Creative Industries Economic Estimates for Northern Ireland

Transcription

1 Creative Industries Economic Estimates for Northern Ireland Experimental Statistics 2011 DCAL Research Findings 7/2011 Philip Spotswood DCAL Research and Statistics Branch TYPE

2 Contents Page Background 3 Key Economic Estimates 4 Technical Discussion 6 Technical Annex 11 References 20 2

3 Acknowledgements DCAL Research and Statistics Branch would like to acknowledge the input from Economic and Labour Market Statistics Branch (ELMS) in the Department of Finance and Personnel (DFP). While the Northern Ireland model was adapted from the DCMS Creative Industries Economic Estimates by DCAL, ELMS provided the raw data for input into the model Further information In keeping with government policy, no hard copies of this report have been published, but are available on request. Requests or enquiries concerning this publication should be directed to: Orla Bateson Research and Statistics Branch Department of Culture, Arts and Leisure Causeway Exchange 1-7 Bedford Street Belfast BT2 7EG Tel:

4 Background The Department of Culture, Arts and Leisure (DCAL) is the government lead on the creative industries and works in partnership with other departments, agencies and sectoral stakeholders to support the growth and development of the creative industries in Northern Ireland. By supporting the culture, arts and leisure infrastructure and initiatives across the region, the Department also aims to nurture an environment from which creative ideas, creative talent and creative entrepreneurs emerge. In December 2010, the Department for Culture, Media and Sport (DCMS) released Creative Industries Economic Estimates based on the new 2007 Standard Industrial Classification (SIC). The DCMS estimates do not provide separate estimates for the Creative Industries in Northern Ireland. Therefore, it has been necessary to separately produce these, using, where possible, the same definitions and methodology as are adopted in the DCMS estimates. These statistics - like their DCMS counterparts - carry the status of experimental statistics as they are still in the development phase. As they are still in the development phase, the statistics should be treated with caution. They represent a snapshot of the Creative Industries using the most recent data available and should not be compared with previous estimates due to the change of SIC codes used. DCMS are still in the process of consulting with users and the definitions and methodology may be further refined. Any changes in the DCMS definitions and methodology may also be adopted in the case of Northern Ireland estimates. The statistics presented here are derived from various databases and refer to different years. In each case, the figures are the latest available. 4

5 Key Economic Estimates The key economic estimates for the Creative Industries in Northern Ireland are shown below. In summary: o Gross Value Added for the Creative Industries was 737 million in This was equivalent to 4.2% of Northern Ireland s total GVA. o The estimated number of business units in the Creative Industries sector was 2,200 in This represented 3.2% of all business units in Northern Ireland. o The number of people in creative employment in 2009 was estimated at 31,000. This represented 4.1% of total employment in Northern Ireland. Table 1 Gross Value Added (GVA) of the Creative Industries (local unit results), Northern Ireland, 2008 Sector GVA at basic prices ( million) Proportion of total Northern Ireland GVA (%) 1. Advertising % 2. Architecture % 3. Art and antiques * N/A 5. Design % 6. Designer fashion * N/A 7. Film, video and photography * N/A 9 & 10. Music and visual and performing arts % 11. Publishing % 8 & 12. Software and electronic publishing % 8 & 12. Digital and entertainment media * N/A 13. TV and radio Total GVA for Creative Industries % Total GVA for all Industries 17,470 Source: Northern Ireland Annual Business Inquiry, 2009 Notes * Data suppressed to avoid disclosure. The 2009 Northern Ireland Annual Business Inquiry is the source for the 2008 revised figures which were produced with 2009 provisional results. It is not possible to measure GVA for the crafts industry. 5

