The Creative Economy: Who needs it?

ARC Centre of Excellence for Creative Industries and Innovation, Final Symposium, Brisbane, June 2014: Keynote address.

The Creative Economy: Who needs it?

Ian Hargreaves
Professor of Digital Economy, Cardiff University, Wales It is a truly great pleasure to be here, at the ARC Centre of Excellence for Creative Industries and Innovation.
I've known about QUT and the CCI for a long time and admired both the focus and the range of your work. Quite why all these remarkable things happened here in Brisbane I've never been quite so sure -it's something I aim to understand better during this short trip.
I do also have a longstanding personal link with the centre through John Hartley, your founding Dean. John was reckless enough to give me my first university job back at the turn of the millennium, when I moved out of full-time journalism to run the Centre for Journalism Studies at Cardiff University, where John was Head of School.
With hindsight, this was the beginning of my intellectual engagement with what I now think of as the creative economy: the growing space in which digitally afforded creative skills are being applied across the whole of our economy and indeed the whole of our societies. I want to talk today about the creative economy and to explain why I think it's a compelling concept for anyone concerned with the evolving shape of advanced economies, their openness to innovation and their chances of comparative success. I hope you won't mind if I begin by sketching out the historical pattern of events which led me to these thoughts. This narrative is intended to support my argument.
I have already mentioned my move, after 30 years as a journalist and editor, to the Centre for Journalism Studies. Since then, I'm afraid I haven't been entirely faithful to the towers work in Wales because the Welsh Government has no powers in that domain, which involves a framework of law hanging, like a precariously heavy chandelier, from the globally recognised Berne Convention. In Europe, IP law is determined at the European Union level, subject to certain very specific exceptions and limitations, which are optional for national governments and permitted under the doctrine of 'fair dealing.' There is a long running and still incomplete battle between those who think Europe needs a unified IP regime and those who wish to emphasise national freedoms: after more than 40 years of trying, the EU has only just this year got a unified patent regime, but copyright remains a patchwork -a fragmented digital market, which contrasts with its essentially borderless American equivalent.
I was given six months to deliver the IP review for Prime Minister Cameron, who famously launched the exercise by saying that someone had told him that under the UK's IP laws, Google would never have got started. I was supported by a secretariat from within the UK Intellectual Property Office and a small, international committee of experts. Ben Mitra-Kahn, now chief economist at IP Australia, was one of those involved in the work of the secretariat.
The review was published in May 2011, on the same day that President Sarkozy was holding a global e-summit in Paris. This was the occasion at which the President said the Internet could never be an agent of democracy if the rules governing it were not set by democratically elected governments and Google's Eric Schmidt replied that the answer to the Internet's problems lay in better technology, not more regulation -an epic tension which remains anything but resolved.
In my review, I argued that substantial reform was needed, especially in copyright, where it was clear the law was in danger of clogging up parts of the digital communications system which had nothing to do with human creativity and the need to incentivise it through copyright.
incumbents against the important need to encourage competition and the emergence of new products and services.
I don't have to tell the people in this room that these observations were not new -then or now. They were, however, and they still are, controversial. The creative industries stuck to their mantra that the only copyright reform needed was further extension of its duration (already, for the most rights holders, in excess of a century) along with intensified prosecution of illegal digital copiers.
On receipt of my review, the Cameron-Clegg Government, fairly promptly, accepted my arguments and proposed three paths of legislative action. Three years on from the review, two of these are complete, covering the rights of designers, easier access to orphan works and the regulation of collecting societies. A third tranche of reform, the most controversial and the most important, aims to establish UK exceptions to the rule of copyright, as permitted by the 'fair dealing' regime of the European Information Directive. These cover parody, education, non-commercial text and data mining, private copying, archiving and preservation, public administration and services for the disabled. If Parliament agrees to this bundle of 'statutory instruments', these changes will come into effect in June.
Whilst all this legislative activity was in train, I started to think harder about the relationship between the work I had done on creative industries and my pronouncements on intellectual property. Throughout, I had been following the work of CCI here and its UK collaborator, NESTA. I had also noted the growing adoption of the term 'creative economy' in UK policy discussions from about 2005, but could see no clear connection between this and the substance of the UK Government's policy thinking.
It is relevant here to mention other research projects which were now emerging as part of my Digital Economy work at Cardiff. One of these is a trans-disciplinary, transinstitutional Arts and Humanities Research Council project to investigate 'creative citizenship' in the UK. 2 This considers the grass-roots base of the creative economy, where individuals collaborate in countless (and economically uncounted) activities like specific forms of IP protection cannot be considered a membership criterion for the creative economy. Parts of the creative economy will thrive best with a less draconian approach to IP laws. Indeed, a too draconian approach will inhibit the emergence of new creative, digital services in areas like health and social care, just as it will inhibit more expansive data analytics.
So, we define the creative industries quite simply as: 'those sectors which specialise in the use of creative talent for commercial purposes'.
