Image: Barbadian Prime Minister Mia Mottley honors Rihanna as a National Hero, during the Presidential Inauguration Ceremony, in Bridgetown, November 2021. Source: Jeff J. Mitchell / AP.
With the losses suffered by Caribbean jurisdictions to their economies, especially in the tourism sector, due to the COVID-19 pandemic and the financial services sector suffering from extra-regional regulatory requirements, the region needs an injection of energy. In particular, the creative and orange economies offer fantastic opportunities. This paper suggests some potential innovation policy mechanisms whereby Caribbean nations may be able to stimulate investment in these sectors.
The creative economy embraces all sectors that base their goods and services on intellectual property (IP), such as advertising, architecture, fashion, film, music, games and toys, publishing, research and development (R&D), and visual and performing arts.[1]
The orange economy involves the relationship between culture and the economy. In “Human Imagination, Innovation, and Competitiveness in the Caribbean,” Doctor Keith Nurse of the University of the West Indies writes that the orange economy includes “cultural industries, creative industries, leisure industries, entertainment industries, content industries, copyright protected industries, the cultural economy, and the creative economy.”[2]
As slow growth and structural unemployment continue to plague Caribbean jurisdictions and interact with insufficient finance, climate change, and rising food and energy prices, Caribbean jurisdictions must develop new routes to economic transformation in order to revitalize and reinvent their economies. Caribbean jurisdictions must grapple with the new economy of small national and regional markets, low levels of financial and human resources for technological development, high administrative and logistics costs, and strong vested interests.
The goal is to enable Caribbean jurisdictions to recast their status as low-cost producers to producers of more knowledge-intensive products and services.
The Caribbean requires an innovation-focused policy agenda for the creative and orange economies. In particular, this requires rethinking innovation governance. The latter consists of a broad spectrum of policy mechanisms. They include traditional trade, tax,[3] and financing reform to policies that facilitate research and development. They also involve ancillary business support services, such as technical assistance and trade facilitation through export promotion, marketing, sales, and distribution.
Innovation governance requires coordination mechanisms and networking opportunities for stakeholders to reduce transactional costs. The reduction of transactional costs will assist increased market entry and lower uncertainty and risk, especially for small and medium-sized enterprises (SMEs). SMEs constitute the bulk of businesses in the region. Hence, innovation governance aims, inter alia, to coordinate economic change and encourage experimentation.
Nurse, a prominent commentator on innovation governance in the Caribbean, has suggested an interconnected three-pronged approach for long-term sustainable development whereby small states must develop: (1) administrative and coordinating capacity to operate and take advantage of both regional and international networks; (2) policies facilitating private sector efforts at innovation must be industry, technology, and value-chain specific while considering the global context; (3) connecting macroeconomic policies with innovation policies to cope with the financial fragility in Caribbean small-market economies.[4]
A challenge is to facilitate an innovation agenda in the context of small Caribbean states, which have inherited a rote-oriented educational system, inflexible command and control management styles, and risk-averse business culture and bureaucratic governmental systems. The lack of cutting-edge or even relatively effective R&D institutions further exacerbates these challenges. Moreover, most R&D institutions are often attached to a university with few resources and institutional depth.
A critical task is how the Caribbean can integrate cultural and economic development and include the commercial dimensions of culture and creativity, especially their interaction with technology, infrastructure, and markets. Caribbean jurisdictions must integrate the mobilization and organizational capabilities of NGOs and public-private partnerships with the economics of value creation. The goal is to support the cultural sector’s partnering with the public and private sectors in terms of investment and capacity-building. Another goal is to facilitate a change in social awareness that promotes the appreciation for the value of creative work and associated IP rights.[5] In particular, the Caribbean must develop an effective strategy on intermediaries so that interested jurisdictions can more strongly develop the orange economy.
National Strategies
National governments must take the lead in establishing the innovation agenda and environment. Jamaica has served as a leader in this regard. Many Caribbean countries have worked to integrate the cultural dimension of nation-building into the total strategy of national development. Since the nationalist effervescence of the late thirties, Jamaican leaders have communicated the need for a conscious role of creative artists and cultural agents in nation-building. As a result, succeeding governments have developed a strong institutional foundation for this cultural development. In particular, its development plan integrated the need to cultivate the creative traditions of its African ascendants.
