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  • 1. GAUTENG’S CREATIVE INDUSTRIES: AN ANALYSIS
  • 2. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S GAUTENG CREATIVE MAPPING PROJECT prepared by ameru (wits university) and CAJ, 2008 IN COLLABORATION WITH The Gauteng Creative Mapping Project: mapping the creative industries in Gauteng: 2008 Enquiries and Information: Ms Dawn Robertson, Head of Department dawn.robertson@gauteng.gov.za This report has been prepared by AMERU, Wits University neil.rankin@wits.ac.za CAJ: culture, arts and jobs avril@caj.co.za This report is available from the Department of Sports, Arts, Culture and Recreation in alternative formats on request and on their website www.srac.gauteng.gov.za
  • 3. T A B L E O F C O N T E N T S C O N T E N T S FOREWORD BY MEC neliswe mbata-mtimkulu 2 FOREWORD BY phillip goodwin, british council 3 Glossary of Acronyms and Terms 4 Key Findings 5 1. executive summary 6 Introduction 6 Characteristics of the Gauteng Creative Industries 6 employment 6 economic impact 7 Key Obstacles and Needs 7 2. Gauteng’s Creative Mapping Methodology 8 1. Background 8 2. Measurement of Creative Industries and the origins of Mapping 8 British Council support to developing countries 9 Limitations of statistics: new evidence and analysis from DCMS 10 The impact of technology on the definition and measurement of the creative industries 11 Purpose of Mapping Studies 11 3. The Creative Mapping Process in Gauteng 11 Initiating the process 11 Planning and preparation 12 The Creative Industries Development Framework in Gauteng 12 Gauteng Technical Team 12 Raising Awareness 12 4. Gauteng’s Creative Mapping Methodology 13 Defining the scope 13 Defining the population 16 Sampling Frame 16 Methodological Instruments 19 Research Considerations 20 5. Recommendations 22 The data set 22 Regular mapping studies 22 Collecting general data relating to the creative industries 22 Collecting data to measure the growing creative economy of GautenG 22 3. Literature Review: Conceptual framework for the Creative Industries 23 Defining the creative industries internationally 23 Review of models and classification systems 23 DCMS (UK Department of Culture, Media and Sport, 1998, 2001) 23 Concentric circles (Throsby, 1998 & 2001) 23 Symbolic Text (Hesmondhalgh, 2002) 24 WIPO Copyright Model (World Intellectual Property Organisation, 2003) 24
  • 4. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S T A B L E O F C O N T E N T S Creative Economy Model (UNCTAD, 2006, NESTA 2008) 25 The creative industries defined in South Africa 26 Economic analysis of the creative industries 27 Industrial organisation analysis 27 Economic impact analysis 27 Economy wide contribution 28 Value chain analysis 28 Urban and regional growth 30 The contribution of the creative industries to the economy – evidence from other countries 30 The economic contribution of the creative industries in South Africa 31 Drivers of the Creative Industries both internationally and in South Africa 34 South African Sector specific Studies 35 Audio-visual sector 35 Craft 38 Cultural tourism and heritage 41 Fashion Design Sector 42 Music 42 Multimedia 43 Performing Arts 43 Print media and publishing 43 Visual Arts 44 Cross cutting themes in creative industries research in SA 44 The Status of the Gauteng Creative Industries 45 1. The creative industries in Gauteng 45 1.1. The creative industry segments 45 1.2. Characteristics of the creative industries 45 1.3. Characteristics of Gauteng’s creative industries 46 2. The contribution of Gauteng’s Creative industries 48 3. Employment, wages and skills 51 Employment 51 Unionisation 52 Employment: full time, part time and freelancers 52 Racial, gender and age composition of employees 53 Wages 55 Education levels 56 4. Markets and exports 58 5. Technology 59 Fixed line phones and mobile phones 59 Computers 60 Sector-specific hardware and software 61 6. Government funding and private sector financing 62 C O N T E N T S
  • 5. T A B L E O F C O N T E N T S C O N T E N T S 7. OBSTACLES 63 8. PERCEIVED NEEDS 65 9. CONCLUSION 68 REFERENCES 69 Websites 75 General 75 Sector Specific 76 Sector Study Data Sources 77 Appendix 1: Firm Level Survey: Long Questionnaire 78 Appendix 2: Telephonic Questionnaire 91 Appendix 3: Creative industry constituents 93 Appendix 4: Vocational Qualifications Registered by the MAPPP-SETA 94 LIST OF FIGURES Figure 1: Employment by Sector in the Creative Industries 7 Figure 2: Framework for developing cross cutting policy, Frontier Economics (2007) 11 Figure 3: Concentric Circles (Throsby) 23 Figure 4: The creative industries - a stylised typology 24 Figure 5: Composition of the Creative Economy 26 Figure 6: Value chain analysis 29 Figure 7: Generic Cultural Value Network 30 Figure 8: The number of people employed in Specialist, Embedded and Support roles within the Australian Creative Workforce (2006) 31 Figure 9: Creative Industries in Gauteng by number of firms in each sector 46 Figure 10: Interdependencies in the Creative Industry Sectors 47 Figure 11: Primary and Secondary Income Sources for the Creative Industries 47 Figure 12: Turnover, assets and wages (second scale) per employee 48 Figure 13: Employment in the Tertiary Sector 49 Figure 14: Proportion of Employment, Turnover and Value-Added by Sector 49 Figure 15: Mean capital intensity by sector 2005 & 2006 50 Figure 16: Breakdown of costs by major category of expense 50 Figure 17: Employment by Sector 51 Figure 18: Employment of Women in the Tertiary Sector 53 Figure 19: Youth Employment in the Tertiary Sector 53 Figure 20: Comparison of Employment Equity in the Labour Market: GAUTENG vs. Creative Industries 54 Figure 21: Comparison of Employment Equity in the Labour Market: Gauteng Tertiary Sector and the Creative Industries 54 Figure 22: Highest Level of Education by Sector in Gauteng 56
  • 6. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S T A B L E O F C O N T E N T S Figure 23: Education levels by sector of the workforce 56 Figure 24: Comparison of Management and Workforce Qualifications 57 Figure 25: National ranking of sectors 57 Figure 26: Export activities by sector 58 Figure 27: Breakdown of export markets 58 Figure 28: Fixed line phone in the creative industries 59 Figure 29: Importance of mobile phones 60 Figure 30: The Importance of computers 60 Figure 31: The importance of the internet 60 Figure 32: The importance of sector specific hardware 61 Figure 33: The importance of sector-specific software 61 Figure 34: NAC Funding by Discipline 2006 62 Figure 35: Primary and Secondary Obstacles 63 Figure 36: Obstacles by Business Size: Costs 64 Figure 37: Obstacles by Business Size: Market Access 64 Figure 38: Obstacles by Business Size: Government 65 Figure 39: Obstacles by Business Size: Access 65 Figure 40: Needs by firm size 66 Figure 41: Market Development Needs 66 Figure 42: Business Development Needs 66 Figure 43: Access to Capital Needs 66 Tables Table 1: Perceived needs reported by companies and organisations 7 Table 2: Findings from DCMS (Frontier Economics) 10 Table 3: Sample by type of interview and sector 17 Table 4: Sampling by firm size 17 Table 5: Sub sector detail 17 Table 6: Creative Industries Models and Associated Sectors 25 Table 7: Timeline of Key Cultural Industry Research in South Africa 32 Table 8: DTI Film and TV sector Interventions 37 Table 9: Customised Craft Sector Plan interventions 40 Table 10: The Total Contribution of the Creative Sectors to the Gauteng Economy 48 Table 11: Mean Replacement Value of Assets by Sector 51 Table 12: Unionisation in creative workplaces 52 Table 13: Employment Summary 52 Table 14: Racial and Gender Breakdown of Employment by Sector 55 Table 15: Mean wage level per sector 55 Table 16: Most important export markets by sector 59 Table 17: Sources of Funding 62 Table 18: Creative Industry needs 66 C O N T E N T S
  • 7. F O R E W O R D B Y M E C N E L I S W E M B ATA - M T I M K U L U Gauteng Department of Sport, Arts, Culture and Recreation Mapping studies have become a common tool for understanding and advocating the contribution of the creative industries in countries such as Colombia, the United Kingdom, Singapore, Hong Kong and Australia. Conducted at a national and regional level, these studies have been influential in creating an evidence base for policy and programming in governments across the world. In 2006, South Africa initiated its first creative mapping studies as collaborative effort between the Department of Arts and Culture (DAC), the British Council and the provincial governments of the Western Cape and Gauteng. The Gauteng Department of Sport, Arts, Culture and Recreation is proud to present this report, at a time when we as government have committed to relooking at the way we do things to ensure the creation of decent work and the growth of an inclusive economy. This commitment to renewal requires of us to ensure that we research and undertake feasibility studies to ensure that our programmes and interventions truly meet the needs and aspirations of our people. This report presents a high level overview of the process, findings and implications of the Gauteng Creative Mapping Project (GCMP) implemented by the Gauteng Department of Sport, Arts, Culture and Recreation (SARC). The broad objectives of the study were to: • Validate the focus by government on the creative industries in terms of its contribution to GDP, employment and small business promotion • Inform policy decisions. • Influence the strategic direction of programmes and projects. • Provide evidence-based information for advocacy purposes. • Provide a baseline from which to measure growth in the creative industries on a more disaggregated basis. We are thankful and acknowledge the partnership that we have established with the British Council which has resulted in various collaborative projects including the commissioning of this report. We are committed to this partnership and we are excited and eager on future collaborative programmes. We invite all stakeholders from policy makers in government, planning and monitoring directorates, department and agencies involved in the creative economy, the various sectors of the creative industries to engage and use this report to grow and stimulate jobs, productivity, and creative content that will incrementally impact on not only the creative economy but the rest of the Gauteng Economy.
  • 8. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S
  • 9. FOREWORD BY PHILLIP GOODWIN FOR THE BRITISH COUNCIL Programme Leader Creative and Knowledge Economy, British Council The creative economy is becoming ever more important as a new generator of jobs, wealth and culture. The UN estimates cultural and creative trade to represent 3.4% of total world trade and is growing at a rate of 8.7%. According to UNCTAD (United Nations Conference on Trade and Development) ‘the creative industries are emerging as a strategic choice for reinvigorating economic growth, employment and social cohesion”. Interestingly, even in the current global downturn, the creative sector remains the fastest growing within the UK economy, a position which it has held for over a decade. The development of the creative economy is seen as critical to the UK’s on-going economic prosperity and cultural development. The UK is a world leader in the development of the creative economy and is seeking to develop this position through a number of policy initiatives built around the concept of ‘Creative Britain’ as a global creative hub. This is an economic agenda but it also has a deep cultural and social purpose which accords closely with the British Council’s cultural relations purpose which is to build trust and understanding through the exchange of knowledge and ideas across the world. Underpinning this is our passionate belief in the value of embracing difference in order to generate new ideas, new ways of thinking and new actions that enrich the lives of individuals and the societies in which they live. British Council, through its work in the creative and knowledge economy aims to develop an even stronger set of relations across cultures firmly rooted in the challenges and opportunities of the 21st century. We recognise that national and regional governments are increasingly seeing the importance of the creative economy but that public policy in skills, infrastructure, network development and education are constantly struggling to keep up. British Council is developing a framework in which to interact with partners and stakeholders in the global creative economy that centres on four themes: innovation in policy, the development of entrepreneurial skills, networks of creative entrepreneurs and creative education. UNCTAD has said that “the world map of the creative industries reveals a yawning gap between North and South”. Africa requires partnerships that will allow it to harness and give access, opportunity and sustainability to their creative sectors. We hope to continue developing collaborations like this one with the Gauteng Province for the mapping of its creative industries. Not only has it enabled an increasingly influential group of policy makers, entrepreneurs, academics and creative people to come together and develop new insights into the opportunities provided by the creative economy but it has also built closer and mutually beneficial ties between South Africa and the UK. We are proud to be a partner in an initiative that is helping turn knowledge into innovation and enterprise. Phillip Goodwin Programme Leader Creative and Knowledge Economy 3
  • 10. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S G L O S S A R Y O F A C R O N Y M S A N D T E R M S AMERU African Micro-Economic Research Umbrella at the University of the Witwatersrand which prepared these reports. CAJ Creativity Avriljoffe (CAJ) cc known also as CAJ: culture, arts and jobs which prepared these reports. DCMS UK Department for Culture, Media and Sport DTI Department of Trade and Industry GDP The total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports. GDPR The GDP of a specific region or province. GCMP Gauteng Creative Mapping Project Mean The mean is the mathematical average of a set of numbers. The average is calculated by adding up two or more scores and dividing the total by the number of scores. Multiplier A multiplier attempts to quantify the additional effects of an economic activity beyond those that are immediately measurable or directly attributable to that activity. Output Output in economics is the total value of all of the goods and services produced in an entity’s economy. Public Good In economics a public good means that consumption of the good by one individual does not reduce the amount of the good available for consumption by others; and no one can be effectively excluded from using that good.1 Ratio A ratio is a way of concisely showing the relationship between two quantities usually expressed as (x:y) Royalties A royalty is a payment made to the developer (inventor) of a product or service based on the amount of product/service sales. Ratio Creativity Avriljoffe (CAJ) cc known also as CAJ: culture, arts and jobs which prepared these reports. SACR Gauteng Department of Sports, Arts, Culture and Recreation Tertiary Sector The tertiary sector is that portion of an economy devoted to service activities (e.g. transportation, retail and wholesale operations, insurance) Turnover All sales Value-added Value-added is calculated in this report as output (turnover) minus inputs (all costs except labour and capital). 1 www.wikipedia.org G L O S S A R Y
  • 11. total economic impact The total direct and indirect contribution of the 11,320 firms and organisations comprising the creative economy is R33,3 billion per annum in turnover, creating employment for over 182,000 people. The audio-visual and the music sectors produce the most revenue per person employed. In terms of the number of firms and organisations active in the sector, the design (25%), craft (21%), audio-visual (11%), music (11%) and visual arts (10%) sectors are the largest. Just over half (54%) are members of industry and professional associations or lobby groups. Income from the sectors comprising the creative industries is primarily derived from direct sales and services. Grants from government and funding agencies contribute 7% of primary income and 9% of secondary income and as such, the creative industries in Gauteng are not as dependent on government grants as generally thought although there are distinct sectoral variations in this regard. The markets for the creative industries in Gauteng are principally the general public and tourists (59%) and other firms (38%) with government representing only 2% of the total market base. All the sectors comprising the creative industries show reasonably high levels of export activity focused primarily on the large consumer markets of the European Union, the United States and Canada. Over a quarter (27%) export to the African continent. Largest employing segment By far the largest employer in the sector, with over 16,000 employees is the cultural tourism and heritage sector, followed by the design (8,616), the audio-visual (8,505) and craft (8,070) sectors. On average, a full-time worker can expect a wage of R8,678; a part-time worker a wage of R3,981 and a freelance a wage of R7,229. There are distinct sectoral variations with regard to wage levels however. Wages are highest in the print media and publishing sector and lowest in the fashion sector Workforce Of all the people employed, 57% are black South Africans and 53% are women. Forty-seven percent (47%) of all employers are young people under the age of 35 and 15% of firms report that they employ at least one person with a disability. The bulk of workers are employed full-time, however significant numbers, in specific sectors such as audio-visual are employed on contract i.e. as freelancers. Over 87% of workplaces report that the majority of employees are not unionised. Qualifications The creative industries workforce is reasonably well educated, with 36% of the workforce reporting to have a tertiary level qualification such as a diploma or degree. Ten percent (10%) of firms and organisations report that vocational education and training is the highest level of education of their workforce and 27% report secondary schooling (Grade 10 – 12) as the highest level. It is important to note 25% indicate that the level of education is not applicable to their workforce at all, an indication that not all sectors have high educational entry requirements. In particular, the visual arts, craft and music sectors provide significant opportunities for school leavers, however the majority of creative industry sectors require some kind of further education and training. The most qualified workforces are found in the cultural tourism and heritage sectors, music, print media and publishing, audio-visual, multimedia, and design sectors. Legal entities Most of the organisations and enterprises that participated in the survey are formally registered. The majority of enterprises (44%) are registered as Closed Corporations, 18% are Limited Companies and 14% are sole traders. A significant portion (11%), are non-profit enterprises registered as trusts, Section 21 Companies or as non-profits predominantly in the craft, visual arts, performing arts and cultural tourism and heritage sectors. In terms of organisational stability, 44% have been trading for 10 years or longer. Significantly, 34% are less than 4 years old, an indication of the rapid growth of enterprises particularly in the sector. k ey findings 5
  • 12. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S introduction The Gauteng Creative Mapping Project (GCMP) was implemented by the Department of Sport, Arts, Culture and Recreation (SACR) in order to quantify the contribution of the creative industries to the Gauteng economy. A secondary aim was to gather information on perceived needs and obstacles to ensure the alignment of policy and programmes to the needs of the sector. The mapping project comprises in-depth and firm-level surveys across the following sectors comprising the creative industries: • Visual arts • Performing arts • Cultural tourism and heritage • Multimedia • Music • Craft • Audio-visual • Print media and publishing • Design • Fashion Characteristics of the Gauteng Creative Industries The GCMP estimates, based on industry databases, directories and key informants, that there are over 11,000 firms and organisations active in the creative economy in the Gauteng province The largest sectors in terms of numbers of entities (both commercial and non-profit) are design (25%), craft (21%), audio-visual (11%), music (11%) and visual arts (10%). The majority of organisations are owned by white South Africans and over 35% of all businesses and organisations are owned by people under 35 years of age. Most organisations are formally registered, the bulk (44%) as Closed Corporations, 18% as limited companies, 14% as sole traders and 11% as non-profit organisations. Slightly less than 70% of all organisations are owned by 1 or 2 people. Only 54% of enterprises report that they are members of professional and/or industry associations and 86% report that the majority of their workforce is not unionised. Slightly more than a quarter (27%) operate from home-based studios or workshops, 46% from rented premises and 23% from premises that they own. While over 40% have been in business for over 10 years, a third of all companies have only been in operation for 4 years or less. Income from direct sales or services comprises the bulk of income streams; grant funding from government or funding agencies comprises 7% of all income. The markets for the creative industries in Gauteng are principally the general public and tourists (59%) and other firms (38%). Government represents only 2% of the total market base. In general, all the sectors comprising the creative industries show reasonably high levels of export activity with the most active sectors being audio-visual (61%), multimedia (55%) and music (54%). Operational and staffing costs represent the highest proportions of expenditure in creative industry organisations and enterprises. Technology is critical to many of the enterprises and organisations. All sectors rely heavily on fixed line telephony but there are distinct variations in other aspects. In design, print media and publishing, audio-visual, multimedia and music, sector-specific hardware and software are important. The craft and fashion sectors however appear to have little use for computer technology. Employment The businesses and organisations operating in the Gauteng creative industries create employment for over 63,000 people. In terms of direct employment, the creative industries account for 1,9% of employment in the province, slightly more than agriculture and forestry (1,8%) and slightly less than mining (2,5%). The cultural tourism and heritage, design, audio-visual, craft and print media and publishing and print media sectors are the largest employers in the creative industries. executive summary E X E C U T I V E S U M M A R Y
  • 13. Figure 1: Employment by Sector in the Creative Industries The average full-time employment per firm is 13,1 people; part-time employment is 2,3 and for freelancers it is 8,1. Of all the people employed, 57% are black South Africans, 53% are women and 47% are youth. The fashion, cultural tourism and heritage and performing arts sectors have the largest proportion of black workers; multimedia, design and print media and publishing the fewest. With regard to gender matters, multimedia, music, visual arts and design sectors show the lowest proportions of women employed Wages are highest in the print media and publishing sector and employees in the craft and the fashion sectors earn on average the lowest of all the sectors (less than R4,000 per month). On average across the creative industries, a full-time worker can expect a wage of R8,678; a part-time worker a wage of R3,981 and a freelance a wage of R7,229 Economic Impact The total direct and indirect contribution of the 11,320 firms and organisations comprising the creative economy is R33,3 billion per annum in turnover, creating employment for over 182,000 people. The creative industries in Gauteng contribute R11,6 billion rand in direct output and R6,2 billion in value-added to the economy. The creative industries in the province contribute about 1% of the value-added by the tertiary sector and 0.7% for the provincial economy as a whole. The workforce is well educated, with 27% reporting secondary schooling (Grade 10 – 12) as the highest level of education and 36% of the workforce reporting to have a tertiary level qualification such as a diploma or degree. The visual arts, craft and music sectors provide significant opportunities for school leavers; however the majority of creative industry sectors require some kind of further education and training. Key Obstacles and Needs Costs were the most frequently mentioned obstacle, while market related issues, such as the practices of competitors and a skilled workforce, were mentioned by 39% of firms, followed by government related issues, such as SARS compliance and labour regulation, by 33% of firms. The perceived needs of the companies and organisations were closely related to the obstacles described above. More than half the companies interviewed said they needed help with marketing their product. The table below provides an overview of needs: Table 1: Perceived needs reported by companies and organisations NEED % Help with marketing 51 Help obtaining external commercial funding 29 Help obtaining external government funding 29 Staff training 26 Help with international expansion 24 Help with strategy and business planning 17 Increased web presence (marketing, distribution) 18 Help with developing new ideas for cash generation 14 7
  • 14. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S 1. Background This chapter details the origins of mapping as well as the methodology followed by the Gauteng Creative Mapping Project (GMCP). It also identifies some central methodological problems and the main constraints to producing mapping studies as well as the solutions adopted by the Gauteng Creative Mapping Project. The technical team guiding this research believed that it is important to make the research process and assumptions transparent so that future mapping processes both in Gauteng and around the country can benefit from the experience and learning acquired in the course of this mapping exercise. Both this chapter and the literature review allow the reader to understand both the presentation of data and the interpretation offered by the GCMP. 2. Measurement of Creative Industries and the origins of Mapping Considering that UNESCO released a framework for cultural statistics more than twenty years ago, in 1987, it is perhaps surprising that there is still no agreement on a methodology for measuring the creative industries. UNESCO’s framework was the first formal international classification of cultural statistics and the organisation now collects a number of cultural statistics globally. In addition to the collection of statistics across countries, data are also collected by individual countries. For example, in Australia statistics are collected through the addition of pertinent questions to existing surveys. There are also a number of other specifically tailored surveys on business and government organisations as well as surveys of individuals to determine the number of people attending cultural activities and in cultural related work. Statistics Canada gathers data through the Culture Statistics Program and is less concerned about its integration into the wider statistical system. It also measures participation in cultural activities and has a detailed Culture Labour Force Survey. Finland, France and Italy are other developed countries where the government statistical agency is the primary collector of statistics concerned with the creative sector. In the Philippines, a country which faces many similar challenges in the creative sector to South Africa such as the informality and micro nature of creative enterprises and the fact that many creative workers have full time jobs in other industries, cultural statistics can also be extracted from those collected from the national statistical agency. Statistical data for the Philippines is collected at the 4 digit SIC code level, which allows for the disaggregation of a number of cultural related activities (CAJ, 2003). This approach – using statistics that are collected by the national statistical agency as part of its ‘ordinary’ surveying – has been used very successfully in a number of other countries to identify trends in and the size of the creative sector. The United Kingdom and Singapore are two countries where the relevant government department, the Department for Culture, Media and Sport (DCMS) in the UK and the Ministry of Trade and Industry in Singapore, extracts information from the data collected from businesses and published at the 4 or 5 digit SIC level. The benefits of this approach are that cultural statistics can then be updated as soon as the official statistics are released. As such, in both these countries there now are a number of publications, spanning a multi-year period that provides a detailed insight into the creative sector. Good official statistics that ‘prove’ the contribution of creative sectors to the overall economy, have in many cases resulted in processes seeking to investigate the contribution at a regional or local level. The United Kingdom was the first country to pioneer the concept of creative industries and the term mapping refers to the characteristics of the sector with the publication of “The Economic Importance of the Arts in Great Britain” in the late 1980s (Myerscough, 1988). The subsequent document “Mapping the Creative Industries, 1998” produced by the DCMS through a Creative Industries Task Force that was established in 1997, was the first systematic attempt to both define and measure the economic contribution of the creative industries and assess their opportunities and challenges. Mapping essentially provides the economic data which shows the current value of the creative economy. It also can show the economic potential of the sector and where the sector needs support to grow and realise its potential. The 1998 report was updated again in 2001. Prior to that, the creative sector was not seen as a significant sector or important to the UK’s economy, but ten years on, the UK is a world leader in identifying creativity as a driver for job creation and economic growth. The Government’s Creative Industries Task Force defines the creative industries as: “those activities which have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property”2 . These include: advertising, architecture, the art and antiques market, crafts, design, designer fashion, film, interactive leisure software, music, the performing arts, print media and publishing, software, television and radio, heritage and tourism services. In early 1999 DCMS set up a Regional Issues Working Group which produced an important study highlighting both the strength of the metropolitan regions as well as the considerable contribution of the creative industries to towns and smaller cities in the country as a whole (DCMS, 2000b). Numerous studies have since been conducted at the regional, sub-regional and local levels including regions such as Yorkshire and towns such as Bristol, Leeds and Manchester focusing on the special needs of the creative industries outside of the UK capital such as regional development strategies, linking creative businesses with wider networks of communication and exchange, improving business development agencies’ appreciation and understanding of the creative industries and investor knowledge of creative industry opportunities. GAUTENG’S CREATIVE MAPPING METHODOLOGY 2 See www.culture.gov.uk/creative/mapping.html M A P P I N G M E T H O D O L O G Y
  • 15. Creative mapping has also become a valuable tool in a wide variety of other countries both in the developed and developing world. Canada, the United States, Singapore, Hong Kong, New Zealand and Australia are all developed countries that have engaged in creative mapping exercises. In the developing world, Colombia was one of the pioneers of creative mapping with its 2002 study of the creative industries in Bogotá. The development of a handbook “Guide to Producing Regional Mappings of the Creative Industries” (Ministry of Culture, Colombia, 2007), provides invaluable guidelines for the creative mapping process and was one of the models used for the GCMP. The provincial process was also heavily influenced by the UK process of mapping the creative industries which has been central to their experience. Since 2002, DCMS has produced Creative Industries Economic Estimates every year using comprehensive survey data collected by the Office for National Statistics (ONS). This has enabled them to provide regular updates and consistent data on the activity of the creative industries. The UK Creative Mapping documents include figures for • Gross Value-added • Number of businesses • Exports • Total creative employment (employment in creative industry firms and creative occupations outside the creative industries) for most sectors The result of the attention placed on the creative industries by the UK government can be seen in the latest government strategy, Creative Britain: New Talents for the New Economy which summarises their achievements as follows: “Britain is a creative country and our creative industries are increasingly vital to the UK. Two million people are employed in creative jobs and the sector contributes £60bn a year – 7.3% – to the British economy. Over the past decade, the creative sector has grown at twice the rate of the economy as a whole and is well placed for continued growth as demand for creative content – particularly in English – grows” (DCMS, 2008). This government strategy was preceded by a mammoth research effort by the Creative Economy Programme (CEP) in 2007. A series of research projects were commissioned from independent consultants, research bodies and DMCS themselves, all of which are published on the CEP website3 . As the CEP website states: “The CEP’s objective in commissioning these research projects was to furnish policy makers with a more complex understanding of the characteristics and structure of the creative industries and trends they have experienced. Together they represent a large advance in DCMS and research partners’ understanding of the creative industries” (DCMS 2007). Four key questions framed this research: • What is the direct contribution of the Creative Industries to the UK economy? • Does the UK have a comparative advantage in the Creative Industries and how might this be eroded by other countries? • Do the creative industries make an indirect contribution to the UK economy? • Do the creative industries face barriers to growth and improved productivity and what is the Government’s role in overcoming these? The CEP believes the work has “gone some way to improving our understanding. It has given us a greater insight into the characteristics and structure of the creative industries and trends they have experienced. The intention with the project on spillovers in particular was to give analytical rigour to a topic which has not been explored in the literature before. Together they represent a large advance in DCMS and research partners’ understanding of the creative industries” (DCMS, 2007). British Council support to developing countries In 2001 the British Council embarked on developing a new programme – Developing Creative Economies – to share the UK’s experience and understanding of the creative industries and creative economy with developing countries, especially those where piracy is an issue. The British Council chose to use Creative Mapping as a way to assist other countries to recognise the importance of this sector. Speaking of the mapping documents produced by DCMS in 1998 and 2001 the organisation states: “The need then was to raise awareness of the industries, the contribution they made to the economy and the issues they faced. Now the impact of creativity in regeneration and social inclusion is widely acknowledged. Every region of the UK has identified the creative economy as a priority area for economic growth. And the special needs of these industries are reflected in policy development at national, regional and sub-regional level. They are a real success story. The Department of Culture, Media and Sport (DCMS) helps the creative industries thrive by raising their profile and supporting their development. It believes that the most successful economies and societies in the twenty first century will be creative ones. The British Council works with the DCMS to promote the vision of the UK as the world’s creative hub; and to share expertise and experience with other countries worldwide” (British Council, undated). 3 The evidence and analysis unit of the DCMS can be accessed on http://headshift.com/dcms/ mt/archives/ blog-36/ evidence%20 summary.doc 9
  • 16. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S This support extends to providing expertise and documentation from mapping studies elsewhere although it leaves each country to interpret and define the creative industries themselves. Mapping studies supported by the British Council have been conducted in a range of countries from Asia to South America. The mapping study in South Africa was able to draw substantially on the experiences of the mapping in Colombia largely due to the Mapping toolkit (Ministry of Culture, Colombia, 2007). Limitations of statistics: new evidence and analysis from DCMS Although the DCMS approach has gained international recognition for measuring the contribution of the creative industries, the data is not without its limitations. Producing annual estimates of the size of the creative industries in the UK economy using data from the Office for National Statistics (ONS) allows for the estimation of the contribution to UK employment, Gross Value-added (GVA) and exports. The key challenge is the inability of official statistics to keep pace with the rapid changes and consequent classification problems that occur in the creative industries. Other challenges relate to the scope of particular sectors, such as design where statistics cannot identify all the constituent parts of that industry. A further limitation is that official statistics fail to capture the full extent of activity as they do not accurately reflect the structure of the industries. As such, Staying Ahead, a report produced by The Work Foundation argues that the figures should be seen as estimates rather than definitive valuations. Their study references alternative data sources for particular sectors (The Work Foundation, 2007). In recent research commissioned by the DCMS, Frontier Economics was able to use a data set from ONS previously not available4 to develop a more detailed supply chain approach to analyse the statistics5 . New insights about the structure of the sectors and the types of firms driving growth emerged and some of the key findings are documented in the findings below: Table 2: Findings from DCMS (Frontier Economics) The report argued that while individually the creative industry sectors (music, performing arts, dance, fashion etc) might not be of strategic importance to the UK, there was no doubt that collectively the creative industries are very important. Therefore Frontier Economics developed a framework for cross-cutting policy making suggesting three sub groups which drew on the analysis of the individual sectors in terms of structure, key trends and issues. The figure below illustrates this framework: FINDING DETAIL Large firms are important for the creative industries The largest 200 firms account for 50% of turnover Growth in the creative industries is driven by start-up companies Start up companies accounted for 48% of growth from 1995-2005 – most of this in year 1. Creative Industry companies appear to grow slowly in the years after they start up Creative firms have survival rates that are similar to other sectors. Three year survival rates for firms within the creative industries is similar to the average across all industrial sectors but there are variations between sectors Large international creative industry firms are important in the UK International firms may locate in the UK because of its supply of high quality graduates, specialist “creative skills”, unique infrastructure and because the UK is an attractive place for executives to live and visit Creative industries perform well on a number of productivity measures compared to other UK sectors The creative industries are more likely to be innovative than the other sectors identified in the project6 and they employ highly skilled workers and have a higher proportion of self employed people that then economy as a whole GAUTENG’S CREATIVE MAPPING METHODOLOGY 4 Responding to concerns that official statistics are not wholly representative of the whole creative industries sector, and that ONS surveys cover businesses that are registered for VAT and therefore exclude those small businesses below the VAT threshold, DCMS and ONS began a process of updating the proportions usually applied to the relevant SIC and Standard Occupation Classification (SOC) codes by using detailed survey data. These changes are now reflected in the Creative Industries Economic Estimates Bulletin. The proportions will be reviewed every 3-5 years (DCMS, 2006a). 5 The Evidence and Analysis Report by Frontier Economics is available on the CEP website: www.cep.culture.gov.uk 6 It should be noted that the data can be disaggregated to different levels and when the broad sectors are broken down certain sub-sectors may have a higher rate of innovation activity than the creative industries aggregate. M A P P I N G M E T H O D O L O G Y
  • 17. Figure 2: Framework for developing cross cutting policy, Frontier Economics (2007) The impact of technology on the definition and measurement of the creative industries Technological change in the creative industries, particularly the development of digital media, disrupts not only conventional value chain analysis and conventional copyright regulation by bringing consumers closer to creators7 , but it also raises significant questions for sectoral boundaries, definitions and measurement. While the sectors identified in the DCMS mapping documents retain a strong identity for measurement, economic value and organisation, there is a view that future exercises to gather data on the creative economy may see sectoral boundaries changing due to incessant technology change (The Work Foundation, 2007). Purpose of Mapping Studies Colombia’s mapping experience in partnership with the British Council produced a guide to designing, conducting and analysing mapping projects. This guide, now translated into English, provides an outline of mapping studies in the UK and Columbia, stages in the production of mapping as well as technical considerations in the mapping process. The GMCP used this guide as a reference although the final process is quite different to that of Colombia. The lack of official statistics has meant that the mapping has needed to rely almost solely on primary data collected through firm level questionnaires with contextualisation and interpretation provided by the technical advisors to the project, CAJ. The document, Guide to Producing Regional Mappings provides useful elaboration on the purpose of mapping studies as follows: • To diagnose a giving situation by identifying its constituent elements, the relations between them and the results of such interaction. • To describe and interpret the data to contribute to solutions to the problems revealed by the diagnosis. • To give greater visibility to the sector through the identification of the value of culture and creation both as cultural expression as well as its contribution to the economy or region. • To provide information that allows national and regional agents to identify key aspects about the dynamics of creative industries. • To provide the necessary facts that improves decision-making in the design of policies to strengthen these industries. • To stimulate the organisation of individuals and companies of the creative and cultural sectors so that they are perceived as a collective whole that facilitates their recognition, positioning and empowerment as an economically important sector. • To identify the targets of the study which are the institutions that are able to support the growth of the sector, the role-players within the creative sector as well as the stakeholders in the creative community. • The process of mapping could, through the building of alliances and clusters of industries, stimulate organisation (Ministry of Culture, Colombia, 2007:6). 3. The Creative Mapping Process in Gauteng Initiating the process The British Council South Africa decided to expand the new programme launched in the UK in 2001 – Developing Creative Economies – to South Africa in 2005 with the aim of developing the understanding of, information about, and interest in the Creative Economies. In 2005 the British Council 7 The impact of technology on cultural value chains is explored in more detail in the literature review chapter, in particular the research by Connectus Consulting Inc. (2007) 1 1
  • 18. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S commissioned Creativity Avriljoffe (CAJ) to undertake a review of the creative sector research in South Africa (CAJ, 2005). In the same year, the British Council UK began discussions with the Department of Arts and Culture (DAC) about conducting a mapping study on the creative economy in South Africa. The elements of an agreement between the BC and the DAC were laid during the Nurturing the Creative Economy (NCE4) meetings in West Sussex in November 2005. By July 2006, with the support of the Developing Creative Economies Programme in South Africa, DAC had developed a clear plan of action for the South Africa Cultural Mapping Programme detailing the governance and administration of the project from co-ordinator, champions group, management group, creative network, technical expertise group to the participating universities in each of the 3 provinces (Western Cape, Gauteng, Kwa-Zulu Natal). A seminar programme for civil servants from all spheres of government as well as an awareness raising programme about the creative economy was part of the planned activities associated with the mapping research. The timeline stretched from October 2006, starting with the visit of the British Council UK and their consultants, a launch of the Creative Mapping in South Africa and the mappings in each of the three provinces during 2007 to the publications of final mapping reports in March 2008. Planning and preparation The DAC appointed the University of the Witwatersrand’s African Micro-Economic Research Umbrella (AMERU), under the leadership of Dr Neil Rankin to conduct the creative mapping in Gauteng. The DAC had allocated funds to conduct a horizontal mapping of a few of the creative industries (such as music) in Gauteng. The Department of Sport, Arts, Culture and Recreation (SACR) in Gauteng however felt that a horizontal mapping of all the creative industries should be conducted to add value to its Creative Industries Development Framework (CIDF) which was released in 2005. To support the scope enlargement and as a major partner in the Creative Mapping project, SACR committed substantial additional funds to the project. In addition, the British Council appointed Burns Owens Partnership (BOP) to support the work of the British Council South Africa in overseeing this creative mapping project. The Creative Industries Development Framework in Gauteng An important consideration for the Gauteng Mapping Project has been to align the mapping project in Gauteng with the Creative Industries Development Framework which guides the work of the Department of Sports, Arts, Culture and Recreation (SACR). The aim of this framework which was released in October 2005 is to: • Develop creative industries to maximize their contribution to the economy, community development and urban regeneration. • Provide a coordinating framework for investment and implementation in the province. • Align creative industries activities with the Gauteng Growth and Development Strategy. The role of the Creative Mapping in Gauteng is to support the CIDF and provide a more nuanced understanding of the sectors that it intends to develop and support. In addition, it was hoped that the process of the mapping would also ensure the involvement of government stakeholders across the board to facilitate the involvement of local governments and other Gauteng government departments in the implementation of the CIDF. Gauteng Technical Team A technical team was established to oversee the research comprising members of the British Council Johannesburg office, SACR officials, the department’s specialist consulting company CAJ, the National Film and Video Foundation (NFVF), the DAC8 and the Directorate of Culture in the City of Johannesburg. This team met monthly in the offices of the British Council with the research team to provide support to the research process and assess progress. Raising Awareness A two-day workshop was held in Johannesburg under the auspices of the British Council with their partners, the DAC, the NAC, the NFVF and SACR, to launch the Creative Mapping Project. The first day was an open day with presentations from the DAC, the SACR department and about creative mapping from the British Council and their consultants, BOP. The second day comprised a more technical discussion between the research team, experts from BOP and members of the technical team about the process of mapping. The workshop report highlighted the inputs from Felipe Buitrago (British Council) and David Holland (BOP) and the current thinking on Creative Mappings which are wholly dependent on the nature of the information requirements of the area under survey and the needs of the end users of the information. GAUTENG’S CREATIVE MAPPING METHODOLOGY 8 The DAC intended to contract the National Arts Council to both receive the funds for the mapping study and act as overall project manager to the Mapping project nationally. However this contract did not materialse. M A P P I N G M E T H O D O L O G Y
  • 19. They highlighted that while mapping has effectively been used in the United Kingdom for many years to provide information about the creative industries and also to direct programmes; it was also found to be a useful tool in less developed countries such as Colombia to initiate creative industry development programmes. As a guide to the Gauteng mapping project they explained the role of the technical expertise of the team from the British Council (and their consultants, BOP) which took the form of a specific “template” that must be applied. The expertise was there “to inform the operational and technical aspects of the project in terms of scope, scale and methodology”. A range of critical factors were highlighted from the two benchmarks, the UK and Colombia, ranging from the definition of creative industries; the range of sectors included in the definition; to the incorporation of commercial and non-commercial aspects of creative industries. In the UK for instance, the creative industries are defined as having their origin in individual creativity, skill and talent; a potential for wealth and job creation; and the potential for the generation and exploitation of Intellectual Property. In this way, the UK creative industries comprised thirteen sectors including advertising, architecture, the arts and antiques market, craft, design, designer fashion, film, interactive leisure software, music, performing arts, print media and publishing, software, television and radio. Current knowledge about the UK creative industries is evidence of the range of information available from Mapping Studies: they constitute 8% of UK GDP which is approximately £83,5 billion and have an annual sustained growth rate of 6% (1997 – 2004) which equates to £5 billion. The industry has been found to be highly diverse, incorporating 120 000 businesses in the UK with less than 30-40 employees and employing 1,9 million people in skilled jobs while at a local level, 12% of London economy is creative and 1 out 5 jobs is in creative industries Most importantly for the Gauteng government is that the UK experience allowed for a shift from advocacy-based to evidence-based policy making that has been greatly facilitated by the information provided by the mapping system. While a national approach was adopted first, the current focus is on regional and local mapping. Mapping therefore is a tool for policy making and policy decisions regarding investment, infrastructure, education and training. It is not a panacea that can solve all matters or a strategy. Rather the evidence collected through mapping can be used to: • “Promote recognition and visibility. • Raise awareness. • Present information as a tool for decision making. • Create a common language for talking about and describing the creative industries. • Present a joint front for making the argument of creative industries development and support for the creative industries. • Strengthen negotiation positions by presenting evidence as to the contribution of the industries” (SACR, 2007). 4. Gauteng’s Creative Mapping Methodology Given the lack of available statistics about the creative sectors the research approach was to conduct firm level studies of a sample of creative enterprises across the sectors of the creative industries. The following elements were important in the development of the methodology. Defining the scope In developing the conceptual framework, eleven sub-sectors were defined for Gauteng, with their respective principal activities and related activities. These definitions were based partially on existing use of sector parameters in the arts and culture sector in South Africa and partially drawn from international experience in defining these sectors. Sub-sector detail 1. Audio-visual For the purpose of this study, the audio-visual, media and film sector includes the following activities: • The generation of creative content for film, TV and radio (commissioning and scriptwriting) • Production for film and TV (all activities involved in creating a movie, TV show, commercial or interactive programme from a script) • Film and video distribution 1 3
  • 20. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S • Screening of film and broadcasting of TV and radio content • Audience consumption and retail • Media-related activities (trading of broadcasting time, organising logistics between corporate clients and producers and broadcasters) • Specialised education and training (e.g. film schools) • Support services (e.g. specialised equipment facilities and sales and archive facilities) The following related activities are excluded from the parameters of this sector: • Advertising • Photography (classified under Visual Arts for the purposes of the Mapping) • Animation (classified under the Multimedia sector) 2. Craft There are several people who are involved in the craft sector’s different value chain stages. The sector includes activities of weavers, goldsmiths, sculptors, potters, leather crafters, jewellers and bead makers. These people are involved in the origination, design, production and distribution of the products. The products made can be categorized into: traditional art, designer goods, craft art, functional wares and souvenirs (DACST, 1988b; Elk, 2004). 3. Cultural tourism and heritage The activities of the cultural tourism and heritage sector include the following main activities: design of tangible cultural heritage, art (such as rock art), crafts, archaeological heritage, built Heritage (Architectural), aural and musical heritage, audio-visual heritage, textiles and clothing, natural heritage, natural reserves, fauna and flora, service of reservations and conservation of tangible natural and cultural heritage and museum, exhibitions and cultural centres. The related activities include: libraries and archives, manufacture of products, administration of locations and places, advertising, publications, printing of books and pamphlets, tourism, transportation, lodging, restaurants, craft sales, sale of heritage at auctions, galleries and stores. 4. Design The areas of design that the Mapping of the Creative industries in Gauteng focuses on are industrial design, graphic design and interior design. Definitions of these activities are presented and discussed briefly below. • Industrial design Industrial design forms the inception stage of the creation of new tools, machinery, equipment and products for manufacturing and services. It is “a creative activity with the aim of determining the formal qualities of objects produced by industry” (Ministry of Colombia, 2002). This includes all forms of functional design (e.g. furniture and home wares). The Department of Science and Technology puts forward a more detailed definition. “Industrial design (ID) is the creation and development of concepts and specifications to improve existing products or develop new products or services. It is the design of products from teaspoons, computers, automobiles and toothbrushes to the design of a corporate identity. ID deals with consumer products as well as industrial products and services. The industrial design process begins with the need for change, improvement or new product has been identified and ends with the fully designed product, process or model” (Ratsatsi, 2005). • Graphic design Graphic design involves the creation of “audio-visual media, logos, stationery, printed material, layouts and covers, posters, packaging, diagrams and maps, signs” (Ministry of Colombia, 2002). • Interior design According to the Wikipedia , interior design “is the process of shaping the experience of interior space, through the manipulation of spatial volume GAUTENG’S CREATIVE MAPPING METHODOLOGY M A P P I N G M E T H O D O L O G Y
  • 21. as well as surface treatment” (undated). This activity is often seen as a sub-category of architecture and was included as part of the Architecture sector in the Bogotá mapping. In the case of the Creative Industries Mapping of Gauteng, architecture falls outside of the scope of the study, but the activities related to interior design are included in the design sector. The following related activities are excluded from the parameters of this sector: • Fashion design (classified under the Fashion sector for the purposes of the Mapping) • Interface design is the “design development, documentation and implementation of software tools” (Wikipedia, undated). In this study, interface design is included in the multimedia sector. 5. Fashion design The fashion design activities included in the research are: Haute Couture, Prêt-a-Porter, lines, fashion product design consultancy, fashion research, manufacture of fashion collections and design of clothing patterns. The research excludes the Cut, Make and Trim (CMT) industry. Model agencies have also been excluded as only a small fraction of the people in their portfolio is involved with fashion. 6. Multimedia The multimedia sector includes the activities of computer technology companies, animation companies, and multi-media experts. The sector, as defined in this mapping study is mainly dominated by animation companies. 7. Music The music industry comprises the following: • Creators: These composers and songwriters compose lyrics and melodies. Musicians, who lend their voices to these lyrics and melodies, are also considered creators. • Publishers: These companies publish musical works as composed by songwriters and lyricists. • Record Companies: Record companies are responsible for the sound recording of artists and ensuring the manufacture, promotion and distribution of phonographs. • Manufacture: This entails the reproduction of phonograms from masters. • Broadcast, Retail and Entertainment Sectors: These constitute the three sectors through which the product of the music industry reaches the market (DACST d, 1998). • Education and Training: Play a crucial role in the training of musicians and professions in the music sector. • Funding and support: Both government and non-government institutions assist in the development of the sector. 8. Performing arts The activities of the performing arts sector include the following: dance, orchestra, music, opera, musical theatre, theatre, comedy, circus performance, magic shows, poetry and storytelling. A number of these activities have not been previously included in this sector. For example we included comedy, especially stand-up comedy, since it is a growing form of entertainment in South Africa. 9. Print media and publishing The structure for the print media and publishing sector is slightly different than the other sub-sectors as official data was obtained from StatsSA. The sector can be divided into two: Print Media, which includes newspapers and magazines; and publishing, which is primarily focused on book publishing but is developing to include multi-media and online publishing. There is also a distribution and retail component of the sector that includes new and second-hand bookshops, online distributors and specialised distribution companies. 10. Visual arts The visual arts sector includes the activities of visual arts practitioners like painters, watercolorists, wild-life artists, ceramists, printmakers, sculptors, installation artists, performing artists, concept/art photographers, some documentary photographers, some designers, and some craftspeople. The sector also includes businesses that provide technical assistance, curators, gallerists, designers, publishers, editors, conservators, art critics and journalists. 1 5
  • 22. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Defining the population Given the paucity of official data on the creative sectors the decision was taken to collect a bespoke dataset that would form the basis of calculations of the size of the sector. Furthermore, the creation of a dataset of this nature allows for the option of repeating the exercise in following years, with a standardised questionnaire and methodology so as to create a longitudinal dataset9 . Most of the databases of organisations operating within the various sub-sectors stated above were obtained through cooperation with SACR and CAJ. The research team also obtained lists of organisations by contacting various associations, newspapers, sector specific publications and via an extensive internet search. In addition, the AMERU team further obtained contacts from the selected companies during the face-to-face interviews. Using a firm-level survey to estimate the overall contribution of the creative sector to the economy depends on the collection of accurate unit level data and a comprehensive sampling frame. A sampling frame is usually an exhaustive listing of all the firms and organisations in the population, and the sample is drawn from this frame. No such list exists for companies and organisations in the Gauteng creative sector. One thrust of the research was the establishment of a database of this nature. The compilation of this database was done through four primary avenues. 1. Through industry bodies, sector associations and other representative bodies. Although many industry bodies supplied lists of members this was not the case for all the bodies. 2. Through contacts obtained in the interviews. Those interviewed were asked whether they could provide the contact details of other individuals or organisations involved in the creative sectors. These were then added to the database and in some cases subsequently interviewed. 3. Through searching listings of companies, individuals, performances and venues in publications such as newspapers, sector specific publications and magazines. Extensive internet searches were also carried out. 4. Through discussion with the technical committee. The lack of a comprehensive population list of creative sector organisations is a limitation in this research. It is unlikely that the databases compiled for this project are exhaustive. Furthermore, they are likely to undercount those individuals or organisations that are informal, small, part-time and do not belong to a representative body. The impact of this on total output and value-added figures will be smaller than the impact on employment figures. This is because in most industries the bulk of the contribution to output and value-added is made by large firms. This is in contrast to employment where smaller firms are often a significant contributor to employment. Despite the lack of databases, it was possible to compile substantial lists of organisations in each sub-sector which served two purposes: • First, they enabled an estimate to be made of the aggregate size of the population of each sub-sector. • Second, they provided the sample frame from which it was possible to select, at random, sufficient names to make up a statistically valid sample for that population. Given that the population lists are sufficiently large and comprehensive, and given that the samples have been properly drawn, the GCMP is justified in assuming that the characteristics of those artists not included in the lists will be broadly similar to those on the lists. The data derived from the survey can be used, according to appropriate statistical procedures, for valid inference to the population of each sub- sector. Sampling Frame For the purpose of this research a stratified random sampling procedure was used. Stratification is the process of grouping members of the population into relatively homogeneous sub-groups before sampling. A simple random sample is likely to select a large proportion of smaller firms, since these form the bulk of the population. A random sample, dominated by small firms, would thus be likely to underestimate the total economic contribution. Since larger firms are likely to contribute a relatively larger proportion in terms of output and value-added than smaller firms, a stratified sampling procedure that over-samples these firms is appropriate. The sampling frames were thus divided between smaller and larger firms and separate random samples drawn from each group. This process improves the representivity of the sample by reducing sampling error and improves the accuracy of estimation. In order to cover as many organisations within the sector as possible, two types of questionnaires were administered. The first was an in-depth face-to-face interview. These interviews took approximately 40 minutes and asked detailed questions on ownership, finances, employment, funding, problems and technology. The second type of questionnaire was administered by telephone. This questionnaire contained a subset of questions from GAUTENG’S CREATIVE MAPPING METHODOLOGY 9 A longitudinal or panel dataset tracks the same firms over time. This allows for actual firm performance to be better understood. It also captures firm survival. It allows for analysis of issues such as firm growth and survival rates. M A P P I N G M E T H O D O L O G Y
  • 23. the long questionnaire. The focus of this questionnaire was on employment, turnover, costs and funding. In total 190 in-depth and 538 telephonic interviews were undertaken. The survey was also supplemented by interviews with important role players within each sector. The breakdown of interviews by sector is given below as well as the employment breakdown (full-time, part-time and freelancers). Table 3: Sample by type of interview and sector The table below (Table 4) provides for a breakdown of the sample by size of firm which allowed for a focus on micro (1-4), very small (5-19) and small (20-49) enterprises as indicated in the table below: Table 4: Sampling by firm size Table 5: Sub sector detail Telephonic interviews In-depth interviews Total Sector N % of sector N % of sector N % of overall Audio-visual 60 68% 28 32% 88 12% Cultural tourism/ heritage 63 84% 12 16% 75 10% Craft 88 77% 27 23% 115 16% Design 48 71% 20 29% 68 9% Fashion 52 83% 11 17% 63 9% Multimedia 44 80% 11 20% 55 8% Music 49 64% 27 36% 76 10% Performing arts 49 64% 27 36% 76 10% Print media and publishing 36 73% 13 27% 49 7% Visual arts 50 78% 14 22% 64 9% Total 539 74% 190 26% 729 100% Firm size 1-4 5-19 20-49 50+ TOTAL Type of interview N % of sector N % of sector N % of sector N % of sector N % of overall Telephonic 326 61% 163 30% 33 6% 14 3% 536 74% In-depth 107 57% 50 26% 23 12% 9 5% 189 28% TOTAL 433 60% 213 29% 56 8% 23 3% 725 100% SECTOR SAMPLE SIZE (INTERVIEWS) POPULATION SIZE SIZE OF FIRMS EMPLOYMENT Visual Arts Face to face: 14 Telephonic: 50 Estimated at 1,100 based on stakeholder discussions & the VANSA database. It is estimated that 1,000 firms have a median turnover of R150,000 p.a. and that 100 firms have a median turnover of R2,500,000. The total employment figure is estimated at 2,400 people based on median employee number of 2 people for firms with turnover under R1 million and 4 for firms with turnover greater than R1 million. Performing Arts Face to face: 27 Telephonic: 49 Based on the PANSA database the population is estimated at 289 entities as follows: Private Theatres: 6 State Theatres:15 University theatres:6 Other members: 262 Median turnover is estimated as follows: Private Theatres: R2 million State Theatres: R14 million University theatres: R1 million Other members: R123,500 Employment estimations are based on the following median number of employees: Private Theatres: 25 State Theatres: 54 University theatres: 32 Other members: 4 1 7
  • 24. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Table 5: Sub sector detail (continued) GAUTENG’S CREATIVE MAPPING METHODOLOGY SECTOR SAMPLE SIZE (INTERVIEWS) POPULATION SIZE SIZE OF FIRMS EMPLOYMENT Cultural Tourism & Heritage Face to face: 12 Telephonic: 63 The population estimate of 942 entities is based on the SAHRA inventory list, the DAC tour guide database and the Museums Online Directory as follows: SAHRA List: 192 Museums: 26 Tour Guides: 724 The turnover figure for the sector is estimated using the following medians per category: SAHRA List: R450,000 Museums: R450,000 Tour Guides: R45,000 The total employment figure was calculated using a median number of 17 employees per entity category. Multimedia Face to face: 11 Telephonic: 44 The population estimate of 600 is based on the Animation SA database and discussions with stakeholders as follows: Micro-businesses: 500 Medium businesses: 100 The turnover calculation is based on a median turnover of R120,000 for micro enterprises and R1,5 million for medium enterprises. The employment figure is based on a median employment of 1 employee in micro businesses and 4 employees in medium businesses. Music Face to face: 27 Telephonic: 49 The population estimate of 1,204 is based on the large companies, CWUSA membership and the 2006 Music Industry Directory: as follows: Large companies: 4 Artists: 700 Other organisations: 500 Estimated turnover was based on the following median estimates: Large companies: R143,5 million Artists: R12,000 Other organisations: R,05 million Employment was calculated using the following median employee numbers: Large companies: 46 Other organisations: 11. With regard to artists no median was calculated and the total figure of 700 from the CWUSA membership was utilised. Craft Face to face: 27 Telephonic: 88 The population is estimated 2390 entities. Turnover has been estimated by calculating the median turnover of companies as follows: Turnover less than R1million: R1,7 million. Turnover larger than one million: R36,000 Total employment was calculated based on median employment as follows: Turnover less than R1million: 3 Turnover larger than one million: 6 Audio-visual Face to face: 28 Telephonic: 60 The population size of 1,215 entities was calculated using the Gauteng Film Commission database as follows: Casting & crew: 226 Equipment etc: 225 Post-production: 169 Pre-production & R&D: 51 Production : 268 Support services : 276 Total turnover for the sector was estimated using a median turnover of R2 million for the population. The large broadcasters, M-Net, eTV and the SABC have been excluded from this calculation. Total employment for the sector was estimated using a median of 7 employees per entity. Once again the large broadcasters have been excluded from this calculation. Print Media & Publishing Face to face: 13 Telephonic: 36 The total population was calculated by extracting from StatsSA as they have category for print media and publishing PASA freelancers etc: 138 PASA members: 65 Distributors: 5 Print media National statistical datasets, the Stats SA AFS 2006 and LSS of 2001, have been utilized to estimate turnover. SIC 326c is estimated at R28,418 million with Gauteng representing 50% of this and publishing comprising 33% of the aggregate turnover. Gross Value Add is estimated at 43% of turnover. The 2006 PASA report was utilized to estimate aggregate turnover nationally and to verify the calculation above. The LSS dataset was utilized to provide an employment to turnover ratio which provides an estimate of total employment. M A P P I N G M E T H O D O L O G Y
  • 25. Table 5: Sub sector detail (continued) Methodological Instruments Collecting unit-level data that may be used to create a longitudinal dataset has numerous benefits. The use of a specifically designed questionnaire enables the collection of data on output, inputs and employment which are central to the creative mapping exercise. It also makes possible the addition of sector-specific questions that can be used to add further insights into the sector and to create indicators that can be updated over time and which track the dynamics of the sector. Longitudinal datasets that follow units of observation over time have a number of valuable aspects. A key benefit of these types of datasets is being able to separate within-firm growth and growth in the number of firms. Aggregate growth in the sector can be driven by either the entry of new firms or the growth of existing firms, or a combination of these effects. These effects have separate and distinct policy implications. Longitudinal datasets also enable research into the relationships between organisational characteristics and outcomes at the organisation level. For example, it may be that organisations that employ certain skill groups or have certain other characteristics are growing faster than other types of organisations. Without longitudinal data identifying these relationships is difficult. The firm-level survey methodology used in this research is similar to the approach taken by statistical agencies when estimating the size of a sector or sub-sector. Firm-level surveys were used in the Bogotá creative mapping (2002) to supplement other sources of data. Firm Level Questionnaire The collection of economic information was arranged into the following sections: • General information: to identify the businesses in the sector according to location, age, legal status, ownership, activity and type of organisation. • Sector development: to identify the needs and potential barriers to the development of the sector. • Employment: to identify the status, number, gender, race, age and qualifications of the employees. • Finances: to identify the businesses in the sector from the qualitative standpoint, including turnover, cost, income sources and debt. • Markets: to identify local and international clients. SECTOR SAMPLE SIZE (INTERVIEWS) POPULATION SIZE SIZE OF FIRMS EMPLOYMENT Design Face to face: 20 Telephonic: 48 The total population was calculatedusingtheWorldDesign Report (2007) which indicates that there are 2,872 entities in the sector. In consultation with experts Gauteng was estimated to host 65% of the total national population which was further adjusted by 10% to counteract over inflated national estimates. For the purposes of this study, government agencies and professional bodies have been excluded as have multimedia designers who are included in a separate category. Total turnover was calculated using a median of R486,366 for the entire population. Total employment was calculated using a median of 3 employees per entity. Fashion Design Face to face: 11 Telephonic: 52 The total population was calculated using a report commissioned by the City of Johannesburg on the Fashion District (JDA, 2004) and discussions with stakeholders. The population was divided as follows: High end designers: 100 Low end designers: 500 Total turnover for the sector was calculated by using median turnovers as follows: High end designers: R1,450 million Low end designers: R95,000 Total employment was calculated using a median number of employee as follows: High end designers: 12 Low end designers: 3 1 9
  • 26. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S • Funding: to identify the sources and application success rate of funding. See Appendix 1 and 2 for the complete Firm Level Questionnaire and Telephonic Questionnaire respectively. Primary Data Collection The research for this project was conducted between September to December 2007 using a 40 minute face-to-face questionnaire and a 10 minute telephone questionnaire. The questionnaire was designed predominantly as a trends/ tracking survey so that various aspects of the sector could be monitored over time. The questionnaire was also designed to allow for comparisons to be made across sectors and between countries. The overlap between these surveys allows that the dataset collected for this project to be used in future to make comparisons with these other data sources. As such, the following models were utilised: 1. The questionnaire provided in the Colombian Ministry of Culture (2007) publication “Guide to Producing Regional Mappings of the Creative Industries”. 2. A number of questionnaires used by BOP in their regional mapping work in the United Kingdom. 3. The Investment Climate Assessment Surveys undertaken by the World Bank. These surveys are administered to manufacturing, construction, retail and service firms in 178 countries worldwide, and use a comparable survey instrument10 . The full scale field work was preceded by a pilot study to determine the appropriateness of the research instruments. The Pilot The questionnaire was piloted with 6 businesses from various sub-sectors to check that the language used was suitable and that the questions were relevant. The sub-sectors were chosen since they had the most comprehensive population lists at the time of the pilot study as follows: • The performing arts sector (3 businesses). • The music sector (2 businesses). • The fashion sector (1 business). A random draw of organisations was selected from these sub-sectors and the organisations that were used for the pilot study were selected based on their willingness to participate and their location within the Greater Johannesburg Metropolitan Area. Furthermore, the pilot interviews attempted to interview a variety of different sized firms to ensure that the instrument would be appropriate to all firm sizes. Those organisations that were drawn but not interviewed in the pilot study were interviewed in the main survey. In general, the pilot was successful, indicating that the instrument was appropriate to the sector and that it would succeed in obtaining the required information. A number of minor amendments such as phrasing of questions, clarifying nature of legal status and interview technique were made based on the experience obtained during the pilot. This primary data collection raised a number of critical issues which are discussed below. Research Considerations a) Sampling freelancers and sub-contractors The mapping study included the large group of freelancers and sub-contractors to some extent as can be seen from the sample. However, in the absence of a comprehensive database of this workforce there is a risk that the study under-estimates the size of this group. This large and flexible workforce is difficult to track and quantify given the weak organisational base of the sector, although in some sectors this is being addressed. Not all representative organisations have managed to develop a comprehensive database of its constituents or have the personnel to maintain this database. As Joffe and Newton (2008:8) have argued: “Future methodologies will have to ensure that this workforce is appropriately quantified within the mapping framework. The current methodology relies purely on reporting from contracting agencies and enterprises, which is not a completely reliable source for this data”. GAUTENG’S CREATIVE MAPPING METHODOLOGY 10 See www.doingbusiness.com for an overview of these surveys. M A P P I N G M E T H O D O L O G Y
  • 27. b) Estimate of employment and value-added The mapping study needed to make two difficult and potentially controversial decisions. The first relates to the estimation of employment from the survey. Here a median value of employment was sought for the sample and this was multiplied by the estimated population. However there are two immediate difficulties which highlight the controversy: • The degree to which the sample provides an accurate median and the levels of accuracy in respondent information regarding employment including full-time, part-time, contractors and freelancers. • The appropriateness of methods to estimate the population size in the absence of official statistics, industry level surveys or any comprehensive database of the sector. The second decision was the use of multipliers and the determination of value-added. A multiplier quantifies the additional economic contribution beyond the direct contribution of an industry. This is because the creative industries, as with other industries, buys inputs from other industries and wages earned in the creative industries are spent outside the creative industries. In the report, value-added is calculated as output (turnover) minus inputs (all costs except labour and capital). In some cases this data was available while in others it was estimated from the average of other firms in the sector. As Joffe and Newton (2008:8) argue: “The expectation of mapping studies in South Africa, however, is that appropriate multipliers will be an outcome of the process. Within a single dataset, it is clear that this will not be possible, however future studies will need to either develop these or find alternative means for quantifying the up- and downstream value of investment in the creative industries”. In estimating the indirect contribution and thus the total contribution, a multiplier of 1.86 for output and 0.9 for value-added have been chosen has been used11 . c) Defining the sectors Key sectors operating in the creative industries which needed to be sampled for this mapping study included • The public sector (public cultural institutions such as museums (heritage), galleries (Visual arts), and public service broadcasting organisations (audio-visual). • The for-profit private sector (a wide range of commercial operations in all fields of cultural production and distribution). • Non-profit sector (such as theatre and dance companies, festivals, orchestras) some of which may receive government financial assistance12 . • NGO Sector (advocacy, organisations, actors and musicians unions, trade organisations). The technical committee was concerned as to the best way to treat purely government funded agencies, partly government funded agencies as opposed to purely commercial and non-commercial enterprises. As Joffe and Newton (2008:8) explain: “like many countries, all spheres of the South African government are significant investors in the creative industries. The challenge with including this information into mapping studies is the problem of duplicate accounting, and also an accurate reflection of the economic base given that government investment is not necessarily premised on returns”. The Creative Industries Mapping of Gauteng excludes government departments, regulatory bodies and professional and sector (or industry) associations. Of course, in many cases these were approached for information, sector databases and comment, but were excluded from the survey and hence the calculations of sector turnover, value-added, employment and other variables. This practice is applied uniformly across the sectors. Non-profit organisations and government-owned entities that participate directly in the activities of the sector (in contrast to fulfilling only facilitation and support functions) are included in the survey. These are entities such as theatres, non-governmental organisations and museums, to name a few. d) Confidentiality and financial information For most organisations, the guarantee of confidentiality was sufficiently compelling to provide financial information. Given the sensitivity of some of the information (including revenues and costs), however some organisations refused to provide this type of information. This means that the calculations of total output and value-added for the sector are based on a sub-sample of firms that provided this information. The estimates of these amounts are thus likely to be less accurate than estimates that could be obtained if all firms provided this information or if a larger sample was used. 11 As discussed in the comparative report, estimates for a Gauteng output multiplier vary between 1.7 and 2.6 (van Seventer, 1999). The higher multiplier is for models that assume that the Gauteng economy is closed i.e. money generated in Gauteng remains in the province. This assumption is likely to false, and the actual multiplier is likely to be closer to the open model estimate of 1.7. In addition, the Literature Review of this Gauteng Creative Mapping Project has a discussion about the value of multipliers and the work of the CCI based at the Queensland University of Technology in Australia called The Creative Trident which assesses the presence of creative employment in the broader economy (Australia Research Council Linkage Project, 2008). 12 See The Creative Economy Report (United Nations, 2008:71-72) for a discussion of public or quasi-pubic cultural institutions 2 1
