1.1.3 Cultural industries

The term “culture industry” appeared in the post-war period as a radical critique of mass entertainment by members of the Frankfurt school led by Theodor Adorno and Max Horkheimer, followed subsequently by writers such as Herbert Marcuse.4 At that time, “culture industry” was a
concept intended to shock; culture and industry were argued to be opposites and the term was used in polemics against the limitations of modern cultural life. It continued to be used as an expression of contempt for the popular newspapers, movies, magazines and music that distracted the masses.5
In the present day, there remain different interpretations of culture as an industry. For some, the notion of “cultural industries” evokes dichotomies such as elite versus mass culture, high versus popular culture, and fine arts versus commercial entertainment. More generally, however, the
proposition that the cultural industries are simply those industries that produce cultural goods and services, typically defined along the lines outlined above, has gained greater acceptance.

In UNESCO, for example, the cultural industries are regarded as those industries that “combine the creation, production and commercialization of contents which are intangible and cultural in nature. These contents are typically protected by copyright and they can take the form of goods or services”. An important aspect of the cultural industries, according to UNESCO, is that they are “central
in promoting and maintaining cultural diversity and in ensuring democratic access to culture”.6 This two-fold nature — combining the cultural and the economic — gives the cultural industries a distinctive profile.

Similarly, in France, the “cultural industries” have recently been defined as a set of economic activities that combine the functions of conception, creation and production of culture with more industrial functions in the large-scale manufacture and commercialization of cultural products.7 Such
a definition seems to initiate a process leading towards a broader interpretation of the cultural industries than that implied by traditional notions of the “cultural sector”.

1.1.4 Cultural economics

Many politicians and academics, particularly in Europe and Latin America, use the concept of “cultural economics” or the term “economy of culture” when dealing with the economic aspects of cultural policy. Moreover, many artists and intellectuals feel uncomfortable with the emphasis given to market aspects in the debate on the creative industries and hence the creative economy. “Cultural
economics” is the application of economic analysis to all of the creative and performing arts, the heritage and cultural industries, whether publicly or privately owned. It is concerned with the economic organization of the cultural sector and with the behaviour of producers, consumers and governments in this sector. The subject includes a range of approaches, mainstream and radical, neoclassical, welfare economics, public policy and institutional economics.8

While the theoretical and economic analysis in this report takes into account the principles of cultural economics as a discipline, the purpose is to better understand the dynamics of creativity and its overall interactions with the world economy, including its multidisciplinary dimension in which cultural
policies interact with technological and trade policies.

1.1.5 Creative industries

Usage of the term “creative industries” varies among countries. It is of relatively recent origin, emerging in Australia in 1994 with the launching of the report, Creative Nation. It gained wider exposure in 1997, when policymakers at the United Kingdom’s Department of Culture, Media and
Sport set up the Creative Industries Task Force. It is noteworthy that the designation “creative industries” that has developed since then has broadened the scope of cultural industries beyond the arts and has marked a shift in approach to potential commercial activities that until recently were
regarded purely or predominantly in non-economic terms.9

A number of different models have been put forward in recent years as a means of providing a systematic understanding of the structural characteristics of the creative industries.
The following paragraphs review four of these models, highlighting the different classification systems that they imply for the creative economy. Each model has a particular rationale, depending on underlying assumptions about the purpose and mode of operation of the industries. Each one leads to a somewhat different basis for classification into “core” and “peripheral” industries within the creative economy, emphasizing once again the difficulties in defining the “creative sector” that were discussed earlier. The four models are as follows:

■ UK DCMS model. This model derives from the impetus in the late 1990s in the United Kingdom to reposition the British economy as an economy driven by creativity and innovation in a globally competitive world. “Creative industries” are defined as those requiring creativity, skill and talent, with potential for wealth and job creation through the exploitation of their intellectual property (DCMS, 2001). Virtually all of the 13 industries included in the DCMS classification could be seen as “cultural” in the terms defined earlier; however, the Government of the United Kingdom has preferred to use the term “creative” industries to describe this grouping, apparently to sidestep possible high-culture connotations of the word “cultural”.

■ Symbolic texts model. This model is typical of the approach to
the cultural industries arising from the critical-culturalstudies
tradition as it exists in Europe and especially the
United Kingdom (Hesmondhalgh, 2002). This approach
sees the “high” or “serious” arts as the province of the
social and political establishment and therefore focuses
attention instead on popular culture. The processes by
which the culture of a society is formed and transmitted
are portrayed in this model via the industrial production,
dissemination and consumption of symbolic texts or messages,
which are conveyed by means of various media such
as film, broadcasting and the press.

