DCMS Sector Economic Estimates

Methodology This publication has been updated on:

19th December 2016 to include a list of the sub-sectors SIC codes for the Creative Industries, Digital Sector and Cultural Sector.

26th June 2017 to include a methodology for the Exports and Imports of goods estimates and to add details on the methodology for producing estimates for the Civil Society, following the move of the Office for Civil Society from the Cabinet Office to DCMS in summer 2016. In addition SIC 93.21 has been added to Table 2.1, having been incorrectly omitted in the previous version.

29th November 2017 to include the methodology for the GVA shown in chained volume measures.

14th February 2018 to include the chapter on business demographics and the breakdowns developed.

28th February 2018 to include the chapter on regional GVA. 6th June 2018 to include an update to the chapters on export and imports of goods and

services. 18th July 2018 to include an update on the Tourism employment data. 28th August 2018 to include the definitions for Audio Visual and Computer Games. 28th November 2018 to include further clarification of the overlaps between DCMS sectors and

an update on GVA estimates. This includes an update on the methodology changes for the Tourism Satellite Account.

30th January 2019 to include some extra information around methodology for the Business Demographics publication.

13th February 2019 to include additional information around the methodology for the Regional GVA publication.

4th September 2019 to include the chapter on earnings in the Digital sector (Chapter 12), to provide an update in Chapter 1 on the UK National Statistics assessment of our economic estimate series as well as an update to the Trade statistics (Chapter 8, 9 and 10).

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Contents

Contents 2

Chapter 1 – Introduction ......................................................................................................... 4

Summary of data sources ................................................................................................... 4

Users .................................................................................................................................. 5

UK statistics authority assessment of the DCMS Sectors Economic Estimates series ........ 5

Quality Report .................................................................................................................... 5

Chapter 2 – Definitions ........................................................................................................... 6

Civil Society ........................................................................................................................ 7

Creative Industries ............................................................................................................. 7

Cultural Sector .................................................................................................................... 8

Digital sector ...................................................................................................................... 8

Gambling ............................................................................................................................ 8

Sport .................................................................................................................................. 8

Telecoms ............................................................................................................................ 8

Tourism .............................................................................................................................. 8

Other definitions ................................................................................................................. 9

Chapter 3 – Limitations ........................................................................................................ 17

3.1 Measurement issues .................................................................................................. 17

3.2 Data sources .............................................................................................................. 19

3.3 Sector definitions ........................................................................................................ 21

Chapter 4 – GVA – current prices ........................................................................................ 24

Data sources .................................................................................................................... 24

Method ............................................................................................................................. 24

Accounting for overlap ...................................................................................................... 25

ABS v National Accounts .................................................................................................. 26

Chapter 5 – GVA – chained volume measures ..................................................................... 28

Method ............................................................................................................................. 28

Chapter 6 – Regional GVA ................................................................................................... 31

Data sources .................................................................................................................... 31

Method ............................................................................................................................. 31

Accounting for overlap ...................................................................................................... 31

Chapter 7 – Employment ...................................................................................................... 33

Data Sources.................................................................................................................... 33

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Estimates ......................................................................................................................... 33

Demographics .................................................................................................................. 33

Disclosure ........................................................................................................................ 34

Tourism ............................................................................................................................ 34

Civil Society ...................................................................................................................... 34

Chapter 8 – Imports and Exports of Services ....................................................................... 35

Chapter 9 – Imports and Exports of Goods .......................................................................... 36

Chapter 10 – Imports and Exports for the Tourism sector (Goods and Services Combined) 40

Chapter 11 – Businesses ..................................................................................................... 41

Number of businesses ...................................................................................................... 43

Size of businesses (Employment band) ............................................................................ 43

Size of businesses (Turnover band) ................................................................................. 43

Region .............................................................................................................................. 44

Foreign-owned businesses ............................................................................................... 44

Number of exporters and importers .................................................................................. 44

Chapter 12 – Earnings ......................................................................................................... 45

Definition .......................................................................................................................... 45

Quality Report .................................................................................................................. 45

Data collection .................................................................................................................. 45

Method ............................................................................................................................. 46

Mean vs Median ............................................................................................................... 46

What is reported? ............................................................................................................. 46

Strengths and Limitations of the data ............................................................................... 47

Annex A – Background Note ........................................................................................... 48

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Chapter 1 – Introduction

This document sets out the methodology underlying the Economic Estimates for DCMS Sectors. They contain Official and National Statistics published by the Department for Digital, Culture, Media and Sport (DCMS). The latest release is available on the DCMS Sectors Economic Estimates release page. The Economic Estimates measure the economic contribution to the UK of each sector for which DCMS has responsibility1,2:

Civil Society

Creative Industries

Cultural Sector

Digital Sector

Gambling

Sport

Telecoms

Tourism This publication covers gross value added (GVA) expressed in current prices (not taking into account inflation) and chained volume measures (taking into account inflation), jobs, exports and imports of services, exports and imports of goods and number of businesses. The estimates in the publication are consistent with national (UK) estimates, published by the Office for National Statistics (ONS). These statistics are produced in accordance with the Code of Practice for Statistics. Summary of data sources

Gross value added data are obtained from the ONS Input-output supply and use tables and the Annual Business Survey (ABS), a survey of businesses listed on the Inter-departmental Business Register (IDBR). These businesses are classified by industry under the Standard Industrial Classifications (SIC07), which was first used in the 2008 data.

Regional gross value added data are obtained from the ONS balanced regional gross value added series and the Annual Business Survey (ABS). These estimates are These estimates are consistent with the UK National Accounts. National aggregates for the components of GVA are allocated to regions using the most appropriate regional indicator available.

Jobs/employment data are obtained from the Annual Population Survey (APS), which is itself a derivative of the Labour Force Survey (LFS). Methodological information about the LFS can be found on the ONS website.

Imports and Exports of services statistics are derived from the International Trade in Services (ITIS) survey, a survey of businesses looking at their overseas trade, based on definitions set out by SIC2007, which was introduced in the 2009 data. Tourism trade data is taken from the International Passenger Survey.

Imports and Exports of goods statistics are based on data from the EU-wide Intrastat survey and from Customs import and export entries, collected by HMRC.

Data on number of businesses is from the Annual Business Survey (ABS), available at the 4-digit SIC code level.

1 DCMS took on responsibility for charities and volunteering in July 2016. Estimates were produced for the first

time in the publications in July 2017. 2 There is overlap between the sectors outlined. More details of how these overlaps are accounted for is set out in

Chapter 2 of this methodology note.

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Earnings data are obtained from the Annual Survey of Hours and Earnings (ASHE) dataset, available at the 4-digit SIC code level and 4-digit SOC code level.

Users The users of these statistics fall into five broad categories:

Ministers and other political figures

Policy and other professionals in DCMS and other Government departments

Industries and their representative bodies

Charitable organisations

Academics The primary use of these statistics is to monitor the performance of the industries in the DCMS sectors, helping to understand how current and future policy interventions can be most effective. UK statistics authority assessment of the DCMS Sectors Economic Estimates series Following a report3 by the Office for Statistics Regulation in December 2018, the following DCMS Sector Economic Estimates were designated as National Statistics on 26th June 2019:

DCMS Sector Economic Estimates: GVA

DCMS Sector Economic Estimates: Regional GVA

DCMS Sector Economic Estimates: Business Demographics

DCMS Sector Economic Estimates: Employment

Since the report we have striven to improve our publications by providing summaries of other notable sources of data, more detail on the nature and extent of the overlap between the sectors, and further information on the quality and limitations of the data. We will continue to improve the series in the future, in line with the recommendations of the report. Quality Report Please note that DCMS have also produced a quality report for each Economic Estimate publication which has been published since 2019. The quality report summarises the quality assurance processes applied during production of DCMS Economic Estimate statistics as well as quality assurance processes and the methodology from the data providers (ONS). These can be found at: https://www.gov.uk/government/collections/dcms-sectors-economic-estimates in the Documents Section.

3 https://www.statisticsauthority.gov.uk/publication/dcms-sectors-economic-estimates/

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Chapter 2 – Definitions

In order to measure the size of the economy it is important to be able to define it. DCMS uses a range of definitions based on internal or UK agreed definitions. More details of the definition used for each sector is set out below. With the exception of tourism and civil society4, all definitions are based on the Standard Industrial Classification 2007 (SIC) codes. This means nationally consistent sources of data can be used and enables international comparisons. The use of SIC codes also allows DCMS to estimate which parts of the economy are included in multiple sectors and avoid double counting. However this approach of developing individual sector definitions in isolation has meant that there is overlap between DCMS sectors. For example, the Cultural Sector is defined using SIC codes that are all within the Creative Industries except for 4 SIC codes (manufacture of musical instruments, retail sale of music and video recording in specialised stores, reproduction of recorded media, and operation of historical sites and buildings and similar visitor attractions), whilst the Telecoms Sector is completely within the Digital Sector. Figure 2.1 below visually shows the overlap between DCMS Sectors in terms of SIC codes. Users should note that this does not give an indication of the magnitude of the value of overlap. For this, users should consult the corresponding statistical release where the value of the overlap is shown. Figure 2.1: Overlap of SIC codes within DCMS Sectors

The Standard Industrial Classification SIC 2007

4 For Tourism, a proportion of several SIC codes are used to identify the element of the industry that is directly

represented by tourism. For the GVA value for Civil Society, non-market charities in the NPISH (non-profit institutions serving households) sector are defined using SIC codes. Both of these sectors therefore enable us to identify overlap with the other DCMS sectors based on SIC codes.

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The Standard Industrial Classification is a means of classifying businesses according to the type of economic activity that they are engaged in. The latest version (SIC 2007) is available here. Civil Society The Office for Civil Society, which moved to DCMS in 2016, is responsible for charities, voluntary organisations or trusts, social enterprises, mutuals and community interest companies. The Civil Society sector is not like a traditional industry and therefore data are not readily available in the usual data sources. Where possible, data are provided from official sources. Some estimates from other sources are quoted to provide a wider context but cannot be added to the official results. It is therefore likely that the estimates for the civil society are an underestimate for this sector. For employment, people who work in a “charity, voluntary organisation or trust” are reported in the DCMS estimates. There are no reported estimates for exports or imports of goods and services for civil society. For GVA in current prices, an estimate for charities has been published. The Civil Society figure published covers non-market charities in the NPISH (non-profit institutions serving households) sector. It does not include market provider charities who have passed the market test and therefore sit in the corporate sector (these data are not currently measured by ONS on a National Accounts basis), mutuals, social enterprises or community interest companies. An estimate of the economic contribution of volunteering is also provided, but this is not included in the “All DCMS Sectors” total due to it being part of the informal economy and therefore not part of the traditional methodology of calculating GVA. An estimate for the Office for Civil Society has not been included in the GVA expressed in chained volume measures. This may be developed in the future if there is sufficient user demand. For the business demographics, the Civil Society sector cannot be uniquely identified in the Annual Business Survey; the data source used for the other DCMS Sectors. Contextual information on the number of businesses in the Civil Society sector is provided. However these are non-official statistic sources and therefore should not be added to the other DCMS Sector totals. Creative Industries The Creative Industries were defined in the Government’s 2001 Creative Industries Mapping Document as “those industries which have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property”. Based on this definition DCMS worked closely with stakeholders to determine which occupations and industries should be considered creative. These were determined on the basis of creative intensity: 1. Through consultation a list of Creative Occupations were identified5 . 2. The proportion of creative jobs in each industry was calculated (the creative intensity). 3. Industries with creative intensity above a specified threshold are considered Creative Industries. The definition is a UK definition based on international industrial classifications. The SIC codes used to capture the Creative Industries are shown in Table 2.2 below. See the Creative Industries Economic Estimates methodology note for a more detailed explaination of how the definition has been derived. The Creative Industries sub-sectors are outlined in table 2.3.

