Rabu, 11 Desember 2019

CULTURE AS AN ENGINE FOR ECONOMIC GROWTH, EMPLOYMENT AND DEVELOPMENT (MahyudinBinoExamplePaper)


IndEX



Introduction ..............................................................................................................………………1

I.                    CULTURE AS AN ECONOMIC SECTOR …....................................………………1

1.      Status of current relationships between culture and economics ......……………..1

2.      Culture, growth, and employment ...................................................……………..4

3.      Towards a broader vision:  culture and development ......................……………10

II.                 POLICY ISSUES ……...........................................................................……………14

III.               CONCLUSIONS ...................................................................................…………….19

BIBLIOGRAPHY ...................................................................................………………………...23





CULTURE AS AN ENGINE FOR ECONOMIC GROWTH, EMPLOYMENT AND DEVELOPMENT[1]

Introduction

Studies and policies in the Hemisphere have for many years addressed the relationship between culture and economics.  However, this relationship has taken different forms in different countries and regions.  Furthermore, initially, studies took a sociological or, in any case, theoretical, approach.  It is only relatively recently that the cultural sector has been formally studied from the perspective of economics and statistics.   Therefore, only now is a framework being created of economic structures for the Hemisphere’s cultural sector.  And, for the same reason, only for the last 10-15 has there been discussion of pertinent policies to address the cultural sector as one generating significant dynamics from an economic perspective.  This document seeks to provide a regional vision of culture as an economic sector, emphasizing today’s crucial topics, rather than constitute an exhaustive list of all specific interrelationships between culture and economics.

This document contains two sections.  The first discusses the cultural sector from an economic perspective.  After briefly reviewing the relationships between the concepts of culture and economics, it proposes a definition of “cultural sector,” used throughout the document.  Then, based on recent statistical and analytical studies in the Hemisphere, it examines the relationship between culture, economic growth, and employment.  This analysis provides an overview of the contribution of the cultural sector at the economic level, and is more a synopsis than a comparative study, as the data identified is not fully uniform.  Section I concludes with a discussion of the cultural sector from the broader and more complex perspective of development.

Section II suggests some economic and social policy themes for the cultural sector, with two aims:  first, to facilitate further growth of cultural sector production and employment, and secondly and especially, to recognize the specific characteristics of cultural sectors and markets in order to propose key aspects where policy is called upon to play an essential part in creating diverse and equitable cultural development.  At the end of the document, conclusions are drawn.


Section I:  Culture as a economic sector


1.      Status of current relationships between culture and economics

Culture is the human endeavor that par excellence produces feelings and imaginaries in society. It also reinforces the feeling of identity and citizenship. From the start, this concept supposes certain specificities in the American continent: the co-existence of cultural manifestations close to, what we can define as, traditional culture, which is product of a multiplicity of ethnic groups and subcultures that has participated in the construction of the identity and history of the region; and the manifestations closer to what we can define as modern culture or, further more, as industrial culture, which is also a characteristic of the contemporary continental culture. The sustainability of these cultural manifestations without exception is then, the inevitable guarantee of multiethnic and pluricultural society.   

Some of the activities related to culture generate, additionally, an analogous economic impact to the one produced by other sectors of the economy. In one word, culture is, besides an indispensable element for social cohesion and the reconstruction of an identity, an economic sector equally or even more important than any other productive sector of society. The economic transactions that take place in the deepest heart of culture generate positive economic effects such as learning and knowledge. That is, the cultural sector contributes to development from the social and identity sectors, such as from the economic ones.

Culture and economics as disciplines have engaged in dialogue for only a relatively short time.   A first approach to the economics of culture was developed in the United States in the 1960s.  Studies based on this approach noted two main issues:  legitimacy of state intervention in the cultural sector; and efficient utilization of public funds by their beneficiary entities (Farchy, 1994; Heilbrun, 2001).  The topics of such studies range from arts in the Anglo-Saxon sense (inter alia, theatre arts, painting, sculpture, museums, and heritage) to what used to be considered “high” culture.  From that perspective, everything not covered by this definition remained in the hands of the market and was, therefore, a matter for industrial economic analysis.

A second approach to cultural economics began to be developed in the late 1970s/early 1980s, when cutbacks in European governmental budgets led to a re-examination of the role of public expenditure in the cultural sector.  In a context of economic crisis, expenditure priorities had to be assigned in order to stimulate the most productive sectors.  In that context, the then-French Minister of Culture, J. Lang, made two points:  first, he noted the many instances where the cultural sector had made the transition from subsidy to generation of employment and added value.  Secondly, he asserted that support for cultural creation should not be provided at the expense of sound management and then, among cultural policy priorities, assigned priority to that criterion.

To demonstrate that the cultural sector generated growth and employment, it became necessary to look beyond an examination of “high” culture.  This was the point where cultural industries became the focus of cultural policy concerns.  Statistics and statistical analyses began appear that focused attention on previously peripheral cultural forms, such as rock concerts, jazz recordings, and television - in general, all forms of creative expression that could be mass produced.  The findings were that cultural industries not only generated considerable added value and conveyed traditional art content, providing them with fresh support, but that, above all, signified a true revolution in the way in which the general public experienced culture.  From that perspective, public cultural expenditure would find new objects, ones much better withstanding the economic cost-benefit test.

The strengths but also the weaknesses of these two concepts of culture have been generating a new approach to the economics of culture.  Although early studies contributed pertinent elements for analysis of public investment in the cultural sector, they omitted the maze of cultural industries, and their impact on economic growth and on the way in which the public experienced new cultural manifestations.  For its part, the point made regarding the important additional contribution of cultural industries to the productive system implied that cultural policy actions needed to cover a broader spectrum, but said nothing further regarding the survival capability of forms that did not necessarily find a market niche. Finally, the realities of a continent such as the American continent, where the development of the cultural industry have not entail the destruction of traditional cultures, although it has entail its transformation and rearrangement, sets a challenge in the conception of culture from a mere cultural industry stand point. The evidence of the production of culture from an industrial level cannot leave behind other sectors that have manage to subsist and readapt in this specific modernity of our continent, such as the hand crafted art or the immense intangible heritage generated by customs and knowledge particular to our richness and multiplicity of ethnic groups and cultures.

We now needed to take a fresh look at the economics of culture.  Increasingly, studies conducted worldwide, including some very recent studies in the Americas, have shown that trade liberalization and investment on a global scale as the necessary consequences of economic globalization have led to tremendous development of cultural industries.  But it is also true that, in this same context, heterodox market structures have been established in which transnational media oligopolies occupy increasingly large segments of the world cultural market, while at the same time occupying a large segment of the chain linking the creator to the public.  To that extent, what circulates on the globalized cultural market and what does not is, for the most part, decided by such groups.  Or, put otherwise, cultural manifestations that are not profitable for the conglomerates will not be placed on the global market.  In any case, this vision of the economy of culture concludes that the diversity of cultural expression is on stake as long as what the market favors is not inevitably bonded with the multiplicity of the cultural production of independent actors, ethnic groups or countless cultures.

In addition, this new approach has sought to describe in detail from a sociological standpoint the production and consumption processes for cultural industry products.  Broadly speaking, the sociological vision has shown that trade in such markets obscures the true dynamics of the change in the conception of the societal arena.  In fact, according to these studies, what we today understand as citizenship and identity is unquestionably reshaped by the vast amount of content that cultural industries provide.

Incorporation of these two elements, the economic and the sociological, has proven a real challenge for cultural policy.  Such policy must, on the one hand, seek to develop cultural industries and, on the other, to ensure that the public has equal access to the greatest possible variety and quality of cultural content.  In a context of convergence of the production and marketing of such products, states are confronted with the dilemma of intervention in cultural markets.  This decision is particularly difficult in a context in which it is rather difficult to maintain the traditional balance between efficiency and equity.

For all the above, what is understood as cultural sector have being growing to the point that it now includes the cultural industries, but it has not set aside the manifestations that exists in the verge of mass and traditional production. The universe that encompasses cultural activities is therefore quite ample: “from the expressions of folklore, the popular culture and the culture of the media, to manifestations of culture of the “elite” or “Fine Arts” and historical heritage. The economic manifestations that belong to this typology are also ample. Some are developed in the market, others are subsidized, and others sponsored by patrons; in many cases, the motivations of the creators are not necessarily driven on by profit incentives and thus does not necessarily participate in the economic dynamisms of supply and demand where the price is the result of the economic value. Regardless if cultural activities are part or not of the market, they have economic dimensions because they presuppose the use of resources as any other economic activity” (Colombian Ministry of Culture, Convenio Andrés Bello, 2003). 

For these reasons, the concept of cultural sector is being broadened to include the concept of cultural industry.  To paraphrase the economic impact study on Colombian cultural industries (Ministry of Culture of Colombia, Andrés Bello Convention, 2003), we may employ the UNESCO definition of cultural industry.  In that definition, cultural industries have the following characteristics:

       Their raw material is a creation protected by copyright and set on a tangible or electronic support;
       Their products are mass produced and preserved, and distributed on a massive scale;
       They have their own processes of production, circulation, and social appropriation;
       They are organized based on the logics of markets and marketing, or have the potential to be so;
       They are places for the integration and production of social imageries, development of identity, and promotion of citizenship.

This definition fully acknowledges the inherently economic nature of cultural industries in the context of a globalized market, but at the same time has the virtue of taking account of the part they play in affirming and defining citizen cultural identity.  For that reason, the analysis made in this study will prefer this definition.

However, this study will not ignore everything that economics as an analytical framework has to say regarding the allocation of public expenditure to other cultural manifestations not mass produced, such as theatre arts, the art crafts or museums – for one essential reason:  it is now virtually impossible to separate “high” from “low” culture at a time when the ties between cultural industries and traditional arts are growing closer than ever.  The theatre arts are an advertising showcase for recorded music. The art craft’s production is starting to be reproduced massively. The sale of mass produced products is a source of museum financing.  In general, any unrepeatable creation may be packaged and reproduced on industrial scale.  All this makes it possible to formulate a rather rich and truly complex concept of the economics of culture.

