Introduction
The creative economy is a crucial contributor to a country’s gross domestic product (GDP). UNESCO (2018) estimates that the creative industry accounts for $2.25 trillion global GDPs and exports of more than $250 billion while creating employment for over 30 million people. This economic impact has led nation-states to invest in their creative economies as ways of boosting their GDPs. The Saudi government has implemented numerous measures geared towards improving its creative industries for global performance. The international economy of creative industries has mostly been driven by the US and UK because of the growth drivers that have favored the economic prowess of these countries. However, the internet, government support, and cultural diversity have intersected with technology in China and other emerging economies for a significant share of the global export of innovative products. This paper examines the international economy of creative industries and incorporates the Saudi creative industries to analyze their performance in a shifting global environment.
The International Economy of Creative Industries
Growth Drivers
Open and Tolerant Cultural Environments
Culture is an invaluable tool for the growth and proliferation of the creative industry. More open and tolerant cultures are conducive environments for creativity (Li et al., 2016). Ideally, societies that tend to be more receptive to new cultures, races, minorities, and immigrants tend to be more culturally open and tolerant. Cultural tolerance is a critical factor in the region’s ability to attract, retain, and mobilize creative talent (Martinaitytė & Kregždaitė, 2015). Culturally tolerant places open themselves up for new ideas, technology, and creative talent that would unlock the untapped creative potential in that place, broadening the scope of creativity that would eventually widen the creative sector’s market boundaries. The global growth of the creative industry in the US and the UK is positively correlated with cultural openness and tolerance (Martinaitytė & Kregždaitė, 2015). This openness is demonstrated in their respective foreign policies that have seen them receptive to cultural diversities, allowing them to open their geopolitical borders for international exchange.
Cultural openness and tolerance have been the most significant source of growth for global economies with large creative industries. Brown et al. (2016) report that London is one of the most ethnically diverse cities globally, with over 300 languages being spoken. This diversity allowed the city to grow its creative industry by 9.4% in 2012, a growth that was six times that of the entire economy (Li et al., 2016). Realizing the net economic value of the creative sector, China has also created a culturally tolerant country that is receptive to immigrants and other new cultures. According to Li et al. (2016), Taiwan experienced annual growth of 7.7% in 2008 from cultural tolerance. The strengthening of its cultural tolerance has the Chinese creative goods exports becoming four times that of the US in 2015, totaling $168.5 billion (United Nations, 2018). Cultural tolerance and openness are a significant driver of global economic growth because it attracts talented and creative people worldwide, allowing the host country to broaden its technology and talent capabilities for financial leverage.
Education/Training
Individual creative or innovative behavior is strongly related to their education and training. Education is needed to transform creativity and imaginative ideas into meaningful products and services with commercial value (Martinaitytė & Kregždaitė, 2015). Ideally, creative individuals need the right skills and competencies to convert their conceptualizations into viable ideas that can be developed and implemented for commercial success (Santoso, 2017). While these creators could be having vague creative concepts, it takes the right skills and methodology to make that concept a reality. Because of this aspect, training institutions are crucial in molding and sustaining innovative behavior in the creative industry. Brown et al. (2016) acknowledge that education institutions are vital in providing a steady stream of diverse, highly skilled workers that accelerate the intersection of talent, research, and technology to develop innovative products and services. This aspect implies that education and training are crucial growth drivers in the creative industry.
Mature and advanced economies have elaborate and diverse education and training for the growth of their creative industries. The US and the UK have globally prestigious colleges and universities for developing individual talent and capabilities. These institutions teach students to use imagination and critical thinking in creating new and meaningful forms of ideas while allowing risk-taking, independence, and flexibility. The presence of these institutions could account for the US and UK experience creative growths of 14% and 12%, respectively (Li et al., 2016). China appears to closely follow the US and UK’s heels with its equally prestigious institutions in Beijing and Shanghai. Beijing, for instance, has many design schools, and more than 30,000 enrolled students (Brown et al., 2016). This proliferation of education and training hubs could suffice the reason for the unprecedented Chinese growth the creative sector by 14% from 2002 to 2015 (United Nations, 2018). The establishment of China’s Silicon Valley in Shenzhen has helped the country tap vast technological talents and human capital.
Infrastructure
Infrastructural development is positively correlated with the growth of the creative industry. Brown et al. (2016) found a strong correlation between access to infrastructure and the creative industries’ proliferation. Creative economies thrive more in denser, diverse, and talent-driven urban centers than suburban centers. For example, San Francisco Bay Area in the US has a comprehensive food economy with about 39 restaurants per 10,000 inhabitants with numerous creative academic institutions and good local amenities that have grown the region’s population from 4.6 million in 1970 to more than 8.5 million currently (Brown et al., 2016). Similarly, in Beijing, the city’s 30 creative clusters that span an art zone and a creative village housing the world’s most considerable painter’s village are significant infrastructures that have seen the city’s creativity economy grow by 9.1% from 2012-2013 (Brown et al., 2016). This growth could be attributed to the creative hub’s clustered order that allows creative interdependencies, local networking, and input sharing.
