IN SYNC FOR ECONOMIC DEVELOPMENT
Poet, painter, planner
By B.P. Tapang, Jr.
It has always seemed unlikely that the worlds of culture and the arts and that of economics and business would be in sync. Collide perhaps, but in sync? If they met at all, that would have been in patronage.
In medieval times, the fine arts of Europe depended on their patron of note, the Church, which then enjoyed the most potent economic and political power. During the Renaissance, if the arts reached an apex, it was thanks to the patronage of Church and monarchy. With the Industrial Revolution and the reduced power of the nobility a new urban culture emerged. With it a new middle class of private individuals—merchants, capitalists, bankers—became the new patrons of the arts.
Today, art patronage is still practiced through state endowments and as evidence of the exercise of private “corporate social responsibility.” Patronage was not an option in times past, and not now; it is a key to social status, after all. Cultural activity had been treated always apart from the economy, and the enjoyment of the arts was something pursued when people were not engaged in productive work.
The United Nations Conference on Trade and Development (UNCTAD) is credited for introducing to the world’s economies and to the economic development agenda the notion of “creative economy,” a concept that links creativity, culture, economics, and technology in the contemporary world. This involves a new paradigm in which creativity takes center stage. The 2010 UNCTAD report on creative economy says: “Adequately nurtured, creativity fuels culture, infuses a human-centred development and constitutes the key ingredient for job creation, innovation and trade while contributing to social inclusion, cultural diversity and environmental sustainability.”
John Howkins refers to the creative economy as “the transactions of creative products that have an economic good or service that results from creativity and has economic value.” Its most often cited definition is from the UK Department for Culture, Media and Sport whose 1998 Mapping Document lists 13 areas of activity (the creative industries) which have in common the fact that they “have their origin in individual creativity, skill and talent and. . . have a potential for wealth and job creation through the generation of intellectual property.” The economy is made up of “industries,” where an “industry” consists of firms, and is classified as to where it belongs: agriculture, industry or service.
But what is a “creative” industry?
In the Philippines, the creative industries have been identified in a government document, “State of the Philippine Creative Industries,” as belonging to the following creative fields with their corresponding creative sectors: (1) heritage and the arts, consisting of music, dance, theater, visual arts and photography, cultural sites, and traditional goods and crafts; (2) architecture and design, including interior design, industrial design, packaging, fashion, jewelry, furniture, household goods; (3) audio-visuals, i.e., film, TV and radio; (4) printing, publishing and the print media made up of newspapers, books and magazines, dissertations and articles; (5) creative services, e.g., animation, gaming, advertising; and (6) science and technology, i.e., research and development in manufacturing in electronics and communication, food, drug, housing, and transport.
The list combines the “traditional” and the “contemporary.” But when ancient forms like crafts, festivals, celebrations, dance, music, literature and performance fuse with the modern (advertising, design, fashion, and the technology-based film and recorded sound media) and are uploaded to the digital platforms, newer and bigger audiences are reached. Thus, the output of traditional creative work finds new sources of revenue, in addition to tourism and collection. The market value of these creative industries is not recognized yet in current templates for measuring economic activity, like the Gross Domestic Product (GDP) accounts, but incorporated as contributions of sectors that are counted within the standard industry classification.
The creative industries and GDP
The government document cited earlier shows preliminary attempts at estimating the contribution of the creative fields and sectors to GDP and other indicators in selected regions and countries, including ours. The GDP is the market value of all final goods and services produced by the country during a reckoning period, typically a year. One way to determine GDP is to add up the value of each of the economy’s producing sectors. Another approach in accounting for GDP adds the amount of a country’s net export (the value of a nation’s export less it imports) to the other expenditures on these final goods.
For the Philippines the value contribution of the creative industries was 5.4 percent of the GDP in 2009, up by a tiny 1.9 percent from their contribution in 1999 (3.5 percent). These compare with, say Thailand’s 12 percent contribution in 2008. Worldwide, the contribution of the creative industries is about 8 percent of global output.
