Understanding Creative Industries: their definitions, models, measurements and drivers
- Conceptual framework for the creative industries
The concept of creative industries is relatively new and remains in flux. Leading organisations such as UNESCO defines them as “those industries that combine the creation, production and commercialization of products which are intangible and cultural in nature. These contents are typically protected by copyright and they can take the form of goods or services”.
Some have argued that it is important to focus on creativity rather than culture. The UK government, for instance defines the creative industries as “those industries which have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property”.
What both definitions have in common is the emphasis on intellectual property or copyright aspect of the creative industries, the creative or cultural origin of the goods or services and the commercialisation or wealth and job creation of the creative industries.
Increasingly, many current studies and governments (SA, 1998; Colombia, 2002, Singapore, 2003, UK 2001,2003) define the creative industries as those that have creativity (creativity in content, in service or product as well as in the value chain associated with the industry) as a focus of their activities.
Over time both the concepts as well as their definitions have changed.
“Back in the late 1980’s when most of the constituent ideas were developed the key terms discussed were: culture, the arts, cultural planning, cultural resources, the cultural industries. Creativity as a broad based attribute only came into common, as distinct from specialist, currency, in the mid-1990’s. For example Australia’s ‘Creative Nation’ instigated in 1992 by Paul Keating spelt out the country’s cultural policy. In the UK by contrast it was the publication of Ken Robinson’s national commission on creativity, education and the economy for the UK Government ‘All our Futures: Creativity, Culture and Education’ that put creativity onto the political agenda. Later some of the phraseology changed. The cultural industries became the creative industries and the creative economy and the notion of the creative class then emerged in 2002. The publication of Richard Florida’s book ‘The Rise of the Creative Class’ gave the ‘movement’ a dramatic lift with the danger of hyping the concept out of favour” (Landry, 2005: 5-6).
It is useful to have a model to frame our work when conducting an assessment of the strength of a country’s creative industry. It will guide the collection of information, the analysis of data, trends and statistics, the conversation with key stakeholders as well as the identification of recommendations and policy direction.
The UK government puts creativity, skill and talent with the potential for wealth and job creation through the exploitation of their intellectual property at the heart of their definition. In this definition, 13 sectors close to the UNESCO definition of the cultural sectors are included as shown in the table below (Table 1).
In contrast, the model of Concentric Circles used by Throsby (1998, 2001) is based on the proposition that the cultural value of cultural goods is the distinguishing characteristic of the creative industries. In this model, creative ideas originate in the core creative arts in the form of sound, text and image and these ideas and influences diffuse outwards through a series of layers or ‘concentric circles’. As activities, product and services move outwards from the centre the proportion of commercial content to cultural content rises. Throsby introduced the term expressive values to enlarge cultural meaning and understanding by encompassing every dimension in the realm of ideas including aesthetic value, spiritual value, social value, historical value, symbolic value and authenticity value of cultural goods and services too (Throsby, 2001).
Figure 1: Concentric Circles (Throsby)
Source: Throsby, 2007: 5
In a recent report prepared for the UK’s DCMS, the Work Foundation developed a stylised typology of this model of the creative industries as represented in the diagramme below (see Figure 2 below) borrowed from the EU’s ‘The Economy of Culture’ (EU, 2006) and originally from Professor David Throsby as illustrated in figure 1. The creative industries are mapped as a series of concentric circles radiating out from the ‘bulls-eye’ of core expressive value creation. This is the home of the artists – musicians, lyricist, dancer, choreographer, composer, writer, painter, sculptor, scriptwriter, and designer. The stylised typology of the creative industries introduces the relationship between the core creative fields, cultural industries, the creative industries and the rest of the economy into the diagramme as well as the notion of expressive value and outputs unlike the original concentric circles model.
The symbolic text model of Hesmondhalgh (2002) arises out of the critical-culturalstudies tradition in Europe and the UK. It is an important addition as it shifts attention from the ‘high’ arts focusing attention on popular culture and the various media that convey these texts to consumers such as film, broadcasting and the press. The WIPO copyright model (WIPO, 2003) considers those industries involved in the creation, manufacture, production, broadcast and distribution and consumption of copyrighted works. Industries that produce the intellectual property – the embodiment of the creativity that is needed to produce the goods and services of the creative industries – are distinct from those that are needed to convey the goods and services to the consumer.
Four groups of copyright-based industries are outlined with the detail in the table below:
- Core: These industries are wholly engaged in the activities listed above
- Interdependent: Refers to products that are jointly consumed with the products of the core group of industries or deal with facilitation equipment
- Partial: These industries only have a part of the production output or process linked to copyright-protected material (design, architecture, furniture) with a significant part of the value added produced not attributed to copyright components
- Non-dedicated support industries: These industries rely only remotely on copyright material but remain relevant as copyright generates part of their business such as internet and transportation.
The WIPO guide (WIPO, 2003) aims to provide a systematic way to isolate the effects produced by copyright in the approximately sixty categories identified. WIPO’s Dimiter Gantchev acknowledges that the structure of industry and copyright markets may vary; as will the level of copyright protection and the level of dependence on copyright. However the approach being recommended is not to mechanically add up all the identified activities, but rather “to focus on quantifiable and measurable direct and indirect impact. It is not suggested to study multiplier effects, tertiary or quaternary economic impact which are not tangible and often non-quantifiable” (Gantchev, 2004:8).