Government Support
Governments have been linked to the growth of creative economies. Governments are crucial in creating cultural openness and tolerance that drive traffic of creative talent and capabilities and technology required to produce innovative content. Ideally, governments provide incentives and the necessary support services to invest in the creative economy (Brown et al., 2016). Government support occurs mainly through regulatory tools and infrastructural development that control the operations of the creative industry.
For example, the Argentine government in 2008 established the “Creative District Initiative” that combines urban regeneration and tax incentives in Buenos Aires (Brown et al., 2016). This initiative has allowed Buenos Aires to experience 12000 to 14000 new creative institutions each year, a development that has seen the city’s GDP grow by 9.3% (Martinaitytė & Kregždaitė, 2015). In China, the government leads in policy development and infrastructural support through direct and indirect funding that has seen cities like Beijing, Taiwan, and Shanghai register incredible growth in the trade of creative and cultural products (United Nations, 2018). The United Nations (2018) reports that China realized an annual average growth of 14% in its creative export from 2002 to 2015, a phenomenon that allowed it to achieve the highest creative export trade surplus at $154 billion in 2015.
Technology Enablers
Digitization is regarded as one of the most significant contributors to the growth in the creative industry. Technology enablers are usually anchored on the number of patents and expenditure on research and development (Martinaitytė & Kregždaitė, 2015). The creative sector is organized at the intersection of culture, technology, science, and commerce. This intersection has made technology an enabler in supplying goods and services of artistic and intellectual capabilities.
The US holds numerous patents for the creative sector, a phenomenon that has allowed it to experience a growth of 14% in its creative industry (Li et al., 2016). However, the internet and new technologies have improved competition and greater access to opportunities to engage in creativity and entrepreneurship. The internet has democratized access to creation and distribution tools, a development that has overcome traditional barriers in creating and implementing creative ideas (Santoso, 2017). Bhargava and Klat (2016) found that Australia, South Korea, and Japan contributed to $ 14.5 billion in revenue from 2012-2014 in all three markets, underpinning the role of digitization as a key growth driver in the creative industry.
Global Distribution of Creative Content
Traditionally, global creative content distribution has occurred from developed countries to less-developed or developing nations. The US, the UK, and countries in EU all experienced growth in their different sectors of post-industrialism development. This phenomenon allowed mature economies to expand their infrastructure, training, and education, to diversify their cultures and remain open and tolerant to new ones, and with governments that provide support through incentives, direct and indirect funding, and favorable policy and regulatory environments. The US has been the leader in developing the creative industry because of its foreign policies that attracted and mobilized creative talent and capabilities, allowing the country to become an international exchange hub for diversity (Martinaitytė & Kregždaitė, 2015). This aspect strengthened the establishment of global content distribution channels with global affiliates.
The US has been a global leader in the distribution of creative content. The country’s content creators have continually made internationally attractive content in television programs, fashion and design, and art and craft, among other creative segments (Steemers, 2014). The ability to make globally receptive creative materials have allowed the development of distribution channels as the “space bridges” between creative producers and innovative consumers. The development has strengthened the creation of giant global media conglomerates with big operating capitals and economies of scale that have facilitated their market penetration (Steemers, 2014). For example, media conglomerates such as Walt Disney, ViacomCBS, and Comcast, among other giant media, have international tentacles and affiliates that primarily distribute creative and intellectual products and services across the world. The existence of policies favoring industry consolidations worldwide has allowed these companies unconstrained access to global markets through mergers and acquisitions. Therefore, the US remains a global powerhouse in the worldwide distribution of creative content.
The Internet and Technology in Shifting Global Creative Content
The internet has transformed content creation and distribution patterns of the global creative industry. Traditionally, marketing relied on complex infrastructure and networks that presented structural barriers to designers (Bhargava & Klat, 2016). An individual had to belong to a particular professional network to derive value from your creative content. Since the creative economies were found in close proximity to academic, research, technology, and cultural centers, this location impeded the commercial success of creative products from faraway places from these hubs. The internet has broken those barriers by providing democratized access to creation and distribution tools (Bhargava & Klat, 2016). This democratized access provides individuals with tools to create more attractive products that resonate with the global market. The internet is both a means and an end to the creation and distribution of the creative economy. Traditionally, the US was a dominant exporter of innovative products and services because of its supply led technology.