  • 28. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S 5. Recommendations The data set This report has drawn together lists of businesses from a number of sources on the creative industries; however, there are still areas where data is particularly sparse and outdated. A key activity for the SACR would be to consolidate the existing databases and work with the representative bodies in each sector to validate the databases. Once this has been done, a new area of activity for the Creative Industries Directorate would be to ensure that these databases are updated and maintained over time. This may include requiring registration and updating from key players in each sector across the value chain, e.g.: • Creative industry businesses • Artists and creatives • Not-for-profit businesses and organisations • Representative bodies Regular mapping studies Since this mapping study is the first, there would be enormous benefit from tracking the data over time. In the first phase, the Department may wish to consider mapping every two years, building up to annual studies in the medium to long term. Collecting general data relating to the creative industries In the meantime the Department may wish to work with other research initiatives in the Gauteng government and the various municipalities to ensure that all primary data collection initiatives include, where possible, data for the creative sector and the broader creative economy. Increasingly, this information would be useful to many different industries and the Gauteng global city region initiative may wish to establish a Gauteng-based cross-industry research group to analyse this information. This could include • educational data • infrastructure audits and asset registers • economic data (GDP, employment, exports, investment) • broadband coverage and costs • unemployment and work seeking data • skills shortages and training opportunities and interventions • planning data (agglomerations and space requirements) • youth and women participation rates • district level specificities • crime Collecting data to measure the growing creative economy of Gauteng The creative economy will become an increasingly important characteristic of the Gauteng global city region and data will need to be collected to show the existence of the beneficial spillovers from the creative sector to other parts of the economy. These range from the general spillovers such as network spillovers and knowledge spillovers (the benefits of leading players to firms located nearby to new ideas and processes) to the specific benefit of the artistic and creative community through artistic spillovers, training spillovers and product spillovers (such as the innovation of artists work, training provided to the creative constituency and artist’s products)13 . The presence of creatives in all other sectors of the economy can also be calculated as has been done through the Creative Trident approach developed in Australia14 . GAUTENG’S CREATIVE MAPPING METHODOLOGY 13 The literature review outlines these ideas of the positive externalities deriving from the creative industries as a whole. 14 See for instance, Higgs, Cunningham and Bahkshi, 2008 M A P P I N G M E T H O D O L O G Y
  • 29. Literature Review: Conceptual framework for the Creative Industries Defining the creative industries internationally There are a number of diverse and differing definitions of the creative industries. UNESCO defines them as “those industries that combine the creation, production and commercialization of products which are intangible and cultural in nature. These contents are typically protected by copyright and they can take the form of goods or services” (UNESCO, undated). The UK government’s definition is “those industries which have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property” (DCMS, undated). Both these definitions emphasise the intellectual property or copyright aspect of the creative industries, the creative or cultural origin of the goods or services and the commercialisation or wealth and job creation of the creative industries. Many studies choose to define the creative industries as those that have creativity as a focus of their activities. This includes not only the generation of creative content, services or products but also the value-chain associated with this. This was the approach followed by the DACST Cultural Industries Growth Strategy (CIGS) report, the Bogotá creative mapping (2002) and also implemented in the official statistical reports in Singapore (2003), UK (2001, 2006). The concepts relating to the creative sector as well as their definitions have changed over time. Landry summarises this chronology succinctly: “Back in the late 1980’s when most of the constituent ideas were developed the key terms discussed were: culture, the arts, cultural planning, cultural resources, the cultural industries. Creativity as a broad based attribute only came into common, as distinct from specialist, currency, in the mid-1990’s. For example Australia’s ‘Creative Nation’ instigated in 1992 by Paul Keating spelt out the country’s cultural policy. In the UK by contrast it was the publication of Ken Robinson’s national commission on creativity, education and the economy for the UK Government ‘All our Futures: Creativity, Culture and Education’ that put creativity onto the political agenda. Later some of the phraseology changed. The cultural industries became the creative industries and the creative economy and the notion of the creative class then emerged in 2002. The publication of Richard Florida’s book ‘The Rise of the Creative Class’ gave the ‘movement’ a dramatic lift with the danger of hyping the concept out of favour” (2005: 5-6). The next section reviews the conceptual models and classification systems used to understand the creative industries. Review of models and classification systems DCMS (UK Department of Culture, Media and Sport, 1998, 2001) Creative industries are defined by the UK government as those requiring creativity, skill and talent with the potential for wealth and job creation through the exploitation of their intellectual property. In this definition, 13 sectors close to the UNESCO definition of the cultural sectors are included as shown in the table below (Table 6). Concentric circles (Throsby, 1998 & 2001) This model is based on the proposition that the cultural value of cultural goods is the distinguishing characteristic of the creative industries. In this model, creative ideas originate in the core creative arts in the form of sound, text and image and these ideas and influences diffuse outwards through a series of layers or ‘concentric circles’. As one moves outwards from the centre the proportion of commercial content to cultural content rises. Figure 3: Concentric Circles (Throsby) Source: Throsby (2007: 5) 2 3
  • 30. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S In a recent report prepared for the UK’s DCMS, The Work Foundation developed a stylised typology of this model of the creative industries as represented in the diagramme below (see Figure 4 below) borrowed from the EU’s ‘The Economy of Culture’ (EU, 2006) and originally from Professor David Throsby as illustrated in figure 3. The creative industries are mapped as a series of concentric circles radiating out from the ‘bulls-eye’ of core expressive value creation. This is the home of the artists – musicians, lyricist, dancer, choreographer, composer, writer, painter, sculptor, scriptwriter, and designer. Professor David Throsby introduced the term expressive values to enlarge cultural meaning and understanding by encompassing every dimension in the realm of ideas including aesthetic value, spiritual value, social value, historical value, symbolic value and authenticity value of cultural goods and services too (Throsby, 2001). The stylised typology of the creative industries introduces the relationship between the core creative fields, cultural industries, the creative industries and the rest of the economy into the diagramme as well as the notion of expressive value and outputs unlike the original concentric circles model. Figure 4: The creative industries - a stylised typology Source: The Work Foundation, 2007 Symbolic Text (Hesmondhalgh, 2002) This model arises out of the critical-cultural-studies tradition in Europe and the UK and focuses attention on popular culture rather than the ‘high’ or ‘serious’ arts typically the concern of social and political establishments. The industrial production, dissemination and consumption of symbolic texts are conveyed to consumers by means of various media such as film, broadcasting and the press. In The Cultural Industries, Hesmondhalgh explores whether shifts in cultural production has led to more or less diversity and quality in cultural texts through a political economy approach to emphasis the central relationship between symbolic artefacts and the financing and organisation of their production (2002: 264). Hesmondhalgh and Pratt argue that the boundary between symbolic, cultural production and other ‘non-cultural’ kinds of production as “porous, provisional and relative, and to think about these boundaries in terms of the relationship between the utilitarian functions and non-utilitarian (artistic/aesthetic/entertainment) functions of symbolic goods” (Hesmondhalgh and Pratt, 2005: 6). WIPO Copyright Model (World Intellectual Property Organisation, 2003) In this model, all industries involved in the creation, manufacture, production, broadcast and distribution and consumption of copyrighted works are included. Industries that produce the intellectual property – the embodiment of the creativity that is needed to produce the goods and services of the creative industries – are distinct from those that are needed to convey the goods and services to the consumer. Four groups of copyright-based industries are outlined with the detail in the table below: • Core: These industries are wholly engaged in the activities listed above • Interdependent: Refers to products that are jointly consumed with the products of the core group of industries or deal with facilitation equipment • Partial: These industries only have a part of the production output or process linked to copyright-protected material (design, architecture, furniture) with a significant part of the value-added produced not attributed to copyright components • Non-dedicated support industries: These industries rely only remotely on copyright material but remain relevant as copyright generates part of their business such as internet and transportation. GAUTENG’S CREATIVE MAPPING METHODOLOGY M A P P I N G M E T H O D O L O G Y
  • 31. The WIPO guide (WIPO, 2003) aims to provide a systematic way to isolate the effects produced by copyright in the approximately sixty categories identified. WIPO’s Dimiter Gantchev acknowledges that the structure of industry and copyright markets may vary; as will the level of copyright protection and the level of dependence on copyright. However the approach being recommended is not to mechanically add up all the identified activities, but rather “to focus on quantifiable and measurable direct and indirect impact. It is not suggested to study multiplier effects, tertiary or quaternary economic impact which are not tangible and often non-quantifiable” (Gantchev, 2004:8). Table 6: Creative Industries Models and Associated Sectors Creative Economy Model (UNCTAD, 2006, NESTA 2008) With the increasing usage of the term ‘Creative Economy’ it is useful to capture the relationship between the core creative fields, cultural industries, creative industries and the broader creative economy as evident in the figure below (Figure 5). An added element in this figure is the clear outline of the upstream and downstream activities of the creative economy. This model has been adapted from industry mapping studies in the city state of Singapore (Heng, Choo and Ho, 2003). 1. DCMS Model 2. Symbolic Texts Model 3. Concentric Circles Model 4. WIPO Copyright Model Advertising Architecture Art and Antiques market Crafts Design Fashion Film and Video Music Performing arts Publishing Software Television and radio Video and Computer games Core Cultural Industries Advertising Film Internet Music Publishing Television and radio Video and computer games Peripheral cultural industries Creative arts Borderline cultural industries Consumer electronics Fashion Software Sport Core Creative Arts Literature Music Performing arts Visual arts Other core cultural industries Film Museums and libraries Wider cultural industries Heritage services Publishing Sound recording Television and radio Video and computer games Related industries Advertising Architecture Design Fashion Core copyright industries Advertising services Copyright collection management societies Motion picture and video Music Theatre and opera Press and literature Software and databases Television and radio Photography, Visual and graphic art Interdependent copyright industries Blank recording material Consumer electronics Musician instruments Paper Photocopiers, photographic equipment Manufacture, wholesale and retail of TV sets Radio CD recorders Computers and equipment Cinematographic instruments Partial Copyright Industries Architecture Clothing, footwear Design Fashion Household goods Toys 2 5
  • 32. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Figure 5: Composition of the Creative Economy In this model, the “upstream arts” refers to traditional art forms such as the performing, literary and visual arts, which may have commercial value in themselves, whereas “downstream arts” refer to the applied arts such as advertising, design, publishing and media-related activities and which derive their commercial value principally from their applications in other activities. All activities – commercial and non commercial – are incorporated in this model with the symbiotic relationship between all the sectors of the creative industries emphasised. In this way, it is clear that growth or decline in one area will have an effect on another area. The concept of the creative economy is an evolving one based on creative assets embracing economic, cultural, social and technological aspects (CAJ 2008). Crucially it has been identified as a feasible policy option to diversify economies and improve trade and development gains in countries around the world (Brandford, 2004). The characteristics of all the industries that comprise the creative economy are premised on knowledge-based economic activities, the intensive use of creativity to add value to products and services, and their ability to generate income from trade and property rights. Recent reports from NESTA highlight the importance of thinking in terms of a creative economy rather than a set of creative industries by drawing attention to two new pieces of research which suggest that creative industries play a significant role in the UK innovation system. One finding shows that “firms that spend twice the average amount on creative inputs are 25% more likely to introduce product innovations” (NESTA, undated). The other finding relates to the work of the ‘Creative Trident’, introduced by Stuart Cunningham and Peter Higgs of the ARC Centre of Excellence for Creative Industries and Innovation (CCI) at Queensland University of Technology, that creative workers are more integrated in the wider UK economy than previous mapping studies implied with more creative specialists working outside the creative industries than within them (Higgs, Cunningham and Bahkshi, 2008). By focusing on creative occupations, the Creative Trident approach shifts the focus from a sector specific one to understanding the full economic contribution of creativity to the wider economy. In this way creative occupations are tracked not only in traditional creative industries, but in manufacturing and the wider service industries, such as health, education, government and business services. This is particularly evident with design occupations many of which are embedded in other industries resulting in the design sector being undercounted by approximately 36% in Australia. As Cunningham explains: “People who are embedded – that is, employed in creative occupations – constitute almost 2 percent of the total Australian work force. Of the total population with creative qualifications at the last Census, our figures show almost 70 per cent of those employed are working outside the specialist creative industries” (2006:3). The creative industries defined in South Africa The South African research community has been influenced by the debates internationally, particularly those of UNESCO, UNCTAD, the DCMS in the UK, Canadian Heritage and AusCouncil in Australia. As CAJ observes, “South African research in the cultural industries has changed focus as international definitions have changed. The first study in South Africa borrowed the definition of the cultural industry from both UNESCO and the work of the Department of Culture and Media Services (DCMS) in the UK but adapted the parameter and scope of the sectors to the South African context as well as the research objectives” (2008:8). The Creative Strategy Group (1998) which conducted the Cultural Industries Growth Strategy research for DACST defines the cultural industries as GAUTENG’S CREATIVE MAPPING METHODOLOGY M A P P I N G M E T H O D O L O G Y
  • 33. the group of sectors where creative input is the primary input into the product or service being created. The definition includes the following sectors; music; the visual arts; the publishing sector based on writing and literature; the audio-visual and media sector; the performing arts; the multimedia sector; craft; cultural tourism and the cultural heritage sector. The definition is extended to include sectors where the creative input is secondary but essential for enhancing the value of other products whose marketability and effectiveness would be lessened without this input. These sectors include design; industrial design and fashion; and the graphic arts. The report, titled Creative South Africa: A Strategy For Realizing the Potential of the Cultural Industries, emphasises that the cultural industries are not only concerned with the front end of creative production – the ideas, people and/or performers – but also with those that market, distribute and provide outlets for the products and services. Thus, the definition is similar to both the UNESCO and the UK definitions. Given that the Cultural Industry Industries Growth Strategy (CIGS) focused on only 4 of the commercially active cultural sectors, namely music, film and video, publishing and craft (DACST, 1988:a-d) an impression was formed amongst creative industry stakeholders and creative industry researchers that these were the only sectors the South African government and their consultants at the time considered to be part of the cultural industries. From the definition provided above, this was clearly not the intention. In CIGS, the term cultural industry was used to refer to different types of cultural expression which are embedded with symbolic meaning as highlighted by the UNESCO definitions (UNESCO, 1982). It followed that since culture provides important public benefits, public policy should provide support for cultural industries. Using this definition, cultural industries consist of goods and services whose primary economic value is derived from their cultural value or symbolic value. This definition includes what has been called the ”classical” cultural industries – broadcast media, film, publishing, recorded music, design, architecture, new media – and the ”traditional arts” which include visual art, crafts, theatre, music theatre, concerts and performance, literature, museums and galleries – all those activities that have been eligible for public funding as ”art” (O’Conner, 1999). These definitions provided the case for public policy and specific interventions to ensure widespread cultural participation and expression, which is now well accepted and understood that if left entirely to the market, there will be a limitation on the production and consumption of culture and hence “a significant democratic deficit both for individuals and society as a whole” (Galloway and Dunlop, 2006: 46). Further policy work in South Africa, specifically for the Gauteng Government through the Creative Industries Development Framework (CIDF) used the term creative industries to broaden the scope of engagement and align discussions with the broader international debates about the creative economy and the role of creative industries as a core of the creative economy (Gauteng Provincial Government, 2006). The CIGS report and the Gauteng CIDF recognised that at the heart of creative industries is creativity. This quality can also be found in industries which have creativity as their key ingredient such as advertising and architecture which are included in the definition of the creative industries in the UK but not as yet in South Africa. Although the term ‘creative economy’ has been used in the South African context, particularly with respect to the Gauteng Creative Economy, new methodologies such as the Creative Trident have not yet been utilised to assess the full contribution of the creative occupations to the South African economy. The Gauteng Creative Mapping Project is in fact the first attempt to use quantitative methodologies to assess the value of this sector in South Africa. Economic analysis of the creative industries A number of analytical approaches are used in assessing the contribution of the creative industries to the general economy and their impact on cities and regions. A few of the ones used in South Africa are considered below. Industrial organisation analysis Industrial organisation analysis involves the measurement of standard economic variables (gross value-added, levels of employment of different categories of labour, levels of investment) as is typical of sectoral analysis. In many ways, it is also the core of mapping studies. It was also the motivation for the CIGS study by the DACST, that is, the need to talk the language of conventional economics in order to convince the rest of government, principally the Department of Trade and Industry (DTI) that the creative industries are a significant contributor to the GDP. Where countries collect statistics beyond the 3 digit SIC code levels, the traditional method of industry organisation analysis can be employed. Even in this case, however there will be the challenging question of boundaries and definitions of the sectors of the creative industries. In both the CIGS study, as well as the Gauteng Creative Mapping Project (GCMP), researchers were unable to use official statistics as they were not sufficiently detailed and there was no consistent view on the definition and boundaries of the creative industries. Nevertheless, the GCMP has collected the standard economic variables through a firm-level study and in so doing, is able to present an analysis based on this standard industrial organisation analysis which would allow a baseline from which further analyses can be undertaken. Economic impact analysis Economic impact studies are typically done for cultural events such as festivals or institutions such as museums or heritage sites (Seaman, 1987; 2 7
  • 34. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Johnson and Sack, 1996; Thompson, Berger and Allen, 1998; Antrobus, Webb and Mather, 1997). The key question of economic impact studies is the effect on the local community and economy as well as the benefits that flow to this local community or economy. This is often done by comparing scenarios that include the event or institutions and those that do not. Unfortunately with many economic impacts being undertaken by the responsible authority for the event or institution the economic impact is often exaggerated as part of advocacy. Independent economic impact studies are useful as a contribution to the understanding of the economic and cultural value of projects such as the Grahamstown Festival in South Africa (Antrobus, Webb and Mather, 1997). Economy wide contribution Harry Hillman Chartrand (1984) lists four distinct levels of economic contribution, which he calls ‘impacts’, that the creative sector has which allow one to isolate the differing level of contribution of the creative industries to the general economy. The primary impact measures the direct and quantifiable contribution to the economy. This is the direct number of jobs and the direct value-added by the sector. It extends through the value chain from the creative originators of the product or service, through the production, distribution and consumption of the product. The creative sector also contributes directly to the economy by increasing the capital stock of the economy. This includes the physical capital, such as facilities and venues, the knowledge or creative capital, such as scripts, scores and paintings, and the human capital, which is the knowledge, skills and education of those involved in the sector. The secondary impact measure the indirect and quantifiable contribution to the economy. This includes multiplier effects, as those employed in the sector spend their wages in other sectors, or creative industries buy inputs from other sectors. It also includes the contribution to the design and marketing of consumer goods and services, the contribution to industrial location (industries and workers may choose to locate in certain areas because there may be a vibrant creative sector), and the contribution to the balance of trade. Exports of products or services directly or indirectly through tourism generate foreign currency which strengthens the balance of payments and provides revenue for the purchase of imports. The tertiary impact measures the direct and non-quantifiable contribution to the economy. This impact involves the contribution to industrial invention, innovation and diffusion, productivity and the contribution of the creative sectors towards a diversified industrial structure. A vibrant creative environment can encourage an innovative institutional climate particularly since the psychology of the creative process is an area of commonality between the arts and sciences (Meyer, 1974). The tertiary impact also includes volunteerism. The quaternary impact measures the indirect and non-quantifiable contribution to the economy. The creative industries improve the quality of life, an end in itself but also an important factor leading to increased motivation and productivity with implications for economic growth. They are also important in terms of cultural identity, in both preserving tradition and culture but also in creating new cultural identities. While mapping is clearly not an economic impact analysis as described above in relation to theatres, festivals or museums it is becoming increasingly important to assess the broader economic contribution that the creative sector makes to the general economy in the way that Chartrand describes. Value chain analysis The cultural production chain can be conceived as one in which the creator or artists begins with a creative idea and which is then combined with other inputs to produce a cultural good or service passing through stages in which value is added until the good or service reaches the consumer. Charles Landry, in his work for Comedia on comparative analyses of cultural industry sectors in cities, modified the 5 elements of the value chain as developed by Michael Porter (product development, manufacturing, distribution, marketing and sales and after sales services). He outlined the five-column model for cultural industries comprising beginnings, production, circulation, exhibition and audience feedback. In southern Africa, this analysis was used both in the Cultural Industries Growth Strategy project for DACST (1988:a-d) and for the ILO research in the SADC region (Joffe and Jacklin, 2003; Lebethe, 2003; Bolnick, 2003 and Ambert, 2003). As Joffe and Jacklin explain: “Beginnings refer to the ‘cultural milieu’ or context in which a television or film production is conceived. Production refers to the process by which cultural goods such as a film is produced. Circulation refers to the process of distributing and marketing the product in the market place and delivery refers to the means by which the audience accesses the production. Lastly, audience reception and feedback refers to the response from audiences to the television production or feature film, which feeds into the beginnings or cultural context for new ideas” (2003:12). For the ILO research this model was adapted and represented as a circular diagram to emphasis the importance of the feedback loop from ‘audience reception’ to ‘beginnings’. GAUTENG’S CREATIVE MAPPING METHODOLOGY M A P P I N G M E T H O D O L O G Y
  • 35. The value chain approach has been found to be useful in showing the relationship between the ‘pure’ or traditional arts and the commercial or industrialised arts and culture by seeing them as ‘stages’ of the process in the production of economic and cultural value. Gauteng’s CIDF used the value chain analysis to illustrate the range of role-players in the sector as well as the core functions as illustrated in the figure below. Figure 6: Value chain analysis Source: Gauteng Provincial Government, 2006 There have been recent developments in the use of the value chain approach in Canada. Connectus Consulting Inc. for Canadian Heritage (2007) in their assessment of how the digital economy is transforming the value networks of the Canadian arts and cultural industries have adapted standard value chains “value networks” which are more fluid arrangements that reflect the non-linear base of value chains and begin to identify relationships between players. Not only do these value chains map the relationships between all the role-players from artist to consumer, government to industry, but they also illustrate functions which do or don’t add value or create new rights. The value chain is shown as three broad stages: • Creation/ Production comprising the primary creators and producers who organise the resources required to create the product • Aggregation comprising the group of product aggregators such as record labels, book publishers, television station or new media websites whose role it is to assemble and sell a large number of cultural products • Distribution/Retail comprises the product distributors and the makers of media receivers (such as a radio signal) and finally the audience or consumer. Key features of this value network are described and analysed from risk management, gatekeeping and what is called ‘value network disconnects’ points of view. The report describes how a product can flow to the consumer but the revenue does not reach the primary creator. This is described as a ‘disconnect’. An example in the music industry is where music and video is distributed to the consumer on the internet through distribution platforms (such as Limewire). This is used as a marketing tool for internet service providers who sell connections while “the value perceived by consumers includes the content they receive” (Connectus Consulting Inc, 2007:19). The authors explain: “In that sense, electronic download of music is generating revenue, but no revenue currently passes from the ISP to any of the producers of music in respect of this use. Since many music rights holders have not authorised the distribution of their content and this ‘free’ music is nonetheless distributed and its value perceived without being monetized through any revenue model, a disconnect is clearly present”. The figure below shows a generic value network: 2 9
  • 36. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Figure 7: Generic Cultural Value Network Source: Connectus Consulting Inc. (2007:18) Urban and regional growth Relevant to this regional mapping study is the work of assessing the contribution of the creative industries to urban and regional growth. In the forefront of this work is Charles Landry and his company, Comedia in their numerous publications on the creative city and the seminal work The Creative City: A Toolkit for Urban Innovators (2000). This work has included the notion of the ‘creative cluster’ (DTI, 2001), ‘cultural quarter’ and ‘creative city’ (Landry and Bianchini 1995; Landry 2000). The central argument is that the creative industries have the potential to encourage regional economic growth and employment creation and, in particular to regenerate depressed urban areas and enhance the liveability of cities thereby contributing to urban development. This work influenced the identification of Newtown as a cultural quarter of the city of Johannesburg (Creative Strategy Consulting, SQW, 1999). The argument that creative industries can contribute to urban and regional economies and create the conditions for inward investment is at the core of the focus on the creative industries in the development of Gauteng’s Global City Region programme (Gauteng Provincial Government, 2007). The Gauteng Creative Mapping Study provides evidence of the value of the creative industries for Gauteng from which further analyses can be done on their impact on the broader Gauteng economy. The contribution of the creative industries to the economy – evidence from other countries The Methodology section outlines the history of measurement and mapping of the creative industries and notes that both help ‘prove’ the contribution of creative sectors to the overall economy. This section takes a few highlights from some of the most recent studies to outline what the contribution is and how methodologies and concepts are changing. Creative mapping studies attempt to measure the quantifiable contribution of the creative sector on the economy. This includes the primary (or direct) impact on jobs and value-added, and also the secondary (or indirect) impact through multiplier effects. The results of mapping studies in the UK, Singapore, Canada and Australia, while not directly comparable across countries since definitions of the creative sectors do vary, illustrate the significant contribution that the sectors make to the economy as a whole. It is likely that this underestimates the total contribution given the difficult to quantify relationships between the creative industries and other aspects such innovation, general well-being and productivity. The UK Department for Culture, Media and Sport study of 2006 argues that the creative industries in the UK contributed 7.3% of Gross Value-added (GVA) in 2004. This was equivalent to £57 billion. Over the period 1997 to 2004 the creative industries increased their GVA at an average annual rate of 5% and grew employment by 2 per year which was significantly higher than the economy wide rate of 3%. Furthermore, they exported £13 billion worth of goods and services and employed 1.8 million people (DCMS, 2006). In Singapore growth rates in various creative sectors can be compared in 5-yearly averages back to 1986. The creative industries directly created value of S$3 billion in 2000 (1.9% of GDP), employed 46,850 people (2.2% of employment) and exported S$536 million worth of goods and service. GAUTENG’S CREATIVE MAPPING METHODOLOGY M A P P I N G M E T H O D O L O G Y
  • 37. The indirect impact of the creative sector, which includes associated downstream distribution firms, is similar, meaning that the total contribution of the creative industries is close to double the direct contribution. In addition to these significant levels of contribution, the Singapore creative industries have experienced higher rates of growth than the economy as a whole. Over the period 1987 to 2000 the creative industries grew by an average of 17.2% per annum compared with average annual GDP growth of 10.5% (Heng, Choo and Ho, 2003). In Canada, Statistics Canada framework and data (Statistics Canada, 2003) measures the contribution of the creative industries. It estimates that the creative industries directly employed 616,000 workers in 2003 with the real value-added output for cultural industries estimated at R46 billion in 2007 or about 3.8% of total real GDP. Using macroeconomic models of the Canadian economy to assess the economic footprint of culture, the Conference Board of Canada estimates that the full contribution is $84.6 billion (7.4% of total real GDP) with the full employment contribution (including direct, indirect and induced effects15 ) being over 1.1 million people in 2007 (2008:7). Statistics Canada also conducts an annual survey of consumer expenditures from which household spending on cultural goods and services can be assessed. The Conference Board of Canada extracted the relevant data to show that the average household in Canada spent about $1,650 (current dollars) on cultural goods and services which translates into $21 billion in 2007 given an estimated 12.6 million households (2008:34). Within this figure the trend shows the increasing role interactive media is having on household spending, with spend on cable and satellite television displacing written media as the largest item. Total government spending (at all spheres of government) but excluding intergovernmental transfers, reached $7.3 billion in the 2003/4 fiscal year, slightly down on the 1999 figures. The most recent study in Australia, the Creative Industries Mapping Project conducted by the ARC centre of Excellence for Creative Industries and Innovation (CCI) shows the full extent of the contribution of the creative industries by analysing not only jobs in the creative industries but rather creative occupations in all industries as opposed to other occupations in both creative industries and other industries (Higgs, 2008). This model, the ‘Creative Trident’ is a major innovation for how one values the contribution of the creative industries. Using the 2001 Australian census, the study shows that while there were approximately 300,000 people employed in the Creative Industries (half of which were creative occupations) representing 3.7% of the total Australian workforce, there were a further 137,000 people working in creative occupations in other industries (finance, government, education and manufacturing) resulting in a 437,000 strong creative workforce accounting for 5.4% of the total workforce. This is illustrated in Figure 8 below which illustrates the significant contribution of creative occupations in the economy. It shows that 55% of creative occupations are located in other industries while creative occupations in other industries account for 35% of total employment. In the creative industries, the figure below illustrates that creative occupations account for 45% of all employment while the most significant figure is the creative occupations in both the creative industries and all other industries account for a massive 64% of total employment. These figures are based on approximately 155,000 creative businesses which were registered with Australian Business Register (ABR) in 2006 and which account for 6.6% of all businesses. Two segments account for 74% of creative businesses. These are software development and Interactive content and Architecture, Design and Visual Arts accounting for 39% and 35% respectively of all these businesses. Figure 8: The number of people employed in Specialist, Embedded and Support roles within the Australian Creative Workforce (2006) Source: Australian Research Council Linkage Project, 2008 These figures clearly illustrate the significant economic contribution that the creative sector can make to the economy as a whole. These examples also highlight the rapid growth rates of the sector. These growth rates are almost double that of overall GDP growth in these respective countries and indicate that the contribution of the creative sectors to the economy as a whole has been growing over a long period. 15 The economic footprint of culture is defined as the combined direct impact (the value-added on the economy of firms directly producing cultural goods and services), the indirect impact (the value-added that the previous group of firms generates their demand for intermediate inputs other support services) and the induced impact (which is derived when employees of the both groups spend their earnings and owners spend their profits) (The Conference Board of Canada, 2008:37). 3 1
  • 38. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S The economic contribution of the creative industries in South Africa The economic contribution of the creative sectors on the South African economy is not well understood. One of the factors contributing to this is the lack of reliable data. Despite these data limitations, a number of researchers and policy documents have attempted to quantify the impact of the creative industries on the economy (See Table 7 below for a rough timeline of research output in South Africa). The CIGS report estimated that the music, film and television sectors in South Africa employ more than 100,000 people (Cultural Strategy Group, 1988). These figures were estimated based on consultations with industry experts and in the case of craft on census and Labour Force Survey estimates. The music sector was estimated to have a turnover of R900 million in 1996 (R1.6 billion in 2006), employed 12,000 and was valued at R2 billion (R3.4 billion in 2006)16 . The entertainment industry, which includes the film and television sector, was estimated to employ 20,525 people and was valued at R7.4 billion (R12.8 billion in 2006). The report valued the publishing industry in the region of R6 billion (R10 billion in 2006) and estimated that it employed between 60-80,000 people. The inability to disaggregate ‘core’ data collected by Statistics SA (Stats SA) such as the labour force and census data restricts analysis (Newton, 2003). Furthermore, the DPRU as part of the establishment of the South African Cultural Observatory17 highlights other problems with data (DPRU, 2003). These include the fact that there is no single source (such as StatsSA) collecting data, and that where data exists within industries it is often limited to businesses or individuals that are members of the organisation collecting the data. This introduces a selectivity bias into the data. Data collected by StatsSA, such as the bi-annual Labour Force Survey, allows for provision to record activities at the 3-digit Standard Industry Code (SIC) level but this is not detailed enough to isolate creative activities and sample sizes are too small to obtain reliable estimates for the relevant sectors. CreateSA produced a National Skills and Resources Audit in 2003 which was based on a postal survey of 1,059 returns and 16 case studies. It was a national survey but Gauteng made up the largest (42%) portion of responses. The bulk of the sample comprised urban-based organisations and micro-enterprises (defined as employing between 0-9 employees) which constituted 53% of the sample. Close corporations and NGOs were the dominant legal status of firms. The audit also highlighted the relatively young age of enterprises in the creative sector – just under half of those firms surveyed were older than 10 years, with a large group of older organisations. It agues that this age profile illustrates the increase in government investment in the arts post-1994 – explaining the new firms – but also the sustainability of the sector – explaining the older firms. The Audit further found that within the sample, revenue is generally low and in most cases survivalist, however, the majority of respondents felt that revenues had improved between 2000 and 2001. The majority of products sold by the respondents were to other creative sectors. 68% of products and services were sold within the province but 11% did sell to the international market. 39% of firms reported that they were exporting and 23% said that they had been participating in the export market for more than 3 years. Table 7: Timeline of Key Cultural Industry Research in South Africa 1994 ACTAG Report, DACST 1996 White Paper on Arts and Culture in SA 1998 Cultural Industry Growth Strategy, DACST 1999 Johannesburg – the creative capital, City of Johannesburg 2000 Promoting the Cultural Sector through Job Creation, ILO 2000 The Film industry in South Africa, PwC 2001 Music Industry Task Team, DAC 2001 The music industry, KPMG 2002 MAPPP-SETA sector brief, DOL and EU 2003 Create SA National Skills and Resources Audit, Create SA 2003 Research towards setting up a Cultural Observatory, HSRC and DAC 2003 Video sales and video rental, NFVF 2003 Scoping the creative industries in Johannesburg, City of Johannesburg 2004-8 Sector Skills Plans for all creative sectors: MAPPP-Seta 2005 Creative Industry Development Framework: Gauteng Province GAUTENG’S CREATIVE MAPPING METHODOLOGY 16 The term ‘valued’ is the amount that includes the contribution of non-core activities. This is gross output or turnover and is not equal to value-added. See www.culturalobservatory.org.za. 17 See for instance, Higgs, Cunningham and Bahkshi, 2008 M A P P I N G M E T H O D O L O G Y
  • 39. Table 7: Timeline of Key Cultural Industry Research in South Africa (continued) The report found that African women were the largest category of employees (30%), followed by African males (28%). Overall, women comprised 54% of the employed. Women had a higher representation in management than men (69%) and Africans were the dominant race group (40%). The audit also asked questions on the education levels of those participating in the sector. 39% of those participating in the sector had completed secondary education with graduate education (13%) the next highest. The main reasons that vacancies are unfilled are due to the skills shortage and relatively low wage rates. This in turn means that firms experience delays in developing and launching new products and the inability to meet targets. The audit found that the most common strategy for dealing with unfilled vacancies is through the use of freelance labour. Freelances are used to perform a range of functions, the most common being: the production of core products and services, technical services and the marketing of products and services. 70% of respondents indicated that they were currently experiencing skills shortages. The primary areas of these shortages were in the areas of management, communication, fundraising and information technology, both basic and advanced. Finding and accessing alternative finance was the most common development challenge over the next 5 years. Market development, technological challenges and training were also identified as major challenges with technology seen as an important tool for the creative industries. This is evidenced by the 40% of respondents who use technology in all aspects of their business as well as the additional 40% who utilise technology for marketing, communication and public relations. The audit describes the creative industries as highly diverse but characterised by smaller firms and concentrated in urban areas. There is a strong women bias and young women are well represented. A large number of businesses are young. Obtaining capital and developing markets are the primary challenges faced by the organisations within the sector. The City of Johannesburg commissioned a scoping investigation into the creative sector (Newton, 2003) as part of its economic development strategy. This was done through a review of secondary data and data extracted from the Create SA survey described above. 104 cases were used from this dataset. A further 40 in-depth interviews were conducted to provide additional insights. This study stresses the ‘people’ rather than ‘product’ centred nature of the creative industries and highlights the importance of networks, peers and the community for the creative sector. Johannesburg is an important hub of creative activity in South Africa and has a number of annual arts events and venues. It is also the home to statutory bodies such as the National Arts Council (NAC) and the National Film and Video Commission (NFVF). Johannesburg is also a site of significant government (local, provincial and national) investment in initiatives that relate to the creative industries. These include investment in skills development (through the MAPPP-SETA), local economic development (through organisations such as BlueIQ – part of the Johannesburg Development Agency) and poverty development (through funds provided by the National Treasury to the Department of Arts and Culture). Furthermore, Johannesburg is the location of a number of head-offices of large media and music groups. However, the report also argues that the creative industries are highly fragmented with a number of various bodies representing interest groups across the sector. This makes information sharing, networking and consultation very difficult. This report analyses the Johannesburg data in a similar way to the Create SA report described above. The results are similar to those for the national survey and emphasise the young nature of the firms – the largest number of firms were established between 1995 and 1999. The report considers the spatial nature of the creative sectors. There seems to be large agglomeration effects. Firms are clustered in District 3 (Rosebank/ Sandton), District 4 (Northcliff), District 7 (Alexandra), District 8 (CBD) and District 10 (Diepkloof/ Meadowlands). The historically white-owned businesses of the music, film, design and multimedia predominate in District 3 and 4 whereas performing arts, heritage and crafts predominate in Districts 7, 8 and 10. Most firms are involved with the development and origination of content but that distribution, agents and retail are more concentrated leading to potential bottlenecks and market-power in these parts of the value chain. The development challenges faced by Johannesburg are similar to those at the national level. These include access to alternative sources of funding, developing markets and new products, networking within the creative industries sector and skills development. These challenges are not sector-specific but are common across all the sectors. Fashion District in the City of Johannesburg, Monitor 2005 Customised sector plan: Film and Television (DTI) 2005 Customised sector plan: Craft (DTI) 2005 Towards and Understanding of the South African Theatre Industry, PANSA 2005 PASA annual industry survey, PASA 2006 Overview of all creative sector research: British Council 2007 Project Gaullywood : Gauteng Film Commission 2008 Gauteng craft audit, SACR, Gauteng 2008 Gauteng Creative Mapping Project: SACR, Gauteng 3 3
  • 40. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Drivers of the Creative Industries both internationally and in South Africa This literature review has outlined the numerous ways in which the contribution of the creative industries to the economy and to urban and regional development is assessed. It is also important to review those factors which themselves drive the creative industries. This will be particularly important as the Gauteng province wishes to influence the growth and vibrancy of its creative economy. While traditionally many of these drivers can be seen as economic, it is clear that in their effect and impact on the creative economy, the social aspect of creativity is paramount. For the purposes of clarity each driver is discussed separately although they are of course interrelated. First amongst these is the changing nature of the relationship between producer and consumers as producers attempt to better understand their consumers and involve the consumer in the co-creation of the final product. This is made possible by the rapid changes to information and communication technologies “that allow users to create their own content, gain access to creative content produced by others, and co-create with them” (The Conference Board of Canada,2008). Quoting from a presentation by PricewaterhouseCoopers (2007-2011:slide23), The Conference Board explains, ‘Ubiquitous Participation’ now characterises the consumer where ubiquitous means “everywhere, anytime, omnipresent, unrestricted, flexible” and where participation refers to “connecting, imagining, inventing, collaborating, contributing, managing, marketing, selling, locating, entertaining, exploring, purchasing, supplying, paying, investing” (The Conference Board, 2008:42) Apple’s iPod and video-on-demand for instance, are in response to demanding consumers who want to personalise their experience of both consuming and contributing to creative content (DCMS, 2007:17) while the creation of social networks on sites such as MySpace.com by companies as different as Nike Inc. and Honda Motors Co. Ltd. turning consumers into personal marketing agents for goods and services that firms sell (The Conference Board of Canada, 2008). Second, and related to this, is impact of the digital revolution on the products and services of the creative industry in the production process, in the new content distribution channels and in the way in which consumers use the content. Much of this has been made possible by the internet and in particular the diffusion of Web 2.0. “a range of on-line services that have facilitated the rise of the user-generate content, enabled file sharing and supported more intensive forms of social networking and participatory forms of content co-creation” all made possible by rates of connectivity and availability of broadband. As the Conference Board of Canada says, ”[t]he internet opens amazing vistas in which creative people can flourish. It presents enormous possibilities for creative firms or entrepreneurs seeking to commoditize aspects of the creative experience so that they can “pay the bills, compete and grow – and continue to invest their energies in personally rewarding an socially enriching creative industries” (2008: 55). Third are the skills and talent needed to drive the creative economy. Key to the creative process is cross-disciplinary collaboration between industry specific skills especially “artistic skills and competencies related to the use and adaptation of ICTs, and knowledge of how to commercialise creative ideas”, business skills (management, entrepreneurship, marketing, financial skills and planning) and a range of ‘soft skills’ such as problem solving and interpersonal skills (The Conference Board of Canada, 2008). This skill base and talent is required throughout the value chain of creative industries to participate in and contribute to the process of creation, production, distribution and consumer or audience feedback. Not only are these processes not mechanical, they are neither fully artistic and creative nor mechanical or managerial. Much of the expertise that resides in established workers in these creative sector has been through learning by doing and incremental innovation (The Work Foundation, 2007). It is not surprising therefore that education and training programmes need to be geared towards accessing both the students’ creativity but also to prepare them for this creative world of work. It is also possibly the key area for public policy with firms in the creative economy already facing challenges in the differing perceptions among employees, and employees and educational institutions with respect to: • “Competencies that new media content creators would like to develop; • competencies that are in greatest demand (and perceived short supply) by employers; • how these competencies should be developed; and • the priority (or lack therefore) employers and employees place on training to support competency development” (The Conference Board of Canada, 2008). The fourth driver, and related to the skills and talent is the diversity of a country. Traditions, rituals and heritage frames peoples’ identify and how each relates to the other as well as the stories people want to write or sing about and the stories or sounds people want to hear or see. The increasing demand for diverse content from both diverse audiences and diverse content aggregators such as broadcasters fuels the creative talent of diverse groups. A diverse creative workforce working collaboratively has therefore a great opportunity to make products to meet this demand. The increasing ability for diverse communities and voices to be heard and to share their experiences, through the convergence of multimedia and telecommunications technology - on social networking sites and other internet related channels - in turn fuels the demand for more diverse content. The fifth driver is the agglomeration possibilities –clusters of creative activity - that come from cities where connectivity, community and culture intersect such that individuals, organisations and companies can take advantage of both competition and collaboration in their creative product and GAUTENG’S CREATIVE MAPPING METHODOLOGY M A P P I N G M E T H O D O L O G Y
  • 41. processes. Landry calls these clusters of creative activity in cities which are rich in cultural resources, the ‘new gold’ of the creative economy in that they are both magnets for creative talent across all sectors of the economy and are economic wealth generators (Landry, 2000). The sixth and final driver is capital investment which gives rise to innovation and experimentation. The uncertain economic returns to many creative industry products make the type of investment and the financing of it especially important. As opposed to debt financing which can make a creative business more precarious than it already is, equity financing remains in short supply even in the more developed creative economies such as Canada and Australia. Nevertheless, The Work Foundation has estimated that there are 3,885 ‘business angels’18 financing creative firms in the UK focusing typically not only on capital in exchange for equity but on hands-on business management skills and mentoring support for creative enterprises. Of particular concern is the limited capacity of the creative firms, especially in the small and medium sector to devise and implement business strategies to raise capital or to create products out of their creative offerings. Nevertheless some extremely innovative business models are being devised from Prince’s offer of his new album, ‘Planet Earth’ as a free cover mount on The Mail on Sunday in the UK in July 2007 to the rock band Radiohead’s release of their seventh album In Rainbows on their own web site as a digital download with customers encouraged to choosing their own price, before it was released physically. In the case of Prince, not only did the newspaper break their circulation records set when Princess Diana died, but Prince earned £5m (set at only 1/10th of the value) and received huge exposure for his performances at the O2 Dome. This translates to six times more money than if his album had reached the number 1 slot in the UK (Beaham-Powell, 2008). Radiohead’s lead singer, Thom Yorke reported that the album was downloaded 1.2 million times and that the band’s profits exceeded the combined profits of digital downloads from their previous six albums19 . By appealing to the fans directly and their interest for downloading is a strategy that trusts “that loyalty and direct appeal are a sufficiently pragmatic approach to commoditizing their audience’s experience” (The Conference Board of Canada, 2008). South African sector specific studies The following represents an overview of the publicly available documentation and analytic reviews (where they exist) for each of the sectors of the Creative Industries identified in the Gauteng Creative Mapping Project. Audio-visual sector There is a significant amount of literature on the audio-visual sector in South Africa, with most of it concentrating on film and video20 . A number of reports on the sector have been produced since the CIGS Report (CAJ, 2008; DTI, 2005; Deloitte SA, 2007; Evolutions, 2006; HSRC, 2004; Joffe and Jacklin 2003; Joffe and Matlhodi, 2004; Joffe, 2004, 2006; Pricewaterhousecoopers, 2000; Standish and Boting, 2006; Tuomi, 2005 and Thomas, 2000). One common feature of most of these reports is that they are largely desktop research done to look at the structure of the sector, to assess the challenges facing the sector (using SWOT analysis), and to provide social and global trends for the sector. These reports assemble and analyse information from different sources as well as conduct focus groups and in-depth interviews to obtain a clear view of the status of the sectors, the challenges and opportunities facing them and provide recommendations for improving the viability of the sector in general and of the skills and training programmes in particular. The CIGS (1998) process selected film and video as one of the four economically viable and well established sectors in the creative industries. The CIGS process saw the production of a more detailed report on the sector. The report looks at, among other things, the evolution of the film and television industry and role of the industry. It also presents some statistics on the industry. Some of the pertinent issues emanating the CIGS report include the following: that 77% (1995/1996) of the film and TV industry is located in Gauteng, broadcasting industry contributed 0.08% to the national GDP in 1995/96, film and television employed 20,525 people21 in 1995, and that the industry as of 1995/1996 was white and male dominated. The 2000 PWC report involved analysing existing literature and existing data. The report argues that the film industry before apartheid was still in its infancy and was largely racially segregated, with most productions separately catering for the black and white communities. The research identifies a number of opportunities and trends for the South African film industry. The report also states that the sector employed 4,405 people in 1995 and the entertainment industry as a whole was worth about R7,7billion, representing about 0.5% of the total global entertainment industry22 . Between 1988 and 1995 the sector grew by an average rate of 17.6% in terms of trading income. 18 Business angels are wealthy individuals who provide capital for start up businesses, usually in exchange for convertible debt or ownership equity 19 See http://en.wikipedia.org/wiki/Radiohead. 20 Most of the studies are qualitative rather than quantitative in nature, relying largely on interviews with people involved in the sector. Such statistics gathered like this, though giving a rough picture of the industry, cannot give a precise and reliable estimate of the true size of the sector (DPRU, undated). 21 The Microeconomic Development Strategy for the South African Sector estimates that the film industry directly employed about 30 000 in 2004. 22 The value includes broadcasting, cinematic, music and interactive industries (PWC, 2000). 3 5
  • 42. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Joffe (2004) uses mainly secondary data collected from different sources to establish a broad picture of the sector as well as come up with a social trend and future projections. The analysis involved a SWOT analysis. Joffe confirms that most firms in the sector are small and white-male dominated in terms of ownership and management, with Blacks largely involved in film and documentary making and other peripheral roles. This report also highlights the lack of transformation in the sector. Joffe and Matlhodi (2004) provide a profile of the broadcasting sector (TV and radio). The authors interviewed industry experts and stakeholders and analysed industry documentation to assess the scarce skills in the industry and the areas in which the MAPPP-SETA could develop projects. Amongst others, the report found a shortage of skilled labour in the labour-intensive sector, the impact of new technology on skills and work practices, transformation challenges at a management and ownership level and the fact that the sector must compete for limited resources from the government. The CPA conducted a survey on the commercial film producers in 2005 (Evolutions, 2006). The methodology involved sending questionnaires to mostly CPA members. The results were based on 34 CPA members and 8 non-members. The results show that the sector provides employment of an estimated 98,418 person-days per year. The data also shows that filming for commercials by the respondents were distributed as follows: Gauteng, 43%; Western Cape, 49%; KZN, 2%; and outside of SA 6%. This is in line with the PWC (2000)’s finding that most firms in the sector conduct their business in the Gauteng (about 82% of the respondents) while Western Cape is popular for shooting commercials. The HSRC (2004) conducted a national survey on the film and video industry. They found that the industry generated revenue of R3,3 billion. This survey also estimates the total number of people employed in the sector to be 6,251 permanent staff and 24,257 freelancers. In 2007 Deloitte was commissioned by the Gauteng Film Commission to conduct a research on the audio-visual industry in South Africa. The objectives of the research were: • “To acquire sound market intelligence on the local and international audio-visual markets (this entailed coming up with a comprehensive overview of the SA and Gauteng audio-visual industries as well as establishing some global trends, best practices and industry benchmarks. • To assess the competitiveness of the Gauteng audio-visual industry – essentially using SWOT and identifying some critical success factors. • To make strategic recommendations to the GFC concerning the optimum positioning of the Gauteng audio-visual film industry” (Deloitte SA Market Research, 2007). The research’s methodology involved the analysis of existing data and literature. The secondary collected was also checked with industry experts and other stakeholders. The results of the research show that in 2006 the audio-visual industry generated over R5,5 billion in economic activity to the South African economy, with Gauteng alone contributing over R2 billion. It was also found that the Gauteng audio-visual industry is dominated by television series23 and local film productions while Western Cape tends to cater for the international film productions. The DTI published a report in 2005 as part of their customised sector programme on the Film and TV sector to outline their development strategy for increasing competitiveness, exports and investments as well as employment and equity. The report signalled the choice of the film and TV sector as one of the priority sectors of the Accelerated Growth and Development Initiative of South Africa (ASGI-SA). The local film and TV sector was situated within an analysis of global opportunities and challenges to inspire and reinvigorate the sector. Drawing on previous strategic papers developed by DAC, IDC, PWC, NFVF, MAPPP-SETA and DOC as well as extensive industry consultation, the report focused on key areas such as skills development, audience development, financing, co-ordination, export and marketing, equity/ BEE, international and domestic intelligence and competitiveness (DTI, 2005a). The strategic vision set for the Film and TV sector was for SA to be the leading producer of film and TV content from Africa and the Middle East watched by the world by 2014. The report identifies an integrated set of interventions as a ‘roadmap’ for the DTI containing development in domestic market, international market and skills; transformation, increased domestic product and market intelligence; industrial upgrading, targeted interventions and incentivising information gathering. The interventions were outlined against 4 key problem statements and are summarised in the table below. GAUTENG’S CREATIVE MAPPING METHODOLOGY 23 7 out of 10 top South African TV productions were based in Gauteng (Deloitte, 2007). M A P P I N G M E T H O D O L O G Y
  • 43. Table 8: DTI Film and TV sector Interventions Substantive problem Nr 1: Erratic production levels Substantive problem Nr 2: Underdeveloped domestic and international markets for SA film and TV product Substantive problem Nr 3: Too little South African feature film production and TV co-productions to build a domestic industry Substantive problem Nr 4: Lack of distribution infrastructure to develop local audiences Background A medium budget international production with a budget of R120ml will spend R50-R70 m in SA with multiplier of 2.5 x and employ 300 cast and crew for 3 months. But do not have regular production of either local or international origin. The film and TV industry does not have a well-developed market access strategy informed by market intelligence. The attendance at international festivals and markets is currently uncoordinated, audience attendance for local content is poor, support and incentives for exporters is limited, skills transfer is limited and relationships with international sales agents is poor. 12 – 25 films need to be made per year to develop the international and domestic audience palate for South African films. More co- productions will raise budgets and therefore standards and access to international audiences. Local production should receive funds from both public and The majority of the population is hampered by the lack of distribution infrastructure in accessing feature films at theatrical release or on DVD. Considerations include digital delivery; the new middle class not yet attending cinemas and content products, delivery platforms and receiving devices in the digital age. Key action initiative Rework current Film and TV rebate for lower budget films Market Development Programme (MDP) administered by a S21 company and reporting to the DTI. Licensed Investment Company run by a respected financial institution with SARS approved structure Public private investment partnership in distribution infrastructure. Goal More consistency of production; teaming up local producers. Introduce BEE and skills development To create a solid framework of information gathering, assessment and dissemination of information so as to develop market performance domestically and internationally and overcome industry fragmentation. Attract private finance to the film and TV industry on a long term basis, get 24f working and trusted by SARS and promote establishment of private investor funds. The goal is also to increase the stock of domestic product and establish relationships with international sales agents. Triple the number of cinema visits of South Africans per capita per annum over next 10 years from 1.2 to 1.6. Increased the percentage of SA product that is being viewed. Obstacles to implementation Uncertainty re delivery of rebate in longer term Budget, research team and industry participation Budget to establish and maintain fund for 5 years Thorough research as part of MDP to identify obstacles and means to overcome these. Intervention to remove obstacles Good communications 5 year business plan with approved budget; recruitment of capabilities and co-ordination with industry Funding of LIC on matching basis for 5 years To be determined Levers required DTI budget extended and commitment to administrative processes DTI budget Industry buy in DTI budget Suitable financial institution Research document, private partnership that fits with conclusion and budget Progress Committee formed Ster Kinekor’s marketing manager for independent production; SABC’s interest in co-production; Sithengi Market and World Film Festival’s work with audience and international sales agents and the interest of the financial community (cf RMB) are part of the solution. FRU has implemented a satellite programme to test the environment with DAC. 3 7
  • 44. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Table 8: DTI Film and TV sector Interventions(continued) Source: DTI (2005a) summarised in CAJ, 2005:84-86 Craft The craft sector was one of the four sectors covered by the Cultural Industries Growth Strategy reports in 1998. This sector was chosen since it has potential for job creation and labour absorption. Not only does it provide income generation opportunities for groups which have access to resources, but also offers employment opportunities for the most economically disadvantaged people in South African society. It cites previous research finding that this sector is dominated by women. Two explanations for this are given. The first is that better opportunities are available to men in other sectors. The second is that there are low barriers to entry in the craft sector and therefore in cases where there is limited access to capital, technology or resources, the craft sector may be the only available income generating opportunity. Furthermore, craft businesses are largely small businesses that may provide an entry point for poorly skilled workers into the economy. Craft businesses are also seen as innovative and able to test new ideas and products. Craft is also closely linked to other sectors, such as tourism or design. The data collection for this project had two phases. The first aimed to produce an overview of the sector through examining existing data (there was very little available) and through surveying existing literature. The second phase probed various aspects of the sector through the collection of primary data. This was done through a fax survey as well as through face-to-face, electronic and telephonic interviews. The collection of primary data was limited to interviews with strategic individuals working either directly or indirectly in the craft sector. Substantive problem Nr 1: Erratic production levels Substantive problem Nr 2: Underdeveloped domestic and international markets for SA film and TV product Substantive problem Nr 3: Too little South African feature film production and TV co-productions to build a domestic industry Substantive problem Nr 4: Lack of distribution infrastructure to develop local audiences Resources required starting from a zero base For every R1m spent SARS will collect R150,000 from incentivised rebate. Need R100m in ’06; R150m in ’07 and R200m in ’08. Annual budget of R5,2million with a view to 50% private sector funding in 5-10 years R30m per year for 5 years depending on funds raised by LIC R170000 per unit as determined by Ster Kinekor. R40 m investment for 5000 units from government on a matching basis Risks and mitigating factors Lack of certainty and confidence in rebate system. Establish a timely review process Lack of co-operation from industry. CEO credibility Insufficient funds raised; modify production targets; reduce equity funding from fund to a lower percentage of total budge; involve NFVF and educational institutions if insufficient developed projects To be determined Implementing group and champion DTI as project champion with Treasury, SARS and NFVF DTI (project champion) DAC, NFVF, DOC, ICASA, Industry associations, Mappp-Seta, International trade offices MDP, DAC, DOC, NFVF, IDC, Provincial departments of Economic Affairs Expected outcome Increase in number of foreign and co- produced film and TV productions Growth in international and domestic market for SA film and TV product and services Increase in amount of commercial domestic product; more sustainable domestic industry; increase in amount of private finance; relationships with international sales agents and local sales agents; one runaway production. Implementation of distribution infrastructure investment to see increase in returns on domestic production of between 3 and 5 times to between R15 and R25 million p.a. Key performance indicator Value of foreign investment in SA; increase in jobs, trainees, BEE percentages and level of tourism Budget secured; MDP established, CEO profiled, CEO employed, MDP business plan, Data collected, stakeholders in quarterly forums, audience survey and 6 festivals attended Approval from SARS of a fund that will work with 24f or new legislation to allow the fund to operate in manner intended; identification of a suitable licensed investment company; private finance raised; 12 suitable projects and returns to fund. Delivery of substantial research to inform this intervention, increase in cinema attendance, increase in domestic returns on SA product, increased DVD sales. GAUTENG’S CREATIVE MAPPING METHODOLOGY M A P P I N G M E T H O D O L O G Y
  • 45. The researchers found that the there were few reliable statistics available on the craft sector in South Africa. This was because the craft sector does not have an ‘industry’ identity and very little union membership or industry associations. The craft sector is also very fluid – businesses expand and contract based on seasonal conditions and some participants are opportunistic salesmen who trade sporadically. There is also significant competition within the sector and increasingly from entrepreneurs from the rest of Africa. The study attempted to estimate the size of the sector. Interviews with experts in the field suggested a figure of 340,000 people employed in the sector in 1995 and 800,000 in 1998. This is not consistent with the two figures mentioned in the CIGS main report. In this report it is claimed that there are “at least 200,000 people are active in the craft sector with monthly incomes varying between R5 and R5,000.” It also claims “that recent census figures have indicated that 1.2 million people are active in the craft and related trades sector.” This second figure for craft, however seems implausibly high given that total employment in South Africa in October 1995 was 9,5 million24 . This figure is also questioned by Erika Elk, Executive Director, Cape Craft & Design Institute, in the report “The South African Crafts Sector” (Elk, 2004). She says “A widely quoted statistic (Creative South Africa, November 1998) tells us that the South African craft industry generates over R3,5 billion in revenue each year and employs over 1,2 million people. This statistic is now seven years old and the truth is, no-one really knows for sure how accurate it is as there is no formal process to gather statistical data”. Three subsequent publications “Audit of craft assets in the Western Cape” (Kromberg and Elk, 2000) and “’Ons maak iets uit niks’ The Craft Industry in the Northern Cape” (2001) examined the craft industry at the provincial level. These reports used a combination of interviews, self-administered questionnaires and visits to areas to gather data. Both reports produced development strategies to help grow the sector in each province. The study by Kaiser Associates in 2005 profiles the craft sector in the Western Cape. It draws data from the Cape Craft and Design Institute (CCDI) database and extrapolates information from this. This database was estimated to cover one-third of enterprises in the sector. The information from this database has been supplemented by information obtained from industry experts. The report suggests that there are 1,662 craft producing enterprises in the Western Cape compared to 1,500 in KwaZulu-Natal and 1,200 in Gauteng. There are an estimated 53 galleries, 45 markets and 250 retailers of crafts in the province. In terms of employment the craft sector in the Western Cape is estimated to employ 7,165 people compared to 9,375 in KwaZulu-Natal, 7,290 in Gauteng and 34,726 in the country as a whole. This is significantly smaller than the figures in the CIGS documents but are “considered by key role players to be more accurate.” Annual revenue for the sector was estimated to be in the R200-R500 million range. The majority of crafters in the Western Cape operated as sole traders, and whites dominated management (50% of sample). Craft enterprises were predominantly located in the Cape Metropolitan Area. The report also examined linkages between the craft sector and other sectors as well as main markets for products. The United States and the European Union were the two most important international markets. The document discusses current government support in the sector and undertakes a SWOT analysis for the sector in the Western Cape. An accompanying document provides recommendations for interventions. The DTI began a process in 2005 of developing specific sector development plans for a range of sector, including film as outlined above and craft. The document identifies the following key developmental challenges in the sector: • Lack of a common vision and co-ordination along the entire value chain. • Lack of reliable national sector profile data and up-to-date market intelligence. • Weak skills base on the manufacturing enterprise side which impacts on product supply to markets. • High and uncompetitive product price – due to high input costs and production inefficiencies. • Poor ability to capitalise on market opportunity – not getting the right products to right markets at the right price at the right time. • Lack of common marketing strategy. • Lack of research and development – due to poor R&D investment and free-flow of information. The Craft CSP comprises a comprehensive set of development initiatives to address the problems listed above with a budget of just over R30 million. Table 9 below summarises these recommendations. 24 Development Policy Research Unit, University of Cape Town figures. Based on 1995 October Household Survey reweighted according to the 1996 Census. 3 9
