JOINING THE CULTURE CLUB? BRIC COUNTRIES AS EMERGING GLOBAL CULTURAL PRODUCERS
Robert C. Kloosterman Rosa Koetsenruijter
Draft: Please do not quote without permisssion of the authors
[email protected] [email protected] Centre for Urban Studies Universiteit van Amsterdam
1. Stages of development
Bollywood films from Mumbai, modernist architectural design from Shanghai, Soviet-retro fashion from St Petersburg and samba music from Rio de Janeiro. The BRIC countries - Brazil, Russia, India and China – are not just making their mark on global markets by exporting raw materials, manufactured goods, and business services, but evidently also with products from their creative and cultural industries. Below, we will explore to what extent the BRIC countries have indeed become important global centres of cultural production. For quite some time, high-tech industries and high-end business services were seen as the hallmarks of advanced economies (cf. Sassen, 1991/2001). More recently, creative and cultural industries have also been recognised as a constituent part of the mainstays of advanced economies employing significant numbers and generating substantial income and economic growth (Pratt, 1997; Scott, 2000, 2008, 2012; Power, 2002; Florida, 2002; Kloosterman, 2004). The size of a country’s cultural industries andtheirroleinglobalmarketscan – among other things - thus be seen as an indicator of economic development.
While there is no general accepted definition of these activities - as with most concepts in social sciences - there exists quite a broad consensus about the underlying common element of these rather varied and disparate activities, namely the crucial role of symbolic and aesthetic aspects in the products of the creative and cultural industries. Here, we use the term cultural industries to denote those economic activities, following Power and Scott (2005: 3) ‘concerned in one way or another with the creation of products whose value rests primarily on their symbolic content and the ways in which it stimulates the experiential relations reactions of consumers’ (the cultural component), while these products are commodified and, hence, being sold on markets (the industries component). These markets can be local, national and even global as products of cultural industries – for example music, films, soaps, design - can be exported across borders as notably the United States and the United Kingdom, the two main exporters of such products – have amply shown (UNCTAD, 2008; Kloosterman and Koetsenruijter, 2016).
For quite some time in the second half of the 20th century, the global division of labour could be described rather well in terms of core-periphery relationships with the Western countries and Japan acting as the core, focused on high-value added production (for example high-tech manufacturing, R&D, advanced business services), the semi-periphery (mostly in Asia) concentrated on intermediate products and low-end manufacturing, while the remaining countries which constituted the periphery mainly provided raw materials. This model was fundamentally altered with the rapid rise of at first the
so-called Asian Tigers (Singapore, South Korea, Taiwan, and Hong Kong) in the 1980s as centres of more advanced forms of manufacturing and, later on, with other countries, among them notably the BRIC countries, moving up the ladder of economic development (cf. Frieden, 2006; Straubhaar, 2010; Dicken, 2011; Kloosterman et al., 2015). Thesecountrieshaveinmanyways‘succeeded in mastering much of the technological and managerial know-how of the corecapitalistcountries’ (Scott 2012: 11). This mastering has been translated first and foremost in higher-value added goods production and, increasingly, also in the provision of business services thus weaving a much more complex global division of labour than the preceding core-periphery model. Does this sea change in the global economy also entail the emergence of former (semi-)peripheral countries as international centres of cultural production? To address this more general issue, we focus on the BRIC countries as they represent emerging economies which, given their size and their domestic market, may be expected to be likely cases of nascent global centres of cultural production.
Below, we will empirically explore if the BRIC countries are indeed emerging as global centres of cultural industries and thus initiating a new phase of global economic development by focusing on two distinct sectors of cultural industries in the BRIC countries : the audio-visual sector (film, TV, music), and architectural design. They represent rather different cases of economic activities – although sharing the strategic importance of the symbolic aspect of the end product – in terms of the type of product, barriers of entry, and the structure of the market structures (suppliers, customers, power relations, level of regulation). Investigating two distinct types of cultural industries allows us to offer a more refined analysis of the possibilities and the barriers faced by the BRIC countries to enter global cultural markets.
