Australia’s economic challenge is now starkly apparent. In the wake of a diminishing contribution to our national income by primary commodity exports (think iron ore, coal), we need to 'rebalance' the economy with new sources of growth and productivity.
One potential source of growth is internationally traded services, currently dominated by tourism and education, but with professional services increasingly part of the mix. Another major source, perhaps surprisingly in the light of recent events in Australian car manufacturing, is advanced manufacturing (the use of innovative technology to improve products) with opportunities for 'smart specialisation' in global value chains.
What these high-potential growth activities have in common is an increasing emphasis in their business strategies on creativity and design innovation and, consequently, a deepening interdependence with Australia’s newly emerging creative industries.
But they have not run out of steam.
Even if we were to allow that Australian Bureau of Statistics (ABS) data on the Cultural and Creative Activity Satellite Accounts may have overstated the direct contribution to Gross Domestic Product of the creative sector at $86.7 billion, a new report, Valuing Australia’s Creative Industries (which the co-author here, Lisa Colley, worked on) demonstrates the far-reaching indirect contribution made by those employed in creative industries to a range of activities across the economy.
The report drills down into the data, finding that at least 43 per cent of the creative workforce consists of 'embedded creatives' – in other words, creative practitioners in 'non-creative' industries such as manufacturing, financial services and healthcare. This marks an increase of 151 per cent since 2006.
'Creative intensity' methodology
The report applies a methodology first used by the UK’s National Endowment for Science, Technology and the Arts, based on the degree of 'creative intensity' of creative occupations.
This approach gets around the problem of determining what is and what is not a 'creative industry' by adopting a new definition based on the recognition that digital technologies have created a 'new class of business', combining creative talent and software design.
NESTA proposes that creative industries are "those sectors which specialise in the use of creative talent for commercial purpose". The implication is that the juxtaposition of creative industries with other supposedly 'non-creative' industries is superseded by the value of deploying creative talent across the whole spectrum of industries and services.
This requires a more integrated approach which recognises that a printing company is now only competitive if it brings in a full suite of digital and graphic design services; that a clothing manufacturer will need to connect materials science with high design values; and that design agencies must increasingly apply the principles of lean manufacturing.
There is much to be learned from such cross-fertilisation of skills and capabilities across these industry sectors.
Future economic success will not be achieved by a simplistic delineation of industries but rather a sophisticated understanding of how to integrate, innovate and apply multiple skills within ever-changing business models.
We are beginning to see a more nuanced debate about these issues, from last year’s report on Smarter Manufacturing to last week’s media story in the Sydney Morning Herald recommending "creating things that are faster, lighter and more efficient and simply better than those already provided by mass-manufacturers – thus providing a competitive edge".
The skills to reposition our manufacturing sector include those from the creative industries combined with materials scientists, engineers and computer technicians, all working together.
The role of design applies not only to the design and quality of the product but also its brand, marketing and distribution – the customer experience. The demand for creative expertise is indicative of the growing awareness within businesses for 'design thinking', which offers ways to rethink business models and anticipate customer needs.
A further finding of the Valuing Australia’s Creative Industries report is that software development and interactive content development account for the largest proportion of creative skills overall, with around 200,000 employed both within and outside the formal creative sector. Over half of these consist of support workers and a further quarter 'embedded creatives', primarily in financial and insurance services.
The report also demonstrates a growing demand in industry for “boundary-crossing” skills such as problem-solving, collaboration and integrative thinking, which build on specialised knowledge.
Around the world, it is increasingly recognised that creative industries, with their associated skills and capabilities, are a major driver of competitive advantage in global markets and supply chains.
Work to be done…
Other countries have placed more emphasis than Australia has on the role of “intangible value” in repositioning their economies for long-term growth and jobs.
We need to understand the best way to grow, sustain and engage small, innovative businesses, and learn how they can help us reconstruct declining uncompetitive industries and create new ones.
This is now increasingly urgent with the mining boom winding down, the end of car assembly manufacturing and the need to find other sources of growth and productivity to maintain our living standards.
The future success of our trade-exposed industries in a high-cost economy will depend to a large extent on strategic investment and coordination by government, research and business to promote global opportunities for Australia’s emerging 'micromultinationals', particularly in advanced manufacturing.
There is no one better placed to make this happen than the people who lead and contribute to our creative industries.
Lisa Colley works for the Creative Industries Innovation Centre which receives funding from the Australian Government.
Roy Green does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.