UKIE: Creative Industries Aren't Risky Investments

A new report, funded in part by British trade group UKIE, argues that creative industries, including game development, are are actually less risky than other sectors of the economy, despite appearances. "The popular image is that creative geniuses – whether computer programmers, writers, designers or musicians – are preoccupied by their art rather than the mechanics of their business, which implies that they are a high-risk option for creditors and investors," the report [PDF] reads. However, data from the Office for National Statistics goes against this perception, showing creative businesses are slightly less likely to fail than those in the rest of economy over a five year period. 49.7 percent of all creative businesses in the report were still operating 5 years after their founding, compared to 46.9 percent of businesses overall. In computer game and software development specifically, 48.7 percent survived for five years, beating the national average for all companies. While creative industries saw more company deaths than any other sector during the 2003-2009 period, with the rate increasing heavily near the end of the decade, on a percentage basis their success rate was squarely in the middle on the pack. Within the creative industries in the UK, software and game publishing was by far the largest source of both company creation and company destruction during the last decade. Roughly 10 percent of all such companies were killed off each year, a rate comparable to other creative industries. "If risk is a function of business survival, creative businesses are not actually riskier than other businesses," the report says. "Overall the data suggest that the perception that businesses in the creative industries are riskier than other businesses is a myth." The British Fashion Council, the Producers Alliance for Cinema and Television, the UK Fashion and Textile Association, and the UK Music and the Association also helped fund the report.