Harnessing the Digital Creative Economy in Small Economies- Creating Pathways Towards Services-led Diversification

Vincent Valentine

The creative economy is a vital contributor to the global GDP, with a value of $1.5 trillion and accounting for 3.1% of the world’s GDP. It also plays a crucial role in employment, providing opportunities for around 6% of the workforce. Despite the challenges posed by the COVID-19 pandemic, the creative economy has shown resilience, particularly in digitally deliverable services, which increased by 5%. However, small economies face hurdles in their creative economy’s growth due to poor internet connectivity and inadequate legislation. Recognising the potential of the creative economy globally is essential, as it is projected to grow by 40% by 2030. Efficient goods movement, specifically Mode 2 (movement of goods), is gradually surpassing Mode 1 (movement of people to collect goods), reflecting shifting trade patterns. However, there are concerns regarding the accuracy of trade volume estimations. Ireland beckons as a digital export hub, attracting major companies and boasting significant technological development. UNCTAD is committed to supporting small economies’ creative economies and offers assistance through initiatives like the creative economy mapping exercise. Overall, the creative economy plays a significant role in the global economy, and with the right support and investment, it can thrive and contribute to a prosperous future.

Audience

In a recent presentation, an audience member raised several questions and sought further clarification on the modes described, the impact of the diaspora on Caribbean creative industries, and the role of Public-Private Partnerships (PPPs) in investing in creative sectors. The audience member’s stance was neutral, indicating a desire for more information and discussion surrounding the key points presented.

One of the main arguments put forth was the importance of intellectual property rights in preventing industry monopolies and oligopolies. The discussion highlighted that intellectual property rights could facilitate growth within the industry by reducing barriers and competition, thereby leading to the desegregation of the sector. Additionally, it was noted that these rights provide a means of generating more revenue, emphasizing their significance in safeguarding the interests of stakeholders in the creative industry.

Dr. Nurse specifically focused on the potential of the creative economy for economic growth and development in Jamaica. Although the presentation had a positive sentiment, the audience member felt that additional details were needed regarding the practical implementation of the suggested solutions. This indicates a desire for more concrete strategies and actions to be outlined to effectively harness the economic potential of the creative economy.

The supporting facts for Ireland’s creative services were not provided, leaving the audience member without further insights into the factors that contribute to Ireland’s status as the second-largest exporter of creative services. This lack of information leaves an important aspect unaddressed.

Lastly, the discussion emphasized the importance of creating awareness and fostering dynamism for the potential of the creative economy. It was argued that by emphasizing the significance and opportunities presented by the creative economy, young people could be encouraged to stay in their countries rather than seeking opportunities elsewhere. The positive sentiment surrounding this argument suggests that raising awareness and showcasing the potential of the creative sector can be an effective means of retaining talent within a country.

In conclusion, the audience member’s inquiries and uncertainties, coupled with the positive arguments put forth regarding intellectual property rights and the potential of the creative economy, underscore the need for further exploration and practical strategies for harnessing the economic potential of the creative industries. Additionally, the lack of information regarding Ireland’s position as a major exporter of creative services warrants further investigation and discussion.

Merewalesi Falemaka

During the discussion, the speakers focused on the influence of digitisation on the creative economy, with particular emphasis on its impact on small economies and small island developing states. The advent of digitisation has acted as a multiplier for opportunities within the creative economy, addressing the issue of geographical isolation by allowing creative industries in remote areas to connect with a wider audience and market their products or services. In addition, digitisation has reduced start-up costs for these industries, providing them with a more level playing field.

However, challenges persist in the commercialisation of the creative and cultural sector. Key issues include ensuring adequate remuneration for artists and entrepreneurs, protecting intellectual property rights, addressing fragmentation, and scarcity of data. Many creative practitioners are unable to access necessary financial support because the creative industry is in its infancy stage and lacks the required mechanisms for funding.

The discussion also highlighted the significant role of culture as a driver for sustainable development. The importance of culture was recognised across various strategic frameworks in the Pacific, including the 2050 Strategy for the Blue Pacific Continent. This recognition highlights the importance of integrating culture into development initiatives, ensuring that it is not overlooked in the pursuit of sustainable growth and progress.

To further support the creative economy, the speakers proposed promoting digital trade and leveraging international platforms. The Pacific e-commerce initiative was identified as a means to improve the e-commerce system, focusing on areas such as the legal framework, ICT infrastructure and services, trade facilitation and logistics, as well as access to finance and skills. By encouraging digital trade, creative artists can establish digital businesses and reach a wider global audience, leading to increased growth and opportunities for the creative economy.

Lastly, it was mentioned that international platforms and activities play a crucial role in promoting the creative economy. The upcoming Fourth SEADS Conference in 2024 was highlighted as an initiative to build on the Samoa pathway, which recognises the significance of the creative economy in the development of small island developing states. By actively engaging with international platforms, these economies can showcase their creative industries, foster collaborations, and gain recognition on a global scale.

In conclusion, the discussion highlighted the transformative impact of digitisation on the creative economy, particularly for small economies and small island developing states. While there are challenges to overcome, such as fair remuneration and intellectual property protection, integrating culture into sustainable development strategies and promoting digital trade and international platforms can contribute to the growth and success of the creative economy in these regions.

David Strusani

The International Finance Corporation (IFC), which is part of the World Bank Group, has recently shown interest in investing in the creative industries. This decision is driven by the potential for development impact and profitable investment opportunities in this sector. The IFC has a dedicated department that focuses on disruptive technologies and has been actively investing in venture capital, early equity, and supporting start-ups in this field for approximately 15 years. Now, the IFC has expanded its focus to include the creative industries, which consist of various sectors such as audio and visual media, fashion arts, crafts, and the intersection between the creative economy and disruptive technologies.

However, private sector investment in the creative industries can face certain challenges that must be addressed to facilitate growth and scalability. Risks and barriers, especially in smaller economies, often deter private sector investment. To tackle this issue, the IFC has adopted a strategy of partnering with established providers in the sector. They have made significant investments in India, particularly in local podcast content and movie production. By leveraging these partnerships, the IFC aims to overcome the obstacles associated with private sector investment in the creative industries.

Digitalization and disruptive technologies have the potential to alleviate some of the risks and barriers associated with investing in the creative industries. Recognizing this, the IFC has established a sizable department that specifically focuses on disruptive technologies. The IFC was the first to invest in venture capital and support start-ups in emerging markets, and it is now considering expanding its reach to smaller economies in the future. By embracing digitalization and disruptive technologies, the IFC seeks to enhance investment opportunities and mitigate certain challenges faced by investors in the creative industries.

While the IFC actively engages in public-private partnerships (PPPs) for hard infrastructure projects, such as those related to transportation and energy, it currently has no plans to implement PPPs for the creative industries. The IFC’s focus on PPPs remains on the development of traditional infrastructure.

Affordable and accessible internet access is crucial for fostering the growth of the creative industries. The younger generation, who are well-versed in platforms like TikTok and YouTube, have a strong potential to create content in these industries. However, limited access to affordable internet acts as a barrier. The IFC acknowledges the importance of providing affordable and available internet to unlock the creative potential of the youth and to promote the growth of the creative industries.

In conclusion, the IFC’s recent investments in the creative industries are driven by the opportunities for development impact and financial returns in this sector. While private sector investment faces challenges, the IFC believes that disruptive technologies and digitalization can help overcome these barriers. Despite actively engaging in PPPs for hard infrastructure projects, the IFC currently has no plans to implement PPPs for the creative industries. Lastly, the provision of affordable and accessible internet is fundamental to nurturing the creative industries and enabling the younger generation to participate in content creation.

Keith Nurse

The digital creative economy is not only instrumental but also holds significant future value. It plays a crucial role in shaping identity and cultural confidence. Content creation from the creative industries visually aids in shaping future realities, as seen in the influence of Star Trek on current technologies. Overall, the sentiment towards the digital creative economy is positive.

However, developing countries face challenges in advancing within this sector due to the lack of dynamic trade and industrial policies. Trade policies in these countries are outdated and primarily focused on goods rather than services. There is also limited participation in data monetization by institutions in developing countries. The sentiment towards this issue is negative.

