The Modern Practice of Creative Industries' Functioning under the
Conditions of Sustainable Development
KHRYSTYNA PLETSAN
Research Institute
Kyiv National University of Culture and Arts
Yevhen Konovalets Street, 36, Kyiv, 01601
UKRAINE
ALLA HAVRYLIUK
Department of Hotel and Restaurant and Tourism Business
Kyiv National University of Culture and Arts
Yevhen Konovalets Street, 36, Kyiv, 01601
UKRAINE
HANNA KOSTROMINA
Department of Philosophy
National Technical University of Ukraine "Igor Sikorsky Kyiv Polytechnic Institute"
Pobedy ave., 37, Kyiv, 03056
UKRAINE
IRYNA MURATOVA
Department of Philosophy
National Technical University of Ukraine "Igor Sikorsky Kyiv Polytechnic Institute"
Pobedy ave., 37, Kyiv, 03056
UKRAINE
SVITLANA KHOLODYNSKA
Department of Philosophical Sciences and History of Ukraine
State Higher Education Establishment ‘Pryazovsk State Technical University’
University Street, 7, Mariupol, Donetsk region, 87500
UKRAINE
Abstract: - This article is devoted to studying the development of creative industries in the world under the
conditions of sustainable development. The study's main purpose is to show the importance and prospects of
the creative and cultural industries for world and humanity development. With this purpose, scientific literature,
which allows estimating foreign experience of formation and development of creative industries, and effect
features in the different countries, has been studied. Using statistical analysis methods, the estimation of
creative industries in dynamics concerning a global gross domestic product has been made. The results show
that the creative industries account for 3% of the country's GDP under the condition of natural development;
the creative industries will develop at the rate of 10% per year, bringing the socio-economic status of the
countries to a new level. The analysis of the creative industries structure showed its concentration around the
information technology sector. However, the cultural sector also has an important role in sustainable
development, allowing humanity to self-realize and be financially satisfied through the high value of creativity
in industrial spheres. Furthermore, it is possible to accelerate the growth of creative industries by creating
creative clusters formed by educational institutions, cultural institutions, and industry taking into account the
peculiarities of regional development. Based on the analysis results, a SWOT analysis allows summarizing the
research, highlighting the prospects for developing the creative industries and the main threats.
Key-Words: - Intellectual capital, creative industries, creative economy, sustainable development, Covid-19
Received: March 2, 2021. Revised: January 11, 2022. Accepted: February 5, 2022. Published: March 14, 2022.
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DOI: 10.37394/232015.2022.18.35
Khrystyna Pletsan, Alla Havryliuk,
Hanna Kostromina, Iryna Muratova,
Svitlana Kholodynska
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1 Introduction
The term "creative industries" started to be used
about 20 years ago to refer to certain cultural
activities. Some of them are very ancient; others
appeared only with the development of digital
technologies. The UK first tried to assess the
importance of creative industries in sustainable
development in 1997. The government published a
Creative Industries - Mapping Document (1998),
which includes 13 areas, including advertising,
architecture, design, and others. The study also
outlined the general fact that they "originate in
individual creativity, skill and talent and have the
potential to create material value through the
creation of intellectual property." Today, the
creative industry has moved beyond the cultural
sector and is perceived by scholars as an industry
associated with innovation in all economic sectors.
Twenty years later, the concept of "creative
industries" and its importance is being recognized
by almost every government globally and is
beginning to give way to the much more
comprehensive idea of a broader creative economy.
The creative economy creates jobs that machines
and technology cannot replace because they depend
on human creativity and emotional intelligence.
The creative industry is now a tool for innovation
and can be implemented in many other sectors,
creating synergies with them. Many scholars
(Pererva, 2021; Savitri et al., 2021; Aldianto et al.,
2020; Trúchliková & Barteková, 2021; Astuty &
Harding, 2020) who have investigated the
relationship between innovation and the creative
industry have confirmed this fact. For example, the
creative industry contributes to various industries
and professions, from advertising to tourism. At the
same time, there is evidence that the skills and work
styles of the creative sector have begun to influence
other areas of the economy (Culture and creativity,
2021). Also, the creative industry is one of the
fastest-growing sectors of the global economy.
