LuxeMag

A Case for the Creative and Cultural Economies

Published on 24th March 2014

Just two months ago in January 2014, the world witnessed one of the most admired heads of states of our time Park Geun-Hye of South Korea make an unprecedented case for the creative and cultural economies. The occasion was the annual World Economic Forum held annually in Davos, which gathers world leaders, the most influential business and financial frontrunners, economists, innovators, veterans of industries, thinkers and just about anyone who plays a major role in shaping the future path of our world.

At such a gathering, it is normal to expect to hear these world influencers intelligently tump up their ideas and vision for re-shaping the world, with the occasional self and country promotion thrown in. However one of the surprises of this year’s forum was listening to the South Korean President speak for nearly one hour on the fundamental role of the creative and cultural economies in defining a new paradigm for the world economy post-recession. Yes, you heard right, the creative and cultural industries; the same sectors that have consistently been dismissed as trivial, inconsequential and oriented towards vanities that the world could do better without.

In President Park’s words, “since the industrial revolution, the health, wealth and happiness of nations and individuals were marked by a material divide. Recently this has given way to a digital divide. The future will be marked by a creative divide. What we need is nothing short of a paradigm shift. What we now needurgently is an engine that takes us beyond these constraints, one that transforms the existing order and helps re-shape the world. Korea is seeking that engine in the creative economy.”

She went on to highlight Korea’s roadmap for attaining economic sustainability through a confluence of the creative and cultural economies, stating that “Whereas existing economies have focused on extracting mineral resources from the ground, creative economies seek to tap into the creativity of the human mind. We in Korea believe that the only way of solving our problems is to creatively innovate our way out of it, hence our pursuit for our creative economy vision as our new paradigm for driving our economy forward.”

These assertions couldn’t be truer particularly in the new post-recession world order, which requires creativity, culture and innovation to feed its emerging path towards sustainable growth. But what do we really mean by the creative and cultural economies and how do we define its sphere of influence?

For the sake of clarity, the creative and cultural industries are those sectors that exist and flourish on the output of imaginative minds often inspired by an original artistic vision and cultural references; and expressed through tangible outputs such as products, some of which also have innovative features. These appealing products whether clothing, leather goods, accessories, beauty, fragrance, timepieces, jewellery, champagne, cognac or rare whiskies all make up an economic sector that form a crucial engine of economic growth. Luxury being an integral part of this industry plays a central role in its character, structure and impact. And now that the creative and cultural sectors are finally receiving their due recognition on the world stage, it is worthwhile to look at their impact across different markets and to decipher their potential role worldwide.

As a major economic contributor to Europe, the luxury industry is also increasingly receiving its due regard by the EU, which recently recognized the sector as a key driver of sustainable growth and a significantcontributor to Europe’s economic health, competitiveness, creativity, innovation, employment and export. The European luxury industry which produces majority of the world’s most renowned luxury brands, accounts for more than €170 billion of the worldwide luxury goods consumption and employs more than one million people directly and indirectly. Also European brands account for about 75% of the worldwide luxury market and among the top 25 worldwide luxury companies, 17 are from the European Union.The EU has also gone further to form the European Cultural and Creative Industries Alliance (ECCIA), which comprises the five major European luxury goods and creative industries organizations from France, Italy, U.K., Spain and Germany. The alliance works with the EU through playing the role of a high level advisory board on competitiveness for luxury brands, among others; and is responsible for formulating sustainable business models, driving innovation and ensuring the excellence of the European creative industry.

France, which is the provenance of about 25% of all international luxury companies, generates €16.8 billion annually from luxury. The country has thriving sectors in the manufacture and distribution of leather goods, clothing, fine jewellery, beauty, fine wines and spirits, among others. The luxury hospitality sector is also a key driver of employment and economic revenue for the country, with tourist pending accounting for 60% of all luxury purchases in France.

The creative and cultural industries have also garnered interest in other regions. In keeping with the pace of development in the West, several countries in the Middle East have embarked on creating different platforms that aim to transform the creative and knowledge economies into valuable economic contributors. In line with this, Dubai has witnessed the creation of Fashion Forward, a platforms that aims to highlight, strengthen, inspire and nurture the creative and cultural industries in the Middle East. Similar initiatives that offer a resounding voice to the creative economies continue to emerge in the four corners of the world, from Jakarta, which has welcomed the U.K.’s Center For Fashion Entreprise; Australia, through the Melbourne Fashion Festival, South Africa through the Southern African Luxury Association and several others too numerous to mention.

It is clear that despite the uncertain economic prospects in the West, which has been until now the unchallenged provenance of the creative and cultural industries, the demand for products from these sectors will continue to rise thereby fuelling more sustainable economic contributions; and the need for consolidated platforms where the creative and cultural industries may thrive.

Image 1  : www.vancleefarpels.com

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