WIPO-KIPO-KIPA IP PANORAMA BUSINESS SCHOOL

Geneva, October 06 - 10, 2008

Intellectual Property and Creative Industries: Estimating the Economic Contribution of Creative Industries

Christopher Kalanje, Counsellor, Creative Industries Division, WIPO

October 10, 2008

Road Map

Creativity and Creative Industries

Defining Creative Industries

WIPO Creative Industries Agenda

Measuring CIs and Empirical Results

Creativity and Creative Industries

• Competition is intensive

• To be competitive a company need to be creative

• Creativity is therefore at the core of business survival

Creativity and Creative Industries

• Not all companies can be categorized as creative industries– Beverage– footwear

– Transport equipment (Motor vehicles)

– e.t.c

Defining Creative Industries

Creative Industries

- Relatively new- Closely linked to cultural industries. Sometimes used interchangeably- Broader than cultural industries. Goes beyond

• performing arts and • handicrafts

Defining Creative Industries contd.

From Cultural to Creative Industries

-1944 Adorno & Horkheimer

- 1970s and 1980s. A positive view different from UNESCO

- 1990s-current. Wide use of term creative industries

Defining Creative Industries contd.

• In early 1940’s Adorno & Horkheimer Introduced the concept of cultural industry (coining the term cultural industry)

• This was in relation to mass production of cultural products

• They were concerned on how cultural products were becoming “trend” products

Defining Creative Industries contd.

• 1970 -1980 UNESCO Development of a more positive way of looking at cultural industry

• Emerging of the concept of “cultural industries”

• UNESCO- working on cultural industries and cultural diversity

Defining Creative Industries contd.

• Late 1990s UK department for culture, media and sports (DCMS) established creative industries unit and task force– UK definition “those industries that have their

origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property”*

* Creative industries mapping document 2001

Defining Creative Industries contd.

UK Creative Industries

Advertising; Architecture; Art and Antiques Market; Crafts; Design; Designer Fashion; Film & Video; Interactive Leisure Software; Music; Performing Arts; Publishing; Software and Computer Services; Television & Radio

Defining Creative Industries contd.

Creative IndustriesDefinitions

- Australia- Austria- Hong Kong- New Zealand- Singapore- USA (core copyright industries)

Defining Creative Industries contd.

• Demand side– Price inelastic and income elastic– Consumption patterns- unpredictable, quality

consideration, focus on superstars (uncertainty on whether sales will cover “cost of expression” nor “variable cost” of making copies

– Demand on local products- often insufficient

• The supply side– High fixed costs for creation/ low marginal cost

of delivery– Low entry barriers

Measuring CIs and Empirical Results

• Clarity is needed on concept, definition and criteria of creative industries at,– International level– National level

• Important to focus on specific local, national and regional context

• Importance of IP in the development and success of creative industries should be highlighted

Measuring CIs and Empirical Results contd.

• Core– Press & Literature; Music, Theatrical

Productions & Operas; Motion Picture & Video; Radio & TV; Photography; Software & Databases; Visual & Graphic Arts; Advertising Services; Copyright Collecting societies

• Interdependent– TV sets, Radio, VCRs, CD Players, DVD

Players, Cassette Players, Electronic Game Equipment and Other Similar Equipment; Computers & Equipment; Musical Instruments; Photographic & Cinematographic Instruments; Photocopiers; Blank Recording Material; Paper

Measuring CIs and Empirical Results contd.

• Partial– Apparel, Textiles and Footwear; Jewelry &

Coins; Other Crafts; Furniture; Household Goods, China and Glass; Wall Coverings and Carpets; Toys and Games; Architecture, Engineering, Surveying; Interior Design; Museums

• Non-Dedicated– General Wholesale and Retailing, General

Transportation, Telephony and Internet

Measuring CIs and Empirical Results contd. Objective

– Through• linking copyright to quantifiable indicators • developing practical guidelines for

measurements • providing consistency of approach

– Enable• positioning of the creative sector in the

national economy• international and cross-sectoral comparisons • identification of competitive advantages

Measuring CIs and Empirical Results contd. Objective

– Provide• input for policy formulation• adjustment of national policies and

practices

Measurement of CIs & Empirical Results

A reinforced perspective on IP and copyright

Relating copyright to business activities A new definition of the copyright-based

industries following the extent of use of copyright material

A more transparent link to statistical reporting

A step-by-step methodology A set of measurement techniques

Measurement of CIs & Empirical Results contd.• Core Copyright

IndustriesCore Copyright

Industries

Interdependent Copyright Industries

Interdependent Copyright Industries

Partial Copyright Industries

Partial Copyright Industries

Non-Dedicated Support IndustriesNon-Dedicated

Support Industries

1. Legislative & Data Review

1. Legislative & Data Review

4. Numerical Methods4. Numerical Methods

3. Interviews3. Interviews

2. Industry Survey

2. Industry Survey

Economic Contribution•Output•Value Added•Employment•Foreign Trade

Economic Contribution•Output•Value Added•Employment•Foreign Trade

Measurement of CIs & Empirical Results contd.

Country % Contr. to GDP

% Employment

USA (2002) 11.97 8.41

Singapore (2001)

5.67 5.80

Canada (2002)

5.38 6.87

Latvia (2000) 4.00 4.40

Hungary (2002)

6.67 7.10

Measurement of CIs & Empirical Results contd.Country % Contr. to GDP % Employment

Philippines (1999) 4.82 11.10

Mexico (2003) 8.07 11.01

Bulgaria (2005) 2.81 4.31

Jamaica (2005) 4.80 3.03

Lebanon (2005) 4.75 4.48

Studies at different stages: Croatia, Romania, Russia, Ukraine, Brazil, Colombia, Peru, China, Malaysia, Pakistan, Morocco, Sudan, Kenya, Tanzania,

Measurement of CIs & Empirical Results contd.

• Feedback,– Growing interest from Member-States, IGOs

and NGOs– Policy and professional interest and support– Becomes an element of the copyright profile– Indicators are generally acceptable– results are not a function of the overall

economic development level of the country– strong influence of economic cycles and

classification system

Measurement of CIs & Empirical Results contd.

• Challenges– Relation between an industrial approach

and individual creative activities (adjustments to data collection)

– It is a production, not consumption based approach

– underdeveloped statistical framework adds to the cost of the studies

Measurement of CIs & Empirical Results contd.

– copyright is limited to what is protectable • some creative expressions are not covered

– the grey economy is not surveyed

– copyright is shaped by policymakers, not necessarily by creators

– anti - IP movement

WIPO Creative Industries Agenda

• Expand and improve surveys of the economic contribution

• Produce guidelines on estimating copyright piracy

• Launching a new generation of studies more focus on the qualitative side of

creativity, on social and cultural impact of IP

WIPO Creative Industries Agenda contd.

• Data collection on cultural industries joint project with UNESCO, UIS, UNIDO, UNDP

Participation in multi agency efforts on developing better cultural indicators satellite accounts for culture

WIPO Creative Industries Agenda contd. Produce practical guides on management of

IP and creative enterprises– Managing IP in the Book Publishing Industry– Rights, Camera, Action! IP Rights and the

Film-Making Process– Managing Creative Enterprises– How to Make a Living from Music

Finally