What is the creative economy?

How the term ‘creative industries’ began

The term ‘creative industries’ began to be used about twenty years ago to describe a range of activities, some of which are amongst the oldest in history and some of which only came into existence with the advent of digital technology. Many of these activities had strong cultural roots and the term ‘cultural industries’ was already in use to describe theatre, dance, music, film, the visual arts and the heritage sector, although this term was itself controversial as many artists felt it demeaning to think of what they did as being, in any way, an ‘industry’. ‘Industries’ or not, no one could argue with the fact that these activities – both the narrowly defined cultural industries and the much wider range of new creative industries – were of growing importance to the economy of many countries and gave employment to a large number of people. But no government had attempted to measure their overall economic contribution or think strategically about their importance except, perhaps, the US government which, for almost a hundred years, had protected and fostered its film industry, not just because of its value to the US economy but because it projected US culture and influence around the world. Although they did not constitute an easily identified industrial ‘sector’ in the way that aerospace, pharmaceuticals or automotive are seen as sectors, one thing all these activities had in common was that they depended on the creative talent of individuals and on the generation of intellectual property.

« It is the configuration of relationships that gives a system its essential characteristics. Thus, it is less helpful to define the creative economy by what it does, than try to understand how it is organised »

In addition, to think of them as a ‘sector’, however arbitrary the definition, drew attention to the fact that they were part of or contributed to a wide range of industries and professions, from advertising to tourism, and there was evidence that the skills and work styles of the creative sector were beginning to impact on other areas of the economy, especially in the use of digital technologies.

The creative economy has a cultural and social impact that is likely to grow

The term ‘creative industries’ began to be used about twenty years ago to describe a range of activities, some of which are amongst the oldest in history and some of which only came into existence with the advent of digital technology. Many of these activities had strong cultural roots and the term ‘cultural industries’ was already in use to describe theatre, dance, music, film, the visual arts and the heritage sector, although this term was itself controversial as many artists felt it demeaning to think of what they did as being, in any way, an ‘industry’.

‘Industries’ or not, no one could argue with the fact that these activities – both the narrowly defined cultural industries and the much wider range of new creative industries – were of growing importance to the economy of many countries and gave employment to a large number of people. But no government had attempted to measure their overall economic contribution or think strategically about their importance except, perhaps, the US government which, for almost a hundred years, had protected and fostered its film industry, not just because of its value to the US economy but because it projected US culture and influence around the world. Although they did not constitute an easily identified industrial ‘sector’ in the way that aerospace, pharmaceuticals or automotive are seen as sectors, one thing all these activities had in common was that they depended on the creative talent of individuals and on the generation of intellectual property. In addition, to think of them as a ‘sector’, however arbitrary the definition, drew attention to the fact that they were part of or contributed to a wide range of industries and professions, from advertising to tourism, and there was evidence that the skills and work styles of the creative sector were beginning to impact on other areas of the economy, especially in the use of digital technologies.

How thinking about the creative industries has evolved

Twenty years later, the concept of the ‘creative industries’, and their importance, is recognised by almost every government in the world and is beginning to give way to a much more inclusive idea of a wider ‘creative economy’. Of course, the desire to define specific industries as ‘creative’ persists, and will no doubt continue to be so. In some countries the definitions revolve closely around the arts and culture. Other countries have broader definitions that include, for example, food and gastronomy on the basis that food and cuisine have both economic and cultural significance. Other countries have a definition that includes well-established business-to-business industries such as publishing, software, advertising and design; the 11th Five-Year Plan of the Peoples Republic had as one of its central themes the need to “move from made in China to designed in China” – a classic exposition of the understanding that generating intellectual property is more valuable in the 21st century economy than manufacturing products. Other countries, including the UK, have wrestled with the tricky question of where to locate policy development for ‘creativity’ within their government structures – is it economic policy, industrial policy, cultural policy, education policy, or all four?

Three stages in the life of the creative economy

The creative economy is of rapidly growing significance in most countries but is a new concept and we are still learning how to value it, measure it and understanding its relationship to the wider economy and its impact on society

• Youth : The emergence of the cultural industries as an economic and cultural force in the 1960s challenged notions of culture, and who and what it was for. From the 1980s award the notion of the cultural industries attracted academic and some policy debate. From the late 1990s the notion of the creative industries was led by the UK, but founded on important statistical work in Canada, Australia and New Zealand. This provided a template – albeit rooted in nation states – that engaged politicians and challenged traditional monolithic ideas of culture.

• Middle age : Now that the first flush of political and policy enthusiasm has passed, the long and careful journey to develop more robust and inclusive understanding of the creative economy is called for. The good news is that there is political momentum; the bad news is that it is difficult and costly: the data simply does not exist in many fields. Nearly every nation state is now pursuing creative economy strategies; notable enthusiasts are the emergent economies of Asia and Latin America.

• Maturity : The drive to maturity in the creative economy is one of the sector itself, as well as its governance; and the shifting impacts on populations. The issues that are on the agenda for the next decade relate to understanding the processes of cultural production and their relation to other creative industries, to all industries and the rest of society. Policy will only be effective if the processes (that is the operation and organisation of the creative economy) are appreciated. One of the challenges will be that demographic and social changes of affluent middle-class growth in India and China will dominate cultural consumption and production in the global economy.