The rise of the creative economy creative minds, enterpreneurship and cities

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1 The rise of the creative economy creative minds, enterpreneurship and cities University of Antwerp, Management School and University of Utrecht, School of Arts and Economics Edna dos Santos-Duisenberg Policy Adviser on Creative Economy and Development Advisor, United Nations Institute for Training and Research UNITAR Founder and Former Chief, Creative Economy Programme UNCTAD United Nations Conference on Trade and Development May 2014

2 Crisis, recovery and the way ahead The rise of the creative economy in a new era Creative business and cultural entrepreneurship Creative cities and a more inclusive society Knowledge, education and creative minds

3 Crisis, recovery and the way ahead

4 Crisis and a fragile recovery The world economy has been through six years of turbulent times The economic recovery is under way but the situation remains fragile The USA economy is resurging: 1.7% in 2013 In Europe, the worst seems behind but still stagnation: EU -0.2% in 2013 In emerging countries growth is slowing-down, depreciation, inflation China growth is decelerating (7.6% in 2013; 10.4% in 2010) A global rise of unemployment mainly for youth in advanced countries A wave of protests, political and social pressures : Africa (Egypt), Asia (Turkey, Thailand), Europe (Greece, Spain), Latin America (Venezuela, Brazil) A turning point

5 Challenges in the world economy World GDP grew at 2.2% in 2013 and the economy remains in desarray Developed contries had the poorest performance: GDP growth only 1% Developing countries became more vulnerable Global trade decelerated, only 1.7% in 2013 Export-led growth strategies are reaching their limits Enphasis to domestic demand growth Structural reforms are still needed The world economy is struggling to resume growth

6 Economic activity in the European Union In the European Union the economy continue to lag behind More severe economic contraction in the euro zone (- 0.7% in 2013) Big imbalances despite the intervention of the European Central Bank Weak competitiveness, lower wages, low consumer confidence Greece, Ireland, Italy, Portugal and Spain are still in adverse conditions Weak intra-european trade caused a sharp decline in European exports Unemployment rates at the EU grew from 7.2% in 2007 to 11% in 2013 Adjusting to the changing dynamics of the world economy

7 The world is in deep transformation Dominance of finance over real economic activities Highly endebted public and private sectors Competition among countries is a race to the botton Income distribution and inequality should be addressed Boom-bust economic cycles brings social instability Addressing policy challenges

8 Changes in the society and new governance G-20 slowly enlarging the G-8, gradual changes in global governance Consuming patterns changing due to rising income in emerging countries The proportion of the middle class in the world population may reach 40% in Asia will account for most of this increase As the industrial revolution of the last century, the digital revolution is forcing change more rapidly transforming the way we live Profound technological, cultural and social changes A participatory and more democratic and open society Structural shifts and socio-economic transformations

9 The rise of the creative economy

10 20th century : The industrial era coal, iron, steel, shipping, manufacturing, infrastructure European Coal and Steel Community ( ) Treaty of Paris Six founding members - BENELUX European Community (1993), European Union (2009) Expansion of the economy, employment and better standard of living of its citizens welfare issues Economic integration, intra-trade The Common Market Incentives for industrialization, capital intensive agriculture Europe s first social and regional policy European PEACE

11 21st century : The knowledge-based era arts, culture, creativity, connectivity Creative Europe Strategy to boost growth and jobs Creative Europe Programme billion EU creative economy : 4.5% GDP, 8.5 million jobs Increase the competitiveness and export potential of creative products Promote partnerships, finance creative business Spill-over impact : innovation, ICT and urban regeneration Europe s cultural and creative sectors economic growth, jobs, innovation, diversity and social cohesion

12 The creative economy in a new era From concept to practice - New concept initially provoked scepticism - Limits of its definition and applicability - Conceptual, institutional and policy framework - Evidence-based research, indicators and policy-oriented analysis - Intergovernmental debate - International economic and development agenda - A priority sector in national policies intangibles, creative business, creative cities

