Hello and welcome back to the State of Britain newsletter. I’m Dan Thomas, the FT’s media editor, and a few months ago I was lucky enough to watch some of the UK’s best young pop stars, including Lola Young and Sam Fender, play to a crowd of music executives preparing to market them to a global audience.
This well-trodden path to “breaking” the US and other major markets, from The Beatles to Adele, has never been harder, in part because previous entrants never had to deal with the current threat of being drowned out by an algorithmically boosted lake of artificial intelligence music slop and eerily similar sounding “acts” of dubious provenance.
Their struggles show the new challenges facing the creative industries more broadly. Often seemingly consigned as a sort of nebulous nice-to-have, it can be overlooked that the creative industries are also the bedrock of the British economy — worth an estimated £125bn.
We’ve seen this movie before
According to industry body Creative UK, the sector is growing at 1.5 times the rate of the overall economy and employs more than 2.4mn people.
It’s a crucial export market for books, music, TV and talent of all sorts. Lost in the panic of the — quite unlikely — film tariff threat by the US was the fact that this was both a sector important enough to warrant national alarm, but also one that has so far been out of the crosshairs in any trade war.
Two things make this a very relevant conversation in the UK right now. First, the UK’s approach to AI regulation in relation to the creative industries has alarmed and angered the sector in equal measures.
An initial position to allow tech companies to scrape and use British intellectual property to train AI tools unless specifically told not to has been shelved for now. But even officials insisting that all options are still on the table is worrying executives and creatives.
A parliamentary “ping pong” action in the House of Lords is being fought by the estimable Baroness Beeban Kidron to ensure at least transparency of content use by AI — which seems to me a minimum requirement — but in the face of government opposition.
It seems probable that a decision gets kicked into the long grass while the results of a consultation are considered, leaving the industry in a less than optimal position of uncertainty about what comes next.
Just as Starbucks would expect the authorities to step in if a rival shop stole its coffee and started selling slightly changed versions, it should be easy for the government to understand why authors, musicians and journalists will be alarmed about their work being ripped off and want to be fairly compensated.
Over time there will be no authors, musicians and journalists left to complain if all the money is sucked out by tech companies. And the latter are good at this: the early years of the internet represented a huge shift of value from the media to the technology industry as groups such as Google and Facebook were able to use freely available content to help build multibillion-pound advertising empires.
But this is not just about protecting basic copyright law: there are sound national economic reasons for setting out a strong and fair policy of AI use. For these are not opposing sides, despite being often presented as such: the creative industries are often at the vanguard of using AI, from advertising agencies and games makers to newspapers and film production.
Some Whitehall insiders worry about letting “yesterday’s economy” get in the way of tomorrow, but any major pot of money from AI is likely to be founded on what we do best rather than hoping to catch up on the strengths of other nations.
And that brings us to the second point: the government needs to support its industries in making these shifts, not just pass value to US or Chinese companies that will only too gladly take advantage.
In a few weeks, the government will unveil its industrial strategy, with the creative industries named as one of eight key growth sectors.
This should be a hugely important document, taking in everything from AI regulation to regional growth plans, but Whitehall insiders admit that the central thread needs to be growth and economic value.
The paper is expected to build on the already strong position that the UK has developed in cutting-edge technology — and, yes, AI — in the creative industries, with additional investment in research and development-led innovation.
Further help with dedicated skills and training is needed, as well as improving access to apprenticeships for the many small businesses in the sector.
These also face greater obstacles in accessing finance. The economic strength of the UK may partly lie in its intellectual property, but valuing films, games, scripts or novels properly can be tricky. Only occasionally, when a deal surfaces such as Amazon buying out the James Bond franchise for $1bn, or as rivals circle the £3bn ITV, can you see a price tag for IP.
Public investment from bodies such as the British Business Bank can help to unlock private capital. The arrival of Tom Adeyoola as head of Innovate UK is a promising sign; Adeyoola, a tech founder and Channel 4 board member, understands the creative industries, but will bring a necessarily sceptical eye to where money will work hardest.
Regional inequalities have long been flagged as a worry — rightly so, although creative industries feel better spread than many others. More can be done to build on the already scores of creative clusters around the UK — games making in Dundee and Leamington Spa, fashion and TV in Leeds, TV production in Cardiff and Bristol and so on — but not forgetting the importance of having a strong London industry, too, that attracts the likes of global filmmakers that then use regional skill sets.
Culture secretary Lisa Nandy’s future is already being speculated over, with whispers around Whitehall that the department as a whole could even be under threat. Let’s hope not: this would show how unseriously Labour is taking — whatever the unfair connotations of “ministry of fun” might have — a seriously important growth sector.
There have been a dozen culture secretaries since Jeremy Hunt left the office in 2012, with an average tenure of about a year (and some much shorter). Nandy has her detractors in the industry — who worry that she is not fully across an extensive brief — but she has also not had the benefit of a fully thought-through government policy.
The last industrial strategy — spearheaded by then business secretary Greg Clark — was a sprawling affair shelved by Rishi Sunak when he became chancellor a few years later. This time, whether it’s Nandy or a successor, the sector desperately needs a champion with a clear, hard-edged strategy that will not just move parts of the creative industry around the country but will grow the sector as a whole so that all parts of the UK benefit.
Britain in numbers
This week’s chart is on Britain’s advertising industry, an often overlooked but significant employer in London as well as in cities such as Manchester, Edinburgh and Leeds.
The UK’s advertising creatives have been responsible for some of the most memorable campaigns over the past 50 years, the visible sign of a large and still growing part of the economy, while companies such as WPP are investing hundreds of millions every year in AI and other technology to keep the UK competitive and relevant.
The industry now supports 5 per cent of UK employment, representing 1.7mn jobs across the UK, according to a recent report by Credos, a UK advertising think-tank, with the Advertising Association. The advertising and marketing industries contributed £109bn of GVA (gross value added) to the UK economy in 2024, it found, or about 4 per cent of the total.
The UK is also the world’s second-largest exporter of advertising services. About £17.9bn worth of UK advertising services were exported in 2024, Credos said, second only to the US. Even Donald Trump might find it difficult to slap tariffs on those export revenues.
The State of Britain is edited by Georgina Quach today. Premium subscribers can sign up here to have it delivered straight to their inbox every Thursday afternoon. Or you can take out a Premium subscription here. Read earlier editions of the newsletter here.
