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WORLD ECONOMY SEES BOOM IN CREATIVE INDUSTRIES

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GENEVA, Mar 5 2008 (IPS) - The world economy has seen an extraordinary expansion in the last five years, and the creative industries are in the forefront as a result of the globalisation and connectivity that have been reshaping the overall pattern of cultural production, consumption, and trade and transforming lifestyles worldwide, writes Supachai Panitchpakdi, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD). In this article, the author writes that though developed countries still dominate this market, many developing-country products are already benefiting from the boom of their creative industries. Their exports of creative goods have increased astronomically, from USD 55.9 billion in 1996 to USD 136.2 billion in 2005, or about 140 percent. This rise is attributable primarily to China, which became the world\’s leading exporter of creative goods in 2005. A challenge to be faced, both domestic and systemic, is that most developing countries are not yet able to harness their creative capacities for development. In Africa, for instance, although there is an abundance of creative talents, the creative potential remains underutilised. The continent\’s share in global trade remains less than 1 percent of world exports, despite recent sharp increases. As is the case for other developing regions, this is a reflection of both domestic policy weaknesses and global systemic biases.

The creative industries are at the crossroads of the arts, culture, business, and technology. They include the creation, production, and distribution of goods and services that use intellectual capital as primary input. Today’s creative industries involve the interplay of traditional, technology-intensive and service-oriented subsectors. They range from folk art, festivals, books, paintings, and the performing arts to more technology-intensive sectors like the film industry, broadcasting, digital animation and video games, and more service-oriented fields like architectural and advertising services. All these activities are intensive in creative skills and can generate income through trade and intellectual property rights (IPRs).

In most advanced countries, the creative economy is a leading component of economic growth, employment, and trade. A recent study shows that in Europe, it is growing 12 percent faster than the overall economy. So-called “creative cities” are proliferating, particularly in Europe and North America, revitalising socio-economic growth and generating employment in urban post-industrial areas.

Ongoing policy-oriented research and analysis by UNCTAD (United Nations Conference on Trade and Development) also finds the creative industries are among the most dynamic emerging sectors in world trade. Over the period 2000-2005, trade in creative goods and services increased at an unprecedented annual average of 8.7 percent.

World exports of creative products reached USD 445.2 billion in 2005, as compared to USD 234.8 billion in 1996, according to our preliminary figures. Creative services in particular experienced fast export growth – 9.1 percent annually between 1996 and 2005.

Developed countries still dominate this market. Nonetheless, many developing-country products are already benefiting from the boom of their creative industries. Their exports of creative goods have increased astronomically, from USD 55.9 billion in 1996 to USD 136.2 billion in 2005, or about 140 percent. This rise is attributable primarily to China, which became the world’s leading exporter of creative goods in 2005. The dynamic creative economies of other developing countries, mainly in Asia, have also begun to bear fruit, thanks largely to policies aimed at strengthening their creative capacities and improving the competitiveness of their creative goods and services. Some of the creative products enjoying rising popularity in world markets include Indian movies and software, Mexican TV stations, and Korean digital animation products.

Design – and arts and crafts – are the most competitive creative goods from developing countries in world markets. Overall, world exports of audio visuals tripled, and exports of visual arts doubled, between 1996 and 2005. While such figures cannot possibly capture the magnitude of the contribution of the creative industries to national economies, especially in developing countries, the trend is indeed very important. The lion’s share of creative revenues is generated by copyrights, licences, and marketing and distribution. Unfortunately for the developing countries that produce the products or services, however, most of this revenue accrues to large companies abroad. An UNCTAD study found that in the mid-1990s, for example, Jamaican reggae artists and producers received only 25 percent of worldwide income from reggae recordings.

This particular figure will have changed since then, due to revolutionary developments in new media and use of the Internet. The underlying problem, however, will probably not have altered substantially. Innovative solutions are thus needed to correct these systemic market distortions, such as reinforcing competition policies, addressing lacunae in the current IPR regime, and developing effective collecting societies for creative-industry revenue.

But there is another challenge to be faced, one that is both domestic and systemic. Most developing countries are not yet able to harness their creative capacities for development. In Africa, for instance, although there is an abundance of creative talents, the creative potential remains underutilised. The continent’s share in global trade remains very marginal, at less than 1 percent of world exports, despite recent sharp increases. As is the case for other developing regions, this is a reflection of both domestic policy weaknesses and global systemic biases.

At the domestic level, developing countries in general will have to upgrade quality throughout the productive value chain, set up institutional and financing mechanisms to support independent artists and creators, and create policies to attract investments that facilitate joint ventures and co-productions. Public/private partnerships will need to be promoted; competition policies enhanced, and awareness of IPRs stepped up. Opportunities must also be created to access advanced technologies and increase the use of new business models and Information and Communication Technologies (ICT) tools to reach new markets, including South-South trade.

There are, however, constraints at the international level as well, related to market access and non-competitive business practices that arise from the oligopolistic market structure, especially in the audiovisual and digital industries. The concentration of marketing channels and distribution networks in a few major markets; limited access to regional and multilateral credit; and technological exclusion all combine to jeopardise the competitiveness of creative products and services from developing countries in world markets.

But there is no doubt as to the potential, and it would be a shame not to exploit it. The fact that the creative economy is driven as much by creativity as by capital makes it particularly well suited for countries that are rich in cultural heritage and creative talent, even if they lack skilled labour, basic infrastructure, and foreign direct investment. It is high time to help developing countries make the most of these new opportunities. (END/COPYRIGHT IPS)

 
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