6 Table 2 Number of Businesses in the Creative Industries, 2010 Sector Number of reporting units As a proportion of Creative Industry reporting units [%] As a proportion of all reporting units [%] 1. Advertising % 0.3% 2. Architecture % 0.6% 3. Art and antiques % 0.1% 5. Design % 0.3% 6. Designer fashion % 0.0% 7. Film, video and photography 9 & 10. Music and visual and performing arts % 0.2% % 0.3% 11. Publishing % 0.2% 8 & 12. Software and % 1.1% electronic publishing 8 & 12. Digital and 0 0.0% 0.0% entertainment media 13. TV and radio % 0.1% Total 2, % 3.2% All enterprises 69,670 Source: Inter-Departmental Business Register, March 2010 Notes Figures have been rounded to the nearest 5 and thus may not add to totals. The measure Reporting unit is used rather than business. A Reporting Unit can be thought of as the head office location that reports for all the individual sites in the business. Therefore a business that has more than one site will only be included once in the table above. Table 3 Number of People in Creative Employment in Northern Ireland, 2009 Number Employees in Creative Industries 16,000 Employees doing creative jobs outside Creative Industries 8,000 Self-employed in Creative Industries 5,000 Self-employed doing creative jobs outside Creative Industries 3,000 Total creative employment 31,000 Creative employment as a percentage of all employment 4.1% Source: DCAL estimates produced using Census of Employment and Labour Force Survey Notes Estimates are based on small sample sizes and are subject to a relatively high degree of sampling variability. They should, therefore, be treated with caution. The employment estimates have been rounded to the nearest 1,000 for publication. As the figures have been rounded, they do not add to the total. It is not possible to disaggregate data by Creative Industries sectors. Total employment in 2009 (August October) was 762,000 (LFS Historical Key Data Series, DETI). 6

7 Technical Discussion Defining the Creative Industries These statistics adopt the official definition of the Creative Industries which is used by the Department for Culture, Media and Sport s Creative Industries Economic Estimates, December The official definition of Creative Industries originates from the DCMS Mapping Document of 1998 and which was reaffirmed in the DCMS Mapping Document of 2001: Those activities which have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property. These have been taken to include advertising, architecture, the art and antiques market, crafts, design, designer fashion, film and video, interactive leisure software, music, the performing arts, publishing, software and computer services, television and radio. DCMS also recognise the close economic relationships with other sectors such as tourism, hospitality, museums and galleries, heritage and sport The Mapping Document formally defines the Creative Industries in terms of 13 sectors. These are listed in Table 4 below: Table 4 Creative Industries Sectors Mapping Document Chapter 1 Advertising 2 Architecture 3 Art & Antique Market 4 Crafts 5 Design 6 Designer Fashion 7 Film & Video 8 Interactive Leisure Software 9 Music 10 Performing Arts 11 Publishing 12 Software & Computer Services 13 Television & Radio Source: DCMS Mapping Document Sector The linkage of the above definition with Official Statistics is through the Standard Industrial Classification (SIC), last revised by the Office of National Statistics in SIC2007 uses 615 classes and a further 191 sub-classes to classify businesses and their employees according to the type of economic activity the business is engaged in. The definitional boundary of the Creative Industries sector does not follow exactly the boundary of any particular aggregation of SIC classes/subclasses. In short, for some types of economic activity, it is safe to assume that all businesses with a particular SIC code will fall within the definition of Creative Industry (for example book publishing). For 7

8 other types, it is safe to assume that all businesses with a particular SIC code will not lie within the definition of Creative Industry (for example the sale of motor vehicles). However, there are types of activity where a proportion of businesses with a particular SIC code will fall within the definition of Creative Industry and a proportion will not (for example clothing manufacture where a small proportion is deemed to be creative ). When considering creative employment, it is important to recognise that there are two broad groups: 1. Those who work within the Creative Industries 2. Those who do creative jobs in businesses which are outside the Creative Industries To estimate the size of the first group, SIC codes are used. To estimate the size of the second group, Standard Occupational Classification [SOC] codes are required in addition to SIC codes. In keeping with DCMS methodology, SIC 2007 and SOC 2000 codes are used in the compilation of these statistics. Tables 5 and 6 in the Technical Annex list the SIC and SOC codes which DCMS currently regard as constituting Creative Industries. These tables also indicate the proportion of each code which is considered by DCMS to belong to the Creative Industries. DCMS used slightly differing SIC groupings when calculating IDBR and ABI/ABS values due to IDBR values not being available at 5-digit SIC. Economic and Labour Market Statistics (ELMS) in Department of Finance and Personnel (DFP) used the SIC groupings from the DCMS December Only the IDBR SIC groupings are shown in Annex A. 8