■ Concentric circles model. This model is based on the proposition
that it is the cultural value of cultural goods that gives
these industries their most distinguishing characteristic.
Thus the more pronounced the cultural content of a
particular good or service, the stronger is the claim for
inclusion of the industry producing it (Throsby, 2001).
The model asserts that creative ideas originate in the core
creative arts in the form of sound, text and image and that
these ideas and influences diffuse outwards through a
series of layers or “concentric circles”, with the proportion
of cultural to commercial content decreasing as one
moves further outwards from the centre. This model has
been the basis for classifying the creative industries in
Europe in the recent study prepared for the European
Commission (KEA European Affairs, 2006).

■ WIPO copyright model. This model is based on industries
involved directly or indirectly in the creation, manufacture,
production, broadcast and distribution of copyrighted
works (World Intellectual Property Organization, 2003).
The focus is thus on intellectual property as the embodiment
of the creativity that has gone into the making of
the goods and services included in the classification. A distinction
is made between industries that actually produce
the intellectual property and those that are necessary to
convey the goods and services to the consumer. A further
group of “partial” copyright industries comprises those
where intellectual property is only a minor part of their
operation (see chapter 6).

Table 1.1 summarizes the industries included in each
model. The UK DCMS model makes no distinction between
the industries included, but the other three designate a group
of “core” industries, i.e., those whose inclusion is central to
the definition adopted in each case. It is apparent that the
contents of the core differ markedly among these three models;
for example, the creative arts, which are the epicentre of
the concentric circles model, are regarded as peripheral in the
symbolic texts construction.

There is no “right” or “wrong” model of the creative
industries, simply different ways of interpreting the structural
characteristics of creative production. The attractiveness of
the various models may therefore be different, depending on
the analytical purpose. From the viewpoint of statistical data
collection, however, a standardized set of definitions and a
common classification system are needed as a basis for
designing a workable framework for dealing with the creative
industries within the larger standard industrial classification
systems that apply across the whole economy.

1.1.6 The UNCTAD classification of the creative industries

A significant landmark in embracing the concept of
the “creative industries” was the UNCTAD XI Ministerial
Conference in 2004. At this conference, the topic of creative
industries was introduced into the international economic
and development agenda, drawing upon recommendations
made by a High-level Panel on Creative Industries and
Development. This topic is further elaborated in chapter 9.
The UNCTAD approach to the creative industries
relies on enlarging the concept of “creativity” from activities
having a strong artistic component to “any economic activity
producing symbolic products with a heavy reliance on
intellectual property and for as wide a market as possible”10
(UNCTAD, 2004). UNCTAD makes a distinction between
“upstream activities” (traditional cultural activities such as
performing arts or visual arts) and “downstream activities”
(much closer to the market, such as advertising, publishing
or media-related activities) and argues that the second group
derives its commercial value from low reproduction costs and
easy transfer to other economic domains. From this perspective,
cultural industries make up a subset of the creative
industries.

Creative industries are vast in scope, dealing with the
interplay of various sectors. These creative sectors range from
activities rooted in traditional knowledge and cultural heritage
such as art crafts, and cultural festivities, to more technology
and services-oriented subgroups such as audiovisuals
and the new media. The UNCTAD classification of creative
industries is divided into four broad groups: heritage, arts,
media and functional creations. These groups are in turn
divided into nine subgroups, as presented in figure 1.3.

The rationale behind this classification is the fact that
most countries and institutions include various industries
under the heading “creative industries”, but very few try to
classify these industries in domains, groups or categories. Yet
doing so would facilitate an understanding of the cross-sectoral
interactions as well as of the broad picture. This classification
could also be used to provide consistency in quantitative
and qualitative analysis. It should be noted that all trade
statistics presented in this report are based on this classification.
According to this classification, the creative industries
comprise four large groups, taking into account their distinct
characteristics. These groups, which are heritage, arts, media
and functional creations, are described in figure 1.3.

■ Heritage. Cultural heritage is identified as the origin of all
forms of arts and the soul of cultural and creative industries.
It is the starting point of this classification. It is
heritage that brings together cultural aspects from the
historical, anthropological, ethnic, aesthetic and societal
viewpoints, influences creativity and is the origin of a
number of heritage goods and services as well as cultural
activities. This group is therefore divided into two
subgroups:

– Traditional cultural expressions: art crafts, festivals and celebrations;
and
– Cultural sites: archaeological sites, museums, libraries,
exhibitions, etc.

