Measuring Cultural Trade: The Canadian Case for Including Craft and Interactive

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OECD/ OCDE Dec. 4-5, 2006
Measuring Cultural Trade:
The Canadian Case for Including Craft and Interactive
Digital Media, and for Identifying Domestic Content
Please note that the statements and views of the author
expressed herein may not necessarily state or reflect those of
the Government of Canada or the Department of Canadian
Heritage.
[email protected]
Contents
Culture in the Canadian economy: exports, GDP
contribution, employment.
Support program for cultural exporters.
Uses of cultural trade data.
Policy makers request domestic content measure.
Data gap: Craft.
Data gap: new media / interactive digital media.
Data gap: downloads and other
Conclusion.
Questions.
2
Culture in the Canadian Economy
Culture’s significant economic contribution in
Canada was CDN$40 Billion (2002) or 3.8% of
Canada’s GDP.
Culture directly employs about 600,000
Canadians, or about 3.8% of workforce.
Culture goods and services exports total
CDN$4.6 Billion; cultural imports ~$7 Billion.
Culture trade data from partnership between
Canadian Heritage and Statistics Canada.
Sources: Statistics Canada cultural goods and services data tables;
Economic Contribution of Culture in Canada. Amounts in CDN$;
Exchange rate 1 CDN$ = 0.88 US$
3
Trade Routes Program
Department of Canadian Heritage
Multi-sector program focused on building
export capacity: Market entry support, In-market
assistance, Market intelligence, Contributions program for
international business development.
Cultural sectors: film and video, broadcasting &
television, publishing, music & sound recording, visual
arts, new media (interactive digital media), crafts, design,
heritage, and performing arts.
4
Uses of Cultural Trade Data
Culture trade balance, flows of culture trade for
senior management in Department.
International comparability and benchmarking.
Used by cultural trade commissioners in posts
abroad and in Canada to aid exporters, buyers.
Supplies background info for inbound/outbound
official delegations in Culture.
Some trade policy implications as well.
5
Cultural Trade Data and Domestic Content
Cultural trade statistics- limited acceptance
in several cultural policy branches where
encouraging domestic content is
paramount.
Funding of certain cultural industries is
restricted to Canadian companies meeting
domestic content rules.
These policy branches at Canadian
Heritage request export data that itemize
the domestic content for some products.
6
Cultural Trade Data and Domestic Content
continued
For film and TV productions, a 10-point
requirement to fully meet Canadian content rules.
Director 2 pts
Screenwriter 2 pts
Highest paid actor 1 pt
Second-highest paid actor 1 pt
Head of Art Department 1 pt
Director of photography 1 pt
Music composer 1 pt
Picture editor 1 pt
For sound recording, a 4-point Canadian content
system (MAPL) is used; Music, Artist, Production,
7
Lyrics.
Cultural Trade Data and Domestic Content
continued
Measuring domestic content is of interest in
context of UNESCO cultural diversity treaty.
Difficulties: cultural goods Import and
Export data are Customs-based.
Possible to verify the national content (by
degree) of cultural goods trade?
Other countries may have the same need.
But surveys = significant costs.
8
Data Gap: Craft
Craft Definitions
Classify by Material Used
Classify by Utilitarian Function (Use)
May need to distinguish fine crafts,
Aboriginal crafts, naïve crafts.
9
Craft in Canada
Canadian craft - represent Canadian
culture. Craft used as diplomatic gifts of
choice for visits inbound and outbound.
In Canada - 22,000 craftspeople, artisans.
Economic contribution: estimated
CDN$700 million in 2001
Canadian Craft exports : ~ CDN$100 million
Estimates from Profile and Development of Craft in Canada; Canadian Craft
Federation, Oct 2003
10
Crafts Now Classified in Manufacturing
Crafts - little in common with manufactured
objects.
Production processes differ: NAICS
Artisans add value: Handcrafted ceramic
bowls should not be classified with toilet
bowls: NAICS 32711
To separate Crafts from Manufacturing,
issues of time, cost, effort, and the differing
NAICS trilateral positions on Craft objects
(CDN-MEX-USA).
11
Craft & Intellectual Property Protection
Craft objects receive recognition under intellectual
property (IP) legislation.
Some Aboriginal craft objects receive special IP
recognition:
 the Toi Iho certification mark for Maori craft;
 the Canadian government’s Igloo ‘tag’ or trademark for authentic
Canadian Inuit carvings, wall hangings, traditional tools.
Protection for indigenous women’s intellectual
property: design of crafts, aboriginal symbols and
patterns.
In developing nations, crafts are an important export.
Sources: WIPO Guide to Marketing Crafts; Government of Canada, Department of Indian and Northern
Affairs; World Summit on Sustainable Development: Intellectual Property Rights and the Inuit
Amauti
12
Measuring Crafts:
Some Considerations
Separate Crafts from Manufacturing. Production
processes are different.
World Customs Organization, UNESCO ask
member nations to measure Craft.
Craft occupations are already in Culture.
Classify by the media used, or functionality.
