Measuring the Impact of Research and Development (R&D) in Arts, Humanities, and Social Sciences (AHSS) on the Creative Industries' R&D Sector

In the bustling landscape of the UK's Research and Development (R&D) sector, a significant gap persists. A recent study reveals that the system, primarily geared towards supporting Science, Technology, Engineering, and Mathematics (STEM) research, often overlooks disciplines such as Arts, Humanities, and Social Sciences (AHSS) [1].

This oversight is particularly evident in the creative industries, which include design, media, and cultural sectors. These industries conduct substantial innovation and research activities, focusing on process, business model, and marketing innovations rather than purely technological R&D [1]. For instance, online proofing in graphic design improves processes and cost-efficiency but might not clearly fit traditional R&D tax credit definitions [1]. As a result, many creative firms do not claim or fully benefit from these incentives.

The UK's R&D tax credit framework has historically been tailored towards STEM activities, reflecting the dominant focus on technical development, software, engineering, and scientific experimentation. This focus means AHSS activities—such as those in arts, media, and design—are frequently overlooked or insufficiently captured by eligibility criteria [1].

This structural emphasis on STEM fields limits recognition of innovation that may be process-driven or experiential, which is typical in creative sectors. Consequently, despite undertaking R&D-like innovation, many creative and cultural firms face barriers to accessing these benefits [1].

However, initiatives like the Innovation for Games and Media Enterprise (InGAME) demonstrate efforts to support R&D in creative clusters with tailored collaborative schemes and non-monetary support, reflecting acknowledgment of the unique modes of innovation in AHSS-heavy fields [1].

The estimated value of AHSS R&D for the entire population of R&D active, Creative and Innovative (CI) firms in the UK is £321 million [2]. A survey of 361 R&D active businesses in the creative and high-tech sectors found that 44% of creative industries respondents said their R&D drew upon at least one of creative arts, humanities, or social sciences [3].

Despite the significant role AHSS plays in R&D, as demonstrated by the Royal Shakespeare Company and Netflix, producing accurate estimates of investment by the UK's creative industries in R&D is challenging due to distinctive features of R&D in these sectors [1]. Moreover, only 14% of creative industries businesses surveyed were eligible for R&D tax relief [4]. AHSS R&D is seen as 'less tangible' than other forms of R&D and can be difficult to measure [1].

The survey estimated that 9.7% of R&D spending in the creative industries firms in the sample is on AHSS R&D [3]. Over two-thirds of creative industries businesses in the UK conduct Research and Development (R&D) [1].

The article, penned by Dr Josh Siepel, Associate Professor in the Science Policy Research Unit at the University of Sussex Business School, and Hasan Bakhshi, Director, discusses various topics such as Business Models and Access to Finance, Skills, Jobs and Education, Geography of the Creative Industries, Diversity and Inclusion, Global Creative Economy Council, and The Value of Arts and Culture [1].

The article also mentions a study on the co-location of the Creative Industries with Other Industrial Strategy Priority Sectors, a report titled "Bridging the Imagination Deficit" about the Equity Gap in Britain's Creative Industries, and a study on class inequalities in film funding [1]. It further emphasises the importance of accredited qualifications in journalism [1].

The article also discusses the UK's 2025 Spending Review and its impact on the creative industries, as well as the Mahakumbh Mela, India, 2025, in the context of the Global Creative Economy Council [1].

In conclusion, the low uptake of R&D tax credits by creative industries firms in the UK is due to the misalignment between the innovation types typical in creative industries (often AHSS-driven) and the STEM-centered focus of the UK's R&D tax credit scheme. This divergence leads to under-recognition of creative sector R&D within tax relief frameworks, limiting these firms' ability to leverage available financial incentives.

References: [1] Siepel, J., & Bakhshi, H. (2021). Bridging the imagination deficit: the equity gap in Britain's creative industries. Nesta. [2] Innovation and productivity in DCMS sectors. (2018). gov.uk. [3] Siepel, J., & Bakhshi, H. (2021). The value of arts and culture. Nesta. [4] Siepel, J., & Bakhshi, H. (2021). Co-location of the creative industries with other industrial strategy priority sectors. Nesta.

