Creative Industries: A new vehicle for trade and development gains in CARIFORUM
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1 Creative Industries: A new vehicle for trade and development gains in CARIFORUM Sudip Ranjan Basu, Ph.D. sudip.ranjan.basu@unctad.org International Trade Division Regional Training Seminar: Assessing the Economic Contribution and Performance of Creative Industries to National Economies March 2011 Castries, St Lucia
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3 I.Post crisis global economy and opportunities II.Concepts, defintions, classification & measurement III.UNCTAD global creative economy database IV. Global trends and CARIFORUM V. Market access for creative industries VI.Policymaking in CARIFORUM
4 Post crisis global economy and opportunities
5 Impact of the global financial and economic crisis Worst economic and financial crisis since the 1930s Sharpest deceleration of economic growth worldwide in 60 years Global unemployment up 7.5% in 2009, 210 million people jobless Sharp drop in foreign direct investment worldwide -40 % in 2009 World trade flows declined 12% in 2009 Gloomy outlook due to instability and uncertainty Domino-effect into emerging markets, CARIFORUM and other developing countries Aggravation of global imbalances between rich and poor Economic crisis of unprecedented scale and magnitude Paradigm shift : shortcomings of neo-liberal model Undermined jobs, economic growth and social well-being Stalled progress in MDGs 5
6 Creative responses to stimulate economic recovery The heart of the creative economy are the creative industries Every day everywhere in the world, individuals consume creative products at home, work, leisure and entertainment We listen to music, watch TV, read newspapers, go to cinema, use software in computers, play video-games, dress with fashion, etc. Demand for some creative products remain stable, particularly for domestically consumed goods and services such as TV formats, music, video-games, films, e-adds, e-news etc More people are eager for culture and entertainment 6
7 UNCTAD s work on creative economy Creative Economy Report 2008: The challenge of assessing the creative economy towards informed policy-making Creative Economy Report 2010: A feasible development option UN perspective on this new topic. Initiative of the UNCTAD/UNDP Partnership Conceptual, institutional and policy framework Analytical tools for informed policy-making and implications to development/mdgs Shared vision based on evidence and comparative analysis Sensitize governments about the potential of the creative economy to foster socio-economic development
8 Concepts, defintions, classification & measurement
9 Creative Economy Knowledge-based activities based on creative assets and intellectual capital potentially generating socio-economic growth It can foster income generation, job creation and export earnings while promoting social inclusion, cultural diversity and human development It embraces economic, cultural and social aspects interacting with technology and tourism objectives Interplay of creativity-led activities with a development dimension and cross-cutting linkages at macro and micro levels with the overall economy It is a feasible development option calling for innovative concerted policy responses and multidisciplinary action ( UNCTAD) 9
10 Definition of the Creative Industries Is the cycle of creation, production and distribution of goods and services that uses criativity and intellectual capital as primary inputs Comprise tangible goods and intangible services, focused on but not limited to arts, with creative content, economic value and market objectives Produces creative products able to generate revenues through trade and intellectual property rights Creative Economy Creative Industries Are at the cross-road among the artisan, manufacturing and services (UNCTAD) 10
11 UNCTAD classification of creative industries
12 Development impact Millennium Development Goals and poverty reduction Creative industries a key sector in national development strategies Development linkages: beyond economics -cultural, social and sustainable development aspects, interface with tourism and technology Traditional knowledge, arts, education and the creative economy Promotes job creation particularly for the youth and women Obstacles to expansion of the creative economy: capital, entrepreneurial skills, infrastructure and institutional tools
13 Creative nexus Use our criativity, be bold, imaginative, transcend Let s shape a better, real and a more creative economy
14 UNCTAD global creative economy database
15 Creative goods data base - Creative economy consists of two parts: *Creative industries to include all creative goods and services *Related industries to include all related goods, computer & information services & royalties and license fees - Uses the UN COMTRADE database using the Harmonised System (HS) classification, version Total codes of creative goods: 211 for all creative goods 60 codes for art crafts 2 codes for audiovisuals 102 codes for design 8 codes for new media 7 codes for performing arts 15 codes for publishing 17 codes for visual arts 170 for all related goods
16 Creative services data base - Uses the IMF BOP using BPM5 and Extended Balance-of-Payments (EBOPS) codes - The level of disaggregation is not ideal but provides an indication of the impact of creative-services activities From the 11 principal BOP categories, 6 were selected : - advertising, market research & public opinion services - architectural, engineering & other technical services - research and development services - personal, cultural and recreational services - audiovisual related services - other personal, cultural and recreational services Royalties and license fees are presented only as indicative since it covers more than the creative industries (trademarks, patents, manufacturing rights etc)