5 Bakhshi et al (2013) propose criteria which can be used to assess which occupation codes should be considered creative for measurement purposes.

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Cultural Sector DCMS has proposed a definition of the Cultural Sector that best reflects UK policy based on the availability of data through the existing standard industrial classification (down to 4 digits). DCMS have defined the Cultural Sector as those industries with a cultural object at the centre of the industry. Based on this principle the 4-digit SICs proposed to make up the Cultural Sector are shown in Table 2.2 and those that make up the sub-sectors in Table 2.5. Digital sector The definition used in this release was developed by the OECD using the UN Standard Industrial Classifications (SICs) and therefore has the advantage of international comparability. The SIC codes used in this definition are shown in Table 2.2 and in Table 2.4 for the sub-sectors. Gambling The definition of gambling used in the DCMS Sectors Economic Estimates is consistent with the internationally agreed definition, SIC 92, Gambling and betting activities. Sport For the purposes of this publication the statistical definition of sport has been used, this incorporates only those 4-digit SIC codes which are predominately sport (see Table 2.2). DCMS also publish estimates of sport based on the EU agreed Vilnius definition. The Vilnius definition is a more comprehensive measure of sport which considers the contribution of sport across a range of industries, for example sport advertising, and sport related construction. The DCMS Sport Satellite Account is based on an EU agreed methodology. However, due to the time lag with the sport satellite account and further development required to make the sport satellite account replicable on an annual basis, the statistical definition is being used in this publication of estimates for DCMS sectors to allow the contribution of sport to be considered in a way which is consistent with the other sectors. Telecoms The definition of telecoms used in the DCMS Sectors Economic Estimates is consistent with the internationally agreed definition, SIC 61, Telecommunications. Please note that as well as appearing as a sector on its own, Telecoms is also entirely included within the Digital Sector as one of the sub-sectors. Tourism Tourism is defined by the characteristics of the consumer in terms of whether they are a tourist or resident. This, therefore, differs from “traditional” industries such as gambling or telecoms which are defined by the goods and services produced themselves, and means that a different approach to defining the industry must be used. The UK estimates are based on the methodology and definition set out in the UN International Recommendations for Tourism Statistics 2008 (IRTS 2008). Table 2.2 gives details of the ‘tourism industries’. The ‘tourism industries’ are a broad category that can be used to define tourism however they are much more extensive than tourism alone (e.g. hospitality). Therefore ratios are calculated (primarily based on tourism spend data from surveys) which can then be applied in order to obtain direct tourism estimates. There is also a tourism contribution from outside the tourism industries which is described as ‘other consumption products’. Once calculated, the tourism ratios are applied to give estimates for tourism GVA and employment Exports and Imports for tourism are from estimates of spend by overseas residents in the UK and spend by UK residents overseas respectively. Data are taken directly from the ONS

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International Passenger Survey, in which there is no attempt to classify goods and services or spend by industry. Other definitions DCMS also publish estimates for the Audio Visual sector (for all measures) and the Computer Games sector (for GVA Current Price estimates and Employment measure). The definition of the Audio Visual sector (see below) is intended to reflect the sectors covered by the EU Audio Visual Media Services Directive.

59.11 - Motion picture, video and television programme production activities

59.12 - Motion picture, video and television programme post-production activities

59.13 - Motion picture, video and television programme distribution activities

59.2 - Sound recording and music publishing activities

60.1 - Radio broadcasting

60.2 - Television programming and broadcasting activities

63.91 - News agency activities

63.99 - Other information service activities n.e.c.

77.22 - Renting of video tapes and disks

77.4 - Leasing of intellectual property and similar products, except copyrighted works

For Computer Games, a 5-digit SIC code is used alongside a 4-digit SIC. The estimates for the Computer Games industry have been calculated based on the SIC codes:

58.21 - Publishing of Computer Games

62.01/1 - Ready-made interactive leisure and entertainment software development

A number of software programming companies in 62.01 – ‘Computer programming activities’ may also contribute to the output of computer games, as part of a range of programming activities. This is not included in these computer games estimates, but will have been implicitly included in the ‘IT, software and computer services’ group in the main estimates.

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Table 2.2: Standard Industrial Classification used in DCMS sector estimates (see notes 1-4 at the end of the table)

SIC07 Description Creative

Industries Digital Sector

Cultural Sector

Telecoms Gambling Sport1 Tourism2 All

DCMS3

18.2 Reproduction of recorded media * *

26.11 Manufacture of electronic components * *

26.12 Manufacture of loaded electronic boards * *

26.2 Manufacture of computers and peripheral equipment * *

26.3 Manufacture of communication equipment * *

26.4 Manufacture of consumer electronics * *

26.8 Manufacture of magnetic and optical media * *

30.12 Building of pleasure and sporting boats * *

32.12 Manufacture of jewellery and related articles * * *

32.2 Manufacture of musical instruments * *

32.3 Manufacture of sports goods * *

46.51 Wholesale of computers, computer peripheral equipment and software * *

46.52 Wholesale of electronic and telecommunications equipment and parts * *

47.63 Retail sale of music and video recordings in specialised stores * *

47.64 Retail sale of sports goods, fishing gear, camping goods, boats and bicycles * *

49.10 Passenger rail transport, interurban * *

49.32 Taxi operation * *

49.39 Other passenger land transport n.e.c. * *

50.1 Sea and costal passenger water transport * *

50.3 Inland passenger water transport * *

51.1 Passenger air transport * *

55 Accommodation * *

56 Food and beverage service activities * *

58.11 Book publishing * * *

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Table 2.2: Standard Industrial Classification used in DCMS sector estimates (see notes 1-4 at the end of the table)

SIC07 Description Creative

Industries Digital Sector

Cultural Sector

Telecoms Gambling Sport1 Tourism2 All

DCMS3

58.12 Publishing of directories and mailing lists * * *

58.13 Publishing of newspapers * * *

58.14 Publishing of journals and periodicals * * *

58.19 Other publishing activities * * *

58.21 Publishing of computer games * * *

58.29 Other software publishing * * *

59.11 Motion picture, video and television programme production activities * * * *

59.12 Motion picture, video and television programme post-production activities * * * *

59.13 Motion picture, video and television programme distribution activities * * * *

59.14 Motion picture projection activities * * * *

59.2 Sound recording and music publishing activities * * * *

60.1 Radio broadcasting * * * *

60.2 Television programming and broadcasting activities * * * *

61.1 Wired telecommunications activities * * *

61.2 Wireless telecommunications activities * * *

61.3 Satellite telecommunications activities * * *

61.9 Other telecommunications activities * * *

62.01 Computer programming activities * * *

62.02 Computer consultancy activities * * *

62.03 Computer facilities management activities * *

62.09 Other information technology and computer service activities * *

63.11 Data processing, hosting and related activities * *

63.12 Web portals * *

63.91 News agency activities * *

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Table 2.2: Standard Industrial Classification used in DCMS sector estimates (see notes 1-4 at the end of the table)

SIC07 Description Creative

Industries Digital Sector

Cultural Sector

Telecoms Gambling Sport1 Tourism2 All

DCMS3

63.99 Other information service activities n.e.c. * *

68.20 Renting and operating of own or leased real estate * *

70.21 Public relations and communication activities * *

71.11 Architectural activities * *

73.11 Advertising agencies * *

73.12 Media representation * *

74.1 Specialised design activities * *

74.2 Photographic activities * * *

74.3 Translation and interpretation activities * *

77.11 Renting and leasing of cars and light motor vehicles * *

77.21 Renting and leasing of recreational and sports goods * * *

77.34 Renting and leasing of water transport equipment * *

77.35 Renting and leasing of air transport equipment * *

79.1 Travel agency and tour operator activities * *

79.9 Other reservation service and related activities * *

82.3 Organisation of conventions and trade shows * *

85.51 Sports and recreation education * *

85.52 Cultural education * * *

90.01 Performing arts * * * *

90.02 Support activities to performing arts * * * *

90.03 Artistic creation * * * *

90.04 Operation of arts facilities * * * *

91.01 Library and archive activities * * *

91.02 Museum activities * * * *

91.03 Operation of historical sites and buildings and similar visitor attractions * * *

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Table 2.2: Standard Industrial Classification used in DCMS sector estimates (see notes 1-4 at the end of the table)

SIC07 Description Creative

Industries Digital Sector

Cultural Sector

Telecoms Gambling Sport1 Tourism2 All

DCMS3

91.04 Botanical and zoological gardens and nature reserve activities * *

92 Gambling and betting activities * * *

93.11 Operation of sports facilities * * *

93.12 Activities of sports clubs * *

93.13 Fitness facilities * *

93.19 Other sports activities * * *

93.21 Activities of amusement parks and theme parks * *

93.29 Other amusement and recreation activities * *

95.11 Repair of computers and peripheral equipment * *

95.12 Repair of communication equipment * * Tourism - other consumption products (tourism not covered by "tourism industries") * *

Notes: 1. Sport – the definition here does not match the sport satellite account. For a full estimate of the value of sport see the Sport Satellite Account. In this, sport overlaps with many of

the other DCMS sectors, including significant overlaps with Telecoms, Gambling and Creative Industries (Advertising and Broadcasting). While the exclusion of these areas from Sport reduces the value of “Sport” significantly, the impact of using the more limited SIC related definition of sport on the overall DCMS estimate is much less significant because of the areas already being included elsewhere in DCMS sectors. 2. Tourism – For all industries except tourism, the entire SIC shown is included in the estimate of DCMS GVA and the GVA for the relevant sector. For tourism, tourism industries

are shown in the table but other data sources are used to determine how much of the SIC is included in the tourism (and therefore DCMS) estimate. 3. All DCMS – the all DCMS estimate is made up by combining the value for each SIC which forms part of a DCMS sector (except tourism where part of the relevant SIC is taken

based on the Tourism Satellite Account methodology). Due to overlap between sectors it is not accurate to add up the sector totals without taking into account the overlap. 4. Civil Society – this sector spans across all industries, both within DCMS sectors and outside. The overlap between Civil Society and other DCMS sectors is taken into account

for All DCMS totals.

