Creative India: Tapping the full potential
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Kukreja, Prateek; Puri, Havishaye; Rahut, Dil Bahadur Working Paper Creative India: Tapping the full potential ADBI Working Paper, No. 1352 Provided in Cooperation with: Asian Development Bank Institute (ADBI), Tokyo Suggested Citation: Kukreja, Prateek; Puri, Havishaye; Rahut, Dil Bahadur (2022) : Creative India: Tapping the full potential, ADBI Working Paper, No. 1352, Asian Development Bank Institute (ADBI), Tokyo, https://doi.org/10.56506/KCBI3886 This Version is available at: https://hdl.handle.net/10419/272895 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by-nc-nd/3.0/igo/
ADBI Working Paper Series CREATIVE INDIA: TAPPING THE FULL POTENTIAL Prateek Kukreja, Havishaye Puri, and Dil Bahadur Rahut No. 1352 December 2022 Asian Development Bank Institute
The Working Paper series is a continuation of the formerly named Discussion Paper series; the numbering of the papers continued without interruption or change. ADBI’s working papers reflect initial ideas on a topic and are posted online for discussion. Some working papers may develop into other forms of publication. Suggested citation: Kukreja, P., H. Puri, and D. B. Rahut. 2022. Creative India: Tapping the Full Potential. ADBI Working Paper 1352. Tokyo: Asian Development Bank Institute. Available: https://doi.org/10.56506/KCBI3886 Please contact the authors for information about this paper. Email: [email protected], [email protected], drahu[email protected]rg Prateek Kukreja is a fellow, and Havishaye Puri is a research assistant, both at ICRIER. Dil Bahadur Rahut is a senior research fellow at the Asian Development Bank Institute. The views expressed in this paper are the views of the author and do not necessarily reflect the views or policies of ADBI, ADB, its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms. Discussion papers are subject to formal revision and correction before they are finalized and considered published. Asian Development Bank Institute Kasumigaseki Building, 8th Floor 3-2-5 Kasumigaseki, Chiyoda-ku Tokyo 100-6008, Japan Tel: +81-3-3593-5500 Fax: +81-3-3593-5571 URL: www.adbi.org E-mail: [email protected] © 2022 Asian Development Bank Institute
ADBI Working Paper 1352 P. Kukreja et al. Acknowledgment The authors would like to thank Deepak Mishra (Director and CE, ICRIER) for his detailed review and useful inputs that enhanced the quality of our analysis. This study would not have been possible without the support and guidance received from B.N. Goldar (Former Professor, Institute of Economic Growth) and Suresh Aggarwal (Former Head and Professor, Department of Business Economics, University of Delhi), who provided their important inputs and observations from time to time on the overall analysis. The authors would also like to express their sincere gratitude to Erica Paula Sioson (Senior Officer, Culture and Information Division, Sustainable Development Directorate, ASEAN), John Newbigin (Chair, The Policy Evidence Centre International Advisory Council on creative industries and The London Mayor’s Ambassador for the creative economy), Puja Mehra (Senior Fellow, ICRIER) and Tarek Virani (Associate Professor, Creative Industries, UWE Bristol) for their in-depth review of the study and for providing their valuable insights that added great value to the study. Several stakeholders, including representatives from industry and industry associations, lawyers, and academicians, were consulted through the course of the study. The authors would like to especially thank Aakanksha Jagdev (Corporate Lawyer, New Delhi), Anubha Sarkar (Lecturer, Cultural and Creative Industries, Monash University), Blaise Fernandes (President and CEO, The India Music Industry, Mumbai), Graham Hitchen (Associate Dean for Enterprise, Loughborough University, London), Isheta Batra (IP and Media Counsel, TrailBlazer Advocates, New Delhi), Jennie Jordan (Research Associate, Creative Research and Innovation Centre, Loughborough University, London), John Khiangte (Executive Director Global Public Policy India, The Walt Disney Company), Jonathan Kennedy (Director—Arts, British Council, India), Jonathan Tan Ghee Tiong (Head, Culture and Information Division, Sustainable Development Directorate, ASEAN), Justin O’Connor (Professor, creative economy, University of South Australia), Megha Patnaik (Assistant Professor, Department of Economics and Finance, LUISS Guido Carli, Rome), Nicolas J.A. Buchoud (Founding Principal, Renaissance Urbaine, France), Mr. Nitin Tej Ahuja (CEO, The Producers Guild of India, Mumbai), Paramita Dey (Head, Resources and Waste , National Institute for Urban Affairs, India), Ranjit Singh (Creative Producer, Animation Director and Founder Trustee, The Animation Society of India, Mumbai), Richard Epstein (Project Manager, GIZ Gmbh), Safir Anand (Senior Partner and Head of Trademarks, Contractual and Commercial IP, Anand and Anand, India), Sahil Deo (Co-founder, CPC Analytics, Pune), Sardana Savvina (Movie Producer, Founder, Sakha Cinema Club, Russian Federation), Shiva Kanwar (Research Associate, ICRIER), and Tita Larasati (Deputy of Strategic Partnership, Indonesia Creative Cities Network, Bandung). The authors also thank Balakrushna Padhi (Assistant Professor, Department of Economics and Finance, Birla Institute of Technology and Science, Pilani) and Radhicka Kapoor (Senior Visiting Fellow, ICRIER) for their valuable comments and suggestions during the conceptualizing stage of the study. Sanjana Shukla, Sanya Dua, and Rehan Kunal Jagota from ICRIER provided excellent research assistance. The preliminary findings of the study were presented at ICRIER’s Half Baked Seminar. The authors thank all the participants for their valuable feedback on the study and also thank ICRIER’s administrative team for their tireless efforts in ensuring the smooth conduct of the seminar and the stakeholder consultations. All errors remain solely those of the authors.
