Creative Industries - To invest or not to invest?
Bernd Fesel
Building a learning and teal organisation for an open innovation ecoystem for Culture & Creativity
What do we know about an European investment market of ≈ 24 Billion Euro?
Furniture, clothing and accessories - 42% of private equity funds still intend to invest in these sectors in the fashion and luxury market in 2021, despite the Covid-19, according to Deloitte Austria on the occasion of the Global Fashion & Luxury Private Equity and Investors Survey 2021. Surprisingly, there were more M&As in 2020 with 277 deals than in 2019 with a total volume of more than $10 billion, e.g. in Sportswear Company S.p.A. (Italy) and Coty Inc. (New York). Among the winners in 2020 was the furniture sector - the average value of main deals in furniture skyrocketed by 482%.
The Unknown Giant
Investments in all sectors of the creative industries were around €24 Billion across Europe in 2017 - so the Monitoring Report 2019 of the Ministry of Economic Affairs and Energy in Germany. While statistics gives an overview by nation across Europe, it does not by sectors, not by tech trends or even consumer trends?- so overall: Not enough knowlegde and transparency about one of the largest sectors in Europe - with some €525 Billion GVA and 12 Mio. workers - to?be called ?Ready for Investments“. While we know that sectors like Streaming, Audiovisual and Games are high growth markets in general, the specific criteria for investors to invest or not invest are not accounted, researched, let alone certified and published by independent bodies. Turnover of the German games market jumbed 2019 / 2020 by 32% from 6.463 Mio. € to 8.531 Mio. €. But still leading investment data-platforms like Pitch Book do not even list the games sector or the creative industries as an investment area.
As Creative industries are often not seen as a high-profit sector, one may come to the conclusion that investors and investing play a rather subordinate role in the sector. However, this could not be further from the truth.
In this part of our “Creative Impacts”-series, we want to go a little more in-depth about the investments and investors in cultural creative industries, how and where to find them, and how investing in the sector can help unleash the full potential of a “sleeping giant”.
Growing sectors with growing investment opportunities
The cultural creative industry (CCI) is one of the fastest growing sectors in Europe. The number of companies in CCI grows fast Year by Year, in almost every European country. In Estonia, the Netherlands, Slovakia or Slovenia, the growth of companies between 2012 and 2016 was higher than 38%, in Lithuania even higher, with an astonishing 89%. This shows which large potential there is still left to develop. Leading in the field today are Germany, Italy and France, with well over 200.000 companies in the Creative Industries.
A case study, taking England as an example, shows the immense potential which remains untapped. The creative industries could – by 2023 – grow by 50% and create 600.000 new jobs. At the moment, the creative industry sees a 72% suffering from lack of growth capital. Even though the data is from short before the Covid-Pandemic broke out, the problem will only be keener after the pandemic is over, as big amounts of capital will be needed to re-grow the sector, which has been hit especially hard by the measures imposed on it.
It is interesting to look in which countries investments in the Creative Industries were most:
TOP 5 European countries by INVESTMENT GROWTH in Creative Industries
Investment Cases - A few Highlights
The Golden Times of Transformations, if…
There are many more companies investing millions and even billions directly or indirectly in the creative industries, from state-run broadcasting services like the BBC or the German ARD/ZDF to streaming services like Netflix, Amazon Prime or Disney Plus.
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Still facts & figures on VC and Private Equity in cultural creative industries remain only occasionally public and not investor ready.
With the post-corona rebuilding of the sector dawning near,
with the European Green Deal incentivizing billions of investments in green architecture - the 3D printing market in housing is estimated to grow to around USD 40 billion by 2027,
with the Digital Transformation incentivizing billions in content creation - with alone Netflix spending $17 Billion on cultural creative content in 2020, expected to reach ≈ $26 billion by 2028,
a shift is at hand: The Green and Digital Transformations will awake many to invest more than before in the cultural creative industries - and will call now to know more and better. Facts & Figures on investments and innovations in the CCI must now be lifted to eye-level to other investment sectors. Then the Golden Times of the cultural creative industries as an indispensable and low risk opportunity for investors in highly growing markets is still to come.
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July 22, 2021, Copyright: Bernd Fesel and?Aaron E?elborn
Interesting Links and Sources:
Founder | investor in tech & entertainment | culture & creative industry expert | research consultant on CCI | CCI policy consultant | CCI Advocate | Curator for innovation & entertainment events
3 年Great piece Bernd, i left you a message in the DM. Cheers