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What Is The "Creative Economy"?

02 Oct 2023

It's a term that gets bandied around by politicians, advocacy groups and organisations - but what does it actually mean? Andrew Wood deep dives to give it perspective and looks at where the "creative economy" is failing creatives.

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Image: Shutterstock.

It’s election time.

Governments love the expression “creative economy” – it’s kind of a sop to creatives, implying that they too can be assimilated into the sort of things governments and the people who vote for them really care about. 

Not that most governments seem to have a concrete idea of what the “creative economy” actually means. 

I’m not sure I do either - so I decided to pop down the rabbit hole and find out. Here, I’ve mainly focussed on research available for free at

Who coined "creative economy"?

We can trace the term back to 1998. Blairite Britain in the grip of its “Cool Britannia” heyday cooked it up as part of its utopian vision of a creative sector that paid for itself as part of a soft power British Empire 2.0.

The UK government of the time had a sort of checklist of the 13 relevant sectors that made up their “third-way” concept of the “creative economy”:

  • Advertising
  • Architecture
  • Art and antiques market
  • Crafts
  • Design
  • Designer fashion
  • Film
  • Interactive leisure software (video games to you and I)
  • Music
  • Performing arts
  • Publishing
  • Software and computer services
  • Television and radio

Basically - creativity as product, reduced to its economic outputs.

Marian Noga and Magdalena Krawiec, writing in Torun International Studies in 2017, pinpointed the distinctive features of the creative economy thus defined:

  • Despite the difficulties in defining and measuring it, the phenomenon in question is a constituent of global economy of growing importance for the development of civilization 
  • Drives innovations
  • Influences consumer and citizen behaviour, shaping consumption preferences
  • Has impact on the quality of life
  • Constitutes a vital interest of business to business economy (B2B)
  • Creates a social and technical infrastructure of contemporary society
  • Is a decisive factor as far as civilisational progress is concerned

The fundamental prerequisite is the legal protection of intellectual property in the form of patents, copyright, trademarks and designs, all of which are monetisable. 

If that sounds familiar, it’s because it’s the same model that the New Zealand and Australian governments more or less adopted wholesale after Britain, made some tweaks for biculturalism, and really haven’t reconsidered since.

All cultural development policy in both countries since then has had the creative economy as a cornerstone, without ever really offering a clear definition of the relationship between creativity for its own sake and creativity as an economic product.

An overview of creative industry policy and research in other countries can be found here.

Academia dives deep

But that’s government; what of the academic perspective?

John Howkins observes in a 2022 letter to Academia Letters that while, since the 1990s, the “creative economy” – the first kind of economic system to be shaped by human qualities rather than externals like land, capital or labour - is much talked and written about, the “creative” part is largely ignored, and the “economy” part is under-researched.

Howkins asserts with his fellow researchers; 

We see the embodied self and creativity as the two co-founders of humanity. We like the analogy of a start-up with two founders having moments of harmony and moments of conflict.

Certainly, the accepted conceptual framework of what the creative economy is has fluctuated wildly from when intensive theorization of it began in the 2010s to how a lot of academics and activists talk about it now.

In 2007, Stuart Cunningham urged a broader and more holistic view of what the creative economy actually is, with an emphasis on educational access and mainstreaming culture and media into policy powerhouses for economic and industrial development in the hope the positives will outweigh the drawbacks.

It was this sort of reasoning that saw the New Zealand government get heavily involved in film production - providing enormous, effectively uncapped tax subsidies to foreign productions. The good and bad of that is still being debated. Similarly, in the last budget, the Government decided to offer similar incentives to game developers.

To a lesser extent, it was also the reasoning behind the big hype push behind New Zealand’s participation in the Venice Biennale in 2014, but whereas the government has continued to back film production, CNZ announced there would be no stand-alone national pavilion in 2024.

Blurred lines

This fits the perception of creative production being prioritised by capital generated - and indeed - much of the uncertainty around what a creative economy is and how it functions comes down to a tussle for control between the vested interests of the private sector and legacy arts organisations.

As early as 2009, academics attached to the Queensland University of Technology’s Creative Industries Faculty argued that the creative economy should be separated entirely from the interests and values of cultural organisations and corporations.

This is not an argument that has ever particularly convinced me, as the creative economy has a complicated symbiotic relationship with both, and to be severed from either would likely result in it collapsing like a wet cake.

