Creativity and Competitiveness (page 2) 

(c) Education

The poor performance of students in international comparisons has fostered a "back-to-basics" movement in both the US and Canada, with particular emphasis on literacy, mathematics and science.  The comparative failure of the Canadian educational system has occurred in spite of a high level of spending which in Canada, as a percentage of Gross Domestic Product, is higher than in the US or Germany.³⁷  But it is not just a failure with respect to science education that contributes to the Canadian problem of competitiveness.

English-speaking culture has never been comfortable with an education.  In Britain, until 1814, the Statute of Artificers regulated training and employment in the craft guild tradition. In that year, responding to the de-regulation or laissez-faire temper of the time, Parliament abolished the Statute.  In short order, the guild system collapsed; the labour market became flooded with unskilled workers.  By 1835 the quality of British production, particularly in textiles, had declined to the point that the British Board of Trade appointed a Select Committee to investigate. The Committee called for the marriage of Art and Industry in order to maintain British competitiveness with European rivals who actively promoted Art and Design.  The result was the establishment of the first school of design at South Kensington in 1836.³⁸

Similarly, in 1870, Massachusetts became the first American state to make art education a requirement in the public schools through passage of the Drawing Act.  The Act resulted from pressure from Boston manufacturers who argued that European students were trained in design and drawing, and therefore American manufacturers suffered a competitive disadvantage.³⁹  Within two decades, the same argument served to introduce art education into Canadian schools. ⁴⁰

During this period, the most eminent economist, Alfred Lord Marshall, explicitly recognized the importance of Art to economic life when he wrote that "it is every day more true that it is the pattern which sells the thing". ⁴¹  Since the Great Depression of the 1930s, however, the contribution of art education to national income was, in effect, forgotten in Canada.  Amnesia partially resulted from the triumph of the Pestolozzian tradition in art education - creativity and expression which displaced the economic rationale. The success of this upper-class concept also reflected the impact of the art-for-art's-sake movement which in the mid-19th century began to withdraw from what many artists considered the dehumanizing effects of the Industrial Revolution.

(d) The Economic Role of Art

There is another relationship between Art and the Information Economy.  Just as the physical sciences are the source of physical technology, Art is the source of what can be called design technology, or, in French, la tecbnologie conceptuelle.  The contribution of design to the economy is elegance, a term also used in economics, mathematics and the physical sciences.  It expresses Occam's Razor, a guiding principle of the scientific method: the fewest assumptions for the maximum explanation. Elegant also means "ingeniously simple and effective", or "more for less".

Aesthetic design is different from technical or functional design such as a more efficient automobile engine.  Its impact on consumer behaviour involves what has been called "the best looking thing that works".⁴²  If a consumer does not like the way a product looks, he or she may not even try it.

The fact is that the best looking things that work tend to come from abroad.  When the design advantage of Europe43 and Japan is combined with the wage advantage of the Third World, then Canadian producers are left with a narrowing mid-range market.  This combination of design and wage disadvantages partially explains the de-industrialization of Canada.  Improved productivity through robotics and new technology may lower costs of production, but only improved design will secure for Canadian producers a competitive share of the growing, up-scale, "Yuppie" market.

Beyond product design, Art plays another critical role in the Information Economy: advertising - perhaps the most pervasive and persuasive aspect of the information Economy. It is generally forgotten that advertising is the informational lubricant of the market economy. And advertising, to a great extent, involves the application of the literary, media, performing and visual arts to sell goods and services. Actors, dancers, singers, musicians, graphic artists, copywriters and editors are employed to sell everything from soup to nuts, from cars to computers, from beer to toilet paper. In fact, more artists are employed through corporate advertising than through corporate giving to non-profit Art. The manipulation of the emotions of consumers through advertising, the reasoned application of Art to place products in a positive context,44 highlight the role of Art as the technology of the heart within the Information Economy.

The economic role of Art was identified by the Royal Commission on the Economic Prospects of Canada when it reported:

There is, then, another aspect to culture, namely good taste, good design and creative innovation, that should enable smaller industrial economies to compete effectively in the world economy ...In this endeavour, higher quality implies an organic relationship between business and engineering, on the one hand, and design and craftsmanship on the other...High quality products, technologies, plants, homes, cities and locales require the longrun supply of artists ...governments must support ...the arts. The long-term return from investment ...is real and substantial. In the absence of strong public support of this sector, Canada will not reap these benefits. Governments at all levels should increase their contribution to their respective arts councils. ⁴⁵

What is Creativity?

