Creative Industries Journal Volume 2 Number 1 © 2009 Intellect Ltd Article. English language. doi: 10.1386/cij.2.1.105/1 Issues in Developing an Audio-Visual Cluster in the West Midlands David Harte Birmingham City University Abstract Keywords The uptake of clusters as a model with which to develop regional economies has been variable since the UK government first issued advice to regional development agencies in the late 1990s. The West Midlands made clusters one of its key strategies for economic growth and nominated the audio-visual sector as an embryonic cluster in order to help support its development. This article examines the development of this cluster from its inception and identifies issues in the way it was conceived and the roles played by the regional development agency, industry and higher education. The author draws on government and regional policies, cluster strategies and other internal documentation produced for the cluster, as well his own experience as an innovation manager for the cluster. clusters creative industries audio-visual West Midlands policy strategy This article charts the development and implementation of a cluster strategy for the audio-visual industries in the West Midlands. To some degree this is a discussion of how policy is worked through into implementation, as well as how national and regional frameworks shape policy. But it also addresses issues of how clusters are articulated and the roles played by those crucial in making clustering a successful policy intervention. Although this article should be seen as a contribution to a growing pool of studies of regional clusters (Bailey and MacNeill 2008b, Berkely et al. 2005, Tully & Berkely 2004, the many examples in Perry 2005 and those collected in Breschi & Malerba 2005) it isn’t intended to compare the West Midlands to other regions. Bathelt (2002: 605) cites a series of examples of regional cluster studies but makes the point that comparison is difficult as the local context in which industries develop is very different. The behaviour of firms may be similar but policy characteristics are very different, something which is even true amongst regional UK policymakers. Indeed the implementation of a cluster strategy in the West Midlands has often sat at odds with the actions of other regions. Writing in 2004, Tully and Berkeley noted how many other UK Regional Development Agencies (RDAs), the bodies charged with shaping regional economic strategy, were already moving away from the model of clustering that by then had been fully endorsed by government: 1. Department for Trade and Industry – a former UK government department replaced by the creation of the Department for Business, Enterprise and Regulatory Reform and the Department for Innovation, Universities and Skills (in June 2007). 2. The name given to the Regional Development Agency for the West Midlands (www.advantagewm. co.uk). Many RDAs, preferring the term ‘sector’ in internal documents, are ‘quietly walking away from the cluster concept, but just not telling the DTI1’ (One North East Representative). Advantage West Midlands2 appears to be the only agency left that is wholly enthusiastic to supporting clusters, probably due to CIJ 2 (1) pp. 105–112 © Intellect Ltd 2009 CIJ_2.1_07_art_David _105-112.indd 105 105 12/10/09 10:47:14 AM 3. 4. Although the recent funding partnership with Channel 4 television (as part of a development strategy for a digital media cluster) demonstrates that established broadcasters can make for powerful strategic partners. Department for Business, Enterprise and Regulatory Reform (BERR) and the Department for Innovation, Universities and Skills (DIUS). a huge financial commitment on its part. It may be the only RDA to see the cluster ‘experiment’ in regional policy to a conclusion. (Tully and Berkley 2004: 53) International comparisons of regional development models likewise provide few points of comparison, although Bathelt (2002)’s tracing of Leipzig’s development of a media cluster does have some resonances with the West Midlands experience. Leipzig developed a new media cluster in the 1990s, largely as a result of the decision to locate Germany’s second state broadcaster (MDR) to the city around which the cluster developed. That experience is not exactly mirrored in the West Midlands3 but the shift from a declining manufacturing base to a knowledge-based economy is certainly similar. However, the key aspect to take from Bathelt’s history of early 1990s post-unification economic development is that it took place at a time during which the notion of ‘clustering’ as a specific policy action was not an available tool to policymakers: The development of Leipzig’s media industry cluster was not planned. In other words, there was no pre-existing policy programme to establish such a cluster. Once the development started, however, policy-makers and planners became active in supporting this growth. (Bathelt 2002: 