Lord Sainsbury of Turville

CREATIVE ECONOMY CONFERENCE

I would like to begin by thanking the industry sponsors and the conference organisers, particularly the British Screen Advisory Council and the British Copyright Council, for all their efforts to make this a successful conference. On behalf of everyone here I would also like to extend an enormous thank you to David Elstein, who has done a truly sterling job as the conference chair, and to the chairs and rapporteurs of the five working groups. Without their hard work, both before the conference started and during the last two and a half days, this conference would not have been such a success.

I am also pleased that this conference has been attended by participants from all parts of the creative economy, from creators to consumers and others throughout the value chain. It is this breadth of participation that has made this such an interesting discussion, and which gives the conclusions we have heard this morning such a degree of credibility.

The Creative Economy is one of the fastest growing parts of the European economy. In the face of growing global economic challenges, we in Europe need to look to our strengths. Increasingly they will lie in the talent of our people, our capacity to innovate, and our ability to turn that creativity into products and services that people around the world want to buy.

Underpinning the value of our creativity and ideas must be a robust intellectual property (IP) regime. Without a robust and fair legislative regime to protect our creators, and those who invest in creativity, we put at risk the economic basis of the Creative Economy. There are other people, of course, who are important as well as the rights’ holders, but those who create and invest in creative material need effective and enforceable rights for the creative economy to flourish. Without the right IP framework Europe will miss a massive opportunity.

In Europe, we are well placed in terms of modern copyright legislation that incorporates the requirements of the digital world, and strikes a balance between the need for the rightholders to be able to extract economic value from creativity and the legitimate expectations of others, including consumers. We need to ensure that the legislation remains fit for the modern world. It must not become a barrier to innovation and the development of new business models.

But having the legislative structure is only a start; it must also be effectively enforced on the ground. The digital world poses unprecedented threats because it allows perfect copies to be made available to millions of others.

In the UK the government is determined to work with industry to combat IP crime and online infringement. Over the last two and a half days we have looked at global issues, at how we need to work across borders to deliver effective enforcement of IP rights. In particular, we need to send a clear message that we will not tolerate IP theft in Europe.

In the UK, we have brought stakeholders together in the IP Crime Group. Group members, including the police, Trading Standards Agency and industry representatives, are working together to ensure that criminal activity, from the large importers to the small dealers, are dealt with in a co-ordinated way. This collaborative approach is already producing results. We have put in place a structure for pooling information and identifying priority areas to target enforcement action.

In the UK we see the Patent Office playing a central role in our efforts to promote the Knowledge Economy because IP underpins so much innovation. To reflect this we have widened the Patent Office’s remit so that it does not just administer the IP system but also is the hub for IP enforcement, and supports innovation by a comprehensive programme of IP education and awareness initiatives. For example, the groundbreaking educational resource, “Think Kit”, is being used in over 70% of UK Secondary Schools. This resource is teaching children about the value of IP in a positive way, making it relevant to their lives.

We now live in an increasingly digital world. One of the ways of dealing with the threats, in addition to enforcement and education, is to maximise the huge opportunities for the Creative Industries.

It is particularly exciting that technologies such as Digital Rights Management (DRM) can facilitate new and innovative ways of making the creative products available to the consumers who want them, in the way they want them. As the conference heard, DRMs are a great deal more than just another way for the creative industries to extract value from their customers. They make possible the consumption of content in ways that would have been inconceivable just a few years ago.

I would like to congratulate the music industry for the way that they have begun to grasp these opportunities. They have looked at a whole mass of ways to offer music to consumers, from simple downloads to subscription models and, yes, peer to peer models, and are exploiting the enabling technologies such as DRM to give consumers unprecedented choice. They have recognised that business models need to evolve.

Recent industry figures show that during the first half of this year digital sales tripled to $790 million, when at the same time physical sales of music declined by 1.9%. The number of legal download sites also tripled to 300, and there have been 180 million legal downloads, three times more than last year.

These figures show that if consumers are given a legitimate and attractive alternative to pirated products, they will buy them. Offering consumers compelling new content in innovative ways, simple for the consumer to use and at a fair price, must be the way forward for all the creative industries.

And other industries such as film broadcasting and publishing also deserve credit for seizing the new opportunities as well. For example, simulcasting is increasingly becoming the norm, and film and publishing are exploring new, innovative online distribution techniques.

In the UK we have brought the Creative Industries and other stakeholders across the whole IP value chain together. The dialogue this has engendered has been valuable, leading to a general recognition that new and emerging business models must benefit everybody in the chain. I know that dialogue elsewhere in Europe has lead to an online music Charter in France, and Commissioner Reding is facilitating dialogue at a European level. This is something we should all encourage.

In this dialogue the technology providers should not be forgotten, those who enable new and exciting methods of content distribution through electronic communications infrastructures and other delivery platforms.

Dialogue is crucial to maximise value for all in a digital world, and for looking at standards. Digital convergence means interoperability is an issue because consumers expect products and services to work together, seamlessly. Just as that convergence brings new business opportunities by breaking down barriers between once technically distinct services, so has the dialogue at this conference between different stakeholders challenged traditional relationships, and, I hope, forged new ones. I hope that dialogue will continue. We are delighted that the Austrians will be taking the agenda for the creative economy forward during their Presidency.

I think that this conference has illustrated very clearly the huge opportunities that exist in Europe for the Creative Industries in the years ahead. They will be a key part of the new Knowledge Economy. But if they are to grow and flourish then Government, the Creative Industries and their partners will need to work hard to see that the best conditions are created for them to be successful in the new digital world in which we live. I hope you feel that this conference has been a valuable initiative and also a useful step in achieving the vision we all share.