Profile of Birminghams Digital and Creative Sector

Profile of Birminghams Digital and Creative Sector

The Digital and Creative Sector

Introduction This profile is one of a suite of seven covering key High Growth Sectors in Birmingham. The profiles were compiled in 2011 and go beyond analysis of the available datasets, to enable us to understand how the sectors support the local economy now, and how we can develop their potential for the future. This has been achieved by integrating data analysis with intelligence from sector experts drawn from businesses, research institutions and networks. Each of the profiles presents statistical information, along with case studies, an analysis of the sector today, and future challenges and opportunities. The seven sectors are: Business and Professional Services Financial Services Creative, Media and Digital Medical Technology Transport Technologies Low Carbon Advanced Manufacturing

5,800+
firms in the digital and creative industries

34,000+
employed in the sector

Sector overview Digital and creative has become one of the key sectors of the modern economy. Its products saturate contemporary life: watching television, going to the cinema, reading newspapers, listening to music, playing computer games or socialising online occupy many of our waking hours. In the first decade of this century these industries have had their power and reach hugely amplified by digital Major sub-sectors technology. Publishing and printing: books, Britain is recognised as a world leader in newspapers and online many aspects of the digital and creative Radio, television and film: sector, and Birmingham is itself home to production and broadcast a wide variety of digital and creative businesses a distant echo of the city of Software development, including a thousand trades of Victorian times. video games This is a highly varied sector, including Advertising design, advertising, video games, film, and publishing yet the industries have certain things in common. They earn their profits from the creative skills of their workforce and the generation of intellectual property. Definitions of the sector vary, but this profile uses one based on that used by the government, with the addition

13%
employment growth between 2005 and 2010

Profile of Birminghams Digital and Creative Sector

of the jewellery trade, a historic creative strength of the citys economy. Birmingham also has a strong position in radio and TV, newspapers, music publishing, arts facilities and advertising. This is a fast-moving sector. Its business models change rapidly. Although the spread of the internet and other digital technologies have revolutionised working practices, creating new products, companies and markets, it has also overturned established business practices. The ease with which digital goods can be produced and distributed means that many people do not expect to pay much (if anything) for creative content. As a result, firms have struggled to ensure that they are paid for their intellectual property. Yet it is still a sector that is viewed as having real potential for the future. The government has identified it as a possibly important way of rebalancing the economy away from an over-dependence on financial services.

Made in Birmingham - Orion Media Orion Media owns five radio stations across the Midlands. Its flagship station is brmb in Birmingham, which broadcasts a mix of chart and classic hits, talk shows, live football commentary and news bulletins. The company employs around 130 staff as well as many freelancers, and has a turnover of 15-20m. Orion Media and BRMB are both based in Brindleyplace, in the heart of Birmingham. Orions boss since 2009, Phil Riley, was the original founder of the company. He began his career in radio as a trainee at brmb in 1980, before rising through the industry to become chief executive of Chrysalis Radio in London. Riley feels the chain can compete against national players, even in a radio market as competitive as Birminghams, by connecting with the citys and the stations heritage. brmb is now the last big local station in the city.

"Birmingham is a much misunderstood city. It's a great place to live, work, relax and enjoy. It has great culture and entertainment. Phil Riley, Orion Media

Brindleyplace, home of Orion Media

Riley has sought to make brmb a distinctive local station, one which draws on the citys rich past as well as its vibrant present. The stations strapline, Made in Birmingham, was taken from the title of a 2009 exhibition about Matthew Boulton, a pioneering Birmingham industrialist, to embody this pride in the citys heritage.

