Creative Chile: Critically examining

the concepts behind creative

economy with a view from the
South

[1]
[2]
 Table of Contents

Table of Content ................................ ........................................ 3

Acknowledgements ................................ ........................................ 4

Abstract ................................ ........................................ 5

I. Introduction ................................ ........................................ 6

II. Literature Review ............................................................. 13

a. Basic Concepts ........................................................... 13

b. Globalization .................................................................. 22

c. Culture and development ..................................... 30

d. Intellectual Property ................................................... 35

e. Chile and the creative economy........................................ 47

III. Finding and analysis ........................................ 58

IV. Conclusion ........................................ 65

V. Bibliography ........................................ 70

[3]
 Acknowledgements

The author wishes to thanks

To Silvia, my wife, for her love and patience

To my daughters Pamela and Romina, for inspiring me

To my parents, Guillermo and Teresa, for teaching me the value of work and
study

To my sister Viviana and my brother Pedro, for helping me to grow up

[4]
 Abstract

There is not much doubt that there seem to be a increasing trend to consider

creativity and culture as the cutting-edge resource in economic and social

development. Nevertheless, the discussion on creative economy or cultural and

creative industries has been conducted from a limited numbers of developed

countries. In this dissertation, the author will attempt to critically review and

discuss the key principles behind these ideas and some practical applications

from a Chilean perspective that, at the same time, can be observed in the Latin

American context. The aim is to analyse whether these approaches are suitable

or not for a developing country like Chile and if they have something to offer in

terms of development to the country.

[5]
I. Introduction

Currently, there seems to be not much debate on the importance of

creative economy and cultural and creative industries as a driving tool for

economic development, urban regeneration and social inclusion. Development

agendas in different places are now being thought of from a cultural perspective.

Moreover, the importance of creativity and innovation in the economic process of

wealth creation is internationally and increasingly recognized. In that sense,

governments from all over the world through different strategies and specialized

bodies are developing or emulating models to obtain the benefits of being

"creative".

Nevertheless, "virtually all 'culture and the new' economy' debate has

been conducted within, and for OECD countries - arguably from within a mainly

'Anglo-spheric' and metropolitan centred coterie". (Cunningham et al, 2005)

Under this statement, it is important to question about the role played by

developing countries in this process as well as whether these ideas can be

considered suitable to be applied or not from the point of view of these countries.

This issue might be observed under the terms of colonialism and post-

colonialism, due the tempting practice used by policy makers to adopt alien

[6]
policies in fostering cultural and creative industries to use them locally (Pratt,

c2009).

In this paper, the author wants to critically review principles and policies

designed to foster the so called cultural and creative industries as a leading edge

in the economic and social growth but from the perspective of a developing

country, like Chile. The author aims to review and discuss the concepts behind

creative economy in order to answer the question on to what extent these

policies and theoretical approaches may be considered useful or coherent if

applied in a contrasting context in relation to the original. The objective of this is

to offer a new perspective and a new approach on these topics. As a Chilean, the

author is interested in developing a view from the South of these ideas in order to

contribute to the discussion which is taking place in different places now. Chile is

among them. At the same time, the author will attempt to carry out a critical

analysis on these current trends as a way to expand the local knowledge on

these issues. Insofar as the government is interested in developing the cultural

and creative sector, the author aims to contrast some global at a global level with

local evidence available.

As considered by the UNCTAD, the creative economy has the many-sided

nature of being both a source of wealth and job creations and a tool for social

inclusion, which is an interesting perspective for societies which show a lack of

social integration due to inequalities such as educational, economical, and

ethnical and so on. However, as previously quoted, the discussion on this subject

[7]
has been almost exclusively lead and developed in the global North, so the idea

of this work is to question to what extent these principles have something to offer

to the country.

Chile is one of the emerging economies in Latin America which during

recent years has shown interesting results in economic development1 . This

country is, as well, one of those small countries from the global South interested

in the development of the creative industries as a way to thwart the dependency

on commodities, but also as a way to develop the arts and cultural sector in

entrepreneurship and employment terms.

So, in order to answer this question, the author will review and analyse

critically some key issues on this subject, namely, creative economy,

globalization, development and intellectual property. To do so, in this paper will

be reviewed some key writings on this subject, including further academic

discussion on specific topics from both a general point of view and a Chilean

perspective.

If it is considered that these policies and practices come mainly from just a

few places in the world, it is thus arguable to assume that those ideas are based

on their cultural background and practices which from several points of view are

different and even contradictory to those from other countries interested in

developing creative economy. From this perspective, Latin America is a region

which in recent years has developed a growing interest in this sector encouraged

1 Since January 2010, Chile is member of the OECD, becoming the second Latin American
country to be invited to be part of this economic forum.

[8]
by research and policies recommended by UNCTAD and UNESCO during the

last decades in terms of offering an alternative for development beyond the

traditional economic sectors, as well as creating the conditions to increase the

levels of social inclusion. Moreover, this region has developed a rich and complex

cultural tradition hardly known outside its borders; however at the same time

Latin America has a reputed name in the television industry as one of the most

successful products such as telenovelas, especially those from Brazil, Mexico

and Venezuela.

In the Latin American context, Chile can be regarded as a medium size

economy with growing levels of development in creative industries, showing, on

the other hand, high standards of political and economic stability. This stability

can be considered as a positive factor in the search of new strategies in

development because it offers a favourable environment to look for new

development strategies and policies. As said before, the country requires new

approaches to counteract the dependency on commodities 2 and at the same time

gain new and sustainable sources of wealth.

In this sense, the Chilean government in 2005 released a document called

Chile quiere mas cultura3 which can be considered an important step in

recognizing the need to foster culture in terms of national identity and aesthetic

values, but also as an industry which generates wealth and employment (CNCA,

2 Copper industry represents approximately the 8% of Chilean GDP and 36% of world
production (de Gregorio, 2007).
3 In English, “Chile wants more culture”

[9]
2005). This document was not the first effort in this sense, but essentially was

one of the first official recognitions of the importance of creative industries in the

development of the country. Since then, it has tried to set up policies tending to

foster cultural and creative industries in the local economy which have been

launched from the Ministry of Economy and the National Council for the Arts and

Culture in the form of the Programa de Fomento a las Industrias Creativas4. In

the section devoted to Chile, the author will review why and how the Chilean

Government has undertaken the task of fostering creative industries.

On the other hand, in a report on film and TV industry in Chile, it can be

found a clarifying approach which states that an opportunity for Chilean industry

is to imitate successful models (UNIACC, 2009). As argued by Pratt, there is an

international current to copy policies and practices with no regard for local

identities. The so called Xerox policy (Pratt, c2009) is a tempting practice in

places where there is interest in developing creative economy, which, at the

same time, shows a lack of local research, ignorance on national academic

approaches or an urgency to show success stories in the short term. So in a

sense these experiences tend to be made based on a top-down approach with

an evident colonial flavour.

As stated previously, one of the basic concepts of creative economy is

related to intellectual property, which is as well one of the most discussed in

academic and entrepreneurial environments. From transnational corporations

4 In English, Creative Industries Promotion Program

[10]
and WIPO to Universities and NGOs, there are different approaches to the

question on to what extent intellectual property expressed in copyright

regulations and laws can be helpful to foster creative economy or, as seen from

another perspective, in what sense can be a way to privatise cultural practices

and even traditions. The author consider that the understanding of this topic is a

key factor in order to analyse creative industries in terms of showing contradiction

or significant differences between international consensus - if existent. Based on

these ideas, the author wants to examine critically these concepts in order to

recognize similarities and discrepancies in the national, regional and international

level.

The idea behind this critical examination on evidence provided by

literature on creative industries is aimed to review to what extent the global

trends in terms of fostering creative economy as a leading edge of development

can be replicated in Latin America, but specifically in Chile.

The author considers that in methodological terms a bibliographical

research based on an overview of different sources can be helpful in order to

contribute to the discussion on this subject in local terms and in analysing the

sustainability of these industries in long-term. At the same time, the author thinks

that widen the perspectives on this area should be beneficial to development in

the country in terms of offering a dialectical view on this phenomenon which will

allow developing both new and useful approaches. So, the author will research

key concepts reviewing what authors have written about them, trying to develop a

[11]
coherent argument and making their ideas to dialogue. To obtain the most

comprehensive information possible, the author set as starting point the Creative

Economy Report published and edited by UNCTAD in 2008, which gave the

clues to develop the further steps on this research. In this sense many readings,

papers and books were not explicitly included in this work, but they were

essential to succeed in the research process. As a result, the author presents the

following pages aimed to contribute to the discussion on creativity, culture and

economy from a non-traditional point of view.

[12]
 II. Literature review

a. Basic concepts

Firstly, it is important to start reviewing the literature available on these

subjects focusing on the concepts which has given life to this widespread trend of

applying creativity to culture as a leading edge of development.

On a first approach, the author will show some ideas and concepts stated

by several authors attempting to focus the subject of this work. For instance, it

can be read that Creative Economy “consists of the transaction in [...] creative

products” which are “economic good or service that results of creativity and has

an economic value” (Howkins, 2001; x) or that creative industries “can be defined

as the cycle of creation, production and distribution of goods and services that

use creativity and intellectual capital as primary inputs” (UNCTAD, 2008; 4).