2.      Culture, growth, and employment

Owing to the increasing importance of cultural industries on the cultural agenda of many of the countries of the Americas, studies of varying depth and different scopes have been conducted to measure the economic impact of such industries on national economies.  Such studies take widely different approaches and the contributions they claim may be summarized as follows:

       Generation of common economic concepts among heterogeneous cultural sectors for the purpose of analysis, comparison, and overall interpretation;

       Measurement of the economic impact of culture using variables such as:  impact on GDP, copyright payments, production, sales, exports, imports, employment, and piracy;

       A better understanding of the structure of supply and demand, i.e., identification of the structure of the different cultural markets. Specifically, seeking to identify suppliers and demanders and to understand the structure of the chain linking the two (in particular, raw materials, distribution, concentration of ownership of the factors of production, and capital flows, etc.)

       At attempt to ascertain the specific particularities of cultural employment that define it and differentiating it from other industries.  For example, wages paid for cultural activities are compared with those paid in other sectors; cultural workers are categorized on the basis of whether they work a full workday or must finance their activity working half-time in another sector; calculations are made of compensation levels in relation to years of training; assessment of whether there is genuine attraction to risk on the part of workers who decide to carry out a cultural activity, as their income will be more irregular than that of other workers.

       Demonstration that culture many times is not an activity without economic viability, but instead may be viable.  In that connection, an attempt to raise awareness of and to discuss the cultural sector at the macroeconomic level.  Specifically, an attempt compare the contribution of the cultural sector to GDP and employment as compared with the contribution of other economic sectors.  This is done taking a statistical (at a given time) or dynamic approach (by considering and comparing the rate of growth of GDP and employment of the cultural sector over time ??? as compared with those rates in other sectors and in the economy in general).

       In view of the foregoing, such studies also suggest a policy objective, as their findings provide justification for more decisive state intervention in the cultural sector. “This means that new mechanisms and negotiating arguments for obtaining budgetary resources must be available which, on the one hand, are in keeping with the economic contribution made by the sector and, on the other, meet at least two key objectives:  subsidization and co-financing of all cultural activities that are not marketable and do not generate economic benefits, but do generate social benefits and to promote industrial processes of undeniable importance for the country’s economic and cultural development” (Ministry of Culture of Colombia, Andrés Bello Convention, 2003: 26).

       (While not mentioning all topics discussed in such studies), lastly, an attempt to ensure that in understanding the economic dynamics, a much more precise concept is formulated of the processes of formation of social imaginaries, identity, and changes in perception of the meaning of citizenship, all of which is channeled through cultural industries.

This series of studies, although far from covering all countries of the region, can provide general indications of the capability of the cultural sector to generate economic growth and employment.T  Most studies have also sought to provide a more complex vision of the economics of the cultural sector in an analysis that takes account of every subsector or sub-industry of the global cultural industry.  Although in this section we use this subsectoral analysis only to explain the overall sector growth, in Section II we will address the issues of each sector of the cultural industry by making policy suggestions.

It would be hazardous to make a comparative table of the findings of the studies consulted, for three main reasons.  The first is that not all studies use the same methodologies.   More than one method in fact exists to evaluate the contribution of an economic sector to the growth of gross domestic product and national employment.  Secondly, the cultural sectors included in the calculations usually vary from one country to another, depending on what each study deems pertinent to include as a cultural industry or, an equally determinant factor, depending on political concerns.  In addition, the productive subsector breakdowns used in national accounting statistics vary from one country to another, meaning that the information for some sectors is at times inconsistent or incomplete.  Lastly, each study provides results for a specific year or period, which rarely coincide with periods used in other studies.  Accordingly, it must be said that the table below needs to be viewed more as a summary than as a comparative framework.  Only very general conclusions should then be drawn based on this summary, and useless rankings of countries should not be attempted.



Country
Contribution of the cultural sector to GDP
% of employment in culture sector as a % of total employment
Sample year
Activities included in the study
Sources
(See footnote * on preceding page)
Argentina
Approx. 4.1%
Approx. 3.5%
1993 (GDP) and 1994 (employment)
See endnote[1]
B
Brazil 1
6.7%
5 %
1998
Ibid. Argentina
B
Brazil 2
0.8%
0.8%
1994
See endnote[2]
A
Colombia
2.01%
27,724 jobs in three sectors
(publishing, phonography, and filmmaking)
2001 (GDP) and different data from 1999 to 2002 (employment)
See endnote [3]
F
Chile 1
Approx. 2%
2.7%
1990-1998
Average
Ibid. Argentina
B
Chile 2
1.8%
-
2000
See endnote [4]
E
Ecuador
1.79%
-
2001(?)
-
F
United States 1
7.75%
5.9%
2001
Ibid. Argentina
G
United States 2
0.002%
-
1997
See endnote [5]
D
Paraguay
Approx. 1%
3.3%
1995-1999 Average (GDP) and 1992 (employment)
Ibid. Argentina
B
Uruguay
6%
4.9%
1997
Ibid. Argentina
B
Venezuela 1
2.3%
-
2001(?)
-
F
Venezuela 2
3% audiovisual and telecommunications sectors (taken as representative of all cultural industries)
35,329 in four sectors (graphic arts, radio, advertising, and filmmaking)
Various data 1997-2000
-
C


An examination of the above table yields the following general conclusions regarding the contribution of the cultural sector to GDP or growth of economic output.  As indicated above, the table has relatively little explanatory or comparative usefulness, as the appropriate context for the figures is not provided.  Accordingly, the following interpretations are based on the explanations provided in each study.

       The indices of the contribution of the cultural sector to gross domestic product may be divided into two groups.  Countries with indices of economic development that may be described as medium-low, such as Colombia, Ecuador, Paraguay, and Venezuela, show very similar percentages of the contribution of the cultural sector to GDP, hovering around 2%.  Countries with medium-high development indices, such as Argentina, Brazil, Chile, and Uruguay, show slightly higher than average rates, although these are very uneven (a maximum of 6.7% for Brazil and a minimum of 1.8%-2% for Chile).  However, gaps between indices may also be explained by the different methodologies and information used.  It should be recalled that it is precisely the countries with high indices that adopted a regional MERCOSUR study with similar methodological guidelines.  To be noted are the cases of Brazil, Chile, and United States, for which more than one study is available.  In the Chilean case, the two studies arrive at very similar indices, which is not surprising as the sectors taken into account in their calculations are not much different.  In the case of Brazil, whose first study yields an index of 6.7% and the second of 0.8%, the difference may be explained simply by information utilized.  We may say without fear of error that the Ministry of Culture study (0.8%) intentionally defines cultural sector to include only strictly creative activity and, therefore, does not take account of dissemination activities and inputs.  This definition acquires real importance as it does not take account of the media sector (radio, TV, advertising) which, as we shall see, largely accounts for the higher indices.  Lastly, the United States data is somewhat similar to that of Brazil.  If the cultural sector is taken in its broadest sense, the findings are surprising (7.75%).  If, on the other hand, only a purist definition is used, measuring only “high” culture, the results are negligible (0.002%).

       With regard to the relative contribution of each activity to the cultural industry total and, specifically, in explaining the index of contribution to GDP, interesting coincidences among the more detailed studies are found.  For all countries included in the MERCOSUR, Chile, and Colombia study, activities directly related to copyright account for approximately 50% of the index of contribution of the cultural sector to GDP.  The remaining 50% is split between distribution activities and inputs; the first clearly has greater weight.  For direct activities, similar patterns are found.  In the direct activities group, media industries (press, radio, television) are those of greatest weight.   In the Colombian and Argentine cases, also to be noted is publishing, and in the case of Brazil, the publishing and information technology industries.  For many of the countries, these industries are followed by industries such as phonography and filmmaking.  In general, activities more closely related to the definition of “high” culture (museums, theatre arts) account for very little of the index of the economic importance of direct activities and, therefore, of the cultural sector in general.  This has nothing to do with the size of the economy:  let us recall the index achieved by these activities in the United States (0.002%).  Lastly, and again in general, as regards distribution activities and inputs, to be noted are telecommunication activities, which account for much of the group’s index.

       The economic behavior of the cultural sector is highly correlated with the growth rate trend in the economy in general.  For countries such as Colombia and Chile, it was shown that income elasticity of culture is greater than 1.  This means that the cultural market is highly dependent on general economic activity.  If the economy grows by one percentage point, the cultural sector will grow more than proportionally; the reverse is also the case. This may be explained by the fact that these goods are not absolutely essential to life so that, in periods of recession, consumption of them is more than proportionally reduced, and in expansionary periods, large amounts of surplus income is allocated to cultural consumption.  With regard to the sector trend over time, in countries such as Chile and United States, it has been shown that sector growth rates are far higher than growth rates for the economy in general.  In Chile, the sector doubled in size from 1990 to 2000, and, in the United States, over the last 20 years more than doubled.  This is due, inter alia, to the fact that the world economy, particularly, the Latin American, performed well in the 1990s.  But perhaps still more determinant was the explosion in new forms of communication, such as the Internet, cable television, etc., which made cultural content a more accessible mass product.

       Lastly, a notable aspect is the emphasis placed by some studies on comparisons with other economic sectors.  It was demonstrated in Chile that the cultural sector slightly exceeded the fishing sector, one viewed in that country as economically powerful.  In Colombia, the cultural sector has slightly more weight than production of processed, unroasted coffee.  The studies emphasize that, in both the case of fishing and coffee, governments have devoted great effort and budgetary resources to maintaining statistics and promoting these sectors, whereas culture has not been accorded the same treatment.