We as well face the problem of scarcity of robust data (cf. Barrowclough and Kozul-Wright, 2011: 28; CISAC, 2014). This is partly because they are not collected at all, partly also because the quantitative data that is available tends to be rather inconsistent and hard to compare, since it is based on a wide range of different definitions. A more coherent quantitative overview regarding the role of cultural industries in the BRIC countries is, as yet, not feasible- not even for separate cultural industries. To deal with this we opted for an eclectic approach, combining data from international trade statistics and data on (lead) firms, and reputation to assess the significance of the selected key cultural industries.
We will first briefly look into the status of the BRIC countries as global cultural players (section 2). We then proceed to analytically locating the issue at hand at the intersection of processes of globalisation and that of the development of cultural industries. We will use theoretical building
blocks from two up till now rather distinct strands in economic-geographic literature, namely that on global production networks and that on cultural industries (Section 3). The next two sections deal separately with the selected cultural industries: audio-visual sector (section 4), and architectural design (section 5). We conclude by positioning our findings in a wider socio-economic and political context (section 6).
2. Setting of the scene InthewakeoftheinventionoftheBRICacronymbyJimO’NeillofGoldmanSachs,muchresearch (comparative or otherwise) has been devoted to the (actual and potential) developmental trajectories of Brazil, Russia, India and China. Trends in GDP, incomes, consumption, foreign direct investment, export, and educational levels have all been looked at in moreorlessdetail(cf.O’Neill,2011).The role of cultural industries in the BRIC countries, however, has gotten rather short shrift – a dearth absence which can be (at least partly) explained by a lack of suitable data. There are, however, a few exceptions.
Gryczka (2010) aimed to assess the stage of development of each of the BRIC countries by examining the shifts in the sectoral structure (more specifically the importance of services) and by analysing the composition of their export. He showed that in all four BRIC countries, the service sector has increased its share in the GDP in the period 1970-2008. He also analysed trends in export and observed that Brazil, India and especially China experienced a substantial growth in the export of high-tech products - a clear indicator of economic development - while Russia showed a decline. From this perspective, he also explicitly discusses the role of creative and cultural industries. Although lacking separate data for the BRIC countries, he still contendsthat‘also in this field China (and in the near future probably other fast-developing economies, for instance India) is going to become a strong competitor for developed economies’ (Gryczka, 2010: 96). This forecast already seems to be materialising according to Barrowclough and Kozul-Wright (2011: 9), who, using the COMTRADE data base, observea‘rapidgrowthofexportsofcreativeindustries”withregardtoChina,India,and Brazil.’
The most extensive analysis of the role of creative and cultural industries in the BRICS (including South Africa) so far can be found in a recent report commissioned by the CISAC – the Confédération Internationale des Sociétés d’Auteurs etCompositeurs(CISAC,2014).Usingadefinitionofcreative industries based, unsurprisingly given its background, on intellectual property rights, this report - The
Creative Industries and the BRICS; A Review of the State of the Creative Economy in Brazil, Russia, India, China and South Africa – concluded that ‘…thecreativeeconomy and creative sectors are an elemental and growing part ofalltheBRICSeconomies’ (CISAC, 2014: 10). Although hampered by the lackof‘robust data on the size and nature of economic contributions of the creative economy’ in the BRICS countries, the review nevertheless states that the contribution to the national economies of the BRICS is still rather modest compared to the average of the OECD countries (CISAC, 2014: 25).
The available data also point to marked differences between the different BRICs both in terms of overall significance and of sectoral specialisation. Using various sources, the report presents the ‘Estimated percentage contribution of copyright-based/creative industries/media and entertainment sector to GDP’ for Brazil, 1.5- 2.5% in 2000-2010; Russia, 6% in 2007; India, 6.4% in 2011; and China 6% in 2009 still way behind the United States with 11.1% in 2011.’ (CISAC, 2014: 11).