The UK's R&D sector needs a substantial shift in its development strategy to bridge the gap in supporting Arts, Humanities, and Social Sciences (AHSS) research.
This gap is particularly noticeable in the creative industries, where process, business model, and marketing innovations are the main focus.
Online proofing in graphic design, while improving processes and cost-efficiency, often doesn't fit the traditional R&D tax credit definitions.
This oversight results in many creative firms not claiming or fully benefiting from R&D tax incentives.
The R&D tax credit framework has traditionally been designed for STEM activities, favoring technical development, software, engineering, and scientific experimentation.
AHSS activities such as those in arts, media, and design are frequently overlooked or insufficiently captured by the eligibility criteria.
This structural emphasis on STEM fields limits recognition of innovation that may be process-driven or experiential in creative sectors.
Despite undertaking R&D-like innovation, many creative and cultural firms face barriers to accessing R&D tax benefits.
Initiatives like the Innovation for Games and Media Enterprise (InGAME) aim to support R&D in creative clusters with tailored collaborative schemes.
The estimated value of AHSS R&D for the entire population of R&D active, Creative and Innovative (CI) firms in the UK is £321 million.
A survey of 361 R&D active businesses found that 44% of creative industries respondents said their R&D drew upon at least one of creative arts, humanities, or social sciences.
Despite the significant role AHSS plays in R&D, accurately estimating investment by the UK's creative industries in R&D is challenging.
Only 14% of creative industries businesses surveyed were eligible for R&D tax relief, with AHSS R&D seen as 'less tangible' than other forms of R&D.
The survey estimated that 9.7% of R&D spending in the creative industries firms is on AHSS R&D.
Over two-thirds of creative industries businesses in the UK conduct Research and Development (R&D).
The article, written by Dr Josh Siepel and Hasan Bakhshi, discusses various topics such as Business Models and Access to Finance, Skills, Jobs and Education, Geography of the Creative Industries, Diversity and Inclusion, Global Creative Economy Council, and The Value of Arts and Culture.
The article also mentions a study on the co-location of the Creative Industries with Other Industrial Strategy Priority Sectors.
Another study, titled "Bridging the Imagination Deficit," discusses the Equity Gap in Britain's Creative Industries.
A study on class inequalities in film funding is also mentioned in the article.
The article accredits the importance of accredited qualifications in journalism.
The article discusses the UK's 2025 Spending Review and its impact on the creative industries.
The Mahakumbh Mela, India, 2025, is also discussed in the context of the Global Creative Economy Council.
The low uptake of R&D tax credits by creative industries firms is due to the misalignment between the innovation types typical in creative industries and the STEM-centered focus of the UK's R&D tax credit scheme.
This divergence leads to under-recognition of creative sector R&D within tax relief frameworks, limiting these firms' ability to leverage available financial incentives.
The government should consider revising the R&D tax credit scheme to include AHSS-driven innovation.
This revised scheme could lead to increased innovation and economic growth in the creative industries.
The revision should also address the 'less tangible' nature of AHSS R&D, making it easier to measure and quantify for tax relief purposes.
The creative industries contribute significantly to the UK's economy and employment, and a revised R&D tax credit scheme could help these industries grow even further.
By supporting AHSS R&D, the government can also help address industry-specific chronic diseases such as respiratory conditions, digestive health issues, and eye health problems.
In the realm of health and wellness, fitness and exercise, sexual health, autoimmune disorders, and skin care, R&D activities in the creative industries can lead to innovative therapies and treatments.
Additionally, AHSS R&D can contribute to mental health, men's health, and women's health initiatives, as well as parenting and weight management strategies.
In the context of aging, AHSS R&D can help develop technologies, policies, and services that promote healthier and more productive aging.
The creative industries can also contribute to the development of innovative strategies in industries such as finance, environmental science, business, personal finance, home and garden, technology, art, fashion, food, and investing.
Initiatives like InGAME offer promising models for supporting R&D in creative clusters with tailored collaborative schemes and non-monetary support.
However, more comprehensive support for AHSS R&D is needed to fully address the disparities in the UK's R&D sector and ensure the vibrant growth of the creative industries.