Since the 1970s, the Jamaican government has adopted a cultural mission to stimulate and promote the creative arts, intellectual creativity, and the exercise of tutelage and curatorship over the cultural inheritance and historical interests of the nation.[6]
Under the Office of the Prime Minister is the Ministry of Culture, Entertainment, and Sport. The latter administers by statute the Institute of Jamaica, whose mandate is to encourage art, literature, science, history; protect, preserve, and promote the nation’s patrimony; and coordinate national cultural development. The institute cooperates with national voluntary cultural organizations, such as ones for performing artists, writers, visual artists, scientific associations, learned societies, and the University of the West Indies. The Institute of Jamaica also cooperates with other ministries and government agencies with cultural interests, such as Foreign Affairs, Youth and Sports, National Craft Development Agency, and the Ministry of Education. The Ministry is also responsible for the Jamaica National Heritage Trust (NTH) and the Jamaica Cultural Development Commission (JCDC) (formerly the Jamaica Festival Commission). The NHT leads the preservation of historic sites and the promotion of national heritage. The JCDC is in charge of promotions of community cultural development (craft, ordinary arts, performing arts, pop music, etc.).
In 2002, the Jamaica government established the Culture, Health, Arts, and Sports and Education (CHASE), which has funded USD $17 billion worth of 3,725 projects from 2002 to 2017.
Among the major institutions for creative arts that CHASE has funded during this period are the Edna Manley College of Visual and Performing Arts, the National Dance Theatre Company, the National Gallery of Jamaica, and the Little Theatre Movement.
In 1977, the Jamaican Parliament enacted a new copyright law to prevent the wanton pirating of works inside and outside the country.
Innovation Hubs: Ruta N, Medellín
One way that Caribbean countries can foster the innovation agenda and develop the creative and orange economies is to develop innovation hubs to support those economies. The innovation hub can emulate other innovation hubs in the region, such as Ruta N Medellín, Panama City of Knowledge, and the Cayman Enterprise Zone. Let’s examine one of these, namely Ruta N.
In 2009, the mayor’s office of Medellín established Ruta N Corp. as a regional innovation agency to transition Medellín, Colombia, from an industrial city to a knowledge-based one. Ruta N has a platform that furnishes office space, utilities, and conference rooms at market cost. From 2012 to 2018, 210 companies from 30 countries generated more than 2,800 innovation-based jobs in Ruta N.
The goals of Ruta N are to contribute to the improvement of the quality of life of the residents of Medellín through science, technology, and innovation. To accomplish its goals, Ruta N has three strategic priorities: (1) attract talent, capital, and global companies to the city; (2) develop and strengthen the innovative and entrepreneurial business fabric; and (3) generate technological and innovative solutions for city challenges.
By continually developing to respond to the changing needs of the ecosystem, it follows its core principle that its greatest economic indicator and engine is the power of innovation.
A major way Ruta N fulfills its goals is through a building complex with offices, conference areas, restaurants, and a rooftop terrace. The design facilitates collaboration and has several areas that entrepreneurs use to share ideas and develop networks and alliances.
Ruta N has five dimensions: (1) urban, whereby it has transformed a part of the urban area through real estate and infrastructure development; (2) business, whereby it promotes and grows local entrepreneurship and facilitates entrepreneurs’ entry into the international arena; (3) social, which seeks broad inclusion by promoting a culture of innovation; (4) human talent, which fosters professional skills and implements strategies to create, develop, and retain talent; and (5) innovation, which integrates science and the market and to foster progress in Medellín through innovation.
It brings together businesspeople, academics, investors, and students. The latter include persons who form part of SMEs and want to use alternative financing. In particular, it took crowdfunding a step further. With the support of the Colombian Stock Exchange, A2censo has provided this model with a new approach. It has converted it into an investment alternative through a platform where SMEs and investors meet to make companies grow.
The academy has training for teachers, free guidance to entrepreneurs, companies, and investors on IP, industrial design, patents, and trading.
Ruta N has six working areas: (1) knowledge business, which supports innovative start-ups and SMEs to provide access to international markets and capital and to develop the capacity to import knowledge; (2) the Medellínnovation District; (3) organizational innovation; (4) R&D; (5) special projects; and (6) forecasting. It attracts innovative companies, especially in the areas of health, energy, information technology, and communications.
Ruta N takes start-ups and helps them through their life cycles from product development to seed investment. In addition, it organizes community and network events to connect entrepreneurs with venture capitalists and investors.
The Ruta N community has alliances with various universities and La Red de Capital Inteligente (The Network of Intelligent Capital), a collection of more than 30 investment groups in Colombia that help nurture Medellín’s ecosystem of entrepreneurship. Ruta N also manages various public grants, supporting young companies and providing training.