Table 1: Creative Industries Models and Associated Sectors
|2. Symbolic Texts
|3. Concentric Circles
|4. WIPO Copyright Model|
Art and Antiques market Crafts
Music Performing arts
Software Television and radio Video and Computer games
Publishing Television and radio Video and computer games
Peripheral cultural industries Creative arts
Borderline cultural industries Consumer
|Core Creative Arts
Other core cultural industries
Museums and libraries
Wider cultural industries
Television and radio Video and computer games
|Core copyright industries
Copyright collection management societies
Motion picture and video
Theatre and opera
Press and literature
Software and databases
Television and radio
Visual and graphic art
Interdependent copyright industries
Blank recording material
Photocopiers, photographic equipment
Manufacture, wholesale and retail of TV sets
Computers and equipment
|2. Symbolic Texts
|3. Concentric Circles
|4. WIPO Copyright Model|
Partial Copyright Industries
With the increasing usage of the term ‘Creative Economy’ (UNCTAD, 2006, NESTA 2008) it is useful to capture the relationship between the core creative fields, cultural industries, creative industries and the broader creative economy as evident in the figure below (Figure 3) with the added element of the upstream and downstream activities of the creative economy.
In this model, the “upstream arts” refers to traditional art forms such as the performing, literary and visual arts, which may have commercial value in themselves, whereas “downstream arts” refer to the applied arts such as advertising, design, publishing and media-related activities and which derive their commercial value principally from their applications in other activities. All activities – commercial and non commercial – are incorporated in this model with the symbiotic relationship between all the sectors of the creative industries emphasised. Importantly for the discussion of the relationship between arts and culture and the commercial exploitation of the arts is that growth or decline in one area will have an effect on another area.
The concept of the creative economy is an evolving one based on creative assets embracing economic, cultural, social and technological aspects. Crucially it has been identified as a feasible policy option to diversify economies and improve trade and development gains in countries around the world (Brandford, 2004). The characteristics of all the industries that comprise the creative economy are premised on knowledge-based economic activities, the intensive use of creativity to add value to products and services, and their ability to generate income from trade and property rights.
The importance of thinking in terms of a creative economy rather than a set of creative industries is made evident by two new pieces of research which suggest that creative industries play a significant role in the UK innovation system:
- a) One finding shows that ‘firms that spend twice the average amount on creative inputs are 25% more likely to introduce product innovations’ (NESTA).
- b) The other finding is that creative workers are more integrated in the
wider UK economy than previous mapping studies implied with more creative specialists working outside the creative industries than within them (Higgs, Cunningham and Bahkshi, 2008).
By focusing on creative occupations, the Creative Trident approach of Higgs and Cunningham shifts the focus from a sector specific one to understanding the full economic contribution of creativity to the wider economy. In this way creative occupations are tracked not only in traditional creative industries, but in manufacturing and the wider service industries, such as health, education, government and business services. This is particularly evident with design occupations many of which are embedded in other industries resulting in the design sector being undercounted by approximately 36% in Australia. As Cunningham explains:
“People who are embedded – that is, employed in creative occupations – constitute almost 2 percent of the total Australian work force. Of the total population with creative qualifications at the last Census, our figures show almost 70 per cent of those employed are working outside the specialist creative industries” (2006:3).
- Where do you think the emphasis should lie, culture or creativity? Why?
- How does your government define these industries?
- Which model do you find most appealing? Why? What would be left out or included in your preferred model?
- Do you think the term creative economy is useful for the African context? Why?
- What is the significance of tracking creative occupations in the broader economy such as manufacturing, services and the public sector?
- Review of models and classification systems
A number of analytical approaches are used in assessing the contribution of the creative industries to the general economy and their impact on cities and regions.
- a) Industrial organisation analysis
Industrial organisation analysis involves the measurement of standard economic variables (gross value added, levels of employment of different categories of labour, levels of investment) as is typical of sectoral analysis. In many ways, it is also the core of mapping studies. It allows researchers to talk the language of conventional economics in order to convince the rest of government, principally the Departments of Economics or Trade and Industry that the creative industries are a significant contributor to the GDP. Where countries collect statistics beyond the 3 digit SIC code levels, the traditional method of industry organisation analysis can be employed. Even in this case, however there will be the challenging question of boundaries and definitions of the sectors of the creative industries. Unfortunately in most of the countries of Africa researchers are unable to use official statistics as they are not sufficiently detailed and there is no consistent view on the definition and boundaries of the creative industries.
- b) Economic impact analysis
Economic impact studies are typically done for cultural events such as festivals or institutions such as museums or heritage sites (Seaman, 1987; Johnson and Sack, 1996; Thompson et al, 1998, Antrobus, Webb and Mather, 1997). The key question of economic impact studies is the effect on the local community and economy as well as the benefits that flow to this local community or economy. This is often done by comparing scenarios that include the event or institutions and those that do not. Unfortunately with many economic impacts being undertaken by the responsible authority for the event or institution the economic impact is often exaggerated as part of advocacy. Independent economic impact studies are useful as a contribution to the understanding of the economic and cultural value of projects such as the Grahamstown Festival in South Africa (Antrobus, Webb and Mather, 1997).
- c) Economy wide contribution
Harry Hillman Chartrand (1984) lists four distinct levels of economic contribution, which he calls ‘impacts’, that the creative sector has which allow one to isolate the differing level of contribution of the creative industries to the general economy.
The primary impact measures the direct and quantifiable contribution to the economy. This is the direct number of jobs and the direct value-added by the sector. It extends through the value chain from the creative originators of the product or service, through the production, distribution and consumption of the product. The creative sector also contributes directly to the economy by increasing the capital stock of the economy. This includes the physical capital, such as facilities and venues, the knowledge or creative capital, such as scripts, scores and paintings, and the human capital, which is the knowledge, skills and education of those involved in the sector.
The secondary impact measure the indirect and quantifiable contribution to the economy. This includes multiplier effects, as those employed in the sector spend their wages in other sectors, or creative industries buy inputs from other sectors. It also includes the contribution to the design and marketing of consumer goods and services, the contribution to industrial location (industries and workers may choose to locate in certain areas because there may be a vibrant creative sector), and the contribution to the balance of trade. Exports of products or services directly or indirectly through tourism generate foreign currency which strengthens the balance of payments and provides revenue for the purchase of imports.
