Definition and Background

• The creative economy (also known as the orange economy) is an evolving concept based on the contribution and potential of creative assets to contribute to economic growth and development.
• At the heart of the creative economy are the creative industries which can be defined as the cycles of creation, production and distribution of goods and services that use creativity and intellectual capital as primary inputs.
• According to the United Nations Trade and Development (UNCTAD) report on the creative economy, Creative Economy Outlook 2024, three sectors are the main contributors of the creative economy (2022): software services (41.3%), research and development (30.7%), advertising, market research and architecture (15.5%). 
• As of 2024, India’s creative industry is valued at $30 billion and employs about 8% of the country’s working population. 
• Creative exports grew by 20% in the previous year, generating more than $11 billion. 

Significance for India

• Economic Development and Empowerment: The creative economy, particularly through traditional crafts and sustainable tourism, contributes to local economic development. 
  • It empowers vulnerable populations, such as women and young people, by promoting inclusive local economies.
  • Through initiatives like linking local producers to global markets via e-commerce and sustainable tourism, the developmental goals are pursued.
• Employment Opportunities: The creative economy is a key driver of job creation, particularly in sectors such as design, advertising, media, and performing arts. 
  • In India, creative industries account for a significant portion of the workforce, employing about 8% of the working population. 
  • This creates opportunities for youth and women, particularly as the sector continues to grow .
• Market Integration and Exports: India’s creative economy has demonstrated substantial contributions through exports, particularly in creative goods and services. 
  • The design segment alone represented a significant portion of creative goods exports. This positions India as an emerging player in the global creative economy.
• Innovation through Creativity: India’s creative economy fosters innovation, from grassroots innovations like the ‘mitti cool clay refrigerator’ to more complex technological solutions. 
  • Creative solutions rooted in local needs can be scaled to solve global challenges, such as climate adaptation and sustainable technology .
• Cultural Transformation and Digitalization: The integration of multimedia and telecommunications technologies in India has radically transformed how people create, consume, and enjoy cultural products. 
  • The digitalization of creative industries, especially in areas like music, design, and video games, enables India to tap into global markets, contributing to the overall growth of the digital economy.
• Sustainable Development Goals (SDGs): The creative economy directly aligns with various Sustainable Development Goals (SDGs), such as decent work, economic growth, gender equality, and responsible consumption. 
  • India’s focus on the creative economy supports SDGs like SDG 4 (quality education), SDG 5 (gender equality), SDG 8 (decent work and economic growth), and SDG 12 (responsible consumption and production) .

Challenges in promoting Creative Economy

• Scaling Up Grassroots Innovations: India has immense creativity but many grassroots innovations struggle to translate into large-scale innovations. 
  • There is a gap between creative ideas and their formalization or commercialization. 
• Intellectual Property (IP) Protection: Creative industries in India, in local and informal sectors, do not have proper intellectual property protection. 
  • This results in the loss of potential revenue and hinders innovation, as creators are often unable to protect and utilise their ideas.
• Limited Investment in Creative Sectors: There is a shortage of targeted investment in creative sectors. 
• Digital Divide: The digital divide remains a significant issue, particularly for women and marginalized groups. Many women face obstacles in accessing digital tools for artistic creation and distribution, limiting their participation in the creative economy.
• Talent and Skill Gaps: While the creative economy is rapidly growing, there is a shortage of skilled talent in the country in areas that require high levels of technical expertise, such as digital services and innovation. 

Way Forward

• Strengthening IP Framework: To encourage innovation and to protect creators, the Indian Government should focus on strengthening the intellectual property (IP) framework and ensure its effective enforcement. 
  • This can include awareness campaigns, improving access to IP registration for grassroots innovators, and creating platforms to simplify the IP protection process for creative entrepreneurs. 
  • Legal and policy reforms should aim at creating a more transparent, accessible, and efficient IP protection system.
• Promoting Investment and Funding: Targeted funding mechanisms should be developed to invest in creative sectors, especially at the grassroots level. 
  • This can include establishing dedicated venture funds, grants, and incubators for creative entrepreneurs, and encouraging both public and private sector investments in local creative businesses. 
  • India could also explore incentivizing global investors to participate in the country’s creative economy by offering tax breaks or other benefits.
• Digital Literacy: Closing the digital divide is crucial to ensure equitable participation in the creative economy. 
  • Government and private sector initiatives can focus on improving digital literacy through community centers, online courses, and collaboration with educational institutions to create a pool of skilled talent for the creative sector.
• The need of the day is an ecosystem that balances creativity and innovations at all levels, backed by investments to ensure that India’s ambitions to improve creative economic conditions are met.