Prospects for future growth Profits and jobs in the sector have undoubtedly been squeezed in recent years by technological upheaval and greater foreign competition. The recession has exacerbated these trends. However, considerable opportunities remain. PWC estimate that after a decline of 3.8 per cent in 2009, the UKs entertainment and media market will have grown modestly in 2010 before accelerating from 2012 onwards. Over the years from 2010 to 2014 growth is expected to average 3.7 per cent a year. The UK will remain the worlds fifth-largest national market, behind the

Profile of Birminghams Digital and Creative Sector

US, Japan, China and Germany. The fastest growing sectors in Britain are predicted to be internet advertising, internet access, video games and filmed entertainment, all of which are thought likely to grow at 5 per cent a year or more over 2010-14. These are areas in which digital infrastructure has opened up new possibilities, such as the growth in mobile applications, or apps.

The wider value of the sector The sectors influence stretches further than the economic value of its own businesses. It sits at the centre of a web of connections with other industrial sectors, and is a source of innovation for the wider economy, particularly through design, branding and advertising. It also has an important role to play in urban regeneration, place-making and community cohesion. Academics have argued that, in the modern knowledge economy, place is an increasingly important factor in attracting inward investment. Knowledge workers have a wide choice of places to live, the argument goes, so they look for creative, tolerant, buzzy places in which they feel comfortable and which provide them with stimulation. The creative industries, through culture, entertainment, media and festivals are key elements in such placemaking.

890m+
contribution to the citys economy

61
firms are headquartered in the city

The business base 2010 data shows that the digital and creative industries comprise a sizeable sector in Birmingham: The sector employs 34,300 people, some seven per cent of the citys workforce. Employment in the sector has grown by 13 per cent since 2005 There are 5,850 digital and creative businesses in the city, very slightly higher than the 2005 figure (5,797). This represents 9 per cent of the citys firm base Gross Value Added in the sector amounts to just over 890m. 94 per cent of creative firms in the city are micro-businesses, employing fewer than ten people

The credit crunch and recession have certainly posed challenges for the sector. However, creative businesses in Birmingham are cautiously optimistic about the future. There is a sense that the sector in the city is still growing, especially among the more technology- and digitally-focused firms.

Profile of Birminghams Digital and Creative Sector

The ten largest firms in the sector, by employment BBC Birmingham Cable Ltd Trinity Mirror PLC Dealer Computer Services Inc Delcam PLC Gala Electric Casinos Ltd ITV Central Ltd Yell Group PLC Specialist Computer Holdings Ltd Cookson Precious Metals Ltd 650 600 559 344 300 295 269 240 203 192

The largest firms in Birminghams digital and creative sector reflect the variation in the sector itself. They include representatives from telecommunications (Birmingham Cable), software (Delcam), business listings (Yell) and jewellery suppliers (Cookson Precious Metals). The BBC is the largest employer in the sector. It maintains a significant presence in the city at its Mailbox headquarters. The long-running radio soap The Archers is produced in Birmingham, as is the daytime BBC1 soap Doctors. BBC1s popular evening drama series Hustle is also filmed in Birmingham.

Digital Birmingham Digital Birmingham is a partnership of 40 organisations, including the BBC, Microsoft, BT, the Chamber of Commerce, and the Birmingham universities. It aims to encourage investment in digital projects and the uptake of broadband across the city to generate economic and sustainable growth, promote greater social inclusion, and improve the quality of life. Digital Birmingham has an influencing and brokering role, helping SMEs in particular to collaborate and develop innovative projects, and to find sources of funding to carry out such work. It also helps shape key city council strategies, such as those for social media and open data, in ways that create opportunities for digital businesses. It is currently working on plans to establish ultra-fast broadband services, firstly in Digbeth, the Jewellery Quarter and Eastside, and then across the core city. It is also seeking to encourage 4G wireless services across the city. The current funding climate is challenging, but Digital Birmingham is focusing on using digital technology to encourage business growth; improve sustainability by, for example, using technology to reduce the need for travel; protect the vulnerable through digital delivery of services. It also intends to share the experience it has gained with other local authorities in the new Greater Birmingham Local Enterprise Partnership.