  • 46. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S GAUTENG’S CREATIVE MAPPING METHODOLOGY Table 9: Customised Craft Sector Plan interventions Substantive problem 1: Lack of co-ordination of development activities and reliable research on the sector Substantive problem 2: Weak sills base and uncompetitive pricing, lack of R&D Substantive problem 3: Lack of investment in R&D Substantive problem 4: Poor ability to capitalise on market opportunities Background The organisational base of the sector is weak, activities are fragmented and data is poor The nature of government intervention has promoted the fragmented and informal nature of craft production The most successful enterprises are those that incorporate product development and design into their core business There is a lack of market-focused product and producer development in the sector and the lack of a common marketing strategy Key action initiative Craft Manufacturing Industry Development Council Enterprise Development Programme Research & Development Programme Integrated Craft Hubs Market Development & Access Programme Goal To ensure constructive engagement to enhancing the future health craft sector To drive commercialisation and build the global competitiveness of the sector Production of excellent products, technologies & commodities To create enabling environment to allow for effective market access SA to capture 5% of global trade by 2014 Obstacles to implementation The lack of resources, the proliferation of development initiatives, the lack of co-operation between stakeholders Contradictory funding policies, disparate range of business services & lack of co-ordination Lack of national design strategy, lack of investment in R&D across economy generally, deficiencies in design education and lack of value placed on design skills Management of complexity of the hub model, lack of resources, lack of market data, Intervention to remove obstacles Development of 5 year funding plan aligned to Cabinet mandated functions and the wide circulation of the CSP. Conducting of detailed audit of services, development of service delivery framework, implementation of pilot enterprise development programme Formulate national policy, develop flagship programmes, advocate importance of design education and design in the economy Well informed strategy, stakeholder buy- in, outsourcing of services, provision of participation incentives; national craft marketing and exhibition plan, regional and national showcases Levers required Budget from DTI, support from stakeholders, commitment from government partners Commitment,financialandhuman resources, skills development Collaboration of key departments, implementation of school curriculum, implementation of learnerships, market-led opportunities Commitment from stakeholders, especially government; financial and human resources; market information Progress (As of 2005) Agreement on the need for the Council has been reached. Enterprises identified. DST design process as launching pad. Prioritised urban hubs at different levels of development National workshop held to discuss model Enterprises being groomed for export Resources required starting from a zero base R5,5 million operating budget over 3 years R 3 million over 3 years with overlaps with Council budget Focus on networking and advocacy as such budget is R200 000 R 17,5 million for regional hubs R 5 million for research and market access programme Risks and mitigating factors Lack of buy-in from key stakeholders. Consensus through CSP drafting process Buy-in, lack of synergy between implementers, budget constraints CSP process, implementation experience, pooling of government resources Failure to find resources, disparate interventions, lack of buy-in Consultative process, inclusion of existing stakeholders. Failure to deliver results, cumbersome model, duplication of services; lack of current market data, cumbersome accreditation processes Development of key programmes, starting small, audit of value chain to identify possible linkages and gaps; annual research, customised accreditation system M A P P I N G M E T H O D O L O G Y
  • 47. Table 9: Customised Craft Sector Plan interventions (continued) Source: DTI, 2005b In 2007 the Gauteng Department of Sport, Arts, Culture and Recreation (SACR) in 2007 initiated the Gauteng Audit of Craft Assets which attempted to map the value of craft in the province and to make recommendations for government action to develop the sector. The first study of its kind in the province the research included a survey of all players in the value chain and in-depth interviews and focus groups with government officials, stakeholders and sector participants. In additional smaller surveys were administered in municipal areas to understand the nature of craft production at a sub-regional level. The research found that the Gauteng province has a reasonably small but dynamic and growing craft sector which encompasses all aspects of the value chain. Each value chain segment however displayed very different characteristics, prompting the strategy based on the research to propose a wide range of custom-designed interventions. The province is well supplied by stable and well established retail and material suppliers; however the production aspects emerged as the core area for strategic intervention. In relation to craft production, two very distinct categories of producers emerged. The first are craft producers the craft producers that generally engaged in very small to micro-enterprises with very low levels of turnover and low levels of market access. The second category is designer-makers that have far higher turnover and employment levels and also significant market access and marketing capabilities. The key findings with regard to developmental challenges in the sector are as follows: • The need to improve craft producers’ access to resources such as raw materials, production space, equipment, ICTs, appropriate financing mechanisms, effective and efficient transport and logistics and marketing materials. • The need for improved market access and the development of new niche markets linked to a marketing strategy to build audiences. • Further skills development focused on mentoring and continuous professional development. • The need for improved linkages and engagement with the design sector to foster product innovation. • The need to support enterprises especially with regard to business process improvement and market access factors. • The need for greater alignment of government and stakeholder initiatives to develop the sector. Cultural tourism and heritage Although closely related, and in many cases difficult to separate, research on cultural heritage and cultural tourism is usually not combined. In fact, work on cultural tourism is usually included under the broader heading of tourism in general. Information on the heritage sector can be found in the South African Heritage Resources Agency’s (SAHRA) annual report. SAHRA is predominantly funded by the Department of Arts and Culture. A list of projects funded by SAHRA is available in the annual report but this gives no indication of the number of people employed. In 2006, SAHRA generated revenue of R36 million of which R29 million was government grants. The bulk of the other Substantive problem 1: Lack of co-ordination of development activities and reliable research on the sector Substantive problem 2: Weak sills base and uncompetitive pricing, lack of R&D Substantive problem 3: Lack of investment in R&D Substantive problem 4: Poor ability to capitalise on market opportunities Implementing group and champion DTI as project champion along with national & provincial departments & agencies, industry representatives, state research agencies Council, the DTI group, national & provincial departments & agencies, industry representatives, MAPPP-SETA, Umsobomvu & IDC DTI, DAC, DST, CSIR, SABS, MAPPP- SETA, educational institutions, professional bodies DTI group, national & provincial departments & agencies, industry representatives, foreign missions, industry agents, Proudly South African, International Marketing Council, Umsobomvu & IDC Expected outcome Implementation of CSP recommendations, integration of services, monitoring of impact 180 enterprises in the programme supporting 5 625 crafters. Awareness of the importance of the role of design, increased spend on RDP, increased competitiveness of products Improvement of access of producer to buyer, improved competitiveness of products. Increase in market share and sales Key performance indicator Agreed vision & road map, increased co-operation, clear strategies & monitoring Unified development programme, clear development trajectory for crafter enterprises, increasingly formalized production National forum of design institutions, national awareness campaign, flagship design & innovation programme Regional hubs to support 200 enterprises & facilitate R24 million in trade annually 4 1
  • 48. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S GAUTENG’S CREATIVE MAPPING METHODOLOGY revenue came from other types of grants and fees from administrating trust funds. Cultural tourism is generally included under the broader tourism heading given that it is difficult to separate specific cultural tourism out. Furthermore, tourist statistics are collected mostly for tourist arrivals. South African Tourism collates and presents statistics collected by itself and by StatsSA. The South African Quarterly Report (Q1, 2007) suggests that a quarter of foreign tourists visited cultural, historic and heritage sites. This is most common among visitors from the Americas and Europe, with those from Germany and Canada most likely to visit a cultural site. The culture and heritage is mentioned by 21% of respondents as their best experience in South Africa. Fashion Design sector Research on the fashion design sector is limited, with most research efforts being expended on the four sectors chosen during the CIGS process. This does not mean the sector does not make a meaningful contribution to the South African economy. Ntshingila-Khosa (2004) conducted a qualitative study on fashion design, craft design and graphic design. The objective of the study was to assess the skills needs of the sector. The methodology of the study involved interviewing key stakeholders of the concerned sectors as well as analysing existing secondary data and literature. A SWOT analysis that was done on the sector identified the following as some of the important weaknesses of the fashion design sector: high start-up capital for industrial equipment; lack of support for SMMEs; and lack of exposure to the international market. Music There have been a number of studies on the contribution of the music industry to the economy. Music was one of the sectors reviewed in the “Creative South Africa” Report in 1998. This report was accompanied by the more specific “The South African Music Industry” (DACST, 1988d). This report provides estimates of the size of the music industry based on interviews with equipment and staging specialist, Gearhouse; major retailers, collection societies SAMRO and SARRAL, as well as on industry representative (ASAMI and NMPA) statistics. The gross turnover of the ‘core’ music industry was estimated as R975 million (R1,68 billion in 2006). Adding additional ‘non-core’ activities increases this figure to R2 billion (R3,4 billion in 2006). Total employment in the ‘core’ activities was estimated at 14,945. This does not include those in related activities or the part-time musicians. KPMG produced two reports on the South African music industry, the first in 1999 and the second in 2001. According to CAJ (2006) the first report is merely an updated and abridged version of “The South African Music Industry” report and contains very little new data. The second report provides some figures for the South African music industry. These are primarily focused on sales, best selling artists and music genres. The report finds that over the period of 1996 to 2000 the percentage increase in the value of sales has been declining (i.e. the value of sales has been increasing at a decreasing rate) and turned negative in 2000 (i.e. sales values fell). KPMG attribute this to low levels of disposable income and low rates of economic growth during this period. The report does not attempt to estimate the overall size of the music industry and comments that the “South African media and entertainment industries are notorious for their lack of detailed and accurate statistics.” The growth and then slump in sales figures is also mentioned by Ambert (2003). She examines the music industry in SADC countries and finds that the South African market dominates with 94% of sales. The issue of local content is discussed in a number of documents. These include the ICASA “Discussion Paper on the Review of Local Content Quotas” (2000) and the “Regional Television Broadcasting Services – Position Paper” (2003). The Recording Industry of South Africa’s (RISA) annual reports are another source of data for music industry sales. RISA figures indicate that the South African recording industry had a wholesale turnover of just over R976 million for physical product in 2005. The estimate of digital sales was R50 million. This suggests that the trade value of the South African music industry is over R1 billion. The initiation (although not completion) of the South African Cultural Observatory by the Department of Arts and Culture (leading only to a website at this time at www.culturalobservatory.org) led to a number of studies being completed for music such as the problem tree analysis for the music sector (CAJ, 2003) as well as a report on the structure of the music industry (Gostner, 2003). The problem tree analysis provided both a narrative and a graphic representation of the linkages between problems, by unpacking their causes and effects. The central problem in the music sector was found to be the lack of cultural entrepreneurship and professionalism. This is related to the absence of an opportunity-seeking culture among role-players to ensure financial viability and profitability as well as role-players’ lack of awareness of the complete span of own role and linkages with others undermine strength of components and linkages between value chain. As the Cultural Observatory website report, “The music industry is perceived as an “art” sector and not as a bona fide business area; the costs of production, reproduction and consumption are exclusionary except for radio broadcasting in an environment where music has to compete with other priorities and luxury items; pirated materials and pirate operational strategies have a competitive advantage over legal materials and mainstream operators which makes addressing parallel markets difficult” (South African Cultural Observatory, undated). M A P P I N G M E T H O D O L O G Y
  • 49. Multimedia The literature on this ‘sector’ is limited. There is also debate on whether multi-media is really a stand alone sector in the creative industry. The literature on the multi-media sector in South Africa includes: Ntshingila-Khosa (2004), Laballo (2004) and Gamede (2006). Ntshingila-Khosa undertook qualitative research on the skill needs of the multimedia and animation sectors for the MAPPP-SETA. The information for the research was gathered using a number of key stakeholders as well as existing literature from different sources. Telephonic interviews and e-mails were also used to gather more information on the sector. A SWOT analysis on the sector identified a number of weaknesses including the following: it is white male dominated, there is poor quality of training and there is inadequate infrastructure. In Laballo (2004) the viability of the animation sector in South Africa is examined. The methodology involved randomly selecting and interviewing firms involved in animation. The report, which is also qualitative in nature, does not provide any figures that give an estimate the size of the sector. The report however made a number of recommendations on how the government can stimulate the growth of the sector. Gamede (2006)’s study’s main objective was to “analyse the multi-media sector by defining and identifying the key stakeholders and challenges with the aim of providing an internationally working definition of the sector for the MAPPP-SETA”. Multimedia, though well developed in developed and some emerging economies like Malaysia, is still in its infancy stages of development in South Africa and currently is not really a stand alone sector. Gamede, who also did a brief literature review on the sector, found that as of 2006 there were 65 companies producing animation products. Animation tends to dominate the multi-media sector. Performing Arts PANSA commissioned an important study, “Towards an understanding of the South African Theatre Industry” PANSA (2005), which is a thorough and comprehensive investigation of the South African theatre industry. The research objectives were to: a. arrive at an overall understanding of the current state of the theatre industry in South Africa b. compile relevant data on the sector as a basis for further research and analysis and c. provide a basis for preparing concrete recommendations for the development of the theatre industry over the next five years i.e. 2006-2010 using the Soccer World Cup as possible leverage to develop the sector. This was done through a survey of 12 theatres, 11 festivals, 12 educational institutions and 13 producers (both individuals and institutions). The largest theatres and festivals were included in the sample. 337 audience members who attended various events across the country were also interviewed as were more than 700 people who attended performances at the Market Theatre and 500 Durban theatre audience members. The report thus combines the views of both the suppliers and the consumers of the theatre. The report does not attempt to estimate the overall size of the theatre industry in South Africa, rather it examines the operating income of the theatres and how this is broken down between box-office revenue and grants from the DAC. Furthermore, it reviews the trends in the national arts budget and the allocation of this budget and also documents the budget of the National Arts Council and the allocations made to Business and Arts South Africa (BASA), as well as Corporate Social Investment (CSI) expenditure. The report concludes by making a number of recommendations for the further development of the South African theatre industry. This is done through a SWOT analysis and through policy recommendations. Print media and publishing The print media and publishing sector, like other creative industry sectors, faces the problem of credible statistics that can be compared spatially and over time. Most industry bodies, in an attempt to circumvent this problem tend to make educated guesses on the size of the sector25 . The main sources of reliable data on the print media and publishing sector include the CIGS Report (DACST, 1998a) and the PASA annual surveys26 . The PASA annual surveys, which target the CEOs/MDs of the PASA members, use a survey instrument that was designed in consultation with PASA and PICC members. The CIGS Report estimates that the sector employed about 90,000 people in 1998. It is further estimated that the book publishing sub-sector directly employs 2,800 people and produces about 30% of academic books. PASA, together with the University of Pretoria, has undertaken an annual survey of the national publishing sector since 2002. The 2002 and 2003 surveys were snapshot surveys while the 2004 and 2005 were more detailed. The overall objective of the surveys is to provide an overview of the shape and size of the sector. The surveys by PASA only cover 25 The main stakeholders interested in the data include Publishers Association of South Africa (PASA), Printing Industries Cluster Council (PICC), International Publishers’ Association (IPA), Board of the Frankfurt Book Fair (FBF), South African Booksellers Association (SABA), Paper Manufacturers Association of South Africa (PAMSA) and Printing Industries Federation of South Africa (PIFSA). 26 The CIGS process produced a more detailed report on the publishing sector. Like in the other three sectors chosen for detailed analysis during the CIGS process, the report on the publishing sector serves as a benchmark for the publishing sector. 4 3
  • 50. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S GAUTENG’S CREATIVE MAPPING METHODOLOGY the book publishing sector. In 2006 PASA published a comparison across years (2002-2005) (Galloway and Dunlop, 2006). According to the authors, there are a number of reasons why it is not possible to make direct comparison between available data across the four years. The reasons include the fact that the structure of the questions evolved over time as more and more information was solicited for; the participant pool also changed overtime; and the core list of companies targeted also differed yearly. For example, for the surveys conducted in 2002 and 2003 the core lists focused on companies whose core business included the publishing of local books while for the 2004 and 2005 surveys the core list was expanded to include companies exclusively involved in sales of imported books and publishing of other kinds of teaching or learning aids. Notwithstanding the above problems the results suggests that the real value of turnover of large publishers increased by 41% between 2002 and 2005. The turnover as a percentage of GDP increased from 0.12% in 2002 to 0.14% in 2005. In terms of employment the sector employed 1,699 and 1,806 employees in 2003 and 2005, respectively. The other findings from the research include that: 58% of the employees in the book publishing sector were black; the number of white female employees declined between 2002 and 2005; and a sharp increase in the number of black male employees in the editorial job category. Visual Arts Research on the visual arts and their context within the South African economy is limited. The focus has been rather on adjacent sectors – craft and design – and other sectors such as film, music and publishing which are seen to link into social and economic development issues more directly, and on a larger scale than the visual arts (VANSA, 2006). The Department of Arts and Culture has recently (2008) initiated a visual arts policy review process. Since the specification included a research component this project is likely to yield much needed new research. Cross cutting themes in creative industries research in SA Most of the previous work on the creative industries in South Africa has been sector-specific and predominantly concentrated on the music, craft, film and television and the publishing sectors possibly because they were studied in detail for the CIGS programme. CAJ (2005) provides a comprehensive survey of research in these sectors over the period 1997 – 2005. The Cultural Industries Growth Strategies (CIGS) reports were the initial documents and remain important. However, many later reports merely replicated much of the CIGS reports and thus “we see little progression in the contents of the earliest reports to the latest” (CAJ, 2005). A theme highlighted in much of the research on the South African creative sector and the various sub-sectors is the lack of accurate and reliable data. Because this data is not available, researchers are forced to make estimates, often through discussions with knowledgeable persons involved in the sector. This means that estimates of the economic contribution vary widely, or that once-estimated figures are quoted for many years after they were estimated. The importance of accurate data is illustrated in the United Kingdom and Singapore. Accurate data collected by the national statistical agencies provides a clear indication of the significant contribution that the creative industries can make to the economy and also accurately documents the high rates of growth in these sectors. These figures can be used by the creative industry to more effectively lobby government. The South African research surveyed above highlights the diversity of the creative sectors. There are however some common findings across the research. • Many organisations in the creative sector are small companies and struggle with the types of issues that are common to many small companies. These include access to finance, the lack of business skills and lack of integration into the international market. • The lack of skills is another commonly mentioned constraint that not only affects small firms. • The creative industries are often fragmented. Even within sub-sectors there are either a number of competing industry level organisations or none. There are few bodies that stretch across sub-sectors to represent the creative sector as a whole. This, together with ‘gatekeepers’ in some of the sectors often means that networking opportunities are limited, especially for smaller newer firms. • Success often depends on not only producing a good or innovative product or service, but also being able to access the right networks to publicise or sell the output. • The perceived lack of marketing of Johannesburg nationally; the need for better education and training; • the lack of flexible facilities that can be used by small business and freelancers; and the importance of networking opportunities. • The role of ‘hubs’ in both regions and around specific sites such as venues were also mentioned as important. • Crime and urban decay were mentioned as threats to tourists and audiences. • Loss of talent to opportunities abroad and in other areas nationally was also an issue identified by respondents. • The importance of technology and its rapid change mean that organisations have to continually evolve and innovate. M A P P I N G M E T H O D O L O G Y
  • 51. The Status of the Gauteng Creative Industries 1. The creative industries in Gauteng The aim of this mapping exercise is to examine the contribution of the creative industries to the Gauteng economy in terms of a number of basic economic variables. An additional purpose is to create a snapshot of the creative industries for policy purposes. As discussed in the literature review, the notion of value in the creative industries is a contentious subject with a multitude of meanings and methodologies to assess its impact. For the purposes of this mapping exercise the chosen variables are contribution to GDP, value-added, employment and turnover. This particular iteration of the research also aims to establish a baseline against which future growth and development can be compared and programme outcomes measured. Economic contribution in this document is narrowly defined as the output of the industries (i.e. turnover), the “value-added” of these activities (i.e. the additional economic value that these industries create once input costs are accounted for) and in terms of employment. With this data it is possible to assess the strategic role of the sector and how it intersects with policy priorities in the province as articulated in the Gauteng Growth and Development Strategy (Gauteng Provincial Government, 2005). 1.1. The creative industry segments This report provides an overview of the Gauteng creative industries and the sectors that comprise it. The methodology section outlines the activities that were the defining principles of the sector definitions in more detail and additional sector reports narrow the focus to each individual sector. The sectors investigated are: • Audio-visual • Craft • Cultural tourism and heritage • Design • Fashion • Multimedia • Music • Performing arts • Print media and publishing • Visual arts It is important to note that many of these industries are interdependent and, through inputs in other sectors in fact create value within each other, as well as in related sectors such as tourism, manufacturing and services. 1.2. Characteristics of the creative industries The broad characteristics can be defined as follows27 : • Primarily constituted of micro, small and medium enterprises. • Agglomeration is a feature of production, especially in sectors that are dependent on key infrastructure such as film studios, theatres and museums. • Largely unorganised both in terms of organisations and workforces. • Dependent on direct sales and service provision to the general public and tourists rather than royalties. • The value chain of the creative industries begins with the creators and artists who typically are the freelancers and individuals rather than the firms. These creators and artists constitute approximately half of the respondents in the sample of this study. The production and distribution stages of the value chain are represented equally in the sample, most typically as specialist firms with a smaller proportion representing the service sector (education and training). This structure is typical for this industry28 . 27 These aspects are explored in great detail in the literature review section of this report 28 See Table 3.11 in Study 1 of The Gauteng Creative Mapping Project 4 5
  • 52. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S GAUTENG’S CREATIVE MAPPING METHODOLOGY The following features distinguish the activities of creative industries from other sectors: • The uncertain nature of creative products and the markets for them which require constant product design, development and innovation. • The role of some cultural products as a “public good”. • Each product is, although sometimes similar, characterised as unique, due to the attributes of the artistic content of the product. • Creative products generally make direct and indirect references to cultural and social relations. • Creators are personally involved and invest in many products and services. • The project-based of activities which are temporary and generally collaborative (Vogel, 1998). 1.3. Characteristics of Gauteng’s creative industries29 The province is host to over 11,000 firms and organisations active in the creative economy. The figure below provides a diagrammatic representation of the breakdown of firms and organisations by sector. It is clear that the largest sectors in terms of the numbers of firms are design (25%), craft (21%), audio-visual (11%), music (11%) and visual arts (10%). Figure 9: Creative Industries in Gauteng by number of firms in each sector With regard to workplaces, 27% operate from home-based studios or workshops, 46% from rented premises and 23% from premises that they own. The sectors most likely to base their work at their homes include visual arts, print media and publishing, music and design enterprises and organisations. In general, across all sectors, these organisations and enterprises report that their majority owners are white South Africans and 37% of these majority owners are young people. The majority of enterprises (44%) are registered Closed Corporations, 18% are Limited Companies and 14% are sole traders. A significant portion (11%), are non-profit enterprises registered as trusts, Section 21 Companies or as non-profits predominantly in the craft, visual arts, performing arts and cultural tourism and heritage sectors. Over 50% of enterprises are owned by a single individual and 19% by 2 people. Over 90% are owned by South Africans. With regard to levels of organisation within the sector, 54% of firms and organisations of the survey indicate that they are members of industry associations/bodies. Given that the sample was drawn primarily from industry data bases from professional associations, this figure is surprisingly low. In addition, 87% of entities surveyed reported that the majority of their workforce is not unionised. The low levels of unionization may be explained by the large proportion of smaller firms within the creative sector as these types of firms are unlikely to be unionised. The creative industry has a degree of organisational stability as evidenced by the 44% of firms that have been trading for 10 years or longer. Significantly, 34% are less than 4 years old, an indication of the rapid growth of enterprises particularly in the sector. This trend is particularly apparent in the fashion, design, multimedia, cultural tourism and heritage and visual arts sectors. 29 The baseline data for this section of the report can be found in Study 1 of the Gauteng Creative Mapping Project M A P P I N G M E T H O D O L O G Y
  • 53. As mentioned above, many sectors of the creative industries, representing 54% of firms, are interdependent and as such, report secondary activities outside of the narrow parameters of their own sector. The figure below is a diagrammatic expression of how each sector views these linkages within the sector, within the broader creative industries or outside of the sector. The most interdependent sectors within the creative industries are the fashion, audio-visual, multimedia, publishing, music and design sectors. Those with dependencies outside of the creative industries include design, print media and publishing and cultural tourism and heritage and to lesser extent audio-visual and music. Figure 10: Interdependencies in the Creative Industry Sectors In general 34% of enterprises and organisations report that they require additional financial activity to support creative activities, however there is some sectoral variation. In the performing arts (54%), music (42%), cultural tourism and heritage (50%) and audio-visual (32%) sectors significant numbers of enterprises report that additional activities are engaged in to support creative work. Income from the sectors comprising the creative industries is primarily derived from direct sales and services. Since grants contribute only 7% of primary income and 9% of secondary income, the creative industries in Gauteng are not as dependent on government grants as generally thought. Royalties, which are the income from intellectual property, appear to have very little significance for the sector as a whole, as does the sub-letting of space. Sectorally, the breakdown is similar, however income from grants is higher in the visual arts, performing arts and cultural tourism and heritage sectors than in the others. Unsurprisingly, royalties are a primary source of income for the music and print media and publishing sectors; however the levels are extremely low. This is indication of the dominance of foreign content in these markets. The visual arts and multi-media sectors derive secondary income from royalties and the cultural tourism and heritage and performing arts sector from sub-letting, but very little primary income is generated from these sources. Figure 11: Primary and Secondary Income Sources for the Creative Industries 4 7
  • 54. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S GAUTENG’S CREATIVE MAPPING METHODOLOGY The figure below (Figure 12) compares turnover per employee (labour productivity), assets per employee (capital intensity) and wages across the sectors. The audio-visual and the music sectors produce the most revenue per person employed. These sectors are also relatively capital intensive in relation to output production. The cultural tourism and heritage sector has by far the highest ratio of assets to employees. This is unsurprising given the number of museums in this sector that have a large asset base. Wages are highest in the print media and publishing and visual arts sector. The high wages in the print media and publishing sector reflect the high levels of education within this sector and the large firm sizes. The high wages in the visual arts sector reflects the underlying composition of the sector sample; a relatively high proportion of gallery owners were sampled in this sector. Employees in the craft and the fashion sectors earn on average the lowest of all the sectors (less than R4,000 per month). Figure 12: Turnover, assets and wages (second scale) per employee 2. The contribution of Gauteng’s Creative industries The total direct and indirect contribution of the 11,320 firms and organisations comprising the creative economy is R33,3 billion per annum in turnover, creating employment for over 182,000 people. The creative industries in Gauteng contribute R11,6 billion rand in direct output and R6,2 billion in value-added to the economy creating employment for over 63,000 people (Table 10 below). Table 10: The Total Contribution of the Creative Sectors to the Gauteng Economy The creative industries in the province contribute about 1% of the value-added by the tertiary sector and 0.7% for the provincial economy as a whole30 . In terms of direct employment, the creative industries account for 1,9% of employment in the province, slightly more than agriculture and forestry (1,8%) and slightly less than mining (2,5%)31 . With regard to industries comprising the tertiary sector, the creative industries do not compare favourably as revealed in the figure below: OUTPUT (R m) VALUE-ADDED (R m) EMPLOYMENT TOTAL CONTRIBUTION Direct 11,639 6,202 63,632 Indirect 21,693 4,450 118,607 TOTAL 33,332 10,652 182,239 30 It is important to note that in this study, the definition of the creative industries used is narrowly defined to understand the dynamics of the core of the creative industries as understood in South Africa (see literature review for a discussion on the definition of the creative industries, internationally and locally). Large sectors (and significant contributors to the economy) such as advertising, architecture and software have been excluded from this study. 31 This comparison is based on the March Labour Force Survey 2007. M A P P I N G M E T H O D O L O G Y
  • 55. Figure 13: Employment in the Tertiary Sector The creative sectors also buy inputs from other sectors. These indirect impacts which are documented in Table 10 above are called multiplier effects. No multipliers exist for the creative sectors as a whole in South Africa or Gauteng and there is little consistency internationally. Therefore, for the purposes of this study, given the estimated Gauteng output multipliers32 and the multiplier range for the UK33 and Singapore34 , the chosen multipliers for the Gauteng creative industries of 1.86 for output and 0.9 for value-added have been chosen35 . Based on these multipliers which assess indirect contributions, the figures increase significantly. Using these assumptions, the sector output totals R21,6 billion, value-added equals R4,4 billion and it creates employment for over 118,000 people. There is a large variation in the employment, turnover and value-added at sector level. This is primarily due to the nature of individual industry outputs, as described in the value chains in the individual sector reports. The figure below (Figure 14) provides a breakdown of employment, turnover and value-added by sector. It is clear that while some sectors, such as print media and publishing and audio-visual represent a small number of firms and employ a relatively small workforce, the turnover and value-added of firms in this sector is high. The visual arts sector, despite representing a large number of firms and organisations, has relatively low turnover, value-added and employment. The cultural tourism and heritage36 and craft sectors, despite employing large numbers, has low turnover and value-added. The music, visual arts, multimedia and design sectors have a more balanced distribution of employment, turnover and value-added. Figure 14: Proportion of Employment, Turnover and Value-Added by Sector 32 Estimates for a Gauteng output multiplier vary between 1.7 and 2.6 (van Seventer, 1999). The higher multiplier is for models that assume that the Gauteng economy is closed i.e. money generated in Gauteng remains in the province. This assumption is likely to false, and the actual multiplier is likely to be closer to the open model estimate of 1.7. 33 In the United Kingdom output multipliers vary between 1.56 and 1.86 and value-added multipliers between 0.83 and 0.95 (Heng, Choo and Ho, 2003) 34 Estimates of output multipliers for the Singapore creative industries vary between 1.27 and 1.78. Value-added multipliers for the same industries vary between 0.48 and 0.72 (Heng, Choo and Ho, 2003). 35 The Literature Review section of this Gauteng Creative Mapping Project has a discussion about the value of multipliers and the work of the CCI based at the Queensland University of Technology in Australia called The Creative Trident which assesses the presence of creative employment in the broader economy. 35 It is important to note that this sector is dominated by public sector institutions which account for the exceptionally high levels of employment and low levels of turnover. 4 9
  • 56. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S GAUTENG’S CREATIVE MAPPING METHODOLOGY The cost to turnover ratio has remained consistent at 0.61 for 2005 and 2006. In 2005, the mean cost of running a creative business was just over R4 million, a cost that rose to just over R5 million in 2006. There are distinct sectoral differences in this regard however. As revealed in the table below, the most capital intensive enterprises to operate are music and audio-visual enterprises. Figure 15: Mean capital intensity by sector 2005 & 2006 The figure below provides proportional breakdown of costs per main category to establish what the primary cost drivers are in the creative industries: Figure 16: Breakdown of costs by major category of expense Operational costs and those associated with wages represent the highest proportions of expenditure in creative industry organisations and enterprises. Once again, there are distinct sector variations in this regard. The craft and fashion sectors expend over 40% on raw materials, while the largest cost for the performing arts and cultural tourism and heritage sectors are wages and salaries. Operational costs are the largest expenditure group for the visual arts, multimedia, audio-visual, design and print media and publishing sectors. There are also distinct variations in the asset base of the individual sectors as indicated in Table 11 below: M A P P I N G M E T H O D O L O G Y
  • 57. Table 11: Mean Replacement Value of Assets by Sector The design sector has the smallest asset value of all sectors, cultural tourism and heritage and performing arts the largest. In the case of the latter two sectors, this is an indication of the specialised nature of infrastructure required for the practice of these art forms. 3. Employment, wages and skills37 Employment The creative industries provide employment for over 63,000 people as shown in Figure 17 below. Figure 17: Employment by Sector 37 Comparisons with provincial employment data in this section have been derived using the Stats SA March 2007 Labour Force Survey. Mean replacement value of assets Mean (R) Design 136,000 Visual arts 588,455 Craft 663,880 Multimedia 720,000 Fashion 1,171,850 Music 1,654,615 Print media and publishing 1,834,444 Audio-visual 1,894,565 Cultural tourism and heritage 2,602,000 Performing arts 6,753,011 Total 1,952,335 5 1
  • 58. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S GAUTENG’S CREATIVE MAPPING METHODOLOGY Unionisation Over 87% of workplaces report that the majority of employees are not unionised. The following table provides a breakdown of reported majority unionisation in the workforce per sector: Table 12: Unionisation in creative workplaces Even sectors such as music and performing arts which have had organised labour structures for many years report 10% or less levels of organisation in the workplace. It is important to note however, that formality of workplaces and the nature of work performed by creative workers may be a deterrent to classical workplace organisation formation such as unions. The low levels of unionisation may also be explained by the large proportion of smaller firms within the creative sector as these types of firms are unlikely to be unionised. Employment: full time, part time and freelancers The mean full-time employment per firm is 13,1 people; part-time employment is 2,3 and for freelancers it is 8,1. This is consistent with data from across the globe which points to the reliance on freelance workers for many enterprises. This is especially true for the music and audio-visual sectors. It is important to note that some sectors, such as visual arts, design and fashion have mean values of less than 1, an indication that the reliance of these sectors is less on a flexible labour force but on a small full-time workforce. The only sectors that report employing significant numbers of part-time workers are performing arts and music and to a lesser degree the craft sector as can be seen from Table 13 below. The audio-visual sector has the highest number of contract and freelance personnel. Table 13: Employment Summary Sector Yes No Multimedia 0% 100% Design 5% 95% Audio-visual 7% 93% Print media and publishing 8% 92% Fashion 9% 91% Performing arts 11% 89% Music 11% 89% Craft 22% 78% Cultural tourism and heritage 25% 75% Visual arts 29% 71% Total 13% 87% Sector (% of total employment) Full-time employees Part-time employees Contract/freelancers/service providers Visual Arts 84.8 9.13 6.09 Performing Arts 73.3 24.97 1.70 Cultural tourism and heritage 96.4 2.39 1.17 Multimedia 94.0 1.11 5.35 Music 53.0 17.91 29.02 Craft 75.7 14.74 9.55 Audio-visual 36.5 6.88 56.58 Print media and publishing 98.2 0.80 0.91 Design 92.4 5.51 2.09 Fashion 93.2 4.85 2.02 M A P P I N G M E T H O D O L O G Y
  • 59. Overall, employment since 2005 has remained stable, with over 60% of firms and organisations reporting no change in employment numbers. With regard to employment growth, 28% of firms report increases. This is particularly the case in print media and publishing sector. Racial, gender and age composition of employees Of all the people employed, 57% are black South Africans and 53% are women. Compared with general employment in Gauteng and the tertiary sector in particular38 , the sector shows a more equitable work environment for women. Of the total number of people employed in the tertiary sector, 50% are women primarily concentrated in the wholesale and retail sector and in private households. The figure below (Figure 18) shows a comparison of employment by industry in the tertiary sector, including the creative industries: Figure 18: Employment of Women in the Tertiary Sector The sector also provides significant employment for young people below the age of 35, with 47% of employees falling into this category, slightly higher than the province-wide proportion of 29%. Just over 40% of the workforce of the tertiary sector in Gauteng is below the age of 35 and when compared with the industries comprising the sector, the creative industries employ a far higher number of young people than other sectors as revealed in the figure below: Figure 19: Youth Employment in the Tertiary Sector The opposite is true however, when the focus turns to the racial breakdown. Provincially over 80% of the workforce comprises Black South Africans but in the creative industries 57% are black. Further research will be required to investigate whether this is a function of the educational requirements of the sector, as such likely to change over time or if there are further systemic issues that need to be addressed. The employment profiles of the creative industry sectors are quintessentially South African, indicating deep rooted social, economic and racial differences in access to skills and education among all South African groups. Black men dominate employment in the visual arts, cultural tourism 38 Comparative data obtained from the March Labour Force Survey 5 3
  • 60. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S and heritage, music and performing arts sectors. Black women are most likely to be employed in the performing arts, craft and fashion sectors. White men dominate the design and multimedia sectors, while white women are more likely to be employed in the print media and publishing and audio-visual sectors. Figure 20: Comparison of Employment Equity in the Labour Market: Gauteng vs. Creative Industries When compared with the tertiary sector in Gauteng, however the picture is more favourable. More Black South African women obtain employment in the creative industries than in the broader tertiary sector, and an almost equal number of black men have access to employment. Employment of white South Africans is disproportionately high however. Figure 21: Comparison of Employment Equity in the Labour Market: Gauteng Tertiary Sector and the Creative Industries Analysing racial representivity by sector shows distinct differences within the creative industries: GAUTENG’S CREATIVE MAPPING METHODOLOGY M A P P I N G M E T H O D O L O G Y
  • 61. Table 14: Racial and Gender Breakdown of Employment by Sector The fashion, cultural tourism and heritage and performing arts sectors have the largest proportion of black workers; multimedia, design and print media and publishing the fewest. With regard to gender matters, multimedia, music, visual arts and design sectors show the lowest proportions of women employed. Unsurprisingly, and supporting all existing assumptions39 , the craft and fashion sectors are the largest employer of women in the creative industries. With regard to employment of people with disabilities, 15% of enterprises and organisations reported that they employ at least one person with a disability. Wages In general, a full-time worker can expect a wage of R8,678; a part-time worker a wage of R3,981 and a freelance a wage of R7,229. Table 15 provides a breakdown per sector of the mean wage levels by employment category: Table 15: Mean wage level per sector Sector % Black % Female Multimedia 26 36 Design 30 46 Print media and publishing 39 62 Visual arts 51 42 Audio-visual 52 54 Music 58 41 Craft 66 72 Performing arts 72 53 Cultural tourism and heritage 76 47 Fashion 78 72 39 See the Cultural Industries Growth Strategy Craft Report, DTI Craft CSI and the Gauteng Audit of Craft Assets and others. Sector Permanent Full-time employees (R) Permanent Part-time employees (R) Freelancers (R) Print media and publishing 14,556 4,833 5,820 Visual Arts 12,000 2,900 2,500 Multimedia 10,750 4,375 15,200 Audio-visual 10,444 9,000 10,900 Performing arts 9,847 3,427 9,383 Design 9,594 2,675 0 Music 7,829 5,167 2,949 Cultural tourism and heritage 6,140 1,613 3,000 Craft 3,839 2,500 3,500 Fashion 3,307 1,325 1,388 TOTAL 8,678 3,981 7,229 5 5
  • 62. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Based on March Labour Force Survey data, 47% of employees in the Gauteng economy earn less than R2,500 per month and only 5% earn between R8,000 and R11,000 per month. As such, the mean wage levels on the creative industries are high relative to general wages in the province. Once again, there are distinct sectoral variations in this regard. Wages are highest in the print media and publishing sector and lowest in the fashion sector40 . While 37% of employers report that there have been no changes in wages since 2005, 35% report that wages have decreased and 25% report that wages have increased. Wages have generally decreased in the performing arts, audio-visual and cultural tourism and heritage sectors and increased in the fashion and design sectors. Education levels The creative industries workforce is reasonably well educated, with 36% of the workforce reporting to have a tertiary level qualification such as a diploma or degree. In terms of vocational training, 10% report that this is the highest level of education and 27% report secondary schooling (Grade 10 – 12). It is important to note 25% indicate that this is not applicable to their workforce at all. Comparatively, the creative industries have far lower levels of secondary education than the Gauteng labour force in general and the industries that comprise the tertiary sector. With regard to post-matric qualifications, such as vocational training, diplomas and university education, the workforce and management of the creative industries show far higher levels of education than the Gauteng labour force and all other industries in the tertiary sector. Figure 22: Highest Level of Education by Sector in Gauteng The various sectors have very different dynamics here as indicated in the graph below: Figure 23: Education levels by sector of the workforce 40 It is important to note the reasonably high wages reported in the visual arts sector is an indication of the number of galleries included in the sample, and is thus not an indication of the earnings of visual artists. GAUTENG’S CREATIVE MAPPING METHODOLOGY M A P P I N G M E T H O D O L O G Y
  • 63. The visual arts, craft and music sectors provide significant opportunities for school leavers, however the majority of creative industry sectors require some kind of further education and training. The most qualified workforces are found in the cultural tourism and heritage sectors, music, audio- visual, print media and publishing and design sectors. It is important to note that with regard to vocational training, some sectors, such as fashion, do not have dedicated qualifications as yet. As such, the low levels of qualifications in these sectors may not be an indication that there is no need, rather that such training is not available in the market as yet41 . Managers in the creative industries mainly have undergraduate or post graduate qualifications and to a lesser extent, diplomas as the figure below shows. The sector variations show similar trends to those of the workforce except with regard to the value of post-graduate qualifications for management in the performing arts, multimedia, print media and publishing sectors. Figure 24: Comparison of Management and Workforce Qualifications Wages and Fields of Study In the South African labour market, tertiary education is the most powerful determinant of wages earned and employees in Gauteng enjoy higher median wages than any other province. Significantly, the culture and the arts sector rank sixth after law, business, agriculture, physics and maths and engineering according to a recent national study on wages for those with post matric education and training (UASA, 2008). Figure 25: National ranking of sectors Source: UASA (2008) 41 A full list of registered qualifications and those under development are included at Appendix 4. 5 7
  • 64. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S 4. Markets and exports The markets for the creative industries in Gauteng are principally the general public and tourists (59%) and other firms (38%). Government represents only 2% of the total market base. In general, all the sectors comprising the creative industries show reasonably high levels of export activity42 . The most active sectors are audio-visual (61%), multimedia (55%) and music (54%) as shown in the figure below: Figure 26: Export activities by sector The sectors generating the highest mean percentage of business through international markets are the cultural tourism and heritage (36%), design (35%), performing arts (34%), visual arts (26%) and audio-visual (23%) sectors. The music (6%), print media and publishing (9%), fashion (10%), multimedia (16%) and craft (18%) sectors show the lowest mean percentages of products and services sold internationally. There is a strong relationship between firm size and exporting; only 40% of those companies with less than 5 employees participate in the international market. This rises to almost 70% of those with more than 50 employees. In spite of relatively high levels of export activity, the international market is not the focus for most of the companies. Only 45% of those in the international market sell more than 10% of their products internationally. Approximately 10% sell more internationally than domestically. Just under 50% of firms and organisations export their products and services to the following countries: Figure 27: Breakdown of export markets Table 16 below outlines the most important markets by sector: 42 It is important to note that many respondents included sales and services provided to international visitors (i.e. tourists) and companies in South Africa as export activities GAUTENG’S CREATIVE MAPPING METHODOLOGY M A P P I N G M E T H O D O L O G Y
  • 65. Table 16: Most important export markets by sector The print media and publishing sectors are the only ones with any real focus on SADC markets which is most probably a function of a large proportion of educational publishing in the South African print media and publishing sector. 5. Technology The sectors vary in their dependence on technology although almost all rely on fixed telephony. The sectors can be grouped into three. The first is those for which computer technology, including sector-specific hardware and software is important. This group includes the design, print media and publishing, audio-visual, multimedia and music sectors. The second group is those that have little use for computer technology and includes the craft and the fashion sectors. The firms in these sectors are generally small and produce low-technology products. The third group is a ‘medium- technology’ group that includes the visual arts, performing arts and cultural tourism and heritage sectors. Fixed line phones and mobile phones More than 80% of respondents viewed fixed line phones and mobile phones as important for their business. In many cases their relative importance depended on the nature of the sector. The cultural tourism and heritage sector had the lowest proportion of firms valuing mobile phones. This is predominantly because of the fixed nature of many organisations, such as museums, in this sector. Figure 28: Fixed line phone in the creative industries Fashion and craft were the sectors that attached the least importance to fixed line phones but were among the sectors that attached the most importance to mobile phones. Sector Most important market % Second most important market % Visual arts US and Canada 86 EU 57 Performing arts EU 77 US and Canada 62 Cultural tourism and heritage EU 100 US and Canada 50 Multimedia EU 67 Asia 50 Music EU 57 US and Canada/Rest of Africa 36 Craft EU/US and Canada 50 SADC/Rest of Africa 38 Audio-visual EU 76 US and Canada 65 Print media and publishing SADC 67 EU 50 Design EU 30 SADC/Rest of Africa/ US and Canada 20 Fashion EU/SADC/US and Canada 25 5 9
  • 66. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Figure 29: Importance of mobile phones Computers Firms in the audio-visual sector highlighted the importance of computers as did the visual arts, multimedia and print media and publishing sectors. The fashion and the craft sectors were the sectors that regarded computers as the least important. As discussed above this is because many of the firms in this sector are small and are involved in the types of activities that do not require computer technology. Figure 30: The Importance of computers There is an obvious correlation between internet use and computers. The print media and publishing, audio-visual, multimedia and design sectors all regard the internet as an important tool for business. In contrast to these sectors, approximately 60% of firms in the fashion sector and close to 40% of firms in the craft sector view the internet as only of moderate importance to their business. Figure 31: The importance of the internet GAUTENG’S CREATIVE MAPPING METHODOLOGY M A P P I N G M E T H O D O L O G Y
  • 67. Sector-specific hardware and software Specialist equipment and hardware is most important in the design, multimedia, music, audio-visual and print media and publishing sectors. Examples include camera equipment, editing and recording equipment. As with other forms of technology, sector-specific hardware is not an important tool in the fashion and craft sectors. Figure 32: The importance of sector specific hardware In most sectors the use of sector-specific hardware and software are related. The multimedia, design, print media and publishing, audio-visual and music sectors all regard sector-specific software as important. There is a second group of sectors – visual arts, performing arts and cultural tourism and heritage – where sector-specific software is less important. Lastly, the craft and fashion sectors have little use for this type of software. This is unsurprising given the low levels of computer technology generally used in these sectors. Figure 33: The importance of sector-specific software 6. Government funding and private sector financing The creative industries are generally regarded as being dependent on government grants as a source of income, however only 25% of firms and organisations that participated in the Gauteng Creative Mapping Project indicated that they had applied for funding over the last two years. When asked what the reason was for not applying, 63% of companies and organisations indicated that there was no need and 18% indicated that they did not apply because they were certain of failure. When compared to the national profile, it is the performing arts and multidiscipline sectors in Gauteng that benefit the most from funding allocations by the National Arts Council (NAC). Over 40% of all funds distributed by the NAC is awarded to Gauteng-based artists, companies and organisations. As the figure below shows, the bulk of this funding benefits the disciplines of dance and choreography, music and opera and theatre and musicals as well as the multidiscipline sector. 6 1
  • 68. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Figure 34: NAC Funding by Discipline 2006 Source: NAC Annual Report (2006) The performing arts, cultural tourism and heritage and audio-visual are predominantly those that did apply for funding from government, arts funding agencies, donors and corporate sponsors. Of those reporting that they had applied for funding, 67% indicated that they were successful. A staggering 100% of cultural tourism and heritage, 87% of performing arts, and 67% of design, multimedia and audio-visual entities successfully applied for funds. The bulk of funding was obtained from government (37%) and 23% from arts funding agencies. Donors and corporate sponsors (12%) also comprise an important source of funding as can be seen from Table 17. Table 17: Sources of Funding There is a correlation between firm size and funding success. Firms with 20-49 employees are almost twice as likely to apply for funding as smaller firms. The likelihood of applying for funding decreases with a further increase in firm size, however larger firms are more likely to receive funding when applying. More than half (59%) of the 1-4 employee firms that apply for funding receive it, compared to three-quarters (75%) in the 5-19 size category and 83% in the 20-49 size category. This rises to 100% for those firms with more than 50 employees. Over 60% of organisations report that they have no debt. The mean amount of debt that the remaining 44% carry is estimated at just over R2,5 million. Sectorally, the visual arts report the least debt and the print media and publishing sector the most. Over 70% of the sector has not applied for credit from a financial institution in the last two years. The companies and organisations most likely to apply for credit are in the audio-visual, cultural tourism and heritage, craft, music and design sectors, and 77% of those applying were granted loans. Of those who did not apply, 66% indicated that there was no need, 8% cited certain failure and 7% indicated that they had no collateral. Both the applications for bank loans and the success of these applications increase with the size of the company, although both level out once a firm is larger than 20 employees. Together this means the probability of success (the probability of applying multiplied by the probability of a successful application) for firms with more than 20 employees is approximately twice that of smaller firms. There are a number of broad reasons why this may be the case. The first is the inherent nature of small firms. These firms are less likely to have collateral, are as a group more risky (small firms are more likely to fail than larger firms) and may not have the resources or time to apply for a loan. Funding obtained from Percentage (%) Government 37 Arts Funding Agency 23 Other entities 15 Donors 12 Corporate sponsorship 12 SA - NGO’s 2 GAUTENG’S CREATIVE MAPPING METHODOLOGY M A P P I N G M E T H O D O L O G Y
  • 69. These factors will all discourage loan applications either because the firm believes the process is too time consuming with little financial benefit or because they may not be able to afford the higher repayments that are required to compensate the banks for the increased risk. The second set of reasons may be because the banks do not understand the risk profile of small firms in the creative sector. They may assume that these firms are more risky than they actually are and thus not lend to them. The third reason is that small firms may not view themselves as needing a loan or being able to productively use a loan. Small firms are likely to be focused more on survival rather than expansion. In terms of obtaining capital from sources other than financial institutions, 22% indicated that they had approached informal sources such as family and friends, and of these, 75% were successful. Informal loans, from friends, relatives or other informal sources, are a less common source of funding than bank loans. However, close to one-fifth of the sample has applied or asked for an informal loan. The fashion, music and design sectors are those with the highest proportion of informal loan applications. Unlike grant funding and bank loans, Informal funding is negatively related to firm size. Small firms are more likely to successfully apply for an informal loan. 7. Obstacles The obstacles43 faced by organisations in the creative sectors fall into four broad categories. The first is access to and the cost of finance. A third of firms in the sample mentioned the cost of finance as either their primary or secondary obstacle. The second area of concern is telecommunications costs. These costs are high in South Africa when compared to other countries (Genesis-Analytics, 2005). For most firms, telecommunications technology, whether in the form of broadband or mobile phones are essential for their business. The third area of concern is the perceived lack of government promotion. Many firms mentioned this as a secondary obstacle rather than a primary one. A common perception across the sectors is that government favours other sorts of recreation, specifically sport, over the creative sectors. The last mentioned area of concern relates to costs in general. Labour costs, raw material costs and transport costs were often mentioned as obstacles to business. Overall, costs were the most frequently mentioned obstacle with 60% of firms mentioning obstacles related to costs as either their primary or secondary obstacle. Market related issues, such as the practices of competitors and a skilled workforce, were mentioned by 39% of firms, followed by government related issues by 33% of firms. Figure 35: Primary and Secondary Obstacles The issue of costs was consistent across sectors as well; more than half the companies reported costs as an obstacle. These were particularly an issue in the visual arts, print media and publishing and fashion sectors where more than two-thirds of firms mentioned costs as an obstacle. Other sector specific areas of concern include access issues for the audio-visual sector (50%), market conditions for the multimedia sector (64%) and the print media and publishing sector (54%) and government issues (including licensing and compliance issues) for the fashion sector (55%). Within the cost category, the cost of finance was the most reported obstacle. 60% of firms that report cost issues as their primary obstacle claim that the finance costs are an obstacle. The next most frequently mentioned primary cost obstacle was telecommunications costs (34% of the primary obstacle cost category). Transport costs (32%) were the most frequently mentioned costs for those organisations mentioning costs as a secondary obstacle. This was closely followed by finance costs (32%) and telecommunications costs (32%). 43 Please note that percentages in this section may not add up to 100 as multiple answers could be provided. 6 3
  • 70. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S When looking at cost-related obstacles by business size, transport, telecommunications and raw material costs are the most problematic for micro and small enterprises, while raw material and labour costs are the most challenging for larger enterprises. Figure 36: Obstacles by Business Size: Costs The practices of competitors were the most commonly mentioned obstacle amongst the market conditions set of obstacles. The lack of a skilled workforce was also commonly mentioned as a secondary obstacle. Taxation rates are a primary obstacle for businesses that employ between 1 and 19 people, while the levels of skills of the workforce hamper the activities of those employing between 20 and 49 people. Market conditions related to the exchange rate and competitor practice are concerns for the larger enterprises in the creative sector. Figure 37: Obstacles by Business Size: Market Access A lack of government promotion of the creative sector was the most frequently mentioned obstacle among the government set of obstacles. This was especially the case among the organisations mentioning government as a secondary obstacle. Labour regulations are the second most frequently mentioned obstacle. Taken by business size, it is clear that SARS compliance, business licensing and customs and trade regulations are challenges for small businesses, while labour regulations are an obstacle for most businesses. All business cites the lack of promotion by government as an obstacle. GAUTENG’S CREATIVE MAPPING METHODOLOGY M A P P I N G M E T H O D O L O G Y
  • 71. Figure 38: Obstacles by Business Size: Government Access to government funding was the most frequently reported obstacle under the set of access obstacles. Access to bank finance was also commonly mentioned as an obstacle. This is in contradiction with the information regarding government and private sector funding above which indicates that the success rate of funding applications is high for those that do apply. Figure 39: Obstacles by Business Size: Access Very small businesses indicate that access to raw materials and production facilities are a significant business obstacle, while businesses employing between 20 and 49 people indicate that access to electricity is a problem. Access to finance from banks is an obstacle for very small businesses while access to government funding is an obstacle for all enterprises. If obstacles are ranked by the proportion of firms citing these as either a primary or secondary obstacle, finance costs emerge as the most common obstacle. Over one-third of firms in the sample mentioned these. The next most common obstacle was the costs of telecommunications. One-fifth of firms reported this as an obstacle. The ten most common obstacles fall into four broad groups – cost and access to finance; telecommunications costs; lack of government promotion; and other costs such as raw material, labour and transport costs. 8. Perceived needs The perceived needs44 of the companies are closely related to the obstacles described above. More than half the companies interviewed said they needed help with marketing their product. This illustrates the relative lack of business experience among many of the firms in the Creative Industries. This response was closely related to the size of the firms – smaller firms were more likely to require marketing help. Related to help with marketing, a quarter of the companies interviewed required help with international expansion. Another key area of firms’ needs was help with obtaining either government or commercial finance. Approximately one-third of firms interviewed mentioned each of these as a need. The need for help with commercial funding increased with firm size, whilst access to government funding was constant across size groups. Help with staff training was the fourth most common need linking with the lack of skilled people mentioned as an obstacle. Table 18 outlines the key needs identified: 44 Please note that percentages in this section may not add up to 100 as multiple answers could be provided. 6 5
  • 72. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Table 18: Creative Industry needs The figure below provides an indication of expressed needs by company size: Figure 40: Needs by firm size Help with obtaining commercial and government funding were the next most common needs articulated. As discussed above, access to and the cost of finance is perceived as an important obstacle to business among these companies. Firms in the 20-49 employee size category were most likely to need help with obtaining either government or commercial funding. Firms larger than this need little help with funding since it is likely that they have an established relationship with either commercial funders or government. Once again, there is a great deal of variation by sector although help with marketing was commonly mentioned across all sectors as revealed in the figure below. The multimedia and audio-visual sectors also highlighted a need for increased web presence. Figure 41: Market Development Needs GAUTENG’S CREATIVE MAPPING METHODOLOGY Need % Help with marketing 51 Help obtaining external commercial funding 29 Help obtaining external government funding 29 Staff training 26 Help with international expansion 24 Help with strategy and business planning 17 Increased web presence (marketing, distribution) 18 Help with developing new ideas for cash generation 14 M A P P I N G M E T H O D O L O G Y
  • 73. The print media and publishing, cultural tourism and heritage, design and fashion sectors highlighted the need for staff training. Improved strategy and business planning was cited as a need in the multimedia, visual arts sectors and craft sectors. Assistance with new ideas for revenue generation was raised primarily in the music and audio-visual sectors, while the multimedia, design, fashion and performing arts sectors highlighted a need to improve business processes. Figure 42: Business Development Needs Obtaining government funding was a key need for the cultural tourism and heritage sector, as was staff training. Obtaining external commercial funding was mentioned as a need by over half the organisations interviewed in the performing arts sector. Figure 43: Access to Capital Needs Scarce and Critical Skills The creative industries are characterised by a large number of generally specialist occupations. Creative workers globally and in South Africa, are experiencing two contradictory trends with regard to skills development. The first is the need for greater and greater specialisation in areas such as digital applications and the second is the need for cross-cutting generalist skills such as project management. This is further compounded by the project-based nature of work which requires constant new skills acquisition. As such, creative workers need consistent opportunities to develop both specialist and general skills during their careers (CAJ, 2008). The annual MAPPP-Seta sector skills plans since 2004 have pointed out the following with regard to skills needs in the creative industries: • Higher-level technical and creative skills are needed in all sectors. • Multi-skilled staff as well as specialists are needed in all sectors. • Business related skills are needed for enterprises to survive. 6 7
  • 74. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S 9. Conclusion It is clear that the creative industries are in a position to make a significant contribution to the Gauteng Growth and Development Strategy (GDS) in a range of key areas as follows: Recommendations outlined in the methodology section highlighted the importance of consolidating the existing databases and working with representative bodies in each sector to develop and maintain a solid database for future mapping studies and other research efforts of the creative industry directorate of the department. Since this mapping study now represents a baseline, future mappings would give the department the opportunity to track the data over time and establish patterns and trends. It was recommended that the department conduct mappings every two years. The Gauteng global city region initiative will require similar information from all industries in Gauteng and collaboration in research (different spheres of government, research institutes, line departments) would yield benefits to all Gauteng industries from data relating to education and infrastructure to economic and planning data. A final recommendation of the methodology section is to evaluate the beneficial spillovers from the creative sector to other parts of the economy to highlight the key contribution of the Gauteng creative economy in the Gauteng global city region. Finally, it is clear from the identified obstacles and perceived needs expressed by respondents in the Gauteng Creative Mapping Project that the following initiatives should be included in government support programmes: • Continued support for skills development, especially for micro and very small enterprises. • Mentoring and coaching support given the business support needs identified by small businesses and the large number of relatively young businesses and organisations in operation. • Assistance with obtaining access to capital either through public and private sector sources. • The development of marketing programmes to promote the creative industries broadly and to support businesses and organisatons in their marketing efforts. GAUTENG’S CREATIVE MAPPING METHODOLOGY GDS Priority Creative Industries Contribution Using existing infrastructure The creative industries primarily occupy home-based studios and workshops and rented premises. While some sectors are dependent on capital intensive and custom-build infrastructure a significant proportion can be accommodated within existing infrastructure. SMME and BBBEE The creative industries are largely populated by SMMEs that create significant employment opportunities for women, youth and people with disabilities. Equity in the sector however should be engaged as a matter of urgency. Nation building The products of the creative industries are by their very nature culturally and socially vested in the South African context. As such they are well positioned to promote social cohesion, brand loyalty and contribute to the broader development of a South African aesthetic, identity and consciousness Agreements and working relationships in Africa and internationally The Gauteng creative industries have high levels of contact through export, performance and tourist-oriented activities with foreign markets all over the world, particularly the EU, North America and Africa. In fact 27% of export activity is focused on the African continent. As such, a powerful base exists to improve exports and relations with key markets. Public Private Partnerships and Inter-Government Co-operation The inter-dependence of the creative industries is an indication of the co-operative structure which forms the base of all economic activity. Funding streams, labour, innovation, technology, products and services are generally conceptualised and offered collaboratively and often involve some level of government engagement. As such, the sector is practiced at partnerships and engagement with government and in a position to benefit from further engagement especially given the shared competencies for cultural development at national, provincial and local level. Focus on the Gauteng region While the sample of this mapping study was too small to differentiate regionally, it is clear that activity within the creative industries is present in all areas in Gauteng, with some sectoral variations. In accordance with international trends, the creative sector agglomerates particularly in urban contexts such as the City of Johannesburg where infrastructure, audience and finance come together most powerfully. The creative industries have the required agglomerations in many areas to maximise investment and programmatic interventions. M A P P I N G M E T H O D O L O G Y
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  • 80. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S industries Vol 2 Edward Elgar: Cheltenham Sen, A., (2004) How does culture matter? In Rao, V. and Walton, M. (eds.) Culture and public action, Stanford University Press Shilowa, M., (2004) Premier’s Speech at the opening of the Gauteng Film Indaba, 24 March 2004. Available from: http://www.gpg.gov.za/docs/ sp/2004/sp0323.html South Africa Foundation, (2005) Telecommunications prices in South Africa: An international peer group comparison, occasional paper No. 1 prepared by Genesis Analytics SA Good News (2007) Tourism Boost for Gauteng, Friday 2 November 2007 access on 2 May 2007 at http://www.sagoodnews.co.za South Africa.info (2008) Afrofusion: dance in South Africa [available at http://www.southafrica.info/ess_info/sa_glance/culture/dance.htm; accessed May 2nd 2008] South African Music Exportation (SAMEX), Business Plan for a Joint Action Group in preparation for an export council, April 2007. SA Yearbook (2007) SA Year Book 2006/07 access on 5 February 2008 at http://www.gcis.gov.za Shilowa, Mbhazima, (2004) Speech by Premier Mbhazima Shilowa at the opening of the Gauteng Film Indaba, 24 March 2004, (The speech is available from: http://www.gpg.gov.za/docs/sp/2004/sp0323.html) Standish, B. and Boting, A. (2006), A Strategic Economic Analysis of the Cape Town and Western Cape Film Industry (a study for the Cape Film Commission). (This document is also known as the “Cape Film Commission Impact Assessment Report” and it is available from: http://www. capefilmcommission.co.za/documents/Western%20Cape%20Film%20Industry%20-%20Impact%20Assesment%20Report%202007.pdf Statistic South Africa, (2007a) The South African Tourism Quarterly Report, 2007. Statistics South Africa, (2007b) Labour Force Survey, March TCI Management Consultants (1999) Study of the Market for Canadian Visual Art, a report commissioned by the Department of Canadian Heritage The Conference Board of Canada (2008) Valuing Culture: measuring and Understanding Canada’s Creative Economy, Preliminary Research Report presented to the International Forum on the Creative Economy, March 17-18, Hilton Lac-Leamy, Gatineau, Quebec. The Department of Environmental Affairs and Tourism, Domestic Tourism Growth Strategy: 2004 to 2007, South African Tourism, 2004. The Global Competitive Context Executive Summary, Final Version, 30 November 2005. The Recording Industry of South Africa (RiSA) Annual General Meeting Report, 20 June 2006. The Work Foundation (2007) Staying ahead: the economic performance of the UK’s creative industries prepared for the DCMS as part of the Creative Economy Programme (CEP) Thompson, E., Berger, C. & Allen, S. (1988) Arts and Kentucky Economy Centre for Business and Economic Research: University of Kentucky [On Line] available: http://www.state.ky.us/agencies/arts/artsecon.htm [Accessed: 4/04/08] Throsby, D. (2001) Economics and Culture, Cambridge University Press Throsby, D. (2007) A new moment for cultural policy? Paper presented to the Researchers’ and Practitioners’ Forum, Perth WA, 21 September 2007, Institute of Public Administration Australia, National Conference available at www.wa.ipaa.org.au/download.php?id=290 [Accessed on January 8th 2008] Thomas, H., (2005) The Art of Co-production (a background document commissioned by the SABC Content Hub). Available from: http://www. busvannah.co.za/Content/AofP%20final.pdf Thomas, H., (2000) “Variety Deal Memo”. Available from www.busvannah.co.za Trinity Session (2003) The Crafts and Visual Arts in the SADC Region, Produced as a SEED working report, International Labour Organisation Tuomi, K. (2005) The Scope of the Film Industry in the Western Cape. Paper 1 of the Micro Economic Development Strategy (MEDS), Western Cape Department of Economic Development and Tourism. Available from: Turnstyle Media Arts and Culture, (2001) Ons maak iets uit niks, The Craft Industry in the Northern Cape, Report commissioned by the Northern Cape Arts & Culture Council and the Department of Sports, Arts & Culture; TurnStyle MAC UASA (2008) The 7th Annual Employment Report, a report compiled by T-Sec Economists for UASA available at http://www.uasa.co.za/reports/ EmpReportNo7.pdf [Accessed 31 May 2008] REFERENCES R E F E R E N C E S
