Nesta has published a 10-point manifesto in a bid to stabilise the creative industries in response to digital disruption, warning if action isn't taken the growing industry could "go the way of the automotive and computing industries, where an early lead was lost".
Priorities in the manifesto include ensuring every teenager in Britain is given the opportunity and capability to create digitally, pressuring public services such as the BBC, museums and galleries to embrace the next generation of digital technologies and calling for tax breaks and procurement to be adapted to boost the industries.
The creative industries provide jobs for 2.5 million people in the UK - more than financial services, advanced manufacturing or construction - and the workforce has grown four times faster than others in recent years, according to the report, while the creative industries account for around one tenth of the whole UK economy.
Co-author of the manifesto - alongside Professor Ian Hargreaves and Juan Mateos-Garcia - and director of creative economy at Nesta, Hasan Bakhshi, said: "Young companies outside the UK have dominated internet markets and UK creative businesses have struggled to compete.
"There is still a vast opportunity but we need the right policy, regulatory and skills infrastructure in place to build on our world class position in the creative economy. It is not too late for the UK to get this right but we are running out of time."
The report identified Big Data and wearable computers as being "further disturbances" of the digital world and said UK policy makers had failed to keep pace with developments in North America and Asia.
The proposals in full:-
Proposal One
The government should adopts our proposed new definitions of the creative industries and the wider creative economy. These are simple, robust and recognise the central role of digital technologies.
Proposal Two
Policymakers should establish a 'creative innovation system' framework within which strategic priorities can addressed in a coherent and effective manner.
Proposal Three
The government should make R&D tax relief more accessible to creative businesses. Technology Strategy Board programmes should be further broadened to address the needs of the creative economy. Public procurement rules should be changed to open up opportunities for smaller digital firms.
Cross-disciplinary Research Council knowledge exchange initiatives should be rigorously evaluated and the lessons applied in a further round of investment. More international collaborations with leading research centres should be encouraged.
Proposal Four
Local policymakers should observe our seven-point guide for developing creative clusters.
Proposal Five
Government should ensure that its generic business finance schemes do not discriminate against creative businesses, and that regulations help the development of financial internet platforms (such as crowdfunding sites). Absent hard evidence of their efficacy, government should resists introducing new sector-specific finance programmes.
A higher priority is to coordinate the collection and publication of the investor-friendly data through the Creative Industries Council, thus supporting the development of a ticker market for risk finance.
Proposal Six
The treasury and the DCMS should undertake a broad–based assessment of the value of public arts and cultural spending in the UK, drawing upon similar work on the natural environment and the cultural value project of the Arts and Humanities Research Council. Funding decisions should be justified in the light of criteria that emerge from this work.
Proposal Seven
Funders should incentivise experimentation with digital technologies by arts and cultural organisations and allocate a sustained percentage of their resources to digital R&D, ensuring that the evidence arising from this work is openly shared. under its new leadership, the BBC should publish in 2013 a strategy to reflect its digital public purpose in the period to 2018, not least through the ambitious vehicle of its digital public space initiative.
Proposal Eight
Ofcom should be given powers to gather information in all internet markets in order to maximise the chances of sound and timely judgments about the emergence of potentially abusive market power and other market concerns (an 'early warning system').
Ofcom should contribute a regularly updated strategic overview of these issues, working closely with the Information Commissioner’s office, the Intellectual Property office, the Competition and Markets Authority and other relevant agencies.
Ofcom's remit should be broadened to advise the government on the actions needed to ensure the UK enjoys a flourishing, open internet, balancing the interests of consumers and citizens and committed to supporting innovation and growth. These changes should be a central feature in any communications Bill planned for 2013/14.
Proposal Nine
UK copyright rules and exceptions should be re-balanced, along the lines proposed by the UK government, and also at the European level as part of the drive for a European digital single market. A new mechanism for enabling vastly increased and more efficient rights licensing transactions (through the proposed copyright hub) should be further developed during 2013, again with potential european replication.
Proposal Ten
Governments across the UK should make a schools digital pledge, designed to ensure that the school curriculum, including its representation in the English Baccalaureate, brings together art, design, technology and computer science and that young people are able to enjoy greater opportunities to work creatively with technologies, both in and out of school.
Steps should also be taken to address the disconnect between what UK creative businesses need from graduates and what universities are teaching them. Measures to improve the quality of graduate employment data made available to prospective applicants for creative courses (including industry-approved course kite marks) should be extended.