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Edna dos Santos-Duisenberg (edna.dos.santos@unctad.org)Chief, Creative Economy and Industries Programme

Second International Cultural Industries Forum, Beijing ,October 2008

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Context and Objective• First UN multi-agency report on this new topic

• UNCTAD, UNDP, UNESCO, WIPO and ITC

• Conceptual, institutional and policy framework

• Analytical tools for informed policy-making

• Shared vision based on comparative analysis

• The English full version can be downloaded by internet at http://unctad.org/creative-economy

• A non-official translation into Chinese, kindly prepared by organizers, will be available during this Forum

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Setting the scene

Cultural assets and human creativity inexhaustible resources with both cultural and economic value

Globalization re-shaping patterns of world cultural consumption in a world dominated by images, sounds, texts and symbols

Connectivity influencing society life-style and the way creative products are created, reproduced and commercialized

Shift towards a more holistic approach to development interface between economics, culture and technology

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Creative Economy Report - 2008

Chapter I: Concept and context of the creative economy

Chapter II: The development dimension

Chapter III: Analysing the creative economy

Chapter IV: Towards evidence-based assessment of the creative economy

Chapter V: International trade in creative goods and services

Chapter VI: The role of intellectual property in the creative economy

Chapter VII: Technology, connectivity and the creative economy

Chapter VIII: Policy strategies for the creative industries

Chapter IX: The international policy framework for creative industries

Chapter X: Lessons learned and policy options

Statistical Annex : World trade of creative goods and services, 1996-2005

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Chapter I: Creative Economy- Concepts and definitions : cultural industries, cultural

economics, creative industries, creative economy, creative cities, creative clusters, creative class, etc

- Major drivers : technology, demand and tourism

- Multiple dimensions: economic, social and cultural - Multi-disciplinary nature: need for concerted inter-ministerial

policies and dialogue with all stakeholders

- The creative economy: a leading sector generating economic growth, employment and trade

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Creative Economy

• An evolving concept based on creative assets potentially generating socio-economic growth

• Embraces economic, cultural and social aspects interacting with technology and tourism objectives

• Can foster income generation, job creation and export earnings, while promoting social inclusion cultural diversity and human development

• Is a feasible policy option to promote trade and development gains (UNCTAD)

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Creative Economy Is a set of knowledge-based economic activities with

cross-cutting linkages to the overall economy

Creative Industries

Are tangible goods and intangible services with

creative content, economic value and market objectives

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UNCTAD Classification

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Chapter II: The Development Dimension

- UN Millennium Development Goals and poverty reduction

- Development linkages: beyond economics - cultural, social and sustainable development

- Traditional knowledge, arts and the creative economy

- Obstacles to expansion of the creative economy: capital, entrepreneurship, infrastructure, institutional mechanisms

- Shaping a model for enhancing the creative economy : UNCTAD’s creative nexus (C-ITET) model

- The creative economy in the developing world :Africa’s share in global trade of creative goods and services is less than 1%

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The Development Dimension

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The Creative Nexus

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Chapter III: Analysing the creative economy

- Need for systematic analysis, sound methods, reliable statistics and qualitative indicators

- Organizational structure: predominance of SMEs and few large TNCs working internationally

- Economic analysis: value-chain analysis, IPRs, inter-industry and locational analysis, contract theory

- Important role : public and quasi-public institutions and individual artists and creative producers

- Distribution and competition issues

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Chapter IV: Towards an evidence-based assessment of the creative

economy

- Reliable benchmark: international baseline using trade data

- Operational model: universal comparative analysis to all countries

- Practical measures: further research, minimal additional costs

- Assessment tools: economic evaluation is partial, not exhaustive

- Problematic : valuation of culture, technological changes and boundaries between arts/culture and industry

- Creative products : relative low value as materials, but real value in intellectual property (CD case)

- Trade in creative industries is relatively invisible, shadows of IPRs

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Chapter V: International trade in creative goods & services - Global trends