605) In contrast, this article outlines a planned approach to cluster development: those ways in which national and regional policies have coalesced and been worked through into a set of actions. The UK national policy context for the development of clusters has largely been the responsibility of one government department – the former Department for Trade and Industry (DTI). That department’s successors4 worked with the Department for Culture, Media and Sport (DCMS) to publish, in early 2008, Creative Britain: New Talents for the New Economy. This outlined 26 commitments from government to ensure Britain’s creative industries continue their move from the ‘margins to the mainstream of economic and policy thinking’ (DCMS 2008: 6). Creativity is recognized as a driver for the local economies of the biggest cities and the document recognizes that one of the ways to ‘bring coherence to public investment in local creative economies’ (DCMS 2008: 58) is through the process of selection that clustering requires: The Government wants to see each region identify and exploit its area of comparative advantage in the creative industries; not every region should try to copy London, but each area should support those industries that have the best capacity for local production and skilled recruitment. (DCMS 2008: 58) It is striking that although clustering has had a place in government economic policy since the late 1990s, Creative Britain expresses itself as if at the start of the process rather than at a point almost ten years down the line. When outlining the main drivers and measures of a knowledge-based economy, the DTI discussed notions of clustering in two key documents in 106 CIJ_2.1_07_art_David _105-112.indd 106 David Harte 12/10/09 10:47:14 AM 1999 (DTI 1999, 1999a). In between then and now the DTI also published an assessment of clusters (DTI 2001) and guidance for Regional Development Agencies (RDAs) (DTI 2003) before those RDAs in turn, to various degrees, produced their own voluminous policies and guidance. However, Creative Britain’s belief in clustering as a tool for the regions is certainly a development from earlier government advice which seemed to indicate that the creative industries were something that regions best leave alone: ‘…London dominates. While there is undoubtedly scope for considerable growth in the creative industries, attempts to develop strengths in other regions run the risk of undermining the position of a globally competitive cluster’ (DTI 2001). Despite this advice, the West Midlands did indeed develop a cluster strategy for certain aspects of the creative industries – those that had a base in manufacturing (carpets, jewellery, ceramics amongst them) and those concerned with creative media production (television, radio, music, computer games, Internet publishing). A cluster strategy was developed by the RDA for the West Midlands, Advantage West Midlands (AWM), in 2001 and implemented in collaboration with the business support agency, Business Link, the Learning and Skills Council and the West Midlands Higher Education Association (WMHEA).5 The identification of ten industry sectors capable of ‘clustering’ was seen as a key element of a wider regional economic strategy to provide sustainable economic growth for the region (Advantage West Midlands 2001). Professor David Bailey describes how industrial policy had rarely been interventionist up until the late 1990s when a concern for productivity growth meant a significant shift from a laissez-faire approach: 5. The author has been part of the implementation of the cluster strategy in the West Midlands, acting as the higher education representative for the audio-visual cluster since January 2003 and from October 2005 as programme manager of the cluster’s key business support projects (until March 2008). The 1998 White Article (DTI, 1998) signalled a shift of focus towards higher quality inward investment and to emphasising clusters, it continued to stress competitiveness (meaning productivity), with a narrowing of focus around the coalescing themes of support for small firms, attraction of foreign firms, science and technology and a regionally-based approach. (Bailey et al. 2008b) In the 1999 West Midlands regional economic strategy, ‘Creating Advantage’, the route towards a cluster-led strategy was set out. In the first instance, it suggested that industry-led ‘business growth task groups’ were to be set up: ‘the Groups will be responsible, to the agency, for agreeing strategic priorities, ordering studies, building on existing best practice projects, developing strategic action plans, considering bids for funding and reporting on progress’ (Advantage West Midlands 1999: 25). Should such groups begin to work collaboratively on projects they would then be considered a ‘cluster’. One of the mentioned five task groups was for creative industries (AWM 1999: 25). But the genesis of the cluster initiative was