News, Views and Commentary

People Who Really Know: A Focused Response to Vasant Bharath's take on the Creative Industries.

November 23, 2012

"We have not destroyed the creative industries sector, what we're trying to do is strengthen it by putting some commercial sense and commercial acumen into developing the sector with people who have succeeded in those areas...who have been there, who have done that, who have been successful, who know what to do, who have the international contacts, who have the network. Who better to lead these sectors than people who have already done it in their private activities and businesses and are now willing to give back to the people of Trinidad and Tobago?"
—Sen., the Hon. Vasant Bharath MP, speaking at a breakfast meeting at the TT Chamber of Industry and Commerce. 20 November 2012.
On Tuesday, November 20, Trade Minister Senator Vasant Bharath spoke to a collected meeting at the TT Chamber of Industry and Commerce, placing in the public domain his opinion of the viability of the creative industry sector. Some key points in his short intervention of his planned breakfast speech were:
  1. His intention to refocus the sector because of his objection to the practice of "money that is being poured into sectors where there has been no measurement or no timeline or determination of what success will be."
  2. His HR solution of manning the board of the new collated company with people "who understand how to commercialize these organisations into businesses..." so that they won't have to rely on government intervention for success.
  3. His need to get the organizations to a point where they are "commercial vehicles and commercially attractive to the private sector."
I have written before on the threat to the sustenance of a globally competitive creative industry by government intervention via a flawed business model of the special purpose company. More recently, I also wrote on the apparent confusion by the players to the necessary catalysts for industry growth and sustenance. I return today for the final part of this evolving trilogy to respond directly to Minister Vasant Bharath under whose ministry the newly founded TT Creative Industries Company (TTCIC) will fall. As said, that state enterprise is supposed to focus and provide a sense of measurability and return on investment for the millions that the government has spent prior, some $80M in "entertainment and film," two sectors defined in his mind by the companies, TTEnt and TTFC respectively. He did not quantify, obviously, how much money was "poured" into steelband and calypso from other ministries via subventions, grants, royalty payments or payment for services. He also did not quantify or want to quantify for this selected audience, the real economic impact of the creative sector as it is today.

By his reckoning, the only solution to the dilemma of a stagnant creative industry sector is to power it up with people "who have been there, done that." The persons named by the minister: Derek Chin, Meiling, Christopher French, and Donna Chin Lee, whose name he couldn't remember, begs the question of how well does he know these titans of creative commerce. His accolade of one named board member has riled a few persons on social networks associated with the craft as to the named board member's bona fides. In a small developing country, the standard rules don't always apply. I remember in my university days when a statistics lecturer made an eye-opening revelation that the formulae and rules we use generally work for large populations, but have to be modified for small ones. That distinction works whether we are speaking about bacteria count or relative success of creative enterprises in TT versus the UK.

Tried and true always wins an argument for me, and the notion that success in wooing cinema goers to a Cineplex with blockbuster films with individual budgets approaching US$200M is the same winning formula needed to develop an entire film industry with an investment of less than TT$100M is a myth worth debunking. The portfolio of Minister Bharath covers Investment as well as Trade and Industry. The minister must be aware that there has been steady investment by private sector companies in the arts and culture. The rush to catalyse the creative industry growth pole from "undisciplined" micro-entrepreneurs to an "industry" is apparent and unfortunate. Differentiation of the industry between more market-based segments and the more culture-related segments was absent from Bharath's intervention, and his focus negates the real economic and workforce impact that the industry has on the local economy. Unstructured yet dynamic and fluid, some segments of the industry—pan, Carnival—have grown and have been exported despite government intervention.

The multi-sector approach to make this service sector a growth pole is organised ultimately by the Ministry of Planning. That ministry has shown its hand in how it wants to catalyse creative industries: spend "other people's money" to create an enabling environment. Hansib Publications out of the UK was the recipient of a government investment to republish and rebrand its successful Terrific and Tranquil coffee-table book to The Gold Book. Machel Montano is the recipient of approximately TT$5M to produce "Going for Gold" multimedia package with the hope that some profits would to accrue create a fund to "assist with music development." It seems that the 50th anniversary of Independence was a time for action. The long lasting action, aptly described by others such as Rubadiri Victor of activist NGO, Artists' Coalition of Trinidad and Tobago, is given short shrift for instant eye and ear candy!