According to The Concise Oxford Dictionary "creativity" derives from "creative" meaning "inventive, imaginative; showing imagination as well as routine skill".  It has been recognized by many observers that the psychology of the creative process is an area of clear commonality between Art and Science.⁴⁶  In both, creativity occurs when an individual steps beyond traditional ways of doing, knowing and making.  Thus the process which brings advances to Science - those leading to new paradigms cum Thomas Kuhn's The Structure of Scientific Revolutions ⁴⁷ - is a process of human design comparable to artistic creation.  It is not logical induction or deduction which work well within an existing paradigm.⁴⁸  As well, the norms of artistic design are inherent in the creative act - in the process, not in the object.  The parallelism between artistic and scientific creativity highlights why vigorous Art fosters scientific and technological innovation in the broader economy.

Whether in the basement inventor, experimental scientist in white lab coat, choreographer, novelist, painter or playwright, it is the creative act that generates the new knowledge that fuels the Information Economy.  At the core of this new economy is the buying and selling of new ideas, inventions, styles and techniques.  The market for creativity constitutes what I have called elsewhere the Fourth Sector of the modern economy.⁴⁹  The first sector is farming, fishing and mining; the second is manufacturing; and the third is services.

The most important law affecting Art and creativity is copyright.  Copyright and other forms of intellectual property legislation are justified as a protection of - and incentive to human creativity which otherwise could be used freely by others.  In return, the State expects creators to make their work available to society as a whole, and that a market will be created in which such work can be bought and sold.  But while the State wishes to encourage creativity, it does not want to foster harmful market power.  Accordingly, the State builds in limitations to the rights granted to the creator.  Such limitations embrace both time and space.  Rights are granted for a fixed period of time, and protect only the fixation of human creativity in material form.⁵⁰\

Intellectual property rights provide the legal foundation for the industrial organization of Art and Science.⁵¹  But legal systems are the product of specific cultures.  For example, in French-speaking and most Western European countries, droits d'auteur or author's rights are the core of what in English-speaking countries is called copyright.  Such rights are rooted in the republican revolution of the late 18th century, and the Rights of Man movement.  In the Communist Bloc, until recently, the situation was similar yet different.  While moral rights of the creator were recognized through one-time awards, all subsequent rights reverted to the State.

Moral rights are not, however, the historical root of copyright in the English-speaking world.  Rather, in the 15th century, with the introduction of the printing press, Tudor monarchs began to grant to approved printers the right to copy approved works, i.e., copyright.  Thus, the roots of copyright are censorship and feudal grants of commercial privilege.⁵²  These residuals of feudal and crown law did not vanish with .the advent of democracy.  On the contrary, they survived in attenuated form to plague democratic law and government. Obsolete in practice; they still influence the spirit of the law. ⁵³

Yet another tradition exists among aboriginal peoples.  Native copyright has not yet been embodied in statute and is based on an alien collectivist understanding of creation.  To tribal peoples, a song, story or icon does not belong to an individual but to the collective.  Rights are often exercised by only one individual in each generation, generally through matrilineal descent.  There is, however, a proposal before the US Congress to convert Amerindian Art into "inalienable communal property".⁵⁴

The sale of intellectual property across national borders is restricted by various devices including the Manufacturing Clause in the US Copyright Act, which requires that no book by an American author be sold in the US unless it is printed in the US (Canada is currently exempted from this clause).  France imposes the most sophisticated barriers to intellectual property: if one enters Canada with a computer tape, tariffs are applied to the value of the physical tape; if one enters France with the same tape, tariffs are levied not on the value of the tape, but on the value of its contents.  If, for example, computer software developed for the US market is sold at marginal cost in the French market, then equivalent French-based software will be undercut in terms of price, and the competitiveness of French intellectual property will be reduced.  If this principle were applied to American film and TV programs, they would be exposed to tariffs at the cost of production.  Sale in a foreign market at less than that price would be dumping.

