The SA Cultural Observatory - Measuring and Valuing SA’s Cultural And Creative Industries

HIGHLIGHT ON OUR PUBLISHED REPORTS

The South African Cultural Observatory was established to undertake economic research for the cultural and creative industries in South Africa. The kind research we conduct provides such information as to the economic size of the sector, number of jobs in the sector or transformation. We publish the reports on our website and in various media platforms, including this newsletter, with a view to empower industry stakeholders with information that we hope they will find useful, informative and can be relied upon when making decisions that affect the sector.

In this edition, we have put a spotlight on the Observatory’s main report -  The Economic Mapping of the Cultural and Creative Industries in South Africa 2022 or in short, the CCI Mapping Study 2022. Published once every two years, the report can be downloaded from our website (www.southafricanculturalobservatory.org.za) or using the link below: https://www.southafricanculturalobservatory.org.za/download/974

The overall goal of the CCI Mapping Study 2022 is to provide updated information on how the cultural and creative industries contribute to the economy of South Africa in terms of Gross Domestic Product (GDP) and GDP growth, employment and transformation, and international trade. The CCI Mapping Study 2022 is an update of previous mapping studies published by SACO in 2018 and 2020. In addition to providing aggregated information about the sector, the           research also analysed specific cultural domains (as defined by the UNESCO Framework for Cultural Statistics, 2009), and to identify areas that are showing potential, and those that are facing challenges, so that policy implications can be identified. A special focus of the 2022 mapping study is the impact of the COVID-19 pandemic on different parts of the sector, adaptation strategies used, and tracking the start of the recovery as lockdown regulations eased.

Using the rebased 2015 GDP data released by Statistics South Africa in 2021, a Cultural Satellite Account showed that the CCIs directly contributed 2.97% or if you like, about 3% of South Africa’s GDP in 2020. As found in previous mapping studies and in the international literature, the creative economy grows quickly when the economy is doing well, but tends to decline more quickly than other sectors when economic growth slows. The CCIs generally grew faster in 2017 than the South African economy overall. However, the growth rate for the sector slowed down relative to the South African economy from 2018. The impact of the slowdown in the economy during 2019 and the COVID-19 lockdowns have resulted in all domains showing some decline over time. Following a peak year-on-year growth rate of 3.4% in 2017, the creative economy showed signs of slowing growth even before the pandemic (year-on-year growth rate of -1.1% in 2019), and a significant overall drop in 2020 (-6.6% in 2020 compared to -5.9% for the economy as a whole).

The largest domain is Design and Creative Services: R51 billion in 2020, 32% of the CCI contribution to GDP. The second-largest domain is Audio-visual and Interactive Media: R48.4 billion in 2020, 30% of the CCI contribution to GDP. Visual Arts and Crafts made up 15% of the CCI contribution to GDP in 2020 but was one of the most negatively impacted by the COVID-19 pandemic. Books and Press made up 13% of the CCI contribution to GDP in 2020, and also had a negative growth rate between 2019 and 2020 (but was already slowing before the pandemic). In addition to their direct impact, the CCIs have strong backward and forward linkages with the rest of the economy, resulting in large multiplier effects, especially in commercial application domains such as Design and Creative Services, and Audio-visual and Interactive Media.

Using the Cultural Trident method (which includes people in cultural occupations working in the cultural sector as well as working in non-cultural firms, and people in non-cultural occupations working in cultural firms), the creative economy accounts for 6% of all employment in South Africa (an estimated 1 million jobs). At least 2.3% of employed people in South Africa were identified as being employed in cultural occupations in 2019 (similar to Malaysia, and higher than Uganda and Mozambique). The largest domain, in terms of cultural occupations in 2019, continues to be Visual Arts and Crafts (44.5%), followed by Intangible Cultural Heritage (22.5%), Design and Creative Services (13.4%) and Books and Press (12.4%).

Creative occupations in South Africa are showing continued transformation: including Black African, Coloured and those of Indian/Asian origin, 86.7% of people working in cultural occupations in South Africa are Black (compared to 83.6% in 2017). The profile of those in younger age groups is also more representative than older people in cultural occupations. There are more men employed in cultural occupations (57.3%) in comparison to women who constitute 42.7%. This trend is very similar to the gender distribution in non-cultural occupations.

As noted in previous reports and mapping studies, the significant under-representation of young women in cultural occupations compared to young men is a concerning trend. However, as found in other studies on the impact of the COVID-19 pandemic on creative economy workers in South Africa (SACO, 2021) and internationally, young and emerging (early career) cultural workers are more vulnerable to disruptions and job losses than older, established creatives. To ensure the continued transformation and sustainability of the sector, it is important to provide support especially to young creatives.