Trends in consumer engagement with creative products have evolved to shift the balance of revenue streams away from tangible products to services and intellectual property revenues, but the case for government intervention does not lie anymore in a failed state enterprise business model focussed on creating and selling a product to a private investor, moreso a foreign one. The irony of another state enterprise intervention into economic activities as opposed to Public-Private partnerships for example, is exposed when listening to Minister Bharath's mantra of not relying on "government intervention for success." That was exactly the rationale for the state enterprise sector!

A WIPO commissioned study a decade ago on best practice cases specific to the music industry found the following:
Governments in developing countries would be well advised to consider carrying out following types of initiatives in support of development of cultural enterprises:
  • to provide, whenever possible, medium and long term finance for cultural enterprises;
  • to consider finance and guarantee schemes in local currency;
  • to assist business with business development services;
  • to share the risks and responsibilities with cultural enterprises;
  • to disseminate information on financial innovations;
  • to assist commercial banks in developing their core competitiveness in providing financial services to SMEs in cultural industries;
  • to assist cultural enterprises in developing their core competencies;
  • To join with private partners in creating public-private funds and investments banks to assist SMEs especially those in Cultural industries;
  • To set up/strengthen development banks to adopt a sectoral approach toward cultural industries;
  • to promote policy dialogue between governments, domestic commercial banks, and other partners to create a supportive financial environment for cultural industries;
  • to provide long-term assistance through loans and equity;
  • to engage in complementary capacity-building for specialized financial institutions and SMEs in cultural industries toward business development service providers;
  • To accelerate the inclusion of SMEs in CULTURAL INDUSTRIES into the formal financial sector (UNCTAD, 2001).
—Wallis, Roger, et al. "Best Practice Cases in the Music Industry and their Relevance for Government Policies in Developing Countries." Geneva, UNCTAD (2001). 47-48
Is TTCIC going to do any of these things? This is a plan of action for the Trade ministry that can be extrapolated to cover most of the creative industries, but the constant is that government intervention, even in TT, should not be in competing with entrepreneurs to reward a few "people who have been successful," with board positions. More successful entrepreneurs than those named have been on state boards with little to reflect in diversifying the economy. The manufacturing sector despite the intervention of IDC, EDC and TIDCO has not become globally competitive, but rather regionally focussed, if only relatively successful. For all these years later, one would have thought that we would be able to compete with India and China or Viet Nam! Industry is the segment of economy concerned with production of goods. Creative industries are about goods, services and intellectual property. Focus on that, Mr Minister.

© 2012, Nigel A. Campbell. All Rights Reserved.

Crosstalk and Jargon, or How To Confuse the Words Creative and Industry!

November 19, 2012

"Globally, creative industries are estimated to account for more than 7 per cent of the world’s gross domestic product and are forecast to grow, on average, by 10 per cent a year. While the economic and employment-generating potential of these industries is vast and many developing and transition countries have great potential in this area, most are still marginal players, despite their rich cultural heritage and an inexhaustible pool of talent. That position reflects a combination of domestic policy weaknesses and global systemic biases."
—U.N. Conference on Trade and Development, 11th Session. Creative Industries and Development. (TD(XI)/BP/13). São Paulo, 4 June 2004.

The idea and nomenclature of a "creative industry" are novel in Trinidad and Tobago when prior to this year we talked about a fledgling fashion industry (catalysed by Miss Universe 1999 and Anya's win of Project Runway, among others), a film industry (catalysed by Hollywood coming here in 1957 and 1960, to Sharc Productions in the 1970s to The Mystic Masseur in 2000), a Carnival industry and a music industry based on calypso and steelpan and soca (from forever!) Jargon is a hell of a thing. Again from the UNCTAD document: "...the designation marks a historical shift in approach to potential commercial activities that until recently were regarded purely or predominantly in non-economic terms."

