What Is The Creative Economy?

In this article, I propose to look into the notion of the Creative Economy. The term became a buzzword not so far ago and I decided to delve deeper into the matter and shed some light on it. The term is coined by John Howkins who is a famous author and contributor to creative industries, especially in China. His book “The Creative Economy: How People Make Money From Ideas” introduced that concept and put it in a prominent place in economic papers and speculations. I consider the concept important as countries all over the globe put big hopes on the Creative Economy when it comes to the creation of new jobs (especially for younger people), spurring innovation, and contributing to culture itself.

As always, it is important to bear in mind some definitions to approach the subject properly. In essence, what we call the Creative Economy today largely accommodates a range of creative industries or activities that have been around for a very long time. For example, here we can name such cultural industries/activities as cinematography, architecture, publishing, dance, theater, music, gaming, etc. Today the biggest industries of the Creative Economy measured against the Gross Domestic Product are Television and the visual arts.

?With the lapse of time and the context of never-stopping technological progress, however, the Creative Economy got way bigger and now spans far beyond well-determined traditional creative industries. For example, we can put such things as Youtube-related activities and any other creative stuff that is enabled by the internet and other digital platforms (e.g., designs created in Canva, some sort of coding, etc).

What should be in place for an activity to be labeled as the Creative Economy is both creativity associated with that and the creation of intellectual property. Those activities traditionally have been important not only for national economies but also for the contribution to the culture they render. Speaking in terms of demographics of Creative Economy, gender balance within it is very promising with almost a half of the workforce being women if we look at the whole world. What is also thrilling, young people – up to 30 years – dominate the Creative Economy. However, it is not very surprising as today the Creative Economy is barely imaginable without good digital skills, I think.

Today, the term is very broad since a lot of jobs and activities are creative. Hence, the Creative Economy does not have very defined boundaries. What is even more interesting, today – due to the proliferation of marketing strategies, etc. – creative economy got a part of more traditional sectors that are well-defined. For example, Creative Economy is incorporated with tourism and manufacturing since these industries need proper advertising, branding, and communication. Howkins himself attributed Research and Development (R&D) to Creative Economy when he produced the concept in 2001. This can be explained by the fact that R&D drives innovation, which he considered to be a product or a form of creativity. Howkins suggests that every time creativity is the reason behind a transaction we speak about the Creative Economy.

Moreover, the influence of the Creative Economy on other sectors and its overall weight in the economy is going to increase as the digital approaches to business become increasingly important. Even more, some experts even voice an opinion that nowadays, creativity is the largest economic engine and such things as assets and capital are a servant to it.

The Creative Economy now is a very important concept when we speak about global Entrepreneurship. For example, in the US the number of entrepreneurs acting in the Creative Economy grew by 40% over just 10 years (2002-2012), according to the Policy Circle. Those are writers, artists, and bloggers to name a few. In the US, the ratio of private funds to public funds concerning the contribution to art and culture is the highest in the world. This means that people from the Creative Economy would probably prefer to work in the US as people are ready to pay for their creativity which eliminates the necessity of government funding.

As mentioned above, digital tools that got available at the beginning of the Digital Age stimulated the Creative Economy a lot. Business models of entire creative industries got disrupted and now look way different than in the 20th century. As mobile devices reached public availability, the process of disintermediation happened as artists became distributors of their product themselves because digital platforms – e.g., Instagram or Fine Art America – allowed to reach large amounts of potential customers at almost zero costs. This development – I would even call it a shift – has been very favorable for representatives of the Creative Economy since its practitioners have been made freer in the way they do things. Apart from greater professional freedom, the digital shift also carved out a greater time for them to do their thing as the majority of tools they need now are placed at their fingertips.

All in all, the Creative Economy is likely to get even bigger importance for the economy in the future. Already today, it delivers about 7% of overall employment in advanced countries on average. It represents a very significant economic and social engine that is going to intensify. Deloitte suggests that the Creative Economy can demonstrate a growth rate of 40% by 2030 in advanced countries. This can be explained by the tendency of people to spend more money on creative goods as they get richer.

Moreover, the Creative Economy represents a safety net as creative activity is not likely to be automated any time soon (AI can be creative but there are dozens of sectors to be hit hard by AI before the Creative Economy gets automated). I think that humanity is gradually but inevitably moving into the Creative Economy as other sectors are dying out under the pressure of machines. At the end of the day, I think that that tendency is rather good since we can make the world a better place via the Creative Economy. For example, it may help us address societal issues via its tools such as public attention, etc.

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