Exciting new paradigm links economy, culture

An exciting new development in international trade has been highlighted in a report produced jointly by the UNCTAD and the United Nations Development Programme (UNDP) and released in mid December.

The report identifies an emerging development paradigm linking economy and culture at both macro and micro levels. Central to this new paradigm is that creativity, knowledge and access to information are increasingly recognised as powerful engines driving economic growth and promoting development in a globalised world.

According to the report, early evidence indicates that demand for some “creative industry” products – particularly those which are domestically consumed, such as videos, music, video games, and new formats for TV programmes – remained stable during the global recession and that this economic sector, especially if supported by enlightened government policies, may help national economies, including those of developing countries, to recover from the downturn,

Global exports of creative goods and services – products such as arts and crafts, audiovisuals, books, design work, films, music, new media, printed media, visual and performing arts, and creative services – more than doubled between 2002 and 2008, the report notes. The total value of these exports reached US$ 592 billion in 2008, and the growth rate of the industry over that six-year period averaged 14%.

What is important for Sri Lankan policy makers to understand from this report is that it notes that the creative industries hold great potential for developing countries seeking to diversify their economies and participate in one of the most dynamic sectors of world commerce.

The global market, according to the report had already been boosted by increases in South-South trade in creative products before the recession set it in. The South’s exports of creative goods to the world reached $176 billion in 2008, or 43% of total creative-industries.

Although the global economic recovery is still weak and it is premature to draw definitive conclusions about the recession’s long-term impact on the creative economy, the sector appears to have been relatively “firm” during the crisis, the report says.  There also are signs that as recovery takes hold, demand for creative goods may resume its previous brisk growth, as people seem eager for products and services linked to culture, social events, entertainment, and leisure.

An increasing number of cities, it notes, are using the concept of “creative cities” to design urban development strategies for reinvigorating growth with focus on culture and creative activities.  These principles can be adapted for rural areas and disadvantaged communities as a tool for generating jobs, particularly for youth, empowering creative women and promoting social inclusion in line with the achievement of the Millennium Development Goals, the report says. The report reviews the market situation for all creative industries and summarises recent developments in all regions of the world. Adequately nurtured by governments and public and private-sector partnerships, the production, sale, and trade of creative goods can broaden developing-country economies, create a wide variety of jobs, and spur innovation, the report contends and states that appropriate institutional and regulatory frameworks are needed to establish a “creative nexus” that attracts investors, technology, and businesses.

One of the key recommendations of the report is that developing countries should include creative goods in their lists of products, and should conclude their negotiations under the Global System of Trade Preferences so that they give more impetus to the expansion of South-South trade in this sector. Sri Lanka is also a beneficiary of the GSTP and attention could be paid to this recommendation.  The rate of growth in such trade of creative goods – from $7.8 billion in 2002 to $21 billion in 2008 – is an opportunity that should be fully realised, the report says. The study takes a particular look at the consequences of the financial crisis. It offers 10 key messages to assist governments in policy-making that can enhance their creative economies.

Other topics explored include the effects of the digital revolution and social networks on unlocking marketing and distribution channels for music, digital animation, films, and related products, and how connectivity is facilitating creative collaboration and new business models.

The report notes that the 75% of the world’s four billion mobile phones are in use in developing countries and it urges greater efforts to expand broadband internet to such nations, as marketing and distribution of creative goods is increasingly based on this technology.

This again is an area where Sri Lanka can score. The report also calls for attention to sensitive areas related to intellectual property issues in the light of these new developments and for steps to be taken that will nurture creative capacities in developing nations, Creative industry exports from Sri Lanka have not been highlighted sufficiently in the past. Now is the time to give this sector the much needed prominence.

(Manel de Silva holds an Honours Degree in Political Science from the University of Ceylon, Peradeniya and has engaged in professional training in Commercial Diplomacy at ITC and GATT. She has served as a trade diplomat in several Sri Lankan Missions overseas and was the first female Head of the Department of Commerce as Director General of Commerce.)