Given that it allows people to enjoy self-fulfillment
and at the same time fosters innovation, it should be
an essential part of every country's sustainable
development strategy.
This article aims to show the importance and
prospects of the creative industry for world and
humanity development.
2 Problem Formulation
The issue of the creative industry is well studied in
the scientific literature (Pareja-Eastaway, 2016).
Research has become especially relevant recently as
society has begun to understand the importance of
the creative industry in sustainable development.
Potts & Cunningham (2010) investigated the issue
of the creative industry in the context of four
models. According to the study results, the creative
industry has economic value through its high-level
profitability, cultural and social value. Thus it is
necessary to designate that influence of the creative
industry's components on social and economic
development is different. Each type of creative
activity is accompanied by its problems, needs, and
prospects.
For today most actively developed IT and media
industries. Aufderheide (2021) investigated the
potential of media in creative industry formation,
showing its importance, the necessity of intellectual
capital protection, and problems of this industry
related to quarantine restrictions due to Covid-19.
In turn, Dmytrenko V. & Dmytrenko V. (2021)
investigated creative industry development in the
context of craft development. The authors show that
this type of art allows tourism development, which
is especially important for potential tourism
countries. Pererva (2021) took an in-depth look at
the concept of the creative industry and cultural
industry, showing their interconnection. The study
concludes the importance of the creative industry to
a country's economy. Finally, Madichie (2021)
showed the resilience of some industry components
under Pandemic conditions because creativity (as a
product) can be manufactured not only in factory
settings but also at home, under quarantined
constraints.
It is necessary to indicate that the creative industry
has different development specifics depending on
the country. Thus, Madichie (2021) investigated this
issue in the context of the development of
underdeveloped and developing countries, which
take an unorthodox approach to demonstrate the
trends and problems of the modern creative
economy to increase the world importance of their
countries. At the same time, in order to develop
creative industries and potential in developing
countries, it is necessary to build cultural
development policies on education. Trúchliková &
Barteková (2021) created a model of the
dependence of economic development on the
creative industry and showed the reliance of
innovation development on expenditures in science
and education. Gillies (2021) conducted a study of
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the influence of the creative sector on the formation
of the cultural and creative economy. He showed
that the association of higher education institutions
and innovative organizations could create a
synergistic effect of economic development. Savitri
et al. (2021) investigated the main components of
creative potential, which is formed by a particular
style of thinking, integrity, and counterproductivity
of work in the creative industries, their relationship,
and importance in the formation of creative
potential. Astuty, Harding (2020) also believe that
creativity is shaped by a combination of science,
culture, technology, and experience. Empirical
research shows that entrepreneurial orientation
depends on creative direction.
Aldianto et al. (2020) believe that creative industries
are based on people's talent and skills, so creative
industries can significantly contribute to national
development through innovation and advanced
technology. In order to ensure that the creative
industry does not lose its potential compared with
other sectors, it is essential to create integrated
creative clusters that will support the efficiency of
the industry as a whole, creating advantages and
adjusting infrastructure to the peculiarities of the
area development. The clustering of creative
industries in Poland was also studied by Namyślak,
Spallek (2021). They concluded that the formation
of creative clusters should occur in the context of
the peculiarities of the regional industry, culture,
and historical preconditions.
Thus, we can conclude that the peculiarities of
creative industry development are different in
different countries. It depends on the territorial
potential, the availability of intellectual capital that
can accompany such growth. It is crucial to develop
the creative industry not as a particular industry
(music, museum, or IT) but in the context of the
region's socio-economic development. It allows
getting a synergistic effect that has the maximum
impact on the country's social development level.
3 Research Methods
This article is devoted to analyzing global trends in
the creative industry, which involves studying the
dynamics and prospects of development based on
reports, statistical data, regulatory documents, and
political decisions. For this purpose, many reports of
international organizations and research companies
that show the vision of the creative industry were
analyzed. For empirical research, analysis of
statistical data was conducted using horizontal and
vertical analysis. The use of trend analysis allows
predicting the development of the creative industry.