Access to data is essential for fair trade in digital industrialization. Without data access, fair trading in culture becomes impossible in the era of digital industrialization. Although big countries like India and South Korea have successfully implemented data localization, most developing countries are unaware of this tactic. The sentiment towards this argument is neutral.

Copyright arrangements and structures are seen as unfair to artists and content creators, especially those from developing countries and certain genres. The income generated in the digital creative economy is often captured by platforms instead of artists. Furthermore, certain genres and music from small countries often go unnoticed in data collection, resulting in a lack of royalties. The sentiment towards this issue is negative.

The diaspora plays a crucial role in small economies, serving as an extension of the home market and contributing to the success of industries like Nollywood in Nigeria and Jamaican industries. The sentiment towards the diaspora’s impact on small economies is positive.

Linking trade policy with industrial and innovation policies is necessary for development. In the Caribbean, the focus on trade policies without direct links to various sectors and expertise to promote them is considered a negative approach.

Various financing mechanisms are already in operation in developing country regions, as highlighted by the ACP study on Africa, the Caribbean, and the Pacific. The sentiment towards this is positive.

Effective infrastructure is crucial for consistent success in the global market. Without institutional mechanisms, small entrepreneurs face difficulties breaking into the market, resulting in one-hit wonders. Therefore, the creation of startups, growth facilitation, clusters, incubators, accelerators, and market integration programs are necessary to scale up these firms globally. The sentiment towards this argument is positive.

Many policy makers and politicians in developing countries lack an understanding of the value of data capture. Outdated concepts of an economy and ignorance of the importance of data capture hinder progress in utilizing data effectively. The sentiment towards this issue is negative.

The lack of training in new technologies, such as blockchain and AI, in most developing countries creates a skills gap for the rapidly transforming global economy. This gap is expected to have a significant impact in the coming years. The sentiment towards this issue is negative.

Strategic investment in future important industries is essential for the development of developing countries. Singapore’s strategic investment in biotechnology, sending individuals for PhDs annually, has resulted in their biotech export earnings being in the top 10. In contrast, most developing countries lack strategic approaches in investing in education. The sentiment towards strategic investment in important industries is positive.

The main issue hindering progress in the digital creative economy is not the lack of funds but rather the lack of strategy and political will to sustain it. The examination of a country with a scholarship program of 200 scholarships annually, without a clear strategy tied to the country’s future, demonstrates the importance of a coordinated and sustained effort. Previous efforts often go back to zero when there is a change in government in developing countries. The sentiment towards this issue is negative.

In conclusion, the digital creative economy holds significant future value and contributes to identity and cultural confidence. However, many challenges hinder the advancement of developing countries in this sector, such as the lack of dynamic trade and industrial policies, unfair copyright arrangements, limited access to data, and the skills gap in new technologies. The role of the diaspora is crucial in small economies, and trade policies should be linked to industrial and innovation policies. Various financing mechanisms are already in play, and effective infrastructure is necessary for success in the global market. The understanding and utilization of data, as well as strategic investment in important industries, are areas that need improvement. The main issue hindering progress is the lack of strategy and political will.

Eveline Smeets

Disruptive technologies, such as digitalisation, have been instrumental in unlocking the financial potential of the creative industries in emerging markets. This has resulted in increased investment and job creation within these sectors. The International Finance Corporation (IFC) has recognised this trend and has begun investing in creative industries in developing countries, leveraging digitalisation. The IFC’s support aims to provide access to finance and raise awareness for creative industries in emerging markets.

Investment in the creative industries has proven to be highly advantageous, as it stimulates more job creation and generates a higher employment effect compared to other sectors in the economy. Additionally, the creative industries have the ability to address various economic, social, and market-related challenges in emerging markets. These industries are known for their labour-intensive nature, creating both direct and indirect job opportunities. Furthermore, creative products contribute to social cognitive benefits, such as improved innovative capacity, health, and well-being. Moreover, the creative industries play a significant role in industrial innovation and tourism in countries.

However, piracy poses a significant barrier to the formalisation and commercial growth of the creative industries. Evidence from countries like Nigeria and India demonstrates that piracy leads to reduced revenues and reinvestment capabilities for filmmakers, resulting in a decrease in the size and quantity of movies produced. This highlights the need for stricter enforcement of intellectual property rights and anti-piracy measures to protect the creative industries and encourage their growth.

For small island economies, addressing challenges such as internet connectivity and small market size is crucial. It is essential to enhance submarine cables and satellites, export promotion agencies, and various digital, financial, and geographical linkages to overcome these challenges. Moreover, alternative financing mechanisms and fiscal policies are necessary to enhance local production, especially in small island economies. These mechanisms and policies help overcome the challenges posed by small market size and economies of scale.

In conclusion, disruptive technologies have played a vital role in unlocking the financial potential of the creative industries in emerging markets. The creative industries have the ability to address economic, social, and market-related challenges, and investment and support from organisations like the IFC are crucial in harnessing their potential. However, piracy remains a significant barrier to the formalisation and commercial growth of these industries. Furthermore, addressing challenges such as internet connectivity and small market size is essential for the development of small island economies. By implementing alternative financing mechanisms and fiscal policies, these economies can enhance local production and overcome the hurdles they face.

Merewalesi Falemaka:
Ladies and gentlemen, distinguished guests, and fellow participants, very good afternoon to you all. My name is Mere Falemaka, I am the ambassador of the Pacific Islands Forum delegation to the UN and to the WTO in Geneva. And I’m honored to be your moderator today for this panel discussion on the theme, Harnessing the Digital Creative Economy in Small Economies, Creating Pathways Towards Services-Led Diversification. We have four distinguished panelists in our midst and I’m sure you will find the discussions today very exciting and informative. Our objective today is, first of all, to explore how the creative economy in small island developing states and other small economies can be optimized by leveraging current trends in technology and digitization. The creative economies create opportunities as more people across the world move out of poverty and enter the middle and upper income classes. The demand for creative goods and services will continue to increase. In such a context, the creative economy provides real opportunities to support the quest of small economies for diversification, job creation, inclusivity, and economic growth. Digitization acts as a multiplier to these opportunities as the global shift towards online streaming and digitized channels advances for creative activities such as arts and crafts, design, fashion, film, video, photography, music, performing arts. and so forth. Digitization is particularly relevant for small island developing states as it lessens the impediments represented by their geographical isolation and reduces the start-up costs for creative businesses. At the same time, there are also challenges that small economies face. Our discussion today will not shy away from acknowledging these challenges that hinder the commercialization of the creative and cultural sector. Typical challenges faced by the creative industry include ensuring adequate remuneration for artists and entrepreneurs, protecting the intellectual property of cultural assets, addressing the fragmentation of creative artists and entrepreneurs, and the scarcity of data regarding the potential of this sector. Lack of skills is also a serious issue, as shown, for example, by a recent EU-ACP grant scheme for the Pacific cultural sector, which reveals that the infancy stage of the creative industry is preventing many creative practitioners from accessing finance to businesses. We also recognize regional and multilateral initiatives can offer real opportunities to address barriers faced by the creative industry. And borrowing from my own region’s experience, I note the shift in development thinking that recognizes the critical role that culture plays as a driver for sustainable development. At the policy level, culture is for the first time recognized across various strategic frameworks in the Pacific, including the most recent, the 2050 Strategy for the Blue Pacific Continent, which is the overarching blueprint. for Pacific regionalism, which addresses the thematic pillar of people-centered development. On digital trade, the Pacific e-commerce initiative can help our creative artists to start successful digital businesses by improving the e-commerce system in such areas such as the legal framework, ICT infrastructure and services, trade facilitation and logistics, access to finance and skills. As we embark on today’s discussion, we should look forward and look towards international platforms and activities to promote the creative economy in small island developing states, including the upcoming Fourth SEADS Conference in 2024 to build on the Samoa pathway, which recognizes the importance of the creative economy in the development of small island developing states. So as we commence the panel discussion, I will turn to our first speaker from the United Nations Conference on Trade and Development, UNCTAD, to set the scene for us. I wish to introduce to you Mr. Vincent Valentine, who is a development economist with more than 30 years of experience. For the last 19 years, he has worked with the United Nations, serving first at the United Nations Economic and Social Commission for Asia and the Pacific, and presently at the United Nations Conference on Trade and Development here in Geneva. Currently he is engaged in working on various projects within UNCTAD’s trading system, services and the creative economy branch. So Mr. Vincent, Mr. Vincent Valentine, the question to you. UNCTAD has, over the years, generated excellent research and analysis of this sector, supporting developing countries to overcome their challenges in nurturing the creative sectors. You described for us the potential of the digital creative services economy, its importance for small economies and seeds, the challenge the sector faces, and why it prohibits more resilience than other sectors. So you have the floor, Mr. Valentine.

