East London - a Hot Spot for Creative Companies
From graphic design to IT and computer services, advertising to architecture, the creative sector is broad and diverse and enjoys close economic relationships with other areas of business such as tourism, hospitality, heritage and sport.
The creative industries' jobs market in the UK is booming and has risen by an average of 2 per cent per annum since 1997 (compared with 1 per cent for the whole economy over this period), and now accounts for over 1 million jobs. The Government has estimated that there are around 120,700 creative industry businesses, accounting for £60 billion Gross Added Value (GVA) and representing 7.3 per cent of the UK. In addition, the sector employs a highly qualified workforce with 49 per cent of employees having a degree level qualification, compared to an economy wide average of 31 per cent.
London lies at the heart of this sector and accounts for a third of all the UK's creative industries employment. The capital is a melting pot of innovative industries and businesses, and arguably has the highest concentration of creative firms of any city or region in the world.
Examples of this include:
- the music industry, which accounts for 20 per cent of creative jobs in the capital, has two thirds of all UK jobs in the industry, and is a strong export earner particularly in post-production visual effects;
- film and television, with London being one of the world's production capital's and the second biggest exporter in terms of television production sales; and
- fashion, with the UK capital being a fashion centre and major source of industry talent.
The sector is vital to London's economy and is estimated at £221 billion per annum, behind only business and financial services. Creative industries employ some 553,400 people - 12 per cent of the capital's workers - and this has risen consistently over the past 14 years.
Analysis of this increase has also shown a clear link with the financial and business sector, which has continued to flourish. With high earners typically based in the capital, this has led to increased spending on creative products and services. London Thames Gateway has become an increasingly popular choice for businesses working in creative industries, offering a low cost, well-connected location where firms can thrive. The region now accounts for 21 per cent of creative workforce jobs in London and 24 per cent of creative businesses, and is a growing contributor to the city's creative sector as well as bringing in significant inward investment from overseas businesses. Highlights include fashion, with 39 per cent of London firms now based in London Thames Gateway; publishing, with 29 per cent of London jobs being found in the region; and computer games, software and electronic publishing, with 30 per cent of the capital's businesses operating here.
In attracting even more creative businesses to London Thames Gateway there is a focus on ‘creative hubs' that have already evolved and grown across the region. Creative businesses favour being located close to similar companies, seeing the benefit of face to face contact with suppliers and customers, access to skilled labour, suitable properties in terms of cost and size, and the potential to share premises and technology.
London Thames Gateway's creative heartland is not hard to spot and the area around Shoreditch, Aldgate and Old Street is perhaps the most well known. Sport Magazine is one of the many creative enterprises that have moved into the area in recent years. Sport is a popular free print title that is distributed to commuters outside tube stations all over London. The company, founded in September 2006, has achieved a remarkable level of success and was awarded the ‘Launch of the Year' title at the prestigious 2007 British Society of Magazine Editors Awards. Now the UK's largest sport magazine, it has a circulation figure of close to 320,000 every month.
Alongside Sport is Last FM, perhaps the best example of a 21st century creative business that has been attracted to the region. Last FM, based in Old Street, is a social music website and internet radio station, set up in 2002 and now has over 21 million active users every month and is popular in over 200 countries. The site allows users to store their favourite music and then connect with other listeners with similar music tastes in a unique system known as ‘scrobbling'. Users can then be connected to retail sites such as Amazon to purchase their music.
In May 2007, Last FM made history when they were a part of the largest ever UK web acquisition - it was bought by CBS Corporation for a record fee of £140 million. Following the acquisition, Last FM has been able to grow not only in the UK and the rest of Europe, but has also managed to break into the American market.
Last FM is a flagship company among the hub of firms working in internet based solutions in the Old Street area. Nicknamed ‘silicon roundabout', and with its own community networking website of the same name, this has become a location of choice for ‘start-up' firms who can make the most of the flourishing supply chain and skills base. Companies include Schulze & Webb, an electronic creative design consultancy, that works hands-on with companies to research and develop their technologies. Their clients include the BBC for whom they have developed a social radio network. tinker.it, is another example; an Italian-run interactive consultancy that also manufactures bespoke IT tools and technologies to the creative sector. The strong sense of community amongst businesses in the area along with opportunities to find new businesses and suppliers, are proving a powerful attractant to likeminded and growing creative firms.
The continuing growth of music orientated firms means that a similar ‘hub' feel has developed in this part of the creative sector in London Thames Gateway. These businesses include innovators such as Play Louder, who launched the world's first Music Service Provider (MSP) - a broadband, internet service provider that gives access to music content with broadband internet access, and 7 Digital, a leading digital media delivery company, catering for record companies, artists, film and TV companies. These industry leaders now sit alongside more traditional music providers such as Rough Trade, who opened a new flagship record store on Brick Lane last year, Pinnacle, a major CD, DVD and computer software on-line retailer and distributor, and Stones Throw an internationally renowned record company who have their UK offices in Shoreditch.
Measuring the growth of a particular business sector in a region is often best assessed by the opportunities available to learn and study the skills needed to work in the industry. In London Thames Gateway this is beginning to take off with the upcoming relocation of the SAE Institute to Kingsland Road in Hackney. SAE is the world's largest worldwide private college for Audio Engineering, Creative Media and Digital Film Training providing training courses as well as academic degree courses. SAE's newly built base includes seven levels offering the best technology possible within close proximity to the plethora of creative companies based in Old Street. It will also be the first time that a specific games development course will be offered in this area.
Creative industries are thriving in London Thames Gateway and are an integral part of the region's strong business base. Gateway to London is looking forward to welcoming more medium and large sized creative companies to the area and augmenting the work of its partners in strengthening the hubs and networks that now exist in this fascinating, diverse and economically vital business area.
