen as a driver for regeneration. Liverpool, as European Capital of Culture 2008, is undergoing the same transformation. Yet, we still come up against the old traditional mentality of the CBI believing that it is manufacturing that will drive the region. I constantly feel frustrated that we are not recognising the value of the industries on our front doorstep.

I have recently been negotiating the Enforcement Directive - which is about how we can get better enforcement for intellectual property rights across the EU. I could not get any government to get out of the mindset of not wanting to interfere with broadband penetration and not wanting to interfere with the roll-out of ICT. That, to me, is the wrong way round. I think we have to face up to the challenge that to have a successful ICT industry, we have to have content protection.

You are not seen as an industry in crisis. You are seen as a prosperous industry. You do not need handouts. In fact, what you do need is a co-ordinated and coherent approach by governments, but I do not know whether that should translate into the establishment of an intellectual property tsar. In any case, I would not call it an "intellectual property tsar" because the term "intellectual property" is not popular and is misunderstood. A US academic who was assisting me on a paper said: "You know, we have the same issue with intellectual property in America. The Republicans don't like it because it is intellectual, and the Democrats don't like it because of the word 'property'."

Deborah Lincoln I was previously a special adviser in the DTI, working for Patricia Hewitt. I know that she took, and still takes, this subject extremely seriously, but I think the point is well made. The word "ghetto" has been mentioned in relation to responsibility for this sector lying within the Department for Culture, Media and Sport or, perhaps, between it and the DTI. And yet the issues are much broader, involving the Department for Education and Skills, for example; in fact, going right across government. So when we are talking about creativity in education with the DfES, we need mechanisms to ensure that the issues and learning are passed across the departments. And considering the economic value of the creative industries, and we are talking about huge sums of money here, the Treasury ought to be concerned about this ghetto effect, too.

You mentioned intellectual property and copyright not being very attractive concepts, but, in the end, that is what it has to be about. The authors and journalists require from us that their creativity is protected, otherwise how can they move forward and earn a living? For government it can be easier to talk about "opening up" and "everybody sharing in creativity", without necessarily recognising or acknowledging what effect that has in terms of an individual's creativity, which is handed out to others without recognition of ownership or payment for that creativity.

We need to vigorously protect the content owners. We need to find ways to educate government to understand the issues around copyright and intellectual property at that level. After all, without authors, journalists, artists and the incentive which the protection of their intellectual property provides, there would be no creative content to share. And we need to encourage government to use its undoubted strength to support the opening up of emerging markets while protecting that intellectual property.

Wilf Stevenson Can we begin to consider what we can offer the government as a group? We do need to offer something more than simply a critique of where we are if we are to be successful with this project.

Emma Pike We are very pleased that the Cox Review is happening, because that is all about how creativity adds value to manufacturing and all kinds of other industries. For music in particular, we are seeing that it is really driving quite a lot of the digital economy. We are seeing ISPs and mobile companies offering better and better music services to attract consumers to their broadband offers or to their networks. That kind of value is very difficult to quantify but it is, clearly, very significant. So creativity does have an enormous value and, obviously, the government is going to want to make sure that that continues.

Building on from what David said about creativity and teaching creative people, I do not know how you teach creativity - or that you necessarily can. What you can do, and what government can definitely do, is lend creative people the skills that they need in order to turn their creativity into profit. We always bang on about copyright but learning how to utilise it is probably the one key skill that creative people need to have if they are going to succeed.

Various initiatives are going on already in this area. The Patent Office has a project called the Think Kit, which teaches children in schools about intellectual property, and there are various other organisations, including British Music Rights, which have programmes running in schools. It would be very good if the government could formalise copyright teaching more in this way.

Adam Singer I think any of us who have been in the creative industries are here in spite of schools, not because of them. I think what helps induce us and lure us into the creative industries is the fact that we have an exceptionally good system in the UK that always provides us with either access to creativity in terms of listening or in terms of providing us with role models, be it musicians, actors or business managers within television. A huge fecundity of role models is really important.

