Creative Economy

1.0 Introduction: The creative economy is defined as the sum of economic activity arising from a highly educated segment of the workforce encompassing a wide variety of creative individuals like artists, architects, computer programmers, university professors and writers from a diverse range of industries such as technology, entertainment, journalism, finance, high-end manufacturing and the arts. Thus, the logic is that attracting the “creative class” to the region will generate jobs and tax revenue, a trickle down of benefits to all citizens. In the Creative Economy the creative class will bring their respective country to great economic growth. Countries and cities compete to attract this creative class. Cities that attract this class are characterized by Talent, Technology and Tolerance. “At the heart of such an effort is recognition of the vital roles that art and culture play in enhancing economic development and, ultimately, sustaining a ‘creative community’, a community that exploits the vital linkages among art, culture and commerce” (Florida, 2007). “Communities that consciously invest in these broader human and financial resources are at the very forefront in preparing their citizens to meet the challenges of rapidly evolving, and now global, knowledge-based economy and society (Eger, 2006).” U.N.E.S.C.O World Report, Towards a Knowledge Society stated that the emphasis was on the need to renew an ethic for guidance of the emerging Knowledge Economy. U.N.E.S.C.O states that history and anthropology teach us that all societies are knowledge societies. The knowledge society is about connecting traditional knowledge with the knowledge economy model. The Knowledge Economy is based on freedom and expression, the right to education and the right to participate freely in the cultural life.

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2.0 A theoretical framework to analyze the Creative Economy: There has been a lot of discussion about how to label the post-industrial age. The post-industrial society is associated with many concepts: Globalization, the New Economy, the Information Economy, the Knowledge Economy, the Weightless Economy (Coy, 2000). The Creative Economy and the Experience Economy (Pine and Gilmore, 1999). Globalization is the process of growing interconnectedness of national states, societies, organizations and corporations, households and individuals (Brinkman, 2002). Globalization is an umbrella term referring to increasing interdependence in the economic, social, technological, cultural, political and ecological spheres. The Information Economy (1970-1995) is characterized by high levels of investment in analytical power to process data and information more quickly. The Knowledge Economy (1995 to date), is characterized by connecting power to share data and information faster and further. Technology enables us to tap into each other’s creativity. The Knowledge Economy is the result of bringing together powerful computers and well-educated minds to create wealth. Technology enables people to work 24 hours a day, 7 days a week. Work and personal lives merge. Work without being personally present is possible (Kamberg, 2007). Kamberg states that we are moving to the Conceptual Age where employees are the source of creativity that will make the difference when competing in the marketplace. This makes employees a major asset (Bolkin, and Handy, 1996), “But when the vital assets are people, there can be no true ownership by corporations. The best corporations can do is to create an environment that makes the best people want to stay.” (Coy, 2000). Moreover, twenty first century may see the emergence of a kind of ‘welfare capitalism’ in which corporations try to recruit and retain employees by providing services that in another area were provided by government agencies or families. (The Economist, 2007a). In the Creative Economy the creative class will bring their country to great economic growth. Countries and cities compete to attract this creative class. Cities that attract this class are characterized by Talent, Technology and Tolerance (Hospers and van Dalm, 2006).

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At the heart of such an effort is recognition of the vital roles that art and culture play in enhancing economic development and, ultimately, sustaining a ‘creative community’. A community that Exploits the vital linkages among art, culture and commerce. “Communities that consciously invest in these broader human and financial resources are at the very forefront in preparing their citizens to meet the challenges of rapidly evolving, and now global, knowledge-based economy and society (Eger, 2006).

