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Woman splashes paint in the air. (Sergey Nivens/Getty Images/iStockphoto)
Woman splashes paint in the air. (Sergey Nivens/Getty Images/iStockphoto)

Canada Competes

U.K. believes in the economic power of arts startups Add to ...

Ten years ago, urban theorist Richard Florida popularized the idea that creative people are linked to economic growth in his book The Rise of the Creative Class. As his theory goes, cities with high concentrations of creatives – designers, musicians, tech workers, artists, and so on – tend to experience higher levels of economic development. But it’s not necessarily the creatives themselves who drive growth, per se; to those who accept Dr. Florida’s ideas (and he has had considerable influence on some city planners), the creative class is seen as having an indirect impact by fostering an exciting, dynamic and open culture that lends itself to innovation.

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Doug Richard takes this line of reasoning a (big) step further. The former Silicon Valley entrepreneur and investor-turned-adviser to the British government argues that creative types are not nonbusiness-minded layabouts who contribute to the economy only passively by making a city cool but are key figures who have the potential to push stagnant economies back into growth. If we knew what was good for us, he says, we’d support creative industries with the same enthusiasm we do science and technology.

“There is this preoccupation with technology, but we don’t do ourselves any favours when we try to build Silicon Valleys all around the world,” Mr. Richard said. “At what point do we run out of the desire to consume creativity? Never. We will never want less music or great television programming.”

The presence of vibrant creative industries in Britain was one reason that Mr. Richard relocated there in 2001 after a career in California that included founding and selling two technology startups. “London is home to some of the best design and art schools in the world. They produce so much talent, but no one was tapping that.”

He now advises the British government on innovation, mentors entrepreneurs through his educational initiatives and is an active angel investor. But his main goal these days is changing perceptions of creative industries; he believes business leaders and governments need to recognize the value of a sector that he says accounts for about $1.6 of every $15.6 that Britain exports. He calculates British creative industries generate about $108,890 every minute.

Stephen Murgatroyd, an educator, writer and consultant based in Edmonton, sees the same promise in Canada. He points to statistics published by the Martin Prosperity Institute think tank (where Dr. Florida serves as director) that suggest creative industries support more than 300,000 jobs in Ontario. The 1,000 digital media companies in Ontario employ 16,000 people and generate about $1.2-billion in revenue. Film and television production companies there account for 30,000 jobs and contributed $1.3-billion to the economy in 2011. The live music sector alone generates $455-million in revenues, according to the institute.

But despite the arts’ contributions, we continue to discourage young people from entering these fields, Dr. Murgatroyd says. “In schools we’re shutting down the arts. Is this really smart?” he questions. “The education system is absolutely crucial to the economy because we need to harness our young people’s talents, but we push them down this narrow path of science or math.”

Mr. Richard argues that the pervasive belief that pursuing the arts is a recipe for financial ruin is the result of an unhelpful stereotype that artists can’t be business-minded. Would anyone walking past Guy Laliberté playing accordion and busking on the streets of Quebec in the 1970s have guessed he had the billion-dollar Cirque Du Soleil enterprise in him?

The fact that many creative industries – most obviously, music and publishing – are in flux doesn’t mean they lack opportunity. “The career for a musician is better now than it was 15 or 20 years ago, but for a distributor it is dire,” says Mr. Richard. Technology disrupted the old business models, but it put more power in the hands of content creators and consumers. “Justin Beiber would not have existed if he wasn’t popularized by the Internet. If not for self-published books, we wouldn’t have Shades of Grey.”

But entrepreneurship does not come naturally to many creatives, as well as others with good ideas. Entrepreneurship is often seen as being innate or somehow magical, but Mr. Richard believes anyone can become an entrepreneur.

With this in mind, he founded the School for Startups five years ago. His School for Creative Startups followed in 2011. The idea is simple: Entrepreneurship can be taught and successful innovation tools pioneered in the technology sector are just as useful to the creative industries. “Why should tools like incubators and accelerators be used solely in technology development?” he asks.

The 12-month program is intended to transform artists, such as painters, musicians, perfumers, interior designers and even illusionists, into successful business owners. Students learn through incubators, benefit from close mentoring and have the opportunity to pitch angel investors and seed funds.

Medeia Cohan-Petrolino, creative director of the School for Creative Startups, described how many students that come to their program lack only confidence. She points to Tina Crawford, a design graduate who came to the program with a knack for illustration using a sewing machine but no real business sense. “Tina had something more than a hobby and less than a business,” Ms. Cohan-Petrolino recalls. “All she really needed was some self belief.” At the end of her year studying with Ms. Cohan-Petrolino and Mr. Richard, Ms. Crawford pitched the influential retail expert Mary Portas and was chosen to design a line of housewares.

Britain does a better job at supporting the creative industries than many countries. After years of scant arts funding under Margaret Thatcher, the National Lottery was launched in 1994 and has since invested about $3.1-billion into the arts. In 2011, the Seed Enterprise Investment Scheme was launched granting tax incentives to investors who put money into companies at an early stage. While it’s not arts focused, the program has been “transformative” for the creative industries, according to Mr. Richard. The government also invests in young entrepreneurs through the Start-up Loans program, which offers small amounts of funding paired with mentoring. Mr. Richard is working with the government to establish the School for Creative Startups in locations across Britain.

Both Mr. Richard and Dr. Murgatroyd suspect that Canada, like most other countries, is smothering potential in the creative industries by focusing solely on STEM subjects (science, technology, engineering and math). “For Canada to be really competitive, we have to unleash a lot more talent that people possess naturally,” Dr. Murgatroyd says. “We are closing options for people to unleash imagination and skills that they are naturally inclined to pursue, and that is where competitiveness comes from. We shouldn’t be constraining people’s imaginations in school by best guesses of what jobs will be available.”

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