Creative Economies in Isolation: Where is the Orange Economy headed in the time of COVID-19

Latin America and the Caribbean is a diverse and culturally-rich region. Its strategic geographical location, variety of climates, and plurality of identities contribute enormously to cultural diversity, which encompasses music, gastronomy, arts and crafts, fashion, and dance—to name just a few. This vast cultural and social diversity has spurred economic growth in recent years, which in turn has led to a boom in commercial activity in these spaces. For example, the region’s tech sector has recently taken off, with companies such as Colombian on-demand delivery unicorn Rappi, Brazilian online food delivery platform iFood, and Panama-based hospitality brand Selina. Global tech companies, such as Uber, now see Latin America as the place to focus their expansion. Similarly, we see fashion transforming within the region as not only a vehicle for expression, but a way to protect cultural heritage—most notably through the renowned Carla Fernández, a Mexican designer, author, and businesswoman. Her approach, which has now become an industry trend, is to opt for a future that is made by hand and sustainable. With the current crisis transforming every aspect of our lives, the question now becomes, how will the COVID-19 crisis affect these industries?

Creative Economies, as a concept, has existed for centuries—even when it hasn’t been clearly defined or categorized. In its most basic form, Creative Economies are based on how people can use their imagination to increase an idea’s value. When formally guided and regulated, a Creative Economy can be a powerful engine of growth and community vitality. According to John Howkins, renowned creative industries speaker and author of ‘Creative Ecologies: Where Thinking is a Proper Job’, creative economies include sectors whose goods and services are based on intellectual property: advertising, architecture, crafts, design, fashion, film, games and toys, music, publishing, research and development, software, TV and radio, video games, and visual performing arts. Together, artists, cultural nonprofits, and creative businesses can produce and disseminate cultural goods and services that generate jobs, revenue, and quality of life.

The “Orange Economy” is a term coined by the current President of Colombia, Ivan Duque, during his time at the Inter-American Development Bank (IDB). For clarification purposes, the “Orange Economy” is shorthand for the ecosystem that encompasses the creative and cultural economies and their associated industries, including design, new media, software, arts, and heritage—particular to Latin America. In this economic model, talent and creativity are the main inputs and resources.

As a vehicle for sustainable development, Orange Economy policies have been very relevant to the region. A study by the British Council, the Organization of American States (OAS), and the IDB highlights that Orange Economy policies range from 2% of GDP output in Chile to more than 10% in Brazil. In Colombia, the proposed host country of The Orange Day, these policies have generated an estimated one million direct and indirect jobs and represent approximately 3.4% of GDP—and, by 2022, they were set to account for more than 6% (pre-coronavirus pandemic).

Since 2018, Concordia has utilized its various convenings and platforms to highlight the Orange Economy from a variety of angles. Concordia’s model brings together industry and thought-leaders from the public, private, and nonprofit sectors to discuss how to create sustainable partnerships and development for all. As the proverb goes: if you want to go fast, go alone; if you want to go far, go together. The collaborative approach championed by Concordia is particularly valuable to the Orange Economy, given the range of actors and insights required to sustainably turn an imagined idea into a thriving business with positive economic and social value.

For example, Concordia’s Innovative Financing Coalition (CIFC) serves as a platform to discuss how the deployment of new funding sources, the enhancement of efficiency in financial flows, the role of integrated thinking to reduce risk, and the creation of results-oriented financial instruments will be critical for Colombia and its Latin American and Caribbean neighbors to achieve the goals set forth by Orange Economy policies. From another perspective, Concordia previously hosted a “Fishbowl” conversation at the 2019 Americas Summit, led by senior executives from the Presidency of Colombia, NBC-Universal, the Bogotá Chamber of Commerce, and the Colombian Ministry of Culture, to address the intellectual and practical questions facing the Orange Economy. Our programmatic focus on the Orange Economy was set to culminate via the Orange Day, alongside the IDB Annual Meeting.