Another contribution expresses that "creative industries might help to revitalize

cities and regions that moved out of heavy industry […], or had never developed

a strong manufacturing base […], or who where over-exposed to declining

industries” (Hartley, 2005; 19) or that they were the solution to “many older cities

[13]
[that] suffered from deindustrialization with a loss of jobs in manufacturing,

warehousing and transport and increase in unemployment” (Law, 1992, 600).

However, as several researchers and scholars have pointed out, the

abundant terminology often lacks of rigour and clarity which make it usually

confusing and inconsistent (Galloway and Dunlop, 2007; Pratt, 2005; Kong,

2000; UNCTAD, 2008; Bharucha, 2008; Raj, 2008). So depending on what kind

on books and papers are chosen to read, it is possible to find the keywords,

“cultural”, “creative”, “industry” and “economy” used interchangeably. In a parallel

way it can be observed some derived concepts such as creative class (Florida,

2004) or creative city (Landry, 2008) to explain specific issues anchored in the

core of this creative tendency. The former aimed to identify the core group of

people which fuel places with loads of creativity; and the latter to recognize urban

environments as the place where creativity fits perfectly to thrive.

This game of adjectives and nouns does not help to give light to a subject,

which is increasingly in public agendas and development strategies all over the

world. However, in basic terms -and not pretending to be exhaustive at all-, the

general idea of creative economy can be explained by saying that is the concept

in which creativity is the key factor to produce development and economic growth

(UNCTAD, 2008). On the other hand, cultural economy may be considered pretty

much the same idea, with the difference of being focused on outcomes which

provides meaning and aesthetic value (Scott, 2008; Pratt, 2005). In the case of

the terms creative industries and cultural industries, it can be said that they are

[14]
the sectors aimed to create, produce and distribute services and goods either

based on creativity itself or in culture (UNCTAD, 2008). The limits between them

are fuzzy and they are quickly and easily crossed when conceptual juxtaposition

is required to explain phenomena, examples or facts in a grey area; however, all

these concepts are linked to the same phenomenon, which is the knowledge

society in which, it is argued, creativity and knowledge are basic factors for

development (Scott, 2008); more than machinery and labour and that is

considered the next stage in capitalism, after manufacturing and Fordism as

industry and production and consumption system. Nevertheless, as argued by

Galloway and Dunlop (2007, 19) “most of the definitions are based around a

combination of five criteria – creativity, intellectual property, symbolic meaning,

use value and methods of productions”.

In addition, UNCTAD on its 2008 report argues that “the interface among

creativity, culture, economics and technology, as expressed in the ability to create

and circulate intellectual capital, has the potential to generate income, jobs and

export earnings while, at the same time, promoting social inclusion, cultural

diversity and human development” (UNCTAD, 2008; 5). This idea is supported by

John Hartley who claimed in 2005 that “Creative industries is not confined to

economic activity as such, but extends also to new models of social development

that are at the cutting edge of international practice” (Hartley, 2005; 3).

However, these developments does not appear by accident, “economic

success stories such as the Silicon Valley and the creative industries in London

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are always accompanied by the substantial involvement of universities and

government agencies” (Hartley, 2005; 3) and he insists on this topic stating that

education is key in the growing of creative industries, firstly because it can

produce creative professionals which will be devoted to provide creative goods

and services and secondly by a provision of employment (Hartley, 2005; 25).

On the other hand, Pratt (2005) has observed that both commercial and

non-profit cultural sectors have developed a strained relationship due to their

different and sometimes contrasting natures. An interesting way to understand

the reasons behind this tension was contributed by Hartley (2005, 16) upon

stating that “as consumers we’re presumed to be interested in comfort, beauty

and price; as citizens in freedom, truth and justice”.

A way to view this conflict is given by Raj (2008) who argues that

investment in cultural programs should not be evaluated just under a commercial

perspective. Many of these projects contribute to improve quality of life and to

promote social inclusion, which cannot be assessed in economic terms. As a

consequence of this tension, Pratt (2005) states that creative industries as for-

profit companies seem to annoy policy makers to whom this phenomenon is

contrasting with the tradition. Culture sector has traditionally been funded through

the strategy of market failure, because it was considered normal that as a public

good, culture should be subsidized by the state (Pratt, 2007), especially when the

government promoted culture in its political and social agenda. So these new

character, commercial cultural industries do not fit in the traditional concept of

[16]
culture, and according to Pratt (2005) as they aim to make profit, they are not

considered as deserving access to public funds.

Canclini (2005) adds that cultural industries should be conceived of not

only as a business, but as a service in which profit is not the only value to be

pursued. He also argues that although the state does not generate cultural

expressions, it can help to create the conditions required to stimulate the

production of services and goods via policies and regulations and, at the same

time, to provide conditions to make them more accessible, so in this sense as

claimed by Raj (2008) policy makers should be aware on the powerful

contribution made by the market, however they must be conscious that it can be

named as the unique judge in defining what deserves to be produced. He argues

that policy makers must recognize anticipatorily those areas in which the market

has no interest in order to promote them.

On the other hand, some critics have argued that behind the attractive and

politically correct discourse of creative industries a clear attempt to promote

neoliberal ideology can be observed (Flew and Cunningham, 2010; Yudice,

2002), tending to reinforce the power and influence of capital in culture, to

concentrate creative industries in just a few media corporations, to globalize

conceptualizations and markets, and to grant rights of private property in new

areas. (Slachevski, 2005; Flew and Cunningham, 2010; Miller, 2009; Pratt, 2007),

but at the same time it ignores key issues such as precarious labour

[17]
(Oudenampsen, 2007, Pool, 2000), technological trash and imperialism in culture

(Miller, 2009).

Nevertheless, both the First World and the Third World have focused their

efforts in developing and consolidating creative industries. The former

recognizing that wealth is not in manufacturing or traditional industries, but in

ideology and finances; and the latter expressing its intention to obtain its share

from intellectual property rather than from commodities (Miller, 2009).

This is interesting to Latin America, because:

“The creative economy also seems to be a feasible option for developing

countries. If effective public policies are in place, the creative economy generates
cross-cutting linkages with the overall economy at macro and micro levels. It thus
fosters a development dimension, offering new opportunities for developing
countries to leapfrog into emerging high-growth areas of the world economy».
(UNCTAD, 2008; 5)

However, during many years, the creative industries sector showed level

of underdevelopment across all the Latin American region and their participation

of their GDP was less than 2 per cent in some cases (Brazil, Argentina, Chile,

Peru Uruguay y Venezuela) and even less than 1 per cent in countries like

Bolivia, Mexico, Colombia y Ecuador (Becerra and Mastrini, 2004). Its

performance during the last years has improved - at a slow pace-, showing an

[18]
increase in exports, though according to UNCTAD (2008) the region is still a “net

importer of creative goods and services”

By applying the ideas provided by the 2008 Report on Creative Economy

made by UNCTAD it can be argued that in general "the obstacles preventing

these developing countries from enhancing their creative economies are a

combination of domestic policy weaknesses and global systemic

biases" (UNCTAD, 2008; 5). So in spite of the rich cultural diversity and talent

thriving in Latin America and other developing regions, they have not yet

benefited from their creative potential.

In addition, Fonseca and Davis (2007) states that all these countries are

still regarded as peripheral by the other nations, and still there is no much mutual

recognition and knowledge from each other. Nevertheless, there are also two

additional factors to be considered in order to understand the situation of cultural

industries depending on which region is analyzed. The first one is the so called

Engel’s Law which is a key factor to comprehend the evolution of creative

industries in Latin American terms, and also internationally. This economic

principle states that along with the increase of household incomes, the proportion

devoted to be spent in food and basic needs decrease (De Mooij, 2004).

However, the important thing is that the proportion of the remaining income tends

to be spent in cultural goods and services as well as in leisure. Historically Latin

America has showed low per capita income levels along with high levels of

inequality, which can be interpreted as considerable amounts of people are living

[19]
with minimum wages, and even under the official line of poverty. People hardly

have enough money to feed themselves, so cultural consumption is completely

out of focus. This figures have improved during late 1990s and early 2000s,

however, vast sectors of population still exhibit low incomes.

The second factor is that showed by UNESCO (2000), which claims that

certain cultural industries require reaching determined economic development

levels as a starting point of their development. The international body has shown

that, for instance, under a GDP per capita of $1200 and a Human Development

Index of 6.00 there is no film production, so in the way a country increases both

its income and its education, it will tend to generate a cultural economy and

copyright protected goods.

According to Cunningham (2005), the lack of development of creative

industries in Latin America and the Caribbean is due to some other reasons, for

instance, concentration of capital and wealth in just a few companies which

means a marginalization of domestic firms. Adding to this debate, UNCTAD

express that "the oligopolistic nature of marketing and distribution inhibits the

competitiveness of creative goods and services from developing countries in the

global trading system (UNCTAD, 2008; 7). Cunningham (2005) exemplifies this

situation arguing that in the music industry in Latin America all the major

companies "account for the lion’s share of each local market" or in terms

of Hesmondhalgh (2002) to question “the extent to which the cultural industries

serve the interest of the wealthy and powerful".

[20]
 It is also important to say that the conceptualization of creative industries

exhibits geographical differences, based upon domestic heritage and local

situations, so the U.S. concept is more market- and consumption- driven,

whereas in Europe is aimed to develop citizenship and national identity (Hartley,

2005).

