1. The challenge

Setting up projects which develop BAME creative businesses – through which the founders can potentially generate significant financial reward – has been at the heart of my life’s work. To date I have supported thousands of artists and entrepreneurs, the four most successful of whom have an estimated combined net worth of £14m.

The bane of my career has been attempting to combine using public funding to drive the creative and entrepreneurial development of people from under-represented communities to commercial success. 

I still haven’t cracked it.

Development of ‘under-represented’ communities in the arts and creative industries is ‘in the public interest’ and therefore eligible for public funding. However, supporting under-represented artists and entrepreneurs to grow their businesses is a ‘private benefit’ and therefore less eligible for public funding, despite the wider public benefits of job creation and contribution to GDP. 

Covid-19 and the BLM movement are the most recent reminders of the deep racial inequalities in our society. They have strengthened my long-held conviction that public money supporting individuals from BAME communities to develop businesses is necessary.

2. Mazzucato on The Entrepreneurial State 

In her book – The Entrepreneurial State – Mariana Mazzucato argues that separation between the public and private sector is more myth than reality. There have always been points of cross fertilisation between the two; where public money is used to support early-stage development followed by commercialisation, again using public money, which also creates individual wealth. 

Examples include Google‘s algorithm and Apple’s touchscreen technologies – both developed with public funding and later commercialised. Government sometimes funds initial R&D in developing a new product, then encourages commercialisation by subsidising prices to make the new product affordable (e.g. development of the internet and solar panels). This is all justified as the public interest; but some people definitely got rich.

Some argue that in these projects the risks have been socialised and the rewards privatised – a long-standing ‘moral hazard’ debate in many industries. But the more relevant question here is why this is okay for the tech or environmental agendas, but not for racial equity: the need for public intervention is equally pressing and potential public benefit immense.

3. Using the entrepreneurial state to fund BAME creative entrepreneurs 

The private sector, left to its own devices, has persistently under-invested in BAME entrepreneurs: only 1.7% of venture capital goes to BAME communities vs. 14% of the population which is BAME. 

Government and philanthropic funders aim to redress this type of ‘market failure’. However, they significantly under-invest in BAME entrepreneurs. By value, only 2.4% of regular grant funding in the arts goes to BAME organisations. Funded BAME organisations also receive disproportionately small grants, at well under 50% of the overall average. 

Something completely new is now required in the arts. This has to tackle the question of personal gain head-on, even if distasteful to some philanthropic and public funders: the best-performing artists are successful both artistically and financially – that’s just how the industry works.

Philanthropic and public investment in ethnic minority entrepreneurialism in the arts is essential: like the climate crisis, racial justice is an existential issue, not just a desirable objective. Like access to the internet, diversity needs to be seen as a driver of innovation with major public benefits. The private sector, major trusts and various agencies of government need to commit fully to finding immediate large-scale solutions. 

4. Why start with culture when the whole system is broken? 

Art and cultural production are the UK’s shop window to the world through the world-class television, books, music, films, comedy, dance and poetry we produce. Think of the 2012 Olympics opening ceremony or the wedding of Prince Harry and Megan Markle: these events are packed with culture and broadcast to billions globally. 

The more routes we provide for people from all groups in our population to participate in production, then the richer the picture of contemporary Britain we show to the world. The more we provide access to distribution and ownership, ownership of commercial broadcast media, publishing and production, the more equitable and cohesive a society we create and the more we add to the UK’s creative output and reputation as a creative powerhouse. It is a matter of ethics and politics first, but the public economic and other benefits that flow from this are massive. 

To support long-term, sustainable development of BAME creative entrepreneurs, we must use the same mechanisms, institutions, agencies and policies that have been used to drive the tech and environmental agendas. This includes R&D to drive up the number and quality of BAME businesses; committing to artistic excellence and its commercialisation; encouraging long term private sector investment in BAME enterprises and allowing profits to flow to successful companies with wealth generated by BAME entrepreneurs and employees.

Early public sector interventions on the tech agenda have not capped wealth for the entrepreneurs at Google and Apple – why should they here? Future investment must not impose limits on BAME entrepreneurs in a sector in which the potential personal gains for privately funded white artists are so high. This would perpetuate exactly the inequality that philanthropic and public funding are intended to tackle. 

Developing the ‘social fabric’ is as important as developing the tech and green infrastructure needed for a more connected, prosperous and sustainable future. We must act now to apply the same solutions used for these other important agendas to fix systemic racial inequality, starting in the arts. 

Let me know what you think in the comments below or join the conversation on Linkedin

NB. We have used the abbreviation BAME. We recognise the diversity of individual identities and lived experiences, and understand that BAME is an imperfect term that does not fully capture the racial, cultural and ethnic identities of people that experience structural and systematic inequality.

Sign up for updates from Kevin Osborne

Explore more content across my blog

CEC: Kevin you’ve dedicated your career to supporting BAME social entrepreneurs, but this fund is a new venture. Why now and how do you think it will make a difference to resolve the disparity of funds distribution?