The tertiary impact measures the direct and non-quantifiable contribution to the economy. This impact involves the contribution to industrial invention, innovation and diffusion, productivity and the contribution of the creative sectors towards a diversified industrial structure. A vibrant creative environment can encourage an innovative institutional climate particularly since the psychology of the creative process is an area of commonality between the arts and sciences (Meyer, 1974). The tertiary impact also includes volunteerism.
The quaternary impact measures the indirect and non-quantifiable contribution to the economy. The creative industries improve the quality of life, an end in itself but also an important factor leading to increased motivation and productivity with implications for economic growth. They are also important in terms of cultural identity, in both preserving tradition and culture but also in creating new cultural identities.
While mapping is clearly not an economic impact analysis as described above in relation to theatres, festivals or museums it is becoming increasingly important to assess the broader economic contribution that the creative sector makes to the general economy in the way that Chartrand describes.
- d) Value chain analysis
The cultural or creative industry production chain can be conceived as one in which the creator or artists begins with a creative idea and which is then combined with other inputs to produce a cultural good or service passing through stages in which value is added until the good or service reaches the consumer. Charles Landry, in his work for Comedia on comparative analyses of cultural industry sectors in cities, modified the 5 elements of the value chain as developed by Michael Porter (product development, manufacturing, distribution, marketing and sales and after sales services). He outlined the five-column model for cultural industries comprising beginnings, production, circulation, exhibition and audience feedback. In southern Africa, this analysis was used both in the Cultural Industries Growth Strategy project for DACST (Cultural Strategy Project, 1998) and for the ILO research in the SADC region (Joffe and Jacklin, 2003; Lebethe, 2003; Bolnick, 2003 and Ambert, 2003). As Joffe and Jacklin explain: “Beginnings refer to the ‘cultural milieu’ or context in which a television or film production is conceived. Production refers to the process by
which cultural goods such as a film is produced. Circulation refers to the process of distributing and marketing the product in the market place and delivery refers to the means by which the audience accesses the production. Lastly, audience reception and feedback refers to the response from audiences to the television production or feature film, which feeds into the beginnings or cultural context for new ideas” (2003:12). For the ILO research this model was adapted and represented as a circular diagram to emphasis the importance of the feedback loop from ‘audience reception’ to ‘beginnings’.
The value chain approach has been found to be useful in showing the relationship between the ‘pure’ or traditional arts and the commercial or industrialised arts and culture by seeing them as ‘stages’ of the process in the production of economic and cultural value.
Gauteng’s Cultural Industry Development Framework in South Africa (SRAC, 2005) used the value chain analysis to illustrate the range of role-players in the sector as well as the core functions as illustrated in the figure below.
|The creative industries value chain:
where and how is wealth created.
5. AUDIENCE – the idea, the context, the rich heritage, the project RECEPTION: funds and finance for development, promotion, Journalists, trade recording and exhibition journals, festival 2. PRODUCTION: commentary, awards,
academiesthe people, the processes, the sites of productions, the facilities, the equipment and suppliers, the designers
Exhibitors, broadcasters, DISTRIBUTION retail outlets, live venues,
performance spaces, Distributors, agents, marketers gallery/ exhibition spaces & intermediaries,
|Core Problems: absence of business savvy, poor integration with other economic sectors (tourism), lack of appropriate training and mentoring support specifically for arts and culture managers, administrators and programming staff, poor organisation, lack of clustering and inadequate networking|
There have been recent developments in the use of the value chain approach in Canada. Connectus Consulting Inc. for Canadian Heritage (2007) in their assessment of how the digital economy is transforming the value networks of the Canadian arts and cultural industries have adapted standard value chains “value networks” which are more fluid arrangements that reflect the non-linear base of value chains and begin to identify relationships between players. Not only do these value chains map the relationships between all the role-players from artist to consumer, government to industry, but they also illustrate functions which do or don’t add value or create new rights. The value chain is shown as three broad stages:
- Creation/ Production comprising the primary creators and producers who organise the resources required to create the product.
- Aggregation comprising the group of product aggregators such as record labels, book publishers, television station or new media websites whose role it is to assemble and sell a large number of cultural products
- Distribution/Retail comprises the product distributors and the makers of media receivers (such as a radio signal) and finally the audience or consumer
Key features of this value network are described and analysed from risk management, gatekeeping and what is called ‘value network disconnects’ points of view. The report describes how a product can flow to the consumer but the revenue does not reach the primary creator. This is described as a ‘disconnect’. An example in the music industry is where music and video is distributed to the consumer on the internet through distribution platforms (such as Limewire). This is used as a marketing tool for internet service providers who sell connections while ‘the value perceived by consumers includes the content they receive’ (2007:19). The authors explain: “In that sense, electronic download of music is generating revenue, but no revenue currently passes from the ISP to any of the producers of music in respect of this use. Since many music rights holders have not authorised the distribution of their content and this ‘free’ music is nonetheless distributed and its value perceived without being monetized through any revenue model, a disconnect is clearly present’.
The figure below shows a generic value network:
Source: Connectus Consulting Inc. (2007:18)
- e) Urban and regional growth
Creative industries and creative activities are found largely in urban areas and it has become useful and important to assess the contribution of the creative industries to both urban and regional growth. Charles Landry and his company, Comedia have led this research and analysis with their numerous publications on the creative city and the seminal work The Creative City: A Toolkit for Urban Innovators. This work has included the notion of the ‘creative cluster’ (DTI, 2001), ‘cultural quarter’ and ‘creative city’ (Landry and Bianchini 1995; Landry 2000). The central argument is that the creative industries have the potential to encourage regional economic growth and employment creation and, in particular to regenerate depressed urban areas and enhance the liveability of cities thereby contributing to urban development. This work influenced the identification of Newtown as a cultural quarter of the city of Johannesburg (Creative Strategy Group, 1999) and will be referenced in the discussions about a cultural capital in Africa.