       Although in some regions of the continent there still is a lack of studies that measure the economic impact of the entire cultural sector, there are investigations that have outlined the economic importance of cultural manifestation through an economic scope. In the case of countries such as Trinidad y Tobago in the Caribbean region, Keith Nurse has demonstrated the importance of the national carnival, not only on a social and identity level, but also on an economic one. This carnival has a significant impact on the micro economy of the country, attracting more than 40,000 visitors per year and generating 15 million of US dollars in foreign currency. It has been calculated that the marginal cost-benefit of the event is 1 to 7. Similar marginal cost ratios have been found in other festivals around the region. Effectively, and proving as well what was stated above about the importance in the continent of other cultural manifestations that are not necessarily included in the industrial sector, popular and traditional culture has been transformed to a phenomenon that is not important just from an identity stand point, but also from an economic one. Besides Nurse’s study, we found studies about the Rio de Janerio Carnival, the Carnival in Barranquilla, and the Labor festival in New York, among others, which proves that the fusion between traditional popular culture and industrial culture in the continent is the best way to keep alive the dynamism of the intangible heritage and to create strong external economies.

Since Hugo Achugar (in Canclini and Moneta, et al., 1999) wrote about the invisibility of cultural employment in Latin America, which “means not only that society does not ‘value’ cultural work as a source of employment and wealth, but also that there is a lack of awareness of its importance and meaning,” the situation remains virtually unchanged.  As the studies cited above discuss cultural employment in less detail and scope, the conclusions are drawn below on a case-by-case basis, and it is hazardous to draw general conclusions.

       It may generally be said that some correspondence exists between the contribution made by the cultural sector to the GDP and to national employment.  The few available statistics provided in the table so indicate.

       In the MERCOSUR countries and Chile, the general trend is for employment in cultural distribution activities to be slightly higher than employment generated by principal or direct activities as a group.  The reverse is true in the United States.  These two groups of activities also provide nearly all employment in the cultural sector.  In terms of employment, the most important distribution activities are trade and sales (Argentina), and telecommunications (Brazil).  Furthermore, in the direct activities group, the same activities that generated a large economic product are those that generate a high level of employment (communications and advertising).  In connection with employment, among principle activities, the contribution of the publishing industry is to be noted.  Cross-referencing these findings with contribution to GDP we find that, although activities directly related to copyright account for much of the cultural GDP in MERCOSUR and Chile, they account for a smaller percentage of employment.  In distribution, in contrast, employment generated is greater than the contribution to GDP made by these activities.  From every standpoint, this finding is to be expected as direct activities employ more skilled, hence more productive, labor (from the same number of workers, more product); whereas distribution activities employ less skilled labor with lower productivity, so that they generate more employment than they contribute to GDP.

       The study prepared by the Ministry of Culture of Brazil makes a detailed description of cultural employment in that country.  In studying employment from a regional perspective, it finds that cultural employment is an urban phenomenon, found mainly in the cities of the country’s southeast.  Another major finding is the average productivity of the cultural worker.  While according to this study, cultural workers as a group account for 0.8% of national employment, wages paid for cultural work account for 1.7% of wages paid in the economy as a whole.  That is, the wage paid for direct cultural activities is far above the average wage.  This demonstrates that, on average, cultural work is highly productive, probably owing to the relatively large amount of skilled labor it employs.  It must not be forgotten that this study is based solely on direct activities, which make intensive use of skilled labor, and it corroborates the findings of the MERCOSUR and Chile study.  In this study, cultural labor is also broken down into employees and self-employed workers, cross-referenced among three groups of activity:  cultural industry, services, and trade.

       The following are the findings of the Colombian study:  The publishing sector employs large numbers of sales workers (52%), followed by technical workers (28%), and administrative workers (17%).  Self-employed workers account for approximately 32%, most of whom work in sales.  As regarding the phonography industry, unsurprisingly, we find that production activities, directly related to direct activities protected by copyright, use large amounts of skilled labor.   Distribution, in turn, uses large amounts of unskilled labor.  The phonography sector has a large, uncalculated, number of temporary workers.  Lastly, we find that the filmmaking sector uses large amounts of temporary labor (in this sector, workers work an average of 3.5 months per year in this activity).  With regard to exhibition, it was found that each cinema screen generates approximately 6 direct and 2 indirect jobs.

At this point, we should make certain key points regarding the available statistics on the contribution of the cultural sector to economic growth and employment in the Americas.  From an economic perspective, the cultural sector is undeniably dynamic.  Its percentage contribution to GDP is comparable to that of the lead sectors of national economies.  In addition, its growth rate remains above that of the rest of the economy.  Regarding the contribution of the cultural sector to employment, we may say that it is similar to its contribution to GDP.  Such jobs, owing to the diversity of cultural industry activities and subsectors, are also highly diversified, and are filled by both skilled and unskilled workers.  This demonstrates that cultural industries in the Hemisphere are effective vehicles for economic growth and job creation.

As noted above, one of the main objectives enumerated by these studies is to begin to position the cultural sector in terms of policy on national policy agendas and, more specifically, in the allocation of public budgetary resources.  It is sought to demonstrate that public investment should be made in the cultural sector because it is profitable, in contrast to what was thought before these studies had been conducted.  Such reasoning has greater weight in situations such as those found in Latin America, whose governments are faced with economic reforms entailing cutbacks in public expenditure, which is therefore allocated to key activities.  This situation is similar to that in Europe in the 1980s, mentioned above.  And, as there were at that time, in our Hemisphere we now have authors highly critical of such arguments.

A first criticism, by J. O. Melo (Andrés Bello Convention, 2001), has to do with the fact that demonstrating that culture is profitable may lead to a paradoxical conclusion, as it in some sense shows that culture is a sector that has operated in the market without major state investment.  Therefore, asks the author, why should public sector support now be given to cultural industries?  For Melo, we must distinguish between what is profitable and what is not; what really is worth supporting and what is not.  It should be recalled that in these studies, the more nearly directly protected by copyright the cultural sector, the less its economic weight.  Total statistics tend to be inflated by the weight of media and advertising activities, and sometimes include activities that are in fact quite removed from what might be appropriate under any definition of culture.  Other activities that would be very difficult to carry out on a commercial basis would be obscured in these global statistics.

Following this same line of argument, J. Farchy and D. Sagot-Duvauroux (1994: 15 and 148) assert that if the argument for funding the cultural sector is that it is profitable, nothing demonstrates a priori that state investment in other alternative sectors would not be still more profitable in terms of growth and employment.  Put otherwise, if it is shown that culture is slightly less profitable than any other sector or that it generates less employment, this would be sufficient justification to withdraw support or subsidy.  What would happen, the authors ask, if the justification for a subsidy were based on a democratic or social argument, even where there is no economic profitability?

For these authors, even if culture has genuine economic advantages, they are unlikely to be more significant than those of other economic sectors.  Public expenditure on culture as an issue common to all approaches relating culture to economics may only be justified, in their view, by culture’s intrinsic value.  That intrinsic value must be identified in terms of a broader relationship, one seeing culture as an essential component not only of growth but also of development.  As is evident, in demonstrating the high correlation between culture, growth, and employment, we do not exhaust but merely introduce the topic of the economics of culture.

3.      Towards a broader vision:  culture and development

In view of the foregoing, although it may be said that, among the numerous consequences of globalization is the growth of cultural industries as a whole, it is not yet clear whether development is among such consequences.  But, to answer this question, we must know what is meant by development.

Defining development may obscure the long historical process that enabled such a definition to be reached.  According to Germán Rey (2000), this process may be understood as a series of “displacements.”  The first is a displacement from a vision of development as a gradual linear process to one seeing it as a flexible and discontinuous process, involving different tensions and permitting different developments.  The second is a displacement from a single model of imposed development to different development possibilities that incorporate the numerous players participating in defining that model.  In the third displacement, acknowledgement is preferred to knowledge.  It is no longer a question of the politician having linear knowledge of his subject of development.  On the contrary, as development is a concept formulated by all societal players, such players must acknowledge their differences (nationality, ethnicity, gender, sexuality, etc.).   Therefore, in the final displacement, development ceases to be a purely economic concept that erroneously considers development to be equivalent to economic growth, and incorporates the whole range of disciplines and realities in formulating a more complex concept.

Rey discusses what may be a broad concept of development now current, taking as his basis United Nations texts, in particular, those of the UNDP.  First, human development is synonymous with the progress of human life and welfare.  Secondly, human development is correlated with the opportunity for individuals to enhance and make the best use of their capabilities in any area - cultural, economic, political, etc.  Third, development has to do with the freedom of individuals to live as they wish (freedom of access to material goods, to education, housing, and to life in society) - in short, the freedom to develop their civicism.  Lastly, development must afford all subjects equal access to its benefits.

Culture and especially cultural industries play a lead part in the scope of development as conceived above, first, through their contribution to the economy, employment, and material welfare, but above all, according to Rey, because cultural industries “participate in both the construction of social identities and in promoting a fabric of symbolic production and cultural appropriation.  In that fabric, development itself is depicted, the drama of modernization is staged, and aspirations and collective demands of broad segments of society are mobilized.”  From this perspective, construction of development has an inherent cultural dimension.

Now, does globalization make it possible to realize this concept of development? And, more specifically, does globalization assist in realizing the cultural aspect of development? This aspect has been discussed at length, especially in the sociological field.  Diana Crane (2003) identifies four major approaches in the field of cultural globalization. The first, which she calls the theory of cultural imperialism, asserts that there is a cultural imperialism that is imposed by the rich countries on the poorer and more peripheral countries, one that is no more than an extension of economic imperialism made possible through globalization.  Multinational and transnational financial organizations are key players in this explanation as, through their control of markets and their products, the richer countries, in particular, the United States, impose a lifestyle, beliefs, values, in short, an alien culture, on the peripheral countries.  This vision has limitations as the concept of imperialism supposes a degree of control by force by the rich over the poor, or by the powerful over the weak, which never occurs in the case of cultural markets.  In addition, globalization is a system to balance forces and tensions, in which all players are interdependent, although such interdependence is in fact problematic.

A second approach to the process of globalization of culture is what Crane calls the theory of cultural flows.  This maintains that cultural transmission flows do not emanate from a single center or move in a single direction; in other words, the receivers are also the transmitters.  This process has little coherence; flows cause globalization to create more cultural hybridization than homogenization.

