Recently the Central Bank presented its 2010 Annual Report. Deviating from the tradition of the report being brought to him by the bank authorities, the President himself went to the Central Bank and received the 61st annual report of the Monetary Board from the Governor of the Central Bank Ajith Nivard Cabraal.
This is for the first time the Central Bank report has been published while Sri Lanka is experiencing the dividends of peace for an entire year. More importantly, the Sri Lankan economy recorded an impressive growth of 8.0 per cent, the highest annual rate of growth reported in the last three decades, and this exceeds the average annual growth of 4.9 per cent recorded since the liberalisation of the economy in 1977.
In perspective of economics if you follow the rule of 72, within nine years’ time (72/8) you can double your Gross Domestic Product (GDP). So we are on the verge of looking at the brighter picture for us and for our next generation.
This study attempts to focus how ‘creative economy’ can be used instead of depending on traditional products and services in order to expedite our economy’s growth. In Sri Lanka we are still concentrating on tea, rubber and garments and something ‘out of the box’ is required to compete in the world market – even if it will utilise the resources in full capacity.
The concept of ‘creative economy’ is a new development for Western countries as well as in world trade. To cite an example, in Nigeria ‘Nollywood’ can be considered as the second best revenue source and it is third in the world’s film industry (after Hollywood and Bollywood).
The emergence of ‘Nollywood’ is remarkable and it came into the world picture within 20 years and now it is producing 1,000 to 1,200 films per year. We have to study the success story of ‘Nollywood’ to see whether we can apply that to our Ranminithanna Film Village, which has all the facilities for the filming world. These feasibility studies should be done through universities and I personally feel the Sri Lankan university system still lacks “partnership” with the private sector. University undergrads can do a study on ‘Nollywood’ and see the Key Successive Factors (KSF) and uniqueness in the film industry. We can then see how we can apply these models (with some modifications) in the Sri Lankan context. This should be the new rule in the current global economy.
It is worthwhile to understand the meaning and implications of creative economy (sometimes referred to as creative industry). According to John Howkins, the author of ‘The Creative Economy: How People Make Money from Ideas,’ creative industry refers to a range of economic activities which are concerned with the generation or exploitation of knowledge and information. They may variously also be referred to as the cultural industries or creative economy. Howkins’ creative economy comprises advertising, architecture, art, crafts, design, fashion, film, music, performing arts, publishing, R&D, software, toys and games, TV and radio, and video games. The concept of creative economy will be the future. It has been observed by many intellectuals around the world.
According to Landry & Bianchini (1995), “The industries of the twenty-first century will depend increasingly on the generation of knowledge through creativity and innovation.” Human capital can be considered important and KSA factors – namely, knowledge, skills and attitude – as prime factors which will govern the world economy at this moment.
The question of how it will influence the global economy can also be raised. Despite the 12 per cent decline in global commerce in 2008, world trade of creative goods and services continued to expand with an average annual growth rate of 14 per cent. According to Creative Economy Report 2010, global exports of creative goods and services – ideas and creativity-centred industries such as arts and crafts, audiovisuals, books, design, films, music, new media, visual and performing arts – have more than doubled from 2002 to 2008, reaching nearly US$ 600 billion.
The UNCTAD-UNDP publication showcases more than 40 concrete examples ranging from the fashion industry in Africa and Asia to soap operas in Mexico and Brazil and from the film industry in India, to reggae in Jamaica and the carnival in Brazil and the Caribbean. Such industries in developing countries have been promoting trade, while often providing training and employment to the poor. As we discussed earlier, Nigeria’s US$ 2.75 billion film industry is the third largest in the world, following the US and India. Nigeria’s ‘Nollywood’ produces more than 1,000 films annually, creating thousands of jobs and is the country’s second most important industry after oil.
Currently, Nigerian films outsell Hollywood films in Nigeria and many other African countries. Some 300 producers turn out movies at an astonishing rate — somewhere between 1,000 and 2,000 a year. The films go straight to DVD and VCD discs. Thirty new titles are delivered to Nigerian shops and market stalls every week, where an average film sells 50,000 copies. A hit may sell several hundred thousand. Discs sell for two dollars each, making them affordable for most Nigerians and providing astounding returns for the producers. Nollywood movies are made on shoestring budgets ranging from $ 10,000 to $15,000 a piece spanning seven to 10 days. This is an incredibly short, jam packed production time by all standards. The Nollywood phenomenon was made possible by two main ingredients: Nigerian entrepreneurship and digital technology. The concept of ‘creative economy’ can be considered a ‘mantra’ for almost all countries. As some first world countries struggle to compete in traditional markets such as manufacturing, many now see the creative industries as a key component in a new knowledge economy, capable perhaps of delivering urban regeneration, often through initiatives linked to exploitation of cultural heritage that leads to increased tourism.
It is often argued that, in future, the ideas and imagination of countries like the United Kingdom will be their greatest asset; in support of this argument, a number of universities in the UK have started to offer creative entrepreneurship as a specific area for study and research. Indeed, UK Government figures reveal that the UK’s creative industries account for over a million jobs and brought in £ 112.5 billion to the UK economy (DCMS Creative Industries Mapping Document 2001).
The contribution made by creative economy is enormous for the national output. Interestingly, according to the Vice Chairman of the Taskforce for Creative Industry in Kenya Michael Onyango, “The creative economy is said to be the fastest growing in the world having grown at an average of 14 per cent between 2002 and 2008. It also has the potential to create wealth and job opportunities especially for the young people. For instance, in the US where the sector contributes 11.2 per cent of the country’s GDP, it also accounts for 8.9 per cent of the jobs in that market.” Even countries like Thailand also invest a substantial amount of money for this. The Thai Government plans to spend 20 billion baht (US$ 667 million) to develop its creative economy by hoping to raise the country’s economic growth. The Thai Government has set up a national creative economy policy committee chaired by the Prime Minister, with the Deputy Commerce Minister as the Secretary General.
Furthermore most countries now deliver courses in ‘creative economy’ by understanding the demand and necessity in international markets.
We have to understand the curriculum and we have to change our structure according to the global market. Most of the people were of the opinion that the courses in the national university system, especially in the arts stream, were not job oriented. So such programmes will always go in line with national/international requirements. It is the duty of our national university system to start programmes like ‘creative economy’ by understanding the global changes. This should be done as soon as possible.
What we have to understand is the importance of moving away from the traditional markets such as manufacturing and see the creative industries as a key component in a new knowledge economy. Policy makers and intellectuals should understand the importance of this. We have already finished the war. Now we have to face an economic war. For victory, we need our own model. But again we have to study new areas like knowledge economy, etc. Again we have to revisit our traditions of Anuradhapura and Polonnaruwa and understand how well we developed in that era.
There are intellectuals in the university system and in the industry who always willing to join and bring this country to forefront. I think this is the last but best chance we have. In other words, a ‘strategic window’ has opened for the country. Everybody (including the Opposition) should help Sri Lanka win the economic war. This should be the New Year message for all Sri Lankans!
(The writer is a Chartered Marketer and Consultant, Senior Lecturer in Marketing – Open University of Sri Lanka and certified trainer for tutors and mentors in online learning. He holds an MBA – Colombo, B. Sc Mkt. – Special, SJP, MCIM, Dip in MKT – UK, MSLIM, MAAT, Dip in CMA Chartered Intermediate – ICASL.)