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Table 2.3 Standard Industrial Classifications used in Creative Industries sub-sector estimates

Creative Industries sub-sector SIC07 Description

1. Advertising and marketing

70.21 Public relations and communication activities

73.11 Advertising agencies

73.12 Media representation

2. Architecture 71.11 Architectural activities

3. Crafts 32.12 Manufacture of jewellery and related articles

4. Design and designer fashion 74.1 Specialised design activities

5. Film, TV, video, radio and photography

59.11 Motion picture, video and television programme production activities

59.12 Motion picture, video and television programme post-production activities

59.13 Motion picture, video and television programme distribution activities

59.14 Motion picture projection activities

60.1 Radio broadcasting

60.2 Television programming and broadcasting activities

74.2 Photographic activities

6. IT, software and computer services

58.21 Publishing of computer games

58.29 Other software publishing

62.01 Computer programming activities

62.02 Computer consultancy activities

7. Publishing

58.11 Book publishing

58.12 Publishing of directories and mailing lists

58.13 Publishing of newspapers

58.14 Publishing of journals and periodicals

58.19 Other publishing activities

74.3 Translation and interpretation activities

8. Museums, Galleries and Libraries 91.01 Library and archive activities

91.02 Museum activities

9. Music, performing and visual arts

59.2 Sound recording and music publishing activities

85.52 Cultural education

90.01 Performing arts

90.02 Support activities to performing arts

90.03 Artistic creation

90.04 Operation of arts facilities

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Table 2.4 Standard Industrial Classifications used in Digital Sector sub-sector estimates

Digital sector sub-sector SIC07 Description

Manufacturing of electronics and computers

26.11 Manufacture of electronic components

26.12 Manufacture of loaded electronic boards

26.2 Manufacture of computers and peripheral equipment

26.3 Manufacture of communication equipment

26.4 Manufacture of consumer electronics

26.8 Manufacture of magnetic and optical media

Wholesale of computers and electronics 46.51 Wholesale of computers, computer peripheral equipment and software

46.52 Wholesale of electronic and telecommunications equipment and parts

Publishing (excluding translation and interpretation activities)

58.11 Book publishing

58.12 Publishing of directories and mailing lists

58.13 Publishing of newspapers

58.14 Publishing of journals and periodicals

58.19 Other publishing activities

Software publishing 58.21 Publishing of computer games

58.29 Other software publishing

Film, TV, video, radio and music

59.11 Motion picture, video and television programme production activities

59.12 Motion picture, video and television programme post-production activities

59.13 Motion picture, video and television programme distribution activities

59.14 Motion picture projection activities

59.2 Sound recording and music publishing activities

60.1 Radio broadcasting

60.2 Television programming and broadcasting activities

Telecoms

61.1 Wired telecommunications activities

61.2 Wireless telecommunications activities

61.3 Satellite telecommunications activities

61.9 Other telecommunications activities

Computer programming, consultancy and related activities

62.01 Computer programming activities

62.02 Computer consultancy activities

62.03 Computer facilities management activities

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62.09 Other information technology and computer service activities

Information service activities

63.11 Data processing, hosting and related activities

63.12 Web portals

63.91 News agency activities

63.99 Other information service activities not elsewhere classified

Repair of computers and communication equipment

95.11 Repair of computers and peripheral equipment

95.12 Repair of communication equipment

Table 2.5 Standard Industrial Classifications used in Cultural Sector sub-sector estimates

Cultural Sector sub-sectors SIC07 Description

Arts

90.01 Performing arts

90.02 Support activities to performing arts

90.03 Artistic creation

90.04 Operation of arts facilities

Film, TV and Music

59.11 Motion picture, video and television programme production activities

59.12 Motion picture, video and television programme post-production

59.13 Motion picture, video and television programme distribution

59.14 Motion picture projection activities

60.2 Television programming and broadcasting activities

59.2 Sound recording and music publishing activities

18.2 Reproduction of recorded media

32.2 Manufacture of musical instruments

47.63 Retail sale of music and video recordings in specialised stores

Radio 60.1 Radio broadcasting

Photography 74.2 Photographic activities

Crafts 32.12 Manufacture of jewellery and related articles

Museums and Galleries 91.02 Museum activities

Library and archives 91.01 Library and archive activities

Cultural education 85.52 Cultural education

Heritage 91.03 Operation of historical sites and buildings and similar visitor attractions

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Chapter 3 – Limitations

DCMS makes all efforts to provide the best possible estimates. However, inevitably there are a number of limitations to the data which users should be aware of. 3.1 Measurement issues Civil Society – In July 2016 DCMS took on responsibility for the Office for Civil Society, which is responsible for charities, voluntary organisations or trusts, social enterprises, mutuals and community interest companies. The Civil Society sector is not like a traditional industry and therefore data are not readily available in the usual data sources. Where possible, data are provided from official sources. Some estimates from other sources are quoted to provide a wider context but cannot be added to the official results. It is therefore likely that the estimates for the civil society are an underestimate for this sector. For employment, people who work in a “charity, voluntary organisation or trust” are reported in the DCMS estimates. There are no reported estimates for exports or imports of goods and services for the civil society sector. For GVA in current prices, an estimate for charities has been published. The Civil Society figure published covers non-market charities in the NPISH (non-profit institutions serving households) sector. It does not include market provider charities who have passed the market test and therefore sit in the corporate sector (these data are not currently measured by ONS on a National Accounts basis), mutuals, social enterprises or community interest companies. An estimate of the economic contribution of volunteering is also provided, but this is not included in the “All DCMS Sectors” total due to it being part of the informal economy and therefore not part of the traditional methodology of calculating GVA. An estimate for the Office for Civil Society has not been included in the GVA expressed in chained volume measures. This may be developed in the future if there is sufficient user demand. For the business demographics, the Civil Society sector cannot be uniquely identified in the Annual Business Survey, the data source used for the other DCMS Sectors. Contextual information on the number of businesses in the Civil Society sector is provided. However these are non-official statistic sources and therefore should not be added to the other DCMS Sector totals. Standard Industrial Classifications (SICs) - Estimates have been constructed from ONS Official Statistics which use international classifications. This is an important element of the methodology due to availability of data and to enable international comparability. However, as a result there are substantial limitations to the underlying classifications. As the balance and make-up of the economy changes the international classifications are less able to provide the detail for important elements of the UK economy related to DCMS sectors, and therefore best fit SIC codes have been used to produce these estimates. Deflators – Deflators have been produced for DCMS Sectors and sub-sectors for the first time in November 2017. The method applied within this analysis uses a slightly different approach to deflation used in National Account although it gives similar results. Instead of apportioning each industry into its respective products, an experimental industry level deflator is applied. These deflators have previously been published on the ONS website (Industry Level Deflators), but here have been updated with the latest data. In a similar way to the

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deflation carried out in National Accounts, deflators are not available for all of the low level industries required by DCMS. Therefore, we have used deflators which match as closely as possible to each industry, and made some assumptions where an exact match could not be found. For example, deflators for industry 46.51 weren’t available, so deflators from industry 46 were used instead. All were in the form of a price index with 2010 = 100. GVA 2017 sector estimates – estimates for 2017 have been modelled (see GVA – current price chapter) and therefore are subject to revisions once the fully balanced National Accounts estimates and latest ABS data become available (in Autumn 2019). Civil Society current GVA estimates – The Civil Society GVA figures are based on NPISH (Non-profit institutions serving households) data. NPISH includes non-market charities, universities, trade unions and political parties. Of these, DCMS only covers the charity sector. As balanced industry data are not available split by source, we have assumed that the balancing adjustment and other inputs used during processing of data, are applied in proportion to the underlying source data. Furthermore, it is not possible to identify the overlap between NPISH sectors and DCMS sectors due to the way the data are processed, unless there is an exact 1:1 match. For example NPISH data are processed for SIC 90, which is also within the Cultural and Tourism sector, and therefore this overlap can be removed in the ‘All DCMS Sector’ value. Conversely, NPISH data are provided for SICs 68.1 and 68.2 and cannot be separated. SIC 68.1 is not a DCMS industry, but SIC 68.2 is, and therefore a slight overlap will be included in the ‘All DCMS Sector’ value. It is estimated that the overlap is a maximum of 0.2% of total UK GVA. However given that the estimates for Civil Society as a whole are an underestimate for the sector (not including market provider charities, mutuals, social enterprises and community interest communities), the ‘All DCMS Sector’ value is not an over estimate even when compensating for this small overlap. Civil Society 2017 current GVA estimate – The Civil Society GVA figures are based on NPISH (Non-profit institutions serving households) data. The 2017 figures cannot be identified in the output approach to GDP, which is the approach taken for other DCMS sectors. Between Blue Books the only data published on NPISH is their final consumption expenditure. It is not appropriate to use this for the 2017 estimate as it only captures only one element of output with no information on intermediate consumption. The 2017 estimates published by DCMS therefore assumes the average proportion of the UK economy that is attributed to NPISH from 2010 to 2016 to be the same for 2017. The same approach is taken to identify the overlap between NPISH and other DCMS sectors for 2017. These figures will be updated in November 2019. Tourism sector 2016 and 2017 Employment estimates – estimates for 2016 and 2017 were modelled (see Employment chapter) in the July publication. The Tourism Satellite Account 2017 was published on 27th November 2017, and therefore these estimates of employment for 2015 and 2016 supersede the ones published in July 2017. The 2016 and 2017 figures are provisional and will be updated in 2019 with the Tourism Satellite Account estimates published on 28 November 2018. Tourism GVA estimates methodology improvements 2015 – 2017 – Similar to Employment estimates, GVA estimates for tourism are also taken from the Tourism Satellite Account. Several methodology improvements were made for the 2016 Tourism Satellite Account, which resulted in the 2015 data being revised. In 2016, several improvements were made to the Great Britain Day Visits Survey (GBDVS): • Questionnaire improvements to make the survey more engaging and easy to complete

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• Questionnaire revisions required as part of the ‘merging’ of GBDVS with the Great Britain Tourism Survey (GBTS) online piloting • From January 2016, the weekly sample size contacted for the wider GBDVS/GBTS combined surveying increased from 673 to 1,000 As a result of these changes, a 15% increase was observed in the levels of visits reported by respondents. To ensure 2015 data are consistent with the methodological improvements, and to allow suitable comparisons with 2016 data, the 2015 data have been revised in line with the increased level of reporting of day visits. This change has not yet been implemented in the UK Tourism Satellite Account prior to 2015. ONS plan to implement these changes in 2019. Therefore, at present, caution should be taken when comparing data from 2015 onwards with previous years. More information on the changes to the GBDVS can be found on slide 8 of The Great Britain Day Visitor 2017 Annual Report and in the ONS Tourism Satellite Account report published on 28th November 2018. Industry breakdowns - The estimates in this report are based on survey data from the Annual Population Survey (APS), which is itself a derivative of the Labour Force Survey (LFS). This is a household survey with industry self-reported by the individual completing the survey. This provides good information on demographics, but leads to some inaccuracies on the industry breakdown. This should be borne in mind when using these estimates. Methodological information about the LFS can be found here. 3.2 Data sources Survey data – all the estimates included in the report are based on survey data. As with all data from surveys, there will be an associated error margin surrounding these estimates6. While these data provide the best available source of information there is often volatility, especially at the 4 - digit SIC level which is used to produce estimates for DCMS sectors.

ABS survey design changes– The ABS (Annual Business Survey) is used to break down the Supply and Use tables estimates to the 4 digit level. However, users should note that the ABS population was expanded in 2015 to include approximately 92,000 solely Pay As You Earn (PAYE)-based businesses. This led to an increase in the number of businesses in the overall population of approximately 4%. In 2015, these businesses increased the level of turnover by 0.4% and GVA by 0.8%.

Users should also note that a sample re-optimisation has been included in the ABS estimates for 2016. This is carried out every five years to improve the efficiency of the sample estimation and reduce sampling variability as part of the regular process to improve estimates.

Both of these survey design changes have a possible impact on the DCMS GVA and Business Demographics estimates although for the GVA estimates, the ABS is only being used to provide a proportion of the SUT so these changes should have minimal impact on the overall figures.

6 Sampling error is the error caused by observing a sample (as in a survey) instead of the whole population (as

in a census). While each sample is designed to produce the “best” estimate of the true population value, a number of equal-sized samples covering the population would generally produce varying population estimates. Sampling error is affected by a number of factors including sample size. Despite these issues, sample surveys are still used as a means of data collection because they have lower associated costs than censuses in terms of both time and money. In addition to sampling errors, there is also the potential for non-sampling error, which cannot be easily quantified. For example, undetected deficiencies may occur in the survey register and errors may be made by the contributors when completing the survey questionnaires.

