Culture vultures

The government's one big idea about business is 'the knowledge-driven economy' - and it's a duff one, argues James Heartfield

Last December the government's white paper, 'Our competitive future: building the knowledge-driven economy', was heavily influenced by Chris Smith's culture department. In fact, an internal memo at the Department of Trade and Industry (DTI) admitted shamefacedly that the 'knowledge-driven economy' was the only new idea that the review had come up with.

While the DTI is at a loss for new ideas, the culture department is buzzing. The success of British films like Lock, Stock and Two Smoking Barrels, Elizabeth and Mrs Brown, or of British artists, pop musicians and fashion designers, all seem to underscore the culture department's seeming importance for the British economy. The department's own 'mapping document' asserts that 'unlike many other industry sectors, creative industries continue to benefit from high growth rates and expanding global markets' ('Creative industries', 1998). Estimates of the cultural industries' earnings are between £50 and £60 billion, and numbers employed between one million and 1.4 million.

The apparent success of the 'creative industries' supports a belief that 'knowledge, skills and creativity help create high productivity' not 'raw materials, land or access to cheap labour' ('Our competitive future'). The DTI is understandably reluctant to write off Britain's manufacturing base, but Chris Smith's advisers have no such hang-ups. I was told by one speechwriter that old-style smoke-stack manufacturing is out, and state of the art design is in. 'Did you know', he said excitedly to me, 'that the components of the world's leading Formula One cars are made in Buckinghamshire? We even make parts for the Italians'.

But the figures cited by the culture department are not as convincing as they appear at first sight. British cinema's big successes, like Shakespeare in Love, The Full Monty and Four Weddings and a Funeral, were made with American money. It was Colin Welland who first boasted that 'the British are coming' when accepting the Oscar for Chariots of Fire nearly 20 years ago, but British filmmaking has never quite fulfilled that potential. Interestingly, it was underemployment in the film business that created the first break for many of Chris Smith's advisers. New Labour's cultural apparatchiks cut their teeth brainstorming arts policies for Chariots of Fire producer David Puttnam after his Enigma Productions company developed into a think-tank as a sideline to making films.

Other culture industries are far from successful. British Film Industry chair Alan Parker used to joke that 'British television is the best in the world' was one of the three biggest lies. In the 10 years from 1985 to 1996 TV and radio broadcasting slipped from being £24 million in the black to £282 million in the red - today the figure is still a yawning £272 million deficit. A culture department inquiry made the astute observation that gloomy British programmes were a bit 'too dark and too socio-political' to do well abroad. The long-term explanation, though, is that the explosion of satellite broadcasting exposed the weakness in Britain's programme makers, as Sky started buying in US comedies and dramas to fill its empty schedules.

It is easy to see through that kind of hype, but more confusing are those areas where cultural industries really are doing well. Some of the big boom areas are the fine arts, pop music and fashion. But while these sectors are enjoying relative success, they are still indicative of an underlying problem in the overall structure of the British economy.

The art and antiques market has a turnover of £2.5 billion (though no new value is created by selling old masters and furniture). Between 1981 and 1991 the number of artists working increased by 71 percent, at a time when employment elsewhere was stagnant or declining, as the culture secretary has often pointed out. But the boom in the fine arts is deceptive.

Luxury goods generally do well when the rest of the economy is not doing much. That is because money that would normally have been directed towards productive investment is instead dedicated to the personal consumption of the very wealthy. In recent years shareholders have demanded big dividends rather than see their money idling away in company accounts. The cash they get back fuels the luxury goods market. So, for example, sports-car sales are up 248 percent in five years, and the luxury housing market is up 124 percent. It is pointed that the peak in both exports and imports of art and antiques is at the height of the recession of the early 1990s, tailing off as the economy improved.

If the top end of the culture industries are stoked by idle capital, the more popular end is being fed by idle labour - in particular underemployed young people. Red or Dead designer Wayne Hemingway makes the point that Britain's growing army of students and unemployed young people are the market for the youth culture that the culture department is so proud of. (The government took Hemingway's protests so seriously that they even considered exempting pop bands from the responsibilities under the JobSeekers' Charter.) Attractive as the image of Britain's 'adultescents' spurred on to ever-greater creativity by their low incomes is, some of them might prefer jobs and higher incomes, even at the cost of being a bit more nerdy. Like the high arts, the popular are a flower growing on a dunghill of low rates of investment in new industries.

The government's embrace of the 'creative industries' is simply adapting to trends that look good but seen in the round are problematic. In principle, economies develop by dedicating their energies mainly towards production, rather than consumption. Increased consumption can spur on production, but only new production makes increased consumption possible. In the main though, the clique of advisers and culturati around the government have a bias in the opposite direction. They celebrate Britain's small Formula One motor-car industry, while investment in Britain's roads is at a standstill and official government policy is to slow the traffic down. The Ferrari team stuck in a 20 mph local authority speed limit sums up the mismatch between Britain's 'creative' industries and its bias against new, mass production.

Contained within the remit of the culture department the conceit that we will all make a living taking in each other's washing is relatively harmless. By contrast the attempt to redefine manufacturing industries as 'creative industries' solidifies the bias against new and productive investments.

In his excellent new pamphlet Cult IT, professor of innovation James Woudhuysen explains that much of the investment in computer technology has had no noticeable impact upon productivity. Instead computers at work are as likely to be absorbing employees' time with Minesweeper and Solitaire as saving time on real work. Woudhuysen quotes Thomas Landauer of Bell Laboratories saying that with companies' essentially wasteful expenditure on new technology 'computers have been consumer products not capital goods'. The problem, as Woudhuysen points out, is that 'the purpose of business has been redefined through information technology as play'. Elevating creativity over production makes this possible.

Recently Oxford professor Theodore Zeldin argued that the real importance of employment is workplace socialisation, not work itself, which if pursued too aggressively is antisocial and disruptive. Instead of being laughed out of court, Zeldin has been asked to oversee the personnel policies of a large corporation and to put his ideas into practice.

The destructive impact of the 'creative industries' can be seen in the DTI's awkward attempts to redefine Britain's biotechnology industry in the same terms. On the face of it, biotechnology ought to fit the model of a knowledge-driven economy perfectly. Britain's universities have spurred on the most advanced genetic engineering programme in Europe. But somehow everybody knew that this is not what was meant by a 'creative industry'.

Instead of embracing this one truly innovative technology, the government has failed to support it against the criticisms of the environmentalist lobby. Clearly Tony Blair's civil servants advised him that this really was something to be cherished and for a while it looked like he might face down the critics. But the New Labour team feels more comfortable hanging out with artists and pop stars than stuffy old scientists. Gradually the government conceded that genetic engineering was to be seen as a problem, carefully labelled and quarantined, instead of what it is, one of few great successes.

I talked to one British scientist who had been working for 25 years to crack the biotechnology of how tomatoes ripen. Today his work is marketed in America as the Flavr Savr Tomato. What would happen if the government conceded to the demands for a moratorium? 'Most of the scientists would simply move to America, where they could work undisturbed', he told me, sadly. 'And in 10 years' time we would all be exporting GMOs to Britain'.

Friends of LM can buy James Heartfield's Need and Desire in the Post-Material Economy (published by Sheffield Hallam University Press) at a reduced price. Phone (0171) 269 9224 for details

James Woudhuysen's Cult IT is published by the Institute of Contemporary Arts