First published on May 2013.
The last five years have marked a turning point in the world economy, bringing about decisive shifts in global wealth and the structure of the international governance. Today the G-8 can no longer ignore the G-20 in the conduct of the international economic and development agenda, as emerging countries are now responsible for nearly 30% of the flows of foreign direct investments and are the main drivers of world trade and global demand. Since the fallout of the financial crisis in late 2007, the world economy has been unable to revive and has suffered uneven and fragile recovery. Paradoxically, developing countries have coped much better with socio-economic instability as compared with the most advanced countries, many of which are still struggling to fight rising public deficits and unemployment. GDP in advanced high-income countries was estimated to have grown by only 1% in 2012 , while growth in developing countries, although high, is losing momentum.
There is fatigue from the current crises and market failures, and long-term political unrest in Africa and Middle-East has exacerbated this adverse situation. Much anticipated reform of the international financial system remains an unresolved issue and worldwide inequality is increasing… favouring the very rich, impoverishing the middle class and depriving the poor. Regrettably, the crisis is not yet over: we are not yet “after the crunch”. It is alarming that over 47 million people lost their jobs in 2012, bringing the level of world unemployment to 197 million. As a consequence the risks for the world economy are growing again. A fundamental policy reorientation is needed not only to restore economic growth and social stability, but also to deal with rising environmental degradation and climate change issues to reduce the urban-rural technological, cultural and social gaps within countries.
Against this background, the creative economy is not a panacea, but it does point to new ways to tackle current challenges integrating economic, technological, social, cultural and environmental dimensions in a more balanced manner. Compared with more conventional goods and services, creative products have proven fairly resilient to the impact of the global recession, since they rely on ideas, knowledge, skills and the ability to seize new opportunities. In spite of global economic turmoil, world demand for most creative products continues to grow and has remained strong throughout the last decade, offering evidence that more and more people including young people and the growing third-age population are keen for culture, entertainment and leisure.
The prospects for the creative economy seem optimistic, reflecting the new lifestyle of contemporary society which is increasingly associated with creativity, innovation, connectivity, style, status, brands as well as with cultural experiences, co-creations, and social networking embedded around the creative economy. It is notable that world trade in creative goods and services totalled US$ 559.5 billion in 2010, compared to US$ 260.5 billion in 2002. According to UNCTAD, global trade in creative products more than doubled in only eight years, with an annual growth rate of 10.7% in the period 2002-2010. World exports of creative services have been growing even faster, with a growth rate of 15%, and the trade in creative goods has grown by 8% annually in the same period. The pattern for cultural production and consumption has changed dramatically in recent years and new products, new art forms, new market structures, new business models, collaborative creations and interactivity are shaping the ongoing transformation of our society.
The creative economy in all regions of the world continues to expand with impressive dynamism. Moreover, advances in the digital age particularly in mobile phones and multimedia applications combined with the growing impact of social media and networks has been unlocking marketing channels for music, digital animation, videos, films, news, advertising etc., in so doing expanding the economic benefits of the creative economy.
The key issue is how to stimulate creativity and innovation. Undoubtedly, the primary inputs to support a robust creative economy are intellectual capital and knowledge led by education and continuous learning. Nowadays, young people are attracted by unconventional creative activities that usually provide greater levels of satisfaction providing for more autonomy, diversity and flexibility.
However, in order to respond to the new job appeals they have to develop creative capacity and entrepreneurship in a way to be able to transform ideas into marketable tangible or intangible creative products. Public investment should prioritize human capital through capacity-building and human resources development. Curriculum of schools and universities should be revisited and adapted to new realities, motivating creativity and emphasizing a multi-disciplinary approach. Today, it is no longer possible to think or work in silos; we have to deal with cross-cutting daily issues of our interconnected world.
Furthermore, the transition towards a greener economy is already underway. Unfortunately, during the UN Conference on Sustainable Development or Rio+20 held in 2012, the international community was unable to reach a consensus on how to implement effective policies and results-oriented actions to address the ecological problems of our planet. Nevertheless, despite the shortcomings, progressively we are moving from the era of over-consumption to a more ethical and smart consumerism where both producers and consumers are starting to argue the true economic, environmental and cultural value of what we create, buy and sell. New products and production processes are gradually replacing older ones.
The challenge now is to avoid a green technological divide and protectionism. Public policies should be put in place to support sustainable business and technologies for promoting creative assets while protecting traditional knowledge and natural and cultural heritage. In this context, the creative economy goes hand-in-hand and is supportive to actions for greening the economy. Together, they can act together to encourage sustainable development while bringing vast opportunities for creative entrepreneurs and communities to sustain creative and environmentally sound practices as a contribution towards a more creative and green economy for all.
The author founded the Creative Economy Programme of the United Nations Conference on Trade and Development (UNCTAD), one of the very first institutional mechanisms entirely devoted to this topic. She directed this UN Programme from 2004 to 2012, launched the pioneering Creative Economy Reports of 2008 and 2010 and set-up the UNCTAD Global Database on Creative Economy. This article reflects her personal views as an international policy advisor and independent expert on creative economy issues.
Further contribution by Edna dos Santos-Deuisenberg to the original 'After The Crunch' can be read here.
Images by Project - http://thisisproject.com/
Illustrations by Paul Davis - http://copyrightdavis.blogspot.com/