The confluence of Covid, Black Lives Matter Movement and the macro economic challenges ahead we have a once in a lifetime opportunity to change the existing funding structures; to redistribute power. Both the demand and the need are at peak. It’s the perfect time to try. As you say, it’s been my life’s work so I can’t pass up the chance to at least try.   

The aim of Create Equity is to campaign for equitable funding by 2031. We are asking all the major arts and social enterprise funders to commit to this. Using Arts Council England as one example; if they were to implement the pledge today, instead of distributing c.£15m per year to BAME organisations it would be c.£87m per year, were they to fund in proportion to the BAME population. That’s an underinvestment of £72m every year. This under investment has gone on forever and it’s not just Arts Council. Every Arts Council and social investor across the UK under invests to the same extent, in percentage terms.

If the Create Equity 2031 pledge is successful then hundreds of millions more each year will be distributed fairly to BAME organisations. Of course given finite resources the question is where might the money for such a significant redistribution come from? This is the challenge I’m trying to address through the Create Equity Fund, a pilot investment fund for BAME entrepreneurs. The intention is to use public money to make equity investments. Given current public funding regulations this comes with the world of challenges, which maybe we’ll get into when we chat.     

 

CEC: Kevin what are some of the practical actions we as mere civilians can take to create real change?

Change your mindset. Equity doesn’t have to be seen as a zero sum game. If black communities get their fair share of funding, for white communities to see this as a loss, because this funding is no longer available to them is the biggest hurdle to change. Inequity inevitably ends in social fragmentation and this comes at a massive cost to us all.  We have to understand that equity is always going to deliver a net gain (perhaps not to you personally) but to society. 

CEC: Kevin in addition to your incubator and your new fund you’ve also got a pretty impressive blog called Skin in the Game which looks at current affairs, popular culture and issues in society through the lens of race, identity and power. Can you tell us more about it and your aspirations for this three-pronged approach?

There’s a social consequence to underinvesting in any community be it BAME communities, women or working class people. It means that we don’t harness the full potential of our society and it’s this waste of human potential that drives me crazy. And this waste of human potential has a cost in terms of underachievement, in education, employment, business and as we’ve seen during Covid in health outcomes. People die because of this shit; it’s real.  

Skin in the Game is a space for me to explore this reality, to try and make some kind of sense out of it and then use that understanding to make real change happen. By making the link between my own experience and the systems that have underinvested in me I’m hopefully able to develop social enterprises and businesses that will make a difference. Skin in the Game is the source of Create Equity 2031 campaign and it’s also the source of the Create Equity Fund.  

My aspirations for this three-pronged approach is very simple; equity!

NB. We have used the abbreviation BAME. We recognise the diversity of individual identities and lived experiences, and understand that BAME is an imperfect term that does not fully capture the racial, cultural and ethnic identities of people that experience structural and systematic inequality.

Go to Creative Entrepreneur’s Website

Sign up for updates from Kevin Osborne

Explore more content across my blog

Several people have challenged my continued use of the term BAME. I remain ambivalent about this change.

The fight to end the use of the BAME acronym seems won. A key recommendation from the government’s report by the Commission on Race and Racial Disparities (the Sewell Report) is to disaggregate the term BAME. Arts Council and other funders have already dropped their use of the acronym, instead writing the words in full (Black, Asian and Minority Ethnic). The aim of disaggregation is to recognise differences in experience and therefore performance (against various metrics) between the different communities represented by the acronym. Like so many others, I don’t like the term BAME. But as a social entrepreneur involved in the practicalities of creating new and fairer structures for diverse communities, I believe timing is everything. Arguments right now about the use of the term BAME are a distraction and the transition away from its use may take us down a path with far reaching and unintended consequences. Our primary goal must be to create a fairer distribution of power; or as the Sewell Report put it: ‘Create Agency’. 

Context to my thinking

I have spent much of the last four months writing a business plan for the Create Equity Fund (a BAME-focused investment fund for the creative industries). Part of this work includes research into the past distribution of arts funding to BAME communities. My research highlighted two issues in relation to changing the BAME acronym: i) disaggregating BAME communities may cause infighting between communities over resources; and ii) changing terms could make measurement more difficult and so make it harder to build statistical evidence of long-term structural issues. These challenges need careful consideration, mature debate and potentially more campaigning.

The potential for infighting between different BAME communities in the arts

Disaggregating the BAME acronym should, in theory, lead to disaggregated data sets. This will highlight inequalities between BAME communities which will inevitably lead to internal wrangling about who gets what. Most of the 2.4% of arts funding to BAME communities goes to ‘Asian’ organisations. With only 2.4% of arts funding shared between us (instead of the 15% which would be in line with the BAME populations), to start a debate on how we distribute equitably amongst ourselves is, in my view, folly. The saying goes, ‘A house divided cannot stand’. ‘We’, as diverse communities, have specific identities, yes. But we still share a common purpose and should not waste energy arguing over the crumbs currently being distributed to us. The worthwhile struggle is for equitable funding to our communities as an aggregated whole. Then and only then can we have a debate about who gets what in terms of disaggregated communities.

