New Study on Access to Finance for the Creative Sector

20 FEBRUARY 2014

In a survey by IDEA Consult and ECORYS Netherlands for the European Commission, a review of the economical potential of cultural and creative sectors in the EU is made. Where do cultural and creative sectors need financial support or opportunities?

AccessToFinance-coverTo get an indication of the needs for finance of companies in the cultural and creative sectors, the structures of these sectors are analyzed and mapped. Based on these needs, an advice on the importance of the new Creative Europe Guarantee Facility is given. As a result, it seems that this initiative will provide lots of advances for, and meet de needs of the analyzed sectors.

Summary fragment
In the article, the main study results are summarized as follows:

“Based on the secondary data analysis, the study finds no evidence that the cultural and creative  industries in Europe generally underperform in terms of profitability and financial health vis-à-vis other sectors. But abundant literature points to existing barriers for CCS organizations – mainly (very) small – when accessing finance. SMEs generally face more challenges than large organizations in attracting external finance, mainly due to problems of information asymmetry. In addition to the barriers to accessing finance for SMEs in general, specific characteristics of CCS organizations reinforce the problem of access to finance. These relate to:

  • Intrinsic characteristics of CCS activities: e.g. lack of tangible assets, dependence on  intangible assets, high uncertainty of market demand;
  • Characteristics of organizations and entrepreneurs within the CCS: e.g. (perceived) lack of business skills, dependence on public investment schemes and
  • Specific market conditions: e.g. size of the market, lack of good market intelligence, pressure on existing business models.”

The problem of access to finance is closely linked to the fact that the CCS in Europe suffers from a  lack of middle-sized firms (the ‘missing middle’ phenomenon). Small CCS organizations have difficulty growing into medium-sized firms. Good access to bank loans is critical for CCS organizations which have the potential to grow.”

Learn more
The whole study can be downloaded below and was published on ec.europe.eu.
Access to Finance for the Cultural and Creative Sector (pdf)