A creative economy for SL’s future development: Much more to be done to realise the goal

Open University’s marketing guru Professor Nalin Abeysekera of Marketing in Sinhalese fame in a recent webinar hosted by Central Bank’s Centre for Banking Studies set the ground conditions for having a creative economy for the country’s future development (available at: https://www.youtube.com/watch?v=Wkg91Pev4TM). 

Delivering the opening remarks for the webinar, Central Bank Governor Deshamanya Professor W.D. Lakshman called for a paradigm shift in the thinking of the economy today given the two external shocks – Easter Sunday bomb attack of 2019 and COVID-19 pandemic of 2020 – that had delivered multifarious consequences to the economy. Lakshman specifically said that out of the box thinking and strategising are needed for the country to compete in the global markets. Abeysekera in his lecture took his audience through the mechanism which Sri Lanka should follow to realise this goal.

Nalin Abeysekera’s thesis on creative economy

Drawing on Shanghai-based British strategist John Howkins who published a book on the subject in 2001 titled ‘The Creative Economy: How People Make Money from Ideas’, Abeysekera has defined what a creative economy is, outlined its components and explained how it would take root in the traditional cultural ethos of a society. According to him, a creative economy is one which looks at the traditional production models from a new point: how it can be changed to add more value to production. This can be done not by harbouring negative thoughts but by relying on positive thoughts. 

The Easter bomb attack of 2019 and COVID-19 pandemic of 2020 have surely delivered an unmitigated blow to Sri Lanka’s economy. But it has also opened a strategic window which the country should use before the window is closed soon. For instance, Sri Lanka’s agriculture, the lifeline offering the rice bowl to the people of the country, is being conducted by using traditional methods. One should look at how it should be modified to create more value for the people or how agriculture should be converted to a creative industry. 

15 subsectors of a creative economy

Howkins has explained creative industries as those using knowledge and information for making money. They have been divided into 15 sectors based on the global economic structure in 2001 but could be more based on the economic systems today. All these 15 sectors – advertising, architecture, art, crafts, design, fashion, films, music, performing arts, publishing, research and development, software, toys and games, TV and radio, and computer games – are in the services sector that relies more on the brain than on the brawn. 

Abeysekera has combined these creative areas with culture. He has quoted London University’s Andy Pratt who has talked about creative industries and cultures of development. Then, says Abeysekera, South Africa’s Jeannette Snowball has come out with a nexus between creativity, culture, and globalisation. She has emphasised the need for an equal distribution of creativity among nations to help emerging economies to benefit from creativity. Those who are engaged in cultural practices are those who produce creative work like those in pottery or clothing industries. Since most of these people are in the micro and small-scale enterprises, creativity should necessarily help them cross the poverty line. Hence, creativity should be an essential ingredient in any poverty alleviation strategy. The requirement is to connect them to the global markets. 

In Nigeria, the film industry, tagged as Nollywood following the Hollywood or Bollywood style, has now become a global industry. Sri Lanka’s hyped TV Village Ranminithenna is a missed opportunity in this context. Abeysekera makes three suggestions to reach this goal. One is reforming educational system. Another is having collaborative creativity projects in the Central Bank, higher learning institutions and private businesses. The last is establishing a unit specifically dealing with the creative economy. 

About this last one, in the questions and answers session, he suggested that it be established in the Central Bank. The Deputy Governor Mahinda Siriwardena welcomed the idea of setting up of a unit but did not commit the Central Bank to undertake it. Perhaps, the Deputy Governor who had had a stint with the IMF would have been well aware that the Bank could lend its heart to the idea but not its purse. 

Creative economy from a cultural point

Abeysekera has looked at the creative economy from a traditional cultural point. The strength of such a point is that the culture of creativity of a nation is behind this whole process. Necessity makes everyone creative for survival. If the challenge for survival is high, the inner thrust for being creative for survival is also high. That was the reason for ancient Lankans to build enviable irrigation schemes – some reservoirs as large as internal seas – to support the agriculture in the dry zone which is deficient in rain-fed waters. 

Once hunger has been subdued, a fertile ground had been created for developing a rich culture that had encompassed all aspects of life, religion, art, literature, etc. Creativity has been the pillar of this rich culture. Abeysekera drew the attention of his audience to these nostalgic memories that spoke proudly of the creation of marvels by ancient Lankans like irrigation tanks and canal systems, hospitals with facilities even for surgeries, palaces in the least expected places like those on Sigiriya rock and so on. 

What he tried to bring home was that Sri Lankans are creative people by nature and therefore, building a creative economy today is just a matter of reactivating that natural knack in them. He suggested that this message be communicated to the natives in their native languages in a manner they could easily understand it. What it meant was that creativity should be made a part of their blood stream. But that is not a simple task as Abeysekera has predicted.

Toleration is a must to be creative

Ancient Lankans were creative people because they had a high degree of tolerance of opposite forces. They tolerated and appreciated human differences in many aspects like religion, language, culture, ethnicity, or race. There was no animosity against foreigners and foreign technicians, engineers, and scholars visited the country freely. One of the disciplines which the prospective civil servants had to master in the civil service training school set up by King Parakramabahu I, according to the author of the Chulavansa, was foreign languages. 

