| FER17, Statements

Dr Christian Ehler MEP

Statement Dr Christian Ehler MEP at #FER17

© Frau Laurence Chaperon

Dear Professor Gorny,

Dear Lord Mayor Kufen,

Dear Ladies and gentlemen,


I would like to start by thanking you for giving me the opportunity to speak to you today. I am particularly grateful to the european centre for creative economy and above all to Professor Gorny for inviting me here. I am delighted that ecce has been bringing together regional stakeholders and representatives of the European creative industries since 2012. This event gives us an opportunity to discuss the future of art and culture; financial support for the creative industries; and the effect of digitalisation on culture. This is of particular importance in relation to the ongoing debates in Europe about the Digital Single Market and reforms to copyright law.

In view of these negotiations, today I would like to talk about the European Parliament’s recent activities regarding the cultural and creative industries. In the past few years, these industries have emerged with increasing clarity as a key pillar of the European economy. The numbers speak for themselves: the creative industries make up 4.4 percent of the EU’s gross domestic product (over €550 billion). They guarantee jobs for twelve million people in over three million companies. To illustrate even more clearly what these numbers represent: the cultural and creative industries employ 3.8 percent of the European workforce, which is two and a half times as many people as the automotive industry and five times as many as the chemicals industry.

However, the unique opportunities that the creative industries open up for the European economy are overshadowed by what is termed the 'value gap'. Profits in the creative industries have not risen in proportion with the rapid growth in the consumption of creative intellectual products. Online platforms retain a portion of the true value of creative work, without acknowledging that it should actually go to artists. While policymakers are still struggling to see the true potential of the creative industries, online platforms have long been aware of the strengths of this business sector and have developed a successful way to siphon off the value created by artists’ work for themselves. In order to counteract this imbalance, I helped to draft the CULT and ITRE committees’ joint report ‘On A Coherent EU Policy for the Cultural and Creative Industries’, which was adopted by the European Parliament in December 2016 (to the report HERE ). This report is the first attempt to develop a coherent EU policy for an ever-growing sector. It represents the first time that key challenges for the creative industries have been addressed at a European level.

For example, for a long time the creative industries were not designated as a distinct economic sector. The lack of a clear definition stood in the way of developing policies that could have had an impact on the situation of the creative industries. For this reason, in the report we agreed on a definition:

"Creative industries are those industries that are based on cultural values, cultural diversity, individual and/or collective creativity, skills and talent with the potential to generate innovation, wealth and jobs through the creation of social and economic value, in particular from intellectual property; they include the following sectors relying on cultural and creative inputs: architecture, archives and libraries, artistic crafts, audiovisual media (including film, television, software and video games, and multimedia and recorded music), cultural heritage, design, creativity-driven high-end industries and fashion, festivals, live music, performing arts, books and publishing (newspapers and magazines), radio and visual arts, and advertising."

However, this definition is only one of the report’s many achievements. The report also discusses the direct challenges faced by the creative industries, such as counterfeiting or the need to improve training and preserve skills – the European savoir faire. With this report, the European Parliament provided a vision for the future of the economic sector. A vision that can generate growth, unlock the sector’s innovative potential and create a fair legal framework for artists and consumers.

Ladies and gentlemen, this vision is unprecedented at European level. So this is the time for us to act. I am aware that one of the most urgent issues for the here represented regions is access to funding. In principle, all EU-funded programmes are open to the creative industries. However, funding from the EU has fallen short of what is possible. According to a 2013 study by the European Commission, the creative industries face obstacles to obtaining funding due to their highly specific characteristics. For example, it is often problematic to assess the risk or value of intellectual property. We need to eliminate this problem by means of individually tailored, fit-for-purpose financing plans. Among other things, we need to create risk financing plans and develop expertise in measuring the value of intangible goods. This expertise is essential both for working with SMEs and for working with financial institutions. Quite simply, we need to create a mechanism that increases the financial viability of intellectual property rights. European businesses need to shed the negative connotations of failure and instead see the risk of setbacks as an important step in an entrepreneurial learning process. The second thing we need to do is to use existing funding mechanisms more effectively. I’d like to focus here specifically on the EFSI and the Creative Europe Guarantee Facility. The EFSI aims to address gaps in the market and mobilise private investment. However, the creative industries have never received any EFSI funding despite being listed as a priority for the programme. Meanwhile, billions of EFSI funding goes predominantly to projects involving lower risk and tangible commodities, which is the European Investment Bank’s normal way of distributing funding.

