CREATIVE INDUSTRIES

BY JOSHUA HELENA M

BAPRM 42571

 Creative industry refers to a range of economic activities which are concerned with the generation or exploitation of knowledge and information. They may variously also be referred to as the cultural industries (especially in Europe (Hesmondhalgh 2002, p. 14)) or the creative economy (Howkins 2001), and most recently they have been denominated as the Orange Economy in Latin America and the Caribbean (Buitrago & Duque 2013)

Creative industries have been seen to become increasingly important to economic well-being, proponents suggesting that "human creativity is the ultimate economic resource," (Florida 2002, p. xiii) and that “the industries of the twenty-first century will depend increasingly on the generation of knowledge through creativity and innovation" (Landry & Bianchini 1995, p. 4)

 According to Caves (2000), creative industries are characterized by seven economic properties:

Nobody knows principle: Demand uncertainty exists because the consumers' reaction to a product are neither known beforehand, nor easily understood afterward.

Art for art’s sake: Workers care about originality, technical professional skill, harmony, etc. of creative goods and are willing to settle for lower wages than offered by 'humdrum' jobs.

Motley crew principle: For relatively complex creative products (e.g., films), the production requires diversely skilled inputs. Each skilled input must be present and perform at some minimum level to produce a valuable outcome.

Infinite variety: Products are differentiated by quality and uniqueness; each product is a distinct combination of inputs leading to infinite variety options (e.g., works of creative writing, whether poetry, novel, screenplays or otherwise).

A list/B list: Skills are vertically differentiated. Artists are ranked on their skills, originality, and proficiency in creative processes and/or products. Small differences in skills and talent may yield huge differences in (financial) success.

Time flies: When coordinating complex projects with diversely skilled inputs, time is of the essence.

Some creative products have durability aspects that invoke copyright protection, allowing a creator or performer to collect rents.

The properties described by Caves have been criticized for being too rigid (Towse, 2000). Not all creative workers are purely driven by 'art for art's sake'. The 'ars longa' property also holds for certain noncreative products (i.e., licensed products). The 'time flies' property also holds for large construction projects. Creative industries are therefore not unique, but they score generally higher on these properties relative to non-creative industries.

Globally, Creative Industries excluding software and general scientific research and development are said to have accounted for around 4% of the world's economic output in 1999, which is the last year for which comprehensive figures are currently available. Estimates of the output corresponding to scientific Research and Development suggest that an additional 4-9% might be attributable to the sector if its definition is extended to include such activities, though the figures vary significantly between different countries.

Taking the UK as an example, in the context of other sectors, the creative industries make a far more significant contribution to output than hospitality or utilities and deliver four times the output due to agriculture, fisheries and forestry. In terms of employment and depending on the definition of activities included, the sector is a major employer of between 4-6% of the UK's working population, though this is still significantly less than employment due to traditional areas of work such as retail and manufacturing.

Within the creative industries sector and again taking the UK as an example, the three largest sub-sectors are design, publishing, and television and radio. Together these account for around 75% of revenues and 50% of employment.

The complex supply chains in the creative industries sometimes make it challenging to calculate accurate figures for the gross value added by each sub-sector. This is particularly the case for the service-focused sub-sectors such as advertising, whereas it is more straightforward in product-focused sub-sectors such as crafts. Not surprisingly, perhaps, competition in product-focused areas tends to be more intense with a tendency to drive the production end of the supply chain to become a commodity business.