Chief Economist, Sound Diplomacy, Germany
The Importance and Challenges of Creative and Cultural Industries in the Digital Age
Studies have shown that CCIs generate $4.3 trillion annually and create nearly 30 million jobs worldwide. These industries contribute significantly to social inclusion and innovation, especially among young people, as they employ more young people (aged 15-29) than any other sector (UNESCO, 2023). For example, Nigeria's "Nollywood" film industry is one of the country's largest employers, contributing up to 2.3% of its GDP.
Beyond the economic value generated by culture, its social importance has been increasingly recognized. Recently, during the UNESCO World Conference on Cultural Policies and Sustainable Development - MONDIACULT 2022, participating countries recognized culture with the status of a public good, placing it on par with education and health. It is essential for human-centered development and societal well-being.
However, the culture and creative industries (CCIs) are facing significant changes that put their benefits at risk, leading to a potential highly concentrated market. The rapid advancement of digital technologies has transformed the sector by democratizing the production and distribution of cultural and creative content, reducing barriers to entry for artists and creators. For example, advances in technology have lowered production costs, making video and music creation more accessible and significantly increasing available content. Platforms like Spotify release 120,000 songs daily, and digital platforms like Mdundo have enabled over 172,000 content providers, paying artists between $1.2m and $1.5m in royalties for the 2023-24 period (Industria Musical, 2023).
However, these advancements have also led to challenges, such as the oligopolistic concentration in certain roles within the value chain, particularly in distribution through streaming platforms. In 2020, 62.1% of the global recorded music revenue came from streaming services (Statista, 2023). Video streaming subscriptions have also increased, reflecting changing consumption habits. This concentration can result in a limited number of entities controlling a significant portion of the market, posing a threat to the diversity and equity of cultural content distribution. The current market structure often benefits certain types of content or agents, limiting cultural diversity by disadvantaging those with less negotiating power, preventing them from generating algorithms that favor them more.
New technologies also bring about significant regional concentrations in the production of cultural and creative content. This technological advancement has the potential to widen existing disparities. For instance, North America and Europe already produce significantly more cultural and creative goods and services than Latin America, the Caribbean, Africa, and the Middle East. Technological gaps between developed and developing countries exacerbate this imbalance, with a significant disparity in cultural content from dominant countries on digital platforms. This disparity can be attributed, among many causes, to digital gap and digital literacy inequity. For example, in the global north, over 80% of the population used the internet in 2020, while in the global south, the average was below 50%. In Latin America, there is a 40% gap in internet usage between higher-income and lower-income households and a 25% difference between urban and rural households (OECD, 2020).
Additionally, the need for digital skills in the arts and culture sector is becoming increasingly important worldwide. According to Wiley's The Digital Skills Gap Index (2022), there are significant differences in digital skills between countries. For instance, Sweden ranks third globally with a score of 9.5, the United States ranks 12th with a score of 8.5, and Colombia ranks 93rd with a score of 4. This disparity in digital skills can further deepen the existing divides, limiting the ability of artists, creators and cultural managers from less technologically advanced regions to compete on a global scale and diminishing the overall diversity of cultural content.
Furthermore, a new factor is set to transform the sector drastically: Artificial Intelligence (AI). The introduction of AI in CCIs has sparked a revolution, further reducing barriers to production while creating new challenges. AI allows for content production without requiring extensive artistic or technical knowledge, needing only an understanding of AI functionality and access to the necessary infrastructure (internet connection, a computer, and software). This advancement can lead to greater disparities between regions, countries, and within countries, significantly impacting cultural diversity. Additionally, AI-generated content is often based on existing references, which risks perpetuating content primarily created in the Global North, limiting the representation of diverse cultural expressions.
It's not enough for countries to declare culture as a public good; they must take actionable measures to reduce the risk of content monopolies and ensure that AI complements creators rather than replaces them. Cultural policy, especially in the Global South, must work closely with technology and digital institutions. Stakeholders in the cultural sector need to be much more active in discussions about new technologies and artificial intelligence. Without proactive participation and investment in digital and AI initiatives, regions like Latin America and Africa risk becoming dependent on global companies, losing control over their own cultural solutions and own cultural diversity. We must prevent a future where digital content is generated by systems programmed by engineers in Silicon Valley, rather than by artists in Latin America or Africa (Kulesz, 2018).
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