  • 81. UK Creative Industries Task Force (2001), Creative Industries Mapping Document 2001, UK Department for Culture, Media and Sport UNCTAD (2006) Creative Economy and Industries, a Creative Industries Division pamphlet UNESCO (1982) Cultural Industries: A Challenge for the Future of Culture, UNESCO, Paris UNESCO (1997) UNESCO/ITC Symposium on Crafts and the International Market: Trade and Customs Codification, Manila, the Philippines, October 1997. UNESCO (1988) World Cultural Report, UNESCO, Paris UNESCO (2000) World Cultural Report, UNESCO, Paris UNESCO (2003) Study on International Flows of Cultural Goods: 1980-1998, published by UNESCO UNITED NATIONS (2008) Creative Economy Report 2008: The challenge of assessing the creative economy – towards informed policy-making UNWTO (2007). United National World Tourism Organisation: Tourism Highlights 2007, access on 2 May 2008 at http://www.unwto.org VANSA (2006) Funding proposal, VANSA: Five year plan, Art and social development, 2006. van Seventer, D.E.N., (1999) The Estimation of a System of Provincial Input-Output Tables for South Africa, Studies in Economics and Econometrics, July. Vogel H (1998) Entertainment Industry Economics. Cambridge, Ma, Cambridge University Press WESGRO, (2000) Background report on the Craft industry in the Western Cape. Western Cape Provincial Manufacturing Technology Strategy, Craft Sector Report, 2004. Wikipedia, the free encyclopaedia (undated) Industrial Design Available at: en.wikipedia.org/wiki/Interior design [Accessed on October 25th 2007] World Economic Forum (2007) Global Competitiveness Report [Accessed on 19 May 2008 at http://www.gcr.weforum.org/ ] World Economic Forum (2008) Governors Meeting for Digital Ecosystem: Convergence Between IT, Telecoms and Media & Entertainment. [Available from: http://www.bain.com/WEFweb/WEF_Emerging_digital_ecosystem_business_models.pdf] World Intellectual Property Organisation (2003) Guide on Surveying the Economic Contribution of the Copyright Based Industries, WIPO publication No 893(E), Geneva Websites General BASA website: www.basa.co.za CAPE GATEWAY: www.capegateway.gov.za WESTGRO: www.wesgro.org.za DAC: www.dac.gov.za DTI: www.dti.gov.za CULTURE AND PUBLICATION: www.cultureandpublication.org CULTURAL ECONOMICS: www.culturaleconomics.atfreeweb.com/eia.html DCMS website: www.cep.culture.gov.uk KALAHARI.NET: http://www.kalahari.net MAIL AND GUARDIAN: http://www.mg.co.za NAC website: www.nac.org.za NEWS24.COM: http://www.news24.com RISA website: www.risa.org.za 7 5
  • 82. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S SAMRO website: www.samro.org.za SOUTH AFRICA.INFO: http://www.southafrica.info/ South African Cultural Observatory website: www.culturalobservatory.org.za UK government website: www.culture.gov.uk/creative_industries UNESCO website: http://portal.unesco.org/culture VANSA website: www.vansa.co.za Wordnet website: http://wordnet.princeton.edu/ Sector Specific 1021 MEDIA AND DESIGN: http://www.1021.co.za/multimedia_1.html ARTTHROB: www.artthrob.co.za . IFPI: www.ifpi.com IOL: http://www.iol.co.za THE NATIONAL LIBRARY OF SOUTH AFRICA: http://www.nlsa.ac.za/NLSA/ WORDNET PRINCETON: www.wordnet.princeton.edu Industry experts consulted in conducting the Gauteng Creative Mapping Project Design Sector Bernard Smith (Industrial Designers Association of South Africa) – email and telephone communication, December 2007. Bongani Nthombela (SABS Design Institute) – email and telephone communication, December 2007 Masana Chikeka (DAC) – in-depth interview on 20 November 2007 Pieter van Heerden (Consulta) – email and telephone communication, December 2007 Fashion Sector Adam Levine (Fashion designer, telephonic interview on 06/12/07) Clive Rundle (Fashion designer, telephonic interview on 06/12/07) Dion Chang (Fashion editor, telephonic interview on 03/12/07) Leshego Malatsi (Mzansi Designers, telephonic interview on 23/11/07) Lucilla Booyzens (SA Fashion Week, telephonic interview on 03/12/07) Masana Chikeka (Design DAC, in-depth interview on 20/11/07) Rees Mann (SewAfrica, telephonic interview on 28/11/07) Renato Palmi (Redress consultancy, telephonic interview on 29/11/07) Shana Rosenville (Lisof, telephonic interview on 06/12/07) Sonwabile Ndamase (SAFDA, telephonic interview on 22/11/07). Tracy Mann (CEO SewAfrica, telephonic interview on 04/12/07) REFERENCES R E F E R E N C E S
  • 83. Audio-visual Sector Bobby Amm (Commercial Producers’ Association) – email and telephone communication, October - December 2007 Howard Thomas (Busvannah Communications) - email and telephone communication, November – January 2008 Jacques Stoltz (Senior Marketing Manager, Gauteng Film Commission) – in-depth interview in May 2007 Josephine Mathe (NFVF) – email and telephone communication throughout 2007 Multimedia Sector Zander Grobler (Director 1021 Media & Design co-ordinator, telephonic interview on 19/12/07) Stephen Hobbs (The Premesis, telephonic interview on 19/12/07) Jamie Haigh (Temple House Design, telephonic interview on 20/12/07) Adam Harris (Technical Director Depth VFX, telephonic interview on 20/12/07) Jason Cullen (Sphere Animation Studio, telephonic interview on 18/12/07) Visual Arts Sector Joseph Gaylard (VANSA co-ordinator, e-mail correspondence on 06/012/07) Andries Oberholzer (Deputy Director:Visual Arts DAC, e-mail correspondence on 07/12/07) Bie Venter (Johannesburg Art Initiative, telephonic interview on 10/12/07) Khwezi Gule (The Johannesburg Art Gallery, telephonic interview on 11/12/07) Stephen Hobbs (The Premises, telephonic interview on 10/12/07) Dennis Clarke (The Paint Basket, telephonic interview on 10/12/07). Sector Study Data Sources Across sub-sectors: Funding database from National Department of Arts and Culture, Grants in Aid provided by Gauteng Arts and Culture Council Visual arts VANSA members list, The 2007 South African Art Information Directory Performing arts: PASA members list, Theatre Management SA Cultural tourism and heritage Museums Online SA (www.museums.org.za), Gauteng Tourism Authority (www.gauteng.net), South African Heritage resources Agency Multimedia Animation SA (www.AnimationSA.org) Music Midi Trust Book, The South African Roadies Association, Technical Production Services Association Craft Ceramics SA members list, Craftwise Magazine 7 7
  • 84. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Audio-visual National Association of Broadcasters members list, National Community Radio Forum (www.ncrf.org.za), Gauteng Film Commission (www. gautengfilmdirectory.org.za) Print media and publishing ABC members list, PANSA members list Design Design Educators’ Forum SA members list, www.BizCommunity.co.za Fashion Sanlam SA Fashion Week database, www.ifashion.co.za Appendix 1: Firm Level Survey: Long Questionnaire COVER PAGE 1. What is the name of your organisation? 2. What is the address of your organisation? 3. What is the phone number of your organisation? 4. What is the name of the respondent? 5. What is the name of the interviewer? 6. Where is the workshop or studio of your organisation located? As per above Other (specify) 7. What is the organisation’s main business location? Home workshop or studio Rented premises Owned premises Other (specify) 8. Time and date of interview GENERAL INFORMATION 9. What is the legal status of your organisation? Sole trader Cooperative Registered under section 21 CC Trust Limited company REFERENCES & appendices R E F E R E N C E S & appendices
  • 85. Partnership Local Government Institution NGOs NPO Voluntary association Freelance Other (specify) 10. How old is your organisation? 0 - 4 years 5 - 9 years 10 + years 11.a. What is the nationality of the principal/majority owner of the organisation? South African Other African International Other (specify) N/A 11.b. How many principal/majority owners does your organisation have? 11.c. What is the race and gender of the principal/majority owner of the organisation? (if no owner, then top manager) Male Female Black White Indian Coloured N/A 11.d. Is the age of the principal/majority owner of the organisation below 35 years? Yes No N/A 12. What is the primary activity of your organisation (choose one)? Visual arts Performing arts 7 9
  • 86. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Cultural tourism Multimedia Music Craft Audio-visual Cultural heritage Print media and publishing Design Fashion Other (specify) 13. Does your organisation have a secondary activity? Yes No 14. What is the secondary activity of your organisation (choose one)? Visual arts Performing arts Cultural tourism Multimedia Music Craft Audio-visual Cultural heritage Print media and publishing Design Fashion Other (specify) 15. What are the current main activities of your organisation (choose one or more)? Agent Producer Creator/artist/crafter Writer Composer Supplier Education/training appendices appendices
  • 87. Public relations Venue owner/exhibitor Facilities manager Promoter Retailer Distributor Design Other (specify) 16. Do you have to spend time doing other things to support your “creative” activity financially? Yes No 17. If yes, why are you involved in other activities to support your “creative” activity (choose one or more)? Cross subsidy Market too small Risk reduction/diversification Business expansion Other (specify) 18. What is the most important obstacle to the current operations of your organisation? (choose one category out of the 5 given and tick one or more in that category) Cost Telecommunications Electricity Transportation Finance Labour Raw materials Other (specify) Government SARs compliance Customs and trade regulations Labour regulations Business licensing and permits Lack of industry promotion Other (specify) 8 1
  • 88. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Access Telecommunications Electricity Production facilities Government funds Bank finance Raw materials Other (specify) Market conditions Tax rate Skilled workforce Practices of competitors Exchange rate Other (specify) Socio-economic conditions Substance abuse HIV AIDS Corruption Crime, theft and disorder Intellectual infringement (piracy …) Other (specify) Other N/A 19. What is the secondary obstacle to the current operations of your organisation? (choose one category out of the 5 given, other than the above and tick one or more in that category) Cost Telecommunications Electricity Transportation Finance Labour appendices appendices
  • 89. Raw materials Other (specify) Government SARs compliance Customs and trade regulations Labour regulations Business licensing and permits Lack of industry promotion Other (specify) Access Telecommunications Electricity Production facilities Government funds Bank finance Raw materials Other (specify) Market conditions Tax rate Skilled workforce Practices of competitors Exchange rate Other (specify) Socio-economic conditions Substance abuse HIV AIDS Corruption Crime, theft and disorder Intellectual infringement (piracy …) Other (specify) Other N/A 8 3
  • 90. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S 20. What do you see as your main needs for company development (choose one or more)? Staff training Help with strategy and business planning Help with developing new ideas for cash generation Help with improving processes and efficiency Help with marketing Help obtaining external commercial funding Help obtaining external government funding Help with international expansion Increased web presence (marketing, distribution …) Other (specify) 21. Is your organisation a member of an industry body/association? Yes No 22. Are the majority of employees of your organisation member of a union? Yes No EMPLOYMENT (Include respondent in numbers) 23. What is the number of employees in your organisation for 2006 by ...? Permanent-full time Permanent part-time Contract/freelancers/service providers 24. Has the total number of employees changed since 2005? No change 0 - 10 % decrease 10 + % decrease 0 - 10 % increase 10 % + increase 25. What is the average wage (per month) for the following employees in 2006 by …? Permanent-full time appendices appendices
  • 91. Permanent part-time Contract/freelancers/service providers 26. Has the average wage of employees changed since 2005? No change 0 - 10 % decrease 10 + % decrease 0 - 10 % increase 10 % + increase 27. What is the average contract length? (months) Open ended N/A Other (specify) 28. What percentage of your employees are under the age of 35? 29. What is the number of employees with disabilities in your organisation by gender? Male Female 30. Can you provide a breakdown (by number) of your employees in terms of race and gender? Male Female Black White Indian Coloured 31. What level of education does most of your workforce have, excluding management (choose one)? Up to Grade 10 Up to Grade 12 Vocational training with Grade 10 Vocational training with grade 12 Diploma with Grade 10 Diploma with Grade 12 Completed a university degree Completed a post-graduate degree Other (specify) 8 5
  • 92. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S N/A 32. What is the highest level of education of the top manager or principal owner of your organisation? (Please mark the appropriate) Up to Grade 10 Up to Grade 12 Vocational training with Grade 10 Vocational training with grade 12 Diploma with Grade 10 Diploma with Grade 12 Completed a university degree Completed a post-graduate degree Other (specify) N/A FINANCES 33. What are the total turnover/sales of your organisation in ...? (R 000’s) 2005 2006 34. What is the main source of income of your organisation (choose one)? Direct sales/services Royalties Subletting space International donors Local government grant Provincial government grant National government grant Funding agency grant Other (specify) 35. What is the secondary source of income of your organisation (choose one)? No secondary source Direct sales/services Royalties Subletting space appendices appendices
  • 93. International donors Local government grant Provincial government grant National government grant Funding agency grant Other (specify) 36. What is the total cost of running your business in …? (R 000’s) 2005 2006 37. What is the highest cost of your organisation (choose one)? Direct raw material costs Operational costs (rentals, transport, electricity, interest charges, cost of technology …) Wages and salaries and related costs (allowances, bonuses …) Other (specify) 38. What is the second highest cost of your organisation (choose one)? Direct raw material costs Operational costs (rentals, transport, electricity, interest charges, cost of technology …) Wages, salaries and related costs (allowances, bonuses …) Other (specify) 39. What is the replacement value of the assets of your organisation (E.g. machinery, tools …)? (R 000’s) 40. Does your organisation have any debt/liabilities? Yes No 41. If yes, could you give an estimation? (R 000’s) FUNDING 42. Did your organisation apply for funding over the last two years? Yes No 8 7
  • 94. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S 43. Did your organisation manage to secure any funding over the last two years? Yes No 44. If yes, what percentage of funding came from … ? Government Donors Arts Funding Agency Corporate sponsorship SA - NGO’s Other entities 45. If your organisation has not applied for funding in the last two years, what was the reason for not applying for funding (choose one or more)? No experience in writing proposals It is pointless, I would still fail to get it It depends on whom you know Compliance issues No need Cross subsidy from other business activity Other (specify) 46. Did your organisation in the last two years apply for a bank loan or other form of finance from a commercial bank? Yes No 47. If your organisation has not applied for a bank loan in the last two years, what was the reason for not applying (choose one or more)? No experience in writing proposals It is pointless, I would still fail to get it It depends on whom you know Compliance issues No collateral No need Cross subsidy from other business activity Other (specify) 48. Did your loan application get approved? Yes appendices appendices
  • 95. No 49. In the last two years, did your organisation try to get money from an informal source such as a money lender, friend or relative? Yes No 50. Did you receive money from this source? Yes No MARKETS 51.a. What is the main market of your organisation (choose one)? Other firms General public - individuals/tourists Public sector - government Other (specify) 51.b. If other firm, please specify? 52. Does your organisation sell its products/services internationally? Yes No 53. If yes, what percentage of your products/services do you sell internationally? 54. What are your organisations international markets (choose one or more)? SADC Rest of Africa EU US and Canada Asia Australia and New Zealand South America Other (specify) 8 9
  • 96. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S TECHNOLOGY (access and constraints) 55.a. To what extent are the following a constraint to the growth of the organisation (choose one or more)? Cost of hardware Cost of software Access to hardware Access to software Speed of broadband Skill to work with technology Other (specify) 55.b. Does your organisation use technology for …? Marketing Sales Distribution Research Communication Other (specify) 56.a. Does your organisation use the following technologies for business purposes? Fixed line Mobile phones Computers Internet Sector specific hardware Sector specific software 56.b. How important are the following technologies for your organisation? Major importance Moderate importance Not important Fixed line Mobile phones Computers Internet Sector specific hardware Sector specific software appendices appendices
  • 97. Appendix 2: Telephonic Questionnaire TELEPHONIC INTERVIEW 1. What is the name of your organization? 2. What is the address of your organization? 3. What is the phone number of your organization? 4. What is the name of the respondent? 10. How old is your organization? 0 - 4 years 5 - 9 years 10 + years 12. What is the primary activity of your organization (choose one)? Visual arts Performing arts Cultural tourism Multimedia Music Craft Audiovisual Cultural heritage Publishing Design Fashion Other (specify) 15. What are the current main activities of your organization (choose one or more)? Agent Producer Creator/artist/crafter Writer Composer Supplier Education/training 9 1
  • 98. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Public relations Venue owner/exhibitor Facilities manager Promoter Retailer Distributor Design Other (specify) 23. What is the number of employees in your organization for 2006 by ...? Permanent-full time Permanent part-time Contract/freelancers/service providers 24. Has the total number of employees changed since 2005? No change 0 - 10 % decrease 10 + % decrease 0 - 10 % increase 10 % + increase 28. What percentage of your employees are under the age of 35? 30. Can you provide a breakdown (by number) of your employees in terms of race and gender? Male Female Black White Indian Coloured 33. What are the total turnover/sales of your organization in ...? (R 000’s) 2005 2006 36. What is the total cost of running your business in …? (R 000’s) 2005 2006 appendices appendices
  • 99. 42. Did your organization apply for funding over the last two years? Yes No 45. If your organization has not applied for funding in the last two years, what was the reason for not applying for funding? No experience in writing proposals It is pointless, I would still fail to get it It depends on whom you know Compliance issues No need Cross subsidy from other business activity Other (specify) Appendix 3: Creative industry constituents Type Sector Organisation Lobby Groups All South African Coalition for Cultural Diversity (SACCD) Audio-Visual Woman of the Sun (WoS) Audio-Visual Women in Film & Television (WIFT) Audio-Visual Black Filmmakers Network (BFN), Audio-Visual Consortium for African Film & TV Practitioners (CAFTEP) Performing Arts Performing Arts Network of South Africa (PANSA) Performing Arts NACTED Print Media & Publishing Gauteng Writers’ Forum Visual Arts Association for Visual Arts Visual Arts Visual Arts Network South Africa (VANSA) Unions All Creative Worker’s Union (CWUSA) Audio-Visual Broadcasting, Electronic Media & Allied Workers Union (BEMAWU) Print Media & Publishing South African Union of Journalists (SAUJ) Professional/ Audio-visual National Association of Broadcasters (NAB) Industry Associations Audio-Visual Independent Producer’s Organisation (IPO) Audio-Visual South African Screen Federation (SASFED) Audio-Visual Camera Guild Audio-Visual Independent Producer’s Organisation (IPO) Audio-Visual National Television and Video Association (NTVA) Audio-Visual South African Guild of Editors (SAGE Audio-Visual South African Society of Cinematographers (SASC) Audio-Visual South African Scriptwriters Union (SASWU) Audio-Visual National Community Radio Forum (NCRF) Audio-Visual Media Workers Association of South Africa (MWASA) 9 3
  • 100. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Audio-Visual Commercial Producer’s Association (CPA) Audio-Visual Association of South African Crew Agents (ASACA) Audio-Visual National Association of Casting Agents (NACA) Audio-Visual Personal Managers’ Association (PMA) Audio-Visual Association of Broadcast Training Providers Audio-Visual Documentary Filmmakers Association (DFA) Audio-Visual & Fashion National Association of Modelling Agencies (NAMA) Craft Craft Council of South Africa Craft Ceramic Society of South Africa Design Design South Africa Design Design Educator’s Forum Multimedia Animation SA Multimedia Association of Animators Music The Association of Independent Record Companies (AirCo) Music Recording Industry of South Africa (RISA) Music South African Roadies Association (SARA) Music Technical Production Services Association (TPSA) Music Composers Association of South Africa (CASA) Music South African Music Promoter’s Association (SAMPA) Music National Organisation for Reproduction Rights in Music in Southern Africa LTD Music Music Managers Forum of South Africa (MMFSA) Performing Arts South African Institute of Theatre (SATI) Technology Performing Arts South African Museums Association (SAMA) Performing Arts Theatre Management of South Africa (TMSA) Print Media & Publishing Community Press Association of Southern Africa (CPA) Print Media & Publishing Magazine Publishers’ Association of Southern Africa (MPA) Print Media & Publishing Newspaper Association of Southern Africa (NA) Print Media & Publishing Print Media South Africa Print Media & Publishing South African National Editors Forum (SANEF) Print Media & Publishing Academic and Non-Fiction Authors’ Association of South Africa (ANFASA) Print Media & Publishing The South African Booksellers’ Association (SABA) Print Media & Publishing The Publishers’ Association of South Africa (PASA) Print Media & Publishing The Professional Editors’ Group (PEG) Visual Arts Professional Photographers’ Association of South Africa (PPSA) Copyright Collection Agencies Music South African Music Rights Organisation (SAMRO) Music The South African Recording Rights Association Limited (SARRAL) Print media & publishing Dramatic, Artistic and Literary Rights Organisation (DALRO) Appendix 4: Vocational Qualifications Registered by the MAPPP-SETA Registered Qualifications45 Qualification NQF Level Status Learnership FETC in Live Events Technical Production NQF 4 Registered SAQA ID: 48669 FETC in Live Events Technical Production appendices appendices
  • 101. Qualification NQF Level Status Learnership FETC in Heritage Practice NQF 4 Registered SAQA ID: 48812 FETC in Heritage Practice FETC in Performing Arts NQF 4 Registered SAQA ID: 48808 FETC in Performing Arts FETC in Arts and Culture Administration NQF 4 Registered SAQA ID: 48818 FETC in Arts and Culture Administration NC in Arts and Culture Enterprise NQF 5 Submitted to SAQA for evaluation and registration NC in Arts and Culture Enterprise NC: Craft Production NQF 2 Registered SAQA ID:48806 NC: Craft Production FETC: Craft Enterprise NQF 4 Registered SAQA ID: 48809 FETC: Craft Enterprise: NC: Craft Operational Management NQF 5 Registered SAQA ID: 49119 NC: Craft Operations Management FETC: Design Foundation NQF 4 Registered SAQA ID: 49127 FETC: Design Foundation Design Degree NQF 6 Public comment SAQA ID: 48810 FETC: Music Sound Technology NQF 4 Registered SAQA ID: 48811 FETC: Music Sound Technology NC in Music Industry Sound Technology NQF 5 Registered SAQA ID: 48671 NC in Music Industry Sound Technology FETC Music Business: (A & C Admin) NQF 4 Replaced by Arts and Culture Management NQF 4 SAQA ID: 48818 FETC Music Business: (A & C Admin) FETC in Film, Television and Video Production Operations NQF 4 Registered SAQA ID: 49120 FETC in Film, Television and Video Production Operations NC in Radio Production NQF 5 Registered SAQA ID: 49125 NC in Radio Production NC in Radio Station Management NQF 5 Registered SAQA ID: 49122 NC in Radio Station Management NC in Broadcasting Engineering NQF 5 Registered SAQA ID: 48792 NC in Broadcasting Engineering: • Radio or Television • Broadcast Contribution • Broadcast Distribution • Broadcast Head-end-Systems • Spectrum Management NC in Interactive Media NQF 5 Registered 45 Information obtained from the MAPPP-SETA website at http:///www.mappp-seta.co.za 9 5
  • 102. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Qualification NQF Level Status Learnership SAQA ID: 4912 NC in Interactive Media NC in Scriptwriting NQF 7 Registered SAQA ID: 49317 NC in Scriptwriting NC in Film and Video NQF 5 Being developed NC in Film and Video NC in 3D Animation NQF 5 Submitted to SAQA for evaluation and registration NC in 3D Animation NC in 2D Animation NQF 5 Submitted to SAQA for evaluation NC in 2D Animation Qualifications Under Development • National Certificate in Heritage Management (NQF 5) • Further Education and Training Certificate in Performing Arts (NQF 5) • National Certificate in Visual Arts (NQF 2) • National Certificate in Visual Arts (NQF 3) • Further Education and Training Certificate in Visual Arts (NQF 4) • National Certificate in Visual Arts (NQF 5) • National Certificate in Craft Manufacturing (NQF 3) • Further Education and Training Certificate in Arts and Culture Development Practice (NQF 5) • National Certificate in Intellectual Property (NQF 5) • Further Education and Training Certificate in Music (NQF 4) • National Certificate in Music (NQF 5) appendices appendices
  • 103. 9 9 INDIVIDUAL SECTOR REPORTS GAUTENG CREATIVE MAPPING PROJECT
  • 104. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S GAUTENG CREATIVE MAPPING PROJECT prepared by ameru (wits university) and CAJ, 2008 IN COLLABORATION WITH CREATIVE INDUSTRIES IN GAUTENG INDIVIDUAL SECTOR REPORTS
  • 105. T A B L E O F C O N T E N T S 1. GlossarY 100 2. Audio-visual sector profile 101 3. Craft sector profile 125 4. Cultural tourism and heritage sector profILE 143 5. Design sector profile 159 6. Fashion sector profilE 175 7. Multimedia sector profile 191 8. MUSIC SECTOR PROFILE 205 9. PERFORMING ARTS SECTOR PROFILE 229 10. Print media and publishing sector profile 245 11. Visual arts sector profile 263 12. Complete list of references 281 13. BASELINE DATA 293
  • 106. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S G L O S S A R Y O F A C R O N Y M S A N D T E R M S AMERU African Micro-Economic Research Umbrella at the University of the Witwatersrand which prepared these reports. CAJ Creativity Avriljoffe (CAJ) cc known also as CAJ: culture, arts and jobs which prepared these reports. DCMS UK Department for Culture, Media and Sport DTI Department of Trade and Industry GDP The total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports. GDPR The GDP of a specific region or province. GCMP Gauteng Creative Mapping Project Mean The mean is the mathematical average of a set of numbers. The average is calculated by adding up two or more scores and dividing the total by the number of scores. Multiplier A multiplier attempts to quantify the additional effects of an economic activity beyond those that are immediately measurable or directly attributable to that activity. Output Output in economics is the total value of all of the goods and services produced in an entity’s economy. Public Good In economics a public good means that consumption of the good by one individual does not reduce the amount of the good available for consumption by others; and no one can be effectively excluded from using that good.1 Ratio A ratio is a way of concisely showing the relationship between two quantities usually expressed as (x:y) Royalties A royalty is a payment made to the developer (inventor) of a product or service based on the amount of product/service sales. Ratio Creativity Avriljoffe (CAJ) cc known also as CAJ: culture, arts and jobs which prepared these reports. SACR Gauteng Department of Sports, Arts, Culture and Recreation Tertiary Sector The tertiary sector is that portion of an economy devoted to service activities (e.g. transportation, retail and wholesale operations, insurance) Turnover All sales Value-added Value-added is calculated in this report as output (turnover) minus inputs (all costs except labour and capital). 1 www.wikipedia.org G L O S S A R Y
  • 107. GAUTENG’S CREATIVE INDUSTRIES: THE AUDIO-VISUAL SECTOR
  • 108. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S AUDIO-VISUAL SECTOR PROFILE TOTAL TURNOVER R2, 430, 000, 000 TOTAL EMPLOYMENT 8,505 GROSS VALUE-ADDED R1, 697, 163, 273 BLACK EMPLOYEES 52% FEMALE EMPLOYEES 54% NUMBER OF ORGANISATIONS 1,215 GAUTENG’S CREATIVE INDUSTRIES: THE AUDIO-VISUAL SECTOR
  • 109. T A B L E O F C O N T E N T S C O N T E N T S AUDIO-VISUAL SECTOR PROFILE 1 BACKGROUND 104 GLOBAL CONSIDERATIONS 104 2. DESCRIPTION 105 2.1 DEFINITION 105 2.2 THE VALUE CHAIN 106 3. THE AUDIO-VISUAL SECTOR SAMPLE 108 4. THE AUDIO-VISUAL SECTOR CONTRIBUTION TO THE GAUTENG ECONOMY 109 4.1 TURNOVER 109 4.2 EMPLOYMENT 112 4.3 GVA 113 4.4 COSTS 113 5. THE STRUCTURE OF THE AUDIO-VISUAL SECTOR 113 6. TYPES OF ORGANISATIONS/FIRMS WITHIN THE AUDIO-VISUAL SECTOR 117 7. DEMOGRAPHICS WITHIN THE AUDIO-VISUAL SECTOR 119 8. MARKETS 121 9. FUNDING AND FINANCING IN THE AUDIO-VISUAL SECTOR 121 10. OUTLOOK 123 REFERENCES 124 LIST OF FIGURES FIGURE 1: Linkages between Content Creators, Technology and Media 105 FIGURE 2: The Audio Visual Sector Value Chain 106 FIGURE 3: Firms per sub-sector 108 FIGURE 4: Types of Commercials Produced per Province (2006) 111 FIGURE 5: Distribution by size of organisation 117 FIGURE 6: Age distribution of organisations 118 FIGURE 7: Percentage of employees by race and gender 119 FIGURE 8: Percentage of management by race and gender 120 FIGURE 9: Sources of income for organisations in the audio-visual sector 121 FIGURE 10: Organisation size and funding applications 122 LIST OF TABLES TABLE 1: Audio-Visual Sector Sample 108 TABLE 2: Turnover for category of companies in the Audio Visual Sector 109 TABLE 3: Comparison of audio-visual sector estimates 109 TABLE 4: Key indicators for Commercial Producers 109 TABLE 5: Filming locations for Commercials Produced (2006) 111 TABLE 6: Tourism Activities Related to Commercial Production (2006) 112 TABLE 7: Total employment in Audio-Visual Sector 112 TABLE 8: Breakdown by function in the Audio-visual Sector 113 TABLE 9: Key national statistics for theatrical distribution 114 TABLE 10: National weekly average attendance by cinema distributor 115 TABLE 11: Major education and training institutions in the audio-visual sector 116 TABLE 12: Legal Status 118 TABLE 13: Education levels of employees 120 TABLE 14: Reasons for not applying for funding 122
  • 110. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Gauteng boasts of a dynamic, diverse and growing audio-visual sector.1 The province is the heart of creating and producing local content for television, radio, film and commercials. All three television broadcasters’ head offices are located in Johannesburg. In addition, the province is known as the economic hub of sub-Saharan Africa and hence the majority of consumers of corporate TV and media services are based within its boundaries. Estimates suggest that more than 70% of the filming and television industry in South Africa are based in Gauteng, mainly in Johannesburg.2 Gauteng has a number of advantages as a film location, including considerably cheaper production costs than in the United States, Australia, or New Zealand, and a range of diverse and spectacular locations such as the African bush, industrial scenery, and American and European-style settings. In addition, the province offers access to a labour force with extensive and variable technical expertise; world-class facilities, including well-established and equipped post-production digital facilities, audio, graphics, and animation houses; state-of-the-art rental equipment; a highly developed infrastructure; a compatible time zone with Europe; and all-year-round sunshine.3 The significance of the audio-visual sector is multi-dimensional. The CIGS (1998) Report on the South African Film and Television Industry ascribes three dimensions to the importance of the sector: social, political and economic. The audio-visual sector’s contribution ranges from the core creative content of ideas and ideology, to its political aspects as an information disseminator and facilitator of dialogue and commentary, to its economic impact on employment, investment, GDP, trade balance and a range of other economic variables. The audio- visual sector is also a marketing tool for South Africa internationally and it is the image that the country presents to its own communities and to the world.4 It is also a channel for receiving foreign exchange, an important mechanism for technology transfer, it plays a significant role in upgrading the South African skills base and it is one of the best forms of promotion for the country (Tuomi, 2005). GLOBAL CONSIDERATIONS The global content industry is valued at US$1,2 trillion with growth in both the film and television industry expected to continue. However, technology convergence, declining box office attendance and the shrinking theatre-to-DVD windows have led to a decline in the traditional industry revenue streams in the global film industry. New distribution channels (online portals) and slate releases are driving business models with studios increasingly using private equity funding to avoid pre-selling rights or entering into co-production agreements (Deloitte, 2007). Established markets have seen a stagnation of theatre attendance. Emerging markets such as Mexico, Thailand, Egypt and South Africa however, are by contrast, enjoying rising attendance figures and remain reliant on public sector funding. In these markets distributors are still granted a licence to distribute firms for a fixed period in specific locations (CAJ, 2007). As with the music sector, digitisation (of production, distribution and exhibition) has led to more content available in many different channels to more audiences faster and cheaper with a greater market segmentation. At the same time piracy and content producers’ competition remains a threat to revenue. Job creation in the film industry is a significant contributor to the economy. The UK Film Council for instance has shown that the UK film industry in 2004 directly supported 31,000 people in 2004 with 97,500 direct and indirect jobs created in the same period (UK Film Council, 2006). Other contributors are turnover, skills development, tourism and ancillary services principally from location shooting. With these changes to the export markets for film and TV content, policy options remain focused on both the promotion and protection for the domestic film and TV industry. Which state funds privilege ‘principal photography’ it is market access, distribution and commercial development that is in need of support. A key mechanism for gaining market access is international co-production which South Africa has been successfully pursuing (Canada, the UK, India, France). B A C K G R O U N D 1 . BACKGROUND 1 Speech by Premier Mbhazima Shilowa at the opening of the Gauteng Film Indaba, 24 March 2004. The speech is available from: http://www.gpg.gov.za/docs/sp/2004/sp0323.html 2 This estimate of Gauteng’s share of the SA film and TV industry is cited in the speech by Premier Mbhazima Shilowa at the opening of the Gauteng Film Indaba, 24 March 2004. The exact source of this often-cited estimate is unclear. In 2005, the “HSRC Survey of the South African Film and Video Industry for the NFVF in 2004” reported that 70% of firms in its sample are based in Gauteng. 3 Gauteng Film Commission Business Plan, 2006 – 2009 4 Firms in sector reported this view of the audio-visual industry in the interviews.
  • 111. 1 0 5 2.1 DEFINITION The sector encompasses the range of activities connected to the “audio-visual media, involving the transmission and reception of signals for communication, information, education and entertainment through a wide range of products” (Ministry of Colombia, 2002). There activities within the audio-visual sector are internally linked in complex and integral ways and are also externally tied with a broad range of activities in the creative industries. In this case, the value chain is perhaps better described as a ‘value web’. For instance, music, writing skills, acting and other performing arts skills are an indispensable part within media production. Performers play an integral role in making programmes, but they also provide a key element of publicity for promotional campaigns and material for general press interest.5 Figure 1 provides an overview of the linkages between the creative content originators, media and technology. The various audio-visual media firms transform the substance provided by art, performance and music into various media products (radio and TV programmes, films, articles, clips, etc.) for audience consumption with the aid of diverse technology. Figure 1: Linkages between Content Creators, Technology and Media Source: Howard Thomas, Busvannah Communications 2 . DESCRIPTION 5 Telephonic interview and email correspondence with Howard Thomas from Busvannah Communications, December 2007
  • 112. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S For the purpose of this study, the audio-visual sector includes the following activities: • The generation of creative content for film, TV and radio (commissioning and scriptwriting) • Production for film and TV (all activities involved in a creating a movie, TV show, commercial or interactive programme from a script) • Film and video distribution • Screening of film and broadcasting of TV and radio content • Audience consumption and retailt • Media-related activities (trading of broadcasting time, organising logistics between corporate clients and producers and broadcasters) • Specialised education and training (e.g. film schools) • Support services (e.g. specialised equipment facilities and sales and archive facilities) The following related activities are excluded from the parameters of this sector: • Advertising • Photography (classified under Visual Arts for the purposes of the Mapping) • Animation (classified under the Multimedia sector) 2.2 THE VALUE CHAIN The value-chain of the audio-visual sector is presented in the figure below. Specialised education and training of creative and technical staff, funding and support organisations as well as government and regulatory activities aid organisations at all levels of the value chain. The two broad networks of the Film and TV value chain are the producer led project networks (supply) and the distributor led rights exploitation network (demand) (CAJ, 2007). The focus in South Africa, as highlighted by CAJ’s recent report to the HSRC, “has been on the provision of funding and development support to the supply functions and in particular the production side. This is not surprising given the country’s employment focus and its ability to service runaway films (big budget USA films) locating to foreign locations. However, real wealth from the film sector comes not from productions, but from content and the ability to sell rights to that content” (2007: 18). Figure 2: The Audio-Visual Sector Value Chain Source: CGIS (1998) which inputs from the Film CSP (DTI, 2005b) 2 . DESCRIPTION D E S C R I P T I O N 1. Content Origination Producers, Scriptwriters, Broadcasting Commissioners, Financiers and Funders 5. AUDIENCE Consumption: Film & TV journalists, trade journals, Festival commentary, awards, academies 4. DELIVERY MECHANISMS: Exhibitors, broadcasters, cinemas, video retail/ rental, Television, live performance, Festivals, licensed merchandise Demand Supply 3. DISTRIBUTtion: Exhibitors, broadcasters, mobile units, distributors, markets both domestic and foreign 2. PRE-PRODUCTION, PRODUCTION AND POST PRODUCTION: Casting and Crewing Agencies, Directing, Producing, Financiers, Production Companies, Post-Production Facilities: editing, computer effects, graphics, music and titles, Equipment and Facility Suppliers, Make-up, Set Designers Distributor led rights exploitation network Audio-Visual Sector Value Chain Picture led project network
  • 113. 1 0 7 The value chain approach has been used successfully in both the CIGS study on the film and television industry (DACST,1998) as well as the subsequent ILO research project on film and video (1999-2001) to focus attention on the economic logic of the sectors (Joffe and Jacklin, 2003). Based on Landry’s five column model (Landry, 2000) adapted for the cultural industries, the value chain has been portrayed in a circular manner in these studies to highlight the important feedback loop between “audience reception” and “beginnings” (CAJ, 2007). The exact process, in which creative ideas are transformed into an audio-visual product (film, video, commercial, TV or radio show, etc.), depends on the nature of the product and its target audience. The processes for TV programs and film are outlined briefly below. LiNKS between firms at various levels of the value chain Production for TV A production company pitches an idea for a show, series or a programme to a commissioning editor, who represents one of the broadcasters. The script may be fully developed at this point or it may only be developed once the idea is approved. If the idea is approved, the production company presents budgets and hires additional help (contractors and freelancers) to assist with the shooting and hires additional gear from equipment facilitators. The shooting stage is followed by technical production, where the material goes through picture and sound editing. In contrast to the UK, in South Africa the broadcaster holds the copyright over the finished product. This means that the production company’s stream of revenues from a particular show or programme ends after the material is delivered to the broadcaster. For example, it is up to the broadcaster whether branded merchandise is produced and sold, and if so, the revenue stream belongs to the broadcaster. Production for film The process starts with a script, which is presented to a studio or a director by the scriptwriter. The studio or production company then raises funding for the shooting of the film, auditions actors, recruits technical and support staff as necessary, scouts for locations, engages set and costume designers as well as equipment suppliers. This is followed by the shooting process and then by picture and sound editing, as well as the addition of computer effects, graphics and music. Often graphics are used to aid special effects and the creation and integration of graphics can precede or be done in tandem with the film shooting. The finished product is then distributed. This can be done through the cinema circuit distributors and/or the broadcasters and/or the DVD rental and retail sector. Some films are of cinematographic quality but are shown only on TV – for instance, this is the case with the films done through the M-Net New Directions Training Programme. Usually, the films are shown on the cinema circuit, then released on DVD after a short period and often broadcast on TV after a longer period. The entities within the sector are distinct for their fluidity – they either exist only for the purposes of a single project (Special Purpose Vehicles (SPV’s)) or they expand in employment numbers for the duration of a project, but shrink considerably in quiet periods.
  • 114. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S T H E A U D I O - V I S U A L S E C T O R S A M P L E 3 . THE AUDIO-VISUAL SECTOR SAMPLE As part of the survey, 88 entities involved in the audio-visual sector (or 7,2% of the total number of 1,215 firms6) were interviewed. Of these 88 entities, 28 responded to the in-depth questionnaire and 60 responded to the short telephonic questionnaire (Table 1). Table 1: Audio-visual sector sample The population estimate was based on the Gauteng Film Commission’s database. The breakdown by category of firm and the total firms shows that out of the 1,215 firms in the Gauteng Film Commission dataset, support services (276) and production companies (268) dominate, followed by equipment, supplies and facilities (225) and casting and crew (226). Figure 3: Firms per sub-sector Postproduction firms account for 13,91% (169) while there are 51 companies (4,2%) in the pre-production, research and development group. 6 Source for total number of entities: Gauteng Film Commission database. See Table 6 in Section 7.2 below for a detailed breakdown by type of activity. CATEGORY OF INTERVIEWS RESPONDENTS Face-to-face interviews 28 Telephonic interviews 60 TOTAL 88 Casting and Crew Equipment, Supplies and Facilities Post production Pre-Production, Research and Development Production Companies Support Services 22% 22% 4% 14% 19% 19%
  • 115. 1 0 9 4 . THE AUDIO-VISUAL SECTOR CONTRIBUTION TO THE GAUTENG ECONOMY 4.1 TURNOVER The survey component of Gauteng Creative Mapping Project (GCMP) showed that in economic terms, in 2006 the audio-visual sector generated a turnover of R2,43 billion, provided permanent employment to close to 8,500 people and it contributed R1,7 billion to the Gauteng GDP. The total turnover figure of R2,43 billion excludes the three broadcasters. M-Net is a fully-owned subsidiary of Naspers. It was listed on the JSE in 1990, but subsequently delisted with effect from April 2004. Hence M-Net’s financial information is not available to the public. The figure was calculated as follows: Table 2: Turnover for category of companies in the Audio Visual Sector Other estimates of the industry’s economic contribution are few and show substantial variation (Table 3). Assuming that the industry experienced some growth in the 2004-2006 period, the Gauteng Creative Industries Mapping estimate is in line with the figure obtained by the “HSRC Survey of the South African Film and Video Industry for the NFVF in 2004” (released in 2005). The Gauteng Creative Industries mapping estimate is, however, substantially higher than the Project Gaullywood estimate of R1,119 billion in turnover for 2006. Table 3: Comparison of audio-visual sector estimates * Project Gaullywood included the multimedia sector as part of the audio-visual industry and obtained an estimate of R2,862bn for the revenue that the industry generated in the South African in 2006. The figure in the table excludes the multimedia sector, which Project Gaulywood estimates to be worth R20 million. ** Based on average annual revenue per firm. *** Based on a 70% proportion of Gauteng firms in the sample, which is believed to represent Gauteng’s share of the national audio-visual industry. CATEGORY OF COMPANIES MEDIAN ANNUAL TURNOVER (R) NUMBER OF COMPANIES TOTAL TURNOVER FOR CATEGORY OF COMPANIES (R) TOTAL TURNOVER 2,000,000 1,218 2, 430, 000, 000 SABC 3, 943, 055, 0007 MNET Not obtained eTV 403, 333, 0008 7 Total turnover for SABC South Africa in 2006. Source: SABC Financial Statements for 2006.. 8 Total turnover for e.TV in South Africa in 2006. Source: authors’ calculations based on Fin24, Profitable picture at etv, 15 November 2007: http://www.fin24.com/articles/default/display_article. aspx?ArticleId=1518-24_2221645 SOURCE AND YEAR NATIONAL AUDIO-VISUAL INDUSTRY ESTIMATES GAUTENG AUDIO-VISUAL INDUSTRY ESTIMATE WESTERN CAPE AUDIO-VISUAL INDUSTRY ESTIMATE Project Gaulywood – Gauteng Film Commission (2007) R2,842 billion annual revenue in 2006* R1,119 billion annual revenue in 2006; R990 million annual revenue in 2005 N/A HSRC Survey of the South African Film and Video Industry for the NFVF (2005) R3,3 billion annual revenue in 2004** R2,31 billion annual revenue in 2004*** R0,693 billion annual revenue in 2004*** Cape Film Commission Impact Assessment Report (2007) N/A N/A R2,65 billion for the 2005/6 financial year, of which about 77% (R2,03bn) was generated in the city of Cape Town
  • 116. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S T H E A U D I O -V I S U A L S E C TO R CO N T R I B U T I O N TO T H E G A U T E N G E CO N O M Y COMMERCIAL PRODUCTION TURNOVER9 South Africa boasts a well-developed commercial production sector, which caters for local demand and also attracts numerous international projects. Superb locations, cutting edge local production companies and post-production facilities, as well as an abundance of skilled and experienced freelancers continue to underpin the sector’s development. During the period from 1 May 2005 to 30 April 2006, the total turnover of the 42 firms that participated in the annual Commercial Producers Association Survey was R800 million. The survey covers firms mainly in Gauteng and the Western Cape. The majority of the firms involved in the production of commercials are small, with 9 permanent employees, but making use of about 1,975 freelance person-days in a year, on average. The table below shows a comparison of some key indicators for the commercial production sector between the 2004/05 and 2005/06 period. Table 4: Key indicators for Commercial Producers Source: Commercial Producers’ Association Industry Survey 2006 South African production companies’ business revolves around three kinds of commercials: local, service and international/SA commercials. Local commercials originate within South Africa and they are usually aimed at the domestic market. In service commercials, South African production companies facilitate the logistical aspects of the making of international commercials. The creative content originates from abroad and a foreign director and production company are involved. The local contribution is in assisting with practical arrangements, shooting and post-production. In the case of an international/SA commercial, a foreign advertising agency commissions a South African production company and director to make the commercial. Here, similarly to local commercials, the production company has considerable creative input but the funding comes from abroad. These commercials may or may not be produced in South Africa. Production companies based in Johannesburg specialise in local commercials, while Cape Town companies are more specialised in facilitating international (service) shoots (Figure 4). Commercials with foreign involvement (both service and international/SA) originate predominantly from European countries. The two biggest players, the UK and Germany, commissioned 211 of the 405 foreign commercials shot in 2006. 9 Figures are from the Commercial Producers’ Association Industry Survey 2006. The total shoot days for the 898 commercials filmed in the above period was 1796, which implies an average of 1.99 shoot days per commercial. 2004/05 2005/06 Number Percentage Number Percentage Ownership Close corporations 19 45% 19 45% Proprietary Limited 22 52% 23 55% Unknown/other 1 3% 0 0% Head office Johannesburg 14 33% 13 31% Cape Town 27 64% 29 69% Europe 1 3% 0 0% Employment Full-time 413 0.97% 373 0.89% Part-time 32 0.08% 38 0.09% Freelance (approx.) 41,969 98.95% 41,717 99.02% 4 . THE AUDIO-VISUAL SECTOR CONTRIBUTION TO THE GAUTENG ECONOMY
  • 117. 1 1 1 Figure 4: Types of Commercials Produced per Province (2006) Gauteng was the filming location of choice for 39% and Cape Town for 54% of commercials involving South African producers in some capacity in 2006 (Figure 5). Table 5: Filming locations for Commercials Produced (2006) Source: Commercial Producers’ Association Industry Survey 2006 The highest cost category for a typical commercial producer is crew remuneration, followed by equipment hire and art department spending. The involvement of international crews and the logistics of shooting in various South African and international locations make the commercial producers’ contribution towards tourism an important one (Table 6). The respondents to the CPA survey spent close to R13m on accommodation in the 2005/06 period. TYPES OF COMMERCIALS PRODUCED PER PROVINCE (2006) Johannesburg Cape Town 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% FILMING LOCATIONS FOR COMMERCIALS PRODUCED (2006) PERCENTAGE (%) Filmed in the Western Cape 54 Filmed in Gauteng 39 Filmed outside the borders of SA 4 Filmed in Kwa-Zulu Natal 2 Filmed elsewhere in SA 1 TOTAL 100
  • 118. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Table 6: Tourism Activities Related to Commercial Production (2006) Source: Commercial Producers’ Association Industry Survey 2006 4.2 EMPLOYMENT The audio-visual sector is comprised of small and medium firms with 41% of firms employing between 1 and 4 employees and 33% of firms employing between 5 and 19 employees. The total permanent employment number is 8,505 calculated as per the table below. Table 7: Total Employment in the Audio-Visual Sector COMMERCIAL PRODUCTION EMPLOYMENT The participating firms in the commercial production sector had 373 full-time, 38 part-time and approximately 41,717 freelance employees in 2006. Total freelance employment amounted to an estimated 82,945 person-days per year, with the average freelancer being employed for two days – the typical duration of a commercial shoot. LOCAL COMMERCIALS SERVICE COMMERCIALS SA/INT COLLABORATION COMMERCIALS TOTAL Bed nights booked in South African accommodation 2,560 13,728 2,044 18,332 International flights booked to SA – Business 5 1,450 170 1,625 International flights booked to SA – Economy 4 323 39 366 Domestic flights within SA 3,347 5,623 229 9,199 4 . THE AUDIO-VISUAL SECTOR CONTRIBUTION TO THE GAUTENG ECONOMY CATEGORY OF COMPANIES MEDIAN EMPLOYEE NUMBER NUMBER OF COMPANIES TOTAL NUMBER OF EMPLOYEES FOR CATEGORYOF COMPANIES TOTAL NUMBER OF EMPLOYEES 7 1,218 8,505 SABC 4,775 MNET Not obtained eTV 265 T H E A U D I O -V I S U A L S E C TO R CO N T R I B U T I O N TO T H E G A U T E N G E CO N O M Y
  • 119. 1 1 3 4.3 GVA The gross value-added of the audio-visual sector is R1, 697,163,273 calculated as turnover less total costs (excluding labour and capital). COMMERCIAL PRODUCTION GVA From the 898 commercials filmed during the 2005/06 period, the surveyed firms generated value-added to the tune of R393,487,459 calculated as turnover (total billable value) less total costs (total billable expenditure), plus wages (crew remuneration). 4.4 COSTS Operational costs were the highest cost category for 46% of surveyed firms, while 39% reported ‘wages and salaries’ and 11% named ‘direct raw materials’ as their largest expense categories. The first two levels in the value chain, namely creative origination and production10 are characterised by a significant degree of competition. In Gauteng, 51 firms are involved in pre-production, research and development and 268 firms are production houses (Table 8). These activities are undertaken by a large number of individuals as well as micro and small firms. The related technical services, such as the supply of equipment and post-production facilities and sales of equipment are represented by several large players, together with a competitive fringe of small entities. Table 8: Breakdown by function in the Audio-visual sector Source: Gauteng Film Commission 5 . THE STRUCTURE OF THE AUDIO-VISUAL SECTOR 10 These activities are sometimes referred to as pre-production, production and post-production. MAIN BUSINESS/FUNCTION NO. OF FIRMS Casting and crew 226 Equipment, supplies and facilities 225 Post production 169 Pre-production, research and development 51 Production companies 268 Support services 276 TOTAL 1,215
  • 120. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S T H E S T R U C T U R E O F T H E A U D I O - V I S U A L S E C T O R The highest degree of industry concentration is found in the circulation & delivery and audience consumption links in the value chain. These are examined closer below. BROADCASTING South Africa has three broadcasters: SABC, M-Net and eTV. The national broadcaster, the SABC, commissions the largest share of local content. It has three national channels and an Africa channel. The SABC’s funding is mainly from adverting revenue, which comprised 66% of its total revenue in financial 2006/0711 . TV licences are mandatory for all households who own a TV set in the country and the fee collection is done by the national broadcaster. Proceeds from TV licences, however, comprise only about 18% of SABC’s total revenue. In 2007, the SABC had 3,800 permanent employees, 2,600 of whom were based in Gauteng. Throughout the country the national broadcaster had, on average, 200 casuals (employees on short term contracts) per month (or 2,400 casuals annually) and 1,500 freelancers (e.g. presenters, actors and technical staff whose work is project- based) annually. Of the casuals and freelancers, 75 – 80% were based in Gauteng. M-Net, which is part of the privately-owned media conglomerate Naspers, offers a service to paid subscribers via decoders. M-Net has two channels and commissions both South African and African-made content in the form of TV series and feature films. MultiChoice is a subscriber-based cable TV service-providers owned by the Naspers group, which has over 40 channels. eTV is the youngest and smallest of the broadcasters. It is a privately owned free-to-air channel, which is funded through advertising revenue. In 2007, e-TV had 478 employees nationally, 29 of whom are contractors. In Gauteng, it had a workforce of 259, including 19 contractors. Theatrical distribution There are three large distributors in South Africa. Ster Kinekor holds the exclusive distribution rights for films made by Fox, Columbia Disney and independent studios. Nu Metro is a distributor for Warner Bros, New Line and independents, while UIP represents Universal, Paramount, Dreamworks, VideoVision and Vision Africa12 . Ster Kinekor is the largest player with regards to both theatrical and DVD distribution. Cinema exhibition South African cinema theatres had 745 cinema screens in 2007, with the largest concentration around Johannesburg (Table 9). Ster Kinekor, which is part of the Primedia group, and Nu Metro, which is part of the Johnnic group, have over 126 screens in Gauteng.13 Table 9: Key national statistics for theatrical distribution Source: Ster Kinekor Cinema attendance has not shown substantial growth in recent years, which is likely to indicate the effect of substitutes, advances in technology and the role of piracy. Audiences have enjoyed the availability of cheaper DVD players (now even sold in supermarkets), a decline in DVD retail and rental prices, as well as increased Internet access to pirated movies. In 2006 and 2007 distributors began to turn their focus on the development of theatres and a cinema culture in previously disadvantaged areas. Specifically, the Ster Kinekor’s cinema at Maponya Mall, the first ‘mega’ mall in one of the largest townships in South Africa, reflects a drive to reach previously neglected potential audiences. 5 . THE STRUCTURE OF THE AUDIO-VISUAL SECTOR 11 SABC Annual Report – Financials 2006/07 12 Howard Thomas, “Variety Deal Memo”, 2000 – available from www.busvannah.co.za 13 Gauteng Film Office, Annual Report, 2006 2001 2007 OWNER SCREENS SEATS SCREENS SEATS DRIVE-INS I-MAX Ster Kinekor 380 68,393 355 55,875 1 0 Nu Metro 212 35,857 218 36,683 1 0 Independents 167 36,984 172 23,771 0 2 TOTAL 759 141,234 745 116,329 2 2
  • 121. 1 1 5 Table 10: National weekly average attendance by cinema distributor Source: Ster Kinekor Notes: ✝ Not available for 2005/6 In the period January to April 2008, before this report went to press, the South African box office grossed $19,911,977.14 VIDEO AND DVD DISTRIBUTION This part of the value chain consists of three players: Ster-Kinekor, Nu Metro and United International Pictures (UIP). VIDEO AND DVD RETAILS AND RENTAL The R140 billion DVD video retail and rental sector consists of four players: Nu-Metro, Ster-Kinekor, GTV and Music for Pleasure. Nu-Metro and Ster- Kinekor continues to control over 80% of the market.15 Film Festivals There are a small number of South African film festivals, and even fewer are held in Johannesburg. Out in Africa is a gay and lesbian film festival, which was first showcased in 1994. It screens shorts, documentaries, series and feature films from across the world at Nu Metro theatres in Johannesburg and Cape Town for 11 days in each city. The Encounters South African International Documentary Festival is the country’s only film festival with a sole focus on documentaries. It was first held in 1999, and visits Johannesburg before its showing in Cape Town. It features screenings, panel discussions and workshops for aspiring film-makers. The Johannesburg calendar also features two prominent exhibition events related to the audio-visual sector. Markex and World of Events is a marketing, promotions and special events exhibition, which was established in 1986. Mediatech Africa is a trade fair with a focus on advanced technology for the live entertainment, broadcast, audio-visual and corporate communications industries. LEGISLATION AND REGULATION Legislation and regulation play a pivotal role both in the functioning and development in the sector.16 The value that the audio-visual sector creates is almost exclusively in its creative content, and hence copyright protection and local content quotas facilitate the sustainability of the sector. The major legislative documents, which govern the audio-visual industry, are outlined briefly below. ❍ SECTOR-SPECIFIC LOCAL AND INTERNATIONAL LEGISLATION a) The Independent Communications Authority of South Africa Act deals with local content quotas, which are perceived as instrumental in sustaining and developing the local industry. The Act also specifies that holders of broadcast licences cannot be foreign-controlled entities. OWNER WEEKLY AVERAGE ATTENDANCE 2001 2005 2006 Ster Kinekor 337,672 517,377 526,456 Nu Metro 190,173 Independents ✝ 144,897 Total 672,742 11 SABC Annual Report – Financials 2006/07 12 Howard Thomas, “Variety Deal Memo”, 2000 – available from www.busvannah.co.za 13 Gauteng Film Office, Annual Report, 2006 14 Source: http://www.boxofficemojo.com/intl/southafrica/yearly/ 15 CIGS “The South African Film and Television Industry Report”, 1998 16 Adapted from Deloitte SA Market Research, “Project Gaullywood” – a study done for the Gauteng Film Commission (October 2007)
  • 122. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S b) The Films and Publications Act legislates that the distribution of any prohibited film or publication is a criminal offence. c) The Intellectual Property Laws Amendment Act provides for the protection of intellectual property rights of local and foreign individuals and companies. d) The Counterfeit Goods Act protects against falsification and trade in falsified goods. e) The TRIPS agreement applies to South Africa as a member of the WTO. The agreement affords scriptwriters and creators a high standard of copyright protection. EDUCATION AND TRaining Gauteng has a number of specialised training entities – from schools to firms who engage in in-house and on-the-job training, some through participation in the MAPPP SETA learnership programme. Even though areas of overlap exist, there is a considerable degree of specialisation in the more formal training institutions, with most focusing on a particular audio-visual medium (e.g. film) or a particular aspect of production (e.g. technical expertise). Table 11: Major educational and training institutions in the audio-visual sector Sources: Gauteng Film Commission (www.gautengfilm.co.za); www.safilm.org.za; www.filmmaking.net There are no formal or transparent standards for audio-visual training in South Africa, even though the Department of Education has accredited a number of audio-visual education institutions. Some training providers develop their own syllabi, while others work in conjunction with international partner institutions to develop teaching material. The latter approach relies on foreign expertise and experience and places importance on students getting both locally- and internationally-accredited qualifications. 5 . THE STRUCTURE OF THE AUDIO-VISUAL SECTOR INSTITUTION AREAS OF SPECIALISATION AFDA (South African School of Motion Picture Medium and Live Performance) Offers degree-based courses in all areas related to film and drama Big Fish School of Digital Filmmaking (formerly the Film and TV Unit at Monash, South Africa) Mainly short courses, such as a 4-month Film Talent Incubator in collaboration with Multichoice; an 8-month Filmmakers in Residency and a 5-day course on script editing for the Department of Arts and Culture; and a 5-day courses on business management for the SABC Boston Media House Offers diploma-based courses in animation, media studies and radio production City Varsity A school of media and creative arts, which offers diploma-based courses in film and TV production techniques Consulting Dynamix Employment-orientated and employment-based training programme developer, based on needs of employer demand, and training auditor Damelin The School of Media and Design Technology offers courses on creative media, design and performing arts. M-Net New Directions Hands-on training in film (through commissioning of projects) – mainly in scriptwriting, directing, producing and editing Motion Picture Academy at the Tshwane University of Technology (also known as TUT Film School) Courses in all the major disciplines including producing, sound design, script writing, cinematography, directing, and editing. NeMiSA (National Electronic Media Institute of South Africa) Technical training, mainly for TV and radio broadcasting Newtown Film and TV School Practical and theoretical aspects of film and video within a 2-year full-time diploma course The Excellent Film School Diploma (2 Years), Short Beginner Courses, Short Professional Courses The South African Scriptwriting Institute The training arm of the South African Scriptwriters Union . It offers short courses and “Script Camps” – going away initiatives aimed at getting feature film scripts written to first draft stage. Wits School of Arts – Television and Film Studies A degree-based programme, with a focus on television and broadcasting, offering training in both technical (camera and sound) and conceptual (scriptwriting, directing, research) aspects T H E S T R U C T U R E O F T H E A U D I O - V I S U A L S E C T O R
  • 123. 1 1 7 DISTRIBUTION OF FIRMS BY SIZE Although the large broadcasters dominate aggregate turnover in the industry, there are a large number of smaller firms within the sample. The majority of the firms sampled are micro and small enterprises, employing less than five people. Advancements in technology and the digitisation trends have allowed for production and technical support activities to be done by smaller firms. Figure 5: Distribution by size of organisation Number of employees 6. TYPES OF ORGANISATIONS/FIRMS IN THE AUDIO-VISUAL SECTOR 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% DISTRIBUTION BY ORGANISATION SIZE 1 to 4 5 to 19 20 to 49 50+
  • 124. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S T Y P E S O F O R G A N I S A T I O N S I N T H E A U D I O - V I S U A L S E C T O R DISTRIBUTION OF FIRMS BY AGE The age distribution of firms indicates that even though 64% of the firms in the sector have been in existence for over a decade, there has been a considerable expansion in the sector in the last ten years. Figure 6: Age distribution of organisations OWNERSHIP WITHIN THE SECTOR Over half of the firms are closed corporations, with limited companies accounting for a further 36%. This reflects the diverse mixture of large and small businesses within the sector, as well as the fact that 16% of firms are relatively new and hence are in the process of establishing their businesses. Table 12: Legal status 6. TYPES OF ORGANISATIONS/FIRMS IN THE AUDIO-VISUAL SECTOR AGE DISTRIBUTION OF ORGANISATIONS 10+years 0-4 years 5-9 years LEGAL STATUS PERCENTAGE (%) CC 54 Limited Company 36 Sole trader 4 NPO 4 Registered under section 21 4 TOTAL 100
  • 125. 1 1 9 EMPLOYMENT CHARACTERISTICS RACE AND GENDER In contrast to the disparities at the management level, the gender distribution of the workforce is balanced, with 54% female. In terms of race and gender, there is an almost even split between black and white. Figure 7: Percentage of employees by race and gender 7 . DEMOGRAPHICS WITHIN THE AUDIO-VISUAL SECTOR PERCENTAGE OF EMPLOYEES BY RACE AND GENDER White female White male Black female Black male
  • 126. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S D E M O G R A P H I C S W I T H I N T H E A U D I O - V I S U A L S E C T O R MANAGEMENT The sector appears to have been slow to transform at the management level: 69% of owners or managers are white and 60% are male as can be seen in Figure 8 below. Figure 8: Percentage of management by race and gender EDUCATION AND TRAINING Education and training play a pivotal role in this sector, which requires a wide range of creative and technical skills. This is confirmed by the fact that 79% of the workforce and 95% of firm owners or managers have some kind of a tertiary education Table 13: Education level of employees A substantial number of people employed in the sector make a living only through project-based work. Of the 704 freelancers listed in Call-a-Crew (an online directory for freelance audio-visual staff), 365 were Gauteng-based 7 . DEMOGRAPHICS WITHIN THE AUDIO-VISUAL SECTOR PERCENTAGE OF MANAGEMENT BY RACE AND GENDER White female White male Black female Black male EDUCATION LEVELS OF EMPLOYEES WORKFORCE (%) MANAGEMENT (%) Completed post-graduate degree 0 21 Completed university degree 29 37 Diploma with Grade 12 50 37 Up to Grade 10 7 0 Up to Grade 12 7 0 Vocational training with Grade 12 7 5 TOTAL 100 100
  • 127. 1 2 1 8 . MARKETS The majority of activities in the sector are related to intermediate stages of production, as 78% of firms reported that they supply their services to other firms, while 22% report that their main source of income is direct sales or services. This is understandable, as firms involved in production and post-production stages of making material for film and TV and those in support services dominate the landscape of the industry in terms of number of entities (see Table above) Most firms (61%) sell their products on international markets since a number of companies in the sample were involved in co-production with international partners or offer their services in neighbouring countries. Of those, 26% reported that the EU was one of the markets they had access to, 30% reported the US and Canada, 13% reported Asia, 9% reported Australia and New Zealand, 9% had sold to African countries in the non-SADC region and 9% to the countries in the SADC region. In a sector, where income streams are often irregular or project-orientated, very small proportion of entities are entirely dependent on funding. This was evident from the fact that only 4% of firms listed a funding agency grant as their main source of income. Commission was the main income source for 14% of businesses, and the overwhelming majority (82%) reported that their earnings were from direct sales or services. Almost two-thirds of businesses (64%) had no secondary income source. For the remainder, the “direct sales or services” category was the most frequently mentioned secondary source of income – it was reported as such by 18% of firms. Commission provided an additional earnings stream for 4% of respondents. Figure 9: Sources of income for organisatins in the audio-visual sector 9 . FUNDING & FINANCING IN THE AUDIO-VISUAL SECTOR Primary source (%) SOURCES OF INCOME FOR ORGANISATIONS IN THE AUDIO-VISUAL SECTOR 90 80 70 60 50 40 30 20 10 0 Direct sales/services Commission Funding agencygrant N/A Nosecondary source Secondary source (%)
  • 128. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S F U N D I N G & F I N A N C I N G I N T H E A U D I O - V I S U A L S E C T O R 9 . FUNDING & FINANCING IN THE AUDIO-VISUAL SECTOR FUNDING AND SUPPORT The entities in the sector that receive some form of financial support rely mostly on institutional or government funding and to a small degree on loans from commercial banks or private investors. Institutional and government funding sources include the IDC, the NFVF Fund and government grants through skills initiatives, sponsorships, small business support and development programmes. Figure 10: Organisation size and funding applications One quarter of the firms interviewed applied for funding in the last two years. Smaller firms are more likely to apply for funding in both absolute and relative terms. Two-thirds of the firms that applied for funding received it. The most common reason given for not applying is that there is no need. 66% of the firms that did not apply for funding gave this as a reason. Compliance issues were only given as a reason by 7% of the firms, 10% replied that it depended on contacts and 13% felt that they would not receive funding even if they applied. Table 14: Reasons for not applying for funding 36% of the firms in this sector had debt of some kind. Applied ORGANISATION Size and funding application 35% 30% 25% 20% 15% 10% 5% 0% 1-4 5-19 20-49 50+ Did not apply Number of employees Compliance issues 7 It depends on whom you know 10 It is pointless, I would still fail to get it 13 No need 65 Other (red tape, not sure who to apply to, no experience in writing proposals) 5 TOTAL 100
  • 129. The Gauteng Audio-Visual sector is well supported by the Gauteng Film Commission and the agglomeration of leading players, broadcasters and dedicated government support organisations and services. A central area of concern and hence for policy is developing sustainable small businesses in the film and television industry as well as in facilitating access to international markets both for exposure (festivals) and for distribution. An important intervention is to close the link between the supply and demand sides of the value chain through a focus on distribution, which is where the wealth is created in this high-risk sector (CAJ, 2007). 1 0 . OUTLOOK BIG IDEAS FILMS SET IN GAUTENG 1 2 3
  • 130. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S R E F E R E N C E S 1 1 . REFERENCES DACST, (1988c) “Creative Industries Growth Strategy: Report on the South African Film and Television Industry”, 1998 Deloitte SA Market Research, “Project Gaullywood” – a study done for the Gauteng Film Commission (October 2007) Evolutions, “Commercial Producers’ Association Industry Survey”, 2006 Gauteng Film Commission South Africa, “Annual Report, 2006/7” Human Sciences research Council, (2005) “HSRC Survey of the South African Film and Video Industry for the National Film and Video Foundation in 2004”, Landry, Charles, “Creative City”, Earthscan Publications Ltd, 2000 Ministry of Colombia, (2002) Creative Industries Mapping of Bogotá, Columbia, SABC Annual Report – Financials 2006/07 Shilowa, Mbhazima, (2004) “Speech by Premier Mbhazima Shilowa at the opening of the Gauteng Film Indaba, 24 March 2004”, (The speech is available from: http://www.gpg.gov.za/docs/sp/2004/sp0323.html) Standish, Barry and Antony Boting, 2007) “A Strategic economic Analysis of the Cape Town and Western Cape Film Industry” (This document is also known as the “Cape Film Commission Impact Assessment Report” and it is available from: http://www.capefilmcommission.co.za/documents/ Western%20Cape%20Film%20Industry%20-%20Impact%20Assesment%20Report%202007.pdf ) Thomas, H. (2000), “Variety Deal Memo”, 2000 – available from www.busvannah.co.za
  • 131. GAUTENG’S CREATIVE INDUSTRIES: THE CRAFT SECTOR
  • 132. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S CRAFT SECTOR PROFILE TOTAL TURNOVER R589, 000, 000 TOTAL EMPLOYMENT 8,706 GROSS VALUE-ADDED R348, 000, 000 BLACK EMPLOYEES 66% FEMALE EMPLOYEES 72% NUMBER OF ORGANISATIONS 2,390 GAUTENG’S CREATIVE INDUSTRIES: THE CRAFT SECTOR
  • 133. T A B L E O F C O N T E N T S C O N T E N T S Glossary of Acronyms and Terms 1. Background 128 2. Description of the Craft SectOR 130 2.1 Definition 130 2.2 The value chain 131 3. The Sample for the Craft Sector 132 4. Craft Sector Contribution to the Gauteng Economy 133 4.1 Turnover 133 4.2 Employment 133 4.3 GVA 133 4.4 COST DRIVERS 133 5. Structure of the industry 134 6. Types of organisations within the Craft Sector 135 7. Demographics within the Craft sectoR 137 7.1 Racial breakdown 137 7.2 Age composition 138 7.3 Educational attributes 138 8. MARKETS 139 9. FUNDING AND FINANCING 140 10. OUTLOOK 141 REFERENCES 142 LIST OF FIGURES FIGURE 1: Global craft market by segment and market share 128 FIGURE 2: Craft sector value chain 131 FIGURE 3: Income sources for organisation in the craft sector 134 FIGURE 4: Distribution by organisation size 135 FIGURE 5: Age of enterprises in the craft sector 136 FIGURE 6: Legal status of organisations in the craft sector 136 FIGURE 7: Gender and racial breakdown of employee 137 FIGURE 8: Gender and racial breakdown of management in the craft sector 137 FIGURE 9: Organisation size and funding applications 140 LIST OF TABLES TABLE 1: Categories of craft production 130 TABLE 2: Sample of the craft sector 132 TABLE 3: Total turnover for category of company in Craft 132 TABLE 4: Total employment in craft 132 TABLE 5: Cost drivers in the craft sector 133 TABLE 6: Educational profile of the workforce and management 138 TABLE 7: Reasons for not applying for funding 140
  • 134. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S 1. www.wikipedia.org 1 . BACKGROUND The craft sector in Gauteng is a growing and vibrant collection of individual crafters, studios, development organisations, enterprises, public and private galleries, retail and wholesale outlets and shows, and organisations. Since the Cultural Industries Growth Strategy in 1998 the sector has generally dominated government strategies and programmes given its potential to grow exports and to create jobs, especially for rural and historically disadvantaged communities. Over time, this core strategy has resulted in a national Craft Customised Sector Programme (CSP) managed by the Department of Trade and Industry (DTI) and a provincial strategy for craft development launched in 2008. The global craft decorative goods market value for crafts and was estimated at US $235 billion in 2003, growing at an annual rate of 5.1% between 1999 and 2003. The United States is the largest net importer of craft, joining countries Germany, the United Kingdom, Japan, Hong Kong, France, Canada, Belgium and Spain in accounting for 77,5% of the total imports. With regard to the product profile of imports, those imported to the US are primarily low value products, while those imported by the countries in the European Union (EU) are mainly medium to high value products. The dominant market trend is the demand for low cost, machine made goods which is having a significant impact on handcraft production and competitiveness around the world (Frost and Sullivan, 2005). South Africa occupies a fraction of this global market. The global market for handicraft products is in a state of flux, mainly due to the flow of low-cost, mainly cloned products, from countries such as China, Taiwan and Hong Kong that are slowly affecting the market for hand-made goods. The figure below outlines the market share of particular pricing categories for craft products. Figure 1: Sector breakdown by number of active entities Source: SACR (2008) B A C K G R O U N D High End Market Segment – USA, Germany, Italy, Turkey, France, Spain, UK Middle Market Segment Poland, Taiwan, Hong Kong, Belgium, Korea, India, China Low End Market Segment China, India, Thailand, Vietnam, Malaysia, Russia Value Volume
  • 135. 1 2 9
  • 136. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S D E S C R I P T I O N O F T H E C R A F T S E C T O R 2 . DESCRIPTION OF THE CRAFT SECTOR Craft combines elements of old and new, culture and economy, traditional and contemporary, form and functionality (SACR, 2008). Working with traditional materials of clay, glass, metal, wood, stone, and natural fibres, as well as plastics, resins, and man-made fibres, crafters conceive, design, and render objects that are expressive, functional or decorative: vessels, clothing, cutlery, tableware, musical instruments, furniture, jewellery, decorative and art pieces (Pear Tree Solutions, 2003). In Gauteng, the sector is characterised by three distinct categories of producer enterprises along with other value chain players. These are: • Enterprises that are established and have been stable over time. • New micro-enterprises with the potential to grow and create employment. • Survivalist producers operating at very low income levels. Craft producer enterprises employ between 1 and 2 people. • Designer-maker enterprises that are primarily stable and established micro-business (SACR, 2008a). 2.1 DEFINITION In South Africa, the Department of Trade and Industry’s Craft Sector Programme (CSP) defines the sector as: “Craft refers to the creation and production of a broad range of utilitarian and decorative items produced on a small scale with hand processes being a significant part of the value-added content. The production of goods uses a range of natural and synthetic materials (ACTAG 2004 cited in DTI, 2005).” The CIGS report identified 5 categories of the craft sector. The following table shows the categories as well as their characteristics. Table 1: Categories of craft production Source: LFS (2007) and own analysis CATEGORY CHARACTERISTICS Traditional art The production of traditional art originates from the material culture and inherited production methods of a community. The products have special meaning to a specific cultural group. Designer goods Developed from traditional art and used to meet the tastes and needs of the international market and the local high-income market segment. Craft art Made entirely by hand. Tend to result from overlap with traditional art. Functional wares Industrialised production of traditionally handmade goods. That is mass produced products like pottery, furniture, carpets, tiles etc. Souvenirs Simplified crafts that serve as a reminder of a particular destination, culture, etc.
