The creative economy

Author:Marta-Christina Suciu
Position::Academy of Economic Studies, Bucharest

More and more of us believe that"the world evolves through innovation". According to the Nomura Institute the main eras of human civilization are: agricultural, industrial, informational and creative. Michael Porter has suggested that "as nations develop, they progress through a number of stages in terms of their characteristic competitive advantages and modes of competing". Porter considers... (see full summary)


Michael Porter has suggested that "as nations develop, they progress through a number of stages in terms of their characteristic competitive advantages and modes of competing"1

1. The age of creativity and the creative economy

Motto: "Change and innovation are the only constant features of work organizations in today's society. Successful organizations in the modern economy work under the imperative of the need constantly to be creative in what they do. Creative organizations are those which seek to be open to the world around them"

(Bob Garvey, Bill Williamson, Beyond Knowledge Management. Dialogue, creativity and the corporate curriculum, p. 109)

Creative economy is the ideas business; it asks to turn ideas into products. According to John Howkins -author of the famous work "The Creative Economy: How people make money from ideas" published in June 2001- worldwide the creative econonmy was worth about 2, 2 trillion $ in January 2000 and is growing at 5% a year. If we project this figure to 2020 at the current growth rate of 5% it can be forecast a total of $ 6, 1 trillion. In some countries, creative economy is growing faster. In United States of America the average growth rate was 14% and in UK the average growth rate was 12%. In the OECD countries the annual growth rate of creative economy through the '90s was twice that of the service sector and four times that of manufacturing. According to the World Bank the world's Gross National Product (GNP) in 1999 was $ 30,2 trillion, the creative economy represents 7,3% of the global economy2.

Creative economy is about the relationship between creativity and economics. Creativity is not new and neither is economics, but what is new is the nature and extent of the relationship between them and how they can be combined to create value and wealth.

In the Global Competitiveness Report 2000 Andrew M. Warner of Harvard University has introduced the Economic Creativity Index. Nations can link themselves to the global technology engine: by being centers of innovation themselves (innovative countries) or by facilitating technology transfer and rapid diffusion of innovation (technology-transfer countries). The Economic Creativity Index is an attempt to bring together under one measure: technology sub-index and start up sub-index. In the 2000 Economic Creativity Index, the United States ranks first, as an innovator. Finland is second, followed by Singapore (3), Luxembourg (4), Sweden (5), Israel (6), Ireland (7), the Netherlands (8), the United Kingdom (9) and Iceland (10).

In new economies there are some industries-called creative industries-where creativity is considered to be the most important raw resource and the most valuable economic product. Such industries include software, publishing, design, music, video and electronic games. More than 50% of the consumer spending is now on outputs from creative industries in G-7 countries (Ryan, 20033). This trend will be true for the middle and higher income economies of East Asia. These creative industries are called by some authors as core creative industries. The International Intellectual Property Alliance (I I PA) defines the country's core copyright industries as those that create copyright products; its categories are: film and video production, book publishing, newspaper publishing, computer software, theatre, advertising, TV, radio etc. It is estimated that these industries contributed with 3,65% of American Gross National Product (GNP) in 1997 and that during 1977-1997 they grew at 6.3% a year compared to the country's overall growth of 2,7% a year-overalll they contributed more to the American economy than almost any other industry. In table 1 there are presented the estimated size of the creative economy.


The size of the creative economy depends also on managing creativity debated in paragraph 3.

Creative industries are among the most skill intensive and IT intensive4. High skilled workers have become increasingly mobile: the workforce of the high-tech and creative industries is also looking for an urban milieu well endowed with recreational amenities and with world class education and health services. For cities & communities aspiring to become creative cities & creative communities it is clear that urban development needs creativity. Glocalization and city's diplomacy are becoming relevant today for the regional development.

As some brief conclusions we consider that:

- creative economy has an increasing role in the world economy. Its dynamics is high and more accelerated than in other sectors.

- creative industries are the most skill intensive and IT intensive.

2. Creative class & new economic geography of creativity

The key to understanding the new economic geography of creativity and its effects on economic outcomes lies in the 3T's of economic development theory: technology, talent, and tolerance. Each is a necessary but by itself insufficient condition; they have to act in synergy.

Creative Intelligence5 provides new data on issues of high importance to the future of regions. This is a joint publication between the Richard Florida Creativity Group6 and Catalytix, Inc.7 and will provide the regional indicators developed by Richard Florida and his team. It provides new data on wages and salaries for the three main sectors of the economy: the creative, manufacturing,

and service sectors. While the creative class makes up 30% of the workforce, it accounts for almost half of all wages and salaries (table 2).


Creative people, who prefer diverse places, tolerant and open to new ideas, power regional economic growth....

To continue reading