The creative sector in New Zealand : mapping and economic role : report to New Zealand Trade and Enterprise

Abstract

The New Zealand creative sector was responsible for almost 121,000 jobs at the
time of the 2006 Census (6.3% of total employment). These are divided between
• 35,751 creative specialists – persons employed doing creative work in creative
industries
• 42,300 support workers - persons providing management and support services
in creative industries
• 42,792 embedded creative workers – persons engaged in creative work in other
types of enterprise
The most striking feature of this breakdown is the fact that the largest group of
creative workers are employed outside the creative industries, i.e. in other types of
businesses. Even within the creative industries, there are fewer people directly
engaged in creative work than in providing management and support.
Creative sector employees earned incomes of approximately $52,000 per annum
at the time of the 2006 Census. This is relatively uniform across all three types of
creative worker, and is significantly above the average for all employed persons
(of approximately $40,700).
Creative employment and incomes were growing strongly over both five year
periods between the 1996, 2001 and 2006 Censuses. However, when we compare
creative and general trends, we see two distinct phases in the development of the
creative sector:
• rapid structural growth over the five years to 2001 (especially led by
developments in ICT), with creative employment and incomes increasing
rapidly at a time when they were growing modestly across the whole economy;
• subsequent consolidation, with growth driven by more by national economic
expansion than structural change, and creative employment and incomes
moving in parallel with strong economy-wide growth.
Other important trends revealed by the data are that
• the strongest growth during the decade was in embedded creative workers,
especially over the first five years. The weakest growth was in creative
specialists, with support workers in creative industries in the middle rank,
• by far the strongest growth in creative industries’ employment was in Software
& digital content, which trebled in size over the decade
Comparing New Zealand with the United Kingdom and Australia, the two
southern hemisphere nations have significantly lower proportions of total
employment in the creative sector (both in creative industries and embedded
employment). New Zealand’s and Australia’s creative shares in 2001 were
similar (5.4% each), but in the following five years, our share has expanded (to 5.7%) whereas Australia’s fell slightly (to 5.2%) – in both cases, through changes
in creative industries’ employment.
The creative industries generated $10.5 billion in total gross output in the March
2006 year. Resulting from this was value added totalling $5.1b, representing
3.3% of New Zealand’s total GDP.
Overall, value added in the creative industries represents 49% of industry gross
output, which is higher than the average across the whole economy, 45%. This is
a reflection of the relatively high labour intensity and high earnings of the creative
industries.
Industries which have an above-average ratio of value added to gross output are
usually labour-intensive, especially when wages and salaries are above average.
This is true for Software & Digital Content and Architecture, Design & Visual
Arts, with ratios of 60.4% and 55.2% respectively.
However there is significant variation in this ratio between different parts of the
creative industries, with some parts (e.g. Software & Digital Content and
Architecture, Design & Visual Arts) generating even higher value added relative
to output, and others (e.g. TV & Radio, Publishing and Music & Performing Arts)
less, because of high capital intensity and import content.
When we take into account the impact of the creative industries’ demand for
goods and services from its suppliers and consumption spending from incomes
earned, we estimate that there is an addition to economic activity of:
• $30.9 billion in gross output, $41.4b in total
• $15.1b in value added, $20.3b in total
• 158,100 people employed, 234,600 in total
The total economic impact of the creative industries is approximately four times
their direct output and value added, and three times their direct employment.
Their effect on output and value added is roughly in line with the average over all
industries, although the effect on employment is significantly lower. This is
because of the relatively high labour intensity (and high earnings) of the creative
industries, which generate below-average demand from suppliers, but normal
levels of demand though expenditure from incomes.
Drawing on these numbers and conclusions, we suggest some (slightly
speculative) directions for future research. The goal is to better understand the
contribution the creative sector makes to productivity growth; in particular, the
distinctive contributions from creative firms and embedded creative workers.
The ideas for future research can be organised into the several categories:
• Understanding the categories of the creative sector– who is doing the business?
In other words, examine via more fine grained research (at a firm level perhaps) just what is the creative contribution from the different aspects of the
creative sector industries. It may be possible to categorise these in terms of
more or less striking innovations.
• Investigate the relationship between the characteristics and the performance of
the various creative industries/ sectors;
• Look more closely at innovation at an industry level e.g. using an index of
relative growth of exports, and see if this can be related to intensity of use of
creative inputs;
• Undertake case studies of the creative sector;
• Undertake case studies of the embedded contribution to growth in the firms and
industries that employ them, by examining taking several high performing noncreative
industries (in the same way as proposed for the creative sector).
• Look at the aggregates – drawing on the broad picture of the extent of the
numbers of creative workers embedded within the different industries, consider
the extent to which these might explain aspects of the industries’ varied
performance in terms of exports, growth and so on.
• This might be able to extended to examine issues like the type of creative
workers that are most effective when embedded, or test the hypothesis that
each industry has its own particular requirements for embedded creative
workers that overwhelms any generic contributions from say design, or IT.