The SA Cultural Observatory - Measuring And Valuing SA’s Cultural And Creative Industries, September 2021

A highlight on our published reports

The SA Cultural Observatory was established to undertake economic research for and about the cultural and creative industries in SA. 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 about the sector.

For this publication, we have focused on two reports mainly for their relevance to local economic development and the high level of interest the industry has on the topics. The two reports are Copyright: Public and stakeholder perceptions and concerns on current copyright and performers legislation and proposed amendments; and Regional Development - The Cultural & Creative Industries in South Africa: A case study of the Sarah Baartman District. The complete reports can be downloaded from our website  (www.southafricanculturalobservatory.org.za) or through the links.

# Report 1: COPYRIGHT: Public and stakeholder perceptions and concerns on current copyright and performers legislation and proposed amendments.

The report sought to achieve a few objectives, and among these were to provide an overview of the current documented positions being taken by parties supporting and opposing the legislation (including but not limited to “fair use versus fair dealing” as well as retrospective clauses) being held by stakeholders within and outside of the Cultural and Creative Industries), identify the key points of agreement and contention; identify the possible economic impact of the proposed implementation based on the points of agreement and/or contention, and identity which positions are the most beneficial to the South African economy and the Cultural and Creative Sector; 

Copyright protection is the right of the copyright owner to prevent others from making copies of their work. It trades off the costs of limiting access to work against the benefits of providing incentives to create the work in the first place. Striking the correct balance between access and incentives is the central problem in copyright law. For copyright law to promote economic efficiency, its principal legal doctrines must, at least approximately, maximise the benefits from creating additional works minus both the losses from limiting access and the costs of administering copyright protection

Effective copyright protection, therefore, encourages or enhances creators to create and publishers to publish. This would be done through providing them with effective incentives to continue creating and publishing. The content that they are providing should not be freely available or accessible so as to make it unprofitable for them and therefore depriving them of their property and to a certain extent, their dignity. However, restricting access too much would result in a monopoly and the prices for accessing the content being so high that most people would not be able to access the content that is created. This would restrict the general public’s freedom of expression as well as their access to information and educational content.

With South Africa’s history of racial imbalances having effective copyright protection is even more crucial. This is even more so in the access to educational content where previously disadvantaged schools and learners still struggle to have access to educational textbooks and materials due to affordability reasons. 

Access to copyrighted materials is also important for the preservation of cultural and creative content since it would allow for the digitization of the content so that it is preserved and reproduced in technological formats that are used currently and therefore making sure that they are available for generations to come. 

It has been argued that in its current form the bill does not balance the interests of creators with the needs of society and that it is heavily biased towards the users. Opponents of the Bill argue that some of the provisions of the Bill will largely impact on the more than 5 000 small and medium-sized record labels, as well as thousands of South African musicians who will not be able to sue big tech companies that are likely to take advantage of the broad exceptions in the Bill and the revenue generated by the industry will likely shrink. This could stifle the culture of writing, reading, education and training, creativity and innovation as well as the socio-economic wellbeing of South Africans. It has also been argued in the PWC Report that publishers expect a 33% decrease in sales which would equate to about R21 billion a year and a loss in tax revenue, resulting in imported publications increasing. 

The United States threat to review South Africa’s eligibility in the General System of Preferences (GSP) as a result of concerns about the effect of the Bills on the country’s intellectual property protection and enforcement would have dire effects for South Africa as a whole (not just the creative industries) and this could result in over R34 billion worth of South African exports to the United States being suspended or withdrawn. 

Key report findings and recommendations include the following: 

• Effective copyright protection balances the rights of creators vs providing access – it is argued by opponents of the Bill that the Bill as it reads now, does not strike this balance and is pro-user, at the expense of creators and copyrights holders.
• The Bill will have a serious impact on CCIs.
• The possible economic impact of the Bill includes loss of income or revenue, lack of investments in CCIs and businesses closing down.
• Foreign investments would also be threatened by the passing of the Bill. 
• The Bill casts the net far too wide and has far reaching consequences that goes beyond the objectives it seeks to achieve.
• An economic impact assessment is recommended to review the impact to the CCIs. 
• Certain provisions of the Bill need to be reviewed in order to bring them in line with the constitution and in order to achieve the objects of the Bill. 

#Report 2: Regional Development - The Cultural & Creative Industries in South Africa: A case study of the Sarah Baartman District

There is growing international interest in how the cultural and creative industries can be used to drive regional economic growth and development. However, previous research has found that the cultural and creative industries (CCIs) usually form clusters in cities due to the benefits of established hard and soft infrastructure. To date, there has been little research on CCI clustering in rural areas and regions without large cities. In this context, the study’s objective was to fill the gap by demonstrating how mapping techniques can be used to identify regional clusters. Such information is important for the design of effective regional cultural policy. 

The Sarah Baartman District (SBD) of South Africa’s Eastern Cape is the largest district in the province yet it does not have any large urban centres. The district has nevertheless identified culture as a potential new economic driver. The identification and development of new economic drivers is necessary as the former economic mainstays of mining and agriculture in many small towns have declined. The potential exists for clusters to form in small towns as many CCIs do not require high technology inputs, extensive networks or long supply chains. 

There are several potential benefits of the CCIs to both economic and social development including job creation, income generation, the intrinsic value of cultural products and spill-overs. To investigate whether clusters can form in small towns and the relationship of the CCIs to development, three maps were created for the SBD using geographic information systems (GIS) technology. By examining the number and type of CCIs (classified by UNESCO cultural domains), it was found that clusters can form in small town settings. These domains should be targeted for development as clusters that are already established and have a greater chance of success. An economic welfare indicator was created with economic and social components to measure the potential development contribution of the CCIs to the municipalities within the district. The municipalities with larger numbers of CCIs tended to have better welfare scores. There is thus a positive relationship between the presence of the CCIs and development. 

Key report findings and recommendations include:

• CCI clusters can form in small towns and rural areas. 
• Existing clusters should be targeted for development as they indicate an existing comparative advantage. 
• There is a positive relationship between the presence of CCIs and economic and social welfare performance.
• GIS is a useful tool in the analysis and presentation of results for culture related studies. 
• While the 2014 National Mapping Study was a valuable starting point for regional studies, it needs to be supplemented by regional data as the details of small town CCIs were not adequately captured.