Sen. Larry Howai MP reading 2012/2013 budget
In the 2012/2013 budget statement, the Finance Minister, Larry Howai said that the government "identified a number of areas for growth and investment with substantial trade opportunities." Prioritizing them, he identified "...fifth [out of seven; such low hope?], is the creative industries which cover film, music and entertainment, fashion and arts and the associated establishment of Trinidad and Tobago as a premier film and television production centre. This represents one of our key public policy initiatives for the creation of employment and national wealth." This collective term suggests we have to collectively develop. Hence, it would seem that in the minds of Cabinet, a TT Creative Industries Company (TTCIC) is a natural follow-through for this amalgamation of creativity to become an industry. Former Planning minister Mary King was a proponent of a knowledge-based economy as a growth pole, so the idea of a creative industry would be a natural result of her input at cabinet level.

A problem here is that stakeholders had initially glommed onto this phrase without comment, but raised a noise when hints and allegations flew about the pending reality of the TTCIC and the make-up of its board. We are having crosstalk when arguments are offered that border two trains of thought. The big question would be how does a government policy straddle two segments, mainly market-based and mainly culture-related, commerce and creativity, to achieve an acceptable goal? The other problem is that the TTCIC won't work here.

The focus on what works and what does not work backed by emperical evidence is a methodology for success. The gestation period for creative ideas is longer than other economic ideas in traditional industrial or commercial activities, and the ability to breach the divide in thinking between traditional institutional funders, say, and creators will be an asset as stakeholders try to convince policy makers that the creative bloc, despite being dominated by micro-enterprises, can and will make an economic impact with the right conditions. I have already written on the potential for disaster in continuing with the state enterprise model to catalyse creativity into mass enterprise that creates sustainable jobs and redefines us globally as masters of our domain. This is the government's rationale for involvement in state enterprises:

Government [GORTT] will retain or acquire equity in the State Enterprise sector only where such ownership is integral to the achievement of policy objectives for the sector in which the Enterprise is located. GORTT will concentrate on providing facilitatory mechanisms, including the removal of constraints to investment in commercial activity and the establishment of the appropriate institutional, regulatory and incentive framework. It is recognised, nonetheless, that there may be instances where state equity participation is necessary, or may become necessary, or where the private sector is not willing to take the risk in the absence of the State’s direct participation. It is not envisaged, however, that such participation should be long-term in nature and enterprises should be divested to the private sector as soon as this becomes feasible. (My emphasis.)
—Ministry of Finance. Investments Division. (2011). STATE ENTERPRISES PERFORMANCE MONITORING MANUAL. [Port of Spain]: Ministry of Finance.
I should be happy that the government sees this as a short term move, yet with all the super-entrepreneurs available out there in the local landscape, it is surprising that there are no takers in creative enterprises. What do they know that the average capitalist doesn't? Or is it just easier for entrepreneurs to get a no-risk, low-risk board position at a state enterprise? This policy, thus, addresses the decision to wind up TTFC and TTEnt, so any counter-arguments must be based on another vision. Objective solutions to subjective problems. Of note, agriculture, although lower on the growth pole than creative industries, has five state enterprises versus the two already existing in TTFC and TTEnt. [If communications technologies are included, add four.]1

There is much talk in the 2012/2013 budget about the film industry. There is rumoured to be a centralized Film City, a variation of Mary King's centre of innovative excellence. Trinidad Guardian Business editor, Anthony Wilson effectively discarded that idea earlier this year.2 Stakeholders swear by the efficacy of retaining the TTFC. Some argue that the new planned super-company's budget, once divided up to handle various sectors would leave little on the table for specificity. Others argue that amalgamation needs skilled persons without noting the irony of a specialised TUCO or PanTrinbago effectively proving the point of non-professional boards being economically unsuccessful, and the harsh reality of having more sub-sectors than the idea of a creative industry can possibly manage. The budget for the TTFC was already small, but local stakeholders seem happy with the growth of the film industry. The problem is that there is no globally competitive industry in the real sense of the word: a micro-industry, certainly, with potential for development across all facets of the sector from creative to technical to education to commercial. Sustained interest and growth of the sector against all odds become necessary.

