Human Sciences Development Policy Sociology of Work

Research Council Research Unit Unit

RESEARCH CONSORTIUM
________________________________________________________________

THE CREATIVE INDUSTRIES IN SOUTH

AFRICA

Sector Studies
Research Project

MARCH 2008

RESEARCH COMMISSIONED BY
DEPARTMENT OF LABOUR
SOUTH AFRICA
CREATIVE INDUSTRIES SECTOR REPORT

The Creative Industries in South Africa

HSRC

15 December 2007

Prepared by CAJ
(Avril Joffe and Monica Newton)

CAJ: Culture, arts and jobs

[email protected]

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Index

Chapter 1 Introduction 3

Chapter 2 Sector Profiles 16

Film 16
Craft 34
Music 41
Performing Arts 51
Visual Arts 58
Cross-cutting sectors 61

Chapter 3 Demand for Skills 64

Chapter 4 Supply of Skills 75

Chapter 5 Case Studies 90

Chapter 6 Conclusion 110

References 119

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Chapter 1: Introduction

The creative industries have long been neglected in mainstream trade and
industry policy in South Africa even though it is recognised as a significant
contributor to the economies of developed economies such as Canada, the UK
and Australia. In its broadest conceptualisation, the creative economy in OECD
countries grew at an annual rate that was more than twice that of the services
industries and more than four times that of manufacturing. Estimates are that the
creative economy is growing annually at 5% per annum and is likely to triple in
size globally by 2020 (Howkins, 2001). Similar trends are found even if using a
more narrowly defined creative sector. In the UK, in the period 1997-2003, for
instance, output of the creative industries, measured as value added, grew at six
percent per annum, compared to 3 per cent growth for the rest of the economy
while employment growth grew at a rate of 3% per annum compared with 1% for
the whole of the economy (DCMS, 2005).

The Accelerated and Shared Growth Initiative of South Africa (ASGISA) has now
identified the creative industries, and particularly the craft and film sectors, as
one of the identified drivers of sustainable economic opportunities and livelihoods
for local communities whilst expanding business opportunities for small, medium
and micro enterprise (SMMEs). The recognition of the creative industries in the
ASGISA programme is a direct result of the ongoing efforts of the Department of
Arts and Culture (DAC) to remedy the neglect of this important sector from
mainstream trade and industry policy. The primary starting point was the initiation
of the Cultural Industries Growth Strategy (CIGS) process by the then
Department of Arts, Culture, Science and Technology (DACST). The final
document, “Creative South Africa: a strategy for realizing the potential of the
cultural industries” completed in 19981 was accompanied by four detailed
sectoral reports covering the Film and Video sector, the Music sector, the Craft
sector and the Publishing (books, magazines and newspapers) sector. These
four sectors were selected for a number of reasons from their identification as
industries in South Africa to their potential to create employment and offer
opportunities for rural and urban job creation as well as their potential
international competitiveness.

A central purpose of the CIGS process was to stimulate dialogue within

government, particularly between the departments of trade and industry and that
of arts and culture by using an industry strategy approach. The research had four
key objectives:

• Create awareness within both government and the cultural industries of the
potential for growth.

1
Commissioned by the then Department of Arts, Culture, Science and Technology (DACST) as part of their Cultural Industry Growth
Strategy. The final report, Creative South Africa, November 1998. available on
http://www.dacst.gov.za/arts_culture/culture/industries/index.htm
CREATIVE INDUSTRIES SECTOR REPORT

• Set ambitious yet realistic targets and goals for the development of the
cultural industries.
• Encourage a self awareness within the cultural industries of the significance
of their industries.
• Map out how ”Creative South Africa” could be implemented.

The core recommendation made in Creative South Africa was to establish the
Cultural Industry Development Agency (CIDA) as “a public-private partnership
agency specifically geared towards building up the cultural industries. The
primary functions of this organisation would be knowledge and information
management, human resource development, strategic investment, grant funding
as well as advocacy on behalf of the cultural industry sector”. The
recommendation was for CIDA to develop cultural industry initiatives with ”a high
potential for commercial success as well as stimulating some already flourishing
enterprises”. Unfortunately this agency was never established.

“Creative South Africa” was the first major study to use a value chain analysis for
creative industries in South Africa. This was partly in reaction to the arts-for-arts
sake approach that had dominated much of the work in South Africa and the
SADC region on culture. It represented an attempt to promote and understand
these cultural industries as an economic sector that generates wealth and
employment. Since CIGS, there has been no new research undertaken on the
same scale although a number of individual sectoral studies have been
undertaken both at the national and provincial level by government and private
agencies (CAJ, 2005).

A number of important initiatives to enhance the growth of the creative industries

arose either directly or indirectly from the CIGS process2, such as

• The Music Industry Task Team which was initiated to identify and
implement a range of initiatives to overcome critical challenges in the
music sector.
• The establishment of a Film and Publishing Clusters which aimed to foster
collaboration across the value chain to develop the sectors. The film
initiative did not take root, however, the recent establishment of SASFED
has filled this gap in the sector. The Print Industries Cluster Council
(PICC) is an ongoing project supported by industry and government.
• The establishment of the National Film and Video Foundation (NFVF),
Business and Arts South Africa (BASA) and the National Arts Council
(NAC) as government agencies to fund and develop various sectors as
prescribed by legislation.

2
A creative industries unit in the Department of Arts and Culture has initiated numerous projects in many sub-sectors of the creative
industries from book and music to craft and film with the department of Trade and Industry completing two customize sector
programmes for craft and film as two priority sectors of the national governments ASGISA programme. See for instance
www.dac.gov.za

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• The CreateSA project in partnership with the Media Advertising Print

Packaging and Publishing Sector Education and Training Authority
(MAPPP-SETA), the Department of Labour and the Department of Arts
and Culture (DAC) which developed a vocational education and training
framework for the sector for the first time.
• SA Music week which provided a platform in collaboration with the music
sector to showcase local music and promote the sector. This initiative
unfortunately no longer exists.
• Poverty alleviation through rural craft development and other cultural
initiatives as part of the Extended Public Works Programme (EPWP) to
create employment in identified rural and urban nodes.
• The inclusion of sectors such as design and multimedia into the national
framework for development thereby including critical cross-cutting sectors
into the broader development objectives of the sector.
• The Customised Sector Programmes for both Film and Craft by the
Department of Trade and Industry (DTI) which aligns creative industry
development to formal industrial policy and outlines a time bound
framework for implementation.

The recognition given to the creative industries by the President of South Africa
and its inclusion into the ASGISA framework as a key sector has done much to
raise the status of the creative industries and ensure that national government
departments as well as other spheres of government begin to develop practical
interventions to support the growth of these industries, for example in the
Western Cape micro economic development strategies have been completed for
both the craft and film sectors.

The customised sector programmes developed by the DTI for both film and craft
are an important addition to the knowledge base about these specific creative
industries. These strategies represent critical milestones in the development of
the creative industries and these sectors in particular, because the alignment to
current industrial and trade policy and the commitment to a series of structured,
measured and coherent interventions is documented and approved by the
highest level of government.

There are three observations to be made from an analysis of the South African
data sources and research into creative industries since the CIGS process.

Data quality and availability

The first observation from this analysis is that research into the creative sector is
relatively new, there is little comparability between the studies completed and the
information collected is not based on thorough quantitative methodologies. In
addition, studies have tended to duplicate the focus areas of the CIGS process
and recommend similar interventions to those contained in the CIGS reports.
This is largely due to the fact that few of the recommendations in that report were

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implemented and those that were, such as the Music Industry Task Team
(MITT)3 took a number of years to materialise. Many of the regional analysis and
sectoral studies have not only restated the strategies as suggested in the CIGS
report but also found it necessary to act as advocacy tools as the creative
industries remained marginal to the mainstream economy and largely excluded
from trade and industry interventions.

Given that the concept of the cultural industries only found a place in global
public policy in the last decade or so it is not surprising that there is a dearth of
reliable and consistent data to assess the economic contribution of these
industries or their social and developmental impact.

All the research in South Africa (and more generally in the rest of Africa) suffers
from poor availability of quantitative and qualitative data resulting in no real
possibility for comparative analysis with international data. There is no single
official source of data for the industries as we define them. The collection of
cultural data globally is a relatively new phenomenon dating to the two world
cultural reports published by UNESCO in 1998 and 2000 as well as the
establishment by UNESCO of an Institute for Statistics based in Montreal,
Canada. The developed countries such as Australia, Canada and the UK have
been particularly prolific in their collection of data. However their increased
capacity to generate statistics has presented a problem of too much data. The
Australian statistical organisation for instance has begun asking of each statistic
collected,” do we need it” and” what will we be using it for”. In developing
countries such as South Africa it is necessary that we have data to measure not
only the strength of each of the creative industry sub-sectors but the extent of
cultural diversity in society. This would add weight to important arguments that
need to be made by developing countries that ”the arts economy is a significant
contributor of the country’s economy”, that ”arts and culture are important for self-
respect as a nation” and that ”public sector patronage could encourage the arts
and cultural sectors to contribute to economic growth” (Joffe et al, 2003).