To conclude this part, it have to be said that after reviewing some ideas on

cultural industries is necessary to recognize as Law (1992) did that these

concepts and their application cannot be considered as a panacea, which will

solve all economic and social issues, although it can be considered as a part of

the solution.

[21]
 b. Globalization

Another key conceptualization that explains many of the current changes

in the world is Globalization. The quick development of technologies and the

increasing speed and outreach in digital communications along with ideological

transformations have sped up this process. Arguably, globalization became a

leading force behind the knowledge economy that, at the same time, fuelled

constant and sometimes permanent changes which were quickly diffused. This

phenomenon is generally regarded in positive terms by people and authorities.

As seen by Savage et al (2005, 1), a globalized world is “a world characterized

by a virtual communication, institutional deregulation and the movement of

capital, information, objects and people at great speed across large distances,

social life cannot be seen firmly located in particular places with clear

boundaries”. For her part, Dos Santos (2008) claims that globalization altered

society in a profound sense and changed our behaviour, making connectivity a

basic factor to understand our lifestyle, our attitude and even our daily choices.

These conceptualizations are key factors to understand the actual impact

of creative industries in modern societies that due to a series of phenomena in

politics, technology and economics have changed the face of the world, giving a

sense of global connectivity (Savage et al, 2008). Nonetheless, some authors

have developed a contrasting perspective on this subject, arguing that

[22]
globalization has not only positive outcomes, but some other which are negative

to certain kind of countries and regions. Fonseca and Davis (2007) comment that

is commonly claimed that one positive consequence of globalization is that ideas,

culture and values are able to overcome physical frontiers which allow people to

live in a multicultural, diverse and more open-minded world. Nevertheless, they

argue that there are three phenomena which are contradictory with this ideal

project of a more democratic world.

“First, the legal framework of intellectual property rights which limits access top
information and cultural expressions to those who can afford it [...]. Second trade
and access are increasingly tied to the digital - a language still unknown to most
Latin American and Caribbean people who are now threatened by the digital
divide, following their exclusion from the knowledge economy. Third, concentration
in distribution prevents free circulation of cultural products, even when the barrier
of IPR is overcome and the digital divide is bridged.” (Fonseca and Davis, 2007,
188)

Nonetheless, criticism on globalization does not stop just in these authors

who add to their argument that this negative trend is not only applicable to this

region, but to others in the world. From this perspective, Garcia Canclini (2002)

considers that the asymmetrical globalization in the cultural sphere has provoked

not only an increase in global inequalities in wealth distribution, but also has

deepened the existent gap in communication, information access and leisure,

and in participation at a local and international level. The same author in 2005

[23]
stated that “culture and development can be examined from the point of view of

inequality and poverty. The gap between rich and poor continues to

widen” (Garcia Canclini, 2005, 3).

In turn, Savage (2005) argues that the previous confinement of

communications to the borders of specific places was no longer allowed by

technological developments, detaching them from their original sites. However,

Garcia Canclini claims that the illusion created by media and cutting-edge

technology that we all live in a knowledge society can be contrasted saying, for

instance, that “Latin America which has 8% of the world population, and

contributes 7% to global GDP, shares only 4% of cyberspace”. (Garcia Canclini,

2005; 4)

The digital divide is a decisive factor to explain these phenomena,

because the gap between people, organizations, communities, countries and

regions in the access knowledge and information technologies as well as to

internet services (OECD, 2001) has deepened the aforementioned global

inequalities, because of the lack of access to big amounts of content, information,

and cultural services, which are only available on the web. In this sense,

UNCTAD (2008) states that information and communication technologies are

recognized as one of the most promising sectors in economy, which have in

penetration of broadband5 and the rate of investment in the sector as the key

indicators of their development and. From this perspective, figures are

5 Broadband penetration: United Kingdom (28.8%), Sweden (37.9%), United States (25.8%)
Source (ITU 2008) – Chile (10.4%), Argentina (10.0%), Brazil, (6.0%) and Peru (3.0%)
(Source: Cisco, 2009)

[24]
disappointing in the Latin American context, so the international body concludes

that digital divide is cause and consequence of both indicators.

Another negative aspect showed by globalization in cultural industries, but

not only in them, is that of concentration, which is clearly explained by Fonseca

and Davies, who talk about “transnational cultural conglomerates [that] tend to

operate and transform local and regional markets into one global space,

leveraged by financial resources and production that know no geographical

boundary or constraint” (Fonseca and Davis, 2007; 185). In this context, both

authors add that Latin America and the Caribbean are considered part of the

periphery not only by the global North, but for the rest of the world and eventually

among the very same countries which lack of mutual knowledge. In addition, the

region suffers the hegemonic influence imposed by the United States. (Fonseca

and Davis, 2007)

Savage et al (2005) add a new component to criticism, when arguing that

authors on globalization put their emphasis on the increasing communications

and mobility but forget issues on erosion of place. As argued by Garcia Canclini

(2005) these situations probably respond to new strategies on a global division of

labour in artistic and intellectual fields, in terms that concentration of cultural

industries and capital results in a concentration of profits in certain countries

(United States, Europe and Japan) and the capacity to appropriate and distribute

cultural diversity according to the interest of conglomerates. Fonseca and Davies

(2007) support this concept when they claim that there is a direct relationship

[25]
between distributional problems and concentration; however they are aware that

not all sectors are affected in the same way. In many countries, they argue,

transnational media corporations exhibit monopolistic participation in sectors

such as books, music and film, and even in whole countries holding the lion’s

share, but also controlling what kind of products or authors have the chance to

reach the market, which makes increasingly difficult to local authors to be

published even in domestic market.

Fonseca and Davis (2007) add to this issue the contradictory relationship

between conglomerates and Latin America, because in spite of the extended

presence of multinational in the region, locally the business structure is manly

based on micro, small and medium-sized companies. Slachevsky (2005)

contributes arguing that in the concentration process, businesses merge, buys

each other or, in simple terms, big companies swallow small firms. He

complements his argument claiming that in this process the global South and

specifically Latin America has nothing to win because the region is not the one

that is concentrating, but that which is concentrated. So in these sense he

expresses that this is a system in which some are globalizing and the rest are

globalized. These ideas are coherent with those by Stuart Hall (1992), who wrote

about the formation of the idea of the west and the rest, concept built by

Westerners which provides comparative models and impose Western standards

and norms, which make them fail in identifying and respecting difference.

[26]
 In terms of creative industries, Fonseca and Davis argues that “the lack of

recognition of the importance of culture as a cross-cutting dimension for

socioeconomic inclusion and development increases national vulnerabilities to

global trends” (Fonseca and Davis, 2007, 189). However, Dos Santos (2008)

include a new perspective on these criticism when he argues that global systemic

prejudices on developing countries, and a weakness of local policies are

obstacles to develop creative economy.

One key element in this analysis concerns those policies responding to

global tendencies, for instance, free trade agreements. In the Latin American

context, and in general, it can be argued that those agreements are basically

focused on commercial matters, and culture hardly is included (Fonseca and

Davis, 2007). This lack of priority given to cultural aspect in these countries when

fostering free trade and progressive deregulation have resulted, in words of

Garcia Canclini (2005), in disappointing performances of film and publishing

industries. In the very case of film industry, he argues that the situation in global

term is the most unequal, because 85% films screened all over the world come

from Hollywood, but U.S. market barely receive a few foreign film a year. They

make their industry to prevail in global terms, controlling the whole process,

which involves production and distribution which restricts the space for Latin

American films, though this situation has affected not only this region. Traditional

film producers like France, Russia and Germany have seen reduced their market

share. (Garcia Canclini, 2005)

[27]
 Moreover, Scott (2008, 311) expresses that, at the same time,

globalization “has vastly extended the market reach and power of cultural

producers in some countries, it is also associated with diverse developmental

problems, both economic and cultural”, for instance saturation of markets with

foreign imports with the potential risk to local traditions and producers. Throsby

adds that it is possible observe how globalization “transmits materialist values

and standardized forms of mass popular culture, it can be seen as a potential

threat to local cultural differentiation, leading perhaps to social alienations and

dislocation” (Throsby, 2001; 70). These concerns have reached international

bodies, which have stated their worries on this issue saying that besides

permitting cultures to be linked and enriching their dialogue, it can be a potential

risk to cultural diversity and pluralism (UNESCO, 1998b). Considering all these

arguments, one interesting approach to these issues is given by Garcia Canclini

(2005, 9) when he claims that “the opening of cultural trade fosters or hinders

development depending on whether or not it is combined with policies to protect

national content” or as expressed in the Intergovernmental Conference on

Cultural Policies for Development in Stockholm to make imperative that all

cultures are mutually respected (UNESCO, 1998b).

From another point of view, Garcia Canclini (2002) argues that although

U.S. corporations exhibit an overwhelming control over media conglomerates,

this situation cannot be interpreted as an immediate obedience of the audience.

His argument is supported by arguing that in Latin America, music consumption

has showed a predominance of local sounds and rhythms.