The other stumbling block is that economists - the kind government is used to listening to - tend to think in terms of the traditional workplace and traditional capital. As Scott Schwartz noted in a 2014 paper delivered at Goldsmith’s College in the UK, the values and practices of this relatively new economy differ considerably from traditional workplace roles. 

Schwartz describes the creative economy as being largely driven by a combination of passion and fear, in which participants gravitate to positions they connect with, while valuing mobility and flexibility over 9-to-5 stability and being part of a system or institution.

What strikes me is that this sounds a lot like an accurate prophecy of the broad characteristics of the millennial workforce - though Schwartz is observing this through a distinctly neoliberal lens - and one might also argue that these are artificially imposed conditions that favour corporate capitalism’s preference for a disposable workforce.

A year earlier Christian Berndt, writing in Die Erde, came to similar conclusions, which is a stark reminder that the 2010s were a very different place in the grip of the fever-dream of the so-called “neoliberal consensus”.

It probably didn’t help that the creative economy was emerging as a concept at the same time as the digital economy, and vested interests have always seen them as being intimately connected and to be treated similarly while excluding more traditional forms of creativity.

Both Schwartz and Berndt - with varying degrees of cynicism and caution - envisioned the development of an empowered creative elite of freelancers flitting online from lucrative gig to lucrative gig in a globalised economy. 

It should be fairly self-evident that this hasn’t really materialised.

Why hasn't it?

This, one suspects, is due to several reasons. 

First, it favours individuals who are already materially well-resourced and connected, with the requisite skills and training across multiple media and in business. 

And second, corporations simply adopting cheaper, cookie-cutter copies of successful ideas, outsourcing to developing nations, and eyeing up AI to further force creatives into the precariat. 

Less a creative elite than a creative serfdom.

An overview of these issues and others can be found here.

More to the point, such utopian visions misguidedly assumed the position of creatives serving and transforming the economy rather than capitalism doing what it always does when vulnerable people own their means of production.

By the end of the 2010s, a more critical analysis emerged - one that actually took note of the existence of cultural organizations and institutions. 

In a 2018 paper published in Cultural Trends, Kate Oakley and Jonathan Ward observed that while from the late 1980s the notion of a “creative economy” had become a global policy paradigm, the policies that came out of it rarely served the creatives themselves.

In fact, the hijacking of the creative economy by a troika of governments, universities, and corporations, has led to it being associated with urban gentrification, rising property prices, exploitive work conditions, and greater inequality - while completely ignoring things like craft production and alternative ways of working.

Where does indigenous culture fit in?

In particular, very few models for understanding the creative economy leave much room for things like an indigenous Kaupapa. The government has made some inroads in attempting to provide legal protection for Māori cultural property, such as the Haka Ka Mate Attribution Act 2014.

But there are limits within our legal framework too, and the contours of these were tested in 2011 by the Wai 262 claim to the Waitangi Tribunal.

Until there are some definitive structures in that space, Māori will not be able to fully participate in the “creative economy." 

On the one hand, this is a disaster, because Māori are the most distinctive and internationally marketable creatives in Aotearoa (our most distinctive brand, to put it crudely).

On the other hand, the “creative economy”, as a fundamentally Pākehā and colonial concept, may be more of a liability for Māori tino rangatiratanga. 

And what then of unique developments in Pasifika creative production in Aotearoa? We need to be very cautious in how present models are applied to Māori and Pasifika creative practice, acknowledging that these often have unique cultural and spiritual dimensions.

Perhaps I should say “creative economies” - as I am by no means convinced there is one big one. It’s more of a multi-tiered ecosystem of staggering complexity. 

Time for a rethink

It seems to me that we need to reconsider the conceptual definition of creative economies in Aotearoa.

The United Nations 2013 Creative Economy Report urged the need to refocus the creative economy at the community level and to seek “new pathways to that encourage creativity and innovation in the pursuit of inclusive, equitable and sustainable growth and development”.

David Colander cogently argued in 2014 that applying a “scientific” mainstream economist’s approach to the creative economy was restrictive and counterproductive. And in 2016, Philip Schlesinger suggested that the “creative economy” was an artificial global orthodoxy anyway.

My own feeling is that we need a broader, more democratic model - that treats non-tangible public and community goods on a par with the financial, reinvesting in developing an informed public who appreciates and is willing to pay for creativity.

It’s great that the Government sees the benefits in investing in our film and video game industries, but that’s a fraction of the potential, and ignores that many of the humanities courses and departments at our universities that feed into the creative side of these industries are at serious risk.