Existing resource constraints in South Africa, as with other developing countries

means that it is necessary to have clarity about the reason for collecting the data,
to know upfront what it will be used for, who the audience is, how the collection
can be simplified and whether the indicator chosen is significant. It is also
important that the data is collected knowing what the strategic vision and
organising principle is and how it may alter policies. There is now an amble body
of ‘best practice’ international examples that can be benchmarked and
intelligently copied when deciding on cultural indicators and survey methodology.
To address our social objectives such as gender equality it is necessary to
produce gender sensitive statistics such as paid and unpaid work, participation

3
The Music Industry Task Team (MITT) process involved the establishment of a panel by the then Minister of Arts, Culture, Science
and Technology Ben Ngubane with the aim of consulting the sector regarding key issues and making recommendations for action to
government.

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by men and women particularly in community and non-profit initiatives (CAJ,

2003).

Standard taxonomies such as the SIC codes do not sufficiently disaggregate the
cultural industries from other activities and are therefore insufficient for the task
of collating cultural/ creative industries data for either countries, regions or areas
larger than that. The bulk of the activities of the creative industries remain
invisible to the statistics. The solution being sought is based on the initiatives
taken by the mapping reports of the UK government (DCMS, 1998, 2001, 2005)
and now promoted by the British Council in their work with developing countries.
These reports use the concept of a production cycle for cultural industries (as
first elaborated by UNESCO) but made locally specific in each context.

Specific problems of data relate to country and sector specifics such as:
• The informality of parts of the creative industry such as craft which
consists of small, often informal businesses that are not in the tax net and
have no representative industry association.
• The tendency to combine creative industries with other sectors such as
entertainment, ICT or tourism so that it is difficult to separate the data. For
example a Merrill Lynch report in 1997 reported that the entertainment
industry in South Africa - including film, broadcasting, cinematic, music
and interactive industries- was worth approx R7.4bn and formed 1.75% of
GDP.
• The collection of industry specific statistics such as by the Recording
Industry of South Africa (RISA) for the music industry which collects real
and nominal sales per year for its members but can offer no real insight
into live music which is where most of the musicians earn their income
(DPRU, 2003; Development Works, 2004).

Although the South African government, agencies and private companies have
been working on the cultural industries since 1996 (CAJ, 2005) and attempting to
define the parameters of each sub-sector of the creative industries and value its
contribution to the national economy there is no one study – apart from CIGS –
that has attempted to value the contribution of all the creative industries
nationally. These problems with data, data sources and the vastly differing
methodologies adopted in research into the creative industries persuaded the
South Africa government, in partnership with the British Council, to conduct a
mapping of the creative economy in 20074. This process is currently under way in
South Africa with a pilot in the province of Gauteng and discussions underway in
Western Cape and KwaZulu-Natal. The purpose is to develop a methodology
appropriate to the data constraints in the country and the specificities of the
creative sector that allows all stakeholders to track trends in these sectors.

4 An important initiative was the establishment of the South African Cultural Observatory by the HSRC in partnership with
the Department of Arts and Culture. However while existing data and newly prepared briefing documents on each of the
creative industries was uploaded onto a website, no further work was commissioned from the DAC and no further data
collection has been conducted for this body.

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Definitions and the classification of the sector

The second observation is that the terms used - cultural industry, cultural sector,
and creative industry - are fluid and lack definition. South African research in the
cultural industry has changed focus as international definitions have changed.
The first study in South Africa borrowed the definition of the cultural industry from
both UNESCO and the work of the Department of Culture and Media Services
(DCMS) in the UK but adapted the parameter and scope of the sectors to the
South African context as well as the research objectives. Thus the Cultural
Industry Growth Strategy (CIGS) investigated only 4 of the commercially active
sectors, music, film and video, publishing and craft.

In CIGS, the term cultural industry was used to refer to different types of cultural
expression which are embedded with symbolic meaning as highlighted by the
UNESCO definitions (UNESCO, 1982). It followed that since culture provides
important public benefits, public policy should provide support for cultural
industries. Using this definition cultural industries consist of goods whose primary
economic value is derived from their cultural value or symbolic value. This
definition includes what have been called the ”classical” cultural industries –
broadcast media, film, publishing, recorded music, design, architecture, new
media – and the ”traditional arts” - visual art, crafts, theatre, music theatre,
concerts and performance, literature, museums and galleries – all those activities
that have been eligible for public funding as ”art” (O’Conner, 1999). The case for
public policy and specific interventions to ensure widespread cultural participation
and expression is now well accepted and understood that if left entirely to the
market, there will be a limitation on the production and consumption of culture
and hence ”a significant democratic deficit both for individuals and society as a
whole” (Galloway and Dunlop, 2007).

Further policy work in South Africa, specifically for the Gauteng Government
through the Creative Industries Development Framework5, used the term creative
industries to broaden the scope of engagement and align discussions with the
broader international debates about the creative economy and the role of
creative industries as a core of the creative economy. The CIGS report and the
Gauteng CIDF recognised that at the heart of creative industries is creativity.
This quality can also be found in industries which have creativity as their key
ingredient such as advertising and architecture which are included in the
definition of the creative industries in the UK but not as yet in South Africa.

Increasingly, the changing DCMS definitions used by the British Council have
influenced the South African community of creative industry researchers,
consultants and policy advisors as well as government officials such that recently
the term creative economy has been adopted, both for the DAC’s Creative
Mapping Study in collaboration with the British Council and by the Gauteng
Government in their branding of Creative Gauteng. In this usage, the larger set of

5
Creative Industry Development Framework of the Gauteng Government is available on www.srac.gov.za

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creative industries (of which cultural industries are a part) as well as the broader
cluster of industries which support them is what we call the creative economy. As
UNCTAD has explained: “Creative Economy is an evolving concept based on
creative assets potentially generating economic growth; [i]t can foster income
generation, job creation, export earnings as well as social inclusion, cultural
diversity and human development; [i]t embraces economic, cultural and social
aspects interacting with technology and tourism objectives; [i]s a set of
knowledge-based activities with development dimension and cross-cutting
linkages at macro/micro levels to the overall economy; [and] [i]t is a feasible
development option calling for innovative intra-ministerial policy responses”
(UNCTAD, 2006).

From industry mapping efforts in the city state of Singapore a useful model for
describing the creative industries has emerged (Heng, Choo and Ho, 2003)
which we have adapted to include the creative economy (Figure 1).

Figure 1: Composition of the Creative Economy

Composition of the Creative Economy
Upstream

Cultural
Industries

Creative
Industries

Copyright
Industries

Creative
Economy

Distribution
Industries

Creative clusters, creative precincts,

creative sectors

Downstream

CAJ (2007) Adapted from Heng, Choo and Ho (2003)

This model of the creative economy has emerged from industry mapping efforts
in the city state of Singapore in which upstream and downstream industries are
clearly outlined (Heng, Choo and Ho, 2003). Using this approach, the creative
industries comprise two distinct groups of activities; basic and applied arts
industries. Together with the distribution industries, these form part of the
broader “copyright industries”. Basic or ”upstream” arts then, refers to traditional
art forms such as the performing, literary and visual arts, whereas ”downstream’
arts” refer to the applied arts such as advertising, design, publishing and media-
related activities. The value of this model is that it allows for an holistic approach
to the sector which incorporates all activities – commercial and non-commercial
and, crucially, emphasises the symbiotic relationships between all the sectors
comprising the creative industries; a growth or decline in one area will have a

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concomitant effect on another. While “upstream” art activities may have

commercial value in themselves, ”downstream” art activities derive their
commercial value principally from their applications in other economic activities.

The creative economy then:

• Is an evolving concept based on creative assets embracing economic,

cultural, social and technological aspects.
• Has linkages at macro and micro levels with the overall economy, hence
an important development dimension.
• Can foster economic growth, job creation, export earnings while
promoting social inclusion, cultural diversity and human development.
• Has been identified as a feasible policy option to diversify economies and
improve trade and development gains in countries around the world
(Brandford, 2004).

In terms of its dimensions, the creative economy is:

• Multi-dimensional incorporating development, cultural, economic and

social policies.
• Cuts across key sectors of the economy including manufacturing, trade,
technology and tourism.
• Omnipresent in that it deals with aspects of education, labour, leisure,
culture and the arts.
• Is inclusive of a wide range of developmental, commercial and non-profit
activities.
• In-temporal because tradition, heritage, present technology and future
visions co-exist.
• Is regarded in global trade as both a public good and a service (Brandford,
2004).

The industries that comprise the sector are complex and diverse; however the
following characteristics typify them:

• They comprise a set of knowledge-based economic activities making

intensive use of creativity as primary input to produce marketable value-
added creative products and services.
• Creative products and services are centred in but not restricted to arts and
culture, and are often found in purely commercial sectors such as clothing,
textiles and furniture.
• The outputs are tangible products or intangible services with creative
content, economic value and market objectives
• They are able to generate income from trade and property rights.

Insisting on definitional clarity is extremely important for public policy support for
the creative economy. The reason for supporting these industries needs to be

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clear so that government can allocate appropriate resources (both financial and
human resources) in an appropriate governance system (with numerous cross-
cutting areas of responsibility). The reason for public policy is well established. It
is not just because they have high growth potential as in developed countries –
some may have little growth potential in developing countries but are still in need
of support precisely because of their symbolic meaning, use value, intellectual
property rights (IPR) implications, but public policy is also important because
cultural industries provide public benefits that cannot be captured through
markets (Fullerton, 1999).