Whereas data on the domestic role of the creative and cultural industries are quite patchy, those on the export of core copyright creative goods and services are rather more comprehensive. Not without problems, though, as this data attributes exports of products to the country which exports them but the copyrights might be belong elsewhere as in the case of fashion produced in China but designed in the United States or Italy. Table 1 shows that China stands head and shoulders above the rest in terms of total value of the export of core copyright creative goods and services. China’s export consisted mainly of creative goods such as garments, arts crafts, and new media (100 billion dollars). However, some 70 per cent of these goods was designed and produced by foreign enterprises, , and, hence, creating value outside China. India exported more cultural goods than services as well, whereas Brazil and Russia exported more cultural services - such as architectural design, engineering and advertising – than cultural goods (CISAC, 2014).
Table 1 Value of export of core copyright creative goods and services of the BRIC countries, total value and broken down to goods and services, in US dollars (billions) at current prices and current exchange rates, 2010. Country
Total
value
of
core Value
of
Value of Services
copyright creative goods goods and services China
103
100
3
India
18
14
4
Russia
8
2
6
Brazil
7
1
6
Source: CISAC, 2014: 28-30
Aside to these attempts to offer more general overviews, there are also case studies focusing on either specific activities, specific places, or a combination of both in BRIC countries (for example Bautès and Valette, 2004;O’Connor,2004;YusufandNabeshima,2005;Mukherjee,2008;Straubhaar,2010; Cassiolato et al., 2011; Yingying et al., 2012). We will come back to this when we discuss the two key cultural industries.
3. Lead firms and systems houses: globalisation and cultural industries The processes of globalisation regarding creative and cultural industries encompass a whole array of social, cultural, political, and, of course, economic facets. We opt for the economic aspects as a window of entry for the analysis of the globalisation of cultural industries and combine the Global Production Network approach as developed notably by Neil Coe and Henry Yeung (2015) with Allen Scott’s(2000,2004)ideal-typical model of cultural industries.
Globalisation entered a new phase sometime in the 1980s with the advent of the so-called second unbundling whereby production chains could be ‘carved up into separate operations, which can, in principle, take place in different locations’ (Kloosterman et al., 2015: 19). This phase has created opportunities for emerging economies to insert themselves in the global economy including in the cultural industries. New approaches were needed to get a handle on the ever more complex spatial patterns of production. Initially, these approaches were very much focused at a more linear and narrow economic interpretation (i.e. cost advantages) of the emerging global value chains. The Global Production Network approach in its most recent version(“GPN 2.0”)takesamuchbroaderview(Coe and Yeung, 2015). It aims at understanding how cross-border production networks are organised and function and are sensitive to different local institutional and political conditions in which components of the value chain are actually embedded. It is, moreover, also very much aware of the role of power as particular actors, notably lead firms, are able to supervise and, to a large extent, control how and where the different components of production take place, including distribution and marketing, and,
typically, operate on a global scale (Coe and Yeung, 2015). These lead firms are ‘defined by their capacity to exercise product and/or market control, and their expanding global production networks’ (Coe and Yeung, 2015: 4). In capital- and technology intensive industries such as aircraft and car production, global production networks tend to be producer-driven chains with the lead firm, e.g. Apple or Volkswagen, using its technological know-how to control both upstream the suppliers and downstream the retailers (Coe et al. , 2013: 234-5). At the other end of the gamut, we find buyerdriven chains in industries where large retailers (such as Walmart) and brand-name merchandisers (for example Adidas) control the global production of networks. In this case, economies of scale are typically located downstream in marketing and distribution and much of the upstream activities take place in export-oriented developing countries. In all these cases, the global production networks embody specific governance regimes which reflect the relations of power and authority within the network and which also impact on the opportunities for newcomers to enter the trade (Coe and Yeung, 2015: 14). As each of the constituting components are embedded in concrete places, these networks also mirror the wider socio-economic and institutional frameworks of their complex geography including ‘state policies and regulations in domainssuchastrade,investment,andtechnology’ (Ibid.).