Changing BAME makes it more difficult to measure progress and reduces accountability of funders 

My research for Create Equity Fund confirmed that in the last ten years only 2.4% of arts funding went to BAME communities, I was unable to find data going back more than ten years because the term used for measuring ethnically diverse communities before 2011 had changed. If we change the term again, to something which doesn’t exactly correlate to the term BAME, we lose the ability to establish longitudinal data that we desperately need to make our case. What scant data there is on racial inequalities in the arts becomes harder to analyse and easier to contest or dismiss altogether. In changing the meaning of the BAME acronym we may unintentionally diminish our ability to keep policy makers and funders fully accountable. With less useable data we reduce our power to change things. If the government (and by extension bodies like ACE) decides against using the term BAME, in favour of something materially different, we would need to ensure that sufficient resources are in place to maintain data continuity. 

But why spend time on that campaign? In the wake of Covid-19, the Black Lives Matter movement, macro-economic uncertainties and climate change, there is a more immediate and bigger prize up for grabs. Our focus must be on an equitable and timely redistribution of resources and power. Only through resolving this do we get to build our own structures – our own ‘houses’ – rather than simply moving the furniture around the existing structures. Then we get to use our own language and truly define for ourselves what matters.

Sign up for updates from Kevin Osborne

Explore more content across my blog

Article published on Arts Professional

Huge energy has been expended by Arts Council England (ACE) on distributing the £1.7 billion Culture Recovery Fund (CRF). There is a clear need for this distribution of funds at pace: the money has provided life support to many large institutions that would have struggled to survive lockdown measures without it. However, distributing this amount of money in a matter of months, rather than the 2/3 years it would take under normal circumstances, has left ACE fully stretched and with little (if any) capacity to focus on much else. As a result, other priorities including diversity, innovation and enterprise have slipped down the agenda.

Diversity

The passionate calls by ACE to do better on diversity, from Darren Henley and Nick Serota, in the wake of George Floyd and the rise Black Lives Matter movement have inevitably played second fiddle to seismic effort invested to preserve larger cultural institutions. BAME organisations, typically individual freelancers or 2/3 person businesses, have not benefited equally from the bailout so far.

It is not too late, but urgent action is needed

Innovation and enterprise

The emphasis on recovery has also meant that in addition to the CRF, all of ACE’s unrestricted budget including budgets for enterprise and innovation has been diverted to the bailout, a decision which if left uncorrected could have a disastrous impact on our sector for years to come. With the economy in crisis, an inevitable sustained tough macro-economic environment ahead of us and the major shifts in practice on how arts and culture are being created, distributed and consumed, we need to grasp the opportunity to re-divert budgets to finding solutions to these major, more medium-term problems. ACE and DCMS need to analyse and reflect on the shifting cultural landscape and double down on investment in enterprise and innovation to respond to these shifts.

Where do we go from here?

It is not too late, but urgent action is needed. Oliver Dowden has been able to secure another tranche of CRF funding (c.£418m) from the Treasury. This, combined with a glimmer of light at the end of the tunnel on Covid-19, makes it the perfect time for DCMS and ACE to raise their respective heads and look beyond what is to be recovered. They must look forward to what needs to be cultivated, including a more equitable funding system. Now is the time to redress any long-term funding imbalances, broaden access to all the UK’s best creative talent (including those from BAME communities) and to focus attention on shaping the new arts and culture landscape that will emerge out of this Covid period. Sector recovery, diversity, enterprise and innovation priorities should never be seen as competing priorities. They are inextricably linked in my view. Focusing on one at the expense of the others is folly.

The education, retail, technology, hospitality and business sectors are being reshaped as we speak. DCMS and ACE need to quickly come to terms with the fact that arts and culture will not be immune and that the sector, as it was pre-Covid, will not be recovered in its entirety. Some organisations who have received CRF cash will unfortunately not survive lockdown measures. They need to be let go and space must be created to explore what the new future looks like. We can then invest in new systems, new structures, and new organisations to deliver this. Some smaller and not yet formed organisations will emerge and thrive in a post-Covid world. They will be the engine for growth of the UK’s new creative and cultural industries. For us not to invest in these organisations would put at risk the UK’s position as an international creative powerhouse and, in my view, would be cultural suicide.

I am asking that £209m, half of the new CRF funding of £418m, be targeted at this more forward-looking and sustainable agenda. One which acknowledges that all will not be as it was in our sector and embraces innovation, enterprise, and diversity to build a more dynamic and resilient sector going forward. This is less than 10% of the total already invested by DCMS and ACE so is proportionate and affordable. We should act now.

Sign up for updates from Kevin Osborne

Explore more content across my blog