A new report from left-leaning think tank Demos will say that banks are unfairly discriminating against creative companies, including music start-ups, because of an unjustified assumption that backing new businesses in the creative sector is particularly risky.
According to The Independent, the Demos report will argue that creative industry start-ups are no more likely to fail than new companies in most other sectors, and are statistically more likely to be successful than, say, new restaurants or hotels, yet banks seem much less willing to provide funding to entrepreneurs operating in the creative space. The report adds that creative businesses are often less likely to fail partly because of “the passion, dedication and skill of the individuals involved” in setting them up.
Although the report will be launched by the government’s culture man Ed Vaizey, it does criticise the Coalition’s policies too. The report says that the government, despite them banging on about how important the creative economy is, define the sector in a confusing way, ignoring the more lucrative areas of the business, and therefore adding to the misconception investing in creative companies is a particularly risky thing to do.
Says report co-author Helen Burrows: “Banks need to stop saying no to everyone who says they run a music company even before they have finished the sentence. And the government needs to [better] understand and take into account the sector”.
Sections: Music Business | Tags: Demos, Ed Vaizey, Helen Burrows
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