I think that one of the reasons why we are particularly creative in this country is because we speak English and can benefit from the whole of English language creativity. That is probably not a popular thing to say, but I think it is true. It is also about us creating as much diversity as possible, and that is where the fact that we speak English has been really helpful, because there has been a huge diversity of input, and it is input which stimulates.

The next issue is that government has been exceptionally good over the years in terms of creating ecologies which sustain large amounts of critical mass of talent. The 19th century had a very diverse newspaper industry, which the government allowed to flourish, as opposed to other nations, which did not allow similar industries to flourish. In the 20th century, the single event which has done more to help sustain and fuel British creativity than anything else was probably the creation of the BBC and the British broadcasting industry, which provided a nervous system that spread that creativity. Both of those were the result of government actions.

The arrival of Channel 4 was another spur to help provide more of a creative community. Clearly, the huge number of independent local radio stations also helped to drive music. So governments have been very good at creating these large mulches, out of which these things grow. I think we need to encourage that, since the creativity driven by broadcasts which we have known for the past 70 to 80 years is coming to an end, replaced by the internet and various other forms of dissemination. It is time to start looking for what the new roles are and how government creates a new Reithian intervention, which drives forward new kinds of highly interactive content for broadband and games. The other important thing is that government has a really important role in balancing out the needs of the public interest against the needs of the vested interests. Speaking as somebody who is employed by a vested interest, I firmly believe that musical copyright should exist with the composer in perpetuity. On the other hand, it is important for government to strike the right balance between the needs of that interest and the needs of creating a flourishing creative community. One of the things we have to differentiate between is "strengthening" copyright, as opposed to "stretching" copyright.

Government needs to focus on those semantics very carefully, because what we need as an industry is the most powerful quantity of diversity and an ability to quote, which drives things forward. That is absolutely possible, while at the same time balancing that out to sustain investment and make sure we have careers that attract people. Government needs to question occasionally what it is that we are asking for.

Dominic McGonigal We have fantastic creative industries here, but we cannot rest on our laurels. The US is doing a huge amount. Consider again what Alan Greenspan said. Those ideas will feed into fiscal and economic policy.

On the other side of the world, China is the new emerging economy and it has chosen to bring in copyright legislation, which is being strengthened at the moment. This year alone, they have brought in two new pieces of copyright legislation and that is no accident, because they see that as part of their economic boom. India, likewise. India is famous for re-engineering and putting two fingers up to copyright and intellectual property rights. This year they have brought in patent legislation for pure self- interest. They have worked out that it is in their interest to have patent legislation and that they will benefit from that.

I think there is an air of complacency within government. Their attitude is: "We have always been good in this area, so what is the problem? We should let them carry on as they have been very successful." I think that Arlene is absolutely right in that we have not asked for enough, and we still do not ask for very much, but what we do ask for is absolutely critical. Most of the time we are saying to the government, "Hands off. We can do this. We want to have industry solutions to digital rights management; we want to have industry solutions to all of these commercial issues", but what we absolutely need from government is protection of the core value of what we are producing, and that is copyright. They miss that. If there is going to be a real change, I think it needs to be a substantial structural change in the way in which government looks at this whole sector. There needs to be a very senior-level focus on the creative industries and copyright has to have a serious focus within government, which can feed into education, fiscal policy and overseas trade policy.

I would like to put two things on the table. I would like to see a creative industries tsar and a copyright office, in charge of promoting the interests of UK copyright.

Eric Nicoli Arlene has made a really important point about why we need some kind of creative industries captain and champion. Dominic made the point that we need a co-ordinated voice for the creative industries. When we consider the constituencies we say we need to influence, size is absolutely imperative, because we are not operating in isolation. There are other industries and enormous companies, which spend their lives lobbying, and politicians have to prioritise. I went to a CBI President's dinner recently, and about a hundred people were present. I was the only representative of not just the creative industries in the narrow sense: there was no one from media or entertainment, no one who was not from heavy industry and the utilities. We have done some brilliant lobbying efforts individually and collectively, but as creative industries we account for enough to make a real difference, provided we are regarded as a collective voice.