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GVA 2010 - 2016 – National Accounts Supply Use Tables are only available with a breakdown of 112 industry categories. In most cases this means for DCMS sectors the most granular data available are at the 2-digit SIC level. Where the required detail is not available in the Supply Use tables the ABS has been used to allocate GVA at the 4-digit level. However, data for aGVA in the ABS are negative for some aspects of SIC 91 so estimates for SIC 91.01, 91.02 and 91.03 make use of sales data from the ABS to allocate SIC 91 at the 4-digit level. National Accounts Supply Use Tables are open to revisions back to 1997 each year resulting in some changes to the back series. The latest GVA for DCMS sectors was published in November 2018, and supersedes the GVA estimates published previously. Both of these survey design changes can have a possible impact on the DCMS GVA estimates although the ABS is only being used to provide a proportion of the SUT so these changes should have minimal impact on the overall figures. 2017 GVA - For the latest year (currently 2017), the GVA data are taken from the output measure of GVA to allow consistency with the sector measures. This is aligned to average GVA up to and including 2016 (last Supply Use balanced year) but then uses growth in the output measure as a proxy for GVA beyond that. The 2017 figure therefore differs from National Account GVA at current basic prices (series named ABML) and National Account GVA at constant prices (series named ABMM). Regional GVA – Regional GVA estimates are only available at a 2 digit SIC code breakdown, and higher. Where the required detail is not available in these tables the ABS has been used to allocate regional GVA at the 4-digit level. However, data for aGVA in the ABS are negative for some aspects of SIC 91 so estimates for SIC 91.01, 91.02 and 91.03 make use of sales data from the ABS to allocate SIC 91 at the 4-digit level. Employment – The Annual Population Survey (APS) is considered to be the best source of information for headlines estimates of UK jobs, including employed and self-employed jobs. However there are significant weaknesses with the industry breakdowns as they are based on self-reporting of individuals (and therefore are often inconsistent with how businesses are allocated in National Accounts). This should be borne in mind when using these estimates. However, comparisons show that the differences between APS and other sources with better industry breakdowns (e.g. the Business Register and Employment Survey, BRES, which is a business survey and therefore all employees are allocated to the same SIC as the business itself, giving greater accuracy and consistency with other measures) are not large. Therefore, APS has been used in this analysis for its demographic information and information on occupations. Businesses – the number of businesses are published, and broken down by different demographics. As the data are from the ABS there are some areas of the economy which are not covered. It covers the non-financial businesses economy. It excludes financial and insurance (Section K), Public administration and defence (Section O), Education (public provision in Section P) and Health (SIC 86.2, public provision in SIC 86.1 and 86.9 in Section Q). This is not a significant issue for DCMS sectors where there is a good coverage, but does have an impact on UK totals. Time series comparisons should also be treated with caution as the ABS is set up with the intention of providing good information on the structure of the economy in a given year, rather than an accurate trend over time (for example revisions are not made to historic data to allow consistent comparison over time). Digital trade and E-commerce - The importance of digital trade is growing. E-commerce (i.e. those goods and services that are ordered and/or delivered digitally) is an important subset of the wider digital trade, however, little information currently exists on the scale of cross-border trade flows that are affected by this.

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There are substantial challenges in relation to the measurement of cross-border e-commerce flows. There is a lack of clear definition of what constitutes ‘digital trade’ and of a comprehensive conceptual measurement framework. This problem is compounded by the emergence of enterprises with new business models (e.g. Airbnb, Uber etc) whose activity is difficult to capture with conventional statistical methods. Although most statistical agencies, including the ONS and HMRC, indicate that current trade statistics do not significantly under-report digital trade flows, it is generally accepted that e-commerce is creating significant international trade that is not picked up by existing data collection systems. The most problematic area is the measurement of trade in e-services such as digital downloads and applications. International organisations like OECD and WTO recognise this problem and have prioritised work in this area. However it is a significant weakness in the current approach.

Exports and imports of goods – Estimates for exports and imports of goods were published for the first time last year (2017). The estimates are based on data from HMRC’s Overseas Trade Statistics, in which entries are listed in Combined Nomenclature 2008 (CN08) format, which is based on the Harmonised System (HS) of tariff nomenclature. This is an internationally standardised system of coding for classifying goods for trade. DCMS Sectors are defined at the 4 digit SIC code level, and therefore a conversion tool from SIC to the CN08 codes was used to find the best match. In response to consultation feedback since the last publication, the CN08 codes associated with the Crafts sub-sector have been revised. These revisions have been made to the back time series, as published in June 2018

Trade in goods and trade in services – Estimates are provided for both trade in goods and trade in services. These are based on different data sources, and as a result have been presented as two separate figures. Data on trade in goods are collected from HMRC's Intrastat survey and Customs import and export entries, which record the movement (for trade purposes) of goods across international borders. As such, the data are gathered under the cross-border principle of trade. Meanwhile, DCMS estimates of trade in services are based on data from the ONS International Trade in Services (ITIS) datatset. These data are collected via survey and are gathered under the change of ownership principle of trade. To reflect these differences, between the two data sources, the trade in services and trade in goods data are presented separately and caution is advised when adding the two sources together. 3.3 Sector definitions Civil Society - The Office for Civil Society are responsible for charities, voluntary organisations or trusts, social enterprises, mutuals and community interest companies. The Civil Society sector is not like a traditional industry and therefore data are not readily available in the usual data sources. Where possible, data are provided from official sources. Some estimates from other sources are quoted to provide a wider context but cannot be added to the official results. It is therefore likely that the estimates for the civil society are an underestimate for this sector For employment, people who work in a “charity, voluntary organisation or trust” are reported in the DCMS estimates. There are no reported estimates for exports or imports of goods and services for civil society. For GVA in current prices, an estimate for charities has been published for the first time in November 2017. An estimate of the economic contribution of volunteering is also provided, but this is not included in the “All DCMS Sectors” total due to it being part of the informal economy and therefore not part of the traditional methodology of calculating GVA. An estimate for the Office for Civil Society has not been included in the GVA expressed in chained volume measures.

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An estimate for Civil Society sector is not currently available in the GVA expressed by chained volume measures. For the business demographics, the Civil Society sector cannot be uniquely identified in the Annual Business Survey, the data source used for the other DCMS Sectors. Contextual information on the number of businesses in the Civil Society sector is provided. However these are non-official statistic sources and therefore should not be added to the other DCMS Sector totals. Creative Industries – Estimates in the DCMS Sectors Economic Estimates for the Creative Industries have replaced the previously used methodology for Creative Industries Economic Estimates. While there are many of the limitations which apply to the previous methodology, particularly around definitions and SIC codes, there are a number of benefits to the new approach which reduce the data limitations. These include:

Accounting for under-coverage (including microbusinesses and black market activity);

Better GVA time series data (the ABS is not intended to be used for comparison over time);

Better industry information for employment (jobs);

An approach which allows consistent comparison with national estimates across economic measures including the potential to produce productivity estimates.

See the Creative Industries methodology note for more details on limitations, including specifics on crafts, music, fashion and computer games. Culture – Whilst the DCMS approach to measurement of culture attempts to better define this sector, there are significant limitations due to the limited granularity of the standard industrial classifications. There are many cases where culture forms a small part of a different industry classification and therefore for cannot be separately identified and assigned as culture using standard data sources. DCMS consulted on definition of Culture and published a response in April 2017. Operation of historical site and similar visitor attractions - The Heritage sector is depicted in our estimates by one SIC code “91.03 Operation of historical sites and building and similar visitor attractions”. DCMS use standard industrial classification (SIC) codes to construct these estimates, which enables international comparability as well as comparability with national estimates. As the balance and make-up of the economy changes, the international SIC codes used here are less able to provide the detail for important elements of the UK economy related to DCMS sectors. It is therefore recognised that the published estimates are likely to be an underestimate for the Heritage sector. Digital – Estimates in this report supersede the previous Digital Sector estimates. The definition used for the Digital Sector has the advantage of international comparability. However, it does not allow consideration of the value added of “digital” to the wider economy e.g. in health care of construction. DCMS policy responsibility is for digital across the economy and therefore this is a significant weaknesses in the current approach. Sport - For the purposes of this publication the statistical definition of sport has been used. This incorporates only those 4 digit Standard Industrial Classification (SIC) codes which are predominately sport (see methodology note Table 2.1). DCMS also publishes estimates of sport based on the EU agreed Vilnius definition. The Vilnius definition is a more comprehensive measure of sport which considers the contribution of sport across a range of industries, for example sport advertising, and sport related construction. The DCMS Sport Satellite Account is currently being developed and therefore has not been used in these estimates.

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Tourism – Estimates for tourism used in this publication are based on a different methodology to all other sectors, they are taken from the Tourism Satellite Account. This is an internationally recommended methodology for measurement of the contribution of tourism to the economy. This methodology uses survey data to allocate spend by industry, which produces robust measures of GVA and “tourism ratios”. The tourism ratios are then applied to employment and number of enterprises to get estimates of direct tourism for these measures. This requires a significant assumption about the ratio of spend to employment/number of enterprises. The same ratios are also applied for employed and self-employed, despite the potential differences in the make-up of these two groups. While there are limitations to this approach, it provides a much better estimate than purely taking the broad group of “tourism industries”, a number of which only contain small proportions of tourism jobs.

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Chapter 4 – GVA – current prices

This chapter presents the methodology for estimates of gross value added (GVA) for DCMS sectors, expressed in current prices (i.e. not taking into account inflation). GVA measures the contribution to the economy of each individual producer, industry or sector in the UK. It is used in the estimation of gross domestic product (GDP).

𝑮𝑽𝑨 + 𝑇𝑎𝑥𝑒𝑠 𝑜𝑛 𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑠 − 𝑆𝑢𝑏𝑠𝑖𝑑𝑖𝑒𝑠 𝑜𝑛 𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑠 = 𝑮𝑫𝑷 Estimates of taxes and subsidies are not available at an industry level and therefore GVA is used as the headline economic measure at an industry level. The GVA estimates in this release have been produced to provide a National Accounts consistent estimate of GVA for “DCMS Sectors”. Data sources The following data sources were used in the production of GVA estimates for DCMS sectors:

Blue Book 2018 Consistent Supply and Use tables (published 31 July 2018) – containing data up to 2016.

Latest Quarterly National Accounts (released 28 September 2018) – used for 2017 estimates.

Unsuppressed ABS aGVA estimates at the lowest level available – used to allocate GVA below the level available in the supply and use tables.

Latest Tourism Satellite Account (produced separately by ONS Tourism Intelligence Unit).

Latest balanced GVA for the non-market charities element of NPISH (Non-profit institutions serving households), per industry.

Method The most reliable estimate of GVA comes from the annually produced Supply and Use tables (SUT), which contain balanced data drawn from many different sources, forming one robust estimate for each of the 112 Industries in the SUT matrix. However, as the DCMS sectors are defined at 4 digit SIC level, and the SUT matrix is at a higher level, a method for breaking down the SUT estimates of GVA was applied. This was done using approximate Gross Value Added (aGVA) data from the UK non-financial business economy (Annual Business Survey). For example, SIC 32.12 (Manufacture of jewellery and related articles) forms part of the Creative Industries. SIC 32 is available in the SUT, however, SIC 32.12 is the only part of the 2 digit SIC which should be included in the Creative Industries (or DCMS sectors) estimate. To get a National Accounts consistent estimate of the GVA for this particular 4 digit SIC code, the ABS aGVA was used to estimate 32.12 as a proportion of 32. This was then applied to the value of 32 in the SUT to get a National Accounts consistent estimate of GVA for 32.12. This approach was applied for all cases where a 3 or 4 digit SIC is used in the DCMS definition. For Gambling and Telecoms the entire 2-digit SIC from the SUT was used.

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ABS survey design changes – The ABS (Annual Business Survey) is used to break down the Supply and Use tables estimates to the 4 digit level. However, users should note that the ABS population was expanded in 2015 to include approximately 92,000 solely Pay As You Earn (PAYE)-based businesses. This led to an increase in the number of businesses in the overall population of approximately 4%. In 2015, these businesses increased the level of turnover by 0.4% and aGVA by 0.8%.

Users should also note that a sample re-optimisation has been included in the ABS estimates for 2016. This is carried out every five years to improve the efficiency of the sample estimation and reduce sampling variability as part of the regular process to improve estimates.

Both of these survey design changes can have a possible impact on the DCMS GVA estimates although the ABS is only being used to provide a proportion of the SUT so these changes should have minimal impact on the overall figures.