The Global Production Network approach departs from the level of analysis of the overall chain of production and then looks at the constituent components - lead firms, branch plants, subcontractors, distributors, and retailers – to analyse how they are interrelated. Much of the literature on cultural industries starts with the individual firm and subsequently explores how they are embedded in the urban economy. Allen Scott (2000; 2004; 2005) provided a concise ideal-typical model of cultural industries based on two key characteristics of cultural industries. On the one hand, cultural industries are marked by highly volatile demand, which undermines economies of scale and fosters vertical disintegration, thereby expanding opportunities for small firms. On the other, production in cultural industries tends to be knowledge-intensive production, dependent on dedicated labour and on the exchange of knowledge for development of products. Search costs (for labour) and transaction costs (between the firms forming networks) and costs of exchange of knowledge are significantly reduced by spatial concentration in clusters. Cultural industries are then typically found in clusters of mostly small firms in related activities as agglomeration economies are crucial for their competitiveness both in the short run (costs reduction) and in the long run (innovation) (Pratt, 1997; Capello, 2001; Kloosterman, 2004, 2008; Markusen et al., 2008; Hutton, 2015).
The important role of small firms in clusters does not imply that there are no large powerful firms in cultural industries as, for example, the Disney and the Sony corporations clearly attest (Krätke, 2003; Krätke and Taylor, 2004; Roeleveld, 2013; The Economist, 2015). Small firms (networked or stand-
alone) may be able to be successful on local markets, but catering to global markets with large numbers of customers creates opportunities for large firms which are able to generate economies of scale notably in marketing and distribution or, as in the case of the making of films, in the launch of a new project requiring a significant initial investment. Going global in cultural industries may partly mean a reversal from flexible specialisation when supplying the domestic market to Fordist mass production for international markets (Barrowclough and Kozul-Wright, 2011: 5). What emerges, then, is a more complex picture of the organisational format of cultural industries which not just comprises clusters of small firms benefiting from local agglomeration economies, but may also entail global production networks with large lead firms or systems houses organising and controlling the production chain and notably enabling access to global markets (Scott, 2000; 2005). These lead firms are powerful actors capable to pose high barriers of entry to newcomers. As Barraclough and KozulWright (2011: 14) state:‘The presence of western-dependent media structures resulting in the inability to resist the external media monopolies.’
Cultural industries tend to be in one crucial respect unlike other industries; their selling point is, by definition, their symbolic value and this is inevitably deeply intertwined with aspects of a local and national cultural identity – much more than is the case with for example electronic devices or cars. This obviously holds in a very fundamental way for those products in which (a significant part of) the symbolic value is expressed in a particular (national) language, but it also holds for say music or cinematographic styles (Lorenzen, 2012). The cultural specificity may, on the one hand, hamper its export potential as (more subtle) meanings may get lost in translation (Appadurai, 1990; Deinema, 2012). On the other, because of their intimate relationship with national identity, cultural industries which are seen to be a part of an accepted national culture can, moreover also be part of conscious state policies to support them and to fend off foreign competition which may be seen as a threat to the avowed national virtues. In many countries, cultural industries - notably the audio-visual sector - are regulated and protected. This protection is often aimed against American cultural hegemony and what is seen as the corroding effects of McDonaldisation (Osterhammel and Peterson, 2004; Barrowclough and Kozul-Wright, 2011; Jacques, 2012). Although architectural design is also embedded in local production milieus, languages of design styles (for example modernism or post-modernism) are much easier to travel across borders (Kloosterman and Stegmeijer, 2004; Kloosterman, 2008; McNeill, 2009). The audio-visual sector and architectural design thus can be seen in this respect as contrasting cases.
The lead-firm/systems houses model seems to dominate the audio-visual sector, notably film and music production, catering to global markets, however, may not be applicable to all cultural industries
as they differ in the minimum efficient scale of production (and marketing and distribution), the need for capital outlays, the structure of markets in terms of number of suppliers and customers, and in types of (state) regulation. Below, we will look at the audio-visual sector which indeed requires in the case of film and TV programme production a substantial investment and typically involves a relatively large crew of workers with different sets of sophisticated skills (Caves, 2000). These requirements, hence, imply a relative large minimum efficient scale. In the audio-visual sector, moreover, economies of scale kick in a big way downstream, as marketing and distribution in mass markets are very costly. This context is, hence, conducive to the emergence of a lead-firm/systems house model.