ADBI Working Paper 1352 P. Kukreja et al. Abstract India’s creative economy is large, but its untapped potential is even larger. This study provides the first reliable measure on the size of India’s creative economy, explores the many challenges faced by the creative industries, and provides recommendations to make India one of the most creative societies in the world. India’s creative economy—measured by the number of people working in various creative occupations—is estimated to contribute nearly 8% of the country’s employment, much higher than the corresponding share in Turkey (1%), Mexico (1.5%), the Republic of Korea (1.9%), and even Australia (2.1%). Creative occupations also pay reasonably well—88% higher than the non-creative ones and contribute about 20% to nation’s overall GVA. Out of the top ten creative districts in India, six are non-metros—Badgam (J&K), Panipat (Haryana), Imphal (Manipur), Sant Ravi Das Nagar (Uttar Pradesh), Thane (Maharashtra), and Tirupur (Tamil Nadu)—indicating the diversity and depth of creativity across India. Yet, according to United Nations Conference on Trade and Development, India’s creative exports are only one-tenth of those of the People’s Republic of China. To develop the creative economy to realize its full potential, Indian policymakers would like to: (i) increase the recognition of Indian culture globally; (ii) facilitate human capital development among its youth; (iii) address the bottlenecks in the Intellectual Property (IP) framework; (iv) improve access to finance; and (v) streamline the process of policymaking by establishing one intermediary organization. India must also leverage its G20 Presidency to put creative economy concretely on the global agenda. Keywords: creative economy, culture, employment, output, intellectual property, G20 JEL Classification: J21, J24, J31, O10, O30, O53, Z10
ADBI Working Paper 1352 P. Kukreja et al. Contents 1. BACKGROUND ......................................................................................................... 1 2. DEFINING INDIA’S CREATIVE ECONOMY .............................................................. 3 2.1 A Review of Past Literature ............................................................................ 3 2.2 Definition ........................................................................................................ 5 3. MEASURING INDIA’S CREATIVE ECONOMY ......................................................... 7 3.1 Approaches to Measure Creative Economy ................................................... 7 3.2 Data Sources ............................................................................................... 10 3.3 Methodology ................................................................................................ 10 3.4 Empirical Results ......................................................................................... 13 4. CHALLENGES AND POLICY RECOMMENDATIONS ............................................ 24 5. ROLE OF G20: CAN INDIA LEAD THE WAY? ........................................................ 27 6. CONCLUSION ......................................................................................................... 29 7. LIMITATIONS OF THE STUDY ............................................................................... 29 REFERENCES ................................................................................................................... 30 APPENDIX .......................................................................................................................... 36
ADBI Working Paper 1352 P. Kukreja et al. 1 1. BACKGROUND The evolution of the term “creativity” dates to the mid-twentieth century, shortly after it first appeared as a topic of academic importance in educational and psychological circles during the 1920s. However, it did not find much space in policy discussions or debates until the late 1950s when it began to be seen as a “modern” response to challenges posed by rapid social and technological changes (Pope 2005). It was only in the 1990s that economists and policymakers began to look at economic activities through the lens of creativity, and the term “creative industries” gained traction. Prior to that, many of these activities, like dance, music, film, and visual arts, were seen as “cultural industries,” owing to their strong cultural roots (Newbigin 2016). Many artists associated with these activities felt it demeaning to consider their work as an “industry” and, therefore, the term “cultural industry” itself became controversial (Newbigin 2016). The idea of “creative industries” was first brought forward in the “Creative Nation” report published by the Labour Government of Australia in 1994. The report emphasized the role of culture in national identity and defined culture more broadly by including film, radio, television, performing arts, literature, dance, music, visual arts and crafts, copyrights, libraries, interactive multimedia, design, and more (Department of Communications and the Arts 1994). This was the first time that the economic significance of cultural and creative industries was stressed. Creative industries found further support from the government of the United Kingdom, which in 1997, included creative industries in its development and political agenda, leading to the creation of the Department of Culture, Media, and Sports (DCMS hereafter) and the Creative Industries Task Force. This shift from the term “cultural industries” to “creative industries” in policy discussions could be attributed to the fact that creative industries were seen as a key sector for economic growth and a key source of employment (Florida 2002; Howkins 2001; Garnham 2005). They provide wide-ranging socioeconomic benefits to both developed and developing countries by combating unemployment, particularly youth unemployment, facilitating social inclusion 1 and cultural development, and improving quality of life (Daubaraite and Startiene 2015). Particularly for developing countries, creative industries play a significant role in contributing toward fulfilment of many of their Sustainable Development Goals (SDGs), especially those related to poverty, inequality, gender disparity, and urban development. In recognition of their economic and social significance as a driver of SDGs, the United Nations in 2019 declared 2021 as the International Year of creative economy for Sustainable Development (UNGA 74). In India, as in other developing and emerging nations, the importance of the creative economy cannot be overemphasized. Communities here have long been the vanguard of the creative economy. Their cultural contribution through products and services, like architecture, dance, festivals, handicrafts, literature, and music, have created a legacy that has lasted across centuries. India is home to some of the oldest surviving dance and music forms, such as Odissi, Kuchipudi, Kathakali, Dhrupad, Jatra, some of the oldest literature, and magnificent architecture like the systematically planned urban settlements of the Indus Valley Civilization (Pearl Academy and FICCI n.d.). India has a long history of holding elaborate festivals to honor old traditions and mythologies, and these can vary depending on the region of the nation. These festivals are known for their extravagant themes and immersive artworks that promote cultural cohesion and benefit the local economy. For instance, based on estimates from a study done by The 1 Brook et al. (2021) points out that the sector may not be socially inclusive, particularly in the UK, and may even lead to more social exclusion.
ADBI Working Paper 1352 P. Kukreja et al. 2 Smart Cube and others (2021), in the Indian state of West Bengal, the festival of Durga Puja holds immense cultural and economic value for the state. The weeklong festival contributed to 2.58% of the state’s GDP for the fiscal year 2019–2020. 2 India is also home to the sixth-largest number of UNESCO heritage sites and varied natural landscapes imbued with versatile cultural traditions (United Nations Educational, Scientific, and Cultural Organization, World Heritage Centre 2021). The fact that India is the fastest-growing large economy and a rising information technology hub paves the way for it to harness its culture as an asset and expand its global footprint. In terms of exports of creative goods and services, India performed exceedingly well, as its share in global exports increased sharply from 1.9% to 5.5% between 2003 and 2012 (Shaban and Filip 2015). However, the pandemic-induced lockdowns have left the sector in shambles. The people engaged in the cultural and creative occupations were amongst the worst hit as they were the first to shut their doors in response to the pandemic and were also among the last to reopen. However, as people are slowly beginning to accept the “new normal,” the creative sector is expected to drive the next wave of growth in India. There has been a pandemic-induced emergence of technology and innovation within the creative industries through the rise of Over-The-Top (OTT) and social media platforms, the livestreaming of events, the growth of virtual tourism, etc. Digital technologies have turned consumers into producers via platforms such as Instagram and YouTube. This has led to an emergence of a large number of creators with a strong following in India. While India’s creative sector undoubtedly holds immense promise to be a game changer in the post-COVID world, there are certain bottlenecks that it currently faces owing largely to the absence of a comprehensive policy framework. Efficient and effective policymaking requires an identification of the needs and requirements as well as a firm understanding of the issues facing the sector, which necessitates quantification and measurement of its economic contribution. So far, little effort has been made toward measuring the size and contribution of India’s creative economy due to challenges with respect to reliability and data limitation. These studies have attempted to quantify and measure the sector either by taking copyright industries as a proxy for creative industries (Patnaik 2020) or conducting a primary survey of a small group of respondents belonging to limited categories of subsectors within the creative sector (Wickham et al. 2021). While these studies do a good job of providing a quantification and measurement of the size and economic contribution of the sector, they tend to ignore a large part of India’s huge unorganized sector that significantly contributes to the overall employment and Gros Value Added (GVA). Against this backdrop, the present study aims to provide one of the most comprehensive and exhaustive estimates on the contribution to overall employment and GVA of India’s creative economy. We use the data collected during the Periodic Labor Force Survey (PLFS) for the years 2017–2018, 2018–2019 and 2019–2020, which is annually conducted by the National Statistical Office (NSO)—the central statistical agency of the Government of India. A key feature of the PLFS is that the survey covers both the formal and informal sectors in India, thus enabling a much more comprehensive measurement of creative employment in the country. The rest of the paper is organized as follows. The next section builds a definition of India’s creative economy based on an in-depth review of the various definitions of creative economy provided in the literature. This is followed by section 3 that measures the size of India’s creative economy in terms of employment and GVA and provides a number of labor market estimates based on the various approaches used in the literature. The fourth section discusses challenges that impede the growth of the creative economy in India and recommends 2 Mapping the Creative Economy around Durga Puja Sept 2021.cdr (britishcouncil.in).