The creative economy, we define as 'those economic activities which involve the use of creative talent for commercial purposes.' Why does all of this matter so much? For the simple reason that the part of the creative economy which lies beyond the creative industries -the creative dimension of advanced manufacturing, the social media dimension of retailing or the data management involved in next generation health and social care systems -are going to mean that this part of the creative economy will grow faster, probably quite a lot faster, than the creative industries themselves; just as the new, born-digital creative industrial sector of electronic games has grown much, much faster than, say, the music industry or publishing in recent years.
It will be in this digital services and advanced manufacturing area that advanced economies will need to do well, applying creativity to service innovation and deploying other 'intangible assets' such as design quality and brand.
It is impossible, I believe, to play successfully long term in the digital, creative economy by adopting the primarily defensive tactics which have been deployed in Europe and, I believe, also here in Australia. Sectorally focused industrial strategies always run the risk of defending what we have, rather than stimulating the emergence of what we need.
By explicitly pursuing a successful creative economy, policy makers can focus upon the things that only policy-makers can achieve: to re-shape education for the creative economy's needs; to ensure the right scale and detail of investment in digital infrastructure; to advocate for an open internet in an increasingly complex global governance debate; to set fiscal rules which open R&D and financial support schemes to creative firms and projects; and to encourage spillover between the public arts and the activities of creative citizens, on the one hand, and the commercial, market-based side of the creative economy on the other. So, if I were inventing CCI today or re-inventing it, I would call it a centre for the creative economy. You have the skills, the history and the culture to deliver the thinking; I don't doubt that you also know how to be leaders in ensuring that your graduates emerge with the entrepreneurial know-how and collaboration culture, which is essential in the digital, creative economy.
But work of this kind also requires deep intellectual underpinning. Here CCI's reputation is second to none. Looking back over the slim text book which six present or former members of the CCI published a year ago, provides a simple illustration of the extent to which QUT has mastered what the book calls the 'key concepts in creative industries.' 5 The book should, however, be called: Key Concepts in Creative Economy.
Perhaps the authors agree -some of them are here, so we can find out. The book, by the way, in its section on creative industries, says that these are not seminal forces of material economic growth, but they are germinal in the role of coordinating the individual and social structure of novelty and in resetting the definition of the normal. The creative industries contribute to a process of adaptation to novelty and the facilitation of change, which by definition underpin the process of economic evolution: they are 'social network markets' (Hartley et al 2013).
Stuart Cunningham asked me yesterday over an elaborate salad bowl lunch at a selfservice joint in downtown Brisbane what influence the Nesta Manifesto for the Creative Economy has had.
Well, it has attracted a lot of attention internationally and it has been very heavily in demand as a download. It has proved very useful in creative economy discussions at the level of cities and regions. But, not least because it incorporates within it the case for reforming intellectual property law, it is also a target for the inexhaustible energy of creative industries lobbyists and their strong nexus in Parliament. So the manifesto has fierce opponents as well as friends. Doing battle with those forces should only be undertaken if you really believe in what you're doing.
At the level of the European Union, this is a problem on a very significant scale. I have been encouraged by a number of people and organisations in the EU to continue my work on IP; by Parliamentarians, parts of the European Commission and by think tanks and citizens' movements. Most recently, I have been chairing an 'expert panel' considering the legal framework (copyright and data protection) governing text and data mining. 6 This work will confirm that European researchers are being put at a serious disadvantage compared with their American counterparts. This arises, in part at least, from differences between the relatively flexible 'fair use', case law based approach of American copyright law and the more rigid, stratified legal 'fair dealing' framework used in Europe. There is no time now to elaborate further on that issue, but let me simply say that I have come to believe that the First Amendment to the American Constitution is the American digital economy's single biggest legal asset.
As the European Union prepares for Parliamentary elections next month and the appointment of a new European Commission shortly thereafter, copyright has emerged as a touchstone and divisive issue. The part of the European Commission responsible for copyright law, the Directorate General for Internal Markets (DG Markets) launched a nervous consultation on copyright reform before Christmas, then extended the deadline against a massive tide of inputs -over 11,000 at the last count.
It is clear from its actions so far, that DG Markets believes that the problems with copyright can be solved entirely by improving licensing procedures. Now, I'm a big fan of improved licensing procedures, having recommended the creation of a Digital Copyright Exchange for the UK in my review, but I don't believe licensing is the entire answer.
Brussels has, in truth, managed to split itself on these issues, with officials and politicians on one side focused upon the need to preserve, as they see it, the protection of European cultures said to be afforded by the current copyright regime and those on the other side who believe, as I do, that without a unified or 'single' digital market, and a copyright law re-framed to fulfil its core purpose, Europe will inevitably fail to thrive in the next phase of the digital age, as it has failed to thrive in the last. 6 Hargreaves et al (2014). Text and Data Mining; report from the expert group. Brussels, European Commission Directorate General for Research and Innovation.