The argument that creative industries can contribute to urban and regional economies and create the conditions for inward investment is at the core of the focus on the creative industries in the development of Gauteng’s Global City Region programme in South Africa as well (Gauteng Government, 2007). The Gauteng Creative Mapping Study provides evidence of the value of the creative industries for
Gauteng from which further analyses can be done on their impact on the broader Gauteng economy.
- Which model or framework do you think is most relevant to the African context?
- Do you think it is possible to assess the contribution of the creative industries in Africa using this model?
- Do you think it is important that each country uses the same model or definition? 4. What is the role of artists, cultural organisations and governments in promoting these industries?
- Measurement of Creative Industries and the origins of Mapping
More than twenty years since UNESCO released a framework for cultural statistics (in 1987) there is still no agreement on a methodology for measuring the creative industries. UNESCO’s framework was the first formal international classification of cultural statistics and the organisation now collects a number of cultural statistics globally. In addition to the collection of statistics across countries, data are also collected by individual countries. For example, in Australia statistics are collected through the addition of pertinent questions to existing surveys. There are also a number of other specifically tailored surveys on business and government organisations as well as surveys of individuals to determine the number of people attending cultural activities and in cultural related work. Statistics Canada gathers data through the Culture Statistics Program and is less concerned about its integration into the wider statistical system. It also measures participation in cultural activities and has a detailed Culture Labour Force Survey. Finland, France and Italy are other developed countries where the government statistical agency is the primary collector of statistics concerned with the creative sector. In the Philippines, a country which faces many similar challenges in the creative sector to those of Africa such as the informality and micro nature of creative enterprises and the fact that many creative workers have full time jobs in other industries, cultural statistics can also be extracted from those collected from the national statistical agency. Statistical data for the Philippines is collected at the 4 digit SIC code level, which allows for the disaggregation of a number of cultural related activities (CAJ, 2003).
This approach – using statistics that are collected by the national statistical agency as part of its ‘ordinary’ surveying – has been used very successfully in a number of other countries to identify trends in and the size of the creative sector. The United Kingdom and Singapore are two countries where the relevant government department, the Department for Culture, Media and Sport (DCMS) in the UK and the Ministry of Trade and Industry in Singapore, extracts information from the data collected from businesses and published at the 4 or 5 digit SIC level. The benefits of this approach are that cultural statistics can then be updated as soon as the official statistics are released. As such, in both these countries there now are a number of publications, spanning a multi-year period that provides a detailed insight into the creative sector.
Good official statistics that ‘prove’ the contribution of creative sectors to the overall economy, have in many cases resulted in processes seeking to investigate the contribution at a regional or local level. The United Kingdom was the first country to pioneer the concept of creative industries and the term mapping refers to the characteristics of the sector with the publication of “The Economic Importance of the Arts in Great Britain” in the late 1980s (Myerscough, 1988). The subsequent document “Mapping the Creative Industries, 1998” produced by the DCMS through a Creative Industries Task Force that was established in 1997, was the first systematic attempt to both define and measure the economic contribution of the creative industries and assess their opportunities and challenges. Mapping essentially provides the economic data which shows the current value of the creative economy. It also can show the economic potential of the sector and where the sector needs support to grow and realise its potential. Prior to the mapping study the creative sector was not seen as a significant sector or important to the UK’s economy, but ten years on, the UK is a world leader in identifying creativity as a driver for job creation and economic growth.
The Government’s Creative Industries Task Force defines the creative industries as: ‘those activities which have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property’. These include: advertising, architecture, the art and antiques market, crafts, design, designer fashion, film, interactive leisure software, music, the performing arts, publishing, software, television and radio, heritage and tourism services.
In early 1999 DCMS set up a Regional Issues Working Group which produced an important study highlighting both the strength of the metropolitan regions as well as the considerable contribution of the creative industries to towns and smaller cities in the country as a whole (DCMS 2000b). Numerous studies have since been conducted at the regional, sub-regional and local levels including regions such as Yorkshire and towns such as Bristol, Leeds and Manchester focusing on the special needs of the creative industries outside of the UK capital such as regional development strategies, linking creative businesses with wider networks of communication and exchange, improving business development agencies’ appreciation and understanding of the creative industries and investor knowledge of creative industry opportunities.
Creative mapping has also become a valuable tool in a wide variety of other countries both in the developed and developing world. Canada, the United States, Singapore, Hong Kong, New Zealand and Australia are all developed countries that have engaged in creative mapping exercises. In the developing world, Colombia was one of the pioneers of creative mapping with its 2002 study of the creative industries in Bogotá. The development of a handbook “Guide to Producing Regional Mappings of the Creative Industries” (Ministry of Culture, Colombia, 2007), provides invaluable guidelines for the creative mapping process. Since 2002, DCMS has produced Creative Industries Economic Estimates every year using comprehensive survey data collected by the Office for National Statistics (ONS). This has enabled them to provide regular updates and consistent data on the activity of the creative industries.
The UK Creative Mapping documents include figures for
- Gross Value Added
- Number of businesses
- Total creative employment (employment in creative industry firms and creative occupations outside the creative industries) for most sectors
The result of the attention placed on the creative industries by the UK government can be seen in the latest government strategy, Creative Britain: New Talents for the New Economy which summarises their achievements as follows:
“Britain is a creative country and our creative industries are increasingly vital to the UK. Two million people are employed in creative jobs and the sector contributes £60bn a year – 7.3% – to the British economy. Over the past decade, the creative sector has grown at twice the rate of the economy as a whole and is well placed for continued growth as demand for creative content – particularly in English – grows” (DCMS, 2008).