ADBI Working Paper 1352 P. Kukreja et al. 3 policy suggestions to address these. The final section identifies areas in which India can take the lead during its G20 presidency and forge consensus among the G20 countries to further support and globally develop the creative economy. 2. DEFINING INDIA’S CREATIVE ECONOMY 2.1 A Review of Past Literature Defining the creative economy has been a contentious issue so far. According to the United Nations Conference on Trade and Development (UNCTAD), the creative economy has “no single definition.” It is seen as an evolving concept that builds on the “interplay between human creativity and ideas and intellectual property, knowledge and technology” (UNCTAD and UNDP 2008, pp. iii–iv). Yet, various attempts have been made to define the concept in different ways. While some studies emphasize the economic aspects of the creative economy by relating it to economic growth and the potential to generate and exploit intellectual property (DCMS 2001; Howkins 2001; NESTA 2006; WIPO 2015a), there are others who primarily focus on the sociological aspects of creativity (Hesmondhalgh 2002; O’Connor 2010), giving importance to culture and heritage. Drawing on the idea of “Creative Industries” put forward in the “Creative Nation” report, 1994, by the Australian government, Department of Culture Media and Sports (DCMS) in the UK pioneered the work on the economic aspect of creativity in 1998 by coming up with the first-ever formal definition of creative industries. They defined the creative economy through the notion of creative industries as entailing ‘those activities which have their origin in individual creativity, skill and talent and which have the potential for wealth and job creation through the generation and exploitation of intellectual property’ (DCMS 1998). DCMS identified thirteen sectors as constituents of Creative Industries in the United Kingdom: advertising, architecture, arts and antique markets, crafts, design, designer fashion, music, interactive leisure software (electronic games), performing arts, publishing, software and computer services, television and radio, and film and video. DCMS’s idea of linking creativity to economy was further developed by John Howkins, who came up with the concept of creative economy in 2001. He defined creative economy as “the transactions of creative products that have an economic good or service that results from creativity and has economic value” (Howkins 2001). Subsequently, he identified 15 industries, spanning from Arts to Science and Technology, that contribute to the creative economy by producing goods and services that “result from creativity and have economic value” (Howkins 2001). The National Endowment for Science, Technology, and the Arts (NESTA) also worked on DCMS’s idea of creative industries to arrive at a more refined model to define these industries. The objective was to identify the sectors with the greatest potential for economic growth. The model divided the Creative Industries into four groups: Creative Service Providers, Creative Content Producers, Creative Experience Providers, and Creative Originals Producers. This model brought together those industries that have a given number of commonalities in terms of business models and value chains (NESTA 2006). The economic approach to creativity also included studies that viewed creative industries as those that were driven by innovation, encompassing both the arts and technological and scientific industries. Cunningham (2004) asserted that creative industries were simultaneously cultural and serviceand knowledge-based industries.
ADBI Working Paper 1352 P. Kukreja et al. 10 most well-cited studies 3 that follow our definition with the International Standard Classification of Occupations (ISCO-1988). This list is then concorded to the National Classification of Occupation (NCO-2004), which is the official classification of occupation followed by the PLFS data to construct a frequency matrix as shown in Table A-1. From the matrix so developed, we classified those occupations as “creative” that are deemed “creative” by at least three of the five studies under consideration. The identified “creative” occupations with their respective average employment between 2017–2018 and 2019–2020 are shown in Table 1. 3.2 Data Sources The present study utilizes the Periodic Labour Force Survey (PLFS) data for the years 2017–2018, 2018–2019, and 2019–2020 to assess the contribution of India’s creative economy to overall employment and wages. The survey has been conducted annually by the National Statistics Office since 2017–2018 and is widely used to estimate India’s labor market statistics in both rural and urban areas using the usual activity status (UPSS) approach (principal status + subsidiary status) and the current weekly status approach (National Statistical Office 2019). For the purpose of the current analysis, the usual status approach is followed. The usual activity status of an individual determines the activity status of an individual based on the reference period of the last 365 days preceding the date of survey. Within the usual activity status, an activity can be defined as either the principal activity or the subsidiary activity undertaken by the individual surveyed. The activity status on which an individual in the labor force spends a relatively long time (major time criterion) during the 365 days preceding the date of survey is considered the usual principal activity status of the individual. The same individual may have pursued some economic activity in addition to his/her usual principal status for 30 days or more during the reference period of 365 days preceding the date of survey. The status in which such economic activity was pursued during the reference period of 365 days preceding the date of survey is characterized as the subsidiary economic activity status of the individual. PLFS also allows the analysis of the occupational and industrial distribution of workers across the country. It collects information on the employment status and wages of workers across industries and occupations and classifies them by five-digit National Industrial Classification Codes (2008) and three-digit National Occupation Codes (2004). The most important characteristic of PLFS is the coverage of both the formal and the informal sector. Further, the National Accounts Statistics (NAS) is used to measure the contribution of the creative workers to India’s GVA during this period. 3.3 Methodology The occupation-based approach is used to estimate India’s creative employment. The first step is to identify India’s creative occupations using a predefined list of occupations that are deemed creative by the most well-cited studies that follow our definition. This list is then concorded to the National Classification of Occupation (NCO-2004), which is the official classification of occupation followed by the PLFS data to construct a frequency matrix as shown in Table A-1. From the matrix so developed, we classified those occupations as “creative” that are deemed “creative” by at least three of the five studies under consideration. 3 This includes Boschma and Fritsch (2009), Ellis et al. (2009), Daschko and Allen (2011), Queensland University of Technology, Australia and University of Newcastle, Australia (n.d.) and Department of Culture, Media and Sports (2016).
ADBI Working Paper 1352 P. Kukreja et al. 11 Suppose each three-digit NCO 2004 occupation code is given by ‘i’ out of a total of ‘n’ occupation codes in the economy, such that i = 1, 2, 3, …., n. Let 𝐸𝑖 be the total number of people employed within each occupation code ‘i’. Further, let each three-digit NIC-2008 industry code be given by ‘j’ out of a total of ‘p’ industries in the economy, such that j=1,2, 3 ,..., p. Let 𝐸𝑗 be the total number of people employed within each industry code ‘j’. Now, using the frequency matrix discussed above (Table A-1), ‘m’ creative occupations are identified from a total of ‘n’ occupations. Next, to arrive at the estimates for creative employment across each industry ‘j’, the number of people employed across ‘i’ creative occupation codes are aggregated for each industry code ‘j’, such that: Total creative employment in industry j equals ∑𝐸 𝑖 𝑗 𝑚 𝑖=1 The total creative employment in the economy will be given by the sum total of creative employment of ‘p’ industries, such that: Total creative employment in the economy equals ∑ ∑ 𝐸𝑖 𝑗 𝑚 𝑖=1 𝑝 𝑗=1 PLFS data also provides estimates on workers’ wages. The survey collects wages for three categories of workers: casual workers, regular salaried workers, and self-employed workers. However, the data contains a significant number of missing values, particularly for wages of self-employed workers. To overcome this limitation, the approach followed by Das et al. (2020) is applied, wherein a Mincer-type regression equation is estimated, such that wages are seen as a function of workers’ characteristics 4 . Any sample selection bias is corrected using Heckman’s two-step procedure 5 as follows. As a first step, following the approach of Das et al. (2020), the selection equation (1) is estimated using a Probit model, where the dependent variable (𝑧𝑣 ∗) explains the decision of an individual ‘v’ of whether to participate in the labor market, taking the value 1 if the individual is employed and 0 otherwise. 𝑧𝑣 ∗= 𝑤𝑣∗ 𝛾𝑣+ 𝑢𝑣 (1) 𝑊𝑣𝑘 consists of a set of k identification factors, which are age, sex, marital status, and general education level. Hence, through this regression, we estimate the effects of individual characteristics on the decision to join the labor market. Since the objective is to impute the missing values for the wages of workers, these effects are of least interest to us. However, the residual of this Probit regression can be used to obtain information on the effect of the unmeasured characteristics that are not available in the dataset or are not captured by the estimated coefficients of the explanatory variables. In the Heckman procedure, these residuals that are contended to reflect the unmeasured characteristics related to employment are used to construct a selection bias control factor in a subsequent regression. In the second stage regression (2), the dependent variable (𝑦𝑣) represents the daily earnings of workers, whereas the set of independent variables (𝑥𝑣) represents workers’ characteristics. This regression helps explain wages received by workers, observable only for those for whom the dependent variable (𝑧𝑣 ∗) in the selection equation (1) takes a value of 1. 4 See Mincer (1974). 5 See Heckman (1976).
