What is the creative economy?

Georgina Lavers
Georgina Lavers

Georgina Lavers explores the meaning and value of the creative economy, and how its cultivation can provide lasting social and economic benefits

Culture is the beating heart of most societies. And today, in an era of mass mobility and digital technology, creative and cultural pursuits enjoy greater reach than ever before, speaking not only to individuals, but to communities, societies and entire nations.

Against this backdrop, the link between culture and the economy has gained significant traction, with smart policy-makers worldwide aware of the importance of fostering a creative economy. At its crux is an appreciation that in our post-industrial world, it is new ideas that drive economic success. So where in the past that momentum might have come from money and machinery, today it is ideas-led groups and individuals in sectors as diverse as publishing, fashion, architecture, broadcasting, theatre, design – even gastronomy – who are the engines of economic growth.

The idea of a creative economy first gained popularity with journalist John Howkins’ 2001 tome, The Creative Economy: How People Make Money from Ideas. Using attention-grabbing statistics, such as the fact that Britain makes more money from its music industry than its car-manufacturing sector, Howkins makes the case for creative industries being more alert than ever.

Since then, both UNESCO and the World Economic Forum have identified the creative economy as one of the global economy’s fastest growing sectors – describing it as “transformative” in terms of income generation, job creation and export earnings.

I wondered why artists have to justify their place in society...
It might not have any obvious relevance to our basic survival but it is nonetheless crucial to social coherence’ 

Fathima Mohiuddin, Founder of Dubai-based collective, The Domino

In 2013, for example, Beijing’s creative economy generated RMB240.6bn (US$35bn) – up almost 10 per cent on the previous year and equating to 12.3 per cent of GDP. Beijing’s design sector is considered to be one of the Chinese capital’s “pillar industries” And at the latest count, employed nearly a quarter of a million people, with an estimated value of RMB160bn (US$23bn).

And in San Francisco, the success of the Maker Movement – a loose collection of independent inventors, designers, computer hackers and traditional artisans – which emerged from the Bay Area a decade ago, is credited with a resurgence in innovative thinking, and its appearance has coincided with a surge in local manufacturing, in areas such as clothing and lifestyle products.

In the UAE, the creative industries are grabbing attention for their ability to generate income through trade and intellectual property rights and create new jobs that involve higher occupational skills, especially for SMEs. The country has been investing more money in arts infrastructure, venues, start-up businesses and events and has already seen this investment bear fruit. The design sector in the MENA region accounted for US$100bn in market value in 2014, according to a MENA Design Outlook report by the Dubai Design & Fashion Council.

In a recent post for the World Economic Forum, Enrique Avogadro, the Secretary of Culture and Creativity for Argentina, highlighted Latin America as a region particularly
keen to capitalise on industries that could create wealth and jobs through the generation and utilisation of intellectual property.

“There are at least three strengths that are characteristic to Latin
 America in terms of the creative economy debate: culture and identity, entrepreneurship, and a young creative population,” he wrote.

Indeed the formation of this alternative kind of economy has been of particular interest to developing nations. “When the creative sector becomes part of an overall development growth strategy, it can contribute to the revitalisation of the national economy,” wrote Helen Clark, Director of the UN Development Programme and author of the UN 2013 report on culture and the creative economy.

The Global South was earmarked
 as containing multiple projects that indicated exciting futures for their country’s inhabitants, from the Essaouira Festival in Morocco – which brought about a revival of Gnawa North African music and a significant increase of foreign tourists – to the pop-up Carwan Gallery in Beirut, which connects renowned designers from the Middle East with local artisans to boost sales of local art.

The changing flow of creative economic output is also proving interesting, says Ines Tofalo, Programme Support Unit at the UN Office for South-South Cooperation. “Initially, most consumption of cultural goods and services, such as movies or music, was from North to South,” she says. “Which is crazy: creativity and ingenuity, after all, isn’t a natural resource.”

Tofalo indicates one example of an atypical flow of creative capital: music produced and consumed in the Caribbean. Because of the way of the royalties are structured, the industry generates most revenue in Miami.

“But, there is starting to be a surge in the countries starting to purchase, cooperate and link their economies in the creative sectors,” she adds. “Although there is a lot more potential to do that.”

Of course for individuals working in the creative economy – most specifically the arts – economic models have not always adapted to an often-capricious buying public. Either you are flavour of the month, or you are not. 
A study from US-based tax services provider H&R Block in 2014 found that unemployment levels among recent graduates were highest for those who studied the arts. Out of the two million art graduates in the US, or 10 per cent, earned their living primarily as artists – according to a 2012 report by the art collective BFAMFAPhD.

“As I got older I wondered why artists have to justify their place in society. Their worth and value. Why for centuries they’ve been ‘starving’”, wrote Fathima Mohiuddin, founder of Dubai-based artistic collective The Domino, in a recent blog post.

“But I believe deeply in the value of creativity... And though it may not have any obvious relevance
to our basic survival (some might argue), it is nonetheless crucial to social coherence.”

Mohiuddin’s point is echoed in a UNESCO report on the creative economy. In it, the UN educational and cultural agency names the sector as a driver for the Millennium Development Goals, asserting that investing in culture and the creative sector can contribute to community wellbeing, individual self-esteem, quality of life, social cohesion, and
an enabling environment.

Ines Tofalo explains: “Many of the places that have succeeded in developing their creative sectors have also invested in the development of hubs, where people are brought together. Part of this is about facilitating finances, but part of it is how to build professional networks, and link ideas and business together.”

A burgeoning creative economy is also breathing new life into industries not typically associated with culture or creativity. “The creative economy is
a broader concept than just creative industries,” says Paul Owens, co-founder of BOP Consulting and Director of the World Cities Culture Forum. He highlights the research
of UK innovation charity NESTA – which finds “creative intensity”, or creative occupations, outside the
core creative industries – as particularly noteworthy.

“The creative economy also overlaps into the notion of innovation and the way, actually, every single sector in the economy is looking to innovate.”

Owens highlights the fintech sector in London, as well as educational technology, as two areas hitherto not considered creative per se but which are taking off due to this injection of innovative thinking.

“I’m seeing these areas start to really blossom around Shoreditch in London,” Owens says. “Those are the kinds of technology companies that are disrupting what clients in the service sectors are doing. It’s a real mixture of high-level skills and creative thinking.”

In short, concludes Owens, “Anybody can be creative anywhere.”