Government boosts growth-driving creative industries in Merseyside and the West Midlands
Creative technology firms and artists in Merseyside and the West Midlands are in line for a major financial boost, as a £13.5 million investment in training, research and development funding is announced by the Culture Secretary to boost economic growth and job opportunities.
- £13.5 million awarded to boost Merseyside’s thriving live music sector and help creative firms in the West Midlands revolutionise live performance with VR and immersive technology
- Clusters funding builds on UK’s regional strengths as part of government’s growth-driving mission for the creative industries
- Next phase of advanced ‘movie magic’ research labs launched, with £6.6 million of funding available for SMEs
Liverpool City Region’s MusicFutures cluster will benefit from £6.75 million to bring together partners including the city’s two universities, the Royal Liverpool Philharmonic and the Liverpool M&S Bank Arena. The cluster will provide funding and training for musicians, educators and small businesses to harness new technologies such as AI and Extended Reality (XR) and explore making the live music sector more environmentally sustainable.
CreaTech Frontiers in the West Midlands will also benefit from £6.75 million, with the investment focusing on developing small, micro- and medium-sized businesses specialising in creative tech like video games and immersive reality. Several regional universities alongside the Royal Shakespeare Company (RSC) will work with industry to boost skills and develop new products, technology and multi-platform content. This will include using VR, 3D-modelling and animation techniques in live events, and adapting video game engines for use in music, theatre and film.
Experimental performance projects curated by the RSC will be showcased at South by Southwest (SXSW) festival in Texas in 2026, while the Birmingham Opera Group and The Rep theatre will stage new works, including co-creations with young people in deprived areas of the West Midlands.
It comes as the CoSTAR network of R&D labs being built across the UK to drive the next generation of ‘movie magic’ visual effects tech in film, TV and performing arts enters its next phase, with £6.6 million now available to help innovating firms build prototypes and take their products to market.
Merseyside and the West Midlands have been selected in the government’s Creative Industries Clusters, delivered by the Arts and Humanities Research Council on behalf of UK Research and Innovation, which aims to grow specialist creative subsectors across the UK. The UK’s world-class creative industries have been named as one of the government’s eight growth-driving sectors in its forthcoming Industrial Strategy.
Culture Secretary Lisa Nandy said:
Talent is everywhere but opportunity is not. That’s why we are supporting firms, artists and freelancers that are innovating, using new technology and driving growth in creative clusters across the country.
Liverpool and Merseyside hold a special place in our nation’s music landscape, and this funding will support imagination and experimentation across the city and region, as creators explore how we can make gigs more environmentally friendly.
Birmingham and the West Midlands have a rich industrial history, and we are putting them at the forefront of a potential new industry developing the amazing technology that will revolutionise visual effects in film, theatre and gaming.”
AHRC Executive Chair Professor Christopher Smith said:
AHRC is delighted to announce the launch of a new wave of Creative Industries Clusters.
The two new clusters announced today, MusicFutures and CreaTech Frontiers, will create vital support for technology and innovation in the UK’s world-leading creative industries and expand our regional investment.
These clusters will support artists and creators so they can benefit from new technologies across a wide range of platforms, and develop their innovation and business skills.
The remarkable projects made possible through our Creative Industries Clusters span sustainable fashion, game design and extended reality, and have attracted major co-investment. They have helped solve real-world problems and they deliver commercial benefits to the UK economy in line with the Government’s Industrial Strategy.
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Notes to Editors
More information on winning projects
Liverpool Creative Cluster - MusicFutures
MusicFutures will promote growth and innovation in the Liverpool City Region’s thriving music sector, which is already home to over 1,400 music businesses. The cluster is led by the University of Liverpool with Liverpool John Moores University alongside 21 strategic partners including the ACC Liverpool Group, operators of Liverpool’s M&S Bank Arena, Adlib and the Royal Liverpool Philharmonic, LIVE, UK Music and the Intellectual Property Office.