[28]
 In any case, as claimed by Garcia Canclini, it is required that the

relationship between developed and developing regions be re-examined

according the their different development models or perspectives in order to

make feasible spaces, both cultural and economic to local and independent

cultural practitioners and artists among different cultures, contributing with a

contrasting view to this subject than that unilateral voice provided by U.S.

government lobby which has ended in paralyzed legal efforts aimed to promote

and foster local cultural production (Garcia Canclini, 2002, 2005). From this

perspective, he claims that currently “We must confront the erroneous notion that

the free market favours the freedom of creators and extends access to

majorities” (Garcia Canclini, 2002; 37), because from his view, corporations have

managed to privatize considerable areas of public sphere, making them

unilateral, multinational and irresponsible with society as a whole. Globalization

cannot be seen just in economic terms, according to Garcia Canclini, there are

“other social interactions that affect quality of life and that cannot be reduced to

the merely merchant, like human rights, scientific and aesthetic innovation, and

the preservation of natural and social environments” (Garcia Canclini, 2002; 37)

and culture can be properly included in these spheres.

[29]
 c. Culture and development

Hitherto traditional economic theories and experts do not consider culture

in their analysis of socio-economical growth. As argued by Throsby (2001), they

probably consider it implicitly as being part of some of the several economic

variables existent to evaluate the performance of contemporary systems.

Nonetheless, during the 1960s and the 1970s, studies on development based on

modernization theory paid special attention to the role played by culture in this

process (Schech and Haggis, 2002). Furthermore, Kong (2000) claims that the

link between economy and culture is not absolutely new or a novelty in social

agendas by quoting David Harvey, who in the forewords to a work by Zukin,

argued that artists as representatives of the cultural world have always shared a

place in the market (Zukin, 1989).

In contrast, progress, as conceived currently, is understood as the

improvement of material conditions in people’s life, for instance, increase in the

per capita product. Nevertheless, during the last years this conceptualization has

started progressively to show a lack of consistency, especially in developing

countries, due to the problems linked to an unequal and distorted distribution of

wealth which is the result of desynchronised economic strategies (Dos Santos,

2008). Poverty, she argues, is still a big problem to be fought in transitional and

developing economies.

[30]
 At this point, when the author talk about culture, as other researchers, he

means “a set of values, beliefs, traditions, customs, etc. which serve to identify

and bind a group together” (Throsby, 2001; 63). This conceptualization implies a

broad field in the sense of expressing a way of living, in contrast with those more

specific related to cultural expressions and practices. Throsby (2001) adds the

idea that individuals in a community will be affected by culture in the way they

think and behave, and, at the same time, they will have a decisive effect in the

thinking and acting of the whole group.

However, during the last 20 years there have been a shift in the

conceptualization of development, basically contributed by international entities,

authors and scholars that have been aware on the problems showed by a

univocal and monolithic notion of progress where all that matter are only

economic variables. A gradually accepted approach which has tended to replace

the former reflects a broad and inclusive array of societal needs as well as

aspirations for higher levels in quality of life (Throsby; 2001).

In addition, the UN World Commission on Culture and Development

(UNCTAD) contributed to this debate when expressing that considering only

economic variables and factors for development does not provide a programme

based on human dignity and well-being. This report argues that the concept of

development is currently broader, which implies the notion of culture, because

this approach on development is aimed to enlarge people’s choices in terms of

integral human being, not only as an economic subject. In that sense they have

[31]
argued the need to bring culture to the centre stage of this re-defined conception

of development.

Furthermore, Dos Santos (2008) claims that another aspect closely related

to creative economy in its development dimension is that culture is omnipresent

in our life, in education, work and even but also in leisure and entertainment. She

adds that another key feature is that cultural values, along with the historical and

ethnical background of individuals, are the essence of cultural diversity, which is

at the same time is needed to equilibrate the overwhelming homogeneity of

tastes and styles established and promoted by media. Moreover, in 1998, during

the Stockholm Conference6 the attendants agreed to recognize that “sustainable

development and the flourishing of culture are interdependent” (UNESCO,

1998b) and the same time that identifies both creativity as a key factor for human

development and diversity as a treasure for human kind, which finally are

essential in development. The report written as a result of the conference states

clearly that one of the objectives is to make “cultural policy […] one of the main

components of endogenous and sustainable development policy.” (UNESCO,

1998b)

Moreover, culture as an ingredient in development strategies should be observed

not only by industrialized societies, but for developing countries, specially, in the

sense of thinking about their progress from the point of view of their ways of

living. Throsby adds to this discussion that “the implication is that strategies to

6 Officially called Intergovernmental Conference on Cultural Policies for Development

[32]
alleviate poverty in the third world and to promote economic advancement will

need to have regard for the processes of cultural change which may be critical in

determining their success or failure (Throsby, 2001; 61).

One interesting point of view raised by Throsby (2001) on the importance

of culture in development is that aimed to what he calls cultural legitimization in

terms of recognize the value of culture in energizing communities and improving

their self-esteem. In more than a way, this process can be helpful in making

those programmes on poverty reduction more effective. Pratt (2008) argues that

many practices in cultural and creative industries, at least in Europe, have been

developed from a “bottom-up” approach with local communities involved in

projects and initiatives, more than policies delivered from the top level. In this

sense, Dos Santos (2008) claims that the challenge for developing countries is to

find a feasible way to development which takes into consideration its social,

cultural and economical reality, but at the same time its limitations in terms of

skilled labour, lack of basic infrastructure and incoming foreign investment. She

also argues that an update is required in development strategies focusing on

cultural, economic, social and technologic changes which are modifying the

world. In addition, Dos Santos (2008) suggests opening those models strongly

based on conventional economics in order to reinforce coherence of policy when

introducing multicultural or multidisciplinary approaches.

As regarded by some scholar and international entities, in developing

countries and especially in the poorest ones, creative economy is a great job

[33]
source, which offers opportunities to mitigate poverty. People from different

classes participate in creative economy, sometimes as producers, but always as

consumers of these kinds of services or goods. Nevertheless in developing

countries, despite their outstanding cultural diversity and abundance of talent, the

potential of their creative economies is still underdeveloped and not completely

deployed which means that a vast majority of countries is still unable to explore

all their creative capacities in order to overcome the threshold of development

(Dos Santos, 2008).

In contrast to other countries, even now when there is an international

trend thriving among policymakers and urban planners, in Latin America, culture

usually means just expenditure. It is not regarded as investment in the future.

Due to that reason, Garcia Canclini (2005, 3) claims that in these countries,

people should stop thinking that way and starting seeing them as “royalty

factories, image exporters, promoters of employment and national dignity”.

[34]
 d. Intellectual Property

A fundamental pillar on current and mainstream models of creative

industries is the concept of intellectual property, as stated by several working

definitions which aim to the exploitation of rights derived of it. With the

contribution of the World Trade Organization (WTO) and the World Intellectual

Property Organizations (WIPO), entities dependant on the United Nations, there

has been established along the years a sort of policy body attempting to globally

regulate the issue on Intellectual Property (IP), which has actually been

supported and boosted by multinational corporations.

According to these actors, intellectual property as conceived by them is a

key factor in the “health” of creative economy, so there have been developed a

consistent campaign in order to demonstrate its value as well as the risks for

creators and even economy in general when these rights are not observed. For

instance, some authors sustain that a «lack of copyright protection in film,

television, and interactive software constrains potentially lucrative investment. A

lack of certainty as to how to extract revenue from the sale of IP inhibits co-

productions (Cunningham et al, 2005).

Apparently, there is a sort of international consensus on the importance in

protecting intellectual property. However, in the next paragraphs the author will

review that there is no such a thing and it can be considered as part of the

[35]
agenda of the global North in order to impose conceptions globally with no regard

for world cultural diversity. As previously stated it is important to be aware that

free trade has been linked as favouring freedom of artists to create as well as to

spread creations. Intellectual property is a key factor to understand this issue, in

terms that according to many definitions of intellectual property the focus is

allowing creators and artists’ creativity to thrive. Some legislative bodies have

recognized this spirit in the practical expression of laws, bills, and even

constitutions. For instance, according to the U.S. Constitution, the interest

expressed by lawmakers on creation and knowledge in science and culture was

stated by saying “to promote the progress of science and useful arts, by securing

for limited times to authors and inventors the exclusive right to their respective

writings and discoveries” (United States Congress, 1787)7. Nonetheless, in the

very same statement, lawmakers establish that the rights derived from these

kinds of human creations had to be granted for a limited term.

Nevertheless, the ideas showed previously by Garcia Canclini (2002)

express clearly the differences between Latin and Anglo-Saxon conceptions of

intellectual property by an example taken from television industry where

Anglophone countries give the company the authorial right to film and television

programmes and in Latin America, France and Europe in general where the

authorship of intellectual creators is recognized. He argues that in the U.S.

legislation those rights are granted to producers and, even to investors. The

7 The author has included a portion of the U.S. Constitution because most of the international
lobby on copyright and intellectual property has been exerted by corporations from that
country, in order to establish their own agendas to an international level – as discussed on this
work.

[36]
author could add to this point that this can be seen annually on important film

festivals. For example, in Cannes, the award for best film (La Palme d’Or) is

received by the director8; whereas in the Oscars the award for best picture is

received by a group of producers, who essentially are managers and investors 9.

This example can give the reader an idea on to what extent, intellectual property

rights are not yet a defined subject as apparently seems to be and its is arguable

that there is still room for discussion on the outreach of these policies in different

cultural contexts.