  • 137. 1 3 1 2.2 THE VALUE CHAIN The figure below shows the value-chain of the craft sector. At the genesis of the chain is the design and supply of inputs. The two (design and inputs) tend to interact and influence each other. For example, a designer can design a product that requires specific inputs, thus he dictates the kind of inputs to be used. Alternatively, the designer’s product may be influenced by the available inputs. The people involved in the design of crafts include: weavers, goldsmiths, leather crafts, music instrument makers, jewellers, sculptors and potters. This is the genesis of ideas, concepts and designs which are then transformed into products. Depending on the size of the entity, design can be done in-house or outsourced, with those involved in the production of high-value low-volume products mostly doing their own design and manufacturing. Bigger craft manufacturing firms tend to either out-source the design process or have it done by a design specialist. The inputs required can be obtained locally through retailers or imported. The second part of the value chain is the production stage. Production involves the transformation of the designer’s ideas into tangible products. The production process can be done on small scale or large scale. Production involves cutting the inputs into appropriate shapes; constructing craft pieces; painting and labelling the crafts; and packaging them for the market. After production the products can then be distributed. The distribution process can take different forms. The products, which can be sold locally or exported, can be distributed through direct selling, through craft markets, by small retailers, wholesaling, national retailers or through e-commerce. Given that a number of crafters have the requisite creative skills that are important for the craft production but lack marketing skills that are necessary for the distribution of the product, there is a need for intermediaries. There is a general mistrust between the producers and the intermediaries, with producers often feeling that they are being exploited by the intermediaries (DTI, 2005) In the South African context, the feeling of exploitation is reinforced due to differences in demographics and characteristics of the firms at various stages of the value chain. The producers are generally smaller firms, often Black or female owned, and with lower educational qualifications and less business experience. The distributors are often larger, sometimes publicly or foreign owned companies, with managers who are often white, male, and highly educated with significant business experience. There are some supporting activities that occur at different stages of the value chain. These include the education and training institutions as well as funding institutions. Education and training institutions tend to train stakeholders on product development, production processes, product marketing, intellectual property rights management and the creation and adaptation of work tools At national government level the supporting institutions include: Department of Arts and Culture, Department of Trade and Industry, Department of Labour and SETAs. Other funding organisations include: National Lottery, National Arts Council, IDC, Umsombuvo Youth Fund and Business Arts of South Africa. Figure 2: Craft sector value chain ConsumptionDistribution Production -weavers -goldsmiths -sculptors -potters -leather crafters -jewellers -bead makers Creative origination -Design -Craft specific inputs Funding and support Education and training
  • 138. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S THE SAMPLE FOR THE CRAFT SECTOR; CONTRIBUTION TO THE GAUTENG ECONOMY 3 . THE SAMPLE FOR THE CRAFT SECTOR The information in this report is based on in-depth and telephonic interviews as follows: Table 2: Sample of the craft sector Based on an industry database developed for the Gauteng Audit of Craft Assets conducted by SARC in 2007 the following population estimates have been utilised to estimate employment, turnover and value-added in the craft sector: Table 3: Total turnover for category of company in Craft Table 4: Total employment in Craft CATEGORY OF INTERVIEWS RESPONDENTS Face-to-face interviews 27 Telephonic interviews 88 TOTAL 115 CATEGORY OF COMPANIES MEDIAN ANNUAL TURNOVER (R) NUMBER OF COMPANIES TOTAL TURNOVER FOR CATEGORY OF COMPANY (R) Turnover ‹ R 1 million 36,000 2,088 75,168,000 Turnover ‹ R 1 million 1,700,000 302 513,400,000 Total TURNOVER 588,568,000 CATEGORY OF COMPANIES MEDIAN EMPLOYEE NUMBER NUMBER OF COMPANIES TOTAL NUMBER OF EMPLOYEES FOR CATEGORY OF COMPANIES Turnover ‹ R 1 million 3 2,088 6,264 Turnover ‹ R 1 million 6 302 1,812 Total number of employees 8,076
  • 139. 1 3 3 In terms of numbers of organisations, the craft sector is the largest of all the creative industries in Gauteng in terms of the numbers of entities active in the province and it constitutes 13% of total employment in the creative industries, second only to the design sector. In terms of turnover and value-added, however the sector contributes 5% and 6% respectively to the total economic output of the creative industries. 4.1 TURNOVER The sector had an annual turnover of R589 million in 2006. It is important to note that there are distinctly differential turnover basis in the different segments of the craft sector. Retailers, wholesalers and designer/makers constitute a large proportion of the total sector turnover while many craft producers operate on a survivalist basis, in some cases just above the poverty line (SACR, 2008). 4.2 EMPLOYMENT Second only to cultural tourism and heritage, the craft sector is the largest employer in the creative industries. The 8,076 employees in the sector represent 13% of total employment. 4.3 GVA In terms of gross value-added, the sector contributes R348,000,000 to the Gauteng economy indirectly. 4.4 COST DRIVERS Raw materials are the primary cost driver in craft enterprises and organisations, followed by operational costs. Reflecting the low skill base of the sector, wages and salaries represent the third highest cost driver in the sector. Table 5: Cost drivers in the craft sector 4 . CRAFT SECTOR CONTRIBUTION TO THE GAUTENG ECONOMY PERCENTAGE (%) Direct raw materials 54 Operational costs (rentals, transport, telephone ...) 35 Wages and salaries 12 TOTAL 100
  • 140. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S STRUCTURE OF THE INDUSTRY; TYPES OF ORGANISATIONS WITHIN THE CRAFT SECTOR 5 . STRUCTURE OF THE INDUSTRY At its core there are three players that drive the sector: • Trader entrepreneurs who may or may not a crafter but generally does not engage in craft production. The role of this player is to collect and sell product through investment and taking on the primary risk. • The artisan entrepreneur who is a crafter and produces products either singly or in collaboration with hired labour. These players sell goods either fully or partly themselves and invest capital in the process. • The artisan worker is a player who has a skill and is paid a wage or a piece rate for the production of work. While this player’s own tools and workspace may be utilised, no risk is borne in the production process. In general, it is the artisan entrepreneur is the focus of government policy given that: • There is large investment by the individual in terms of skill, time and capital. • They have their own production arrangement and premises, which often includes a showroom or retail component. • There is likely to be exposure to the market in some form. • Have the ability to create and maintain good interpersonal relationships. • There is likely to be exposure to the market in some form. • Innovation through design and market study. • There is generally consistent quality. The firms or organisations surveyed were asked about the primary and secondary sources of income. The results show that 92% of the firms stated that direct sales were the main source of income. The remaining 8% was split evenly between government funding and NGO funding, an indication that the sector in the province is less dependent on government that previously supposes. Just under 60% the firms, however, also reported that they had a secondary source of income. Direct sales were the most common source of secondary income, although government was also mentioned. Figure 3: Income sources for organisation in the craft sector Design companies are mainly based in rented premises (70%), however a significant number (19%) work out of studios and workshops based within their homes. Sources of income for organisations in the craft sector Primary source (%) Direct sales/service National government grant Local government grant Funding agency grant N/A No secondary source Secondary source (%) 100 90 80 70 60 50 40 30 20 10 0
  • 141. 1 3 5 Production activities in the value chain occur through the activities of five segments: • Informal enterprises which are unregistered primarily home-based businesses that generate some kind of income. • Sole traders that are individuals registered as provisional tax payers. • Co-operatives which are collaborative structures formally registered with the DTI under the Co-operative Act of 2005. • Small batch manufacturers which are registered business producing craft competitively. • Project-based activities which tend to be primarily grant funded operations through non-government organisations and community-based organisations (DTI, 2005). The retail activities in the sector are carried out through a variety of activities including: • Formal craft markets. • Retailers both large and small ranging from boutique shops to large outlets in airports to national retailers such as Mr Price Home. • Direct sales to the public through informal markets such as roadside stalls at tourism sites. • Wholesaling although this is not necessarily that common. • E-commerce activities, although these are also not common at this stage (SACR, 2008a). Over 60% of enterprises in the sector are micro-business employing between 1 and 4 people. Just over 20% of enterprises employ between 5 and 19 people. Figure 4: Distribution by organisation size 6 . TYPES OF ORGANISATIONS WITHIN THE CRAFT SECTOR Distribution by organisation size Number of employees 70% 60% 50% 40% 30% 20% 10% 0% 1 to 4 5 to 19 20 to 49 50+
  • 142. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S T Y P E S O F O R G A N I S AT I O N S W I T H I N T H E C R A F T S E C TO R ; D E M O G R A P H I CS In the craft sector there is a very even spread of organisation by age, roughly two thirds of organisations are over 5 years of age. Figure 5: Age of enterprises in the craft sector Supporting by the Gauteng Audit of Craft Assets (SACR, 2008a), the mapping study found that the bulk of entities active in the sector are formally registered in some way, and that 59% are Closed Corporations and 30% are sole traders. Figure 6: Legal status of organisations in the craft sector 6 . TYPES OF ORGANISATIONS WITHIN THE CRAFT SECTOR 10+ years, 31% 5 to 9 years, 35% 0 to 4 years, 34% NGOs 4% Age distribution of organisations Legal status CC 59% Limited Company 7% Sole trader 30%
  • 143. 1 3 7 7.1 RACIAL BREAKDOWN The largest proportion of employees in the sector are black women, followed by white women supporting the commonly held notion that the sector provides employment opportunities for women. In addition, after the fashion and cultural tourism and heritage sectors, the craft sector has the highest levels of employment of black South Africans (66%). Figure 7: Gender and racial breakdown of employees With regards to employment at management level, however a different picture emerges with only 34% of all managers from historically disadvantaged groups. Over 50% of managers in the sector are women however, again indicating that the sector provides signification opportunities for gender empowerment., Figure 8: Gender and racial breakdown of management in the craft sector 7 . DEMOGRAPHICS WITHIN THE CRAFT SECTOR Percentage of management by race and gender Percentage of employees by race and gender White female 36% Black male 18% Black female 16% White male 30% White female 27% Black male 22% Black female 45% White male 6%
  • 144. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S D E M O G R A P H I C S W I T H I N T H E C R A F T S E C T O R ; M A R K E T S 7.2 AGE COMPOSITION In terms of youth, 20% of employees are under the age of 35 and only 4% report that they employ one or more persons with disabilities 7.3 EDUCATIONAL ATTRIBUTES Only 27% of the craft sector workforce has reached a Grade 12 qualification and 23% have up to Grade 10. At management level, however 58% have some kind of tertiary qualification including degrees diplomas and post graduate degrees. Table 6: Educational profile of the workforce and management 7 . DEMOGRAPHICS WITHIN THE CRAFT SECTOR WORKFORCE % MANAGEMENT % Completed post-graduate degree 0 12 Completed university degree 4 19 Diploma with Grade 10 0 0 Diploma with Grade 12 8 19 Up to Grade 10 23 12 Up to Grade 12 27 23 Diploma 4 8 N/A 31 4 TOTAL 100 100
  • 145. 1 3 9 Only 31% of crafters who participated in the mapping study reported that they export products and on average less than 20% of their revenue is generated in foreign markets. Markets in the United States, Canada and the EU are the primary target of export activities, followed by SADC and the rest Africa. It is clear, however that the craft market is primarily reliant on domestic markets. The general public and tourists are the largest markets for craft in the province (65%) while 35% is sold to other businesses in the value chain. Government does not feature at all as a market for craft objects. In South Africa, the markets for craft products can be segmented as follows: • Predominantly functional items primarily produced on a large scale, are of medium to high quality and are generally sold in formal and large retailers. • Fashion-led items which are also of medium to high quality and produced on a large scale and are sold in large and small specialist retailers. • Gifts and novelty items which can be at any level of quality, tend to be produced in small batches are a sold through a variety of retail outlets. • Corporate gifts which are generally medium to high quality, generally made in large batches and retailed directly or online to corporate purchasing managers. • Collectible/Craft Art objects which are high quality objects, sold in specialist retail outlets such as galleries and museum shops and generally produced as once-off or limited edition pieces. • Cultural Artifacts which can be of low or high quality are generally produced on a small or medium scale and are sold at markets, tourist outlets or by informal traders. • Souvenirs/Curios of low or high quality, manufactured on a small or medium scale and are sold at markets, tourist outlets or by informal traders. • Socially Responsible/Fair Trade products are generally of medium quality, tend to manufactured in small or medium batches and are sold through historically associated retailers and, increasingly, by mainstream retailers (Kaiser Associates, 2005). 8 . MARKETS
  • 146. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S F U N D I N G & F I N A N C I N G O F T H E C R A F T S E C T O R ; O U T L O O K Only 11% of craft organisations and enterprises reported that they had applied for funding in the last year. Of those that did apply, 50% received the funding that they applied for, the bulk of which was obtained from government as opposed to other funding sources such as sponsors. As is the case with most other creative industries sectors, there is a strong correlation between business size and funding. Funding applications are most commonly received from small enterprises employing between 1 and 4 people. Figure 9: Organisation size and funding applications The lack of a need for funding was the primary reason listed for not applying, however a reasonably significant number of small enterprises (19%) appear to have little experience in proposal drafting and 10% are sceptical as to the benefit of applying. Table 7: Reasons for not applying for funding It is important to note that when asked about whether or not they applied for loan finance from a credit institution, 69% reported that they not done so primarily citing the lack of need as the reason. Of the 31% that did apply, 38% received the credit that they had requested. 9 . FUNDING AND FINANCING LESS THAN 5 EMPLOYEES MORE THAN 5 EMPLOYEES No need 38 18 Compliance issues 5 0 It is pointless 10 0 No experience in writing proposals 19 10 TOTAL 72 28 Organisation size and funding application Number of employees 60% 50% 40% 30% 20% 10% 0% 1 to 4 5 to 19 20 to 49 50+ Applied Did not apply
  • 147. 1 4 1 The craft sector enjoys a high profile in many development strategies because of its perceived ability to contribute to national priorities including: • Black economic empowerment. • The empowerment of women. • Rural and urban development. • Small business development. • Export promotion. • Beneficiation. • Poverty alleviation (CAJ, 2008). Both international and local research shows however that the craft sector continues to be constrained by the following factors: • Handicraft is a growing market however the market is mainly supply driven and as such a demand oriented focus is required that identifies buyers and builds that capacity of crafters to meet the demand. • There is a lack of organisation and standards in the handicraft trade both on the policy and capacity side and as such artisans are overly dependent on market linkage intermediaries (SACR, 2008). In Gauteng, the finalisation of the Gauteng Craft Development Framework in 2008 will give renewed focus to the work of provincial and local government in supporting the sector. The key focal points of the strategy, which will be driven through integrated service delivery hubs and rural satellite hubs are: • Improving access to resources. • Improving market access. • Focusing on marketing as a key activity. • Skills development. • Improving design and innovation.. • Developing craft enterprises. • Improving information sharing and co-ordination of efforts (SACR, 2008b). 1 0 . outlook
  • 148. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S R E F E R E N C E S 1 1 . REFERENCES ACTAG (1995) Report of the Arts and Culture Task Group DACST (1998) The South African Craft Industry prepared by the Cultural Industry Growth Strategy commissioned by the then DACST DTI (2005) Customised Craft Sector Programme, Pretoria, DTI Elk, E. (2004). The South Africa Crafts Sector. Cape Craft and Design Institute Frost & Sullivan, (2005) Market Feasibility Study and Business Development Plan For The Handicrafts Sector, a study commissioned by the Export Promotion Council for Handicrafts, New Delhi, India Kaizer Associates, (2005) Western Cape Micro-Economic Development Strategy Craft Study, First report, Crafts Profile, revised draft Pear Tree Solutions (2003) Profile and Development Strategy for Craft in Canada, a study co-ordinated by Conseil des métiers d’art du Québec (CMAQ) for the Canadian Crafts Federation/Fédération canadienne des métiers d’art (CCF/FCMA) SACR (2007) Gauteng Audit of Craft Assets, report prepared by the Cape Craft and Design Institute SACR (2008) Gauteng Craft Development Framework, (unpublished)
  • 149. 1 7 GAUTENG’S CREATIVE INDUSTRIES: CULTURAL TOURISM & HERITAGE SECTOR
  • 150. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S CULTURAL TOURISM & HERITAGE TOTAL TURNOVER R130,680, 000 TOTAL EMPLOYMENT 16,104 GROSS VALUE-ADDED R83,000, 000 BLACK EMPLOYEES 76% FEMALE EMPLOYEES 47% NUMBER OF ORGANISATIONS 942 GAUTENG’S CREATIVE INDUSTRIES: CULTURAL TOURISM & HERITAGE
  • 151. T A B L E O F C O N T E N T S C O N T E N T S 1. Background 146 2. Description of the CULTURAL TOURISM & HERITAGE SectOR 148 2.1 Definition 148 2.2 The value chain 149 3. The Sample for the CULTURAL TOURISM & HERITAGE Sector 150 4. CULTURAL TOURISM & HERITAGE Sector Contribution to the Gauteng Economy 150 4.1 Turnover 150 4.2 Employment 150 4.3 GVA 151 4.4 COSTS 151 5. Structure of the industry 152 6. Types of organisations within the CULTURAL TOURISM & HERITAGE Sector 153 7. Demographics within the CULTURAL TOURISM & HERITAGE sectoR 155 7.1 Racial breakdown 155 7.2 Age composition 156 7.3 Educational attributes 156 8. MARKETS 157 9. FUNDING AND FINANCING 157 10. OUTLOOK 158 REFERENCES 158 LIST OF FIGURES FIGURE 1: The role of heritage in the tourism value chain 149 FIGURE 2: Income sources in the sector 149 FIGURE 3: Size of organisations in the sector 152 FIGURE 4: Age distribution of organisations 153 FIGURE 5: Race and gender breakdown of employees 154 FIGURE 6: Race and gender breakdown of management 155 FIGURE 7: Organisation size and funding applications 155 LIST OF TABLES TABLE 1: Main and related activities in cultural tourism and heritage 148 TABLE 2: Turnover by category of companies in the Heritage and Tourism Sector 150 TABLE 3: Cost drivers in the sector 151 TABLE 4: Legal status of organisations 153 TABLE 5: Education levels of employees and management 153 TABLE 6: Reasons for not applying for funding 157
  • 152. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S 1 . BACKGROUND The status of heritage resources as part of the ‘cultural capital’ of a society distinguishes them from cultural products specifically constructed for sale or distribution (i.e. crafts, music and films). Since 1994 a great deal of public policy has centred on the transformation of the sector to provide a more representative image of the country’s past. As such, enormous resources have been channelled into the development of new heritage institutions (Deacon, Mnqolo and Prosalendis, 2003). In Gauteng these include: • Freedom Park in Tshwane. • Kliptown in Soweto • Constitution Hill in Johannesburg. There have also been private and community heritage sites that have emerged such as: • The Drill Hall. • The Apartheid museum. The cultural tourism sector is a sub-sector of the general tourism sector of which South Africa boast the greatest volume tourists of the entire SADC region (Bolnik, 2003). In Johannesburg alone the value of the sector is estimated at between R500 million and R1 billon (ComMark Trust, 2005). Special interest and cultural tourism have begun to emerge as distinct market segments within tourism. The primary factors contributing to the global rise of cultural tourism include: • Rising education levels • The increasing economic status of women who are generally more culturally active than men. • The increasing number of events and festivals. • Increased access to and usage of the internet. • The increasing demand for diversity in travel experiences (Ramchander, 2004). In Gauteng annually an average of 18 million bed nights are sold in the province. In 2007, between January and September, 9,2 million people arrived at the OR Tambo International Airport in Johannesburg. Visitors to Gauteng fall into the following categories of people: • Local day trippers. • Domestic tourists (comprising 65% of all arrivals). • Business tourists. • African visitors (65% of visitors). • Overseas tourists. • Overseas tour groups. B A C K G R O U N D
  • 153. 1 4 7
  • 154. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S D E S C R I P T I O N O F T H E C U L T U R A L T O U R I S M & H E R I T A G E S E C T O R 2 . DESCRIPTION OF CULTURAL TOURISM & HERITAGE SECTOR Cultural heritage includes many cultural forms such as buildings, art, crafts, that add value to society. Intangible heritage such as symbolism, languages, oral history and dance also form part of our cultural heritage. The table below lists the activities that comprise the cultural tourism and heritage sector for the purposes of this mapping study: Table 1: Main and related activities in cultural tourism and heritage 2.1 DEFINITION1 The cultural tourism and heritage sector can be broken down into two: cultural heritage; and cultural tourism. Although linked, cultural heritage focuses more on the preservation of history and culture predominantly through not for profit mechanisms and organisations such as museums. For the purposes of this study, the heritage is defined as follows: “Heritage is defined as ‘what we inherit’, ‘what we value’ or ‘what we want to pass on to future generations’”. “[T]he heritage sector includes both formally recognised heritage resources managed by the institutions such as museums and heritage resources agencies (i.e. the formal heritage sector) as well as heritage resources owned, protected and managed by individuals and communities” (Deacon, Mnqolo and Prosalendis, 2003) A broad definition of tourism is as follows: “Tourism comprises the activities of persons travelling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business ad other purposes not related to the exercise of an activity remunerated within the place visited (UNTWO, 2007). In relation to this, cultural tourism can be defined as: “[T]ourists travelling to particular locations for the express purpose of understanding and/or experiencing a culture that is somehow different from their own and to increase their appreciation of cultural resources (Ramchander, 2004) MAIN ACTIVITIES RELATED ACTIVITIES Design of tangible cultural heritage Libraries and archives Art (such as rock art) Manufacture of products Crafts Administration of locations and places Archaeological heritage Advertising Built Heritage (Architectural) Publications Aural and musical Heritage Printing of books and pamphlets Audio-visual heritage Tourism Textiles and clothing Transportation Natural heritage Lodging Natural reserves Restaurants Fauna and Flora Craft sales Service of reservations and conservation of tangible natural and cultural heritage Sale of heritage at auctions, galleries and stores Museum, exhibitions and cultural centres 1 References include Joseph Gaylard (VANSA co-ordinator, e-mail correspondence on 06/012/07), Andries Oberholzer (Deputy Director:Visual Arts DAC, e-mail correspondence on 07/12/07), Bie Venter (Johannesburg Art Initiative, telephonic interview on 10/12/07), Khwezi Gule (The Johannesburg Art Gallery, telephonic interview on 11/12/07), Stephen Hobbs (The Premises, telephonic interview on 10/12/07) and Dennis Clarke (The Paint Basket, telephonic interview on 10/12/07)
  • 155. 1 4 9 2.2 THE VALUE CHAIN The cultural tourism value chain encompasses the following activities: Figure 1: Cultural tourism value chain In relation to this, while heritage sector cannot be analysed within the traditional value chain (which uses the production-based economic model) because it is not a production-based sector it is possible to view the role of the heritage sector within the circulation aspects of the value chain as follows: Figure 2: The role of heritage in the cultural tourism value chain Source: Adapted from Minghetti, Moretti and Michelli (1998) Creation Tourists Education and training Information services such as guidebooks and travelogues Production Transportation & travel agents & tour operators Distribution Travel agents & tour operators Circulation Hotels Attractions Heritage sites Cultural activities Creation Tourists Information services such as guidebooks and travelogues Education and training Production Transportation & travel agents & tour operators Distribution Travel agents & tour operators Circulation Hotels Attractions Heritage sites Cultural activities Heritage Site Tourism related services Administrative function Conservation function Exhibition function Marketing/commercial function Information & reception Exhibitions Tours Merchandise Information Merchandise Pre-Sale Services On Site Services Post-Sale Services General information Booking & ticketing Collaboration with tourism • • • Equipment & display Information & ticketing Site retail outlet Other facilities e.g. restaurant • • • • Promotion of events Member and loyalty programmes Online services • • •
  • 156. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S THE SAMPLE FOR THE SECTOR; CONTRIBUTION TO THE GAUTENG ECONOMY 3 . THE SAMPLE FOR THE CULTURAL TOURISM & HERITAGE SECTOR This profile is based on a sub-set of the larger sample comprising 12 detailed firm-level surveys and 63 telephonic interviews using a simple questionnaire.2 Given the low levels of organisation in the sector, it is important to recognise the limitations of the sample as it is based on the information from publications and associations The cultural tourism and heritage sector represents 8% of organisations in the creative industries in Gauteng. 4.1 TURNOVER The estimated turnover for 2006 for the cultural tourism and heritage sector is R130,680,000. The figure was calculated as follows: Table 2: Turnover by category of companies in the Heritage and Tourism Sector In the cultural tourism sub-sector particularly, there are high levels of cross-subsidisation, with 50% of entities reporting that they have secondary activities. 4.2 EMPLOYMENT The sector is the largest employer (25%) in the creative industries in Gauteng, providing opportunities for 16,104 people the bulk of who are employed full time. Indirectly it is estimated that the sector accounts for over 80,000 jobs in related industries and sectors. 2 Please see the methodology section in Gauteng Creative Mapping Project Study 2a for a more detailed discussion of the sector. 3 http://www.sahra.org.za/PHS%20and%20Register.pdf 4 http://media1.mweb.co.za/mosa/oid_view.asp?pg=find_quick 5 DAC figures 4 . CULTURAL TOURISM & HERITAGE SECTOR CONTRIBUTION TO THE GAUTENG ECONOMY CATEGORY OF COMPANIES MEDIAN ANNUAL TURNOVER (R) NUMBER OF COMPANIES TOTAL TURNOVER FOR CATEGORY OF COMPANY (R) SAHRA3 Inventory list (heritage) 450,000 192 86,400,000 Museums4 450,000 26 11,700,000 Tour guides5 45,000 724 32,580,000 Total TURNOVER 130,680,000
  • 157. 1 5 1 4.3 GVA The gross value-added that the Cultural Tourism and Heritage sector contributes to the provincial economy is estimated at R83,000,000. 4.4 COSTS Just under 60% of entities in the sector reported that wages and salaries were their largest cost to business operational. Direct raw materials account for only 8% costs Table 3: Cost drivers in the sector PERCENTAGE (%) Direct raw materials 8 Operational costs (rentals, transport, electricity ...) 33 Wages and salaries 58 TOTAL 100
  • 158. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S STRUCTURE OF THE INDUSTRY; TYPES OF ORGANISATIONS WITHIN THE SECTOR 5 . STRUCTURE OF THE INDUSTRY Most heritage resources, especially institutions, are located in major centres such as Johannesburg and Pretoria. It is important to note however, the small museums, generally maintained at local level proliferate across the sector. The cultural tourism and heritage sector derives more than half (67%) its income from direct services and sales and a further 33 percent of its income from domestic and international funding from government and funding agencies. The heritage sector accounts for the majority of the income from government given the high levels of government investment in infrastructure. The cultural tourism sector on the other hand, is more a self- reliant sector although its success is closely linked to the heritage sector. : Figure 3: Income sources for organisation in the craft sector Sources of income for organisations in the cultural tourism/heritage sector Primary source (%) Direct sales/services National government grant Local government grant International donors Subletting space Secondary source (%) 70 60 50 40 30 20 10 0 Funding agencygrant Ecotourism Nosecondary source
  • 159. 1 5 3 Although the cultural tourism and heritage sector is labour intensive, the majority of firms (81%) in the sector employ less than 20 employees. Only four percent of firms employ more than 50 people. Figure 4: Size of organisations in the sector Representing the entrepreneurial base of the cultural tourism sector, 33% of firms are registered as CC, however highlighting the strong institutional foundations of the sector, 25% are local government institutions and 17% are non-profit organisations. Table 4: Legal status of organisations The majority (53%) of organisations in this industry are more than 10 years old. A further 40% are recently established (0-4 years old). This is reflective of the growth in both cultural tourism and heritage resources in the past decade following the end of the apartheid regime. 6 . TYPES OF ORGANISATIONS WITHIN THE CULTURAL TOURISM AND HERITAGE SECTOR PERCENTAGE (%) CC 33 Local government institution 25 Registered under section 21 17 Sole Trader 8 Trust 8 N/A 8 TOTAL 100 Distribution by organisation size Number of employees 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 1 to 4 5 to 19 20 to 49 50+
  • 160. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S T Y P E S O F O R G A N I S A T I O N S W I T H I N T H E S E C T O R ; D E M O G R A P H I C S Figure 5: Age of distribution of organisations 6 . TYPES OF ORGANISATIONS WITHIN THE CULTURAL TOURISM AND HERITAGE SECTOR 10+ years, 53% 5 to 9 years, 8% 0 to 4 years Age distribution of organisations
  • 161. 1 5 5 7.1 RACIAL BREAKDOWN The majority (76%) of those employed within the sector are black South African. Black males are the largest demographic group with 45% of employment. Figure 6: Race and gender breakdown of employees The picture at management level is very different however. White men and women dominate the landscape (66%). While almost a third of managers are black males, black women do not appear to feature in management structures at all. Figure 7: Race and gender breakdown of management 7 . DEMOGRAPHICS WITHIN THE CULTURAL TOURISM AND HERITAGE SECTOR Percentage of employees by race and gender White female 18% Black male 45% Black female 31% White male 8% Percentage of management by race and gender White female 33% Black male 34% Black female 0% White male 33%
  • 162. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S D E M O G R A P H I CS W I T H I N T H E S E C TO R ; M A R K E T S ; F U N D I N G & F I N A N C I N G 7.2 AGE COMPOSITION Just under 50% of employees are under the age of 35 and 17% report that they employment people with disabilities. 7.3 EDUCATIONAL ATTRIBUTES Over 80% of the workforce has at least a grade 12-education level. Of those who completed grade 12, 17% have a university degree and none of the workforce has a post-graduate degree. This is representative of a labour-intense and medium skilled sector. In contrast to the 17% workforce with a university degree, 50% of management in the cultural tourism and heritage sector have a university degree and 17% have a post-graduate degree. This is reflective of the high-skill demand of a management job in the sector. Table 5: Educational levels of employees and management The cultural tourism and heritage sector provides employment opportunities for Black school-leavers. However, further training in the form of a diploma or vocational training remains important for those employed in the sector. With growth in the sector, it offers potential for the absorption of medium-skilled individuals. WORKFORCE % MANAGEMENT % Completed post-graduate degree 0 17 Completed university degree 17 50 Diploma with Grade 12 25 8 Up to Grade 10 17 0 Up to Grade 12 8 25 Vocational training with Grade 12 25 0 N/A 8 0 TOTAL 100 100 7 . DEMOGRAPHICS WITHIN THE CULTURAL TOURISM AND HERITAGE SECTOR
  • 163. 1 5 7 The market for all the services produced in this sector is the public. These include both domestic and international visitors. The domestic tourism sector remains underdeveloped and South African Tourism’s initiatives such as the 2007 Sho’t Left campaign are aiming to develop this. International visitors remain important, with 55% of survey respondents selling goods and services to international travellers. The North American, European, Asian and SADC markets were identified as major focal points in the sector. Over 40% of the respondents have applied for funding over the last two years and 86% of applicants received funding. The funding applications mostly came from firms in the 1-4 and 5-19 size groups Figure 8: Organisation size and funding applications The most common reason given for not applying was that there was no need (46%), followed by compliance issues (18%). Table 6: Reasons for not applying for funding 8 . MARKETS 9 . FUNDING & FINANCING LESS THAN 5 EMPLOYEES Compliance issues 18 It depends on whom you know 10 It is pointless, I would still fail to get it 8 No need 46 Not aware funding is available 8 Others 10 TOTAL 100 Organisation size and funding application Number of employees 30% 25% 20% 15% 10% 5% 0% 1 to 4 5 to 19 20 to 49 50+ Applied Did not apply
  • 164. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S O U T L O O K ; R E F E R E N C E S Tourism in Gauteng is a significant contribution to the provincial economy and is one of the fastest growing sectors (SA Good News, 2007). This fact, coupled with the increasing demand for “special interest” tourism has positive indications for the sector. Research conducted by South African Tourism (SAT) in 2004 however indicates that while South African cultural experiences are in demand in the tourist market the lack of authenticity of what is on offer and the lack of interest of the domestic tourism market in these products will remain a challenge (SAT, 2004). African is the fastest growing tourist destination on the globe with the SADC region registering a 10% increase in the number of visitors between 2006 and 2007 (UNWTO, 2007). For the heritage sector, along with issues of transformation and ensuring the collections remain relevant; there is the challenge of competing for audiences within the creative industries and from outside sectors such as sports. 1 0 . OUTLOOK 1 1 . REFERENCES Bolnick, S. (2003) Promoting the Culture through job creation and small development in SADC Countries, ILO SEED Report Deacon, H.J, Mnqolo, S. and Prosalendis, S. (2003), ‘Protecting our Cultural Capital: a research plan for the heritage sector’, HSRC Occasional Papers: Cape Town Minghetti, V., Moretti, A. and Michelli, S (1998) Reengineering the Museum’s Role in the Tourism Value Chain: Towards and IT Business Model, Information Technology and Tourism, Vol 4, pp 131-143 SA Good News (2007) “Tourism Boost for Gauteng”, Friday 2 November 2007 access on 2 May 2007 at http://www.sagoodnews.co.za SAT (2004). Global Competitiveness Study, a study commissioned by SAT, the DTI and the Department of Environmental Affairs and Tourism. UNWTO (2007). United National World Tourism Organisation: Tourism Highlights 2007, access on 2 May 2008 at http://www.unwto.org
  • 165. 1 5 GAUTENG’S CREATIVE INDUSTRIES: DESIGN SECTOR
  • 166. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S DESIGN TOTAL TURNOVER R1,393,971,152 TOTAL EMPLOYMENT 8,616 GROSS VALUE-ADDED R809,000, 000 BLACK EMPLOYEES 30% FEMALE EMPLOYEES 46% NUMBER OF ORGANISATIONS 2,872 GAUTENG’S CREATIVE INDUSTRIES: DESIGN SECTOR
  • 167. T A B L E O F C O N T E N T S C O N T E N T S 1. Background 162 2. Description of the DESIGN SectOR 164 2.1 Definition 164 2.2 The value chain 165 3. The Sample for the DESIGN Sector 167 4. DESIGN Sector Contribution to the Gauteng Economy 167 4.1 Turnover 167 4.2 Employment 168 4.3 GVA 169 4.4 COSTS 169 5. Structure of the DESIGN SECTOR 169 6. Types of organisations within the DESIGN Sector 170 7. Demographics within the DESIGN sectoR 171 7.1 Racial breakdown 171 7.2 Age composition 172 7.3 Educational attributes 172 8. MARKETS 173 9. FUNDING AND FINANCING 173 10. OUTLOOK 174 REFERENCES 174 LIST OF FIGURES FIGURE 1: How design creates value 165 FIGURE 2: The role of design in the value chain 166 FIGURE 3: Distribution by organisation size 168 FIGURE 4: Sources of income in the design sector 170 FIGURE 5: Legal status of design entities 170 FIGURE 6: Age distribution of organisations in the design sector 171 FIGURE 7: Racial and gender breakdown of employees 171 FIGURE 8: Racial and gender breakdown of management 172 FIGURE 9: Funding applications by organisational size 173 LIST OF TABLES TABLE 1: Total turnover for category of companies in Design sector 167 TABLE 2: Total employment in Design 168 TABLE 3: Costs in the design sector 169 TABLE 4: Educational level of employees and management 172 TABLE 5: Reason for not applying for funding 174
  • 168. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S 1 . BACKGROUND Internationally the design sector is being seen as increasingly importance as a competitive edge in the global knowledge economy. In countries such as Korea and India this has led to large scale policy interventions at all education levels, creating design curriculum at schools and focusing on design at tertiary and vocational education levels. In developed countries such as the United Kingdom, Sweden, Norway, Italy and France design has been a focal point of their economies for many years and in others, such as Australia (especially the state of Queensland in Western Australia)1 and Canada, design has been at the forefront of efforts to support the creative industries (Robertson, 2006). Design offers businesses, organisations, communities and nations the ability to differentiate themselves from their competitors and add value to their products, services, communications and environments, increase their economic competitiveness, enrich and improve their quality of life and express cultural identity (Massey University, 2002). The most compelling case for the use of design as a means of maximising international competitiveness is provided by the World Economic Forum’s Global Competitiveness Reports. The basis of these annual reports is a range of indices that measure diverse factors impacting on competitiveness, one of which is the use of design as an input to business – that influence competitiveness (World Economic Forum, 2007). In all cases where design policy interventions have been successful, it is due a close alignment with broader economic strategies and specific manufacturing, research and development policies. In this case, the recognition of a design as a “cross-sectoral” sector has been critical, as has integrated policy and programme design and implementation. One of the most fundamental factors to recognise is the link between design and innovation. Design can be a catalyst of innovation, but also a regulating force upon it. Design links the technology and capabilities of a company to the needs and desires of markets and consumers and it generates innovations. It regulates innovation by linking the needs and desires of markets to the capability of an organisation (Robertson, 2006). 1 It is important to note that in the Australian case, changing manufacturing strategies have impacted severely on design investment. In the early 1990s the powerful and influential Australian Design Council (ADC) was closed heralding a era of disinvestment in design and in the long term having a negative impact on the Australian manufacturing economy. B A C K G R O U N D
  • 169. 1 6 3
  • 170. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S D E S C R I P T I O N O F T H E D E S I G N S E C T O R 2 . DESCRIPTION OF the design sector “Design” is an integrated process describing a methodology or approach which guides the synthesis of creativity, technology, science and commerce to produce unique and improved products, services and communication. As a commercial strategy design aims to create products or services that: • Anticipate and satisfy the requirements of the customers and hence meet demands by improving existing products or services or creating new ones. • Are distinct from competitors in the market place in terms of form, function, under interface, technology, environmental factors and quality (Massey University, 2002). Design can be: • A specialised function undertaken by a particular job role or by a consultant brought in to design an outcome which is then realised by others, including the management of production or realisation. • An integrated activity where the designer also works to manage the realisation of the outcome. • A team activity where a number of people with different functions collaborate to design and realise an outcome. • An integrated activity where an individual designs and realises an outcome (VQA, 2003). The design sector is an amorphous and complex service sector that for the purposes of this study has been designed as follows: 2.1 DEFINITION Design is a process of purposeful creative thinking, planning and work used to identify and make opportunities that lead to commercial and cultural advantage. Design gives tangible dimension, shape, colour, pattern and character to products, information, communications, spaces and services. It is a strategic means of making knowledge, technology and future orientated thinking accessible, understandable and “ownable” by end users. It is physical evidence of the integration of philosophy and action (Haythornthwaite, 2001 cited in Massey University, 2002). The areas of design that the Gauteng Creative Mapping Project focuses on are industrial design, graphic design and interior design. Definitions of these activities are presented and discussed briefly below. Industrial design Industrial design forms the inception stage of the creation of new tools, machinery, equipment and products for manufacturing and services. It is “a creative activity with the aim of determining the formal qualities of objects produced by industry”(Ministry of Culture, Colombia, 2002). This includes all forms of functional design (e.g. furniture and home wares). The Department of Science and Technology puts forward a more detailed definition. “Industrial design (ID) is the creation and development of concepts and specifications to improve existing products or develop new products or services. It is the design of products from teaspoons, computers, automobiles and toothbrushes to the design of a corporate identity. ID deals with consumer products as well as industrial products and services. The industrial design process begins with the need for change, improvement or new product has been identified and ends with the fully designed product, process or model”2 . Graphic design Graphic design involves the creation of “audio-visual media, logos, stationery, printed material, layouts and covers, posters, packaging, diagrams and maps, signs”3 . 2 Cited in a presentation, titled, “The Development of a National Industrial Design Strategy” by S. Ratsatsi, DST. Available from www.defsa.org.za/2005conference/strategyRatsatsi.pdf 3 Definition from: Creative Industries Mapping Document 2002: Bogotá, Columbia
  • 171. 1 6 5 Interior design “Interior design is the process of shaping the experience of interior space, through the manipulation of spatial volume as well as surface treatment”4 . This activity is often seen as a sub-category of architecture and was included as part of the Architecture sector in the Bogotá mapping. In the case of the Creative Industries Mapping of Gauteng, architecture falls outside of the scope of the study, but the activities related to interior design are included in the design sector. The following related activities are excluded from the parameters of this sector: • Fashion design (classified under the Fashion sector for the purposes of the mapping study) • Interface design is the “design development, documentation and implementation of software tools”5 . In this study, interface design is included in the multimedia sector. 2.2 THE VALUE CHAIN Design forms the creative component for activities at different levels of value chains in a wide variety of sectors within and outside the creative industries. Industrial design forms part of different links in manufacturing value chains. Graphic design is part of the creation of a corporate image, as well as the advertising and distribution stages of the value chain for various manufacturing- and service-related activities. Interior design often forms a part of the planning and construction stages of business and residential building developments. The figure below indicates how design makes businesses more competitive. Figure 1: How design creates value Source: (Massey University, 2002) 4 Wikipedia definition from: en.wikipedia.org/wiki/Interior design 5 Ibid SUCCESS BY DESIGN NOT CHANCE IT TRANSFORMS INSIGHT INTO REFERENCE IT WINS HEARTS AND MINDS IT ENSURES FITNESS FOR PURPOSE IT FUTURE PROOFS PRODUCTS AND POSITIONING IT COMMERCIALISES INTELLECTUAL PROPERTY A WAY OF THINKING THAT MAKES OUTCOMES MORE CERTAIN A STRATEGIC DISCIPLINE FOR CREATING SUSTAINABLE COMPETITIVE ADVANTAGE A CREATIVE PROCESS THAT TURNS CULTURAL INSIGHTS INTO DESIRABLE PRODUCTS WHAT IT DELIVERS WHAT IT PROMISES HOW IT DOES IT WHAT IT DOES WHAT IT IS
  • 172. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S DESCRIPTION OF THE SECTOR; SAMPLE; CONTRIBUTION TO THE GAUTENG ECONOMY Specialised education and training of creative and technical staff, funding and support organisations as well as government and regulatory activities aid design at all levels of the value chain. Design is likely to play an important role at every stage in a production process; however, a “typical” value chain for this sector does not exist. A general view of the value chain and the role of design at different levels is presented below. Figure 2: How design creates value Source: Adapted and expanded from the simple value chain representation in Kaplinsky and Morris (2000) 2 . DESCRIPTION OF the design sector Industrial design for products and machinery Interior design in architectural planning Graphic design for corporate identity development • • • Industrial design for products and tools/ machinery Graphic design for labels and packaging • • Graphic design in marketing material and websites Industrial design of recycling goods and machinery Consumption and recycling MarketingDesign and product development Production - inward logistics - transforming inputs - packaging - Etc
  • 173. 1 6 7 This profile is based on a sub-set of the larger sample comprising 20 detailed firm-level surveys and 48 telephonic interviews using a simple questionnaire6 . The population sizes that have informed the calculation of key indicators such as employment and turnover were based on a the World Design Report, a study commissioned by SABS Design Institute (DI), Design South Africa (DSA), Design Education Forum Southern Africa (DEFSA) and the South African Graphic Design Council in 2007. The study incorporates the following organisations and agencies into its population estimate: • government • professional bodies and design organisations • educational institutions • graphic designers • motion graphics, animation and new media designers • industrial designers • interior designers • multidisciplinary designers It is important to recognise that while design outputs have value in and of themselves, design to be an important factor in the success of work processes and their products. Design is important to the general economy because it improve efficiency, products and services (VQA, 2003). In addition, established design cultures such as Sweden, design plays a clear role in everyday life and informs the production of everyday objects and services, rather than just those that are destined for a certain elite. Design is a crucial factor in the competition and the difference between success and failure for businesses, citing the battle between Swedish Ericsson and Finnish Nokia, which has become a pure issue of design (Helgeson, 2004). 4.1 TURNOVER The design sector represents 25% of organisations in the creative industries in Gauteng representing over 2,800 enterprises. The estimated median turnover for 2006 for the design sector is R1,393,971,152 which was calculated as follows: Table 1: Total turnover for category of companies in Design sector Reflecting the relatively high turnover in the sector, 85% of the sector report that they do not have to cross-subsidise their “creative activities” with other activities. Of the 15% that do report having to cross-subsidise, 33% indicate that this is related to business expansion. CATEGORY OF COMPANIES MEDIAN ANNUAL TURNOVER (R) NUMBER OF COMPANIES TOTAL TURNOVER FOR CATEGORY OF COMPANIES (R) Total TURNOVER 485,366 2,872 1,393,971,152 3 . THE SAMPLE FOR THE DESIGN SECTOR 4 . DESIGN SECTOR contribution to the gauteng economy
  • 174. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S D E S I G N S E C T O R C O N T R I B U T I O N T O T H E G A U T E N G E C O N O M Y 4 . DESIGN SECTOR contribution to the gauteng economy 4.2 EMPLOYMENT The design sector employs a total of 8,616 people representing 14% of total employment in the creative industries. The design sector is mainly comprised of micro firms with 63% of firms employing between 1 and 4 employees. The total permanent employment number is 8,616. Table 2: Total employment in Design Consistent with the national sample the bulk of enterprises are micro in size, employing less than 5 people (Consulta, 2008). In Gauteng, just over 60% of firms sampled employ less than five people. Just under 30% reported between five and nineteen employees and 7% reported between 20 and 49 employees. Most staff are employed full time. Figure 3: Distribution by organisation size Design companies are mainly based in rented premises (70%), however a significant number (19%) work out of studios and workshops based within their homes. Just under 70% of firms report that there has been no change in employment since 2005, however 28% report that there has been a change, 11% reporting that this change is over 10% of total employment. With regard to wages, the median wage for full-time staff is R9,594 and R2,675 for part-time staff. Over 50% of firms report that wages have increased since 2005. CATEGORY OF COMPANIES MEDIAN EMPLOYEE NUMBER NUMBER OF COMPANIES TOTAL NUMBER OF EMPLOYEES FOR CATEGORYOF COMPANIES TOTAL NUMBER OF EMPLOYEES 3 2,872 8,616 Distribution by organisation size Number of employees 70% 60% 50% 40% 30% 20% 10% 0% 1 to 4 5 to 19 20 to 49
  • 175. 1 6 9 4.2 GVA The gross value-added for the design sector is estimated at R1,381,584,046. 4.4 costs Half of the firms surveyed reported that their highest cost category was operational costs, with a quarter reporting wages and salaries and the remainder considered direct raw material costs as their biggest expense. Table 3: Costs in the design sector PERCENTAGE (%) Operational costs (rentals, transport, electricity ...) 50 Wages and salaries 25 Direct raw materials 25 TOTAL 100 4 . DESIGN SECTOR contribution to the gauteng economy 5 . STRUCTURE OF THE DESIGN SECTOR The sector comprises of numerous micro and small enterprises with a few established medium-sized and large firms. Intellectual capital is the crux of the design business, hence firms are characterised by relatively small holdings of physical assets (mainly computers and specialised design equipment for making models, moulds, prototypes, etc). Only 30% of the sector reports that they are members of industry bodies or associations and 5% report that their employees are unionised. Design companies are often home-based, with 50% of companies reporting that they work from home or home-bases studios. One quarter (25%) of companies operate from rented premises and the remaining 25% operate their businesses from premises that they own. The design firms interviewed rely mostly on direct sales or services as their primary source of income. 80% of firms in sample reported direct sales or services as their primary income stream, with 15% representing the training institutions in the sample, reporting student fees as their predominant income stream. Only 10% of respondents had a secondary income stream, with subletting space (5%) and education (5%) being the only two reported sources.
  • 176. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S STRUCTURE OF THE SECTOR; TYPES OF ORGANISATIONS WITHIN THE SECTOR Figure 4: Sources of income in the design sector Half of the firms in Gauteng surveyed were closed corporations. Sole traders and limited companies each accounted for 20% of surveyed businesses, whereas partnerships accounted for 5%. Figure 5: Legal status of design entities 5 . STRUCTURE OF THE DESIGN SECTOR Partnership 5% Legal status CC 50% Limited Company 25% Sole trader 20% 6 . TYPES OF ORGANISATIONS WITHIN THE DESIGN SECTOR Sources of income for organisations in the design sector Primary source (%) Direct sales/services Subletting space Education Studentfees N/A Nosecondary source Secondary source (%) 90 80 70 60 50 40 30 20 10 0
  • 177. 1 7 1 6 . TYPES OF ORGANISATIONS WITHIN THE DESIGN SECTOR 10+ years, 31% 5 to 9 years, 28% 0 to 4 years Age distribution of organisations The age distribution of firms points to a recent growth spurt in the in industry, with 41% of the interviewed firms entering the sector in the last four years. Thirty-one percent of the interviewed firms were established businesses in existence for more than 10 years. Figure 6: Age distribution of organisations in the design sector 7.1 RACIAL AND GENDER BREAKDOWN White males constitute 36% of the design sector’s workforce. The gender distribution is slightly skewed towards males who make up 54% of the total. The racial equity of the sector is low compared to other creative industries sectors, with black workers making up only 36% of the sector Figure 7: Racial and gender breakdown of employees Percentage of employees by race and gender White female 34% Black male 18% Black female 12% White male 36%
  • 178. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S D E M O G R A P H I C S W I T H I N T H E S E C T O R ; M A R K E T S The picture in management is somewhat different; white women dominating management and significantly lower proportions of black males and females represented. Figure 8: Racial and gender breakdown of management 7.2 AGE COMPOSITION Just under 50% of employees are under the age of 35 and 10% are people with disabilities. 7.3 EDUCATIONAL ATTRIBUTES Education and training are crucial for those involved in the design sector. Undoubtedly, the combination of high-level creative and technical skills required for a successful career in design is the main barrier to entry. This is confirmed by the fact that 90% of firm owners or managers have some kind of a tertiary education or hold a post-graduate degree. Sixty percent of the workforce has studied further after obtaining Grade 12 certification with a third of those being university graduates Table 4: Educational level of employees and management WORKFORCE % MANAGEMENT % Completed post-graduate degree 0 20 Completed university degree 20 35 Diploma with Grade 12 35 35 Up to Grade 10 5 0 Up to Grade 12 5 0 Vocational training with Grade 12 5 5 N/A 30 5 TOTAL 100 100 7 . DEMOGRAPHICS WITHIN THE DESIGN SECTOR Percentage of management by race and gender White female 40% Black male 10% Black female 5% White male 46%
  • 179. 1 7 3 8 . MARKETS 9 . FUNDING & FINANCING The sector appears to have substantial degree of access to international markets with 50% of businesses reported that they sell their products internationally. Europe and North America were the export destinations of 46% of businesses, while 30% had access to markets in South Africa’s neighbours and other African countries. Only 30% of design companies reported that they had applied for finance from a financial institution in the last two years, 44% of whom cited the lack of need as the reason for not applying. Of those companies that had applied, 83% reported that they were successful. Only 30% reported using informal sources such as family for financial support with a 100% success rate. Only 15% of the firms in the sample had applied for funding in the last two years. Of those that applied, two-thirds received funding. The funding applications were almost evenly split between firms in the 1-4, 5-19 and 20-49 groups. Figure 9: Funding applications by organisatinal size The firms who did not apply for funding were mainly those who had no need (88%). This is much larger than the second most important reason for non-application – compliance issues (6%) Organisation size and funding application Number of employees 70% 60% 50% 40% 30% 20% 10% 0% 1 to 4 5 to 19 20 to 49 Applied Did not apply
  • 180. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S funding & financing ; O U T L O O K ; R E F E R E N C E S 9 . FUNDING & FINANCING REASONS FOR NOT APPLYING PERCENTAGE (%) Compliance issues 6 It depends on whom you know 3 It is pointless, I would still fail to get it 3 No need 88 TOTAL 100 Table 5: Reasons for nt applying for funding Half the firms in the sample had some debt. This suggests that the companies within this sector are relatively sophisticated and have the ability to borrow from financial institutions. This access to other types of finance explains why very few companies felt the need to apply for funding. Design is achieving a greater focus in South Africa than ever before. In order to facilitate the role that this sector has to play in improving the country’s competitiveness, a clear and focused approach will be required from government and other development stakeholders. In addition, there are a number of changes that are occurring in industry that will impact significantly its functioning that will need to be taken into account: • The merging of sectors and job roles. • Increase in designer-maker businesses. • Increase in graduates wanting to work for themselves. • Technological developments that speed up the design-production-market cycle • Technological developments that enable new processes and products (for example, robotics and nanotechnology) • Prefabrication of components which reduces the level of design detail from construction or production (Churches, 2002). Churches, A., (2002) Where to for Australian design – and how? Tas April 2002 Forum, April, Tasmania, Australia, Consulta (2008). World Design Report study, commissioned by the SABS Design Institute, Design South Africa, Design Educational Forum of Southern Africa (DEFSA) and the South African Graphic Design Council (THINK) Helgeson, S. (2002), Swedish design today, http://www.sweden.se, accessed online March 2004 Massey University (2002) Design Industry Scoping Review: An appraisal of the current status of the New Zealand design profession/industry Ministry of Culture, Colombia (2002) Creative Industries Mapping Document 2002: Bogotá, Columbia Kaplinsky,R. and Morris, M., (2000) Handbook for Value Chain Research, IDRC Roberston, D (2006). Co-ordinated Design Policy for Australia? World Economic Forum (2007) Global Competitiveness Report accessed on 19 May 2008 at http://www.gcr.weforum.org/ 1 0 . OUTLOOK 1 1 . REFERENCES
  • 181. GAUTENG’S CREATIVE INDUSTRIES: THE FASHION DESIGN SECTOR
  • 182. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S FASHION DESIGN SECTOR PROFILE TOTAL TURNOVER R192, 500, 000 TOTAL EMPLOYMENT 2,700 GROSS VALUE-ADDED R121, 115, 764 BLACK EMPLOYEES 78% FEMALE EMPLOYEES 72% NUMBER OF ORGANISATIONS 600 GAUTENG’S CREATIVE INDUSTRIES: FASHION DESIGN SECTOR
  • 183. T A B L E O F C O N T E N T S C O N T E N T S 1. Background 178 2. Description of the FASHION DESIGN SectOR 180 2.1 Definition 180 2.2 The value chain 180 3. The FASHION DESIGN SECTOR Sample 181 4. FASHION DESIGN Contribution to the Gauteng Economy 181 4.1 Turnover 181 4.2 Employment 182 4.3 GVA 182 4.4 COSTS 182 5. THE Structure of the FASHION DESIGN SECTOR 183 6. Types of organisations within the FASHION DESIGN Sector 184 7. Demographics within the FASHION DESIGN sectoR 186 7.1 Racial breakdown 186 7.2 Age composition 187 7.3 Educational attributes 187 8. MARKETS 188 9. FUNDING AND FINANCING 188 10. OUTLOOK 190 REFERENCES 190 LIST OF FIGURES FIGURE 1: Distribution by organisation size 180 FIGURE 2: Legal status of firms in Fashion Design 184 FIGURE 3: Age distribution of firms in the fashion design sector 185 FIGURE 4: Racial and gender composition of the workforce 186 FIGURE 5: Percentage of management by race and gender 187 FIGURE 6: Organisation size and funding application 189 FIGURE 7: Sources of income for organisations in the fashion design sector 189 LIST OF TABLES TABLE 1: Fashion Design Sample 181 TABLE 2: Total turnover per category of company in Fashion Design 181 TABLE 3: Total employment in Fashion 182 TABLE 4: Costs of firms in Fashion Design Sector 182 TABLE 5: Education levels of employees 187 TABLE 6: Reasons for not applying for funding 188
  • 184. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S 1 . BACKGROUND The South African fashion design sector has changed dramatically over the past 10 years. Rather than merely adopting international designs, fashion designers have creatively adapted their designs to create a South African identity. Local brands have become increasingly popular, many of them reflecting the unique cultural blend of South Africa . Gauteng is home to many of the successful new fashion designers, including Sun goddess and Stoned Cherry. It is also home to the ‘Fashion District’ in downtown Johannesburg where many smaller designers are located. The South African fashion industry has experienced tremendous growth since 1994. One factor that has contributed to this growth has been the South African Fashion Week (SA Fashion week) introduced 11 years ago. Before the introduction of the SA Fashion Week, fashion designers mainly displayed their designs in their own design studio and during corporate events, e.g. the Nederburg Auction and the J&B Met. Local fashion magazines have also begun to showcase more South African designers, which has successfully changed the perception of the consumers. The role of Fashion Week events such as the SA-, Cape Town-, Durban- and Johannesburg- Fashion Weeks, in promoting South African fashion design is vital to the growth and sustainability of South Africa’s clothing sector. These events create a central point of reference, where all the stake holders in the value chain have the opportunity to network, exchange ideas and regenerate the industry. For the fashion designers, it is an ideal opportunity to market their creative statements (Renato Palmi, 2007). Some involved in the South African fashion industry argue that South Africa has too many fashion weeks – taking place in a short period of time – and should line up with international standards, such as in France and the United States which only have one fashion show a year. They feel that the local market is too small and that the four fashion shows create confusion among the stakeholders and often act as a dividing factor. B A C K G R O U N D
  • 185. 1 7 9
  • 186. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S D E S C R I P T I O N O F T H E F A S H I O N D E S I G N S E C T O R 2 . DESCRIPTION OF THE FASHION DESIGN SECTOR 2.1 DEFINITION This research will focus on high profile fashion designers and other lower profile designers located in areas such as the Fashion District. It excludes the informal economy and home based fashion designers as these individuals are difficult to locate and thus their contribution to the economy is difficult to quantify. Some high profile fashion designers are self-employed and design for individual clients, whereas others cater to specialty stores or high-fashion department stores. These high profile designers create original garments, as well as clothing that follow established fashion trends. Most fashion designers, however, work for clothing manufacturers, creating designs for the mass market. The fashion design activities included in the research are: Haute Couture, Prêt-a-Porter, lines, fashion product design consultancy, fashion research, manufacture of fashion collections and design of clothing patterns. The research excludes the Cut, Make and Trim (CMT) industry. The models agencies have also been excluded as only a small fraction of the people in their portfolio are involved with fashion. 2.2 THE VALUE CHAIN The value-chain of the fashion design sector is presented in Figure 1 below. The fashion designers draw/sketch their ideas on paper and/or computer. The design concept will run through various stages of development until the garment is finally completed. The designer will then decide on the styling of the design concept (colours, fabrics, fit). The designers will either produce the design concepts within their studio or outsource the production to local or foreign manufacturers. The local or imported fabrics are purchased through an agent or directly from retail shops. One of the frequently stated problems is that designers have to buy very large quantities from the textile companies. The fashion designers work together with CMT staff and seamstresses to produce the garments, although some fashion designers opt to outsource the production locally or across national borders. The completed garments are then sold through agents, retail outlets, speciality stores or through the designers’ studio. Marketing and public relations (either web based or not) play an important role in the above process. There are other related organisations and activities that play a role across the value-chain, like the Textile Export Council, Clothing Federation, Cotton Boards, government departments (e.g. DTI), and education and training. The Gauteng province has about 4 private schools and 3 universities of technologies (Tshwane, Vaal and Johannesburg) that have specialist fashion design programmes. Figure 1: Fashion Design value chain Education and training Funding and support Creative origination and development -Designer -Stylist Production -Fabric providers (Textiles mills, Agents and stores – Local and imported) -Manufacturers (local and inernational) -CMT -Seamstresses Distribution -Retail -Specialty stores -Studio -Agents -Marketing and public relations Consumption -Public -Fashion shows -Magazines -Journalists
  • 187. 1 8 1 The figures are based on a population size of 600. Through our discussions with various stakeholders of the industry we estimated that about 100 high profile fashion designers and 500 lower profile fashion designers are operating in the Gauteng province. The population number was based on a JDA report (2004) and discussions with various stakeholders. Table 1: Fashion Design Sector sample In Gauteng, the sector accounts for a turnover of R193 million, employs 2,700 people and adds about R121 million to the provincial GDP. Seventy nine percent of those employed in the sector are Black and 72% are female. 4.1 TURNOVER The estimated turnover for 2006 for the fashion design sector is R192,500,000. The figure was calculated as follows: Table 2: Total turnover for category of company in Fashion Design 3 . THE Fashion design sector sample CATEGORY OF INTERVIEWS RESPONDENTS Face-to-face interviews 11 Telephonic interviews 52 TOTAL 63 4 . FASHION DESIGN CONTRIBUTION TO THE GAUTENG ECONOMY CATEGORY OF COMPANIES MEDIAN ANNUAL TURNOVER (R) NUMBER OF COMPANIES TOTAL TURNOVER FOR CATEGORY OF COMPANY (R) Low profile designers 95,000 500 47,500,000 High profile designers 1,450,000 100 145,000,000 Total TURNOVER 192,500,000
  • 188. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S CONTRIBUTION TO THE GAUTENG ECONOMY; STRUCTURE OF THE SECTOR 4 . FASHION DESIGN CONTRIBUTION TO THE GAUTENG ECONOMY 4.2 EMPLOYMENT The Fashion design sector is mainly comprised of small size firms with 60% of firms employing between 1 and 4 employees and another 38% of firms employing between 5 and 19 employees. The total permanent employment number is 2,700. We arrive at this figure in the following manner: Table 3: Total employment in Fashion Design 4.3 GVA The Gross Value Added of the Fashion design industry to the Gauteng economy is estimated at R121,115,764 4.4 COSTS The most important cost to most firms were both direct raw material costs and operational costs. 90 percent of firms reported that one of these types of costs were the most important. The importance of these costs is also reflected in the relatively low value-added ratios and thus low margins found in this sector when compared to other sectors. Furthermore, it also reflects the impact that interventions, such as the fashion district, that keep overhead costs (such as rentals) low, can have Table 4: Cost of firms in Fashion Design Sector Firms were also asked about whether they had any debt. Forty five percent of the respondents have some level of debt. The median amount of debt was R90,000. CATEGORY OF COMPANIES MEDIAN EMPLOYEE NUMBER NUMBER OF COMPANIES TOTAL NUMBER OF EMPLOYEES FOR CATEGORY OF COMPANIES Low profile designers 3 500 1,500 High profile designers 12 100 1,200 Total number of employees 2,700 COST TYPE PERCENTAGE (%) Wages and salaries 9 Operational costs (rentals, transport, electricity ...) 45 Direct raw materials 45 TOTAL 100
  • 189. 1 8 3 The fashion design industry in Gauteng consists of many small businesses; however there are a number of successful larger businesses, e.g. Loxion Kulcha, Sungoddess, Stoned Cherry and Julian. Government has played an active role in this sector. The Fashion Fusion project initiated by the SA Fashion Week and the Department of Arts and Culture in 2004 is an exchange programme between leading fashion designers and traditional crafters. It aims to forge a unique design aesthetic that would excite local consumers and generate international interest in South African fashion. The national Department of Arts and Culture has also introduced mentorship programmes between established and up and coming fashion designers, which have been very successful. The Johannesburg Development Agency (JDA) has driven the establishment of the Fashion District Development. This development, located in downtown Johannesburg, includes a Fashion District Institution, is aimed to provide an area where fashion designers, including smaller potentially up-and-coming designers, and related fashion activities can agglomerate (JDA, 2004). An urban design of the core area has been completed and work on the creation of a Fashion Capital Square has commenced. Another important contributor to the growth of the sector is the consumers themselves. People have become more knowledgeable about fashion, especially the emerging black middle class. The Johannesburg Fashion Week was organized in Soweto for the first time this year, with great success. Finally, the design sector has been transformed from a manufacturing led industry to a fashion design led industry, which helped the establishment of a South African fashion identity. 5 . STRUCTURE OF THE FASHION DESIGN SECTOR
  • 190. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S TYPES OF ORGANISATIONS WITHIN THE FASHION DESIGN SECTOR 6 . TYPES OF ORGANISATIONS WITHIN THE FASHION DESIGN SECTOR Figure 2 shows the distribution of firm by size. In this case, size is defined by the number of people employed within the surveyed firm. The results show that the sector is dominated by micro businesses. More than 60% of firms have less than 5 employees and more than 98% of firms have less than 20 employees. Less than 2% of the firms employ more than 20 people. Figure 2: Distribution by organisation size The dominance of small firms within this sector is also reflected by the legal status of the firms surveyed. Most firms (82%) are registered as close corporations (CCs), whereas sole traders make up the remainder of firms surveyed. These types of legal statuses are associated with the smaller firms within the sample. Figure 3: Legal status of firms in Fashion Design Distribution by organisation size Number of employees 70% 60% 50% 40% 30% 20% 10% 0% 1 to 4 5 to 19 20 to 49 50+ Legal status Sole trader CC
  • 191. 1 8 5 The fashion design sector is a very young sector as can be seen from the figure below (Figure 4) with only a quarter of the firms older than 10 years. About 75% of the firms are younger than 10 years and 60% is even younger than 5 years. A potential explanation without data available over time, may suggest that the barriers to entry are low, but the firms don’t survive in the long run or may point out to the deliberate post 94 government policies to assist the sector and thus increased entry. These figures further confirm the growth of, and increased competition within, the fashion design industry. South African designs have become more popular, resulting in increased sales and entries. There has also been a change in perception among Black students who previously accepted fashion design to be for the elite. Figure 4: Age distribution of firms in the fashion design sector 6 . TYPES OF ORGANISATIONS WITHIN THE FASHION DESIGN SECTOR Age distribution of organisations 10+ years 5 to 9 years 0 to 4 years
  • 192. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S D E M O G R A P H I CS W I T H I N T H E FA S H I O N D E S I G N S E C TO R 7.1 RACIAL BREAKDOWN The workforce in the fashion design sector is dominated by females (72%), most of whom are Black (58%). In total Black people make up 78% of the industry. Fashion design is the creative sector with the highest percentage of Black participation. Figure 5: Racial and gender composition of the workforce The management staff is dominated by black males (42%). White and black females represent 27% and 26% of the management staff, respectively. White males only represent 7% of the management staff. 7 . DEMOGRAPHICS WITHIN THE FASHION DESIGN SECTOR Percentage of employees by race and gender White female Black male Black female White male
  • 193. 1 8 7 Figure 6: Percentage of management by race and gender 7.2 AGE COMPOSITION Respondents were asked to indicate whether the principal/majority owner of the organisation was below 35 years and 73% of the sample said yes. 7.3 EDUCATIONAL ATTRIBUTES Most of the people employed at managerial level have at least completed matric. At management level all employees have some type of diploma or university degree. None of the workforce had a university degree, although half had a diploma. This suggests that this sector provides an opportunity for those with lower levels of education than other sectors, and that many of the skills important in this sector are learnt on the job. Table 5: Education level of employees 7 . DEMOGRAPHICS WITHIN THE FASHION DESIGN SECTOR EDUCATION LEVELS OF EMPLOYEES WORKFORCE % MANAGEMENT % Completed university degree 0 40 Diploma with Grade 10 33 20 Diploma with Grade 12 17 40 Up to Grade 10 33 0 Up to Grade 12 17 0 TOTAL 100 100 Percentage of management by race and gender White female Black male Black female White male
  • 194. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S M A R K E T S ; F U N D I N G A N D F I N A N C I N G The majority (64%) of the firms interviewed sell their products directly to the public. Another 27% sell to other firms – mostly clothing shops. Only a small percentage (36%) of the firms interviewed participate in the export market. The main markets (33% each) are the EU, North America and Canada and SADC, with approximately a quarter of those exporting participating in each of these markets. The low export participation rate within this sector is directly linked to the size distribution of firms. Smaller firms struggle to enter into and maintain export relationships given the administrative burden that this entails. This includes maintaining relationships with clients, travelling abroad, obtaining letters of credit from banks, tracking shipments as well as the administrative burden of running the business, designing and making clothes. Thus interventions that aim to get smaller firms to export are likely to fail if they do not take these factors into consideration. A more successful strategy would be to focus on policies that enable the firms to grow to a large enough size where they can successfully enter into and survive in the international market. Only 17 percent of the respondents in this sector applied for funding. Until last year, the DTI helped Fashion designers to register and set-up their business during SA Fashion Week. Fashion designers can apply for funding from the DTI through the Black Business Supplier Development Programme (BBSDP) and the Export Marketing and Investment Assistance Scheme (EMIA). The EMIA can be used by designers to showcase their designs overseas. However, costs are only refunded on return to South Africa, so the current structure does not benefit small or poor businesses which do not have the working capital or access to credit to fund these types of trips. There is also very little continual progress for the designer after participating at an international event. Furthermore, a designer may not benefit fully from these types of trips if they do not have the business skills or production capabilities to move into the export market. Exporting can be associated with large administrative burdens, which many smaller companies cannot bear. When asked for the reasons for not applying for funding, 31% respondents stated they did not needed funding – some cross-subsidized from other businesses, 13% stated that it would be pointless to apply as they would fail to get it and 9% stated compliance as a reason for not applying. A further 26% respondents stated that a lack of knowledge/information about the availability of and types of funding, and the application process as reasons for the low levels of funding applications in this sector. Some stated that they did not have the resources or time to investigate the availability of funding as many fashion designers are single-person businesses. Also, some designers interviewed during this research noted that the application procedure is too complicated and too long. Others question where the funds go to and if they reach the ‘right’ people. A number of designers suggested that more transparency surrounding the funding process, e.g. publishing of a list of beneficiaries and the selection criteria for those beneficiaries would encourage more designers to apply for funding. Table 6: Reasons for not applying for funding Firms employing between 1 to 4 employees and 5 to 19 employees represent 11% and 6% respectively of the 17% of firms that did apply for funding. 8 . MARKETS 9 . FUNDING AND FINANCING REASONS FOR NOT APPLYING PERCENTAGE (%) Compliance issues 9 Cross subsidy from other business 6 It depends on whom you know 9 It is pointless, I would still fail to get it 13 Did not know there was funding 26 No need 31 Other (Red tape, time, ) 6 TOTAL 100
  • 195. 1 8 9 Figure 7: Organisation size and funding application The firms surveyed for this project were asked about primary and secondary sources of income. All firms generated all their income through direct sales and have no secondary sources of income. This illustrates the specialist nature of the sector. Figure 8: Sources of income for organisations in the fashion design sector 9 . FUNDING AND FINANCING Organisation size and funding application Number of employees 60% 50% 40% 30% 20% 10% 0% 1 to 4 5 to 19 20 to 49 50+ Applied Did not apply Sources of income for organisations in the fashion sector Primary source (%) Direct sales/services Secondary source (%) 100 90 80 70 60 50 40 30 20 10 0 Nosecondary source
  • 196. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S O U T L O O K ; R E F E R E N C E S Although the sector has increased its profile in the past ten years, there are a number of factors that could restrict its growth in the future. The industry remains fragmented, as the competing fashion weeks illustrate, and lacks an industry body or council which means that it does not speak with one voice. Government support of this sector would need to address the following: • business support to the many young black entrepreneurs • sustainability of small businesses. • design capability through exchange programmes and international exposure. • organisation and representation • opportunities for emerging designers to showcase their work 1 0 . OUTLOOK 1 1 . REFERENCES JDA (2004) Development Business Plan: Fashion District Development, JDA 009, 2004. Palmi, R., (2007) ‘MTN Durban Fashion Week: Presenting Opportunities for South African Designers’, May 2007 [Available at: http://thealexanderreport. com/2007-mtn-durban-fashion-week/] Background reading Persuit magazine Issue 11: 2007. Industry experts consulted in conducting the research Adam Levine (Fashion designer, telephonic interview on 06/12/07) Clive Rundle (Fashion designer, telephonic interview on 06/12/07) Dion Chang (Fashion editor, telephonic interview on 03/12/07) Leshego Malatsi (Mzansi Designers, telephonic interview on 23/11/07) Lucilla Booyzens (SA Fashion Week, telephonic interview on 03/12/07) Masana Chikeka (Design DAC, in-depth interview on 20/11/07) Rees Mann (SewAfrica, telephonic interview on 28/11/07) Renato Palmi (Redress consultancy, telephonic interview on 29/11/07) Shana Rosenville (Lisof, telephonic interview on 06/12/07) Sonwabile Ndamase (SAFDA, telephonic interview on 22/11/07). Tracy Mann (CEO SewAfrica, telephonic interview on 04/12/07)
  • 197. GAUTENG’S CREATIVE INDUSTRIES: THE MULTIMEDIA SECTOR
  • 198. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S MULTIMEDIA SECTOR PROFILE TOTAL TURNOVER R267,000,000 TOTAL EMPLOYMENT 1,100 GROSS VALUE-ADDED R185,119,991 BLACK EMPLOYEES 26% FEMALE EMPLOYEES 36% NUMBER OF ORGANISATIONS 500 GAUTENG’S CREATIVE INDUSTRIES: THE MULTIMEDIA SECTOR
  • 199. T A B L E O F C O N T E N T S C O N T E N T S 1. Background 194 2. Description of the MULTIMEDIA SectOR 194 2.1 Definition 194 2.2 The value chain 194 3. The MULTIMEDIA SECTOR Sample 195 4. MULTIMEDIA Sector Contribution to the Gauteng Economy 196 4.1 Turnover 196 4.2 Employment 196 4.3 GVA 196 4.4 COSTS 196 5. THE Structure of the MULTIMEDIA SECTOR 197 6. Types of organisations within the MULTIMEDIA Sector 198 7. Demographics within the MULTIMEDIA sectoR 199 7.1 Racial AND GENDER breakdown 199 7.2 Age ATTRIBUTES 201 7.3 Educational attributes 201 8. MARKETS 201 9. FUNDING AND FINANCING OF THE MULTIMEDIA SECTOR 202 10. OUTLOOK 203 REFERENCES 204 LIST OF FIGURES FIGURE 1: Multimedia value chain 194 FIGURE 2: Sample by firm size 195 FIGURE 3: Distribution by organisation size 198 FIGURE 4: Legal status of multimedia companies 198 FIGURE 5: Age distribution of multimedia entities 199 FIGURE 6: Racial and gender breakdown 200 FIGURE 7: Racial and gender breakdown of management 200 FIGURE 8: Organisation size and funding application 202 FIGURE 9: Sources of income for organisations in the multimedia sector 203 LIST OF TABLES TABLE 1: Sample for Multimedia industry 195 TABLE 2: Turnover in the multimedia sector 196 TABLE 3: Multimedia employees per category 196 TABLE 4: Costs 196 TABLE 5: Education levels of multimedia employees 201 TABLE 6: Funding in the multimedia sector 202
  • 200. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S 1 . BACKGROUND Multimedia is a relatively new sector in South Africa although it is globally established as a leading new knowledge-based industry contributing to employment growth and increased trade. Globally the multimedia sector is experiencing strong growth with innovations visible in web-based programmes, the games industry, the telecommunications industry generally (the cell-phone industry particularly), as well as in the audio-visual industry. 2.1 DEFINITION Multimedia is “media that uses multiple forms of information content and information processing like text, audio, graphics, animation, video and interactivity to inform or entertain the audience. Multimedia also refers to the use of electronic media as a medium to convey the multimedia content but is not limited thereto” (1021 Media and Design). The Department of Education (2003) defines multimedia as “mixed media; computer programmes that involves users in the design and organisation of text, graphics, video and sound in one presentation; computer-based activity which integrates text, visuals and sound.” There is debate over whether multimedia should be classified as a separate sector. One argument suggests that multimedia cannot be seen as a sector as it can not be identifiable in the nation’s economic operation (Gamede, 2006). Many of the participants in the survey, especially those involved with animation, held this view and see themselves as part of the audio-visual sector. However, given the young age of the sector, its central use of technology and its potential to evolve, it has been classified as a separate sector in this report. This also serves to provide a baseline for future studies on the sector. 2.2 THE VALUE CHAIN The value-chain of the multimedia sector is presented in Figure 1. The concept originates from the authors; TV/film producers; publisher; advertising companies; broadcasting commissioners or the developers; programmers and animators themselves. The latter further realize the concept. The products/services are then distributed/circulated through computer retailers, mass merchandisers, video clubs, broadcasters, and other distributors. The products/services are consumed by the general public, TV/film journalists and private networks.1 There are other related activities that take place across the value-chain, like education and training provided by several organisations and higher education institutions. The Gauteng province has several multimedia training institutions like e.g. CityVarsity campus, NEMISA and Boston Campus. Figure 1: Multimedia value chain 2 . DESCRIPTION OF THE MULTIMEDIA SECTOR 1 Private networks are networks accessed through the Internet but with access restricted to suppliers, buyers and other selected parties Distribution Computer retailers Mass merchandisers Video clubs Broadcasters Distributors Production Developers (content writers) Animators Programmers (coders, testers) Multimedia publishers Creative origination Authors TV/Film producers Publisher Broadcasting commissioners Funding and support Education and training Consumptions Public TV/Film journalists Private networks B A C K G R O U N D
  • 201. 1 9 5 CATEGORY OF INTERVIEWS RESPONDENTS Face-to-face interviews 11 Telephonic interviews 44 TOTAL 55 3 . THE MULTIMEDIA SECTOR SAMPLE The multimedia sector includes the activities of computer technology companies, animation companies, and multimedia experts. The sector is mainly dominated by animation companies. Table 1: Sample for the Multimedia industry The population number is based on discussions with various stakeholders combined with the Animation SA database. The figures are based on an estimated population size of 500: 350 micro businesses (1 person) and 150 businesses larger than 1 person are operating in the Gauteng province. Figure 2: Sample by firm size 5 to 9 29% 1 to 4 65% 20 to 49 4% 50+ 2% 1 to 4 5 to 9 20-49 50+
  • 202. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S S E C T O R C O N T R I B U T I O N T O T H E G A U T E N G E C O N O M Y 4 . MULTIMEDIA SECTOR CONTRIBUTION TO THE GAUTENG ECONOMY 4.1 TURNOVER In Gauteng, the estimated turnover for the multimedia sector in 2006 was R267 million. Table 2 shows how the figure was calculated: Table 2: Turnover in the Multimedia sector 4.2 EMPLOYMENT The multimedia sector employs 1,100 people in Gauteng and twenty-six percent of those employed in the sector are Black and 36% are female. The multimedia sector is mainly comprised of small firms. We arrive at the above figure in the following manner: Table 3: Multimedia employees per category 4.3 GVA The multimedia sector adds about R185 million to the provincial GDP. 4.4 COSTS As shown in Table 4, the most important cost stated by 64% of the surveyed firms was operational costs (e.g. rentals and transport). These costs include telecommunications costs and access to broadband. Thirty-six percent reported wages and salaries as the main cost. Table 4: Costs CATEGORY OF COMPANIES MEDIAN ANNUAL TURNOVER (R) NUMBER OF COMPANIES TOTAL TURNOVER FOR CATEGORY OF COMPANY (R) Micro-businesses 120,000 350 42,000,000 Medium-businesses 1,500,000 150 225,000,000 Total TURNOVER 267,000,000 CATEGORY OF COMPANIES MEDIAN EMPLOYEE NUMBER NUMBER OF COMPANIES TOTAL NUMBER OF EMPLOYEES FOR CATEGORY OF COMPANIES Micro-businesses 1 350 350 Medium-businesses 5 150 750 Total number of employees 1,100 COST TYPE PERCENTAGE (%) Operational costs (rentals, transport, telephone ...) 64 Wages and salaries 36 TOTAL 100
  • 203. 1 9 7 The multimedia sector includes the activities of computer technology companies, animation companies, and multimedia experts. The sector is mainly dominated by animation companies - there are over 65 animation companies operating in South Africa (Gamede, 2006). The largest animation companies in the Gauteng province are: Ministry of Illusion, Masters and Savants, Annimate, Black Ginger, Depth VFX and Luma. Multimedia products take five main forms: 1. CD ROMs 2. Multimedia software for Personal Computers, mainframe systems and Internet applications 3. Web sites and online publications 4. Motion graphics for television, film and other mediums 5. Presentations and events (Creative Strategy Consulting, 1999). The multimedia sector is a fast growing sector – some respondents2 stated that the sector has doubled in size and number of players over the past 10 years. The large number of young companies within the sector confirms this (see below). This accelerated growth is mainly due to the rapidly expanding reach of the internet, and cheaper and easier access to software and hardware. Some respondents stated that the increased competition and cheaper technology have caused the broadcasters and advertising agencies budgets to shrink and thus more marketing efforts are required to secure work. 5 . THE STRUCTURE OF THE MULTIMEDIA SECTOR 2 This information was obtained during the confidential in-depth interviews.