Tourism estimates are also included in the report, however these data were produced separately by the ONS Tourism Intelligence Unit, based on the methodology and definition set out in the UN International Recommendations for Tourism Statistics 2008 (IRTS 2008). These estimates are also produced to be consistent with National Accounts. More details on the methods applied for the UK are included in the 2014 Tourism Satellite Account. As mentioned in Chapter 3, several methodology improvements were made for the 2016 Tourism data, which resulted in the 2015 data being revised. These changes have not yet been implemented in the data prior to 2015. ONS do plan to implement these changes in 2019 and at present, caution should be taken when comparing data from 2015 onwards with previous years. The Civil Society GVA figures are based on NPISH (Non-profit institutions serving households) data. NPISH includes non-market charities, universities, trade unions and political parties. Of these, DCMS only covers the charity sector. As balanced industry data are not available split by source, we have assumed that the balancing adjustment and other inputs used during processing of data, are applied in proportion to the underlying source data. Accounting for overlap Several of the sectors defined as DCMS sectors overlap. For example, the Creative Industries and Digital Sector, which in turn overlaps with the Cultural Sector. This overlap must be estimated in order to avoid double counting and produce a robust estimate for all DCMS sectors. In most cases, estimating the overlap is straight forward as it solely requires looking at which SIC codes appear in multiple sectors. All unique SICs can then be aggregated to give a total figure with no overlap (see final column in Table 2.1). For Tourism a slightly different approach is required due to the methodology used to calculate GVA for this sector. The first stage is to identify SIC codes which form are part of tourism and appear in other DCMS sectors (90, 91.02, 91.03, 91.04, 77.21, 92, 93.11 and 93.19). These are treated in two different ways:

1. All of 'Cultural activities' within the tourism satellite account (90, 91.02, 91.03, 91.04) is included in other DCMS sectors. 2. Tourism estimates for the other SICs which form part of tourism and other sectors (77.21, 92, 93.11 and 93.19) can not be so easily separated out, as the tourism estimates are not categories at the SIC 4-digit level. This means an estimate has to

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made for the part of tourism which is in each of these SICs. This is done using the tourism ratio.

The total overlap was therefore the sum of 1 and 2 above, and was deducted from the total DCMS sector GVA to avoid double counting (in 2017 this overlap accounted for approximately 0.3% of UK GVA). For Civil Society, it is not possible to identify the overlap between NPISH sectors and DCMS sectors due to the way the data are processed, unless there is an exact 1:1 match. For example NPISH data are processed for SIC 90, which is also within the Creative Industries, Cultural and Tourism sectors, and therefore this overlap can be removed in the ‘All DCMS Sector’ value. Conversely, NPISH data are provided for SICs 68.1 and 68.2 and cannot be separated. SIC 68.1 is not a DCMS industry, but SIC 68.2 is, and therefore a slight overlap will be included in the ‘All DCMS Sector’ value. It is estimated that the overlap is a maximum of 0.2% of total UK GVA in 2017. However given that the estimates for Civil Society as a whole are an underestimate for the sector (not including market provider charities, mutuals, social enterprises and community interest communities), the ‘All DCMS Sector’ value is not an over estimate even when compensating for this small overlap. ABS v National Accounts Previously DCMS has published estimates for the Creative Industries and Digital Sector using purely approximate GVA data from ABS. The approach used this time has included National Accounts Consistent GVA data. Although ABS data are used in the production of output and intermediate consumption, many other sources (including surveys and administrative sources) are also used to produce National Accounts estimates. These include sources of data on taxation and inventories (which are preferred to the ABS as they are used consistently throughout all parts of the National Accounts), as well as own-use output and non-market output (as these activities are only partially covered by the ABS). There are differences between the two measures of gross value added in terms of coverage. For example, GVA covers the whole of the UK economy while aGVA covers the UK Non-Financial Business Economy, a subset of the whole economy that excludes large parts of agriculture, all of public administration and defense, publicly provided healthcare and education, and the financial sector. There are conceptual differences between the two measures of gross value added. For example, some production activities such as illegal smuggling of goods must be included in the National Accounts but are outside the scope of the ABS. In addition, the national accounts data (with the exception of 2015) have gone through the Supply and Use balancing process, which reconciles all three estimates of GDP. More information on the differences between National Accounts GVA and Approximate GVA can be found in the article, ‘A Comparison between Annual Business Survey and National Accounts Measures of Value Added’. In particular, the new method makes comparison with the wider UK economy more straightforward and ensures that non market production is included in the DCMS estimates. SIC 91: Libraries, archives, museums and other cultural activities In the ABS data the aGVA for aspects of SIC 91 can be negative (most likely due to under coverage in the ABS). In previous DCMS estimates for the Creative Industries the 4-digit SICs within SIC 91 have been excluded from estimates due to these issues. However, it has now been possible to include an estimate for SIC 91.01, 91.02 and 91.03 using the SUT, and then using sales data from the ABS to allocate SIC 91 at the 4-digit level. This is the only SIC where this approach has been used.

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2017 GVA Data The SUT and ABS only provide data up to 2016. Therefore estimates for 2017 use data from the short term measures of output (Index of Production, Index of Services, Construction Output), as a proxy for GVA. A complete time series of GVA (including these 2017 estimates) is available in the UK GDP(O) low level aggregates table which is published each month alongside the UK GDP publication. These short term measures tend to use turnover as a proxy for output and have no information on intermediate consumption. The exception to this is for the Civil Society sector. The Civil Society GVA figures are based on NPISH (Non-profit institutions serving households) data. The 2017 figures cannot be identified in the output approach to GDP, which is the approach taken for other DCMS sectors. Between Blue Books the only data published on NPISH is their final consumption expenditure. It is not appropriate to use this for the 2017 estimate as it only captures only one element of output with no information on intermediate consumption. The 2017 estimates published by DCMS therefore assumes the average proportion of the UK economy that is attributed to NPISH from 2010 to 2016 to be the same for 2017. The same approach is taken to identify the overlap between NPISH and other DCMS sectors.

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Chapter 5 – GVA – chained volume measures

This chapter presents the methodology for estimates of gross value added (GVA) for DCMS sectors, expressed in chained volume measures (i.e. taking into account inflation). A GVA expressed in chained volume measures was published for the first time in November 2017 in response to user demand. GVA measures the contribution to the economy of each individual producer, industry or sector in the UK. It is used in the estimation of gross domestic product (GDP).

𝑮𝑽𝑨 + 𝑇𝑎𝑥𝑒𝑠 𝑜𝑛 𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑠 − 𝑆𝑢𝑏𝑠𝑖𝑑𝑖𝑒𝑠 𝑜𝑛 𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑠 = 𝑮𝑫𝑷 Estimates of taxes and subsidies are not available at an industry level and therefore GVA is used as the headline economic measure at an industry level. In Chained Volume Measures (CVMs)7, inflation is taken into account. The base period is updated each year (for DCMS’ estimates, this is 2016). CVMs are created by linking together series with different base years. In this analysis we use the CVM price series to calculate volume in terms of previous year prices and current year prices. Method 1. Current Prices The methodology, developed by the ONS, for 2017 current price GVA analysis was used as a starting point (See Chapter 4 for the methodology). The current price data are broken down by industry for each of the aggregated industries included within the DCMS Sectors. The exception to this is Tourism, which is included as a single aggregated industry. Current price data for Tourism in 2010 were not available to ONS when producing the deflators. We therefore estimate using figures from the Tourism Satellite Account to produce a non-overlap tourism figure for 2010. Within the Tourism Satellite Account we used current price figures for 2010 and 2011 to find a growth rate between the years. We then take this rate along with our figure for 2011 and reverse the growth to obtain an estimate for 2010 i.e.

𝛾 =𝑡𝑠𝑎𝑡𝑜𝑢𝑟𝑖𝑠𝑚,2011

𝑡𝑠𝑎𝑡𝑜𝑢𝑟𝑖𝑠𝑚,2010,

𝑥𝑡𝑜𝑢𝑟𝑖𝑠𝑚,2010 = 𝑥𝑡𝑜𝑢𝑟𝑖𝑠𝑚,2011

𝛾.

In order to derive a Chain Volume Measure (CVM) we make use of the relationship

𝑉𝑎𝑙𝑢𝑒 = 𝑉𝑜𝑙𝑢𝑚𝑒 × 𝑃𝑟𝑖𝑐𝑒.

7 CVMs are different to constant prices. Constant Price is simply the current price data deflated using a price from a base period. Generally the base period is updated every 5 years (in this analysis it is 2010 as prices are based at 2010). It can be thought of as Constant Price Value. Further information explaining the difference in current price, constant price and chained volume measure is available at http://webarchive.nationalarchives.gov.uk/20160107002820/http://www.ons.gov.uk/ons/guide-method/method-quality/specific/economy/national-accounts/faqs/gdp-questions/index.html

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Current price estimates are the 𝑣𝑎𝑙𝑢𝑒 component of this equation. To obtain the 𝑣𝑜𝑙𝑢𝑚𝑒 component it is usually easier to derive it using 𝑣𝑎𝑙𝑢𝑒 and 𝑝𝑟𝑖𝑐𝑒 rather than measuring

𝑣𝑜𝑙𝑢𝑚𝑒 directly. Therefore, we rearrange to get

𝑉𝑜𝑙𝑢𝑚𝑒 =𝑉𝑎𝑙𝑢𝑒

𝑃𝑟𝑖𝑐𝑒.

(1)

Deflators (Price Index) Deflation at an industry level within National Accounts is carried out by proportioning the industries into their relevant products and then deflating each product separately, before aggregating back up to an industry level. In general, deflation is carried out at a higher Standard Industrial Classification (SIC) level than is required by DCMS as suitable weights and deflators are not available for these low level industries (at a 4 digit SIC code level). The method used within this analysis uses a slightly different approach to deflation that is simpler to apply but gives similar results. Instead of apportioning each industry into its respective products, an experimental industry level deflator is applied. These deflators have previously been published on the ONS website (Industry Level Deflators), but here have been updated with the latest data. In a similar way to the deflation carried out in National Accounts, deflators are not available for all of the low level industries required by DCMS. Therefore, we have used deflators which match as closely as possible to each industry, and made some assumptions where an exact match couldn’t be found. For example, deflators for industry 46.51 weren’t available, so deflators from industry 46 were used instead. All were in the form of a price index with 2010 = 100. Tourism Deflator Since Tourism is treated as a single industry we need to obtain a single Tourism deflator. For each industry within the Tourism aggregate we collect deflators in the same way as before (i.e. using the experimental deflators). We then need to weight these together to form a single deflator. The Tourism industries are omitted from the current price data at an industry level so we cannot use the current price data for our weights. Instead we use Annual Business Survey (ABS) data for weighting, to obtain the weight 𝜔 of industry 𝑖 at time 𝑡 𝜔𝑖,𝑡 =

𝑥𝑖,𝑡

∑ 𝑥𝑖,𝑡𝑛𝑖=1

,

(2)

where 𝑥𝑖,𝑡 is the current price GVA of industry 𝑖 at time 𝑡 for all 𝑛 industries within tourism

sourced from ABS. Then the deflator (or price index) 𝑘 at time 𝑡 is given by

𝑘𝑡 = ∑ 𝑥𝑖,𝑡 × 𝑘𝑖,𝑡

𝑛

𝑖=1

.

(3)

where 𝑘𝑖,𝑡 is the deflator at time 𝑡 for industry 𝑖. This gives us a single deflator series for all

the tourism industries. Chained Volume Measure (CVM) For each industry within the DCMS economy, we use the deflator series and value (current price) series to derive a volume (or quantity) series using equation (1). The units of this volume series are not meaningful since we use a price index rather than actual prices, though this is not an issue.

