The creative economy in Australia

What part of the economy employs more people than the mining and agriculture sectors combined? And contributes to Gross Value Added as much as the employment and training sector and almost twice that of the agriculture, forestry and fishing sector?

It is the creative economy. The most recent accounting from the Australian Bureau of Statistics reports cultural and creative activity plays an important role in Australia’s economy, growing to $115.8 billion in 2018–19, a 27.4 per cent increase over the last 10 years, and contributing a six per cent share of GDP. Cultural and creative economic activity is measured in industry sectors, dominated by design (including software design); fashion; broadcasting, electronic and digital media and film; and literature and print media. It also captures creative activity in the rest of the economy, using creative employment of creative workers as a proxy.

These baseline data can be combined with the startling figure from the government’s Bureau of Communications, Arts and Regional Research that 9.5 per cent of those employed in 2016 – around a million workers – held a creative qualification as their highest level of qualification.

The pandemic and longer-term structural change in the economy has seen the digital and professional services end of the creative economy – design and architecture, advertising and marketing, creative software applications – surge while print media and the live arts have been savagely hit, cleaving the creative economy in two.

At the last Census, and conservatively defined to include only those industry segments and occupations that generate new knowledge (‘non-routine cognitive jobs’), there were almost 600,000 employed creatives. And we know there are many, many more than that, as the Census only counts primary jobs. At the 2016 Census, there were more creatives employed outside the creative industries than inside, demonstrating the value placed on creative skills across the economy. And creative skills are exportable: the share of exports attributable to creative skills inputs is 4.5 per cent at 2018-19.

What would effective investment and return in the creative economy look like for Australia?

Before anything else, we need to define and recognise the creative economy as a whole, in order to justify investment and grow the industry. The best model of that process is the UK (additionally, in our region, South Korea, China and Indonesia have seen serious attention to the creative economy). Since the late 1990s the UK has embedded the concept of support in policy and programs, entailing four key factors:

• Policy-focused research effectively measured the economic contributions of the creative industries;
• The creative industries were accepted by government as playing an integral role in the digital economy;
• The case for public investment in creative industries R&D was secured through the UK’s Industrial Strategy;
• The sector was organised effectively at peak levels to represent its interests to government.

The creative economy is diverse, mixing sectors of rapid growth, stability and relative and absolute decline; of private, public and community activity; and of globally exposed versus domestically embedded and hyperlocal sectors. That isn’t a case for exceptionalism – most sectors exhibit such lumpiness – but it is a case for flexibility and adaptiveness.

Policies supporting arts and culture rest largely on the grounds of market failure and positive externalities. For the commercial creative industries, the rationale for support can be various. Large commercial creative industries (print and broadcast media) require regulation but also new forms of intervention to offset the loss of public interest journalism and Australian content as global platforms come to dominate news dissemination and expensive scripted drama production.

At the other end of the scale, the creative sector is mostly composed of small and micro businesses that need specific visibility separate from Big Business and Big (Public) Culture. And innovation often comes from the margins. Creative small businesses need facilitated access to innovation schemes – R&D tax credits, export market intelligence and networking opportunities. A sophisticated innovation framework would also maximise the complementarity of publicly funded cultural institutions and commercial creative industries.

Perhaps most fundamentally, the role of creative skills in the evolution of our future economy needs to become mainstream knowledge. The same government report that pointed to almost one in ten workers having a creative qualification as their highest qualification also argued that creative skills are some of the least likely to be supplanted by automation. They have been integral to fast-growing industries over the last decade. Around a quarter of those employed in Information, Media and Telecommunications, and one fifth of those employed in Professional, Scientific and Technical services all have a formal qualification in a creative skill.

They are also significant in several innovation-intensive industries. Of the top five most innovation-active industries, between 10 and 28 per cent of employees hold a creative qualification. Creative skills will be vital to future employment growth.