A much greater proportion of people in cultural occupations work in the informal economy (46.3% in 2019) than those in non-cultural occupations (29.8%). Cultural occupations are also more likely to be freelance “own account” workers (34.5% of cultural occupations compared to 9.5% of non-cultural workers). Both these characteristics make those in cultural occupations more vulnerable to shocks, such as the COVID-19 lockdown.

Quarterly Labour Force Survey (QLFS) data showed that cultural occupations suffered larger relative decreases in the number of jobs in 2020 than non-cultural occupations: by 2020Q4 there were 295 000 people working in cultural occupations, compared to 380 000 in 2019Q4 (a 22% decline in cultural occupations, or 85 000 jobs lost between 2019Q4 and 2020Q4). However, although there are fewer women overall working in cultural occupations and industries, women in cultural occupations were not as negatively affected by the crisis as men. While cultural jobs for both men and women declined in 2020, compared to 2019, the decline was steeper for men (a year-on-year drop of 25%) than for women (a year-on-year drop of 18.9%).

In 2020, South Africa’s cultural goods exports were worth US$316.46 million, and made up 0.37% of the value of all South Africa’s commodity exports. Until 2018, cultural goods exports had been growing strongly, making up 0.47% of South Africa’s total commodity exports (US$448.86 million) in that year. As with GDP growth and employment, the economic slow-down and the impact of COVID-19 have had a negative impact on cultural goods exports. Cultural goods trade contracted more sharply than total commodity trade on both the export and import side for 2018–2020.

Like many small, open economies, South Africa had a cultural goods trade deficit, with the value of cultural goods imports being more than the value of exports. However, cultural goods imports have been declining recently, and for the first time in 20 years, South Africa had a positive cultural goods trade balance for some quarters in 2020 and 2021. While cultural goods exports initially appeared to recover more quickly after the hard lockdown, they have not yet reached pre-pandemic levels.

Visual Arts and Crafts, Books and Press, and Performance and Celebration are the most significant domains for South Africa’s cultural goods trade. South Africa has a trade surplus in Cultural and Natural Heritage trade, and in Visual Arts and Crafts. Visual Arts and Crafts contributes a relatively small share to the creative economy in terms of the value of its production (15%). However, it accounts for 44% of cultural occupations. The promotion of cultural goods exports in this domain would not only increase the overall cultural goods surplus, but could help to improve the value added of the sector and support jobs.

In 2019, South Africa had a significant cultural goods trade surplus with USMCA (of US$111.64 million) and with SADC and the rest of Africa (US$62.35 million and US$12.6 million respectively). The USMCA bloc has become an increasingly important destination for South Africa’s cultural goods exports in Visual Arts and Crafts, Cultural and Natural Heritage, and Performance and Celebration domains. Visual Arts and Crafts exports to USMCA actually increased in 2020, as did Books and Press. South Africa’s cultural goods exports to SADC also increased in 2020, during the COVID-19 pandemic. Exports to SADC grew in the Performance and Celebration domain and in Books and Press. TCIs are used to assess the potential for trade expansion between trading partners. South Africa’s Export TCI with the USMCA (47.20%) exceeds that with SADC (35.79%) by nearly 12 percentage points. However, the country’s export TCI with the EU is even greater at 65.07%.

South Africa has a low Import TCI with SADC, which suggests that the region does not produce enough of the range of cultural products that South Africa imports. There is a need to build productive capacity in the CCIs in the SADC region, address non-tariff barriers, infrastructure constraints, transport costs, financing and information flows. It is important to add a regional dimension to South Africa’s CCI focus at the domestic level to harness the potential of the creative economy in other SADC countries and address regional imbalances.

Growing digitisation has increased the importance of services trade in the CCIs. CCI services exports grew strongly in several domains, including Audio-visual and Related Services until 2019. The impact of the pandemic on Personal travel services was largely responsible for turning South Africa’s small overall services trade surplus in 2018 into a significant deficit in 2020.

There is overall evidence that South Africa’s creative economy, like that of many countries, has been negatively affected by measures put in place to contain the COVID-19 pandemic. Production growth rates, which were already slowing in response to low overall economic growth rates, declined further. Cultural occupations declined dramatically between 2019 and 2020, as did international trade in cultural goods and most cultural services.

Nevertheless, there is also evidence that the creative economy continues to contribute significantly to South Africa’s GDP, job creation and transformation agendas, and some parts of the sector have shown resilience, and the start of recovery.

The full report is made up of 5 chapters covering the Macroeconomic Impact of the CCIs in South Africa; Cultural Employment and Transformation; International Trade in Cultural Goods and Services; Provincial Profiles; and The South African Creative Economy in Historical Context