ADBI Working Paper 1352 P. Kukreja et al. 12 𝑦𝑣= 𝑥𝑣∗ 𝛽𝑣+ 𝜀𝑣 ; 𝑜𝑏𝑠𝑒𝑟𝑣𝑒𝑑 𝑜𝑛𝑙𝑦 𝑖𝑓 𝑧𝑣 ∗= 1 (2) where 𝑦𝑣 is the earnings of individual ‘v’, 𝑋𝑣𝑘 are a set of k individual characteristics like gender, age, location, general and technical education level, marital status, and the industry of work. An additional independent variable is added to this equation: the residual (the inverse of Mill’s ratio) from step 1, which captures the unmeasured characteristics. (𝑢𝑣,𝜀𝑣) ~ bivariate normal [0, 0, 1, 𝜎𝜀, ρ], where ρ is the correlation between 𝜀𝑣 and 𝑢𝑣. As Das et al. (2020) pointed out, estimates obtained from this model using a standard regression would be biased if ρ ≠ 0, but in the Heckman model, they are consistent and asymptotically efficient. This is because a likelihood ratio test is done for the independence of these equations, that is, testing for ρ = 0 and obtaining the corresponding chi-squared statistic. This technique helps overcome the problem of not being able to observe the wage of those who are not employed in the reference period. The regression function in step two uses the daily earnings of self-employed workers , casual workers, and regular salaried workers as their wages are observed, and the selection model is used for workers whose wages are not observed. After computing the two step Heckman Model, we predict the missing values within the three categories of workers to obtain a more accurate estimate of daily wages. Hence, the combined average wages per day are computed for self-employed workers, regular salaried workers, and casual workers across occupations and industries. To estimate the average GVA contribution of creative occupations, the PLFS estimates are combined with the National Account Statistics (NAS) for the given period. Employment and wage estimates from the PLFS (across NIC 2008 classification) are mapped to 25 broad industry categories of the National Account Statistics, as shown in Table A-2, to arrive at the estimate for GVA contribution by creative occupations. To estimate creative workers’ contribution to GVA, there is a need to separate creative wages from non-creative wages. Therefore, average daily wages for creative and non-creative workers are estimated across these 25 industry groups. Let there be a total of ‘q’ industry groups in the economy, where each industry group is given by ‘h’ such that h = 1, 2, 3 ……. q. Average creative wage for each industry group ‘h’ is given by: 𝐶𝑊 ℎ, whereas average non-creative wage is given by: 𝑁𝐶𝑊 ℎ Therefore, average daily creative labor income for a particular industry group ‘h’ is given by: 𝐶𝐿𝑌ℎ= 𝐶𝑊 ℎ∗∑𝐸𝑖 ℎ𝑚 𝑖=1 , (3) where ∑𝐸𝑖 ℎ𝑚 𝑖=1 is the total creative employment within a particular industry group ‘h’. Similarly, we can calculate the average daily non-creative labor income in a particular industry group ‘h’ as 𝑁𝐶𝐿𝑌ℎ= 𝑁𝐶𝑊 ℎ∗∑𝐸𝑖 ℎ𝑛−𝑚 𝑖=1 , (4) Where 𝑁𝐶𝑊 ℎ is the average non-creative wage in a particular industry group ‘h’ across ‘n-m’ non-creative occupations, ∑𝐸𝑖 ℎ 𝑛−𝑚 𝑖=1 is the total non-creative employment in a particular industry group ‘h’, and 𝑁𝐶𝐿𝑌ℎ is the average daily non-creative labor income in a particular industry group ‘h’.
ADBI Working Paper 1352 P. Kukreja et al. 13 We assume that there are two factors of production available: Labor and Capital to produce output in each industry group ‘h’ in the economy, having a high degree of boundness with each other, that is, labor works with capital (Goldar and Mukhopadhyay 1991). Given this, both creative and non-creative labor will have a high degree of boundedness with capital in determining the value of GVA within each industry group ‘h’. Therefore, the contribution of the two types of labor to GVA may be assumed to be proportional to their marginal productivity, which in equilibrium is equal to wages. Hence, the GVA in each industry group ‘h’ can be split by creative (and non-creative) labor income share to determine the GVA contribution of creative (and non-creative) workers in the economy. Consequently, creative GVA in each industry group ‘h’ is given by: 𝐶𝐺𝑉𝐴ℎ= 𝐶𝐿𝑌ℎ 𝐶𝐿𝑌ℎ+𝑁𝐶𝐿𝑌ℎ∗ 𝐺𝑉𝐴ℎ, (5) where 𝐶𝐺𝑉𝐴ℎ is the creative GVA of a particular industry group ‘h’. This implies that the creative GVA for the entire economy is given by: 𝐶𝐺𝑉𝐴 = ∑𝐶𝐺𝑉𝐴ℎ 𝑞 ℎ=1 (6) 3.4 Empirical Results 3.4.1 Aggregate-Level Estimates It is found that between 2017–2018 and 2019–2020, average annual employment in India’s creative economy was around 39.73 million, accounting to about 8.30% of total employment in India during the period. This includes all three categories of workers: casual, regular salaried, and self-employed working in either the organized or the unorganized sector. Figure 1(a) depicts the sectoral composition of creative employment, suggesting that the contribution of the tertiary sector is the highest (50.73%), closely followed by the secondary sector (47.62%), whereas the primary sector’s contribution to creative employment is miniscule (1.65%). In contrast, among the non-creative workers, as Figure 1(b) shows, the highest share is contributed by the primary sector (46.33%), followed by the tertiary sector (44.68%), while the secondary sector lags far behind (8.99%). Comparing the two distributions, it is clear that while the non-creative workforce is concentrated in the primary sector of the economy, the creative workforce is located in the secondary sector (tertiary sector’s contribution remaining similar across the two categories). This observation becomes even more pronounced when we consider the proportion of the creative workforce in the total employment of the secondary sector. A staggering 32.42% of all jobs in the secondary sector are held by the creative workforce even though it accounts for 8.30% of total employment in the economy. This has important policy implications, particularly in a country like India where there is a huge dearth of jobs in the manufacturing sector. Policies targeted toward enhancing creative employment by imparting required skills and expertise and building adequate infrastructure could eventually result in higher manufacturing jobs in the country.