Cultural policy and Creative Industries Development

The third observation is that there is a “smorgasbord” approach to cultural policy

and creative industries development generally, in developing countries where
policy exists. South Africa is one of the few developing countries where the trade
and industry department has taken responsibility for enhancing the growth
potential of the creative industries but this has also resulted in a tension as to
which department (trade and industry or arts and culture) has purview over the
creative industries. The relatively new focus on cultural or creative industries in
public policy in countries such as South Africa often receives harsh criticism of
those cultural practitioners in the non governmental organisations arguing that
the focus is heavily biased and wrongly so, towards commercial viability while the
support (funding, grants, resources) for “art-for-arts” sake (cultural development
of theatre, dance, music) is declining annually. This is exacerbated by the debate
about cultural policy that is focused on traditional forms (heritage and
conservation) and that focused on commercial forms (often seen as modernised
culture).

The fundamental problem is that many or most cultural and artistic forms in
developing countries will always be dependent on grant funding and the focus on
commercial viability can obscure this. The successful commercial creative
enterprises such as local music production studios, fashion and design houses,
private galleries or commercial theatre however have often developed with no
support from the state and are inclined to remain outside of these debates and
outside of public interventions.

The relationship between cultural industries and heritage and that between
regulation and control in the developing countries therefore are key tensions to
manage. In developing countries the solution is often to create new public
institutions to manage and control these activities but at arms length from the
government. The institutionalisation of the policy and institutional environment
landscape has resulted in government putting its money through statutory
institutions such as the National Arts Council (NAC), the Film and Video
Foundation (NFVF) and the various film commissions in South Africa.

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In general, the trend both in South Africa as in other developing countries is to

motivate for creative industries development in the context of broader economic
and social objectives that have already achieved mainstream attention by
government such as job creation, poverty alleviation, tourism development or
community participation. In this way, the cultural sector and creative industries
become an instrument to achieve other goals and are able to receive funding
through the fiscus. The ASGISA process represents one of the first indications
that the sector has value in its own right.

In South Africa, the poverty alleviation budgets were used by the Department of
Arts and Culture to support the development of the craft industry in areas such as
Limpopo while in Africa a number of countries (Ghana, Mali, Nigeria and
Senegal) integrated culture in the Poverty Reduction Strategy Papers (PRSP) as
‘major axes’ (Sagnia, 2006) which has highlighted the contribution that the
cultural sector can make to poverty reduction. These programmes, however, do
not imply that cultural strategies are as yet significant in these PRSP
programmes. A report prepared for the Arterial Conference on Vitalizing Cultural
Assets in Dakar raised a number of important issues that still need to be
addressed to enhance the contribution of cultural policies to the effectiveness of
poverty reduction strategies (Sagnia, 2006).

Given the enormous focus on the development of the creative industries across
the world there are a wide range of reasons for the current level of state
investment. As mentioned above, the creative industries are not a self-sufficient
production system. The sector interacts with other economic and cultural sectors,
which invariably would result in an extended mapping of both tangible and
intangible values brought to society and the economy at large. Figure 2 portrays
these multi dimensions of the creative sector with other economic and socio-
cultural sectors.

Similar to the taxonomy presented in Figure 1 above, the approach by the Centre
for Cultural Policy Research developed as part of the mapping of the creative
economy of Hong Kong Figure 2 below places the three value chain components
on a single axis and then begins to outline the external values attributed by policy
to these. Content origination relates to those activities which produce creative
content, the production aspects are related to the packaging of creative content
into different media and the distribution aspects relate to the dissemination of
content. While each of these aspects has an intrinsic economic value in and of
themselves, policy assigns additional value to them, including cultural values,
cultural identity, city image and branding and urban development.

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Figure 2: Matrix Model of the Creative Industries

Direct Economic Values

External Values of Derived from the CIPS
Creative Industries Urban / City
Development

City Image

Reproduction / Peripheral /
Distribution Supportive
Cultural Industries Industries Other recreational
Identities / industries
Creativity Educational training
Venue / Facilitation
Value added to Management
Production Input Product
Industries Manufacturing
Cultural /
Amenity Values
Value added to
Services Apparels Manufacturing Shoes Manufacturing
Furniture Manufacturing Toys/Electronics
Content Origination Manufacturing
Industries Cultural Tourism
Real Estate
Multiplying Values
to Other Industries

Source: Centre for Cultural Policy Research (2003)

Creative industries in Africa

Many countries in Africa have recognised the potential of the cultural sector to
alleviate poverty and create jobs and have committed their governments to
support these sectors. Member States of the Southern African Development
Community , at the inter-Ministerial conference in Mozambique in 2000 on the
“Role and Place of Culture in the Regional Integration Agenda” agreed to ”take
decisive steps toward the promotion of cultural industries as a way of exploiting
their capabilities to alleviate poverty, generate employment and contribute to
economic growth” (Sithole, 2000). There is as yet no integrated co-ordinated
framework for Africa. As a prelude to the full implementation of the African
Economic Community, cultural leaders in Nairobi in 2005 urged their
governments to put in place the legal and institutional frameworks for the
development of cultural products, their free movement in all African countries and
detail legislative and fiscal measures to foster cultural industries through a ”policy
subsidy”. The Common Market will be based in broad outline on the Nairobi Plan
of Action (see Table 1) for the Development of Cultural Industries adopted in
December 2005 (OCPA, 2005).

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Table 1: Nairobi Plan of Action

Objective of the Nairobi Plan of Action: Guarantee the organization, production, distribution,
exhibition, and preservation of the products of African cultural industries
Economic Social Political
Generate new resources for the economic Strengthening the Reduce the dependence on the
development of Africa and the creation of African cultural wider world outside of Africa for
new jobs and income generation identify and creativity the production and distribution of
opportunities as well as broaden cultural goods
Open up new markets for African culture in people’s participation Facilitate new institutional
and outside of Africa in endogenous partnerships between the public
cultural development sector, private sector and civil
society such as within the
framework of UNESCO’s Global
Alliance for Cultural Diversity and
NEPAD
Strengthen the African cultural identity and Strengthening the Adopt flexible responses to
creativity as well as broaden people’s acknowledgement of initiatives from the African private
participation in endogenous cultural the cultural dimension sector towards the development
development of sustainable of cultural industries
Strengthen the competitiveness of African development in Africa
cultural goods within the framework of
globalization and the liberalization of
markets
Improve national capacities for creating, Bring about new and Achieve better regional
producing, distributing and exhibiting pluralistic forums of integration
cultural goods cultural expression
Strengthen private and community supporting the Strengthen the role of the private
initiatives of small and medium enterprises installation of sector and civil society
democracy in African
Enhance the organization and protection of Develop South/North cooperation
societies
creators as well as South/South
Set up an African Cultural Common Market cooperation and real partnership
and develop intra-African cooperation

The priority recommendations arising from the Nairobi Plan of Action are four-
fold:
o To map existing cultural activities, structures, resources and products in all
member states.
o To identify and consider regional and sectoral specificities and strengths
to enable the rationalisation of legislation, policies and resources.
o To conduct research to assess the economic impact of cultural industries
and initiatives.

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o Establish regional cultural think tanks to source information and debate

the status of each sub-sector.

UNCTAD will launch “Creative Africa” at its forthcoming meeting in Accra, Ghana
at UNCTAD XII and highlight the development of the creative industries in Africa.
To this end they are preparing a study, Creative Economy Report 2007: the
Challenge of Assessing the Creative Economy: towards an Informed Policy-
Making on the development dimension of the creative economy focusing on
Africa, Asia and South America which will be launched at this meeting.

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Chapter 2: Sector Profiles

The Film Sector

The US remains the leader in the exportation of filmed content in a global content
industry valued at US$1.2 trillion. Global trends in the film and television industry
indicate that while growth estimates in 2003 were 9.4% and 6.3% respectively,
traditional industry revenue streams are declining. Some of the factors include
technology convergence, declining box office attendance and the shrinking
theatre-to-DVD windows. Business models are increasingly not driven by box
office sales but by new distribution channels such as online portals with slate
releases more evident while production funding models are changing due partly
to an increase in big budget productions and increasing private equity funding
which lessens the studio’s need to pre-sell rights or enter into co-production
arrangements (Deloitte, 2007). This is not necessarily the same picture in
emerging markets. Countries such as Mexico, Thailand and Egypt, for instance
are experiencing rising attendance figures while others are still heavily reliant on
public funding with filmmakers granting distributors a license to distribute film for
a period of time in a specific geographic area and media.

A key trend affecting all aspects of the value chain is the digitisation of
production, distribution and exhibition creating virtual studios, digital transmission
to theatres, TV stations or computers and allowing for greater market
segmentation. Digital animation has also seen a huge growth with Japanese
animation and animators sought after. New technology has enabled higher
quality content and both faster and cheaper distribution in a markedly increased
global entertainment arena. This globalisation of entertainment allows national
film industries to target global audiences as they seek new ways to increase
market share and boost revenue. Internationally revenue is being threatened
both by piracy and the competition between producers of content as they try and
respond to the increased buying power of audiences. The latter has led to the
proliferation of content delivery channels while movie theatre attendance has
been stagnating in established markets.

