In a post-industrial economy, the cultural resources of countries become a priority. This is due to the fact that the role of raw materials industries in the economy is declining in favor of creative ones. We tell you about prospects for the development of the creative economy in the CIS countries.
What is creative economy
Creative economy is a sector of the economy associated with intellectual activities. Its main resources are the ideas and technologies that come up with people. Creative industries include many areas of life: this is design, music, fashion, architecture, R&D, and software development.
Creative economy is also translated from the English as the economics of creators. This is the kind of business that online content creators do. They try to make money from their work, for example, through advertising or sales of their products. Over 50 million people position themselves as “creators” in the world, and their number is only growing.
Creative economy growth drivers
Creative industries act as a driver of innovative development and show higher growth compared to other sectors of the market.
The rise of the creative economy sector in the world is explained first by growing number of mobile devices and the advent of the second generation of the Internet – web 2.0 format. Its features are interactivity and the ability to upload custom content. Further development continued thanks to the emergence of social networks and an increase in the number of content creators.
Also, this trend was accelerated by the COVID-19 pandemic. Number of representatives of creative professions in the Russian labor market has increased. For example, in 2020 the number of advertisers and marketers increased by 18.9% relative to the level of 2019. The level of online content consumption also increased. Netflix, Disney+, Amazon Prime Video and YouTube reported audience growth by 30% in 2020.
If a couple of years ago they often joked about the fact that a blogger or creator is not profession, now the content creation is already becoming a business in itself. It launches its own products and services. It is backed by a team of producers, directors, editors, and screenwriters.
Creative economy sector in CIS countries
The UN has declared 2021 the international year of the creative economy. It generates about three percent of global GDP.
Initially, the creative economy in the CIS countries lagged behind the world trends for two to three years. The events of 2022 discarded the development of creative industries for a few more years, if not more.
The lag was due to a variety of reasons: blocking of social networks inside Russia, turning off monetization for bloggers by social media. An important factor was the ban on the use of foreign platforms by the Russians. For example, the Anchor service with which absolute majority of podcasters used to work, suspended its activities in Russia and closed access to Russian accounts. The impossibility of paying for foreign services with Russian cards and withdrawal to Russian cards also played significant role in developmental delay. So, the crowdfunding platform Patreon warned Russian users about the impossibility of processing their payments because of the sanctions.
The rest of the CIS countries were not affected directly by the blocking. Despite this, they also felt its effect. On the one hand, a massive move of qualified specialists from Russia can help make creative industries in the CIS countries more expert and professional. However, there is a negative aspect too: before there were many international remote teams with employees from different CIS countries, which means the problems of Russia complicated their activities also.
State support for the creative economy
Despite everything, at the state level many CIS countries want support creative economy. Recently, CIS states have adopted the following solutions in this sector:
- Russian Federation
In 2021, the Government of the Russian Federation approved the “Concept of creative industries and state support until 2030”. According to plans, its implementation will increase the share of the creative economy sector from 2.2% to 6% of Russia’s GDP. In conditions of instability in 2022, the Ministry of Culture of the Russian Federation decided to postpone until 2024 legislative formalization of the institute of creative industries in Russia.
Kazakhstan approved “Concept of development of creative industries for 2021-2025”. Expected results are the emergence of 30 thousand new jobs, and growth in the export of products of creative industries up to $200 million.
In Kyrgyzstan, the president took support measures, and the deputies adopted the law “On the park of creative industries”.
Uzbekistan will host World Conference on Creative Economy in 2024.
This is part of a huge work that the CIS states are trying to do together with entrepreneurial and creative community. It will allow them to support creative business in all areas.
Prospects for the development of the creative economy
The circumstances the market faced in 2022 are transforming specifically the creative economies of the CIS countries. However, global trends are still relevant, and the CIS follows them. We list the most noticeable trends in the development of creative economies of the CIS countries.
Creators’ independence from social media
Creators want to become more and more financially independent of social networks. Therefore, sites become popular that allow authors to give access to subscription content to “sponsors” or to provide unique work to donors. For example, Patreon and Boosty.
Leaving the main content distribution site due to locks means audience loss for blogger. Creators will strive to “pour” the audience on own sites, which means there will be more tools designed to help them. The Bart project has already appeared, which helps creators to accumulate an audience on several sites, as well as to create sites for the sale of their information products.
Reliance on advertising revenue
The dependence of creators on brands is high, which limits their activities. For example, in the spring in Russia due to the departure of foreign companies, advertising revenues fell by various estimates by 60% to 90%. In addition to monetization at the expense of advertising, creators will look for another way of income. For example, building business or creating products. It can be physical goods – merch or own clothing brand, as well as expert information products.
Creators will form communities around them. It suggests a different approach to the audience, with closer interaction. It is possible to share income with an audience when it performs as co-investor in creator products. Creators will develop at the expense of the audience, offer it to earn together. Use of crowdfunding instruments is likely.
For example, Rally allows creators to run their own “creator” coins. This allows them to monetize their work and themselves with the help of the community, which they gathered around their activities. Creator‘s audience and investors can buy this coin, sell it or use it as currency on platforms that operate on a similar technology.
The emergence of mechanisms for the implementation of the new law “On Advertising” will change greatly social media. Creators will be required to label advertising content with a special token that will be received in the system. It’s going to change the interaction of advertising agencies with customers, as well as the job of the creators themselves.
The law will affect ads becoming native because bloggers will try to bypass it. For example, trying to make ads not look like commerce.
2022 has thrown the creative industries of the CIS countries back a lot. However progress cannot be stopped, and this industry will still develop. Fast adaptation to sector trends, search for new ways to advance, close contact with the audience – these mechanisms will help creators, despite rapidly changing market conditions.
Creative industries are a priority area of development thanks to their economic potential. CIS countries need to pay more attention to this particular area.
For the rapid development of the sector of the economy of creators in the CIS countries, it is necessary to provide:
- open access to international social media and content,
- exchange of experience,
- ability to monitor trends.
Conditions that will also contribute to the growth of the creative economy of the CIS countries:
- financing and investments,
- infrastructure and development of the Internet,
- public policy.
By Felix Khachatryan, founder and owner of Neotech, IT development of information systems, services, and mobile applications