Mapping the Creative Industries in Jordan

2012

Yusuf Mansur

Economy of Jordan

• Real GDP at market

prices grew at an

average annual rate of

6.65% between 2005

and 2011

• The growth rate

slowed in 2010 to

2.3%, 2.6% in 2011

2

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

2005 2006 2007 2008 2009 2010 2011

Source: Central Bank of Jordan

Real GDP Growth Rate (%),

2005-2011

Economy of Jordan

• For the period of 2005-

2011 net inflows of

foreign direct

investment (FDI)

amounted to a total of

JD 12,290 million

• The average annual

growth rate was -8.1%

• FDI peaked in 2006

and reached its lowest

point during 2011

• FDI rose again in 2012 0.00

500.00

1,000.00

1,500.00

2,000.00

2,500.00

3,000.00

2005 2006 2007 2008 2009 2010 2011

Source: Central Bank of Jordan

Foreign Direct Investment, 2005-2011

Economy of Jordan

• Jordan imports almost twice the amount it exports

• Imports increased from JD 7.4 billion in 2005 to JD 11

billion in 2011, an average annual increase of 11.2%

• Jordan’s trade deficit reached JD 5.895 billion in 2011

• Throughout the past decade, the unemployment rate

has been hovering between 15.3% and 12.3%

• There is a severe case of structural unemployment, a

mismatch between the skills of workers seeking

employment and the demand in the labor market

• The CPI, a measure of inflation, increased by 38.84

from 94.125to 129.967 during the period 2005-2011

Jordan Ranking in Major Economic Indices

• Ranked 71st out of 142 countries, falling 6places from 65th place in 2010/2011

Global Competitiveness Report, 2011/2012

• Ranked 111th out of 183 countries, falling 4places from 107th place in 2010

Doing Business Report, 2011

The Creative Economy

Creativity comes in various forms, as in the figure

presented below:

Scientific Creativity

Cultural Creativity

Economic Creativity

Technological Creativity

The Creative Economy

Manifestations of creativity (outputs and outcomes)

Culturalcapital

Social capital

Structural or institutional

capital

Humancapital

Four Types of Capital

The Creative Economy

According to the UNCTAD Creative Economy Report 2010,

creative industries are defined as:

– The cycles of creation, production and distribution of

goods and services that utilize creativity and intellectual

capital as main inputs;

– A set of knowledge-based activities, focused on but not

limited to arts, that potentially generate revenues from trade

and IPRs

– Tangible products and intangible intellectual or artistic

services that have creative content, economic value and

market orientation

– Intersect the artisan, services and industrial sectors.

The Creative Economy

The statistical correlation between the Global Competitiveness Index and GDP per capita stands at 0.84. The Global Creativity Index also has a close association with the Global Competitiveness Index, the correlation is 0.79

11

Factor Conditions

Strategy, Structure &

Rivalry

Demand Conditions

Clusters & Clustering

Government

Mapping Competitiveness: Porter Diamond

Demand Conditions

• A slight majority of demand originates locally

• In all industries the majority of demand is patterned except for Books and Press in which half of the demand is patterned

• Cyclical demand is the prevalent type of demand in all the industries except in Performance and Celebration

• Price is the main factor affecting demand in all the industries except in Performance and Celebration in which trends is the main factor

• Quality is the driving factor in the pricing of creative services and products

12

Demand Conditions

• Customers are not adequately knowledgeable of industry trends

• The Arab Awakening has increased demand

• Jordan is capable of handling increased demand

• The Arab Awakening has changed the work culture and environment

• The nature of the creative content has changed with the advent of the Arab Awakening

• The quality and sophistication of the creative content has increased

13

Factor Conditions

• Equipment is new, yet lacking in sophistication

• Focus is mainly on a few projects (77% complete 30 projects or less)

• Projects are small

• A majority view the global market as open to their activities

• Global connectivity is high

• Regional markets are open

• Connectivity to global markets is higher than connectivity to regional markets

• Medium to low availability of quality human resources

• Medium availability of technology14

Clusters & Clustering

• In all industries except in the Audio-Visual and Interactive Media, less than 15% of the stakeholders have agreements in place with supporting industries

• Between 31%-44% of stakeholders in all industries utilize services and products from supporting industries

• Those stakeholders using products and services from supporting industries, use them frequently

• Supporting industries are reliable

• Relationships with suppliers from other industries are long term

• The large majority of relationships are project based

• Suppliers are relatively reliable in terms of quality consistency

• The majority of suppliers are local

15

Government

• The majority say there are no policy restrictions on new entry

• The government is not responsive to stakeholders’ needs

• Government agreements with other countries do slightly harm stakeholders

• Monopolistic practices are apparent and harm businesses

• It is difficult to find both local and regional investors

• The regulator limits the growth of companies

• Customs are very high and higher than those of surrounding countries

• Government legislation and procedures do not help exports reach their potential

• Intellectual property rights are not protected

• Problems faced with regard to IPR are not being solved

16

Strategy, Structure, & Rivalry

• The main competitors to Jordan are Lebanon, United Arab Emirates (UAE) and Egypt

• Price is the most important factor in being competitive with regional competitors

• The majority of stakeholders are not members of professional associations

• Stakeholders receive minimal support from professional associations

• Information on industry trends is widely accessible

• Insufficient finance and limited markets are the main factors affecting demand

17

Thank You