09/02/2012 17:45 GMT | Updated 10/04/2012 06:12 BST

Thinking Out Loud: FACTOR or X Factor?

Arts Council England funds all kinds of music, but one area where we haven't been seen as players is in pop music - however you define it.

The Arts Council actually has a long history of supporting a wide range of contemporary music, from our pioneering Contemporary Music Network touring scheme which ran from the 1970s for over 30 years, to our current investment in organisations such as Urban Development, Generator, Serious and British Underground which support the promotion and development of new musical talent across a variety of genres.

Partnership with the PRS for Music Foundation has also helped us target our funds towards helping emerging bands to take their first steps into the international market through the British Music Abroad scheme.

It's true to say though that in the past we've assumed that in genres like pop, contemporary folk, roots or urban music, talent would be nurtured by the record industry; something that has meant there hasn't been a pressing need for us to act. This is changing.

It's changing because the commercial music industry, by this I mean the big multi-national companies, are increasingly adopting a short-term approach to promoting, producing and supporting artists - from the X Factor's promise of overnight celebrity to the host of musicians and bands dropped if their first or second album commercially underperforms.

This short-term approach is a product of what has been a tumultuous decade for the UK and international music industry as it struggles to come to terms with a radically changed commercial landscape. Though this short-termism may help companies keep their accountants happy by dealing with immediate financial needs, it's a path that can stop talented musicians developing and fulfilling their potential. And with young musicians finding it increasingly difficult to get their first gigs due to UK licensing laws making it hard for some small venues to sustain themselves, the path for genuine talent to both find its way, and its voice, has become more tangled and more uncertain than ever.

One place where talent in contemporary music does blossom is Canada, with a recent blog wondering if there was something in the water there that has enabled so many great songwriters to emerge. Well, what's in the water is money and support.

On a recent trip to Canada I met Duncan McKie, who runs the Foundation Assisting Canadian Talent on Recordings (FACTOR). FACTOR was set up in 1982 by a group of Canadian record executives, broadcasters, producers and publishers looking to help Canada's independent record industry grow.

The scheme awards around $14m a year to artists seeking support for recording, touring and promotion costs. It also invests in managers, record labels and distributors to ensure the infrastructure is in place for Canadian artists to be able to make work, and for that work to reach bigger audiences.

FACTOR has played a huge role in the success of the Canadian music scene, from launching the careers of internationally recognised artists such as Feist and Arcade Fire to contributing to the thriving local music scenes of Toronto and Montreal. This kind of investment - giving artists the right kind of support at the right stage of their career - can play a really significant role in allowing musicians to continually renew and reinvent their work.

Allowing artists this time and space to develop is important to making sure the work they produce is the best it can be. And it often takes more than two albums. Hell, Tom Waits arguably didn't reach his critical and creative peak until he completely transformed his sound on Swordfishtrombones and Rain Dogs, his ninth and tenth albums. But that was the old days.

FACTOR helps small labels stick with artists and nurture them to maturity rather than chasing overnight success to make a fast buck. Six Shooter records, for example, have used FACTOR grants to nurture artists like Justin Rutledge and Luke Doucet, allowing them to mature artistically and commercially through several albums and a lot of live work.

Supporting recording and touring in this way often combines with local conditions to establish musical communities with a real depth of talent. Take the west end of Toronto, where small venues such as the Dakota Tavern and the Cameron House offer residencies to artists so they can develop their work. This has created a burgeoning music scene in the city, a mutually supportive community of artists that collaborates and encourages talented musicians to test and perfect their songs in an environment where they can take risks, rather than prematurely thrusting them into the spotlight. This environment has led to the city producing a succession of promising young artists, writers and bands. It's a place to make new music - entire bands can be recruited from bar staff in Queens West/Dundas and Parkdale.

Imitating FACTOR may not be the cure for the UK record industry's ills, and trying to create a scene overnight that imitates Toronto will never be a replacement for the organic development of an artistic community. Instead we need to support the emerging musical communities that are blossoming across the country so the artists they produce have the opportunity to fulfil their potential and reach the audiences they deserve.

Welcome changes to UK licensing laws should make getting gigs easier but access to finance for young musicians remains a problem. Banks won't even consider making an investment they see as high risk and offering little return. So perhaps it's time to look at new ways of micro-financing recording and promoting emerging musicians - whether by loans or grants - and making sure that talent has time to mature and develop. Any plan to do this would need to offer support in nimble and flexible ways, and would need to involve and be backed by the music industry.

So while many reports on the fate of the music industry focus on the bottom line, we need to start a debate about how together we can support the development of artists in the longer term. Invention, innovation and a long term view will be essential if we're to keep the music industry interesting as well as profitable, and for talent to emerge and be sustained.

Whatever we might come up with, it'll be nearer FACTOR than X Factor.