A third approach, the theory of receipt, states that publics of different countries, of different races, creeds, and cultures, respond actively, rather than passively, to global cultural messages.  That is, each group interprets these messages in differentiated and innovative fashion.  Therefore, from this perspective, local cultures and identity would not be diminished by the globalization of culture.  Critics of this view emphasize that the voices of the audiences have little weight in comparison with those of the cultural conglomerates, who treat their receivers as an undifferentiated mass.

A fourth and final approach suggested by Crane seeks to view the cultural globalization process as a complex relationship of forces among nations, states, publics, and cultural entrepreneurs.  This relationship is developed through competition and negotiation among participants.  In this approach, cultural globalization is a process constantly moving from balance to conflict.

Each of these four models makes some contribution to a complex conception of cultural globalization and its relationship to development.  In other words, none of them is fully valid.  Their degree of validity depends on the cultural subsector to which they are applied or the country of study.  The cultural imperialism model, which until recently predominated, may be reformulated as a model of media imperialism, in which, according to Crane, for economic more than political reasons, in the cultural messages transmitted, a few suppliers predominate.   In fact, the globalization of worldwide trade in content enables those countries with large domestic markets to develop much greater competitive advantages than those of other countries.

There is an economic explanation for this (McFadyen et al., 2000).  As the cost of production in cultural industries, especially audiovisuals, does not increase with the number of consumers, when the domestic market is sufficiently large, huge economies of scale are generated.  As language and culture differences generate a sort of natural barrier to trade in content, the industry that will develop most will be that whose domestic market is, in economic terms, the largest.  This will therefore be the one that is able to dominate international trade in cultural content.  This is the case of the audiovisual industry in the United States or, to some extent, the case of television in Brazil and Mexico, to cite two examples from the region.

It may be said that the three remaining models serve to assess the relative value of the conclusions yielded by the media imperialism model.  The cultural flows model assists in understanding the complexity of the relationships that regional cultures establish with global cultures. This is particularly relevant in developing countries that export or return increasingly greater numbers of cultural messages to developed countries.  The third approach, that of the receiver, assists in understanding attitudes of publics to global culture, to the extent that it does not reshape and destroy local identities.  The last model, that of the relationship of forces, recognizes the role of each player (local media, the public, and government) in a difficult negotiation process.   In particular, this redeems the role of the public sector and cultural consumers in resisting and defending their values and identities.  As indicated at the beginning of this section, this approach emphasizes the role of policy in a broad sense, including cultural policy and public concerns, in a model of development that is constructed and not impose.  To summarize, these three visions restore the possibility that actors other than media conglomerates may play a major role determining their cultural environment.

Having seen the sociological perspective that examines globalization and its impact on culture, we may return to the question of whether globalization contributes to development and the cultural dimension thereof.  As Crane’s analysis shows, the answer is unclear.  The existence of media imperialism is not compatible with development as defined herein as, given that international circulation of content is dominated, individuals have limited capability to develop their civicism, identity, and a model for their own lives. But we also know that publics are not passive.  They utilize channels to return messages; they express themselves politically, negotiate, reinterpret, etc. This ambiguity means that the original question must be reformulated.  It is more useful to ask what basic conditions must be met for globalization to generate development as well as growth. Different authors of the Hemisphere suggest different answers.  Below we present two arguments grouping these authors together.

The first condition is that globalization must go hand-in-hand with equity.  Some authors (Hopenhayn, 2001; Prieto de Pedro, in Andrés Bello Convention 2001 and 2002; Achugar, 2003) argue that globalization and its impact on culture must not jeopardize equity as an essential element of development.  There are several slight differences in the concepts of equity, but they all generally point in the same direction.  For Hopenhayn, cultural democracy or symbolic equity is the core of democracy in its most general sense.  The first is a guarantee to societal and cultural players that they may constitute a public voice, participate in political dialogue, and form part of the symbolic exchange that increasingly defines each player’s place in political negotiations. “And in speaking of symbolic equity, we are now in the sphere of political economy, as greater access today to symbolic assets (information, education, new forms of consumption, information processing, and acquisition of knowledge) translates tomorrow into enhanced productive capabilities.  In other words, better distribution in cultural industry of the assets of production, circulation, and consumption generates a more equitable relationship of economic competition, especially in an economy where the knowledge-information component is key” (in Andrés Bello Convention, 2001: 71-72). 

For Prieto de Pedro, equity includes the right to culture, which “must be interpreted as the right to the full array of dimensions of culture, the universal dimension and the other community and societal dimensions surrounding it (state or national, regional, of ethnic communities, of social groups, etc.); or, put otherwise, the right to the full array may only be exercised in a context of cultural pluralism (…) as the right to enjoy all cultural spheres and to be able to access all media through which those spheres are expressed” (in Andrés Bello Convention, 2001: 223-224).

To summarize:  we may say that the condition of equity requires:

       Promotion of democratic access to and redistribution of symbolic assets (education, training in the use of cultural goods and services and their supports, etc.);
       Promotion of democratic access to and redistribution of material cultural assets (heritage, arts, book, audiovisuals, new technologies, infrastructure, etc.);
       Promotion of access to diversity of cultural content produced by minorities not necessarily recognized by the market (ethnic groups, alternative urban groups, regional associations, peripheral countries, etc.).

However, according to these and other authors (Canclini and Moneta, 1999; Hopenhayn, 2002; and Kalmanovitz, in Andrés Bello Convention, 2001), the condition of equity must not give free rein to the state to dispose of citizen will.  Thus, freedom must be a complementary requisite if globalization of culture is to be translated into development.  Accordingly, an attempt is made to ensure respect for individual sovereignty, as this makes two things possible:  first, the development of cultural consumption practices as a space for reshaping the public arena, cultural identities, and civicism and, therefore, for broadening an updated conception of citizenship; and, secondly, the growth of cultural industries and the generation of employment and welfare.

“As the part played by individual consumption, both material and symbolic, is enlarged in the life of society, the sense of belonging is shifted from the nation-state axis to a large dispersion in the production of consciousness and interaction among subjects.  The republican idea re-emerges - not in the context of political participation, but rather as a wide array of cultural practices - associative or communicative – which do not necessarily converge in the public-state arena.” (Hopenhayn, 2002). 

To summarize, the condition of freedom supposes:

       That the development of cultural industries as generators of economic growth and formation of citizenship is permitted and promoted;
       That producers’ and consumers’ priorities and interests (associations, producers’ associations, entrepreneurs, regions, etc.) are recognized in designing and formulating cultural policy.

In view of the foregoing, globalization of culture may simultaneously represent a threat to and an opportunity for development.  Whether globalization is not only a factor in economic growth but also in development as conceived in this document also depends on the capability of cultural policy to maintain the difficult balance between conditions of equity and freedom.  From a more pragmatic point of view, this dilemma restates the question long asked by economists, researchers, and the state:  To what extent should the state intervene in the cultural sector?  Section II of this paper sets out some central economic and social policy themes for the cultural sector, based on an implicit analysis of the particular sectoral characteristics of some cultural industries and of international aspects affecting them.




Section II:  Policy issues


The dilemma of development translates into practice.  Going beyond an analysis of the cultural sector as a bloc generating growth and employment, we find that not all cultural activities contribute equally thereto.  Effectively, cultural markets are far from perfect and cultural policy must address and correct the imperfections of these markets while nonetheless seeking to ensure minimal impact on sector productivity, consumer sovereignty, and international free trade negotiations, and at the same time include market players in the formulation of this policy.  Therefore, it is not easy to determine what action should be taken by the state.

The more traditional cultural production hardly subsists due to the fact that there is little investment in creating mechanism that would bring it closer to the dynamics of the market. Paradoxically, perhaps this is the reason why the more traditional cultural production has not disappeared or has not been transformed into merely museum objects. At the margins of the commercialized tradition (vallenato, reggae, hamacas y sombreros) there is always a fertile land for the inquiry and the evolution of what is our identity, which would be difficult to have outside the boundaries of the economy. To underestimate the capacity of these cultural manifestations to recreate themselves in the eyes of modernity is the most effective way to archive them in the past. However, there still is the need to create better mechanism to integrate them, in a harmonious way, into the economic sphere. 

As regards production in sectors such as publishing, phonography and, above all, audiovisuals, in the Hemisphere, we find that globalization of trade and investment has generated a process of concentration of that activity in large transnational conglomerates.  In fact, cultural industry production processes may be characterized as generating economies of scale in large domestic markets protected by cultural barriers.  This means that, although the initial investment made to produce a cultural good may be very large, no additional costs are incurred in enabling ever increasing numbers of people to enjoy that good (a film, music CD, a book).  This means that countries with large domestic markets will develop unique competitive advantages with which small countries, with less purchasing power, cannot compete.  This imperfection of international markets generates high concentration of production in large companies which, in merging, increase their market power.  Another major problem for development and growth of the cultural sector is the high levels of piracy in sectors such as publishing, phonography, cable television, etc.

Furthermore, distribution of culture is also a space where the market is imperfect.  It has been shown that distribution of cultural goods and services, likewise concentrated in the hands of a small number of players with large amounts of capital and large market shares (chains of bookstores and large retailers of cultural products, movie distributors linked to large producers, etc.) is an area which in a majority of countries has been shown to be key to the development of a pluralistic and diverse supply of industrialized culture.  This is a pertinent problem, especially for independent production, which is rapidly reaching a limit in the small scale of national markets.  Feeble efforts have thus far been made to develop more aggressive sales and marketing strategies and to search for external markets.

Lastly, the poor coverage and quality of education, especially in most Latin American countries, has limited the volume of cultural demand.  This is particularly relevant for sectors such as publishing and the new technologies, which are, nevertheless, key in the dynamics of development.  In fact, flows of high quality cultural supply and demand are closely correlated with the educational levels of the public.  Accordingly, education must be a policy priority.