Four key questions framed a mammoth research effort by the Creative Economy Programme (CEP) in the UK begun in 2007 which are pertinent to any country’s analysis of their creative industries:
- What is the direct contribution of the Creative Industries to the UK economy?
- Does the UK have a comparative advantage in the Creative Industries and how might this be eroded by other countries?
- Do the creative industries make an indirect contribution to the UK economy?
- Do the creative industries face barriers to growth and improved productivity and what is the Government’s role in overcoming these?
As part of this progress made by the UK government, the British Council in 2001 embarked on developing a new programme – Developing Creative Economies – to share the UK’s experience and understanding of the creative industries and creative economy with developing countries, especially those where piracy is an issue. The British Council chose to use Creative Mapping as a way to assist other countries to recognise the importance of this sector. Speaking of the mapping documents produced by DCMS in 1998 and 2001 the organisation states:
“The need then was to raise awareness of the industries, the contribution they made to the economy and the issues they faced. Now the impact of creativity in regeneration and social inclusion is widely acknowledged. Every region of the UK has identified the creative economy as a priority area for economic growth. And the special needs of these industries are reflected in policy development at national, regional and sub-regional level. They are a real success story. The Department of Culture, Media and Sport (DCMS) helps the creative industries thrive by raising their profile and supporting their development. It believes that the most successful economies and societies in the twenty first century will be creative ones. The British Council works with the DCMS to promote the vision of the UK as the world’s creative hub; and to
share expertise and experience with other countries worldwide”( http://originwww.britishcouncil.org/ca/arts-creative-economy.htm). .
This support extends to providing expertise and documentation from mapping studies elsewhere although it leaves each country to interpret and define the creative industries themselves. Mapping studies supported by the British Council have been conducted in a range of countries from Asia to South America. The mapping study in South Africa for instance was able to draw substantially on the experiences of the mapping in Colombia largely due to the Mapping toolkit (Ministry of Culture, Colombia, 2007).
Although the DCMS approach has gained international recognition for measuring the contribution of the creative industries, the data is not without its limitations. Producing annual estimates of the size of the creative industries in the UK economy using data from the Office for National Statistics (ONS) allows for the estimation of the contribution to UK employment, Gross Value Added (GVA) and exports. The key challenge is the inability of official statistics to keep pace with the rapid changes and consequent classification problems that occur in the creative industries. Other challenges relate to the scope of particular sectors, such as design where statistics cannot identify all the constituent parts of that industry. A further limitation is that official statistics fail to capture the full extent of activity as they do not accurately reflect the structure of the industries. As such, ‘Staying Ahead’, a report produced by the Work Foundation argues that the figures should be seen as estimates rather than definitive valuations. Their study references alternative data sources for particular sectors (Work Foundation, 2007).
In recent research commissioned by the DCMS, Frontier Economics was able to use a data set from ONS previously not available to develop a more detailed supply chain approach to analyse the statistics. New insights about the structure of the sectors and the types of firms driving growth emerged and some of the key findings are documented in the findings below:
Table 2: Findings from DCMS (Frontier Economics)
|Large firms are important for the creative industries||The largest 200 firms account for 50% of turnover|
|Growth in the creative industries is driven by startup companies||Start up companies accounted for 48% of growth from 1995-2005 – most of this in year 1. Creative Industry companies appear to grow slowly in the years after they start up|
|Creative firms have survival rates that are similar to other sectors.||Three year survival rates for firms within the creative industries is similar to the average across all industrial sectors but there are variations between sectors|
|Large international creative industry firms are important in the UK||International firms may locate in the UK because of its supply of high quality graduates, specialist “creative skills”, unique infrastructure and because the UK is an attractive place for executives to live and visit
|Creative industries perform well on a number of productivity measures compared to other UK sectors||The creative industries are more likely to be innovative than the other sectors identified in the project8 and they employ highly skilled workers and have a higher proportion of self employed people that then economy as a whole|
The report argued that while individually the creative industry sectors (music, performing arts, dance, fashion etc) might not be of strategic importance to the UK, there was no doubt that collectively the creative industries are very important. Therefore Frontier Economics developed a framework for cross-cutting policy making
8 It should be noted that the data can be disaggregated to different levels and when the broad sectors are broken down certain sub-sectors may have a higher rate of innovation activity than the creative industries aggregate.
suggesting three sub groups which drew on the analysis of the individual sectors in terms of structure, key trends and issues. The figure below illustrates this framework:
The impact of technology on the definition and measurement of the creative industries
Technological change in the creative industries, particularly the development of digital media, disrupts not only conventional value chain analysis and conventional copyright regulation by bringing consumers closer to creators, but it also raises significant questions for sectoral boundaries, definitions and measurement. While the sectors identified in the mapping documents retain a strong identity for measurement, economic value and organisation, there is a view that future exercises to gather data on the creative economy may see sectoral boundaries changing due to incessant technology change (see Work Foundation, 2007).
Mapping Studies in the developing world
Colombia’s mapping experience in partnership with the British Council produced a guide to designing, conducting and analysing creative industry mapping projects. This guide, now translated into English, provides an outline of mapping studies in the
UK and Columbia, stages in the production of mapping as well as technical considerations in the mapping process. The GMCP in South Africa used this guide as a reference although the final process is quite different to that of Colombia. The lack of official statistics has meant that the mapping has needed to rely almost solely on primary data collected through firm level questionnaires with contextualisation and interpretation provided by the technical advisors to the project.
The document, Guide to Producing Regional Mappings provides useful elaboration on the purpose of mapping studies as follows:
- To diagnose a giving situation by identifying its constituent elements, the relations between them and the results of such interaction.
- To describe and interpret the data to contribute to solutions to the problems revealed by the diagnosis.
- To give greater visibility to the sector through the identification of the value of culture and creation both as cultural expression as well as its contribution to the economy or region.
- To provide information that allows national and regional agents to identify key aspects about the dynamics of creative industries.