actually in the collapse of the Rover Group in 2000 when BMW withdrew from the company leaving it on the brink of collapse. Subsequent to the Phoenix Group’s partial rescuing of the Rover Group, £50 million of government funds supported the creation of the Rover task force. This had a remit to help support and develop a regional economy too reliant on ‘low value-added metal bashing’ (Bailey et al. 2008b) rather than higher-value technology or design-based industries. It Issues in Developing an Audio-Visual Cluster in the West Midlands CIJ_2.1_07_art_David _105-112.indd 107 107 12/10/09 10:47:14 AM was a ‘Rover task force report’ of 2000 (cited in Bailey et al. 2008b) that identified the ten clusters and differentiated between them as established (transport technologies, building technologies, food and drink, tourism and leisure and high-value consumer products), growing (ICT, specialist business and professional services and environmental technologies) or aspirational (medical technologies and interactive media). These clusters are fully articulated in the ‘Creating Advantage’ (Advantage West Midlands 1999) action plan, and ‘Agenda for Action’ (Advantage West Midlands 2001). An ‘interactive media for education and entertainment’ cluster is cited as including the following subsectors: ‘recorded media manufacture, media production, distribution, content developers, specialist business services, content creators – including education community, museums – [overall counting around] 10,000 employees’ (AWM 2001: 14). An implementation plan for the clusters included the setting up of industry-chaired ‘cluster opportunity groups’ (COGs) whose role was to ‘set priorities for each cluster and will check applications for funding against these to assess their strategic fit’ (AWM 2003: 3). COG membership typically developed from the industry group that was already meeting as part of the ‘business growth task group’ – in this case, the ‘creative industries task group’ (established since 2000). Agenda for Action (AWM 2001) therefore enshrined these clusters as policy for the region for the following four years, through which growth in the regional economy was to be delivered. The emphasis was now on the clusters to organize themselves and produce delivery strategies. From the outset the ‘interactive media for entertainment and education’ cluster had some trouble making clear its remit. Members of the COG rejected the title given in the regional economic strategy as too narrow, preferring instead ‘new media’ (AWM 2002), and then ‘screen and new media’ (AWM 2004b) before settling on its current title ‘screen, image, sound’ (AWM 2008). What has remained largely the same are the sectors to which the cluster relates: film, television, video, animation, music, radio, computer games and digital imaging. Yet even here there was a lack of precision that made accurate data gathering difficult: ‘the relationship between these [cluster] definitions and the Standard Industrial Classification is inevitably very imprecise’ (Collinge 2003: 4). A more recent study commissioned by the cluster itself in 2007 identified that the situation remained unchanged: The Screen Image and Sound cluster is even more challenging to measure, for it represents a relatively narrowly defined sub-set of the creative industries, and it is particularly difficult to isolate those parts of the economy within the sector using official statistics. (Burns Owen Partnership Ltd 2007: 27) The cluster has produced two strategy documents to date: in 2004 (for 2005–2008) and in 2008 (for 2008–2011). Neither strategy gives precise figures for numbers employed or numbers of businesses covered by the cluster. However, there is precision about which sectors to target (the emerging specialism of ‘serious computer games’) and which delivery vehicles to adopt (programmes with an emphasis on networking and showcasing). 108 CIJ_2.1_07_art_David _105-112.indd 108 David Harte 12/10/09 10:47:14 AM Despite being, at heart, an industry-focused initiative, clusters were always recognized as being a collaborative delivery solution; the role of higher education in clustering was always recognized at a strategic level by Advantage West Midlands (AWM 2001), given fresh impetus by the Lambert Review (HM Treasury 2003) and subsequently addressed at an operational level by implementing ‘cluster innovation managers’ to liaise between industry, higher education and the cluster programme itself. This role was played by the author between 2003 and March 2005 and involved reporting to an ‘executive group’ (with Business Link, the AWM Cluster Manager and the Learning and Skills Council) that largely shaped the agenda for meetings of the industry-led COG and jointly ‘spotted and seized opportunities, put together alliances and deals to exploit opportunities’ (Advantage West Midlands 2004: 4). Many of those involved continued to participate in executive group meetings, as