Arlene McCarthy It is a matter of making a connection between the jobs and the growth. This is not just about culture, but it is central to achieving the ICT agenda. The whole point - not just within the UK but within Europe - is that if you do not have content and delivery of content you will not get jobs and growth.

Antony Walker I dispute the term "added value", and do the creative industries just provide added value to those industries? I am not sure that it is "added value", but the value. It is the lifeblood which flows through the whole part of that sector and industry. Without the creative industries and without the ability to realise and monetise value from products and services, actually the whole thing suffocates. It does not have that flow-through. I am a bit nervous when we talk about having a tsar for the creative industries because this market is changing so fast. Convergence is a boring term, but it is really happening and it is turning the world on its head at the moment.

I absolutely agree with Adam's point that we are coming to the end of the broadcast and television era, and are moving into an entirely new period which is about convergence. That is putting real pressure on the way in which governments are organised and structured and the way in which we approach regulations, and it puts also a real pressure on the way in which we organise ourselves as an industry. I would argue that what we need is a convergence tsar, someone who really looks at the big picture, which is absolutely core to the knowledge economy. That is where we need to be coming from. We need to strengthen that coalition and broaden it, because one without the other does not work.

Wilf Stevenson It is interesting that, uniquely across the industrial sectors, this government has created a regulatory organisation in advance of there being any industrial grouping in the areas it regulates. Ofcom is an integrated regulator for a disaggregated industry.

Sara John We are lacking influence in the right places. I am interested in how we change things. Perhaps one suggestion might be to sit down with the key driver of economic policy research at the Treasury and try to work out some way by which we can, effectively, measure our sector and really make the government understand the importance of the sector.

At present the government is looking at intellectual property. The key factor from our point of view about intellectual property is its value. I do not think the government is looking at that. I think they are looking at what it allows you to do, what it allows the consumers to do and what it does not allow the consumers to do.

I think they should be looking at how to value it. If you look at media companies - and I am thinking of the US - they have a better feel, be it across the government or in their financial institutions as to how to value intellectual property. We need to address that problem because we are undervalued on every score. Intellectual property is undervalued and the "creative" tag undervalues us.

I agree completely that a tsar would have a difficult job, because a tsar tends to be outside the structures of government and perched on the top as a kind of Aunt Sally for the tabloid press to launch things at. What you need is a better structure within government for championing the industry and for really valuing it across the board.

Alison Wenham I recall that John Sorrell and I were part of a very similar group to this a few years ago, chaired by Michael Bichard, looking at how we, as industries under the convergence umbrella, could help the government develop policies to support our young, creative entrepreneurs. It quietly sank below the waterline. Have you ever been to the Small Business Service? Was it the type of place where you would like to hang out? This is the basic problem - that there is a form of dyslexia in the DTI, who think the job has been done, without the need to audit where that money has gone to.

We need a financial make-over in this country, so the government can realise intangible assets are not a dirty word and that intellectual property is the engine room of UK plc going forward. The Treasury must realise that - although we do not make things which they can see, measure, weigh and bank against - we do create value.

I have set up meetings with film producers who have successful track records and publishers who, every time they want to go into a new venture, have had to put up their houses as security. Why should we have to put our houses up as security every time we want to grow UK plc, to create jobs, to create investment and to create money for people to spend at Tescos? We must kick out this idea of us being a pampered and fluffy community.

Angela Mills-Wade I agree that it has to be dealt with in the heart of government and not by having somebody on top. The point is that if you nominate somebody as a creative whatever, then the government will think: "OK, we have done that. That is being looked after."

Peter Jamieson Let me say that British music has the potential to sell all over the world. I have lived and worked in many very weak intellectual property regimes outside of this country. Unfortunately the EU is regarded as a pussycat in terms of its influence globally in the realm of copyright. So I would like our government to champion copyright and all forms of intellectual property within the EU in a stronger way than they do, because unless we are leading that charge in the EU, our influence further afield is completely negligible and we also weaken the EU's approach to copyright.

