The British Council recently profiled the creative industries of the Philippines and came up with two very interesting segments: the SWOT (strengths, weaknesses, opportunities and threats) analysis for this exciting sector with so much potential. I have picked up some ideas that I would like to share with you:
What are the strengths?
Talent:
The availability of a large, skilled, creative and educated work force, with close familiarity with Western culture and proficiency in the English language.
Their talent and passion for creativity is internationally recognized, and creates an “assurance” or a trademark of good performance (in the case of performance arts), superior quality and design.
Some hubs and clusters are generating value, energy and exchange; and emergent creative districts in area, such as Makati, Quezon City and Cebu, are offering a mix of fine grain and historical and industrial buildings that, with the right enabling conditions, could be very attractive to creative businesses.
Coordination and leadership:
Clear commitment to partnership and reform from key government departments and agencies and a shared commitment to improving baseline mapping, piloting targeted research and development activities, and building effective governance structures and investment models as witnessed in leading creative economies globally.
The weaknesses?
Costs:
High production costs—e.g., utility costs, licensing and equipment, professional fees and travel across a distributed geographic area.
High market entry costs for certain types of creative activity—e.g., film and some elements of gaming—the gap from ideation to development and distribution is very large without significant investment.
Distribution issues—e.g., copyright infringement, poor Internet connectivity beyond the main cities and the diseconomy of congestion/poor public transport.
Underdeveloped collaboration:
The creative industries sit across several government departments and agencies without clear ownership and a lack overall of policy literacy. There is also a disconnect in governance and development between arts and cultural sectors and the commercial creative industries, even though there are multiple interdependencies in the ways businesses and organizations operate across shared value chains. It is encouraging to see, though, that both the government and the private sector are making strong efforts to get their act together, as demonstrated during the recent Arangkada Philippines Roundtable on Creative Industries.
Weak local and/or foreign market collaboration. Creative originators and manufacturers have struggled to collaborate and establish business relations with other relevant local and international companies.
Weak national brand/positioning:
The Philippines lacks a consistent and focused country brand and culture, and the creative industries do not feature strongly in tourism, inward investment or even soft power activities. A strong creative brand underpinned by genuine sector-development activities, can be positively impactful on inward investment, tourism, talent attraction and retention. Let’s hope that “Creative Philippines” will be adopted!
Investment:
IN part, an outcome of a lack of good quality data, the investment landscape for the creative industries is fragmented, with little coordination between grant-giving bodies and negligible coherence between grants, microfinance, debt and equity programs. Low levels of investment readiness and investor readiness are compounded by the imperfections of these supply-side aspects.
After we have looked at some strengths and weaknesses of this emerging industry, let’s focus on the opportunities the sector has.
The good news is that the sector leaders are determined to make this sector big, demonstrated by one of outcomes of the Arangkada Philippines Roundtable.
The Design Center’s recent Creative Industries Road Map sets out a vision that works well and could be adopted for future strategic development purposes:
“A major creative hub in the Asia-Pacific, with strong and thriving creative industries supported by a pool of world-renowned Filipino talent, imbued with the passion to innovate goods and services that showcase the best of the Philippines, using new and emerging technologies.”
Growing market:
Rising per-capita incomes, advances in modern technology, and increasing international demand for creative goods and services are catalysts of growth of The Philippine Creative Industries. The increase in real per-capita income worldwide and a growing middle class in the Philippines is a significant contributor to growth. Digitalization is also enabling the development of new markets.
Given the large pool of graduates from nursing, computer science, marketing, accounting, legal and medical fields, there is a huge possibility for the Philippines to penetrate and step up to the knowledge-intensive, higher value-added segment of the business-process outsourcing industry, in particular animation, game development and information-technology-enabled creative services.
Leadership:
The Creative Industries can be positioned as a higher priority sector by the Neda, with the eventual establishment of a national dedicated creative economy program/policy.
People (education and skills):
With a coordinated approach to creative education and skills across the country it should be possible to develop a set of creative entrepreneurship and management activities with higher education institutions; and mobilizing professional development and skills activities for existing creative businesses and cultural organizations. Priority areas could include:
Intellectual property (IP) literacy—building confidence and capacity to monetize IP, collaborate and move toward more effective value retention (e.g., licensing rather than selling film content to broadcasters).
Entrepreneurship and management—focused on the “millennials”—younger entrepreneurs specializing in the short format (e.g., gaming, APPs), contemporary designer-makers, theater producers, etc.—i.e., the talent that is under-nurtured and at risk of leaving the Philippines.
Technical skills that retain traditional crafts and approaches to visual and performing arts while opening them up to new influences —with a focus on contemporary markets and export.
Audience development: a national program of championing and celebrating diverse cultural programming—supporting smaller organizations to produce new work and reach new audiences.
Investment and support:
With a growing cohort of creative entrepreneurs, the opportunity exists to develop a more effective support environment. This should include a program of specialist business support for creative micros and small and medium enterprises (e.g., pilot activities in the cities); B2B network activities; and targeted investment-readiness support. This should include a focus on nurturing appetite for sector investment from the commercial banks (e.g. looking at options for IP as collateral); scoping research and development investment; the effectiveness of tax incentives and tariffs; and on growing business angel appetite in the creative industries.
Place:
The creative industries can play a transformational role in the quality and competitiveness of cities and regions across the Philippines. There are opportunities to nurture significant cluster developments across the country. This should include a strategic development push where there is already appetite—e.g., Cebu. But it should also focus on Greater Manila as a regionally, even globally significant cluster.
There is no doubt in my mind, that the Arangkada Philippines Roundtable set the stage to make Creative Philippines happen, taking the SWOT analysis and the opportunities highlighted in the Report of the British Council into consideration.
Comments are welcome. Contact me at Schumacher@eitsc.com.