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Study for Theme 1: "Culture as an Engine for Economic Growth, Employment and Development"
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IndEX
Introduction ...... ………………1
- CULTURE AS AN ECONOMIC SECTOR …...... ………………1
- Status of current relationships between culture and economics ...... ……………..1
- Culture, growth, and employment ...... ……………..4
- Towards a broader vision: culture and development ...... ……………10
- POLICY ISSUES ……...... ……………14
- CONCLUSIONS ...... …………….19
BIBLIOGRAPHY ...... ………………………...23
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CULTURE AS AN ENGINE FOR ECONOMIC GROWTH, EMPLOYMENT AND DEVELOPMENT[1]
Introduction
Studies and policies in the Hemisphere have for many years addressed the relationship between culture and economics. However, this relationship has taken different forms in different countries and regions. Furthermore, initially, studies took a sociological or, in any case, theoretical, approach. It is only relatively recently that the cultural sector has been formally studied from the perspective of economics and statistics. Therefore, only now is a framework being created of economic structures for the Hemisphere’s cultural sector. And, for the same reason, only for the last 10-15 has there been discussion of pertinent policies to address the cultural sector as one generating significant dynamics from an economic perspective. This document seeks to provide a regional vision of culture as an economic sector, emphasizing today’s crucial topics, rather than constitute an exhaustive list of all specific interrelationships between culture and economics.
This document contains two sections. The first discusses the cultural sector from an economic perspective. After briefly reviewing the relationships between the concepts of culture and economics, it proposes a definition of “cultural sector,” used throughout the document. Then, based on recent statistical and analytical studies in the Hemisphere, it examines the relationship between culture, economic growth, and employment. This analysis provides an overview of the contribution of the cultural sector at the economic level, and is more a synopsis than a comparative study, as the data identified is not fully uniform. Section I concludes with a discussion of the cultural sector from the broader and more complex perspective of development.
Section II suggests some economic and social policy themes for the cultural sector, with two aims: first, to facilitate further growth of cultural sector production and employment, and secondly and especially, to recognize the specific characteristics of cultural sectors and markets in order to propose key aspects where policy is called upon to play an essential part in creating diverse and equitable cultural development. At the end of the document, conclusions are drawn.
Section I: Culture as a economic sector
- Status of current relationships between culture and economics
Culture is the human endeavor that par excellence produces feelings and imaginaries in society. It also reinforces the feeling of identity and citizenship. From the start, this concept supposes certain specificities in the American continent: the co-existence of cultural manifestations close to, what we can define as, traditional culture, which is product of a multiplicity of ethnic groups and subcultures that has participated in the construction of the identity and history of the region; and the manifestations closer to what we can define as modern culture or, further more, as industrial culture, which is also a characteristic of the contemporary continental culture. The sustainability of these cultural manifestations without exception is then, the inevitable guarantee of multiethnic and pluricultural society.
Some of the activities related to culture generate, additionally, an analogous economic impact to the one produced by other sectors of the economy. In one word, culture is, besides an indispensable element for social cohesion and the reconstruction of an identity, an economic sector equally or even more important than any other productive sector of society. The economic transactions that take place in the deepest heart of culture generate positive economic effects such as learning and knowledge. That is, the cultural sector contributes to development from the social and identity sectors, such as from the economic ones.
Culture and economics as disciplines have engaged in dialogue for only a relatively short time. A first approach to the economics of culture was developed in the United States in the 1960s. Studies based on this approach noted two main issues: legitimacy of state intervention in the cultural sector; and efficient utilization of public funds by their beneficiary entities (Farchy, 1994; Heilbrun, 2001). The topics of such studies range from arts in the Anglo-Saxon sense (inter alia, theatre arts, painting, sculpture, museums, and heritage) to what used to be considered “high” culture. From that perspective, everything not covered by this definition remained in the hands of the market and was, therefore, a matter for industrial economic analysis.
A second approach to cultural economics began to be developed in the late 1970s/early 1980s, when cutbacks in European governmental budgets led to a re-examination of the role of public expenditure in the cultural sector. In a context of economic crisis, expenditure priorities had to be assigned in order to stimulate the most productive sectors. In that context, the then-French Minister of Culture, J. Lang, made two points: first, he noted the many instances where the cultural sector had made the transition from subsidy to generation of employment and added value. Secondly, he asserted that support for cultural creation should not be provided at the expense of sound management and then, among cultural policy priorities, assigned priority to that criterion.
