Economy: Creative Industries
7:42 pm
Baroness Buscombe (Conservative)
My Lords, I declare an interest in this welcome debate: I have been chief executive of the Advertising Association since January 2007. I want to passionately, positively and proactively assert the virtues of the advertising industry, a creative industry I know well from past and current experience. I entirely agree with the noble Lord, Lord Smith of Finsbury, particularly in relation to intellectual property and the protection of copyright, but we ought to be championing other aspects of creative industry, and I shall concentrate on advertising.
It is my strong belief that the creative industries are a huge and growing contributor to the economy by lifting horizons, enriching and improving the quality of life of British people and hugely benefiting society. The creative sectors are central to the economy. It is no accident that the creative industries are growing at twice the rate of the rest of the economy.
Advertising is the third largest creative industry, and advertising expenditure in the UK passed £19 billion in 2006, according to figures to be published in June. The UK is the largest advertising market in Europe; indeed, Britain's advertising industry received more awards than that of any other nation in 2006. It is important to recognise the interdependence of the advertising industry and the rest of the economy. Advertising has, of course, a substantial impact on other creative sectors in the UK. Its supply chain includes activities such as graphic design, audio-visual production and interactive media. Given that the creative industries now represent 8 per cent of the UK economy, which means that they make a bigger contribution to the nation's GDP than the construction industry, the key strategic importance of the ad industry to the British economy is undeniable.
Advertising is not only about generating wealth and selling products but also has intrinsic creative significance. It promotes innovation and increases and facilitates consumer choice. Indeed, advertising allows consumers to see the variety of choices available and to understand the differences between products. It drives competition, which drives down prices. There is a direct correlation between ad spend and economic growth, which leads to job creation. Public policy advertising campaigns raise awareness, inspire action and save lives. Indeed the Central Office of Information is consistently one of the top three biggest advertisers in the UK. We all remember campaigns on road safety, drink-driving, drugs and AIDS. They worked and informed because advertising works and informs. Advertising is used to showcase corporate green credentials, sustainable development and corporate social responsibility.
Advertising, in my opinion more than any other industry, champions creative values and inspirational and innovative ideas. It can be compared and paired with other aesthetic arts such as music recording, publishing, and film and video production. It also funds culture and groundbreaking events. As Michael Payne, who was the International Olympic Committee's marketing director, said, there would be no Olympic Games without advertising.
In recent correspondence on this issue, Martin Sorrell told me:
"For the future of advertising, globalisation, over-capacity and the shortage of skilled human capital, new technologies such as the web, internal communications, concentrating distribution and corporate social responsibility are all driving growth in the advertising and marketing services industry, not just in the UK but throughout the world. As a result, without exception, every company faces the challenge of geographical growth and capitalising on the changes that new technologies bring. Differentiation is the key and the advertising and marketing services industry provides both tangible and intangible differentiation to all companies' goods and services".