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To create a CVM we firstly calculate our value series in previous years and current year’s prices (PYP and CYP respectively). The CYP series is simply the current price/value series:

𝑐𝑦𝑝𝑡 = 𝑣𝑜𝑙𝑢𝑚𝑒𝑡 × 𝑝𝑟𝑖𝑐𝑒𝑡 = 𝑣𝑎𝑙𝑢𝑒𝑡 and the PYP series is given by

𝑝𝑦𝑝𝑡 = 𝑣𝑜𝑙𝑢𝑚𝑒𝑡 × 𝑝𝑟𝑖𝑐𝑒𝑡−1. These are then used to obtain scaling factors (SF)

𝑠𝑓𝑡 = {

𝑐𝑦𝑝𝑡+1

𝑝𝑦𝑝𝑡+1× 𝑠𝑓𝑡+1, 𝑡 < 𝑏𝑎𝑠𝑒 𝑦𝑒𝑎𝑟,

1, 𝑡 ≥ 𝑏𝑎𝑠𝑒 𝑦𝑒𝑎𝑟.

The CVM is then given by

𝑐𝑣𝑚𝑡 = {𝑠𝑓𝑡 × 𝑐𝑦𝑝𝑡, 𝑡 ≤ 𝑏𝑎𝑠𝑒 𝑦𝑒𝑎𝑟,

𝑠𝑓𝑡 × 𝑝𝑦𝑝𝑡 , 𝑡 > 𝑏𝑎𝑠𝑒 𝑦𝑒𝑎𝑟.

In this analysis, the base year is 2016 to remain in line with National Accounts data published by ONS. For total DCMS and each DCMS sector, we then sum the PYP series and CYP series. The corresponding scaling factors and CVM are then derived using the same formulae above. These are then all summed up at SIC level to produce sector and ‘All DCMS Sector’ figures.

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Chapter 6 – Regional GVA

This chapter presents the methodology for estimates of regional gross value added (GVA) for DCMS sectors, expressed in current prices (i.e. not taking into account inflation). GVA measures the contribution to the economy of each individual producer, industry or sector in the UK. It is used in the estimation of gross domestic product (GDP).

𝑮𝑽𝑨 + 𝑇𝑎𝑥𝑒𝑠 𝑜𝑛 𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑠 − 𝑆𝑢𝑏𝑠𝑖𝑑𝑖𝑒𝑠 𝑜𝑛 𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑠 = 𝑮𝑫𝑷 Estimates of taxes and subsidies are not available at an industry level and therefore GVA is used as the headline economic measure at an industry level. The GVA estimates in this release have been produced to provide a ONS Regional GVA consistent estimate of regional GVA for “DCMS Sectors”. Data sources The following data sources were used in the production of GVA estimates for DCMS sectors:

ONS Regional Gross Value Added balanced tables (published 12 December 2018) – containing data up to 2017.

Unsuppressed ABS aGVA estimates at the lowest level available – used to allocate GVA below the level available in the supply and use tables.

Method The most reliable estimate of regional GVA comes from the annually produced ONS Regional gross value added (balanced) tables for each 2 digit SIC code. These estimates are consistent with the UK National Accounts, The Blue Book: 2018. National aggregates for the components of GVA are allocated to regions using the most appropriate regional indicator available. However, as the DCMS sectors are defined at 4 digit SIC level, and the regional GVA table is at a higher level, a method for breaking down the regional estimates of GVA was applied. This was done using approximate Gross Value Added (aGVA) data from the UK non-financial business economy (Annual Business Survey). For example, SIC 32.12 (Manufacture of jewellery and related articles) forms part of the Creative Industries. SIC 32 is available in the regional GVA table, however, SIC 32.12 is the only part of the 2 digit SIC which should be included in the Creative Industries (or DCMS sectors) estimate. To get a regional GVA consistent estimate of the GVA for this particular 4 digit SIC code, the ABS aGVA was used to estimate 32.12 as a proportion of 32. This was then applied to the value of 32 in the regional GVA table to get a consistent estimate of GVA for 32.12. This approach was applied for all cases where a 3 or 4 digit SIC is used in the DCMS definition. For Gambling and Telecoms the entire 2-digit SIC from the regional GVA table was used. Accounting for overlap Several of the sectors defined as DCMS sectors overlap. For example, the Creative Industries and Digital Sector, which in turn overlaps with the Cultural Sector. This overlap must be estimated in order to avoid double counting and produce a robust estimate for all DCMS sectors.

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Estimating the overlap requires looking at which SIC codes appear in multiple sectors. All unique SICs can then be aggregated to give a total figure with no overlap (see final column in Table 2.1). SIC 91: Libraries, archives, museums and other cultural activities This SIC code is used in the estimates for the Creative Industries and the Cultural sector. In the ABS data, the aGVA for aspects of SIC 91 can be negative (most likely due to under coverage in the ABS as some organisations are locally funded). For the regional GVA estimates, it has been possible to include an estimate for SIC 91.01, 91.02 and 91.03 using the ONS regional GVA table, and then using sales data from the ABS to allocate SIC 91 at the 4-digit level. This is the only SIC where this approach has been used due to the nature of these organisations. Tourism and Civil Society Regional GVA estimates for Tourism and Civil Society sectors have not been provided. This is due to these DCMS sectors not being defined in the same way as other DCMS sectors, and therefore there currently is no ability to produce robust regional estimates. The Tourism sector national GVA figures are taken from the Tourism Satellite Account. This currently is not split by region. The Civil Society sector national GVA figures are based on NPISH (Non-profit institutions serving households) data, which cannot be split by region. Negative GVA Approximate Gross Value Added (aGVA) is derived as ‘income’ minus ‘expenditure’ so where this expenditure exceeds the income then the aGVA will be negative. More detail on this can be found at http://www.ons.gov.uk/ons/rel/abs/annual-business-survey/2012-revised-results/info-agva.html Overall UK economy When we talk about the overall UK economy, we refer to all UK sectors which are based on the Standard Industrial Classification 2007. It is worth noting that the UK GVA figure includes the GVA for ‘Extra-Regio’ which comprises activity that cannot be assigned to regions. The term Extra-Regio is applied to economic activity that cannot be assigned to any specific region within a country. For example, the contribution to Compensation of Employees (CoE) of UK embassies abroad, UK forces stationed overseas and activities taking place on the continental shelf (North Sea oil and gas extraction) are treated as Extra- Regio.

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Chapter 7 – Employment

This section provides details of the methodology used to estimate employment. Employment in the publication is measured by number of jobs. Analysis is on a workplace basis. Employment estimates are made up of all first and second jobs in each of the DCMS sectors. The jobs are included if the job is in a DCMS sector, regardless of the occupation. For example, an accountant in an advertising firm would be counted as being in the Creative Industries, despite the occupation not being creative. Estimates are produced for both employed and self-employed jobs. Data Sources The Labour Force Survey (LFS) which feeds into the Annual Population Survey (APS) is considered to be the best source of information for headlines estimates of jobs, including employed and self-employed jobs. However there are significant weaknesses with the industry breakdowns as they are based on self-reporting of individuals, rather than on information from business returns (and are therefore often inconsistent with where businesses are allocated in National Accounts). Therefore the LFS and APS data on industry breakdowns should be treated with caution. However, comparisons show that the differences between APS and other sources with better industry breakdowns (e.g. the Business Register and Employment Survey, BRES, which is a business survey and therefore all employees are allocated to the same SIC as the business itself, giving greater accuracy and consistency with other measures) are not large. Therefore, APS has been used in this analysis for its demographic information and information on occupations. It should be noted, this approach is not consistent with national estimates by industry, but is comparable with national totals for all industries, and demographic information at a national level. Estimates Employment in the release covers all first and second occupations. In order to count the occupations, the data are first restricted to those who are employees or

self-employed (main job - INECAC05 = 1 or 2; second job – SECJMBR = 1, 2 or 3). They are

then restricted only to those who work in the relevant DCMS sector. Finally, data are

weighted according to the person weighting (PWTA16). Confidence intervals can be

constructed at the 95 per cent confidence level according to guidance in the LFS user manual. With the exception of Tourism, each sector is made up of full 4-digit SICs which means that overlaps between sectors can be easily estimated, based on where a specific code is included in multiple sectors. Demographics The data can be split by various demographic groups. These (and the APS variables used) are:

Employed/Self-employed (INECAC05, SECJMBR)

Nationality - EU/non-EU (NATOX7)

Region (first job GORWKR, second job GORWK2R)

Ethnicity (ETHUK11)

Gender (Sex)

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Age (Age)

Highest level of qualification (HIQUL15D)

Full time/part time (FTPT)

Socio-economic classification (NSECMJ10)

Disclosure All figures under 6,000 are supressed in order to prevent any disclosure of personal data in the statistics in accordance with APS guidance. The mean value for weights in the APS data set is around 200 (199 in 2014 and 196 in 2013), although the maximum can take values of 3,000 or more. Therefore a figure of 6,000 could typically be based on a sample of 30 individuals, but may in some cases refer to fewer. Tourism A different methodology is used to estimate employment in the Tourism sector. Tourism total employment up to 2015 is provided in the Tourism Satellite Account (TSA) Table 7. Tourism ratios are applied to Tourism Industry figures to give an estimate of tourism direct employment. In the July 2018 publication, the 2017 Tourism Satellite Account was not available and therefore provisional estimates were produced to produce the 2016 and 2017 tourism direct employment estimate. Tourism direct employment estimates for 2016 and 2017 were calculated using tourism ratios as at 2015 and applied to the latest Tourism industries data. Tourism total employment up to 2015 is provided in the Tourism Satellite Account (TSA) Table 7. The 2016 and 2017 figures are provisional and will be updated in 2019 with the Tourism Satellite Account estimates published on 28 November 2018. To calculate overlap between the Tourism sector and other DCMS sectors, SIC codes that appear in the TSA and in other DCMS sectors are identified. The relevant tourism ratio (from the TSA) is applied to the total employment number in these SICs (from APS data) to produce an estimate of the number of jobs that need to be discounted from the tourism direct employment figure to avoid double counting. This is done at the four digit SIC level. There is a complete overlap with the ‘Cultural activities’ section of the TSA and a partial overlap with the ‘Sport and recreation activities’ category (SICs 92.00, 93.11, 93.19 and 77.21). Civil Society The employment estimates included in this report attempt to measure jobs for this sector for

people who “work in a charity, voluntary organisation or trust” (SECTRO03=7). This is an

underestimate for the sector and does not include volunteers, social enterprises and mutuals. External data sources have been used where appropriate to give an approximation of the size for these elements not captured in the DCMS sectors. Employment estimates have been produced from 2011 including the Office for Civil Society to aid comparisons over time.

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Chapter 8 – Imports and Exports of Services

The next few chapters (Chapters 8, 9 and 10) relate to the Trade statistics for the DCMS Sectors. For a more comprehensive explanation of the data sources and data quality processes used for these statistics, please refer to the Quality Assurance report – located here. However, these chapters have been kept here for further reference. This section provides details of how estimates of imports and exports of services are produced. Estimates in the publication are in current prices (i.e. not adjusted for inflation) and are based on data from the International Trade in Services (ITIS) survey. Method For all sectors except Tourism and Civil Society, to obtain estimates of imports and exports the data is first limited to organisations that are listed as belonging to a SIC code for one of the DCMS sectors. Checks are then made to the output tables by market to ensure that the statistics published do not disclose any potentially sensitive information relating to any identifiable business. Data are found per SIC code and then aggregated up for each DCMS sector and for all DCMS sectors combined. Imports and exports in Civil Society sector are minimal and not easily recognisable in official statistics data sources. Civil Society are therefore not included in the DCMS sector totals. Estimates of imports and exports for Tourism are based on a different methodology to other DCMS sectors, as described in Chapter 10. Total UK estimates which are used to calculate the percentage of UK total for each sector are taken from the Pink Book 2017:

Exports of services, KTMQ.