Adam Singer I do think that a copyright office is a terrific idea, because we need some kind of central body which gets across a very simple message.

The point which the government is not getting hold of is that in the future, in a converged world, there is no difference between music and this coffee cup, in the sense that both are transmitted as ones and zeros and both were the subset of an act of design.

Where you actually manufacture something is increasingly going to be irrelevant, because this is just an act of adding value to an original piece of design, which is actually a piece of copyright.

The nature of the converged world is that everything becomes a subset of copyright. The great news for us sitting around this table is that the world is coming to us rather than us going to them, because the world is having to move because the real value is in the design, not the manufacture. So a copyright office, which can proselytise this message and increase the value of copyright by getting the government to think about the values in design while realising that manufacture is just a subset of that, would be highly beneficial.

John Woodward A copyright office does not feel entirely right for me, mainly because what we have here is a huge structural problem. Apart from copyright and direct intellectual property issues, there are issues to do with skills, education and international co-operation. Many of us in this room separately spend a lot of time trying to connect across government, and it is difficult. But I do not think we should beat ourselves up about this. The reality is that we all know what the issues are. We have spent an hour-and-a-half rehearsing them and no one has said anything that we have not already said to each other a dozen times before, often in government meeting rooms. The problems we have are nobody's fault; they are simply structural.

The primary drivers in government, as we know, are No 10 and the Treasury, who are not prioritising this debate. We have the ownership of copyright as a policy issue in the DTI. We had the minister here today who is in charge of culture at DCMS. We also have education as a big issue, but that comes under the DfES. We have regional development agencies, which Feargal was talking about, and which go back to the Office of the Deputy Prime Minister.

So, until the government sorts out a structure which allows creativity to be considered across the piece, we will make limited progress, and in matters of detail we may well go round in circles.

John Sorrell I think that the government needs to establish the climate for the creative industries sector, and the only way to do that is by producing the statistics. I think the Treasury should take the lead in doing an annual rigorous statistical survey that puts what we are doing in the world context, so that we can see that we are doing very well in the league table. If this meeting was about the financial services sector, and there was a discussion about the possibility that we might drop down from the top, or very near the top, to maybe number six or eight because of international competition during the next 15 years, everyone would be getting very worried. That is the kind of situation we could face in this sector. We need to be able to see very clearly how we are doing, and make it clear that at the moment we are doing pretty well but that we need to maintain that.

The second suggestion is that I think we need to understand and recognise the difference between the creative industries sector and creativity in individuals and businesses, which we do not define as being in the creative industries sector.

I am very worried about the use of the word "creative". I see adds in the papers for "creatives". What it means is that everyone else is not. I think we need, absolutely, to understand the difference.

My third action point is about education. We have to have a real strategy and then real actions to follow. I am not necessarily talking about teaching creativity because I think it is in one's lifeblood.

We must engender a creative community from four years of age, right through primary, secondary and tertiary education, but we are not doing that at the moment. I believe that is where the future lies. I think a real strategy in that area could be the most important thing that comes out of this discussion.

Eric Nicoli It is really easy to get a consensus on what the problems are and really hard to get a consensus on what the solution is. Everyone in this room has been involved in a failed initiative with government. If you think about why, it is first of all because we need to think carefully about where creative industries begin and end, because until we do we are really easy to divide and rule.

Second, it is very clear that individually we are struggling to get the message home, but collectively we stand a chance: in combination we are really powerful. Third, we have the problem that the political agenda is, on average, about two years out in terms of the time horizon because of elections and so on, yet we are here trying to develop something for the longer term. So I agree, not least because prime ministers and chancellors seem to last a bit longer than the average minister, that we should go after them and be relentless in our pursuit of our objectives.

It is undeniable that these industries are extremely important. Unfortunately, we're not yet a priority. If we were, we would not be having this conversation.

Wilf Stevenson Thank you all very much indeed.

This article first appeared in the 10 October 2005 issue of the New Statesman, A very corporate loss of nerve