The organisational format in second selected key cultural industry, architectural design, can be expected to be quite different. Located very much at the beginning of value chains customers and with only limited economies of scale in marketing and distribution as the number of potential customers is relatively small, there is less room for a powerful lead firm throwing up barriers for entry of newcomers. Consequently, we expect that, from the perspective of global production networks, these markets are more easily accessible for architectural practices from developing countries if they are able to educate and train produce a sufficient number of architects. Below, we will explore to what extent firms from the BRIC countries are able to play an important role on global markets.
4. The audio-visual sector in the BRIC countries According to the basic core-periphery model of 1960s, high-value added economic activities such as high-tech manufacturing and advanced business services would primarily take place in the core countries and, subsequently, be exported from there to less-developed economies where both highly skilled labour and capital to fund such activities were much less available. In the closing decades of the 20th century, this model has been upturned by the emergence of former (semi-)peripheral countries first as locations of high-value added manufacturing and, increasingly, also of advanced services making use of a growing high-skilled labour force and also of the increasing availability of capital and exploiting the opportunities opened up by ever more complex global production networks.
The hegemonic position of core countries in cultural industries has always been much more partial than those in manufacturing or services. Those local and national cultures in countries (and regions) which have been at a relative large distance in cultural terms from the hegemonic powers proved quite resistant to globalisation and showed quite different responses to American culture after the Second World War than, for instance, the United Kingdom, the Netherlands or even France which were more
culturally proximate (Osterhammmel and Peterson, 2003). Cultural industries in these (semi)peripheral countries in which the vernacular language, musical vocabulary, and established role models played an important role were, thus, at least to some extent, protected against foreign competition on their domestic markets.
India very much fitted this pattern. Although it officially allowed foreign audio-visual products, India did not import much film or music due to what seems to be cultural barriers. Brazil, although at first open to foreign imports, pursued an import-substitution policy regarding cultural industries just as it did for other industries (Straubhaar, 2010; Cassiolato et al., 2011) China and Russia were for decades extreme cases of import substitution as they for all practical purposes were almost sealed off from the rest of the world in terms of audio-visual products as their communist regimes resisted all imports from abroad - and especially those from the superpower the United States (Straubhaar, 2011: 257; Jacques, 2012). They thus produced their own films, TV programmes and music. One could argue, then, that because of these restrictive policies in all four BRIC countries at least a foundation of a viable audio-visual sector attuned to domestic tastes was present.
With the rise in incomes and the expansion of the middle classes, domestic markets for audio-visual products have been growing as well (Mukherjee, 2011). Table 2 shows that India ranks first in the topten film producing countries with China in third place. Part of this production is for domestic use, but trade liberalisation and technological advances (digitisation) enabled export from notably India, China, and Brazil to increase in the first decade of the 21st century (Barraclough and Kozul-Wright, 2011) and according to Straubhaar (2010: 257) ‘India, China and other emerging powers are also becoming important in the global mediascape.’
Table 2 Top 10 film producing countries in 2011 Country
Number of films
1. India
1,255
2. The United States
891
3. China
584
4. Japan
441
5. The United Kingdom
299
6. France
272
7. South Korea
216
8. Germany
212
9. Spain
199
10. Italy
155
Source: UIS, 2013
In the case of India and China, a stepwise development can be observed (Taplin, 2007; Straubhaar 2010). First, catering to the domestic market, then selling audio-visual services to the Indian diaspora and culturally proximate South Asian populations abroad initially enabled by satellite television (Thussu, 2013: 158). Thereafter a new phasehassetinwithIndia’saudio-visual sector becoming truly global with Bollywood films attaining a global brand status (Mukherjee, 2011). The first two steps can also be noted for China with its expanding domestic market and its own large diaspora population. The third step, that of becoming global, however, seems to be more difficult. India’s familiarity with the English language and Western culture more in general (‘the fact that Indians are able to understand Western humour’ -Mukherjee, 2011) bestows a competitive advantage on the Indian audio-visual sector (Wiedemann, 2011).