The economic impact of the film industry is principally experienced in job

creation. The UK film industry for instance, directly supported 31,000 people in
2004 with 97,500 direct and indirect jobs created in the same period (UK Film
Council, 2006). However a range of other economic impacts occur from its
contribution to GDP, skills development, tourism spin-offs and spend on ancillary
services. The multiplier in South Africa is approximately 2.5 on direct film spend.
This varies across countries. The Australian Bureau of Statistics sets the output
multiplier (Table 2) for screen production at 2.67. Foreign productions in Australia
have increased from Aus$78m in 2000 to Aus$249 in 2004 which has driven
growth while tax incentives have attracted these productions.

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Table 2: Economic Multipliers for the Film Sector in Australia

National Economic Multiplier in Australia

Gross value added Employment Multiplier

multiplier (effect on GDP) (FTE employment by $ million of investment
spend)

1997 2005/6

Film and video 1.8 37 30.7

production and
distribution
Motion picture 1.3 19 15.8
exhibition

Export markets for film and TV content in English is undergoing significant

changes. Public broadcasters are under pressure to film locally produced
content; audiences are demanding ‘formats’ for television which are both
curtailing export opportunities for some while creating opportunities for others.

Policy options vary from protection to promotion of the film and TV industry.
While the US is the largest exporter of filmed content, Africa is the largest
importer of US film production especially in English speaking countries. By the
end of the 1990’s 85% of films shown around the world originated in Hollywood.
New patterns of regional trade in Asia allow export countries (India, Japan and
Hong Kong) to occupy more than 33% of the box office.

International co-production remains the key tool for gaining market access,
increasing production budgets and upgrading production skills. These will vary
depending on whether the country is a high volume nation (200 or more
productions and will include tax incentives); a medium volume nation (needing
production subsidies and co-productions) or a small low volume nation (needing
introduction of digital technologies, new content).

Most state funds tend to go to ‘principal photography’, as this is the most labour
intensive stage of filmmaking to the exclusion of other aspects of the value chain.
The demand side is most often overlooked, as is the development of commercial
film companies.

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CREATIVE INDUSTRIES SECTOR REPORT

Services and Products

The Film and TV value chain comprises two broad networks, the producer led
project networks (supply) and the distributor led rights exploitation network
(demand) as illustrated in Figure 3. In South Africa, the focus has been on the
provision of funding and development support to the supply functions and in
particular the production side. This is not surprising given the country’s
employment focus and its ability to service runaway films (big budget USA films)
locating to foreign locations. However, real wealth from the film sector comes not
from productions, but from content and the ability to sell rights to that content.

Figure 3: The Film and Television Value Chain

The Film and TV Value Chain

Producer led project network

1. Beginnings and Development 2. Pre-production, production and post-
Producers, Scriptwriters, production
Broadcasting Commissioners, Casting and Crewing Agencies, Financiers,
Financiers and Funders Production Companies, Post-Production
Supply

Facilities, Equipment and Facility

Suppliers, Make-up, Set Designers
5. AUDIENCE RECEPTION:
Film & TV journalists, trade
journals, Festival commentary,
awards, academies

Demand
3. DISTRIBUTION: Exhibitors,
broadcasters, mobile units,
4. DELIVERY MECHANISMS: Exhibitors, distributors, markets both
broadcasters, cinemas, video retail/ rental, domestic and foreign
Television, live performance, Festivals

Distributor led rights exploitation network

© CAJ, 2003

Source: CIGS (1998) with inputs from the Film CSP (DTI, 2005b)

The key to the success of the film industry and its ability to create wealth and
income for the economy is that the focus shifts to the creation of uniquely South
African content and the distribution of this content. In many respects distribution
is the link between the supply and the demand side of the value chain and in fact,
where the wealth is created in this high-risk sector. The monopolised
international distribution networks coupled with high volatility and general lack of
profitability are a concern to South African industry stakeholders.

The CIGS study on the film and television industry (1998) as well as the
subsequent ILO research project on film and video (1999-2001) analysed the
status of this creative industry through a value chain approach to make evident
the economic logic of the sectors (Joffe and Jacklin, 2003). The methodology
used in the studies is based on Charles Landry’s five column model (Landry,
2000) adapted for the cultural industries and further adapted in the CIGS study to
represent the feedback loop between “audience reception” and “beginnings”.

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While it is clear that the beginnings of the value chain in creative industries
represents a rich and vital heritage or cultural context, this is not where the
money is made. With more than 90% of all film releases in South Africa
consisting of imported material there is no doubt that local talent and local
content remains a priority. Unfortunately, the distribution of creative content is the
Achilles’ heal of the creative industries as it is this phase in the realisation of
value from South Africa’s creative content. There are bottlenecks in distribution
caused by a small domestic market and limited access to foreign markets. The
distribution problem of audio-visual products was identified as the primary
blockage in the film and television value chain in the SADC region in the ILO
study: “Many films are produced in the southern African regions which never
reach any level of substantial audience. In addition, due to the problems of
broadcasting and theatrical distribution in the region, many films and television
programmes may be seen by a small audience in Europe and never seen by
Africans. Increasingly, production companies ….know that ‘only effective
distribution justifies production’. The distribution of television and film productions
into all SADC countries is also very difficult” (Joffe and Jacklin, 2003).

The lack of sustainability in the film and TV sector is directly related to this
problem of distribution and the general lack of inter-relatedness of the broader
sector for film and television with most companies operating in only one segment
and where the project-based nature of the industry often produces ‘feast or
famine’ income patterns. Table 3 highlights the small percentage of companies
(167 in the sample) that operates in different market segments of the broader
sector (feature film, animation, audiovisual, commercials, corporate,
documentary, foreign facilitation, local TV) with the majority (54%) operating as
highly specialised businesses.

Table 3: Profile of Diversity in the Film Sector in South Africa

Diversification Profile: No of No of Firms with this % of Total Sample
Market Segments Firms Operate diversification Profile
In
1 90 53.89%
2 40 23.94%
3 18 10.78%
4 14 8.38%
5 4 2.40%
6 1 0.50%
Source: Film CSP (DTI, 2005b) with data from Screen Africa

The most specialised is the Animation sub-sector where the vast majority of firms
operate in a highly specialised segment with almost no diversification of
activities. These companies face the highest risk of failure.

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The following table (Table 4) outlines the strengths and weaknesses of the South
African film and TV sector.

Table 4: Strengths and Weaknesses in the Domestic Sector

Strengths Weaknesses
Infrastructure Creative and business skill gaps
Technical skills Co-ordination
Locations International and domestic intelligence
Stories Erratic production patters
Value Financing
Climate Market access
Time zone Distribution
International interest

Opportunities Threats
Untapped audiences Exchange rate
New platforms and increased demand for Competing incentives
content Foreign content
Gateway to Africa International perceptions
New technology Reduced government support
Co-production strategy
Government support

The vision for the film sector in South Africa to strive to be the leading producer
of film and TV content from Africa and the Middle East watched by the world was
firmly established by the DTI CSP study on Film and Television. South Africa has
a comparative advantage in relation to a group of countries (Table 5) in creating
content, which the world would watch, however, it is simply not realising this at
the moment. Instead, South Africa is a service industry over content competing to
get runaway films to the country (DTI, 2005b). Table 5: European Demand for
Film from Africa and Middle East

Iran - 52.9%
The comparative advantage is based on a number South Africa - 3.4%
of related points: Israel - 10.8%
• The biggest driver of film and TV is the Egypt - 8.1%
Algeria - 7.2%
economy, and South Africa has the largest Tunisia - 6.1%
economy of the group of countries for which Palestine territories
the European demand for films is high. - 5.8%
Morocco - 3.0%
• South Africa has the highest box office Lebanon - 2.7%
attendance levels of all its regional Senegal - 0.5%
competitors. This is despite it having a Cameroon - 0.2%
Burkina Faso - 0.2%
smaller population than most of its regional Mali - 0.2%
competitors. Guinea-Bissau - 0.1%
Source: European Audiovisual
Observatory

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• There is real growth in cinema going with South Africa only one of 4
countries in the world where this is the case.
• South Africa has the strongest growth of these countries in broadcasting
and cable TV segments reaching over 4 million households in 2004 and
growing consistently since 1987.
• South Africa is well positioned to exploit the regional broadcasting base in
Africa (there are 206 national TV channels in the region or 35% of the total
number of national TV channels in the world).
• South Africa has had increasing government support over the last decade.
• South Africa has pre-existing cultural ties to Europe’s largest film market
by value, the UK which also accounts for the largest tourist inflow into the
country).
• DVD sales are increasing at a real adjusted 12.6% (at a value of only R3m
but nevertheless growing).

Despite poor quantitative data in the sector, it is possible to provide an overview

of the sector (Table 6) by sourcing data from various film offices and
commissions (especially the Gauteng Film Office, the Western Cape Film
Commission and the Durban Film Office), the National Film and Video
Foundation as well as independent studies conducted in the past 5 years.

