Research Update: Innovation in the Arts and Entertainment Sectors

In a bid to optimise research and development (R&D) funding in the UK's creative industries, a strategic approach is necessary to leverage government investment, focus on innovation-driven partnerships, and attract global research talent.

Eliza Easton, the Founder of Erskine Analysis, and previously Deputy Director at the Creative PEC, has contributed to a policy brief on R&D in the creative industries, which is set to be published this week. This policy brief is based on a PEC Discussion Paper about creative industries innovation in seaside resorts and country towns.

The creative industries, which account for one in eight UK businesses, contributed almost £115.9 billion in Gross Value Added (GVA) to the UK economy in 2019, growing four times faster than the UK economy as a whole in 2019. This growth is particularly noteworthy given the challenges posed by the pandemic.

One of the key strategies for R&D investment in the creative industries is leveraging substantial government R&D funding. In 2025, the UK government allocated a record £13.9 billion to R&D aimed at transformational research across sectors, including innovation-centric areas like life sciences, green energy, and engineering. Although not explicitly focused on the creative industries, this funding ecosystem benefits them indirectly by supporting technological and interdisciplinary advances that can be adapted or integrated into creative sectors.

Another strategy is focusing R&D on high-potential creative sectors via talent attraction. Universities such as the University of Warwick recently secured dedicated funding (£4.35 million) to attract outstanding global researchers specifically for the creative industries. This facilitates collaboration, knowledge exchange, and technological innovation in creative fields, driving economic and technological growth post-pandemic.

Increasing investment to capitalise on sector resilience and potential is another crucial strategy. The creative industries have proven relatively resilient during the COVID-19 pandemic and show promise for growth. Research indicates that a 20% increase in spending from 2019 levels could create 300,000 new jobs and generate £132.1 billion in GVA by 2025. Targeted R&D investment can further stimulate innovation, especially in resilient subsectors like IT, software, and video games.

Building partnerships with SMEs, local councils, and public funders is also essential. Collaborative research efforts linking universities, industry players, SMEs, and local governments can enhance the practical impact of R&D in creative sectors. Social and community investment models, which support local innovation, can help tailor R&D funding to regional strengths and needs.

The UK television production sector is one of Britain's leading creative export sectors. However, a lack of a clear definition for 'innovation' in the creative industries makes it challenging to design new financial levers. The policy brief outlines recommendations for transitioning to more sustainable theatre production in the UK, and the Department for Digital, Culture, Media and Sport (DCMS) announced a further £50 million funding for creative businesses.

Moreover, the creative industries have been identified as one of four key sectors in the Plan for Growth to encourage recovery following the pandemic. The policy briefing sets out areas for possible policy action regarding authors' earnings in the UK, and Professor Hasan Bakhshi MBE, the Professor of Economics of the Creative Industries and Director of Creative PEC, is among the contributors.

To remain competitive and valuable post-COVID-19, the UK creative industries should prioritise R&D projects that integrate new technologies, use public R&D funding as leverage to attract private sector investment, support interdisciplinary approaches linking arts, manufacturing, technology, and science, and ensure inclusive growth by embedding research initiatives in diverse communities and regions. These approaches align with the UK government’s Plan for Change, aiming to foster innovation-led economic growth, job creation, and technological advancement across sectors including the creative industries.

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The policy brief, authored by Eliza Easton, emphasizes the importance of a strategic approach to optimize research and development funding in the creative industries.
The creative industries, including one in eight UK businesses, contributed nearly £116 billion to the UK economy in 2019 and grew four times faster than the national economy.
Leveraging government R&D funding is a key strategy for investment in the creative industries, with £13.9 billion allocated by the UK government in 2025.
Attracting global research talent via dedicated funding is another strategy, as shown by the University of Warwick's £4.35 million allocation.
Increasing investment to stimulate innovation in resilient subsectors, such as IT, software, and video games, can create jobs and generate economic growth.
Building partnerships with SMEs, local councils, and public funders can enhance the practical impact of R&D in creative sectors.
The UK television production sector, a leading creative export, requires clear definitions of innovation and sustainable theatre production strategies.
The creative industries have been identified as a key sector in the Plan for Growth, with policy action areas including authors' earnings in the UK.
To remain competitive, the UK should prioritize R&D projects integrating new technologies, attract private sector investment, support interdisciplinary approaches, and ensure inclusive growth.
These approaches align with the UK government's Plan for Change, aiming to foster innovation-led economic growth, job creation, and technological advancement across sectors, including the creative industries.