Brazil already developed into a major exporter of television programs, especially of soap series or telenovelas already in the 1980s (Straubhaar, 2010). At first, it catered to Latin America countries, but with the diaspora of their populations it also became more global (Sinclair, 1999).
Film and television program production requires already in the production stage a fairly large sector and high-skilled workforce with technological know-how. The production of music is rather different as this already can be done on a small scale involving local players without sophisticated technological skills (Brandellero and Pfeffer, 2011). Brazil seems so far the only BRIC country which has been able to become a global power in the music industry with global superstars as Astrid Gilberto and Gilberto Gil. Like some other developing countries (for example South Africa), Brazil has a rich musical heritage because of their demographic composition and socio-cultural history (Wiedemann, 2011). Notwithstanding this rich heritage, the Brazilian music market was dominated by foreign music until the government embarked upon policy of import substitution in the 1960s (Cassiolato et al., 2011). This policy can be seen as quite successful as about 80 per cent of the domestic market is music from Brazil. The Brazilian music market for physical music itself ranks number 9 in the world (see Table 3). According to Cassiolato et al. (2011: 158), the music industry of Brazil in 2004 already comprised 6,000 firms and 73,000 employees and as digitisation has lowered barriers of entry more small and local firms are entering the domestic Brazilian market.
This success of Brazilian music is, however, only partly truly Brazilian. Like in other countries, these small firms are part of larger networks with foreign majors outsourcing talent scouting (and risk taking) and recording to these smaller firms, while they exploit their economies of scale in the distribution network. The case of Brazilian music then does fit the global production network model for cultural industries with large lead firms in control of music production on a global scale and displaying high levels of monopolistic and oligopolistic structures (Barrowclough and Kozul-Wright, 2011). Four US mega-enterprises control over 70 to 80 per cent of the world sales of music records (inter alia Universal, Warner, Sony, Kloosterman and Koetsenruijter, 2016). These same corporations control over 80 per cent of the Brazilian music market (Cassiolato et al., 2011).
Table 3 The physical and digital music industry in percentages of the total global market in 2013. Physical market shares in 2013
Digital market shares in 2013
1. Japan
31
1. United States
45
2. United States
17
2. United Kingdom
10
3. Germany
13
3. Japan
8
4. France
8
4. Germany
5
5. United Kingdom
7
5. Australia
4
6. Canada
7
6. France
4
7. Australia
2
7. Canada
4
8. Italy
2
8. Sweden
2
9. Brazil
2
9. South Korea
2
10. Netherlands
1
10. Norway
1
Source: RIAJ, 2015
The opening up of global markets for audio-visual services posed a threat to the BRIC countries. Their markets had been fenced off from foreign competition, almost completely in the Soviet Union and in China, and behind this protective walls an indigenous audio-visual sector developed. Given the barriers thrown up by language and cultural traditions characteristic of these kind of cultural industries, it would have been unlikely that the indigenous audio-visual industries would be swept away by western films, television programmes, and music. What could be expected though of the global production network model, that powerful western lead firms would be able to dominate the fragmented audio-visual sector in these countries tapping in into their know-how of domestic markets and outsource high-risk content production to small firms while reaping the benefits of their economies of scale in distribution and their technological know-how. This seems to have happened in the case of Brazilian music which, although a success in terms of sales at home as well as abroad, is controlled by foreign lead firms or systems houses. This is also very much in line with the analysis of Barraclough and Kozul-Wright (2011: 14) who emphasise the gatekeeping and controlling role of large oligopolistic and monopolistic multinational media corporations.
