By Sasha Lennon*
Introduction
‘Creative industries’ is a relatively new phrase in government policy, industry and academic discourse. As the United Nations (2008) explains, the term “is of relatively recent origin, emerging in Australia in 1994 with the launching of the report, Creative Nation. It was given wider exposure by policy-makers in the United Kingdom in 1997, when the Government, through the Department of Culture, Media and Sport, set up the Creative Industries Task Force”.
Creative industries include, but are not limited to, those economic activities that are characterised by new forms of cultural production. Leveraging cultural roots and assets but focusing on generating an income, creative industries “turn creative ideas into commercial outcomes” (Telesis Consulting et al., 2007, 4). While all industries have embedded in them a degree of creativity, the creative industries are different because ‘creativity’ is their primary source of value.
To attract what academic Richard Florida (2002) calls the ‘creative class’ Australia’s cities and regions need to put in place the preconditions for an attractive ‘people environment’ as well as an attractive business investment environment. Florida argues that creative people value and rely on those elements of an economy that support and encourage their creativity and the diffusion of ideas. They place a high value on an area’s lifestyle attributes like its recreation and leisure facilities, the quality of its public transport and pedestrian amenities, its ‘green space’ and its cultural infrastructure.
But putting in place these important foundations for attracting creative people and creative industries alone will not ensure success. For the creative industries to establish and grow, cities and regions must also support and encourage one of the most fundamental elements of business success, that is, entrepreneurship.
Creative Industries Defined
Definitions of the creative industries vary from country to country, usually because of differences in the terminology used by statistical agencies to quantify industry employment and output. Generally-speaking, the creative industries consists of: music and performing arts; film, television and radio; advertising and marketing; software development and interactive content; writing, publishing and print media; and architecture, design and visual arts (Centre for International Economics, June 2009). This common grouping is applied in countries such as Australia and is similar to classifications used elsewhere, as demonstrated for example in New York (Center for an Urban Future, December 2005), Hong Kong (Hong Kong Central Policy Unit, 2003) and Singapore (Singapore Department of Statistics, 2003).
Figure 1.
The Six Creative Industries Segments
While official categorizations of creative industries are useful for the purpose of quantification and analysis, policy-makers need to understand that ‘creativity’ extends beyond rigid industry groupings. As Hartley (2005) notes, the creative industries depend on “some decidedly anti-industrial folk”. Rather than being separate sectors of the economy, creative industries are a pervasive input to many industries, from manufacturing and construction to business services, retailing and entertainment to name a few. Representing what is in effect, a ‘creative services economy’, creative enterprises add value to production through design, technical performance, packaging and branding.
The Economic Contribution of the Creative Industries
The potential of the creative industries as a driver of economic development cannot be understated. Australia is arguably a world-leader in research and policy development for the creative industries. Data produced by the Australian Research Council Centre of Excellence for Creative Industries and Innovation (April 2010) shows the creative industries contributed over $30 billion towards Australia’s Gross Domestic Product (GDP) in 2007/08, which is more than industries such as agriculture, hospitality & accommodation and communications. Over the 11 years to 2008 creative industries grew at a rate of 5.8% per annum compared to an average of 3.4% for all industries.
According to the United Nations’ Creative Economy Report 2010: A Feasible Development Option (2011), global trade in creative goods and services is robust, growing at 14% even as world commerce declined by 12% in 2008 as a result of the global financial crisis. Global trade in creative goods and services such as arts and craft, audiovisuals, books, film, music and new media more than doubled from 2002 to 2008, reaching nearly $600 billion.
In countries such as Australia, the UK, the US, Singapore and Hong Kong, creative industries’ growth has averaged between 5% and 10% per annum over the past ten years.
Creative Industries Dynamics
For many creatives, their work is spread globally and isn’t tied to just one location, making the internet and e-commerce the most efficient tool to source contractors and to make and maintain contact with clients. Input suppliers too, are often a mix of local and global enterprises and individuals. Hence, “technology plays a key role in the creative economy for content production and distribution” (United Nations, 2008, 8).
This is perhaps most evident in sectors like journalism, film production and interactive software design where bloggers and freelancers are working as independent service providers to a multiplicity of clients, earning an income at multiple points in the supply chain, that is, the system of organisations, enterprises, individuals, capital, equipment, technology, information and other resources involved in moving a product or service from the supplier through to the customer.
Figure 2 illustrates a conceptual model of a small Australian film production company’s interaction with the music video and documentary-making value/supply chain. It relies on the author’s interpretation of information obtained through personal discussions with the creative enterprise. The boxes in the chart represent the different points in the value chain where the firm earns income. For some projects it will earn income at one or two points while for others, it may earn income at all points along the chain. The circles at the bottom of the illustration represent the firm’s production inputs. This reinforces the importance of one of the fundamentals of creative industries’ success raised in the introduction to this article, that is, entrepreneurship.
Figure 2.
