By Loren Rodriguez Estrada, Concordia Spring '21 Partnerships Intern
Creativity is the act of conceiving something original or unusual. Thanks to intellectual property rights, this distinctly human ability is the main input of a sector of the economy that, according to UNESCO, generates annual revenues of USD 2,250 billion. Aside from being one of the fastest-growing economic sectors in the world, a study by EY shows that creative economies count for 2.2% of GDP in Latin America and the Caribbean. For the Inter-American Development Bank (IADB), the creative industries ecosystem and entrepreneurship are seen as part of the solution for the region’s economic recovery, with innovative offerings at the crossroads of creativity and digitalization. “The Future is Creative” is the title of one of the points on the agenda of the IADB’s annual meeting, which will take place this week. At this juncture, it is worth asking: Are we taking advantage of the full potential of creative economies to propel economic growth in the region while making social impact? Addressing this reflection requires the perspective of different stakeholders, which is why, in the past few years, Concordia has undertaken the task of bringing them together to prompt dialogue and foster partnerships.
Creativity: The Driver of Innovation
The creative economy covers knowledge-based economic activities, such as research & development (R&D), which are essential for innovation and decision-making. In an increasingly digital economy, the development of platforms is helping creative industries inhabit and expand. This is the case of Salesforce, a company that specializes in customer relationship management (CRM) software and is now exploring ways to address global issues, like deforestation. At the 2020 Concordia Americas Summit, Salesforce’s* Director of Government Affairs for Latin America, Alejandro Anderlic, spoke about the pilot project that Salesforce is conducting along with the IADB to link the company’s cloud with geolocation data in order to identify the most deforested areas of the Amazon rainforest. Creativity is not only core to the project’s creation, but also its implementation: How do we ensure that the governments of the amazonian countries eventually take advantage of this digital solution to make faster and smarter decisions? How can we coordinate heads of state, environmental organizations, and sponsors to join efforts around the platform? The success of an innovation like this would lead to lower costs and remove several logistical obstacles of addressing such a large-scale problem as deforestation. Furthermore, it may push economic recovery towards sustainability. Given that the transition to more sustainable practices in the rainforest is not a short-term process, the use of the platform provides an opportunity to mitigate the impact of economic activities, like agriculture and cattle ranching, in which South American countries still rely on.
Another good example of creative entrepreneurship for propelling sustainable economic growth in the region is Pachama, a climate-tech company founded by two Argentinians and named in honor of Pachamama, the Mother Earth goddess for the indigenous people of South America. Pachama is leveraging data, artificial intelligence, and automation to protect ecosystems, restore forests, and improve carbon markets. With innovation core to its approach, this start-up tackles the accountability, accuracy, and transparency concerns that companies willing to invest in forest restoration face. Thanks to this, Pachama not only has customers like Microsoft and Shopify, but also was recently selected as a key strategic partner by Mercado Libre, Latin America’s largest ecommerce and fintech company, to develop ecosystem restoration projects in Brazil. The company’s accelerated growth represents an enormous potential for job creation in Latin America and the Caribbean. The platform helps open up the market for selling carbon credits to small landowners who can’t afford expensive monitoring programs. The Pachama case represents different reflections endemic in the creative economy-policy environment: In a region with wide connectivity and digital literacy gaps, what measures should be taken to enhance inclusion and, consequently, increase the number of people who benefit from digital innovation? Beyond that, are we training the digitally-enabled workforce that Latin America and the Caribbean is demanding? What incentives are being displaced for other creative companies that, like Pachama, generate positive externalities?
The intersection between creativity, research, innovation, and technology may not only lead to the creation of companies like Salesforce and Pachama, but also to the transformation of unlikely industries, like tobacco. At the 2020 Concordia Americas Summit, Lucie Claire Vincent, President for the Andean Cluster of Philip Morris International (PMI), explained that the company has invested more than USD 7.2 billion to fulfill its mission of creating a smoke-free future. The company has created IQOS, a heat-not-burn electronic device backed by scientific evidence, as a better alternative to cigarettes. Recently, the FDA authorized the marketing of IQOS as a modified risk tobacco product (MRTP). This case invites us to further consider the linkages between creative economies, market innovations, and policy regulations, in the interest of positive social impact and towards the Sustainable Development Goals (SDGs). For example, taking into account the new evidence, how can the regulation of a creative industry like advertising be enhanced to continue dissuading people from starting to smoke while encouraging less-harmful alternatives to smoking cigarettes for smokers who would otherwise continue to smoke? Furthermore, how can the regulatory environment propel consumer switching to smoke-free alternatives? Finally, for analyzing mid/long-term patterns of use in Latin America and the Caribbean, how can a cross-sector partnership be coordinated to ensure the financial, technical, and human resources required to do a longitudinal study examining aggregated public health outcomes? Definitely, the R&D wing of industry players is essential for making effective decisions that lead to a better future.
As seen, creative tech and innovation can solve large-scale global problems and transform unlikely industries. Besides, the 2020 Concordia Americas Summit provided insights on how a creative industry, like software, can impact people’s daily life. At the event, Rubicon’s** COO, Renaud de Viel Castel, presented the company’s ambitious mission to end waste through a platform that connects customers (who generate waste, including commercial, municipal, and residential waste) with haulers (who collect waste). Just as in the case of Pachama, actionable data plays an important role for bringing visibility and transparency. As explained by de Viel Castel, with the platform it is possible to identify the color of the trash bins outside the households and map neighborhoods according to their recycling patterns. The app is already changing the way citizens in the United States relate to the waste they generate day to day, as well as giving policy-makers new valuable data. In the context of economic recovery in Latin America and the Caribbean, implementing this type of solution can boost commerce while contributing to environmental sustainability. Because of low marginal costs, versatility, replicability, and scalability, countries in the region should prioritize digital-creative economies in their sustainable development strategy. The questions that remain open from the former innovation case are the following: Are we constantly incentivizing the formulation of new ways of approaching old problems? How can we make it? How are we building smarter cities?
Last November, the United Nations declared 2021 as the “International Year of Creative Economy for Sustainable Development”. The pandemic is causing us to experience an accelerated digital transformation, it is showing us the potential of the creative industry for economic recovery, and it is accentuating the importance of scientific knowledge and data for making policy decisions. There is an open window of opportunity that should be seized to assess whether current regulation keeps pace with innovation or whether it is generating stagnation. The IADB’s annual meeting, happening this week, serves as a pivotal platform to tackle some of the questions identified previously. It is crucial to better understand the relationship between the creative economies (and all of its potential), industry actors (and all of their insights), and policy (and all of its scalability) to satisfactorily achieve the SDGs. The time to generate a dialogue between companies, academia, governments, and NGOs to formulate evidence-based public policies that promote economic growth and the resolution of social problems through creative activities and innovation, is now. Concordia’s mission is more relevant than ever because, while the future is creative, the present must steer it towards sustainability.
*Salesforce and Philip Morris International (PMI) are Global Patron Members of Concordia. **Rubicon was a Patron Sponsor of the 2020 Concordia Americas Summit.