The Economic Importance of Cultural and Creative Industries

July 5, 2019
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The creative economy “refers to economic systems in which value is derived from creative and imaginative qualities instead of traditional sources such as capital, land or labour”. The Cultural and Creative Industries (CCIs) fall under this broad definition of the creative economy. According to the United Nations Educational, Scientific and Cultural Organisation (UNESCO), the cultural industries include music, writing, art, fashion, design and media industries and are inclusive of technology and craft-intensive production. Whereas, the creative industries consist of a wider range of production activities including goods and services that rely on innovation, research and development (R&D) such as film, museums, galleries and photography.  

The creative economy has cultural benefits, creates economic value and demonstrates relative resilience to external shocks over other industries as evidenced by its continued growth in the past 20 years. Creatives such as artists play a role in preserving the history of areas, foster diversity in terms of culture, race, age and encourage social cohesion because their expressions tend to bring people together and build communities. Furthermore, the arts play an important role in helping individuals and countries shape their identities. 

Globally, the CCIs is driven by television and visual arts in terms of revenue generation, which is the same as trends in Africa and the Middle East. Technology is an integral part of CCIs in the global market because much of the content for the digital economy is generated by these industries. Examples of this include the consumption of videos and movies, music and books on digital platforms as well as online and mobile games. 

CCIs are also important for employment, however, the benefits of the creative economy are heavily concentrated in North America, Asia and the Pacific as well as Europe, both in terms of revenue and employment. For instance, the creative industries in the United Kingdom (UK) have experienced growth at twice the rate of the national economy since 2010 and exceeded the £100 billion mark (£101.5 billion) in 2017. The UK government points to the strength of their digital and technological sector in driving economic growth as well as continued support from the government for creative industries in the form of innovation funding for example.  

From a local perspective, there are numerous events under CCIs which have a significant impact on local businesses and the economy of the local municipalities as well as provinces. According to Tourism KZN, Splashy Fen, which the oldest and longest running music festival in South Africa, the economic impact of the festival was approximated to be between R35.1 million and R45.5 million in 2017. This is much higher than estimates from the 2012 Splashy Fen which suggested an economic impact of between R19.5 and R22.3 million.

The United Nations Development Programme (UNDP) suggest several strategies for countries, particularly in Latin America and the Caribbean, Africa and the Middle East to explore in order to make the most of opportunities presented by the creative economy and promote growth. Briefly, the UNDP suggests that countries should integrate CCI opportunities into their national strategies, policies and budgets; enhance the protection of intellectual property rights; improve regional ties; develop, retain and attract human capital required for CCIs; lastly, collect data for CCIs in order to improve the dynamics of these industries, improve planning and policy-making.

The arts have always played an important social role. However, today the arts, as defined within creative and cultural industries, is positioned as an untapped growth engine. Skewed gains in the creative economy in favour of developed countries (the North) due to their strengths in distribution, capital and investment is a hurdle for countries located mostly in the south, as well as the need to make the right policy decisions to support CCIs.  

Image Source: http://www.amanrefined.com/south-africas-subcultures-creative-goldmine/

Thembi Sikobi

Thembi Sikobi