Profile of Birminghams Digital and Creative Sector

Strong identity, strong sense of place The sector has helped to improve Birminghams image. The big cultural buildings of the city centre, such as Symphony Hall, the Birmingham Rep and the International Convention Centre, have raised the profile of cultural activity in the city. The Barber Institute of Fine Arts on the campus of the University of Birmingham is home to important works by the likes of Botticelli, Bellini, Drer, Van Dyck, Rembrandt, Manet and Degas. The Birmingham Art Gallery has the largest collection of PreRaphaelite works in the world, as well as Old Masters and Impressionists. Digital and creative businesses, meanwhile, are found across the city, but tend to concentrate in certain central neighbourhoods. Two of these are especially notable: the Jewellery Quarter and Digbeth. The Jewellery Quarter is home not just to the citys jewellery trade around 40 per cent of UK production is still made in the Quarter but to many creative businesses as well. It is a designated conservation area with over 200 listed buildings, and has been described by English Heritage as a unique historic environment in England, which has few, if any, parallels in Europe. Rewired in the Jewellery Quarter

When I set up Rewired I couldnt think of a better place for an office than the Jewellery Quarter. I love the combination of beautiful buildings, burgeoning creativity and a wealth of independent bars and restaurants. Ruth Pipkin, Rewired PR

Rewired PR is a small but fast-growing PR consultancy founded in 2008 by Ruth Pipkin, a former Birmingham Young Professional of the Year. In just three years the companys turnover has grown to 250,000 and has six staff. It offers PR services as well as event management, social media strategy and training, copywriting, and media training. From the start Pipkin chose to target the digital and creative industries as potential clients. Rewireds clients come from both the private and public sector, and include Punch Records, the Birmingham Book Festival, Screen West Midlands and the Wolverhampton Art Gallery. They have also started to attract businesses from other industries, such as Kraft (the new owners of Cadbury). Pipkin originally came to the city to study at Birmingham University, and has become a passionate advocate of the city. She considered setting up her business in London, but felt she would have been a very small fish in a very big pond there. For her, the opportunities were as good in Birmingham. She also feels that there is a great sense of camaraderie among businesses in the city. Although there is competition there is also shared pride in the achievements of Birmingham firms. There are also many networks and groups to tap into, which provide both commercial and social opportunities. She feels that Birmingham has many assets, from its wide choice of business premises types, to its cultural offer and its work-life balance. While the recession and the public-sector cuts have and will continue to pose challenges for the sector, she sees grounds for optimism. New businesses are being set up all the time, and for small, agile firms such as hers the recession has been an opportunity to demonstrate their quality to clients looking ever harder for value for money. Digbeth was the first industrial district in Birmingham. The factories and warehouses left behind by manufacturing continue to dominate the architecture of the area. A number of these buildings have been converted into spaces for digital and creative businesses. The concentration of similar businesses has helped to create a large, well-qualified labour pool in a fashionable urban environment.

Profile of Birminghams Digital and Creative Sector

Digbeth offers a central urban setting, which is highly accessible and in the digital media hub of Birmingham. Mark Betteridge, Rare Games, Fazeley Studios

The entrepreneurs Bennie and Lucan Gray have been central to the development of Digbeth they were the driving forces behind the Custard Factory and Fazeley Studios, which have become important hubs for the creative industries in Digbeth. This part of Birmingham has now been designated as a Digital District.
The Custard Factory, Digbeth