To demonstrate that the cultural sector generated growth and employment, it became necessary to look beyond an examination of “high” culture. This was the point where cultural industries became the focus of cultural policy concerns. Statistics and statistical analyses began appear that focused attention on previously peripheral cultural forms, such as rock concerts, jazz recordings, and television - in general, all forms of creative expression that could be mass produced. The findings were that cultural industries not only generated considerable added value and conveyed traditional art content, providing them with fresh support, but that, above all, signified a true revolution in the way in which the general public experienced culture. From that perspective, public cultural expenditure would find new objects, ones much better withstanding the economic cost-benefit test.
The strengths but also the weaknesses of these two concepts of culture have been generating a new approach to the economics of culture. Although early studies contributed pertinent elements for analysis of public investment in the cultural sector, they omitted the maze of cultural industries, and their impact on economic growth and on the way in which the public experienced new cultural manifestations. For its part, the point made regarding the important additional contribution of cultural industries to the productive system implied that cultural policy actions needed to cover a broader spectrum, but said nothing further regarding the survival capability of forms that did not necessarily find a market niche. Finally, the realities of a continent such as the American continent, where the development of the cultural industry have not entail the destruction of traditional cultures, although it has entail its transformation and rearrangement, sets a challenge in the conception of culture from a mere cultural industry stand point. The evidence of the production of culture from an industrial level cannot leave behind other sectors that have manage to subsist and readapt in this specific modernity of our continent, such as the hand crafted art or the immense intangible heritage generated by customs and knowledge particular to our richness and multiplicity of ethnic groups and cultures.
We now needed to take a fresh look at the economics of culture. Increasingly, studies conducted worldwide, including some very recent studies in the Americas, have shown that trade liberalization and investment on a global scale as the necessary consequences of economic globalization have led to tremendous development of cultural industries. But it is also true that, in this same context, heterodox market structures have been established in which transnational media oligopolies occupy increasingly large segments of the world cultural market, while at the same time occupying a large segment of the chain linking the creator to the public. To that extent, what circulates on the globalized cultural market and what does not is, for the most part, decided by such groups. Or, put otherwise, cultural manifestations that are not profitable for the conglomerates will not be placed on the global market. In any case, this vision of the economy of culture concludes that the diversity of cultural expression is on stake as long as what the market favors is not inevitably bonded with the multiplicity of the cultural production of independent actors, ethnic groups or countless cultures.
In addition, this new approach has sought to describe in detail from a sociological standpoint the production and consumption processes for cultural industry products. Broadly speaking, the sociological vision has shown that trade in such markets obscures the true dynamics of the change in the conception of the societal arena. In fact, according to these studies, what we today understand as citizenship and identity is unquestionably reshaped by the vast amount of content that cultural industries provide.
Incorporation of these two elements, the economic and the sociological, has proven a real challenge for cultural policy. Such policy must, on the one hand, seek to develop cultural industries and, on the other, to ensure that the public has equal access to the greatest possible variety and quality of cultural content. In a context of convergence of the production and marketing of such products, states are confronted with the dilemma of intervention in cultural markets. This decision is particularly difficult in a context in which it is rather difficult to maintain the traditional balance between efficiency and equity.
For all the above, what is understood as cultural sector have being growing to the point that it now includes the cultural industries, but it has not set aside the manifestations that exists in the verge of mass and traditional production. The universe that encompasses cultural activities is therefore quite ample: “from the expressions of folklore, the popular culture and the culture of the media, to manifestations of culture of the “elite” or “Fine Arts” and historical heritage. The economic manifestations that belong to this typology are also ample. Some are developed in the market, others are subsidized, and others sponsored by patrons; in many cases, the motivations of the creators are not necessarily driven on by profit incentives and thus does not necessarily participate in the economic dynamisms of supply and demand where the price is the result of the economic value. Regardless if cultural activities are part or not of the market, they have economic dimensions because they presuppose the use of resources as any other economic activity” (Colombian Ministry of Culture, Convenio Andrés Bello, 2003).
For these reasons, the concept of cultural sector is being broadened to include the concept of cultural industry. To paraphrase the economic impact study on Colombian cultural industries (Ministry of Culture of Colombia, Andrés Bello Convention, 2003), we may employ the UNESCO definition of cultural industry. In that definition, cultural industries have the following characteristics:
•Their raw material is a creation protected by copyright and set on a tangible or electronic support;
•Their products are mass produced and preserved, and distributed on a massive scale;
•They have their own processes of production, circulation, and social appropriation;
•They are organized based on the logics of markets and marketing, or have the potential to be so;
•They are places for the integration and production of social imageries, development of identity, and promotion of citizenship.