The significance of this Fourth Sector is reflected in the hard-nosed American negotiating position leading to the Canada-US Free Trade Agreement, the similarly tough American posture in current GATT discussions, and the recent genuflection of newly industrialized Asian tigers to American interpretation of international intellectual property conventions.  From video piracy to art fraud, from trade mark and patent infringement to copyright abuse and theft of registered industrial designs: while hiding behind headlines about agricultural subsidies, the American government has demonstrated that international competitiveness increasingly depends on abstract intellectual properties, the economic rights associated with them, and the ability to enforce legally these rights.

Traditional intellectual property legislation is subject to international convention.  Canada is thus required to extend national treatment to foreign citizens, both individual and corporate, if rights are embodied in the Copyright Act and if foreign states extend the same rights to Canadians.  There exists, however, a class of intellectual property rights not covered by convention: so-called parallel rights, which are becoming increasingly common in the US. Such rights include droits de suite, i.e., rights of following sale for visual artists.  Early in his or her career, an artist sells a work which is subsequently resold at a much higher price.  With the right of following sale, the artist is entitled to a percentage of the increased sale price.  This right has been created in California and New York and declared constitutional by the courts even though it applies only to citizens of those states.  Another American example is the Chip Protection Act, which provides copyright-like protection for integrated microchips to prevent "reverse engineering", i.e., a competitor's taking a chip apart to discover its design and then creating a similar chip.  American business groups and a bipartisan coalition of Congressional leaders are also pressing for legislation to provide tenyear copyright-like protection for product designs as small as the curve on an automobile bumper.⁵⁵

A more far-reaching example exists in the Republic of Ireland, where all copyright income earned by residents is exempt from personal income tax.  This has led a large number of authors to take up residence in Ireland.  Even Canada has adopted some parallel rights, such as Public Lending Right, which highlight a related issue: market failure with respect to intellectual property.  All citizens gain through the diffusion of knowledge resulting from the public library system. Authors, however, are denied sales because works are available through libraries. The government of Canada recognized market failure by creating the Public Lending Right program, which pays authors for works held in libraries.  Accordingly, around the world, governments are enhancing incentives for creativity through the use of parallel rights, outside of international conventions, thereby avoiding payment or protection to foreigners.

Gilles Paquet of the University of Ottawa has argued that free trade does not mean Canada should give up important levers of government action to manage trade to its national advantage.  It only constrains such action. In an Information Economy, he notes, knowledge is a central input and the production of knowledge - scientific, technical and artistic - is a critical economic activity.  Government has a responsibility to ensure that production of knowledge is treated as a 21st century equivalent of railroads and transportation infrastructure that made the Industrial Revolution possible.  The decision of Canada to exclude intellectual property from the CanadaUS Free Trade Agreement means that the government either recognizes the role of such policy instruments in an Information Economy, or has reserved judgement.⁵⁶

This decision provides a window of opportunity for development of policies and programs to encourage knowledge production in Canada.  One possible vehicle is parallel rights.  Such rights are a means by which the government of Canada, or the provinces, can provide compensation and create incentives for knowledge production that are restricted to Canadians. Funds similar to the Public Lending Right program could be developed to ensure that Canadian creators receive a just and fair economic return on their work.  This approach would represent a shift away from a supply-side policy of direct grants to producers (called, by some, "artistic welfare") towards demand-side policies which compensate producers for the use of their work by consumers but for which the market fails to provide a just or adequate return.

One immediate example is Performers' Rights for Canadian performers whose works are broadcast.  To avoid foreign criticism and countervail measures, compensation for the "re-use" of the work of Canadian artists should be available only to individuals, not to corporate entities, i.e., they should be nontransferable.  They should not become commercial rights bought and sold in the marketplace.

Similar Canadian parallel rights, restricted to individual creators, could be developed for patents, registered industrial design, and trade marks.  The rationale is the creativity haven of the 21st century, analogous to the, tax, haven of the 20th.  If creativity, in all domains of human endeavour, is the ultimate means of production in an Information Economy, then international economic competitiveness in the 21st century will focus on competitive national and regional policies conducive to creativity and exploitation of associated intellectual property rights. 
In a more philosophic vein, a community, region or nation will eventually run out of critical raw materials and lose comparative advantages which have been the traditional source of personal and public wealth.  Only creativity can conjure up a substitute to turn lead into gold, sand into silicon chips, or a first novel into billions in the form of book, movie, T-shirt, toys, records, tapes and other ancillary sales and royalties.