Application to the Caribbean
Caribbean jurisdictions should consider developing innovation hubs emulating Ruta N. They should have a component on the creative and orange economies. These hubs would link visual and performing artists and other members of the creative and orange economy with investors, accountants, and lawyers—especially ones knowledgeable about international agreements and licensing. They would give courses on accounting, law, financing, and marketing for the creative and orange economies, including the international aspects. In addition, it would include persons experienced in using social media to both perform and market services.
To help develop capacity building—bearing in mind the lack of institutional R&D and financing—it would seek collaboration with international organizations, such as the World Bank Group (International Finance Corporation), the Inter-American Development, and the European Union through the Economic Partnership Agreement with CARIFORUM. It would seek collaboration with governments, such as the Colombian government’s Strategy for Cooperation with the Caribbean Basin and Cuba through CARICOM Cuba Trade and Economic Cooperation Agreement. The Caribbean jurisdictions should partner with the U.S. and Canada through the national and state/provincial governments and universities. Already some Caribbean universities have agreements with foreign universities to exchange professors, students, and courses. In this regard courses on Caribbean culture, including music, dance, carnivals, and visual art should be popular and increased, partly to develop more activity and investment.
The Need for International Cooperation
Among the international organizations working to promote culture in the region is the United Nations Educational, Scientific and Cultural Organization (UNESCO). Its Transcultura: Integrating Cuba, the Caribbean and the European Union through Culture and Creativity program started in 2020 with funding the European Union. Transcultra aims to deepen cultural integration in the Caribbean and strengthen people-to-people cooperation and exchange in the region and the European Union. The EU has contributed over $15 million in financing. Beneficiaries include the 17 Member States of the Caribbean Community (CARICOM), the Caribbean Forum (CARIFORUM), and the Organization of Eastern Caribbean States (OECS), namely Antigua and Barbuda, Bahamas, Barbados, Belize, Cuba, Dominica, the Dominican Republic, Grenada, Guyana, Haiti, Jamaica, Montserrat, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname, as well as Trinidad and Tobago.
Another inter-governmental organization supporting the creative economy and culture in the region is the Inter-American Council for Integral Development (CIDI) of the Organization of American States (OAS). The OAS organized the Eighth Inter-American Meeting of Ministers of Cultural and Highest Appropriate Authorities in Barbados on September 19 and 20, 2019. At the meeting, the authorities of OAS member countries issued The Declaration of Bridgetown on “Strengthening the Creative Economy and Culture Sector: Repositioning the Culture Sector to Secure Sustainable Development.” It calls, inter alia, for the Inter-American Committee on Culture (CIC) to consider proposing an initiative to foster regional cooperation, in the framework of the Work Plan of CIC, to promote opportunities for sharing and exchanging information and experiences in the creative economy of the Americas and requests the OAS to work with relevant international organizations, such as UNESCO, to support member states, in generating policies, aimed at advancing the creative economy and cultural sector.
The Inter-American Development Bank’s Culture, Solidarity, and Creativity Affairs Division has produced a non-convention manual on the importance of the orange economy and the analytical tools for nations to take advantage of the opportunities across the arts, heritage, media, and creative services. The manual underscores the commercial dimension of culture and creativity and its interaction with markets, infrastructure, technology, etc. It highlights the mobilization and organizational skills of NGOs with economic notions of value creation to displace the sector’s overreliance on public and charitable investment. It recommends that the cultural sector partner with the public and private sector in terms of investment rather than expenditure and the need for effective protection and regulation of intellectual property so that the right holders will benefit.
The manual states that the orange economy can create new jobs with relatively low levels of investment, such as making micro-loans to support participatory community projects, as Jamaica has done.
Additionally, education ministries must make reforms and emphasize digital literacy. Science, technology, engineering, and mathematics (STEM) programs must integrate arts and design creativity into their curriculums, to become STEAMD instead.
CARICOM’s revised treaty of Chaguaramas provides in Art. 17(2)(e) that the Council for Human and Social Development (COHSOD), which consists of ministers designated by the Member States, promotes and establishes programs for the development of culture and sports in the Community. One of the regional initiatives with respect to culture has been the Caribbean Festival of Arts (CARIFESTA), an international multicultural event organized periodically by the countries of the Caribbean. The main purpose is to gather artists, musicians, and authors to exhibit the folkloric and artistic manifestations of the Caribbean and Latin American region.
Corporate Social Responsibility
Most multinational enterprises (MNEs) have corporate social responsibility programs. Some of these match the priorities of Caribbean governments: environmental, social, and governance; sustainability; privacy, security, transparency, and the responsible use of artificial intelligence; strengthening communities, including via nutrition and disaster relief and preparedness; and using technology to address societal and environmental challenges. In particular, the Caribbean would want to partner with MNEs that focus on these areas in addition to the creative and orange economies.
