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Prepared by VANUS JAMES Senior Fellow; Adj. Distinguished Professor, University of Technology, JA For WTO Regional Workshop on the Creative Industries and Intellectual Property for countries of the Caribbean Modified for WIPO Training of Trainers, Jamaica 6/6/2012 CONTRIBUTION OF THE COPYRIGHT INDUSTRIES TO DEVELOPMENT
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WIPO has engineered a number of studies of the copyright-based industries around the world. They all seek to determine the share of GDP, employment and trade in the participating country. This note: Explains the broad grouping of copyright industries used in measuring the contribution to development Reports some of the evidence for Caribbean countries Reports some of the benchmark data Explains why the data are important for an understanding of the contribution of the sector to development WHAT IS COVERED
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1.Core Copyright Industries 1.Core Copyright Industries, which exist to create, produce, and/or distribute copyright materials. Creation and production include performance, broadcasting, communication and exhibition. These include a.Press and literature. b.Music, theatrical productions, opera. c.Motion picture, video and sound. d.Radio and television. e.Photography, visual & graphic arts, related professional & technical services f.Software, databases and new media. g.Advertising services. h.Copyright collective management societies. MAIN GROUPS OF COPYRIGHT INDUSTRIES
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2.Interdependent Copyright Industries 2.Interdependent Copyright Industries, which are engaged in production, manufacture and sale of equipment whose function is to facilitate the copyright activities. These include TV sets, radios, DVD players, electronic game consoles, computers, musical instruments, photographic instruments, blank recording material, and paper. 3.Partial Copyright Industries 3.Partial Copyright Industries, whose main activities may not be copyright but include a significant component that is based on copyright as defined in (1). These include architecture, engineering and surveying, interior design, museums, and furniture design and jewelry and coins. MAIN GROUPS OF COPYRIGHT INDUSTRIES
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Non-dedicated Support Industries 4. Non-dedicated Support Industries (not elsewhere counted), which are the distribution industries that facilitate broadcasting, communication distribution or sales of copyright-based activity but which have not been classified in the core or partial copyright activities. These are intended to measure spillover effects of the Core, Interdependent and Partial Copyright Industries but are in themselves not normally thought of as copyright activities. The industries include general wholesale and retailing, general transportation, telephony and the Internet. MAIN GROUPS OF COPYRIGHT INDUSTRIES
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Jamaica Jamaica – estimates for Jamaica need to be updated!!! 2005 4.8% of GDP 3.03% of jobs Trinidad & Tobago Trinidad & Tobago, despite the overwhelming dominance of the petroleum industry, copyright-based industries contributed: 2011 4.8% of GDP 5% of jobs 2007 4% of GDP 5.1% of jobs 2000 3.6% of GDP 3.9% of jobs ESTIMATES JAMAICA, T&T
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Data for the OECS show a very strong rising trend in the share of copyright in GDP (St Lucia). OECS DATA
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Contribution of Copyright Sector by Country Conducting WIPO-Sponsored Studies NoBaseline YearCountryContribution to GDP (%)% of Employment 12011Trinidad & Tobago4.85.0 22007USA11.128.49 3 Australia10.308.00 42005Korea8.674.31 52009Hungary7.407.20 62006Panama6.956.35 72006China6.416.50 82004Russia6.067.30 92005Netherlands5.908.80 102005Malaysia5.807.50 112004Singapore5.805.90 122005Romania5.544.17 132007Kenya5.323.26 142007Slovenia5.106.80 152000Philippines4.9211.10 162005Jamaica4.803.03 172003Mexico4.7711.01 182005Lebanon4.754.49 192008Bulgaria4.544.92 202004Canada4.505.55 212006Pakistan4.453.71 222004Croatia4.424.64 232000Latvia4.004.50 242005Peru3.602.51 252005Colombia3.305.80 262005Ukraine3.471.91 272005Brunei2.003.30 Average5.535.81
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The share of each sector to GDP, employment, and trade are the “weights” that determine the impact of the sector on Labour productivity and labour productivity growth. Import productivity and import productivity growth Productivity growth is the central driver of development. Countries like the US extract a high contribution from copyright to their productivity growth because the sector contributes a high share to output and employment. US – 11.12% GDP; 8.49% of jobs Australia – 10.3% GDP; 8.49% of jobs WHY RELEVANT TO DEVELOPMENT?
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Development combines per capita income, education and healthcare to raise living standards Standard of living depends on both labour productivity and import productivity. Growth of productivity depends on the structure of the economy – this is a major reason the copyright sector studies are important Structure of economy depends on: a.a high capital-labour ratio, which is really a multiple of consumption per worker and the ratio of the output of capital to the output of consumer supplies, b.a high capital-import ratio, which is really a multiple of the capital- exports ratio and import productivity in the export sector. c.both, as is most likely. (a) and (b) are the keys to relevant development cooperation DEVELOPMENT WITH COPYRIGHT
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Capital output includes the major capital services of education, healthcare, housing, music, press and literature, and the like. Music, press and such activities, are core capital outputs of the Copyright-based sector These are high productivity activities As their collective share in the economy, employment and trade grows, so does the development prospects of the society. COPYRIGHT AND DEV, CONT’D
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Policy Model Used Econometric model of the nexus of profits - labour productivity – import productivity Explanatory variables included Export-output ratio Import-domestic shipments ratio COPYRIGHT AND DEVELOPMENT POLICY
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Parameter estimates show Main basis on which copyright sector is likely to be generating its advantages is a rising share of domestic capital in total capital used a high ratio of demand for domestic intermediates through the interindustry system High ratio of music exports to total music output – note, music is a capital service The ratio of domestic capital to imported capital has the biggest impact on the profit share the productivity of imports, which then transmit positive impacts to labour productivity. PARAMETER ESTIMATES
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The policy implications Grow the ratio of output of capital-to consumer supplies Grow the capital-exports ratio –> increase exports of domestic capital Focus on growing domestic capital as a share of total capital Focus on growing skills as the main component of the domestic capital Implications are consistent with the suggestions of the successful players in the industry. This approach to policy is not strictly consistent with trade restrictive approaches to support for the copyright sector. POLICY IMPLICATIONS
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Evidence suggests the copyright sector Can thrive and grow in a competitive global environment, without trade restrictions. Should be supported in its efforts to take advantage of the expanded access to a global market in the relatively free trading context. Should be supported in its efforts to grows domestic capital, especially for export. POLICY CONT’D
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The nonlinearities – quadratics - in the estimated model suggest that there are multiple solutions Implies that a strong push to good governance is a necessary component of the policies required to take advantage of the potential of the copyright sector. In addition, the copyright industries are themselves democratizing industries, in that a large segment of the industry wields substantial public education power. This suggests that the single largest domestic capital development project needed is one that develops systems of governance that promote reliance on the will of the people. POLICY FINAL
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THANK YOU
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