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CONTENTS
 Economics Growth and Development Employment and Entrepreneurship
Media Entertainment and Information

The Potential of the Creative Economy

An Economic Sector to Support the Realization of Inclusive Economic
Opportunities and Social Cohesion

Stefan Hajkowicz, Commonwealth Scientific and Industrial Research

Organisation (CSIRO)

The creative economy is an underappreciated bright spot of the global economy. The sector continued to
expand even during the recent economic crisis and could grow significantly more as technology
advances and incomes increase in emerging countries. Such a development could help reduce youth
unemployment and poverty, as creative services generate financial returns with minimal production and
distribution costs, thereby lowering the barriers to entry into the global economy. Furthermore, creative
services could act as an engine of understanding, cooperation and trust between cultures, in much the
same way as tourism and trade have historically improved cross-cultural relations. Governments,
companies and communities have to find effective ways to ensure that the creative economy’s growth
realizes its full potential so as to increase the resulting economic opportunities and social cohesion.
 

Creative services continued to grow even during the recent global financial and Share this page:

economic crisis, and could grow significantly more as technology advances and
 50  71
incomes increase in emerging economies. Creative services are important as they
generate financial returns with minimal production and distribution costs, help
 17  0
people escape poverty, and bolster cross-cultural exchange and understanding.
How can we best ensure they serve these functions?

Author
Creative services are an underappreciated bright spot of the global economy.
There is no commonly accepted definition of creative services or the creative
economy, terms often used interchangeably; however, according to the definition
adopted by the United Nations – which understands it to include arts and crafts,
books, graphic and interior design works, fashion, films, music, new media, printed
media, visual and audiovisuals – world trade in creative services more than
10
doubled in a decade to reach a record total of $624 billion in 2011.
 
10
Stefan Hajkowicz
Their growth is fastest in developing countries. In the decade to 2011, exports of
Principal Scientist in Strategic
creative services grew by an average of 12.1% in emerging economies, compared
11 Foresight, Commonwealth
with a global average of 8.8%. Creative services appear to be decoupled
Scientific and Industrial
from the rest of the economy, in that they grew strongly during the global
Research Organisation (CSIRO)
financial and economic crisis of 2008 when many other sectors contracted: in that
period, international trade contracted by 12%, while creative services trade
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6/9/2015 Global Strategic Foresight Community - Reports - World Economic Forum
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continued to grow at an average rate of 14% per annum worldwide. This strong Disclaimer
performance resulted from: (a) rapid income growth in developing countries; (b) the
All opinions expressed herein are those
transition of emerging economies into a services-sector phase; and (c) the rise of of the authors. The World Economic
Forum provides an independent and
ICT. impartial platform dedicated to
generating debate around the key
topics that shape global, regional and
11 12
industry agendas.

Current and future demand for creative services can be explained by the
growth in internet usage and the increase in disposable income. There is room
for further growth as hundreds of millions more people start using the internet. Highlight
13
According to the World Bank, in low-income and middle-income countries –
Creative services are an
where the bulk of humanity resides – only 30% of people use the internet,
underappreciated bright spot
compared with 81% in high-income countries. From 2012 to 2013 alone, an
of the global economy
additional 176 million people in low-income and middle-income countries started
using the internet for the first time – a 12% increase on the previous year. 
13
As more people come online, they also have more to spend online. In 1960, the
average global income was $455 per person per year in current dollars. In 2012, it
was $10,206 per person. Forecasts suggest it could reach $44,000 by 2060, with
14
the same purchasing power as today’s dollar.

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The growth of the internet as a distribution channel and a tool for
collaboration also explains the increasing supply of creative services. Digital
technology allows a creative product to be reproduced and delivered to a
customer at zero marginal cost. As technology improves, so too does our ability to
design, produce and distribute creative services tailored to meet individual
preferences en masse. Future developments in communications technology – from
telepresence systems to virtual reality, voice recognition and artificial intelligence –
are likely to further expand the creative economy by enabling the evolution of
entirely new kinds of creative services. 

The development of the creative services market could assist in the

alleviation of some major global challenges, such as youth unemployment
and poverty reduction. Virtual goods can be produced and distributed at a low
cost compared with other industries – often all that is required to successfully
become part of the global economy is an internet connection and a good idea. 3D
printers will increasingly lower production and distribution costs of physical as well
as virtual goods by allowing an object of just about any shape to be constructed
quickly and cheaply on demand. It will no longer be necessary to own a factory, a
wholesale warehouse or distribution mechanisms to capture value in
manufacturing – anyone with creative design abilities will be able to do so, further
lowering the barriers to entry into the global economy.

Highlight

Creative services will change

the way the world economy
works

Creative services could also play a bridging role across societies and
humankind in a world which looks increasingly fragmented. Creative services
could be an engine of understanding, cooperation and trust between cultures.
Exchanges enabled by tourism and trade have historically improved cross-cultural
relations. Can we find ways to increase the likelihood that virtual as well as physical
cross-cultural exchanges and trade in creative goods and services will have the
same effect?

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6/9/2015 Global Strategic Foresight Community - Reports - World Economic Forum
The creative economy could have a transformative and positive effect on
social cohesion and economic growth – if we can find ways to catalyse it. So
how can we foster the full potential of its growth? From regulatory environments to
awareness creation and investment in education and infrastructure, what are the
most effective ways in which governments, companies and communities can
create a platform for the creative economy to grow?

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