The creative economy
“Supporting the cultural sectors and the creative economy as a way to diversify economic activities is a key issue. The media, museums, theatres, cinema, all these infrastructures have a positive impact on society because they allow economic development, the proliferation of ideas and innovation that lead to progress.”
Youssou N’Dour, Senegalese singer, composer and producer
Our latest issue on the series on the lesser-known economic models analyzes the creative economy.
What is it?
The creative economy (also known as the orange economy) is the most abstract sector of the economy at large, as it revolves around knowledge and ideas. It covers two vast economic subgroups:
- Culture: art, entertainment, cuisine, architecture, design, fashion, advertising etc.
- Knowledge: research and development, education, computing and telecommunications, gaming, high technologies, robotics and nanotechnology, as well as artificial intelligence and the air and space industry.
Products that come from the orange economy stand out because of the intellectual activity behind them. That means that a great part of its power resides in intellectual property.
This type of ownership distinguishes itself by its –in many cases- intangible character. The most known types of intellectual property are copyrights, patents, trademarks and industrial-commercial secrets. However, there are intellectual properties that do not belong to a single person or entity but rather to cities, regions and even nations; that’s the case with denominations of origin and the UNESCO-recognized heritages.
Other characteristics of the creative economy
- People who work in the creative industries value the purpose of their work and the efforts they make far beyond their monetary worth or prestige. Good examples of this are small music groups or scientists who work in fields like molecular chemistry.
- Regardless (or maybe because of that), the fruits of their work tend to be unique and have a value very often unrelated to their functionality. Such is the case with a work of art, or a much discussed topic these days: vaccine patents.
- Because of their uniqueness, these products are created knowing that there’s a distinct possibility that they will not work or have no public acceptance. For example: for every big musical hit each year, there are thousands upon thousands of tunes that never make it.
- And finally, society itself and the fast pace of advances in knowledge often make time a crucial factor on the success and prolonged existence of the products of the creative economy. Goods examples are: the two video systems that fell to the success of VHS, or one-hit musical bands that disappear.
The monetary importance of the creative economy
According to the Sustainable Development Goals Fund, the orange economy is the fastest growing sector of the global economy. It employs over 30 million people and is worth $2,250 billion. Furthermore, it’s the creative economy employees employs more people under 29 years of age than any other.
It is also a clear breadwinner in many nations, representing a quantifiable part of their gross domestic product (GDP): it represents 4.8% of the annual GDP in México, 11% in the United States, and 12.8% in Spain.
Its cultural importance
Innovation stems from the combination of knowledge and creativity. That very development is what makes civilizations go forward. That’s why the role of the creative industries grows in this modern postindustrial era. Not only does it generate more jobs: it fosters cultural diversity worldwide.
Ultimately, the creative economy is culture itself. It promotes dialogue, creativity, diversity and creates understanding between peoples. It brings about social development, social inclusion and the constant advancement of society.