Reykjavík Grapevine - 16.07.2010, Page 20

The Reykjavík Grapevine
Issue 10 — 2010
20
In a downtown office loft, the staff of
Caoz is immersed in the making of
‘Thor: The Edda Chronicles—Iceland’s
first full-length 3D animation film, ad-
opted from old tales of the Nordic God
of Thunder. Caoz is perhaps not what
you would expect of a movie studio. In
fact, it is not so much a studio, as it is
a computer cluster. One of the largest
one in Iceland at that.
“We are a high-tech company, really.
Every frame in the movie contains 10mb
of data,” explains Managing Director
Hilmar Sigurðsson. “There are 250.000
frames in the 3-D version of the movie,
and behind every frame, there is prob-
ably twenty times that amount of data.
So we need considerable processing
power.”
In fact, Caoz is typical for the kind of
company that more and more experts
consider vital for restoring the Icelandic
economy. A company that harnesses
human resources, rather than natural
ones. A company that above all places
a premium on creativity.
Welcome to the creative economy
MAPPING THE CREATIvE ECONOMy
The term ‘creative economy’ first ap-
peared in John Howkins’ book, ‘The
Creative Economy: How People Make
Money From Ideas’, published in 2001.
In John’s view “creativity is not new and
neither is economics, but what is new
is the nature and the extent of the re-
lationship between them and how
they combine to create extraordi-
nary value and wealth.”
The United Nations’ Cre-
ative Economy Report of 2008
states that the creative economy
is founded on the creative indus-
tries, which are at the crossroads
of the arts, culture, business and
technology. The term ‘creative
industries’ is a loosely defined
concept that incorporates “the
cycle of creation, production and
distribution of goods and servic-
es that use intellectual capital as
their primary input.” The creative
industries are grounded on the for-
mulation of new ideas, and the ap-
plication of those ideas to “produce
original works of art and cultural
products, functional creations, sci-
entific inventions and technologi-
cal innovations.”

Creative industries are a burgeoning
sector of modern economy that ranges
from fine art to software development.
And everything in between. Worldwide,
trades in creative services increased
on average by a staggering 8.7% annu-
ally between 2000–2005. In Europe, the
turnover of creative industries in 2003
totalled 654 billion Euros, employed
more than 5.6 million people, and grew
12.3% faster than the overall EU econo-
my. In 2007, creative industries were re-
sponsible for 6.2% of Gross Value Add-
ed in the UK, and export of services by
the creative industries equalled 4.5% of
all good and services exported.
These are large numbers, indica-
tive of a rapidly expanding sector that
will play an increasingly important role
in the future. These are desirable eco-
nomic indicators.
THE CREATIvE CLASS
“Economic growth is driven by creativ-
ity, so if we want to increase it, we have
to tap into the creativity of everyone,”
says Professor Richard Florida, at the
Rotman School for Management at
the University of Toronto. “That’s what
makes me optimistic. For the first time
in human history, the basic logic of our
economy dictates that further econom-
ic development requires the further de-
velopment and use of human creative
capabilities. The great challenge of
our time is to find ways to tap
into every human’s creativ-
ity.”
In 2002, Pro-
fessor Florida
coined the
term ‘the
c r e a t i v e
class’ to
identify a
s o c i o - e c o -
nomic class
of people that
he believes will
drive economic
growth in modern so-
cieties through creativity.
This class includes pro-
fessional, scientific and
artistic workers whose
economic function is
to create new ideas,
new technology, and
new creative content.
I asked Professor Florida to expound
on his definition of the creative class:
“I define the creative class and the
creative economy a little broader than
Peter Druker’s knowledge economy. I
extend the definition to include design-
ers, artists and entrepreneurs who are
critical to our economic growth. The
creative class describes two segments
of workers: Creative Professionals—
these are the classic knowledge-based
workers and include those working in
healthcare, business and finance, the
legal sector, and education; and the
Super-Creative Core—these workers
include scientists, engineers, techies,
innovators, and researchers, as well
as artists, designers, writers and musi-
cians.” In his estimate, some 40 million
Americans, nearly a third of the Ameri-
can workforce occupies the creative
class, and 12 million of them belong to
the Super-Creative Core.
Florida maintains there are three
key factors to nurturing creative in-
dustries: “Talent, technology and toler-
ance represent what I call the three Ts
of economic development. The driving
force behind any effective economic
strategy is talented people. We live in
a more mobile age than ever before.