With foresight, we can anticipate the inevitable, diversify local economies, and, most importantly, create a civic climate which stimulates new ideas, market innovations, progressive change and development.  Today, there are as many people in Canadian regional centres as in ancient Athens, Renaissance Florence, or Shakespearean London. All that is lacking is a civic psychic alchemy that cultivates talent and genius.  How much is one Edison or Armani worth to a national, regional, or local economy if he or she is attached to that community by ties of care and culture?  As the Japanese say, "An obligation not felt is not an obligation."

The 1990s will, I believe, see a change in local, regional and national economic planning - a shift from the "tax haven" strategy of the 60s, 70s and 80s aimed at attracting manufacturing industries through the use of costly tax concessions towards a "creativity haven" strategy. Such a policy, is aimed at promoting and retaining local talent and attracting the best minds from afar by creating a community or country in which such talent wants to live, love, work and belong.  The instruments of such a strategy include tax and fiscal policies, and, most importantly, innovative use of intellectual property rights of all types to reward creators for their contribution to the Information Economy.

If Canada, through these or other policy measures, comes to recognize the role and contribution of creativity - artistic and scientific - to the competitiveness of the Information Economy, then Leonard Cohen could be right when he sings, "First we take Manhattan, then we take Berlin."⁵⁷ 


Notes

1. Porat, M.U., The Information Economy, US Department of Commerce, Washington, DC, 1977.
2. Chartrand, H.H., "The Hard Facts: Perspectives of Cultural Economics", Transactions of the Royal Society of Canada, Series V, Vol. IV, 1989, University of Toronto Press, 1990.
3. Surtees, L., "Quality control found lacking", The Globe and Mail, October 17, 1990, 136.
4. Paquet, G., "Science and Technology Policy Under Free Trade", Technology in Society, Vol. II, Pergammon Press, 1990, pp. 221-234.
5. Innis, H.A., Essays in Canadian Economic History, University of Toronto Press, 1956.
6. Innis, H.A., Empire and Communications, University of Toronto Press, 1950.
7. Innis, H.A., Bias of Communications, University of Toronto Press, 1951.
8. McLuhan, M., "The Eye and the Ear and the Hemisphere of the Brain", Futures Canada, Vol. 2, No. 4, 1978.
9. McLuhan, M. and R.K. Logan, "Alphabet, Mother of Invention", Et Cetera, December 1977.
10. Jussawalla, M. and C.W. Cheah, "International Trade and Information: Some Welfare Implications", in M. Jussawalla and H. Ebenfield, eds., Communication and Information Economics: New Perspectives, North Holland, 1984, pp. 51-71.
11. Dasgupta, P. Stoneman, eds., Economic Policy and Technological Performance, Cambridge University Press, 1987.
12. Harman, W., "Mind Research and Human Potential", Congressional Clearinghouse on the Future, November 1979.
13. Chartrand, H.H., "University Research in the Information Economy: A Clash of Cultures", in University Research and the Future of Canada, B. Abu-Laban (ed.), University of Ottawa, 1989.
14. Naimark, A., "Legislative wrong doesn't make a (copy)right", Globe and Mail, May 6, 1988.
15. Berleant, A., "Surrogate Theories of Art", Philosophy and Phenomenological Research, University of Buffalo, December 1969, #2, Vol. XXX, pp. 163-185.
16. "Meet the new media monsters", The Economist, March 11, 1989, pp. 65-66.
17. "Crowd Pleasers", The Globe and Mail, Report on Business Magazine, July 1990, p. 55.
18. "Research and Evaluation", Selected Arts Research Statistics, 8tb edition, The Canada Council, December 1988.
19. Robinson, K., ed., The Arts and Higher Education, Society for Research into Higher Education, Guildford, UK, 1982, p. 134.
20. Cantor, N.F., Medieval History: The Life and Death of a Civilization, second edition, Macmillan, 1969.
