THE IMPORTANCE OF IP FOR DEVELOPMENT IN THE CREATIVE INDUSTRIES Visit to WIPO by Students from the University of the West Indies Geneva 14 May 2008 Brigitte Vézina Creative Industries Division World Intellectual Property Organization

THE CREATIVE INDUSTRIES DIVISION AGENDA Support policy-oriented research Provide expertise Assist in institutionalizing the measurement process Promote review of strategies in related areas Contribute to conceptualizing the creative industries endorse the IP approach Methodology development improve measurement tools guidelines for measuring copyright piracy data collection models Develop tools for individual creators in specific industries – music, publishing, film, design, management of creative enterprises Further expand the surveys Revise and adapt the guidelines to country specifics Publish new studies Collaboration on data collection methods with UNESCO, UIS, UNDP and UNIDO

CREATIVITY FOR DEVELOPMENT Domestic creativity and talent: abundant resources available in all countries Enriches society and helps a country keep pace in the creative economy But, in order to achieve development, creativity must be cultivated A country’s development is in direct relation with the creativity of its people and the ability to economically exploit creative assets Is creativity a driver in the knowledge economy? Can creativity bring more development? Creativity = act of manifesting original expressions through works (music, software, literary works, artistic works and performances). Can be found in all individuals or societies independently of the level of education, cultural background or development. It can be generated either individually or collectively. The oversimplified syllogism: creativity brings wealth, thus development, and IP exists as an incentive for creativity, so indirectly IP brings development. Obtain maximum economic benefits for developing countries from resources in indigenous creation (traditional knowledge and arts, crafts and folklore) Teaching material created by authors originating in the community to which the works are addressed. Recourse to foreign works sometimes desirable, to facilitate cultural interchange and reciprocal flow of ideas. Shortage of specialists. Incentives and subsidies required to encourage national authorship. Need guarantees to the author of adequate remuneration for his efforts, to enable him to devote time and attention. Copyright protection involves ensuring payment of royalties and suitable protection for publishers (opportunity for an author to have his works disseminated). Also required is copyright education of the public. Protection of authors and creators = protection of traditional manifestations of culture which are the expression of their national identity. Cliché that only developed countries can benef from the CIs (most rapidly growing sector) Undeniable role of culture for development. Because CIs can reach in traditional, non-formal parts of society: key to poverty reduction thru participatory and community-based development

COPYRIGHT AND CREATIVITY Purpose of system: protect and promote expressions of creativity to capture its benefits Balance between the interests of: creators to be remunerated for their creative investment, and protect their moral and material interests society to have access to a diversity of creative products for their socio-economic and cultural benefits Protection → more creativity in society? Is the basis of the common law copyright legal system, but not as straightforward—Relationship proved by empirical research: look at how creative outputs flourish once the appropriate protection system is in place IP is one of the incentives for creativity. Of course, not the only one. (Very few artists actually think about copyright during their creative process). There are many motivations: cultural, religious, self-expression, personal history, etc. “From inside” Identify the importance of IP as a specific factor, among others, contributing to economic performance But copyright is better than cultural subsidies because the reward received is directly related to the demand for that product (but for avant-garde art?) IP laws alone are insufficient. Need effective infrastructure: laws, professionals, police, customs, judiciary… IP= tool to ensure the extension of creative enterprise to a broader segment of the population

WHY MEASURE THE CREATIVE INDUSTRIES? Knowledge-based economy Wealth, jobs, and trade A figure on the intangible Policy making Strong interest in measuring creative outputs Knowledge-based economy: creativity = growth factor Identify what the creative industries represent in terms of job creation, wealth and trade generation Put a figure on the intangible Major benefit: providing evidence for policy making to appropriately support them Activities never considered of major economic importance and mostly studied in a cultural perspective Important for developing countries: Can spur development Diversify the economy Internet: level playing field (except film) High-arts (status among developing countries) In developed countries: done regularly: Canada, Finland, UK, Netherlands WIPO’s role: channel resources and expertise

COPYRIGHT TO MEASURE CREATIVITY A well defined concept bundle of rights equilibrium financial mechanism Well defined economic characteristics and functions A basis for huge industries Why use copyright as a benchmark for economic analysis? Copyright = well defined concept a bundle of economic and moral rights an equilibrium between interests of creators and the public a financial mechanism to reward creators who can: Control economic use of the works Receive payment (royalties) Protect the reputation and integrity Clearly defined economic characteristics and functions Copyright = basis for huge industries, hence widely available statistics Creativity ≈ subjective definition Equilibrium between: an exclusive property right and a system of limitations and exceptions Copyright goods and services can be defined. Creative industries produce their own data (IFPI, BSA, MPAA, etc.) and monitor themselves, which facilitates the analysis

THE WIPO GUIDE ON SURVEYING THE ECONOMIC CONTRIBUTION OF THE COPYRIGHT-BASED INDUSTRIES Through linking copyright to quantifiable indicators practical guidelines for measurements consistency of approach To enable positioning of the creative sector in the national economy international and cross-sectoral comparisons identification of competitive advantages And provide input for policy formulation adjustment of national policies and practices Basis for undertaking a comparative analysis between countries on the size of their creative sector

