Creative Economy: A Feasible Development Option

tries to the benefits of growth in the global creative economyhas been limited at best. Indeed, there is a danger thatwhen these countries are brought into international marketnetworks, they will be relegated to the lowest value-addingstages in the value chain.8.5.1 The creative nexus modelFigure 8.3The creative nexus: The C-ITET modelC-ITET = Creative Investment Technology Entrepreneurship TradeTechnologyInvestmentSource: UNCTAD (Dos Santos, 2007).Creative NexusEntrepreneurshipTradeAgainst this background, the UNCTAD secretariathas been shaping an economic model to assist developingcountries to optimize trade and development gains from thecreative economy. The basic premise is the recognition thattrade plays an increasing role in promoting socio-economicgrowth, employment and development. Trade alone, however,is an insufficient condition for strengthening creativecapacities. The contribution of domestic and foreign directinvestment to capital formation is essential to induce technology-led,as well as soft innovation, artistic creativity andtechnical inventiveness. In addition, creative entrepreneurshipcan provide the basis for well-adapted and result-orientedmarket strategies.Furthermore, in order to positively influence exportperformance while enhancing creative capacities, effectivecross-cutting mechanisms should aim at strengthening institutionaland regulatory instruments, particularly to supportintellectual property regimes, competition law and fiscalpolicies. Such a framework can facilitate the following: betteraccess to financing, including microcredit for independentcreative workers and microenterprises; the formation ofcreative clusters for sharing know-how and infrastructurefacilities; investment promotion and public-private partnerships;greater efficiency in the functioning of networks oflocal creative firms; and increased competitiveness of creativeproducts and services in global markets. In this schema,tailor-made capacity-building activities to improve entrepreneurialskills and trade and investment-related policies arehighly recommended.The conceptual approach of this scheme is inspired byongoing policy-oriented research in areas of competence ofUNCTAD. 1 The model is in its embryonic stage, still requiringempirical analysis with a view to capture how the economicand technological spillovers interact or, in otherwords, how the so-called “positive externalities” may occurin practice. It should also be recalled that creative industriescomprise a vast and heterogeneous group of firms with distinctand usually flexible organizational structures specific toeach creative sector (see chapter 3). The model is still a set oftestable propositions requiring practical application to provideevidence and validate these assumptions. Indeed, todate, there is insufficient evidence about the impact of thecreative industries on the wider economy, particularly theirspillovers into other segments of the economy. 2In this scenario, a pragmatic way to nurture creativecapacities is to lay the foundation for putting in place a creativenexus. The starting point is to reinforce thenexus between creative investments, technology,entrepreneurship and trade, which is named theC-ITET model (see figure 8.3). The rationale isthat effective public policies are likely to stimulateprivate-sector investments, attracting technologiesand therefore leading to export-led strategies forcreative-industry firms. These in turn would leadto greater convergence between macro and micropolicies as a result of better synergy among governmentinterventions and business initiatives byenterprises, including by providing incentives forinvestments and mobilization of domesticresources. Sequenced and mutually supportivemechanisms would provoke a virtuous circle tooptimize the impact of target investments in themost competitive creative industries, identified by8Policy strategies for the creative industries1In July 2007, the Secretary-General of UNCTAD set up the Ad Hoc Inter-divisional Task-Force on Creative Economy and Industries with a view to building on in-house expertisein the multifaceted aspects of the creative economy, such as development policies, trade, investment, technology and enterprise development.2Frontier Economics (2007).CREATIVE ECONOMY REPORT 2010225