How Britain's Creative Economy Could Shape Its AI Future

With the appointment of Kanishka Narayan as the UK’s first dedicated Minister for AI, Andy Burnham, the UK’s new prime minister, has signalled a desire to place artificial intelligence at the heart of his government’s industrial strategy.

Although the Department for Science, Innovation and Technology (DSIT) has been abolished in the prime minister’s Whitehall reorganisation, Narayan has been given a seat at the cabinet table, ensuring AI retains representation at the highest level of government despite the disappearance of a standalone technology department.

Born in India and raised in Cardiff, Narayan entered Parliament in 2024 as MP for the Vale of Glamorgan after a career spanning government and business. Following his appointment, he described Burnham’s decision to invite him to cabinet as AI minister as “a sign of his deep commitment to AI’s importance”.

“AI is likely the most significant technology in human history. Its impact will dwarf other things,” Narayan wrote on X shortly after taking office. “The best case for it is compelling beyond our dreams: a reindustrialised Britain, stronger national security, public services transformed for the better.”

He also acknowledged the anxieties accompanying that vision, adding that “it is right that the British public shares those worries, for jobs, for the pace of change”.

As ministers begin defining what an AI-led industrial strategy should look like, a more fundamental question is emerging. Should Britain attempt to compete with the United States and China by investing heavily in data centres, computing infrastructure and foundation models? Or should it concentrate on the sectors in which it already enjoys a genuine international advantage, particularly the creative industries?

Avery Singer, 'Shit Coin Maxi', 2025 Copyright by Avery Singer. Courtesy the artist and Hauser & Wirth. Photo by Lance Brewer

For many in Britain’s creative industries, the answer is the latter. They argue Britain’s long-term strength will depend less on building the world’s largest AI models than on becoming the most attractive place for creative businesses to develop, adopt and commercialise artificial intelligence.

Much of the debate has focused on protecting artists’ rights. Stronger copyright protections safeguard the intellectual property of artists, but technology companies warn that they could discourage investment in AI.

Hasan Bakhshi, director of the Creative Industries Policy and Evidence Centre, disagrees. He tells The Art Journal: “I have seen no robust evidence that copyright is the main – or even a major – reason driving the destination for foreign direct investment in AI. The UK has historically shown it is perfectly possible to attract foreign investment in technology while maintaining an IP regime that supports both technological and creative innovation.”

Where AI companies choose to invest depends on a much wider mix of factors, including infrastructure, energy costs, taxation, skills, finance and market size. On many of those measures, Britain is unlikely to rival either the United States or China.

Bakhshi argues Britain’s distinctive strength lies in the creative industries. “The UK lacks the scale of US and Chinese AI markets to position it as a competitor in the supply of general AI models. However, the creative industries are one of the very few sectors where the UK can genuinely claim to be world leading, so to maintain that position we should be committing to be the best place in the world for creative industries to use AI.”

That represents a significant shift in emphasis. Rather than treating the creative industries primarily as a source of copyrighted material requiring protection, it positions them as one of Britain’s principal economic assets in an AI-driven economy.

!Mediengruppe Bitnik, 'Download Finished', 2006. Web project and archive. Screenshot. Courtesy of HEK (House of Electronic Arts) Collection. Purchased with funds from the Freiwilliger Museumsverein Basel in 2016. Permanent loan of the Freiwilliger Museumsverein Basel.

Realising that ambition will require more than defending existing rights.

“We need urgently to imagine what a creative economy looks like that will fully realise the benefits of the AI revolution while managing the risks effectively,” Bakhshi says. “Governments need to consider what they can do to bring this about.”

Some industry observers believe that the government needs to invest more in the people whose ideas give AI technologies value. Maria Balshaw, the former director of Tate and now deputy chair of the University of the Arts London, tells The Art Journal: “We need creative education even more in a world that is moving to AI-driven automation, as it is the UK’s creative energy that will protect growth and jobs.”

Balshaw, who previously led both the Whitworth and Manchester Art Gallery, argues that ministers should restore the Strategic Priorities Grant for creative courses and strengthen arts education in schools. Britain’s future prosperity, she suggests, will depend not only on technological capability but on maintaining the pipeline of creative talent.

Kate Oakley, professor of cultural policy at the University of Glasgow, says that beyond supporting education, the government needs to provide a broader package of reforms, including helping artists tackle the cost of living and making freelancing more financially sustainable through taxation, benefits or social insurance.

Her analysis broadens the discussion beyond copyright and AI regulation. Even if Britain succeeds in attracting technology companies, its long-term economic advantage may ultimately rest on whether the people producing new ideas, artworks and intellectual property can continue to build viable careers.

DEAFBEEF, Detail of 'Glitchbox', 2021-25, Courtesy of the artist and Asprey Studio.

That question is becoming increasingly urgent as AI tools move rapidly into everyday creative work. Across publishing, design, advertising, film and the visual arts, artificial intelligence is already accelerating workflows and lowering barriers to production. Advocates argue AI could increase productivity and expand creative experimentation. Critics fear the technology could erode entry-level commissions that have traditionally provided both income and professional development for emerging creatives.

Whether AI ultimately expands creative employment or displaces it remains uncertain. What is clear is that Britain’s ambition to build an AI economy around creativity will depend not only on technological innovation but on sustaining the workforce that gives those technologies cultural and commercial value.

For Christian Zimmermann, chief executive of the Design and Artists Copyright Society (DACS), the answer lies not in abandoning copyright but in making it work more effectively for an AI economy.

“By the end of the next Parliament, we need a clear, enforceable system that upholds copyright, enables licensing and ensures artists are respected and fairly paid for their work,” he says.

Rather than rewriting copyright law, Zimmermann argues that the government should prioritise transparency, licensing and effective enforcement.

Agnieszka Kurant, 'Alien Internet', 2023. Courtesy of the artist and Marian Goodman Gallery. Photo by Mathias Völzke

“DACS has licensed visual works for more than 40 years, and collective licensing is a practical, sustainable way to ensure money from AI companies reaches artists and rightsholders. Their work has value to those using it, so they must be able to share in this value.”

In his view, licensing is not simply a mechanism for protecting artists but for creating a more stable environment in which AI businesses can operate. Greater transparency over training data and clearer licensing arrangements could reduce legal uncertainty while giving creators confidence that they are participating fairly in the economic value generated by their work.

Looking ahead, Hasan Bakhshi believes Britain could exert influence beyond the size of its domestic AI market.

“The UK’s status as a leading creative nation positions us to contribute to essential efforts at international coordination in AI regulation,” he says. “The UK should press multilateral organisations such as the World Intellectual Property Organization and the G20 to develop more aligned approaches to AI regulation affecting the creative industries, particularly around transparency, attribution and copyright.”