ADBI Working Paper 1352 P. Kukreja et al. 14 Figure 1(a): Sectoral Composition of Creative Employment in India Figure 1(b): Sectoral Composition of Non-Creative Employment in India Source: Authors’ computation based on PLFS data. Having examined the sectoral distribution of creative employment in India, we next move to its spatial distribution to identify the creative centers in India. To do this, a Location Quotient (LQ) is estimated across 640 districts 6 of India, measuring the concentration of creative workers within a district relative to the concentration of creative workers in India as a whole. LQ is calculated as 𝐶𝐸𝑑 ∑𝐶𝐸𝑑 𝑠 𝑑=1 𝑇𝐸𝑑 ∑𝑇𝐸𝑑 𝑠 𝑑=1 (Wheeler, 2005), where 𝐶𝐸𝑑 represents creative employment in a district ‘d’ out of a total of ‘s’ districts in India, such that d = 1, 2 ,3 ….. s. Similarly, 𝑇𝐸𝑑 is the total employment in that particular district. Further, ∑𝐶𝐸𝑑 𝑠 𝑑=1 represents the total creative employment in India and ∑𝑇𝐸𝑑 𝑠 𝑑=1 represents the total employment in India. The higher the value of the LQ in a particular district, the greater will be the concentration of the creative workforce in that district relative to the overall concentration of creative employment in India. As Table 2 indicates, creative workers are primarily concentrated within cities in India; the top ten districts with the highest LQ estimates are Tirupur (4.09), Mumbai Suburban (3.94), Bangalore (3.86), New Delhi (3.38), Panipat (3.20), Gurgaon (3.14) and Sant Ravi Das Nagar (3.13), Thane (2.87), Badgam (2.77), and Imphal—East and West (2.67). Each of these districts exhibits unique characteristics that make them a center of creativity. Tirupur district in Tamil Nadu is known for being a dominant player in the production and export of knitted garments (Yoganandan 2015). Mumbai Suburban is a district within the Mumbai Metropolitan Area that is known for its significant role in the production and dissemination of Media and Entertainment in India (Bombay First 2009). This includes the world-renowned Hindi film industry (Bollywood) and creative hubs like the Dadasaheb Phalke Chitra Nagari, an integrated studio complex that contains 16 studios and 42 outdoor location venues for the purpose of movie production. 7 Bangalore is world renowned for its production and exports in the computer and 6 As per 2011 Census of India. 7 Film City, Mumbai.
ADBI Working Paper 1352 P. Kukreja et al. 15 software-related industries (Meenakshi 2012). New Delhi and Gurgaon districts are part of the National Capital Region (NCR) of India—a hub of education, research, news media, and information technology in the country (CII 2005). Panipat district in the Indian state of Haryana is known as the “city of weavers” and is renowned for its home furnishing and floor covering products (TERI 2016). Sant Ravidas Nagar in Uttar Pradesh has a rich cultural history of manufacturing exquisite carpets and is a major center for the same in India (K. Singh et al. 2008). Thane, with its close proximity to Mumbai, caters largely to the Indian media and entertainment sector. The district of Badgam is known for exquisite handicrafts like shawls, crewels, namdha, chain stitch, wood carving, costume jewelry, Kani shawls, paper mache, and carpets (Yasmin and Bhatt 2013). Imphal is home to the largest women’s market in Asia—the Ima market—which is famous for handwoven items, particularly Kauna grass craft (Panwar 2017). An overview of the top 100 districts in India by their LQ is given in Table A3. Table 2: Top 10 Districts by Location Quotient of Creative Employment across India District LQ Tiruppur 4.09 Mumbai Suburban 3.94 Bangalore 3.86 New Delhi 3.38 Panipat 3.20 Gurgaon 3.14 Sant Ravidas Nagar (Bhadohi) 3.13 Thane 2.87 Badgam 2.77 Imphal (East and West) 2.67 Source: Authors’ computation based on PLFS data. Moving on from the geographical distribution of the creative workforce in India to the rural–urban divide as shown in Figure 2, it is found that creative employment is more urban centric; a sizeable 67.07% of all creative workers are in the urban areas, compared to merely 29.62% non-creative workers in the urban areas. Furthermore, while the creative workforce accounts for 8.03% of India’s total employment, it contributes about 17.03% to total urban employment but only 4.07% to total rural employment. This result underpins the importance of the creative economy in generating employment within urban areas in India that face a much starker unemployment situation compared to the rural areas in the country. Estimates suggest that the unemployment rate in the urban sector between 2017–2018 and 2019–2020 averaged around 7.5%, significantly higher than both the average rural unemployment rate of about 4.77% and the overall average unemployment rate of 5.57% during the period (National Statistical Office 2021, p. 65).
ADBI Working Paper 1352 P. Kukreja et al. 16 Figure 2: Rural–Urban Distribution of Creative and Non-Creative Workers in India Source: Authors’ computation based on PLFS data. Next, to assess the demographic trends of the creative employment, the age composition of the creative workforce is examined and is compared with that of the non-creative workforce, as shown in Figure 3. The share of the creative workforce in India is highest for the age group 25 to 29 years, consisting of 16.55% of all creative workers. On the other hand, the non-creative workforce is primarily concentrated around the age group of 35 to 39 years, capturing about 13.84% of all non-creative workers. It is clear that the creative workforce in India is more youth 8 centric with 29.87% of all creative workers falling between the age bracket of 15 and 29 compared to 24.16% of all non-creative workers falling in that bracket. This result has important policy implications for India as this shows the potential for the creative economy to create employment opportunities for the youth in the country. India has been facing high youth unemployment rates of about 16.53% per annum on average between 2017–2018 and 2019–2020 (National Statistical Office 2021, p. 66) as compared to the overall unemployment rate that averaged 5.57% during the same period (National Statistical Office 2021, p. 65). The situation gets even bleaker when we look at youth unemployment rates within the urban sector, which averaged 20.23% between 2017–2018 and 2019–2020 as compared to youth rural unemployment that averaged 15.16% during this period (National Statistical Office, 2021, p. 66). Given the urban and youth centric characteristic of the creative workforce in India, it seems imperative that concerted policy focus be shifted toward the sector to promote overall development of the country’s economy. 8 Youth here refers to people between the ages of 15 and 29 years, following from the definitions of National Youth Policy (2014) and PLFS.