Table 66: Overview of the South African Film Industry 2003/2004

Gauteng KZN Western Cape South Africa total

Annual turnover R5.1bn R1bn R2.2bn

Economic activity R1.3bn R2.5bn R5.5bn

generated
Number of commercials 68 12 461 570

Number of feature films 20 1 24 46

and TV series

Number of stills shoots 1674

Other productions 20

Contribution to GDP 0,5% 0,9% 2%

(including Broadcasting)
Employment (including 30000
broadcasting)
Registered producers 150

6
Estimates in Table 6 are from the following sources: KwaZulu-Natal (KZN) Film Office estimates. Film South African Business
Plan, August 2004 for total turnover estimates; Cape Film Commission estimates related to central and south Cape Town and Film
Industry Fact Sheet, 2005, City of Cape Town as well as Gauteng Film Office (GFO) estimate for year ending June 2004

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Table 7 below gives an estimate of the growth of individual sub-sectors from

1997 showing a marked increase in TV production, film and commercial servicing
as well as video retail and a small decline in commercials production and
corporate video. A partial explanation for the decline is the increase in production
prices.

Table 7: Value of the Film and Television Industry (R Million) 7

Sector 1997 1999 2001 2003 % growth rate:
1997-2003
TV programme 350 400 610 700 100
production
Commercials 220 200 168 120 -45.5
production
Corporate 250 200 150 160 -3.6
video
Film and 150 280 350 450 200
commercial
servicing
Cinema box 350 399 380 430 22.8
office
Cinema 100 130 120 150 50
concessions
Cinema 100 120 110 160 60
advertising
Video rental 492 508 500 580 17.9
Video retail 77 142 150 190 146.8

Employment and skills

The film industry is project-based with filmmakers – from director, scriptwriter,

producer to editor and animator – working principally as freelancers, making it
extremely difficult to get accurate employment figures. The Independent
Producers Organisation (IPO) estimated production employment at 3,925.
Depending on the nature of production, the number of people employed behind
the camera varies from 40-50 (commercial or documentary) to 75-100 (feature
films) to more than 1,500 (for larger productions lasting a few months). Using
these estimates in 1997 there were 24 324 people directly employed across the
entire value chain, while further jobs are stimulated in the transport, hospitality
and catering industries. The skills breakdown of these jobs are reflected in Table
8 below and while current figures are substantially higher, the percentage

7
Howard Thomas compiled the 1997-2001 figures for the Department of Communication and the 2003 figures for the Cultural
Observatory

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CREATIVE INDUSTRIES SECTOR REPORT

distribution among categories remains unchanged providing us with a good

indication of the skills distribution in the industry.
Table 8: Employment in Production
SKILL LEVEL POSITION NUMBER (1995) PERCENTAGE
HIGH Assistant Director 28 0.71
Art Director 46 1.17

Director 106 2.70

Director of Photography 59 1.50
Editor 74 1.89
Producer 104 2.65
Production Designer 12 0.31
Production manager 61 1.55
Scriptwriter 85 2.17
Special effects 25 0.64
Stunt coordinator 14 1.04
MEDIUM/HIGH Actor 665 16.94
Cameraman 30 0.76
Costume designer 10 0.25
Electrician 28 0.71
Music department 34 0.87
Sound recordist 41 1.04
MEDIUM/LOW Animal handler 7 0.18
Clapper loader 23 0.59
Construction 11 0.28
Continuity 21 0.54
Focus puller 27 0.69
Gaffer 19 0.48
Make up 44 1.12
Props 28 0.71
Sets 23 0.59
Wardrobe department 35 0.89
Best boy 15 0.38
Boom swinger 16 0.41
Grip 40 1.02
UNCLASSIFIED Miscellaneous 2194 55.90
TOTAL EMPLOYEES 3925 100

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Even though there is a large percentage of people in the unclassified category

(56%) it is clear from the table that a substantial number are employed in the
high- and medium-skilled categories (37%) contributing to the country’s skill
base. The impact of the film industry on the support industries translates into
employment growth in the low-skill sector.

More recent figures from the NFVF (2004) suggest that employment figures have
risen (see Table 9).

Table 9: Numbers of Staff Members by Companies

Staff members Sampled Companies (92 completed out of
1258 companies)
0-5 28%
5-10 20%
11-51 29%
51-200 12%
200 and more 11%

The NFVF survey revealed some movement in transformation albeit fairly slow
with males still forming the majority of permanent (61%) and temporary (56%)
staff and whites forming the majority of permanent staff (59%).

The special challenges in the animation industry are being addressed by the
Animation Production Training Initiative to improve high quality African animation
programmes. The shortage of black and female representation in SA animation
has been identified as a key concern for future growth highlighting the need to
develop critical skills and capacity and create a bridge between schools and
industry.

Key interventions

The most important interventions the government has instituted are the
establishment of the NFVF, the Skills Development Act establishing the MAPPP-
SETA8, the DTI film rebate and the adoption of the DTI Customised Sector Plan
for Film. There are, however, a number of other interventions that have had a
significant impact on the film industry such as the IDC’s Media and Motion
Pictures division investments in film, South African Revenue Services (SARS)
film and television rebate scheme, provincial government support for film offices
and film commissions and the formation of an industry federation, the South
African Screen Federation (SASFED).

8
The Mappp-Seta has recently been placed under administration

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NFVF
The NFVF was established in 1999 with a mandate from an Act of Parliament (73
of 1997) to develop and promote the industry. The focus of its work is to assist
the industry to access finances through the National Lottery, private investors
and international donors and promote the industry through incentive schemes
that attract international film productions.

Since its inception the NFVF has been funding institutions and individuals with
production, development, distribution and training grants. Its approach has four
key priority areas:

• “To increase foreign and local direct investment into film production
through encouraging private-public partnerships.
• To invest directly in infrastructure and facilitate industrial capital
formation required to exhibit South African and African film product.
• To improve access to a viable film industry both in terms of ownership
and in terms of consumption.
• To establish a regulatory and legal framework for the industry, that will
provide the necessary certainty and stability required by the investor
community” (NFVF, 2007).

The NFVF’s record of success is uneven with the core problem being the
continued trend of state fiscal support targeting ”principal photography” stage of
filmmaking (most labour intensive) – to the detriment of other aspects of the
value chain such as distribution. The majority of publicly funded films have never
received funds for distribution and even if they do there has been no commercial
return.

The NFVF is currently involved in research and distribution initiatives such as the
development of a Sectoral Information System to assess the performance of the
sector. This programme requires collaboration with Statistics South Africa,
SARS, the DTI, the IDC, the South African Bureau of Standards, the Council for
Scientific and Industrial Research (CSIR), the Human Sciences Research
Council (HSRC) and tertiary education institutions. Other programmes include
the “Integrated Promotional and Developmental Campaign” to assess the impact
of programmes on the revenue stream and tax base and therefore facilitate the
alignment of projects with the needs of audiences. The NFVF is hoping to ensure
the development of local content with global appeal through the South African
Film Portfolio.

It is clear that support at production level needs to be balanced with greater

emphasis at other stages of the value chain – especially at the demand side.
Secondly it would be important to develop a commercially minded tract of
investment targeted at a slate of productions which run alongside more traditional
project based systems of grants. The establishment of provincially based film
offices and commissions has lessened the need to promote South Africa to

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international filmmakers although there remains a need to co-ordinate the

marketing campaign and increase South Africa’s exposure in the international
film community as well as to facilitate co-production agreements.

There has been concern at the lack of co-ordination between government

departments and parastatal agencies and the apparent disagreement about roles
and responsibility between the DTI (which developed the Film CSP), the DAC
(which is the lead department on film and other creative industries) and the NFVF
over research, incentives and representation. The NFVF’s CEO has explained
their concern: “In relation to film matters, the role of the DAC is to represent the
NFVF at various forums and platforms, such as the service delivery clusters to
which we have no direct access. The failure on the part of the DAC to do this has
meant that there is a lack of awareness at high levels of government of
programmes that could be implemented that would be in support of key
government initiatives such as ASGISA and the broader government programme
of economic development and poverty alleviation” (NFVF, 2007). The
fragmentation within government is matched by that within the industry although
increasingly the industry is finding a single voice through the newly established
SASFED.

The DTI Film Rebate and Customised Sector Programme for Film and Television
In 2004 the DTI launched a film rebate designed to attract larger budget film
productions to the country and to increase the number of film producers under a
co-production treatise. This, the DTI believed, would boost opportunities for
employment in the film industry. As such, the Department allocated R225m to
this incentive over 3 years. The rebate per allocation was capped at R10m with a
minimum spend of R25m. This minimum was seen as far too high by the industry
as maximum budgets seldom reach beyond R5m. Although the DTI attempted to
facilitate interfirm collaboration through offering the rebate to bundled films, this
strategy did not work partly because local companies are opposed to this type of
collaboration, partly because of a sense that the IDC would not support bundled
films and partly because internationally there is a 12 month time frame which
would make it difficult to complete 3 films in this time. Other concerns with the
rebate are outlined in the Film CSP report noting in particular the lack of clarity
about bundling local films with offshore films, the erratic administrative system,
the lack of understanding of the film industry within the DTI to effectively
administer the system and the delay in issuing provincial certificates.

A significant intervention by the DTI is the Film CSP study undertaken and the
consequent inclusion of the film sector into the key ASGISA sectors. This study
has been widely lauded for its measured assessment of the film and television
industry as well as the opportunities which it outlined for the industry and the
practical recommendations to take advantage of these. The FILM CSP report
provides a situational analysis of the sector both locally and internationally with
the aim of inspiring and reinvigorating the sector that suffered from ”strategy
fatigue”. The Film CSP outlines interventions for increasing competitiveness,

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exports and investments as well as employment and equity in the film and TV
sector as one of the priority sectors of South Africa. The CSP report builds on
previous strategic papers developed by DAC, IDC, Price Coopers Waterhouse
(PWC), NFVF, MAPPP-SETA and the Department of Communication (DoC).
Extensive industry consultation focusing on key areas such as skills
development, audience development, financing, co-ordination, export and
marketing, equity and black economic empowerment, international and domestic
intelligence and competitiveness were undertaken. In addition an analysis of
global opportunities and challenges with respect to this industry were explored.

