Tessa Jowell keynote speech to the Creative Economy conference, London
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5 October 2005
How do you put a price-tag on an idea? The truth is, you can't. Ideas form the basis of all progress; they are the nub of all development and improvement.
Some ideas cause a revolution in human society. Others, a radical change in our economy. And the best ideas do both.
This is a time of dramatic change.
We are in the midst of a seismic shift in global economic activity.
China is consuming half the world's cement, over a quarter of the world's steel, and a third of the world's iron ore. Asia is now consuming 30 per cent of world oil.
Between them, India and China account for nearly two fifths of the World's economic population – five times that of the EU.
A third of world growth since 2000 has come from China. China now accounts for 7% of world trade - producing 30% of the world's television sets, 50% of cameras and 70% of photocopiers.
Asia is on the cusp of becoming a larger exporter than Europe.
Soon, half the world's manufactured exports could come from developing countries.
And with these major changes come equally major challenges –
It is no secret that Europe faces growing competition from the developing world.
So faced with these facts, some commentators may feel compelled to sit back and to look back to what used to be.
But that's not the answer.
We cannot pretend change is not happening.
And we must not let the pace of change overwhelm us.
Europe has to present a united front, look to the future, adapt to change and seize the opportunities that it creates.
We can't compete with 'pile them high sell them cheap' trade strategies. But the truth is that we don't have to.
We need to concentrate our efforts on where our strengths lie - in adding value through innovation and creativity.
We need to invest in the skills and potential of our people, and to create an environment where creativity can flourish, and enterprise is rewarded.
We need to deliver on the Lisbon agenda.
Couple this, with the fact that at no point in our history has the pace of technological change been so rapid or so far reaching -
And so the importance of our creative economy moves centre stage.
A healthy creative economy is vital if Europe's knowledge economy is to continue to flourish.
This is a time of dramatic change.
The worlds of culture and technology have collided, creating a universe of new possibilities, and new opportunities to access, consume and create content.
Analysts predict that worldwide, convergence will lead to a one trillion dollar shift in valuations and revenues in the converging sectors by 2010.
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Who would have thought even a few years' ago that 10 million people would have their entire music collection stored on an iPod the size of a mobile phone?
Or that people would increasingly download their music over the web, instead of buying them over the counter? Yet in 2004, 200 million tracks were downloaded in the UK, US and Germany alone. And the number of on-line services where consumers can buy music has jumped to 230 – with more than 150 of them based in Europe.
Eight years ago, people had barely heard of digital TV, DVDs and video phones and broadband was the exception, not the rule. With the global broadband universe set to expand from 82 million households in 2003, to 320 million in 2008, the market for creative content is only going to get bigger.
And we can only guess what technological advances the next eight years will hold.
So, we can, rightly, be very proud of our existing creative economy. But we certainly cannot be complacent.
Because while the UK is producing 5,000 computer science graduates a year, India and China are producing 125,000. And while an estimated 9.6 million jobs will be created in Europe's multimedia and software sectors over the next decade, China created 9.5 million new jobs last year alone.
The emerging economies are only too aware of the economic potential of the creative economy. If we don't increase our pace of innovation and investment, it will only be a matter of time before Europe's position in the global economy is surpassed.
But just as the developing world poses a challenge to our creative economy, it is also providing more opportunities: By 2008, Asia Pacific is set to become the world's largest internet market.
So the question for us here today is: how can we harness the power of the digital revolution, without being flattened beneath it?
And that is a question that requires an urgent response, because far from catching up with the US, and China, and India, the EU is actually falling further behind. Five years after Lisbon, those economies are still growing five times faster than the European Union's.
Across the EU, there is a shortage of qualified, 'creative' personnel, which is the single biggest factor affecting growth in the creative industries sector.
But there is a prescription for progress, that was clearly set out in the Lisbon Strategy. We need to start putting more emphasis on growth and jobs. And take concrete steps to ensure that Europe is the most attractive place for businesses to work and invest in.
That means putting knowledge and innovation at the very heart or our growth. Ensuring that our population is well-educated and highly-skilled. And giving entrepreneurs the flexibility, freedom and support they need to meet the challenges of our modern economy.
We also need to draw upon the strengths of our creative economy in its widest sense.
We should capitalise on the centuries of knowledge and inspiration that are tucked away, safely stored in our cultural institutions so that they can inspire and stimulate creators for the future.
And that's why we have been working with European partners on a new Action Plan to co-ordinate the digitization of our cultural heritage. This is a major policy and technological challenge, but it aims to make sure that this material is preserved digitally and made accessible to the widest possible audience.
We must also recognise that the innovation, design and enterprise that are currently the trade marks of our creative industries will also give us the blue print for revolutionising our more traditional industries.
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For example, research has shown that when companies invest in best design practice, they do much better than those that don't.
So we need to do more to help European entrepreneurs turn today's good idea into tomorrow's brilliant business success. Because in the future, the only successful industries will be those that have incorporated a strong streak of creativity into their businesses.
Every industry must look to become a creative industry, in the broadest sense of the word.
Conferences such as these underline the importance of bringing a varied range of contributors from many different sectors and member states together. When we talk to each other like this, we can find out what works and learn from each other's experiences.
It's also heartening that there are so many things happening right across the Commission at the moment, which will help us to exploit the full economic potential of our creative economy.
For example, over the next two days many of you will no doubt be discussing the work of the Internal Markets Directorate to make the licensing of online music services easier and more transparent.
