1Edna dos Santos-Duisenberg (edna.dos.santos@unctad.org)

Chief, Creative Economy ProgrammeTHAILAND, March 2009

2

Context and Objective

• First UN multi-agency report on this new topic

• UNCTAD, UNDP, UNESCO, WIPO and ITC

• Conceptual, institutional and policy framework

• Analytical tools for informed policy-making

• Shared vision based on evidence and comparative analysis

• The full English version of the 330-pages study can be downloaded by internet at http://unctad.org/creative-economy

3

Setting the scene

Cultural assets and human creativity are inexhaustible resources available in all countries with both cultural and economic value

Ideas, knowledge and information are drivers of creativity

Globalization re-shaped patterns of world cultural consumption in a world dominated by images, sounds, texts and symbols

Connectivity influencing society life-style and the way creative products are created, reproduced and commercialized

Shift towards a more holistic approach to development strategiesinterface between economics, culture and technology

4

Creative Economy Report - 2008Chapter I: Concept and context of the creative economyChapter II: The development dimensionChapter III: Analysing the creative economyChapter IV: Towards evidence-based assessment of the creative economyChapter V: International trade in creative goods and servicesChapter VI: The role of intellectual property in the creative economyChapter VII: Technology, connectivity and the creative economyChapter VIII: Policy strategies for the creative industriesChapter IX: The international policy framework for creative industriesChapter X: Lessons learned and policy optionsStatistical Annex : World trade of creative goods and services, 1996-2005

5

Chapter I: Creative Economy- Concepts and definitions : cultural industries, cultural

economics, creative industries, creative economy,creative cities, creative clusters, creative class, etc

- Major drivers : technology, demand and tourism

- Multiple dimensions: economic, social and cultural

- Multi-disciplinary nature: need for concerted inter-ministerial policies and dialogue with all stakeholders

- The creative economy: a leading sector driving economic growth, employment and trade

6

Creative Economy• An evolving concept based on creative assets

potentially generating socio-economic growth

• Embraces economic, cultural and social aspects interacting with technology and tourism objectives

• Can foster income generation, job creation andexport earnings, while promoting social inclusion cultural diversity and human development

• Is a feasible policy option to promote trade anddevelopment gains

(UNCTAD)

7

Creative EconomyIs a set of knowledge-based economic activities with

cross-cutting linkages to the overall economy

Creative IndustriesAre tangible goods and intangible services with

creative content, economic value and market objectives

8

UNCTAD Classification

9

Chapter II: The development dimension- Millennium Development Goals and poverty reduction

- Development linkages: beyond economics - cultural, social and sustainable development

- Traditional knowledge, arts and the creative economy

- Obstacles to expansion of the creative economy: capital, entrepreneurial skills, infrastructure and institutional tools

- Shaping a model for enhancing the creative economy : UNCTAD’s creative nexus (C-ITET) model

- The creative economy in the developing world :Africa’s sharein global trade of creative goods and services is less than 1%

10

The development dimension

11

The Creative Nexus

12

Chapter III: Analysing the creative economy

- Need for systematic analysis, consistent methodology, reliable statistics and qualitative indicators

- Organizational structure: predominance of SMEs and few large transnationals working internationally

- Economic analysis: value-chain analysis, IPRs, inter-industry and locational analysis, contract theory

- Important role : public and quasi-public institutions and individual artists and creative producers

- Distribution and competition issues

13

Chapter IV: Towards an evidence-based assessment of the creative economy

- Reliable benchmark: international base using trade data - Operational model: universal comparative analysis to all countries - Practical measures: further research, minimal additional costs- Assessment tools: economic evaluation is partial, not exhaustive- Problematic : valuation of culture, technological changes and

boundaries between arts/culture and industry- Creative products : relative low value as materials, but real value

in intellectual property (blank CD case)- Trade in creative industries relatively invisible, shadows of IPRs

14

Chapter V: International trade in creative goods & services

World trade of creative productsannual growth rate of 8.7% during 2000-2005, reaching US$ 424,4 billion in 2005

Creative goods totalled US$ 335,5 billion in 2005, 47% higher than in 2000, as shown in the table

• Developed countries dominated trade but exports have risen faster in developing countries due to China

