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  • Writer's pictureWinston Peng

Cultural Industry, Creative Industry and Creative Economy. What is the Difference?

Updated: Apr 28, 2019

Many different terms have been coined for the creative domain - “creative industries”, “creative economy” and “cultural industries”. Actually, the different labels correspond to different ideological stakes, the history of which has been studied by numerous scholars of the field.

It is important to note that these terms have come to be widely used in cultural policy circles. Many cultural actors and institutions also have adopted them in their self descriptions, although by doing so they may be applying the term of “industry” to activities that are neither industrial in nature or profit-making but instead require permanent subsidy and corporate CSR funding.

In some cases, identifying with this now fashionable category is thought to be a means of securing greater investment, political support and sometimes funding to sectors that have been historically overlooked. Yet, some feel the terms have developed an ambiguous, buzzword quality that is hyped and employed by artists and creative professionals when it suits their cause.

This chapter looks at the development of the three most commonly used terms, namely the creative economy, cultural industries and creative industries, in order to establish a deeper understanding of the creative industry – what it comprises, how it functions, and its potentialities for sustainable human development.

Cultural Industry

The term 'cultural industry' traces back to the Frankfurt School in the 1930s and 1940s, that opposed commodification that favoured capitalist societies during the emergence of a popular culture industry. Pessimistic views between culture and capitalism persist today's such as "art for art's sake" amidst threat of cultural homogenization. These views posited culture and economy as mutually hostile and when they cross, the integrity of culture would always suffer. By the 1960s, many began to recognize that the process of commodification does not necessarily degenerate cultural expressions. On the contrary, industrially (or digitally) generated goods and services clearly possess many positive qualities. By the 1980s the term cultural industries began to be used by academia and policymakers as a positive label.

Cultural industry refers to the symbolic or expressive elements in their production. It was propagated worldwide by UNESCO in the 1980s and encompassed a wide range of fields such as music, art, writing, fashion and design, and media industries, e.g. radio, publishing, film and television production. Its scope is not limited to technology intensive production. These productive domains have significant economic value and are vectors of profound social and cultural meanings

Creative Industry

The term ‘creative industry’ is applied to a much wider productive set, including goods and services produced by the cultural industries and those that depend on innovation, including many types of research and software development.

The phrase began to enter policy-making in Australia in the early 1990s, followed by the transition made by the influential Department for Culture, Media and Sport ("DCMS") of the United Kingdom from cultural to creative industries. Critics of the creative industries agenda find that the terms tend to blur the boundaries between “creativity” in a very general sense and the expressive qualities that characterize cultural goods and services. They also find that the term “creativity” is used far too broadly.

Creative Economy

The term “creative economy” was popularized in 2001 by the British writer and media manager John Howkins, who applied it to 15 industries extending from the arts to science and technology (Howkins. J., 2001). According to Howkins’ estimates, this creative economy was worth US$2.2 trillion worldwide in 2000 and growing at an annual rate of 5 per cent.

Broadly, the creative economy embraces not only cultural goods and services, but also toys and games and the entire domain of “research and development” (R&D). While recognizing cultural activities and processes as the core of a powerful new economy, it is also concerned with manifestations of creativity in domains that would not be understood as “cultural” such as software development and wider application in mainstream industries such as product design in automotive industry

Creative Industry in a Creative Economy

In a recent variant of creative economic thinking, some argue that the cultural and creative industries not only drive growth through the creation of value but have also become key elements of the innovation system of the entire economy.

According to this viewpoint, their primary significance stems not only from the contribution of creative industries to economic value, but also from the ways in which they stimulate the emergence of new ideas or technologies, including the processes of transformative change.

The creative economy should be seen, therefore, as a complex system that derives its ‘economic value’ from the facilitation of economic evolution – a system that manufactures attention, complexity, identity and adaptation though the primary resource of creativity (source: UNDP/UNESCO Creative Economy Report 2013). In this view, the cultural and creative industries are trailblazers, nurturing societal habits which stimulate creativity and innovation, working to the benefit of the creative economy.

In conclusion, we should adopt 'creative industry' as the concentric base of a wider creative economy where core creative and cultural expressions are sources of ideas, symbols and images that can evolve into other forms to impact the entire economy. This rippling effect to mainstream economies as a whole is what we are defining as the 'creative economy'.

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