The juxtaposition of creative and industry, and the enhanced expectations as the clock winds down on oil and gas, leads to rash behaviour by the political forces to rig solutions that may look great on paper, but as history has shown, aren't the best uses for our meagre financial resources. As proof, we can read:
Machel Montano
Minister of Planning and the Economy, Dr. Bhoendradath Tewarie is standing by the decision to fund Machel Montano’s ‘Going for Gold Album.’ ...Tewarie admitted that the idea [to fund Machel's Going for Gold Album] is all Machel’s. However, Dr. Tewarie said it is in keeping with government’s thrust to stimulate the industry. Dr. Tewarie disagrees with the view that the state is funding a private project of the Soca star. He also responded to critics who argue that foreigners should not be included in the album which is being specially produced to commemorate this country’s 50th anniversary of independence. Pitbull, Beenie Man and Chaka Khan are among the international artistes who are on the album. Dr. Tewarie believes the collaboration is good for the local music industry. On the question of the cost of the project, minister Tewarie preferred not to comment, except to say that it is an investment.
—Francis, Oprah. "Minister defends decision to fund Montano's album." i955fm.com. 25 July 2012.

There is now a pattern by this government to take risks with the people's money or assets to invest in entertainment and enterprise. The confidence with which Derek Chin has asserted that his Streets of the World enterprise has the government's blessing is made clearer with the knowledge that Sen. Tewarie is also the line minister responsible for the planning permission for Chin's mini-city, the valuable Invader's Bay land being the State's equity in the project.3 This is no different from Anil Roberts funding a flopped Nicki Minaj concert in 2010 or worse yet, Hochoy Charles of the THA funding a bigger flop Ringbang Concert featuring Eddy Grant in 1999. The nexus between creative entrepreneurs and the willingness of governments to "try a thing" begs the question of their [governments'] suitability to make decisions on creativity. Beyond creativity, however, we have a yawning indifference to what's happening until it's too late. Where have we heard this before? Spending money does not automatically make an enabling environment. Old news, same story.

Former Trade minister Steven Cadiz MP with yacht services entrepreneur
I don't know if many remember there was talk of a yacht services "industry." This island was located outside of the hurricane belt, and was an ideal location to dock boats in that season, and as such, services grew. Peake Marine bought a special hoist to lift boats out of the water, and a number of service operators and micro-entrepreneurs grew from there. That "industry" has shrunk now due to, among other reasons, poor quality standards, assurance, and control, and low value-for-money. In 2000, "approximately 3,250 yachts arrived in Trinidad seeking a safe port of call for repairs, supplies and general maintenance. The industry averaged US$120 million a year. By 2009, the yacht arrival figure had dwindled down to 1,379 vessels and generated just US$40 million in revenue."4 A combination of the quality problems and archaic government agency regulations led to customer choice determining that Trinidad was not worth it anymore. Between 2011 and 2012, the government promised to put a hand by creating an enabling environment via modern and improved legislation and training local service providers. The promise has not been kept, and the cycle or decline continues. Old news, same story. By the way, this industry now called maritime services is ranked sixth as a growth area, one above agriculture. This government inaction should not be the vision for the creative industry.

Steps to be taken by all parties, government and stakeholders, to avoid crosstalk:

  1. Enactment of a National Cultural Policy, first!
  2. Elucidation of the structural problems of the industry in the context of the wider economic space locally. Recognition that the industry segments share the common feature of the creative act as the core of their value-added, but they possess very different structures in some cases.5
  3. Effective negotiation of appropriate incentives to monetise the cross-fertilisation of the industry via the myriad transaction networks and income streams.
  4. Enhancement of legislation for intellectual property and rights in a digital age.
  5. Embracing the fact that in a capitalistic space, some will win and some will lose, so the impetus to create a globally competitive product should not dim. Build a body of work, and with it, innovate and build the distribution channels for maximum impact and social influence.

