14 June 2007

All is not well with the UK design industry

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Business pencil“The creative industries account for more than seven per cent of the UK economy. But many are now struggling in the face of unprecedented overseas competition. The contribution made by the UK design sector has halved since 2000, with the number of larger agencies falling by one third.”

These strong statements were part of a short text by NESTA, the innovation agency, on the need for entrepreneurship education for creative industries.

With the help of NESTA’s staff, I was able to found out more details.

The 2006 Creative Industries Economic Estimates bulletin, published by the UK Department for Culture, Media and Sport, has only data up till 2004. The publication shows that whereas the creative industries accounted for 7.3% of Gross Value Added in 2004 (as compared to 7.8% in 2000), only 0.5% of that comes from the design industry (a 50% drop from 2000, when the contribution was 1%).

The British Design Industry Valuation Survey 2005 to 2006 contains some further data:

  • 2006 turnover for the industry has seen a 6% fall on 2005 figures, from £4.6bn to £4.3bn, and a 36% fall on 2000 figures (£6.7bn)
  • Growth in 2006 has been in the mid-sized companies, suggesting that smaller, newer companies and freelancers are struggling.
  • Total fee income for the industry has fallen in 2005/2006 by some 16% from £4.0bn to £3.3bn, and by 34% as compared with 2000 (£5bn)
  • 2005/2006 employee numbers are down overall by 8.4% from 71,000 to 65,000, and a 21% fall on 2000 figures (82,000)
  • The growth in export income shows that design firms are becoming more reliant on winning business overseas to compensate for a shrinking volume of work in the UK.
  • The volume of employees in large agencies (the 50+ bracket) has fallen to account for just 38% of the total employment. Their total number went down from about 400 (in 2000) to 305 (in 2006).

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