The correlation analysis and application of Pearson's
coefficient will prove the importance of the creative
sector in the socio-economic condition of the state.
At the same time, by synthesizing the data on the
current problems and scientific prerequisites of the
creative industry development, the SWOT-analysis
of the creative industry on the global scale was
made, which allowed determining the strengths and
weaknesses of the industry, prospects, and threats of
development in the future. The application of
general scientific methods of knowledge, in
particular induction and deduction, will allow
forming opportunities of the creative industry for
world and humanity development.
4 Problem Solution
Literature analysis showed that cultural and creative
industries are agents of economic, social, and
cultural changes affecting the life of society. They
also become "a prerequisite and driving force of the
economic, social and environmental aspect of
sustainable development" (Bakhov et al., 2020).
Consequently, the formation and development of a
creative economy are conditions for the sustainable
development of society. This fact is confirmed by
the results of the Global Competitiveness Report.
According to this document, it is possible to trace a
close relationship between the country's overall
ranking and innovation.
Table 1. Comparisons of the overall
competitiveness and innovation index in the context
of some countries
Country
Competitiveness
Index
Innovation
capability
UK
81,2
78,2
Japan
82,3
78,3
Spain
75,3
64,3
Korea
79,6
79,1
Australia
78,1
69,5
China
73,9
64,8
Italy
71,5
65,5
Poland
68,9
49,7
Turkey
62,1
44,5
India
61,4
50,9
Georgia
60,6
32,7
Albania
57,6
29,8
Ukraine
57,0
40,1
Egypt
54,5
39,6
Nigeria
48,3
32,2
Zambia
46,5
28,6
Cameroon
46,0
30,8
Zimbabwe
44,2
28,6
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Venezuela
41,8
30,9
Chad
35,1
22,7
Pearson's
Coefficient
0,946
Source: compiled by the author based on Schwab
(2019)
According to the table, it can be seen that the
indicator of innovativeness, i.e., the creative
industry is the main link in the formation of the
competitiveness index. The Pearson coefficient is
0.946, which indicates a very close relationship.
The concept of "sustainable development" was
first mentioned in 1987 in the report "Our Common
Future," which was prepared by the UN
International Commission on Environment and
Development under the leadership of Brundtland.
This document states that sustainable development
is "development that satisfies the generation of the
present without compromising the ability of future
generations to meet their own needs" (Our Common
Future Report, 1987). At the same time, analysis of
different scientific views regarding the
interpretation of "sustainable development" gives
grounds to assert that most scientists consider the
classical definition of sustainable development not
the interpretation of the UN International
Commission on Environment and Development, but
the meaning given in the UN framework document
"Agenda-21": "sustainable development is a model
of human progress which allows satisfying needs of
the present generation without depriving future
generations of such opportunity.
Consequently, based on the above definitions of
sustainable development, and taking into account
the purpose of cultural and creative industries, we
can state that the complex, even synthetic nature of
cultural and creative industries makes it impossible
to consider these activities separately from the
economic, social and environmental components of
sustainable development. According to the official
UNCTAD data, the contribution of cultural and
creative industries to the world GDP as of the
beginning of 2020 was 3% on average for the
countries (Fig.1).
If we talk about the geographical distribution of
the creative industries, then the Asia-Pacific region
is currently the largest market. Dramatic changes in
the socio-cultural landscape marked the end of the
20th century for Asian countries. The politics of
creative industries in Asia also began as urban
politics. The first megacities in Asia to embrace it
was Hong Kong and Singapore. In these cities, the
British model of creative industries development
was taken as a basis. In 2002, Singapore adopted a
"Strategy for the Renaissance City for Arts and
Culture," conceived by the authors as a
comprehensive project of national construction and
renewal, according to which Singapore was to
become a "new Asian cultural hub. Similarly, Hong
Kong, after its reunification with China based on the
British model, developed its creative industries
policy based on support for the film industry, the
creative sciences, and a methodology for assessing
the creativity of territories. Taiwan's "Two Trillion
and Twin Stars" program, approved in the early
2000s, was prompted by the fierce competition
between Taiwan and China in the video game
market and emphasized the development of digital
technologies (Blagova, 2020).