■ Arts. This group includes creative industries based purely
on art and culture. Artwork is inspired by heritage, identity
values and symbolic meaning. This group is divided
into two large subgroups:
– Visual arts: painting, sculpture, photography and
antiques; and
– Performing arts: live music, theatre, dance, opera, circus,
puppetry, etc.

■ Media. This group covers two subgroups of media that produce
creative content with the purpose of communicating
with large audiences (“new media” is classified separately):
– Publishing and printed media: books, press and other publications;
and
– Audiovisuals: film, television, radio
and other broadcasting.

■ Functional creations.This group comprises
more demand-driven and
services-oriented industries creating
goods and services with functional
purposes. It is divided into
the following subgroups:
– Design: interior, graphic, fashion,
jewellery, toys;
– New media: architectural, advertising,
cultural and recreational,
creative research and development
(R&D), digital and other
related creative services.
– Creative services: architectural, advertising, cultural and
recreational, creative research and development (R&D),
digital and other related creative services.
There is an ongoing debate about whether science and
R&D are components of the creative economy, and whether
creative experimentation activities can be considered R&D.
Recent empirical research has begun to analyse the interactions
between research, science and the dynamics of the
creative economy. In UNCTAD’s approach, creativity and
knowledge are embedded in scientific creations in the same
way as in artistic creations. In order to nurture the creative
economy, it recommends that governments regularly assess
the conditions for technology acquisition and upgrading and
implement and review their science, technology and innovation
policies, including information and communications
technologies (ICTs) and their implications for development.
Lately, the term Science 2.0 and Expansion of Science
(S2ES) has been used with different meanings. It is usually
related to Web 2.0-enabled scientific activities, but it has
also been related to the expansion of science by means of
new concepts and theories, or new modes of producing
knowledge.11

UNESCO approached this matter in the context of
increased cooperation between science and industry as well
as between the public and private sectors in the promotion
of scientific research for long-term goals, prior to the discourse
about the creative economy, in the context of the
World Conference on Science in 1999. As pointed out in the
Declaration, the two sectors should work in close collaboration
and in a complementary manner. However, from reviewing
follow-up activities, it seems that scientists from the
public and private sectors have not yet articulated this cooperation
even if the private sector is a direct beneficiary of scientific
innovation and science education and an increasing
proportion of funds for creative-industry-related scientific
research are financed by the private sector.
Sport and its role in the creative economy are also
debatable. Some classifications of creative industries include
sport. In most cases, this is because ministries of culture are
also in charge of sport matters. This is also justified by the
fact that sport is an important source of revenue and generates
positive externalities in various other sectors of the
economy. Another practical and methodological reason is
that in national accounts, sport is aggregated with recreational
services. From the conceptual viewpoint adopted by
the present report, sport is associated more with training,
rules and competition rather than with creativity. Therefore,
sport is not included in the UNCTAD classification of
“creative industries”.

1.1.7 The creative economy

Regardless of how the creative industries are defined
and classified, there is no disagreement that they lay at the
centre of what can be labelled in broader terms the “creative
economy”. The term “creative economy” appeared in 2001 in
John Howkins’ book about the relationship between creativity
and economics.12 For Howkins, “creativity is not new and
neither is economics, but what is new is the nature and the
extent of the relationship between them and how they combine
to create extraordinary value and wealth”. Howkins’ use
of the term “creative economy” is broad, covering 15 creative
industries extending from arts to the wider fields of science
and technology. According to his estimates, in the year 2000,
the creative economy was worth $2.2 trillion worldwide, and
it was growing at 5 per cent annually. For Howkins, there are
two kinds of creativity: the kind that relates to people’s fulfilment
as individuals and the kind that generates a product.
The first one is a universal characteristic of humanity and is
found in all societies and cultures. The second is stronger in
industrial societies, which put a higher value on novelty, on
science and technological innovation, and on intellectual
property rights.

There is no unique definition of the “creative economy”.
It is a subjective concept that has been shaped throughout
this decade. There is, however, growing convergence on a
core group of creative industries and their overall interactions
both in individual countries and at the international level.
This report adopts the UNCTAD definition of the “creative
economy”, which is summarized in the following box.13
For countries in the developing world, recognition of the
development dimension of the creative industries and hence of
the creative economy has been more recent. The São Paulo
Consensus arising from UNCTAD XI was a decisive step in
this regard. Subsequently, UNCTAD enlarged the focus of its
policy-oriented analysis, emphasizing four key objectives in its
approach to the creative economy:

■ To reconcile national cultural objectives with technological
and international trade policies;
■ To analyse and deal with the asymmetries inhibiting the
growth of creative industries in developing countries;
■ To reinforce the so-called “creative nexus” between investment,
technology, entrepreneurship and trade; and
■ To identify innovative policy responses for enhancing the
creative economy for development gains.

