First published on April 2013.
In 2009, we had no idea what a new, post-crunch British economy would look like. What we did know was that whatever shape a new economy took, it would depend increasingly on creativity. At the time, there was very little public recognition of this fact, prompting us to invite over forty commentators from across the creative and cultural sector to present their thoughts on the future of the creative economy to provoke and stimulate wider debate.
In this 2009 essay, John Howkins introduced the idea of ‘creative ecologies’ and looked at how a holistic approach might build resilience and sustainability into future economic models.
The crisis started with the collapse of asset values but the solution goes far beyond economics. It is not a single moment, like a crunch or a squeeze, but a process of change, a discontinuity. The issue is not any particular economic theory but the way we handle knowledge.
So Lord Mandelson’s declaration in his March (2009) Mansion House speech that ‘The entire thrust of the government has been directed for six months at repairing the hole in the banking system’ was depressing. What a wasted opportunity! Of course, we need to re-establish the banking system but we need to re-think a lot more than that.
The motor of capitalism is capitalising: bringing forward the future value of an asset to today so its owner can use it to finance growth. What’s been happening since the 1990s is that companies have been capitalising practically everything from brands to business methods, from patents to pop songs. Some large companies have also used equity ownership to sell or lease shares in their assets. Now, if you do this with intangible stuff like ideas then you quickly get rapid and volatile changes in valuation. A company’s balance sheet begins to bear little relationship to its profit-and-loss accounts. We desperately need to start devising an economics based on ideas.
Where to begin? We need a new index to measure the assets that actually matter. Traditional metrics of GDP, productivity, added value and growth do not measure what we need to know most. I welcome President Sarkozy’s request to Joseph Stiglitz and Amartya Sen to develop a new index that would replace GDP with something that takes account of education and individual well-being.
The concepts and business models of the creative economy are part of this solution, especially the value given to personal expression, networking and collaboration, the predominance of small informal businesses, the move from static, institutional hierarchies to temporary projects, our enthusiasm for ‘creative destruction’ and the premium paid to novelty. These promise a more humanistic, diverse and freer way of working. But they are also part of the problem. The creative economy’s diversity and freedoms present countries with social, economic and regulatory challenges far in advance of our ability to solve them.
It seems to me that the only way to resolve this is to take a holistic approach. My new book, ‘Creative Ecologies’, suggests eco-systems as a useful. A creative ecology is a network of habitats where people change, learn and adapt. If we include resilience and sustainability, which is a system’s capacity to cope with disturbance and still retain its basic function, we have a good base to build on. Balance and mutuality are good guiding principles.
Whatever emerges in the next few years, people need to make connections between all factors in the eco-system, such as those contained in the E4 model for measuring a system’s health: ecology, energy, ethics and economics. It is important to start with ecology, not economics.
Running throughout the model is what the Indonesian diplomat Soedjatmoko calls the ‘capacity to learn’. It is astonishing how closely a country’s capacity to learn, rather than individual genius, affects national levels of creativity and innovation. The government’s education system is the most obvious part of this, but the many ways in which each individual develops their own learning skills is even more important. So we should enable people of any age to learn what they want, when they want and how they want; bring thinktanks, research bodies and NGOs into the education process; protect learning-for the-sake-of-learning from being squeezed out by learning-for-a-job vocational courses. We should divert the public R&D budget into growth areas (instead of into massive silos like aerospace and pharmaceuticals); use R&D grants and tax credits to mitigate risk in all sectors that are creative and innovative, increase the ways that individuals, businesses and universities crossfertilise learning. We must re-think ‘knowledge transfer’.
For a start, Lord Drayson, Science Minister, should request the research councils earmark 10% of their £2.8 billion budget to projects that help us learn and adapt through the crisis. Oh, and all the publicly funded research should be available to the public, immediately, no copyright restrictions, no quibbles.
One of the easiest ways of encouraging people to use and re-use existing ideas is through the copyright system. Andrew Gowers, the former editor of the ‘Financial Times’ who led Gordon Brown’s 2007 inquiry, said recently that the government’s current policy on copyright term was ‘pretty silly’ and ‘out of tune with reality’. As an example, the recent ‘Digital Britain’ interim report proposed a new Rights Agency, likely to be funded by rights-holders. The Rights Agency will muddy the waters, further squeeze out marginal users, and postpone change. This is exactly the kind of old fashioned Whitehall thinking that got us into this crisis. What happened to the notion that the government should act in the interests of everyone?
For a more enlightened view of the future, read instead the Cabinet Office’s ‘Power of Information’ review which is genuinely innovative. In McLuhan’s phrase, BERR and DCMS seem to advance by looking in the rear view mirror, chiefly by wanting to subsidise big institutions that are unfit for the new ecology, whereas the people who wrote the ‘Power of Information’ seem to welcome digital media and its freedoms and opportunities.
Ecology warns us against attempting too much centralised control. More government intervention is necessary in some sectors in the short-term, but in the long-term I am not so sure, especially if it means government’s traditional forms of centralised monopolies. Telecoms, software and the Internet, three of the foundations of the creative economy, only took off when government got out of the way.
Next year will be the 300th anniversary of Britain’s 1710 Copyright Act, the world’s first. Its purpose was ‘the encouragement of learning’. Here’s an interesting question: If we were writing the world’s first copyright act in 2010 instead of 1710, what would we say? How would we want to regulate the flows of knowledge in our society so as to enhance access and incentivise investment? I would like to see Britain hold a global conference to address this question. What is the role of knowledge in society (not only, please note, in an economy)? How do we maximise its use? How do we cope with the different traditions in non-Western countries, notably Brazil, India, China and sub-Saharan Africa?
‘Fair use’ stands as a metaphor for what we should be aiming at, regulating the flow of knowledge in society to general benefit. It will take tremendous leadership and energy to get through the current crisis. We need to avoid the temptation to sink back in the cosy myopia of the 1990s, and forge a new creative ecology. What’s the alternative?
Further contribution by John Howkins to 'After The Cruch: Revisited' can be found here.
Illustrations by Paul Davis - http://copyrightdavis.blogspot.com/