As argued by Howkins (2001) the principles of intellectual property lies in

the core of creative industries; however it cannot be ignored that these ideas

have been originated in the global North based on its own cultural practices,

traditions and customs and all these efforts in order to globalize the conception

collide with other cultures and eventually overcome them. That is why Fonseca

and Davis (2007; 189) have expressed that “the current approach to IPR is

incomprehensible to many people in the region to whom it is inconceivable that

communally owned cultural knowledge or technology could now be registered as

intellectual property”. Smiers (2007) adds that historically the conceptualization of

intellectual property in private terms has not been present in the tradition of most

of cultures, although there have always existed artists and creators. He also

raises an issue on the treatment of copyright, because in the current model,

8 In 2010, the best movie was a film directed by Apichatpong Weerasethakul, who was invited by
the jury to receive the award.
9 The award to best picture during the 2010 ceremony went to the movie” The hurt locker” and the
prize was given to a group of producers.

[37]
cultural and artistic works are conceived to be exploited in the market,

nevertheless in non-Western societies this approach may be considered a

blasphemy or would be preferred not to be used in such context. Fonseca and

Davis argued in their text (2007; 189) that “the first problem faced [...] is that the

IPR10 legislation proposes a monolithic approach to culture, without taking into

consideration traditional or collective knowledge and creation”.

One of the most evident cases on discrepancies and contradictions on

intellectual property and the evidence that it is corporate-oriented are the

kiondo 11 and kikoy12 in Kenya. In brief, both are hand-made crafts by tribal

communities from this African country. In the case of kiondo, the Kenyan

government failed to patent this traditional technique and later was patented by a

Japanese corporation. On the other hand, kikoy is the name of traditional textiles

and a UK company submitted an application to patent the name. Both cases

showed that multinational and private companies fit better than traditional

communities in the framework of intellectual property.

Another contradiction with the current conceptualization on intellectual

property is the requirement for permission to perform even someone’s own

creation. Garcia Canclini (2005) exemplifies this by arguing that the famous

Brazilian songwriter and singer Milton Nascimento is required to obtain

10 Intellectual Property Rights

11 Kiondo is hand-made bag form sisal which is produced by women in the Kenyan community of
Machakos, which is a collective and traditional handicraft in the African country.
12 “Kikoi is cotton hand-made sarong, traditionally worn by Kenyans living by the coast. Normally
tied around the waist, or used by mothers to hold babies on their backs, the kikoi has been
converted into gowns, cushion covers and bags”. (The independent, 2007)

[38]
permission from a major company, in order to play his own songs if he does not

want to be charged on piracy (of his own work).

The scholar also critiques the copyright model when he expresses that “it

does us little to exalt the creativity of people and artists or the wealth of cultural

diversity, if we permit the authorship rights of individuals and communities to be

subjected to copyright rules, allowing the profits generated to be taken over by

mega companies that manage copyrights” (Garcia Canclini, 2005; 9). Smiers

(2007) contributes to this point arguing that the system as currently conceived

mainly benefits corporations and just a few artists rather than average creators,

to whom it has little to offer.

With this discussion, the author does not intend to question the rights of

creators and authors, but a business model imposed by corporations lobbying in

international organisations and national parliaments, without considering the

social value of culture, but only profit and particular interest, and the

technological changes that are questioning traditional concepts.

A discussion on the perspective of intellectual property in development

should include a review on its history in order to understand the progressive

transformation of this policy until the current restrictive and exclusive conception.

[39]
 Since 1710, when the first legal framework on copyright was established in

England under the name of Statute of Anne 13 in relation with the book publishing

business a complete transformation had happened in legal systems in order to

protect those rights. However, in general, it is possible to check a considerable

number of laws on this subject and all of them clearly state that the main purpose

is to protect the rights of creators and artists to their work and their creativity.

As a starting point, Thomas Jefferson, one of the most prominent

intellectuals in the American Revolution during the XVIII century in the United

States stated once: “Ideas should freely spread from one to another over the

globe, for the moral and mutual instruction of man, and improvement of his

condition” (Jefferson, 1813). Currently, there is a distance of almost 200 hundred

years with the time Jefferson expressed these ideas, but the conceptual distance

in even bigger than that showed by that time. In this sense, the current legal

framework in the U.S.14 which is published by the Office of Copyright, expresses

clearly that "copyright is a form of protection provided by the laws of the United

States (title 17, U. S. Code) to the authors of “original works of

authorship"(United States Copyright Office, 2008). However, after reviewing

some legal bodies established along the years in the U.S. and that came into

13 Named after the Queen Anne, the Copyright Act 1709, whose full name was “An Act for the
Encouragement of Learning, by vesting the Copies of Printed Books in the Authors or
purchasers of such Copies, during the Times therein mentioned” granted books publishers
legal protection for 14 years, eventually renewable if the author was still alive by the end of the
first term.
14 As previously pointed out, it is important to the argument to include specifically U.S. legislation
rather than others, because U.S. policymakers as well as corporations has been among the
main promoters of international copyright and intellectual property legislation.

[40]
effect so far, there is no such clarity to argue that the principle is aimed to protect

authorship.

Firstly, the Copyright Extension Act of 1976 (United States Copyright

Office, 2009) states that works suitable to be protected by copyright are no longer

asked to receive a register from the corresponding office, because they are

automatically –with no formalities in the way- under protection in the very

moment of their creation no matter whether it is published or not.

Secondly, when the – at that moment- U.S. President Bill Clinton agreed

the Uruguay Round Agreement Act (United States Copyright Office, 2007) all the

expired copyrights for foreign works were automatically restored in the United

States. That act implied a direct intervention in the concept of Public Domain15,

which changed a global concept, which tended to benefit the whole humanity in

order to grant privileges to specific interests.

And thirdly, one of the most controversial and illustrative cases on

intellectual property and its close links with corporate interest. The Sony Bono

Copyright Term Extension Act (United States Congress, 1998) that in 1998 was

enacted by the U.S. Congress and in operational terms extended the copyright

term 20 more years in addition to the already extended 75-year-term, so with this

15 Public Domain as understood by Boyle is “material that is no covered by intellectual property

rights” (Boyle, 2008, 38), due to it never was suitable to be owned or to the rights derived from
it expired.

[41]
change copyright term lasts 95 years 16. Moreover, this amendment to the law

took place at the same time that Mickey Mouse was in risk to “fall” in public

domain with the consequent “prejudice” to Disney. Actually international media

reported that U.S. Congress had this issue in mind when they approved this

extension (English, 2002).

Considering that Congress was worried about the future of one cultural

good from one company to the point that changed the whole law and the

principles lying behind it, it is valid to question what happened with cultural goods

in similar conditions. Well, there is a concept to explain that, it is the so called

Orphan Works, which mean that at the same time that congress protected

Disney’s rights, made huge amounts of cultural good unavailable to public. This

is because these works should be put on public domain in 1998 because their

rights holders if existent failed to renew them 17; however they were kept in the

private domain with no possibility to access to audience or other creators for

further creations.

All these legal changes that took place in the last years have shown that

“traditional notions of intellectual property sit uncomfortably in this new

world” (Pinter, 2008) where culture has been submitted to its commoditization

and digital technologies have detached cultural products (content) from traditional

16Lawrence Lessig (2004) has argued that according to the further revision of this act made by
the U.S. Supreme Court (in the Eldred vs. Ashcroft case) the term established on it may
become in a potential perpetual term, because it set that the U.S. Congress has the faculty to
review and alter the term, even contradicting the spirit expressed on the U.S. Constitution.
17 This is normally due to the lack of heirs if original author is already dead at the moment of
renewal or that it is no possible to identify or locate eventual right holders on these works.

[42]
media (container). In words of UNCTAD (2008), this situation can be understood

because in the past those rights were directly linked and locked into a physical

object, so from that point of view, the rights derived from these cultural objects

were indivisible with the good itself.

Currently, different entities have started promoting intellectual property as

a means to develop economies all over the world (UNESCO 2008, UNCTAD,

2008); however none of these efforts have noticed or recognized that there is no

such thing as a global and general conceptualization of intellectual property.

Pinter (2008) argues that intellectual property legislation, at both international and

domestic level, have been strongly biased favouring developed economies, but

more specifically, media and cultural industries corporations, during the last 15

years. Nevertheless, at the same time, some of these bodies have shown their

concern on the situation of cultural traditions and collective knowledge, which

have been set in a delicate position, recognizing the need to protect this heritage

in order to maintain and support local identities, to foster social inclusion and

promote national sovereignty, among others features (UNESCO, 1998; UNCTAD,

2008; Dos Santos, 2008).

Nonetheless, even from the point of view of the developed world there are

inconsistencies on the legal system on intellectual property or at least in the

reasons argued to sustain the legal framework as currently conceived. For

[43]
instance, in his dissenting vote in the Eldred vs. Ashcroft court case 18, the US

Supreme Court Justice Stephen Breyer states that “in conjunction with official

figures on copyright renewals, the CRS Report indicates that only about 2% of

copyrights between 55 and 75 years old retain commercial value—i.e., still

generate royalties after that time” (Breyer, 2003). As a direct consequence of it,

98% of all the works suitable to be set on public domain will be kept under

copyright regime for 20 more years with no possibilities to be recovered in the

cultural life due to the strictness of the intellectual property regimes which allow

to eventual and improbable right holders to sue users and demand the payment

of millionaires damages, so in that case potential users resign the chance to work

with those goods fearing to eventual legal effects. Having said that it is

interesting to point out what expressed by Sundara Rajan (2008) in terms of “the

moral credibility of intellectual property rights, an essential foundation for any

credible system of law, is increasingly eroded by practices in the cultural

industries“.