International aspects of hemispheric integration and liberalization of trade and capital flows pose a challenge not always addressed by the cultural sector.  In the integration and negotiation forums (MERCOSUR, Andean Group, FTAA, and NAFTA, among others), the cultural industry sector is usually sidelined or made subject to exceptions.  These forums are not yet, in any case, discussion frameworks appropriate for the defense of sectoral strategies utilized in addressing liberalization of trade and capital flows.  International cooperation entities, on the other hand, have made slightly more progress.  International cooperation in the form of co-production and co-distribution of cultural products and services, and of recognition and exchange of knowledge and market strategies, have proven to be essential elements of the development of diverse cultural production and in expanding domestic markets.

Based on these general findings, we may propose some cultural policy themes.  These result from analyses of studies that view the cultural sector both from the perspective of its specific characteristics and as a productive bloc.

       Policy formulation

Many of the analyses consulted insist that cultural policy must update its role, in two senses:  first, it must broaden its vision of culture so that policy covers and fully acknowledges the forms of cultural expression channeled through cultural industries. The above taking into account, nevertheless, a special care for the activities that are still away from the margins of commercial culture, or better still, to incline towards their successful integration in the economic sphere without erasing their identity aspects (intangible heritage and art crafts, among others). 

Secondly, the state must take account of all players in the cultural industry value chain in the process of designing and formulating sector policies, as it is such players who may generate assessments of the major problems they face. This is a complex task due to the fact that these actors are heterogeneous. The specialists of the different cultural manifestations fields should make sure that investment in content innovation is not absent of any governmental programs. Although necessary to the development of a dynamic and original culture from a creative standpoint, innovation can be of an exclusive character (e.g. experimental theater or music, reinterpretations of art or traditional heritage, etc). That is why it is necessary that other agents insert the democratic value of state investments. We are referring to the creators, the PYMES, the media industries, the agents of cultural diffusion, and specially the average cultural consumers. We are also referring to the creators whose expressions do not fit necessarily inside the industrial dynamics or in the innovation criteria that is characterized by an “elitist” tone. This group, for example, includes the artisans, the creators of minority ethnic groups, and the popular public at carnivals and festivities.
  
Finally, one problem generally identified by specialists is the great lack of pertinent information for use in policy formulation for cultural industries.  States must provide support for the compilation and analysis of such information in at least two ways:  first, compilation of annualized statistics on the industries’ basic economic indicators (contribution to GDP, employment, production, sales, copyright payments, exports, imports, and piracy); and secondly, analyses and recommendations based on such information (market structures, legal framework, sectoral strategies, but also social impact, forms of consumption, etc.). The last aspect is central, since the study and assessment of the social impact of the policies and activities of the cultural sector provides the economic aspect of culture with a more comprehensive scope. If we see culture as an engine for the creation of employment opportunities, seeing culture through solely an economic standpoint would just explain partially what way and how much does culture is changing society. The state’s support to the analyusis of the social impact of the cultural manifestation is a fundamental element on the definition of the criterions of a cultural politic that tends toward development.

       State funding

Subsidies to the publishing industry as a means of indirect finance are in many countries sheltered under a book law, which recognizes the function of subsidies as essential to development.  Such legislation, broadly speaking and with exceptions, makes it possible to: (a) exempt from any type of customs tariff the importation of fixed and variable capital for the publishing production industry; (b) import and export the end product (books) also entirely duty-free; (c) exempt from income tax publishing companies for a determined period; (d) exempt from income and other taxes income received as copyright payments; (e) exempt books from sales tax.  The authors assert that it is important to preserve such legislation, where it exists, as its benefits have been demonstrated, and to evaluate the benefits of implementation of such legislation where such evaluation has not been made.

Subsidies are particularly justified in the filmmaking sector, as production and distribution involve substantial costs that cannot be recovered by countries with a limited domestic market.  Subsidies are usually allocated by means of a sector fund, whose funds come from different sources depending on the country:  direct public funds; a tax imposed unevenly on producers, distributors, exhibitors, and the public; a tax on national exploitation of foreign audiovisual products, etc.  Although the reason for the existence of such funds and their modes of operation appear clear, consideration must be given to what financing structure is most viable in the context of inter-American and world trade liberalization, market efficiency, and budgetary cutbacks at the state level.

In the cultural industries as a whole it is crucial to make possible the financial viability of small and medium-sized industries (SMEs) (producers, distributors, partnerships, etc.) as sources of diversity and innovation. To that end, some texts make two, possibly complementary, proposals:  (a) subsidization or co-financing of infant industries in direct proportion to the content produced by the self-employed creators they handle; (b) taking advantage of flexible lending channels (moderate interest rates and longer terms) for SMEs, where they exist, or to create them where they do not.  The government may also serve as a guarantor of loans to players who assume greater risk, that have been made by regular financial institutions.

One of the problems identified in several sectors is a lack of infrastructure (inter alia, movie theatres in remote locations, computerized public libraries, telecommunications, and the Internet) and its scant democratization in relation to cultural industries.  It is the function of the state to finance or co-finance the construction and expansion of such infrastructure based on criteria of quality and equity.

Lastly, efficient administration of subsidies must be a condition that applies to all proposals made.  The state must establish clear priorities if cultural policy is to generate both growth and development of cultural industries, as was suggested at the beginning of this paper.  For their part, decisions made regarding the allocation of public funds must reflect such priorities precisely, but must be made independently, as has been noted, taking account of the views of cultural experts and of all agents in the industry’s value chain.  We set out two views:  first, allocation of subsidies must achieve balance between criteria of equity (expansion of cultural infrastructure, projects whose design and results bring together the general public, education and training, etc.) and innovation (support for self-employed creators, risk initiatives, etc.).  Secondly, balance must be established between public and private funding, depending on the specific characteristics of each cultural industry sector, criteria of independence, etc.

       Private funding

As a complement to effective administration of public subsidies and the condition of independence of creation vis-à-vis culture centered entirely on state criteria, incentives may be offered to private investment in all cultural industry subsectors.  The means most utilized is to design tax deduction schemes for private agents in the economy who invest independently in cultural production and distribution (as investments are made in some countries to support the arts, heritage, and the movie industry).  This is usually done either by means of a tax deduction for the investing company, equivalent to the investment made, or by means of an income tax deduction itself, not to exceed a certain amount.  The private co-financing system for independently produced culture acquires particular value in the context of international economic liberalization and, specifically, of conclusion of free trade agreements.

       Distribution

In all cultural industries, distribution appears to be the most sensitive topic.  Distribution creates the possibility of financial viability for independent and diverse production and enables it to reach the public effectively.  Together with independent companies taking advantage of the above-mentioned lines of finance available for them, policy emphasizing distribution must focus on the following aspects:

Generation of spaces for gaining understanding and providing advice for industry experts, representatives of companies with best market performance (including majors and conglomerates), and media mediators, on the one hand; and, on the other, the indies [independent filmmakers], industry SMEs, local communities, radio, television, and all community expertise, cultural NGOs, and public representatives.  This would make it possible for at least three key things to occur:  (a) an exchange of value added in awareness of distribution and market strategies in general. To that end, it is sought for recognition of these different players to generate joint strategies with small players in order to identify new market niches and to ensure the sustainability of such players; (b) creation of productive ties among players in the same link of the chain.  Specifically, this means forming alliances for productive projects or joint ventures among independent companies, which would lead to cost reduction (in production or distribution) and an increase in their market power. This may be particularly important in projects that require large investment.  The state may also participate in such alliances via the mechanisms and conditions mentioned in the above paragraph on financing; (c) identification of the needs of the large media windows, as they represent distribution and dissemination alternatives for independent supply, thus far little favored by producers. It should be noted that the state must not necessarily be the party centralizing such activities; it is rather a question of establishing such spaces, for subsequent appropriation by the players involved.
                 
In addition, as mentioned above, there is a very strong correlation between greater distribution of cultural industry content and international cooperation.  Specifically, international co-financing may nearly always be translated into co-distribution on external markets.  Accordingly, policy must support the organization of such systems, which have been shown to be particularly important as state subsidies are limited in terms of budget and scope, a situation aggravated by international trade liberalization and structural reforms.

Lastly, an effective and clear information system must be created to which all players in the value chain may have recourse.  Often, cultural SMEs have large transaction costs, as they lack a basic business organizational structure.  An office or, still less costly, a Web site containing legal information, information on public and private financial resources and on other companies involved in its sector’s chain, etc., would vastly reduce transaction costs and would constitute invaluable support for the economic performance of cultural industries.

       Training and new technologies

Support for training and education that must be provided by the state in connection with cultural industries has two principal themes:  first, it must generate and support a system for training and providing advice for entrepreneurs and cultural agents.  Training of entrepreneurs must cover topics of production, management, new technologies, marketing, and administration, among other, readily identifiable needs.  Agents, for their part, must have the capability to address traditional channels of distribution and promotion – domestic and foreign – and identify other new channels, such as independent or community radio stations, the Internet, alternative festivals, etc., which have already been used as pilot cases throughout the region.

A second theme is primary, secondary, and tertiary education.  This has positive impact in at least two senses involving culture:  first, it has been shown that demand for a higher level of cultural goods and services is positively correlated with education and the income it generates.  Secondly, and perhaps more determinant, education generates capabilities not only for critical appropriation of cultural content but also for creative use of the content production media.

Lastly, a lead part is played by support for the appropriation of new technologies.  Here the future of the industry is at stake.  First, they are exceptional elements for use in independent production, as they drastically reduce costs and increase innovative capacity.  Secondly, the long-term sustainability of the industry depends on the capability of agents and entrepreneurs to take optimal advantage of such technologies (cost reduction, new channels for trade and dissemination, distribution and sales, etc.). For that reason, training (creators, entrepreneurs, agents) must emphasize this topic.  Lastly, technology must be readily available to any child in the educational system, as it is now a commonplace that it is in that system that productive capabilities are determined in an economy that is transitioning increasingly to the knowledge sector, and knowledge, in turn, increasingly travels over technological networks.