13 The rise of the creative economy Creativity, knowledge, access to information and innovation are driving economic growth and more sustainable and inclusive development ICTs has been a huge accelerator of economic and social progress The creative economy where real and virtual worlds co-exist People are eager for culture, leisure and entertainment Global market for creative goods and services has strong dynamism New products, new art forms, new market structure, new business models, creative collaboration, networking are shaping contemporary life Lifestyle associated with status, brands, differentiation, experiences social media all embedded around the creative economy The creative economy provide jobs, nurture local business and spin-offs, revitalizing local economies and neighborhoods

14 Creative business trade contemporary society markets creative entrepreneur creative nexus jobs investments soft innovation financing

15 Trade evolution in creative products (million US dollars) Creative goods Creative services Global trade of creative products more than doubled in a decade reaching 624 billion dollars in 2011 with an annual growth rate of 8.8% Source: UNCTAD Creative Economy Database

16 Exports of creative goods to world market European Union is a leading exporter of creative products creative goods : US$ 150 billion creative services : US$ 120 billion (million US$) World Europe EU-27 Source: Dos Santos, data from UNCTAD Global Database on Creative Economy

17 Belgium trade balance in creative products Belgium exports US$ 16.6 billion of creative products Creative goods Creative services exports im ports imports exports Source: Dos Santos, data from UNCTAD Global Database on Creative Economy

18 Creative enterprises creative business Creative economy is very different from the rest of the economy Require specific rather than generic policymaking Big distinction between types and value-chains of creative industries: markets, products, technologies and distribution systems Three important dimensions : Organizational : missing middle (Hollywood, independent artist) Operational : fast turnover of products, soft innovation cycle Locational : clustering or co-location, creative placemaking The creative economy rely on ideas, skills and the ability to seize opportunities

19 The creative nexus Technology Entrepreneurship Investment Trade Source: UNCTAD (Dos Santos, 2007)

20 European Entrepreneurship indicator Key factors affecting the entrepreneurial potential of the creative sector 1) Access to capital and financing 2) Access to the latest technology and R&D 3) Lack of entrepreneurial skills 4) Access to local and global markets 5) Regulatory and institutional framework 6) Entrepreneurial culture At the European Union : EU Commission special programmes 80% of creative industries are SMEs and micro-enterprises 60% of the micro enterprises with only 1 to 3 employees The Entrepreneurial Dimension of the Cultural and Creative Industries (HKU)

21 Policies to stimulate creative innovation Ease financial and technical resources for creative entrepreneurs Review fiscal policies for ICTs and creative sectors Promote digital education to enhance creative skills (ICT tools) Support development of local content for local needs Encourage SMEs creative enterprises to produce creative content Implement legal reforms to promote e-commerce and e-business Align national policies with multilateral agreements, negotiations: WTO market access, WIPO legislation, OECD directives Creative economy and digital innovation : a perfect match

22 Public Private Partnerships The creative economy is a big business, employs millions of people but also promotes cultural diversity, social cohesion, sustainability Need to reinforce linkages between creative investments and business - enhancing creative capacities, skills training - attract investors from domestic and global markets - support creative entrepreneurship (start-ups, micros) - improve labour and social laws (contracts, pension: job precarity) - revisit legislation for intelectual property rights - new business models for creative entreprises (internet law) - explore new markets, North-South trade Government and corporations working in a mutually-supportive manner

23 Creative economy not a panacea but a feasible option The contemporary and connected society is increasingly dominated by images, sounds, texts, symbols and networking ICT tools unlocked the trade potential for digitalized creative content music, films, games, news, advertising, books.. The increasing power of social media transformed our life style The creative economy also contributes to social cohesion, cultural diversity and sustainability Creative products are environmental-friendly contributing to the transition towards the green economy Reconciling arts and culture with investments, technology, business and trade

24 cities arts creative placemaking diversity urban revival culture livability sustainable environment creative jobs smart cities small tows leisure community engagement

