The Essence of Creative Economy
1. BackgroundAs Pink (2005) insisted in his book, our economy is moving from the “Information Age” to a “Conceptual Age” where creativity, innovation, empathy, and a holistic view will be rewarded with value gains in the market. His book appealed to people in developed countries such as the U.S., European countries, and Japan, where jobs are being outsourced to the BRIC countries (Brazil, Russia, India and China), which are the world’s leading emerging economies. This outflow of jobs applies to blue-collar as well as white-collar jobs. These global factor movements reflect the shift in the value of human capital, from the worker with a logical and linear thinking, to one with artistic and conceptual thinking in the labor market of the developed countries. Indeed, Pink (2005) writes, the Master of Fine Arts is now the new Master of Business Administration (MBA). The demand for human capital is a derived demand for the consumption of goods and services, and the shift in this demand reflects the maturing of the consumer. The matured consumer wants products that are “physically beautiful and emotionally compelling.” The concept of the “Creative Economy” was proposed to capture the changes in the values of products, services, and human capital.
2. Definition of Creative EconomyDefining the Creative Economy is not as simple as it seems. The definition differs depending on the depth and width of the phenomena captured by this term. Howkins (2001) was the first to attempt a definition for this term as “the new economy, based on creative people, creative industries, and creative cities.” As summarized in UNCTAD (2010), this definition has evolved with the emergence of the associated concepts of “creative class,” “creative cities,” and “creative clusters.” Moreover, recent innovations in this field also relate to the “experience economy,” “creative commons,” and “creative ecology.”
These recent developments in definitions in this sphere capture the essence of the Creative Economy. Unlike the name suggests, its definition is not limited to specific industries, such as creative industries. Rather, it captures the value generated from economic activities. The experience economy advocates that the main source of the market value shifts from services to experience, and that the values of experience are generated from artistic and emotional factors included in the activities. Without understanding humanity, it is not possible to assign values to experiences. Take the simple example of watching a movie or listening to music, or a more complicated example of the Apple’s iPhone. The values of creativities are rooted in the understanding humanity associates with these examples: empathy and aesthetic feeling. Sharing these kinds of feelings among people promotes a sense of belonging to society, also referred to as “inclusion.” Moreover, humanity is closely related to ecology, and people assign high values to protecting ecology. From these arguments, we can forward a superlative definition of the Creative Economy as “an economy whose value stems from the creative activities rooted in understanding humanity.”
3. Public Policies in the Creative EconomyThe main areas of public policy that can promote a Creative Economy are summarized as follows.
1. Policies for building creative cities.
As discussed by Florida (2005), a city serves as an incubator of creativity. Policies for enhancing creative activities focus on the improving the charm of the city by promoting art, and improving its comfort of living, and the beauty of its landscape. As creativity is fostered by creative people, a city needs to appeal to creative people.
2. Education policies and policies for human capital development.
Good education policies, which are necessary to improve creativity, are not easily derived. Berliant and Fujita (2008) argued that divergence is the key factor in improving creativity. Therefore, it is imperative to design an educational policy that enables students to study in a mixed cultural environment, and motivate their intelligence to accept different cultures.
3. Policies for promoting research and development (R&D).
Appropriate schemes for promoting R&D should be considered so that the new ideas can originate and be financially supported. Without doubt, policies promoting financing systems for venture capital, and those encouraging cooperation among the private, public, and educational sectors, are necessary.
4. Building information and communications technologies (ICT) infrastructure.
ICT infrastructure is crucial for promoting a Creative Economy. Notably, high-speed wireless networking technology should be available at a reasonable fee. This technology makes it possible to communicate anywhere and at anytime, and helps establish effective social networking. It will also provide the publishing industry (such as e-books) unparalleled opportunities for business expansion.
5. Cultural policies for strengthening the basis of creativities.
The term “creativities” often implies artistic activities. New concepts are born when artists challenge themselves and each other. The cultural policy for a Creative Economy should include an incentive-compatible income security program for artists. The system should motivate artists to think and act creatively, while guaranteeing them a comfortable income.
6. Social affairs.
The emergence of the experience economy and the promotion of cultural activities have had positive influences on strengthening social ties and the inclusion of relatively unfortunate people into society. The best illustrative example would be sports. Utilizing sports effectively to promote community activities is expected to help solve/alleviate some social problems at least.
7. Trade and industrial policy.
It is expected that the creative industry will gain significance in the economy. Already, issues such as improvements to industrial competitiveness (such as the skewed/unfair business relations/practices caused by unequal bargaining powers) are being discussed. Violation of copyright is also an important issue that the trade policy must address for a creative industry.
We intend to conduct a more detailed examination of the above-mentioned policies in the future.
Berliant, Marcus and Masahisa, Fujita (2008), “Knowledge creation as a square dance on the Hilbert Cube,” International Economic Review, Vol. 49, No. 4, pp.1251-1295.
Florida, Richard (2005), The Flight of the Creative Class, Harper Collins Publishers.
Howkins, John (2001), The Creative Economy: How People Make Money from Ideas,
Published by Penguin in 2001, revised 2007.
Pink, Daniel (2005), A Whole New Mind, Riverhead Books, A Member of Penguin Group (USA) Inc., New York 2005.
UNCTAD (2010), Creative Economy Report 2010.