_The Cultural Trade Index_ Page | **2** of **14**

# **I. Introduction**

Trade in cultural goods and services is among the most opaque areas in economic statistics. What is the contribution of cultural tourism to Colombia’s economy? How much do art crafts contribute to Ghana’s gross domestic product (GDP)? Who knew that since 2010 Vietnam has been among the fastest-growing piano exporters, reaching more than 400 percent in 2014?<sup>1</sup> If the United States is the largest global music market, how much do its music imports add to employment in places where the music is imported? Answers to such questions are not easy to find, nor are they the easiest to begin to tackle. Cultural commerce feeds into the GDP and the gross national product (GNP),<sup>2</sup> even though questions about sampling and the treatment of intangibles abound. Yet its contribution to economic development is less understood. What is more, although GDP is a key economic indicator — and improvements in <mark>capturing investment in “artistic originals” mean that GDP could be a better measure for such investments anyway —</mark> it does not measure services well, and, needless to repeat, it falls short on capturing wellbeing.<sup>3</sup> Such limitations have in part encouraged other indices to crop up. These include the Human Development Index (HDI), the Gross National Happiness (GNH), the Global Innovation Index (GII), and the Social Progress Index (SPI). There is also the Measure of Economic Welfare (simply called MEW), the Genuine Progress Indicator (GPI), the Better Life Index (BLI), and so on.

What is common among these indices is that they attempt to enrich the development debate. Along those lines, it is worth exploring the creation of a Cultural Trade Index (CTI), an index that would gather data to show and rank how countries perform in aspects of international cultural trade. The prime aim is to inform policies that promote cultural trade for development. As will be shown later, a Cultural Exchange Index (CEI) that shows cultural exchanges between countries could compliment the CTI. Like other indices, the CTI would not account for the true cultural contribution to development — especially the non-instrumental aspects, which enrich human welfare in countless ways. It could, however, be useful in evaluating global cultural trade, and thereby stimulate debate, enrich public knowledge, and inform decision-making on the diverse role the arts can contribute to sustainable development.

_Creative or Cultural Economy? A Word on Definitions_ With respect to definitions, a 2008 United Nations creative economy report has this to say: “There is no single definition of the creative economy nor is there a consensus as to the set of knowledgebased economic activities on which the creative industries are based.” With that in mind, the terms “creative” and “cultural” economy here mean the same thing, as are the terms cultural or creative trade index. “At the heart of the creative economy lie the creative industries. Loosely defined, the creative industries are at the crossroads of the arts, culture, business and technology. In other

> 1 Workman 2015.

> 2 The following notes are intended for non-specialists: “Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country's borders in a specific time period. Though GDP is usually calculated on an annual basis, it can be calculated on a quarterly basis as well. GDP includes all private and public consumption, government outlays, investments and exports minus imports that occur within a defined territory. Put simply, GDP is a broad measurement of a nation’s overall economic activity.” — Investopedia. See also Callen 2012. GDP is different from GNP. “GNP includes, and GDP excludes, income owned by residents but generated abroad, and GNP excludes, and GDP includes, incomes generated domestically but owned by foreigners. The difference is usually small, but it is important for some countries.”  — Deaton 2013, pp. 30-31.

> 3 See Coyle 2010, p. 93.