It should be frustrating for us to note that while China’s creative sector provided only a 2.6 percent contribution to the value of its (huge) GDP account in 2006, it nonetheless reported the biggest revenue share in 2008 and highest annual growth rate from 2002 among the nations in East Asia by way of the export value of its creative industries. Among ASEAN countries, one is not surprised that Thailand is listed with Singapore as capturing the biggest share of the US$17.4B export revenue from the region’s creative industry sector.
While our creative industries provided 12.4 percent of value of total Philippine exports in 2008 and only 4.6 percent of total Philippine imports, we are a net importer of the output of foreign creative industries. This means that in monetary terms, the 4 percent share of the creative industry imports was higher than its 12 percent contribution to Philippine exports. For the country, the creative industries most heavily traded are: press and literature, motion picture, and video. We need to up our share by our enhancing our ability to compete in the market for globally traded creative products and services. It is a market that, after all, registered a total value of US$592B in 2010, and that grew at an annual rate of 14.4 percent from 2002.
Enabling the creative economy
Thankfully, the cost to the country in terms of opportunity loss from not participating more and earlier in the global market, and encouraging the faster growth of the local for these types of goods are being officially addressed. The expression for this concern cannot be louder than a full chapter on culture (Chapter 7, “Promoting Philippine Culture and Values”) in the Philippine Development Plan 2017-2022. Part of the legislative agenda that it presents provides for the reorganization of the National Commission on Culture and the Arts into the Department of Culture, with clearly delineated powers and functions. Also included in this agenda is the establishment of offices for culture and arts in the local government units, with a mandate “to protect and promote local cultural heritage and arts.”
This latest national plan should put in one place the earlier but disparate and isolated efforts of different line agencies and legislations to preserve, if not actually expand, the already existing creative industries. But it also recognizes that inter-agency and inter-sector collaboration and the necessary legislations have a long way to go to utilize fully one of the enabling factors of the creative economy, the government itself.
In a World Economic Forum White Paper on “Factors for Enabling the Creative Economy,” it is said that governments can create the right conditions for these industries to flourish with the right mix of regulatory tools and incentives for creative entrepreneurs. These include intellectual property protection via copyright, trademarks and licensing; and incentives provided through tax breaks and vouchers or simply, subsidized working spaces. They make access to finance easier, and in addition encourage private funding, e.g., venture capitalists, investors and creditors for creative entrepreneurs to take the risk in starting and growing their businesses.
Toward this end, already created is a new Creative Industries Board/Task Group with National Economic Development Authority (NEDA) and the Department of Trade and Industry (DTI) in the lead, with its key agencies included, such as the Board of Investment (DTI-BOI), the Intellectual Property Office (DTI-IPO), the Design Center of the Philippines (DTI-DCP) and the Export Marketing Bureau (DTI-EMB). Also in this new board/task group are the Department of Finance (DOF), the National Museum of the Philippines (NM), the National Historical Commission of the Philippines (NHCP), the Komisyon sa Wikang Filipino (KWF), the Philippine Statistics Authority (PSA), Bohol Kasing Sining and the National Commission for Culture and the Arts (NCCA).
A most encouraging sign that the creative economy idea is establishing a strong foothold in the country is Baguio City’s getting declared a “creative city” in late 2017 by the United Nations Educational, Scientific and Cultural Organization (UNESCO). The basis of that recognition is three of the city’s many crafts and folk arts: silver craft, weaving, and wood carving. Created in 2004, the UNESCO Creative Cities Network (UCCN) promotes cooperation among cities that place “creativity and cultural industries at the heart of their development plans at the local level and cooperating actively at the international level.”
That we are a country of diverse local cultures is a big plus. John Newbigin who, as special advisor to the UK government, played a big role in establishing the creative economy idea as a legitimate and necessary focus of public policy, has argued that: “It is the existing and entrenched strengths of a locality, including its longstanding local customs and cultures, that make it ripe for creative development.”
As Baguio secures its enviable status as the first creative city in the Philippines, other culturally rich localities in the country should take heed and develop their strengths so that someday they too could join the roster of some 180 other creative cities in the world.
B.P. Tapang is a professorial lecturer of economics at the College of Social Sciences, University of the Philippines Baguio where he was once also the director of the Cordillera Studies Center. (firstname.lastname@example.org)