By focusing on R&D, talent development, and emerging technologies such as AI, MusicFutures will aim to establish Liverpool as the UK’s leading hub for music innovation. For example, it will build on Liverpool’s status as the world’s first UN Accelerator city to address environmental challenges and advance economic sustainability through innovative solutions for the live sector.
MusicFutures will also provide new opportunities for both small and medium-sized businesses, such as a start-up incubator, scale-up, and responsive R&D funding, as well as training through bespoke programmes for music makers and educators. These programmes include training and legal advice on intellectual property issues, and guidance on the effective and responsible use of generative AI.
MusicFutures will aim to reshape Liverpool’s creative economy, solidifying its position on the global stage and establishing new opportunities for the UK’s music industry. All of which will fuel artistic, technological, and IP breakthroughs, create high-paying jobs, and open pathways for music professionals into sectors like gaming, film, and extended reality (XR).
Professor Richard Koeck, University of Liverpool, project lead MusicFutures, said:
The UK Music sector is worth £7.6 billion a year with the trend going upwards. Our industry is the third largest in the world and we rank as the second-largest exporter of recorded music globally. While such figures sound strong, they overlook significant sector challenges ahead of us. Liverpool is the right place to innovate, develop and test ideas that could drive music businesses nationally and secure our position internationally.
We have a clear goal and that is to transform the Liverpool City Region (LCR) into a global leader in music innovation. By connecting our combined world-leading research capacity with an already thriving sector ecosystem of more than 1400 businesses, we will not only further strengthen Liverpool’s global reputation for music innovation, but also create a boost for other highly successful creative industry sectors in the city region.
West Midlands Creative Cluster - CreaTech Frontiers
CreaTech Frontiers is led by Birmingham City University with Coventry University, the University of Birmingham, The University of Warwick and the RSC. It will spur growth in the West Midlands’ creative industries by developing a strategic pathway to connect creative technology companies with high growth industries, such as creative content production and gaming.
It will do this by fostering innovation via a cross-pollination of skills and services which will deliver new tools, processes and platforms. This will include responsible AI and immersive technology which will revolutionise creative productions while widening access and participation. Applications will include incorporating VR and AR technologies for live events; adapting game engines for non-gaming applications in music, theatre, and film; using game design principles to engage audiences; and employing 3D modelling and animation techniques to create high-quality immersive content.
The RSC will lead a programme of R&D pilot production projects in collaboration with SXSW to profile creative tech businesses identified through the cluster’s work, reaching diverse audiences and exploring new ways of creating. A collaboration between the Birmingham Opera Group with businesses and researchers will stage new works co-created with young people in deprived areas of the West Midlands, and a collaboration with The Rep, Birmingham Contemporary Music Group and industry partners to explore new technologies for performance.
CreaTech Frontiers will also run a series of events and workshops that will support businesses to explore immersive technologies to develop new products, services and create new content and concepts. These will cover a range of focus areas including responsible R&D and innovation, the integration of generative AI in content and processes, green production, IP protection and commercialisation.
Lamberto Coccioli, Professor of Music and Technology and BCU project lead, said:
CreaTech Frontiers will bring together the most valuable assets of this region – a young and diverse talent pool, world-class research, outstanding arts organisations, and a budding tech sector – to spark innovation and stimulate growth. We’re delighted to support creative technology companies in the West Midlands with a comprehensive programme of grants and skills development led by industry needs. It’s fantastic news for the people and businesses of Birmingham and beyond.
Next phase of CoSTAR
The Culture Secretary has also announced the next phase of UKRI’s Convergent Screen Technologies and performance in Realtime (CoSTAR) programme. It is a national network of laboratories in production studios that are developing new technology to maintain the UK’s world-leading position in gaming, TV, film, performance, and digital entertainment sectors.