25 Is Antwerp in transformation? In the 20th century this city played a key role as a leading port for cargo shipments Antwerp, a modern rebuilt city Museums and artistic reputation Diamond trade Modernization of the port s infrastructure At the 21st century the economic focus shifted to services and knowledge activities High-education, fashion, design, soft innovations Art, mega events and cultural festivities Tourism became an important sector

26 Cities, culture and creativity Since antiquity cities played a key role in promoting culture, artistic innovation and trade Initially Athens, Rome, Venice, Florence More recently London, Paris, New York Cities have always been the melting-pot to foster creativity The design of cities requires shared responsibilities and should be a collective undertaking involving all categories of local citizens Transition towards a green economy and smart cities Today, at the post-industrial era with the increase of services the creative economy became a drive in the development of cities New approaches to how we live, work, engage and interact with our planet

27 The participatory society and welfare Today, the urban citizens represents 75% of the world population Social justice and cohesion are crucial for a liveable city Need to balance economic goals with quality of life Promote diversity and a cross-cultural environment Find imaginative solutions to deal with human distress Growing environmental degradation and more severe natural and man-made ecological catastrophes To keep alive the history and cultural heritage of cities The right balance between old and new and greener quietness and dynamism

28 The jobless generation with creative minds The main economic and human resource of a city is people Today, 26 million young people from age are idle in developed countries (OECD). They are not in employment, education or training Over 50% of the youth is looking for a job (ILO) Cities should be able to offer: - job and educational opportunities to attract and retain young talents - stimulate new projects and catch the attention of investors - good infrastructure, public transportation and security - public spaces: parks, waterfronts, art activities and events - provide support for community aspirations - facilitate connections and street life A creative city should provide a lively climate to stimulate business, cultural activities, social events and leisure

29 Shaping a better city image Establish an international image as a dynamic and lively city - Amsterdam A creative city : diverse, green, inclusive a cool place Facilitate connections among neighbourhoods: gentrification All urban cities have some degree of misery, prostitution, drug dealing, delinquency Changing the reputation of the redlight district: new creative business art, bars, fashion, pop culture Creative solutions to deal with day-today troubles and human distress

30 knowledge education capacity-building continuous learning review curriculum creative capacities new methodology intellectual capital creativity holistic approach retain talents multi-disciplinary attract the youth cross-cutting disciplines

31 Knowledge, universities and creative cities Universities are the source of knowledge, research and innovation Europe has high-educational institutions Antwerp is an illustration Universities are active in applied research that can be translated in regional growth. Master in Cultural Management is a good example Today, universities are providers of creative capacities for the creative economy, their ties with the private sector is growing and many are involved in incubating innovations and creative business Cities and companies should provide the opportunities as well as cultural and recreational amenities in line with the lifestyle Universities play a role in attracting and retaining creative talents in the cities

32 How to stimulate creativity and innovation? The primary inputs to support a robust creative economy are intellectual capital, knowledge and education Education and continuous learning are the drives of innovation The youth should be able to transform creative ideas into tangible goods and intangible services with economic and cultural value In the knowledge-based society, youth are attracted by unconventional cultural, creative and artistic expressions Creative activities usually provide greater levels of satisfaction providing for more autonomy, diversity and flexibility Creativity fuels culture and is a key for jobs and innovation

33 Creative education for nurturing the creative economy The main public investment should be on education and human development by stimulating creative capacities Curriculum of schools and universities should be revisited and adapted to new realities - multi-disciplinary approach, new methodologies Jobs generated by the creative economy are knowledge intensive requiring specific skills and high-level qualifications It is no longer possible to work in silos; we have to deal with crosscutting daily issues arts, law, management, design, economics, ICTs Reinforcing linkages between education, creativity, entrepreneurship and urban cities

34 Creative ideas by creative artists. art of puppetry, pop music and new media Thanks for your attention Quotes and reproduction authorized with acknowledgement E. Dos Santos-Duisenberg