The creative economy is a vital and growing engine of growth and employment in many countries. It spans sectors such as advertising, broadcasting, architecture, arts, crafts, design, fashion, gastronomy, music, publishing, theatre and technology. They are becoming a key force in entrepreneurship and innovation, helping to boost social development and employment. According to UNESCO, the creative economy is “one of the most rapidly growing sectors of the world economy and a highly transformative one in terms of income generation, job creation and export earnings”.
As economies develop from agriculture and manufacturing, many are building new clusters of creative and artistic activities. These were considered in the past to be offshoots of economic activity — means of leisure rather than forms of work. But it is increasingly clear that they are not only significant and profitable industries in their own right but provide well-paid, satisfying jobs.
The creative economy includes large companies in sectors such as advertising and video games. But it also takes into account creative companies founded by entrepreneurs that blossom as small and medium-sized enterprises, from restaurants to design studios. Like craft industries in the past, they operate in clusters within cities and districts, which gives them critical mass and a talent base. Indeed, it is the city that is increasingly a country’s growth engine and – with the world’s top 100 cities estimated to account for 35% of global GDP growth between now and 2025 – the creative economy will play an increasingly important role in developing and sustaining progress.
Until now, the primary beneficiaries of technological progress have been the consumers in advanced economies who can afford and access the digital world, as well as the productivity gains it brings. But if the latest technological revolution continues at pace, the lines between work and leisure are likely to blur. People will seek alternative forms of employment that are more closely tied to their hobbies, passions and interests. According to one study, “Many advanced technologies can be replicated across the world using cheaper labor. But original artistic creation, innovative design and other higher-level creative work cannot be outsourced so easily.” These will be innovative, entrepreneurial endeavours that will grow the creative economy even further.
This is not to say that the creative economy is currently small change in the pocket of finance ministers. Rather, the size of some creative economies is already considerable. In 2015, for example, the United Kingdom’s creative economy was worth a staggering $14 million per hour to the overall economy, and made up almost 9% of Britain’s service exports and 5.6% of jobs.6 Cultural and creative sectors employ almost 7 million people in the European Union, equivalent to around 3% of total employment, while creative goods account for 4.3% of the EU-27’s external exports.
At the same time, traditional creative activities are finding new revenue streams with technology. Globally, digital subscription services in the music industry are expected to triple by 2019, while venture capital investment in food startups was $48 billion in 2014: the highest amount since 2000.
No single determining force drives success in the creative economy, but commonalities exist in many creative hubs. In studying the creative economy, the Global Agenda Council on the Creative Economy has identified five simple factors that policy-makers should take into account when aiming to stimulate creative economies in their countries. They can be considered a framework for maximizing the contribution of the creative economy to wider economic growth and development:
- The local strengths: Successful creative economies are found in close proximity to academic, research and cultural centres, allowing ideas and people to mingle.
- The technological enablers: Digital technology enables creative ventures to be launched from any location at scale, and successful creative entrepreneurs have been able to harness technology to their advantage.
- The inspiring entrepreneurs: The catalysts in creative hubs are successful individuals who demonstrate what is possible while inspiring and training other creative entrepreneurs.
- The role of government: By using regulation and incentives wisely, governments can help create the right conditions for creative economies to flourish.
- The power of place: Creative economies are in places where people want to live due to location and amenities – and the most successful have established themselves as international hubs.