Vincent Valentine:
Ambassador Salamaki, thank you very much. That’s a challenge you presented me there. So I’m going to tackle those three areas in the presentation that I have before me. So, first of all, I just want to say about UNCTAD, I’m sure you know of UNCTAD. UNCTAD has its four mandates from its last quadrennial conference, and that is to build upon helping countries to diversify, to help them build resilience, to help in multilateralism and to help in finance. And the creative economy is ideal for at least two of those, for the diversification and the building of resilience. And I’m going to show you how through the presentation. You’ll find in the room a copy of our biennial publication, the Creative Economy Outlook. We’re just in the process of collecting data for the 2024 edition. It should be out in April. So we’re focusing upon digitally deliverable services as a way to help developing countries, and especially small states and SIDS, as a way to help them to… to engage into the international economy from far away, but there are some impediments. Now, the creative economy is a growing industry, as we will see, and it’s important that developing countries and small states get into this area as quickly as possible. So UNCTAD is here to help. But first of all, what is the creative economy? Like everything, there is a definition, and different organizations have different definitions. So here I have the definition of what the creative economy comprises of, and those are industries, so industrial sectors which comprise of tangible products and intangible intelligent or artistic services, which, with creative content, create economic value. So basically, it’s some good or it’s some service that has intellectual value added to it. So, and we have an example on the right there of the different services, and the ones that are highlighted in bold are the main areas where we’re likely to find data. Data is a particular challenge in the creative economy. Not only is it a challenge to get data, it’s actually a challenge to map the process, and this is one of the things UNCTAD does. We have a newly developed product, which we have tested in Angola, to map their creative industries, and we hope to replicate that in other places to help countries define what it is and to then go about collecting data, because first of all, if you have to manage anything, you need to be able to measure it. So, why does the creative economy… Why is it so important? Why are we here? Well, you’re here because you recognize that it is important, I’m sure. But we’ve seen that it’s a growing sector. We’ve seen that in the last decade that it now accounts for 21% of total service exports up from 12% a decade ago. Not only that, more recently it’s been recognized in the G20 with this cashy cultural pathway outcome document just being released, which advocates the importance of international organizations collaborating together on the creative economy in order to help define, to monitor, to strengthen, to build frameworks. So it has an international standing. And it’s even more particularly important when you consider that the African Union is now a permanent member of the G20. So it has a bigger reach. So we as UNCTAD, we have our specific mandates from our member states. But we see that other organizations are also following this path. And so if we think about the scope then, where the creative economy is at the moment, it’s responsible for $1.5 trillion, or 3.1% of world GDP. So 3.1% may not sound a lot, but as I said, it’s growing. It counts around 6% of total employment. So it’s quite significant. And here we have an example from our study, which we’re just about to undertake for our next publication. So we want more respondents. We only had 33 respondents in the last survey. And what we have here is the significance of how it affects some countries. So we can see Mexico that employs 2.2 million people, Canada 700,000, Turkey 1.2 million. For countries such as Panama it equates to over 6% of its GDP. Okay, in other areas it’s less but it shows that it has the potential to build resilience. And it has the potential for diversification even though globally the average may be around 3%. In some countries it’s bigger. So we can see here some of the trends and we see here that the global exports of creative goods and services reached over a trillion dollars there. But we see that where is all that trade? Where is it coming from? And on the right in the bar graph we can see that we have the leading exporters and it is developed countries. So developing countries need to act now if they don’t want developed countries to take all of the markets. But what does that comprise of? What is that trillion dollars worth? The biggest sector there is the software industry sector which accounts for almost 40%. Almost 40% of the trade is software because it’s easy to digitally deliver services via the internet. So it’s an area that’s seen exponential growth. But how is it resilient then? During the COVID pandemic, we saw that all services declined and services themselves declined by just almost 2%. Some services, more transport and tourism, you know, 60%, 20%, but the creative economy also declined. But it was the software, digitally deliverable soft services that increased by 5%. So it showed resilience. So when all the planes are grounded and airports closed, we could still have trade via digitally deliverable services. So it shows that we need to have this to become resilient. So if there is another pandemic or another economic shock, that the economy can still function. And if it’s a significant employer, which it is, it means people are still going to keep their jobs. And then it has extra benefits and taxation is still provided, people’s welfare is taken care of. But one of the other important things is that the creative economy is also highly populated by women and by young people, people who are innovative entrepreneurs. So this then leads us towards tackling the SDGs. And the creative economy, I think it touches all of the SDGs, but these ones in particular are the most strongest. Now I want to move on to the challenges side. So we’ve seen how good the creative economy is. is to build resilience, to enable diversification. But what are the challenges? So here, we did a study with our compatriots in Economic Commission for Africa. This was published, I think, last year. And what we did here is that we looked at the cost of mobile internet, so one gigabyte of data. How much does it cost in Africa? And we can see that it ranges from $75 to just a few cents in some places. And on the left-hand side, we have some of the countries here that our colleagues, the Commonwealth, are dealing with and how there’s a huge variance there between $2.50 and $20. So there’s a cost element. That needs to be addressed. We need to find out what are the best examples. How is it that some countries can achieve a lower price? So what are the impediments in other places? And also, what about in the Pacific? This year, we launched our Digital Economy Report, a special Pacific edition. And here, we examined, then, the cost of the internet being provided in different islands. We see there that the Solomon Islands, for instance, comes out quite poorly. But the Solomon Islands consists of 900 islands. And there are 300 inhabited islands. So it’s very difficult to provide infrastructure connection to them. So you would expect the cost to be quite high. Vanuatu and East Timor also require attention in terms of costs. These internet these digital deliverable services are delivered mainly by Submarine cables, but there are not cables connecting everywhere, and so we have Nauru Timor-Leste Tuvalu that are currently not connected there are plans underway to connect them, but it takes time and It’s not just about the physical connection if you only have one Connection then you’re also quite vulnerable, so you need to have a backup of satellite services, which Is also quite expensive But we see here when we compare the actual speeds of internet services Boardwidth in different countries we can see the world average developed countries And we see that the Pacific Islands are really suffering. They’re really they have slow speeds and we see from the The table on the right in blue we have these internet exchange points and these are They’re like roundabouts. They are they connect different Roads together, and if you have one of these it enables a faster speed in the board which you can have ten times The speed but there aren’t many of those in the Pacific So there needs to be Attention given to that and now here we see we have in in terms of ITC the different aspects what’s The different costs what we want to see here is well What we want to see the other blue boxes we want to see above average the dark Orange boxes and there are many of those on this graph these Denote problems we see now for the first column. It’s the submarine cables that There’s even zero or there’s one which is Not good, so this requires focus So you need to focus upon the infrastructure, but also on the soft side. And here we have the legislation side. And we have too many countries there in orange. We see we only have Fiji and Tonga who have comprehensive online content regulations. So this is actually paramount if you want to be engaged in digitally deliverable services. So these other countries need help in these areas. But we see in terms of digital ID, e-payments, that there is no regulation at all in these countries, in those areas. So that needs focus. So those are the problems that I mentioned. I wish to highlight, we can’t just talk about problems. We have a good panel in front of us. So we should be hearing from those about some of the solutions. So I’ve presented to you the trend of what is happening. The creative economy is resilient and it’s expected to grow by around 40%, depending upon which source you look at, by 2030. So it’s a growing area. But one of the reasons why we’re here today is to help to put this topic of digitally deliverable creative economy services on the table. And as Ambassador Falimaka mentioned, that we have the fourth SIDS conference. The creative economy was mentioned in the. the Samoa pathway, but it’s only mentioned there once. It’s not got that much attention. We need to give that greater attention. Ambassador, I have used up my time. Thank you.

Merewalesi Falemaka:
Thank you very much, Vincent. Thank you for the trends and for highlighting both the opportunities and also the challenges. We’ll certainly now move to our next seeker who has all the solutions, I guess, for us this afternoon. So let me introduce our next speaker, the two speakers from the International Finance Corporation. They are Miss Evelyn Smith and Mr. David Strussani. David is the Principal Economist for Disruptive Technology. He leads the economics team that focuses on creative industries, digital infrastructure, technology, digital services, venture and equity funding investment. And Evelyn is the economist responsible for assessing the economic impact of IFC’s investment in digital start-ups, venture capital funds and telecommunications. She led IFC’s research on the creative industries, their development impact and how the technology can advance the sector in emerging markets. The question to you, IFC, is that the IFC has recently recognized the potential of homegrown creative industries to boost growth and sustainable development in developing countries around the world. I understand you have recently added creative industries to your portfolio, turning your attention to assessing potential investment opportunities and impacts in relation to the creative economy, harnessing the potential of recent emerging new technologies to this end. IFC, can you elaborate on the relevant disruptive technologies in this sector, and how can they contribute to address some of the challenges that UNCTAD has just highlighted, including lowering barriers to entry into the sector, especially in the context of small developing economies? IFC will also describe what makes this sector investable, and what role developmental institutions play in boosting this sector and its investment credentials. So, over to you, please, Gerhard.

David Strusani:
Thank you, Madam Ambassador, for the invite, and it’s a pleasure to be here today. It’s nice to see so many people thinking about this new but extremely important topic. First of all, let me just give you a little bit of an introduction on the IFC. We are part of the World Bank Group, and we are, in fact, the private sector arm of the World Bank Group. We share the World Bank Group mission to reduce global poverty and boost share prosperity on a livable planet, and we do that by focusing slowly on the private sector, so by funding projects in the private sector in emerging markets. As you may know, the World Bank, especially the IDA and the IBRD parts of the bank, provide loans and grants to governments in developing countries. The IFC does the same, but to the private sector. More specifically, and let’s go to the next slide, what we do, and this is important to contextualize some of the work that we’ve been doing in the creative economies. We offer a full suite of investment services, like any traditional investment bank that you would have. Think about Goldman Sachs or J.P. Morgan. We offer debt equity, trade finance, derivative and structure finance, as well as blended finance, which is fairly common. big for us, to companies, funds, financial institutions that are either based in emerging economies and want to invest there, or are based in developed economies and want to develop projects in emerging markets. We also supplement often these services with advisory services to companies, to financial institutions and funds, and sometimes to governments on how to boost the private sector, but also very simply also to make companies work, to improve their sustainability and governance footprint, to improve their gender strategy. So we offer a whole suite of advisory services. And also very big for us, we mobilize private sector. So we try to mobilize third-party private sector investment to come along with us, co-invest with us, and we do that through equity, debt, and syndications. You may have seen a lot in the news around the World Bank and the changes that we’re seeing, but basically we have received a far bigger mandate to really expand substantially our investments, especially on the private sector side. So this year that just closed, FY23, we have actually made about $40 billion in commitments, which is an all-time record for IFC, and a 20% increase on last year. Now the reason we are here is that we have started recently, about a couple of years ago, to invest in the creative industries, and this is sort of quite important for us. We’ll talk a little bit later about why, but sort of a spoiler alert, I think it’s because we see development impact and because we see opportunities for investment. And I just want to give you a sense here on the verticals that we want to cover. So we have the audio and visual media sort of vertical, this is effectively, this comprises a lot of areas, and we’re talking about film and series. music, but also sports, the whole infrastructure associated with these events, and distribution services. Also the more hidden services around post-production, animation, and virtual reality. But also we are focusing on fashion arts and crafts. This is another area that is very important for us. We have just locked in an investment in a start-up in West Africa. I don’t know if you are familiar with Etsy, but it’s kind of a local version of Etsy that basically allows small art and craft creators locally to effectively leverage the diaspora in the U.S., Europe, and Canada, and offers a little bit of a platform, a digital platform like Etsy, but just targeted to help local creators and local entrepreneurs. This also comprises fashion, but as I said, e-commerce, homeware, jewelry, and also looks at other educational services. And then one area that we are going to talk a lot is the intersection between the creator economy and the disruptive technologies. This is really one of the key reasons that we invest in creative industries. At the IFC, we have a huge department, of which I am the principal economist, that focuses on disruptive technologies. We were the first development finance institution to invest in venture capital, early equity, and support start-ups around 15 years ago, ranging from fintech to all sorts of other services, edtech, architect, climate tech. So we think we understand the investing in disruptive tech in emerging markets quite well. And at this point, when we are comfortable with the underlying economics and the underlying financials of investing in disruptive tech, we thought that the next obvious step would be the creative economy. creator economy. So all those verticals that we talked about, we are sort of starting in this space. So our strategy right now is to partner with established providers. We’ve had a couple of large investments in India, focusing on podcasts and sort of creating local content or podcasts, and as well as another investment in focusing on the production of movies and visual content. And slowly we are sort of expanding in other areas. We will talk perhaps a little bit towards the end around our views on how we can partner with smaller countries, which is a little bit more difficult for a number of reasons, but hopefully in the future we want to get there. Let me now pass it on to my colleague, Evelyn. She will talk a little bit in more detail around sort of what kind of economic potential and development potential we see, but also she’ll talk a little bit about some of the issues that as private sector investors we face, and that we need to sort of resolve if we want to scale private sector investment in the industries. She’ll also talk a little bit about some of the, the importance of digitalization, if you want, how we can leverage the digitalization and disruptive technologies to solve some of the, or to at least mitigate some of the risks and the barriers that Naveen was talking about, and that as private sector investors we see, and that often prevent large chunk of investments, and especially in smaller economies. Over to you, Evelyn.

Eveline Smeets:
Okay, thank you so much. So you may be wondering the creative industries, a lot of emerging markets have historically held a lot of cultural capital, rich creative heritage. So why now? So for IFC, as David already mentioned, the why now is really on the one hand the development impact potential of the sector, specifically job creation, and the second one is the right timing. We perceive that disruptive technologies have really unlocked the financial potential of the creative industries in emerging markets. Let’s unpack this a little bit. So in terms of the key development challenges that we believe the creative industries can address, there are three main areas, so these are economic, social and market-related challenges. Vince has already elaborated on some of them, so I will only be focusing on the main ones or some of the very interesting ones. So in terms of economic, I think a lot of emerging markets have challenges surrounding a lot of high unemployment rates, subdued economic growth and generally a mismatch in terms of the skill set in the labor market and the work that individuals eventually take up. So for example, we see that there are large populations with creative skills, yet at the same time the creative sector is not commercialized yet, and as a result, individuals with creative skills have a tendency to work more in, let’s say, lower productivity sectors. What is interesting about the creative industries is that this unleashed potential can be harnessed when developing the creative industries more formally and in a more commercial manner. On the employment side, we see that in terms of direct job creation, the creative industries tend to be more labor-intensive. What we see on average is that across the world, around 5% of the workforce works in the creative industries, and a lot of marginalized groups, as Vince has already mentioned, like youth and women, tend to work in the creative industries. What we see is, based on evidence from South Africa, is that actually an investment dollar into the creative industries tends to generate a higher, let’s say, employment effect compared to an investment. dollar in the average economy, which of course is a very relevant statistic as a motivator to enhance our investment in the creative industries. But not only that, the creative industries have a lot of indirect job creation benefits. What I mean with that is we have the creative sector itself, but it also has intensive linkages with other sectors, like let’s say costume design requires manufacturing of apparel, and a similar thing is, for example, during movie production, one requires catering services to cater to the staff, so there’s a lot of linkages. And what we see, based on the evidence across different countries, is that on average one additional job in the creative industries generates 1.9 additional jobs in these associated sectors. An interesting example is, for example, in Hollywood, the Nigerian film industry, which has about 300,000 people working in the industry itself, but it also generates one million of these induced jobs that I mentioned. So that’s quite a significant amount of labor or jobs that are being created. On the social side, I’ll just briefly touch upon this. We know we’re familiar with some of the challenges in emerging markets, like social cohesion or lack of civic participation, and we see here that the creative industries can really provide access to information on the one hand, and also access to creative products has a lot of social cognitive benefits, like improved innovative capacity, as well as health and well-being, specifically mental health. On the market side, I will just focus on two of the spillover effects that we see of having strong creative industries or a strong creative hub in a certain country or city. On the one hand, contribution to industrial innovation, and on the second hand, what I refer to as amenity effects. So in terms of industrial innovation, it’s very interesting to see that actually, based on evidence from the UK, countries or sectors that have stronger relationships with the creative industries tend to show more industrial innovation. So you may all know, for example, this iMac older G3 model that Apple originally introduced, which was really an interesting crossover between design and strong technology that really supported some of Apple’s initial successes. And in terms of the amenity effects that I mentioned, it’s really a spillover onto the tourism industry. So for example, K-pop and Korean TV dramas have induced a lot of new tourism into Korea of people that want to experience the Korean pop culture more. Now, the question is, with all this development impact potential, what actually held back the financial potential in the sector? So there is four broad reasons. One is risk perception. One is analog and broken value chains. Then we have challenges in accessing markets, as well as a limited enabling environment. So in terms of risk perception, the idea here really is that creative industries trade in what we call experience goods. So it’s really only possible to assess the success of the product after it has been consumed. Take, for example, a movie that requires a movie producer for a period of two years to invest time in pre-production and production, but it’s only at the box office when it hits the theaters that you are able to understand the quality of the product. Analog and broken value chains, just briefly, I think here the challenge is really that there’s not enough linkages between talent discovery, production of creative products, and then their distribution, which also brings me to challenges in accessing markets. So we know that creative products often experience challenges, or creative producers. experience challenges in delivering to local markets as well as international markets. So locally, there may be issues like purchasing power or, for example, in the case of Nigeria, we see that there’s relatively limited availability of cinema, so it’s very difficult. There need to be other ways to bring products to markets. And then finally, limited enabling environment. I think here I’m really referring to IP protection, for example. So piracy is known to have been an issue that can drag down the revenues in the sector. Now, how does technology enter the picture? So we find we did a bit intensive research within IFC to get an understanding of what is the sector looking like now. So we’ve seen that there were these challenges and risks involved. How does digitalization or technology more broadly change this? In the picture, you can see a number of the interesting technologies that have come up. So for example, YouTube, Instagram, Spotify, which created a direct connection between producers of creative content and consumers, but there’s also the drastic reduction in terms of films, sorry, recording equipment that is really enabling enhanced production of creative products. I can elaborate a bit more on this in the question stage, but these are some of the technologies that are really interesting for more perception. Now finally, how can we support the investment readiness of the creative industries in emerging markets? So there are about three main factors, so providing access to finance, generating more awareness and fostering an enabling environment. And when I say we, it’s really about us at development finance institutions, but also other commercial investors. as well as governments and the artists themselves. ISD has worked in all of these three areas already in the past year, since it started focusing, so we have provided access to financing for creative companies, as David already mentioned. We have started to develop a number of events focused on generating awareness on the investment readiness of the industry, specifically in Latin America and the African region. And then finally, in terms of the enabling environment, I think digitalization is still a key focus of ISD. We support a number of digital infrastructure players in different countries. And yeah, that’s the broad outline of our work to date. And what we hope is that we will have, let’s say, a demonstration and replication effect, so by showing our interest in the sector that others are encouraged to invest in the sector and really ultimately help us achieve these development outcomes that we set out initially. Thank you.

Merewalesi Falemaka:
Thank you very much, Evelyn. And thank you, David, for those very clear presentations. And I’m sure the participants are taking note of some of the good work that IFC is doing to help businesses and the creative industries turn those creative talents into commercial opportunities. Let me now turn to our third speaker for today. Our third speaker is Dr. Keith Nurse. He is the president of the College of Science, Technology and Applied Arts in Trinidad and Tobago and the former principal of St. Appelui Community College in St. Lucia. He has served the development and academic community in many roles, including… but not limited to working as a senior economist and advisor at the OECD in Paris, holding the World Trade Organization Chair at the University of the West Indies and lecturing at the University of Ottawa. Dr. Nurse has researched and published a great deal on the digital creative economy and this is one of the books that he has contributed to for your information, so it’s available from the WTO bookshop. And his writing deals with the digital creative economy and strategic options for developing economies when it comes to trade. We are in the WTO and the specific cross-border trade dimensions of the creative economy are critical to harness its potential. Dr. Nurse will now evaluate what is the role of trade policy, including the WTO, to support inclusive growth of the creative services economy. The chair is yours, Dr. Nurse.

Keith Nurse:
Thank you very much, Chair, Ambassador. It’s a real pleasure to be here. Thanks very much to the organizers for inviting me to participate. I’ve been working in this sector for a long time, so it’s very dear to my heart. In fact, I was just looking at my reference list of books. I wrote a paper on digital music and copyright in 1998 and then it was published again in 2000, so it’s been a while. What’s striking about this process is that even back then, one of the authors that I referenced talked about the digital jukebox. Well, that’s Spotify, that’s Netflix, that’s Deezer, that’s an effect. What the author was suggesting is that the global economy was shifting to this framework whereby content would be uploaded, and those who are able to upload content are going to be the winners. And then you’d have a mass of people who are desk downloaders. So one of the parliamentarians from Toronto Bego was in parliament quoting me once, and she said that we are all becoming a nation of downloaders. And so the real challenge for developing countries, and small developing countries in particular, is the real threat that they may only become downloaders. It is not how much creativity you have that matters. It is your capacity to upload. And once you’ve uploaded that content, and that is your capacity to then distribute that content, market that content, monetize that content, meaning collect your money. If you are unable to do any of those things, and all of those things in fact, you are not in the game. Well, that’s the end of my presentation. If you have to leave the room, you just got the elevator pitch. So let me go through some of the details. Can I get the clicker, please? Thank you. Am I pressing the right button? The arrow pointed to the screen. Oh, it’s pointed to the screen. You see my challenges with the digital economy? Ah, it’s going the wrong direction. Okay, so this morning, there was a presentation of the upcoming report that is being… done by WTO, WIPO, World Bank, OECD, and so on. And they were quoting some of the data, some of which is a little bit updated to this. This is the WTO World Trade Statistical Review. And it says, so for 2021, digitally delivered services were estimated at 3.7 billion, trillion, sorry. Global exports of digitally delivered services have tripled since 2005, rising by 7.3% between 2005 and 2019, outpacing goods. So digitally delivered services generates more income in trade than goods. And that’s now for a few years. And while goods trade fell in 2020 because of the pandemic, particularly, exports of digital services rose by 14%. So it really emphasizes the point that Vincent was making earlier. I’m still having. Okay, so what do we mean by the digital creative economy? I teach trade policy, I’m researching the area. And one of the real big challenges is this conceptual framework of, well, what is it that we are aiming to count and measure in the first instance? And really, it’s a moving target because I’ve updated this slide several times since I produced it. So they are trading goods. So they are goods that are physically delivered, but they are purchased over the internet or via e-commerce and so on. So, I mean, how did Amazon start out? delivering books that which you purchase online. Okay, so it’s the book industry that really accounts for Amazon initial success. Now they’re into everything. They’re even delivering food. Then there’s trade and services. This is a digitally delivered cross-border supply. So this could be digital cultural content delivered online through downloads or streaming, ebooks, e-music, e-videos, video games, etc. And things like video games and particularly gaming is now larger than music. Music, film, and book publishing combined. And it’s a composite sector because in effect there’s music embedded into it and so on. Which really illustrates how the creative economy is a circular economy or transversal economy. So that the classic example I use is, what’s her name, that makes that the books. Thank you very much. Yeah, JK Rowling. Okay, so you have JK Rowling. Well done. Yeah, that was a quiz. You passed the test. So she produces a book. That book is then you put into movies. Now you have theme parks that generate merchandise. And the list goes on and on and on and on. So JK Rowling, by herself, has created a huge economy. And it’s the gift that keeps on giving, right? So basically, she can generate all forms of income through copyright and licensing and merchandising, corporate sponsorships, etc. Almost ad infinitum. So then it flows into what we call trading intellectual property. So these are, for example, digitally enabled, things like charges for the use of intellectual property, such as payment for licenses, patents, trademarks, copyright, and then you have royalties and so on, which includes things like copyright and related rights, neighboring rights, synchronization rights, et cetera. So if your music is in a film, which is like the best, one of the best scenarios for a music producer or an artist. So I once did a workshop in the Bahamas and I met the guy who produced a song called Funkin’ and Nassau. And he showed me his income statement from one of the copyright music organizations. And I was like, oh my God, I’m in the wrong business. I’m in the wrong end of copyright production. We were talking about that at lunch. Those of us who are authors, we get the worst deal in terms of copyright producers. Yeah, we have to pay for our own article. So this guy was able to generate so much income from that one song. He says he doesn’t produce music anymore. He doesn’t have to, because that one song is giving him income ad infinitum, because the movie has done really successful. And there are several other movies that have used his song. And then there’s data monetization, which is really a critical new area of growth. And really it’s the ways in which the data that is generated from the use of content on platforms is then further utilized to target us for marketing purposes and so on. So your Amazons and your Apple and Spotify and so on are selling our data packaged for other purposes. So they’re earning income, not just from the sale of content. they’re earning it from the leveraging or monetization of data. So very few developing country institutions are participating in this element of it. And then now you have the creative economy, which you guys are working on. And I’ve added this only recently because it’s a different animal in some respects because it’s widened the base because there’s no user generated content, like on TikTok, for example. And it’s different from many of the other forms of monetization because whereas the other forms are largely experts and professionals who are generating income through these various methodologies. It’s not the ordinary person or an upcoming young artist who’s tapping into this. And so they’re earning income largely from things like sponsorship and brand deals, but offering courses online, blogs, vlogs, subscriptions, memberships, and all kinds of other methodologies, which we are still haven’t yet captured data-wise. So this is the area where we have very little data, except in some of the developed economies. For the most developing countries, you have no idea what size the creative economy is. So one of the challenges with all of this is that our capacity to measure is very challenged. So I wrote this article for the WTO during the pandemic, it was in 2020, and so it’s available online. And the key aspect of this is this, why is the digital creative economy so important? Vincent referenced it, Evelyn and David also. is that this economy is different from a traditionally understood understanding of an economy or a sector. As I indicated earlier, it’s circular, it’s transversal, but also it feeds into what we call identity, right? So you, things like cultural confidence, the cultural confidence of a country is often associated with its culture. So French food, right? And it’s associated. So you know how things like appellations of origin, you have also the issues of geographical indications. So other forms of IP associated with the cultural confidence of our people. But it’s also that it’s important for visualizing our future. So I was listening on BBC recently, and this guy invented this new way of embedding software into IO, to eyewear. And when asked, where did you get the idea? He said, from a movie. All right, so creative production is not just about, it’s not just instrumental. It’s not just about its economic value here and now, that’s traded, it’s also about its future value. So recently I read an article about the importance of Star Trek to all the technologies. So your flip phone, the doors that open when you approach it, and all of those things were visualized on Star Trek. You can tell I was Trekkie, right? So creativity and the creative industries are important for us to visualize a future reality as well. But how do you get there, is the key point. And it requires dynamic trade policy, and it also requires strategic industrial policy, through what I call an innovation roadmap. And this is where developing countries are very deficient. Often their trade policies are very outdated. It’s largely focused on goods. Even the trade policy mechanisms are not very much focused on services. And when it does, it’s commodity services like tourism. So tourism is viewed as a commodity rather than in its more dynamic. Okay, thank you. All right, okay. So I’ve been using, because data capture is so difficult in this sector, what I’ve been doing is using proxies. So one of the areas where we have some fairly good data that’s consistent over time is world exports of cultural recreational services. There are other areas, but this one seems to be most robust. And what you see happening is this. North America’s share is declining. Europe’s share has been rising and it’s declining partially because of the pandemic. South and Central America and the Caribbean’s share has been largely declining. Africa has remained very low, but consistent. The Middle East is rising and Asia is rising. And this has been consistent for the last 10 plus years or so. So there’s something happening in these respective regions. Next one. I’ve also been looking at the data in relation to collections of copyright. And this is also very consistent data. It’s the data that’s collected by the copyright music organizations in particular, but also the other copyright areas like film, book publishing, drama, and so on. Africa accounts for only 1%. Latin America is 4%, Asia Pacific is 16% and rising, North America is declining, and Europe has a larger share. Europe has a larger share because, in many respects, the average per capita consumption of copyright content in Europe is significantly higher than most other regions. And this is what is important, because those are where the markets are. You can see, in the other regions, the markets are really small in terms of monetization. And this is an example of the Caribbean. This is data for music only. And this is from IFPI, the International Federation of Phonographic Industries. And it shows you the different modalities that are used to capture data. Now, what we know is that the earnings collected here is very small relative to the earnings that are traditionally earned in, let’s say, live performance, or even from things like festival tourism. I’m almost done. Okay, so, in the literature, there’s something called the value gap, meaning that the income that’s being generated in the digital creative economy is largely being captured by the platforms and not by the artists or the authors or the composers and so on. And so, there’s a whole literature about the value gap. It’s also that there’s a genre gap, so some genres of music earn more than other genres of music. And it also, you know, where does this music come from? So, I come from Toronto Bagels, so Calypso, Soca music, and so on. Does it collect money? And it also has to do with the infrastructure for collecting the royalties. So in United States, which is a big market, they only capture data for the top 200 registrations, the top, how much of a concert, top 500 concerts, et cetera, et cetera. What that means is that if you are from a small country, which includes Ireland, then your music doesn’t get captured in the data and therefore in terms of monetization, you don’t get royalties. So this is a problem that pre-existed in the digital creative economy and still applies. So the question that arises now is, can blockchain technologies and some of the new technologies bypass this problem? And the answer is, well, potentially, but it requires a level of sophistication from developing countries for which they don’t currently have. It’s also that the rapid pace of things like the e-commerce moratorium becomes really important. Can you tax Netflix in your country, for example, like they do now in Switzerland, or at least coming from January, 2024, and then redirect some of that resources to production at home, or can you facilitate data localization, which is that capture some of the data so that firms in your country can also use the data that is being, let’s call it, appropriated by Netflix or Spotify or Amazon and so on. So some big countries do it, India, South Korea, and so they’re able to create firms that can use that data. Most developed countries are not even, it’s not even on their radar screen. They don’t even know what data localization is. So digital industrialization requires you to understand how to tap into these things. So at UNESCO, they are talking about things like fair trade. I’ve been involved in the discussions. And they also talk about fear data. You cannot have fear trading culture without access to data going forward. Because digital industrialization. Madam Chair, I know that I’m over my time. I blame it on the clicker. I think you might have to do it. All right, so UNESCO, I’ll try and conclude on this slide and we’ll pick up in the discussion. So UNESCO has in the 2005 convention, article 16, which speaks to preferential trade and treatment for developing countries to allow for the mobility of artists and cultural professionals, a balanced flow of cultural goods and services. And what is important, it doesn’t include IP. The Americans required that it was, IP was only mentioned in the preamble to the convention and not in the convention. So it’s excluded. And then it allows for international treaties and agreements and the best example of it and the first example of it, of a treaty or agreement that embeds the 2005 convention and particularly article 16, is the Cary Forum EU Economic Partnership Agreement, which we’ve studied on. That’s David, okay. Which I’ve studied with another colleague, Myra Buri, who’s here from Switzerland. And what we found is that between 2008, when the agreement was signed and 10 years later, the trade between the Caribbean and Europe in cultural content declined considerably. So the agreement was actually, although it has a cultural protocol built into it, it did not facilitate increased exports from the Caribbean. Mind you, it happened at the same time that the global economy went into a global recession. And also when the new digital technologies had escalated, so the dematerialization of creative content meant that the data that we usually captured, which is goods particularly, we weren’t able to capture the new areas, new services, the new IP, the new whatever. So it looks probably worse than it is, but we aren’t able to capture it. So I’ll end on that note. Thank you very much for your kind consideration.

Merewalesi Falemaka:
Thank you. Thank you very much, Dr. Ness, for this presentation. I know some parts of it is quite technical to me, but great, great presentation. I mean, just the fact that you are provoking us that we should not be nations of downloaders, you know, it’s quite provocative. But you know, it provokes our thinking about how we need to reframe the way we deal with creative economies. But thank you for all the presentations that have been made today. I would like to open the floor now for questions from the audience, if you have any questions. Yes, please introduce yourself.

Audience:
Sorry. My name is Jose, reopened earlier last year. And I used to go to PhDs as a student, I think probably up until 20 sacrifice. So, I do teach a little bit of that, and just a few lectures at a university. But what interests me is, I guess, the most exciting thing I’ve experienced in the last 40 or 50 years So I come back just to the question. How much of what you have described is mode 1, 2, 3 or 4? What’s increasing? What’s maybe decreasing? That’s the question I have to you. And the second question to Professor Nurse, I know you’ve published quite a lot on the diaspora influence for the Caribbean. How much of what you all described, what’s the positive and maybe negative influence that the diaspora has on creative industries in the Caribbean? And the last question to our colleagues from the IFC, I’m also curious to know to what extent are PPPs part of the investment in the creative industries? And I have to admit I have a second question attached to it. When it comes to the SDGs, there’s a 17.17, it’s about public-private partnerships. And your colleagues at the World Bank are the custodians. So I’m just interested to know to what extent it’s PPPs or not, and how you see it, positive or negative. Thank you.

Merewalesi Falemaka:
Thank you for those two questions. Yes, in the middle, please.

Audience:
Hello, and thank you so much for the panel. It was really informative and really interesting. I am a young professional here at the WTO currently, but previously was a services trade negotiator for Nigeria on the AFCFTA. So I’m really fascinated by the concept of intellectual property rights and what that means. for developing countries and the potential impact it could have. I recently had a conversation with someone about the role, I’m actually from Nigeria, so the role that intellectual property rights could play in Nollywood, which is our movie industry. And they spoke about the possibility, or at least from their perception, they felt that intellectual property rights, the lack of intellectual property rights in Nollywood had actually decreased, had actually enabled the growth of the industry early on and had allowed it to get to the size that it was because of lack of barriers to entry, I guess, as well as just reduced competition. And so it desegregated the industry and kept it easy, like kept it favorable for MSMEs. And he felt that it could, that if it had been, if intellectual property had played a greater role, we would have actually ended up having more of an industry that’s similar to Hollywood in that there are larger, almost monopolies and oligopolies in charge of the industry, just a few studios that are basically in charge of almost everything else. And so he, and so that would have had, of course, an impact on MSMEs. And so I was just kind of curious about what research or what your thoughts are really regarding the dual role of an impact of intellectual property rights, because prior to this, I had really just seen it as a route or a way to get more revenue, and I’d only seen the positive ends, the positive aspects of intellectual property rights spoken about, but I hadn’t thought about this other side to it. So I’d love to hear your thoughts. Thank you. Hello, everyone, my name is Rashaun Watson from the Permanent Mission of Jamaica. And first, let me just thank the organizers for organizing this panel discussion. I think it’s very interesting. And being from Jamaica, I can appreciate the topic of our discussion. And Dr. Nurse, I must appreciate you being from the region. I think you were able to give us a very candid and interesting presentation about the importance of the creative economy and its potential for economic growth and development. I was particularly keen on hearing a bit more on your solutions, which included a more dynamic trade policy, and as well as the innovation roadmap. I know sometimes we say these things and they sound good, but when you get down to the practical implementation, what would that look like for small Caribbean island developing countries like Jamaica in the Caribbean region, as well as other developing countries? Thanks. Thank you. Thank you, Ambassador. Brendan Vickers, Commonwealth Secretariat. I have a question for Vincent. I think in your presentation, I saw that Ireland was the second largest exporter of creative services. I was just curious if you have any more clarity about what factors are relatively more important in driving that. Is it a tax jurisdiction issue with advertising and marketing spend? We know some of the big multinationals are there. They invoice their advertising through Ireland. What are the factors that put it second, which was quite surprising? Okay. Thank you. Thank you very much, Madam Ambassador. Thank you very much. I would like to thank you for allowing me to be here and I would like to congratulate you. I would like to thank you because through this training, I have realized right now that the oil deposits can be found in this type of training. Naturally, by exploiting these areas that are unfortunately unknown to our countries, we can go much further. And naturally, it can prevent our young people, it can make our young people loyal to stay in our countries, to develop our countries more than to have to cross the continents each time and give the results that there are. The big question is that we are the representatives of the state. How to understand and make a faithful restitution in order to create a certain dynamic? The concern is first of all what we call political oil. Certainly, there is political oil. It is confirmed. If there is no political oil, we will not be here. This would be the challenge that we think you are going to help us, the representatives of the states, for the IPMA. How to understand and translate what you tell us in a simple language so that a CR can be made to the capital and create a certain dynamic? Frankly, I want to congratulate you a lot. Starting from the WTO today, I finally understand that digitization, trade, all that, is a lot too. It is more gold, more diamonds, more gold and more oil. Thank you.

Merewalesi Falemaka:
I think I’ll turn to our panelist for the responses to those questions. I’m sure you’ve taken note of the questions that have been posed to you. So I’ll probably start with UNCTAD for those questions that have been posed to you, Vincent. Go ahead.

Vincent Valentine:
Thank you, Ambassador. Thank you to the gentleman from the Centre of Social Economic Development in Geneva. Thank you for challenging me on the four modes. So yeah, I was thinking, okay, four, movement of national persons, three, commercial presence, and it was one and two. So which one has increased more? Well, I think it has to be number two. It’s the movement of goods rather than the person moving, number one, to collect the goods. However, I have to say that last year I had a meeting with our statisticians in UNCTAD and I was questioning the data that they had divided by mode. And it turns out that it’s just an extrapolation. It’s an estimate based upon what happens in other places. It’s not necessarily exact. So when we have data by mode, by country, it’s an estimate. And I was quite disappointed with that because I used to be involved in maritime transport and container ports and I had to estimate how much the throughput was of different container ports. And I would use either a global average as an estimate or I would use a regional average. And I was disappointed in myself in that and I’d have to go back three years later and check that data. And, you know, it was actually… quite accurate. So maybe the estimates that we produce by mode, maybe there is a relevance there, but they are not exact now. Thank you for that. And I have to say that I’m Irish, and it’s a bit of an embarrassment then that I don’t know exactly what it is that Ireland is exporting digitally. I mean, we know about it being a tax haven, and we know about this, what was it, 13 billion euro rebate that Ireland was ordered to give back. Actually, it was asked its companies based in Ireland to pay. It was ordered this by the EU, and it was reluctant to do that. So we know that it’s the large Facebook companies, the Alphabet, Meta. But there is also quite a bit of technology being developed there. You have manufacturing in terms of Dell, and you must have with that associated services. So, yeah, that’s what I can think of, is the manufacturing combined with the information. And can I just address the colleague from Togo who made the intervention? And just to say that we in UNCTAD, we have this mapping exercise of the creative economy, which we have just rolled out in Angola, and we would be happy to undertake the study in other places. So if you’re interested, when you go back to capital, you can do that. you can explore this option. Thank you.

Merewalesi Falemaka:
Thank you, Vincent. Unfortunately, our interpreters will have to leave. So unfortunate. But we can move on to the other responses. I think, Dr. Nurse, you have quite a few questions that have been raised. So please go ahead.

Keith Nurse:
Okay, thank you very much. My headpiece wasn’t working, so I didn’t hear our French colleague. So I’m not sure what question or issue is there. But I’ll respond first to Professor Sana, then I’ll go to my colleague from Jamaica. So Professor Sana, the diaspora issues are a really important one for small economies. Why? Because it aids in the expansion of their market. In fact, the diaspora is an extension of the home market. It’s a market that is really critical because often you don’t have to explain to them what the content is. They know what the content is. And it’s part of their identity. Diasporas are hugely important. So would the Nigerian or Nollywood have been successful if there wasn’t a Nigerian diaspora? That’s over 30 million people or so. The answer is probably no. Even if they have a large domestic market, Jamaica’s success can largely be attributed to the size of its diaspora. And the diaspora plays a role beyond just being a market. The diaspora are both co-creators, meaning that they often are involved in investments at home and abroad. And they’re also competitors. So last night we had a Jamaican band out there. I doubt they came from Jamaica. So the demand for Jamaican music can be supplied by the diaspora, and it’s also becoming a really important issue. So that’s the first thing, and you know, diasporas also offer a beachhead into wider markets. The – to come back now to Jamaica in terms of, well, is there a roadmap for building capacity? Well, my last slide hints at it. I have a slide that has more details, but it’s not just a matter of trade policy. A lot of the work that I do, I argue that trade policy must be linked to industrial policy, must be linked to innovation policy. In the Caribbean, what we have done is we have – we had almost a singular focus on trade policy. So we signed an agreement, and then what? Then we created implementation teams, but the implementation teams were not directly linked to the various sectors, nor did they have the expertise to promote those sectors. And then there’s issues like financing. So it’s interesting to hear that the IFC is moving in this direction. It’s very gratifying, in fact. But our financial institutions will have been about the last entities to come on board in this area, and financing in the creative sector is multifaceted. So I did a study for the ACP, looking at Africa, Caribbean, and Pacific. So if you Google me, you’ll find it. And what we found was a multiplicity of financing mechanisms in play already in the developing country regions in Africa, the Caribbean, and Pacific. So there were crowdfunding, agile investing, debt and equity financing mechanisms, trade financing mechanisms, as well as IP financing and branding mechanisms. of all different sorts. But the key thing though that is missing is that often the financing is not linked to industrial upgrading process. So in my diagram there, I talk about you need to have startups and facilitate the growth of startups. Then you need to create clusters and you need to create incubators, accelerators and a market integration program to scale up these firms into global marketplaces. Now I know this personally because I’ve been, I’m the co-founder of the creative, of a film incubator that operates out of Toronto, a company that I’m the chairman of. We’ve been doing this for like almost 14, 15 years now. And the only way we can get filmmakers into global market is through this process. If they are standalone firms, their success ratio tends to be a lot lower. And that’s the big problem in developing countries where there aren’t the institutional mechanisms to take small entrepreneurs to global markets. Otherwise what you have is one hit wonders. So you get a Rihanna, but Rihanna doesn’t contribute to the Barbados or Caribbean economy except when she gives philanthropy. All of her business is outside of the Caribbean. All the top Jamaican artists are not on J-Cap which is the domestic copyright society. So that money doesn’t go to Jamaica. And so you can have global stars and they contribute very little to your economy unless you have the infrastructure in place. So I’ll end on that note.

Merewalesi Falemaka:
Thank you very much, Dr. Ness for those responses. I’d now turn to colleagues from IFC.

David Strusani:
Thanks. would be very brief, conscious of time. The first question was around PPPs. So typically we do PPPs in hard infrastructure. So I don’t think we have any plan to do PPPs for creative industries, it’s hard infrastructure. But I think it’s really important that the infrastructure is a critical component of creative industries. And in fact, actually this links me to the answer for our friend from Togo over there. And I think the focus really should be on providing affordable internet and affordable onsets. Because your youth will be very familiar with TikTok, with YouTube, they just lack the access, the affordable access. And once they do, they will create their own content, they will share and disseminate their content. It’s not enough to create an industry, but it’s a fair starting point. So the focus should really be on affordable and available internet, thanks.

Eveline Smeets:
Yeah, I can address some of the other questions, yeah. So in terms of the questions surrounding piracy, I think what we find is that at the moment it’s sort of a barrier to formalizing and having a more commercial sector. So based on some of the evidence from countries like Nigeria but also India and the 1980s, which is where piracy became a much bigger factor is that we do see that there’s an effect on having less revenues from a certain movie. And in turn, filmmakers are less able to reinvest in an additional movie. So either the movie stays small or the number of movies will decline over time. And so the movie stays small, I mean, the total production size remains relatively small. Now, if we’re able to, if filmmakers are able to capture the revenues that would have otherwise been pirated, they would be able to reinvest that in bigger productions and ultimately support more jobs over time. So that’s how we are looking at it essentially. And then, for example, on your points regarding Hollywood, I understand that it’s. It’s a big blockbuster organization. But there’s a lot of independent movie production going on besides that. And then I think there was one question on small island economies. So here I think there’s a number of challenges that we’re hoping to address. The Internet connectivity is one critical issue. Small market size and the need for exporting remains an issue as well as economies of scale remains an issue. So here there’s a number of policies as well as industry efforts that countries can work on. I think most of them have already been featured. So enhancing, focusing more on submarine cables and satellites as well as cross-border terrestrial networks. In terms of exports, more export promotion agencies as well as supporting more digital, financial and geographical linkages such as networks with bigger production companies. And finally in terms of economies of scale I think here are some areas of interest that could be focused on is alternative financing mechanisms like through more leveraging more financial institutions to provide financing as well as policies like fiscal and financial incentives to enhance local production. Thank you.

Merewalesi Falemaka:
Thank you very much, Evelyn. Are there any further questions from the floor? Okay. I see no other hand up for questions. Let me make one quick comment. Go ahead. We are the last session of the day so there’s no one at the door trying to get in.

Keith Nurse:
I know that our French colleague, I think I heard the word political will. Yes, you did, yes. It’s an important issue. I have sat across the table from many Prime Ministers and Presidents and other senior political people from developing countries all across the world now, and invariably, they don’t get it, partly because we don’t have the numbers, the data, the point that Princeton was making. So data capture is really important to sell it to our Minister of Finance, for example. Secondly, most of our politicians and other policy makers have a concept of an economy that’s an outdated one, a 19th century version of an economy, which is premised on what we call like a widget economy, production of things. So if you say, well, we want to produce smartphones in the country, they’ll be like, oh, yeah. But Apple makes more money from the apps on the phone than the phone. The phone, in effect, is our last leader. This is a new economy that they are getting to understand better and better, but we are taking too long to understand it. The speed at which the global economy is transforming is so rapid, because five years from now, we’ll be having a different conversation, I can assure you, about the technologies, and 10 years from now, I don’t even want to project there. So the longer we take to get up to speed, the harder it is to get up to speed. So we are not training people in blockchain technologies in most developing countries. Because we didn’t have lecturers who know anything about blockchain or AI and so on. So unless we make a very strategic intervention and say, and this is where I learned something from Singapore, okay, with their biotechnology program. I met the people who set it up. They said they didn’t know anything about biotech, except it was going to be important in the future. And what they did was to identify the top 10 experts in the world, and every year they sent three people to go and do PhDs with them. So every few years they got 30 new people with PhDs in biotech. If you go and look at the data for Singapore’s export earnings from biotech, you will be impressed. It’s in the top 10 in the world. How did they do it in a small country? They were very strategic. Most developing countries are unstrategic when it comes to the future, all right? And so the longer we take, and if you think about it, sending away 30 people to go and do PhDs is nothing, it’s peanuts. Every year in my country, which has a population of 1.2, 1.3 million, we give about 200 scholarships. But it’s to do aeronautics, or you could go and do, I don’t know, filmmaking, or pottery making, or whatever. It was not tied into our strategy. So we’re spending the same money as Singapore, but with no strategy. And that’s happening in almost every developing country, with a few exceptions. So it’s not a problem of money, the issue is strategy. He does help, but more importantly, it’s strategy. and political will to sustain it. Because if you change the Prime Minister, if you change the government, what happens in developing countries is you all go back to zero.

Merewalesi Falemaka:
Well, thank you. Thank you, Dr. Nurse, for sharing those very pertinent comments, certainly. I think we have no problems with money because on this panel we have the IFC who can give us the money. But strategy is an important issue. So I believe you have heard the very interesting interventions and presentations today, and I certainly have learned a lot. I’m sure all of us have learned a lot. And I’d like to bring this session to a close. And just before that, I’d like to extend my deep appreciation again to our experts, to our panelists today, David from IFC, Dr. Keith Nurse and Vincent, as well as Evelyn. And also on behalf of the Commonwealth, I also want to express my appreciation to the Commonwealth Small States Office here in Geneva and the Commonwealth Secretary in London, as well as UNCTAD, for putting together this really interesting panel discussion program. Thank you. So see you in five years’ time, Dr. Keith, as he said. Thank you.