Fig. 1: Contribution of Creative Economy to Global
GDP, $ billion
Sources: author's calculations based on WorldBank,
2021, UNESCO, 2021
It is necessary to designate that different spheres
of the creative economy have an individual
contribution to the development of humanity.
Analysis of the structure of the creative economy
showed that the cultural component, in particular
crafts, architecture, and museum work is the main
one (8.4% of employment in all industries). Today
the IT sector of the economy (25%), creative
business outside creative industries (23%), music
(15%), films (8%), and publications (8%) make the
most significant contribution to the development of
the global creative economy, as shown in Fig.2.
Thus, given the current society's maximum
demand for creative activities, IT, music, and
cinema are considered the most relevant professions
in the creative industries today. The development of
humanity today will require educational systems to
meet the demands of these industries as much as
possible. Still, as soon as the market becomes
saturated with specialists and offers in this industry,
in the long term, it will be necessary to pay attention
to such industries as crafts and architectural design
and museum business as potential areas for the
2205
2255
2320
2383
2251
2287
2433
2584
2623
2537
0
20000
40000
60000
80000
100000
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development of the creative economy. At the same
time, these spheres will not be able to do without the
widespread impact of digitalization, so they will not
develop as they are now but will be adapted to the
digital economy (Anantrasirichai & Bull, 2021).
Fig. 2: Structure of global creative economy
Source: authors' calculations based on Deloitte,
2021
Among the new directions of development of the
creative industry, it is necessary to highlight virtual
reality, which is already considered to be one of the
most dynamic. According to Professor Mehri
Madarshahi, today, the leader of this industry is
China, which in 2020 has already generated 8.8
billion U.S. dollars in revenue. Today's global
market for virtual reality is estimated at $ 30 billion,
with 47% of the market occupied by virtual video
games, about 20% is the development of equipment
for viewing virtual reality, and the creation of
movies in virtual reality takes 15%. The niche
sphere now accounts for about 5% of the market.
The niche sphere allows museums, architectural and
design services, and crafts to a new level of
development (Madarshahi, 2021).
Today, experts predict an annual increase of 10%
after 2020, which outstrips the rate of development
in the spheres of production and services.
Accelerated economic growth contributes to capital
accumulation, which positively affects the
development of the city's social infrastructure,
thereby improving the quality of life of the
population and ensuring the achievement of
sustainable development goals. At the same time,
given the accelerated, dynamic creative industry
development under the influence and support of
digital technologies, as well as the replacement of
many professions by automated complexes and
production lines, by 2030 a significant increase in
the creative industry in the total employment of the
population is projected (Fig. 3).
Fig. 3: Dynamics of creative industries in the
conditions of sustainable development
Source: authors' calculations based on Deloitte,
2021
All scheduled prognoses of rapid development of
the creative industry are only possible under
conditions of sustainable development and with a
sufficient level of financing, which is present in the
developed countries. Today we can distinguish five
main obstacles to the development of the creative
industry.
1. Quarantine restrictions. According to Deloitte
experts, the year 2020 was disastrous for the
development of creative industries due to the
coronavirus pandemic and quarantine restrictions,
which are still being imposed worldwide. Experts
estimate that in 2020 alone, live cultural events will
lose approximately $30 billion (Variety, 2020). By
rejecting concerts, exhibitions, and cultural events,
almost the entire music and movie industry has
become unprofitable. Thus, we can conclude that
today the Covid-19 pandemic is considered the most
urgent threat to disrupt the projected pace of the
creative industry.
2. The low level of intellectual capital. Let's talk
about the development of the creative and cultural
industry in developing countries. It should be noted
that the main disincentive to growth in these
countries is the low level of intellectual capital. This
is primarily due to the low level of education, which
does not allow a sufficient number of people
capable of creativity.
3. Inaccessibility of international financing. The
main obstacle to getting funding for creative
projects is the lack of knowledge of international
languages, which is the primary tool for entering the
global markets of cultural projects financing, and
the low level of digital and financial competence.