  • 204. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S TYPES OF ORGANISATIONS WITHIN THE MULTIMEDIA SECTOR; DEMOGRAPHICS 6 . TYPES OF ORGANISATIONS WITHIN THE MULTIMEDIA SECTOR The multimedia sector is dominated by micro businesses (58%). A further 36% employ 5 to 19 people and 6% employ more than 20 people. Figure 3 shows the distribution of firms by size. The size is defined by the number of people employed within the surveyed firm. For those with access to capital and the skills to be part of this sector, entry is relatively easy. Many of these small businesses are part of the value-chain in other sectors including the audio-visual sector and the information technology sector. Figure 3: Distribution by organisation size Figure 4 shows that the majority (64%) of surveyed firms are registered as close corporations, the remainder (36%) are registered as Limited Companies. Figure 4: Legal status of multimedia companies 70% 60% 50% 40% 30% 20% 10% 0% Distribution by organisation size Number of employees Legal status 1 to 4 5 to 19 20 to 49 50+ Sole trader CC
  • 205. 1 9 9 Figure 5 shows that 42% of the surveyed firms are fairly new to the industry and 38% have been operating in the industry for over 10 years. The remainder 20% have been in operation for 5 to 9 years. The entry of new firms has corresponded with a decline in the cost of the technology, such as computer hardware and software, used in the sector and the rise in demand for the products and services produced by the multimedia firms. Animation is now widely used in films, advertising and television. Furthermore, multimedia products, such as CD-Roms, have become commonplace with educational textbooks. Figure 5: Age distribution of multimedia entities 7.1 RACIAL AND GENDER BREAKDOWN The workforce in the multimedia sector is predominately white (74%) and male (64%). The figures for the management staff are even more one sided, with 88% being white, of whom 68% are male. There are a number of explanations for this. Technology plays a central role in the multimedia industry. Those that choose to enter the sector have often been exposed to computers and computer programming at a young age. They also often have studied mathematics at the secondary school level. Both of these factors disadvantage Black students and limit the number of Black students that are able to enter tertiary training. In addition to this, entry into the sector usually requires access to technology, such as a computer (Fortt, 2004). These prices have however fallen in recent years, making them affordable to middle-class families. However, computers remain unaffordable for Black working-class families. 7 . DEMOGRAPHICS WITHIN THE MULTIMEDIA SECTOR Age distribution of organisations 10+ years 5 to 9 years 0 to 4 years
  • 206. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S D E M O G R A P H I C S W I T H I N T H E M U LT I M E D I A S E C TO R 7 . DEMOGRAPHICS WITHIN THE MULTIMEDIA SECTOR Figure 6: Racial and gender breakdown Figure 7: Racial and gender breakdown of management Percentage of employees by race and gender White female Black male Black female White male Percentage of management by race and gender White female Black male Black female White male
  • 207. 2 0 1 7.2 AGE ATTRIBUTES Not surprisingly, a substantial number, (fifty percent) of the respondents reported that the principal or majority owners of the organisation were less than 35 years old. 7.3 EDUCATIONAL ATTRIBUTES The specialist qualifications required in the sector mean that 63% percent of the employees at managerial level have at least completed a university degree, compared to only 24% of the general workforce. However, a diploma is the most common educational qualification among the general workforce and 63% of the workforces have at least completed matric. The education levels confirm that advanced skills are required in the multimedia sector. Table 5: Education levels of multimedia employees The majority (88%) of the surveyed firms sell their products/services directly to other firms and 18% sell their products/services directly to the public. The firms they sell their products/services to are mainly advertising agencies, post-production houses, the national broadcaster and other corporate organisations. The multimedia sector thus forms an important link with the value-chains of other sectors. Fifty-five percent of the surveyed firms stated that they sell their products/services in the international market. Respondents reported EU as their main export market (42%). Other export markets include Asia (25%), Rest of Africa (25%) and the Middle East (8%). Given the technology based products and services in the sector, distance and thus physical transport costs are less important than for other types of products. However, high broadband and telecommunication costs make companies less competitive in the global market (South African Foundation, 2005). An important component of operating in the international market is making connections to other companies. Thus many of those in the multimedia sector need to travel to trade-shows or other conferences to create and maintain international networks. This can be costly. 7 . DEMOGRAPHICS WITHIN THE MULTIMEDIA SECTOR EDUCATION LEVELS OF EMPLOYEES WORKFORCE % MANAGEMENT % Completed post-graduate degree 0 36 Completed university degree 24 27 Diploma with Grade 12 50 27 Up to Grade 12 13 9 Vocational training with Grade 12 13 0 TOTAL 100 100 8 . MARKETS
  • 208. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S F U N D I N G A N D F I N A N C I N G O F T H E M U LT I M E D I A S E C TO R ; O U T LO O K The multimedia sector is predominantly a commercial sector. Only 19% of the surveyed firms had applied for funding over the past two years, and two-thirds of these secured funding. Most firms (68%) did not apply for funding because they did not need it. Only 10% stated they were not aware of the availability of funding and 7% found the procedure of applying too complex. Others (5%) stated that it is pointless to apply as they would fail to get funding and the remainder reported compliance issues, lack of time and experience and cross subsidy from other business as reasons for not applying. These results suggest that government attempts to promote the sector through making more funding available are likely to fail given the lack of need. Table 6: Funding in the multimedia sector Out of the 19% that did apply for funding over the last 2 years, 11% employ between 5 and 19 people and 4% employ between 1 and 4 people. Thus in this sector mainly the medium-sized firms apply for funding. Figure 8: Organisation size and funding application The firms surveyed for this project were asked about primary and secondary sources of income. Every firm reported that they generated 100% their primary income through direct sales/services. Seventy-five percent reported they do not have a secondary source of income. The remainder stated royalties, government and funding agency grants as a secondary source of income. These results suggest that the growth in the sector will be driven by growth in demand and an increase in market size. 9 . FUNDING AND FINANCING OF THE MULTIMEDIA SECTOR REASONS FOR NOT APPLYING PERCENTAGE (%) Process is too complex It is pointless,I would still fail to get it 6 Did not know there was funding 3 It is pointless, I would still fail to get it 3 No need 88 TOTAL 100 Organisation size and funding application Number of employees 60% 50% 40% 30% 20% 10% 0% 1 to 4 5 to 19 20 to 49 50+ Applied Did not apply
  • 209. 2 0 3 Figure 9: Sources of income for organisations in the multimedia sector Firms were also asked about whether they had any debt. Forty percent of those interviewed claimed to have some level of debt. The median amount of debt was R750,000, although this is based on a very small sample size. This access to debt and the low reliance on government funding indicates the commercial sustainability and relative sophistication of the sector. Firms are integrated into the formal financial sector, have assets that can be borrowed against and thus do not need other sources of funding. There is reason to believe that, especially in the Gauteng province, the multimedia industry is poised for sustained future growth. Critical to this potential will be enhancing the competitiveness of our telecommunications sector, specifically bandwidth, improving the appropriateness and quality of skills available in the market and developing support mechanisms (from financing, loans and grants to export plans) suitable to this sector. 9 . FUNDING AND FINANCING OF THE MULTIMEDIA SECTOR 1 0 . OUTLOOK Sources of income for organisations in the multimedia sector Primary source (%) Direct sales/ services National government grant Funding agency grant Royalties N/A No secondary source Secondary source (%) 90 80 70 60 50 40 30 20 10 0
  • 210. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S R E F E R E N C E S 1 1 . REFERENCES 1021 Media and Design (2007) http://www.1021.co.za/multimedia_1.html [Accessed on 18/12/07] Creative Strategy Consulting, (1999) The Creative City: Johannesburg and the Creative Industries - Johannesburg: the creative capital, Gauteng Spatial Development Initiative, Prepared by Avril Joffe, Creative Strategy Consulting, SQW (SA) for the DBSA. Department of Education, (2003) National Curriculum Statement Grades 10 – 12, Visual arts, Seriti Printing (Pty) Ltd, 2003. Available from http:// curriculum.pgwc.gov.za/php/circular_docs/29_ncs_visual_arts.pdf accessed on 10.12.07 Fortt, J.(2004), 2004’s Top Technology Trends, [Available from http://www.forbes.com/2004/01/02/102techtrendspinnacor_ii.html; Accessed on 14/03/2008]. Gamede, F. (2006) Multimedia: A sector or New Technology? An analysis research report about the multimedia in South Africa Research completed as part of the requirements for the MAPPP-Seta Skills Programme on Research Skills (April) South Africa Foundation, (2005) Telecommunications prices in South Africa: An international peer group comparison, occasional paper No. 1 prepared by Genesis Analytics, 2005. Industry experts consulted in conducting the research Adam Harris (Technical Director Depth VFX, telephonic interview on 20/12/07) Jamie Haigh (Temple House Design, telephonic interview on 20/12/07) Jason Cullen (Sphere Animation Studio, telephonic interview on 18/12/07) Stephen Hobbs (The Premises, telephonic interview on 19/12/07) Zander Grobler (Director 1021 Media & Design co-ordinator, telephonic interview on 19/12/07)
  • 211. GAUTENG’S CREATIVE INDUSTRIES: THE MUSIC SECTOR
  • 212. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S MUSIC SECTOR PROFILE TOTAL TURNOVER R1,201,295,000 TOTAL EMPLOYMENT 6,384 GROSS VALUE-ADDED R547,790,520 BLACK EMPLOYEES 58% FEMALE EMPLOYEES 41% NUMBER OF ORGANISATIONS 1,204 GAUTENG’S CREATIVE INDUSTRIES: MUSIC SECTOR
  • 213. T A B L E O F C O N T E N T S C O N T E N T S 1. Background GLOBAL CONSIDERATIONS 208 2. Description of the MUSIC SectOR 210 2.1 Definition 210 2.2 The value chain 211 3. The MUSIC SECTOR Sample 212 4. MUSIC Contribution to the Gauteng Economy 213 4.1 Turnover 213 4.2 Employment 216 4.3 GVA 216 4.4 COSTS 217 5. THE Structure of the INDUSTRY 218 6. Types of organisations within the MUSIC Sector 220 7. Demographics within the MUSIC sectoR 222 7.1 Racial breakdown 222 7.2 Age composition 223 7.3 Educational attributes 224 8. MARKETS 225 9. FUNDING AND FINANCING 226 10. OUTLOOK 227 REFERENCES 228 LIST OF FIGURES FIGURE 1: Music industry value chain 211 FIGURE 2: Total performance rights in SA 214 FIGURE 3: Total literary and dramatic rights 215 FIGURE 4: Mechanical rights income 215 FIGURE 5: Global Music Industry 218 FIGURE 6: Music Digital Value Network 219 FIGURE 7: Distribution by size of organisation 220 FIGURE 8: Legal status of music firms 220 FIGURE 9: Age Distributions of organisations 221 FIGURE 10: Percentage of employees by race and gender 222 FIGURE 11: Percentage of management by race and gender 223 FIGURE 12: Age of principal/owner in the music sector and others in the Creative Industry 223 FIGURE 13: Education levels of employees 224 FIGURE 14: Main markets for firms 224 FIGURE 15: Sources of income for organisations 226 FIGURE 16: Organisation size and funding applications 226 LIST OF TABLES TABLE 1: Breakdown by Function of Firms: Music Sector 212 TABLE 2: Music sample 212 TABLE 3: Turnover by category of company in the Music sector 213 TABLE 4: Employment by company category in the Music sector 216 TABLE 5: Total employment in the Music sector 216 TABLE 6: Costs in the Music Sector 217 TABLE 7: International and local markets 220 TABLE 8: Reasons for not applying for funding 227
  • 214. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S 1 . BACKGROUND Gauteng is the home to the South African music industry from musicians to music majors, award ceremonies to collection societies. Successful genres such as kwaito and rock, driven by significant entrepreneurship, originate in Gauteng while African jazz remains rooted in the townships around the province. Music entrepreneurship drives the success of many of Gauteng’s local artists who have found that being active in the live performance sector also results in higher record sales. The national Department of Arts and Culture (then DACST) prepared a first overview of the music industry as part of the Cultural Industries Strategy Group (DACST4: 1988) focusing principally on the recorded industry. The release of the CIGS report, ‘Creative South Africa: A strategy for realising the potential of the cultural industries’ was followed by a multi-stakeholder team being assembled by the DACST Minister called the Music Industry Task Team (MITT). The MITT addressed blockages and obstacles to strengthen the SA music industry. The Independent Broadcasting Authority also issued measures to support SA Music by issuing regulations to radio stations to broadcast SA music. This government support has continued within the DAC and has also found a new home with the DTI’s recent decision to prepare a Customised Sector Strategy for the music industry as has already been done for film and craft. Global considerations Globally, recording industry returns have decreased in the past decade at rates of 5-9%. This was a result of continuous declines in album sales for the recording industry. In the U. K between 2006 and 2007, there was a 10% decline in album sales (Randall, 2007). The U.S, France and Canada suffered a similar fate, by experiencing album sale declines of 15%, 25% and an incredible 35% respectively. This decline in album sales was a result of piracy driven by unauthorised internet distribution, CD burning and ongoing competition for consumers spend from the multimedia and audio-visual sectors. The impact of album sale declines has been phenomenal as can be witnessed from EMI’s experiences; EMI’s workforce has shrunk in the past ten years from more than 10,000 employees worldwide to 4,000 today (Randall, 2007). Due to declines in global album sales, there has been a reprioritisation of live performances in order to increase company profits. Ticket prices for live performances have soared in London as the price of CD’s has tumbled. (Randall, 2007). South Africa has however not experienced this trend – in 2005 the recording industry’s turnover increased by 10% from the previous year. South Africa remains one of the few countries in the world that is still experiencing growth in the music industry (The Recording Industry of South Africa, 2006). South Africa has not expressed this global trend because piracy has not resulted in a calamitous decline in music sales; largely because of a lack of advanced technology accessibility and the slow speed of broadband. With the imminent increase in the speed of broadband and increased accessibility of music technology, the impact of piracy will deal a severe blow to the development and health of the music industry if the private sector and government do not deal with it effectively. The traditional role of music companies is constantly being challenged by technological advancements and the internet. Interaction between artists and consumers of music has become more important with the surge of internet blogs and social networking websites such as ‘Facebook’ and ‘MySpace’. The communication between the two parties is no longer through the record companies but is rather real and credible (through the artist). It is clear from this that the survival of the global music industry will depend on its ability to transform and adapt to the ever-changing challenges it faces from the technological world. B A C K G R O U N D
  • 215. 2 0 9
  • 216. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S D E S C R I P T I O N O F T H E M U S I C S E C T O R 2 . DESCRIPTION OF THE MUSIC SECTOR 2.1 DEFINITION The Gauteng music industry consists of companies with distinct and diverse roles that result in the realisation of musical products. The music industry consists of1 : l Creators: These composers and songwriters compose lyrics and melodies. Musicians, who lend their voices to these lyrics and melodies, are also considered creators. These originators are the creative core of the music sector, providing the raw material which, through the process of recording, marketing and performance generate the income stream of the music sector. l Publishers: These companies publish musical works as composed by songwriters and lyricists and collect royalties (publishing rights). l Record Companies: Record companies are responsible for the sound recording of artists and ensuring the manufacture, promotion and distribution of tangible music products such as CDs. Cassette tapes, music videos and internet downloads. l Manufacture: This entails the reproduction (into cassettes, CDs) from masters. l Broadcast, Retail and Entertainment Sectors: These constitute the three sectors though which the product of the music industry reaches the market (DACST, 1988). At the heart of these three sectors is the performance industry that remains the principal means of income generation for musicians in South Africa (CAJ, 2008). l Agents, Managers and Promoters: Agents and managers provide a service to the creators and act as intermediaries to negotiate income opportunities while promoters negotiate and organise live performances with same agents and managers as well as broadcasters and venues. l Technical Personnel: Sound engineering expertise is important for both recording and performance while light, staging, rigging and event and production management personnel are needed for live performance. l Intellectual Property Rights (IPR) Administrators: The music sector relies on agents to protect IPR and collect licensing fees and royalties. l Regulators and Government Institutions: Broadcast and telecommunications regulators (such as ICASA) as well as government departments play an important function in the effective functioning of the music sector. l Education and Training: Play a crucial role in the training of musicians and professions in the music sector. l Funding and support: Both government and non-government institutions assist in the development of the sector. 1 Previous studies in South Africa have referenced some of these aspects of the music industry such as the music report of CIGS (DACST,1988:18) and the MAPPP-Seta Music Sector Skills Plan (2004).
  • 217. 2 1 1 2.2 THE VALUE CHAIN As discussed above, the music industry value chain is being transformed with digital technologies, specifically the internet. Nevertheless, it is worth looking at the representation of the traditional value chain (at least for recorded music) (see Figure 1 below). Figure 1: Music industry value chain The list of activities that comprise the music sector expands on the CIGS music report that highlighted composer, musician, live performance, record labels and recording studios, retailing, broadcasting, promotion and publicity. In addition to extending the CIGS report definition, our definition also expands on the International Standard Industrial Classification (ISIC) that refers to the music industry as comprising of sound recording, producing and music publishing activities. -Composers -Songwriters -Musicians -The record producer Training and development Regulation and legislation -Music Publishing Distribution Travel agents & tour operators -Manufacturing of cassettes, CD’s & DVD’s Creators Production Production -Sound recording & mixing -Producing -Arrangements -Record labels -Recording studios Manufacture (medium) Music Instruments Music Specific Inputs Publishing Recording/ Production -Music festivals -Media -Broadcasting -Internet & digital media -Advertising services Distribution -Music festivals -Media -Broadcasting -Internet & digital media -Advertising services Distribution Funding and supportFunding and support Training and development Regulation and legislation Creators -Composers -Songwriters -Musicians -The record producer Publishing -Music Publishing Recording/ Production -Sound Recording & Mixing -Producing -Arrangements -Record labels -Recording studios Music Specific Inputs -Music instruments Manufacture (Medium) -Manufacturing of cassettes, CDs & DVDs Distribution -Music Festivals -Media -Broadcasting -Internet & digital media -Advertising services Retail -Sale of music at retail outlets
  • 218. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S M U S I C S E C T O R S A M P L E ; C O N T R I B U T I O N T O T H E G A U T E N G E C O N O M Y 3 . THE MUSIC SECTOR SAMPLE The population estimate was broken-down into three categories. The first category is that of the “big-four” companies. The second category is that of artists. The figure of 700 is based on the Musicians Union of South Africa’s membership number. The artists figure does not include part- time artists because a reliable database of these artists is not available. The third category is that of other firms. The figure of 500 was obtained from the SA Music Directory. Table 1: Breakdown by Function of Firms: Music Sector The sample of 76 was drawn from this population with 27 face-to-face interviews and 49 telephonic interviews as can be seen in Table 2. Table 2: Music Sample CATEGORY OF INTERVIEWS RESPONDENTS Face-to-face interviews 27 Telephonic interviews 49 TOTAL 76 MAIN BUSINESS/FUNCTION NO. OF FIRMS “Big Four” 4 Artists 700 Other firms 500 TOTAL 1,204
  • 219. 2 1 3 Gauteng has a diverse cultural heritage as is reflected in the types of music produced within the province. The strict enforcement of local content quotas and the fact that Gauteng has the most number of radio stations has also enabled local music to receive more airplay(African language public broadcasters have consistently played thirty-percent local music, in some instances even reaching sixty-percent, in addition to this the English language public broadcasters play around 20% local music). Economic growth, and with it growth in personal disposable income should benefit the local industry (Independent Communications Authority of South Africa, 2002). The industry however does face the threat of piracy. This is not only through the downloading and sharing of music through the internet but also through the distribution of pirated CDs.2 The Gauteng music industry is a dynamic and growing industry 3 , which has experienced huge growth in the urban and youth genres of kwaito and hip-hop in the past decade. The diversity and rich cultural heritage of the people who call Gauteng their home is evident in the diversity of music produced and consumed in the province. Gauteng’s importance as the economic hub of South Africa places it at the heart of the South African music industry and home to the “big four” record companies – Warner, Universal, SonyBMG and EMI: with Warner’s subsidiary being Gallo Africa. 4.1 TURNOVER The economic contribution of the music industry to Gauteng is large. The music industry in Gauteng produces a turnover of over R1 billion. The total contribution to the economy, which includes the indirect impact of the music industry, is much larger than this. The estimated turnover for 2006 is R1.2 billion calculated as follows: Table 3: Turnover by category of company in the Music sector 4 . MUSIC CONTRIBUTION TO THE GAUTENG ECONOMY 2 In 2005, IFPI received 1.9 million counterfeit music discs from the South African Customs to destroy (The Recording Industry of South Africa , 2006). 3 Interview with a “Big Four” record company CEO. 4 Number of members of the Musicians Union of South Africa (MUSA).http://www.cosatu.org.za/affiliates/affimusa.htm 5 Number of companies in the Midi Trust Directory. CATEGORY OF COMPANIES MEDIAN ANNUAL TURNOVER (R) NUMBER OF COMPANIES TOTAL TURNOVER FOR CATEGORY OF COMPANY (R) “Big Four” recording companies 143,581,000 4 574,324,000 Artists 12,000 7004 100,800,000 Other companies 1,052,990 5005 526,495,000 Total TURNOVER 1,201,295,000
  • 220. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S MUSIC SECTOR CONTRIBUTION TO THE GAUTENG ECONOMY 4 . MUSIC CONTRIBUTION TO THE GAUTENG ECONOMY The impact of live music It is difficult to quantify the total contribution of live music to the Gauteng economy without a survey that specifically investigates this. However, the Creative Mapping study does give some indication of the magnitude of the contribution. These results need to be interpreted with caution, given the small sample size, and that respondents were not asked to provide a breakdown between live and recorded music. The assumption in our calculations is that all the turnover of musicians, promoters and music venues can be attributed to live music. Based on estimated population sizes of 700 for musicians, 50 for promoters and 30 for venues, the estimated turnover of the Gauteng live music sub-sector is approximately R100 million. This is approximately 8% of total turnover in the music sector. Rights Income Total performance rights and total literary and dramatic rights income show a growth in the period since 2004. Total performance rights have grown 35% in 3 years (2005/6/7) from R163,578,000 in 2005 to R220,675,000 in 2007 as can be seen in Figure 2 below. Figure 2: Total performance rights in SA Source: SAMRO Annual Reports (2005 & 2006) Total Performance Rights (South Africa) 250000000 200000000 150000000 100000000 50000000 0 1 2 3 4
  • 221. 2 1 5 Total literary and dramatic rights have grown 52.5% in the period 2005 to 2007 from R15,436,000in 2005 to 23,532,000 in 2007 as illustrated in Figure 3 below. Figure 3: Total literary and dramatic rights Source: SAMRO Annual Reports (2005 & 2006) Mechanical rights on the other hand saw a peak in 2005 (R13,287,000) but the 2006 (R11,943,000) is only slighter more than it was in 2004 (R11,625,000). Figure 4: Mechanical rights income Source: SAMRO Annual Reports (2005 & 2006) 4 . MUSIC CONTRIBUTION TO THE GAUTENG ECONOMY Total Literary & Dramatic Rights 25 000 000.00 20 000 000.00 15 000 000.00 10 000 000.00 5 000 000.00 0.00 1 2 3 4 Mechanical Rights 13 500 000.00 13 000 000.00 12 500 000.00 12 000 000.00 11 500 000.00 11 000 000.00 10 500 000.00 1 2 3 4
  • 222. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S MUSIC SECTOR CONTRIBUTION TO THE GAUTENG ECONOMY 4 . MUSIC CONTRIBUTION TO THE GAUTENG ECONOMY 4.2 EMPLOYMENT The The Gauteng music sector directly employs more than 6,000 people. The sector mainly comprises small and medium size firms with a median number of permanent employees of 11 (this figure excludes the employment numbers for the “Big Four” recording companies whose median employee number is 46). Table 4 below illustrates how the total permanent employment number is 6,384 is constituted: Table 4: Employment by company category in the Music sector The total number of employees; total of permanent, part-time and contract is 18,8846 as shown in the table below (Table 5). Table 5: Total employment in the Music sector 4.3 GVA The Gauteng music sector adds more than R547 million to the value of the Gauteng economy. CATEGORY OF COMPANIES MEDIAN EMPLOYEE NUMBER NUMBER OF COMPANIES TOTAL NUMBER OF PERMANENT EMPLOYEES FOR CATEGORY OF COMPANIES “Big Four” recording companies 46 4 184 Artists 700 N/A 700 Other companies 11 500 5,500 Total PERMANENT employees 6,384 CATEGORY OF EMPLOYMENT MEDIAN EMPLOYEE NUMBER NUMBER OF COMPANIES TOTAL NUMBER OF EMPLOYEES FOR CATEGORY OF EMPLOYMENT Total permanent employees 6,384 Part-time employees 7 500 3,500 Contract employees 18 500 9,000 Total NUMBER OF employees 18,884 6 This figure does not include part-time musicians because of the lack of data on them.
  • 223. 2 1 7 4.4 COSTS The majority of firms in this sector reported that operational costs were their highest cost. These costs, which include the rental of space, electricity and other overhead costs are the largest costs for 41% of the firms. This is indicative of a sector that rents out studios and uses technology and hence electricity to produce its recordings and live performances. Thirty percent of businesses reported staff costs as their most important cost; staff costs do not include musicians’ salaries, as they are not employees of record companies. Royalty costs are the highest costs for approximately 4% of the firms surveyed. Table 6: Costs in the Music Sector The importance of operational costs and salaries is also reflected in the responses firms gave to questions about obstacles to business operation. Costs (operational, salaries, etc.) were the most commonly mentioned obstacle to business operation. 40% of firms mentioned these as their primary obstacle. Access issues (such as access to finance) and market conditions were each mentioned as a primary obstacle by 19% of firms. Social-economic conditions such as substance abuse and intellectual infringement only rate as the fourth greatest obstacle to business operations, this is supportive of the fact that piracy has not made as much a dent on the profitability of South African music firms as opposed to those of other advanced countries. Thirty-one countries had physical piracy levels above 50% (IFPI, 2005). Two of the world’s highest pirate countries China and Greece had physical piracy levels of 85% and 50% respectively in 2005 (IFPI ,2006). South Africa was however rated amongst the countries with moderately high physical piracy rates. South Africa was rated as having a piracy rate between 25% and 50% (IFPI, 2005). Wages and operational costs were also rated as the second highest cost to business operation for 60% of firms. 4 . MUSIC CONTRIBUTION TO THE GAUTENG ECONOMY COST TYPE PERCENTAGE (%) Wages and salaries 30 Operational costs (rentals, transport, electricity ...) 41 Direct raw materials 11 Royalties 4 N/A 15 TOTAL 100
  • 224. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S STRUCTURE OF THE INDUSTRY 5. STRUCTURE OF THE INDUSTRY The Global music industry encompasses the activity of many music-related businesses and organisations but is currently dominated by the “big four” record groups namely; Sony BMG, EMI, Universal and Warner all of which operate exclusively in Gauteng, South Africa (see Figure 5). In 2006 these companies accounted for 71.6% of global record sales in value terms. This is slightly lower than in 1996 when the major companies accounted for 78% of global record sales (SAMEX 2007). The major record companies and entertainment groups are shrinking in size and independent record companies are winning market share from the major labels (SAMEX, 2007). The music industry in Gauteng is populated with many independents able to enter the market partly due to a cheapening of recording equipment and a powerful appetite for local product. Small, niched independents have been given a boost by the wave of agglomeration of the global music players and the massive technological changes resulting from digitization (CAJ, 2007b). The nature, scale and performance of the music industry has changed irreversibly with “digital revenues (only) partially compensating for the decline in physical sales across major music markets” (CAJ, 2007b:47) which, as seen above, has been avoided in the South African market. Figure 5: Global Music Industry Source: World music market sales shares, according to IFPI (2005) These changes are captured by the amended value chain for recorded music as developed by Connectus Consulting Inc (See Figure 6) which argues that “music is without doubt the value network in which the effects of digital technology have been most marked” (2007:53). Two decades ago a musician needed to sign with a record company to make a professional recording that would, if they were part of the fortunate few, reach a global market through worldwide promotion and distribution after many months of hard work. Now, “a teenager can record a song in her bedroom one night, upload it before going to bed, and have it in the pockets of other teenagers around the world by the following morning” (2007:53). 6 This figure does not include part-time musicians because of the lack of data on them. Global music industry Warner Other Universal SonyBMG EMI
  • 225. 2 1 9 Figure 6: Music Digital Value Network Source: Connectus Consulting Inc. (2007:66) The Internet, through its support of digital downloads, has created an important disconnect in the flow from music master to physical project and the consumer with the result that “sale of physical product has been substantially undermined by the availability of a much cheaper alternative” (2007:67). However, it is not only the traditional business model (governed by sales) that is affected but so is the management of risk in the music business. Previously a few good ‘hits’ compensated for the many non-hits with the risk equation balanced in the label’s favour. The much greater range, choice and availability of music to consumers because of the Internet has resulted in the relative size of hits being reduced. In 2000 for instance a No I hit sold 252,000 copies (Nelly’s album Country Grammar) while in 2007 a No 1 hit on the Billboard charts sold only 66,000 albums (Dreamgirls) (Connectus Consulting Inc, 2007:68). While this is potentially very disruptive to the record industry as traditionally understood, with record labels and recording companies loosing their gate keeping power over production, there is no doubt than in opening up distribution, the Internet provides many opportunities to entrepreneurial musicians now able to reach more audiences worldwide. 5 . STRUCTURE OF THE INDUSTRY
  • 226. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S TYPES OF ORGANISATIONS WITHIN THE MUSIC SECTOR 6 . TYPES OF ORGANISATIONS WITHIN THE MUSIC SECTOR Although the Gauteng recording industry is dominated by the “Big Four” recording companies which are subsidiaries of international companies, more than 90% of interviewed firms7 are owned by South Africans. In addition to this, 41% of firms in the industry are owned by Black individuals (Africans, Indians and Coloureds)8 . The ownership of firms in the music industry by women is still low with only 22% of firms being owned by women; this is not reflective of a country with a 52% female population. The majority (80%) of firms in this industry have fewer than 20 employees. This result is consistent with Johannesburg creative industries scoping report that stated that the creative industries is dominated by micro-enterprises, employing between 1-9 people (Newton, 2003). The firms that are of larger size (20-50 employees) are mainly the record labels. Figure 7: Distribution by organisation size Close corporations and limited companies (33% each) and sole traders (19%) dominate the sector. Section 21 companies made up 7% of the companies with individual artists and NPOs each representing 4% of the total within the music sector. Figure 8: Legal status of music firms 7 “Interviewed firms” include full-time artists and firms characterised as follows: “big-Four” record companies, Independent record labels, recording studios, distributors and manufactures, music equipment sales, event and production companies, NGO, education institutions, publishing firms, design, marketing and publicity companies and venues. 8 Result from survey. Distribution by organisation size Number of employees 50% 45% 40% 35% 30% 25% 20% 15% 5% 0% 1 to 4 5 to 19 20 to 49 50+ Non-profit 11% Legal status CC 35% Limited Company 34% Sole trader 20%
  • 227. 2 2 1 Firms that have been in operation for 10+ years dominate the music industry, accounting for 51% of surveyed firms (Figure 9). The percentage of firms that are between 0-4 years and 5-9 years old is 29% and 20% respectively. The music industry in the past ten years has seen a large increase in the number of operating firms, ‘which is indicative of the youth of the sector’ (Newton, 2003). This result is also reflective of ‘recent’ emergence of genres such as kwaito and hip-hop that have resulted in the formation of firms that focus on these genres. Figure 9: Age distribution of organisations 6 . TYPES OF ORGANISATIONS WITHIN THE MUSIC SECTOR 10+ years 5 to 9 years 0 to 4 years Age distribution of organisations
  • 228. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S D E M O G R A P H I CS W I T H I N T H E M U S I C S E C TO R 7.1 RACIAL AND GENDER BREAKDOWN Black males are the most common demographic group within the sector comprising 33% of the workforce. White males are the next most common. Males dominate the industry comprising 59% of the workforce. Figure 10: Percentage of employees by race and gender White males dominate management positions as they account for fifty-one percent of management. Females account for only 26% of management and blacks account for 38% of management. Therefore, it is clear that management in firms in the Gauteng music industry are dominated by whites and males with the presence of both blacks and females is still not felt. 7 . DEMOGRAPHICS WITHIN THE MUSIC SECTOR
  • 229. 2 2 3 Figure 11: Percentage of management by race and gender 7.2 AGE COMPOSITION Less than half of the music firms said their principal or majority owner was younger than 35 years old which compares well to the other sectors although, not surprisingly fashion, design and multimedia all had a greater proportion of younger owners/ principals. Figure 12: Age of principal/owner in the music sector and others in the Creative Industry 7 . DEMOGRAPHICS WITHIN THE MUSIC SECTOR
  • 230. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S D E M O G R A P H I C S W I T H I N T H E S E C T O R ; M A R K E T S 7.3 EDUCATIONAL ATTRIBUTES There is a wide variation in educational attainment among the workforce in the music industry. The most common level of education attained by the workforce is a grade 12 certificate (48%). More then a quarter of the respondents have both a grade 12 certificate and a diploma. Individuals with university and post-graduate degrees dominate management positions with fifty-five percent having a university degree. The next most common category of education amongst management is a grade 12 level of education (25%). Figure 13: Education level of employees The main market for the music sector is the general public. 81 percent of firms describe their main market as the general public, whilst only 15% produce for other firms and 4% produce for government as illustrated in Figure 14 below. Figure 14: Main markets for firms 7 . DEMOGRAPHICS WITHIN THE SECTOR 8 . MARKETS
  • 231. 2 2 5 More than half the firms in the sector (54%) sell their products on the international market (Table 7). However, for those companies that do sell on the international market this is a small percentage of total turnover. On average only 3.5% of their turnover is sold internationally. Despite the international success of a few South African artists, this indicates that the local market remains the most important market for most of the music sector. The European Union and the rest of Africa are important export markets, each accounting for 28% of exporters. Twenty-two percent export to North America and Canada, 17% % to SADC and 6% to Asia. Table 7: International and local markets 8 . MARKETS INTERNATIONAL AND LOCAL MARKET PERCENTAGE (%) Yes 54 No 46 TOTAL 100
  • 232. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S funding & financing ; O U T L O O K The organisations and individuals in this sector mostly derive their income from direct sales of their products and services and live performances. 78% of respondents in the survey listed this as their main source of income. Revenue from royalties was the next most commonly mentioned main source of income (7% of respondents). Funding agency and local government grants together were the main source of income for 8% of the respondents. Concerning secondary sources of income, forty-eight percent of firms reported to having no secondary source of income. The highest secondary source of income is derived from royalties; thirty percent of firms reported this fact. Eight percent of firms reported that they received their secondary income from either local government or a funding agency. From this, it seems that the Gauteng music industry is self-sufficient. Figure 15: Funding applications by organisational size Only 21% of firms applied for funding from the government; of those who applied, 60 percent were successful in securing government funding. The funding applications mainly came from firms employing 5 to 19 employees, followed by the 1-4 groups as is illustrated in Figure 16 below. Figure 16: Organisation size and funding applications 9 . FUNDING & FINANCING
  • 233. 2 2 7 REASONS FOR NOT APPLYING PERCENTAGE (%) Compliance issues 9 It depends on whom you know 6 It is pointless, I would still fail to get it 17 No need 55 Not aware funding is available 8 Other 6 TOTAL 100 9 . FUNDING & FINANCING 1 0 . OUTLOOK The firms who did not apply for funding were mainly those who had no need (55%). A further 18% reported that it would be pointless to apply as they would fail to get funding, 9% reported compliance issues, 6% stated that it depends on whom you know and 8% was not aware that funding is available. Many respondents said that funding channels need to be made more visible to business as people do not know where funding is available and how to access it. They further added that government funding needs to increase, as it is currently too small to cater for the needs and development of the sector. Table 8: Reasons for not applying for funding The music sector is strong, vibrant, and set for continued growth in the domestic market. In the global economy, the outlook is changing dramatically with the increasing applications of digital technology, social networking sites, file sharing and piracy. There will be continuing intellectual property challenges from this environment which will need to be addressed in the local market as well. The current economic climate may have repercussions for the music industry in the medium term. Future government involvement will need to address the following: l the structure of the domestic music industry (relationship between musicians, the independent production companies and the music majors) l the performance sector (concerts, festivals, live music) which continues to be the main livelihood for musicians in the province l distribution and intellectual property issues from physical product piracy to internet downloads both in the domestic market and within the southern African region l the sustainability of music firms given that half the firms in Gauteng are less than 10 years old l organisation and representation within the sector
  • 234. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S R E F E R E N C E S 1 1 . REFERENCES Ambert, C.,(2003) Promoting the Culture Sector through Job Creation and Small Enterprise Development in SADC Countries: The Music Industry, SEED Working Paper No.49 CAJ, (2006) MAPPP-Seta Music Sector Skills Plan Update DACST (1988) Cultural Industries Growth Strategy (CIGS), The South African Music Industry, Report to the Department of Arts, Culture, Science and Technology, November 1998. ICASA (2000) Discussion paper on the Review of Local Content Quotes, Independent Communications Authority of South Africa (ICASA), December 2000. IFPI (2005) Recording Industry 2005 Commercial Piracy Report at http://www.ifpi.org/content/library/piracy2005.pdf [accessed on 26-11-07]. IFPI (2006) Recording Industry 2005 Commercial Piracy Report at http://www.ifpi.org/content/library/piracy-report2006.pdf [accessed on 26-11-07] Newton, M., (2003) Economic Sector Scoping: Creative Industries, June Final Report, 30 June 2003, prepared for the City of Johannesburg. Randall. S, The day the music industry died, The Sunday Times, October 7, 2007. From http://entertainment.timesonline.co.uk/tol/arts_and entertainment/music/article2602597.ece The Recording Industry of South Africa (RiSA) Annual General Meeting Report, 20 June 2006. SAMRO (2005) Annual Report at http://www.samro.co.za [Accessed on 30 May 2008] SAMRO (2006) Annual Report at http://www.samro.co.za [Accessed on 30 May 2008] South African Music Exportation (SAMEX), Business Plan for a Joint Action Group in preparation for an export council, April 2007. World Economic Forum (2008) Governors Meeting for Digital Ecosystem: Convergence Between IT, Telecoms and Media & Entertainment. Available from: http://www.bain.com/WEFweb/WEF_Emerging_digital_ecosystem_business_models.pdf
  • 235. GAUTENG’S CREATIVE INDUSTRIES: THE PERFORMING ARTS SECTOR
  • 236. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S PERFORMING ARTS SECTOR PROFILE TOTAL TURNOVER R260, 357,000 TOTAL EMPLOYMENT 2,200 GROSS VALUE-ADDED R166, 107,766 BLACK EMPLOYEES 72% FEMALE EMPLOYEES 53% NUMBER OF ORGANISATIONS 289 GAUTENG’S CREATIVE INDUSTRIES: PERFORMING ARTS SECTOR
  • 237. T A B L E O F C O N T E N T S C O N T E N T S 1. Background 232 2. Description of the PERFORMING ARTS SectOR 234 2.1 Definition 234 2.2 The value chain 234 3. The PERFORMING ARTS SECTOR Sample 235 4. PERFORMING ARTS Contribution to the Gauteng Economy 236 4.1 Turnover 236 4.2 Employment 236 4.3 GVA 236 4.4 COSTS 236 5. THE Structure of the PERFORMING ARTS SECTOR 237 6. Types of organisations within the PERFORMING ARTS Sector 238 7. Demographics within the PERFORMING ARTS sectoR 240 7.1 Racial AND GENDER breakdown 240 7.2 Educational attributes 241 8. MARKETS 242 9. FUNDING AND FINANCING 243 10. OUTLOOK 244 REFERENCES 244 LIST OF FIGURES FIGURE 1: Performing Arts value chain 234 FIGURE 2: Distribution by organisation sizn 238 FIGURE 3: Age distribution of organisationsr 239 FIGURE 4: Racial and gender breakdown 240 FIGURE 5: Racial and gender breakdown for management 241 FIGURE 6: Sources of income for organisations in the performing arts sector 242 FIGURE 7: Organisation size and funding application 243 LIST OF TABLES TABLE 1: Breakdown by business / function 235 TABLE 2: Sample of interviews 235 TABLE 3: Category of companie 236 TABLE 4: Employment by entities 236 TABLE 5: Costs in the Performing Arts Sector 236 TABLE 6: Legal status of performing arts organisations 238 TABLE 7: Education levels of employees 241 TABLE 8: Reasons for not applying for funding 243
  • 238. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S 1 . BACKGROUND The performing arts sector has a rich and vibrant tradition in South Africa. It was an outlet for social commentary and protest under Apartheid and continues to reflect issues of relevance to a democratic South Africa. Alongside the social commentary aspect of the sector, there are a number of types of activities that are primarily focused on entertainment, as well as those that combine the two. The diversity of activities is mirrored by the types of organisations and individuals within the sector. There are a number of large government subsidised theatres, a growing number of privately owned theatres, a diverse range of community groups, more formally organised dance troupes and production companies and a large number of individuals that work on a contractual basis. The large theatres, both government subsidised and private, account for three-quarters of turnover in the sector. Government subsidies contribute approximately 20-25% of total revenue in the sector. That is, approximately R52m-R65m of the total turnover of R260m.These subsidies undoubtedly have spill-over effects to other organisations within the sector. Subsidies to theatres increase the employment opportunities for performers, play an important training role, introduce people, especially school children to the performing arts, and provide an opportunity for productions which are commercially risky but may be important for other reasons. Subsidies to community organisations may also enable them to play a valuable training role which can then provide opportunities for these performers to enter the more formal organisations within the sector. Without grants, the theatre sector would simple cease to exist. The private theatre venues are an important group within this sector. These theatres contribute an equivalent amount, in terms of turnover and value-added, to the economy as the government subsidised theatres. There has also been a significant amount of private investment in new theatres and the revamping of old theatres. New theatres include The Montecasino Theatro and Lyric Theatre. Examples of revamped theatres include Victory and Alexander theatres. Victory Theatre was renovated at a cost of R28 million and was reopened in 2007 (Joburg News, 2007). Many developments have also been witnessed in the sub-categories of dance and live music. Local companies like Soweto Dance Company, Umoja, Free Flight Company and Moving into Dance (MID), among others, have expanded and are exploring more territories of artistic expression. For example, now we have “Afrofusion” which is a technique that blends the formal dance training and a spirit that is purely African. More and more black entrepreneurs, such as Todd Twala and Thembi Nyandeni (who founded Umoja), Christopher Kindo (who founded the PACT Dance Company), and Carly Dibokwane are establishing their own dance companies. B A C K G R O U N D
  • 239. 2 3 3
  • 240. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S D E S C R I P T I O N O F T H E P E R F O R M I N G A R T S S E C T O R 2 . DESCRIPTION OF THE PERFORMING ARTS SECTOR The activities of the performing arts sector include the following: dance, orchestra, music, opera, musical theatre, theatre, comedy, circus performance, magic shows, poetry and storytelling. A number of these activities have not been previously included in this sector. For example we included comedy, especially stand-up comedy, since it is a growing form of entertainment in South Africa. 2.1 DEFINITION Performing Arts can be defined as “arts or skills that require public performance” (WordNet, Princeton). The Performing Arts Network of South Africa (PANSA), an organisation established in 2001 to provide an organised voice for the sector, has members in: dance, music, opera, musical theatre and theatre. For the purpose of this study, performing arts includes the following: dance, orchestral music, opera, live music, musical theatre, theatre, comedy, circus performance, magic shows, poetry and storytelling. A number of these activities have not been previously included in this sector1 . Comedy, mostly in the form of stand-up comedy, is a growing form of entertainment in South Africa. A number of venues within Gauteng host regular comedy nights, and there are a number of comedy festivals although these are mainly hosted in Cape Town. Circus performance and magic shows, although a small component of the sector, are included for completeness sake. Live poetry recitation and storytelling have an important role in African culture. There is also overlap with spoken word poetry and forms of expression, such as MCing, that link poetry and music. 2.2 THE VALUE CHAIN The value-chain of the performing arts sector is presented in Figure 1. The writers, choreographers, producers, conductors and composers are where the product originates (Schmitz, 2005). Their ideas are then transformed into a form that can be consumed. This is done by the directors, producers, actors, dancers and others. These individuals may be connected to an organisation but may also act as freelancers. The product is then presented in a live performance. This is the consumption stage of the value-chain. Those involved in the production of the performance, such as the actors, are also involved at this stage. There are also set designers, sound, lighting and other related activities involved. The venue and activities related to the management of the venue are also part of the consumption part of the value-chain. There are other related activities that happen across the value-chain, such as education and training, and the organisations that provide these services. Figure 1: Performing Arts value chain 1 See for example PANSA (2005).
  • 241. 2 3 5 The population estimate for the Performing Arts Sector is based on the PANSA database and was broken-down into four categories: private theatres, state-funded theatres, university theatres and other PANSA members (including NPOs) as can be seen by Table 1. Table 1: Breakdown by Business/function A total of 76 entities were surveyed including 27 face-to-face interviews and 49 telephonic interviews. Table 2: Sample of interviews 3 . THE PERFORMING ARTS sector sample MAIN BUSINESS/FUNCTION NO. OF FIRMS Private theatres 6 State-funded theatres 15 University theatres 6 Other PANSA members 262 TOTAL 289 CATEGORY OF INTERVIEWS RESPONDENTS Face-to-face interviews 27 Telephonic interviews 49 TOTAL 76
  • 242. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S CONTRIBUTION TO THE GAUTENG ECONOMY; STRUCTURE OF THE SECTOR 4 . PERFORMANING ARTS CONTRIBUTION TO THE GAUTENG ECONOMY Looking at the contribution of the sector the data shows that in Gauteng alone the sector accounts for a turnover of R260 million, employs 2,200 people and adds over R166 million to the provincial GDP. Seventy two percent of those employed in the sector are Black and 53% are female. 4.1 TURNOVER The estimated turnover for 2006 for the performing arts sector is R260,357,000. The figure was calculated as follows: Table 3: Category of companies 4.2 EMPLOYMENT The performing arts sector is mainly comprised of SMMEs firms with 46% of firms employing between 1 and 4 employees and 32% of firms employing between 5 and 19 employees. The total permanent employment number is 2,200. We arrive at this figure in the following manner: Table 4: Employment by entities 4.3 GVA The gross value-added for the Performing Arts sector is calculated as R166,107,766. 4.4 COSTS Wages and salaries are the largest cost for the organisations in this sector. This is unsurprising given that for most of the organisations, people are part of the product. Operational costs, such as rental of space, are the second largest cost Table 5: Costs in the Performing Arts Sector CATEGORY OF ENTITY MEDIAN EMPLOYEE NUMBER NUMBER OF ENTITIES TOTAL NUMBER OF EMPLOYEES FOR CATEGORY OF ENTITY Private theatres 25 6 150 State-funded theatres 54 15 810 University theatres 32 6 192 Other PANSA members 4 262 1048 Total number of employees 2,200 COST TYPE PERCENTAGE (%) Wages and salaries 41 Operational costs (rentals, transport, electricity ...) 44 Direct raw materials 15 TOTAL 100 CATEGORY OF COMPANIES MEDIAN ANNUAL TURNOVER (R) NUMBER OF COMPANIES TOTAL TURNOVER FOR CATEGORY OF COMPANY (R) Private theatres 2,000,000 6 12,000,000 State-funded theatres 14,000,000 15 210,000,000 University theatres 1,000,000 6 6,000,000 Other PANSA members 123,500 262 32,357,000 Total TURNOVER 260,357,000
  • 243. 2 3 7 The largest organisations within this sector are the theatres. These can be further divided into those that are state subsidised and those that are privately-owned. There is also another group of theatres, such as the Wits Theatre, that are attached to universities. Gauteng has six state subsidised theatres, fifteen privately owned theatres and six theatres associated with educational institutions (PANSA, 2005; Lebethe, 2003). The government subsidised theatres, such as the State Theatre and the Market Theatre, whilst they do generate some income from ticket sales, receive a significant amount of government funding. For example in 2004 the Market Theatre generated about R4m from box office receipts and received about R10m from the Department of Arts and Culture (DAC). The State Theatre received more than R20 million from government but generated only R2m from box office receipts (PANSA, 2005). Independent theatres in Gauteng include the Barnyard Theatres (in Broadacres, Cresta and Menlyn), The Sound Stage (in Midrand), the Liberty Life Theatre on the Square (in Sandton) and Pieter Toerien’s Montecasino Theatre (in Fourways). Recently, a number of new private theatres have opened or been redeveloped. These include the Lyric Theatre (a 1,100-seater theatre at Gold Reef City which opened in October 2007), the Theatro Montecasino (a 1,900 capacity theatre that opened in May 2007 and which cost over R100 million to construct) and the revamped Victory Theatre (opened in 2006). The Lyric Theatre and Theatro Montecasino are both attached to casino complexes. These large investments indicate that the owners of these theatres are confident that enough demand exists for them to justify this spending. These independent largely depend on self- generated incomes while community and cultural theatres depend on government or donor funding. Outside the formal theatre sector there are a large number of community and cultural theatre groups. These also largely depend on government funding for survival. These include: Abangani Theatre Group, Alexandra Theatre Organisation and Buya-Africa Community Theatre. Often these organisations have an important social, educational and cultural role – often training young people in dance and performance. The community dance organisations, such as Gauteng Dance Manyano, Mazuzu Dance Club and Pheelo Dance Company, also play a similar role. Festivals are an important part of the performing arts sector. Many performers travel to the National Arts Festival in Grahamstown to perform and to showcase their work. Although not a direct injection into the Gauteng economy, some of the revenue generated by Gauteng based organisations is spent in Gauteng. There are at least two large festivals held annually in Gauteng. The Arts Alive festival2 , which started in 1992 and funded by the City of Johannesburg, is held in September every year. Most of the venues are located in Johannesburg’s inner city and in Soweto and a number of these events are free. The festival features a mix of dance, visual art, poetry and music. The second important festival is the FNB Dance Umbrella that is held in February/March each year. This festival is sponsored by First National Bank, the National Lottery Distribution Trust Fund, Gauteng provincial government and a number of other local and international donors. It focuses on contemporary choreography and dance and has a diverse range of participants from community-based dance troupes to international companies. There are also a number of smaller festivals, such as the Gauteng Carnival – called Pale ya Rona - and the Joburg Carnival. Approximately 3,000 participants from 30 troupes parade through the streets of Braamfontein and Newtown in September in the Pale ya Rona street carnival that brings together community organisations, performers and artists. 5 . STRUCTURE OF THE PERFORMING ARTS SECTOR 2 In 2004 about R8 million was dedicated to the Arts Alive Festival (Mail and Guardian online: www.mg.co.za)
  • 244. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S TYPES OF ORGANISATIONS WITHIN THE PERFORMING ARTS SECTOR 6 . TYPES OF ORGANISATIONS WITHIN THE PERFORMING ARTS SECTOR As discussed above, the aggregate turnover and value-added for the performing arts sector is dominated by the large government funded and private theatres. However, there are a large number of smaller organisations within the sector that, although they do not contribute as much in economic terms, are important role players3 . The figure below (Figure 2) shows the distribution of organisations by the number of people employed for the organisations surveyed. More than two-thirds of these organisations have less than 20 employees. Figure 2: Distribution by organisation size Close corporations (CCs), sole traders and NGOs/NPOs/Cultural institutions are the most common types of firms within the sample as can be seen from Table 6. Freelancers are also common. These types of legal status are associated with the smaller firms within the sample. Table 6: Legal status of performing arts organisations 3 It should be self-evident that the contributions of the creative industries are not limited to their economic contribution (i.e. as measured using turnover or the Gross Value-added) and extend to social and developmental benefits as well as those of personal and group identity, self esteem, nation building and sense of community. PERCENTAGE (%) CC 11 NGO/NPO/Cultural institution 19 Sole Trader 41 Voluntary association 4 Local government institution 11 Trust 7 Registered under section 21 7 TOTAL 100
  • 245. 2 3 9 Approximately half of the organisations are older than 10 years. These organisations include the state subsidised theatres as well as well established dance groups and community organisations and individuals who have been involved with the performing arts for a long time. The other half of those surveyed is evenly split between those aged 0-4 years and those 5-9 years. Figure 3: Age distribution of organisations 6 . TYPES OF ORGANISATIONS WITHIN THE PERFORMING ARTS SECTOR
  • 246. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S D E M O G R A P H I CS W I T H I N T H E P E R F O R M I N G A RT S S E C TO R 7.1 RACIAL AND GENDER BREAKDOWN The workforce in the performing arts sector is dominated by black females. Black males are the second largest demographic group. In total 72% of employees were black South Africans and 53% were female. The performing arts sector is one of the creative sectors that most closely reflects the demographics of Gauteng province. Barriers to entry for black individuals into certain parts of the sector are relatively low, and community dance, theatre and cultural organisations play an important role in identifying and developing black talent. Furthermore, there is also interest in products that incorporate traditional or cultural aspects Figure 4: Racial and gender breakdown Figure 5 shows that managerial positions in this sector are dominated by white females (45%). White males account for 24% of the managerial positions. 7 . DEMOGRAPHICS WITHIN THE PERFORMING ARTS SECTOR
  • 247. 2 4 1 Figure 5: Racial and gender breakdown for management 7.2 EDUCATIONAL ATTRIBUTES Most of the people employed at managerial level have completed a degree. About 36% had completed a university degree and 36% had completed a post-graduate degree. More than 75% of the general workforce had no university degree. Diplomas and vocational training are important educational qualifications for those in the general workforce. This reflects the importance of learning on the job and the teaching and training that takes place when preparing for performances. Table 7: Education levels of employees 7 . DEMOGRAPHICS WITHIN THE PERFORMING ARTS SECTOR EDUCATION LEVELS OF EMPLOYEES WORKFORCE % MANAGEMENT % Completed post-graduate degree 6 36 Completed university degree 23 36 Diploma with Grade 10 0 4 Diploma with Grade 12 17 8 Up to Grade 10 6 0 Up to Grade 12 23 8 Vocational training with Grade 12 23 4 Other 0 4 TOTAL 100 100
  • 248. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S M A R K E T S ; F U N D I N G A N D F I N A N C I N G The majority (78%) of those firms interviewed sell their products directly to the public. Fifteen percent sell to other organisations. Actors, independent directors and production companies are examples of the types of organisations that sell to other organisations further up the value-chain. The international market is an important outlet for products and services in the performing arts sector. There are several ways of assessing the firms’ participation in the international market. Firstly, firms can be involved in international tours . Secondly foreign tourists can attend local shows by the firms. Approximately 48% of the organisations interviewed participate in the international market. The main markets include Africa (21%), EU (34%), US and Canada (28%) and New Zealand and Australia (17%). Many organisations in the creative industries in general, and performing arts sector in particular, depend on donor funding. The government plays a pivotal role not only in creating a conducive environment for the creative industries but also by funding the organisations. In 2004/05 the State Theatre, Market Theatre, Windybrow Theatre and Gauteng Orchestra received 15% of the total funding allocated to arts and culture in society (this translates to 3.6% of the total DAC budget). The figure increased to about 20% in 2005/06 (this is equal to 3.6% of the total DAC budget) (PANSA, 2005). In 2004 about R8 million was dedicated to the Arts Alive Festival (Mail and Guardian online). Those organisations surveyed for this project were asked about primary and secondary sources of income (see Figure 6). The results show that 44% of the firms stated that their main source of income is direct sales. 19% stated that they depend on government as a primary source of income and another 7% said that government funding was an important secondary source of income. Given the perceived importance of funding in this sector, the fact that only 19% of the sample mentioned government funding as their primary source of income may seem low. If one aggregates primary and secondary sources of funding together, and exclude those that had no secondary sources of income, more than a third of organisations rely on government funding as an important source of income. Given that the survey interviewed a number of community and for-profit organisations, this percentage is high. Furthermore, these results do not indicate the indirect recipients of funding. Organisations may benefit from government funding by being employed by the large state subsidised theatres. The responses also highlight the importance of direct sales. Forty four percent of organisations in the sample rely on the income generated from sales. The number of people attending performances, and the size of the audience base, is a key factor for the growth and sustainability of this sector. Figure 6: Sources of income for organisations in the performing arts sector 8 . MARKETS 9 . FUNDING AND FINANCING
  • 249. 2 4 3 As discussed above, government funding is an important source of income for performing arts organisations. 54% of those surveyed had applied for funding in the previous financial year. The figure below (Figure 7) illustrates the percentage of organisations that applied for funding by size. There are two key findings from this graph: 1) organisations that apply for funding are on average larger than those that do not; 2) there is a certain size threshold – 5 employees – after which a higher proportion of firms start to apply for funding. Figure 7: Organisation size and funding application There may be a number of factors that could explain these results. Organisations that reach a certain size may require additional funding to grow or it may be that these sized firms have more information on funding opportunities. An important issue highlighted by many of the firms interviewed was that funding opportunities within the sector are not well publicised, and the process was not straightforward. Small firms particularly made this point, explaining why relatively fewer small firms apply for funding. Increasing awareness and understanding of the various funding options available to organisations is important, given that most of the firms (86%) that applied for funding actually received it. Table 8: Reasons for not applying for funding An alternative to government funding, for some organisations within the sector, is debt. Unsurprisingly, given the large number of organisations that received government funding, only 7% of firms reported any type of debt. 9 . FUNDING AND FINANCING REASONS FOR NOT APPLYING PERCENTAGE (%) Compliance issues 14 It depends on whom you know 7 It is pointless, I would still fail to get it 17 Cross subsidy from other business 10 No need 34 Other (Time, too expensive, nepotism, not aware) 17 TOTAL 100
  • 250. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S O U T L O O K ; R E F E R E N C E S This sector is very important to the vitality of the creative industries as it is where artists interact directly with their audiences, both domestic and foreign. Live theatre, live music, live performances, whether in formal settings such as theatres or concert halls or informal settings such as streets, stadia or school do much to increase the attractiveness of our key cities to their residents (City of Johannesburg, City of Tshwane and the City of Ekurhuleni) and attract visitors to these places. It is clear that the Gauteng performing arts sector has an important role to play in promoting the diversity and rich heritage of Gauteng’s province and its citizens as well as the technical expertise required to stage live performances and the artistic excellence involved in these performances. The showcasing of South Africa’s culture can be enhanced by a strong, globally recognised performance sector giving impetus to the promotion of Gauteng as a preferred host of large events and the home of champions. Future research and promotion work needs to focus on the economic impact of Gauteng’s performing arts sector, global trends and the place of Gauteng within these as well as on developing cultural and business links internationally and within African more particularly. Ali 1 0 . OUTLOOK 1 1 . REFERENCES Freedthinkers, (2005) Developing audiences for Joburg Live Arts, Prepared for the City of Johannesburg, unpublished Joburg News (2007) Joburg is SA’s Culture Capital, [Available at www.joburgnews.co.za/2007/aug/aug7_theatres.stm: Accessed on November 24th 2007] Lebethe, A. (2003) Promoting the Culture Sector through Job Creation and Small Enterprise Development in SADC Countries: Performing Arts and Dance, ILO Working Paper 52, Geneva, 2003. Mail and Guardian website: www.mg.co.za Market Theatre (2008), The 2006-2007 Market Theatre Foundation Annual Report Perfoming Arts Network of South Africa, (2005) Towards an understanding of the South African theatre Industry. South Africa.info (2008) Afrofusion: dance in South Africa [available at http://www.southafrica.info/ess_info/sa_glance/culture/dance.htm; accessed May 2nd 2008] Schmitz, H., (2005) Value chain analysis for policy-makers and practitioners. ILO, Geneva WordNet Princeton accessed on www.wordnet.princeton.edu
  • 251. 1 5 GAUTENG’S CREATIVE INDUSTRIES: THE PRINT MEDIA & PUBLISHING SECTOR
  • 252. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S PRINT MEDIA & PUBLISHING SECTOR PROFILE TOTAL TURNOVER R4,774,224,000 TOTAL EMPLOYMENT 7,637 GROSS VALUE-ADDED R2,052,916,320 BLACK EMPLOYEES 39% FEMALE EMPLOYEES 62% NUMBER OF ORGANISATIONS 208 GAUTENG’S CREATIVE INDUSTRIES: PRINT MEDIA & PUBLISHING SECTOR
  • 253. T A B L E O F C O N T E N T S C O N T E N T S 1. Background 248 2. Description of the PRINT MEDIA & PUBLISHING SectOR 250 2.1 Definition 250 2.2 The value chain 250 3. The PRINT MEDIA & PUBLISHING SECTOR Sample 252 4. PRINT MEDIA & PUBLISHING Contribution to the Gauteng Economy 252 4.1 Turnover 252 4.2 Employment 253 4.3 GVA 253 4.4 COSTS 253 5. THE Structure of the PRINT MEDIA & PUBLISHING INDUSTRY 254 6. Types of organisations within the PRINT MEDIA & PUBLISHING Sector 258 7. Demographics within the PRINT MEDIA & PUBLISHING sectoR 259 7.1 Racial breakdown 259 7.2 aGE COMPOSITION 260 7.2 Educational attributes 260 8. MARKETS 261 9. FUNDING AND FINANCING 261 10. OUTLOOK 262 REFERENCES 262 LIST OF FIGURES FIGURE 1: Consumption of media in South Africa 2002 - 2006 248 FIGURE 2: Newspaper circulation in South Africa 2006 248 FIGURE 3: The Print media and publishing sector value chain 251 FIGURE 4: Detailed value chain for the print media and publishing sub-sector 251 FIGURE 5: Newspaper circulation by group 2006 254 FIGURE 6: Sources of income for organisations in the print media and publishing sector 257 FIGURE 7: Distribution by organisation size 258 FIGURE 8: Legal status of entities in print media and publishing 258 FIGURE 9: Age distribution of organisations 259 FIGURE 10: Race and gender profile of employees 259 FIGURE 11: Race and gender breakdown of management 260 FIGURE 12: Organisation size and funding application 261 LIST OF TABLES TABLE 1: Print media and publishing population estimates for Gauteng 252 TABLE 2: Print media sector titles in Gauteng 252 TABLE 3: Change in turnover for print media and publishing companies 2002 to 2005 253 TABLE 4: Cost drivers in print media and publishing firms 253 TABLE 5: Print titles in Gauteng 255 TABLE 6: Share of print media and publishing markets by segment 256 TABLE 7: Educational profile of employees and management 260 TABLE 8: Reasons for not applying for funding 261
  • 254. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S 1 . BACKGROUND In keeping with international trends, it is clear that the South African media sector, and all related sectors are experiencing significant growth on the back on broader economic growth. The figures below show that while there has been some fluctuation in media consumption in for example, television and newspaper consumption, these trends have been positive. The area experiencing a downturn in consumption is magazine publishing. Figure 1: Consumption of media in South Africa 2002–2006 Source: Adapted from AMDI South African Context Country Report 2006 Figure 1 above illustrates the consumption of the different forms of media over the last five years. Among the discernible trends are the steady growth of radio penetration; the growth of newspaper consumption alongside a decline in magazines; and the relatively rapid growth of internet penetration (from a small base). Figure 2: Newspaper circulation in South Africa 2006 Source: South Africa Yearbook 2006/7 B A C K G R O U N D
  • 255. 2 4 9 Print Media While the print media sector is small relative to the South African economy, it does wield influential political power. There are no publicly-owned mainstream newspapers in South Africa. There is, however, a broad spectrum of daily and weekly newspapers, all of which are privately owned and run on a commercial basis. The array of titles, only some of which are shown in Figure 2, would suggest a healthy diversity in the print media sub-sector. This is especially true of newspapers. Significantly, more than 33% of the sector’s total advertising spend is in print media. The fourth estate’s role in the democratic process remains of central importance contributing as it does to access, development and knowledge sharing (PICC, 2002). One of the effects of democracy has been the growth of print media. Simultaneously, the advent of convergence has brought about a proliferation of media platforms – satellite TV, the Internet, even cell phones – that has provided and will continue to provide increasing access to information. Publishing The publishing industry also acts as the central core of an entire network of related individuals and industries, such as paper manufacturers, educational institutions, ink producers, authors, printers, designers, bookbinders, illustrators, booksellers, distributors and CD manufacturers. The industry is therefore an important source of revenue and employment in South Africa (HSRC, 2005). The publishing industry incorporates the production of newspapers, magazines, books, CD ROM’s and on-line communications. These mediums make the publishing industry significant in at least six areas of South African society; l Education and training, l Awareness of, and participation in current affairs, l Cultural expression and entertainment, l Research and innovation, l Critique and commentary, l Communications (HSRC, 2006).
