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Creative Economy Report 2008


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UN UNCTAD/WIPO Creative Economy Report presentation; excerpt

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Creative Economy Report 2008

  2. 2. Foreword <ul><li>Economic models do not function in isolation </li></ul><ul><li>The time has come to go beyond economics and look for a more holistic development approach </li></ul><ul><ul><li>that considers their different cultural identities, economic aspirations, social disparities and technological disadvantages </li></ul></ul><ul><li>The interface among creativity, culture, economics and technology, as expressed in the ability to create and circulate intellectual capital </li></ul><ul><ul><li>has the potential to generate income, jobs and export earnings </li></ul></ul><ul><ul><li>while at the same time promoting social inclusion, cultural diversity and human development </li></ul></ul>
  3. 3. Towards a definition
  4. 4. Creativity <ul><li>“ Creativity” refers to the formulation of new ideas and to the application of these ideas to produce original works of art and cultural products, functional creations, scientific inventions and technological innovations </li></ul><ul><li>“ creativity” is associated with originality, imagination, inspiration, ingenuity and inventiveness. </li></ul><ul><li>the twenty-first century has seen a growing understanding of the interface between creativity, culture and economics, the rationale behind the emerging concept of the “creative economy”. </li></ul>
  5. 5. artistic creativity involves imagination and a capacity to generate original ideas and novel ways of interpreting the world, expressed in text, sound and image; scientific creativity involves curiosity and a willingness to experiment and make new connections in problem solving; economic creativity is a dynamic process leading towards innovation in technology, business practices, marketing, etc., and is closely linked to gaining competitive advantages in the economy
  6. 6. Creative industries <ul><li>“ Creative industries” : the cycles of creation, production and distribution of goods and services </li></ul><ul><li>that use creativity and intellectual capital as primary inputs. </li></ul><ul><li>they comprise a set of knowledge-based activities </li></ul><ul><li>that produce tangible goods and intangible intellectual or artistic services </li></ul><ul><li>with creative content, economic value and market objectives. </li></ul><ul><li>Creative industries </li></ul><ul><ul><li>constitute a vast and heterogeneous field </li></ul></ul><ul><ul><li>dealing with the interplay of various creative activities </li></ul></ul><ul><ul><li>ranging from traditional arts and crafts, publishing, music, and visual and performing arts to more technology-intensive and services-oriented groups of activities such as film, television and radio broadcasting, new media and design </li></ul></ul>
  7. 8. Cultural industries: post-war <ul><li>Post-war period as a radical critique of mass entertainment (Frankfurt school; Theodor Adorno, Max Horkheimer, Herbert Marcuse) ; at that time, “culture industry” was a negative concept </li></ul><ul><li>Culture and industry as opposites </li></ul><ul><li>Dichotomies: </li></ul><ul><ul><li>elite versus mass culture </li></ul></ul><ul><ul><li>high versus popular culture </li></ul></ul><ul><ul><li>fine arts versus commercial entertainment </li></ul></ul>
  8. 9. The UNCTAD classification of the creative industries <ul><li>are the cycles of creation, production and distribution of goods and services that use creativity and intellectual capital as primary inputs; </li></ul><ul><li>constitute a set of knowledge-based activities, focused on but not limited to arts, potentially generating revenues from trade and intellectual property rights; </li></ul><ul><li>comprise tangible products and intangible intellectual or artistic services with creative content, economic value and market objectives; </li></ul><ul><li>are at the cross-road among the artisan, services and industrial sectors; and constitute a new dynamic sector in world trade. </li></ul><ul><li>Cultural heritage is identified as the origin of all forms of arts and the soul of cultural and creative industries; the historical, anthropological, ethnic, aesthetic and societal viewpoints </li></ul>