However, by contrast with standard EFSI projects, the creative industries are mostly made up of SMEs with a higher risk potential for investment. But as we all know, the creative industries don’t need large loans. Often, a small grant is enough to begin implementing a business idea. The creative industries don’t need billions of euros in funding, they need support. For this reason, my colleagues and I are proposing to link the Creative Europe Guarantee Facility and the new EFSI programme. Specifically, we want to transfer the EFSI funding allocated to the creative industries to the guarantee facility. The guarantee facility is a financing instrument that forms part of the Creative Europe programme. It comprises 121 million euros to be used to improve funding opportunities for companies in the creative industries sector. It addresses the pressing need for innovative projects to have access to credit, and is familiar with the industry’s specific needs. However, demand is very high and the available funds are very low, so it is essential to increase them. The step that we are proposing would not only result in additional credit, but would also (and this is the most important thing) create new networks, opportunities andprojects for knowledge-sharing. Since this transfer is one of the points of our report that is closest to my heart, I am following the present discussions between the Commission, the Parliament and the Council very closely. But that is not the end of the EU Parliament’s role.

We are very interested in the negotiations on improving financing plans and want to establish the creative industries as a priority for the research programme Horizon 2020, its successor programme and EU structural funds. I’m also supporting three pilot projects that are currently being debated in the EU Parliament’s Committee on Budgets. These projects will, respectively, consolidate the link between art and technology, support a European music funding programme and help to preserve traditional industrial skills. There is an increasing understanding in the EU Parliament of the importance of the creative industries, and we are aware of what we need to do. We know that the creative industries strengthen regions like no other industry. They are especially valuable for expanding training, education and job opportunities. They also make significant contributions to other sectors such as tourism. For this reason, regions are very effective at developing networks and regional and cross-border cooperation in the creative industries. One distinctive feature of these networks is their ability to build bridges between companies of widely varying sizes, thereby facilitating dialogue between international corporations, local SMEs and small start-ups. One good example of this is high-end industries, where companies like Hermès are establishing partnerships with traditional crafts businesses. As we can see, although this sector is highly varied, all actors share the same concerns. When you, the creative industries, come together in regional networks, you have a powerful voice. The time has come to establish more networks and continuously expand them. In this context, there needs to be closer collaboration between art academies, professional training institutions, universities and businesses in the creative industries. This is the first step towards unlocking the full competitive potential of the creative sector. You can depend on my personal dedication to this cause. But we also need to be able to count on you as we attempt to determine the future of the creative industries. It is insufficient to rely on our existing knowledge. We need to gather innovative ideas through open dialogue, and to do that we need your input. I call on you to unlock the full potential of your sector, making use of regional resources and cross-border networks. The creative industries combine many different areas, ranging from design, art and theatre to science, technology and IT. One of the clearest examples of the potential of the creative industries is ‘FashionTech!’, which brings together designers and engineers, and implements projects based around the use of smart textiles and digitisation.

An example from Germany is ElektroCouture, which makes wearable technology. The ElektroCouture designers have been very successful at incorporating traditional technologies into stylish clothing. They develop new battery and smart energy systems that can be used in customised wearable technologies. We want and need more innovative ideas like this. So we’re counting on your feedback. Please let us know how you see the future of the creative industries, what your goals are and how we can help you to achieve them. We are interested to hear your concerns and demands so that we can address them and develop proposals for solutions. So please make your collective voice heard. You have the chance to make the vision outlined in our report into a reality. Speak up on behalf of your industries so that we can ensure sustained growth in the creative sector. I look forward to working in partnership with you. Thank you very much for your attention.