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19 Evidanced-based assessment: Global trends and CARIFORUM
20 Global trends World trade of creative products annual growth rate of 14% during , and reached US$ 592 billion in 2008 plus gains from intellectual property rights (no data) South goods & services exports stood at US$176 billion in 2008 CARIFORUM goods & services exports stood at US$583 million in 2008 (about 0.10 % of world trade) Developed countries dominated trade but exports have risen faster in developing countries due to China New opportunities for economies in South-South cooperation to leapfrog in high growth sectors 20
21 Global goods trade snapshots
22 Creative industries, by group
23 Economic groups
24 Global rankings
25 Developing countries
26 South-South trade
27 Creative services,
28 Creative services, top 10
29 Evolution of goods exports in CARIFORUM in millions of $ Source: UNCTAD
30 Benchmarking, by groups in millions of $ Source: UNCTAD
31 Source: UNCTAD CARIFORUM trends
32 Creating country profiles
33 Market access for creative industries
34 Multilateral Trade Negotiations WTO Doha Round launched in 2001 remains inconclusive Several issues relevant for trade policy of creative/cultural goods and services GATS : market access in cultural services including audiovisuals Mode 4 -free circulation of artists and creative professionals -visas TRIPs: trade of copyrightable and non-copyrightable items such as those originating from traditional knowledge, technology transfer etc TRIMS, investments, competition policies, and trade efficiency As LDCs further explore special treatment for market access (EBA) Other legal provisions such as free trade and regional trade agreements, economic partnerships agreements (EPAs), customs unions
35 Market access opportunities Significant differences still exist between MFN and bound tariff rates Use of NTMs remain particularly important in the case of creative industries, especially related to labeling, marketing and packaging requirements under TBT, local content measures under TRIMs and IPRs to sectors such as design, new media and publishing Average MFN applied tariffs are much lower among developed economies than among developing countries on all creative sectors Lower South-South tariff rates could accelerate trade expansion and deepen liberalization process, which could help provide empirical evidence to speed up GSTP negotiations
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38 Policymaking in CARIFORUM
39 Policymaking in CARIFORUM
40 Policymaking in CARIFORUM Facilitate interactions between the public and private sector, universities, and relevant institutions including NGOs, to facilitate a participatory approach Put in place cross-cutting mechanisms and institutions involving relevant ministries /departments (education /tourism /technology) Integrate local creative industries from the communities into national strategies towards global markets Articulate policies to attract investment and business, mechanisms for financing/micro-credit, promote training on entrepreneurship, ICT tools and IPRs policies
41 Reconcile national policies and global processes International policy framework : achievement of MDGs in 2015 UNESCO - implementation of the Convention on the Protection and Promotion of the Diversity of Cultural Expressions WIPO Development Agenda - debates on intellectual property rights WTO Doha Round of multilateral trade negotiations : inconclusive UNCTAD - policy-oriented analysis to assist in policy-making, providing platform for advancing the policy and research agendas, implementing technical cooperation projects on creative economy UNDP facilitating South-South cooperation 41
42 The role of the main actors in CAROFORUM - Role of governments: to articulate a conducive climate and infrastructure to stimulate creative capacities, through policies such as creative clusters, financing, SME support - Role of the creative community: to reinforce skills and continuous learning for strengthening the linkages between arts, creation and business - Role of the civil society: forging strategic alliances to facilitate interactions and networking among stakeholders - Role of the UNCTAD: policy-oriented analysis to assist in policy-making, providing platform for advancing the policy and research agendas, implementing technical cooperation projects on creative economy 42
43 Key policy messages for CAROFORUM There is no one-fits-all recipe but flexible and strategic choices to be made by national governments Creative economy calls for multi-disciplinary and concerted inter-ministerial policy response Reconcile interests at public and private sectors for shaping a national strategy to enhance creative capacities ICTs and IPRs are key drivers of the creative economy Technology offers opportunities for SMEs: new distribution channels for creative content, new business models to reach out global markets through internet (see ITC modules) The creative economy strengthens the links between creativity, culture, technology and socio-economic development 43
44 National Creative Industries Support Pilot project on "Strengthening the Creative Industries in Five African, Caribbean and Pacific countries, including Mozambique, Zambia, Senegal, Trinidad and Tobago and Fiji, through employment and trade expansion (jointly with ACP Secretariat, the European Commission, ILO and UNESCO, ) Objectives: -to assist the Governments in articulating a development strategy that can optimize the economic potential of the creative sector for job creation, trade expansion and social inclusion. - to review current policy in these areas and to facilitate concerted policy actions and inter-ministerial decisions - to create a participatory methodology, the identification of key creative sectors, and the development of institutional and productive capacity
45 Thank you for your attention Reproduction autorized with acknowledgements UNCTAD (Sudip Ranjan Basu)
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