ADBI Working Paper 1352 P. Kukreja et al. 17 Figure 3: Age Distribution of Creative and Non-Creative Workers in India Source: Authors’ computation based on PLFS data. Figure 4: Gender Distribution of Creative Employment in India Source: Authors’ computation based on PLFS data. While it is clear from the above analysis that India’s creative employment is both urban and youth-centric, the data suggests that it is also relatively less gender-biased. Figure 4 presents the gender distribution of creative employment in India and shows that the female share in creative employment (27.89%) is higher than in non-creative employment (24.33%) or even in overall employment (24.62%). It accounts for a total of 11.08 million female creative workers in the Indian economy. To better gauge the extent of female contribution in the sector, the gender wage differential (calculated as the difference in the daily average wage between all men and women) across all occupations within the two categories (creative or non-creative) is also assessed as shown in Figure 5. It is found that there is a significant gender wage gap prevailing across both the creative as well as non-creative workforce, though the gap is significantly wider among the latter. This implies that female workers in India employed in creative occupations accrue a higher wage than those employed in non-creative occupations. This wage premium is uniform across all of the highly creative industry groups discussed later, indicating a strong trend within the creative workforce to be more gender inclusive. Thus, given the higher prevalence of female workers in the
ADBI Working Paper 1352 P. Kukreja et al. 18 creative workforce coupled with higher wages, the creative economy in India is positioned to be a driver for gender inclusion in India. Figure 5: Gender Wage Gap in India: Creative and Non-Creative Workforce Source: Authors’ computation based on PLFS data. Next, we examine the overall wage differential (calculated as the difference in the average daily wages) between creative and non-creative workers between 2017–2018 and 2019–2020, as shown in Figure 6. The findings suggest a significant wage differential of 88.42% in favor of the creative workforce, signifying the large productivity gain that could be leveraged by promoting creative employment. Figure 6: Wage Differential between Creative and Non-Creative Workers Source: Authors’ computation based on PLFS data. Based on the methodology discussed earlier, wage estimates of creative and non-creative workers are used to ascertain the contribution of creative occupations to overall GVA. It is found that the creative occupations on average contributed 20.22% to India’s total GVA between 2017–2018 and 2019–2020. The sectoral composition of the creative GVA is shown in Figure 7(a), which indicates that the tertiary sector contributes the most to the GVA in India’s creative economy (69.47%), followed by the secondary sector (27.58%), whereas the primary sector lags behind (2.95%). Comparing these shares with the contribution of the non-creative occupations to GVA
ADBI Working Paper 1352 P. Kukreja et al. 19 in Figure 7(b), it is found that the major contribution to GVA is again by the tertiary sector (63.32%), followed by the primary sector (21.23%) and the secondary sector (15.45%). These results clearly suggest that India’s creative economy is largely comprised of the tertiary and the secondary sector (about 97.05%), whereas the primary sector makes significant contributions to non-creative GVA. The significant role of the creative workforce in the secondary sector is underpinned by the fact that even though it contributes to 20.22% of the economy’s total GVA, it produces a remarkable 31.18% of the total value added in the secondary sector. Hence, a concerted effort toward supporting India’s creative economy through optimal policy support could enable structural transformation through transition from the primary sector to the secondary sector. Figure 7(a): Sectoral Composition of Creative GVA Figure 7(b): Sectoral Composition of Non-Creative GVA Source: Authors’ computation based on NAS data. 3.4.2 Industry-Level Estimates Moving on to a more disaggregated analysis of creative employment and GVA, the estimates are obtained across industries. All three digit NIC 2008 industries are classified based on their respective creative intensities into four categories: (i) Highly Creative; (ii) Moderately Creative (iii); Low Creative; and (iv) Non-Creative. Creative intensity is the ratio of the number of people employed in creative occupations to the total number of people employed. Therefore, the creative intensity of each industry ‘j’ is given by: 𝐶𝐼𝑗 = ∑𝐸𝑖 𝑗 𝑚 𝑖=1 ∑𝐸𝑖 𝑗 𝑛 𝑖=1 where 𝐸𝑖 is the number of people employed within each occupation code ‘i’, ‘n’ represents the total number of occupations in the economy, whereas ‘m’ represents the total number of identified creative occupations, such that m Є n. Therefore, ∑𝐸𝑖 𝑗 𝑚 𝑖=1 represents the total creative employment in a particular industry ‘j’, whereas ∑𝐸𝑖 𝑗 𝑛 𝑖=1 represents the total employment in a particular industry ‘j’.
ADBI Working Paper 1352 P. Kukreja et al. 26 of the credit facility that is not covered by collateral security. The government could devise a similar scheme to include entrepreneurs and micro and small businesses in the creative sector. The government could also set up a crowdfunding platform to connect creative smalland medium-sized enterprises (SMEs) and entrepreneurs with the crowdfunding community. For instance, in Europe, an online portal “Crowdfunding4Culture” was created by the European Commission to collect data on the crowdfunding market for the cultural and creative industries and to facilitate connections among creative professionals and crowdfunding communities. This allowed users to search for crowdfunding campaigns for cultural and creative projects in Europe (World Bank, 2020). For enterprises requiring a larger capital injection, venture capital can be a suitable source of funding. This is because venture capital firms have a longer time horizon for their investments and invest in businesses involving greater uncertainty. For example, the HEVA Fund is an African fund dedicated to assisting creative professionals in Rwanda, Tanzania, Kenya, and Uganda. The Cultural Heritage Seed Fund is a scheme within this fund that promotes start-ups in the crafts, fashion, film, gaming, music, performing arts, and tourism sectors (World Bank 2020). India can also establish a government-sponsored venture capital fund with the sole purpose of promoting enterprises in the creative sector. Reforming Intellectual Property Rights Framework The creative sector faces critical bottlenecks regarding the protection of intellectual property. This includes the lack of an effective copyright enforcement framework, insufficient intellectual property (IP) training and expertise, particularly to address specific issues of digital copyright infringement, a cumbersome registration process and complex paperwork, a lack of coordination among enforcement agencies, inefficiency in collective management society operations, and expensive judicial procedures. 10 Due to such weak enforcement and complex procedures for damage claims, piracy, intellectual property rights (IPR) thefts, and copyright infringement pose considerable challenges to the operations of the highly creative industry groups and are responsible for the loss of a large share of output of creative producers in India. The National Policy on IPR (2016) was introduced to tackle some of these issues, particularly those related to the administration and enforcement framework for IPRs in India. This policy reduced certain limitations and simplified some processes within the IPR framework; however, there is still scope for improvement. First, there is a need to reform existing laws to keep in line with the rapidly evolving technological landscape in the country. A positive step would be for the government to reform the Design Act, which seems to be losing its true relevance in light of the creative sector’s fluid nature. The law stifles innovation in the creative sector by increasing compliance costs. Second, a concerted effort is required to address the procedural delays and complexity that still plague India’s IPR regime. For instance, the average pendency for a final decision in acquiring a patent in India is 42 months, compared to 20.8 months in the US, 20 months in the People’s Republic of China, 15.8 months in the Republic of Korea, and 15 months in Japan (Department of Economic Affairs, Ministry of Finance 2022, pp. 339–342). This is one major reason that India lags behind these countries when it comes to patent grants. Possible solutions to this problem could be requiring the controller to publish the applications for patents in a shorter timeframe and increasing the number of patent examiners in India. 10 Also pointed out by Patnaik (2020).