Pinter (2008) adds to the discussion that as currently conceived

intellectual property can be regarded as an impediment to the cultural flow, while

Litman (2001) explains that currently copyright is more focused on control rather

than on incentives to creativity. In that sense, Slachevski (2005) argues that the

mode of intellectual property applied was built to fit with corporations needs in

terms of fostering conglomeration, so he claims that non-Western legislations on

18 Eric Eldred, Internet publisher and former computer programmer, tried to challenge the
constitutionality of the Sony Bono Copyright Extension Act by means of legal action before the
U.S. Supreme Court, supported and represented by Lawrence Lessig, a Harvard constitutional
scholar (Lessig, 2004).

[44]
copyright and IPR should be thought from a global South perspective, regarding

the interest of artists and creators as well as those of consumers rather than from

demands of multinational companies. From this perspective, one interesting way

to understand what reasons are behind the lobby and the legislative pressure on

international bodies and alien governments can be seen in the words stated by

Mark Getty, owner of one of the most important copyright-based companies in

the world –Getty Images-, during an interview published by The Economist:

“Intellectual property is the oil of the 21st century. Look at the richest men a

hundred years ago: they all made their money extracting natural resources or

moving them around. All today’s richest men have made their money out of

intellectual property” (The Economist, 2000).

As many scholar and authors have said, it is important to avoid and

terminate piracy, because it produces huge damages for economy, artists and

companies; however as argued by Slachevski (2005), society cannot face this

issue only from a punitive perspective. He claims that intellectual property cannot

be reduced just to the fight against pirates. It is required a revision on these ideas

under a prism of diversity, as expressed by several authors who recognize that

Western point of view does not necessarily mean World point of view (Smiers,

2007; Flew and Cunningham, 2010). In addition, it is also required the

observation of international agreements and statements which are aimed to

foster the respect and promotion of cultural diversity, protection of traditional

knowledge and customs.

[45]
 If this issue on intellectual property is regarded from a unique perspective,

that of corporations, it could be possible to question as Fonseca and Davis did: “It

is hard to avoid wondering what kind of piracy is more harmful: that based on

illegal copying or the form that allows corporations to register, trade and exclude

traditional people who produced that very cultural knowledge (Fonseca and

Davis, 2007; 190).

In general terms, as argued by Garcia Canclini (2002, 2005), cultural

industries and consequently intellectual property cannot be seen just in terms of

profit making, but in terms of a service helpful and necessary to society. As

previously expressed, this process of privatization and trans-nationalization of

local cultural expression and traditions carried out by corporations affects

negatively social interest.

[46]
 e. Chile and the Creative Economy

As argued before, the potential of creative industries in development has

been internationally recognized. "It can foster income generation, job creation

and export earnings while promoting social inclusion, cultural diversity and

human development". (UNCTAD, 2008; 4), but at the same time reality shows

some contrasting views among different approaches and different regions both in

the meaning and the practical development of creative industries. For instance, in

spite of all the diversifying efforts made by these countries, currently "86 of 144

developing countries still depend on commodities for more than half their export

earnings" (UNCTAD, 2008; 5).

In Latin America, creative industries have shown an improvement in their

performance, but at a slower pace than other regions and despite this region has

more than doubled its exports of cultural goods, this figures are still quite limited

and low in comparative terms. So in spite of the some eventual appearance on

specific top lists by Mexico, Brazil, Argentina and Colombia, Latin America and

the Caribbean remains as importers of cultural goods and services, but, at the

same time, they have not yet explored their potential on creative industries.

(UNCTAD, 2008)

In this section, the author will review the current situation on creative

industries in Chile, which will be contrasted and compared with those situations in

[47]
Latin America and in the global context, which has been reviewed in previous

parts.

Chile as every country which reaches certain economic and educational

threshold 19tends to generate goods protected by intellectual property and

copyright laws in order to counteract potential dependencies on commodities.

These cultural goods, in a parallel way, tend to be included in the growing sectors

in world economy and, moreover, they promote exchange for production,

promotion or distribution in such scale that they have become the most global

sector in economy (CNAC, 2005). In this sense, UNCTAD (2008) has recognized

the role of the country as well as of some other in making efforts of developing

creative industries under the premise of their economic importance.

As a first point, in the country, policymakers and authorities talk about

Sector Creativo – Creative Sector – which is defined, for operational purposes,
as

“al sector economico compuesto por varios subsectores culturales y creativos, en

que el producto o servicio tiene su origen en la creatividad individual, la habilidad y
el talento, además de tener un potencial de riqueza y generación de empleo a
través de fomento y la explotación de la Propiedad Intelectual” (CORFO, 2008).

If translated, this definition is exactly the same to express that they are “those

industries which have their origin in individual creativity, skill and talent and which

have a potential for wealth and job creation through the generation and

exploitation of intellectual property” (DCMS, 2001; 5). Actually, the Chilean

19 As previously explained, UNESCO recognises, for instance, that under a GDP per capita lower
than $1200 and a Human Development Index of 6 it is hard to develop film production.,

[48]
working conceptualization was transferred from the Colombian one20, which was

translated and stated with the support of the British Council 21.

On the other hand, in the Latin American context, Chile also imports goods

and services, and although it is an active participant in regional economic

agreements, as other countries, it exhibits a minimum share in comparison with

North American countries (Mexico, United States and Canada). However, as

previously argued, Chile, in the context of small share holders in creative

industries, has a potential of growth based on its unexplored possibilities.

Cunningham (2005) has raised an interesting point of view which is

«Commercialization of tradition» that is seen as a form to develop economically

for those economies facing hard times due to modernization, so these countries

might consider their culture as a resource, meanwhile their local manufacturing

industry collapses or, at least, shows low levels of growth. However, as

previously said, the market concentration seen at international level in creative

industries is a powerful reason, especially for those developing economies, like

the Chilean, to be concerned about conservation and promotion of local, regional

and national repertoires. Based on this, Cunningham (2005) raises the question

on how can cultural production in developing countries retain national specificity

while accruing value in global markets?

20
Both countries part part of the Convenio Andres Bello, which aims, among other
ends, to develop cultural industries in South America (CAB, 2010).
21
In 1999, Colombia was the first place out of the UK to develop a project on
Creative Industries with the support and guidance of the British Council. (British
Council Colombia, 2003)

[49]
 As expressed by UNCTAD (2008), Chile can be considered a special case

in the region, because of its social and economic indicators, but also because of

its educational and strategic development. Based on that, the country has

established an appropriate framework and support system to foster creative

industries, which has been demonstrated by means of developing a national

information system that includes an annual statistic on cultural consumption and

production with data gathered by the National Statistics Institute.

Aware of this promising situation offered by cultural and creative

industries, the Chilean government started a series of initiatives tending to define

future development strategies. At the moment this discussion were taking place,

Chilean creative industries contributed a 1.8% to GDP and employed a 2.7% of

labour force (Quartesan et al, 2007, CNCA, 2003).

Table 1. Contribution of Cultural and Creative Industries (CCI) to GDP

in Chile

Year GDP (bn) % CCI CCI GDP (bn)

1990 £23,717 0.90% £213

1991 £25,486 1.00% £255

1992 £27,711 1.10% £305

1993 £29,094 1.20% £349

1994 £31,077 1.20% £373

1995 £34,726 1.20% £417

1996 £39,047 1.60% £625

[50]
 1997 £41,626 1.60% £666

1998 £42,971 1.70% £731

1999 £42,551 1.70% £723

2000 £44,417 1.80% £800

Source: CNCA, 2003

Table 2. Cultural Industries’ Contribution to GDP in Latin America,

2000-2005 (%)

 Country/Year 2000 2001 2002 2003 2004 2005

Argentina 2.32 2.4 2.47 2.63 2.85 3
Brazil 1.64 1.57 1.5 1.57 1.46 1.36
Chile 1.80 1.8 1.9 1.9 1.8 *
Colombia 1.83 1.83 1.81 1.77 * *
Ecuador * 1.79 * * * *
Peru 0.4 0.4 0.5 0.6o.6
o.6 0.6
Paraguay * * * * * *
Uruguay 3.05 2.92 2.97 3.13 3.36 3.43
Venezuela 1.4 1.4 1.4 1.6 * *
* Not available
Source: Quartesan et al, 2007

Table 3. Contribution of Cultural

Industries to Employment

Country % Year
Argentina 3.2% 2004
Brazil 5.0% 1998
1990/199
Chile 2.7% 8
Mexico 3.65% 1998
Paraguay 3.3% 1992

[51]
 Uruguay 4.9% 1997
USA 5.9% 2001
Source: Quartesan et al,
2007

An initial analysis shows that Chile is part of a new stage in globalization

which seems to be moving every country, including Chile, forward. The opening

of new markets to national exports, modification of intellectual property regulation

and the emergence of competitors in markets already captured reflect this

change (Eyzaguirre et al, 2007).

