Scottish Rural Creative Sector
This report is a deliverable within the Novel Insights on Scotland’s Rural and Island Economies (NISRIE) project as part of the Environment, Natural Resources and Agriculture Strategic Research Programme 2022-27. Using a narrative research approach, this work is designed to generate contextual ‘real-life’, but subjective, evidence from businesses operating in prioritised sectors and geographies on the opportunities, challenges, barriers and circumstances they face as operating in rural and island environments. This narrative approach supplements secondary data analysis being conducted on rural economies within the NISRIE project. 
What were we trying to find out?
This research explores recent, current and future challenges and opportunities facing creative sector businesses - a sector which has a vital role to play in the economic and social vibrancy of many coastal and island communities across Scotland. The research provides subjective narratives from a six interviewees on their recent ‘real life experiences’ operating creative sector businesses during a turbulent period that saw the UK leave the EU, Covid-19 pandemic disruptions, the cost-of-living crisis, as well as other legislative and policy developments.
What did we do?
The NISRIE team undertook a number of in-depth, online qualitative interviews with representatives from the creative sector in rural and island communities across Scotland. The sample included organisations supporting creative industries in Scotland, and individuals operating businesses across the spectrum of sectors included under the umbrella of ‘creative industries’, covering a geographical spread of locations across rural and island Scotland.
What did we learn?
Interviews with businesses and organisations across the creative industry emphasised the diversity across creative sectors and activities, how they engage with audiences or clients, and subsequently, the diversity of impacts from recent socio-economic challenges. The implications of EU exit and the Covid-19 pandemic were experienced much more heterogeneously across interviewed businesses, whereas the rising cost of living produced more similar impacts around mitigating rising costs, and balancing the wellbeing of both the business and employees.
The creative sector was overwhelmingly against EU exit, with polls suggesting 96% were in favour of remaining . Sectors highly involved in touring internationally, such as music and other performing arts, have seen a significant contraction of income opportunities, with the costs and complexities of both visas and moving equipment through customs limiting touring circuits and financial feasibility. While other sectors reported not to have been as directly impacted, interviewees were concerned about the long-term shrinking of creative ambition, through a less outward-looking sector and reduced movement of creative labour.
These impacts for performance-based creatives were exacerbated by the Covid-19 pandemic, with limited opportunity for monetisation via digital means of engagement, and organisations supporting creative sectors reporting a notable drain of talent into other industries, and a move towards some roles as part-time and supplementary income out of financial necessity. Larger businesses and organisations supporting freelancers talked about innovative means of commissioning work and a surge in creative outputs during early lockdowns, which served to support the sector somewhat. More digitally-based sectors, such as film and video editing, tech-based design, and architecture, reported minimal impact to business as usual, given the ability to work remotely from clients. Overall, sectors felt that Covid-19 had accelerated a move towards digitisation of the sector and opened up opportunities for many creatives to relocate based on quality of life, which for some meant a move to rural areas.
Rising operational costs were universally felt across interviewees, in particular for businesses still attempting to recover and adapt to the impacts of EU exit and Covid-19. Most notable was the increased cost of travel and accommodation, particularly in island locations and where tourism enhanced resource scarcity, thereby pushing costs even higher. Reductions in real terms of grant funding in relation to increased costs, as well as difficulties for some businesses in accessing private funding due to perceptions of risk by banks, meant that mitigating higher outgoings was challenging. Insurance, professional fees and software were also noted as increasing in price significantly, and employers noted concern about providing competitive enough salaries for employees to sustain the increased cost of living (accommodation especially).
Other challenges facing the Scottish sector identified by interviewees included:
- Difficulties in meeting requirements or KPIs for funding in remote and island locations, where outcomes based on reach, spend per head, or timescales for delivery may not be feasible;
- Challenges in meeting compliance for public funding streams such as Fair Work First and sustainability criteria, which were acknowledged as important, but required additional cost, capacity and skills at a time when organisations already felt stretched and under-resourced;
- Barriers in local government and planning to business development, due to a lack of understanding about innovative business types and models;
- Complexity for smaller Scottish SMEs to engage competitively in public sector procurement for Scotland-based projects;
- A ‘postcode lottery’ of quality and reliable broadband access, with delays in rollout based on delivery plans.
Despite the challenges that rural creative businesses have been navigating over the last few years, businesses were positive about the opportunities created by increased digitisation of creative sectors, opening up the potential for increased hybrid or remote work in rural areas.
What do we recommend?
Based on the evidence from the interviews, we would suggest the following issues be considered by policymakers seeking to support creative sectors across rural and island communities in Scotland:
- Recognising rural creative sector needs: Expanding understanding of the rural creative sector’s distinct characteristics to ensure that funding and support mechanisms reflect its specific challenges and contributions, and broadening success metrics to include social impact could provide a more comprehensive assessment of sector outcomes.
- Enhancing funding and support mechanisms: Consider adjustments to funding criteria, including recognition of higher travel and accommodation costs in remote and island areas, which may improve accessibility and impact of funding outcomes for rural creative businesses. A clearer definition of rural creative enterprises could also support more targeted policy development in this regard.
- Facilitating SME participation in public procurement: Exploring ways to streamline processes, reduce administrative barriers, and provide targeted training could enhance opportunities for smaller rural creative businesses to engage with public contracts.
- Supporting rural business growth: Addressing planning and regulatory delays and barriers through place-based approaches suitable to rural contexts, alongside improvements in digital and physical infrastructure, could help create a more enabling environment for rural creative enterprises.
- Strengthening business support and coordination: Enhancing collaboration and distinctions in remit between business support services, and ensuring clear communication about available funding and assistance, may improve accessibility and effectiveness for rural businesses.
- Expanding financial opportunities: Increasing awareness of alternative financing mechanisms and exploring new models of financial support could help address funding challenges in the creative sector, particularly as grant competition intensifies.
