Comparative analysis of Cultural and Creative Industries support models in selected countries

Overview

Cultural and Creative Industries (CCI) have enormous potential and can contribute to South Africa’s economic growth. Unlike other economic sectors, CCIs have many spillover effects, not only into the rest of the economy through the innovation they bring, but also benefit society as a whole as they contribute to national identity, nation building and social cohesion. The aim of this report is to inform government about support provided by selected countries to CCIs as well as analysing the economic rationale for support for CCIs.

This report firstly analyses the economic rationale for supporting businesses in general and CCIs in particular. It looks at the theoretical foundations for support to targeted industries and then how they apply to CCIs.

Government is responsible for delivering goods such as national defence, infrastructure and education and are referred to as “public goods.” The output of many CCI sectors can also be seen as public goods. Museums, for example, are non-rivalrous. Monuments and radio broadcasts (that are not encoded) are non-excludable and all citizens can benefit from them.

Market failure occurs, when the market, when left to its own, do not produce socially efficient (or Pareto efficient) outcomes. Government intervention in the economy is justified when there is market failure and provided that the benefits of any interventions outweigh the costs (Bator, 1958). “The main economic rationale for public finance for the arts is that they have public-good characteristics and so the extent to which that is the case has been debated for a long time in cultural economics” (Towse, 2011)

The report then goes on to look at the support that selected countries provide to their CCIs. Using the best practices that have been identified on the principles that were discussed guidelines are proposed on how to move forward.

It is important to note that there have been no stakeholder consultations in drafting this report largely because of the time constraints.