  9. 11. UNCTAD definition of the “creative economy” <ul><li>An evolving concept based on creative assets potentially generating economic growth and development. </li></ul><ul><li>It can foster income-generation, job creation and export earnings while promoting social inclusion, cultural diversity and human development. </li></ul><ul><li>It embraces economic, cultural and social aspects interacting with technology, intellectual property and tourism objectives </li></ul><ul><li>It is a set of knowledge-based economic activities with a development dimension and cross-cutting linkages at macro and micro levels to the overall economy. </li></ul><ul><li>At the heart of the creative economy are the creative industries. </li></ul>
  10. 12. The creative class/creative entrepreneurs <ul><li>Richard Florida: </li></ul><ul><li>descriptions of the emerging “creative class” in society </li></ul><ul><li>a cohort of professional, scientific and artistic workers (creative professionals in business, finance and law) whose presence generates economic, social and cultural dynamism, especially in urban areas </li></ul><ul><li>based on values of individuality, meritocracy, diversity and openness </li></ul><ul><li>creativity is the prime factor of our economy </li></ul><ul><li>“ 3 Ts theory” for economic growth: technology, talent and tolerance </li></ul>
  11. 13. Creative cities <ul><li>Four ways in which the term “creative city” has been used: </li></ul><ul><li>The creative city as arts and cultural infrastructure </li></ul><ul><li>The creative city as the creative economy </li></ul><ul><li>The creative city as synonymous with a strong creative class </li></ul><ul><li>The creative city as a place that fosters a culture of creativity </li></ul>
  12. 14. The facts
  13. 15. Major drivers of the creative economy worldwide I <ul><li>Technology : </li></ul><ul><li>convergence of multimedia and telecommunication technologies -> integration of the means by which creative content is produced, distributed and consumed </li></ul><ul><li>deregulation and privatization of media and telecommunication industries -> massive growth in private-sector investment, with consequent effects on output and employment </li></ul><ul><li>Digital technology -> enormous growth in the range of media through which creative content is conveyed to consumers, such as video-on-demand, music podcasting, streaming, computer games and the provision of television services via cable, satellite and the Internet </li></ul>
  14. 16. Major drivers of the creative economy worldwide II <ul><li>Growth in demand for creative products: </li></ul><ul><li>Increasing demand for creative content. It is the task of the creative industries, wherever they are located, to supply this content in a way that is culturally expressive and economically profitable </li></ul><ul><li>rising real incomes in industrialized countries </li></ul><ul><li>changing patterns of cultural consumption </li></ul><ul><li>Worldwide growth in tourism: visits to cultural heritage sites, museums and galleries, festivals </li></ul>
  15. 17. The multiple dimensions of the creative economy I <ul><li>Social aspects: </li></ul><ul><ul><li>contribution to employment: from 2 to 8 per cent of the workforce ; knowledge intensive, requiring specific skills and high-level qualifications of their workforce, and labour intensive </li></ul></ul><ul><ul><li>fostering social inclusion: linking social groups in communities and contributing to social cohesion (incl. women) </li></ul></ul><ul><ul><li>important relationships with the educational systems </li></ul></ul><ul><li>Cultural aspects: cultural identity and diversity </li></ul><ul><li>!!! </li></ul>
  16. 18. The multiple dimensions of the creative economy II <ul><li>Economic aspects : </li></ul><ul><ul><li>world trade in creative-industry products increased sharply in recent years (8.7 % /yr) </li></ul></ul>
  17. 19. International trade: Global trends Total exports of all creative-industry products $424.4 billion with a growth- rate of 6.4 per yr (Owing to the gaps in the availability of data for creative services, figures for exports of creative goods were higher than those for creative services – a distortion of the reality)
  18. 20. <ul><li>NL: Place top 100 ?? </li></ul>
  19. 22. <ul><li>Key players in the global market </li></ul>
  20. 23. <ul><li>Key players in the global market: </li></ul><ul><li>visual arts </li></ul>focus on the exclusivity and originality
  21. 24. <ul><li>Key players in the global market: publishing and printing; </li></ul><ul><li>literary production translated into books (novels, poetry, educational, professional, etc.) and the printed media </li></ul>
  22. 25. <ul><li>Key players in the global market: design; the creation of forms and the appearance of products (interior objects, graphic design, jewellery, toys and fashion) </li></ul>