21. von Busch, W., editor-in-chief, Art Education and Artists' Training in the Federal Republic of Germany, Inter Nationes, Number 7-8(e), Bonn, 1985, p. 3.
22. Robinson, op. cit., pp. 178-179, 191-192.
23. "Industry Outlook Scoreboard", Business Week, March 21, 1984, pp. 236-284.
24. Lortie, P., "National target for R & D spending a mistaken notion", The Globe and Mail, March 23, 1990, B2.
25. Surtees, op. cit.
26. Dylan, Bob, "Ballad of a Thin Man", Highway 61 Revisited, CBS Records, 1965.
27. Boulding, K.E., "Toward the Development of a Cultural Economics", Social Science Quarterly, Vol. 53, No. 2, September 1972, 267-284.
28. Chartrand, 1990, op. cit.
29. Slesin, S., "IKEA Takes on New York in Big Way", New York Times, May 17, 1990, CT & 6.
30. Economic Council of Canada, The Bottom Line, Ottawa, 1985.
31. Science Council of Canada, Placing Technology Upfront: Addressing Bilateral Trade Negotiations, Ottawa, May 1986.
32. Lortie, P., "Getting more bang for education bucks", The Globe and Mail, September 10, 1990, B8.
33. Bell, D., The Cultural Contradictions of Capitalism, Basic Books, New York, 1976, pp. 33-35.
34. Sellner, J.B., "The Arts and Business Partners in the Economy", in Issues in Supporting the Arts, C. Violette and R. Taqqu, ads., Graduate School of Business and Public Administration, Cornell University, 1982, p. 82.
35. Shanahan, J., "The Arts and Urban Development", in The Arts and Urban Development: Critical .Comment and Discussions, W.S. Hendon, ed., Center for Urban Studies, University of Akron, August 1980 p. 8.
36. Galbraith, J.K., Economics and the Public Purpose, New American Library, Toronto, 1973, p. 60.
37. Lortie, op. cit., March 23, 1990.
38. Savage, L., "The History of'Art Education and Social History: Text and Context in a' British Case of Art School History", in Wilson, B. and H. Hoffa, ads., The History of Art Education: Proceedings from the Penn State Conference, Pennsylvania State University, 1985.
39. Freedman, K., "Art Education and the Development of the Academy: The Ideological Origins of Curriculum Theory", ibid.
40. Chalmers, F.G., "South Kensington and the Colonies II: The Influence of Walter Smith in Canada", ibid.
41. Marshall, A., Principles of Economics, 8th edition, English Language Book Society, London, 1969.
42. Cwi, D., Cultural Policy Institute, in conversation with the author, November 1985.
43. Scitovsky, T., The Joyless Economy, Oxford University Press, 1976.
44. McCracken, G., Culture and Consumption: New Approaches to the Symbolic Character of Consumer Goods and Services, Indiana University Press, 1988.
45. Royal Commission on the Economic Prospects of Canada, Report: Volume II, Supply and Services Canada, Ottawa, 1985.
46. Meyer, L.B., "Concerning the Sciences, the Arts and the Humanities", Critical Inquiry, Vol. 1, No. 1, September 1974, pp. 163-217.
47. Kuhn, T.S., The Structure of Scientific Revolutions, University of Chicage Press, 1962.
48. Jantsch, E., Design for Evolution, Braziller, New York, 1975, p. 80.
49. Chartrand, H.H., The Canadian Cultural Industries, Futures Socio-Economic Planning Consultants, Ottawa, 1979.
50. Chartrand, H.H., A Guide to Copyright Reform in Canada: A Cross Reference of Proposed Revisions to the Canadian Copyright Act 1977 to 1987, Research and Evaluation, The Canada Council, 1987.
51. Commons, J.R., The Legal Foundations of Capitalism (1926), University of Wisconsin Press, 1957.
52. MacDonald, B., Copyright in Context: The Challenge of Change, Economic Council of Canada, Ottawa, January 1971.
53. Gray, H.M., "Reflections on Innis and Institutional Economics", in W. Melody, L. Salter and P. Heyer, ads., Culture, Communication and Dependency: The Tradition of H.A. Innis, Ablex Publishing Corp., Norwood, 1981.
54. Suro, R., "Quiet Effort to Regain Idols May Alter Views of Indian Art", New York Times, August 13, 1990, A1 & 13.
55. Andrews, E.L., "When Imitation Isn't the Sincerest Form of Flattery", New York Times, August 5, 1990, E20.
56. Paquet, op. cit., p. 229.
57. Cohen, L., "First We Take Manhattan", I'm Your Man, Columbia Records, 1988.