Creative economy (economic system)

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A creative economy is based on people's use of their creative imagination to increase an idea's value. John Howkins developed the concept in 2001 to describe economic systems where value is based on novel imaginative qualities rather than the traditional resources of land, labour and capital.: [1] Compared to creative industries, which are limited to specific sectors, the term is used to describe creativity throughout a whole economy.

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Some observers take the view that creativity is the defining characteristic of developed 21st century economies, just as manufacturing typified 19th and early 20th centuries. [2]

Definitions of a creative economy

Definitions of a modern creative economy continue to evolve. [3] When John Howkins popularized the term “creative economy” in 2001, he applied the term to the arts, cultural goods and services, toys and games, and research and development. [4] The most common models of the creative economy share many elements. Howkins’ creativity-based model includes all kinds of creativity, whether expressed in art or innovation. [5] The narrower culture-based models concentrate on arts, design and media and are normally restricted to nominated industries. [6] The term increasingly refers to all economic activity that depends on a person's individual creativity for its economic value whether the result has a cultural element or not. In this usage, the creative economy occurs wherever individual creativity is the main source of value and the main cause of a transaction.

There are several ways to measure a creative economy. It is possible to use the same indicators as in other economies, such as producer outputs, consumer expenditure, employment and trade. Businesses also use valuation, value chains, price and transactional data. There are additional indicators of intellectual property. However, measuring intangibles such as ideas, design, brands and style presents a challenge. [7] Furthermore, the nature of work is different, with a high proportion of part-time workers and with many transactions being non-financial.

Governments have been slow to adjust their national statistics to capture the new forms of creative occupations, productions and transactions. As a result, national data on employment, GDP and trade is often unreliable. America and the UK are in the process of adjusting their national statistics to measure their creative economies more accurately. [8]

History

The roots of today's creative economy go back to two main themes on the nature of work and especially the relationship between the individual and their work. The first started with the industrial revolution and focussed on urbanisation, information and knowledge, and was developed by economists and management writers. [9] In the second half of the 20th century these ideas were expressed as the Post-Industrial Society, Information Society, Knowledge Society and Network Society. These concepts prioritised data and knowledge over the individual's creation of new ideas and made little reference to an individual's personal creativity or the cultural context.

The second theme was the arts and culture. Europe began to recognise culture's economic elements and to develop the concepts of cultural industries and creative industries in the 1990s. These prioritised culture, design and media. This approach was led by the British Department for Culture, Media and Sport (DCMS) which designated 14 creative industries in 1998, later reduced to 12. [10]

Other developments at the turn of the century include Richard Florida’s creative class and Charles Landry’s creative city. [11] [12] The primary role of individual creativity as the defining source of the new economy was put forward by John Howkins in 2001. [13] He prioritised creativity rather than either information or culture. He defined a creative product as an economic good, service or experience resulting from creativity and with the characteristics of being personal, novel and meaningful. He said its defining characteristics are twofold: it results from creativity and its economic value is based on creativity. Howkins’ second edition of The Creative Economy in 2013 shows an even greater awareness of the importance of creativity and the need to include all economic activity.

Howkins acknowledges that creative economies have been found in many societies over time. ‘Creativity is not new and neither is economics but what is new is the nature of the relationship between them’. [14] He suggests this new relationship reflects increases in higher education, shifts in employment patterns, market liberalisation, higher average wages, more leisure time and increasing urbanisation.

In 2013 the British NESTA criticised the UK government culture-based approach saying, ‘For example, the definition doesn’t include a large (and growing) software segment of the creative industries’. [15] It proposed a new model based on creative intensity. This uses five criteria to measure the extent to which a specific occupation is creative, regardless of whether the worker is in a nominated industry. The criteria include novelty, a resistance to mechanisation and non-repetitiveness.

Creative economies are more commonly found in market-based economies where they can benefit from intellectual and artistic freedom, lack of censorship, access to knowledge, availability of private capital, and the freedom to set market prices and where the population is able to exercise their own choice in terms of what choose to buy or rent. Command economies may allow selected individuals to be creative but cannot sustain a creative economy. The growth of China's economy since 1980 has been stimulated by market-based creativity and innovation. [16] Europe, America, Japan, China and other countries see creativity as the dominant economic force affecting jobs, economic growth and social welfare. The 2014 OECD Forum declared ‘Creativity and innovation are now driving the economy, reshaping entire industries and stimulating inclusive growth’. [17] [18] [19]

Issues

According to Howkins, current issues in the creative economy include [20] Aesthetics, Branding, Business Models (Value Chains), Networks (Systems, Ecologies), Culture (intrinsic and instrumental values), Education and Learning, Intellectual property (proprietorial and open source), Management, Digital and Online, Policy, Pricing, Public statistics (definitions), Software, Start-ups, Tax, Urban design, and Work

See also

Related Research Articles

Intellectual property Notion of ownership of ideas and processes

Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The most well-known types are copyrights, patents, trademarks, and trade secrets. Early precursors to some types of intellectual property existed in societies such as Ancient Rome, but the modern concept of intellectual property developed in England in the 17th and 18th centuries. The term "intellectual property" began to be used in the 19th century, though it was not until the late 20th century that intellectual property became commonplace in the majority of the world's legal systems.

