On the Creative Economy in Jordan

On the Creative Economy in Jordan

By Yusuf Mansur

Jordan, a country with scarce natural resources, a narrow manufacturing base, and an endemic trade deficit may find a bonanza and a great opportunity in focusing on the development and promotion of creative industries. Such an imperative or strategic opportunity, depending on one’s perspective and sense of urgency, requires coordinated efforts and interventions at many levels.

Creative industries are defined as industrial-scale productions combined with significant cultural content; mass-produced goods and services with sufficient artistic content to be considered creative. They include: performing arts, art markets, crafts, design, fashion, film, videos, the music industry, publishing, software, toys and games, television and radio, advertising and architecture. Sometimes cultural tourism is included. Clearly, due to the nature of the creative products, such industries rely on the enforcement of intellectual property rights (IPR), such as copyrights and patents, to protect the creative content.

Jordan has tremendous potential in growing such industries, especially because it has been a consistent producer of highly skilled workers and human capital. It is also blessed with diverse cultural content that can be parlayed into creative cultural products such as films, stories, and unique narratives. Furthermore, ICT, a sector that received support from His Majesty King Abdullah II, is an important and necessary input and output of the creative economy. Moreover, Jordanian architects have been consistently winning international acclaim and awards for their work. Certain films like Theeb, which made it to the five best film finalist list in the Oscars, have received accolades worldwide. 

Globalization, of which Jordan is a seeming practitioner, increased trade in cultural goods. It is now possible for a creative producer to choose a local, regional or global market. For example, in painting, there is a rule that someone will always want it; this someone now may reside in Houston or Jeddah, and not necessarily in Amman. Furthermore, individual valuations can differ and are usually based on income and wealth. To obtain a higher price than that offered in a small domestic market, one needs to export; and the Internet has made this possible. The cultural content cost may become also smaller when measured relative to other markets, which also enables greater profitability and in turn encourages more exports.

Notwithstanding, exports of creative goods have not performed in a manner consistent with such capabilities.  Creative goods exports increased from US$215 million in 2005 to US$$230 million in 2014, a 7% cumulative growth rate over 10 years, or less than 0.7% per year, which is much less than the growth rate of the GDP in both nominal (9.63%) and real (5.13%) terms. In fact, given the inflation rate over this period, creative exports have underperformed other traditional goods and services. Such performance is also low when compared to the growth of creative goods production worldwide (140% during 2002-2015).

In terms of the components of these exports, design goods, jewelry and interior design (estimated all together at $168 million), accounted for the largest share of creative goods exports. On the other hand, handicrafts made in Jordan are bourgeoning. Imports of creative goods, at US$574 million in 2014, were double the value of exports.

Handicrafts are important also in promoting tourism, particularly cultural tourism and its products. In economic terms, handicrafts enable Jordan to keep more of the tourism revenues as expenditures go into local producers—women, suffering from double the unemployment rate of men, make up the largest contributor in terms of labor inputs into the production of handicrafts. Fashion exports is another sector with growth potential. More than 7,000 establishments operated in the clothing and fabrics retail sector in Jordan in 2007, employing nearly 21,000 people; which sector too is primarily populated by female workers.

There is no doubt that if Jordan desires to increase its exports and reduce the trade deficit, the creative industries provide such a venue. But in order to encourage the emergence of a thriving creative industries in Jordan, there need to be clustered activities (clusters), which are geographic areas where competitors or producers of intermediate input and complementary activities are agglomerated. Such clustering, based on best practice and observations from the likes of the United Kingdom, which has been a leader in this regard encourages the fast emergence of positive creativity spillovers and fast economic growth.

The government has to work on creating sizeable agglomeration economies, economies of scale and scope, in order to enable the establishment and growth of larger firms that can better compete globally. Establishing art colleges and schools within these areas encourages even faster spillovers.

Moreover, few people can be creative and brilliant every day, thus producing creative content in sufficient amounts for them to survive, make a decent living or even flourish. Imitations and infringements lead to substitution and derailment of the industry. Wonderful ideas and their implementation, if not properly protected, can lead to the abandonment of the type of activities that leads to their creation. Hence, a country like Jordan must first and foremost protect the IPR of creative Jordanians; a costless step for which the legislative framework is already in place. 

Jordan can easily encourage the growth of creative industries within its borders. The cost is almost nothing when compared to the benefits that could emerge from such endeavors. All that is required is the establishment of a recognized space, a creative industries city, and the proper enforcement of IPR. Steps like funding and subsidies are also required, as markets and economic activities, as the history of developed nations demonstrate, are born out of the womb of the state and not by chance alone.

This article was written for and published on the Facebook page of AmCham-Jordan on Nov 11 2019