If original visual art can be measured (the work of
17 000 individual CDN artists), then crafts can be
measured (work of ~ 22 000 individual artisans).
Classification codes needed.
13
Data Gap: New Media /
Interactive Digital Media
“Our industry now generates more revenue than
motion picture box office sales. To people under
20, we’re a bigger cultural force than the
movies.”
Don Mattrick
President, Electronic Arts Worldwide Studios (BC & CALIF)
Game Creators: FIFA Soccer 2005, The Sims 2, The Lord of the Rings:
Battle for Middle Earth, Harry Potter and the Prisoner of Azkaban
14
Interactive Media Industries
in Canada
Approximately 3000 firms in interactive digital
media across Canada. Estimated total gross
revenues - almost CDN$5 Billion.
Full-time employment estimated 32 000 (2005).
Part-time employment was estimated at 7 000;
contractors numbered around 9 000.
Game development city clusters: Montréal,
Vancouver, Toronto. Canada is home to two of
largest game development studios worldwide.
Source: Canadian Interactive Alliance Interactive canadienne
15
Defining Interactive Digital Media (IDM)
New media/ interactive digital media is
the creation, production, and delivery of
interactive digital content for the purposes
of informing, educating, and entertaining.
Three components:
 Interactive design
 Interactive entertainment
 E-learning
Source: Canadian Interactive Alliance Interactive canadienne
16
Interactive Digital Media (IDM) and
the Selection of NAICS Industry
Problem: Classification systems often don’t
recognize new media / IDM as a distinct entity.
Question: How do interactive media companies
classify their principal business activity in NAICS?
Context: Companies operating in Canada require a
Business Number (BN) for taxation and other
administrative purposes such as Import/Export.
Canada Revenue Agency requires them to identify
their NAICS industry (major business activity).
17
Interactive Digital Media (IDM) and
the Selection of NAICS Industry- continued
The Project: Identify the NAICS industry chosen by
existing Canadian interactive digital media
businesses when applying for the Business Number.
Finding: Many interactive media companies have
aligned themselves in non-culture industries.
Task: Encourage changes to the major international
classification systems (industries, goods, services,
and occupations). Or count the culture activities in a
non-cultural industry.
18
Interactive Digital Media (IDM) and
the Selection of NAICS Industry - continued
A sample of 650 Canadian interactive digital media
businesses yielded the following preliminary findings,
classed by NAICS industry.
Frequency
Computer Systems Design and related services
Motion Picture and Video Production
Software Publishers
Graphic Design Services
Advertising Agencies
Internet Service Providers
Administrative Management Consulting
Computer and pre-packaged Software
Motion Picture and Video Distribution
All others (100 other industries selected)
35.4%
14.4%
6.0%
4.5%
2.8%
2.0%
1.7%
1.4%
1.4%
30.5%
19
Interactive Digital Media (IDM) in Culture?
1. Interactive media has two components:
Content creation, and Coding.
Identify content creation to separate IDM from
Information and Communications Technology (ICT).
Some countries have content legislation or content
ratings (industry regulated) for video games:
Canada, Korea, China, USA, UK, Germany,
Australia, and others.
Computer software does not require a content rating.
20
Interactive Digital Media (IDM) in Culture?
continued
2. Production processes: NAICS Aggregates
The North American Industry Classification System principle: the producing
units that use similar production processes should be grouped together in
the classification.
Possible reason why IDM was initially placed in ICT: Original
IDM was mostly coding, with a little art.
Now, new media is mostly art, and a little coding. IDM’s
Coding and Programming processes (ICT): ~ 30% of total.
Production Processes (already identified in Arts & Culture):
About 70% of total.
3. Close Substitutes: NAPCS (Products)
Close substitutes for interactive digital media products: Table
games like chess? Other Software? Digital video?
21
Measuring IDM: Roadblocks
Some interactive media activities are already
in other non-culture categories and cannot
easily be separated. i.e. interactive web
design in an agriculture supplies firm.
In NAPCS (Products), there are inherent
difficulties measuring the online transactions
common to many interactive media.
22
Measuring IDM:
Proposed Solutions
Measure content, not coding. Coding properly
belongs in ICT.
Interactive digital media firms can be identified and
separated from other firms.
There are many companies that work in interactive
media exclusively.
Industry lists exist and are publicly available.
23
Other Culture Measurement
Gaps to Address
Need measurement of downloads: music,
television, film, video on demand, online
games, books and magazines, etc.
Music: copyright collection societies.
Royalties for Copyright industries, for Design.
Classification revisions needed in 2012, if not
present in 2007 revisions.
24
Conclusion & Questions
Culture is a significant sector in our economies,
but is under-measured.
Culture measurement data gaps: Crafts,
Interactive Digital Media, downloads, and other
sector-specific issues, i.e. Video On Demand,
copyright collection societies.
Measurement of domestic content of products
would satisfy some culture policy needs.
It is proposed that major classification systems
be revised in 2012, if not in 2007, to address
these gaps.
Questions
25
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