Comparative Advantage and Intellectual Property Rights: Some Evidences from Creative Industries in Bhutan, China and Egypt
19 Pages Posted: 21 Jul 2012 Last revised: 12 May 2013
Date Written: September 8, 2011
Creative industries (CI) “are the cycles of creation, production and distribution of goods and services that use creativity and intellectual capital as primary inputs” (UNCTAD 2010). The notion that intellectual capital can be organized as a primary factor of production whereby various industries can be deemed ‘creative’ does not go without inviting academic scrutiny (Oakley 2004; Elliot 2007). In the UK where the idea conceived, as Labour government was voted out of the office and general business environment changed, ‘creative industries’ have lost much of its currency as an industrial policy tool. With the onset of the worst recession in decades, many cultural organizations and creative businesses which have only recently gone through a period of boom are found to be facing large budget cut and the withdrawal of supports by the government.
Elsewhere in the world, the contrast could not be more different. In the dynamic industries such as new media, game and performing arts, Germany is rising fast to challenge the traditional US leadership. In the developing world the concept is now increasingly taken up by the government to encourage creativity, entrepreneurship and innovation. China, for example, instituted first official Cultural and Creative Industries Development Plan to ‘kick start’ a nation-wide campaign, and began strategic reorganization of state owned enterprises (SOEs) in publishing and media, to be followed by capital market listing, Chinese firm such as Crystal CG has quietly entered the world stage of creative business after its debut in the grand opening of the Beijing Olympics. In India, increasing level of specialization has made India the world’s largest exporter of handmade paper with 23 % of the world’s export market share. In spite of major instability, Afghanistan has become the 11th largest carpet exporter in the world with a 2 % of global share in export.
While creativity is and has always been a key force behind human progress, it can be argued that the concept of creative ‘industries’ offers a new lens through which one can examine and capture ‘kaleidoscopic’ combination and recombination of human ingenuity and organization. In the context of development, trade in creative goods such as handicrafts provides the least developed countries (LDC) with income generation and diversification opportunities from traditional agriculture. Trading a country’s authentic material culture embodied in the form of traditional handicraft also gives voice to the nations (Barrowclough and Kozul-Wright 2007; Schultz and Van Gelder 2008) and has a great potential to transform skills into opportunity driven entrepreneurship and self empowerments (UNIDO 2011).
Based on recently released international trade data provided by UNCTAD’s creative economy programme, this paper presents some preliminary findings of an ongoing study which aims to empirically assess, though at this stage very partially and limited, the relationships between revealed comparative advantage (RCA) and intellectual property rights (IPRs). While there is no shortage of academic literatures which pointed out the importance of IPRs to creative industries (Schultz and Van Gelder 2008), there remains few sector based, large scale, cross national study which investigates the relationship between RCA and IPR. While the research is ongoing to explore wider implication of IPRs for development, the focus of this paper is to present the result of empirical assessment on creative economy hence the focus is leaned towards understanding the overall performance of creative industries in the world and related comparative advantage of CI and its sub-groupings. Specifically, the paper looks at (1) trade dependency ratio in relation to CI, (2) revealed comparative advantage across 24 CI sub-groups and top performer, (3) local development issues pertaining to CI based interventions aiming at enhancing competitiveness.
The analysis is drawn from a 206 x 206 country to country trade flow matrix organized by 24 creative industries sub-groups to assess sectoral pattern of trade. The dataset for trade dependency ratio uses a smaller sample of 103 countries which reported on both trade in goods and services. The research has not been able to provided evidences on the linkage between RCA and IPR which would only be available with more time and efforts finding a suitable concordance between WIPO based statistics measure and UNCTAD’s ISTC/HS systems. Future directions are discussed as to how to develop from this paper for the ongoing research and the difficulty to integrate WIPO based IPR statistics with UNCTAD’s classification on creative industries6. The structure of this paper is as follows. The first part of the paper presents an overview of creative economy in terms of trade dependency and RCA. The second part of this paper looks at the RCA and sectoral pattern of CI trade in the cases of Bhutan, Egypt and China. The third part of this paper reflects on the findings from the field missions and discusses the potential of CI for development. The final part of this paper outlines further steps for the future research.
Keywords: Creative Industries, Revealed Comparative Advantage, Intellectual Property Rights, Cultural Economics
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