Just how big is India’s creative economy?

The creative economy can be leveraged to revive economic growth in India. A large entertainment sector and diverse cultural traditions form a strong backbone of creative capital. The commercialization and monetization of creative works generate a chain of economic activity and drive the production and consumption of goods and services. Intellectual property rights, such as copyright, are at the heart of this process. Copyright provides incentives and protections for the production of new creative works. Despite this potential for generating growth and employment, the contribution of India’s creative economy was never measured using a verifiable methodology and data from the public domain, until now.

The first step to realizing the economic potential of any sector or industry is to measure its existing value. The World Intellectual Property Organisation (WIPO) provides a standard methodology to evaluate the economic contribution of copyright-relevant industries in terms of value addition, employment and trade. I follow the WIPO methodology for India, using data from the Annual Survey of Industries, CMIE Prowess, and various industry reports, to estimate the value of India’s creative economy.

First, consider value addition. Globally, the creative sector has a share of 5.5% of total output, in terms of value-added. In India, gross value addition (GVA) from copyright-relevant industries was ₹89,000 crore in 2016-17, and at 0.58% share of total value-added, it is a tenth of the global average. Part of this asymmetry stems from the lack of data in the services sector. While the Annual Survey of Industries spans manufacturing activity, the data on services at the narrow industry level required to identify and estimate the value of copyright-relevant services remains unavailable. The Central Statistical Office releases GVA figures under a 2-digit industry classification. The availability of GVA figures under a 4-digit classification will give a much more realistic picture of the value contribution of copyright-related industries, especially as most creative activities are classified under services.

However, a low share of value-added to India’s gross domestic product (GDP) by copyright-relevant activity cannot be attributed solely to the lack of data on services. For instance, in manufacturing, where formal sector plants data is captured, the contribution of copyright-relevant work (including the contribution of design of apparel, toys, games and furniture, for example), is about 2.8%. This is still lower than the global average of 5.5%.

The composition of value addition across copyright-relevant industries follows the patterns of other countries, with the highest value addition from core copyright industries. These are industries which are wholly involved in copyright-relevant activities, including press, literature, dramatic arts, music and film. They contribute 45% of total value added in the creative economy. The second highest contribution is from interdependent industries, at 40%, which include distribution of creative works through radio and television. The rest of the contribution is made up of non-dedicated or partial copyright industries, which range from design to information and communication technologies.

Now, let’s look at employment and trade. The measurement exercise also reveals that copyright-relevant industries employ around 1.1 million workers in India. With the right growth impetus through policy and markets, the creative economy can create a large share of jobs in the future. This is because employment elasticity is high, with 10% growth in value-added stimulating an 8.7% increase in employment. Radio and Television account for a large share of existing employment (38.3%), closely followed by motion pictures and video (32%). Press and literature cover another 26.5%. Shares of other industries are relatively low.

The trade deficit of copyright-relevant industries totalled ₹1.10 trillion in 2016-17. The Directorate General of Excise and Customs reports India’s trade in goods, but not our trade-in services. Service imports and exports data can help improve the valuation of the creative economy.

How could policy action help? India can support value generation in the creative economy by modernizing the legal framework governing it. The Copyright Act was last amended in 2012 when the digital creative economy had limited presence. In 2012, less than 13% of Indians were connected to the internet, and most still had feature phones. Today, more than half the country is connected to higher quality internet. India sees over 400 million unique site/app visits every month, 97% of which are directed at entertainment content such as audio and video streaming. Consequently, the legal framework must be revisited and rebuilt, to support a fast-paced creative environment, with more freedom to contract, dynamic forums for dispute resolution and greater capacity for enforcement.

Lack of detailed data for the services sector as well as the informal sector remains the biggest barrier inaccurate evaluations of the true value of India’s creative economy. The WIPO methodology helps estimate the value of copyright-relevant works in developed countries more readily than in developing nations, where large segments of the economy remain informal. Qualitative aspects of copyright can further help us build understanding in this relatively understudied segment. Surveys, interviews, and community-sourced data are key resources in this regard. This includes understanding the economies of small artists and musicians, and the millions of informal workers across all creative industries. Measuring their contribution would be the logical next step.