  • 256. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S D E S C R I P T I O N O F T H E P R I N T M E D I A & P U B L I S H I N G S E C T O R 2 . DESCRIPTION OF THE PRINT MEDIA & PUBLISHING SECTOR Stakeholders in the print industry value chain include: l Developers of markets: advertising & marketing agencies, research & development agencies and marketing divisions of downstream companies. l Originators of content: writers, journalists, photographers, artists, illustrators, and translators. l Producers of content: the publishers of books, newspapers and magazines. l Packagers of content: printers and paper-makers. l Deliverers of the packaged product to the consumer: distributors and booksellers. l Suppliers to the sector: Material and equipment suppliers, ITC, HR and Training suppliers. l Customers of sector: Readers of books, magazines and newspapers, manufacturers and retailers of product and consumers/purchasers of packaged products. l Suppliers to the sector: Material and equipment suppliers, ITC, HR and Training suppliers. l Employees in sector: Workers and their families within sector and related sectors. l Society within which businesses in sector operates (PICC, 2002) 2.1 DEFINITION The sector can be divided into two: print media, which includes newspapers and magazines; and publishing, which is primarily focused on book publishing but is developing to include multimedia and online publishing. There is also a distribution and retail component of the sector that includes new and second-hand bookshops, online distributors and specialised distribution companies. For the purposes of this study, publishing is defined as follows “[T]he business of issuing printed matter for sale or distribution.” With the development of electronic forms of publishing, such as the internet and email, the importance of the physical product – the printed matter – although it remains important, is diminishing. Increasingly publishing is about the distribution of content and information, whether the distribution is done physically or electronically” (Wordnet, 2007). In this study, the print media and publishing sector was further disaggregated into three components: l Print media (newspapers, magazines and publications such as the free distribution publications). l Book publishing (including fiction, non-fiction and educational). l Electronic publishing. There is overlap between these distinctions, for example all the major newspapers such as The Star, The Sowetan and The Sunday Times have an online edition. The disaggregation however allowed the mapping project to capture the full value of contributions to the Gauteng economy. 2.2 THE VALUE CHAIN The value-chain for the sector is presented below. The originators of the product are the authors, journalists and illustrators. They may also be other companies, such as NGOs that want to publish educational pamphlets, or private companies that want to publish promotional material or information. In the publishing sector particularly, authors may have another occupation given that income from this kind of work tends to unstable. The authors of educational books are usually lecturers or teachers but there is also a fairly large group of freelance writers, editors and authors that are active across both sub-sectors. In the print-media sector, although freelancers exist particularly in the magazine sub-sector, many of the journalists are employed by the newspaper or magazine they write for. The second link of the value-chain is the creation of a product. This is mostly done through the publishing companies, the newspaper titles and magazines. Self-publication is increasingly possible through the use of the internet but this currently has a limited economic value to the sector.
  • 257. 2 5 1 2 . DESCRIPTION OF THE PRINT MEDIA & PUBLISHING SECTOR The publication and print companies bring together sub-editors, editors, designers, desktop publishers and others to create the output in the form of books, newspapers, magazines and online content. If the product is distributed electronically or through the internet, the next link in the value chain consists of electronic publishing specialists including web-designers. In the case of printed products, printing is the next link in the value chain. The large newspaper companies do their printing in house. Magazines are also mostly published in South Africa however many titles are “split-run” publications of international titles such as Cosmopolitan which contain foreign and local content. Increasingly, mainly due to cost factors, books are printed abroad, particularly in East Asia. The final link in the value-chain is the distribution of the product. Distribution may occur in-house, or through specialist distribution companies. The retail of the product can occur through specialist retailers or general retailers. Once again, online activities are changing retail behaviours with specialist retailers such as Kalahari.net allowing for local online purchases and specialist retail stores creating online services. In addition to the market for new books, there are a number of second-hand bookshops. Newspapers and magazines are also sold on the street or delivered to subscribers and increasingly online content is becoming available. Figure 3: The Print Media and Publsihing Value Chain The following diagramme provides a more detailed outline of how published materials reach the end market.. Figure 4: Deatiled value chain for the Publsihing sub-sector Source: DAC (1998)
  • 258. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S SAMPLE OF THE SECTOR; CONTRIBUTION TO THE GAUTENG ECONOMY 3 . SAMPLE FOR THE PRINT MEDIA & PUBLISHING SECTOR The mapping study conducted 13 in-depth interviews and 36 telephonic interviews bringing the total sample to 48. In constructing the total population, and as such turnover etc, the following base estimates have been used: Table 1: Publishing population estimates for Gauteng Table 2: Print media sector titles in Gauteng A total of 76 entities were surveyed including 27 face-to-face interviews and 49 telephonic interviews. The print industries, which incorporate print media and publishing, are a strategic industry sector, with an importance to the economy and the development of the country well beyond their size. They: l Originate, package and disseminate ideas and information through the print and electronic media. l Are critical to politics, education, culture, entertainment, nation-building, trade and economic growth. l Are the most effective means of education and communication. l Are as central to the knowledge economy as they are to the industrial economy. l Are essential to empowerment and social development. l Are economically self-sufficient, employing tens of thousands of skilled and unskilled workers. l Are world class and by far the largest in Africa (PICC, 2002) In Gauteng, the sector accounts for a turnover of R4.8 billion, employs 7,637 people and adds over R2 billion in value-added to the provincial GDP. 4.1 TURNOVER The statistics for this sector are based predominantly on StatsSA’s Annual Financial Statistics (AFS) 2006 and the Large Sample Survey (LSS) of 2001. The total turnover for the Print media and publishing, Printing and reproduction of recorded media sector (SIC 326c) was R28,418 million. Due to the small sample size the AFS aggregated publishing, printing and reproduction of recorded media. The underlying data from the LSS NO. OF FIRMS1 PASA freelancers, contacts and other sources 138 PASA members (Gauteng) 65 Distributors 5 TOTAL 208 1 Organisations are calculated as publishers rather than titles. GAUTENG NATIONAL % Urban dailies and Weeklies 20 64 31 Community press 5 54 9 Free distribution publications 68 141 48 Magazines 269 403 67 4 . SECTOR CONTRIBUTION TO THE GAUTENG ECONOMY
  • 259. 2 5 3 suggest that publishing forms 33% of the turnover of the aggregate turnover for these three sectors. Gauteng is estimated to comprise 50% of this turnover. This provides an estimated turnover for the 2006 print media and publishing sector of R4,774,224,000. The LSS data indicates a ratio of turnover to employment of R625,144. Based on the turnover calculated above this provides an employment figure of 7,637. The value-added ratio is also calculated from the LSS. Value-added is approximately 43% of turnover which suggests that the amount of value-added to the Gauteng economy is R2,052,916,320. The PASA report (2006) reports that aggregate turnover for the 27 firms interviewed nationally was R2,123,150,837 in 2005. If we assume that these firms are a random draw from the population of 45 publishing firms listed in the report, then aggregate turnover for the publishing industry in the country is R3,538,584,728. These are national figures, are likely to under-sample small publishers and do not include the print media. This suggests that the turnover figure estimated above is likely to be of the correct magnitude. In real terms, publishing turnover for companies participating regularly in the annual PASA survey increased by 41% between 2002 and 2005. This is an average annual growth rate of 13.7%. This suggests an annual growth rate of value-added of 5.9% which was higher than GDP growth during this period. This indicates that publishing is increasing its contribution to GDP (PASA 2006). Table 3: Change in turnover for publishing companies 2002 to 2005 Source: PASA (2006) 4.2 EMPLOYMENT The print media and publishing sector in Gauteng provides employment for 7,637 people, accounting for 12% of total employment in the creative industries. The largest concentration of employees is found in small enterprises employing between 5 and 19 people and micro enterprises employing between 1 and 4 people: 4.3 GVA The gross value added that the Print Media and Publishing Sector makes to the province is estimated at R2,052,916,320. In terms of combined direct and indirect contribution to the economy, the Print Media and Publishing Sector contributes R3,900,541,008 4.4 COSTS The creative mapping survey asked firms about the main sources of costs. 46% of firms indicated that operational costs, which includes the rental of space, transport costs and electricity were the most important costs they faced. Staff costs, as shown in Table 4 were reported to be the most important source of costs by 38% of firms and raw material costs by 15%. Table 4: Cost drivers in print media and publishing firms 4 . SECTOR CONTRIBUTION TO THE GAUTENG ECONOMY COST TYPE PERCENTAGE (%) Wages and salaries 38 Operational costs (rentals, transport, electricity ...) 46 Direct raw materials 15 TOTAL 100 2002 2003 2004 2005 Real Total Net Turnover 1,249,426,969 1,576,208,128 1,638,693,613 1,877,206,167 Change (1-year) 0.23 0.04 0.14 FChange (2-year) 0.27 0.17 Change (3-year) 0.41
  • 260. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S 5. STRUCTURE OF THE INDUSTRY Print Media Ownership of print media is consolidated into major conglomerates with media holdings across a variety of media. Four companies dominated the SA print media landscape of newspapers and magazines until the 1990s. They were Nasionale Pers, Perskor, SAAN and the Argus Company. There have been changes since then, as Johnnic has emerged, Caxton has developed its influence, SAAN has been disassembled and the community media has been promoted through the creation of the Media Development and Diversity Agency (SA Year Book, 2007). It is important to note however, that while there are a great many newspaper titles in the print media sector, ownership of these papers is concentrated in the hands of just a few companies. The figure below indicates the percentage of newspapers sold divided according to the companies that own the various titles. This illustrates that three companies - Media24, Johnnic Communications and the Independent Group - together account for 95% of weekly and daily newspapers sold in South Africa. Johnnic Communications, formerly known as Times Media Limited, owns a number of daily and weekly newspaper titles, including the biggest selling Sunday newspaper – the Sunday Times. Jointly with British group Pearson it owns the daily business paper, Business Day, and the weekly business magazine, Financial Mail. It also has holdings in entertainment, through Nu Metro Theatres, music, through Gallo music group, book publishing, including Struik and Zebra press, book retail, Exclusive Books, and other publishing companies – the Caxton and CTP group (SA Yearbook, 2007). Nasionale Media (Naspers) is a multinational media company with holdings in both electronic (including M-Net, Multichoice and Supersport pay TV channels and MWeb internet services) and print media. Its print media ownership is in the form of Media24 (which published the Afrikaans newspaper Beeld, the Daily Sun and Son). Media24 also publishes a number of popular magazines (including Drum, Huisgenoot and You, Fairlady, Sarie and True Love) and free distribution publications (such as Property 24). It is also involved in printing and distribution, through Paarl Media. Naspers also has holdings in a number of book publishers as well as private education group Educor. Naspers also owns Kalahari.net, an online retailer (SA Yearbook, 2007). The Caxton and CTP group, partly owned by Johnnic Communications, publishes the daily newspaper the Citizen, and dominates the community and free delivery newspapers2 and also publishes a number of magazines. It has interests in printing, magazine distribution and Maskew Millar Longman, a book publisher (SA Yearbook, 2007). The other significant newspaper based in Gauteng is the Mail and Guardian. Founded as the Weekly Mail in 1985, it was renamed the Mail and Guardian when the Guardian (the British newspaper) became the majority shareholder in 1995. In 2002 the Guardian reduced its shareholding to 10% and Zimbabwean Trevor Ncube, through his company Newtrust Company Botswana Limited, now owns 87.5% of the paper (SA Yearbook, 2007). Figure 5: Newspaper circulation by group 2006 2 These are the weekly suburban newspapers delivered free of charge to each house within a neighbourhood. STRUCTURE OF THE INDUSTRY
  • 261. The print media sub-sector in particular has come under considerable pressure to improve its BEE profile, culminating in the establishment of the government-sponsored, industry-supported MDDA. A recent feature of the sub-sector has been some turbulence in BEE holdings, however, with an attempt at a takeover of Kagiso by New Africa Media blocked by broadcasting regulatory restrictions and the subsequent dissolution of NAM, with its holdings sold into other media companies, including Johnnic, which now owns the Sowetan and the Sunday World. Johnnic is in turn, coming under pressure for regulatory reasons to do with its BEE shareholding (SA Yearbook, 2007). Hadland suggests that despite this movement in ownership, “traditional patterns of ownership and of readership persist” in the South African media today (Hadland, 2004). Its historical divisions into an Afrikaans press, an English-language press and a black press have to some degree remained, as has the concentration of ownership in the sector. The table below provides a breakdown in the number of print media titles with main offices based in Gauteng. Approximately one-third of urban daily and weekly newspapers, half of the free distribution publications and two-thirds of magazines are published in the province. This figure is substantially lower for the community press since many of these newspapers serve smaller towns rather than the metropolitan areas. Table 5: Print titles in Gauteng Book publishing The Publishing Association of South Africa (PASA) is the largest publishing industry body and represents over 150 members in South Africa. The breakdown of membership by region is as follows: l Gauteng – 65 (43%) l Western Cape – 63 (42%) l KwaZulu-Natal – 18 (12%) l Other – 5 (3%) Many of the larger publishers that are not based in Gauteng have branches in the province. Among the publishing houses, approximately a third (at the National level) have at least 50% foreign ownership (PASA, 2006). PASA, together with the University of Pretoria, conduct an annual survey of the South African publishing sector. In 2007 they interviewed 36 publishing entities. These publishing entities were classified into size groups based on their turnover. The large publishers (those with annual turnover of R50 million or more) contributed approximately 90% of total net turnover for the sample as a whole. PASA also has an online database of freelancers involved in the publishing industry which, although not exhaustive, lists 27 freelancers that are based in Gauteng. The educational sector is the largest source of turnover for the publishing sector. This sector publishes for schools, further education and training (FET) colleges and adult basic education and training (ABET). Of these three groups, publishing materials for schools accounts for 53% of total national net turnover. Trade publishing (fiction and non-fiction) is the next most important source of revenue accounting for 29% of total net turnover. The market for non-fiction is about 6% larger than for fiction. Academic publishing, including textbooks, professional publications, scholarly books and academic journals, contributes 17% to total net turnover (PASA, 2007). 5 . STRUCTURE OF THE INDUSTRY GAUTENG NATIONAL % Urban dailies and Weeklies 20 64 31 Community press 5 54 9 Free distribution publications 68 141 48 Magazines 269 403 67 2 5 5
  • 262. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S 5. STRUCTURE OF THE INDUSTRY Table 6: Share of publishing markets by segment Source: PASAI (2007) Books for schools are the most important locally published product. The next most important is trade non-fiction, where the value of the locally produced output was slightly higher than imported non-fiction. Academic textbooks and professional publications are also important locally produced products. Imported books are dominated by the trade category. Together imported fiction and non-fiction books comprise 65% of imported material. Educational books for schools and academic textbooks are also important imported products. In total locally published books account for 75% of total net turnover. The turnover of large publishers (those with an annual turnover of more than R50 million) is mostly generated by sales of local educational books and imported trade books. Small and medium publishers (annual turnover less than R50 million) gain most of their income from trade books, particularly non-fiction books (PASA, 2007). More than 80% of the companies interviewed in this sector as part of the creative mapping project reported that their main source of income was from direct sales. Royalties and the national government were the only other primary sources of income mentioned . This indicates the market driven nature of the sector. TOTAL LOCAL IMPORTED Total Net Turnover % Total Net Turnover % Total Net Turnover % Educational - schools 1,502,683,742 53.19 1,384,935,576 64.91 117,748,166 17.03 Educational - FET 5,666,176 0.20 5,606,473 0.26 59,703 0.01 Educational - ABET 4,235,852 0.15 4,235,852 0.20 0 0.00 Academic textbooks 257,599,054 9.12 174,645,630 8.19 82,953,424 12.00 Professional 221,092,356 7.83 197,298,356 9.25 23,794,000 3.44 Academic journals 15,943,196 0.56 4,922,196 0.23 11,021,000 1.59 Scholarly books 1,158,913 0.04 1,158,913 0.05 0 0.00 Trade fiction 317,145,859 11.23 98,076,965 4.60 219,068,894 31.68 Trade non-fiction 499,524,174 17.68 262,770,581 12.32 236,753,593 34.24 STRUCTURE OF THE INDUSTRY
  • 263. Figure 6: Sources of income for organisations in the print media and publishing sector The commercial sophistication of the sector is highlighted by the relatively large number of organisations (62%) which had some sort of debt. Larger firms are much more likely to have access to debt. The average size of a firm with debt was 53 employees compared to 3 employees for firms without debt. 5 . STRUCTURE OF THE INDUSTRY 2 5 7
  • 264. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S TYPES OF ORGANISATIONS WITHIN THE SECTOR 6 . TYPES OF ORGANISATIONS WITHIN THE SECTOR Aggregate turnover and value-added in this sector is dominated by large media companies (in the print media sub-sector) and the large publishing houses (in the book publishing sub-sector). Despite this, there are a large number of smaller publishers in the survey sample. More than 63% of the firms sampled had less than 20 employees. Many of these companies are magazine and other specialised publishers. There are also online publishers, small retailers (mostly of second-hand books) and freelancers in the sample. It is important to note that the print media and publishing sector is one of only 3 sectors in the creative industries that has a significant concentration of enterprises employing more than 50 people Figure 7: Distribution by organisation size Most organisations in the sector are CCs (47%) or Limited Companies (38%) while 15% are sole traders, reflecting the relatively high levels of freelance work in the sector. Unlike many of the creative industries, there are very few development organisations and non-profits active in the sector. Figure 8: Legal status of entities in print media and publishing 3 It should be self-evident that the contributions of the creative industries are not limited to their economic contribution (i.e. as measured using turnover or the Gross Value-added) and extend to social and developmental benefits as well as those of personal and group identity, self esteem, nation building and sense of community.
  • 265. 2 5 9 The organisations in this sector are relatively old. More than half the sample is older than 10 years, with a further 20% aged between 5 and 9 years. Approximately one-fifth have begun operating within the last 5 years. Figure 9: Age distribution of organisations 7.1 RACIAL BREAKDOWN The print media and publishing sector is dominated by white employees and managers. Women comprise more than 62% of employees with white women making up 41% of employment. ects Figure 10: Race and gender profile of employees 6. TYPES OF ORGANISATIONS WITHIN THE SECTOR 7 . DEMOGRAPHICS WITHIN THE SECTOR
  • 266. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S D E M O G R A P H I CS W I T H I N T H E S E C TO R ; M A R K E T S ; F U N D I N G & F I N A N C I N G With regard to management however, white males dominate the landscape, representing 51% of managers in the sector. At this level black South Africans make up only 15% of employment. Figure 11: Racial and gender breakdown for management Royalty payments to authors are also strongly skewed towards whites. Of the 2,282 authors receiving royalty payments in the trade sector 85% were white. In the academic sector 83% of the 3,334 authors receiving royalty payments were white (PASA, 2007). 7.2 AGE COMPOSITION Across the print media and publishing sector, 47% of employees are under the age of 35 and 31% of organisations report that they employ at least one person with a disability. 7.3 EDUCATIONAL ATTRIBUTES The high education requirements of the sector are reflected by the education levels of both the workforce and management. Over 75% of the workforce have some type of post-secondary school qualification and 69% of management have a university of post-graduate degree as shown in the table below: Table 7: Educational profile of employees and management 7 . DEMOGRAPHICS WITHIN THE SECTOR EDUCATION LEVELS OF EMPLOYEES WORKFORCE % MANAGEMENT % Completed post-graduate degree 0 38 Completed university degree 15 31 Diploma with Grade 12 31 15 Up to Grade 10 15 0 Up to Grade 12 8 8 Vocational training with Grade 12 8 0 N/A 23 8 TOTAL 100 100
  • 267. 2 6 1 Over 45% of firms indicate that the primary market for their products and services are other firms, however direct sales to the public also constitute an important market. Across the print media and publishing sub-sectors, 46% of companies reported export-oriented activities. Over 60% of firms indicate that SADC is a primary market, followed by the United States and Canada and the EU. The sector has very little reliance on government funding. Only 8% of firms interviewed had applied for funding, although all of these received it. There is a high correlation between business size and funding, most applicants employ between 5 and 9 employees. Figure 12: Organisation size and funding application The most common reason given for not applying was that there was no need as shown in the table below: Table 8: Reasons for not applying for funding 8 . MARKETS 9 . FUNDING & FINANCING REASONS FOR NOT APPLYING PERCENTAGE (%) Cross subsidy from other business 18 Did not know funding is available 11 It is pointless, I would still fail to get it 5 It depends on whom you know 5 No need 61 TOTAL 100
  • 268. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S O U T L O O K ; R E F E R E N C E S The following factors are having a major impact on the way that print media and publishing firms conduct their business: l Changes in the technological process (convergence of print media and electronic and digital forms of production and dissemination) and the emergence of new types of publications, new genres and new forms of reading have all shifted traditional perceptions of book-publishing. One aspect of this is that relationships between publishers and writers are shifting as publishers have now become more involved in commissioning, designing and targeting content. l Electronic publishing changing the economics and politics of publishing globally, with authors having a wide range of choices for distributing their works, including website publications, mail groups and newsletters, digital print-on-demand solutions, custom publishing and underground magazines. l There are significant opportunities for the industry in Africa, tariff barriers, distribution problems and high distribution costs are challenges that will need to be overcome. l Employment equity remains a significant challenge in an industry where English is the major publishing language and employees speak English as a second language. l Threats to the viability of publishing enterprises include: copyright violation and piracy, the threat from substitute products (such as DVDs), growing competition across all sectors, a fluctuating currency and diminishing leisure time globally (Punie et al, 2006). The slow progress of copyright amendments and the lack of responsive government policy to issues of illiteracy and aliteracy remain a significant threat to the industry. AMDI, South Africa Context Country Report, December 2006. http://www.bbc.co.uk/worldservice/trust/researchlearning/story/2006/12/061206_ amdi_southafrica.shtml Cultural Industries Growth Strategy (1998) The South African Publishing Industry prepared by LMA/SQW for the Cultural Industry Growth Strategy commissioned by the then DACST Hadland, A. 2004. Shape of the Print Media Industry. Report prepared for SA Cultural Observatory, DAC HSRC (2005), Scarce and Critical Skills in the Publishing and Print Media Sectors, Commissioned by The Media, Advertising, Publishing, Printing and Packaging (MAPPP) SETA, October 2006 (unpublished) HSRC (2006), Skills Analysis in the Book-Publishing Sub-sector, Commissioned by The Media, Advertising, Publishing, Printing and Packaging (MAPPP) SETA, August 2006 (unpublished) PASA (2006) PASA Industry Surveys: Executive Summary: Broad Trends over Four Years (2002 – 2005) , compiled by the School of Information Technology at the University of Pretoria for PASA PASA (2006). PASA Annual industry survey 2005 Report. Compiled by Galloway, F., Venter R. MR, Bothma, T. PASA (2007), PASA Annual Industry Survey 2006 Report. Compiled by Galloway, F., Venter, R., Struik, W. PICC (2002), “If it is not on the page, it is not on the stage”, Print Industries Cluster Council Business Plan 2002/3, 3rd draft 19 March 2002 Punie, Y., Burgelman, J.C., Bogdanowicz, M. and Desruelle, P., The Future of news media industries: Scenarios for 2005 and beyond, MUDIA/International Institute of Infonomics, 2001, available at http://www.mudia.org/results/WP1%20Del%201.2%20Web%20version.pdf SA Yearbook (2007) SA Year Book 2006/07 access on 5 February 2008 at http://www.gcis.gov.za dnet (2007), 1 0 . OUTLOOK 1 1 . REFERENCES
  • 269. 1 3 GAUTENG’S CREATIVE INDUSTRIES: THE VISUAL ARTS SECTOR
  • 270. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S VISUAL ARTS SECTOR PROFILE TOTAL TURNOVER R400,000,000 TOTAL EMPLOYMENT 2,400 GROSS VALUE-ADDED R191,000,000 BLACK EMPLOYEES 51% FEMALE EMPLOYEES 42% NUMBER OF ORGANISATIONS 1,100 GAUTENG’S CREATIVE INDUSTRIES: THE VISUAL ARTS SECTOR
  • 271. T A B L E O F C O N T E N T S C O N T E N T S 1. Background 266 2. Description of the VISUAL ARTS SectOR 268 2.1 Definition 268 2.2 The value chain 268 3. The Sample for the VISUAL ARTS Sector 269 4. VISUAL ARTS Sector Contribution to the Gauteng Economy 269 4.1 Turnover 269 4.2 Employment 270 4.3 GVA 270 4.4 COSTS 270 5. Structure of the industry 271 6. Types of organisations within the VISUAL ARTS Sector 272 7. Demographics within the VISUAL ARTS sectoR 273 7.1 Racial breakdown 273 7.2 Age composition 275 7.3 Educational attributes 275 8. MARKETS 276 9. FUNDING AND FINANCING 277 10. OUTLOOK 279 REFERENCES 280 LIST OF FIGURES FIGURE 1: Global visiual arts market share 266 FIGURE 2: Global auction sales share by category 2006 267 FIGURE 3: The visual arts value chain 268 FIGURE 4: Distribution by organisation size 271 FIGURE 5: Source of income in the visual arts sector 272 FIGURE 6: Legal status of entities in the visual arts sector 272 FIGURE 7: Age distribution of organisations 273 FIGURE 8: Race and gender of employees 274 FIGURE 9: Gender and racial breakdown of management 275 FIGURE 10: Visual arts market distribution channels 276 FIGURE 11: Organisation size and funding applications 277 FIGURE 12: NAC funding by discipline 2006 278 FIGURE 13: NAC funding to the visual arts by category 2006 278 LIST OF TABLES TABLE 1: Turnover in the visual arts sector 269 TABLE 2: Employment in the visual arts 270 TABLE 3: The cost structure of visual arts entities 270 TABLE 4: Education levels of employees and management 275
  • 272. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S 1 . BACKGROUND In 2001 the US accounted for nearly 50% of the almost 30 billion dollar global art market, with a market share for the first time having surpassed Europe’s, and gaining almost a 7% share from the European market in recent years. It is important to note that the UK art market, with a global market share 25.3% also accounts for over half of the entire European Union (EU) art and antiques market which as a whole generated expenditure of £l.7 billion on ancillary services, such as conservation, restoration, specialist shipping and packing, and insurance and security (Kusin and Company, 2002). In 2007, and for the seventh year running, the art market saw an overall rise in prices primarily as a result of demand from “non-traditional markets” such as China, Russia, India and the Emirates where new collectors and investment funds are showing interest as they seek out alternative investment forms. These “young collectors” are particularly drawn to contemporary art, the most volatile sector but also the most liquid. In global terms, art prices rose 18% from 2006 representing and increase of approximately $9.2 billion. While 2007 saw record prices at large auctions1 , even in the below-10,000 euros segment, which traditionally accounts for 90% of total market transactions (Art Price, 2007), The figure below shows that the US and EU markets continue to dominate global market share, but that China has made significant inroads. Figure 1: Global visual arts market share 2007 Source: Art Price (2007) Of this global market, the lion’s share of auction sales is garned by paintings, followed by watercolour drawings and sculpture as shown in the figure below: B A C K G R O U N D 1 Sotheby’s recorded its best ever all-time sale (14 November) generating a total revenue of $316 million from its Contemporary Art Evening (topping the $286 million it generated from its Impressionist and Modern Art sale in 1990). The day before, its rival Christie’s took a total of $325 million. Christie’s had already posted a sales figure of $385 million from its contemporary art sale in May.
  • 273. 2 6 7 Figure 2: Global auction sales share by category 2006 Source: Art Price (2007) While developing countries generally do not feature in the global art markets, there is a growing awareness and overall interest in the US art world, and other large art markets such as the European Union in acquiring both contemporary and indigenous art in all forms from different countries (Austrade, 2007). In South Africa, despite the potentially significant contribution of this sector, government attention has focussed on adjacent sectors of craft and design (VANSA, 2006). With regard to attributing product value, the visual arts sector, more than any other in the creative industries, is based on a system of validation and a contextual location of the products in space and time, relative to other products in the same genre, period or medium. This validation system has evolved in a range of practices; art criticism, curating, patronage, and discourse in the academic domain. The operation of this system has given rise to a wide range of specialisations within the arts value chain including art banking services, collectors’ investment consortia, art shipping and insurance experts, art lawyers, corporate art collections and consultants, independent curators who double as dealers, public relations companies specializing in managing the reputations of artists and museums, and online inventory management and art trading services (McCarthy et al, 2005).
  • 274. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S D E S C R I P T I O N O F T H E V I S U A L A R T S S E C T O R 2 . DESCRIPTION OF THE VISUAL ARTS SECTOR The visual arts sector n Gauteng comprises a complex and fragmented infrastructure that includes state funded art museums, commercial and corporate galleries, exhibiting contemporary art organisations, developmental organisations and education institutions that offer higher education and training degrees and diplomas in the visual arts.2 The sector includes the activities of visual arts practitioners like painters, watercolorists, wild-life artists, ceramists, printmakers, sculptors, installation artists, performing artists, concept/art photographers, some documentary photographers, some designers, and some craftspeople. The activities of businesses that provide technical assistance, curators, gallerists, designers, publishers, editors, conservators, art critics and journalists are also included. It is important to note that there is a distinct overlap between visual arts and crafts when craft works revolve around a once-off creation. In general, visual artworks are once-off or very low volume high-value products. 2.1 DEFINITION The visual arts represents “a broad field of creative practice that involves the hand, the eye, the intellect and the imagination in conceptualizing and crafting two-dimensional and three-dimensional objects and environments which reflect the aesthetic, conceptual and expressive concerns of individuals or groups” (The Department of Education, 2003) 2.2 THE VALUE CHAIN The value-chain of the visual arts sector is presented in Figure 3 below. The concept originates from the visual artist and is then realized by the visual artist and/or curator. The material and equipment is supplied by art material suppliers, hardware stores and other retail shops. The artists’ works are then translated into money and profile through the exhibition of their works. Visual artists exhibit their work in galleries (some on-line) and museums in the public and private sectors, in their own studio, or they make use of the informal sector (e.g. shops and flea markets). The artist’s work is often resold in auction houses. A range of technical service provision companies (e.g. foundries and installation specialists) assist in the display of the artists’ works. The production and sale of catalogues and associated materials involve various professionals, e.g. designers, publishers, editors, writers and photographers. There are also a variety of print and web-based vehicles for the promotion of artists work (e.g. web designers, journalists and art writers). A number of other related activities take place across the value-chain, including education and training by art organisations, NGOs and higher education institutions. Figure 3: The visual arts value chain Distribution -Public and private galleries and museums -Auction houses -On-line art galleries -Markets (informal) -Shops (informal) Production -Visual artists -Suppliers of materials and equipment -Technical service provision Creative origination -painters, water- colorists, wild-life artists, printmakers, sculptors, installation artists, performance artists, photographers, designers, craftsman, ceramists, graphics Education and training – Arts organisations, NGOs and Higher education institutions Funding and support 2 References include Joseph Gaylard (VANSA co-ordinator, e-mail correspondence on 06/012/07), Andries Oberholzer (Deputy Director:Visual Arts DAC, e-mail correspondence on 07/12/07), Bie Venter (Johannesburg Art Initiative, telephonic interview on 10/12/07), Khwezi Gule (The Johannesburg Art Gallery, telephonic interview on 11/12/07), Stephen Hobbs (The Premises, telephonic interview on 10/12/07) and Dennis Clarke (The Paint Basket, telephonic interview on 10/12/07) Consumption -Public (local and foreign) -Galleries -Museums -Written and web based art publications -Archiving and conservation
  • 275. 2 6 9 This profile is based on a sub-set of the larger sample comprising 14 detailed firm-level surveys and 50 telephonic interviews using a simple questionnaire3 . Given the low levels of organisation in the sector, it is important to recognise the limitations of the sample as it is based on the information from publications and visual arts associations, especially with regard to individual artists. In addition, the relatively large number of galleries included in the sample provides a slightly skewed representation. The visual arts sector contributes to the economy in the following ways: • The visual arts sector is often the creative origin of products or ideas that feed into the craft and design sectors, as well as other sectors; • The visual arts generate representations and expressions of the South African experience; • The local and international market for South African visual arts products - whether it be cutting-edge contemporary art exhibited at the Venice Biennale, 19th century Cape landscape paintings auctioned at Sotheby’s, or wildlife paintings sold to Californian interior design shops raises the profile of South Africa and can act as a marketing tool for the country (VANSA, 2006). The study estimates that the total number of visual arts entities active in the is 1,100 representing 10% of organisations in the creative industries in Gauteng. The sector constitutes 3% of total turnover and 3% of value-added for the creative industries. The sector contributes 4% to total employment across all 10 sectors. 4.1 TURNOVER The estimated median turnover for 2006 for the visual arts sector is R400,000,000 calculated as follows: Table 1: Turnover in the visual arts sector Despite relatively low turnover rates per entity, 64% of the sector report that they do not have to cross-subsidise their “creative activities” with other activities. 3 . THE SAMPLE FOR THE VISUAL ARTS SECTOR 3 Please see the methodology section of this report for a more detailed discussion of the sector. 4 . Visual Arts Sector contribution to the Gauteng Economy CATEGORY OF COMPANIES MEDIAN ANNUAL TURNOVER (R) NUMBER OF COMPANIES TOTAL TURNOVER FOR CATEGORY OF COMPANY (R) Turnover ‹ R 1 million 150,000 1,000 150,000,000 Turnover ‹ R 1 million 2,500,000 100 250,000,000 Total TURNOVER 400,000,000
  • 276. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S CONTRIBUTION TO THE GAUTENG ECONOMY; STRUCTURE OF THE INDUSTRY 4 . Visual Arts Sector contribution to the Gauteng Economy 4.2 EMPLOYMENT The visual arts sector is mainly comprised of micro firms with 75% of firms employing between 1 and 4 employees. The total employment number is 2,400 workers. This figure has been calculated as follows: Table 2: Employment in the visual arts While the bulk of staff are employed full-time, there is some employment of part-time and contract workers. 4.3 GVA The gross value-added to the Gauteng economy is estimated at R191,000,000. 4.4 COSTS Operating costs (e.g. rent of space, transport, electricity) are the most important cost for 57% of the firms surveyed in this sector. Wages and salaries constitute the second largest cost factor for visual arts entities, followed by raw materials. Table 3: The cost structure of visual arts entities CATEGORY OF COMPANIES MEDIAN EMPLOYEE NUMBER NUMBER OF COMPANIES TOTAL NUMBER OF EMPLOYEES FOR CATEGORY OF COMPANIES Turnover ‹ R 1 million 2 1,000 2,000 Turnover ‹ R 1 million 4 100 400 Total number of employees 2,400 PERCENTAGE (%) Operational costs (rentals, transport, electricity ...) 57 Wages and salaries 29 Direct raw materials 11 N/A 4 TOTAL 100
  • 277. 2 7 1 The visual arts sector is dominated by small firms and individuals. The figure below shows that 75% of those sampled employed 1-4 people. A further 22% employ 5 to 19 people, whereas only 3% employ more than 20 people. There were no organisations that employ more than 50 people in the sample. Figure 4: Distribution by organisation size The businesses surveyed for this project were asked about primary and secondary sources of income. The majority (86%) generated their primary income through direct sales/services and 7% stated a local government grant as primary source of income. Over 40% stated they have no secondary sources of income and the remainder stated direct sales/services, provincial government grant and royalties as a secondary source of income. 5 . STRUCTURE OF THE INDUSTRY Distribution by organisation size Number of employees 1 to 4 5 to 19 20 to 49 80% 70% 60% 50% 40% 30% 20% 10% 0%
  • 278. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S STRUCTURE OF THE INDUSTRY; TYPES OF ORGANISATIONS WITHIN THE SECTOR 5 . STRUCTURE OF THE INDUSTRY Figure 5: Source of income in the visual arts sector Firms were also asked about whether they had any debt and 33% those interviewed indicated that they did have claimed to have some level of debt. The median amount of debt was R200,000. For companies with debt, this was approximately half the level of annual turnover. Over 40% of visual arts organisations and enterprises companies operate from premises that they own, 29% report that they work from home- based workshops and 28% from rented premises. The figure shows that the legal status of the surveyed firms is centred around two types; close corporations (36%) and sole traders (36%) account for 72% of registration types. Figure 6: Legal status of entities in the visual arts Sources of income for organisations in the craft sector Primary source (%) Direct sales/service Local government grant Provincial government grant Royalties N/A Nosecondary source Secondary source (%) 90 80 70 60 50 40 30 20 10 0 6 . TYPES OF ORGANISATIONS WITHIN THE VISUAL ARTS SECTOR
  • 279. 2 7 3 With regard to the age of entities, 39% of the surveyed firms are fairly new to the industry and while 44% have been operating in the industry for over 10 years. These older firms are mostly established galleries. The remainder 17% have been in operation between 5 and 9 years. Thus 56% of the surveyed firms have been in operation since 1994. This indicates the relatively low barriers to entry within the sector points to an influx of new participants since 1994 (VANSA, 2006). Figure 7: Age distribution of organisations 7.1 RACIAL BREAKDOWN The workforce in the visual arts sector is reasonably evenly split between whites and blacks. Black males are the largest demographic group, averaging 35% of the workforce within firms. White females are the next largest group (26%) followed by white males (22%). Overall males (57%) are more numerous than females. 6 . TYPES OF ORGANISATIONS WITHIN THE VISUAL ARTS SECTOR 7 . DEMOGRAPHICS WITHIN THE VISUAL ARTS SECTOR
  • 280. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S D E M O G R A P H I CS W I T H I N T H E V I S U A L A RT S S E C TO R Figure 8: Race and gender of employees With respect to management, white males (41%) dominate the sector, followed by black males and white females, each comprising 27% of management. Black females only represent 5% of the management staff. This demographic breakdown reflects the slow rates of racial transformation that have occurred within the sector. The slow transformation is attributed to the following factors: • The fragmented nature of representative bodies. • Weak engagement with government. • Poor networking. • A divide in access to information and opportunities by race, class and geography. • The perceived unattractiveness of visual arts as a career for (particularly Black) university entrants. • The inability of the sector to absorb all those trained through tertiary institutions and NGOs n the visual arts (VANSA, 2006). 7 . DEMOGRAPHICS WITHIN THE VISUAL ARTS SECTOR
  • 281. 2 7 5 Figure 9: Race and gender breakdown of management 7.2 AGE COMPOSITION Just under 50% of employees are under the age of 35 and 10% of entities in the sector report that they employ one of more people with disabilities. 7.3 EDUCATIONAL ATTRIBUTES Over 45% of employees at managerial level have at least completed a university degree, compared to only 10% of the workforce. A further 39% of management have completed secondary school. The most common education categories among the workforce are some secondary education, completion of secondary school or a combination of secondary school and vocational training. This indicates that entrants into the visual arts enter at two levels that are determined by their educational background. Those with tertiary education are more likely to fill managerial roles compared to those with only secondary education. Table 4: Educational levels of employees and management 7 . DEMOGRAPHICS WITHIN THE VISUAL ARTS SECTOR WORKFORCE % MANAGEMENT % Completed post-graduate degree 0 23 Completed university degree 10 23 Diploma with Grade 12 0 8 Up to Grade 10 30 0 Up to Grade 12 30 31 Vocational training with grade 10 20 0 Vocational training with grade 12 10 0 National diploma 0 8 Other 0 8 TOTAL 100 100
  • 282. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S M A R K E T S ; F U N D I N G A N D F I N A N C I N G There are two principal forms of consumption of the visual art; viewing original works of art primarily (but not exclusively) in museums and galleries and buying and collecting art. In addition, public involvement in the arts can take several different forms. Individuals may be involved as producers at a professional or amateur level, as consumers by visiting a museum, watching a television program on the visual arts, or purchasing and collecting art works, and as supporters by donating time or money to art organisations (Balfe and Peters, 2000). The figure below is a diagrammatic representation of generic visual arts markets. The majority (64%) of the surveyed firms sell their products/ services directly to the public. A further 21% sell their products/services to other firms – mainly galleries and publishing companies. Seven percent sell their product to the public sector. Figure 10: Visual arts market distribution channels Source: TCI Management Consultants (1999) Half (50%) of the surveyed firms stated that they export their products/services. Consistent with the global market data presented above, the respondents reported US and Canada as their main export market (40%). Other export markets include EU (27%), Australia & New Zealand (20%), SADC region (7%) and the Rest of Africa (7%). Cities take centre stage in the arena of global art markets with New York, London and Paris home to large auction houses and collections. Once again, global art market growth was mainly driven by the United Sta­tes where 43% of the world’s auction revenue was generated in 2007 (Art Price 2006). 8 . MARKETS
  • 283. 2 7 7 Funding is an important source of income for organisations in the visual arts sector. Thirty percent of the surveyed firms had applied for funding over the past two years. Figure 11: Organisation size and funding applications The figure above shows that overall 30% of businesses applied for funding over the last two years. Most of the applicants (22%) were in individuals or smaller firms (1 to 4 employees). When asked for reasons for not applying for funding, the majority (40%) of the respondents stated that they did not require funding. Ten percent stated that it was pointless to apply for funding as they expected that they would fail to get it. Others stated compliance issues (14%) and lack of experience in writing proposals (14%) as reasons for not applying. Another 10% respondents stated they were not aware that they could apply for funding. The remainder (12%) stated other reasons for not applying, e.g. it depends on whom you know. These results suggest that there is a large pool of visual arts organisations that are discouraged from applying for funding because they lack information, experience or belief in the funding process. 9 . FUNDING & FINANCING
  • 284. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S F U N D I N G & F I N A N C I N G O F T H E S E C T O R ; O U T L O O K With regard to funding from the National Arts Council (NAC), the visual arts is allocated significantly less funding than other disciplines as revealed in the figure below: Figure 12: NAC funding by discipline 2006 The bulk of the funding allocated is project-based with comparatively little dedicated to bursary and company funding as shown in the figure below: Figure 13: NAC funding to the visual arts by category 2006 9 . FUNDING AND FINANCING 60% 50% 40% 30% 20% 10% 0%
  • 285. 2 7 9 While the global art market is currently trading at exceptional levels, analysts argue that the le­vels of sales are ceiling prices, particularly now that the eco­nomic outlook is clouding over. As such, the art market is unlikely to remain im­mune to the weaker health of the glo­bal economy or to strong turbulence on financial markets (Art Price, 2007). Cultural institutions are also facing challenging times. While developing programmes to deal with the more intense competition they face for audiences, they are also encountering increasing financial pressures as costs rise but revenues often stabilize or decline. They must also deal with more complex legal, ethical, and operating environment and are under increasing pressure to focus more on expanding public involvement at the expense of their missions of collecting, preserving, and interpreting art. Changes in the arts environment for individual artists and enterprises have been myriad and complex both on demand and supply side. Changing patterns of demand for the arts have resulted from more fragmented leisure time, a more diverse population, and increasing competition from burgeoning entertainment and leisure industries. Changes in supply include new technologies that have altered the way the arts are produced, distributed and consumed; shifts in the organisational ecology of the arts that are blurring the distinctions among the commercial, non-profit, and volunteer or informal sectors; and more competition for funding. In combination, these changes have created a daunting array of challenges for the arts. Arts organisations, for example, have found it increasingly difficult to target and attract audiences, to increase their earnings and other income, to manage their resources and contain their costs, and to identify their mission and the roles they play in an increasingly complex and competitive public environment (McCarthy et al, 2005). 1 0 . outlook
  • 286. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S R E F E R E N C E S 1 1 . REFERENCES Art Price (2006) 2006 Art Market Trends Art Price (2007) 2007 Art Market Trends Austrade (2007) Visual Arts to the United States, http://www.austrade.gov.au/Visual-arts-to-the-USA/default.aspx Balfe, J. and Peters, M. (2000). “Public Involvement in the Arts” in J. Cherbo and M. Wyszomirski (eds) The Public Life of the Arts in America. Rutgers University Press: New Brunswick, New Jersey Department of Education, National Curriculum Statement Grades 10 – 12, Visual Arts, Seriti Printing (Pty) Ltd, 2003. Available from http://curriculum. pgwc.gov.za/php/circular_docs/29_ncs_visual_arts.pdf accessed on 10.12.07 Kusin & Company (2002), reproduced in the European Art Market in 2002, published by The European Fine Art Foundation (TEFAF). McCarthy, K.F., Ondaatje, E.H., Brooks, A. and Szanto, A. (2005). A Portrait of the Visual Arts: Meeting the Challenges Of A New Era, Rand TCI Management Consultants (1999) Study of the Market for Canadian Visual Art, a report commissioned by the Department of Canadian Heritage VANSA (2006) Funding proposal, VANSA: Five year plan, Art and social development, 2006.