9 The Three Key Economic Measures 1 GVA Estimates Gross Value Added (GVA) represents the income generated by businesses, out of which is paid wages and salaries, the cost of capital investment, and financial charges before arriving at a figure for profit. Further details about how GVA is calculated can be found in the Northern Ireland Annual Business Inquiry (Experimental) 2009, published in April The source of GVA data is the Northern Ireland Annual Business Inquiry, a statutory survey which adopts a stratified sample. All businesses with 50+ employees, or 20+ employees and more than one local unit, are fully enumerated while smaller enterprises are selected on a random stratified basis. Because the estimates of GVA are partly based on a sample, they are subject to sampling error. 2 Number of Businesses The source of data is the Inter-Departmental Business Register, maintained within ELMS. The register contains information on all businesses which are VAT registered or operating a PAYE scheme, and therefore excludes very small businesses below these thresholds. It may also exclude some new start-ups because of delays in notification. 3 Employment Estimates Possible methods of estimation There are two possible data sources which enable sufficient disaggregation at SIC level to formulate employment estimates for the Creative Industries the Labour Force Survey (LFS) and the Census of Employment (CoE). The main advantage of the LFS is that it includes employees and selfemployed persons in both Creative Industries and Creative Occupations outside the Creative Industries. The main disadvantage is that the sampling errors associated with what is a very small sector of the workforce are large and make interpretation of the findings difficult. The main advantage of the CoE is that it is free from sampling error. The main disadvantage is that it does not include self-employed people and cannot be used to identify those in Creative Occupations outside of the Creative Industries. Creative Industries employment estimates produced by DCMS are based solely on the Labour Force Survey. However, Northern Ireland is excluded from these estimates as DCMS regard the LFS as having too small a sample size in Northern Ireland to produce reliable estimates for the Creative Industries sector here. 9

10 DCAL Statisticians (in consultation with Statisticians from ELMS) considered several possible approaches to deriving estimates for Northern Ireland. Firstly, estimates derived exclusively from the Northern Ireland Labour Force Survey (NILFS) were considered. DCMS were consulted about this suggestion and they advised against this approach for producing Northern Ireland estimates on the grounds that the small sample size would rise to potentially unreliable estimates. This view appears to be borne out when NILFS-derived estimates for 2009 and 2010 are considered. These figures suggest an increase in Northern Ireland Creative Industries employment of 11% in this short period, a finding which appears to be highly questionable given the economic climate prevalent during this time. A second option explored was using Census of Employment as the data source. The fundamental limitation of this approach is that it will only provide estimates for employees in Creative Industries. It will not provide any estimates for those who are self-employed nor for those who work in Creative Occupations outside of the Creative Industries. A third option is to combine the two sources, appealing to the strengths of each while at the same time mitigating against the weakness of each. Given the limitations of Options 1 and 2, Option 3 was chosen as the means of producing Creative Industries employment estimates. This methodology is outlined below and the full detail is contained in the Technical Annex. Methodology Creative employment consists of those in employment within the Creative Industries and those who do creative jobs in businesses outside the Creative Industries (Source: DCMS Creative Industries Economic Estimates Statistical Bulletin, p7). There are four components: 1 Employees in Creative Industries 2 Self-employed in Creative Industries 3 Employees in creative jobs outside Creative Industries 4 Self-employed in creative jobs outside Creative Industries The general approach is to use the more statistically robust Census of Employment to estimate the number of employees in Creative Industries and to use the Northern Ireland Labour Force Survey to estimate ratios between the different components listed above. These ratios are estimated by longterm average data derived by combining several years of Northern Ireland Labour Force Survey data. The Census of Employment acts as the cornerstone of the creative employment estimate. 10