• New opportunities for developing countries to leapfrog in high growth sectors of the world economy

15

Creative economy: leading growth and employment in advanced countries

In Europe EU-25, the creative economy has grown 12% faster than the overall economy during 1999-2003

UK: In 1997-2004, as value added 5% growth compared with 3% for the rest of the economy. Employment grew twice faster

EU led world exports, US$ 145 billion in 2005

Italy, ranked first in exports of creative goodsdue to competitive position in design products

Exports earnings 42% higher in developed countries in 2000-2005. Same countries among top 10 exporters during the period

16

Creative industries exports goods and services

0

50

100

150

200

250

300

350

400

450

All creativeindustries

Design Publishing Creativeservices

0

5

10

15

20

25

30

Culturalheritage

Visual Arts Audio-visual Performingarts

New media

1996 2005

billion US$ billion US$

Source : UNCTAD

17

Creative goods and services A new dynamic sector in world trade

• UNCTAD figures show that world exports of :Design Art crafts-US$ 119.7 billion in 1996 - US$ 14.7 billion in 1996-US$ 218.1 billion in 2005 - US$ 23.2 billion in 2005

18

In developing countries a nuanced situation• Despite the abundance of creative

talents, most developing countries are not yet fully benefiting from the potential of their creative economies

• In Asia-Pacific and Middle-East the creative economy is growing fast with competitive products

• In Latin America and the Caribbean noticeableimprovements but need to reinforce creative capacities

• Africa very fragmented creative industries requiring financingand business support

19

39.2

59.7

1.1

89.2

8.22.6

51.6

46.9

1.5

89.9

9.50.6

53.8

45.8

0.5

82.6

14.82.6

70.7

28.9

0.5

0%

20%

40%

60%

80%

100%

Artcrafts Audio visuals Design Music (CDs,tapes)

New media Publishing Visual arts

Developed Economies Developing Economies Economies in transition

Creative industries goods share in world exports - 2005

Source : UNCTAD

20

Regional economic groups in world markets• European Union leads world exports with

43% market share

• Exports from Asia is now higher than from North America

• FTAA countries exported US$ 45.5 billion in 2005, about 14% world market, mainly from NAFTA countries

• MERCOSUR has very small share in world trade of creative goods

• ACP countries, which includes Caribbean, Africa and Pacific have an inexpressive participation in world markets.

21

THAILAND

Source: UNCTAD

22

THAILANDCREATIVE INDUSTRIES EXPORTS BY PRODUCTS

(millions of dollars)

0

500

1000

1500

2000

2500

3000

3500

4000

2001 2002 2003 2004 2005

ART CRAFTSAUDIO VISUALSDESIGNMUSIC (CDs, tapes)NEW MEDIAPUBLISHINGVISUAL ARTS

Source: UNCTAD

23

THAILANDDESIGN: EXPORTS BY PRODUCTS

(millions of dollars)

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2001 2002 2003 2004 2005

__ARCHITECTURE__FASHION__GLASSWARE__INTERIOR__JEWELLERY__TOYS

Source: UNCTAD

24

THAILANDART CRAFTS: EXPORTS BY PRODUCT GROUPS

(millions of dollars)

0

20

40

60

80

100

120

140

2001 2002 2003 2004 2005

__CARPETS __CELEBRATION __OTHER__PAPERWARE __WICKERWARE __YARN

Source: UNCTAD

25

Chapter VI: Intellectual Property Rights and the creative economy

Intellectual property: sensitive area with different approachesCopyrights: source of wealth, can be an incentive and reward for production and dissemination of creative worksIPRs contribution to the creative economy: GDP/ employmentTraditional cultural expressions and public domain issuesCopyright and new technologies: the “internet treaties”Possible policy options

26

Policy optionsAn efficient and fair international IP system

- Protect IP in export markets is crucial

- Increase awareness and adherence to international treats

- Viable reinforcement is often a more critical issue

- Protecting copyright is a public-policy goal

- Developing countries better explore flexibilities of the TRIPs agreement and WIPO “Development Agenda”

- No “one-size-fits all” model, some alternatives

27

Chapter VII: Connectivity and the creative industries

- ICTs impact on the creative economy: changes in marketing & distribution and stimulus for creative content

