Understanding the impact of AI in the creative industries
Research from the LSE Growth Lab provides insights on the potential impacts and opportunities of AI in the creative industries. The Growth Lab team surveyed the global evidence on AI, including the history of previous disruptive technologies, before drilling down on the creative industries. The report helps to clarify the state of play, deepen understanding of the potential impact of generative AI, outline key benefits and risks, and offer a sensible route forward. This research was supported by Netflix.
The 2020s is the decade of AI. We are living through a paradigm shift in the use of information technology in the workplace, the public sphere, and in our daily lives. With this new technology come new perspectives. There is hope: AI is a new tool, promising productivity improvements. There are concerns: as with all novel tools, stretching back to the threshing machine, there are worries about the impact on jobs and wages. And there are ongoing questions: over competitiveness—how economies can ensure they get the best of AI—and over regulation, and over openness. The creative industries have a long history of adopting frontier technology. In line with previous waves of technical change, creative firms are developing and adopting industry-specific AI tools. For example, graphic designers are using AI features integrated into industry standard software. Adobe reports that 83% of professionals now use generative AI in their work. In film, editors are using language models to pre-visualise scenes, helping them inform set and costume design. More than 70% of marketers use generative AI every week. Across these creative sectors, the broad technical advancements have led to tailored, sector-specific tools.
Our review of economic evidence and structured case studies suggest that AI is generating output gains in the creative industries. It has led to improved visual effects in films, enhanced post-production processes, and more complex video games. There is, as at the economy-wide level, some concern in sub-sectors about the risk of job losses. However, two positive trends can clearly be seen. First, business dynamism, with each sub-sector of the creative industries developing its own tailored tools often built by start-ups who are creating new roles as they expand. Second, augmentation, with tools working alongside the human workforce to drive up their productivity.
The creative industries are likely to be a frontier as the adoption of AI plays out. This is because these industries have long been early adopters of new technology—and this is also the case with AI. The creative industries are dynamic and international sectors, offering positive spillovers to many others. The report concludes with some high-level policy suggestions: to seize the gains AI can bring, firms in this sector will need clear plans for regulation and for the support of skills, access to finance for firms of all sizes, and the widest possible set of markets to trade in.
FULL REPORT AND RELATED PROJECTS
Read the full report here.
Other Growth Lab projects and events on this theme include: