Ushering In the Creative Age

Alan Freeman was the principal economist in the Greater London Authority’s Economic Analysis Unit from 2001 to 2011, and now writes and advises on cultural policy. While with the GLA’s intelligence unit, he produced a series of reports that defined the field of measuring the cultural and creative industry activity of large cities. These were Creativity: London’s Core Business, the first comprehensive study of London’s cultural and creative industries, five subsequent updates, and London: A Cultural Audit, a rigorous comparison of the cultural offer of London, Shanghai, Paris, New York and Tokyo.

The ‘creative industries’, a term popularized by the 1997 British labor government, are a copywriters’ dream. They create wealth. They unleash innovation. Since offer a sustainable growth path. Their put art and culture in reach of middle and low income earners. They drive urban regeneration, enhance well-being, and cut crime. Creativity beats apple pie hands down.

Alan Freeman

But these enticing ideas are disputable. The link between the creative and innovation is elusive. They can be surprisingly energy-intensive. Creative clusters do seem to foster regeneration, but we still don’t know what works best. Nevertheless, while working for the Mayor of London, England, I found strong evidence that these industries exist, are growing and generating employment, and give rise to ‘overspill’ benefits above and beyond mere sales revenue. In fact, if I am right, the creative industries are a new technology, comparable to the big inventions that helped bring the world out of the last two ‘Great Depressions’ of 1873-1893 and 1929-1942.

We should invest in it, not only because ‘art is good’ but for an urgent economic reason: it’s the best, and perhaps the only, way out of the crisis.

Yet it’s a technology of a radically new type, in which labor, not machinery, is the driver of growth. There are precedents for labor-driven technical advance: the Hindu-Arabic number system, a purely mental transformation, revolutionized commerce in the fourteenth century, increasing merchants’ productivity many times (try multiplying XIV by MCMLVI and you’ll see what I mean). But this is probably the first case in modern times where human development has driven an entire growth sector. Society needs a paradigm shift to harness this new technology. It has to move away from an ‘economy of things’—food, cars, and gadgets—to an ‘economy of people’—design, content, and experience. This shift is as radical as the eighteenth-century shift, from agriculture to machines, which launched the age we live in.

Services employ 86% of all US labor. It is a no-brainer that, if we want growth that takes the whole economy forward, that’s where it will have to happen. But service productivity growth defies conventional thinking. To get more value from a service, you have to make it better, not bigger. Music-lovers don’t pay for more music but for performances they like—for aesthetically superior products. The drive towards content and design lies behind the phenomenal success of Apple, and is penetrating all spheres of production. It led Sony, for example, to re-invent itself as a content-provider instead of a gadget-maker. Of course, Sony still makes gadgets. But the content decides what the gadget has to do, and that’s the key difference.

Of course we still need manufacture: the creative industries themselves depend on the linked nexus of broadcast, recording and communication technologies—not to mention the modern city—which are indispensable to their growth. But, like agriculture in the 1800s, manufacturing has become so successful that it has no more room to grow. It counts for a diminishing proportion of employment and value added.

We can’t do without food—but we aren’t going to escape from the crisis by making more of it. The same is now true of machines.

This paradigm shift will not happen by itself. Administrations still live in a bygone age where ‘investment’ means mechanization: reducing laborers to automata before replacing them with machines. Design can’t be mechanized—reduced to a pre-ordained sequence of repetitive actions—because the designer doesn’t start from a preconceived plan but an effect that is imperfectly specified. Like a computer you can stroke, or music that evokes mist. And you don’t want to watch a machine play football or rock music, even if it could. Creative labor, in a nutshell, is irreducibly human: I define it as labor that can’t be replaced by machines. The age of creation lies before us—if we can rediscover the lost art of investing in humans.

And the benefits are not automatic, as Andy Pratt has shown. On the one hand, the combined capital assets of the seven biggest ‘content’ companies add up to over $4 trillion, more than Exxon’s, while celebrities earn fortunes rivaling bankers. This is a sign that a sunrise industry is in the making—but for each eight-figure-salaried superstar, tens of thousands of talented youngsters cannot even make a living from their art, let alone get on the ladder of success.

Cultural industries breed ‘internisation’—zero-income or precarious jobs on which superstar earnings are built. Selfless dedication can produce Wikipedias. But it can be ruthlessly exploited. The selflessness found in the open software movement exists side by side with extremes of hierarchy and celebrations of indignity that arise directly from the cult of celebrity. Contrary to the hype, the creative industries do not generate diversity. Most of the nine London creative industries employ proportionately less women than the all-industry average, and only two of them more ethnic minorities.

We have to relearn how to invest in people—in their creativity, their capacity for care, and their respect for their built and natural environment. It’s not only backward, but economically insane, to cut back on the arts, education, heritage and place-building, or postpone green spending, on cost grounds. These are the productive assets of the future. To starve them is to emulate our Victorian forebears who wanted a man with a red flag to walk in front of every train.

We need cities and towns that nurture a creative population: diverse, culturally active, a harbor for caring and mutually respectful communities in all quarters. We must invest in place. But without people, place is just an empty space. We need new ideas to invest in them.

The problem is that you can’t treat humans as machines—above all if you want to unleash their creativity. It takes decades for artists, designers, or performers to realizes their potential. Traditional private investors don’t want to pour millions into educating a laborer who can simply walk away, and don’t know how to manage a productive force which, by its nature, resists and even defies control.

This is why the public sphere has a role in launching the creative revolution. Education to tertiary level should be universal and financially accessible to all. Lifelong development should be a primary goal of welfare policy. Instead of workfare, we need ed-fare: public support for time out of work to develop knowledge and talents. We need employer responsibilities that recognize a duty of human development, including the right to care for dependents, diverse and tolerant workplaces, a systematic reorganization of work to fully include disabled people; and a ‘living’ or family-supporting wage that permit the employee to educate and develop a family, not just survive from day to day.

Until now, such traditional demands of the social and labor movements have been treated as an ‘extra’, an imposition on employers. Experience with London’s procurement policy, suggests that enlightened employers—when backed by vigorous public policy—positively welcome and profit from such measures, which is why for example the multinational consultancy KPMB is spearheading efforts to introduce them, and why they have won the support of all major political parties. Such measures are not at all a cost but an investment. They’re an investment in the primary productive resource of the creative age.

Feature photo:  cc/Lieven SOETE

mbergen@uchicago.edu'
Mark Bergen
Mark is a 2012 MPP graduate of the Harris School of Public Policy. He writes about urban policy for Forbes.

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