ADBI Working Paper 1352 P. Kukreja et al. 27 Human Capital Development among Youth A distinctive feature of India’s creative economy is that a significant proportion of the workforce is young. India’s education and skilling ecosystem must be improved to prepare its youth for the rapid technological changes that are transforming the creative sector. This entails instilling digital skills, such as digital marketing and graphic design in young workers and creative entrepreneurs. This is critical given the rise of online freelancing and microwork in the creative sector. Further, a lot of creative industries in India, like the animation and gaming industry, focus on producing content for the international market rather than the domestic market. This is because India’s skilling ecosystem puts greater emphasis on imparting technical skills rather than developing creative skills to produce unique products. Hence, it is imperative to develop both creative and digital skills within the youth. A national level initiative which can be utilized in digitally skilling the youth for the creative sector is the Government of India’s digital skilling program in emerging and future technologies. This program creates a platform that will focus on skilling, reskilling, and upskilling students via internships, apprenticeships, and employment in Emerging Technologies. The program has already onboarded 100+ technology corporate/manufacturing firms to its platform for providing free-of-cost emerging technology certifications. Furthermore, the encouragement of creative entrepreneurship can help young people develop their creative skills. This can be achieved by developing entrepreneurship skills in young creative entrepreneurs, which includes the development of marketing and technical skills. A scheme of the government of India that could aid youth entrepreneurs in the creative sector would be the Pilot Project on Entrepreneurship, which aims to promote entrepreneurship as an alternate career choice by providing end-to-end entrepreneurship education, handholding, and mentoring support to potential and existing entrepreneurs who aspire to start or scale-up their existing enterprises. Need for an Integrated Policymaking Institution While there exist strong synergies between the policy needs of the sector and existing policies and initiatives of the government, there is no integrated policymaking institution for the sector in the country. The policymaking for creative industries remains scattered among 14–16 ministries, limiting its growth. Further, due to the heterogenous nature of the creative economy, there is no single association or informed industry body to take forward its views on regulations and policies beneficial to its growth and development. Hence, streamlining the policy development process for the sector will greatly aid its growth. This can be accomplished by establishing an intermediary organization that can better inform policymakers on the policy support needed for the creative economy’s growth and development. 5. ROLE OF G20: CAN INDIA LEAD THE WAY? For the creative and cultural industries to play a critical role in driving the growth process, governments across the globe need to reform policies in their own countries as well as to collectively come together and form a consensus within country groups, such as the G20 (Kukreja 2022). Of late, the creative economy has become a critical component of the agendas of almost every G20 presidency. Saudi Arabia in 2020 was the first to recognize and acknowledge the cultural and creative industries as key drivers of inclusive and sustainable economic development. Subsequently, the issue was carried forward during the Italian G20 presidency in 2021 and was firmly placed on the agenda. Indonesia, which is assuming the G20 presidency in 2022, has also emphasized the role of the creative economy sector in promoting sustainable
ADBI Working Paper 1352 P. Kukreja et al. 28 development, and the discussion is taking shape at the various engagement groups like the T20 and the U20. As India prepares to assume the G20 presidency beginning December 2022, it is important that it leverages this opportunity to concretely place creative economy on its agenda. Given that the sector accounts for a significant share of employment and GVA in India, its importance to the country’s economy cannot be overemphasized. A major challenge for this sector is the lack of an available database and statistics. This can be achieved if there is consensus at the G20 on an internationally acceptable uniform definition of the creative economy and its constituents. This will greatly assist in assessing the impact of the creative sectors on economic growth within a country and will allow evidence-based policymaking at both the national and regional levels. In this regard, India could take the lead in bringing the G20 nations together to collectively arrive at an umbrella definition for the sector. There is also a need to improve information dissemination, training, market access, knowledge management, policy formulation, and research in the sector. In this regard, India could take the lead by way of its G20 presidency in getting the G20 nations to work toward establishing an intercountry network to promote the cultural and creative sectors. This could be along the lines of the Arterial Network in Africa: a non-profit civil society network formed in 2007 and comprised of artists, organizations, and cultural practitioners from 17 African countries. The network has worked to strengthen Africa’s cultural and creative sectors through information dissemination (World Bank 2020). A large number of artists and creative actors, particularly in developing countries like India, work as freelancers with limited financial support, inhibiting their ability to reach a global audience and, thereby, limiting international cultural exchanges. The G20 can help by providing mobility grants to artists and creative workers across its member countries. This grant will support artists and creative workers to travel internationally and present their work to new audiences and to experience diverse cultural exchanges. This could be the perfect opportunity for India to place the proposal on the G20 table. Countries could also work together toward creating a digital platform for creative and cultural workers to increase their visibility. The online platform could help present and archive the artistic production (animation, audio/visual production, design, handicrafts, film, graphic art, and interactive projects) of creative workers across G20 countries. Finally, the creative sector plays an important role for the success of the 2030 Agenda for Sustainable Development, thus India could lead the G20 nations toward integrating culture into their broader economic and social development strategies, bringing them in line with the UN Sustainable Development Goals (OECD 2021). We are at an inflexion point currently, as far as the G20 is concerned. The first inflexion point at the G20 came in 2010, when the Republic of Korea took over the G20 presidency and it put development very strongly on the agenda, by bringing out the Development consensus. Prior to that, development issues lacked discussion space at the G20-level. Today, the G20 stands at another historic moment when three developing countries are supposed to chair the G20 back-to-back: Indonesia will be followed by India and then Brazil. This seems to be the perfect opportunity for these countries to place creative economy strongly on the G20 agenda and help build a momentum to bring about a significant impact by obtaining consensus towards policy support for the sector.
ADBI Working Paper 1352 P. Kukreja et al. 29 6. CONCLUSION The creative economy has become a powerful transformative force in the world today. It is one of the most rapidly growing sectors of the world economy in terms of income generation, job creation, and export earnings. However, since there is no uniform definition of the term, and as it varies by time and space, any estimates related to it are likely to be largely ambiguous and unreliable. This calls for an utmost need to look for a comprehensive and wide-ranging definition of India’s creative economy that will help to provide more reliable estimates on the sector. Against this backdrop, the present study identifies specific characteristics of the creative economy that are relevant for India based on an in-depth analysis of the various definitions of creative economy provided in the literature. These characteristics are then used to arrive at a definition for India’s creative economy. With reference to the definition so developed and based on the various approaches used in the literature to measure the creative economy, the study provides one of the most comprehensive and exhaustive estimates on the contribution of India’s creative economy to the country’s overall employment and GVA, using the data from the Periodic Labour Force Survey (PLFS) for the years 2017–2018, 2018–2019, and 2019–2020. It is found that India’s creative economy on average accounted for 8.30% of total employment between 2017–2018 and 2019–2020. Further, it contributed about 20.22% to India’s Gross Value Added during the period. Interestingly, as compared to the non-creative workforce, a huge 88.42% wage differential in favor of creative workforce is observed. Also, the creative workforce is found to be more urban-centric, younger, and less gender biased as compared to the non-creative workforce. In terms of spatial concentration of employment, the creative workforce is found to be concentrated in cities, with Tirupur, Mumbai Suburban, Bangalore, New Delhi, and Gurgaon turning out to be the top five creative centers in India. In terms of industrial concentration, the creative workforce was found to be most highly concentrated in the industries of: (a) Media, Entertainment, and Recreation; (b) Computer Programming and Software Publishing; (c) Architecture, Design, and Engineering; (c) Fashion; and (d) Education and R&D industries. Based on the findings and consultations with experts and stakeholders, some policy suggestions are then made to support the development of the sector. These include increasing the recognition of Indian culture globally, improving access to finance for this sector, addressing bottlenecks within the country’s IPR framework, and facilitating human capital development among the youth. While it is important for India to support the sector through domestic policy reforms, its G20 Presidency in 2023 can be a great opportunity to take the lead in driving policy reforms in the sector at a global level. 7. LIMITATIONS OF THE STUDY It must be noted that the findings of the study are strongly dependent on the specific occupations that are identified as creative based on mapping of the Indian occupation categories with those from the other countries. The Periodic Labour Force Survey (PLFS) data, which is used for the present analysis provides information on occupations based on the National Classification of Occupation (NCO)-2004 at a relatively broad disaggregation of three-digit level only. The analysis could significantly improve if this classification is made available at a more disaggregate level.