  • 287. GAUTENG’S CREATIVE INDUSTRIES: REFERENCES
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  • 296. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S D E M O G R A P H I CS W I T H I N T H E FA S H I O N D E S I G N S E C TO R Department of Economic Development and Tourism. Turnstyle Media Arts and Culture, (2001) Ons maak iets uit niks, The Craft Industry in the Northern Cape, Report commissioned by the Northern Cape Arts & Culture Council and the Department of Sports, Arts & Culture; TurnStyle MAC UASA (2008) The 7th Annual Employment Report, a report compiled by T-Sec Economists for UASA available at http://www.uasa.co.za/reports/ EmpReportNo7.pdf [Accessed 31 May 2008] UK Creative Industries Task Force (2001), Creative Industries Mapping Document 2001, UK Department for Culture, Media and Sport UNCTAD (2006) Creative Economy and Industries, a Creative Industries Division pamphlet UNESCO (1982) Cultural Industries: A Challenge for the Future of Culture, UNESCO, Paris UNESCO (1997) UNESCO/ITC Symposium on Crafts and the International Market: Trade and Customs Codification, Manila, the Philippines, October 1997. UNESCO (1988) World Cultural Report, UNESCO, Paris UNESCO (2000) World Cultural Report, UNESCO, Paris UNESCO (2003) Study on International Flows of Cultural Goods: 1980-1998, published by UNESCO UNITED NATIONS (2008) Creative Economy Report 2008: The challenge of assessing the creative economy – towards informed policy-making UNWTO (2007). United National World Tourism Organisation: Tourism Highlights 2007, access on 2 May 2008 at http://www.unwto.org VANSA (2006) Funding proposal, VANSA: Five year plan, Art and social development, 2006. van Seventer, D.E.N., (1999) The Estimation of a System of Provincial Input-Output Tables for South Africa, Studies in Economics and Econometrics, July. Vogel H (1998) Entertainment Industry Economics. Cambridge, Ma, Cambridge University Press WESGRO, (2000) Background report on the Craft industry in the Western Cape. Western Cape Provincial Manufacturing Technology Strategy, Craft Sector Report, 2004. Wikipedia, the free encyclopaedia (undated) Industrial Design Available at: en.wikipedia.org/wiki/Interior design [Accessed on October 25th 2007] World Economic Forum (2007) Global Competitiveness Report [Accessed on 19 May 2008 at http://www.gcr.weforum.org/ ] World Economic Forum (2008) Governors Meeting for Digital Ecosystem: Convergence Between IT, Telecoms and Media & Entertainment. [Available from: http://www.bain.com/WEFweb/WEF_Emerging_digital_ecosystem_business_models.pdf] World Intellectual Property Organisation (2003) Guide on Surveying the Economic Contribution of the Copyright Based Industries, WIPO publication No 893(E), Geneva REFERENCES
  • 297. 2 9 1 Websites General BASA website: www.basa.co.za CAPE GATEWAY: www.capegateway.gov.za WESTGRO: www.wesgro.org.za DAC: www.dac.gov.za DTI: www.dti.gov.za CULTURE AND PUBLICATION: www.cultureandpublication.org CULTURAL ECONOMICS: www.culturaleconomics.atfreeweb.com/eia.html DCMS website: www.cep.culture.gov.uk KALAHARI.NET: http://www.kalahari.net MAIL AND GUARDIAN: http://www.mg.co.za NAC website: www.nac.org.za NEWS24.COM: http://www.news24.com RISA website: www.risa.org.za SAMRO website: www.samro.org.za SOUTH AFRICA.INFO: http://www.southafrica.info/ South African Cultural Observatory website: www.culturalobservatory.org.za UK government website: www.culture.gov.uk/creative_industries UNESCO website: http://portal.unesco.org/culture VANSA website: www.vansa.co.za Wordnet website: http://wordnet.princeton.edu/ Sector Specific 1021 MEDIA AND DESIGN: http://www.1021.co.za/multimedia_1.html ARTTHROB: www.artthrob.co.za . IFPI: www.ifpi.com IOL: http://www.iol.co.za THE NATIONAL LIBRARY OF SOUTH AFRICA: http://www.nlsa.ac.za/NLSA/ WORDNET PRINCETON: www.wordnet.princeton.edu Industry experts consulted in conducting the Gauteng Creative Mapping Project Design Sector Bernard Smith (Industrial Designers Association of South Africa) – email and telephone communication, December 2007. Bongani Nthombela (SABS Design Institute) – email and telephone communication, December 2007 Masana Chikeka (DAC) – in-depth interview on 20 November 2007 Pieter van Heerden (Consulta) – email and telephone communication, December 2007 Fashion Sector Adam Levine (Fashion designer, telephonic interview on 06/12/07) Clive Rundle (Fashion designer, telephonic interview on 06/12/07) Dion Chang (Fashion editor, telephonic interview on 03/12/07) Leshego Malatsi (Mzansi Designers, telephonic interview on 23/11/07) REFERENCES
  • 298. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S M A R K E T S ; F U N D I N G A N D F I N A N C I N G Lucilla Booyzens (SA Fashion Week, telephonic interview on 03/12/07) Masana Chikeka (Design DAC, in-depth interview on 20/11/07) Rees Mann (SewAfrica, telephonic interview on 28/11/07) Renato Palmi (Redress consultancy, telephonic interview on 29/11/07) Shana Rosenville (Lisof, telephonic interview on 06/12/07) Sonwabile Ndamase (SAFDA, telephonic interview on 22/11/07). Tracy Mann (CEO SewAfrica, telephonic interview on 04/12/07) Audio-visual Sector Bobby Amm (Commercial Producers’ Association) – email and telephone communication, October - December 2007 Howard Thomas (Busvannah Communications) - email and telephone communication, November – January 2008 Jacques Stoltz (Senior Marketing Manager, Gauteng Film Commission) – in-depth interview in May 2007 Josephine Mathe (NFVF) – email and telephone communication throughout 2007 Multimedia Sector Zander Grobler (Director 1021 Media & Design co-ordinator, telephonic interview on 19/12/07) Stephen Hobbs (The Premesis, telephonic interview on 19/12/07) Jamie Haigh (Temple House Design, telephonic interview on 20/12/07) Adam Harris (Technical Director Depth VFX, telephonic interview on 20/12/07) Jason Cullen (Sphere Animation Studio, telephonic interview on 18/12/07) Visual Arts Sector Joseph Gaylard (VANSA co-ordinator, e-mail correspondence on 06/012/07) Andries Oberholzer (Deputy Director:Visual Arts DAC, e-mail correspondence on 07/12/07) Bie Venter (Johannesburg Art Initiative, telephonic interview on 10/12/07) Khwezi Gule (The Johannesburg Art Gallery, telephonic interview on 11/12/07) Stephen Hobbs (The Premises, telephonic interview on 10/12/07) Dennis Clarke (The Paint Basket, telephonic interview on 10/12/07). Sector Study Data Sources Across sub-sectors: Funding database from National Department of Arts and Culture, Grants in Aid provided by Gauteng Arts and Culture Council Visual arts VANSA members list, The 2007 South African Art Information Directory Performing arts: PASA members list, Theatre Management SA Cultural tourism and heritage Museums Online SA (www.museums.org.za), Gauteng Tourism Authority (www.gauteng.net), South African Heritage resources Agency Multimedia Animation SA (www.AnimationSA.org) Music Midi Trust Book, The South African Roadies Association, Technical Production Services Association Craft Ceramics SA members list, Craftwise Magazine Audio-visual National Association of Broadcasters members list, National Community Radio Forum (www.ncrf.org.za), Gauteng Film Commission (www.gautengfilmdirectory.org.za) Print media and publishing ABC members list, PANSA members list Design Design Educators’ Forum SA members list, www.BizCommunity.co.za Fashion Sanlam SA Fashion Week database, www.ifashion.co.za REFERENCES
  • 299. GAUTENG’S CREATIVE INDUSTRIES: BASELINE DATA
  • 300. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S
  • 301. T A B L E O F C O N T E N T S Gauteng Creative Mapping Project Baseline Data 296 Cross-tabulations of the Gauteng Creative Mapping Project Dataset 296 1. SAMPLE CHARACTERISTICS 296 2. COVER SHEET 298 3. GENERAL SECTION 299 4. EMPLOYMENT 314 5. FINANCES 319 6. FUNDING 323 7. MARKETS 329 FIRM LEVEL SURVEY: LONG QUESTIONNAIRE 334 8. COVER PAGE 334 9. GENERAL INFORMATION 334 10. EMPLOYMENT 338 11. FINANCES 340 11. FUNDING 341 11. MARKETS 342 LIST OF FIGURES FIGURE 1: Global craft market by segment and market share 8 FIGURE 2: Craft sector value chain 10 FIGURE 3: Income sources for organisation in the craft sector 11 FIGURE 4: Distribution by organisation size 12 FIGURE 5: Age of enterprises in the craft sector 13 FIGURE 6: Legal status of organisations in the craft sector 14 FIGURE 7: Gender and racial breakdown of employee 15 FIGURE 8: Gender and racial breakdown of management in the craft sector 17 FIGURE 9: Organisation size and funding applications 18 LIST OF TABLES TABLE 1: Categories of craft production 5 TABLE 2: Sample of the craft sector 6 TABLE 3: Total turnover for category of company in Craft 9 TABLE 4: Total employment in craft 11 TABLE 5: Cost drivers in the craft sector 12 TABLE 6: Educational profile of the workforce and management 18 TABLE 7: Reasons for not applying for funding 18
  • 302. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S BASELINE DATA 1. Sample characteristics Table 1.1. Sample by type of interview and sector Telephonic interviews In-depth interviews Total Sector n % of sector n % of sector n % of overall Audio-visual 60 68% 28 32% 88 12% Craft 88 77% 27 23% 115 16% C u l t u r a l tourism and heritage 63 84% 12 16% 75 10% Design 48 71% 20 29% 68 9% Fashion 52 83% 11 17% 63 9% Multimedia 44 80% 11 20% 55 8% Music 49 64% 27 36% 76 10% P e r f o r m i n g arts 49 64% 27 36% 76 10% Print media and publishing 36 73% 13 27% 49 7% Visual arts 50 78% 14 22% 64 9% Total 539 74% 190 26% 729 100% Table 1.2. Sample by firm size (employment) and sector Firm size 1-4 5-19 20-49 50+ Total Sector n % of sector n % of sector N % of sector n % of sector n % of overall A u d i o - visual 49 56% 27 31% 9 10% 3 3% 88 12% Craft 83 73% 26 23% 5 4% 0 0% 114 16% C u l t u r a l t o u r i s m / heritage 36 48% 25 33% 11 15% 3 4% 75 10% Design 48 71% 16 24% 4 6% 0 0% 68 9% Fashion 40 63% 23 37% 0 0% 0 0% 63 9% Multimedia 36 65% 16 29% 2 4% 1 2% 55 8% Music 36 47% 31 41% 5 7% 4 5% 76 10% Performing arts 45 59% 19 25% 8 11% 4 5% 76 10% P r i n t media and publishing 12 24% 19 39% 10 20% 8 16% 49 7% Visual arts 48 79% 11 18% 2 3% 0 0% 61 8% Total 433 60% 213 29% 56 8% 23 3% 725 100%
  • 303. Table 1.3. Sample by type of interview and firm size (employment) Firm size 1-4 5-19 20-49 50+ Total Type of interview N % of sector n % of sector N % of sector n % of sector n % of overall Telephonic 326 61% 163 30% 33 6% 14 3% 536 74% In-depth 107 57% 50 26% 23 12% 9 5% 189 26% Total 433 60% 213 29% 56 8% 23 3% 725 100% BASELINE DATA 2 9 7
  • 304. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S 2. Cover sheet Table 2.1. Q6. Where is the workshop or studio of your organisation located? n % of total Home workshop or studio 51 27% Rented premises 88 46% Owned premises 44 23% N/A 5 3% Other 2 1% Total 190 100% Table 2.2. Q7. What is the organisation’s main business location? Home workshop or studio Rented premises Owned premises N/A Other Total Sector n % of sector n % of sector N % of sector n % of sector n % of sector n % of over- all visual arts 4 29% 4 29% 6 43% 0 0% 0 0% 14 7% performing arts 10 37% 10 37% 4 15% 1 4% 2 7% 27 14% c u l t u r a l t o u r i s m / heritage 2 17% 3 25% 6 50% 0 0% 1 8% 12 6% multimedia 2 18% 6 55% 3 27% 0 0% 0 0% 11 6% music 7 26% 11 41% 8 30% 1 4% 0 0% 27 14% craft 5 19% 19 70% 2 7% 1 4% 0 0% 27 14% a u d i o - visual 4 14% 16 57% 7 25% 0 0% 1 4% 28 15% p r i n t media and publishing 4 31% 7 54% 2 15% 0 0% 0 0% 13 7% design 10 50% 5 25% 5 25% 0 0% 0 0% 20 11% fashion 3 27% 7 64% 1 9% 0 0% 0 0% 11 6% Total 51 27% 88 46% 44 23% 3 2% 4 2% 190 100% BASELINE DATA
  • 305. 3. General section Table 3.1. Q9. What is the legal status of your organisation? n % of total Sole trader 27 14% Cooperative 1 1% Registered under section 21 7 4% CC 84 44% Trust 3 2% Limited company 35 18% Partnership 1 1% Local Government Institution 7 4% NGOs 3 2% NPO 6 3% Voluntary association 1 1% Freelance 10 5% Other (specify) 5 3% Total 190 100% Table 3.2. Q9. What is the legal status of your organisation? (by sector) % of sector n A u d i o - visual 0% 0% 4% 54% 0% 36% 0% 0% 0% 4% 0% 4% 0% 28 Craft 26% 0% 0% 59% 0% 7% 0% 0% 4% 0% 0% 0% 4% 27 C u l t u r a l t o u r i s m / heritage 8% 0% 17% 33% 8% 0% 0% 25% 0% 0% 0% 0% 8% 12 Design 15% 0% 0% 50% 0% 25% 5% 0% 0% 0% 0% 5% 0% 20 Fashion 18% 0% 0% 82% 0% 0% 0% 0% 0% 0% 0% 0% 0% 11 0% 0% 0% 64% 0% 36% 0% 0% 0% 0% 0% 0% 0% 11 Music 15% 0% 7% 33% 0% 33% 0% 0% 0% 4% 0% 4% 4% 27 Perform- ing arts 19% 0% 7% 11% 7% 0% 0% 11% 4% 11% 4% 19% 7% 27 P r i n t media & p u b l i s h - ing 8% 0% 0% 46% 0% 38% 0% 0% 0% 0% 0% 8% 0% 13 Visual arts 29% 7% 0% 36% 0% 0% 0% 7% 7% 7% 0% 7% 0% 14 Total 14% 1% 4% 44% 2% 18% 1% 4% 2% 3% 1% 5% 3% 190 BASELINE DATA %of sector Soletrader Co-operative Section21 CC Trust Limited company Partnership Localgovt institution NGOs NPO Voluntary Assoc Freelance Other n Multimedia 2 9 9
  • 306. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Table 3.3 Q10. How old is your organisation? 0-4 years 5-9 years 10+ years Total n % of sector n % of sector n % of sector n % of total Audio-visual 14 16% 18 20% 56 64% 88 12% Craft 39 34% 40 35% 36 31% 115 16% Cultural tourism and heritage 29 39% 6 8% 40 53% 75 10% Design 28 41% 19 28% 21 31% 68 9% Fashion 38 60% 9 14% 16 25% 63 9% Multimedia 23 42% 11 20% 21 38% 55 8% Music 22 29% 15 20% 39 51% 76 10% Performing arts 20 26% 20 26% 36 47% 76 10% Print media and publishing 10 20% 10 20% 29 59% 49 7% Visual arts 25 39% 11 17% 28 44% 64 9% Total 248 34% 159 22% 321 44% 729 100% Table 3.4. Q11.a. What is the nationality of the principal/majority owner of the organisation? n % of total South African 178 94% Other African 3 2% International 6 3% N/A 3 2% Table 3.5. Q.11.b. How many principal/majority owners does your organisation have? n % of total 0/N/A 22 12% 1 96 51% 2 36 19% 3 14 7% 4 9 5% 5 4 2% 6 1 1% 7 1 1% 10 4 2% 11 1 1% 101 1 1% Total 189 100% BASELINE DATA
  • 307. Table 3.6. Mean number of majority owners by sector (excludes those which answered 0 or N/A) Mean N Audio-visual 2.7 26 Craft 5.4 25 Cultural tourism & heritage 1.4 7 Design 1.7 20 Fashion 1.6 11 Multimedia 2.3 11 Music 2.0 22 Performing arts 2.8 23 Print media and publishing 1.7 11 Visual arts 1.1 11 Total 2.6 167 Table 3.7. Q11.c Mean proportion of majority owners by race and sector (excludes those with 0 majority owners or N/A) African White Indian Coloured male female male female male female male female Audio-visual Mean 0.18 0.05 0.42 0.27 0.00 0.04 0.00 0.04 n 26 26 26 26 26 26 26 26 C u l t u r a l t o u r i s m / heritage Mean 0.19 0.00 0.33 0.33 0.14 0.00 0.00 0.00 n 7 7 7 7 7 7 7 7 Craft Mean 0.16 0.12 0.30 0.36 0.02 0.00 0.00 0.04 n 25 25 25 25 25 25 25 25 Design Mean 0.10 0.05 0.46 0.40 0.00 0.00 0.00 0.00 n 20 20 20 20 20 20 20 20 Fashion Mean 0.33 0.26 0.05 0.27 0.09 0.00 0.00 0.00 n 11 11 11 11 11 11 11 11 Multimedia Mean 0.06 0.00 0.68 0.20 0.00 0.00 0.00 0.06 n 11 11 11 11 11 11 11 11 Music Mean 0.15 0.14 0.51 0.11 0.02 0.00 0.08 0.00 n 22 22 22 22 22 22 22 22 Performing arts Mean 0.11 0.18 0.24 0.45 0.00 0.01 0.00 0.01 n 23 23 23 23 23 23 23 23 P r i n t media and publishing Mean 0.09 0.00 0.52 0.34 0.04 0.00 0.02 0.00 n 11 11 11 11 11 11 11 11 Visual arts Mean 0.27 0.05 0.41 0.27 0.00 0.00 0.00 0.00 n 11 11 11 11 11 11 11 11 Total Mean 0.16 0.09 0.39 0.30 0.02 0.01 0.01 0.02 n 167 167 167 167 167 167 167 167 BASELINE DATA 3 0 1
  • 308. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Table 3.8 Q.11.d. Is the age of the principal/majority owner of the organisation below 35 years? No Yes Total n % of sector n % of sector n % of total Audio-visual 16 67% 8 33% 24 14% Craft 16 67% 8 33% 24 14% Cultural tourism/ heritage 5 63% 3 38% 8 5% Design 11 55% 9 45% 20 12% Fashion 3 27% 8 73% 11 7% Multimedia 5 50% 5 50% 10 6% Music 13 57% 10 43% 23 14% Performing arts 17 74% 6 26% 23 14% Print media and publishing 11 100% 0 0% 11 7% Visual arts 8 67% 4 33% 12 7% Total 105 63% 61 37% 166 100% Q12 What is the primary activity of your organisation? (see Table 1.1) Table 3.9 Q13. Does your organisation have a secondary activity? No Yes Total Sector n % of sector n % of sector n % of total Audio-visual 9 32% 19 68% 28 15% Craft 18 67% 9 33% 27 14% Cultural tourism/ heritage 4 33% 8 67% 12 6% Design 10 50% 10 50% 20 11% Fashion 7 64% 4 36% 11 6% Multimedia 1 9% 10 91% 11 6% Music 13 48% 14 52% 27 14% Performing arts 10 37% 17 63% 27 14% Print media and publishing 9 69% 4 31% 13 7% Visual arts 7 50% 7 50% 14 7% Total 88 46% 102 54% 190 100% BASELINE DATA
  • 309. Table 3.10 Q14. What is the secondary activity of your organisation? Within sub-sector Within creative sector Outside creative sector n Audio-visual 16% 79% 5% 19 Craft 70% 20% 10% 10 Cultural tourism and heritage 70% 10% 20% 10 Design 30% 30% 40% 10 Fashion 0% 100% 0% 2 Multimedia 20% 70% 10% 10 Music 29% 64% 7% 14 Performing arts 41% 47% 12% 17 Print media and publishing 25% 50% 25% 4 Visual arts 86% 14% 0% 7 Total 39% 49% 13% 103 BASELINE DATA 3 0 3
  • 310. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Table 3.11. Q15. What are the current main activities of your organisation (choose one or more)? Agent Producer Creator/ a r t i s t / crafter Writer Composer Supplier Educa- t i o n / training P u b l i c relations Audio-visual 10% 39% 6% 10% 0% 10% 10% 3% Craft 2% 52% 23% 0% 0% 11% 27% 0% Cultural tourism and heritage 4% 3% 7% 4% 0% 3% 24% 1% Design 0% 21% 21% 0% 0% 3% 3% 0% Fashion 3% 8% 14% 0% 0% 19% 14% 2% Multimedia 0% 20% 16% 2% 5% 7% 5% 0% Music 13% 36% 17% 12% 16% 16% 21% 5% Performing arts 12% 22% 29% 9% 7% 4% 51% 3% Print media and publishing 4% 8% 6% 12% 0% 2% 12% 2% Visual arts 0% 6% 25% 0% 0% 3% 13% 0% Total 5% 24% 17% 5% 3% 8% 19% 2% V e n u e o w n e r / exhibitor Facilities manager Promoter Retailer Distributor Design O t h e r (specify) Audio-visual 3% 1% 2% 2% 5% 5% 41% Craft 11% 0% 3% 47% 29% 43% 3% Cultural tourism /heritage 15% 1% 3% 1% 1% 3% 67% Design 1% 1% 0% 7% 9% 75% 12% Fashion 0% 0% 3% 17% 16% 78% 14% Multimedia 2% 2% 2% 0% 2% 18% 56% Music 7% 3% 16% 8% 26% 5% 21% Performing arts 7% 3% 7% 1% 1% 1% 20% Print media and publishing 2% 2% 2% 10% 6% 12% 76% Visual arts 30% 0% 6% 28% 2% 5% 27% Total 8% 1% 5% 14% 11% 25% 30% BASELINE DATA
  • 311. Table 3.12. Q 16. Do you have to spend time doing other things to support your “creative” activity financially? No Yes Total n % of sector n % of sector n % of total Audio-visual 19 68% 9 32% 28 17% Craft 19 70% 8 30% 27 16% Cultural tourism and heritage 6 50% 6 50% 12 7% Design 17 85% 3 15% 20 12% Fashion 8 73% 3 27% 11 7% Multimedia 9 82% 2 18% 11 7% Music 14 58% 10 42% 24 14% Performing arts 12 46% 14 54% 26 16% Print media and publishing 10 77% 3 23% 13 8% Visual arts 9 64% 5 36% 14 8% Total 123 66% 63 34% 186 112% Table 3.13. Q17. If yes, why are you involved in other activities to support your “creative” activity (choose one or more)? Cross subsidy Market too small Risk reduction/ diversification Business expansion Other n Audio-visual 33% 11% 0% 0% 56% 9 Craft 67% 0% 0% 0% 33% 6 Cultural tourism and heritage 50% 0% 17% 0% 33% 6 Design 0% 0% 0% 33% 67% 3 Fashion 0% 50% 0% 50% 0% 2 Multimedia 0% 0% 0% 100% 0% 1 Music 9% 9% 18% 27% 36% 11 Performing arts 15% 15% 8% 0% 62% 13 Print media and publishing 0% 0% 0% 67% 33% 3 Visual arts 0% 0% 0% 0% 100% 5 Total 22% 8% 7% 14% 49% 59 BASELINE DATA 3 0 5
  • 312. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Table 3.14 Q18. What is the most important obstacle to the current operations of your organisation? n % of total Costs 90 48% Government 19 10% Access issues 30 16% Market conditions 29 15% Socio-Economic conditions 12 6% Other 4 2% N/A / none 5 3% Total 189 100% Table 3.15 Q18. What is the most important obstacle to the current operations of your organisation? (by sector) % of sector Costs Govern- ment Access issues Market conditions Socio-Economic conditions Other N/A / none n Audio-visual 54% 11% 18% 18% 0% 0% 0% 28 Craft 41% 15% 15% 22% 0% 4% 4% 27 Cultural tourism /heritage 67% 8% 8% 0% 8% 0% 8% 12 Design 45% 10% 10% 10% 10% 5% 10% 20 Fashion 55% 18% 0% 9% 18% 0% 0% 11 Multimedia 36% 27% 0% 36% 0% 0% 0% 11 Music 42% 8% 15% 19% 12% 4% 0% 26 Performing arts 44% 4% 33% 11% 0% 4% 4% 27 Print media and publishing 46% 0% 23% 23% 8% 0% 0% 13 Visual arts 57% 7% 14% 0% 21% 0% 0% 14 Total 48% 10% 16% 15% 6% 2% 3% 189 Table 3.16. Types of costs as a primary obstacle. % of those that report costs as the primary obstacle (sums to more than 1 since respondents could choose more than 1 category) Telecom- munications Electricity Transpor- tation Finance Labour Raw materials n Audio-visual 29% 7% 7% 50% 14% 14% 14 Craft 36% 45% 36% 36% 27% 64% 11 Cultural tourism and heritage 38% 25% 25% 88% 38% 25% 8 Design 33% 11% 33% 11% 22% 0% 9 Fashion 33% 0% 33% 50% 50% 33% 6 Multimedia 50% 25% 0% 50% 0% 0% 4 Music 27% 18% 18% 91% 27% 27% 11 Performing arts 33% 25% 33% 100% 33% 25% 12 Print media and publishing 17% 0% 0% 33% 17% 17% 6 Visual arts 57% 57% 71% 71% 57% 57% 7 Total 34% 22% 26% 60% 28% 27% 88 BASELINE DATA
  • 313. Table 3.17. Types of access as a primary obstacle. % of those that report access as the primary obstacle (sums to more than 1 since respondents could choose more than 1 category) Telecom- munications Electricity Production facilities Govern- ment funds Bank finance Raw materials n Audio-visual 40% 40% 20% 60% 40% 20% 5 Craft 0% 0% 0% 50% 25% 25% 4 Cultural tourism and heritage 0% 0% 0% 100% 0% 0% 1 Design 100% 0% 0% 0% 0% 0% 2 Fashion . . . . . . 0 Multimedia . . . . . . 0 Music 0% 0% 0% 60% 80% 0% 5 Performing arts 0% 11% 0% 78% 56% 0% 9 Print media and publishing 33% 33% 33% 33% 0% 0% 3 Visual arts 50% 0% 0% 0% 0% 50% 2 Total 19% 13% 6% 55% 39% 10% 31 Table 3.18. Market conditions as a primary obstacle. % of those that report market conditions as the primary obstacle (sums to more than 1 since respondents could choose more than 1 category) Tax rate Skilled workforce Practices of competitors Exchange rate n Audio-visual 0% 40% 60% 0% 5 Craft 33% 0% 50% 17% 6 Cultural tourism and heritage . . . . 0 Design 0% 0% 0% 50% 2 Fashion 0% 0% 0% 0% 0 Multimedia 50% 0% 75% 0% 4 Music 0% 40% 60% 0% 5 Performing arts 33% 0% 33% 33% 3 Print media and publishing 33% 0% 0% 33% 3 Visual arts . . . . 0 Total 21% 14% 45% 14% 28 BASELINE DATA 3 0 7
  • 314. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Table 3.19. Government related issues as a primary obstacle. % of those that report government related issues as the primary obstacle (sums to more than 1 since respondents could choose more than 1 category) SARs com- pliance Customs and trade regulations Labour Business licensing and permits Lack of industry promotion n Audio-visual 33% 0% 0% 0% 67% 3 Craft 25% 50% 75% 0% 50% 4 Culturaltourism and heritage 0% 0% 0% 0% 100% 1 Design 50% 50% 0% 0% 50% 2 Fashion 50% 0% 50% 0% 0% 2 Multimedia 0% 0% 33% 0% 33% 3 Music 0% 0% 50% 0% 50% 2 Performing arts 0% 50% 0% 0% 50% 2 Print media and publishing . . . . . 0 Visual arts 0% 0% 0% 0% 0% 1 Total 20% 20% 30% 0% 45% 20 Table 3.20. Socio-economic issues as a primary obstacle. % of those that report socio-economic issues as the primary obstacle (sums to more than 1 since respondents could choose more than 1 category) HIV AIDS Corruption Crime, theft and disorder Intellectual infringement (piracy …) n Audio-visual . . . . . 0 Craft . . . . . 0 Cultural tourism/ heritage 0% 0% 0% 100% 0% 1 Design 0% 0% 0% 50% 0% 2 Fashion 50% 50% 50% 50% 100% 2 Multimedia . . . . . 0 Music 33% 33% 33% 0% 67% 3 Performing arts . . . . . 0 Print media and publishing 0% 0% 0% 100% 0% 1 Visual arts 33% 33% 33% 67% 33% 3 Total 25% 25% 25% 50% 42% 12 BASELINE DATA
  • 315. Table 3.21. Q19. What is the secondary obstacle to the current operations of your organisation? % of sector Costs Government Access issues Market conditions Socio-Economic conditions Other N/A / none n Audio-visual 11% 21% 32% 11% 11% 0% 14% 28 Craft 15% 19% 23% 27% 12% 0% 4% 26 Cultural tourism/ heritage 0% 45% 0% 27% 0% 0% 27% 11 Design 5% 21% 16% 26% 0% 0% 32% 19 Fashion 18% 36% 18% 18% 0% 0% 9% 11 Multimedia 18% 18% 18% 27% 0% 0% 18% 11 Music 15% 19% 4% 15% 27% 0% 19% 26 Performing arts 16% 28% 12% 20% 8% 0% 16% 25 Print media and publishing 23% 31% 8% 31% 8% 0% 0% 13 Visual arts 14% 7% 14% 50% 0% 0% 14% 14 Total 14% 23% 16% 23% 9% 0% 15% 184 Table 3.22. Types of costs as a secondary obstacle. % of those that report costs as the secondary obstacle (Sums to more than 1 since respondents could choose more than 1 category) Telecom- munications Electricity Trans- portation Finance Labour Raw materials n Audio-visual 67% 67% 33% 100% 33% 33% 3 Craft 25% 25% 25% 25% 25% 100% 4 Cultural tourism/ heritage . . . . . . 0 Design 0% 0% 100% 0% 0% 0% 1 Fashion 50% 0% 50% 50% 50% 50% 2 Multimedia 100% 50% 50% 0% 0% 0% 2 Music 0% 25% 0% 50% 25% 0% 4 Performing arts 0% 0% 50% 25% 25% 0% 4 Print media and publishing 33% 0% 0% 0% 0% 0% 3 Visual arts 50% 50% 50% 0% 50% 0% 2 Total 32% 24% 32% 32% 24% 24% 25 BASELINE DATA 3 0 9
  • 316. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Table 3.23. Types of access as a secondary obstacle. % of those that report access as the secondary obstacle (Sums to more than 1 since respondents could choose more than 1 category) Telecom- munications Electricity Production facilities Govern- ment funds Bank finance Raw materials n Audio-visual 22% 0% 0% 44% 56% 0% 9 Craft 33% 50% 33% 67% 50% 50% 6 Cultural tourism and heritage . . . . . . 0 Design 0% 0% 33% 0% 33% 0% 3 Fashion 0% 0% 50% 0% 100% 0% 2 Multimedia 0% 0% 100% 100% 100% 0% 1 Music 100% 0% 0% 0% 0% 0% 1 Performing arts 50% 25% 50% 75% 25% 25% 4 Print media and publishing 0% 0% 0% 100% 0% 0% 1 Visual arts 100% 100% 67% 67% 67% 67% 3 Total 33% 23% 30% 50% 50% 20% 30 Table 3.24. Market conditions as a secondary obstacle. % of those that report market conditions as the secondary obstacle (sums to more than 1 since respondents could choose more than 1 category) Tax rate Skilled workforce Practices of Exchange rate n Audio-visual 0% 67% 33% 33% 3 Craft 14% 29% 57% 57% 7 Cultural tourism and heritage 0% 67% 0% 0% 3 Design 40% 60% 0% 0% 5 Fashion 0% 50% 50% 0% 2 Multimedia 67% 67% 33% 0% 3 Music 25% 50% 25% 0% 4 Performing arts 0% 33% 33% 17% 6 Print media and publishing 25% 0% 50% 25% 4 Visual arts 71% 29% 71% 43% 7 Total 27% 41% 39% 23% 44 BASELINE DATA
  • 317. Table 3.25. Government related issues as a secondary obstacle. % of those that report government related issues as the secondary obstacle (sums to more than 1 since respondents could choose more than 1 category) SARs compliance Customs and trade regulations Labour regulations Business licensing and permits Lack of industry promotion n Audio-visual 50% 17% 33% 50% 50% 6 Craft 33% 17% 0% 0% 67% 6 Cultural tourism/ Heritage 0% 0% 25% 0% 75% 4 Design 25% 50% 25% 25% 25% 4 Fashion 25% 50% 50% 0% 25% 4 Multimedia 0% 0% 50% 0% 50% 2 Music 40% 60% 60% 20% 80% 5 Performing arts 14% 14% 14% 0% 71% 7 Print media and publishing 0% 0% 25% 0% 50% 4 Visual arts 0% 0% 0% 0% 100% 1 Total 23% 23% 28% 12% 58% 43 BASELINE DATA 3 1 1
  • 318. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Table 3.26. Socio-economic issues as a secondary obstacle. % of those that report socio-economic issues as the secondary obstacle (sums to more than 1 since respondents could choose more than 1 category) Substance abuse HIV AIDS Corruption Crime, theft and disorder Intellectual infringement (piracy …) n Audio-visual 67% 0% 0% 0% 0% 3 Craft 0% 67% 0% 33% 0% 3 Cultural tourism and heritage . . . . . 0 Design . . . . . 0 Fashion . . . . . 0 Multimedia . . . . . 0 Music 0% 13% 13% 13% 50% 8 Performing arts 0% 0% 0% 0% 50% 2 Print media and publishing 0% 0% 100% 0% 0% 1 Visual arts . . . . . 0 Total 12% 18% 12% 12% 29% 17 Table 3.27 Q.20. What do you see as your main needs for company development (choose one or more)? Staff train- ing Help with strategy and business planning Help with Help with improve- ing processes and efficiency Help with market- ing Help obtaining external comer- cial funding Help obtaining external govern- ment funding Help with internat- ional expan- Sion Increased web presence (marketing, distribution …) n Audio-visual 18% 14% 25% 11% 46% 36% 36% 36% 18% 28 Craft 30% 26% 15% 11% 48% 19% 26% 11% 26% 27 Cultural tourism/ heritage 50% 0% 17% 8% 83% 42% 58% 17% 42% 12 Design 45% 10% 5% 20% 35% 10% 15% 25% 15% 20 Fashion 27% 9% 9% 18% 64% 27% 36% 27% 18% 11 Multimedia 18% 45% 0% 27% 55% 27% 18% 36% 9% 11 Music 15% 11% 15% 4% 48% 33% 30% 26% 15% 27 Performing arts 26% 19% 15% 15% 59% 52% 33% 22% 15% 27 Print media and publishing 31% 8% 8% 0% 46% 8% 15% 23% 15% 13 Visual arts 7% 36% 14% 7% 50% 21% 21% 29% 7% 14 Total 26% 17% 14% 12% 52% 29% 29% 25% 18% 190 BASELINE DATA
  • 319. Table 3.28 Q21. Is your organisation a member of an industry body/association? No Yes Total n % of sector n % of sector n % of total Audio-visual 11 39% 17 61% 28 15% Craft 20 74% 7 26% 27 14% Cultural tourism and heritage 7 58% 5 42% 12 6% Design 14 70% 6 30% 20 11% Fashion 10 91% 1 9% 11 6% Multimedia 7 64% 4 36% 11 6% Music 11 41% 16 59% 27 14% Performing arts 12 44% 15 56% 27 14% Print media and publishing 2 15% 11 85% 13 7% Visual arts 9 64% 5 36% 14 7% Total 103 54% 87 46% 190 100% Table 3.29. Q22. Are the majority of employees of your organisation member of a union? No Yes Total n % of sector n % of sector n % of total Audio-visual 26 93% 2 7% 28 15% Craft 21 78% 6 22% 27 14% Cultural tourism and heritage 9 75% 3 25% 12 6% Design 19 95% 1 5% 20 11% Fashion 10 91% 1 9% 11 6% Multimedia 11 100% 0 0% 11 6% Music 24 89% 3 11% 27 14% Performing arts 24 89% 3 11% 27 14% Print media and publishing 12 92% 1 8% 13 7% Visual arts 10 71% 4 29% 14 7% Total 166 87% 24 13% 190 100% BASELINE DATA 3 1 3
  • 320. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S 4. EMPLOYMENT Table 4.1 Q23. What is the number of employees in your organisation for 2006 by ...? (mean number of employees by sector) Permanent full-time Permanent part- time Contract/ freelancers/service providers A u d i o - visual Mean 9.4 3.5 43.7 n 88 88 88 C u l t u r a l tourism/ Heritage Mean 16.2 0.8 0.6 n 75 75 75 Craft Mean 3.9 1.5 1.5 n 115 114 114 Design Mean 5.4 0.6 0.4 n 68 68 68 Fashion Mean 4.9 0.5 0.3 n 63 63 63 Multimedia Mean 6.9 0.2 1.2 n 55 55 55 Music Mean 11.1 7.5 18.2 n 76 76 76 Performing arts Mean 12.1 5.1 1.9 n 76 76 76 P r i n t media and publishing Mean 82.5 1.3 2.3 n 49 49 49 Visual arts Mean 3.3 0.7 0.7 n 64 63 63 Total Mean 13.1 2.3 8.1 n 729 727 727 Table 4.2. Q24. Has the total number of employees changed since 2005? 10%+ decrease 0-10% decrease No change 0-10% increase 10%+ increase n Audio-visual 2% 14% 56% 22% 7% 88 Craft 4% 3% 83% 4% 6% 114 Cultural tourism/ heritage 7% 11% 56% 16% 11% 75 Design 1% 3% 68% 13% 15% 68 Fashion 2% 3% 67% 17% 11% 63 Multimedia 2% 9% 58% 16% 15% 55 Music 5% 5% 53% 14% 22% 76 Performing arts 4% 7% 59% 20% 11% 76 Print media and publishing 0% 4% 35% 29% 33% 49 Visual arts 3% 0% 78% 9% 9% 64 Total 3% 6% 63% 15% 13% 728 BASELINE DATA
  • 321. Table 4.3. Q25. What is the average wage (per month) for the following employees in 2006 by …? Permanent Full- time Permanent Part- time Contract/ freelancer/ service provider A u d i o - visual Mean 10,444 9,000 10,900 n 25 5 10 C u l t u r a l tourism/ Heritage Mean 6,140 1,613 3,000 n 10 3 2 Craft Mean 3,839 2,500 3,500 n 21 4 3 Design Mean 9,594 2,675 n 16 4 0 Fashion Mean 3,307 1,325 1,388 n 7 2 4 Multimedia Mean 10,750 4,375 15,200 n 10 2 5 Music Mean 7,829 5,167 2,949 n 17 6 7 Performing arts Mean 9,847 3,427 9,383 n 20 8 6 P r i n t media and publishing Mean 14,556 4,833 5,820 Visual arts Mean 12,000 2,900 2,500 n 7 7 2 Total Mean 8,678 3,981 7,229 n 142 44 44 Table 4.4. Q26. Has the average wage of employees changed since 2005? 10%+ decrease 0-10% decrease No change 0-10% increase 10%+ increase Audio-visual 4% 46% 32% 14% 0% Craft 0% 31% 38% 31% 0% Cultural tourism/ heritage 8% 42% 25% 25% 0% Design 0% 25% 20% 55% 0% Fashion 0% 9% 45% 45% 0% Multimedia 9% 9% 55% 27% 0% Music 4% 26% 56% 11% 4% Performing arts 0% 48% 33% 11% 0% Print media and publishing 0% 38% 31% 23% 0% Visual arts 0% 36% 36% 14% 0% Total 2% 33% 37% 24% 1% BASELINE DATA 3 1 5
  • 322. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Table 4.5. Q27. What is the average contract length? (months) 0-3 month 4-6 month >6 months Open ended Project based n Audio-visual 14% 19% 5% 48% 14% 21 Craft 0% 0% 0% 100% 0% 10 Cultural tourism/ heritage 0% 0% 33% 67% 0% 9 Design 8% 0% 8% 85% 0% 13 Fashion 17% 0% 17% 67% 0% 6 Multimedia 0% 0% 25% 75% 0% 8 Music 0% 0% 7% 79% 14% 14 Performing arts 23% 8% 23% 46% 0% 13 Print media and publishing 0% 0% 10% 80% 10% 10 Visual arts 0% 10% 0% 90% 0% 10 Total 7% 5% 11% 71% 5% 114 Table 4.6 Q28. What percentage of your employees are under the age of 35? Mean n Audio-visual 49 88 Craft 20 114 Cultural tourism and heritage 49 75 Design 49 68 Fashion 66 58 Multimedia 66 55 Music 38 73 Performing arts 64 74 Print media and publishing 47 48 Visual arts 50 64 Total 47 717 Table 4.7 Q29. What is the number of employees with disabilities in your organisation by gender? Proportion of organisations in the sector with at least one disabled employee. Mean N Audio-visual 18% 28 Craft 4% 26 Cultural tourism and heritage 17% 12 Design 10% 20 Fashion 27% 11 Multimedia 9% 11 Music 12% 26 Performing arts 19% 27 Print media and publishing 31% 13 Visual arts 21% 14 Total 15% 188 BASELINE DATA
  • 323. Table 4.8. Q30. Can you provide a breakdown (by number) of your employees in terms of race and gender? Proportion of workforce by race and gender African White Indian Coloured Male female male female male female male female A u d i o - visual 19% 20% 26% 29% 0% 1% 2% 3% Craft 22% 44% 6% 27% 0% 0% 0% 0% C u l t u r a l tourism/ Heritage 44% 30% 8% 16% 0% 0% 0% 0% Design 17% 11% 36% 34% 0% 0% 0% 1% Fashion 19% 56% 7% 14% 0% 2% 1% 0% Multimedia 9% 8% 51% 24% 3% 1% 2% 2% Music 29% 21% 26% 17% 1% 2% 3% 1% Performing arts 32% 34% 12% 16% 2% 2% 1% 1% P r i n t media and publishing 13% 13% 20% 41% 2% 4% 2% 4% Visual arts 33% 14% 22% 26% 2% 1% 1% 1% Total 24% 26% 21% 24% 1% 1% 1% 1% Table 4.9. Q31. What level of education does most of your workforce have? Up to Grade 10 Up to Grade 12 Vocational training with Grade 10 Vocational training with grade 12 Diploma with Grade 10 Audio-visual 0% 11% 0% 11% 7% Craft 23% 27% 4% 0% 0% Cultural tourism/ heritage 17% 8% 0% 25% 0% Design 5% 5% 0% 5% 0% Fashion 18% 9% 0% 0% 18% Multimedia 0% 9% 0% 9% 0% Music 7% 41% 0% 4% 7% Performing arts 4% 15% 0% 15% 0% Print media and publishing 15% 8% 0% 8% 0% Visual arts 21% 21% 14% 7% 0% Total 10% 17% 2% 8% 3% Diploma with Grade 12 Completed a university degree Completed a post- graduate degree Other N/A Audio-visual 32% 21% 0% 4% 14% Craft 12% 4% 0% 0% 31% Cultural tourism/ heritage 25% 17% 0% 0% 8% Design 35% 20% 0% 0% 30% Fashion 9% 0% 0% 0% 45% Multimedia 36% 18% 0% 0% 27% Music 15% 11% 0% 0% 15% Performing arts 11% 15% 4% 4% 37% Print media and publishing 31% 15% 0% 0% 23% Visual arts 0% 7% 0% 0% 29% Total 20% 13% 1% 1% 25% BASELINE DATA 3 1 7
  • 324. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S Table 4.10. Q 32. What is the highest level of education of the top manager or principal owner of your organisation? (% in each sector) Up to Grade 10 Up to Grade 12 Vocational training with Grade 10 Vocational training with grade 12 Diploma with Grade 10 Audio-visual 4% 4% 0% 0% 0% Craft 12% 23% 0% 0% 0% Cultural tourism and heritage 0% 25% 0% 0% 0% Design 0% 0% 0% 5% 0% Fashion 0% 0% 0% 0% 18% Multimedia 0% 9% 0% 0% 0% Music 7% 22% 0% 0% 0% Performing arts 0% 7% 0% 4% 4% Print media and publishing 0% 8% 0% 0% 0% Visual arts 0% 29% 0% 0% 0% Total 3% 13% 0% 1% 2% (% in each sector) Diploma with Grade 12 Completed a university degree Completed a post- graduate degree Other (specify) N/A Audio-visual 32% 39% 14% 0% 7% Craft 27% 19% 12% 4% 4% Cultural tourism/ heritage 8% 50% 17% 0% 0% Design 35% 35% 20% 5% 0% Fashion 36% 36% 0% 0% 9% Multimedia 27% 27% 36% 0% 0% Music 7% 30% 19% 7% 7% Performing arts 7% 33% 33% 4% 7% Print media and publishing 15% 31% 38% 0% 8% Visual arts 14% 21% 21% 7% 7% Total 21% 32% 21% 3% 5% BASELINE DATA
  • 325. 5. FINANCES Table 5.1 Q33. What are the total turnover/sales of your organisation in ...? 2005 2006 Mean n Mean n Audio-visual 5,580,319 69 5,935,870 69 Craft 710,956 87 661,922 93 Cultural tourism/ heritage 6,070,091 44 6,171,341 44 Design 1,120,099 41 1,184,125 43 Fashion 544,155 58 527,117 60 Multimedia 1,416,195 41 1,509,163 43 Music 6,935,290 40 9,362,080 45 P e r f o r m i n g arts 2,199,556 50 2,263,663 49 Print media and publishing 109,000,000 43 115,000,000 43 Visual arts 883,905 42 937,476 42 Total 11,600,000 515 12,000,000 531 Table 5.2 Q34. What is the main source of income of your organisation (choose one)? Primary source of income (% of sector) (% of sector) Direct sales/ services Royal- ties Sublet- ting space International donors Local govern- ment grant Provincial govern- ment grant National govern- ment grant Funding agency grant Other n A u d i o - visual 82% 0% 0% 0% 0% 0% 0% 4% 14% 28 Craft 89% 0% 0% 0% 4% 0% 0% 4% 4% 27 C u l t u r a l t o u r i s m / heritage 50% 0% 0% 8% 0% 0% 17% 8% 17% 12 Design 80% 0% 0% 0% 0% 0% 0% 0% 15% 20 Fashion 100% 0% 0% 0% 0% 0% 0% 0% 0% 11 Multimedia 91% 0% 0% 0% 0% 0% 0% 0% 9% 11 Music 74% 7% 0% 0% 4% 0% 0% 4% 4% 27 Performing arts 44% 4% 4% 7% 0% 0% 11% 0% 26% 27 P r i n t media and publishing 85% 8% 0% 0% 0% 0% 0% 0% 8% 13 Visual arts 86% 0% 0% 0% 7% 0% 0% 0% 7% 14 Total 76% 2% 1% 2% 2% 0% 3% 2% 11% 190 BASELINE DATA 3 1 9
  • 326. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S BASELINE DATA Table 5.3 Q35. What is the secondary source of income of your organisation (choose one)? Secondary source of income (% of sector) (% of sector) Direct sales/ services Royal- ties Sublet- ting space Inter- national donors Local govern- ment grant Provincial govern- ment grant National government grant Funding agency grant Other n A u d i o - visual 11% 0% 0% 0% 0% 0% 0% 0% 14% 28 Craft 7% 0% 0% 0% 0% 0% 4% 4% 7% 27 C u l t u r a l t o u r i s m / heritage 25% 0% 8% 0% 8% 0% 17% 0% 8% 12 Design 0% 0% 0% 0% 0% 0% 0% 0% 10% 20 Fashion 0% 0% 0% 0% 0% 0% 0% 0% 0% 11 Multimedia 9% 18% 0% 0% 0% 0% 9% 0% 0% 11 Music 4% 30% 4% 4% 0% 0% 0% 4% 7% 27 Performing arts 26% 4% 4% 4% 0% 0% 7% 0% 19% 27 P r i n t media and publishing 15% 8% 8% 0% 0% 0% 0% 0% 15% 13 Visual arts 14% 7% 0% 0% 0% 7% 0% 0% 14% 14 Total 11% 7% 2% 1% 1% 1% 3% 1% 11% 190 Table 5.4 Q36. What is the total cost of running your business in …? (R 000’s) 2005 2006 Mean n Mean n Audio-visual 8,933,600 20 9,153,333 21 Craft 732,322 19 707,327 20 Culturaltourism and heritage 2,231,429 7 2,268,857 7 Design 1,247,988 13 1,479,379 14 Fashion 136,406 8 159,361 9 Multimedia 1,354,286 7 1,336,500 8 Music 10,200,000 13 18,100,000 16 P e r f o r m i n g arts 4,884,390 21 5,221,952 20 Print media and publishing 4,887,778 9 5,188,889 9 Visual arts 707,062 13 756,139 13 Total 4,030,640 130 5,147,043 137
  • 327. BASELINE DATA Table 5.5 Costs to turnover ratio by year and sector 2005 2006 Mean n Mean n Audio-visual 0.70 18 0.64 21 Craft 0.58 17 0.57 17 Cultural tourism and heritage 0.62 5 0.51 6 Design 0.50 13 0.52 14 Fashion 0.45 8 0.44 9 Multimedia 0.60 7 0.61 8 Music 0.72 11 0.72 13 Performing arts 0.58 12 0.60 11 Print media and publishing 0.72 8 0.81 9 Visual arts 0.58 12 0.60 12 Total 0.61 111 0.61 120 Table 5.6 Q37. What is the highest cost of your organisation (choose one)? (% of sector) Direct raw material costs Operational costs (rentals, transport, electricity, interest charges, cost of technology …) Wages and salaries and related costs (allowances, bonuses …) Other (specify) Audio-visual 11% 43% 39% 7% Craft 50% 35% 12% 4% Cultural tourism and heritage 8% 33% 58% 0% Design 25% 50% 25% 0% Fashion 45% 45% 9% 0% Multimedia 0% 55% 36% 9% Music 11% 41% 30% 19% Performing arts 11% 30% 41% 19% Print media and publishing 15% 46% 38% 0% Visual arts 14% 57% 21% 7% Total 20% 42% 31% 8% Table 5.7 Q38. What is the second highest cost of your organisation (choose one)? (% of sector) Direct raw material costs Operational costs (rentals, transport, electricity, interest charges, cost of technology …) Wages and salaries and related costs (allowances, bonuses …) Other (specify) None Audio-visual 7% 39% 46% 0% 7% Craft 23% 35% 35% 0% 8% Cultural tourism and heritage 17% 50% 25% 8% 0% Design 5% 40% 45% 10% 0% Fashion 9% 27% 45% 9% 9% Multimedia 9% 45% 45% 0% 0% Music 7% 30% 26% 19% 19% Performing arts 7% 41% 30% 15% 7% Print media and publishing 23% 38% 23% 8% 8% Visual arts 43% 29% 14% 14% 0% Total 14% 37% 34% 8% 7% 3 2 1
  • 328. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S BASELINE DATA Table 5.8 Q39. What is the replacement value of the assets of your organisation (E.g. machinery, tools …)? (R 000’s) Mean replacement value of assets Mean n Audio-visual 1,894,565 23 Craft 663,880 21 Cultural tourism and heritage 2,602,000 5 Design 136,000 15 Fashion 1,171,850 10 Multimedia 720,000 9 Music 1,654,615 13 Performing arts 6,753,011 19 Print media and publishing 1,834,444 9 Visual arts 588,455 11 Total 1,952,335 135 Table 5.9 Q40. Does your organisation have any debt/liabilities? No Yes Total n % of sector n % of sector n % of total Audio-visual 18 64% 10 36% 28 15% Craft 18 69% 8 31% 26 14% Cultural tourism and heritage 6 50% 6 50% 12 6% Design 10 50% 10 50% 20 11% Fashion 6 55% 5 45% 11 6% Multimedia 7 64% 4 36% 11 6% Music 17 65% 9 35% 26 14% Performing arts 25 93% 2 7% 27 14% Print media and publishing 8 62% 5 38% 13 7% Visual arts 9 64% 5 36% 14 7% Total 124 66% 64 34% 188 100% Table 5.10 Q41. If yes, could you give an estimation? Average value of debt Mean n Audio-visual 686,667 6 Craft 514,286 7 Cultural tourism and heritage 1,265,000 4 Design 536,625 8 Fashion 170,625 4 Multimedia 750,000 2 Music 10,500,000 9 Performing arts 550,000 2 Print media and publishing 3,366,667 3 Visual arts 107,304 5 Total 2,513,400 50
  • 329. BASELINE DATA 6. FUNDING Table 6.1 Q42. Did your organisation apply for funding over the last two years? No Yes Total n % of sector n % of sector n % of total Audio-visual 66 75% 22 25% 88 12% Craft 101 89% 13 11% 114 16% Cultural tourism and heritage 41 55% 34 45% 75 10% Design 58 85% 10 15% 68 9% Fashion 52 83% 11 17% 63 9% Multimedia 45 82% 10 18% 55 8% Music 59 79% 16 21% 75 10% Performing arts 35 46% 41 54% 76 10% Print media and publishing 45 92% 4 8% 49 7% Visual arts 45 70% 19 30% 64 9% Total 547 75% 180 25% 727 100% Table 6.2 Q43. Did your organisation manage to secure any funding over the last two years? No Yes Total n % of sector n % of sector n % of total Audio-visual 4 33% 8 67% 12 19% Craft 4 50% 4 50% 8 13% Cultural tourism and heritage 0 0% 6 100% 6 9% Design 1 33% 2 67% 3 5% Fashion 3 100% 0 0% 3 5% Multimedia 1 33% 2 67% 3 5% Music 3 50% 3 50% 6 9% Performing arts 2 14% 12 86% 14 22% Print media and publishing 0 0% 3 100% 3 5% Visual arts 3 50% 3 50% 6 9% Total 21 33% 43 67% 64 100% 3 2 3
  • 330. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S BASELINE DATA Table 6.3 Q44. If yes, what percentage of funding came from … ? Government Donors Arts Funding Agency Corporate sponsorship SA - NGO’s Other entities Sector Audio-visual Mean 13 13 13 13 1 19 n 8 8 8 8 8 8 Craft Mean 50 0 0 0 0 25 n 4 4 4 4 4 4 Cultural tourism and heritage Mean 38 0 5 0 0 40 n 6 6 6 6 6 6 Design Mean 0 3 50 0 0 4 n 2 2 2 2 2 2 Fashion Mean . . . . . . n 0 0 0 0 0 0 Multimedia Mean 35 5 10 0 0 0 n 2 2 2 2 2 2 Music Mean 33 10 1 17 0 0 n 3 3 3 3 3 3 Performing arts Mean 32 13 24 11 0 1 n 12 12 12 12 12 12 Print media and publishing Mean 35 0 2 2 0 33 n 3 3 3 3 3 3 Visual arts Mean 3 0 1 0 0 0 n 3 3 3 3 3 3 Total Mean 28 7 13 7 0 14 n 43 43 43 43 43 43 Table 6.4 Q45. If your organisation has not applied for funding in the last two years, what was the reason for not applying for funding (choose one or more)? (The ‘other’ category is not included in the table and thus some rows sum to less than 1) No experience in writing proposals It is pointless, I would still fail to get it It depends on whom you know Compliance issues No need Cross subsidy from other business activity n Audio-visual 0% 31% 25% 13% 31% 0% 16 Craft 11% 21% 0% 5% 53% 5% 19 Cultural tourism and heritage 0% 0% 0% 20% 80% 0% 5 Design 0% 6% 6% 0% 88% 0% 17 Fashion 13% 13% 25% 0% 75% 0% 8 Multimedia 0% 13% 0% 0% 50% 13% 8 Music 0% 19% 10% 0% 62% 0% 21 Performing arts 0% 23% 8% 15% 54% 15% 13 Print media and publishing 0% 10% 0% 0% 90% 0% 10 Visual arts 14% 29% 0% 0% 71% 14% 7 Total 3% 18% 8% 5% 63% 4% 124
  • 331. BASELINE DATA Table 6.5 Q46. Did your organisation in the last two years apply for a bank loan or other form of finance from a commercial bank? No Yes Total n % of sector n % of sector n % of total Audio-visual 13 46% 15 54% 28 15% Craft 18 69% 8 31% 26 14% Cultural tourism and heritage 6 50% 6 50% 12 6% Design 14 70% 6 30% 20 11% Fashion 8 73% 3 27% 11 6% Multimedia 10 91% 1 9% 11 6% Music 18 69% 8 31% 26 14% Performing arts 25 93% 2 7% 27 14% Print media and publishing 12 92% 1 8% 13 7% Visual arts 12 86% 2 14% 14 7% Total 136 72% 52 28% 188 100% Table 6.7 Q47. If your organisation has not applied for a bank loan in the last two years, what was the reason for not applying (choose one or more)? No experience in writing proposals It is pointless, I would still fail to get it It depends on whom you know Compliance issues No collateral No need Cross subsidy from other business activity Other Audio-visual 0% 7% 0% 7% 7% 67% 7% 33% Craft 10% 14% 0% 5% 14% 62% 0% 24% C u l t u r a l tourism and heritage 0% 0% 0% 14% 14% 43% 0% 43% Design 0% 0% 0% 0% 0% 93% 0% 20% Fashion 0% 11% 0% 11% 22% 44% 0% 33% Multimedia 0% 0% 0% 0% 0% 70% 0% 50% Music 0% 5% 5% 5% 0% 75% 10% 25% Performing arts 0% 13% 0% 4% 8% 54% 13% 21% P r i n t media and publishing 0% 8% 0% 0% 0% 83% 8% 8% Visual arts 0% 8% 0% 0% 8% 62% 15% 23% Total 1% 8% 1% 4% 7% 66% 6% 26% 3 2 5
  • 332. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S BASELINE DATA Table 6.6 Q48. Did your loan application get approved? No Yes Total n % of sector n % of sector n % of total Audio-visual 2 13% 13 87% 15 28% Craft 3 38% 5 63% 8 15% Cultural tourism and heritage 1 17% 5 83% 6 11% Design 1 17% 5 83% 6 11% Fashion 1 33% 2 67% 3 6% Multimedia 0 0% 1 100% 1 2% Music 2 25% 6 75% 8 15% Performing arts 1 33% 2 67% 3 6% Print media and publishing 0 0% 1 100% 1 2% Visual arts 1 50% 1 50% 2 4% Total 12 23% 41 77% 53 100% Table 6.8 Q49. In the last two years, did your organisation try to get money from an informal source such as a money lender, friend or relative? No Yes Total n % of sector n % of sector n % of total Audio-visual 22 79% 6 21% 28 15% Craft 21 81% 5 19% 26 14% Cultural tourism and heritage 10 83% 2 17% 12 6% Design 14 70% 6 30% 20 11% Fashion 6 55% 5 45% 11 6% Multimedia 9 82% 2 18% 11 6% Music 19 73% 7 27% 26 14% Performing arts 20 77% 6 23% 26 14% Print media and publishing 12 92% 1 8% 13 7% Visual arts 13 93% 1 7% 14 7% Total 146 78% 41 22% 187 100%
  • 333. BASELINE DATA Table 6.9 Q50. Did you receive money from this source? No Yes Total n % of sector n % of sector n % of total Audio-visual 4 57% 3 43% 7 16% Craft 2 33% 4 67% 6 14% Cultural tourism and heritage 0 0% 1 100% 1 2% Design 0 0% 6 100% 6 14% Fashion 0 0% 5 100% 5 11% Multimedia 1 50% 1 50% 2 5% Music 1 14% 6 86% 7 16% Performing arts 1 14% 6 86% 7 16% Print media and publishing 1 100% 0 0% 1 2% Visual arts 1 50% 1 50% 2 5% Total 11 25% 33 75% 44 100% 3 2 7
  • 334. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S BASELINE DATA 7. MARKETS Table 7.1 Q51.a. What is the main market of your organisation (choose one)? (% of sector) Other firms General public - individuals/tourists Public sector - government Other (specify) n Audio-visual 75% 21% 0% 4% 28 Craft 35% 65% 0% 0% 26 Cultural tourism and heritage 0% 100% 0% 0% 12 Design 60% 40% 0% 0% 20 Fashion 27% 73% 0% 0% 11 Multimedia 82% 18% 0% 0% 11 Music 19% 81% 0% 0% 26 Performing arts 15% 81% 4% 0% 27 Print media and publishing 46% 46% 8% 0% 13 Visual arts 21% 64% 7% 7% 14 Total 38% 59% 2% 2% 188 Table 7.2 Q52. Does your organisation sell its products/services internationally? No Yes Total n % of sector n % of sector n % of total Audio-visual 11 39% 17 61% 28 15% Craft 18 69% 8 31% 26 14% Cultural tourism and heritage 6 50% 6 50% 12 6% Design 10 50% 10 50% 20 11% Fashion 7 64% 4 36% 11 6% Multimedia 5 45% 6 55% 11 6% Music 12 46% 14 54% 26 14% Performing arts 14 52% 13 48% 27 14% Print media and publishing 7 54% 6 46% 13 7% Visual arts 7 50% 7 50% 14 7% Total 97 52% 91 48% 188 100%
  • 335. BASELINE DATA Table 7.3 Q53. If yes, what percentage of your products/services do you sell internationally? Mean n Audio-visual 23 13 Craft 18 7 Cultural tourism and heritage 36 2 Design 35 7 Fashion 10 3 Multimedia 16 4 Music 6 10 Performing arts 34 12 Print media and publishing 9 5 Visual arts 26 6 Total 22 69 Table 7.4 Q54. What are your organisations international markets (choose one or more)? SADC Rest of Africa EU US and Canada Asia Australia and New Zealand South America n Audio-visual 18% 29% 76% 65% 29% 12% 12% 17 Craft 38% 38% 50% 50% 0% 0% 13% 8 Cultural tourism and heritage 33% 17% 100% 50% 33% 33% 0% 6 Design 20% 20% 30% 20% 10% 10% 0% 10 Fashion 25% 0% 25% 25% 0% 0% 0% 4 Multimedia 0% 50% 67% 0% 50% 0% 0% 5 Music 29% 36% 57% 36% 7% 0% 0% 15 Performing arts 31% 15% 77% 62% 0% 38% 8% 13 Print media and publishing 67% 17% 50% 33% 0% 17% 0% 6 Visual arts 14% 14% 57% 86% 0% 43% 14% 7 Total 26% 25% 62% 46% 13% 15% 5% 91 3 2 9
  • 336. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S BASELINE DATA Table 7.5 Q55.a. To what extent are the following a constraint to the growth of the organisation (choose one or more)? Cost of hardware Cost of software Access to hardware Access to software Speed of broadband Skill to work with technology No technical constraints n Audio-visual 39% 75% 25% 21% 32% 32% 11% 28 Craft 15% 31% 8% 4% 4% 15% 31% 26 C u l t u r a l tourism/ Heritage 25% 25% 8% 0% 8% 25% 50% 12 Design 40% 70% 10% 10% 35% 15% 15% 20 Fashion 20% 20% 10% 0% 10% 50% 10% 10 Multimedia 55% 82% 18% 18% 55% 27% 0% 10 Music 24% 36% 20% 8% 40% 16% 32% 26 Performing arts 31% 46% 8% 15% 8% 23% 27% 26 P r i n t media and publishing 15% 31% 8% 8% 38% 31% 8% 13 Visual arts 36% 36% 7% 14% 36% 0% 29% 14 Total 30% 47% 13% 11% 25% 22% 22% 185 Table 7.6 Q55.b. Does your organisation use technology for …? Marketing Sales Distribution Research Communication n Audio-visual 61% 46% 36% 68% 75% 28 Craft 46% 46% 31% 15% 50% 26 C u l t u r a l tourism and heritage 58% 33% 8% 75% 83% 12 Design 50% 55% 45% 70% 70% 20 Fashion 50% 30% 10% 70% 50% 10 Multimedia 82% 73% 64% 82% 91% 10 Music 64% 48% 36% 68% 64% 26 Performing arts 68% 48% 44% 68% 84% 25 P r i n t media and publishing 69% 85% 69% 69% 85% 13 Visual arts 79% 64% 57% 64% 79% 14 Total 61% 52% 40% 62% 72% 184
  • 337. BASELINE DATA Table 7.7 Q56.a. Does your organisation use the following technologies for business purposes? Fixed line Mobile phones Computers Internet Sector specific hardware Sector specific software n Audio-visual 93% 100% 100% 93% 75% 82% 28 Craft 58% 85% 65% 65% 23% 19% 26 C u l t u r a l tourism 100% 75% 92% 83% 33% 33% 12 Design 95% 90% 100% 90% 75% 75% 20 Fashion 73% 91% 91% 91% 9% 0% 11 Multimedia 100% 100% 100% 91% 91% 91% 11 Music 77% 100% 77% 81% 65% 69% 26 Performing arts 85% 89% 93% 89% 26% 26% 27 P r i n t media and publishing 92% 92% 100% 92% 46% 69% 13 Visual arts 86% 71% 79% 79% 29% 50% 14 Total 84% 90% 88% 85% 48% 52% 188 Table 7.7 Q56.b.1. How important are fixed line phones to your organisation? Major importance Moderate importance Not important n Audio-visual 71% 21% 7% 28 Craft 54% 15% 31% 26 Cultural tourism and heritage 83% 17% 0% 12 Design 75% 15% 10% 20 Fashion 55% 27% 18% 11 Multimedia 73% 18% 9% 11 Music 73% 15% 12% 26 Performing arts 63% 22% 15% 27 Print media and publishing 77% 15% 8% 13 Visual arts 64% 21% 14% 14 Total 68% 19% 13% 188 Table 7.8 Q56.b.2. How important are mobile phones to your organisation? Major importance Moderate importance Not important n Audio-visual 82% 18% 0% 28 Craft 73% 19% 8% 26 Cultural tourism and heritage 50% 25% 25% 12 Design 75% 20% 5% 20 Fashion 91% 9% 0% 11 Multimedia 64% 18% 18% 11 Music 69% 23% 8% 26 Performing arts 67% 19% 15% 27 Print media and publishing 77% 23% 0% 13 Visual arts 86% 7% 7% 14 Total 73% 19% 8% 188 3 3 1
  • 338. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S BASELINE DATA Table 7.9 Q56.b.3. How important are computers to your organisation? Major importance Moderate importance Not important n Audio-visual 100% 0% 0% 28 Craft 58% 23% 19% 26 Cultural tourism and heritage 83% 17% 0% 12 Design 95% 0% 5% 20 Fashion 55% 36% 9% 11 Multimedia 91% 0% 9% 11 Music 85% 8% 8% 26 Performing arts 89% 7% 4% 27 Print media and publishing 92% 8% 0% 13 Visual arts 93% 0% 7% 14 Total 85% 9% 6% 188 Table 7.10 Q56.b.4. How important is the internet to your organisation? Major importance Moderate importance Not important n Audio-visual 89% 11% 0% 28 Craft 46% 27% 27% 26 Cultural tourism and heritage 75% 25% 0% 12 Design 95% 0% 5% 20 Fashion 64% 27% 9% 11 Multimedia 91% 0% 9% 11 Music 73% 19% 8% 26 Performing arts 78% 19% 4% 27 Print media and publishing 100% 0% 0% 13 Visual arts 71% 7% 21% 14 Total 77% 14% 9% 188 Table 7.11 Q56.b.5. How important is sector specific hardware to your organisation? Major importance Moderate importance Not important n visual arts 57% 0% 43% 14 performing arts 30% 22% 48% 27 cultural tourism and heritage 50% 33% 17% 12 multimedia 82% 9% 9% 11 music 69% 4% 27% 26 craft 23% 8% 69% 26 audio-visual 71% 14% 14% 28 print media and publishing 69% 15% 15% 13 design 85% 0% 15% 20 fashion 9% 64% 27% 11 Total 54% 14% 31% 188
  • 339. BASELINE DATA Table 7.12 Q56.b.6. How important is sector specific software to your organisation? Major importance Moderate importance Not important n Audio-visual 79% 11% 11% 28 Craft 23% 8% 69% 26 Cultural tourism and heritage 50% 33% 17% 12 Design 80% 0% 20% 20 Fashion 9% 36% 55% 11 Multimedia 91% 0% 9% 11 Music 69% 8% 23% 26 Performing arts 33% 19% 48% 27 Print media and publishing 77% 15% 8% 13 Visual arts 43% 7% 50% 14 Total 55% 12% 32% 188 3 3 3
  • 340. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S BASELINE DATA m COVER PAGE 1. What is the name of your organisation? 2. What is the address of your organisation? 3. What is the phone number of your organisation? 4. What is the name of the respondent? 5. What is the name of the interviewer? 6. Where is the workshop or studio of your organisation located?   As per above   Other (specify) 7. What is the organisation’s main business location?   Home workshop or studio   R e n t e d premises   O w n e d premises   Other (specify) 8. Time and date of interview GENERAL INFORMATION 9. What is the legal status of your organisation?   Sole trader   Cooperative   Registered under section 21   CC   Trust   Limited company   Partnership   Local Government Institution   NGOs   NPO   Voluntary association   Freelance   Other (specify) 10. How old is your organisation?   0 - 4 years   5 - 9 years   10 + years 11.a. What is the nationality of the principal/majority owner of the organisation?   South African FIRM LEVEL SURVEY: LONG QUESTIONNAIRE
  • 341. BASELINE DATA   Other African   International   Other (specify)   N/A 11.b. How many principal/majority owners does your organisation have? 11.c. What is the race and gender of the principal/majority owner of the organisation? (if no owner, then top manager)     Male Female Black     White     Indian     Coloured     N/A 11.d. Is the age of the principal/majority owner of the organisation below 35 years?   Yes   No   N/A 12. What is the primary activity of your organisation (choose one)?   Visual arts   Performing arts   Cultural tourism   Multimedia   Music   Craft   Audio-visual   Cultural heritage   Print media and publishing   Design   Fashion   Other (specify) 13. Does your organisation have a secondary activity?   Yes   No 14. What is the secondary activity of your organisation (choose one)?   Visual arts   Performing arts   Cultural tourism   Multimedia   Music   Craft   Audio-visual   Cultural heritage   Print media and publishing   Design   Fashion   Other (specify) 3 3 5
  • 342. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S BASELINE DATA 15. What are the current main activities of your organisation (choose one or more)?   Agent   Producer   Creator/artist/crafter   Writer   Composer   Supplier   Education/training   Public relations   Venue owner/exhibitor   Facilities manager   Promoter   Retailer   Distributor   Design   Other (specify) 16. Do you have to spend time doing other things to support your “creative” activity financially?   Yes   No 17. If yes, why are you involved in other activities to support your “creative” activity (choose one or more)?   Cross subsidy   Market too small   Risk reduction/diversification   Business expansion   Other (specify) 18. What is the most important obstacle to the current operations of your organisation? (choose one category out of the 5 given and tick one or more in that category) Cost   Telecommunications   Electricity   Transportation   Finance   Labour   Raw materials   Other (specify) Government   SARs compliance   Customs and trade regulations   Labour regulations   Business licensing and permits   Lack of industry promotion   Other (specify) Access   Telecommunications   Electricity   Production facilities   Government funds   Bank finance
  • 343. BASELINE DATA   Raw materials   Other (specify) Market conditions   Tax rate   Skilled workforce   Practices of competitors   Exchange rate   Other (specify) Socio-economic conditions   Substance abuse   HIV AIDS   Corruption   Crime, theft and disorder   Intellectual infringement (piracy …)   Other (specify) Other N/A 19. What is the secondary obstacle to the current operations of your organisation? (choose one category out of the 5 given, other than the above and tick one or more in that category) Cost   Telecommunications   Electricity   Transportation   Finance   Labour   Raw materials   Other (specify) Government   SARs compliance   Customs and trade regulations   Labour regulations   Business licensing and permits   Lack of industry promotion   Other (specify) Access   Telecommunications   Electricity   Production facilities   Government funds   Bank finance   Raw materials   Other (specify) Market conditions   Tax rate 3 3 7
  • 344. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S BASELINE DATA   Skilled workforce   Practices of competitors   Exchange rate   Other (specify) Socio-economic conditions   Substance abuse   HIV AIDS   Corruption   Crime, theft and disorder   Intellectual infringement (piracy …)   Other (specify) Other N/A 20. What do you see as your main needs for company development (choose one or more)?   Staff training   Help with strategy and business planning   Help with developing new ideas for cash generation   Help with improving processes and efficiency   Help with marketing   Help obtaining external commercial funding   Help obtaining external government funding   Help with international expansion   Increased web presence (marketing, distribution …)   Other (specify) 21. Is your organisation a member of an industry body/association? Yes No 22. Are the majority of employees of your organisation member of a union? Yes No EMPLOYMENT (Include respondent in numbers) 23. What is the number of employees in your organisation for 2006 by ...? Permanent-full time     Permanent part-time     Contract/freelancers/service providers   24. Has the total number of employees changed since 2005?   No change   0 - 10 % decrease   10 + % decrease   0 - 10 % increase   10 % + increase 25. What is the average wage (per month) for the following employees in 2006 by …?
  • 345. BASELINE DATA Permanent-full time     Permanent part-time     Contract/freelancers/service providers   26. Has the average wage of employees changed since 2005?   No change   0 - 10 % decrease   10 + % decrease   0 - 10 % increase   10 % + increase 27. What is the average contract length? (months)   Open ended   N/A   Other (specify) 28. What percentage of your employees are under the age of 35? 29. What is the number of employees with disabilities in your organisation by gender? Male   Female   30. Can you provide a breakdown (by number) of your employees in terms of race and gender?     Male Female Black     White     Indian     Coloured     31. What level of education does most of your workforce have, excluding management (choose one)?   Up to Grade 10   Up to Grade 12   Vocational training with Grade 10   Vocational training with grade 12   Diploma with Grade 10   Diploma with Grade 12   Completed a university degree   Completed a post-graduate degree   Other (specify)   N/A 32. What is the highest level of education of the top manager or principal owner of your organisation? (Please mark the appropriate)   Up to Grade 10   Up to Grade 12   Vocational training with Grade 10   Vocational training with grade 12   Diploma with Grade 10   Diploma with Grade 12   Completed a university degree   Completed a post-graduate degree   Other (specify)   N/A 3 3 9
  • 346. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S BASELINE DATA FINANCES 33. What are the total turnover/sales of your organisation in ...? (R 000’s) 2005 2006     34. What is the main source of income of your organisation (choose one)?   Direct sales/services   Royalties   Subletting space   International donors   Local government grant   Provincial government grant   National government grant   Funding agency grant   Other (specify) 35. What is the secondary source of income of your organisation (choose one)?   No secondary source   Direct sales/services   Royalties   Subletting space   International donors   Local government grant   Provincial government grant   National government grant   Funding agency grant   Other (specify) 36. What is the total cost of running your business in …? (R 000’s) 2005 2006     37. What is the highest cost of your organisation (choose one)?   Direct raw material costs   Operational costs (rentals, transport, electricity, interest charges, cost of technology …)   Wages and salaries and related costs (allowances, bonuses …)   Other (specify) 38. What is the second highest cost of your organisation (choose one)?   Direct raw material costs   Operational costs (rentals, transport, electricity, interest charges, cost of technology …)   Wages, salaries and related costs (allowances, bonuses …)   Other (specify) 39. What is the replacement value of the assets of your organisation (E.g. machinery, tools …)? (R 000’s) 40. Does your organisation have any debt/liabilities?   Yes   No 41. If yes, could you give an estimation? (R 000’s)
  • 347. BASELINE DATA FUNDING 42. Did your organisation apply for funding over the last two years?   Yes   No 43. Did your organisation manage to secure any funding over the last two years?   Yes   No 44. If yes, what percentage of funding came from … ?   Government   Donors   Arts Funding Agency   Corporate sponsorship   SA - NGO’s   Other entities 45. If your organisation has not applied for funding in the last two years, what was the reason for not applying for funding (choose one or more)?   No experience in writing proposals   It is pointless, I would still fail to get it   It depends on whom you know   Compliance issues   No need   Cross subsidy from other business activity   Other (specify) 46. Did your organisation in the last two years apply for a bank loan or other form of finance from a commercial bank?   Yes   No 47. If your organisation has not applied for a bank loan in the last two years, what was the reason for not applying (choose one or more)?   No experience in writing proposals   It is pointless, I would still fail to get it   It depends on whom you know   Compliance issues   No collateral   No need   Cross subsidy from other business activity   Other (specify) 48. Did your loan application get approved?   Yes   No 49. In the last two years, did your organisation try to get money from an informal source such as a money lender, friend or relative?   Yes   No 50. Did you receive money from this source?   Yes   No 3 4 1
  • 348. G A U T E N G M A P P I N G R E P O R T l A N A N A L Y S I S O F G A U T E N G ’ S C R E A T I V E I N D U S T R I E S BASELINE DATA MARKETS 51.a. What is the main market of your organisation (choose one)?   Other firms   General public - individuals/tourists   Public sector - government   Other (specify) 51.b. If other firm, please specify? 52. Does your organisation sell its products/services internationally?   Yes   No 53. If yes, what percentage of your products/services do you sell internationally? 54. What are your organisations international markets (choose one or more)?   SADC   Rest of Africa   EU   US and Canada   Asia   Australia and New Zealand   South America   Other (specify) TECHNOLOGY (access and constraints) 55.a. To what extent are the following a constraint to the growth of the organisation (choose one or more)?   Cost of hardware   Cost of software   Access to hardware   Access to software   Speed of broadband   Skill to work with technology   Other (specify) 55.b. Does your organisation use technology for …?   Marketing   Sales   Distribution   Research   Communication   Other (specify) 56.a. Does your organisation use the following technologies for business purposes?   Fixed line   Mobile phones   Computers   Internet
  • 349. BASELINE DATA   Sector specific hardware   Sector specific software 56.b. How important are the following technologies for your organisation?     Major importance Moderate importance Not important Fixed line       Mobile phones       Computers       Internet       Sector specific hardware       Sector specific software       3 4 3