Stakeholders' conversations with policy-makers can't only be about identity formation and nation building, and cultural confidence, but must address economic empowerment.6 These new growth poles have to generate $10-15B in taxes in five years to "float this boat" when oil and natural gas are done, so arguing about budgets for funding projects is the small money hustle we can't afford to dwell in. Our strength comes from a united voice balanced with members of both the creative and industrial. We, as stakeholders have to recognise that the Ministry of Arts and Multiculturalism is not talking the same "language" as the Ministry of Finance or the Ministry of Planning. Our goal has to be multi-lingual in the vagaries of bureaucratic and technocratic jargon and philosophies to drive the attainable goal of engendering a commercially viable and globally competitive cultural and creative industry.

  1. Ministry of Finance (2012) State Enterprises Investment Programme 2013 [Port of Spain]: Ministry of Finance.
  2. Wilson, Anthony. "If Mark Zuckerberg were a Trini...?" Trinidad and Tobago Business Guardian. Feb 16, 2012.
  3. John-Lall, Raphael. "MovieTowne’s Derek Chin to open T&T to the world." Trinidad and Tobago Business Guardian. Jul 7, 2011.
  4. Gonzales, Gyasi. "Yachting industry in decline: 1,400 jobs under threat." Trinidad Express Newspapers. Dec 28, 2010
  5. Dapp, Thomas F. & Ehmer, Philipp. Cultural and creative industries: Growth potential in specific segments. Deutsche Bank Research. Apr 29, 2011.
  6. Nurse, Keith, et al. The Cultural Industries in CARICOM: Trade and Development Challenges. Caribbean Regional Negotiating Machinery. Dec 2007.
© 2012, Nigel A. Campbell. All Rights Reserved.

Creative Industries Company has a heritage that should be avoided.

November 15, 2012

I recently saw a movie at Movie Towne (Skyfall, it good!) and before the main feature a short movie/promo was shown with Derek Chin presenting his "Streets of the World" project to all assembled. He was acting as if it was a done deal. He spoke to all watching and listening there like this was the fillip for the creative and entertainment industries. He promised a cinema for exclusive display of local film, and designs of streets by Carnival artists such as the late Wayne Berkley, Brian MacFarlane and Rosalind Gabriel along with a Carnival museum. There would be work for musicians, dancers, actors, and other creative types. In one fell swoop, all the ills of the industry would be cured. His short movie message was not muted. The captive audiences were the new messengers of a vision of fun in the sun with profits for all.
Artist's impression of Streets of the World

This Dubai duplicate on the Foreshore would quiet the din of protest against his presence on the Board of the planned TT Creative Industries Company (TTCIC) and its operation thereafter. To the unaware politician or the uninitiated onlooker, Chin represents the entrepreneur necessary for an industry to exist, and more like him would suffice as a beginning of that industry. The suitability of this man as chairman of TTCIC would be proven by his risk taking gamble of $2B for the benefit of TT creative types. [The question of the acquisition of the land on the waterfront valued at over $1B has been raised by the JCC, and they would show how the bids for the land would not redound to the benefit of taxpayers. That chicanery in the guise of investment, while par for the course in TT investment history, would be dealt with elsewhere.]

The cogent argument against the TTCIC thus could not be the personnel at the head table taking directions from the line minister, but the precedent of failure already meted out by this business model to drive the creative industry towards profit and denting the GDP percentage. The special purpose company approach has not generally yielded positive results outside of the energy sector. TIDCO in the 1990s was to be the catalyst for growth of the non-oil sector by collating IDC, TDA and EDC (Export Development Company) into a super company. TIDCO's mandate, among other things, was to ensure that the industry is well positioned to compete effectively in the global arena by promoting the holistic and sustainable development of the entertainment sector. The purpose was nebulous, the focus was unclear.

TIDCO's history vis-à-vis the arts has a major black spot in the name of World Beat Festival which racked up losses of close to $10M for a failed annual event. (For more, see http://on.fb.me/QToN6H) The other dubious investments in Trinidad and Tobago Trade Facilitation Company Limited (trade), Trinidad and Tobago Pageant Company Limited (an adjunct to tourism and fashion), and Vanguard Hotel Limited (tourism) never yielded profit. Piarco Airport Development Project was another TIDCO project. Note that the infamous Ishwar Galbaransingh was the chairman of TIDCO. Hello Section 34!