Imports of services, KTMR. Note on SIC 92.00: There is a substantial percentage change for the Gambling sector (SIC 92.00) for both imports and exports of services in 2015, and again in 2017. This sector is relatively small and therefore changes in trading activity, reporting structure or industrial classification for any business can have a large impact on the overall sector figures. Care should therefore be taken when comparing figures over time. Trade by destination/source The estimates in the release are further broken down by (correct as of the 2019 publication):

EU (including figures for all EU member states)

Selected non-EU countries (e.g. Australia, Canada, China, India, Japan, USA)

Continent (Europe, Americas, Asia, Africa and Oceania)

Selected sub-regional breakdowns (e.g. Latin America & Caribbean)

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Chapter 9 – Imports and Exports of Goods

This section provides details of how estimates of imports and exports of goods are produced. These estimates were published for the first time in 2017, using annual data for the year 2015. Estimates in the publication are in current prices (i.e. not adjusted for inflation). Data for goods trade with EU countries are currently collected through a survey of trading businesses known as Intrastat. In the absence of customs controls for trade within the EU, data cannot be collected at a border. Data for non-EU trade in goods are collected from customs declarations made to HMRC when goods leave or enter the UK (Customs Handling of Import and Export Freight (CHIEF) system). These data are combined to produce overall import and export estimates. Method The Intrastat survey and CHIEF data are listed in Combined Nomenclature 2008 (CN08) format. CN08 is based on the Harmonised System (HS) of tariff nomenclature. This is an internationally standardised system of coding for classifying goods for trade. CN08 codes are 8 digit codes that identify categories of goods. The first 6 digits correspond to the HS code, with the 7th and 8th digits adding further detail. DCMS sectors are defined using the 4 digit Standard Industrial Classification (SIC) code level. To estimate the value of trade in goods for DCMS sectors, it has been necessary to apply a conversion between DCMS sector 4 digit SIC codes and CN08 codes to specify an initial set of CN08 codes linked to DCMS sectors. This was done using the European Classification of Economic Activities (NACE) 2.1 at the 4 digit level which is equivalent to 4 digit SIC codes. A lookup file was used to convert DCMS SIC codes to the CN08 codes in use in the year 2015. To make it possible to compare like-for-like goods over time this list was used, working backwards, to make comparable lists for CN08 codes for each year back to and including 2010. During this time period some of the CN08 codes initially identified as DCMS codes for 2015 were changed as part of revisions to the Combined Nomenclature system. It was therefore necessary to make subsequent substitutions of codes to link each year’s codes with the 2015 list. For the 2016 and the 2017 data, changes in Commodity Code classifications were examined to assess the impact of DCMS sectors. Where DCMS Commodity Codes were affected, these were analysed further and CN08 codes again matched to SIC Codes to assess whether they remained DCMS Sector codes and, if so, to ensure they were correctly allocated to the relevant sectors and sub-sectors. A spreadsheet providing a list of product codes within DCMS sectors for 2017, and details of substitutions through from 2010 to 2017 is available in the Goods tables of the 2017 Trade statistics, published in August 2019. For example, see here. There were some SIC codes which did not have any corresponding CN08 codes, i.e. they did not have any goods associated to that industry. These are listed in table 9.1 below. Table 9.1 – List of SIC codes without any goods

SIC Description

18.2 Reproduction of recorded media

46.51 Wholesale of computers, computer peripheral equipment and software

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46.52 Wholesale of electronic and telecommunications equipment and parts

47.63 Retail sale of music and video recordings in specialised stores

47.64 Retail sale of sports goods, fishing gear, camping goods, boats and bicycles

58.12 Publishing of directories and mailing lists

58.21 Publishing of computer games

59.12 Motion picture, video and television programme post-production activities

59.13 Motion picture, video and television programme distribution activities

59.14 Motion picture projection activities

60.1 Radio broadcasting

60.2 Television programming and broadcasting activities

61.1 Wired telecommunications activities

61.2 Wireless telecommunications activities

61.3 Satellite telecommunications activities

61.9 Other telecommunications activities

62.01 Computer programming activities

62.03 Computer facilities management activities

63.91 News agency activities

63.99 Other information service activities n.e.c.

70.21 Public relations and communication activities

73.11 Advertising agencies

73.12 Media representation

74.1 Specialised design activities

74.3 Translation and interpretation activities

77.21 Renting and leasing of recreational and sports goods

77.22 Renting of video tapes and disks

77.4 Leasing of intellectual property and similar products, except copyrighted works

85.51 Sport and recreation education

85.52 Cultural education

90.01 Performing arts

90.02 Support activities to performing arts

90.04 Operation of arts facilities

91.01 Library and archive activities

91.03 Operation of historical sites and buildings and similar visitor attractions

92 Gambling & betting activities

93.11 Operation of sports facilities

93.12 Activities of sports clubs

93.13 Fitness facilities

93.19 Other sports activities

95.11 Repair of computers and peripheral equipment

95.12 Repair of communication equipment

Once the CN08 codes for each year were established, tables were produced combining the two data sources to create import and export totals. This was done by adding the two sources together:

Imports: EU Intrastat arrivals + CHIEF imports

Exports: EU Intrastat dispatches + CHIEF exports

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Data were then aggregated up for each DCMS sector and for all DCMS sectors combined. In response to consultation feedback after the July 2017 publication, the CN08 codes associated with the Crafts sub-sector were revised. This change affects the codes included in the Creative Industries, Cultural Sector and DCMS sectors total. It was implemented for the June 2018 publication (containing new 2016 data), and was maintained for the August 2019 publication (containing new 2017 data). Coverage As set out above, estimates for imports and exports for the Tourism sector are based on a different source (see Chapter 10).Information for this sector has therefore been excluded from this section. The Gambling and Telecoms sectors do not import or export goods to a value sufficient to be included in the original dataset. Information for these sectors has therefore been excluded from this section. Currently there are no formally recognised imports or exports associated with the Civil Society sector. Information for this sector has therefore been excluded from this section. Overall, this means that estimates of the value of imports and exports of goods in DCMS sectors only cover Creative Industries, Cultural Sector, Digital Sector and Sport. Disclosure HMRC have suppressed data which may disclose sensitive information relating to business or national interests. This is predominantly at the request of businesses with the majority of trade. More information can be found here: https://www.uktradeinfo.com/Statistics/OverseasTradeStatistics/AboutOverseastradeStatistics/UnderstandingOTSData/Pages/SuppressionsandRevisions.aspx Goods estimates using ONS data In August 2016, an ad hoc release was published providing estimates of exports of goods for DCMS sectors. These estimates were based on Office for National Statistics UK Trade in Goods by Classification of Product by Activity CPA(08). The definitions for each sector were based on the closest matching product code for each industry. There were no associated product codes for Telecoms or Gambling industries. It was recognised that whilst this definition was not a perfect comparison of the products exported to DCMS sectors, it provided an indication of exports of related products. Feedback from users also suggested that these data were not granular enough to be able to identify specific products within DCMS sectors. This was the main reason for using the HMRC trade in goods data. The HMRC and ONS trade in goods statistics are not directly comparable as they are compiled on a different basis.

HMRC statistics are based on the ‘Cross-border’ or ‘Physical movement’ principle: a good is recorded as an export (import) if it physically leaves (enters) the economic territory of a country.

ONS Balance of Payments estimates are based on the ‘Change of Ownership’ principle: goods entering and leaving the UK border are not recorded as imports or exports unless they change ownership between UK residents and non-residents. In addition, the ONS data are seasonally adjusted.

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The products in the HMRC data also are more granular which means we can be more selective than was possible when using the ONS data in 2016. All these adjustments mean that the ONS and HMRC data are not directly comparable and should be treated as two different sources.

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Chapter 10 – Imports and Exports for the Tourism sector (Goods and Services Combined)

This section provides details of how estimates of imports and exports for the Tourism sector are produced. Estimates in the publication are in current prices (i.e. not adjusted for inflation).

Estimates for the Tourism sector are taken from the International Passenger Survey, and are based on the assumption that imports of tourism are equal to spend by UK residents on trips abroad and exports of tourism are equal to spend by overseas residents during visits to the UK.

These figures represent trade in goods and services combined and therefore are not directly comparable with the trade in services or trade in goods estimates presented for all other sectors (excluding Civil Society). Therefore, estimates of imports and exports of Tourism are not presented in the DCMS sector totals.

Total UK estimates which are used to calculate the percentage of UK total for Tourism are taken from the Pink Book 2017:

Exports of goods and services combined, KTMW.

Imports of goods and services combined, KTMX.

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Chapter 11 – Businesses

This section provides details of the methodology used for the estimates within the Business Demographics publication including the number and characteristics of businesses in DCMS sectors. Please note that data for the Civil Society sector are not available on a basis consistent with the other DCMS sectors, and are therefore not included in the DCMS Sector total.

Users should note that there were a number of changes between the August 2016 publication and the February 2018 publication which affect the comparability of estimates between these two releases.

In August 2016, we published estimates of the number of enterprises in DCMS

sectors. In comparison, from February 2018, we have been publishing estimates of

the number of businesses in DCMS sectors. Further information about this

difference is included in the ‘Definition of a business’ section of this chapter.

In the August 2016 publication, a direct definition of Tourism was used to estimate

the number of enterprises in the Tourism Sector. Stakeholder feedback and further

discussions with Visit England and Tourism Intelligence Unit suggested that this

was not the most accurate approach. From February 2016, published estimates for

the Tourism Sector are based on the "tourism industries" definition which covers all

establishments for which the principal activity is a tourism characteristic activity.

Between 2015 and 2016, the Office for National Statistics (ONS) carried out a

sample re-optimisation for the Annual Business Survey (ABS) – the survey on

which the Business Demographics estimates are based. Sample re-optimisations

are carried out every five years as part of the regular process to improve

estimates. The purpose of such exercises is to improve the efficiency of the

sample and estimation, and reduce sample variability. This re-optimisation led to

discontinuity between 2015 and 2016 within small- and medium-sized businesses

(those with less than 250 employees).

In 2015, the ONS business population was expanded to include approximately

92,000 solely Pay-As-You-Earn (PAYE)-based businesses. This led to an increase

in the number of businesses in the overall population of approximately 4%. Nearly

all of these businesses (99.3%) were in employment size-band one (0 to 9

employees) and nearly half of them were in the non-financial services sector.

Within the ABS the new population was used for the first time in 2016. New

estimates for 2015 were therefore calculated to assess the impact of the inclusion

of these additional businesses. An impact article and corresponding reference

tables showing the new 2015 estimates were published on Friday 20 October 2017

by ONS. New estimates for 2015 (and before) cannot be produced for

disaggregation of the data, which includes the level of data for DCMS sectors. This

means that only 2016 data have been provided for DCMS sectors (except for

region for foreign owned tables where 2015 is the latest year), and comparisons

with historic data are therefore not possible. Further information can be found at:

https://www.ons.gov.uk/businessindustryandtrade/business/businessservices/bullet

ins/uknonfinancialbusinesseconomy/2016provisionalresults.

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Data source The data underpinning this release are taken from the Office for National Statistics (ONS) Annual Business Survey (ABS). Example copies of the questionnaire itself are available here. The survey covers the UK non-financial business economy, which accounts for approximately two-thirds of the economy in terms of gross value added (GVA). The industries covered are:

non-financial services (includes professional, scientific, communication,

administrative, transport, accommodation and food, private health and education, and

entertainment services)

distribution (includes retail, wholesale and motor trades)distribution (includes retail,

wholesale and motor trades)

production (includes manufacturing, oil and gas extraction, energy generation and

supply, and water and waste management)

construction (includes civil engineering, house building, property development and

specialised construction trades such as plumbers, electricians and plasterers)

parts of agriculture (includes agricultural support services and hunting), forestry and

fishing.