  23. 26. <ul><li>Key players in the global market: new media </li></ul>technologies used for the production and consumption of creative content
  24. 27. <ul><li>Key players in the global market: music export: </li></ul><ul><li>Music is a talent-based creation and one of the central creative industries </li></ul>
  25. 28. Towards Policy Development
  26. 29. Analysing the creative economy: the need for systematic analysis <ul><li>Three requirements are critical to providing the sort of information and analysis upon which sound policy can be based. These are: </li></ul><ul><li>a systematic understanding of the structure of the creative economy, who the stakeholders are, how they relate to one another, and how the creative sector relates to other sectors of the economy; </li></ul><ul><li>sound methods to analyse the functioning of the creative economy and to assess the contribution it makes to economic, social and cultural life; </li></ul><ul><li>and comprehensive statistics to quantify the analytical methods and to provide a systematic basis for evaluation of the contribution of the creative sector to output, employment, trade and economic growth. </li></ul>
  27. 30. Organization of the creative economy <ul><li>Key question ; is it the same as the “rest of the economy” </li></ul><ul><li>Traditionally, matters relating to “culture and arts” have been dealt with as special cases, given their peculiar forms of production and the specific characteristics of their markets </li></ul><ul><li>Historically, cultural policy is considered as exceptional or a field with special needs based upon a welfare-economics conception of market failure balanced against cultural values. </li></ul><ul><li>UNCTAD: The creative economy is sufficiently different from the mainstream economy; therefore, specific rather than generic policy-making might be appropriate </li></ul>
  28. 31. Organizational structures <ul><li>Main characteristic ; the “missing middle” (a small number of very large firms working internationally, counterbalanced by a very large number of essentially local, micro enterprises, many of which are simply single persons) </li></ul><ul><li>Operational matters : “chart-driven markets” ; “winner takes all” (movies: 80% failure, 20% make super profits ) </li></ul><ul><li>Locational issues : networks and clustering ; knowledge and expertise are constantly circulated and updated across firms and projects, informal exchange of information and ideas among competitors that serves them all by keeping them at the leading edge of their industry </li></ul>
  29. 33. Structure of the creative industries <ul><li>Predominance of small and medium-sized enterprises : evident at the creation state </li></ul><ul><li>Large-scale corporate enterprises : motivations of the firms are likely to be more profit-related than cultural in nature </li></ul><ul><li>Public or quasi-public cultural institutions ; museums, galleries, archives, monasteries, shrines, historic buildings, heritage sites, etc. Repositories of intangible cultural capital; tourist attractions </li></ul>
  30. 34. Distribution and competition issues <ul><li>Marketing and distribution : High levels of concentration; demand uncertainty (“nobody knows”) </li></ul><ul><li>Changing consumption patterns: Changing demographics (elderly; time and budget); new consumption technologies (the young as significant players) </li></ul><ul><li>Creative industries and regulation: preferential treatment, including subsidies, tax incentives, tariffs and dubbing requirements applicable to the film and broadcasting industries </li></ul>
  31. 35. Measurements: limitations / potential <ul><li>Time use : measuring the time that people spend on particular activities; a useful way of uncovering informal and not-for profit or simply community activity / time consuming, </li></ul><ul><li>Participation or attendance data: not measured for many informal events; </li></ul><ul><li>3. Trade and value added: </li></ul><ul><li>Physical trade : the creative economy does not register in trade or economic statistics </li></ul><ul><ul><li>much of the activity takes place in the informal economy </li></ul></ul><ul><ul><li>many cultural activities are carried out on a voluntary or recreational basis </li></ul></ul>
  32. 36. Measurements: limitations and potential <ul><li>4. Copyright and IPR : measuring the impact of copyright-based creative industries on national economies in terms of employment and contribution to GDP: WIPO definitions </li></ul><ul><li>5. Public investment: many different reporting conventions for public and not-for-profit bodies; how much money is available in any given year does not tell one how effectively the spend is or what the outcome is </li></ul>