Much is left to be discussed and identified when it comes to Orange Economy policies in the region. COVID-19 postponed the Orange Day, but in reality, this topic will now be more relevant than ever. In turbulent times like these, creativity flourishes. In the 2008 financial crisis, tech companies such as WhatsApp, Venmo, and Uber were all created, and there’s no doubt that there will be a flood of innovation on the other side of today’s pandemic. But are Latin American policies set up to foster their growth? If not, what is missing?

Taking a deeper dive into Colombian policies, we see that there is a strong foundation for encouraging economic growth via the Orange Economy. For example, commercial incentives for orange industry businesses is a crucial first step. In Colombia, the specifics of the orange economy initiative include a number of valuable incentives for businesses looking at operating within one or more industries identified as ‘creatives’. These include a five-year income tax exemption, VAT exemption on the importation, production, or purchase of fixed assets, and access to credit/seed capital at favorable conditions. Yet, in order to take advantage of these incentives, foreign investors and entrepreneurs must first incorporate a company within the country.

Questions still remain—and not just in Colombia, but in the region at large. What comes first, commerce or creativity? Is a country only going to promote those creatives that find a way to turn their art into business? Is attracting foreign direct investment as it pertains to creative industries mutually exclusive to promoting locally-developed industries? What type of policies will a country promote when a giant such as Uber goes up to bat against a regional success story such as Rappi?

One of the biggest questions that has arisen from the COVID-19 pandemic and resulting economic downturn revolves around the inevitable mental health burden that will increase as stay-at-home policies and potential financial distress continue. Though necessary to prevent loss of life due to COVID-19, these public health measures expose many people to experiencing situations that are linked to poor mental health outcomes, such as isolation and job loss. What relationship will this have with creativity, and ultimately the Orange Economy? A recent project in the town of Soacha, Colombia, in the outskirts of Bogotá, has set to tackle this very issue by attempting to link the socio-cultural and emotional development of Soachan youth with economic inclusion via job training, as well as management and entrepreneurship skills in the culture and creative sector. This program, led by Fundación Gratitud, which was co-founded by acclaimed international musical artist Fonseca, and partnered with the IDB, will explore how addressing mental and emotional health can actually be a conduit for Orange Economy entrepreneurship.

COVID-19 is radically changing the way the world functions. In this new environment that we’re all finding ourselves in, Concordia is working hard to ensure that its programming is innovative, timely, and impactful. Concordia also understands, however, that the Orange Economy as a thematic issue will remain an extremely relevant topic, and perhaps more so now than before. As we approach the next wave of innovation sparked by today’s crisis, Concordia is making sure that the right voices are at the forefront.

Next Steps:

Concordia remains committed to bringing together the world’s experts from the private, public, and nonprofit sectors to address major societal issues through the lens of partnerships For a full breakdown of our 2020 Agenda, see below:

• Virtual Americas Partnership Accelerator on July 23
• 10th Annual Summit on September 20-22 in New York City (TBC as virtual)
• 2020 Americas Summit in Q4 2020 in Bogotá, Colombia
• 2020 Africa Summit in November in Kigali, Rwanda
• Rescheduling The Orange Day, alongside the IDB Annual Meeting, in Baranquilla, Colombia (pending rescheduling of the IDB Annual Meeting)
• Rescheduling A New Decade of Opportunity for Latin America, with Georgetown University’s Latin America Leadership Program, in Washington, D.C. (projected date TBD).

Editor’s Note:

On March 18-22, 2020, the Inter-American Development Bank (IDB) was due to host its Annual Meeting of the Board of Governors in Barranquilla, Colombia. Each year, the IDB hosts these Annual Meetings in order to discuss how to make the region’s economy more sustainable and competitive on a global stage. In coordination with the IDB, and in partnership with the Presidency of the Republic of Colombia and the Mayor’s Office of Barranquilla, Concordia planned to host The Orange Day, a major parallel event alongside these Annual Meetings, on March 19, 2020. The event was designed to be a continuation of the previous conversations that Concordia has hosted around the Orange Economy, gathering representatives from different sectors and backgrounds to talk about how the creative industries are a tool to drive economic and sustainable development in Latin America.

Unfortunately, due to the extraordinary public health circumstances surrounding the global response to COVID-19, The Orange Day has been postponed, pending rescheduling of the IDB Annual Meeting.