Orange Economy, an infinite opportunity

The Orange Economy focuses on investing in new skills, attracting talent and nurturing it.

Architecture, visual and performing arts, crafts, cinema, design, publishing, research and development, games and toys, fashion, music, advertising, software, TV and radio, and video games are some of the sectors that are part of the Orange Economy, as defined by John Howkins, one of the most influential researchers in the field.

Photo: Connect Americas

The trade in creative goods and services – hereafter referred to as ‘mentefacturas’ – had a very good decade: between 2002 and 2011 exports grew 134%, according to the United Nations Conference on Trade and Development (UNCTAD). If we included them in the International Trade Centre’s (ITC) classification, they would be the fifth busiest commodity on the planet.

According to the book “The Orange Economy, an Infinite Opportunity“, written by Felipe Buitrago Restrepo and Iván Duque Márquez, and edited by the Inter-American Development Bank (IDB), a distinction can be made between:

  • Creative goods (visual and performative arts, crafts; audiovisual, design, new media, etc.)
  • Creative services (architecture, culture and recreation, research and development, advertising, etc.).

Exports of both reached $646 billion in 2011, but services grew 70% faster than goods as these transactions are increasingly done over the Internet.

Creative trade is less volatile than commodities. Proof of this is that it withstood the global financial crisis better than sectors such as oil. While sales by the Organization of the Petroleum Exporting Countries (OPEC) fell by 40% in 2009, exports of creative goods and services barely contracted by 12%.

Measured in trillions of dollars, if the Orange Economy were a country, it would be the fourth largest economy in the world after the United States, China and Japan; the ninth largest exporter; and the fourth largest labor force with 144 million workers.

The Orange Economy of the Americas has clear global leadership due to the impressive performance of the United States. Latin America and the Caribbean’s trade deficit is enormous in relation to its exports of creative goods and services. More worrisome is the net payments for royalties and intellectual property licenses, as the deficit nearly doubles.

Only 1.77% of the world’s exports of creative goods originate in Latin America and the Caribbean. A little less than a third of these go to other countries in the region, more than 64% to developed economies and less than 3% to other developing ones.

The Orange Economy as an axis of development

Now that the trend in creative trade is leaning in favor of services, the lead will be taken by nations with an intensive digital strategy in “minds” and that make the Orange Economy one of its main development axes for the creation of jobs and wealth. “Mentefactures” such as art, design, video games, films and handicrafts carry with them an intangible symbolic value that exceeds their use value.

Another option is to convince the talent of the 107 million young people (between 14 and 24 years old, living in Latin America and the Caribbean) by early adoption of business models based on “mentefacturas” (base of an Orange Revolution) and build an empire based on this creativity.

Access (virtual or physical) is key, as is contact between audiences, content, creatives, entrepreneurs and technology. Access and contact are the fundamental catalysts to generate innovation that derives from the cross-fertilization of ideas, uses, interpretations, customs.

Currently culture as a whole is treated by society as a public good, this situation does much harm to artists and creatives, as it denies them at least two fundamental rights: the recognition of their activity as a legitimate job and adequate remuneration. At the same time, it denies society the progress that artists, creatives and their entire value chain can bring.

Cultural exchange and economic processes that transform symbolic content into goods and services for society are constantly evolving. Today, the nature of content consumption is niche. It is necessary to adopt an Inter-American Market of Original Contents (MICO).

In the development of the Orange Economy it is possible to close the social gaps and bring the humblest people closer to the most privileged people around a common purpose. And there are many people who have the motivation to use the tools of the Orange Economy in social integration.

Posted by ConnectAmerica