Other initiatives that have furthered the role of the creative
economy in development include a symposium held in
Nagaur, India, in 2005, organized by UNESCO. The symposium
focused on the role of cultural industries in development,
with particular emphasis on the importance of local
artistic and cultural activity as a means for economic empowerment
and poverty alleviation. The recommendations of this
event, known as the Jodhpur Initiatives, put forward a series
of strategies for data collection and industry development for
implementation in various Asian countries.
At the same time at UNESCO headquarters, work
was proceeding on the preparation of a cultural diversity
convention whose provisions would specifically recognize the
contribution that cultural industries make to economic and
cultural development in both industrialized and developing
countries. The resulting Convention on the Protection and
Promotion of the Diversity of Cultural Expressions was
adopted by the General Conference of UNESCO in
October 2005 and entered into force in March 2007 (see
chapter 9).14

Thus it can be seen that the concept of the “creative
economy” has evolved along several paths over the last ten
years. It has emerged as a means of focusing attention on the
role of creativity as a force in contemporary economic life,
embodying the proposition that economic and cultural
development are not separate or unrelated phenomena but
part of a larger process of sustainable development in which
both economic and cultural growth can occur hand in hand.
In particular, the idea of the creative economy in the developing
world draws attention to the significant creative assets
and rich cultural resources that exist in all developing countries.
The creative industries that use these resources not only
enable countries to tell their own stories and to project their
own unique cultural identities to themselves and to the world
but they also provide these countries with a source of economic
growth, employment creation and increased participation
in the global economy. At the same time, the creative
economy promotes social inclusion, cultural diversity and
human development.

1.1.8 The creative class and creative entrepreneurs

A broad interpretation of creativity also underlies
Richard Florida’s descriptions of the emerging “creative
class” in society, a cohort of professional, scientific and artistic
workers whose presence generates economic, social and
cultural dynamism, especially in urban areas.15 More specifically,
the creative class includes people in science and engineering,
architecture and design, education, arts, music and entertainment whose economic function is to create new ideas, new technology or new creative content. According to
Florida: “Creativity is not intelligence. Creativity involves the
ability to synthesize. It is a matter of sifting through data,
perceptions and materials to come up with something new
and useful”. In his approach, the creative class also includes
a broader group of creative professionals in business, finance
and law. Whether they are artists or engineers, musicians or
computer scientists, writers or entrepreneurs, these workers
share a common creative ethos that values creativity, individuality,
difference and merit. In sum, they are people who add
economic value through creativity. The values of the creative
class are individuality, meritocracy, diversity and openness.
Florida estimated that at the beginning of the 21st
century, the creative class represented almost one-third of the
workforce in the United States of America and that the creative
sector accounted for nearly half of all wage and salary
income in this country, about $1.7 trillion, as much as the
manufacturing and service sectors combined.16 In his
second book,17 Florida points out that we are entering the
creative age, as the rise of creativity is the prime factor of our
economy. He presents his “3 Ts theory” for economic
growth: technology, talent and tolerance. His theory differs
from conventional theory since he argues that talent drives
growth, and he goes a step further by adding the third T, tolerance,
which is needed to attract human capital. Criticisms
have been raised about Florida’s work, including that the
range of occupational categories to define the creative class
is too broad. Nevertheless, it is recognized that he has contributed
to advancing a public discourse about the emerging
creative economy.

Along these lines, the notion of “creative entrepreneurs”
is also gaining ground to characterize successful and
talented, entrepreneurial people who are able to transform
ideas into creative products or services for society (see box
1.1). The terminology is actually derived from the concept of
“cultural entrepreneurship” as it deals with strategy formation,
organizational design and leadership in a cultural context.
Entrepreneurship in this sense is described as a new way of
thinking, a new attitude: looking for opportunities within the
environment of a cultural organization, regarding the cultural
mission as the starting point. According to Haggort,18 after
the rise and development of arts management, cultural entrepreneurship
became a leading organizational philosophy for
the 21st century. Creative businesses are also more active in
promoting innovations.



LInk: UNCTAD 
Link: Creative Economy Report 2010