The country has some of the most sophisticated and complex distribution channels with the capacity for worldwide access. This attribute accounted for the country’s 76% export of creative content in 2007, with the UK following closely with a paltry 7% (Steemers, 2014). The dominance shifted with digitization that saw China becoming the global export leader in innovative products in 2015, accounting for the country’s $168.5 billion in exports (United Nations, 2018). Elsewhere, it is reported that the internet is responsible for the growth in the creative industry of Japan, Australia, Thailand, and South Korea, accounting for a 7.5% growth between 2011 and 2015 (Kehoe & Mateer, 2015). With traditional content creation and distribution being supply-led, the internet has shifted those dynamics towards a demand-led market. This development was the reason China topped the US in the global export of innovative products in 2015. Nonetheless, supporting the internet in the US has allowed the regain of its global dominance in the trade of creative merchandise, as shown by their continuously growing e-commerce platforms and streaming channels. The rate technology development and adoption in China may not allow USSA to dominate the global creative industry.
Incorporation of the Saudi Creative Industries within the Shifting Global Environment
Evaluating Current KSA Creative Industries
Saudi Arabia’s creative industries demonstrate increased demand globally. The United Nations (2018) reports that in 2014, KSA’s creative product exports were worth $746.97 million, up from $308.5 million in 2005. The European Union appears to be a rising KSA’s innovative products’ importer, as shown by a rise in demand from 7% in 2005 to 30% in 2014 (United Nations, 2018). Similarly, Asia accounts for over 60% of the country’s market demand (Esmail, 2019). However, the majority of this export is in the fashion and design segment, accounting for 80% of the country’s creative export (United Nations, 2018), suggesting underdevelopment in the audiovisual, new media, performing arts, art, and crafts, visual arts, and publishing. The rise in global demand could be attributed to the stronger government ties with development partners, technological improvements that facilitate the creation of high-quality international products through research and development, and progress in the country’s training and education to develop skills.
Despite the high global demand for the KSA’s creative products, the country cannot meet the global supply for its products. Historically, the Kingdom of Saudi Arabia (KSA) has embodied a closed cultural paradigm characteristic of Arab and Muslim cultures (Siswanto, 2017; Esmail, 2019). This cultural closeness impedes the country’s ability to attract artistic talents, capabilities, and technology required to revamp the country’s underperforming creative industries like visual arts, performing arts, and publishing, among other segments. Besides, the country’s infrastructure is less developed to attract suppliers. As reported by Brown et al. (2016), the conversion of creative and cultural value to commercially viable products and services requires local strengths embodied in academic, research, technology, and cultural centers. This infrastructure needs favorable government policies that provide direct and indirect financing and create cultural tolerance to facilitate global migrations towards KSA to unlock its cultural economies. The inadequacy of the factors mentioned above could be impeding KSA’s value chains in the supply of the required intellect and innovation for creative success.
Nonetheless, there are various enablers for the creative performance of KSA’s creative industries. The country’s Vision 2030 anchors KSA’s development trajectory where the creative economy is projected to contribute at least 3% of the country’s GDP. According to Moshashai et al. (2020), KSA’s Vision 2030 intends to enable the country to diversify its over-reliance on oil revenues, reduce its budget deficits, balance its budgets, and promote long-term economic growth. The government has begun direct and indirect investments in the creative industry. Al-Khudair (2019) reports that the government plans to provide 60000 free Wi-Fi hotspots across the country as part of its infrastructural expansion. KSA established the ministry of culture in 2018, with 11 subsectors revamping the country’s creative economy. This development was reinforced when KSA’s culture ministry became a signatory to the G20’s summit backing a $ 2.3 trillion cultural economy (Esmail, 2019). Besides, KSA is undergoing a cultural progression towards supporting arts and culture (Al-Khudair, 2019). These enablers will attract suppliers and the necessary talent and technology to transform creative ideas into innovative products.
KSA’s Creative Industries within the Shifting Global Environment
The internet has transformed the supply chain from a supply-driven market into a demand-driven market. This development means that the SMEs involved in the different Saudi creative industries’ different segments do not require singular and rigid value chains to distribute their content globally. The proliferation of content creation technologies and support from the KSA government motivates the national strategy (Kehoe & Mateer, 2015). The Saudi SMEs and individual content creators should leverage the internet as the source of creative ideas and develop and implement those ideas in creating highly attractive products that respond to global needs. The 60,000 public Wi-Fi spots are crucial internet access points for augmented creativity and distribution of innovative products (Kehoe & Mateer, 2015). Therefore, beyond the government support and realization of Vision 2030, KSA creative industries are better placed to handle the future volatilities of the creative industries’ infrastructural and capability development.
Conclusion
Saudi SMEs and individual content creators have the potential to compete and grow in the global creative economy. KSA’s Vision 2030 and the government’s direct and indirect investment in infrastructural development are cultural enablers for the development of the country’s creative industry. Other policy developments include the relaxation of the strong Arab and Muslim cultures, and the adoption of progressive cultures. These initiatives will bridge the global supply issues by providing decisive local factors to attract new talent and capabilities that will subsequently provide the innovative behavior required to produce demand-driven goods and services worldwide. The internet is a crucial tool in providing creative and distribution channels for Saudi innovative products’ global performance.
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