Creative Economy: A Feasible Development Option

5International trade in creative goods and services: Global trends and featuresthe resale of original art works in public auctions. Someargue that the Berne Convention for the Protection ofLiterary and Artistic Works should be reviewed, so thatpainters, sculptors and their heirs can draw royalties whentheir work is sold. Within the European Union a debate hasarisen about whether EU directives on the resale rights ofliving or dead contemporary artists approved in 2001 shouldbe amended — and if so, whether any new legislation shouldprotect the interests of the artists and their heirs or those ofcommercial dealers and buyers. 20International tradeThe real art market is a multi-billion dollar businesscharacterized by lack of transparency, fierce competition andpotential for tremendous commercial gain. The largest publicmarketplace are the auction houses, which rarely discloseterms of sales such as reserve prices or commission agreementsand which routinely withhold the identities of somesellers and nearly all buyers. For instance, auctioneers’ commissionscan reach up to 20 per cent on each end of the winningbid, far greater than the standard fees for buying or sellingstocks. 21 Transparency is even more rare at art galleries,where private sales rely heavily on insider information passedamong dealers and favoured collectors. Gallery sales are seldomreported publicly, making it difficult to estimate awork’s ultimate rate of return. Moreover, the art world islightly regulated, and no licenses are required to opena gallery.The largest markets for fine and contemporary arts areNew York, London, Geneva/Basel, Berlin, Paris and HongKong. For the reasons stated above, the trade analysis presentedin this report is partial and unable to entirely reflectthe huge economic contribution of the global market ofvisual arts to the world economy. For instance, according toa study published in 2010 by Arts Economics, the British artmarket in 2009 directly supported about 60,000 jobs, andan additional 66,000 indirect jobs, generating $11.7 billionin art sales and substantial tax revenues. In developing countries,the visual arts sector is led by individual initiatives andentrepreneurship with minimal intervention of governments,unwritten rules and predominance of informal norms andbusiness practices; in most cases the sector is unregulated andundocumented. Because most art sales take place in galleries,framing stores or even flea markets, these intermediaries tendto benefit more than the artists, whose income is unpredictable.Few contemporary artists from the South receiveinvitations from international biennales. The visual arts sectoralso suffers from a shortage of art galleries and insufficienteconomic and infrastructural support.Global art markets have soared in recent years. Worldtrade in visual arts jumped from $15 billion in 2002 to $30billion in 2008, driven by sales of both contemporary artand antiques. This translates to an average annual growth rateof 12.8 per cent and accounts for 5 per cent of total exportsof creative goods.The export value of paintings increased from $6.3 billionin 2002 to $15 billion 2008. Second was sculpture,both traditional ornamental articles and three-dimensionalworks of contemporary art, whose exports reached $9 billionin 2008 — half of it originating in developingeconomies. The market for antiques grew from $2.2 billionin 2002 to $3.2 billion in 2008, when developed economiescommanded 86 per cent of the global market. Photographyexports climbed to $2.5 billion in 2008, with developingeconomies increasing their share from 8 per cent in 2002 to17 per cent. These official data are certainly underestimatedsince they fail to capture the informal sales of paintings thattake place in flea markets for tourists in developing countries.For detailed data on the trade flows of visual-arts products,see tables 1.2.A and 1.2.B of the annex.Key players in global marketsDeveloped economies continued to dominate the marketfor visual arts, and their market share remained relativelystable at around 77 per cent during the period 2002-2008.Antiques were the main item exported and imported. Withregard to paintings, developed economies were net importersof works from developing economies. The key players in theglobal market for arts were the United States and the UnitedKingdom, which together accounted for 47 per cent of internationalsales, as shown in table 5.16. London and New Yorkare major hubs for artwork transactions, followed by Paris,Berlin, Geneva and Tokyo. These cities are typical examplesof the spillovers of the creative economy, where cultural andtrade objectives are intertwined to reinvigorate socio-economicgrowth. Moreover, they encompass the concept of“creative cities” as elaborated in chapter 1.For developing economies, the situation is morenuanced. While their total exports of visual arts increased20 Betts (2010).21 Crow (2008).148 CREATIVE ECONOMY REPORT 2010