MNEs which have direct investment in and sell their products to the Caribbean may be interested in using their corporate social responsibility funds in the region, which could help raise their visibility as good corporate citizens and market a positive image. In addition, since many Caribbean cultural products become cross-over, that is, a fusion of the Caribbean and other cultures, MNEs have an opportunity to develop new profitable products through their corporate social responsibility activities.
Some MNEs require grant applications, while others accept applications only by invitation. In some cases, only nonprofit organizations are eligible to apply.
Importantly, MNEs with corporate social responsibility programs are numerous and diverse. Therefore, Caribbean governments, universities, and NGOs should be able to access some of those programs to achieve both their own goals and those of MNEs.
Examples of U.S. MNEs already dealing with the creative and orange economies include IBM, Zoom Video Communications, T-Mobile, Oracle, Cisco, AT&T (and its subsidiary WarnerMedia), Adobe, Intel, Verizon, Comcast, Netflix, Nvidia, Facebook, Amazon, Microsoft, and Apple.
Establishing a Network with the Diaspora
An important source of assistance to the creative and orange economies is the Caribbean diaspora. The significance of the creative and orange economies to the diaspora is evidenced by the Carnival in New York City at the start of September, globalization of steelpan in South Florida and the Caribbean diasporic identity, relocation of the Trinidad Carnival to Notting Hill in London, and rajamuffin sounds in Britain.[7]
One mechanism whereby the Caribbean can more easily access such assistance is through establishing an organization in the United States and obtaining status as a tax-exempt entity, a Caribbean charity can receive tax-deductible contributions from U.S. individuals or other sources such as corporations and grants from private foundations. Most U.S. persons expect to receive a tax deduction for their charitable contributions. A representative example is how some followers and collectors of art aficionados living in Barbados with U.S. citizenship established the Art Collection Fund, Inc. (ACF) as an IRC section 501(c)(3) corporation to support visual arts in the Caribbean. The ACF raised funds from U.S. donors. The ACF then donated the funds to a counterpart Barbadian entity and started a national art gallery, which showed works that had received prizes in annual art competitions. The ACF seconded a person who was the first director and curator of the art gallery.
Another example is the Consortium for Belizean Development. At one point, Francis Ford Coppola, a well-known director of top-notch movies who lived in the U.S. and had a home in Belize donated $100,000 to the organization to buy computers for primary schools in Belize.
In the 1990s, several dancehall and roots reggae acts found two major labels—Columbia and Elektra. Striking deals with major international labels translated into international sales and musical and commercial success. Moreover, independent labels, such as VP Records, with offices in New York and Miami, specialize in Caribbean music and know their core markets in ways that major labels evidently do not.
Conclusion
The uniqueness of the creative and orange economies and their critical importance both in terms of commercial value and national development mean that, as Bob Marley said, it is time for the Caribbean to “Get Up, Stand Up.” It is time for its leaders and other interested stakeholders to take advantage of the opportunities offered by the creative and orange economies.
Bruce Zagaris is a partner with the Washington, D.C. law firm of Berliner Corcoran & Rowe LLP, fellow with the Caribbean Policy Consortium, and former lecturer at the Law Faculty of the University of the West Indies at Cave Hill, Barbados.
Alexander Mostaghimi is a legal assistant at Berliner, Corcoran, and Rowe LLP, with a keen interest on legal work and economics.
Footnotes
[1] John Howkins, The Creative Economy 88-117 (2015).
[2] Keith Nurse, Human Imagination, Innovation, and Competitiveness in the Caribbean 4-6 (Inter-American Development Bank2014).
[3] See Bruce Zagaris, Some New Paths for Caribbean Jurisdictions Facing the Global Minimum Tax, 104 Tax Notes Int’l 1245,, 1248-51 (Dec. 13, 2021) for a discussion of some of these ideas in the context of the G20/OECD Inclusive Framework and the Global Minimum Tax.
[4] Nurse, supra at 7.
[5] Patrick E. Bryan, “Philanthropy & Social Welfare in Jamaica,” at 74-75, Institute of Social and Economic Research (1990).
[6] For background on the stimulation and promotion of the creative arts and intellectual creativity in Jamaica, see Rex Nettleford, Caribbean Cultural Identity: The Case of Jamaica (1979).
[7] For background on the role of the diaspora in Caribbean popular culture see Globalisation, Diaspora Caribbean Popular Culture (Christine G.T. o & Keith Nurse, eds.) (2005); Peter Manuel with Kenneth Bilby and Michael Jargey, Caribbean Currents: Caribbean Music From Rumba to Reggae (1995).