  33. 37. Intellectual Property: WIPO <ul><li>WIPO: relationship between creativity and intellectual property protection (copyright): </li></ul><ul><li>“ core industries”; copyright industries: film and video, music, performing arts, publishing, software and database, television, radio, advertising, visual and graphic art, incl. photography </li></ul><ul><li>“ interdependent industries”; manufacture, wholesale and retail of television sets, radios, CD players, DVD players, electronic games equipment, computers, musical instruments, blank recording material, paper, photocopiers, and photographic and cinematographic instruments </li></ul><ul><li>“ partial industries”, a portion of the activities is related to works and other protected subject matter (architecture, textiles and footwear, interior design, household goods, china and glass, furniture, jewellery and coins, crafts, wall coverings and carpets, toys and games, and museums) </li></ul><ul><li>“ non-dedicated industries”; related to facilitating broadcast, communication, distribution or sales of works and whose activities have not been included in the core industries (general wholesale and retailing, general transportation, and telephony and the Internet) </li></ul>
  34. 38. Copyright and the creative economy <ul><li>“ Copyright and related rights” defined in national legislation, but largely consistent with the provisions of international instruments </li></ul><ul><li>Exclusive rights : given to creators at the moment of creation (provided they are not under contract that specifies otherwise); tradable </li></ul><ul><li>Moral rights : the right to claim authorship of a work and the right to oppose changes to it that could harm the creator’s reputation </li></ul><ul><li>Related rights : mass distribution, communication and financial investment for their dissemination (for example, publications, sound recordings and films); creators sell or license the copyrights to individuals or companies best able to market the works in return for payment (“royalties”. ) </li></ul>
  35. 39. IPR: Recent changes <ul><li>Technological developments : distribution through a variety of mechanisms, including radio, television, satellite transmission and the Internet </li></ul><ul><li>Unlimited and repeated reproduction </li></ul><ul><li>The current business model which requires ever greater content control and legal remedy, is out of step with the realities of the nature and usage of Internet and digital technologies </li></ul><ul><li>Piracy one of the central issues </li></ul><ul><li>Cultural products deeply rooted in the cultural heritage of developing countries have crossed borders and established significant market niches in industrialized countries, without IPR protection </li></ul><ul><li>The Digital Divide?? </li></ul>
  36. 40. Technology, connectivity/creative economy <ul><li>ICT has opened a new set of marketing and distribution opportunities, boosting the economic potential of the creative economy </li></ul><ul><li>Digitization: various art forms have the same basic format; potentially integrated into one medium </li></ul><ul><li>Common digital basis of information allows it to be easily communicated and transferred with no degradation of the original, in fact, in an exact copy of the original </li></ul><ul><li>Multiple exploitation of intellectual property (a cartoon character in a computer game, a film, a book, a toy or on a piece of clothing) </li></ul>
  37. 41. New business models, market structures and governance <ul><li>Closer integration of separate product lines (books, films and music, for example) creates a striking concentration of ownership and power </li></ul><ul><li>Channels monopoly profits into music companies and ensures very high intellectual property returns (for a small number) </li></ul><ul><li>As a consequence companies expect a large percentage of failure to be discounted by a small number of super successes </li></ul><ul><li>However: the more concentrated in the hands of a few transnational conglomerates, the more alternative business models emerge (KaZaA , Napster, Skype, Open Source Software) </li></ul>
  38. 43. Policy strategies creative industries <ul><li>Knowledge and creativity are becoming powerful drivers of economic growth in the contemporary globalizing world </li></ul><ul><li>Together with technology, they open up a huge potential to develop new areas of wealth and employment creation consistent with wider trends in the global economy </li></ul><ul><li>Creative industries well placed to benefit from the development of ICT; challenges: </li></ul><ul><ul><li>lacks professionals in financing and accounting </li></ul></ul><ul><ul><li>SMEs face uncertainties relating to cross-border e-commerce </li></ul></ul><ul><ul><li>companies find it hard to prove the financial potential of their creative products (“nobody knows”) </li></ul></ul><ul><ul><li>challenges with respect to intellectual property </li></ul></ul>