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3.0 Critical Analysis: (Schumpeter, 1975), coin the term “Creative Destruction”, he strongly suggests that Capitalism champion of creative economy is by nature a form or method of economic and evolutionary change which is stationary and people in general have physiological affects of this rapid moving world. However, in Schumpeter's vision of capitalism, innovative entry by entrepreneurs was the force that sustained long term economic growth, even as it destroyed the value of established companies that enjoyed some degree of monopolize power. Moreover, it appears that growth of the creative economy is exacerbating inequality and exclusion. The creative economy is contributing to both the renewed prosperity and the inequitable social and geographic distribution of its benefits. At its heart the creative economy has two fundamental flaws: one, a misperception of culture and creativity as a product of individual genius rather than collective activity; and, two, a willingness to tolerate social dis-location in exchange for metropolitan vitality or competitive advantage. Furthermore, (Stern and Susan , 2008), points out that the creative industries have generated more than twenty million US jobs since the 1990s and currently account for half of all US wages and salaries. Comments that America has been able to develop new ideas and innovations by attracting and energizing the best and brightest people, including talented and educated immigrants from around the world. However, recent wave of mistrust and lack of understanding between West and the rest, reflects on the consequences of making it more difficult for highly educated foreigners to obtain visas to attend scientific conferences or do research in the US and quotes one leading American researcher's reasons for preferring to work in England rather than America. This outlines the economic and social consequences which draws attention to an increasing trend of brain drain from US. (Porter, 1980) suggest that in knowledge economy people like to live into communities of likeminded people with similar cultural and lifestyle preferences. He concludes that if the country is to strengthen its creative economy and replace lost jobs, and country desperately needs economic, cultural and political change in leadership with enough savvy to bridge ideological, geographical and international gaps. 4

4.0 Green Economy:

The financial crisis, fomented in the U.S. subprime market, has brought down banking and insurance giants, contaminating the entire sector, and affecting businesses and jobs around the world. The fuel crisis, reflected in the large fluctuations of the price for crude oil, is threatening the reliability, affordability, and security of energy supply. (Fig-1: Industrial Average) Fig – 1 Dow Jones Industrial Average Oct. 2007 to Oct. 2008

Source: moneycentral.msn.com The food crisis, (Fig-2) reflected in the dramatic increase in the prices of grains, is affecting the survival of hundreds of millions of people. This crisis cost developing countries $324 billion in 2007 the equivalent of three years worth of global aid. Together, the food and fuel crises have put 950 million people. (U.N.E.P Report, 2008). These crises are taking place in a changing climate, aggravating the

Challenges faced by humanity, and collectively they are severely impacting our ability to achieve the (MDG) Millennium Development Goals. Fig – 1: Overall food prices (US$) up 75% since 2000

Source: U.N.E.P Report, 2008.

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The Green Economy initiative with the sponsorship of the Governments around the world is to communicate a global plan for a green industrial revolution to be supported by strong and convincing evidence of income generated, decent jobs created, and poverty reduced through investing in a new generation of assets. The Green Economy initiative are making recommendations for greening national economies, for creating new green jobs and greening existing jobs, and for a just transition from a dirty to a green economy for enterprises and workers. The project will provide guidance to policymakers and other stakeholders on how to overcome these challenges, highlighting the important role of the government in the march towards a green economy. In addition, the project will make and communicate a strong economic case for proactive investments and active labour market policies in such areas as water, forest, soil, and marine resource management, which are key components of ecosystem management, so as to prompt the environmental causes of conflicts, disasters, and poverty. In this regard, the initiative will be closely linked to another global initiative on “The Economics of Ecosystems and Biodiversity” (TEEB).

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5.0 Conclusion:

The reality of the emerging Information Society requires that more careful attention be applied to the design of an open and accessible “Creative Economy”. Yet recent attempts to modify, for instance, the global framework for electronic commerce so that educational, cultural, and political needs can be better served, have not succeeded in shifting the global debate. Similarly, efforts to insert cultural diversity and development goals into economic development initiatives for the Internet has also fallen short of acknowledging the central creative and innovative problem of the Information Economy, including the need to apply a sharp focus on the conditions governing the production and distribution of expression. Redeeming the cultural and creative promise of an information age would require nations, acting in cooperation with social movements and public interest organizations to modify the entire body of international agreements and policies for the Information Society according to a set of fundamental principles required of a “Creative Economy”.

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