Digital media in DigbethSubstrakt Substrakt is a digital media and design agency established in 2006 by Andy Hartwell. The business has grown steadily: it now has eight staff and a turnover of around 350,000. Hartwell set up his business with the help of a grant from Birmingham City Council and the EU, and chose to base himself in Digbeth, where he already knew some of the creative companies. He felt it was an up-and coming area, and still likes the gallery spaces and creative businesses of the district, although it very much remains an area in transition. Substrakt has a number of high-profile clients, including Selfridges, Microsoft X48 Gamecamp, the Birmingham School of Architecture and CABE. Substrakt prides itself on the quality of its work. It is now attracting high-end web and design commissions. It has to compete against London agencies, but Hartwell does not find being Birmingham-based any handicap. If anything, the recession has prompted clients to search harder for high-quality work. Hartwell studied at what is now Birmingham City University. He has maintained links with the university, teaching there and becoming involved in their Creative Metropoles and Innovation Vouchers programmes. Substrakt is also working on a project around digital media in the European cultural sector with the University of Birmingham. Substrakt has also helped set up Jobplot, a website to help Birmingham creatives find work, in conjunction with Meshed Media and Creative Alliance. Contributing to the wider success of Birmingham is important to the company. Many creative businesses have grown out of Birminghams lively arts scene. The City of Birmingham Symphony Orchestra is based at arguably the best concert hall in the country (Symphony Hall). The Birmingham Royal Ballet is based at one of the citys 3 major theatres, and one of the best museums outside London, as well as contemporary art venues and large conference and exhibition arenas. It will shortly be home to a spectacular new library the Library of Birmingham. Birmingham is also blessed with a large number of festivals, such as Fierce!, the Flatpack Film Festival and Rhubarb-Rhubarb (photography). Supersonic is a music festival based at the Custard Factory. Its promoters, Capsule, have turned Supersonic into a nationally respected music event, bringing acts to Birmingham from far and wide, as well as providing a showcase for local acts.

Profile of Birminghams Digital and Creative Sector

Close to London, and a sector hub in its own right Londons position as one of the worlds great cultural capitals means that it and the wider South East of England dominate many of the creative and digital industries. By some estimates this part of the country accounts for almost 60 per cent of all creative jobs in Britain. But Birmingham has many advantages on which it can draw. It is significantly cheaper Birminghams Jewellery Quarter both in terms of rents and labour, has excellent transport links (90 minutes from central London by train), yet is big enough to attract highly talented people. Many of its companies, especially in digital media (a strength of both the city and the Midlands as a whole) have a high reputations in their fields. Television Junction and Maverick have won BAFTA and Royal Television Society awards for their work, while in the fields of web and digital media Clusta, Made Media, Codemaster and Meshed Media have all received acclaim.

Pressing the point In book publishing, it is difficult for firms outside the capital to make an impact, but this is the challenge that Tindal Street Press has set itself. Established in 1998, it is an independent publisher of regional literary fiction. As its website states, it aims to find writers of national and international significance from places other than London and the South East. In this, it has had much success. It has a roster of writers who have won critical acclaim for their work. They include Clare Morrall, whose Astonishing Splashes of Colour was shortlisted for the Booker Prize in 2003; Austin Clarke, author of The Polished Hoe, which claimed the Commonwealth Writers Prize in the same year; and Catherine OFlynn, whose debut novel, What Was Lost, won both the Costa First Novel Prize in 2007 and the Galaxy British Book Best Newcomer in 2008. The Tindal Street Press has its origins in a local writers group, Tindal Street Fiction Group. It now has a turnover of around 300,000 a year and employs six people. The Press is based in the Custard Factory in Digbeth. Alan Mahar, TSPs Publishing Director describes the Factory as a demonstration that there is such a thing as an arts and media quarter in Birmingham. The Press has plans to become fully independent of public subsidy. It has entered a sales partnership with a high-profile London firm, Atlantic Books, and a distribution agreement with TBS. These moves should allow Tindal Street Press to expand the number of titles it publishes each year from 8 to 12, and to improve its marketing and sales. Mahar feels that Tindal Street Press is now succeeding in breaking through the dominance of London-based publishers.

Profile of Birminghams Digital and Creative Sector

A collegiate and collaborative culture Although it is Britains second-largest city, Birmingham is still small enough for businesses to build relationships with one another. There is a strong collegiate, collaborative style among creatives in Birmingham much different from the culture of many other cities. A host of informal networks and web resources have been established in the city to support this culture, including Creative Republic, Created in Birmingham, Creative Alliance and Game Central.