1%
3% 5%
5%
7%
8%
8%
15%
23%
25%
Crafts
Architecture
Museums
Design
Advertising and Marketing
Publishing
Film, TV, radio
Music
Creative occupations
IT
2537
2791
3070
3377
3714
4086
4494
4944
5438
5982
6580
18,719,420,120,921,623,023,824,625,426,227,0
0,0
5,0
10,0
15,0
20,0
25,0
30,0
0
1000
2000
3000
4000
5000
6000
7000
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Creative industry, $bln
Creative industry, mln employment
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4. Weak state policy. Lack of formulation of the
state policy in the cultural sphere and lack of
necessary information about practical methods and
management strategies. Many states do not have
tools for the development of cultural and creative
potential. Thus there is no uniform technique of
development of the cultural policy for each country.
This is due to the fact that each country has its
characteristics of the formation of creative potential.
5. Underestimation of the creative sector. One of
the problems of many developing countries is the
very understanding of culture, its importance in the
modern world, and its role in modernization and
economy. Unfortunately, the understanding of
culture in such countries is perceived with outdated
standards, which do not allow assessing the full
potential of this sphere.
It is necessary to recognize that developing a
creative industry separately from the overall socio-
cultural development will not be possible,
evaluating the prospects of creative industry
development and the main driving forces. If an
individual stakes the development of intellectual
potential, it must start from its production, stimulate
and support further development. This cannot be
done without cluster associations that contain the
creative industry and education and production.
Creative clusters, which include non-profit
enterprises, cultural institutions, art centers,
scientific and media centers, are being actively
introduced and implemented today in the world
practice. The primary purpose of creating these
clusters is to increase the tourist potential of the
territory, which in the future may become the basis
for economic development in the region. But the
unification of creative industries will allow the
development of the sector with the existing forces.
Therefore, new ideas, patents, and technologies
need to be involved in such clusters and cooperation
with the industrial sector to make the development
more dynamic.
To this end, it is necessary to create such creative
clusters, including educational institutions that can
significantly increase the intellectual potential of the
territory of the country as a whole. The founder of
the creative class theory R. Florida showed that the
presence of universities is a necessary condition for
the concentration of the creative class in the
territory, which, in turn, largely determines the
economic development. However, according to
Khakimova (2013), universities do not directly
influence regional development's technological and
economical levels. Instead, the influence of
educational institutions on economic development
occurs through the creative industry, which acts as a
filter and mediator of increasing intellectual capital
(Khakimova, 2013).
Let us summarize the research by forming - SWOT
analysis of the creative industry in the context of
sustainable development in Table 2.
Table 2. SWOT analysis of creative industry in the context of sustainable development
Strengths
Weaknesses
realization of an important need - the creative realization of a
person;
development of culture and traditions of the region;
inclusiveness of different types of activities;
formation of the intellectual capital of the nation and humanity;
the ever-increasing need for creativity in the market;
formation of employment with high-paid labor;
increased interest in creative industries on the part of investors;
an instrument of dynamic development of individual
entrepreneurship.
sensitivity to the sustainable development of
society;
the need to provide the basic human needs of
food, shelter and security as a prerequisite for
the development of creativity;
weak awareness of the need for creativity in
underdeveloped and developing countries;
insufficient level of education as the main
prerequisite for realization of creative
potential.
Opportunities
Threats
the elimination of poverty in all its forms;
ensuring healthy lifestyles;
full and productive employment, and decent work for all;
ensuring sustainable and equitable development of cities and
human settlements;
ensuring sustainable consumption and production patterns;
conservation and sustainable use of natural resources;
the skewing of creative and cultural potential
in the direction of digitalization;
the decline of human health as a result of
active mental activity and as a result of the
development priorities of states;
discrimination against people with a low
threshold of creativity.
Source : author's elaboration
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5 Discussion
The question of the dynamics of the creative
industry today is quite debatable. In particular, we
can say that the creative sector can develop
naturally, without additional stimulation. This
occurs through the concentration of intellectual
capital, which is formed on a competitive basis.