● World trade of creative products annual growth rate of 8.7% during 2000-2005, and reached US$ 424,4 billion in 2005

● Creative goods totalled US$ 335,5 billion in 2005, 47% higher than in 2000, as shown in the table

• Developed countries dominated trade but exports have risen faster in developing countries, thanks to China

• New opportunities for developing countries to leapfrog in high growth sectors of the world economy

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Creative economy: leading growth and

employment in advanced countriesIn Europe EU-25, the creative economy has grown 12% faster than the overall economy during 1999-2003. (EC-KEA)

UK: In 1997-2004, as value added 5% growth compared with 3% for the rest of the economy. Employment grew twice faster (DCMS)

EU led world exports, US$ 145 billion in 2005

Italy, ranked first in exports of creative goods due to competitive position in design products

Exports earnings 42% higher in developed countries in 2000-2005. Same countries among top 10 exporters during the period

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Creative goods: Top 20 exporters worldwide, 1996 and

2005

Source : UNCTAD

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China’s exports of all creative products

US$ 61.3 billion in 2005

Source : UNCTAD

9.1%

76.7%

0.2%

6.4%1.9%

5.6%

Art crafts Design Music New media Publishing Visual arts

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China Exportsselected creative goods -1

Source : UNCTAD

0

10

20

30

40

50

60

70

All creative goods Design

19962005

billion US$

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China Exportsselected creative goods-2

Source : UNCTAD

0

1

2

3

4

5

6

Art crafts Visual arts New media

19962005

billion US$

20

China Exportsselected creative goods-3

Source : UNCTAD

billion US$

0

200

400

600

800

1000

1200

Publishing Music

19962005

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39.2

59.7

1.1

89.2

8.22.6

51.6

46.9

1.5

89.9

9.50.6

53.8

45.8

0.5

82.6

14.82.6

70.7

28.9

0.5

0%

20%

40%

60%

80%

100%

Artcrafts Audio visuals Design Music (CDs,tapes)

New media Publishing Visual arts

Developed Economies Developing Economies Economies in transition

Source : UNCTAD

Creative industries goods share in world exports - 2005

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Creative industries exports structure by economic groups in 2005

(trends - creative goods)

Source : UNCTAD

58%

1%

19%

22%

41%

Developed economies

Developing economies

Economies in transition

China

Other developing economies

23Source : UNCTAD

Creative industries exports structure by economic groups in 2005(trends - creative services)

Developedeconomies(82%)

Developingeconomies(11%)

Economies intransition (7%)

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Creative goods and services A new dynamic sector in world trade

• UNCTAD figures show that world exports of :

Design Art crafts-US$ 119.7 billion in 1996 - US$ 14.7 billion in 1996

-US$ 218.1 billion in 2005 - US$ 23.2 billion in 2005

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In developing countries a nuanced situation

• Despite the abundance of creative talents, most developing countries are not yet fully benefiting of the potential of their creative economies

• In Asia-Pacific and Middle-East the creative economy is growing fast with competitive products

• In Latin America and the Caribbean relatively small, despite improvements

• Africa very fragmented creative industries requiring financing and business support

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Chapter VI: Intellectual Property Rights and the creative economy

-Intellectual property: sensitive area with different approaches

-Copyrights: source of wealth, incentive and reward for creative works

-IPRs contribution to the creative economy: GDP/ employment

-Traditional cultural expressions and public domain issues

-Copyright and new technologies: the “internet treaties”

-Possible policy options

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Chapter VII: Connectivity and the creative industries

- ICTs impact : changes in marketing & distribution and stimulus for creative content

- Digitization: 1/3 developing countries penetration rate of internet less than 5%

- Convergence : new business models, markets structures and governance

- Impact across the production chain: from conception to access to markets /audience

- Looking into the future

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Chapter VIII: Policy strategies for the creative industries

