UNCTAD has released a new report stating that the creative economy is an option for development for all countries, including developing ones.
UNCTAD’s Creative Economy Outlook 2022 is launched this morning (October 7, 2022) at the 3rd World Congress on Creative Economy in Bali, Indonesia. UNCTAD defines creative industries to be cycles of creating and producing goods and services that are creative and use intellectual capital as primary inputs. They are a collection of knowledge-based activities that produce tangible products and intangible intellectual and artistic services with creative content, market value and market objectives.
According to the report, although creative services exports are vastly greater than those of creative goods and are more popular in developing countries, they face significant obstacles when exporting these services. There is also a significant gap in creative trade data between developing and developed countries.
UNCTAD Secretary-General Rebeca Grynspan said: “The report is published at a time when the global community faces some of the most significant challenges in decades: the COVID-19 pandemic, looming climate change and environmental crisis, geopolitical tensions and a major cost-of-living crisis. Despite these challenges, the creative economy remains a critical sector for sustainable development.”
Creative industries raise countries’ revenues
Trade in services and creative goods can generate more revenue for countries. Services are the dominant sector. According to the most recent data, creative goods and services accounted for 3% of total merchandise exports in 2020 and 21% of total exports of services in 2020.
Global exports for creative goods increased by $419 million from 2010 to $524 millions in 2020. Meanwhile, global exports for creative services increased by $487 billion to nearly $1.1 trillion in the same period.
Developing economies export creative goods more than developed ones. China was the world’s largest exporter of creativity goods in 2020 ($169 billion). The United States ($32 billion), Italy (27 billion), Germany (26 billion), Hong Kong (China), and Germany ($26 billion) followed by the United States ($26 billion).
In the last two decades, South-South trade has nearly doubled in creative goods. In 2020, South South trade in creative goods accounted for 40.5% of all creative exports from developing countries. South-South trading is crucial for developing countries to diversify their exports and create new trading opportunities.
The COVID-19 pandemic infected and locked downs all over the globe harmed creative goods exports.
Exports of creative goods fell 12.5% in 2020 while all goods exports fell by only 7.2%. Preliminary data indicate that creative goods exports began recovering in 2021 and have exceeded 2019 levels.
The share of creative services exports also increased, rising from 12.3% to 21.4% in 2010 and then again in 2020.
82.3% of all creative service exports to 2020 came from developed countries. The United States ($206billion), Ireland ($174billion), Germany ($75billion), China ($59billion) and the United Kingdom (57billion) were the top creative services exporters for 2020.
During the COVID-19 epidemic, creative services were more resilient than any other service sector. In 2020, exports of creative services declined by 1.8%, while all services saw a 20% drop.
There are many barriers that developing countries face in order to participate in services trade, including creative service. These include a lack of infrastructure and fundamental skills that can prevent them from being competitive in creative services.
How countries harness creative industries
This report presents statistics from both developed countries and developing countries that show how creative industries contribute to different economies. In Azerbaijan, for example, the contribution of cultural and creative industries to the gross domestic product (GDP), and 3.8% of total employment, was 1%.
Canada’s culture and sport accounted for 3% of its GDP. In 2019, cultural products accounted 2.5% of total exports, and 2.9% of imports. In Colombia, more than 500,000 people worked in creative industries in 2021. Georgia’s culture accounted for 2.8% GDP and 5.1% workforce in 2017.
Mexico’s cultural sector made up 2.9% of the GDP in 2020 and employed more than 2 million people.
Study of South Africa, Indonesia and Mexico shows that developing countries can measure the economic impact of their creative industries in different ways.
International comparisons are difficult because of the lack of annual reporting and the diversity in definitions and methods used in different countries.
Countries support the creative economy
Responses from 33 countries to an UNCTAD online survey provide insights into how the creative economy’s social, political and economic significance has grown at the national level.
More developing countries have issued regulations, policies, and strategies for the sector since 2015. Most countries that responded have developed a strategy or national plan for supporting and developing creative industries.
A number of countries also developed national plans to support their creative industries in 2020-2021 as part of their post COVID-19 recovery strategies.
Tech is changing creative industries
The report states that new and emerging technologies (Industry4.0), are fundamentally changing some creative industries. The COVID-19 epidemic accelerated the shift toward e-commerce, digital platforms, as well as the potential transformation of the creative economy.
However, global digital divides continue to exist with negative consequences for the creative economy. Digital divides mainly affect the creative economy’s ability to be inclusive, notably in developing countries that still need to benefit from the digital dimension of the creative economy.
UNCTAD urges multidisciplinary policy responses in education and digital infrastructure to increase the development impact of the creative industry, especially in developing nations.
Measurement of the creative economy: Challenges
Lack of data and harmonized definitions are key problems in measuring the creative economy. Insufficient data could lead to certain creative industries and activities being left out of analysis, policy design, and development.
There are many frameworks available to measure the creativity economy. These include patterns of common industries and products, as well as differences due to national or region-specific classifications, activity, or product coverage, and methodology.
Quantifying creative services presents many challenges for developing countries. They often lack adequate statistical systems, appropriate institutional arrangements, financial ressources, IT infrastructure, and trained specialists. Even if data exists, formatting, publishing and processing them can be difficult.
To gain greater insight into the role of creative service in economic transformation and their potential to diversify in developing countries, we need better and more disaggregated information. according to the report.
Source: newbusinessethiopia