- To provide the necessary facts that improves decision-making in the design of policies to strengthen these industries.
- To stimulate the organisation of individuals and companies of the creative and cultural sectors so that they are perceived as a collective whole that facilitates their recognition, positioning and empowerment as an economically important sector.
- To identify the targets of the study which are the institutions that are able to support the growth of the sector, the role-players within the creative sector as well as the stakeholders in the creative community.
- The process of mapping could, through the building of alliances and clusters of industries, stimulate organisation (Ministry of Culture, Colombia, 2007:6).
- Do you think it is important to put numbers to our assessment of the contribution of the creative industries? Why?
- Which measurements do you think are most important? Why?
- Have you any experience of mapping studies? For which industries?
The contribution of the creative industries to the economy – evidence from developed countries
Measurement and mapping of the creative industries help ‘prove’ the contribution of creative sectors to the overall economy and make the advocacy case for government to support these industries. Some of the most recent studies (UK, Singapore, Canada and Australia) assessing the contribution outlines how methodologies and concepts are changing.
Creative mapping studies attempt to measure the quantifiable contribution of the creative sector on the economy. This includes the primary (or direct) impact on jobs and value-added, and also the secondary (or indirect) impact through multiplier effects. The results of these mapping studies (UK, Singapore, Canada and Australia) while not directly comparable across countries since definitions of the creative sectors do vary, illustrate the significant contribution that the sectors make to the economy as a whole. It is likely that this underestimates the total contribution given the difficult to quantify relationships between the creative industries and other aspects such innovation, general well-being and productivity.
The UK Department for Culture, Media and Sport (DCMS) study of 2006 argues that the creative industries in the UK contributed 7.3% of Gross Value Added (GVA) in 2004. This was equivalent to £57 billion. Over the period 1997 to 2004 the creative industries increased their GVA at an average annual rate of 5% and grew employment by 2 per year which was significantly higher than the economy wide rate of 3%. Furthermore, they exported £13 billion worth of goods and services and employed 1.8 million people.
In Singapore (2003) growth rates in various creative sectors can be compared in 5yearly averages back to 1986. The creative industries directly created value of S$3 billion in 2000 (1.9% of GDP), employed 46,850 people (2.2% of employment) and exported S$536 million worth of goods and service. The indirect impact of the creative sector, which includes associated downstream distribution firms, is similar, meaning that the total contribution of the creative industries is close to double the direct contribution. In addition to these significant levels of contribution, the Singapore creative industries have experienced higher rates of growth than the economy as a whole. Over the period 1987 to 2000 the creative industries grew by an average of 17.2% per annum compared with average annual GDP growth of
In Canada, Statistics Canada framework and data (Statistics Canada, 2003) measures the contribution of the creative industries. It estimates that the creative industries directly employed 616,000 workers in 2003 with the real value added output for cultural industries estimated at R46 billion in 2007 or about 3.8% of total real GDP. Using macroeconomic models of the Canadian economy to assess the economic footprint of culture, the Conference Board of Canada estimates that the full contribution is $84.6 billion (7.4% of total real GDP) with the full employment contribution (including direct, indirect and induced effects10) being over 1.1 million people in 2007 (2008:7). Statistics Canada also conducts an annual survey of consumer expenditures from which household spending on cultural goods and services can be assessed. The Conference Board of Canada extracted the relevant data to show that the average household in Canada spent about $1,650 (current dollars) on cultural goods and services which translates into $21 billion in 2007 (given an estimated 12.6 million households) (2008:34). Within this figure the trend shows the increasing role interactive media is having on household spending, with spend on cable and satellite television displacing written media as the largest item. Total government spending (at all spheres of government) but excluding intergovernmental transfers, reached $7.3 billion in the 2003/4 fiscal year, slightly down on the 1999 figures.
The most recent study in Australia, the Creative Industries Mapping Project conducted by the ARC centre of Excellence for Creative Industries and Innovation (CCI)11 shows the full extent of the contribution of the creative industries by analysing not only jobs in the creative industries but rather creative occupations in all industries as opposed to other occupations in both creative industries and other
- 10 The economic footprint of culture is defined as the combined direct impact (the value added on the economy of firms directly producing cultural goods and services), the indirect impact (the value added that the previous group of firms generates their demand for intermediate inputs other support services) and the induced impact (which is derived when employees of the both groups spend their earnings and owners spend their profits) (The Conference Board of Canada, 2008:37
- 11 A series of 15 fact sheets on employment and business characteristics from the ARC study were published by Peter Higgs in January 08 and available on cci.edu.au/pub/publications accessed on April 6th 2008.
industries. This model, the ‘Creative Trident’ is a major innovation for how one values the contribution of the creative industries. Using the 2001 Australian census, the study shows that while there were approximately 300,000 people employed in the Creative Industries (half of which were creative occupations) representing 3.7% of the total Australian workforce, there were a further 137,000 people working in creative occupations in other industries (finance, government, education and manufacturing) resulting in a 437,000 strong creative workforce accounting for 5.4% of the total workforce. This is illustrated in Figure 4 below. Approximately 155,000 creative businesses were registered with Australian Business Register (ABR) in 2006 which account for 6.6% of all businesses. Two segments account for 74% of creative businesses. These are software development and Interactive content and Architecture, Design and Visual Arts accounting for 39% and 35% respectively of all these businesses.
Figure 5: The number of people employed in Specialist, Embedded and Support roles within the Australian Creative Workforce (2006)
Source: Australian Research Council Linkage Project, 2008
These figures illustrate the significant economic contribution that the creative sector can make to the economy as a whole. These examples also highlight the rapid growth rates of the sector. These growth rates are almost double that of overall GDP growth in these respective countries and indicate that the contribution of the creative sectors to the economy as a whole has been growing over a long period.
