By Sebastian Fernandez
In 2013, Colombia’s incumbent president, Iván Duque Márquez, co-wrote The Orange Economy: An Infinite Opportunity, an economic manual that advocates for the development of creative and cultural industries (CCIs). Duque uses the term “Orange Economy” to refer to CCIs as a whole. He attributes the necessity of the term to the ambiguity that has existed when discussing CCIs due to the copious number of redundant labels with similar meanings—such as leisure industries, cultural economies, and so forth. The new term solves this problem by taking all of these labels and sectors and “squeezing” them together like an orange into the compact title of “Orange Economy.”
The convenient new title will prove useful for Colombia, as Duque wants to ensure that its Orange Economy will be a topic of frequent discussion in the coming years. Since assuming office, Duque has remained focused on furthering the pro-CCI ideas expressed in The Orange Economy, making the development of Colombia’s CCIs a primary economic objective. Developing the Orange Economy is a step in the right direction for Colombia, which has historically been dependent on industrial sectors. Increasing the output of its CCIs represents a valuable opportunity for Colombia, as CCIs have been a consistently growing contributor to Colombia’s GDP in the past, and CCIs aid in diversifying Colombia’s markets—especially away from overdependence on oil.
The growth of creative sectors in the decade leading up to Duque taking office has been a boon for Colombia’s output, providing a contemporary example of the type of economic growth that he hopes to achieve with the Orange Economy. In 2005, the United Nations Educational, Scientific, and Cultural Organization (UNESCO) held its Convention on the Protection and Promotion of the Diversity of Cultural Expressions, a convention intended to examine the global cultural sector and outline a “framework for [the] governance for culture.” In 2018, over a decade later, UNESCO published the report Re|Shaping Cultural Policies, which aims to catalog progress on the goals originally outlined in 2005. In the report, Mariana Garcés Córdoba, Colombia’s current Minister of Culture, states that Colombia is aiming to improve its “development of cultural entrepreneurship” and “[strengthen] artistic training and [elaborate] long-term plans in the field of performing and visual arts.” The content of the report supports Córdoba’s claims, enumerating the sizable growth of Colombia’s CCIs.
A primary sector of CCIs covered in UNESCO’s Re|Shaping Cultural Policies report is the Colombian film industry. Robust film industry policies have been enacted, such as the Location Colombia Act of 2012, which provides tax incentives for investments in film projects. Additionally, UNESCO reports that the number of feature films produced in Colombia increased from 5 in 2003 to 41 in 2016. Over the same period, box office sales skyrocketed from 351,000 to 4.79 million, far outpacing Colombia’s natural population growth. Moreover, Ciro Guerra’s 2015 film Embrace the Serpent recently became the first Colombian movie ever nominated for the Best Foreign Language Film Academy Award, another indication of the industry’s advancement.
Now, as would be expected from this advancement, Colombia’s film industry makes up roughly a third of the state’s CCI output. This increased output has benefited the nation’s overall economic growth, as well. Colombia’s National Administrative Department of Statistics (DANE) reports that CCIs grew consistently from 2008 to 2017. So much so that Colombia’s creative industries grew faster in the last decade than the nation’s overall output and some more traditionally profitable industries. The World Bank recorded that Colombia’s GDP grew 38.7% from 2008 to 2017, and over the same period, DANE reports that manufacturing industries grew 50.1%. However, CCIs outpaced both GDP and manufacturing over this stretch, growing 88.6%. Furthermore, the Americas Society/Council of the Americas (AS/COA) noted in 2018 that Colombia’s CCIs account for approximately 3.3% of its GDP. In comparison, CCIs account for roughly 6% of global GDP, implying high potential for further growth.
These recent trends provide credibility to Duque’s focus on the Orange Economy as a future driver of economic growth for Colombia. Duque argues that CCIs have historically been overlooked due to the uncertainty of the creative process and the resulting difficulty that comes with turning a nation’s culture into a profitable venture. Duque also cites the broadness of the variety of economic sectors that fall under CCIs as a reason for their historical omission from much discussion. In The Orange Economy, Duque defines the sectors that fall under Orange Economy using three widely overlapping categories: arts and culture as productive ventures (such as film and music), products related to intellectual property (all copyrighted content), and any services in the value chain that work to convert ideas into consumable products. Given that these categories include everything from architecture to crafts, and also newer products like software, the broadness of CCIs will help shift the country’s economy away from industrial and raw material sectors—providing essential diversification that has long proved elusive.
Colombia should be eager to make Córdoba’s statements to UNESCO about its development of creative industries a reality. According to OPEC, an international oil cartel, Colombia doubled its crude oil exports between 2004 and 2015, increasing from about 340,000 to 736,000 barrels per day. As of 2017, OPEC reports that exports have fallen closer to 580,000 barrels per day, but this quantity still rivals Colombia’s past export peak of 610,000 barrels per day in 2000. Colombia’s increased crude oil exports put its economy at risk of overdependence on the stability of the global oil market. Additionally, the AS/COA states that one-fifth of the Colombian government’s revenue came from oil profits in 2018. Diversifying the source of Colombia’s GDP away from crude oil is therefore a national priority.
Not only has Colombia already experienced the impact of their dependence on the oil market, but it also borne witness to an economic crisis right in its backyard; Venezuela experienced a crisis in 2014 which was exacerbated by a decline in oil prices. In 2016, OPEC estimated that 96% of Venezuelan exports came from oil, making it the single most oil-reliant nation in the world. The severe results of reduced oil prices on Venezuela’s economy serve as a warning to Colombia; the same 2014 decrease in oil prices that impacted Venezuela was reported by DANE to have caused a 25.9% reduction in Colombia’s oil profits from 2014 to 2015.
Further arguments against reliance on oil were published in a 2016 study by the National University of Colombia. The study warns against the dangers of being too reliant on “the export of natural raw materials without added value,” a trend related to stagnating growth of “the knowledge pool from which [a] society as a whole can benefit in terms of the production of innovation.” To stabilize economic growth, avoid Venezuela-style economic collapse, and ensure productivity levels continue to grow, Colombia must develop new industries with even further potential for expansion, as Duque seems to plan on doing with Orange Economy.
The Orange Economy was one of Duque’s central proposals during his first 100 days in office. Still, new policy remains in its infancy. In November 2018, an auction for “orange bonds” representing creative infrastructure was held. Duque has big plans for the Orange Economy, however, including the establishment of a free-trade zone for cultural products in Latin America. Although the long-term impacts of Duque’s plans are yet to be seen, CCIs have recently exhibited potential for significant growth in Colombia, and developing the nation’s CCIs would serve as an effective diversification of Colombia’s outputs other than raw materials. The future looks bright for Colombia’s Orange Economy.