Figure 4: The Strategic Vision for the Film Sector

S tra te g ic V is io n : A n In te g ra te d R o a d m a p
I n d u s tr y - g o v t
S o u th A fr ic a n E c o n o m ic & S e c to r i n te r f a c e
D e v e lo p m e n t S tr a te g y
S t r a t e g ic U p g ra d in g R e s e a rc h
F o ru m s F o ru m s F o ru m s
E x p o r t C o u n c il

M a r k e t D e v e lo p m e n t P r o g r a m m e M a rk e t
D e v e lo p m e n t
F o ru m
R e s e a rc h U n it

P e rfo rm a n c e M o n ito rin g S y s te m M a rk e t R e s e a rc h L ib ra ry A u d ie n c e D e v e lo p m e n t

I n v e s tm e n t re s e a rc h

B ro ad c a
D is trib u t
R e b a te L ic e n s e d NFVF ID C s te r (a n d
io n
fu n d I n v e s tm e n t fu n d e d Funded fre e -to -
In fra s tru
e x te n d e d P ro p o sal c o n te n t c o n te n t a ir)
c tu re
c o n te n t
C o n te n t fu n d in g s tre a m s
Source: The DTI Film CSP (DTI, 2005b)

The Film CSP’s Integrated Roadmap vision as illustrated in Figure 5 establishes

a clear relationship between research, market development and export for the
film industry. The strategic outputs of the Market Development Programme are:

• Integration and dissemination of market development reporting.

• Targeting of interventions.
• Monitoring of industrial upgrading.
• Incentivise industry integration.
• Inform government policy and resource allocation.
• The proposal to establish a Licensed Investment Company to bring private
investment into the industry (DTI, 2005b).

The IDC’s Media and Motion Picture Division

The IDC has invested approximately R500m in film and TV production to date
and continues to allocate significant funds to this industry for both equity and loan
financing of large film industry projects through the newly established Media and
Motion Pictures Division. A comprehensive risk assessment is required before
any finance is made available. The IDC expects the successful applicant to have
secured a significant theatrical release and or television airing to support the

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IDC's back-end profit share. The IDC also requires a share in the copyrights and
ancillary rights proportional to its investment. The IDC investment can be spent in
SADC countries (IDC, 2004).

Some in the industry have expressed concern over the lack of clarity in the IDC
guidelines and drawn out process of the funding application making it difficult for
small film initiatives to benefit from this financing. In addition, the IDC is seen to
micro-manage and demand cuts in budgets in areas which could destroy a
project. More film expertise to guide the decisions has been called for (DTI,
2005b).

SASFED – the South African Screen Federation

The formation of SASFED was widely supported by the film, television, video,
distribution and new media sub-sectors in recognition of the need for unity,
representation and coherence in the industry. The fragmentation of the film
industry has long been a concern not only of filmmakers but of government and
institutions dedicated to supporting this industry. At the film Indaba in 2005, the
industry role-players agreed to establish an industry federation. More than 17
member organisations are affiliated to SASFED9 representing more than 10,000
working individuals and over 200 businesses operating in the industry. Special
interest groups such as the Black Filmmakers Network (BNF) and Women of the
Sun have been included to begin to addresses the historical lack of
representation. Common purpose across the organisation was evident in the first
meeting and is reflected in the aims of the organisation which are:

• To uphold and safeguard the rights and interests of South African

professional audio visual practitioners.
• To act as a political lobby and advocacy organisations.
• To improve the film production and distribution environment in South
Africa and if necessary to initiate research on specific industry related
issues.
• To deliver information to its members and the greater community about
the economic, legal and creative conditions under which audio visual
professionals in South Africa work.
• To facilitate better communication between the various bodies that will
form part of the federation membership for SASFED.

Subsequently SASFED joined two other organisations, the IPO (Independent

Producers Organisation) and the recently formed TPA (The Producers Alliance)
to facilitate unity and mobilise industry stakeholders to better communicate with
government, government agencies and the broadcasters such as DTI, DAC,
9
Affiliated members include Association of South African Crew Agents (ASACA); Black Filmmakers Network; Commercial
Producers Association (CPA); Independent Producers Organization (IPO), National Association of Casting Agents (NACA); National
Association of Modeling Agencies (NAMA); Official South African Casting Association (OSCA); Personal Managers Association
(PMA); the Producers Alliance (TPA); Southern Africa Communication for Development (SACOD); South African Guild of Editors
(SAGE); South African Script Writers’ Association (SASWA); South African Society of Cinematographers’ (SASC); Women of the
Sun (WOS), Association of Broadcast Training Providers, Animation SA, Documentary Filmmakers Association (DFA), Women in
Film and Television South Africa (WIFTSA) and Motion Pictures Training Association (MPTA).

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DoC, Independent Communications Authority of South Africa (ICASA), the

Lottery, the NFVF and the South African Broadcasting Corporation (SABC). A
priority intervention at this point is the ongoing crisis at the SABC regarding
commissioning, licensing, contracting, payments, the lack of rights for content
creators and censorship which is negatively affecting the growth of the sector
(Screen Africa, 2006). An important recent agreement between the SABC, the
IPO, TPA and SASFED is to establish a task team on Intellectual Property (IP) to
research the current local and international terrain of IP ownership and
management, international trends, best practice and practical requirements. This
agreement gives weight to their joint recognition of the value inherent in IP and
that the broadcaster and the independent production sector needs to commit
themselves ”to building a stable, sustainable, transformed and diverse
industry”10.

Provincial and Local Film Offices and Commissions

There are three provinces with functioning film commissions and/or film offices
and at least two others planned in Mpumalanga and the Eastern Cape.
Established as either special purpose vehicles or as units within other
development agencies the primary role of these institutions is to develop local
industries and facilitate film and television productions on location in their specific
region.

• Gauteng Film Commission (GFC)

The Gauteng Film Office was established in 2002 by the Gauteng Provincial
Government (Finance and Economic Affairs) as a section 21 company. The
GFO’s core objective was to promote film production in the province and make
Gauteng a premier destination for local and international film producers. While a
number of films were shot in Gauteng (Hoodlum and Son, Stander, Hotel
Rwanda, Drum, Tsotsi, Soldiers of the Rock) and more than R400 million worth
of investment in film and commercial production came into the Gauteng
economy, in 2004 the GFO seemed to lose focus and contact with its
stakeholders. This resulted in an Indaba in 2004 to set a direction for the GFO,
get a mandate from its stakeholders and make progress on appointing a CEO.
The GFO has subsequently appointed Terry Tselane as CEO and began a
process to review the organisational mandate and strategic direction. It recently
completed a study to re-position itself from a Film Office to a Film Commission
acknowledging that the work of a film office (permits, traffic, road closures, etc) is
best done at the municipal level. The GFC will have both conventional film
commission obligations as well as developmental responsibilities related to the
domestic film and television industry.

10
Set of 5 principles agreed on 2.7.2007 by the SABC/IPO/TPA/SASPEC task team for IP available at
http://www.ipo.org.za/articles7.htm

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The core functions of the GFC were presented to a wide variety of stakeholders
in July 2007 and remain unchanged from the Gauteng Film Office Annual report
2006 ranging from marketing Gauteng as a location of choice, being a hub and
resource on centralised industry intelligence, working with stakeholders (private
and government) to support a sustainable audio-visual industry, promoting an
active screen culture across the Province and supporting the transformation of
the sector into a “world class industry and that is reflective of South Africa in its
entirety”.

• The Cape Film Commission (CFC)

The Cape Film Commission (CFC) is particularly active in the Western Cape film,
television, commercials, video and stills photography production sector. It was
established as a Section 21 company and plays a significant role in promoting
the indigenous industry and acting as an interface between the industry and
government. The CFC works with the NFVF to enhance incentive and support
programmes.

• The Durban Film Office (DFO) and KwaZulu-Natal Film Commission (KZNFC)

The DFO was established as a special purpose vehicle of the eThekweni

Municipality, formally launched in October 2003 as the official advocate for the
feature film, television, video, commercials and stills photography production
industry to promote Durban and the KwaZulu-Natal region to the entertainment
industry. Additional responsibilities include the facilitation and coordination of on-
location filming in the City and the Province. To achieve the aim of a film friendly
destination the DFO believes it important to promote the development of local
filmmakers, crews and other related professions especially those from
disadvantaged backgrounds. The DFO provides information on funding and
training opportunities and facilitates regular communication between the local
industry and film related government agencies.

In 2005 the KwaZulu-Natal Department of Economic Development commissioned

a business plan for the establishment of a KZN Film Commission. Envisaged as
a Section 21 company, the KZNFC will promote, market and develop the film
industry in Durban and the province as a whole both as a film destination for local
and international filmmakers as well as a regional trade association and
networking body for the industry. No further developments have occurred and the
KZNFC has not yet been established. There has also been no decision on the
demarcation between the DFO and the KZNFC.