Current Drivers of the Creative Industries
This review has outlined the numerous ways in which the contribution of the creative industries to the economy and to urban and regional development is assessed. It is also important to review those factors which themselves drive the creative industries.
This will be particularly important as the Arterial Network wishe to encourage and influence the growth and vibrancy of the African creative economy.
While traditionally many of these drivers can be seen as economic, it is clear that in their effect and impact on the creative economy, the social aspect of creativity is paramount. For the purposes of clarity each driver is discussed separately although they are of course interrelated.
- 1) The relationship between producer and consumers is becoming more direct as producers attempt to better understand their consumers and involve the consumer in the co-creation of the final product. The rapid changes to information and communication technologies ‘allow users to create their own content, gain access to creative content produced by others, and co-create with them’ (The Conference Board of Canada,2008). Quoting from a presentation by PricewaterhouseCoopers (2007-2011:slide23), The Conference Board explains that ‘Ubiquitous Participation’ now characterises the consumer where ubiquitous means ‘everywhere, anytime, omnipresent, unrestricted, flexible’ and where participation refers to ‘connecting, imagining, inventing, collaborating, contributing, managing, marketing, selling, locating, entertaining, exploring, purchasing, supplying, paying, investing” (The Conference Board, 2008:42) Apple’s iPod and video-on-demand for instance, are in response to demanding consumers who want to personalise their experience of both consuming and contributing to creative content (DCMS, 2007:17) while the creation of social networks on sites such as MySpace.com by companies as different as Nike Inc. and Honda Motors Co. Ltd. turning consumers into personal marketing agents for goods and services that firms sell (The Conference Board of Canada, 2008).
- 2) Consumers are able to use the content differently because of the impact of the digital revolution (the internet and the diffusion of Web 2.0) on the products and services of the creative industry in the production process and in the new content distribution channels. This digital revolution made possible by rates of connectivity and the availability of broadband presents as ‘a range of on-line services that have facilitated the rise of the user-generate content, enabled file sharing and supported more intensive forms of social networking and participatory forms of content co-creation’. There is no doubt that creative people are able to flourish in this new environment as the internet “presents enormous possibilities for creative firms or entrepreneur seeking to commoditize aspects of the creative experience so that they can ‘pay the bills ‘- compete and grow – and continue to invest their energies in personally rewarding an socially enriching creative industries” (2008: 55).
- 3) Increasingly the skills and talent needed that drive the creative economy are a combination of cross-disciplinary collaboration between industry specific skills especially ‘artistic skills and competencies related to the use and adaptation of ICTs, and knowledge of how to commercialise creative ideas’, business skills (management, entrepreneurship, marketing, financial skills and planning) and a range of ‘soft skills’ such as problem solving and interpersonal skills (The Conference Board of Canada, 2008). This skill base and talent is required throughout the value chain of creative industries to participate in and contribute to the process of creation, production, distribution and consumer or audience feedback. Not only are these processes not mechanical, they are neither fully artistic and creative nor mechanical or managerial. Much of the expertise that resides in established workers in these creative sector has been through learning by doing and incremental innovation (The Work Foundation, 2007). It is not surprising therefore that education and training programmes need to be geared towards accessing both the students’ creativity but also to prepare them for this creative world of work. It is also possibly the key area for public policy with firms in the creative economy already facing challenges in the differing perceptions among employees, and employees and educational institutions with respect to “Competencies that new media content creators would like to develop;
- competencies that are in greatest demand (and perceived short supply) by employers;
- how these competencies should be developed; and
- the priority (or lack therefore) employers and employees place on training to support competency development” (The Conference Board of Canada, 2008).
- 4) Cultural and social diversity, tradition and heritage drive the creative economy. Traditions, rituals and heritage frames peoples’ identify and how each relates to the other as well as the stories people want to write or sing about and the stories or sounds people want to hear or see. The increasing demand for diverse content from both diverse audience and diverse content aggregators such as broadcasters fuels the creative talent of diverse groups. A diverse creative workforce working collaboratively has therefore a great opportunity to make products to meet this demand. The increasing ability for diverse communities and voices to be heard and to share their experiences, through the convergence of multimedia and telecommunications technology – on social networking sites and other internet related channels – in turn fuels the demand for more diverse content.
- 5) The fifth driver is the agglomeration possibilities –clusters of creative activity – within cities. Connectivity, community and culture intersect in large urban centres such that individuals, organisations and companies can take advantage of both competition and collaboration in their creative product and processes. Landry calls these clusters of creative activity in cities which are rich in cultural resources, the ‘new gold’ of the creative economy in that they are both magnets for creative talent across all sectors of the economy and are economic wealth generators (Landry, 2004:9).
- 6) The sixth and final driver is capital investment which gives rise to innovation and experimentation. As opposed to debt financing which can make a creative business more precarious than it already is, equity financing remains in short supply even in the more developed creative economies such as Canada and Australia. Nevertheless, the Work Foundation has estimated that there are 3,885 ‘business angels’12 financing creative firms in the UK focusing typically not only on capital in exchange for equity but on hands-on business management skills and mentoring support for creative enterprises. Of particular concern is the limited capacity of the creative firms, especially in the small and medium sector to devise and implement business strategies to raise capital or to create products out of their creative offerings. Nevertheless some extremely innovative business models are being devised from Prince’s offer of his new album, Planet Earth as a free cover mount on The Mail on Sunday in the UK in July 2007 to the rock band Radiohead’s release of their seventh album In Rainbows on their own web site as a digital download with customers encouraged to choosing their own price, before it was released
- 12 Business angels are wealthy individuals who provide capital for start up businesses, usually in exchange for convertible debt or ownership equity
physically. In the case of Prince, not only did the newspaper break their circulation records set when Princess Diana died, but Prince earned £5m (set at only 1/10th of the value) and received huge exposure for his performances at the O2 Dome. This translates to six times more money than if his album had reached the number 1 slot in the UK (Beaham-Powell, 2008). Radiohead’s lead singer, Thom Yorke reported that the album was downloaded 1.2 million times and that the band’s profits exceeded the combined profits of digital downloads from their previous six albums13. By appealing to the fans directly and their interest for downloading is a strategy that trusts “that loyalty and direct appeal are a sufficiently pragmatic approach to commoditizing their audience’s experience” (The Conference Board of Canada, 2008).
