Creative industries represent a vital segment of the UK economy, contributing to the growth of local economies (Mateos-Garcia et al., 2018) and the country’s competitive advantage (HM Government, 2018). In 2018, the creative industries comprised 6.2% of the economy of the
United Kingdom in terms of employment (DCMS, 2019) and 5.8% in terms of gross value added (GVA) (DCMS, 2020). Additionally, the creative industries are fast growing – employment in the creative industries grew by 30.6% over the period 2011 to 2018, while the GVA in real terms increased by 43.2% since 2010 (DCMS, 2020). Creative industries tend to be innovative (Bird et al., 2020) and can be highly productive, although they constitute a diverse sector of the economy embracing a wide range of productivity levels (see Section 2 below). Currently, the creative industries, and arts, humanities and social sciences more generally, are ineligible for R&D tax policy support in the United Kingdom (Bakhshi, Breckon and Puttick, 2021). This report will explore the potential of R&D tax policy to support the creative industries.