Risky Business : Creative SMEs, microenterprises and independents trading globally in a time of transition

Patha, Catharine and Dunn, Nick and Whitham, Roger (2024) Risky Business : Creative SMEs, microenterprises and independents trading globally in a time of transition. PhD thesis, Lancaster University.

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Abstract

The UK government’s 2018 Industrial Strategy: Creative Industries Sector Deal policy aimed to increase firm size in the sector. Policymakers identified small company size as a particular obstacle to creative industries exports, arguing that very small firms lack the “absorptive capacity” to undertake extra export duties (BEIS, 2018). Yet, there is a critical gap in knowledge about the global trading patterns of the UK’s creative industries, particularly amongst the microenterprises and independents that make up the bulk of the sector. This research endeavours to answer the question, is small firm size indeed a barrier to international trade in the creative industries? Employing anonymous online surveys and in-depth interviews, this study investigates whether small firm size acted a deterrent to trade engagement amongst small-tomedium sized enterprises (SMEs), microenterprises and independents based in creative hubs in England’s North West. The primary research was conducted during the inter-Brexit era, i.e. after the Brexit referendum of June 2016 and prior to the UK’s formal secession from the EU on 31 January 2020. The results challenge the assumption that small firm size was a barrier to international trade in the creative industries at the time of the study. Sampled SMEs, microenterprises and sole proprietors were found to be deeply involved in international markets, with 66 percent of respondents exporting. Furthermore, exporters often relied heavily on their overseas income with almost one-third earning over 50 per cent of their annual income overseas. Digital innovations and barrier-free access to the EU trade block appear to have supported the trade capabilities of independents and microenterprises at the time of the research. These findings imply that, in the absence of new trade deals, creative industries policy makers may need to shift focus away from firm size to other measures, such as supporting creative hubs or clusters to facilitate network-building and information sharing.