More broadly there is the i2010 agenda, looking at how EU policy can be used to encourage the development of the digital economy, without regulating it to within an inch of its life.
And it's important to be clear about the overall effect that regulation can have. Instead of trying to hit a moving target by regulating yesterday's innovation, we need to work together to focus on the outcomes we wish to achieve.
The revision of the Television Without Frontiers Directive is a good case in point. We know that we need new regulations to reflect the fact that TV services are now being delivered via the net and mobile phones. But we don't want to use a sledge-hammer to crack a nut, as regulation of these platforms will have an enormous impact on how they develop.
Creativity and enterprise can't flourish if they are beset by reams of red tape.
That's why improving the European regulatory environment is one of the key policy priorities for the UK presidency.
At the European level, the Better Regulation Agenda will be looking at ways of reducing the burden of legislation, improving Europe's regulatory environment and simplifying existing European law.
Regulation has to be proportionate, and take into account the opinions and needs of the businesses it is trying to regulate.
Bad legislation places a heavy burden on all businesses, but particularly the smaller ones, which are so prevalent in the creative economy. We should remember that regulation should support individuals and firms, boost productivity and encourage labour market participation. Not crush businesses flat.
And we should also remember that the international community can only do so much. Each country must also take responsibility for creating a thriving knowledge economy at a national level, too.
The issue of Intellectual Property is a case in point.
Economies aren't just built on good ideas: they are powered by them. But only when the people who are executing those ideas are being properly and fairly rewarded for their creativity.
Back in 2000, the copyright industries were already contributing an estimated 1.2 trillion euros to the EU economy, and accounted for just over 3% of total EU employment.
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According to a recent report from Price Waterhouse Coopers, the European entertainment and media market will be worth around 351 billion euros by 2008. But this growth is being threatened by the increasing illegal use of intellectual property.
Despite the growth in legal downloads, in 2004, nine out of ten people who were downloading music – some 36 million people – were still not paying for it.
Indeed, the OECD estimates that the trade in all counterfeit goods is worth 5-7% of world trade and that 50% of all video sales are counterfeit. The EU is estimated to have lost 100,000 jobs over the last 10 years because of counterfeit and pirated products.
Without IP protection the creative industries could not survive, let alone prosper.
A strong and fair Intellectual Property regime is absolutely fundamental to a thriving, creative economy.
In a digital world it's key to our future prosperity.
Because in an increasingly competitive global economy any attack on our intellectual and creative capital is an attack on our economy itself.
So at the international level, we are using our presidency of the G8 to push for anti-piracy and counterfeiting measures to be more effectively enforced.
Whilst we aren't here to promote the UK, I think it's helpful to highlight what the UK is doing at a national level, too.
We are making it very clear that we won't tolerate intellectual property crime. We believe its best tackled in three key ways – effective enforcement, better understanding of IP and meeting legitimate consumer expectations.
On enforcement, our stand will only be effective if we have support from the international community. To this end, we are implementing a major strategy to deal with IP crime that focuses on increased international cooperation.
On the one hand, that means forging closer links with overseas enforcement agencies, and sharing our technical expertise, training programmes and advice with colleagues abroad.
On the other hand, that means helping to develop a comprehensive investigators guide for Interpol, and chairing the UN Economic and Social Advisory Group on the Protection of IP rights.
These measures will all make a big difference. But perhaps the most important thing we can do, individually and collectively, is to help consumers, creators and industry to understand better the importance of IP as a social, economic and creative tool.
At the moment, many people don't see the harm in buying a counterfeit CD or DVD. But if they understood the real cost of their actions, both in terms of our revenue today and our creative competitiveness tomorrow, I think they would start to think twice.
We need to explain that IP is not just a negative, piracy story: it's also central to the success of our creative economies and the people who work in them.
As an example, in your delegates packs you will find a short film made by young creators and brought about through Government and industry collaboration, which aims to explain why IP is so important to them.
So we all have a part to play. I've spoken about the international and national effort, but neither the Commission nor we member states hold all the solutions.
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Many of the answers and much of the progress lies with industry itself.
That's why in the UK we've brought together representatives from across the creative economy to discuss the opportunities and obstacles they face in exploiting their IP in the new digital environment.
They presented Government with a series of recommendations, which we are publishing today as a contribution to the conference discussions.
It's clear that our content and technology businesses are investing a huge amount of time and energy in dealing with the current and upcoming challenges. The increasing array of new and exciting ways to access creative content clearly demonstrates that industry is responding to the needs and expectations of consumers.
But these are not just creative industries issues. They are issues for everyone who has a stake in the future of our knowledge economy.
This conference is shining a spotlight on the creative economy and its role in Europe's future economic prosperity. But this isn't a stand alone initiative - it's an important contribution to a continuing European Agenda.
It feeds into the EU Culture Council's current workplan, and will be progressed by our Austrian Colleagues during their Presidency of the EU. The outcomes of your discussions will be taken forward at their expert seminar in Vienna in March, which will look at the coherence of content related policies within Europe.
With the world moving so quickly, it's almost impossible to predict how the future will look. But we still need to be making every effort to work with our international partners to maximise opportunities, encourage cultural exchanges, and push events down a positive path.
If nothing else, we need to understand the power of an idea. Good ideas developed into high-quality creative content are the lynchpin of a knowledge economy. Used wisely, they can lead us towards economic prosperity and success. But if we allow them to be squandered, stifled or stolen, we won't just lose our economic edge; we are also risk losing our raison d'etre.
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