The audio-visual sector of India, however, displays a rather different trajectory of development which combines liberalisation and active government intervention and fosters both upgrading and access to global markets. The opening up of Indian markets did not entail a withdrawal of the state form the economic domain. On the contrary, the Indian government has intervened actively to improve the infrastructure, increase private investments and competitiveness while maintaining cultural diversity (Mukherjee, 2011). One example of such active economic policies, is the organisation by the government of film festivals where Indian film makers can show their products to potential customers
from abroad (Mukherjeee, 2011: 183). This, in addition, is not just about selling end products, but India has increasingly become part of global production networks with large media firms (notably American firms as Disney and the News Corporation) outsourcing different parts of the value chain – such as post-production - to Indian firms and now also to Chinese firms (Thussu , 2013: 156). Like in manufacturing and increasingly in services, the combined effects of liberalisation and digitisation have set in motion the process of the second unbundling in the audio-visual sector and thereby created a much more finely-grained spatial division of labour (cf. Kloosterman et al., 2015). This second unbundling triggered an inflow of technological know-how and capital which enabled upgrading of skills, products and production processes thus strengthening the position of India as a global media hub. Being ever more inserted in global audio-visual networks, also allows Indian film producers to use these distribution channels to sell their products in foreign markets (Mukherjee, 2011:186). Part of these markets are not in the West, but are in other Asian countries. Thussu (2013: 157) points at the increasing popularity of Indian entertainment in China which also stimulates joint projects such as Bollywood-inspired Chinesefilms withBollywood’s directors.
5. Architectural design Architectural design differs from the audio-visual sector in several key aspects. It is first and foremost a producer service. Unlike films and music, architectural designs are not sold on a mass market but to a relatively small number of customers. Economies of scale can be generated, but tend to be modest because of the designing process itself and because architectural practices tend to aim at projecting their own identity in design and larger scales may dilute that identity as there are limits to the span of control of the leading architects of the firm (Kloosterman, 2010). There are also no substantial economies of scale to be reaped in the distribution phase of production, whereas marketing and branding of architectural practices is very much done by a field of professional tastemakers writing blogs and articles on new buildings and designs (McNeill, 2009). Architectural design, hence, does not seem to be dominated oligopolies or monopolies. In addition, architectural design is can be seen as a cultural industry that is less bounded by cultural proximity and consequently may encounter less difficulties when it exported. The high-end of architectural design even seems to be able to cross cultural boundaries more easily given its role as a marketing tool to brand (global) cities (McNeill, 2009; Ren, 2011: 4-5). Architectural design, then, does not fit the global production network model very well as there are no large lead firms dominating the value chain. We expect that architectural practices from BRIC countries, combining low wage costs and high skilled labour, are , in principle, well positioned to enter global markets.
Data for export of architectural practices is hard to come by. The UNCTAD compiles the COMTRADE data for the export of construction services, but does not break this down into a design and an actual construction part. Several design and architecture websites, and blogs publish rankings of the best architects (Gibson, 2012; Henderson, 2012 and Ford, n.d.). These listings are dominated by Western architects (cf. Ren, 2011). The architects from elsewhere, such as Ieoh Ming Pei (China), Cesar Pelli (Argentina) and the late Oscar Niemeyer (Brazil) and Zaha Hadid (Iraq), however, typically have been educated at institutions in Western countries and have subsequently set up their practices there as well.
Aside of individual prominent architects, leading firms within the industry are assessed here as well. BD Online yearly releases a report stating the Top 100 of the largest architecture firms worldwide, inter alia based on the number of architects employed. The Top 10 largest architecture firms in 2013 are shown below in Table 4.
Table 4 Top 10 largest architecture firms in 2013, based on the number of architects employed. Firm
Number of Architects
Country of Origin
1. Aecom
1,370
United States
2. Gensler
1,346
United States
3. IBI Group
1,129
Canada
4. Nikken Sekkei
1,109
Japan
5. Aedas
1,078
China
6. Perkins & Will
771
United States
7. DP Architects
726
Singapore
8. HOK
715
United States
9. Samoo Architects & Engineers
712
South Korea
10. Foster & Partners
646
United Kingdom
Source: WA100, 2014
The scant data that we have do not yet indicate a strong emergence of architectural design from the BRIC countries on global markets. We do observe, however, a recognition for the quality and the innovativeness of a few individual architects from the BRIC countries. The Pritzker prize, for instance, was won by Whang Shu (China), Paulo Mendes de Rocha (Brazil), Oscar Niemeyer (Brazil) and I.M Pei (China).