- Digitization: 1/3 developing countries penetration rate of less than 5%

- Convergence : new business models, markets structuresand governance

- Impact across the production chain: from conception to access to markets /audience

- Looking into the future

28

Chapter VIII: Policy strategies for the creative industries

- The role of public policies : government as facilitator

- The policy process : objectives, tools, implementation

- Policy directions : strategic concerted actions

- Target measures for enhancing creative capacities

- Tailoring policy action at the national level

29

Policy directions

- Provision of infrastructure- Provision of finance & investment- Creation of institutional mechanisms- Development of export markets- Protection of creator’s rights- Establishment of creative clusters- Tools for effective data-collection measures

30

Chapter IX: The international policy framework

Highly influenced by the MDG’s- poverty reduction goal- UNCTAD : Introduced the creative economy on the economic and

development agenda: Mandates to promote trade and development gains based on three pillars : (i) consensus-building, (ii) policy-oriented research and (iii) technical cooperation

- UNDP : Engaging developing countries in the creative economy for development, promoting South-South cooperation

- ITC : Creating business opportunities for creative industries from developing countries. Focus on crafts, visual arts and fashion

31

Multilateral Trade Negotiations

- WTO Doha Round launched in 2001 remains inconclusiveSeveral issues relevant for trade policy of creative/cultural goods and services

GATS : market access in cultural services including audiovisuals and the built-in flexibilities. Modes of supply and the mobility of artists/creators to offer services in world markets

TRIPs: trade of copyrightable and non-copyrightable items such as those originating from traditional knowledge and folklore, technology transfer etc

TRIMS, competition policies, trade efficiency and Special &Differential treatment for developing countries

Other legal provisions such as free trade and regional trade agreements, economic partnerships, customs unions

32

Ongoing multilateral processes

UNESCO Cultural diversity perspective - implementation of the “Convention on the Protection and Promotion of the diversity of Cultural Expressions”- recognizes the sovereign right of States to articulate cultural policies

WIPO Development Agenda- closer integration of the development dimension into policy-making in the field of intellectual property protection- intergovernmental committee, 45 agreed proposals

33

Chapter X: Lessons learned and policy options

Lessons Learned :

- Creative economy calls for multi-disciplinary and concerted policy response

- World exports of creative goods and services grew by 8.7 %annually during 2000-2005 with faster growth in developing countries

- ICTs and IPRs are major drivers of the growth of the creative economy worldwide

- Technology offers opportunities for SMEs: new distribution channels for creative content, innovative business models

- The creative economy strengthens the links between creativity, culture, technology and economic development

34

Major findings- An evolving concept : no common definition of the

creative economy, nor a unique classification of the creative industries

- There is no one-fits-all recipe but flexible and strategic choices to be made by governments at national level

- The creative economy offer new venues for developing countries to leapfrog into high-growth areas of the world economy

- Need to reconcile national policy-making for the creative economy with on-going multilateral processes

35

Policy options

- Role of governments: to articulate a conducive climate and infrastructure to stimulate creative capacities

- Role of creative entrepreneurs: to promote creative entrepreneurship to upgrade skills and linkages between arts, creation and business

- Role of civil society: forging strategic alliances to facilitate interactions with all stakeholders

36

Key messages- Creative industries is one of the most dynamic sector in world

trade. Developing countries have great potential to expand exports as a source of economic growth and development

- Policy strategies to support the development of the creative industries require inter-ministerial policy actions

- Policy measures should reinforce the “creative nexus” between investment, technology, entrepreneurship and trade

- Lack of reliable data affect policy-making. Need for better methodologies for gathering data worldwide

- IP should provide a stimulus to creators and is crucial for enhancing the creative sector for development. Current IPR regime needs improvements

37

The Way Ahead

- Redefining priorities: Developing countries have impressive trade deficits as regards creative products, how to reverse this situation?

- The role of international cooperation: UN system can assist governments to better grasp the dynamics of the creative economy and identify areas for possible policy action

-The “Creative Economy Report” paved the way for enhanced cooperation in both national and international levels.

38

Thank you for your attentionReproduction authorized with source acknowledgement UNCTAD (E. dos Santos)

Copy of quotation or reprint to be sent to the UNCTAD Secretariat