People, especially top creative talent,
move around a lot. A community's abil-
ity to attract and retain top talent is the
defining issue of the creative age. Tech-
nology and innovation are critical com-
ponents of a community or organisa-
tion's ability to drive economic growth.
To be successful, communities and or-
ganisations must have the avenues for
transferring research, ideas, and inno-
vation into marketable and sustainable
products. Universities are paramount to
this, and provide a key hub institution
of the creative age.”
Tolerance is equally impor-
tant, and according to Professor
Florida, creative people thrive
in a tolerant atmosphere.
“ E c o n o m i c
p r o s p e r -
ity relies
on cultural,
entrepreneurial,
civic, scientific,
and artistic cre-
ativity. Creative
workers with these
talents need commu-
nities, organisations,
and peers that are open
to new ideas and different people.
Places receptive to immigration,
alternative lifestyles, and new
views on social status and
power structures will ben-
efit significantly in the
creative age.”
SEARCHING FOR THE ICELANDIC
CREATIvE ECONOMy
This June, the Ministry of Education,
Science and Culture, announced a
project to map the economic effects
of creative industries in Iceland for the
first time. Official figures for the Ice-
landic economy do not accurately re-
flect the increasing importance of this
sector in our society. Minister of Edu-
cation Katrín Jakobsdóttir said at the
time: “The knowledge that this project
will create will be invaluable for mak-
ing important policy decisions on how
we want to reshape and reconstruct
Icelandic society, in particular, how we
want to shape our economy.“
Despite little official information
on the economic effects of creative
industries in this country, we do have
clues that clearly indicate the eco-
nomic effects are considerable. In 2004
Ágúst Einarsson, Professor of Econom-
ics at Bifröst University, published his
research on the economic effect of
creative industries, in particular cul-
ture and music. “My conclusion was
that nearly a quarter of the Icelandic
workforce is employed by the creative
sector. This conclusion has later been
confirmed by other studies. I found
that culture was responsible for 4% of
the GDP in 2004, and music
alone was responsible for
1% of the GDP,” Ágúst
explains.
“I have been fol-
lowing this development
since, and the share of
creative industries has
increased in the last
years. The world’s
economy is at a
milestone where
the creative indus-
try is as valid as
primary produc-
tion, industry, and
service as a foundation
for our economy. The
rapid expansion of soft-
ware development and
computer games plays
an important role, and
Icelandic companies have
gotten good results in these fields.”
He is very optimistic for future de-
velopments in this sector and believes
creative industries based on culture
and arts can be the industry of the fu-
ture in Iceland. “There is a lot of cul-
tural activity here, compared to other
nations. This claim is supported by the
large contribution of culture towards
the GDP, in particular Gross Value
Added. There is a strong music indus-
try in Iceland that creates a lot of value,
and there are many opportunities for
growth in the film industry if we play
our cards right. The same can be said
for design. There is an industrial revo-
lution taking place, fully comparable to
the last one, 250 years ago with the ar-
rival of steam power. We have great op-
portunities to be at the forefront of this
revolution and improve our standards
of living considerably. The foundation,
interest in culture and creative ambi-
tion, is already in place,” Ágúst says.
IT’S ALL IN THE GAME
Another positive sign for Icelandic
creative industries is the expansion of
computer game development in Ice-
land. Fifteen years ago there was no
gaming industry to speak of in Iceland.
In 1997, a few young men founded CCP
with the goal to become a leading com-
pany in massively multiplayer on-line
role playing games (MMORPGs). In
2003 the company launched their flag-
ship title, Eve Online. Today, Eve Online
has over 350.000 subscribers, employs
450 people and the yearly turnover ex-
ceeds 40 million Euros. And CCP keep
developing more games.
The Icelandic gaming industry as a
whole consists of at least ten compa-
nies, and the yearly turnover exceeds
60 million Euros. “We didn’t even know
that there was a gaming industry here
until we planned a meet-up and realised
that there were at least
seven or eight differ-
ent companies work-
ing in this field,” says
Finnur Magnússon,
a founding member
of the Icelandic
Gaming Indus-
try (read more
about this or-
ganisation on
page eight),
who moved back
to Iceland two
years ago after
working for a com-
puter game developer
in London for several
years. “That’s when we
figured this was an in-
dustry and created a
community called the
Icelandic Gaming In-
“We have all the conditions
in place – economical,
historical, cultural and
educational – to succeed in
the economy of the future,
but Icelandic authorities
don’t seem to recognize that
possibility.”
Feature | New Economy
Because that would be great