BBC Trust

In a keynote speech this evening at the Institute of Directors' Annual Dinner, Rona Fairhead, Chairman of the BBC Trust, will highlight the "pivotal contribution" made by the BBC to the "Darwinian success story" of the UK's creative industries. The Trust Chairman will use the economic theory of business ecosystems to outline the BBC's key role in the UK music industry as an example. She will also argue, however, that the BBC can do more - calling for a new public purpose specifically relating to the creative industries to be inserted into the BBC's new Charter next year.

In addition, she will make a wider point about the impending Charter Review process - saying that “our overall goal should be one of evolution, rather than revolution. There is next-to-no public appetite for radical change in the BBC. People want the BBC to be nurtured, rather than subject to root and branch reform. Changes should be specific and targeted, rather than sweeping and grand."

The Chairman is expected to say:

“The American economist James F Moore was one of the first people to use the ecosystem metaphor to describe how businesses work. And one of his key insights was that a viable business ecosystem needs what he calls ‘central ecological contributors’. Moore said that a central ecological contributor provides: ‘a compelling vision for the future that encourages suppliers and customers to work together to continue improving the complete offer.’ That, I would submit, is exactly what the BBC does. And the example I’d use to illustrate my submission is the UK music industry.

“It’s a continuing source of wonder that the UK – a relatively small country in population terms, plays such a huge role in the global music business. The UK music industry employs well over a hundred thousand people, and it’s estimated that its overall GVA reached £3.8bn in 2013, with 60% of that - well over £2bn - coming from exports. That GVA figure is also growing astonishingly fast. Between 2012 and 2013, it rose by 9%. This is a great high-growth British business.

“And the ‘central ecological contributor’ to that great British business is - the BBC. Now you might think, I would say that wouldn’t I? But it’s not just me. There’s an organisation called UK Music. It represents the whole music industry from musicians to record labels to music licensing organisations and the live music business. According to UK Music, and I quote: ‘BBC output supports the entire UK music ecosystem.’

“One of the key ways the BBC uses this amazing array of music services is to spot new talent and actively nurture it. We hear a lot about Silicon Roundabout and the start-up businesses taking root there, nurtured by early-stage investors. That’s exactly the role the BBC plays with Britain’s young musicians. For example, the BBC Introducing website allows any UK musician to upload their material. The best gets airtime on BBC local radio and the best of the best are invited to play live on BBC Introducing stages at major festivals. That’s how Jake Bugg and Ed Sheeran got their big breaks.

“I used the analogy of Silicon Roundabout before. But there’s one big difference. The venture capitalists backing new hi-tech start-ups are doing it because they expect a healthy financial return.

But that’s not why the BBC supports great talent like Sam Smith or Jake Bugg or Ed Sheeran. The BBC does it simply because they are great talents. The BBC is not driven by financial interest here. Its aim is simply to bring the best creative talents the UK has to offer to the widest audiences, and to support the UK’s creative industries by doing so.

“Just because one system works, it does not mean others cannot. Look across the pond to the United States, which has modest investment in public service broadcasting by European standards but self-evidently has a thriving creative industries sector. That doesn’t mean, however, it can be replicated with ease over here – not least because of the economies of scale that can be enjoyed with a population of 300 million.

“As a result, the United States is something of an outlier by international standards. As a 2013 report by Dr Jonathan Simon concluded, countries with well-resourced public service broadcasters tend also to have desirable market outcomes – a virtuous circle in which competition between public and private leads to a race to the top. This is not just true in the UK, it happens across the Nordic nations as well. Whereas, countries where the public service broadcaster is weaker; also have weaker creative economies overall – as is the case in Italy and Portugal. That’s why the BBC’s role in supporting economic growth is so important - creating ecosystems supporting highly specialist creative talent and projecting the outcome on the national - and often the global – stage.

(…)

“In the past four months, we have had an unprecedented response to our public consultations - tens of thousands of people taking the trouble to tell us what they want of the BBC. They show a truly humbling degree of trust in what the BBC tells them. They recognise that it's a unique institution. They show it enjoys extraordinary levels of support and that they are willing to pay for it. Most of all, they express the highest expectations of the standards they expect BBC to deliver. Our job at the Trust, and the job of any future BBC regulator, is - as Tony Hall said this week - to hold his feet to the fire to make sure the BBC delivers on the many different things the public wants and expects.

“I'm not here tonight to defend everything the BBC has done in the past, nor everything it will do in the future. It is not perfect and changes will need to be made and we must be clear about where those changes need to be made. For example, the BBC must become ever more efficient and agile to ensure the best possible value for money; and it needs to have a simpler, more accountable governance structure.

“But the BBC plays a central, critical and unrivalled role in one of the big business success stories of the 21st Century - the UK’s creative industries. It's a shared success story, but the BBC is its beating heart. But that doesn’t mean the BBC cannot do more. The BBC can and should.  It needs to be a better partner for the rest of the creative and cultural sector.

“One way of doing that, as the BBC Trust has proposed, is to include a sharper, more distinctive remit for the BBC set out in the Charter to explicitly describe what the BBC exists to achieve. We believe one of those ‘public purposes’ should be 'contributing to the UK's creative economy.' And these 'public purposes' shouldn't just be warm words, they should be accompanied by proper measurements, so we can really hold Tony Hall’s feet to the fire when it comes to judging the BBC’s role in the wider creative economy.

“But, our overall goal should be one of evolution, rather than revolution. There is next-to-no public appetite for radical change in the BBC. People want the BBC to be nurtured, rather than subject to root and branch reform. Changes should be specific and targeted, rather than sweeping and grand. The global achievements of the UK’s creative industries are a Darwinian success story in which the BBC has made a pivotal contribution. We should continue to help that success story evolve, not change the whole environment it has thrived in.”

The full speech can be found here.