       Demand incentives

The impetus behind the dynamics of the publishing sector is, for the most part, support policies based on producer exemptions.  Although exemptions for consumption may play a large part, as income is an important factor determining demand for books, most analysts agree that the support policy for the sector should be centered on the promotion of reading.  Accordingly, it is recommended that public funds be invested in books, principally by creating a large public library infrastructure with national coverage, and by supplying books to such libraries.

However, support for the appropriation of skills in receiving cultural content cannot be limited to books.  The cultural industry has increased many times over the amount of valuable content capable of being stored for future generations.  It is increasingly necessary to include in libraries the new formats on which the assets of cultural industries are stored (CDs and MP3, videos, television, the Internet, etc.).  This, along with teams of individuals available to train the public in the use and consultation of these media must promote the crucial mass receipt of what is available in parallel on the market.

       Piracy and copyright

Copyright protection may be justified from two perspectives:  first, copyright does not benefit any cultural industry agent (neither the major or the independent), but rather enhances the scope of mass produced culture; secondly, it is an indispensable requirement of free trade negotiations in the Hemisphere.  Copyright defense policy must be cross-cutting, in two senses:  first, education and awareness campaigns must be conducted regarding the importance of copyright and the harm caused by piracy (financial loss for the creator and distributor, loss of lawful employment, etc.). Secondly, national police bodies must be trained to identify violations of this right.  In addition, legislation must be developed and/or strengthened that effectively sanctions this crime at the national level.  This must lead to operations to discourage the production and distribution of pirated materials.

       Free trade negotiations

Generally speaking, cultural industries do not enjoy their own discussion framework in most of the free trade negotiation processes consulted.  For the time being, the topic of culture is addressed principally from the perspective of defense of identities and heritage.  This has two main consequences:  first, that negotiations with regard to topics outside the scope of the arts and filmmaking remain solely in the hands of the private sector, which accords priority to the issues of respect for copyright and combating piracy (video, cable television, music, etc).  Secondly, there is no sectoral strategy to be defended.  In that context, a strategy is proposed for joint negotiations between the government and the private sector, one taking account of the particular characteristics of the cultural industry sector in the following ways:

First, cultural cooperation alliances must continue to be fed (studies, co-financing, and co-distribution, etc.), an area where MERCOSUR, for example, has made significant progress.  Secondly, national legislation must be harmonized in order to facilitate the circulation of cultural industry goods and services, copyright protection strategies, and the fight against piracy, among others.  Thirdly, consideration must be given to the advisability of exceptions for vulnerable sectors under the Most Favored Nation and National Treatment principles, such as the audiovisual case.  Specifically, the pertinence must be examined of screen quotas, import tariffs on foreign cultural industry products, and ownership restrictions for national telecommunication companies, in any event, with specific objectives and predetermined deadlines.

       International cooperation

The topic of international cooperation acquires particular importance in the context of free trade negotiations among the area’s countries.  The following recommendations are made:  first, the scope of cooperation must be enlarged to include, in addition to other issues of respect for national identity and heritage, culture industry-related areas.  Secondly, the approach to cooperation must be shifted a governmental slant (which has yielded little result) to one that includes civil society players (cultural entrepreneurs, associations, NGOs, etc.), which has yielded positive results.  This approach includes international co-financing and co-distribution agreements in cultural industries.  In the audiovisual case, the importance of such agreements has already been demonstrated in organizing sectoral strategies, sharing costs and risks of investment in production, and broadening international markets, thereby facilitating distribution. Lastly, advantage must be taken of the many spaces for cooperation provided by organizations such as the Andrés Bello Convention or the Global Alliance for Cultural Diversity, among many others, with the aim of rectifying the lack of studies and analyses of the cultural industry sector, providing advice for the formulation of sectoral strategies for the sustainability of independent production that may be replicated in other countries, etc.


Conclusions


The most recent studies of the relationship between economics and culture suggest a real challenge for cultural policy.  Such policy must seek both to generate development and growth of cultural industries and to ensure public access on equal terms to the greatest possible variety and quality of cultural content.  In a context of regional trade integration and the development of cultural oligopolies, states are faced with the dilemma of intervention in cultural markets and their liberalization with a view to their opening.

At the regional level, studies are being conducted level of the economic impact of industries protected by copyright.  Their findings may be summarized as follows:  Cultural industries contribute considerably to GDP (from 1 to 7%, depending on the country) and they generally grow at a faster rate than the economy in general.  In countries with large domestic markets, the sectors of greatest weight, according to these findings, are the media, followed relatively closely by publishing and phonography.  More traditional cultural activities contribute relatively little to this economic index.  The same may be said of cultural employment, as its weight within the economy is similar.  Cultural jobs are usually highly skilled, especially in creation and production, and are more highly paid than the economy’s average wage.  In areas more closely related to distribution, on the other hand, jobs are less skilled.  Despite the foregoing, the cultural sector continues to be seen as one requiring resources; for that reason, it is usually sidelined in economic and trade policies.

Although the cultural sector contributes substantially to economic growth and employment, this is not an argument that necessarily supports its importance to development, conceived from a complex perspective.  There is an important economic component to development, as growth ensures social welfare, but nowadays one could not fail to realize that the definition of development includes other elements, such as the public’s capability to access such benefits, and freedom for everyone, without exception, to participate in building their civicism. Culture broadly defined directly generates growth and employment, but it is also a space for updating the public arena, for incorporating differences and questioning identity; hence its contribution to the scope of development.

For culture to make an effective contribution to development, two conditions must be met:  the first is equity.  This condition supposes that individuals may access the media on equal terms in order to express and satisfy their needs, including cultural needs.  It also supposes that individuals may access the whole array and quality of products and services offered by culture.  This is jeopardized when large media conglomerates concentrate the decisions of what circulates on international and national cultural markets, and what does not.  For that reason, state policy is faced with a true challenge in establishing the necessary conditions to offset this bias.  The second condition is freedom.  This presupposes respect for and recognition of the attitudes of a public that does not passively accept the determination of its cultural preferences.  This means that the public reinterprets and recreates its cultural environment in a context of economic globalization and, in the end, also plays an active part.  This must cause the state to support conditions determined by the public and cultural entrepreneurs for sector growth.  All of the foregoing presupposes the incorporation of all players in the cultural industry value chain in defining national and international free trade policies for culture.

The dilemma translates into practice.  Cultural markets are in fact far from perfect and cultural policy must address and correct these imperfections while seeking, nonetheless, to ensure that there is minimum negative impact on sector productivity, consumer sovereignty, and international free trade negotiations, and at the same time include market players in the formulation of such policy.  For these reasons, it is not easy to identify what action should be taken by the state.

The imperfections of cultural markets vary from one sector to another, but some are common to more than one.  First, cultural industry production processes are characterized by generating economies of scale in large domestic markets protected by cultural barriers.  This means that, although initial investment to produce a good may be very high, no additional costs are incurred in allowing increasing numbers of people to enjoy this good (a movie, music CD, book).  This means that countries with large domestic markets will develop unique competitive advantages with which small countries with less purchasing power cannot compete.  This imperfection of international markets generates high concentration of production in large companies which, in merging, increase their market power.  This appears to be the most important reason why cultural policy should support cultural production in countries where independent producers are unable to generate competitive advantages owing to the small domestic markets.  This has been understood for some time, as is demonstrated by policies developed, in particular for the audiovisual sector.

Subsidy policies, however, must be formulated on the basis of clear criteria, ones that reflect cultural policy priorities as regards diversity, innovation, and democratic access to cultural goods and services, among others.  To that end, an efficient and independent system to administer such subsidies is proposed, in whose allocation criteria must participate all players in the chain linking the creator to the public with a view to decentralization of state power.  This system must therefore maintain two balances:  first between democratization of criteria of cultural supply and creative innovation; and secondly, between state and private funding, essential to the sustainability of cultural industry players.  To that end, it is essential to broaden tax deduction schemes for private agents investing in cultural industry firms.  Policies that create legislative frameworks for tax exemptions for production and consumption may be justified for sectors which, first, are key to development, such as publishing or, secondly, whose independent production is particularly costly, such as filmmaking.  Other measures supporting production, such as screen quotas, ownership restrictions on cultural firms, and taxes on foreign production, are much discussed in the context of free trade agreements, under which barriers to international flows of investment and trade tend to disappear.  Accordingly, it is proposed that criteria for the public and private sectors be brought together to create a sectoral negotiation strategy for culture that takes account of the cultural industry sector, which has traditionally been sidelined.  In any case, this is urgent, and deadlines and specific objectives for that strategy remain must be set if it is wished to preserve any type of exception for culture in the international framework.

The topic of production is not in any way the only problematic aspect of the cultural industry.  It has been demonstrated that distribution of cultural goods and services, also concentrated in the hands of few players with large amounts of capital and large market presence, is, in most countries, also a key issue in the development of a pluralistic and diverse supply of industrialized culture.  Here too policy has been weaker.  Accordingly, policy is proposed to create spaces for strategic alliances among players in the cultural production and distribution chain and the public.  It has been demonstrated that forms of co-financing and co-distribution among small players are capable of generating ambitious sectoral strategies and of undertaking projects that are impossible for a single independent player to execute.  Policy action must, in addition, promote the formation of cultural agents capable of creating not always self-evident mechanisms to bring cultural products to the national and foreign public.  In other words, promotion and distribution initiatives must be as important as the production efforts made.

Here international cooperation plays a key part.  It has been shown that co-financing initiatives among countries for cultural industry products generate co-distribution processes, which enlarge markets and therefore permit the sustainability of independent initiatives which otherwise stagnate in a market of limited size.  Cooperation also plays a key part in defining the above-mentioned sectoral strategies and in the recognition of each subsector’s players.  Policy must therefore promote such spaces for cooperation, taking into account civil society and cultural entrepreneurs, while decentralizing this aspect within the state.  Cooperation then becomes a key alternative at a time of integration and liberalization of international trade.  Here the dynamics needed for the sustainability of independent cultural production are generated as a complement to production support policies, policies which are participants at a time of liberalization of trade and investment.