Instead of adding visual effects and CGI in post-production, virtual production allows filmmakers and theatre directors to create large-scale digitally-generated environments using LED panels that performers can interact with in real-time, as a faster and less expensive alternative to green screens. The technology has been used in the ABBA Voyage live concert at the Queen Elizabeth Olympic Park in London and on Disney’s hit show The Mandalorian.
The CoSTAR Labs are building and testing the technologies needed to ensure the UK has the skills and infrastructure to stay on the cutting edge of new creative production techniques. As part of this:
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The CoSTAR enterprise and commercialisation programme will allocate £3m to projects designed to catalyse and support the growth of creative technology businesses. The funding is designed to lower barriers to entry and build capacity and the right capabilities in businesses through targeted support for enterprise development and commercialisation.
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The CoSTAR piloting and prototyping programme will allocate £3.6m to projects that test, demonstrate and develop the benefits of the CoSTAR infrastructure. This is designed to encourage R&D activity, collaboration and investment, and ensure that firms can access equipment, technologies, facilities and expertise.
CreaTech Frontier - Consortium Partners
- Birmingham City University (lead)
- Coventry University
- University of Birmingham
- The University of Warwick
- Royal Shakespeare Company
CreaTech Frontiers - Industry Partners
- CreaTech Frontiers Industry Partners
- Advantage Creative
- Ars Electronica Center
- BIMM University
- Birmingham City Council (Public Health)
- Birmingham Contemporary Music Group
- Birmingham Open Media (BOM)
- Birmingham Opera Company
- Birmingham Repertory Theatre
- Capture Ltd
- Central Conservatory of Music (Beijing)
- Covatic
- Coventry City Council
- Create Central
- Creative UK Holding Ltd
- Culture Central
- Digital Catapult
- Elemental Compute
- Hollywood Gaming
- Holosphere
- ReachMirrorpix
- Rebellion
- SXSW LLC
- Tech West Midlands
- Totem Learning
- Ulster Future Screens NI
- Vodaphone (UK)
- West Midlands Combined Authority
MusicFutures - Core Partners
- University of Liverpool
- Liverpool John Moores University
- ACC Liverpool Group, operators of Liverpool’s M&S Bank Arena, convention centre and exhibition centre
- Adlib
- Liverpool City Council
- Liverpool City Region Combined Authority
- UK Music
- LIVE
- UK IPO
MusicFutures - Delivery Partners
- Association for Project Management
- Baltic Ventures
- Ditto Music Distribution
- Futureyard
- Francis McEntegart (McLegal)
- Generator
- Intellectual Property Office
- Kempston Street Studio
- LIPA, The Liverpool Institute for Performing Arts
- Live Nation
- Loft Mastering
- Modern Sky UK
- Yaw Owusu (Nothin But the Music)
- PRS Foundation
- Royal Liverpool Philharmonic Orchestra, RLPO
- Sentric Music Publishing
- Sound City
- Starwood Management
- STFC UKRI – Daresbury Laboratory
- Sum Vivas
- XR Stories Network+
More information on Creative Industries Clusters programme
The creative industries tend to concentrate in geographic areas, forming ‘clusters’ - groups of creative businesses which grow quicker together by collaborating and competing with each other. Liverpool City Region and the West Midlands will join the nine creative clusters across the UK which the Arts and Humanities Research Council’s Creative Industries Clusters programme have supported since 2018:
- Bristol + Bath Creative R&D - Screen and performance industries in Bristol, Bath and South West England
- Business of Fashion, Textiles and Technology - Fashion and textiles inLondon
- Clwstwr - Media production in Cardiff, Wales
- Creative Informatics - Data for creative entrepreneurs in Edinburgh, Scotland
- Future Fashion Factory - Fashion and textiles in Leeds, Yorkshire and the Humber
- Future Screens NI - Film, broadcast and animation in Northern Ireland
- InGAME - Video games in Dundee, Scotland
- StoryFutures - Screen industries in London
- XR:Stories - Immersive and Virtual Reality in Yorkshire and the Humber