A more current example would be the TT Entertainment Company (TTEnt) that was to serve as a facilitator of the development of a globally competitive entertainment industry. That has not happened. By comparison, the TT Film Company, with its more focused objective of developing "the national film industry through the provision of service and support," has been championed by its stakeholders as a necessary organ for the sector. The cries of "don't dump the film company" are loud for this under-funded special purpose company. The paucity of effective management available to the government for these state enterprises becomes clear. Additionally, super-entrepreneurs (Duprey, Lok Jack) have served at board level of special purpose companies (BWIA/CAL) only to see losses associated with their names. What's in Derek Chin's future? Are the “shine of his Japan and the sparkle of his China” better than the rest?

The rules of the running of this company, still secret, along with such important legislation such as the procurement legislation, still outstanding, allows for the feared run on the treasury by over-ambitious board directions trying to fast-track policy mandates and platform election promises. In the music sector, we have already seen the investment of $5M by the Ministry of Planning into Machel Montano's still-to-be-released Independence CD project with information showing that this "winning horse" got the deal of the century: an advance with the ability to share in gross sales of an over-priced product for this market that has acclimatised itself to $10 DVDs and CDs from bootleggers, and free torrent downloads. A portion of sales is said "to establish an investment fund for the development of the creative industry." The funding of the creative industry is based on this flawed business model. The intent of this industry being a growth pole seems diminished now.

Allied with this mindset locally are the stated opinions of both the Director of Culture and the Minister of Communications to bypass legislation necessary for effecting local content increases in broadcast in favour of suasion and incentives. Peter Campbell writing in the TT Chamber’s Contact magazine in his 2010 article, “Tax Incentives for Cultural Industries.”, said the following then:
Although an attractive taxation incentive package exists for corporations wishing to invest in the arts and culture, the interest it has generated is low. “There still is generally little interest from the private sector. There is indeed an adequate framework of incentives, but the perceived before-tax financial returns of embarking upon business ventures which actively and directly promote arts and culture does not seem to pique a lot of interest,” says Wade George, Regional Service Line Leader, Tax Services, Ernst & Young. “...the tax incentives for the industry are there, but to find the people with the right vision to seek out the market to make such investments viable is another issue. The question, therefore, is why isn’t the private sector’s involvement as it ought to be and how you inspire people who have the ability to export culture?”
—Campbell, Peter. “Tax Incentives for Cultural Industries.” Contact 10.1. (2010): 47. Print.

Why after all this time, the message has not gotten through is worrisome in the least, and disrespectful when considering that we elected legislators who seem comfortable relegating legislation to the back-burner for the convenience of satisfying an unmeasured status quo of ineffective governance.

Creative industry stakeholders are flexing their muscles. The tipping point has to be when the collective voice of the dreamer is matched by the collective voice of the cultural entrepreneur both speaking cogently to the policy makers. The still incubating National Cultural Policy identifies within it the separate functions of heritage curation, talent incubation, and economic empowerment. That policy should be at the forefront of any charge to grow the pole of the creative. The industry must be empowered by a mix of enforceable new legislation, enforcement of current regulations, mutually beneficial negotiation of deals, collaborative enterprise between public-private. Nihilistic behaviour by policy-makers has no place here.

It is pleasing that the print media has caught up in the reporting of the objections by stakeholders in the industry to the formation of the super company. Film-makers have come to the front of this march offering reasons such as fear of funding cut-offs, low budget to run the planned new enterprise, and ignorance of who will be running this ship. To date, however, there is no official spokesperson advocating for the company. Actions behind the scenes are happening with the agglomeration of a Board, the winding up of TTEnt, and the silence of the cabal to the protests of stakeholders. The rush is on.

Derek Walcott wrote in 1970 in his essay, "What the Twilight Says", "...the state is impatient with anything which it cannot trade." More than 40 years later, the haste to establish the phenomenon of a state catalysed creative industry to add to the national GDP appears like a throwback to a time when political destinies were tied to results dictated not by its citizens, but some agency of money lenders. The act of doing the same thing and expecting a different result is not a self-fulfilling prophecy. The inevitability of another fiasco looms.

© 2012, Nigel A. Campbell. All Rights Reserved.