11 Specifically, the following information is used: Data Source Number of employees in Creative Industries CoE 2009 Ratio of employees in Creative Industries: NILFS Employees in creative jobs outside Creative Industries [Ratio 1] Ratio of employees in Creative Industries: self-employed in Creative Industries [Ratio 2] Ratio of employees in Creative Industries: self-employed in creative jobs outside the Creative Industries [Ratio 3] NILFS NILFS By using the above data, the four components of creative employment are estimated. The calculations required are as follows: a The number of employees in Creative Industries is taken to equal the figure as stated in the Census of Employment; b Using Ratio 1 above, input the number from a) above into the relevant part of the ratio. This produces an estimate for the number of employees in creative jobs outside the Creative Industries; c Using Ratio 2 above, input the number from a) above into the relevant part of the ratio. This produces an estimate for the number of selfemployed in the Creative Industries; d Using Ratio 3 above, input the number from a) above into the relevant part of the ratio. This produces an estimate for the number of selfemployed in creative jobs outside the Creative Industries. The calculations are reproduced in the Technical Annex. Limitations of employment estimates There are two main limitations with the approach outlined to estimate employment in the Creative Industries. The first is that it makes use of the LFS and therefore, the resultant estimates are influenced by the sampling error inherent in the survey. LFS estimates in GB are also influenced by sampling error, but the much larger sample size in GB ensures that sampling error associated with GB data is far less. In Northern Ireland, unlike in GB, it is not possible to look at employment in the various sectors (outlined in Table 4) that comprise the Creative Industries. While sectoral data is available from the Census of Employment, sectoral analysis would also require disaggregated data on a sector-by-sector basis from the LFS in order to estimate those in occupations in businesses outside the creative industries and the self-employed. Given that each sector within 11

12 the creative industries is quite small, the sampling error associated with the LFS at this level of analysis would be too large to enable reliable estimates to be made. Despite the large sampling errors associated with using the LFS for such specialised investigation as estimating employment in the Creative Industries, it should be borne in mind that care has been taken to minimise their effect by using several years LFS data to inform the estimates made in this paper. The second main limitation is associated with the weightings used to estimate the proportion of various SIC and SOC groups which are creative (Tables 4 and 5 refer). There is no known calculus available to determine what these weights should be in Northern Ireland. The principle of weighting is sensible, but all that is available are the weights developed in GB and these have been adopted here. Further limitations include the scope of the Census of Employment (which means that numbers of self-employed have to be estimated from the LFS), the biennial nature of the Census of Employment, and, finally, there is the possibility that official statistics are not picking up people who are engaged in the sector on a spare time basis. 12

13 Technical Annex Annex A Table 5 Eligible SIC and SOC Codes Standard Industrial Classification Codes Relevant to the Creative Industries Sector SIC 2007 Description Proportion of code deemed relevant by DCMS Advertising Advertising agencies 100.0% Media representation 100.0% Architecture Architectural activities 100.0% Specialised design activities 4.5% Art and antiques Other retail sale of new goods in specialised stores 3.8% Retail sale of second-hand goods in stores 21.1% Crafts No relevant SIC codes Design Specialised design activities 89.7% Designer fashion Manufacture of leather clothes 0.5% Manufacture of workwear 0.5% Manufacture of other outerwear 0.5% Manufacture of underwear 0.5% Manufacture of other wearing apparel 0.5% Manufacture of articles of fur 0.5% Manufacture of knitted and crocheted hosiery 0.5% Manufacture of other knitted and crocheted hosiery 0.5% Manufacture of luggage, handbags etc 0.5% Manufacture of footwear 0.5% Specialised design activities 5.8% Video, film, music, photography Music and the visual and performing arts Reproduction of recorded media 10.0% Photographic activities 25.0% Motion picture and video production activities 9.6% Motion picture, video and TV post-production activities 9.6% Motion picture and video distribution activities 90.0% Motion picture projection activities 100.0% Sound recording and music publishing activities 100.0% Reproduction of recorded media 10.0% Performing arts 100.0% Support activities to performing arts 100.0% Artistic creation 100.0% Operation of arts facilities 100.0% Activities of employment placement agencies 0.5% Publishing Book publishing 100.0% Publishing of newspapers 100.0% Publishing of journals and periodicals 100.0% Other publishing activities 50.0% News agency activities 100.0% Software and electronic publishing Digital and entertainment media Reproduction of recorded media 5.0% Computer programming activities 98.2% Computer consultancy activities 100.0% Other software publishing 100.0% Publishing of computer games 100.0% Computer programming activities 1.8% Radio and TV Radio broadcasting 100.0% Television programming and broadcasting activities 100.0% 59.11/3 TV programme production activities 90.4% Motion picture, video & TV post-production activities 90.4% 59.13/3 TV programme distribution activities 10.0% Source: DCMS Creative Industries Economic Estimates (Experimental Statistics),

