The Business of Music in Developing Countries

A 2008 report from the UN Development Program explores the economic dimension of the creative economy’s contribution to the development process. Here are some highlights.

World exports of recorded music tripled between 1996 and 2005, despite the dramatic drop in music sales  in the developed world:

On the basis of available figures, world exports of recorded music tripled from $5 billion in 1996 to $14.8 billion in 2005, accounting for 4.4 per cent of total exports of creative goods. This spectacular increase – 13.5 per cent annual growth during the period 1996-2005 – represents the highest rise in growth rates among the exports of all the creative industries. (p. 120)

The report finds that the economic benefits of Latin American and Caribbean music fail to accrue to their home countries, despite the widespread popularity of their Latin American and Caribbean genres across the globe. The observation brings to mind a recent finding from the MPI’s sister Institute for Competitiveness & Prosperity – that when it comes to reaping the economic rewards of creativity, management skills matter almost as much as raw talent and creative innovation:

Surprisingly, Latin America and the Caribbean are practically absent from world markets for recorded music despite the great appeal of their music worldwide. . . Brazil is an important music producer, with a large domestic market but with a very timid presence in the world market in terms of exports despite the fact that its famous music is played worldwide. This is a typical case of structural problems of marketing and distribution, as explained earlier and below. A similar situation hampers foreign exchange earnings from reggae and calypso music in the Caribbean in addition to the fact that their music industry is highly fragmented and lacks a strong institutional framework. (p. 121)

The section on the use of new business models and technology in creative industries is also interesting (p. 163-169). Music shows up at the forefront of a lot of these challenges and innovations – it’s both culturally ubiquitous and uniquely suited to a digital world.

The full report can be found here:
Creative Economy Report 2008: The challenge of assessing the creative economy towards informed policy-making.