- The role of public policies : government as facilitator

- The policy process : objectives, tools, implementation

- Policy directions : strategic multi-disciplinary actions

- Target measures for enhancing creative capacities

- Tailoring policy action at the national level

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Policy directions

- Provision of infrastructure- Provision of finance & investment- Creation of institutional mechanisms- Development of export markets- Protection of creator’s rights- Establishment of creative clusters- Tools for effective data-collection measures

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Chapter IX: The international policy framework

Highly influenced by the UN MDG’s- poverty reduction

- UNCTAD : Introduced the creative economy on the economic and development agenda: Mandates to promote trade and development gains based on three pillars : (i) consensus-building, (ii) policy-oriented analysis and (iii) technical cooperation

- UNDP : Engaging developing countries in the creative economy for development, promoting South-South cooperation

- ITC : Creating business opportunities for creative industries from developing countries. Focus on crafts, visual arts and fashion

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Ongoing multilateral processes

UNESCO Cultural diversity perspective: - implementation of the “Convention on the Protection

and Promotion of the Diversity of Cultural Expressions” - recognizes the sovereign right of States to elaborate

cultural policies and promotes international cooperation

WIPO Development Agenda: - closer integration of the development dimension into

policy-making in the field of intellectual property protection - intergovernmental committee submit 45 agreed proposals

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Multilateral Trade Negotiations

- WTO Doha Round launched in 2001 remains inconclusive. Several issues relevant for trade policy of creative/cultural goods and

services

GATS : market access in cultural services including audiovisuals and the built-in flexibilities. Modes of supply and the mobility of artists/creators to offer services in world markets

TRIPs: trade of copyrightable and non-copyrightable items such as those originating from traditional knowledge and folklore, technology transfer etc

TRIMS, competition policies, trade efficiency and Special &Differential treatment for developing countries

Other legal provisions such as free trade and regional trade agreements, economic partnerships, customs unions

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Chapter X: Lessons learned

Lessons Learned :

- Creative economy calls for multi-disciplinary and concerted policy response

- World exports of creative goods and services grew by 8.7 % annually during 2000-2005 with faster growth in developing countries

- ICTs and IPRs are major drivers of the growth of the creative economy worldwide

- Technology offers opportunities for SMEs: new distribution channels for creative content, innovative business models

- The creative economy strengthens the links between creativity, culture, technology and economic development

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Major findings- An evolving concept : no common definition of the

creative economy, nor a unique classification of the creative industries

- There is no one-fits-all recipe but flexible and strategies choices to be made by national governments

- Creative industries offers new venues for developing countries to leapfrog into high-growth areas of the world economy

- Need to reconcile national policy-making for the creative economy with on-going multilateral processes

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Policy options

- Role of governments: to articulate a conducive climate and infrastructure to stimulate creative capacities, such as creative clusters

- Role of creative entrepreneurs: to promote creative entrepreneurship to reinforce skills and linkages between arts, creation and business

- Role of civil society: forging strategic alliances to facilitate interactions with all stakeholders.

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Key messages

- Creative industries is among the most dynamic sector in world trade. Developing countries have great potential to expand exports as a source of economic growth and development

- Policy strategies to support the development of the creative industries require inter-ministerial policy actions

- Policy measures should reinforce the “creative nexus” between investment, technology, entrepreneurship and trade

- Lack of reliable data affect policy-making. Need for better methodologies for gathering data worldwide

- IP should provide a stimulus to creators and is crucial for enhancing the creative sector for development.

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The Way Ahead

- Redefining priorities: Developing countries have impressive trade deficits as regards creative products. Need o enhance creative capacities

- The role of international cooperation: UN system can assist governments to better understand the dynamics of the creative economy, for national and international policy-making

- The “Creative Economy Report” advanced the research and policy agendas. Starting point of a “work in progress”

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Thank you for your attentionReproduction authorized with source acknowledgement UNCTAD (E. dos Santos)

Copy of quotation or reprint to be sent to the UNCTAD/UNDP Secretariat