Scriptwriter’s Institute of South Africa

The Scriptwriter’s Institute was borne out of the South African Script Writer’s
Association (SASWA) to provide quality skills training for scriptwriters in all
aspects of the entertainment industry. SASWA became internationally
recognised as a guild with the International Association of Writers’ Guild as of

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November 1st 2005 and in March 2006 the SASWA membership ratified a
recommendation to split into two organisations, the South African Scriptwriters
Union (now registered with the Department of Labour) and its training arm, the
South African Scriptwriting Institute (the Institute). The aim of the Institute is to
train scriptwriters across the film, television and radio genres as well as be the
custodian of the professional standards within the scriptwriting industry. Their
target market is all scriptwriters (working and aspirant) as well as the producers
for whom they work.

The programmes of the Institute are run nationally in all provinces with funding
from the MAPPP-SETA and the National Lottery. Scriptwriting programmes are
offered at NQF level 5, 6 and 7. In 2007 the Institute planned a Script Camp
initiative for 12 writers over a 3 month period working on their scripts under the
guidance of script editors and a producer and ran master classes with the GFC
and international scriptwriters. These programmes are reflective of the strong
relationships the Institute maintains within the industry through SASFED, the
Motion Pictures Training Association (MPTA) and the SAQA standards
generating process. The “Fundamentals of Scriptwriting” programme feeds into
other programmes such as Sediba, Sithengi (see below) and the NFVF script
development process.

The South African Revenue Service’s Tax Incentive

Section 24F of the Income Tax Act offers deductions against production and
post-production costs but this concession was severely abused in the 1980s
which has put this incentive at risk. There are suggestions that Section 24F
should be re-examined to make it more investment friendly. Key concerns relate
to the timing of allowances and accruals in underwritten transactions. Despite
these and other ambiguities (such as the ”at risk” rules on transactions that are
credit financed or underwritten by revenue shortfall insurance), Section 24F is
seen as a useful tool for local filmmakers (Webber Wentzel Bowens, undated).

Sithengi Film and TV Market

The Sithengi Film and TV Market (Incorporating the Cape Town World Cinema
Festival) has been an important part of the film and television industry in South
Africa and a significant date on the calendar for all filmmakers for the past 11
years. Unfortunately Sithengi is currently threatened with closure by its board of
directors who stated that it is “technically insolvent” (Screen Africa, 2007a). No
new CEO was appointed after the contract of Michel Auret expired in April 2007.
This premier film market provided an opportunity for networking, conferencing
and trading between South African and other African film filmmakers, distributors,
exhibitors, broadcasters and international players (CIGS, Film and Television,
1998). It also administered the R3ml HIVOS/Sithengi Film Fund for aspirant
filmmakers and projects in the SADC region in 2005 (Henderson, 2005).

Previous funding streams for 2004-2006 were secured from the NFVF (R3.6ml),
the City of Cape Town and the Provincial government (R2.4ml), the National

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Lottery Fund (approximately R11 ml) and a commitment to a renewable contract

from the SABC. The Sithengi Film and TV Market will, as a result of this funding
crisis, not take place in 2007.

Film Resources Unit (FRU)

The Film Resources Unit (FRU) has been the only development agency
concerned with distribution in the country. It was established as a non-
governmental organisation to disseminate and promote independently produced
and developmentally appropriate film and video materials as well as educate
audiences about film. FRU began as an underground distributor of African audio
visual and socially relevant documentary material during the Apartheid era and
grew into a successful NGO working with communities on a grass roots level and
representing African filmmakers across the continent. It developed a rich archive
of film and video resources over its 21 years of existence.

Its recent financial crisis led to a decision to go into voluntary liquidation while at
the same time support from the industry and the media encouraged it to develop
a comprehensive strategic plan to revitalise the organisation. A statement
released by FRU reported on the discussions the organisation was having with
the Department of Arts and Culture regarding its financial status and the way
forward to ensure its longevity (FRU, 2007).

Key challenges facing growth

In addition to the core problems identified by the Film CSP outlined below, there
are a number of other key challenges the film industry will need to address in
order to ensure the growth of a viable and sustainable industry. These are:

a) There is a lack of strategic information and research vital for industry

sustainability. Without this understanding of market trends and audience
analysis, industry participants are unable to make effective investment decisions
(Joffe, 2004).

b) Intellectual property rights might exist but are poorly enforced. The
appearance of the pirated DVD for Tsotsi, South Africa’s Oscar winning film on
the day of the release of the movie – albeit with a different ending - galvanised
the South African Federation against Copyright Theft (SAFACT) to launch a
campaign educating the public about piracy in which fake pirated DVDs are sold
by students dressed as street vendors (SAFACT, 2006). A few minutes into the
genuine movie, a message appears on the screen: “Thank you for buying this
DVD. Your R40 has been donated to the Anti Piracy Foundation. Piracy is a
crime”. The price of the product is viewed as expensive to the majority of the
population. The pirated DVD of Tsotsi sold for R50 on the streets while the legal
DVD sells for R150-R200. There is no doubt that the digitisation of content in all
markets facilitates the growth in piracy and it is a huge threat to the industry.
Piracy rates globally vary from 90% in China, to 79% in Russia and Thailand to

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less than 8% in the US. Table 10 shows that DVDs account for more than 60% of
piracy in the sector while the value of the loss from global piracy is more than
$12bn.

Table 10: The Impact of Global Piracy

Global piracy loss $12.2bn
MPA member companies $6.1bn
Hard goods (DVDs) 62%
Internet Piracy 38%

c) The inadequate access to funding in South Africa and the requirement for
revenue generation guarantee is a barrier to investment in the sector. Producers
are unable to meet requirements of financial institutions given the high risk of the
industry and fragmentation of audiences and are unable to recoup value from
content made for television - as broadcasters currently have a monopoly on IP
ownership. Given the need to develop the local film industry it is of concern that
the Lottery, a major alternative source of funds, only funds not-for-profit
companies. There is a need for business development support for the industry to
mitigate these industry inherent financial risks.

d) The lack of seamless government services and the consequent fragmentation

of government interventions and support policies remain a concern to the
industry. There are numerous policy research studies conducted by different
institutions, training interventions developed, incentive schemes created and
marketing strategies promoted. It is necessary for these to be aligned to an
overarching strategy and developed in such a way so as achieve effective
outcomes for the industry without duplication and confusion.

Recommendations for Development

The Film CSP report (DTI, 2005b) identifies an integrated set of interventions
towards a vision for South Africa to be the leading producer of film and television
content from Africa and the Middle East watched by the world by 2014. The
document identifies four substantive problems in the film sector that it seeks to
remedy through strategic interventions:

• Erratic production levels in both local production and productions of

foreign origin.
• Underdeveloped domestic and international markets for South African
products as a result of a lack of market access strategies informed by
reliable market information.
• Levels of content production below international benchmarks of 12 –
25 feature films per annum in order to support a domestic industry.
• The lack of infrastructure to build local audiences, especially for feature
films in theatrical or DVD release.

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In response to the issues raised above, the Film CSP proposes the following
interventions:

a) Reworking of the current film and television rebate offered by DTI to

ensure greater consistency in production rates, collaboration amongst
local producers, support BBBEE objectives in the sector and facilitate
skills development.
b) The development of a market development programme, administered by
an institution established for this purpose to ensure regular information
gathering and dissemination and to promote collaboration and co-
operation in the sector in order to develop a clear market access strategy.
c) The establishment of a licensed investment company within an existing
financial institution to attract private sector investment, improve the
functioning of Section 24F of the Income Tax Act, increase the stock of
domestic product and promote relations with international sales agents.
d) The development of distribution infrastructure through a public private
partnership to triple the number of cinema visits per capita over ten years
and increase the percentage of South African content consumed.

Evaluated by a range of key performance indicators attached to the individual

interventions, the anticipated outcomes of the Film CSP are an increase in the
number of foreign productions and co-productions in film and television, growth in
the international and local markets for South Africa content, increased levels of
private finance and an increase in the returns on domestic production to between
R15 and R25 million per annum.

The Craft Sector

Definition

In South Africa, the Department of Trade and Industry’s Craft Sector Programme
(Craft CSP), published in 2005, defines the sector as follows:

“Craft refers to the creation and production of a broad range of utilitarian

and decorative items produced on a small scale with hand processes
being a significant part of the value-added content. The production of
goods uses a range of natural and synthetic materials” (ACTAG, 2004).

The distinction between crafts and visual arts has always been blurred. Some
experts talk of ”the useful arts” (of the craftspeople) as objects produced for
everyday use, and the ‘decorative arts’ (of the visual artists) as those created for
their own sake. Some other experts refer to the ”plastic arts”, in which they
include painting, sculpture, photography, architecture, and sometimes even fine
glassware, jewellery and furniture. The use of artistic works in artisanal products
is common. The use of craft techniques and skills by visual artists is also

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common. A photograph of a craft product is considered to be a manifestation of

visual art. It is important to note that there can be no sharp dividing line between
crafts and visual arts. Each sector has its own independent standing and market,
but they also have a mutually supportive and interdependent relationship,
including their linkages with the industrial design and formal factory-oriented
mass production sectors.