did the author, even after the formal arrangement came to an end. What emerges as the audio-visual cluster progresses is an increasing role for higher education. Collinge (2003) sets out one of the key challenges for creating the conditions for successful clustering. He saw the current state of play as a major weakness: ‘Definitions and policy priorities do seem to diverge somewhat, and it is not at all clear that the higher education institutions have a sound grasp of their role’ (Collinge 2003: 16). An examination of the cluster strategy documents reveals an increasing need for universities to take on the delivery role of projects.6 The impetus for this is largely as a result of the need for Advantage West Midlands to have partners that can both meet match-funding requirements and evidence a commitment to support regional businesses. Universities had, by that stage, made use of dedicated funding for ‘third-stream’7 activity through the Higher Education Funding Council for England so, in most cases, had dedicated personnel in place to work on bids and projects. The outcomes were Birmingham City University’s successful bid in 2005 to run the cluster’s major programme for networking and showcasing, ‘Digital Central’. Also, Coventry University were positioned (within the 2008–2011 ‘screen, image, sound cluster strategy’) as a key player in developing the serious games industry. The West Midlands has been the only Regional Development Agency to follow through on cluster strategy so completely – that is, to turn the concept into a funded set of delivery actions. Across the regional policy documentation and guidance notes there is some evidence to suggest that those eager to engage in clustering were advised to look beyond policy and take note of the theoretical basis out of which the policy was created: 6. Reports produced by the author in his role as Cluster Innovation Manager also make reference to an increasing awareness by the COG for higher education to take on major projects. 7. ‘Third Stream’ largely refers to university business engagement activities. The objective of the cluster approach is to use cluster development as a tool for upgrading the performance of firms in the regional economy, both in terms of employment and added value. A cluster is defined as a ‘geographic concentration of interconnected companies, specialised suppliers, service providers, firms in related industries and associated institutions … In particular fields that compete but co-operate’. (AWM 2003: 3) It should come as no surprise that Michael Porter (1990) is the sole point of reference for policymakers in conceptualizing clusters. Tully and Berkeley Issues in Developing an Audio-Visual Cluster in the West Midlands CIJ_2.1_07_art_David _105-112.indd 109 109 12/10/09 10:47:14 AM (2004) critique the government’s lack of engagement with the wider discussion around clustering that had taken place since the publication of Porter’s The Competitive Advantage of Nations in 1990: ‘despite the extensive academic debate over the definition of clusters, Porter’s work has come to represent the definitive explanation for policy makers and is central to UK Government guidance’ (Tully and Berkeley 2004: 41). Martin and Sunley (2003) undertake a detailed analysis of the appeal of Porter’s work and argue that: ‘the work of economic geographers on industrial localisation, spatial agglomeration of economic activity, and the growing salience of regions in the global economy, has been largely ignored (Martin and Sunley 2003: 7). By the time Porter himself (with Christian Ketels) made his own assessment of UK clustering (for the DTI in 2003) he found that any regional implementation would have been hampered by the 2001 DTI analysis, which he found to be of limited value and based on ‘ad-hoc’ definitions (DTI 2003: 29). But by then the discussion within the West Midlands audiovisual cluster had already moved on to focus on the difficulties in engaging firms in clustering, ensuring key partners play their part, and identifying appropriate funding streams. Outside of the critical academic discussion these issues represented the day-to-day critical activities of cluster policy in action. This article has attempted to give an overview of regional and national policy interventions as they relate to the development of a business cluster for the audio-visual sector in the West Midlands cluster. Data (Burns Owen Partnership Ltd 2007) suggests that the cluster remains ‘embryonic’ (circa 15,000 employees). But despite the cited lack of clarity over the remit of the cluster it continues to exist and is still supported by a secretariat and by an industry ‘COG’ (with many of the original members still serving). That board still makes key decisions on the funding of regional development projects for this sector and their influence is now felt in other aspects of Advantage West Midlands’ commitment to growing ‘digital’ industries. A