Intellectual capital is the intangible value of a business, covering its people, the value relating to its relationships, and everything that is left when the employees go home, of which intellectual property (IP) is but one component. It is the sum of everything everybody in a company knows that gives it a competitive edge. The term is used in academia in an attempt to account for the value of intangible assets not listed explicitly on a company's balance sheets. On a national level intellectual capital refers to national intangible capital, NIC.
A second meaning that is used in academia and was adopted in large corporations is focused on the recycling of knowledge via knowledge management and intellectual capital management (ICM). Creating, shaping and updating the stock of intellectual capital requires the formulation of a strategic vision, which blends together all three dimensions of intellectual capital within the organisational context through exploration, exploitation, measurement, and disclosure. Intellectual capital is used in the context of assessing the wealth of organizations. A metric for the value of intellectual capital is the amount by which the enterprise value of a firm exceeds the value of its tangible assets. Directly visible on corporate books is capital embodied in its physical assets and financial capital; however all three make up the value of an enterprise. Measuring the real value and the total performance of intellectual capital's components is a critical part of running a company in the knowledge economy and Information Age. Understanding the intellectual capital in an enterprise allows leveraging of its intellectual assets. For a corporation, the result will optimize its stock price.

Department for Digital, Culture, Media and Sport United Kingdom government department

The Department for Digital, Culture, Media and Sport (DCMS) is a department of the United Kingdom government, with responsibility for culture and sport in England, the building of a Digital Economy, and some aspects of the media throughout the whole UK, such as broadcasting and internet.

The creative industries 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 or the creative economy, and most recently they have been denominated as the Orange Economy in Latin America and the Caribbean.

According to international organizations such as UNESCO and the General Agreement on Tariffs and Trade (GATT), cultural industries combine the creation, production, and distribution of goods and services that are cultural in nature and usually protected by intellectual property rights.

The creative class is a posited socioeconomic class identified by American economist and social scientist Richard Florida, a professor and head of the Martin Prosperity Institute at the Rotman School of Management at the University of Toronto. According to Florida, the creative class are a key driving force for economic development of post-industrial cities in the United States.

The Adelphi Charter on Creativity, Innovation and Intellectual Property is the result of a project commissioned by the Royal Society for the encouragement of Arts, Manufactures & Commerce, London, UK, and is intended as a positive statement of what good intellectual property policy is. The Charter was issued in 2004.

Intangible cultural heritage Class of UNESCO designated cultural heritage

An intangible cultural heritage (ICH) is a practice, representation, expression, knowledge, or skill considered by UNESCO to be part of a place's cultural heritage; it comprises "nonphysical intellectual property, such as folklore, customs, beliefs, traditions, knowledge, and language" in contrast to tangible heritage. Intangible cultural heritage is considered by member states of UNESCO in relation to the tangible World Heritage focusing on intangible aspects of culture. In 2001, UNESCO made a survey among States and NGOs to try to agree on a definition, and the Convention for the Safeguarding of Intangible Cultural Heritage was drafted in 2003 for its protection and promotion.

Creative entrepreneurship is the practice of setting up a business – or setting yourself up as self-employed - in one of the creative industries. The focus of the creative entrepreneur differs from that of the typical business entrepreneur or, indeed, the social entrepreneur in that s/he is concerned first and foremost with the creation and exploitation of creative or intellectual capital. Essentially, creative entrepreneurs are investors in talent – their own or other people’s.

Innovation management is a combination of the management of innovation processes, and change management. It refers to product, business process, marketing and organizational innovation. Innovation management is the subject of ISO 56000 series standards being developed by ISO TC 279.

The creative city is a concept developed by Australian David Yencken in 1988 and has since become a global movement reflecting a new planning paradigm for cities. It was first described in his article 'The Creative City', published in the literary journal Meanjin. In this article Yencken argues that while cities must be efficient and fair, a creative city must also be one that is committed to fostering creativity among its citizens and to providing emotionally satisfying places and experiences for them. A city named Pune from Maharashtra, India is known as the city of creativity because of its unique culture, variety of festivals, education option from engineering to film making to design, theater, and play culture in the city.

Charles Landry English businessman and author

Charles Landry is an author, speaker and international adviser on the future of cities best known for popularising the Creative City concept. His book The Creative City: A Toolkit for Urban Innovators became a movement to rethink the planning, development and management of cities. He has chaired multiple urban innovation juries including The European Capital of Innovation Award – iCapital, New Innovations in the Creative Economy (N.I.C.E.) and Actors for Urban Change. He is a fellow of The Robert Bosch Academy in Berlin.

Free Culture Forum international forum of free culture and digital rights

The Free Culture Forum (FCForum) is an international encounter of civic society actors on free culture, digital rights and access to knowledge. It has been taking place in Barcelona every year since 2009. It takes place jointly with the oXcars, a free culture festival.

