By Alan Freeman
Welcome to our new column – and thanks to the Chamber for the invitation.
Our first post ties together two news items: We are headed into a recession while every level of government is announcing commitments to ‘Creativity and Culture’.
To conventional thinking this sounds odd: why spend on luxuries when we should be tightening our belts? Yet, research shows, creativity is not a luxury – it’s an investment. Through it, Manitoba can help Canada diversify away from commodity-dependency, harnessing a vibrant new sector to grow out of recession.
The ‘Creative Economy’ has become a multibillion-dollar industry, growing faster than almost any other. In the UK, which has the best figures, it employs 2.6 million people who add £76.bn to output. Europe employs 11 million creative workers. According to conservative estimates Canada’s 675,000 cultural workers contribute $50bn to output – the true figure is probably closer to 1.8 million people creating $130 billion, more than Agriculture, Utilities, and Construction.
UK creative industry jobs have risen at 6% per year since 1997, four times the sluggish UK average. They are set to beat manufacturing by the year 2020.
The association between ‘culture’ and leisure, luxury, and elites comes from bygone times when most people produced material goods – food, housing, machinery, and so on. Today’s advanced economies produce services, employing 84% of US workers, 82% of UK workers and 78% of Japanese workers.
As with agricultural products in earlier times, productivity advance has driven down prices so that a shrinking workforce is needed to produce material goods. Services have lagged behind – but not any more. Electronic communications, especially the internet, have revolutionised service production and delivery – leading to the growth of creative services.
Simple? Not quite. Carlota Perez’s challenging work on ‘socio-economic paradigms’ shows that major changes in technology transform the way we live. Steam brought not just cheap power but the iron and coal industries, the railways, ships – and also tourism and holidays. The petrol engine gave us roads, trucks and airplanes. What is the internet giving us? On its own, it’s like a road, a railway, a phone or power line; it’s just a carrier. What matters is what it carries – ‘content’ – and how this content is produced. Business, research, and government have to work together to envision the changes that will result.
Consider Samsung phones, with over 70% of market share. What makes the brand? not just the phone, but the apps – additional, human, creative content. UK ‘leisure’ expenditure outstripped food and drink in 1994 and is now 2.5 times higher. Consumers now seek aesthetic content; in a nutshell, they want things that are different.
This general principle calls for clear thinking. The UK classification of the creative industries extends well beyond ‘high culture’: beside Arts, Crafts and Music we find Advertising, Fashion, Film and Software. Not only are these growing at an impressive clip, but so is every product, from clothing to plumbing, in which distinction has become the decisive factor for consumers.
Fashion is a striking illustration. Fifteen years a tiny proportion of the market was concerned with high fashion and the rest was ‘mass production’. Then came ‘fast fashion’. A designer sitting by the catwalk could get a copy into the high street shops within weeks. And consumers paid for it. They would rather have the dress that Naomi Campbell wore on television, than a sackcloth. In short, they exercised discrimination.
In 2004 Honda relocated its central design department to Soho, England. Why? Because designing and selling cars was no longer about what went under the bonnet, but what went above it. Cars now sold on their entire aesthetic appeal and ‘feeling’ – in short, they had become cultural items.
Is this just hype? What constitutes a wise investment? Three words sum up what’s needed: reposition, rethink, and research. Businesses should study where design will give them the cutting edge of distinction; sectors need to develop unfamiliar markets by studying what new needs they can meet; researchers are needed to join up the dots.
This is a new industry – and we don’t know enough about it. That means investment is risky – which does not mean we shouldn’t do it, but that we have to study first. Nobody would launch a rocket without spending at least 10% of final cost on R&D. To build functional creative city centres, nurture productive workforces, and make products that meet real needs, we must find out who will buy them, how they complement or compete with each other, and what resources they will need.
The last word is key. The unfamiliar thing about the creative economy is that its primary resource consists of people; designers, artists, software experts, performers, writers. They have material needs of course; urban centres, the internet. But these are not material needs as we know them; creative infrastructure starts where the snowplough stops.
The needs are clearly described in Richard Caves’ underrated book on creative contracts. Each product is new, leading to short one-off product runs. Principles like the ‘motley crew’ draw together project teams each with a unique mix of talents. ‘Nobody knows’ contracts respond to risk with flexibility, re-assessing rewards and inputs rapidly as soon as we get more knowledge on whether a product will be a hit or a bust. The substratum for all these practices is the place they happen. A place is a space together with what people do in it – think of London’s Soho, Greenwich Village, or Silicon Valley.
The ‘infrastructure’ of the creative economy consists of people, places, and connectivity.
So is the investment worth it, and can business contribute to, and reap, the benefits? Yes – but it calls for a rethink. Manitoba hosts a treasure trove of untapped assets – its creative workforce, its diverse communities, the rich tradition of its aboriginal cultures, and heritage sites like the Exchange District. We need new partnerships between government, business and the arts to unleash this potential. With the recession on us, the going will be tough; all the more reason to start early, work hard and stay together.