14 Table 6 Standard Occupational Classification Codes Relevant to the Creative Industries Sector SOC 2000 Description Proportion of code Deemed relevant BY DCMS Advertising 1134 Advertising and public relations managers 100.0% 3433 Public relations officers 100.0% 3543 Marketing associate professionals 100.0% Architecture 2431 Architects 100.0% 2432 Town planners 100.0% 3121 Architectural technologists and town planning technicians 100.0% Art/antiques trade No relevant SOC codes for this sector Crafts 5491 Glass and ceramics makers, decorators and finishers 100.0% 5492 Furniture makers, other craft woodworkers 100.0% 5493 Pattern makers (moulds) 100.0% 5494 Musical instrument makers, tuners 100.0% 5495 Goldsmiths, silversmiths, precious stone workers 100.0% 5496 Floral arrangers, florists 100.0% 5499 Handcraft occupations not elsewhere classified 100.0% 8112 Glass and ceramics process operatives 100.0% 9121 Labourers in building and woodworking trades 5.0% Design 2126 Design and development engineers 100.0% 3411 Artists 100.0% 3421 Graphic designers 100.0% 3422 Product, clothing and related designers 93.9% Designer fashion 3422 Product, clothing and related designers 6.1% 5411 Weavers and knitters 100.0% Film and video 3434 Photographers and audio-visual equipment operators 100.0% Music and the visual and performing arts 3412 Authors, writers, journalists 100.0% 3413 Actors, entertainers 100.0% 3414 Dancers and choreographers 100.0% 3415 Musicians 100.0% 3416 Arts officers, producers and directors 100.0% Publishing 3431 Journalists, newspaper and periodical editors 100.0% 5421 Originators, compositors and print preparers 100.0% 5422 Printers 100.0% 5423 Bookbinders and print finishers 100.0% 5424 Screen printers 100.0% Software and electronic publishing Digital and entertainment media 1136 Information and communication technology managers 100.0% 2131 IT strategy and planning professionals 100.0% No relevant SOC codes for this sector Radio and TV 3432 Broadcasting associate professionals 100.0% 5244 TV, video and audio engineers 100.0% Source: DCMS Creative Industries Economic Estimates (Experimental Statistics),

15 Annex B Employment Estimates Methodology Calculations Step 1 Produce a LFS dataset comprising two non-overlapping annual datasets and ensure it is free from duplicate cases. The complex wave structure of the LFS sample means that individuals are interviewed for up to five consecutive quarters and it is important that no individual appears more than once in a dataset. The dataset used for these estimates is an aggregate of the following annual datasets: January 2009 December 2009 January 2010 December Remove all self-employed cases. Using the information from Tables 5 and 6 in Annex A, use the LFS data to calculate the ratio: Step 2 Eligible SIC employees: Eligible SOC employees where Eligible SIC employees are those who work in a Creative Industry; and Eligible SOC employees are those who do a creative job but not in a Creative Industry. Using the information in Table 5, calculate the number of eligible SIC employees from the Census of Employment. Step 3 Using the ratio from step 1, the number of employees doing creative jobs outside the Creative Industries can be estimated. Step 4 From the LFS, calculate the following ratios: Eligible SIC employed: Eligible SIC self-employed Eligible SIC employed: Eligible SOC self-employed Steps 1 to 4 produce all of the information required to produce the creative employment estimate. Table 7 and Table 8 show the employment estimates from the LFS and the employment ratios. 15