This would have surely enabled the civil servants to communicate with foreign traders in their own languages, thereby eliminating the language barrier which we have today. In Parakramabahu’s seat of administration, Pulasthipura or modern day Polonnaruwa, there were places of worship for all religious practitioners. The advantage of being such a tolerant nation is that people had a thirst for learning new things from others. There was a free exchange of scholars between ancient India and Lanka. Creativity comes not by living in isolation, but by living harmoniously with others. 

Divided Lanka today

Today’s Sri Lanka is a divided nation. It is divided on religious, language, cultural, regional, and ethnic grounds. Each group is suspecting other groups of carrying out deadly schemes against them. There is no toleration of foreigners. There are anti-Indian, anti-Chinese, anti-American, anti-Western sentiments expressed at all levels of society. Instead of living harmoniously together getting enriched by each other, what is being preached is to live separately in isolation. There is a tendency to praise one’s own culture, language, religion, or race, while condemning that of others. 

This is not in accord with what Emperor Asoka – the Indian monarch who is responsible for spreading Buddhism in ancient Lanka – had dictated in his rock inscriptions. He had said that those who praise their faith while condemning those of others are doing the greatest harm to their own faith. Such a bigotry is evident when the Sinhalese Buddhists and Hindu Tamils celebrate their New Year in April every year ignoring that that New Year belongs to both the Sinhalese and the Tamils. It is being celebrated by each group in isolation from the other. There is no any attempt at getting them together. Such a divided nation has very little prospect of being creative though Abeysekera has a nostalgic craving for it.

Inventions alone are not sufficient

The importance of invention – the product of creativity – was promulgated long before John Howkins by Austrian American economist Joseph Schumpeter. In his ‘The Theory of Economic Development’ published in 1911, Schumpeter made a distinction between invention and innovation which are sometimes interchangeably used. Invention is a creation of a new thing by a researcher, scientist, or an engineer to do things better and faster. Inventions can be of two types. One is to do the things which are presently done in a better and more effective way. The other is to create a new thing altogether displacing old things and habits. They would creatively destroy the old things which Schumpeter called ‘creative destruction’. 

Today they are called disruptive technologies. Though we are fearful of these disruptors, they are a necessity for a society to move forward. Creativity can handle disruptors by disrupting the disruptors. For instance, banks have been disrupted by non-bank tech companies by offering financial services. But banks can beat them by offering a better service to customers by using the same disruptive technologies. This is an essential part of being creative in today’s context.

Schumpeter has said that inventions do not serve mankind unless they are made available to people for their use. That part comes from the commercial production of inventions by entrepreneurs. Schumpeter called this latter process innovation. Thus, without innovation, inventions will just sit idle as prototype products in laboratory files. Hence, from files to production is a must for a creative economy.

The story of desktop computer and gorilla glass

The classic example is the creation of the first Apple Mackintosh Desktop Computer invented by an engineer called Stephen Wozniak. It would have remained as a prototype product had it not been commercially produced by an entrepreneur called Steve Jobs, the innovator of the product. The entrepreneur raises money from banks and other sources to finance it, sets up the production process, undertakes marketing and handles after sale services. These are risky affairs and therefore, innovator’s task is to take risks or take action to mitigate risks. 

Another case is the Gorilla Glass now universally used in smart phones. When Apple invented the first iPhone in 2004 without an external keypad to enter data, the problem was the screen that got scratched due to rough handling by fingers. Fortunately for Apple, a non-scratching glass had been invented by an American technology company called Corning Incorporation in 1960 for the US Air Force. For some reason, the US Air Force had not used it and therefore, it had remained idle in the records of the company. This invention was put to use or innovated by Apple in terms of Schumpeterian terminology. Had it not been done, it would have just remained idle as another unused invention. 

Thus, as Abeysekera had explained, creative invention is necessary. But that invention should be commercially produced by innovators if it is to be of any use to mankind. 

Objective should be to create wealth in the whole society

Inventions and innovations will support a single firm or a single industry to make profits. That was the theme of Howkins’ book. But for an economy to benefit from inventions and innovations, that knowledge should be spread among as many economic agents as possible. Schumpeter called this process ‘diffusion’. In the case of the two examples that I have cited above – desktop computer and gorilla glass – the word soon spread among the potential entrepreneurs. 

This learning process is a must for any society to remain creative. Then, a fourth process should also take place for the whole economy to benefit from inventions. That is, the original entrepreneurs should be imitated by other entrepreneurs. Such an imitation will push the economy up creating new wealth for people, according to Schumpeter. 

Can a government bureaucracy promote creativity?

What this means is that Abeysekera’s creative economy should be supported by three other processes: innovation or commercial production, diffusion or spread of knowledge and imitation or adopting the newly acquired knowledge through diffusion. In a market, driven by the profit motive of entrepreneurs, they would happen automatically without the promotional engagement of the government. The two examples cited above are a testimony to this observation. No government got involved in supporting the production of desktop computers or use of Gorilla Glass in smart phones. Yet it happened automatically across the entire globe. 

Hence, there is no necessity to set up a central government unit to cater to creativity in society. Such central government units are bureaucratic outfits infected by red tapes or inefficiency. Or there is a tendency for such bureaucratic outfits to drift away from their main mission. What is necessary is that governments should implement structural reforms in the economy to create a healthy environment for business to engage in business. Without it, the creation of a creative economy becomes purposeless.

Abeysekera has set the groundwork for a creative economy. But much more has to be done for a nation to benefit from it.

(The writer, a former Deputy Governor of the Central Bank of Sri Lanka, can be reached at [email protected].)