Creative Economy: A Feasible Development Option

5International trade in creative goods and services: Global trends and featuresChart 5.11(in billions of $)2520151050Performing arts: Exports, by economic group,2002, 2005 and 2008DevelopedeconomiesDevelopingeconomies2002 2005 2008tional companies. As a result, developing countries importnot only foreign music but also their own music.Asia is the developing region with better, althoughsmall, penetration in global markets for music, reflectingincreases in exports, particularly from China and India. Indiaincreased its exports from a very low level, reaching $69 millionin exports of recorded music in 2008. RegulatoryTransitioneconomiesSource: UNCTAD, based on official data reported to UN COMTRADE databaseTable 5.13Economic group and regionPerforming arts: Exports, by economicgroup and region, 2002 and 2008Value (inmillions of $)World 9,689 26,136 170Developed economies 8,947 22,539 152Europe 7,253 17,505 141United States of America 1,102 3,642 230Japan 178 940 429Canada 270 302 12Developing economies 698 3,323 376Eastern and Southeastern Asia 492 2,746 459China 168 723 330Western Asia 13 46 265Latin America and Caribbean 187 446 139Africa 6 16 163LDCs 1 20 1900SIDS - - 17Transition economies 43 274 531Source: UNCTAD, based on official data in UN COMTRADE databaseChange(%)2002 2008 2002-2008frameworks in China and India are less conducivefor penetration by the major conglomerates,and therefore have independent domesticmusic production. Singapore and the Republicof Korea have improved their export performancebetween 2002 and 2008.Surprisingly, Latin America and theCaribbean are practically absent from world marketsfor recorded music despite the great appealof their music worldwide. Mexico is the region’sleading exporter, while Argentina is a small player.Brazil is an important music producer, with alarge domestic market but with a relative timidcontribution of music exports on its trade balance,despite the fact that its famous music isplayed worldwide. This is a typical case of structuralproblems of marketing and distribution,similar to those that hamper foreign exchangeearnings from reggae and calypso music in theCaribbean (table 5.15).The case of Latin America and theCaribbean illustrates the difficulties that developingcountries face in their efforts to benefit fromthe earnings of their own music. As stated earlier,the key factors are the market structure andthe dominant position of the major conglomeratesand their business practices. Three aspectsstand out: (a) intra-firm trade between headquartersand subsidiaries, where transfer pricing mayresult in underestimation of trade figures; (b) theorigin of the cultural or creative content (most ofthe music is recorded in studios abroad, where itis published and from where it will be distributedto world markets, the international sales of thefinal product are declared elsewhere); and (c)copyrights are collected by the publisher in thecountry where the music is produced. As a result,export earnings from world sales as well as revenuesfrom royalties and copyrights are retainedabroad instead of reverting to the homeland of the singersongwriterin developing countries.African countries are absent from table 5.15, partlybecause the big conglomerates have a weak presence on thecontinent. Music production in Africa is largely independent,informal, small in scale and domestically oriented,146 CREATIVE ECONOMY REPORT 2010