This definition fully acknowledges the inherently economic nature of cultural industries in the context of a globalized market, but at the same time has the virtue of taking account of the part they play in affirming and defining citizen cultural identity. For that reason, the analysis made in this study will prefer this definition.
However, this study will not ignore everything that economics as an analytical framework has to say regarding the allocation of public expenditure to other cultural manifestations not mass produced, such as theatre arts, the art crafts or museums – for one essential reason: it is now virtually impossible to separate “high” from “low” culture at a time when the ties between cultural industries and traditional arts are growing closer than ever. The theatre arts are an advertising showcase for recorded music. The art craft’s production is starting to be reproduced massively. The sale of mass produced products is a source of museum financing. In general, any unrepeatable creation may be packaged and reproduced on industrial scale. All this makes it possible to formulate a rather rich and truly complex concept of the economics of culture.
- Culture, growth, and employment
Owing to the increasing importance of cultural industries on the cultural agenda of many of the countries of the Americas, studies of varying depth and different scopes have been conducted to measure the economic impact of such industries on national economies. Such studies take widely different approaches and the contributions they claim may be summarized as follows:
•Generation of common economic concepts among heterogeneous cultural sectors for the purpose of analysis, comparison, and overall interpretation;
•Measurement of the economic impact of culture using variables such as: impact on GDP, copyright payments, production, sales, exports, imports, employment, and piracy;
•A better understanding of the structure of supply and demand, i.e., identification of the structure of the different cultural markets. Specifically, seeking to identify suppliers and demanders and to understand the structure of the chain linking the two (in particular, raw materials, distribution, concentration of ownership of the factors of production, and capital flows, etc.)
•At attempt to ascertain the specific particularities of cultural employment that define it and differentiating it from other industries. For example, wages paid for cultural activities are compared with those paid in other sectors; cultural workers are categorized on the basis of whether they work a full workday or must finance their activity working half-time in another sector; calculations are made of compensation levels in relation to years of training; assessment of whether there is genuine attraction to risk on the part of workers who decide to carry out a cultural activity, as their income will be more irregular than that of other workers.
•Demonstration that culture many times is not an activity without economic viability, but instead may be viable. In that connection, an attempt to raise awareness of and to discuss the cultural sector at the macroeconomic level. Specifically, an attempt compare the contribution of the cultural sector to GDP and employment as compared with the contribution of other economic sectors. This is done taking a statistical (at a given time) or dynamic approach (by considering and comparing the rate of growth of GDP and employment of the cultural sector over time ??? as compared with those rates in other sectors and in the economy in general).
•In view of the foregoing, such studies also suggest a policy objective, as their findings provide justification for more decisive state intervention in the cultural sector. “This means that new mechanisms and negotiating arguments for obtaining budgetary resources must be available which, on the one hand, are in keeping with the economic contribution made by the sector and, on the other, meet at least two key objectives: subsidization and co-financing of all cultural activities that are not marketable and do not generate economic benefits, but do generate social benefits and to promote industrial processes of undeniable importance for the country’s economic and cultural development” (Ministry of Culture of Colombia, Andrés Bello Convention, 2003: 26).
•(While not mentioning all topics discussed in such studies), lastly, an attempt to ensure that in understanding the economic dynamics, a much more precise concept is formulated of the processes of formation of social imaginaries, identity, and changes in perception of the meaning of citizenship, all of which is channeled through cultural industries.
This series of studies, although far from covering all countries of the region, can provide general indications of the capability of the cultural sector to generate economic growth and employment. Most studies have also sought to provide a more complex vision of the economics of the cultural sector in an analysis that takes account of every subsector or sub-industry of the global cultural industry. Although in this section we use this subsectoral analysis only to explain the overall sector growth, in Section II we will address the issues of each sector of the cultural industry by making policy suggestions.
It would be hazardous to make a comparative table of the findings of the studies consulted, for three main reasons. The first is that not all studies use the same methodologies. More than one method in fact exists to evaluate the contribution of an economic sector to the growth of gross domestic product and national employment. Secondly, the cultural sectors included in the calculations usually vary from one country to another, depending on what each study deems pertinent to include as a cultural industry or, an equally determinant factor, depending on political concerns. In addition, the productive subsector breakdowns used in national accounting statistics vary from one country to another, meaning that the information for some sectors is at times inconsistent or incomplete. Lastly, each study provides results for a specific year or period, which rarely coincide with periods used in other studies. Accordingly, it must be said that the table below needs to be viewed more as a summary than as a comparative framework. Only very general conclusions should then be drawn based on this summary, and useless rankings of countries should not be attempted.