At the end of March a group of 60 influential figures from across the creative industries met in No 11 Downing Street to discuss New Deal of the Mind, a novel approach to the recession designed to harness the natural inventiveness of this country. The gathering came about in response to an article in the New Statesman arguing that we should draw inspiration from the cultural projects of Franklin D Roosevelt’s 1930s New Deal, which produced the writers Saul Bellow and John Cheever and artists Mark Rothko and Jackson Pollock.

We felt we risked losing a whole generation of young people to the recession. At the same time, whole lifetimes of experience and expertise from older people who find themselves out of work could be lost. Unless we acted immediately it was felt the effect could be catastrophic. New Deal of the Mind has grown into a coalition of prominent figures in the creative industries, the media and academia who believe that the received wisdom of the recession should be turned on its head. This is especially true of the arts and the wider world of innovation, invention and creative entrepreneurship.

Instead of wringing our hands, we should be asking ourselves three questions. First, are there projects of national and local significance that can be carried out in a time of surplus labour that are difficult to recruit for in times of relatively low unemployment? Second, how do we put an end to the pernicious culture of free labour that has permeated the creative industries and the media over the past decade and replace it with sustainable paid internships, apprenticeships and training? Third, how do we encourage a new entrepreneurship to allow creative individuals to devise their own solutions to the predicament in which we find ourselves?

New Deal of the Mind has been encouraged by the government’s intention to place the creative and cultural sector at the heart of economic recovery. In the package announced jointly by James Purnell and Andy Burnham to provide up to 100,000 jobs in the sector, it was announced that the Department for Culture, Media and Sport will be working in partnership with New Deal of the Mind on initiatives to deliver jobs over the next year.

As the unemployment figures rise to over 2 million, increasing numbers of British artists, writers, designers and architects find themselves on the dole queue. With around a third of people who sign on for benefits defining themselves as working in the creative sector, it is essential that we tackle the systemic problems facing young people who want to break into these industries or to set themselves up as independent artists or designers.

There is a growing consensus that the system of ‘work experience’ and unpaid internships is benefiting no one. The culture of free labour, particularly in the creative sectors and the media, excludes the vast majority of young people unable to afford to work without being paid.

Ministers have taken some positive steps, but we don’t have much time. Already individuals within the arts world have taken up the challenge and begun to discuss innovative solutions to the mess in which we find ourselves. New Deal of the Mind is already in discussion with the South Bank Centre, the Barbican and the National Theatre in London, the Sage Gateshead and the Arnolfini in Bristol to set up a network of ‘cultural hubs’ to provide between 100 and 200 job and training opportunities for the long-term unemployed. A similar plan for ‘heritage hubs’ is being considered by the Heritage Lottery Fund and museum and libraries organisations.

But we must act now or we risk losing a whole generation of talent.