The industries not covered by the ABS are: public administration and defence, public provision of education and health, all medical and dental practice activities, and finance and insurance. The sampling frame for the ABS is the Inter-departmental Business Register (IDBR) which records all organisations registered for Value Added Tax (VAT) with HM Revenue and Customs (HMRC); registered for a Pay As You Earn (PAYE) scheme with HMRC; or registered as incorporated businesses at Companies House. ONS provide us with data at the 4-digit SIC level, which we can then aggregate up to produce estimates for our sectors and sub-sectors. NB: Whilst ONS are the providers of the data underpinning the Business Demographics releases, they bear no responsibility for their further analysis and interpretation within DCMS Sectors Economic Estimates publications. Definition of a business

Within the IDBR, information is held about a variety of types of "business unit". These are described below along with how they are referred to within DCMS Business Demographics releases.

Businesses are defined as any Reporting Units held on the Inter-Departmental Business Register (IDBR). Meanwhile, business sites (also referred to within DCMS Business Demographics releases) are defined as any local units held on the IDBR. The table below8 outlines the differences between these types of unit and another high-level grouping – the enterprise. Prior to the February 2018 publication, DCMS provided estimates of the number of enterprises rather than the number of businesses.

8 Information for this table was taken from: ‘Methodology: Business population’

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In practice, in the vast majority of cases, the local unit and business unit are the same unit - only about 2% of businesses operate more than one local unit9. As such, most of the time the terms ‘enterprise’, ‘business’, and ‘local unit’ may be used interchangeably.

Business unit Description Example Referred to as…

Enterprise The smallest combination of legal units (generally based on VAT and/or PAYE records) which has a certain degree of autonomy. An enterprise carries out one or more activities at one or more locations, but may still be a sole legal unit.

Arcadia (who own Topshop, Topman, Dorothy Perkins and Burton among others)

“Enterprise” in the August 2016 publication

Reporting unit

Put simply, the Reporting Unit holds the mailing address to which the survey questionnaires are sent. The questionnaire can cover the enterprise as a whole, or parts of the enterprise identified by lists of local units.

Topshop "Business" from the February 2018 publication onwards

Local unit A local unit is an enterprise or part thereof (e.g. a workshop, factory, warehouse, office, mine or depot) situated in a geographically identified place.

An individual Topshop store e.g. on a local highstreet or in a shopping mall

"Business site" from the February 2018 publication onwards

Number of businesses ONS provide us with data on the number of businesses (reporting units) at the 4-digit SIC level. The relevant SICs have been aggregated to produce estimates for each DCMS sector. Size of businesses (Employment band) The standard definition of a small and medium sized enterprise (SMEs) is any business with fewer than 250 employees. Taking this into account, DCMS have classified employment size in the following categories:

0-9 employees (representing micro businesses)

10-49 employees (representing small businesses)

50-249 employees (representing medium businesses)

250+ employees (representing large businesses)

Information on number of employees is collected as part of the ABS. ONS provide DCMS with data on the number of businesses (reporting units) within each of the employment size bands listed above. Size of businesses (Turnover band) Turnover consists of total takings or invoiced sales and receipts of the business in connection with the sale of goods and services. Interest and similar income, “Other Operating Income” and extraordinary income is excluded. VAT invoiced to the customer is excluded.

9 Information taken from: ‘UK Business; Activity, size and location: 2018’

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Information on turnover is collected as part of the ABS. ONS provide data on the number of businesses (reporting units) within specified turnover size bands. Region The regional distribution of DCMS businesses is based on the number of business sites (local units). A local unit represents an individual site (for example a factory or shop) in a business (reporting unit). One business may have many sites, and, where this is true, the location of the business is generally the main operating site or the head office. Generally, businesses (reporting units) are the same as enterprises (legal entities of the business) but larger enterprises can be split into a number of reporting units based on divisional structure, geographical considerations, type of activity, or other agreed reporting structures. Reporting units return total values that represent one or many local units of that business. To produce these estimates, the reporting unit data must be apportioned amongst the local units of that business. Regional data are apportioned based on local unit industry classification, employment size and regional location. All ABS national results for the UK are produced using reporting unit data, and the UK national total for each variable at the "all industry" level is the figure that the regional estimates for that variable will add up to. ONS provide DCMS with data on the number of business sites (local units) within each region (or devolved administration) for each 4-digit SIC. This information is then aggregated up to produce estimates for DCMS sectors. Foreign-owned businesses Ownership status is determined by the nationality of a business’ parent company. The industry of the business has been taken at the reporting unit level so may not fully reflect the structure of the business. Industry data are not available at the local unit level for these questions and so this breakdown should be treated with caution. Data are split into UK-owned and foreign-owned (EU and non-EU) businesses. The definitions for each category are defined by Eurostat and figures for the EU exclude the UK-owned figures. Number of exporters and importers Within the ABS, there are questions covering whether a business has purchased from or provided goods and/or services to individuals, enterprises or organisations outside of the UK. This includes transactions with any of the business’ parents or subsidiaries based outside of the UK (if applicable). The statistics published within the DCMS release cover the number and proportion of businesses in Great Britain engaged in the international trade in goods and services. Northern Ireland estimates on exporters and importers are published by the Department of Finance and Personnel Northern Ireland (DFPNI). International trade is defined as the import and/or export of goods and/or services. Businesses trading internationally are those who import or export goods or services. Industry breakdowns of these data are based on the main activity of the business. For example, if a business undertakes both distribution and service activities, but most of its employment is within distribution, then the whole business will be classified as distribution. Due to methodological differences between the statistics from HM Revenue and Customs (HMRC) and the ABS statistics, the “trade in goods” figures within each dataset are not directly comparable and may differ. Methodological differences between the two releases include differences in data sources and coverage, measurement of employee count, disclosure control procedures and the handling of revisions.

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Chapter 12 – Earnings

This section provides details of the methodology used to estimate earnings in the Digital Sector. Please note that this is the first release where DCMS have introduced analysis on earnings in the Digital Sector and Digital Occupations, based on a request from policy colleagues for information in this area. It is therefore classed as an experimental statistic. DCMS plan to widen this analysis further to include all DCMS sectors, if there is sufficient interest in these statistics in the future. Definition The ONS’s definition of earnings is the payment received by employees in return for employment. Most analyses of earnings consider only gross earnings, which is earnings before any deductions are made in light of taxes (including National Insurance contribution) and benefits.10 Quality Report A detailed quality report outlining the characteristics of the data (e.g. data collections, sampling design, and response rate) has been published alongside the Digital Sector earnings report. This document also summarises the quality assurance processes applied during production of these statistics by the ONS as well as by DCMS and can be found at: https://www.gov.uk/government/collections/dcms-sectors-economic-estimates in the Documents Section. Data collection The estimates of earnings for the Digital sector are based on the Annual Survey of Hours and Earnings (ASHE) dataset provided by Office for National Statistics (ONS). This includes information about the levels, distribution and make-up of earnings and hours paid for employees in all industries and occupations across the UK. Businesses are surveyed in April of each year. The survey uses a random sample of 1% of all employee jobs from HM Revenue and Customs’s (HMRC’s) Pay As You Earn (PAYE) system, taken in January of the reference year. The sample is drawn in such a way that many of the same individuals are included from year to year, thereby allowing longitudinal analysis of the data.

Since ASHE is a survey of employee jobs, it does not cover the self-employed or any jobs within the armed forces. Given the survey reference date in April, the survey does not fully cover certain types of seasonal work, for example, employees taken on for only summer or winter work.

Validation is carried out on returned data that is regarded as incomplete or potentially inaccurate, based on automatic comparisons with data for similar jobs or against data for the same job in previous years. In these cases, respondents may be re-contacted by ONS in order to verify the information that has been provided.

10 ONS (2019) A guide to sources of data on earnings and income [Online] https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/methodologies/aguidetosourcesofdataonearningsandincome [Accessed online 27/08/2019]

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Method The definition of the Digital sector and Digital occupations are consistent with DCMS definition of these sectors. Table 2.4 in this report outlines the SIC codes used for the Digital sector.

The table below shows the list of occupations used in the earnings report based on 4 digit Standard Occupational Classification 2010 (SOC) codes. These SOC codes have been used based on by work that has been undertaken by Nesta and techUK (2015)11.

SOC Description

1136 IT and telecommunications directors

2133 IT specialist managers

2134 IT project and programme managers

2135 IT business analysts, architects & systems designers

2136 Programmers and software development professionals

2137 Web design & development professionals

2139 IT & telecommunications professionals not elsewhere classified

3131 IT operations technicians

3132 IT user support technicians

5242 Telecommunications engineers

5245 IT Engineers

Mean vs Median The headline statistics for ASHE are based on the median rather than the mean. The median is the value below which 50% of employees fall. It is ONS's preferred measure of average earnings as it is less affected by a relatively small number of very high earners and the skewed distribution of earnings. Thus, provides a better indication of typical pay than the mean. What is reported? These statistics cover the following areas:

Digital Sector earnings - this looks at the breakdown of median annual earnings by

employment status e.g. full time and part time, age, and by sub-sector Gender pay gap - looking at the percentage difference between men's and women’s

earnings in the digital sector Annual earnings by place of work - looking at the median annual earnings of digital

sector employees by place of work (English regions, Scotland, Wales and NI) Annual incentive pay - looking at the amount paid to an employee as a result of

meeting a performance or productivity objective (bonuses etc.) Earnings by Digital Occupation - (by sex, employment status, age) - looking at

earnings of those employees working in digital-related jobs across all UK economic sectors, not just within the digital sector itself.

Earnings for those working in the Digital Economy - (i.e. median annual earnings for those working in the Digital Sector + those working in Digital Occupations outside the Digital Sector)

11 http://www.nesta.org.uk/sites/default/files/dynamic_mapping_of_the_information_economy_industries.pdf

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Strengths and Limitations of the data

The ASHE data used for this analysis are robust and have a number of strengths:

• Size and coverage - the ASHE dataset contains information on approximately 180,000 jobs in all industries, occupations and regions, making it the most comprehensive source of earnings information in the UK and enabling a vast range of analyses.

• Quality - alternative sources of earnings information such as the Labour Force Survey (LFS) rely on self-report or proxy data, which are known to be less reliable than information from employers’ administrative systems.

• Uniqueness - for many uses, ASHE is the main data source and for some uses it is the only data source.

but there are some limitations of which users should be aware:

• Analysis presented here have been calculated on a consistent basis in DCMS. Due to minimal differences in the methodology and analysis used to calculate the median, results in this report may not match the ONS published results, in particular when looking at further breakdowns to some data e.g. by region or age. These differences are small but should be treated with caution.

• Lack of personal demographic information - characteristics such as ethnicity, religion, education, disability and pregnancy are not recorded in the ASHE dataset.

• The quality of estimates at low levels of disaggregation can be poor.

• The dataset does not cover those who are self-employed.

The strengths and limitations of the Annual Survey of Hours and Earnings (ASHE) can be found in the Quality and Methodology Information report and the Guide to sources of data of earnings and income.

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Annex A – Background Note

1. For enquiries on this release, please email evidence@culture.gov.uk.

2. For general enquiries contact:

Department for Digital, Culture, Media and Sport 100 Parliament Street London SW1A 2BQ Telephone: 020 7211 6000

3. DCMS statisticians can be followed on Twitter via @DCMSInsight.

4. The Economic Estimates of DCMS Sectors release is an Official Statistics publication and has been produced to the standards set out in the Code of Practice for Statistics. For more information, see https://www.statisticsauthority.gov.uk/code-of-practice/ . Details of the pre-release access arrangements for this dataset have been published alongside this release.

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