Academic credibility A key ingredient in the success of creative industries is access to a large talent pool. Birmingham has one of the youngest populations of any big city in Europe, and three large universities Birmingham (a member of the Russell Group of universities), Aston and Birmingham City University, as well as a number of specialist institutions and city colleges. Some of these institutions have a strong creative industries focus. Birmingham City University (BCU) is perhaps the most notable of these. It has 25,000 students on eight campuses and was among the first universities in the country to offer media degrees. The long-established Birmingham Institute of Art and Design, which is now a faculty of BCU, is one of the countrys top ten institutions for research in its field, according to the most recent Research Assessment Exercise. BCU has a Centre for Design and the Creative Industries, a research centre which focuses on design innovation and jewellery, and is home to the Jewellery Industry Innovation Centre, which helps the citys jewellery trade stay on the cutting-edge of technology. It offers training and consultancy in such fields as CAD/CAM, rapid prototyping, laser welding and marking, and 3D scanning. BCU has an Institute for Digital Experience and Applications and was recently host to a region-wide Interactive Digital Media Programme which encouraged the development of the serious games segment of the digital media industry.

Profile of Birminghams Digital and Creative Sector

Leading computer and software firms in Birmingham Cisco and Microsoft both have a presence in Birmingham. Cisco has a communications technology demonstrator based at Birmingham Science Park Aston. Ciscos Ideas and Communications Suite at the Science Park uses the latest teleconferencing and other technology to enable communication and collaboration across the world, making available to start-ups and SMEs the kind of facilities that would normally be beyond their affordability. Rare is a British video game developer, acquired by Microsoft in 2002. The company has a new facility in Fazeley Studios, Digbeth which will be home to 90 staff working on new games development.

Business location As the map shows, digital and creative businesses can be found right across Birmingham, but there is a particularly large concentration in the city centre. This reflects the importance of the Jewellery Quarter and Digbeth areas as creative places. With its business districts such as Brindleyplace and Colmore Row, the city centre also provides a concentration of potential clients. Beyond the city centre, smaller clusters of sector businesses can be seen in Sutton Coldfield to the north, and along the Birmingham-Solihull corridor to the east.

Profile of Birminghams Digital and Creative Sector

Future opportunities Taken as a whole, the digital and creative industries represent a dynamic sector in Birmingham, accounting for a significant and growing proportion of the citys economy. Birmingham is not a major rival to London in this area - the capital is a global centre for the sector, and will always exert a strong pull for talent and business. The sector would benefit from attracting some larger, more productive firms that would act as more significant drivers of the local economy. However, the digital and creative sector has a diverse and innovative base from which to grow, as well as the following strengths: A geographical focus for digital and creative activity in the city centres Jewellery Quarter and Digbeth Digital District A number of firms that are intent on making a splash, not just in the city, but much further afield A collegiate sector, reflected in the formal and informal networks that abound within its boundaries Significant research resources in the citys universities A lower cost of living compared to London, but with good transport connections to the capital

Further Information Reporting and analysis by Consulting Inplace and BOP Consulting. Unless otherwise specified, the statistical data in this profile relates to 2010 figures, based on a bespoke sector definition determined by Birmingham City Council for the purposes of this research. Data comes from TBR and may therefore differ from ONS and other business datasets. Copies of all seven High Growth Sector profiles can be downloaded from: www.birmingham.gov.uk/birminghameconomy Further information about this profile can be obtained from: Economic Strategy Birmingham City Council PO Box 14439 Birmingham B2 2JE T +44 (0) 121 464 2114 E birminghameconomy@birmingham.gov.uk Get in touch with Business Birmingham's specialist inward investment team to find out more about the opportunities Birmingham offers: T +44 (0) 121 202 5022 E invest@marketingbirmingham.com W www.businessbirmingham.com

Profile of Birminghams Digital and Creative Sector