The Arab Thought Foundation is an independent international non-governmental organization having no association with regimes and no political, party or sectarian affiliations whatsoever. Since its establishment in the year 2000 by His Royal Highness Prince Khalid Al-Faisal, with the support and competencies of a group of intellectuals, investors and businessmen who believed in its message and principles of enlightenment, the Foundation is committed to instilling pride in the traditions, principles and values of the nation by promoting responsible freedom, reinforcing Arab solidarity and strengthening the unifying Arab identity, while preserving the wealth diversity and plurality.

John Howkins Author and speaker of Creative Industries

John Anthony Howkins is a British author and speaker on Creative Industries, particularly the development of this economic sector in China. He is visiting professor, University of Lincoln, England, and vice dean and visiting professor, Shanghai School of Creativity, Shanghai Theater Academy, China.

Copyright for Creativity - A Declaration for Europe issued on 5 May 2010, is intended as a statement of how copyright policy could be constructed in the Internet Age. It comes against the background of political debate within Europe to rethink copyright in an era where the use of digital content without paying fees to the creators is part of the business model for some of the largest global internet platforms. Interests of content creators and online platform providers collide. The declaration has been written by a group from political party "European People's Party (EPP)" The Declaration focuses on both the exclusive rights and the limitations and exceptions to existing copyright rulings and standards.

Tenstar Community, often known simply as "TEN", is a Third Sector not-for-profit movemente and association established and registered in Italy, in the city of Verona.

The creative industry in Brazil refers to various economic sectors of Brazil that depend on the talents and creativity to develop. In other words, it is about generating wealth for the region through knowledge, culture and creativity, in order to contribute to sustainable development. The term 'creative industries' was coined by the United Kingdom in 1990 and in 2001 won two updates: one by researcher John Howkins, which gave it an entrepreneurial vision when focusing on the transformation of creativity in product; and another one by professor Richard Florida, which focused on professionals involved in the creative processes of production, addressing the social aspects and the "potential contribution to the development" of the "creative class". The first study of international coverage only emerged in 2008 - conducted by the United Nations Conference on Trade and Development (UNCTAD) - the same year it was published another study on the subject, only fully about Brazil.

The Indigo Era, or "Indigo economies", is a concept first publicized in early 2016 by international businessman Mikhail Fridman, the co-founder of LetterOne, an international investment business. He used the term to describe what he views as an emerging new era of economies and economics based on ideas, innovation, and creativity, which he sees as replacing economies which are based on the possession of natural resources. The word "indigo" was initially chosen based on the term indigo children, which has been used to describe people with unusual and innovative abilities.

References

  1. ↑ John Howkins (2001; 2nd Edition, 2013), The Creative Economy, Chap 1.
  2. ↑ OCED 2014 Forum .
  3. ↑ John Howkins, ‘Creative Ecologies’, 2009, Chap 2.
  4. ↑ United Nations Development Programme, (UNDP); United Nations Educational, Scientific, and Cultural Organization, (UNESCO) (2013). Creative economy report 2013 widening local development pathways (PDF). New York: United Nations Development Programme. pp. 19–20. ISBN   978-92-3-001211-3 . Retrieved 5 March 2015.CS1 maint: multiple names: authors list (link)
  5. ↑ John Howkins, 2013, op cit., Chap 1.
  6. ↑ DCMS Mapping Document, 2nd edition, https://www.gov.uk/government/publications/creative-industries-mapping-documents-2001.
  7. ↑ Robert S Kaplan and David Norton, ‘Strategy Maps: Converting Intangible Assets into Tangible Outcomes’, 2004; and International Accounting Standards, ‘IAS 38: Intangible Assets’, revised 12 May 2014.
  8. ↑ US Department of Commerce, ‘Preview of 2013 Comprehensive Revision of the National Income and Producer Accounts, March 2013; and Howkins, 2013, page 153.
  9. ↑ Peter Drucker, ‘The Landmarks of Tomorrow’, 1959; and Daniel Bell, ‘The Coming of Post-Industrial Society, 1973.
  10. ↑ Creative Industries Mapping, Documents 2001: https://www.gov.uk/government/publications/creative-industries-mapping-documents-2001.
  11. ↑ Richard Florida, ‘The Rise of the Creative Class: And how it’s transforming work, leisure, community and everyday life’, 2002.
  12. ↑ Charles Landry, ‘The Creative City: A toolkit for urban innovators’ 2000.
  13. ↑ John Howkins, The Creative Economy, 2001.
  14. ↑ John Howkins, The Creative Economy, 2013.
  15. ↑ Hasan Bakhshi, Ian Hargreaves and Juan Mateos-Garcia, ‘A Manifesto for the Creative Economy’, NESTA, 2013.
  16. ↑ Marina Guo, ‘Creative Transformations’, 2011.
  17. ↑ OECD 2014 Forum .
  18. ↑ ‘The 'creative economy', and the broad spectrum of creative industries that it encompasses, is increasingly important in the 21st century's global economy’ (Colette Henry and Anne de Bruin, 2011).
  19. ↑ Entrepreneurship and the Creative Economy: Process, Practice and Policy Ruth Towse and Christian Handke, ‘Creative Economy, Creative Cities’, 2013.
  20. ↑ John Howkins, ‘Current Issues in Creative Economies’, Drucker School of Management, 2014.

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