Since innovation is the main criterion for shaping
the competitiveness of organizations and states,
many companies seek to attract as much intellectual
capital as possible to survive in the market and be
ahead of other players (Aldianto et al., 2020). On
average, practice shows that this development
option provides for industry growth of 10%
annually, which is already a good result.
On the other hand, the state can initiate the
acceleration of its development by stimulating the
growth of innovation. To this end, clusters of state-
commercial interaction can be created or
preconditions for forming such groups between
commercial organizations from different industries
(Astuty&Harding,2020; Trúchliková & Barteková,
2021; Gillies, 2021).
Even though today, IT and media have the most
important importance in forming creative industries
(Deloitte, 2021), many scholars believe that the
future of regional development lies in the
development of cultural projects. At the same time,
cultural and arts organizations are anchor
institutions in forming these collaborations, which
can play a crucial role in the economy (CLES,
2019).
It should be noted that the relationship between the
cultural and other sectors of the economy is of great
benefit to both sides. For example, cultural
institutions can find staff in the local market,
maintain social development, and be an essential
part of the economy (CLES, 2015).
The suppliers of staff to cultural organizations are
educational institutions, libraries, and religious
organizations. In general, the practice of Britain
(Arts Council England, 2019) has shown that
cultural facilities have a great ability to shape the
socio-economic infrastructure, strengthen society
and make regions attractive for investment. And the
practice of Asian countries has shown that such
projects can create a new economy from scratch
(Ermakova et al., 2017). Despite the fact that most
cultural agglomerations are located in big cities, art
and culture can revitalize regions and bring them out
of stagnation, opening new regional potential by
organizing exhibitions, archives, formation of
research institutions, innovative companies,
educational providers, etc.
6 Conclusion
An analysis of the dynamics of the credit industry
leads to the following conclusions:
1. Creative industry, the product of which are
innovations today, is one of the main elements in
forming the competitiveness of states.
2. For today, the size of the creative industry is
estimated at 2537 billion dollars.
3. Taking into account the steady development of
the global economy and natural growth rate of the
given industry at the level of 10% per year, the
volume of the industry by 2030 will be estimated at
6580 billion US dollars, at the same time,
employment in the sector will be estimated at 27
million people.
4. The IT sector accounts for 25% of the creative
industry volume, which allows us to foresee its
digitalization and the rapid development of new
sectors based on virtual technologies.
5. Digital technologies are the primary tool of
innovation development. So, we can talk about the
synergistic effect of the creative industry
development on all spheres of the economy and
social development.
According to the SWOT analysis results, we can
conclude that today the creative industry has great
prospects for development in developed countries
by investing in the commercial sector to increase its
competitiveness. The creative sector is also the
primary tool for regional development of developing
and developed countries in interaction with
educational institutions and industry. The creative
industry has a possibility of more dynamic
development by creating clusters. It will allow
solving the issues of employment, income level of
population, and also will give impulse to the
development of new, advanced technologies, to
create rational models of consumption and use of
natural resources, which are the main components of
sustainable development of the countries of the
world.
References:
[1] Aldianto, L., Wirawan, C., Anggadwita, C.,
Rizqi, V. (2020). Integrated clustering of
creative industries to foster innovation:
Bandung's creative industries. International
Journal of Entrepreneurial Venturing, 12(4),
pp.420-438.
DOI:https://doi.org/10.1504/IJEV.2020.109542
[2] Anantrasirichai, N., Bull. D. (2021). Artificial
intelligence in the creative industries: a review.
Artificial Intelligence Review. URL:
https://link.springer.com/article/10.1007%2Fs1
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WSEAS TRANSACTIONS on ENVIRONMENT and DEVELOPMENT
DOI: 10.37394/232015.2022.18.35
Khrystyna Pletsan, Alla Havryliuk,
Hanna Kostromina, Iryna Muratova,
Svitlana Kholodynska
E-ISSN: 2224-3496
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DOI: 10.37394/232015.2022.18.35
Khrystyna Pletsan, Alla Havryliuk,
Hanna Kostromina, Iryna Muratova,
Svitlana Kholodynska
E-ISSN: 2224-3496
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