6. Conclusions When O’Neill coined the BRIC acronym there was optimism all around regarding the economic development of Brazil, Russia, India, and China. Much in line with this optimism is one of the first attempts to assess the potential of BRIC countries as exporters of cultural products by Gryczka (2010). He paints a rather optimistic, albeit nuanced picture with India and China coming to the fore as global cultural producers. The same kind of nuanced optimism can be found in the report of the CISAC (2014) which also points to the potential of the BRIC countries but – as could be expected from a report commissioned by the Confédération Internationale des Sociétés d’Auteurs et Compositeurs – is critical when it comes to the protection of intellectual property rights which may hamper the expansion of cultural industries. All of these studies are, just like ours, much constrained by the lack of coherent and robust data, but there emerges a general picture of a still untapped huge potential which might be the next step in economic development of the BRIC countries.
Currently, the optimism about the economic development of the BRIC countries has been tainted to say the least. Brazil is facing a deep economic and financial crisis, the economic growth of China has slumped severely, and Russia’s economy is in the doldrums because of economic sanctionsandthe low oil price. As for now, only India seemed to be doing relatively well. Still, with their large populations and ditto domestic markets, relatively large number of high-skilled workers and substantial middle classes, and rich and diverse cultural traditions, there is no reason to doubt that these countries have a strong potential regarding the development of cultural industries as engines of economic growth and export
Above, we have looked at two sectors of cultural industries, the audio-visual sector and architectural design from the combined perspective of the global production network approach and the ideal-typical model of cultural industries. The available data only allowed for a more impressionistic picture. We did find evidence for Scott’s (2000: 2111) prognostication of ‘… a global but polycentric and multi/faceted system of cultural production/straddled by large multinational corporations – to make its
appearance over the course of the twenty-first century.’ We also observed- based on the studies of Straubhaar (2010), Mukherjee (2011) and Thussu (2013) – that the global production network approach – although developed for manufacturing - with its emphasis on the role of lead firms provides important insights for the cultural industries where a clear lead firm can be identified as well, notably for the audio-visual sector. The music scene in Brazil fits the model quite well. For India and, to a lesser extent China, the model only goes so far as it seems that firms in the audio-visual sector, while part of extended global network through outsourcing by a (western) lead firm, are not just able to upgrade their capabilities but also use the network in another way by using it to distribute their content and end products to a global audience. Given the role of cultural proximity, it will be only a matter of time before Indian and Chinese lead firms in the audio-visual sector will emerge which will cater to Southeast Asian audiences, the diaspora populations elsewhere, and probably also to western audiences interested in non-mainstream culture. As Straubhaar(201:259)notes‘China is one of the few countries that can directly challenge and limit the power of global media conglomerates like Murdoch’sNewsCorporation.’
To develop a globally competitive and innovative audio-visual sector, a strong protection of intellectual property rights is important (Wiedemann, 2011; CISAC, 2014), To what extent the freedom of expression is also a necessary condition for the realisation of this potential remains a moot point (Wiedemann, 2011; Jacques, 2012).
Due to a lack of data, it is even harder to draw more definite conclusions with respect to architectural design. This sector lacks clear lead firms as economies of scale are hard to realise. There some indications that Chinese architectural design is becoming more global, but no conclusive empirical evidence yet.
The global division of labour has evolved from a distinct core-periphery model to a much more complex pattern in which the BRIC countries are now also emerging as global sites of cultural production. As their audio-visual sector was for a long time protected against foreign competition by formal trade, and informal language and cultural barriers, the BRIC countries did have to start from scratch when liberalisation and digitisation opened up markets. Their historical geopolitical and cultural position together with migration patterns (diaspora) explains to a large extent their rise as global producers. This path-dependent development also helps to explain the differentiation among the BRIC countries with different countries specialising in different cultural products in different markets. One country seems to be lagging in our case, Russia (though not in the CISAC report which shows a
relatively high share of copyright-related export, CISAC, 2014). It is quite surprising that Russia with its strong tradition in literature, theatre, ballet, and music - all widely appreciated in the Western world – should absent in the global audio-visual production networks.
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