Training is another issue.  Education in its broadest sense is a factor closely linked to the volume of cultural demand.  In addition, it produces the skills needed for innovative participation in generating and creating content.  In a context of rapid technological change, policy concerns must seek to ensure that individuals are able effectively to utilize the available media, beyond efforts to distribute the ownership of such media. This applies to creators, producers, distributors, and the general public, for whom the means of production are useless if they do not generate and utilize cultural media, goods, and services in an innovative manner.

Lastly are the two international and policy topics that are the responsibility of all sectors:  first, virtually all cultural sectors are faced with the crime of piracy.  In addition to the fact that copyright violations lead to the loss of major cultural markets, which decreases the number of formal jobs generated in the industry and causes governments to lose a major source of revenue, piracy has no impact on the key problems of concentration of cultural production and supply.  Accordingly, it is proposed to continue promoting and strengthening education policies regarding the harm it causes and operations to dismantle networks for the production and sale of pirated materials.  This is key to the success of and negotiations for regional integration treaties in which the large cultural industry conglomerates have already made proposals and suggested objectives. The second topic is the new technologies.  In fact, the new technologies and forms of information exchange are an unparalleled opportunity for policy formulation in all areas discussed.  For the producers, cost reductions and possibilities for innovation that arise with the new technologies are enormous.  For distributors, information and communication networks have become crucial in long-term enlargement of national and foreign markets. For the public, they have become a direct and innovative way to access cultural production and, yet more surprisingly, to create new products and social alliances, based on what it receives.

To summarize, the existence of economic and social dynamics that weave themselves into a cultural sector that is tending to become integrated in the Hemisphere makes it possible to identify major challenges and major opportunities.  It is no longer possible to limit state action to traditional support for production and creation.  In any event, in the context of market liberalization, state action must be expanded on the basis of specific commitments and for specific purposes.  Innovative partnership and cooperation alternatives in distribution and within the reach of publics must become a priority of policy, in which new players, entrepreneurs, and publics are called to participate.  This is perhaps one way to strike the difficult balance between growth of the cultural sector and the development of diverse cultural content in the context of necessary and, in any case, inevitable, economic globalization.

Bibliography


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Texto básico que explica la economía de la cultura desde una doble óptica: primero, hace una revisión sobre el estado del arte mundial de la teoría económica que se ocupa del tema cultural y, segundo, lo abroda desde una perspectiva sectorial.

Bonet, Lluís, Políticas de cooperación e industrias culturales en el desarrollo euro-latinoamericano, Seminario Internacional previo a la 3ª Cumbre de Jefes de Estado y de Gobierno de América Latina, el Caribe y la Unión Europea, México, 2004.
El texto analiza el estado de cosas de la relación entre economía y cultura, y posteriomente hace un recuento crítico de las relaciones de cooperación entre Europa y América Latina, especialmente desde el sector audiovisual.

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La autora hace un recorrido por los paradigmas que desde la sociología han abordado la relación entre globalización y cultura, para proponer finalmente una visión conjunta.

Diagnóstico dos investimentos em cultura no Brasil, Belo Horizonte, Minstério da Cultura, Fundaçao Joao Pinheiro, 1998.
Estudio estadístico del Ministerio de Cultura del Brasil que trata a profundidad tres temas: la inversión pública en cultura en ese país, la inversión privada y por último la aportación al PIB y al empleo de las industrias culturales desde una perspectiva estricta.

Estudio sobre la importancia económica de las industrias protegidas por el derecho de autor y los derechos conexos en los países de MERCOSUR y Chile, Universidade Estadual de Campinas, Organización Mundial de la Propiedad Intelectual (OMPI), 2001.
Estudio estadístico y analítico sobre la economía de las industrias culturales en los países del MERCOSUR y Chile. Contiene cálculos de aporte al PIB, empleo y comercio exterior y cálculos sectoriales, todo lo cual está acompañado por análisis país por país.

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Los autores examinan críticamente los modelos teóricos que desde la economía  sustentan el apoyo estatal a la cultura. El análisis se concentra especialmente en la cultura desde una perspectiva tradicional.

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Libro que recopila textos de diferentes autores. Cada autor hace un análisis de la situación de un sector de las industrias culturales desde una perspectiva latinoamericana. Normalmente, cada texto lleva reflexiones en torno a políticas y a los temas de integración en la región.

Guzmán Cárdenas, Carlos E., Diagnóstico de las industrias culturales y comunicacionales en Venezuela, Innovatec-Innovarum Inteligencia del Entorno, 2000(?).
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Texto a la vez teórico y básico sobre la visión estadounidense de la economía de la cultura. En un principio expone los argumentos económicos para subsidiar la cultura para después analizar el sistema de política cultural de este país.

Hopenhayn, Martín, “El reto de las identidades y la multiculturalidad” en Revista Pensar Iberoamérica, OEI, 2002.
El texto analiza el concepto de multiculturalidad como parte del desarrollo desde una perspectiva latinoamericana. Finalemente recoge unas recomendaciones de política.

Impacto de la cultura en la economía chilena: participación de algunas actividades culturales en el PIB y evaluación de las Fuentes estadísticas disponibles, Bogotá, Consejo Nacional de la Cultura y las Artes de Chile, Universidad ARCIS, Convenio Andrés Bello, 2003.
Estudio estadístico que calcula el impacto económico de las industrias culturales en Chile en conjunto. Realiza posteriormente un análisis de los resultados y, finalmente, recopila y analiza algunas cifras sectoriales disponibles.

Impacto económico de las industrias culturales en Colombia, Bogotá, Ministerio de Cultura de Colombia, Convenio Andrés Bello, 2003.
Estudio estadístico y analítico sobre el impacto económico de las industrias culturales en Colombia. El estudio calcula el impacto de este sector en el PIB, para luego abordar la información sectorizadamente. Las cifras están acompañadas por profundos análisis. Finalmente, se recogen proposiciones de política articuladas en ejes temáticos.

InCorpore, “El desarrollo cultural en Centroamérica y la participación de las entidades culturales en el proceso de integración regional” en Revista Pensar Iberoamérica, OEI, 2002.
Artículo que elabora una recuento de la experiencia de la Asociación InCorpore de Centroamérica a través de los años, destacando aciertos y problemas encontrados. Finalmente, se hace una somera descripción de los programas ejecutados.

McFayden, Stuart, Colin Hoskins y Adam Finn, “Cultural industries from an Economic/Business Research Perspective”  en Canadian Journal of Communication Vol. 25,  No. 1, 2000.
Balance de los estudios económicos y estadísticos de estos autores sobre la efectividad de las políticas audiovisuales en Canadá. Se analiza, específicamente, la pertinencia econométrica de cada medida.

Nivón, Eduardo, “Cultura e integración económica. México a siete años del Tratado de Libre Comercio en Revista Pensar Iberoamérica, OEI, 2002.
Recuento de la experiencia mexicana en el ámbito de las negociaciones de libre comercio en el TLCAN. Desde una perspectiva crítica, el autor analiza aciertos y, ante todo, carencias de la política de negociación en relación a las industrias culturales.

Nivón, Eduardo, “La cooperación cultural como proceso de la globalización. Una visión desde América Latina” en Revista Pensar Iberoamérica, OEI, 2002.
Artículo que mira el proceso del concepto de cooperación internacionbal en el tema de la cultura desde Latinoamérica. Específicamente, describe como se está pasando de un modelo de cooperación en la cultura tradicional hasta uno que mire la importancia económica de la cultura.

Ochoa, Ana María y George Yúdice, “The latin american music industry in an era of crisis”, París, Global Alliance for Cultural Diversity, UNESCO, 2002.
Los autores hacen una puesta al día de cifras y análisis sobre la situación de la industria musical en el hemisferio. Reconocen aspectos positivos del crecimiento y analizan posibles salidas alternativas a la crisis que ha sobrevenido en los últimos años.

Prieto de Pedro, Jesús, “Cultura, economía y derecho: tres conceptos implicados” en Revista Pensar Iberoamérica, OEI, 2002.
Después de analizar el estado de las relaciones entre economía y cultura, el autor propone una visión del derecho como elemento necesario para el buen desarrollo de estas relaciones y de un crecimiento de las industrias culturales socialmente equitativo.

Rascón, Victor Hugo, “Legislación y políticas en las industrias culturales de latinoamérica”, Seminario Internacional previo a la 3ª Cumbre de Jefes de Estado y de Gobierno de América Latina, el Caribe y la Unión Europea, México, 2004.
Repaso de la situación actual de los ectores de las industrias culturales en Latinoamérica, con recomendaciones legislativas para la sustentabilidad de estas industrias.

Rey, Germán, “Cultura y desarrollo humano: unas relaciones que se trasladan”, en Revista Pensar Iberoamérica, OEI, 2002.
Texto que analiza la posición de la cultura dentro de lo que hoy en día puede ser ua definición de desarrollo global.

Rivas, Patricio, “Cooperación cultural en el espacio del MERCOSUR” en Revista Pensar Iberoamérica, OEI, 2002.
El autor analiza el proceso que ha tenido el tema cultural desde la creación del MERCOSUR. Al final compila aciertos, carencias y perspectivas futuras.

Sandoval, Natalia, “Las industrias culturales en América Latina en el marco de las negociaciones de la OMC y del ALCA: opciones para la elaboración de una política cultural latinoamericana que favorezca el crecimiento y el desarrollo del sector cultural” en Revista Pensar Iberoamérica, OEI.
Profundo estudio jurídico dividido en dos partes. La primera parte expone la aspecto cultural de los diversos procesos de integración regional y libre comercio en la región; la segunda, por su parte, se ocupa de mirar la legislación que protege al sector audiovisual en 6 países latinoamericanos. Al final expone unas conlcusiones desde una perspectiva comparada.

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Libro que compila las ponencias presentadas en este seminario. Los temas son variados: estado del arte de las relaciones entre economía y cultura, estudios sectoriales, conveniencia del apoyo estatal a las industrias culturales, medios de comunicación, diversidad, mecenazgo.