In another document, Eyzaguirre (2005) argues that the country until the

1970s carried out a strategy focused on a forced industrialization inconsistent

with Chile’s comparative advantages, in contrast with developed nations which

aimed their policies to use their advantages, such as natural resources,

generating a web of productive chains in all directions. This awareness

generated, in Chile, the need to develop a more diversified set of services and

goods, suitable to be exported and traded and one of the areas considered was

the Creative Industries sector.

In that way, based on the interest expressed on the document Chile quiere

mas cultura (CNCA, 2005) and the analysis on innovation made from economics

ministries (Eyzaguirre, 2005; Eyzaguirre et al, 2007), with the supplement given

by international bodies promoting it, the government started an agenda aimed to

[52]
foster the sector, which included to start up the so called Programa de Fomento

al Sector Creativo 22. This initiative is run by CORFO and CNCA and its ends are

to develop during the 2009-2013 period an agenda aimed to accomplish 3

objectives: inter-institutional coordination, managerial improvement and

distribution and trade of creative services and goods (CORFO, 2008).

An example of previous policies, in this sense, is that in recent years, the

Chilean film industry has showed a positive development, which is testified by the

increasing size of audiences viewing Chilean films, and also a rising amount of

national films available in the market (CNAC, 2005; Quartesan et al, 2007). So, in

this very sense, according to the evaluation made by the Consejo Nacional de

Innovacion para la Competitividad 23, Chilean creative industries show a great

growing potential and, at the same time, a low level of state effort to promote

their competitiveness (CNIC, 2007).

Back to the program, one key factor is the coordination of two public

bodies. First, CNCA who’s work has focused on a sociological perspective of

culture which tends to contribute to quality of life and national identity, but also

promoting cultural production and, second, CORFO, via its Promotion Office,

which is more focused on the industrial branch, developing strategies to improve

the offer by strengthening both entrepreneurial and managerial perspective to

succeed in marketing services and goods.

22 In English, Creative Sector Promotion Program

23 In English, National Council of Innovation for Competitiveness

[53]
 One of the key issues of these policies to promote creative industries is

that related to intellectual property; although the framework has not been

completely friendly with the country.24. Chile is not alien to this issue in terms that

governmental documents assume the importance of intellectual property in the

promotion of an innovation-based development (Eyzaguirre et al, 2007).

In order to be up to date in these matters, Chile has signed several

international agreements such as WIPO Trademark Copyright Conventions and

its legislation has been made according to TRIPS25 (CNIC, 2007). However,

despite these intentions Chile has been placed on a “Priority List Watch” by the

U.S. government, which considers that the country has ineffectively implemented

protection to intellectual property and, at the same time, considers that existent

penalties to infringement to regulation on intellectual property rights are

insufficient. It is possible to read in the report made by the U.S. Trade

Representative that “the United States remains concerned about inadequate

enforcement against copyright piracy and trademark counterfeiting” (USTR,

2009).

24 Based on patents regulations (IPR), in 2004 an Australian company patented the Chilean
Guava (Myrtus Ugni), a native berry from Southern Chile, and renamed it as Tazziberry to
commercialize it (RIRDC, 2004; 20).
25 The Agreement on Trade-Related Aspects of Intellectual Property sets minimum standards on
national regulations and legislations on IP. It is administered by WIPO.

[54]
 Currently, in legal terms, Chilean law on Intellectual Property26 establish

both moral and the economic rights of creators or right holders for a maximum of

70 years after creator’s death, after that all works belong to common cultural

heritage 27 (Congreso Nacional, 2010).

On the other hand, the importance of culture and cultural industries to

catalyze social issues shows a worrying situation in the country: The lack of

equity in accessing cultural goods and services, excluding radio and TV. In effect,

more than 93% of people from lower classes show a minimum or low level in

cultural consumption, which, in other terms mean, that they just listen to radio or

watch TV and occasionally read newspaper or listen to music. Actually, 60

percent people have a poor cultural consumption just limited to what is offered by

mass media. In contrast, the 83% percent of high-class consumers show high or

medium levels of cultural consumption (CNCA, 2005).

As expressed previously, according to the Engel’s Law, when people’s

incomes increase, they tend to spend a lesser proportion on basic needs and, at

the same time, the expenditure (or investment) in cultural activities tends to

increase (Scott, 2008). However, the fast growth in Chilean economic

performance during the last 20 years shows a very negative feature: that of

26 Law 17336 on Intellectual Property was enacted in 1970, with further modifications in 1992,
2003 and 2010. The first version of the law granted a protection term of 30 years after
creator’s death and included only individuals as potential right holders. Further modifications
to the law changed both the term of protection (to 50 and then to 70 years) and the potential
right holders (incorporating legal entities to individuals).
27 According to the law, works in the common cultural heritage can be used freely by anyone,
regarding moral rights of right holders and the work on its integrity.

[55]
unequal distribution. And even worse, according to the Chilean academic Dante

Contreras (1999), the country exhibit one of the most unequal economies of the

world28. So many people in Chile live in poverty, with low wages which makes

them acceding to paid cultural services or goods impossible.

In Chile, these matters are especially sensible due to the well known

episodes in its recent political history, because after the Pinochet's regime, under

democratic administrations started a process of political and economic

stabilization. Among the changes the country went through during the last years,

the author can name the strengthening and consolidation of a democratic

system, with a strong commitment regarding human rights. Because of that, is

argued that those minimum levels in consumption of cultural goods are related to

a lack of sociability, a decrease in appraisal of diversity and of democracy as

form of government (CNCA, 2005).

In terms of this approach is that since early 1990s the democratic

governments started developing a funding system based on grants open for

bidding called FONDART29, which was mainly aimed to creation and cultural

production, but with an evident lack of interest in distribution and audiences. Just

in the last two years, it can be seen a stronger concern on this issues, basically

when the discussion on the creative sector started. In Table 4, the reader can

28 The Gini Coefficient measures inequality in income distribution and shows that this situation is
a constant in Chilean economy. If one considers an index 1 as absolute inequality and 0 as
absolute equality, Chile exhibits 0.55(1990), 0.56(1996) and 0.55 (2003) (UNDP, 2009). These
figures set the country as one of the most unequal countries in the world.
29
In English, Arts and Culture National Funds

[56]
see the amount of resources invested in arts and culture by means of national

public funds.

Table 4. Chilean Public Funds

Invested Annually (in millions)

Literature Fund £4.9

Music Fund £1.5
Audiovisual Fund £2.1
Arts Fund £2.6
Source: MINREL, 2006

In general, if the Chilean case is analysed, cultural and creative industries

have a potential economic relevance, but at the same time, the value of them in

order to foster social integration cannot be ignored, as several authors have

stated on their works. So, as argued by several authors, in this case both visions,

the economic and the social are required to dialogue in terms of offering an

appropriate approach on these issues.

[57]
 III. Findings and Analysis

Before starting this research, it seemed that the global trend on creativity

applied to economy under labels such as creative economy, cultural industries

and so on were vastly extended and promoted with no resistance. However,

evidence has shown that there is no such a thing. Despite best sellers on these

matters, several scholars and researchers have expressed their discrepancies

with policies and theories behind the efforts made by governments, international

bodies and agencies all over the world.

First, this discussion started about 30 years ago in countries which can be

characterized as Anglophones, developed and part of the global North, so these

policies naturally will tend to express their culture and practices with all the

evident differences with the “rest” as clearly stated by Stuart Hall (1992). It can

be argued that with the digital revolution and the consequent globalization, these

countries modified their productive structure to become producers of ideology. In

many senses-, producing content is more profitable than agriculture and mining.

This explains the 7% global GDP and exports their ideology, culture and values.

[58]
 As regarded by some researchers, creative industries sit comfortably in

the neoliberal thought, which after the collapse of industrial and Fordist economy

and by means of globalized technologies have discovered a new seam of wealth

in commodification and mass productions of cultural goods and services. Based

on post-Fordism and post industrial economy, multinational media corporations

have used globalization to market a uniform and limited set of values in mass-

produced goods and services. As seen by Yudice (2002), culture started to be

observed as an economic resource, with no regard of its other features, as well

as in a utilitarian way, whether in economics or in social issues.

Ideologically and theoretically sustained mainly by thinkers from the North,

those ideas behind creative industries aim to the free circulation of ideas,

creations and cultural expressions; however, in a sense, globalization is more

about free flow of capital rather than of culture. That is why this process has

tended to establish a global division of labour, in which obviously dominant

powers have maintained and consolidated their leading position. They deliver

and the rest consumes. They create, the rest produces.

Furthermore, several authors have recognized in knowledge economy the

next step in the development of capitalism (Scott, 2008), in a process which has

meant progressive deindustrialization of developed world, where manufacturing

is replaced by financial services and trade of meaning and knowledge,

maintaining in that way the control of economy and wealth. In Florida’s terms

[59]
(2004), when speaking of countries it is also possible to see a creative class and

a service class. So, that élite makes the rules and takes profits.

On the other hand, Latin America, in general, and Chile, in particular, have

expressed their interest in developing their creative industries to promote a

diversified offer of services and goods, and, in a parallel way, to support social

development of communities and to strength national identity. Nevertheless, in

certain way, they have interest in being part of a game already made up by

others, so the possibilities of success under these terms are pretty limited.

