Dr. Vanus James, Professor at the University of Technology, Kingston, Jamaica discusses Creative Industries as a Factor of Economic Development in Trinidad and Tobago and the World at MusicTT, WIPO & IPO's How to Make a Living from Music workshop

1. CREATIVE
INDUSTRIES IN
DEVELOPMENT IN
T&T

2. Topics – (2013 Report on Contrib. of
Copyright-based Industries)
 Basic Development Problems
 Consequences
 Opportunities to Raise Growth / Development
 Targeted Sectors & Contribution of Creative
Industries
 Inhibiting Factors and Main Policy Implications
 Summary and Conclusion

3. Basic Development Problems
 Exports highly specialised (oil & gas) or low
productivity growth (tourism)
& low foreign income elasticity of demand for
exports
vulnerable to price shocks of commodity cycles
 High share of non-traded domestic capital output
(e.g., government-controlled tertiary education)
 Unequal distribution of assets by sector
 High dependence on industrial imports
& high income elasticity of demand for imports

4. Consequences
Repeated current account deficits and FX shortages
– every 5-10 years since 1959-61 -> 1967-72; 1983-86;
1990-94; 1998-2000; 2008-10; 2014-17
Rising public debt
Repeated need to reduce domestic demand
Reduced growth rate
Capital stock low relative to labour supplies
Significant disguised unemployment of labour,
many employed in government
Associated social turmoil

5. Opportunities to Raise Growth /
Development Rate
■ Reduced demand slows imports
■ Underutilized labour can be redirected to investment to develop
sectors that can export or substitute imports
■ Investment – two choices
– Investment in domestic capital -DC– can be produced; no real
bottlenecks – introduce dynamic gains from trade
– Investment in imported capital – bottlenecks of costs FX and
investment income going abroad
■ Best choice is investment in DC. Effects would be to
– Grow productivity, grow savings and grow investment; diversify
and grow exports; grow/restructure output; and lower
prices/inflation
– Reverse the balance of payments deficit and lower debt

6. Targeted Sectors – the domestic capital
sectors
■ Traditionally tried manufacturing – not globally
competitive
– High dependence on low cost labour & large
minimum efficient scale of imported plant
– High cost of investment income going abroad
– Small scale of underutilized labour & rising labour
costs
■ Share of GDP has stagnated or declined

7. Targeted Sectors – the domestic capital
sectors
■ Best alternatives for restructuring
– Education
– ICT
– Creative industries
■ Music; Performing and visual arts
■ Radio,TV, Film, Photography,Video
■ Advertising, marketing
■ Fashion design
■ Others

8. Targeted Sectors – Creative Industries –
Key Advantages
■ Produce some of the capital needed for investment
■ Use small minimum efficient scale imported capital
■ Low cost of investment income going abroad
■ Environmentally sustainable
■ Innovate to be globally competitive; rapid transfer
of knowledge beyond sector boundaries
■ Not very vulnerable to commodity price shocks

9. Contribution of Creative Industries –
music flagship
■ Use the popular culture and widespread information sharing to
introduce new meaning, intuition, inspiration, innovation, new
exports – create intellectual property
– Can use tourism as an exporting platform
■ Diversify and grow the capital-labour ratio – endowments ratio
■ Grow productivity - Among the most productive industries
– Highest productivity response to growth of capital-labour ratio –
62% (Jamaica data); compare to 46% for manufacturing; 12% for
tourism and related
– increasing returns to investment in imported capital
■ Address inequality and poverty - redistributes assets & income
■ Share of GDP growing

10. Growth of Creative Industries
■ The creative industries are outperforming the GDP
– The real size of the copyright sector grew at an average rate of
■ 11.7% per year between 2000 and 2007
■ 3.2% per year between 2007 and 2011
– The real size of the GDP grew at an average rate of
■ 10.7% per year between 2000 and 2007
■ -1.1% per year between 2007 and 2011

11. Growth of Creative Industries
■ The creative industries outperform other key sectors
– The share of the copyright-based sectors grew
■ 3.9% to 4.2% of GDP between 2000 and 2011
– The share of agriculture declined
■ 1.2% to 0.6% of GDP between 2000 and 2011
– The share of manufacturing declined
■ 16.9% to 9.7% of GDP between 2000 and 2011; now 8.3%
– The share of hotel and guesthouses declined
■ 1.2% to 0.2% of GDP between 2000 and 2011
■ Indication? – macroeconomic increasing returns and
development stimulus available from creative industries
■ Policy interventions necessary – development not automatic
process

12. Inhibiting Factors and Main Policy
Options
■ Government is a major investor in tertiary education, which offers high-quality
options to transform a non-traded domestic capital activity into a successful
export activity.
– Current policy inhibits that transformation.
■ Investors in ICT and the creative industries tend to have small assets
– disadvantaged by the historical distribution of landed assets and cash
– Disadvantaged by the historical lack of specialised public infrastructure that
address market failure
■ Tertiary education sector provides minimal leadership to the other creative
industries and ICT in terms of collaborating with global players to identify skills
gaps and produce globally-competitive graduates to boost their export
capacity

13. Main Policy Options to Raise Growth
Rate
■ Transformation of tertiary education sector into export sector
■ Redirect tertiary education sector to provide leadership in
shaping international collaborations to grow creative sector
exports, including by producing globally-competitive graduates
with applicable skills
■ Improve measurement of performance of creative sector,
including the intellectual property assets of creative
establishments
■ Create credit for the creative sector using modern financial
inclusion methods – including specialised development banking

14. Main Policy Options to Raise Growth
Rate
■ Targeted development of priority infrastructure to address
market failure, including
– Specialized production and performance facilities
– Reforms to enable inclusive policy making
– Reforms to address social and personal security
■ Technical support for creative sector
■ Tax and tariff concessions to creative sector
■ Investment promotion to attract international collaborators
into creative sector

15. Summary and Conclusion
■ Growth of creative industries and the other elements of the
DC sector can address the BOP and growth challenges ofT&T
■ Despite policy landscape, sector has been creating increasing
returns and growing its share of GDP
■ Growth constrained by small asset size, missing specialised
infrastructure that address market failure, and missing
leadership from tertiary education sector
■ Sound policy requires updated sector monitoring, significant
political will and participatory approach to policy design
■ Key reforms are needed for such changes, especially political
reforms

16. ThankYou
■Vanus James
■ WIPO/IPOTraining Seminar, Cascadia Hotel, POS,T&T
■ April 6, 2017