16 Table 7 LFS estimates Jan 2009 Dec 2010 Employees in Creative Industries Employees doing creative jobs outside Creative Industries Self-employed in Creative Industries 18,000 9,000 5,000 4,000 Source: Labour Force Survey Self-employed doing creative jobs outside Creative Industries Notes Estimates are based on small sample sizes and are subject to a relatively high degree of sampling variability. They should, therefore, be treated with caution. The employment estimates have been rounded to the nearest 1,000 for publication. Table 8 Employment ratios Employees in Creative Industries Eligible SIC employees: Eligible SOC employees Eligible SIC employed : Eligible SIC self-employed 15, : : : 1 Eligible SIC employed : Eligible SOC self-employed The estimated number of people in creative employment is: Employees in Creative Industries 16,000 Employees doing creative jobs outside Creative Industries 8,000 Self-employed in Creative Industries 5,000 Self-employed doing creative jobs outside Creative Industries 3,000 Total creative employment 31,000 Margin of error +/- 3,824 Notes Estimates are based on small sample sizes and are subject to a relatively high degree of sampling variability. They should, therefore, be treated with caution. The employment estimates have rounded to the nearest 1,000 for publication. As the figures have been rounded, they do not add to the total. 16

17 Annex C Margin of Error for Employment Estimate As the creative employment estimate uses data from the Labour Force Survey, estimates will be subject to sampling error. This section outlines the methodology used to calculate the confidence interval for the employment estimates. Approximate margins of error have been calculated by means of simulation. Simulation is the preferred approach to such calculations when estimates are derived from a complex sample. In this case, the complexity arises because two sources are used to calculate employment estimates. Table 9 shows the 95% confidence intervals that applied to the LFS data. Table 9 LFS estimates Jan 2009 Dec 2010 Employees in Creative Industries Employees doing creative jobs outside Creative Industries Self-employed in Creative Industries Self-employed doing creative jobs outside Creative Industries Creative employment 18,000 9,000 5,000 4,000 36,000 95% CI = 2,947 95% CI = 2,135 95% CI = 1,605 95% CI = 1,357 95% CI = 4,136 From this, the standard error of each of the four components can be estimated by dividing the 95% confidence interval by Simulation of each component is then carried out in Microsoft Excel. For example, to model the likely values of the ratio of employees in the Creative Industries : employees in doing creative jobs outside the Creative Industries, Excel is programmed to generate two columns of data to the following specification: Column A 20,000 normally distributed random numbers with mean 18,000 and standard deviation 2,947 / 1.96 Column B 20,000 normally distributed random numbers with mean 9,000 and standard deviation 2,135 / 1.96 The random values in Column A are then divided by those in Column B. This models the behaviour of the ratio employees in the Creative Industries : employees doing creative jobs outside the Creative Industries under conditions of repeated sampling 20,000 times 1. This process is repeated, using the relevant LFS data, for the other two ratios used in the employment estimation process. The simulated ratios are then used to construct simulated components, the components being estimated according to the method outlined in Steps 1 to 4 in Annex B. 1 Microsoft Excel Introduction to Monte Carlo Simulation recommends at least 1,000 iterations be performed 17

18 The data in the Total column represents how the estimate for creative employment would be expected to behave under conditions of repeated sampling. The histogram and descriptive statistics on the following page show that the figures in the Total column follow a normal distribution centred approximately on the estimate of 31,000 (Table 10 and Figure 1). Table 10 Ratio estimates Example of simulation data used Component estimates RATIO1 RATIO2 RATIO TOTAL SIC Emp SIC Emp SIC Emp SIC Emp SOC Emp SIC S-emp SOC S-emp to to to SOC Emp SIC S-EmpSOC S-Emp

19 Figure 1 Distribution of the simulated data Frequency Mean Standard Error Median Mode #N/A Standard Deviation Sample Variance Kurtosis Skewness Range Minimum Maximum Sum 6.3E+08 Count By multiplying the standard deviation of by 1.96, an approximate 95% confidence interval around the estimate can be constructed. The estimate for Creative Industries employment with 95% confidence interval is therefore: 31,000 +/- 3,824 The confidence interval is less than that associated with a pure Labour Force Survey estimate. This is to be expected as the estimate derived from the Census of Employment and LFS contains a component which is not subject to sampling error. 19

20 References Department for Culture, Media and Sport, Creative Industries Economic Estimates (Experimental Statistics) Full Statistical Release. [online] Available at: Department for Culture, Media and Sport, Creative Industries Mapping Document. [online] Available at: e_library/publications/4632.aspx Department of Enterprise, Trade and Investment. Labour Force Historical Key Data Series. [online] Available at: _-_2011.xls Department of Enterprise, Trade and Investment, Northern Ireland Annual Business Inquiry (Experimental) [online] Available at: 20