Questions for Arterial Network seminar participants
- 1) What is an appropriate definition of the creative economy and its associated creative industries in the African context?
- 2) What model or framework of analysis would be most useful to our context both for understanding the sector as well as producing advocacy material?
- 3) How would be go about measuring and valuing our creative economy and creative sector in the absence of formal, collected statistics and data?
- 4) Given the poor digital infrastructure and connectivity in many countries of Africa, what drivers are most relevant to Africa?
- 5) What are the principal ways in which governments, civil society, creative organisations, networks and artists can advance the growth and impact of the creative economy in various African contexts?
- 6) Who should be leading the research on the creative economy in Africa – pan African organisations, governments, civil society, universities etc?
Prepared by Avril Joffe (CAJ: Culture, arts and jobs, Johannesburg, South Africa) email@example.com
- 13 See http://en.wikipedia.org/wiki/Radiohead.
- o Australian Research Council Linkage Project (2008) Australia’s Creative
Economy Information Sheet published by the Australian Research Council
Linkage Project between the Department of Communications, Information
Technology and the Arts, the Australian Film Commission and Queensland University of Technology Available online at eprints.qut.edu.au/archive/00011958/01/Creative_Workforce_Information_Sh eet_2008.pdf – [Accessed: February 25th 2008]
- o Bradford, N (2004) Creative Cities Structured Policy Dialogue Backgrounder,
[online] available at: http://www.cprn.ca/en/doc.cfm?doc=1081
- o British Council (undated) Creative Economy Available at http://originwww.britishcouncil.org/ca/arts-creative-economy.htm [Accessed: February 8th, 2007]
- o CAJ (2008) Producing Creative Content: skills and economic challenges in the South African creative industries, a paper prepared for the HSRC
- o Connectus Consulting Inc. (2007) The Transformation of Value Chains in the
Canadian Arts & Cultural Industries submitted to Strategic Policy and
Management, Department of Canadian Heritage, December 3
- o Florida, R. (2002) The rise of the creative class – and how it is transforming leisure, community and everyday life, New York: Basic Books
- o Frontier Economics (2007) The Evidence Report, prepared for the DCMS, UK
Government, [Available at www.cep.culture.gov.uk/cepevidence2007; Accessed on November 25th 2007]
- o Gantchev, D. (2004) ‘The WIPO guide on surveying the economic contribution of the Copyright Industries’, Review of Economic Research on Copyright Issues, 2004, vol. (1), pp. 5-16
- o Heng,T.M. Choo,A. and Ho,T. (2003) Economic Contribution of Singapore’s
Creative Industries, Economic Survey of Singapore First Quarter 2003
- o Hesmondhalgh, D. (2002) The Cultural Industries Sage Publications: London o Higgs, P. Cunningham, S and Bakhshi, H., (2008) Beyond the Creative Industries: Mapping the Creative Economy in the United Kingdom, NESTA Technical Report, Feb 2008
- o Landry, C. (2000) The Creative City Earthscan, London
- o NESTA (undated), Beyond Creative Industries [Available at http://www.nesta.org.uk/informing/policy_and_research/policy_briefings/beyo nd_creative_industries.aspx; Accessed on February 12th 2008]
- o The Conference Board of Canada (2008) Valuing Culture: measuring and Understanding Canada’s Creative Economy, Preliminary Research Report presented to the International Forum on the Creative Economy, March 17-18, Hilton Lac-Leamy, Gatineau, Quebec.
- o The Work Foundation (2007) Staying ahead: the economic performance of the UK’s creative industries prepared for the DCMS as part of the Creative Economy Programme (CEP)
- o Throsby, D. (2001) Economics and Culture, Cambridge University Press
- o Throsby, D. (2007) A new moment for cultural policy? Paper presented to the Researchers’ and Practitioners’ Forum, Perth WA, 21 September 2007,
Institute of Public Administration Australia, National Conference available at www.wa.ipaa.org.au/download.php?id=290 [Accessed on January 8th 2008]
- o UK Creative Industries Task Force (2001), Creative Industries Mapping
Document 2001, UK Department for Culture, Media and Sport
- o UNCTAD (2006) Creative Economy and Industries, a Creative Industries Division pamphlet
- o UNESCO (1982) Cultural Industries: A Challenge for the Future of Culture,
- o UNESCO, Paris
- o UNITED NATIONS (2008) Creative Economy Report 2008: The challenge of assessing the creative economy – towards informed policy-making
 UNESCO website: http://portal.unesco.org/culture
 DCMS (UK Department of Culture, Media and Sport, 1998, 2001)
 http://www.nesta.org.uk/informing/policy_and_research/policy_briefings/beyond_creative_indus tries.aspx
 See www.culture.gov.uk/creative/mapping.html
 Responding to concerns that official statistics are not wholly representative of the whole creative industries sector, and that ONS surveys cover businesses that are registered for VAT and therefore exclude those small businesses below the VAT threshold, DCMS and ONS began a process of updating the proportions usually applied to the relevant SIC and Standard Occupation Classification (SOC) codes by using detailed survey data. These changes are now reflected in the Creative Industries Economic Estimates Bulletin. The proportions will be reviewed every 3-5 years (DCMS, 2006a).
 The Evidence and Analysis Report by Frontier Economics is available on the CEP website:
 The impact of technology on cultural value chains is explored in more detail in the literature review chapter, in particular the research by Connectus Consulting Inc. (2007)