Chile has started its own process, trying to participate in the benefit

promised by a thriving creativity, starting up an agenda on innovation and

creative industries which will tend to foster the development of the cultural and

creative sector in the country as a tool for economic growth and democratic

consolidation. The lack of outstanding figures in the sector has been seen as a

potential growth in a still unexplored area, more than a negative performance.

The contribution of the creative sector to the Chilean economy is still low, but the

government expects to increase it during a 15-year-period by means of specific

strategies in the sector.

However, both social and economic situations in the country make it

difficult for some people to accede to cultural services. The negative indexes on

poverty and inequality have made creative industries a sort of elitist sector in the

country, which is a problem not only to the industry, but to the whole society in

that there is a direct relationship between culture and democracy.

[60]
 Another point to be analyzed is that related to intellectual property. This

issue has been regarded as a key factor in the development of creative economy,

because wealth making is sustained in the exploitation of the rights derived from

it. Nevertheless, the idea behind intellectual property policies cannot be

considered as an internationally-accepted trend. To many people from different

places in the developing world, the idea of private knowledge or individual rights

to centennial traditions is incomprehensible.

Since the very first regulations on copyright, the idea behind the protection

of creative works was to protect moral and economic rights of creators and

authors during a limited term in order to promote creativity and progress, and,

after that term, cultural works were released to the public domain where others

creators could use them as inspiration or base for further developments.

However since the critiques on industrialization of culture made by Adorno and

Horkheimer (2002), the situation on cultural economy changed completely until

the beginning of 21st century when economy reached a stage where creativity

can be -increasingly- privatized.

The framework on intellectual property has been modified and biased

towards corporations’ interests. In spite of these modifications, the discourse

remains the same: protection of creators and authors and promotion of

innovation and creativity. However, as several authors have argued, corporations

cannot be considered as examples on innovation, but on control which is really

what they seem to be interested in.

[61]
 In this perspective, developing countries like Chile are at a disadvantage

because they have agreed to international conventions which sometimes are

contrary to their traditional cultures and contradict their heritage. Nevertheless, in

order to be up to date, they have accepted conditions imposed by media

conglomerates. That is why currently, a punitive perspective on copyrights is

spreading all over the world, pursuing piracy as a serious crime. In contrast, it

has not been seen a similar reaction in international bodies, when corporations

take actions to privatize cultural expressions or even more seriously genetic

material or vegetal breeds (under intellectual properties regulations). This is not a

justification of piracy, but a way to point out the evident contradictions existent on

this delicate subject.

In economies where small- and medium-sized companies are the main

component in cultural industries, the presence of conglomerates can be regarded

as a menace to diversity, which can derive in a homogenization in the cultural

offer, but also in people’s taste. In a way, that risk was foreseen by Adorno and

Horkheimer (2002), when discussing on the nature of cultural industry, and in

contrast to the positive outcome in offering the democratization in the access to

cultural goods and services, this shows the risk to tend to uniform both offer and

taste.

In countries like Chile, where arts and culture has been traditionally

subsidized by the state, this new stage in which cultural industries are clearly

commercial is still resisted by the state, but especially by traditional practitioners.

[62]
According to the conceptualization of market failure, traditional cultural

expressions as seen as economically unviable receive state support in order to

grant their development and diffusion in terms to facilitate the access to

audiences and/or to enrich cultural heritage; however these new principles on

profitable cultural industry are observed cautiously because industries prone to

commercialization such as film, music and publishing are still strongly dependant

on public funds, which is contradictory with the entrepreneurial spirit of cultural

industries found in textbooks.

In general terms, Chile can be observed as an exception in the Latin

America context due to its political and economic stability and to the development

of policies aiming to promote creativity and innovation as tools for growth. In

contrast, the country exhibits a small-sized market, if compared with other

nations, and a still limited offer of cultural goods and services. Nevertheless

growing figures on performance in the last years can be analysed as the result of

those policies implemented to foster creative industries, which have boosted

cultural production in certain sectors.

In this sense, in Chile and other places, it can be attested the lack of

diversity as a result of conglomeration of local companies by international media

corporations. The intervention of these multinationals in the domestic market has,

in a certain way, impoverished local offer with uniform content available

simultaneously wherever you may think. Cinema billboards, television and

[63]
mainstream radio stations are actual examples of that trend. As some authors

have argued, corporations are in the opposite field to innovation.

Diversity, which is mainly contributed by local producer and practitioners,

thus suffers from serious problems of distribution, due to reasons at an intrinsic

and extrinsic level. Intrinsically because of the lack of knowledge and as a

subsidized industry, producers tended to be more focused on production rather

than on distribution30 ; and extrinsically because multinational chains have

captured almost all spaces which make them to be in a monopolistic situation,

but also the have the expertise on the area, that allow them to impose

overwhelmingly their terms.

30 In Chile, the main funding mechanism for cultural project is a national system of grants open to
bidding and many projects tend to develop project in several stages, excluding distribution or
assigning low importance, a consequently scarce budget, to distributional activities.

[64]
 IV. Conclusions

In this dissertation, the author has tried to develop an argument about the

relevance of creative economy and cultural and creative industries in

development matters in Chile. To do so, some key concepts on the subject from a

global, Latin American and Chilean perspective have been reviewed in order to

contrast ideas and evidence.

Daring to answer the question as to what extent these concepts can be

helpful to foster social and economic development in a country like Chile, the

author can express that, although these ideas have been conceptualized and

stated in the global North, they are still helpful to plan and set up developmental

strategies. However, this perspective should be established from a critical point of

view, without falling in the tempting practice of emulating and replicating policies

from somewhere else with no regard for cultural differences and domestic issues.

In that sense it is important to develop more local research and establish

collaborative links with other Latin American entities and scholars, and

[65]
simultaneously to observe carefully and critically both policies and experiences in

other places.

From a Latin American point of view, the need for mutual knowledge with

other regional realities is essential to develop long-term and coherent policies,

and, at the same time, it offers a way to develop a contrasting force to the

overwhelming presence of transnational corporations in domestic markets. The

music industry has shown that local repertoires are attractive to the audience and

researches have argued that the only presence of corporation cannot be

understood as an automatic obedience to new standards. The issue here is, as

previously said, distribution or, better said, the lack of policies and

entrepreneurships on distribution.

The development of audiences and support for local producers it is an

important issue to be discussed locally. It is not sustainable in the medium- and

long-term the lack of state support to domestic labels arguing that these are free

market rules. It is not sustainable, for instance, that all investment in new artists

be made by small and independent labels, and when the artist reaches a certain

threshold in sales or success is captured by major companies that make all the

profits and impose the rules. This is basically because those small companies

reach their ceiling in distribution matters and they feel they cannot go further with

the efforts on this, so they finally cede before corporations and transfer the work

they feel they cannot afford anymore, without exploring new possibilities to

distribute their catalogue.

[66]
 On the other hand, innovation is far from being native to corporations,

nonetheless when particular cases show potential of success they appear on

scene taking over the promises and future profit. Nevertheless, the opportunistic

behaviour of multinationals can be harmful for themselves in the sense that, in a

way, they are terminating with their providers. A purely economics-based thought

could be just to buy the provider or to merge to it, but they are probably simply

buying the estate or the reputation. Imposing a new management or new rule

could mean the loss of identity and mystic, which is in the nature of diversity.

Obviously as developing societies from the global South with limited and

sometimes no presence in international debates and decision making, it can be

expressed that policies on these subjects will normally be written somewhere

else with someone else in mind. Nonetheless, now an increasing critique on

these matters can be seen in comparison to a few years ago, when the good

news of the fusion of creativity, culture and economics was (and still are) a global

mantra. From the South and even from the North, critics have started to show

contradictions, which previously were invisible, on these processes or in the

theoretical construct.

Probably, in that process there is still room to discuss new approaches,

since there is not a unique vision of the world. In terms of the actual policies and

conceptualization, it is clear that Chile and other countries are not in the group of

the winners. In a game, in which rules were made by and for someone else, it is

difficult to win.

[67]
 The issue of creative industries as such is pretty new in Chile as well as is

in Latin America and, despite some previous experiences, there is still potential to

develop them as well as to contribute to the discussion and policies. There is a

global discussion on issues of intellectual property all over the world in terms of

the spirit and the expression, so it can be expected that some of these issues,

like creative economy and cultural industries, have the chance to be discussed in

order to reach a new equilibrium, where all the players have the chance to play.

In terms of further development, it is important to generate further

research on distribution in Chile, because the country shows increasing level of

cultural production, but at the same time has a lack of distribution. Creativity and

innovation should be applied not only to the creation of services and goods, but

also in the moment that they are already available and made to reach the widest

audience possible.

Latin American countries, like Chile, have their rich culture and heritage to

contribute to world development; however in the current stage they have not so

many possibilities to face an encouraging future in cultural and creative

industries. Nevertheless, it is in their hands to try to make things different,

developing local knowledge, generating alternative management models, tending

to create a sustainable development with local flavour.

As Yudice (2002) expressed, culture as resource is not only available to

the powerful, but also to those who resist or are committed with the

transformation of their societies. Chile has the interest; has started to work; offers

[68]
institutional advantages in comparison with similar countries, so the country

needs to include its identity in this process. Chile needs to be integrated in the

global economy; however it cannot be by jeopardizing its culture and identity.

Chile, as part of the South, has to take part in a play that started long time ago. A

play not yet finished.

[69]
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