closer working between higher education and the cluster can be seen at an operational level in the cluster projects themselves and in the presence of senior higher education personnel on the COG. Above and beyond any lack of critical engagement with the theoretical basis for ‘clustering’, in many ways this particular cluster punches well above its weight. In those terms alone – strategic positioning, widening of influence – the cluster can be seen to have had some measure of success. References Advantage West Midlands (AWM) (1999), Creating Advantage: The West Midlands Economic Strategy, Birmingham: Advantage West Midlands. Advantage West Midlands (AWM) (2001), Agenda for Action: a Regional Partnership to Deliver the West Midlands Economic Strategy, Birmingham: Advantage West Midlands. Advantage West Midlands (AWM) (2002), Business Needs Analysis: New Media, Birmingham: Advantage West Midlands. Advantage West Midlands (AWM) (2003), Cluster Projects: Background Information for Applicants, Birmingham: Advantage West Midlands. Advantage West Midlands (AWM) (2004), Cluster Staff Resources Memo, Birmingham: Advantage West Midlands. 110 CIJ_2.1_07_art_David _105-112.indd 110 David Harte 12/10/09 10:47:14 AM Advantage West Midlands (AWM) (2004a), Delivering Advantage: The West Midlands Economic Strategy and Action Plan 2004–2010, Birmingham: Advantage West Midlands. Advantage West Midlands (AWM) (2004b), Screen and New Media Cluster: 3 year strategic business plan, Birmingham: Advantage West Midlands. Advantage West Midlands (AWM) (2008), Screen, Image, Sound Cluster Plan 2008 – 2011, Birmingham: Advantage West Midlands. Bailey, D. and MacNeill, S. (2008a), ‘The Rover Task Force: A Case Study in Proactive and Reactive Policy Intervention?’, Regional Science Policy and Practice, 1:1, pp. 1–16. Bailey, D., Kobayashi S. and MacNeill, S. (2008b), ‘Rover and Out? Globalisation, the West Midlands Auto Cluster, and the end of MG Rover’, Policy Studies, 29: 3, pp. 267–279. Bathelt, H. (2002), ‘The Re-emergence of a Media Industry Cluster in Leipzig’, European Planning Studies, 10:5, pp. 583–611. Berkeley, N., Jordane, D. and Jarvis, D. (2005), ‘The Role of Mature Sectors in Promoting Regional Economic Development: The Case of the High Value Added Consumer Products Cluster in the West Midlands Region’, paper presented at Regional Studies Association International Conference, Aalborg, Denmark, 28–31 May. Breschi, S. and Mallerba, F. (2005), Clusters, Networks and Innovation, Oxford: Oxford University Press. Burns Owen Partnership Ltd (2007), Screen, Image & Sound Cluster Preliminary Impact Study, Birmingham: Advantage West Midlands. Collinge, C. (2003), Higher Education and the Interactive Media Cluster in the West Midlands, Birmingham: Centre for Urban and Regional Studies, Birmingham University. DCMS (2008), Creative Britain: New Talents for the New Economy, London: HMSO. DTI (1999), Our Competitive Future: Building the Knowledge Driven Economy, London: Department of Trade and Industry, HMSO. DTI (1999a), Our Competitive Future. UK Competitiveness Indicators, London: Department of Trade and Industry, HMSO. DTI (2001), Business Clusters in the UK: a First Assessment, London: Department of Trade and Industry, HMSO. DTI (2003), UK Competitiveness: moving to the next stage, London, Department of Trade and Industry, Economics Article no. 3: HMSO. HM Treasury (2003), Lambert Review of Business-University Collaboration, London: HMSO. Martin R. and Sunley, P. (2003), ‘Deconstructing clusters: chaotic concept or policy panacea?’, Journal of Economic Geography, 3:1, pp. 5–35. Perry, M. (2005), Business Clusters: An International Perspective, Oxford: Routledge. Porter M. E. (1990), The Competitive Advantage of Nations: with a new introduction, London: Macmillan. Tully J. and Berkeley, N. (2004), ‘Visualising the operating behaviour of SMEs in sector and cluster: evidence from the West Midlands’, Local Economy, 19:1, pp. 38–54. Suggested citation Harte, D. (2009), ‘Issues in Developing an Audio-Visual Cluster in the West Midlands’, Creative Industries Journal 2: 1, pp. 105–112, doi: 10.1386/cij.2.1.105/1 Issues in Developing an Audio-Visual Cluster in the West Midlands CIJ_2.1_07_art_David _105-112.indd 111 111 12/10/09 10:47:14 AM Contributor details David Harte is a Senior Lecturer in Media and Communication at Birmingham City University, where he has developed strong links to the regional development agency running a major creative industries support programme on their behalf and contributing to the development of regional clusters. He has recently completed a secondment with Birmingham City Council as Economic Development Manager for their Digital Birmingham programme. Contact: Birmingham School of Media, Birmingham City University, Perry Barr, Birmingham B42 2SU. Tel: 0121 3315241 0771 9374437 E-mail: dave.harte@bcu.ac.uk 112 CIJ_2.1_07_art_David _105-112.indd 112 David Harte 12/10/09 10:47:14 AM