  39. 44. The role of public policies <ul><li>In general: public activities to promote: </li></ul><ul><ul><li>efficient resource allocation in the economy; </li></ul></ul><ul><ul><li>full employment, price stability and external balance; and </li></ul></ul><ul><ul><li>equitable distribution of income and wealth </li></ul></ul><ul><ul><li>Public legitimation involvement Creative economies: </li></ul></ul><ul><ul><li>Market failure (public goods): social cohesion </li></ul></ul><ul><ul><li>Market failure (imperfect competition): monopolized global market that threaten local cultures </li></ul></ul><ul><ul><li>Market failure (research and development); government better equipped to invest in R&D </li></ul></ul><ul><ul><li>Education and training: targeted training opportunities (formal, non-formal, informal) in skills and knowledge relevant to professional participation in the creative-industries sector </li></ul></ul><ul><ul><li>Protection Cultural identity/cultural diversity </li></ul></ul>
  40. 45. Policy action at the national level <ul><li>strengthening of the infrastructure that supports the creative economy; </li></ul><ul><li>capacity-building to ensure that countries can continue to oversee the development of their creative economies; </li></ul><ul><li>the critical role of finance and investment in areas where the government can play an important facilitating role; </li></ul><ul><li>adopting measures to expand the exports of creative products and to foster import replacement; </li></ul><ul><li>appropriate copyright legislation and the administrative infrastructure to provide effective enforcement; </li></ul><ul><li>the importance of protecting the fundamental artistic and cultural resources on which the creative economy depends. </li></ul>
  41. 46. Lessons learned and policy options <ul><li>Creative industry is alive and kicking! </li></ul><ul><li>Creative products and activities have real potential to generate economic and social gains </li></ul><ul><li>The policy broadens from culture (empowerment and social cohesion) into an economic sector </li></ul><ul><li>This Report seeks to establish a realistic benchmark of definitions of the “creative economy” </li></ul><ul><li>In the developed world the creative industries grew faster than other sectors, including services and manufacturing; because of technological change in multimedia and telecommunications, ITC </li></ul><ul><li>Cross-cutting nature of the creative economy -> policy development on a coordinated interministerial basis </li></ul>
  42. 47. Different policy roles <ul><li>Role of governments : put in place a plan of action and effective mechanisms to articulate tailor-made policies to stimulate creativity and improve the competitiveness of creative products </li></ul><ul><li>Role of creative entrepreneurs : have to deal with both artistic and entrepreneurial aspects; combining art, creations and business </li></ul><ul><li>Educational goals: </li></ul><ul><li>The main areas with which creators should be familiarized include: </li></ul><ul><li>employment, wages, working conditions, contracts, regulations; </li></ul><ul><li>financing instruments, access to credit and funding for creative or cultural projects; protection for IPRs, copyright legislation; </li></ul><ul><li>new technologies and ICT tools for creation, production and distribution of creative content; </li></ul><ul><li>continuous learning in their respective fields for upgrading of know-how </li></ul>
  43. 48. Notes RK: <ul><li>Cultural sector has gained in status and importance by becoming part of the concept of “Creative Industries” </li></ul><ul><li>This report puts the Creative Industries on an international platform within the context of globalization processes </li></ul><ul><li>It combines – from an economical standpoint – the sociological perspectives (creative class), the geographical (creative networks), and the urban planning perspective (creative cities) </li></ul><ul><li>It develops a clear educational program towards integrated artistic and entrepreneurial qualifications </li></ul><ul><li>Do not despair: the Netherlands are in many of the cultural industries placed in the global top ten ! </li></ul>
  44. 49. Questions and remarks ??! <ul><li>[email_address] </li></ul>