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ADBI Working Paper 1352 P. Kukreja et al. 42 Table A4 continued Sector NIC 2008 Description Average Creative Intensity Tertiary 351 Electric power generation, transmission, distribution 19.56% 352 Manufacture of gas; distribution of gaseous fuels through mains 11.89% 353 Steam and air conditioning supply 2.85% 360 Water collection, treatment and supply 8.53% 370 Sewerage 4.87% 381 Waste collection 5.81% 382 Waste treatment and disposal 1.11% 383 Materials recovery 9.95% 390 Remediation activities and other waste management services 7.49% 410 Construction of buildings 1.08% 421 Construction of roads and railways 4.36% 422 Construction of utility projects 4.48% 429 Construction of other civil engineering projects 59.76% 431 Demolition and site preparation 2.05% 432 Electrical, plumbing and other construction installation activities 4.64% 433 Building completion and finishing 4.21% 439 Other specialized construction activities 2.30% 451 Sale of motor vehicles 15.82% 452 Maintenance and repair of motor vehicles 4.66% 453 Sale of motor vehicle parts and accessories 9.01% 454 Sale, maintenance and repair of motorcycles and related parts and Accessories 6.89% 461 Wholesale on a fee or contract basis 9.20% 462 Wholesale of agricultural raw materials and live animals 4.41% 463 Wholesale of food, beverages and tobacco 6.59% 464 Wholesale of household goods 10.96% 465 Wholesale of machinery, equipment and supplies 20.21% 466 Other specialized wholesale 9.41% 469 Non-specialized wholesale trade 8.98% 471 Retail sale in non-specialized stores 4.27% 472 Retail sale of food, beverages and tobacco in specialized stores 4.34% 473 Retail sale of automotive fuel in specialized stores 3.86% 474 Retail sale of information and communications equipment in specialized stores 4.38% 475 Retail sale of other household equipment in specialized stores 6.49% 476 Retail sale of cultural and recreation goods in specialized stores 3.35% 477 Retail sale of other goods in specialized stores 5.12% 478 Retail sale via stalls and markets 3.03% 479 Retail trade not in stores, stalls or markets 3.53% 491 Transport via railways 18.72% 492 Other land transport 1.01% 493 Transport via pipeline 9.97% 501 Sea and coastal water transport 19.71% 502 Inland water transport 6.72% 511 Passenger air transport 23.88% 512 Freight air transport 30.23% 521 Warehousing and storage 6.71% 522 Support activities for transportation 11.13% 531 Postal activities 9.87% 532 Courier activities 5.63% 551 Short term accommodation activities 14.10% continued on next page
ADBI Working Paper 1352 P. Kukreja et al. 43 Table A4 continued Sector NIC 2008 Description Average Creative Intensity 559 Other accommodation 5.13% 561 Restaurants and mobile food service activities 4.74% 562 Event catering and other food service activities 4.86% 563 Beverage serving activities 3.64% 581 Publishing of books, periodicals and other publishing activities 32.76% 582 Software publishing 69.82% 591 Motion picture, video and television programme activities 34.75% 592 Sound recording and music publishing activities 66.87% 601 Radio broadcasting 77.98% 602 Television programming and broadcasting activities 66.53% 611 Wired telecommunications activities 24.78% 612 Wireless telecommunications activities 33.89% 613 Satellite telecommunications activities 38.60% 619 Other telecommunications activities 35.17% 620 Computer programming, consultancy and related activities 63.74% 631 Data processing, hosting and related activities; web portals 34.27% 639 Other information service activities 30.63% 641 Monetary intermediation 25.03% 642 Activities of holding companies 13.83% 643 Trusts, funds and other financial vehicles 14.83% 649 Other financial service activities, except insurance and pension funding activities 20.45% 651 Insurance 14.62% 661 Activities auxiliary to financial service activities, except insurance and pension funding 22.95% 662 Activities auxiliary to insurance and pension funding 8.34% 663 Fund management activities 21.08% 681 Real estate activities with own or leased property 14.49% 682 Real estate activities on a fee or contract basis 6.69% 691 Legal activities 8.42% 692 Accounting, bookkeeping and auditing activities; tax consultancy 42.69% 701 Activities of head offices 24.77% 702 Management consultancy activities, *ship management and crew management 36.06% 711 Architectural and engineering activities and related technical consultancy 78.15% 712 Technical testing and analysis 53.88% 721 Research and experimental development on natural sciences and engineering 47.12% 722 Research and experimental development on social sciences and humanities 83.57% 731 Advertising 37.68% 732 Market research and public opinion polling 16.03% 741 Specialized design activities 56.85% 742 Photographic activities 50.82% 749 Other professional, scientific and technical activities n.e.c. 34.03% 750 Veterinary activities 4.79% 771 Renting and leasing of motor vehicles 2.49% 772 Renting and leasing of personal and household goods 18.61% 773 Renting and leasing of other machinery, equipment and tangible goods n.e.c. 4.19% 781 Activities of employment placement agencies 20.53% 782 Temporary employment agency activities 18.46% 783 Human resources provision and management of human resources functions 40.69% 791 Travel agency and tour operator activities 13.92% continued on next page
ADBI Working Paper 1352 P. Kukreja et al. 44 Table A4 continued Sector NIC 2008 Description Average Creative Intensity 799 Other reservation service activities 15.87% 801 Private security activities 0.64% 802 Security systems service activities 4.72% 803 Investigation activities 7.67% 811 Combined facilities support activities 8.44% 812 Cleaning activities 1.30% 813 Landscape care and maintenance service activities 3.72% 821 Office administrative and support activities 13.02% 822 Activities of call centres 18.97% 823 Organization of conventions and trade shows 25.28% 829 Business support service activities n.e.c. 23.28% 841 Administration of the State and the economic and social policy of the Community 12.06% 842 Provision of services to the community as a whole 5.09% 843 Compulsory social security activities 5.64% 851 Primary education 7.25% 852 Secondary education 57.44% 853 Higher education 66.90% 854 Other education 32.43% 855 Educational support services 15.37% 861 Hospital activities 5.67% 862 Medical and dental practice activities 3.69% 869 Other human health activities 7.79% 871 Nursing care facilities 2.29% 872 Residential care activities for mental retardation, mental health and substance abuse 9.75% 873 Residential care activities for the elderly and disabled 3.55% 879 Other residential care activities n.e.c. 9.93% 881 Social work activities without accommodation for the elderly and disabled 15.91% 889 Other social work activities without accommodation n.e.c. 28.05% 900 Creative, arts and entertainment activities 44.19% 910 Libraries, archives, museums and other cultural activities 34.54% 920 Gambling and betting activities 12.13% 931 Sports activities 66.71% 932 Other amusement and recreation activities 44.38% 941 Activities of business, employers and professional membership organizations 5.56% 942 Activities of trade unions 7.30% 949 Activities of other membership organizations 2.54% 951 Repair of computers, communication equipment 15.94% 952 Repair of personal and household goods 11.29% 960 Other personal service activities 3.22% 970 Activities of households as employers of domestic personnel 1.35% Source: Authors’ computation based on PLFS data.