A Conceptual Creative Enterprise Supply Chain Dynamic
Source: Lennon, S., personal communication various industry sources, September 2010
Commercial Creatives, Entrepreneurship and Creative Cities
To be ‘creative’ is to have the ability to make things, to show imagination and originality to produce creative goods or services. An ‘entrepreneur’ is someone who organizes and manages a commercial undertaking, especially one involving commercial risk (Oxford University Press, 2006). A creative entrepreneur requires a diverse set of skills and knowledge to create things and to then take those things to market, to turn them into something commercial, while managing the risk which underpins that undertaking. Not only are they creative, they are also risk-takers, innovators, originators, thought-leaders and product (or service) makers. They are the sort of people that regions need to attract, nurture and retain to capture a share of the 21st Century knowledge economy.
The creative industries include what is arguably a sometimes overlooked segment of creative individuals and enterprises, one that does not fit neatly into a ‘cultural’ categorization but which, by virtue of its influence on the way we all work and live, is a driver of economic and community development. This segment is the architecture and urban design segment.
Architects and urban designers are not typically thought of as ‘artisans’ and instead are part of the other broad grouping of creatives, what Felton et al. (2010) call the ‘commercial’ creative workers. These ‘commercial creatives’ are perhaps the most telling example of how, together with traditional sectors of the economy, well-nurtured creative industries (or more broadly, the ‘creative economy’) can be a source of growth, job creation, innovation and trade, while at the same time contributing to social inclusion, cultural diversity and sustainable economic development.
Simatupang (February 2010) cites the New England Council’s definition of the creative economy aptly by referring to two factors: firstly, the rising importance of creative workers in creating new jobs in companies and in helping mature industries retool for the future; and secondly, the recognition of arts and cultural assets as more than contributors to quality of life in a particular place, but as important economic drivers for their region. This is illustrated by the concept of the ‘creative city’, “an urban complex where cultural activities of various sorts are an integral component of the city’s economic and social functioning. Such cities tend to be built upon a strong social and cultural infrastructure, to have relatively high concentrations of creative employment, and to be attractive to inward investment because of their well-established cultural facilities” (United Nations, 2008).
Architects and urban designers have a special role to play in the creative economy framework. As Higgs et al. (2005) contend, the design segment (including architecture and urban design) “is the archetypal ‘leverage’ industry: while it does not generate high employment or have a massive industry turnover in itself, it is increasingly valuable in what it enables other industries to achieve” (Higgs et al, 2005, 3).
Apart from their contribution to output and employment, creative industries make more intangible yet highly valued contributions to their cities and regions through “the indirect and induced effects caused, for example, by the expenditures of tourists visiting the city to experience its cultural attractions. In addition, cities with an active cultural life can attract inward investment in other industries seeking to locate in centres that will provide an enjoyable, stimulating environment for employees” (United Nations, 2008, 17).
The Dynamic Cycle of Creativity and Regional Prosperity
A city or region that is drawing in new skills, enterprises and income and then traps and re-circulates that income locally through consumption and production multipliers is more likely to generate a rich pool of jobs, including the ‘creatives’, and a high quality of life. In turn, this strengthens the region’s appeal as a place in which to invest and as a place where creatives and knowledge workers choose to live. This further enhances the region’s effectiveness as a producer and exporter, representing a dynamic cycle of creativity and regional prosperity.
If policymakers are not in tune with the urban planning and city-building needs and expectations of the greater populace, there is a risk of disconnect between what cities or regions are and what people want and need. As Marcus Westbury (2008) argues about governments that fail to respond to community needs, “a flagrant disregard for community and cultural consequences has led to buildings, cities, suburbs and communities that are ludicrously profitable and culturally barren”.
Fortunately, over the past decade or more, urban planners, urban designers, architects and government policy-makers have become increasingly aware of and placed greater emphasis on the important role that creativity and ideas generation play as foundations for quality of life and economic performance. Charles Landry, who writes extensively on the concept of ‘creative cities’, argues that people “want places to meet, talk, mix, exchange, interact and play”. He adds, “the city should feel creative and imaginative, a place with a ‘can do’ mentality that is ‘entrepreneurial” (Landry, April 2010).
Figure 3.
The Dynamic Cycle of Creativity and Prosperity
Following the work of Landry and others, it is now widely understood that new ideas will increasingly underpin almost all forms of economic development in a city’s engagement with the new economy.
As entrepreneurs working in the field of architecture and urban design, creative practitioners have an important role to play in policy-making by actively demonstrating and promoting the merits of urban amenity and the role of good design in facilitating the development of liveable (and therefore) prosperous cities and regions. In other words, if provided with the opportunity, creative entrepreneurs can demonstrate the value of their contribution to city-building and economic development.
If Australia’s cities and regions can nurture the right environment for creative industries and identify those segments that present genuine potential to capture regional market share, then there is scope for this still-developing segment of the knowledge economy to contribute to economic growth and development over the long term.
* Sasha Lennon (B.Ec., Grad. Dip. Advanced Economics) is a Principal and Partner of SGS Economics and Planning Pty Ltd based in Brisbane, Australia. He specializes in economic development policy, industrial and commercial needs assessments and policy advice concerning the creative industries and knowledge-based industries. He is a qualified economist and an Australian Certified Economic Developer (ACEcD) with Economic Development Australia (EDA). He is undertaking a Master of Journalism within the Creative Industries Faculty at Queensland University of Technology.
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