Creative Economy

Are you familiar with the concept of creative economy? How about creative industries?

These terms began to be used about twenty years ago to describe a range of activities, some of which are among the oldest in history and some of which only came into existence with the advent of digital technology. As many of these activities had strong cultural roots, the term cultural industries was already in use to describe theater, dance, music, film, the visual arts and other related sectors. It is curious to say that the use of this term was controversial as many artists felt it depreciating to think of what they did as being, in any way, an industry. Controversy apart, 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.

Dealing with the interface between creativity, culture, economics and technology in a world dominated by images, sounds, texts and symbols, a creative economy is based on people’s use of their creative imagination to increase an idea’s value. This concept is understood differently from one place to another, else from one country to another. 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”, what reinforces the understanding that generating intellectual property is more valuable in the 21st century economy than manufacturing products. A United Nations survey of the global creative economy, published in 2008, pointed out that far from being a particular phenomenon of advanced and post-industrial nations in Europe and North America, the rapid rate of growth of ‘creative and cultural industries’ was being felt in every continent, North and South.

Let us put the creative economy in a historical perspective, by going back in time to the 18th century. During the first Industrial Revolution, new manufacturing processes were adopted replacing human and animal power with steam and water. The second Industrial Revolution was a phase of rapid industrialization in the final third of the 19th century and the beginning of the 20^th; it brought new innovations in steel production, petroleum and electricity, and led to the introduction of public automobiles and airplanes. In the second half of the 20th century, the third Industrial Revolution appeared with the emergence of a new type of energy (nuclear energy), bringing the rise of electronics, transistors, microprocessors, Internet and IT used for the automation of the mass production. The experts describe the fourth Industrial Revolution as a blurring of lines between the physical, digital, and biological spheres. It is characterized by innovations in areas such as driverless cars, smart robotics, materials that are lighter and tougher, and a manufacturing process built around 3D printing. Creativity is playing an integral role in today’s thriving economies, and will continue to become increasingly important during the emerging of this Industrial Revolution.

Aware of this landscape, governments around the world are taking concrete steps to support companies and their initiatives in the creative economy field. Here in North America, many cities developed projects in this regard. In Canada, for instance, the City of Toronto produced reports focused on supporting and growing its creative economy, developed with input from the sector stakeholders. Showing specific action items to strengthen Toronto’s economy and enhance its place as a leading international arts & cultural center these reports are an important tool for the local entrepreneurs. In the US, the City of Sacramento shaped the Creative Economy Pilot Project (https://cityofsac.forms.fm/creative-economy), an initiative by the city to increase economic activity and improve public spaces through art, food, and technology initiatives. The City offered $500,000 in micro grants up to $5,000 and larger grants up to $25,000 to support projects such as pop-up events, art installations, and street performances in Sacramento’s neighborhoods. In the Orlando region, a study titled Arts & Economic Prosperity found that non-profit arts and culture organizations annually generate nearly $400 million in economic activity across Central Florida, according to the Orlando Sentinel. As part of the creative economy sector, it is clear that this field provides full-time jobs (13,764, as per the survey), generates government revenue ($39.9 million, same source) and is a cornerstone of Florida’s vital tourism industry.

It is sometimes said that where oil was the primary fuel of the 20th century economy, creativity is the fuel of the 21st century. In a time of rapid globalization, many countries recognize that the combination of culture and commerce that the creative industries represent is a powerful way of providing a distinctive image of a country, a city and even a company, helping it to stand out from its competitors. So, thinking about what we mean by creativity and the creative economy could not be more important! This might be a good time to ask yourself – is my business leveraging the power of creativity to survive and thrive in a new world economy?

This article is for general, indicative purpose only and should not be considered investment advice. Florida Connexion is not liable for any financial loss, damage, expense or costs arising from your investment decisions based on this article.

At Florida Connexion our multidisciplinary business brokers can assist you in identifying the right business for you and the right buyer for your business.

Sources:

Orlando Sentinel – http://www.orlandosentinel.com/entertainment/arts-and-theater/the-artistic-type/os-et-arts-economic-prosperity-study-20171005-story.html

Are we crushing the creative economy? – https://thinkmarketing.ca/banter/crushing-the-creative-economy/