Venture capitalists are far more likely to invest in pharmaceuticals despite having less faith that the UK can be a world leader in the field and the fact that it contributes far less to the UK economy.
Creative industries, including advertising, architecture, design, music and fashion, contributed 拢11.4bn to the balance of trade in the UK in 2001, twice the contribution of the pharmaceuticals sector and well ahead of the construction industry and insurance and pensions.
Despite this fact, only 22% of venture capitalists said they would be likely to invest in the creative industries compared with 42% for the pharmaceuticals industry because they are see the sector as more risky.
In today's Financial Times, David Carratt, partner at Kennett Ventures, says: "Creative industries are often seen as having black arts at their centre. They have something that private equity professionals just don't understand and that it's difficult to replicate."
The research has been carried out by the National Endowment for Science, Technology and the Arts, which supports the creative industries in the UK.
In a report entitled 'New solutions to old problems' Nesta says that investors and creative industries need better to recognise each other's needs and capabilities. It recommends establishing a trade association that will act as a gateway for investors; encouragement of "creative clusters", such as Hoxton in London and the Northern Quarter in Manchester; and improved financial skills for people working in the creative industries.
Nesta is also offering financial training to young entrepreneurs in creative industries through its Graduate Pioneer Programme, which offers an award of up to 拢35,000 to help recent graduates get started.
Chris Powell, chairman of Nesta and former chairman of BMP DDB, said: "Nesta's Graduate Pioneer Programme is the first step in addressing some of the barriers to investing in the creative industries identified by our research. It will arm young creative entrepreneurs with the skills to thrive in business but more still needs to be done to help others in the sector access appropriate finance."
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