SHAIN SHAPIRO, MICHAEL SHELDRICK and TSHEPO MAHLOELE: How music and culture can drive economic development

The need for a radical rethink of economic development has never been more pressing. With the urgent issues of climate change, migration, escalating global conflict and rapid technological change, the time to reimagine the development sector is now.

To do this, it is important to expand the sectors and disciplines that are traditionally factored into global development programmes and indices. A sector that is both accessible to everyone and powerful enough to spur change and potentially offset job losses from artificial intelligence (AI) is the creative industries.   

It is clear that the world’s approach to development needs a shake-up, as only 15% of the UN sustainable development goals have been achieved so far. Furthermore, global poverty saw a surge in 2023, with 712-million people living in extreme poverty, an increase of 23-million from 2019. The World Bank has projected that a further 216-million people will be displaced due to the climate emergency by 2050, with more than a third of them in Sub-Saharan Africa.

According to the World Bank, 55.3% of South Africans live in poverty. Finally, the IMF has expressed concerns about how the productivity benefits from the AI revolution might bypass countries in the Global South, leading to exponential growth in inequities between countries even as technology expands. 

Of all industries that could have an impact — and hastily improve — international development outcomes and withstand the disruption to jobs of the coming tech revolution — the creative industries are statistically one of the most lucrative. Take music — the global sector grew by 10.2% in 2023, with Sub-Saharan Africa the fastest-growing region for a second year. For SA specifically, its value is expected to grow by 10.68% by 2027, and across the continent streaming revenue alone is predicted to grow to $314.6m in 2026 compared with $92.9m in 2021, while access to Wi-Fi and mobile banking continues to expand.

The opportunities in film and audiovisual are much the same. According to the UN Educational, Scientific & Cultural Organisation, the sector employs 5-million people across the continent. What was once valued at 2% of global GDP, according to UN Conference on Trade & Development, is now closer to 4% and growing.

Given this potential it is no wonder that countries such as Nigeria, long reliant on oil extraction revenues, are setting bold targets to generate $100bn of their GDP from the creative industries by 2030. Yet, handbrakes remain in place that keep the industry from achieving its full potential. Nigeria’s music market generates just more than $2bn per year, way below what it should given the popularity of Afrobeats and other regional genres.

One reason for this stunted growth is that most of the money produced in the creative industry is derived from transactions we can’t see — through intellectual property registration, compliance and trade. And here is where the world, en masse, lacks regulation, resources and understanding of the money that can be earned.

In most nations, including Nigeria and SA, effective intellectual property (IP) regulation is absent; with it, there is no respect for these products as economic goods. When IP regulation is lacking or poor culture becomes more of a utility — merely a cost to society — and less of an economy, as it is often removed as a domiciled revenue generator that can be tracked in and by local economies.   

If countries have inadequate systems to track IP it does not mean IP isn’t generated. It is just offshored to other markets, and with it the income it generates. Instead of using this growing area of income to invest in jobs and skills locally, the creative IP is registered to a foreign copyright management entity because it is the only path to capturing the value generated from its usage. With AI expansion and its potential to mimic artists’ likeness, sound and lyrics, having the right IP protections in place will be even more crucial to safeguarding the economic value of music and culture as it contributes to a nation’s GDP.

When culture cannot be tracked in GDP, it limits the arguments that can be made to invest in music education and infrastructure, further holding back the industry from reaching its potential. This includes the creation of new jobs ancillary to and supporting creative industries, from production to live events to photography. More than 100 countries lack foundational policies and compliance for culture to be treated as an economic good, resulting in ad hoc programmes that create a postcode access lottery.

This is made worse because most governments lack the knowledge to develop economic policies to support these businesses. As a result, how money is made in music or film, for example, is often disconnected from investment decisions taken by governments and international development institutions. Consequently, few development banks have introduced investment products to leverage these sectors for development. While green shoots exist in film and fashion, there is no global framework to understand and measure the impact of these sectors as development tools.

What does this lead to? A global missed opportunity everywhere. When there is no investment in culture and music it becomes far more challenging to tour — whether you are a band, an exhibition or a film- because there is no infrastructure to do so.

Meanwhile, making money from one’s artistic and creative pursuits becomes a mere pipe dream rather than a legitimate career choice, which it could be with the right infrastructure and policy protections. As a result, value leakage in the music industry is estimated at hundreds of millions of dollars. Such lost revenue is not because we are not consuming art, it is because the foundational ecosystem set up to monetise it is inefficient and antiquated.    

To change this we need the creative economy to be a pillar of development investment. The World Bank, IMF and other funders could create a creative economy unit to develop large-scale, multi-territorial financial instruments for the creative economy. It could enrol partners such as international advocacy organisation Global Citizen, whose Move Afrika programme seeks to stimulate investment in live event infrastructure. It could tie low-interest finance to a requirement to develop robust, compliant intellectual property infrastructure and the education and partnership to do so in a cost-effective, non-extractive manner.

We could commit to ending offshoring and a global goal to ensure all countries, should they wish to, have non-partisan IP management entities. To spearhead this we must launch a global creative industries development plan to embed the required understanding of these sectors, starting with the UN, World Bank and IMF.   

Music, art, film and culture have always been tools for raising awareness and uniting and promoting action. Indeed, it is listed as the 42nd aspiration of Africa’s Agenda 2063. However, the true value of this culture is not only in its ability to influence but also in its capacity to create systemic, long-term passive income for the creators, as well as a whole chorus of supporting jobs.

However, to do that we must recognise the creative economy as just that; one that can be robust and thriving everywhere. Doing so can address our biggest challenges — making us smile, dance, think and unify.

• Shapiro is founder and executive director of the Centre for Music Ecosystems; Sheldrick cofounder and chief policy, impact & government affairs officer of Global Citizen; and Mahloele founder and chair of Harith General Partners.