MAIN FEATURES OF THE MODEL IP Business Definition those involved directly or indirectly in the creation, manufacture, production, broadcast and distribution of copyright works Statistics Step-by-step Techniques A reinforced perspective on IP and copyright Relating copyright to business activities A new definition of the copyright-based industries those involved directly or indirectly in the creation, manufacture, production, broadcast and distribution of copyright works A more transparent link to statistical reporting A step-by-step methodology A set of measurement techniques Business activities: (“industry” = economic activity, may include individual activities) Definition: (main criterion: level of dependence on and use of copyright protected material)

THE COPYRIGHT INDUSTRIES Core copyright industries fundamentally Interdependent industries facilitate Partial copyright industries a portion Non-dedicated support industries delivery Core copyright industries fundamentally exist to produce/distribute copyright materials Interdependent industries facilitate the creation, production or use of works Partial copyright industries a portion of the activities is related to copyright Non-dedicated support industries Induced impact, delivery modes, spillover effects Main criterion: level of dependence on and use of copyright protected material Industry may include individual activities, it is a synonym of economic activity

FINDINGS A substantial contribution Drivers of the economy? Adequate policy measures All studies show a substantial contribution of the creative industries to the national economy Allow us to see which parts of the economy are the real drivers/leaders The sector deserves adequate policy measures Substantial: position among other industry groups. Ex.: bigger than agriculture in Bulgaria The real question: is there growth?

Country Contribution to GDP % of Employment USA 11,12 8,49 Singapore 5,70 5,80 Canada 4,50 5,55 Latvia 4,00 4,50 Hungary 6,67 7,10 Philippines 4,92 11,10 Bulgaria 3,42 4,31 Mexico 4,77 11,01 Lebanon 4,75 4,49 Jamaica 4,80 3,03 Russia 6,06 7,30 Romania 5,54 4,17 Croatia 4,42 4,65 Peru 3,60 2,51 Ukraine 3,47 1,91 Korea 8,67 4,31 Ongoing: Brazil, China, Colombia, Kenya, Malaysia, Morocco, Nigeria, Pakistan, Sudan, Tanzania Source: WIPO

FINDINGS (contd.) Overall economic development level Growing interest THE RECORD THE PERCEPTION Overall economic development level Economic cycles and classification systems Dynamics Multiplier effect Structural changes Growing interest 5 languages, over 27 surveys, new edition in preparation Copyright awareness Copyright profile Individual specifics Objectives Available information Available financing Links to policy development Results not necessarily a function of overall economic development level of the country Strong influence of economic cycles and classification system Impressive dynamics Multiplier effect Indicative of structural changes in the economy Economic cycles: (in times of economic booming: creative industries outperform the overall economy, and vice versa) Dynamics: Bulgaria: x 3, Canada: x 2 Multiplier effect: Singapore: “7”: investment in this sector would create 7 times more jobs than if investing in traditional sectors Growing interest in surveys underpinning policy action 5 languages, over 27 surveys, new edition in preparation Raises awareness about copyright Becomes an element of the copyright profile Individual specifics depend on: Objectives Available information Available financing Links to policy development

MAIN CHALLENGE Practical and reliable, but not possible to apply uniformly everywhere Specific context of countries: systems for statistical information economic environment and traditions policymakers WIPO methodology: practical and reliable model, but not possible to apply uniformly everywhere Specific context of countries: systems for statistical information economic environment and traditions need and readiness of policymakers to accept and apply results

ISSUES Policy issues Statistical issues match level of expectations Scope and coverage copyright limited to what is protectable gray economy and piracy not surveyed social and cultural aspects not surveyed Statistical issues industrial approach/ individual activities production, not consumption based approach underdeveloped statistical framework Technical issues Consumption based approach traditionally used in culture field Conservative estimates Despite impressive record and interest in research, always challenges with IP framework to research on the creative industries. Difficulty of reconciling the industrial approach to individual creative activities. Careful work and adjustments in data collection and data analysis. WIPO studies do not disclose data on public or private spending on culture. They focus on macroeconomic indicators. The overall underdeveloped statistical framework in the field of culture, copyright and creativity adds to the cost of the studies. Copyright protects only creative expressions, hence the scope of the survey is linked to what is protected under the national legislation. As a result some creative expressions may not be accounted for if they do not fall within the protection provisions. Based only on official data sources, meaning that the entire grey economy or piracy production is excluded from the scope of the survey. Establishment of the level of dependence on copyright, calculation of value added, and others which have to be dealt with by every individual research team. WIPO offers assistance in this field based on its experience so far. adds to the cost

CONCLUSIONS The model works A basis for policy action Social, cultural… International cooperation The model works, problems are solved differently from country to country Studies provide information for countries and a basis for policy action, when desired Better results if complemented by social, cultural studies, like impact assessments Challenges can be solved more easily through international cooperation (Example: work with UNESCO, OECD, ILO, UNCTAD)

THANK Y©U! brigitte.vezina@wipo.int