Siwek, Stephen E., Copyright industries in the US economy: the 2002 report, International Intellectual Property Alliance (IIPA), 2002.
Estudio estadístico anual sobre el peso de las industrias protegidas por el derecho de autor desde ua perspectiva estadounidense. Hay cifras sobre empleo, igualmente y un somero análisis de la evolución de las cifras a lo largo del tiempo.

Tolila, Paul, “Industrias culturales: datos, interpretaciones, enfoques. Un punto de vista europeo”, Seminario Internacional previo a la 3ª Cumbre de Jefes de Estado y de Gobierno de América Latina, el Caribe y la Unión Europea, México, 2004.
Cifras estadísticas y análisis de las industrias culturales europeas y su relación con la economía del continente americano.

UNESCO, “Etat de l’industrie de l’audiovisuelle en Amérique Latine”
Recuento sumario sobre el estado de la industria audiovisual en algunos países de Latinoamérica, identificación de problemas de política y experiencias de caso existosas.

Yúdice, George, “Industrias culturales y desarrollo culturalmente sustentable”, Seminario Internacional previo a la 3ª Cumbre de Jefes de Estado y de Gobierno de América Latina, el Caribe y la Unión Europea, México, 2004.
Análisis sectorial sobre experiencias de caso que representan alternativas cooperativas de sustentabilidad en las empresas culturales frente a una coyuntura de globalización y concentración económica de la producción y distribución cultural.

Zuleta, Luis Alberto y Lino Jaramillo / Fedesarrollo, Impacto del sector fonográfico sobre la economía colombiana, Convenio Andrés Bello, 2003.
Estudio completo sobre la estructura del sector fonográfico en este país. Cálculo de aporte a la economía, identificación de actores y dinámicas en cada uno de los eslabones de la cadena de valor. Problemas y recomendaciones de política.

Zuleta, Luis Alberto, Lino Jaramillo y Mauricio Reina / Fedesarrollo, Impacto del sector cinematográfico sobre la economía colombiana: situación actual y perspectivas, Bogotá, Convenio Andrés Bello, 2003.
Estudio completo sobre la industria cinematográfica en este país. Cálculo de aporte a la economía, identificación de actores y dinámicas en cada uno de los eslabones de la cadena de valor. El estudio hace gran énfasis en las recomendaciones de política.






SCCIP00004E01
 
 



[1] The Study was commissioned by the Unit for Social Development and Education of the Organization of American States with the intent of supporting the discussions on Theme 1 at the II inter-American Meeting of Ministers and Highest Appropriate Authorities of Culture. The document was elaborated by Javier Machicado, Doctorate Candidate in Iberian-American Studies. University of Paris X.
T The studies referred to are:
A.     Diagnóstico dos investimentos em cultura no Brazil. (Belo Horizonte: Ministry of Culture, Fundaçao Joao Pinheiro, 1998).
B.     Estudio sobre la importancia económica de las industrias protegidas por el derecho de autor y los derechos conexos en los países de MERCOSUR y Chile.  State University of Campinas (World Intellectual Property Organization (WIPO), 2001).
C.    Guzmán Cárdenas, Carlos E., Diagnóstico de las industrias culturales y comunicacionales en Venezuela.  Innovatec-Innovarum Inteligencia del Entorno, 2000(?)
D.    Heilbrun, James, Charles M. Gray. The Economics of Art and Culture. (Cambridge University Press, 2001).
E.     Impacto de la cultura en la economía chilena: participación de algunas actividades culturales en el PIB y evaluación de las Fuentes estadísticas disponibles.  Consejo Nacional de la Cultura y las Artes de Chile, Universidad ARCIS.  (Bogotá:  Convenio Andrés Bello, 2003).
F.     Impacto económico de las industrias culturales en Colombia.  Ministry of Culture of Colombia, Core Economics and Culture Team of the Andrés Bello Convention. (Bogotá:  Andrés Bello Convention, 2003).
G.    Siwek, Stephen E. Copyright Industries in the U.S. Economy:  the 2002 Report.  (International Intellectual Property Alliance (IIPA), 2002).


[1] For the United States, the IIPA has been conducting a study of the economic impact of the copyright sector from 1987 to 2001.  A similar study has been made for the MERCOSUR countries and Chile (Campinas, WIPO, 2001) with a joint perspective, although with slight differences of methodology and taking account of slightly different sectors.  To calculate the contribution of the cultural sector to GDP and employment, the study identifies four different groups of economic cultural activities so defined.  A first group of principal activities includes those to create products or jobs primarily protected by copyright.  This group includes database activities; radio and television activities, photographic activities, production, exhibition, and distribution of films and videos; news agencies; libraries; museums, information system consultancy; development of information technology programs; newspaper and magazine publishing and printing; publishing and printing of books and other printed products; publishing and reproduction of records, videos, films, and programs; operation of dance halls, discotheques, and other similar places; other publishing activities; other entertainment activities; data processing; advertising; theatre, music, and other artistic activities.  A second group is that of industries partially covered by copyright.  It includes a wide array of activities such as manufacturing, types of negotiation, architecture, and design, among others.  A third group of activities is related to distribution, covering the transportation of goods, bookshops, record stores, telecommunications, and other forms of retail distribution and wholesale trade in products protected by copyright.  The fourth and final group is known as copyright-related industries.  It includes the production and technical support of equipment used exclusively with copyright-protected material.  This category includes, for example, computers, radio and television equipment, and other sound and recording equipment.  The results given in the table summarize reflect the totals for the groups, in order to provide an overview of the contribution to growth of the MERCOSUR and Chile cultural industries.
[2] An alternative study for Brazil (Ministry of Culture, Fundaçao Joao Pinheiro, 1998) examining in depth the qualities of that country’s cultural employment used a somewhat more restricted definition of the cultural sector vis-à-vis that used in the MERCOSUR study.  This study categorized cultural activities as industrial, service, and commercial.  The results presented represent the totals for the three categories.  Industrial activities:  publishing of newspapers, other periodicals, books, and manuals; printing of newspapers, other periodicals, books, and manuals; performance of other unspecified printing services; publishing of records, tapes, and other recorded materials; manufacture of optical and photographic equipment, instruments, and materials; manufacture of sleeves, films, papers, and other materials; manufacture of musical instruments; reproduction of records and tapes.  Service activities:  photographic activities; film and video projection; management of entertainment halls.  Commercial activities:  trade in books, newspapers, magazines, and stationery stores.
[3] The Colombian study (Ministry of Culture of Colombia, Andrés Bello Convention, 2003) calculates the contribution of the cultural sector to GDP based on three groups of activities:  a first group of direct activities related to cultural production; a second group, “Related Activities I,” is related to the use and dissemination of cultural creations; and a third and final group, “Related Activities II,” is related to the inputs required by the cultural sector.  The result of the cultural GDP shown in the table is the total for the three groups.  These are the activities included in each.  Direct activities:  Publishing of books, brochures, scores, and other publications; publishing of periodicals, magazines, and periodicals; publishing of recorded materials; experimental research and development in the fields of social sciences and the humanities; advertising; photographic activities; production and distribution of films and videos; television and radio activities; recording activities and record production; theatrical and musical activities and other artistic activities; library and archive activities; museum activities and preservation of historic places and buildings.  Related activities I: Printing activities; service activities related to printing; other publishing work; manufacture of non-heat resistant ceramic products for non-structural use; manufacture of jewels and related articles; wholesale sale and exportation of books and magazines; retail sale of records, cassettes, compact discs, videos, musical instruments and related products, retail trade in books and newspapers; retail trade in photographic equipment in specialized establishments; radio and television program transmission services; cable transmission services; other telecommunication services; entrepreneurs and representatives of national and foreign artists; other entertainment activities not previously classified (n.c.p.); news agency activities.  Related activities II:  Manufacture of cellulose pulp: chip and cardboard; manufacture of radio and television transmitters and telephony and telegraphy equipment; manufacture of radio and television receivers, recording equipment and sound and image reproduction equipment, and related products; manufacture of optical instruments and photographic equipment; manufacture of musical instruments.  In addition, the employment figure only includes three sectors for which information was available (publishing, phonography, and filmmaking) for different years (from 1999 to 2002), so that this figure is merely indicative and it was not intended to determine a percentage of total national employment.
[4] In this study for Chile (National Council for Culture and the Arts of Chile, ARCIS University, Andrés Bello Convention, 2003), calculations were made based on a general group of cultural activities identified in the national accounts of that country.  The following activities are included:  publishing of books, brochures, scores, and other publications; publishing of newspapers, magazines, and periodicals; other publishing activities (photography, recordings, cards, postcards, schedules, forms, posters, art reproductions, etc.); printing activities (periodicals, books, maps, scores, posters, catalogues, postage stamps, paper currency) for publishers, producers, government agencies, etc.; printing-related service activities (bookbinding, production of print characters, printing plates, etc.); publishing of recordings, films, and videos; contracting of artists, films; distribution of films and videos; film exhibition; production or radio and television programs whether or not broadcast; rental of theatre equipment; activities of agencies hiring artists for sports and entertainment events; theatre productions; other entertainment activities n.c.p.; recording of gramophone records and magnetic tapes; placement and employment agencies for artists; activities of authors, composers, and other self-employed artists n.c.p.; leisure and recreational services n.c.p.; motorcycle rental; recreational equipment rental n.c.p. (for example, bicycles, saddle horses, recreational craft, sports equipment); operation of dance halls, discotheques, amusement parks, and similar; sports activities; other leisure and recreational service activities; theatre productions; other entertainment activities; recording of gramophone records and magnetic tapes; placement and employment agencies for artists; activities of authors, composers, and other self-employed artists n.c.p.; dance schools; news agency activities; library and archive activities; museum activities and activities to preserve historic places and buildings; botanic gardens, zoos, and national park activities; operation of dance halls, discotheques, amusement parks and similar; sports activities; other leisure and recreational service activities n.c.p.
[5] Another study for the United States (Heilbrun and Gray, 2000), based strictly on non-profit cultural activities includes these sectors:  theatre arts (plays and productions), museums, government expenditure to support the arts, and private donations.

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