The 1-4 employee businesses that form the backbone of the creative economy but operate “Below the Radar”, with a fragile survival rate.

A new report, published today, Wednesday 18 March, calls for a series of policy, regulatory and economic developments to address the pressing need to protect “nano” creative enterprises.  

Below the Radar: Unlocking the “nano” potential in the UK’s Creative Industries sets out new evidence on the scale, economic contribution and policy gaps faced by this vital part of the creative economy.  

Authored by Susie Warran-Smith CBE DL (Chair) and Mary-Alice Stack (Chief Executive) of social enterprise Creative United, the report shows that nano businesses (with 1-4 employees) are not a niche. They are the dominant segment of the sector, with up to an estimated 40,000 creative industry nanos in the UK.  

In contrast to other countries, such as Japan and New Zealand, they are not recognised as a separate category in UK government policy [or statistics]. Structurally precarious, they have a 1-in-10 annual risk of closure, regardless of age. However, with targeted support and help to cross the “5-job line”, their chance of survival changes sharply – adding significant extra jobs and tax revenues.  

Calling on the government to formally recognise nano businesses in UK definitions, the report highlights the pitfalls for the creative economy of ignoring this group in the government’s Sector Plan for the Creative Industries. 

Images: (left) Susie Warran-Smith & (right) Mary-Alice Stack

Launching the report, Susie Warran-Smith said: “These businesses are absolute heroes but very, very vulnerable. Recognising nanos formally and treating them as the backbone they actually are is one of the simplest, most measurable growth levers available in the UK.” 

Mary-Alice Stack added: “The investment and targeted interventions in the government’s Creative Industries Sector Plan are welcome. But a continued emphasis on ‘high-growth potential’ is overshadowing the importance of supporting the livelihoods of freelance creatives and those trading as nano enterprises. This is something we believe should be addressed as a matter of urgency.”  

Drawing on a range of data from the UK and internationally, the report calls for the following:  

• Recognise nano businesses in UK definitions: Create and report on a nano business category: 1 to 4 employees, turnover under £500K, balance sheet under £250K 

• Invest in business support for nano enterprises. Prioritise sustainability and growth of nano enterprises within the Sector Plan for the Creative Industries 

• Prioritise delivery of sector-specific business support by organisations with real small-business experience and practitioners who have “lived it”

• Address shared, cross-cutting issues around regulation, fair pay and work standards for nanos, freelancers and sole-traders in the Creative Sector, recognising the particular business challenges and vulnerabilities they face when compared to those employed within larger firms.  

To address the gaps in support for this vital group, Creative United is now seeking to form a coalition of partners to help raise the profile of this important group and co-invest in sector-specific business support. A new intensive business growth programme, the Re:Create GrowthCamp, for the smallest creative enterprises will launch this year. Building on the experience of working with more than 900 creative businesses over the past 13 years, the programme will offer tailored support from industry experts with lived experience.   

Read the full report >