From an intellectual property perspective as well as from a marketing and

consumer perspective, crafts and visual arts overlap in that they both produce
essentially hand-made products, often culturally rooted, whose distinctive quality
or inherent character has primarily an aesthetic appeal which is judged largely by
the eye, although elements of touch and smell may also be important. Craft items
may also have functional or useful features, whereas the products of visual arts
do not.

Sector Products and Services

Craft products encompass a vast variety of goods made of diverse materials.

This diversity makes it incredibly difficult to give a satisfactory definition of the
material content, technique of production and/or functional use of craft products.
Yet, for a variety of reasons, a working definition of such products is sought by
importers, exporters, customs and excise departments, or trade development
agencies. Although there is no universally agreed definition of artisanal products,
the following characteristics broadly apply to a wide range of the world’s crafts:
• They are produced by artisans, either completely by hand or with the help
of hand-tools and even mechanical means, as long as the direct manual
contribution of the artisan remains the most substantial component of the
finished product.
• There is no particular restriction in terms of production quantity.
• Even when artisans make quantities of the same design, no two pieces
are ever exactly alike.
• Their special nature derives from their distinctive features, which can be
utilitarian, aesthetic, artistic, creative, culturally attached, decorative,
functional, traditional, and religiously and socially symbolic and significant
(UNESCO/ITC, 1997).

The crafts sector is composed of small and micro-business, with work often
conducted in studios and workshops. The “economies of scale” that drive
international competition in many goods markets are rarely a factor in the crafts
sector, though there are crafts communities and collectives that sometimes band
together for sales and marketing purposes.

The small scale of studios and diversity of media in the crafts sector also means
that it is more difficult to create and sustain business or industry associations in
the sector. The crafts community is diffuse and loosely organised, partly because
it is possible for an individual to design and produce a product or range of

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products. A profile of crafts workplaces, like a profile of crafters, is hampered by

statistical and definitional problems.

Basic Enterprise Characteristics

Crafters may be defined as people who make products manually. They can work
individually or in groups. The sector also includes entrepreneurs who:

• Manage or belong to micro-, small- or medium-sized enterprises

concerned with craft production.
• Use machine tools or even machinery, without affecting the essentially
hand-made nature of the work and the production process.
• Beyond the usual micro enterprise, have associated in co-operatives or
any other form of organisation, formal or informal.
• Although not actively participating in production, specialise in research,
market negotiations or product design and conception.

Recent Sector Developments

The craft sector has been the focus of a great deal of attention in the South
African economy since the publication of the CIGS reports which identified the
potential of the sector to contribute to economic development and also social
objectives such as the empowerment of women, poverty alleviation and black
economic empowerment. Some critical interventions include:

• The establishment of the Cape Craft and Design Institute (CDDI) in the
Western Cape (See Box 3).
• The national “Craft Imbizos”11 which provide a platform for communication
and consultation in the sector, as well as retail opportunities.
• The mounting of the Beautiful Things Exhibition as part of the World
Summit on Sustainable Development (WSSD) and subsequent craft
“supermarket” initiative that provided a retail and showcasing opportunity
for the sector under the patronage of First Lady Zanele Mbeki.
• The initiation of “One of a Kind” as part of the Decorex trade show.
• The inclusion of the craft sector as a priority in the “Investing in Culture”
programme of the DAC and the Expanded Public Works Programme.
• The registration of formal technical and vocational qualifications for the
sector through the CreateSA project and the MAPPP-SETA.
• The development of the national craft marketing strategy by the DTI which
has been incorporated into the CSP.
• The publication of the Craft CSP by the DTI.

While the sector has been prioritised since the late 1990s interventions coming
from numerous line-function departments and different spheres of government

11
The Imbizos were established as to promote discussion and networking in the sector, aligned to market access programmes.

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have been fragmented and social and welfare motivations have impacted on the
economic sustainability of initiatives (DTI, 2005a).

Upstream and downstream industries

Upstream and downstream industries which impact on the sector include:

• The agricultural sector

• The mining sector
• Tourism
• Heritage
• Interior design
• Retail

Key statistics

The Craft CSP estimates that the South African Craft Sector contributes
approximately R2 billion to GDP (0.14%), providing income and employment to
approximately 38,062 people. The document further estimates that the sector
comprises over 7,000 micro and small enterprises operating across the value
chain. With regard to global market position, the country is a very small player,
contributing less than 1% to the global trade in craft (DTI, 2005a)12.

Market size

Global Market

The world market for handicrafts is in a state of transition. The growing influx of
look-alike, low-cost, fully or partly mechanised crafts and decorative products
from countries such as China, Hong Kong, and Taiwan, has penetrated and
thereby affected the market for traditional hand crafted products. The current
effective world market for crafts and decorative stands at an estimated US $235
billion in 2003, with an annual growth rate of 5.1% between 1999 and 2003 (Frost
& Sullivan, 2005).

In 2003, the top 10 markets, which include countries such as USA, Germany,
United Kingdom, Japan, Hong Kong, France, Canada, Belgium and Spain,
accounted for 77.5% of the total world imports of crafts and decorative products.
The USA is the largest importer of crafts and decorative products and imported
US $75.8 billion worth of crafts and decorative products in 2003. This translates
into 32.3% of the world imports. Taking into account the significant number of re-
exports to Canada, Mexico, and other South American and many African
countries, however, Frost & Sullivan (2005) estimate the nett consumption by
USA to be around US $50 billion.

12
The document notes that these are estimates based on inconsistent industry data and should thus be treated with caution.

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The demand for these products depends on the overall economic climate of a
country, which include key aspects such as employment, disposable income and
changes in spending patterns. Despite the fact that USA is the largest market,
the European Union (EU), viewed as a trading block, is fast emerging as a very
attractive destination for crafts and decorative products. The 25 countries that
constitute the European Union, account for 40% of the world imports (Frost and
Sullivan, 2005).

The bulk of the imports by the USA are low value products, whereas in the case
of the EU countries it is mostly medium to high value products. The influx of low-
cost products from Asian countries, however, has made these markets highly
competitive. On the other hand, Japan, which accounts for 6.5% of the world
market, is relatively less competitive. Consumers here are willing to pay better
prices for unique handcrafted products especially those originating from
developing Asian countries.

Local Market

The local market for South African products is showing strong growth and with an
annual economic growth of between 3-4% annually and rising middle class with
increasing disposable income, the local market is set to expand. The rise in local
interest in South African craft is also attributed to a general trend towards African
styles.

The sector contributes approximately R2 billion to GDP in retail sales, which

represents approximately 0.14% of GDP, of which approximately R150 million is
in export sales. Over the last 5 years, the number of production enterprises has
increased by 40%, an average growth of 8% per year which is double the
national average for economy growth. This growth can largely be attributed to
two factors: growth in tourism visitor numbers which grew by 82% over the last
10 years; and the impact of interventions on the sector.

There are a wide variety of inputs used in craft production supplied by

approximately 436 craft material suppliers nationally. These include: beads,
grass & plant material, clay, wax, stone, wood, wire & metal, textile & fibre, glass,
leather/animal by-products, paper, plastic & resin. Access to materials, especially
access to wholesale pricing of raw materials, and other supply chain factors are a
major limiting factor to the efficiency of the craft sector.

Recent estimates indicate that there are 5,725 full time craft production
enterprises nationally, with a concentration in KwaZulu-Natal, the Western Cape
and Gauteng. These enterprises or production units are classified as informal,
sole traders, co-operatives, project-based and small batch manufacturers with
the greatest concentration in the informal/ sole-trader category. The estimated
numbers of employees is just over 30,000, significantly lower than figures
projected in earlier reports such as the CIGS Craft Report.

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Craft retail takes place through just over 750 outlets which include craft markets,
galleries, small retailers and national chains. The latter has seen increased
activity in the last 5 years although the bulk of these are in the provinces with
greater urban-based populations and strong tourism economies. Based on
figures available from listed tourism companies it is estimated that the national
turnover of craft retails sales is between R1,9 billion and R2 billion. There is a
growing specialist service industry to the sector that includes product developers,
financial, marketing and distribution services and skills development and
technical training. Using available figures, a total of 100 enterprises in the
support services have been identified (DTI, 2005a). Little information is available
on local consumers and the exact nature and the potential of the market has not
been quantified.

The market can be segmented into eight major categories as follows (Kaiser
Associates, 2005):

• Predominantly functional items primarily produced on a large scale, are of

medium to high quality and are generally sold in formal and large retailers.
• Fashion-led items which are also of medium to high quality and produced
on a large scale and are sold in large and small specialist retailers.
• Gifts and novelty items which can be at any level of quality, tend to be
produced in small batches are a sold through a variety of retail outlets.
• Corporate gifts which are generally medium to high quality, generally
made in large batches and retailed directly or online to corporate
purchasing managers.
• Collectible/Craft Art objects which are high quality objects, sold in
specialist retail outlets such as galleries and museum shops and generally
produced as once-off or limited edition pieces.
• Cultural Artifacts which can be of low or high quality are generally
produced on a small or medium scale and are sold at markets, tourist
outlets or by informal traders.
• Souvenirs/Curios of low or high quality, manufactured on a small or
medium scale and are sold at markets, tourist outlets or by informal
traders.
• Socially Responsible/Fair Trade products are generally of medium quality,
tend to manufactured in small or medium batches and are sold through
historically associated retailers and, increasingly, by mainstream retailers.
Performance: historical, current, future

The craft sector in South Africa has been characterised by two distinct
developmental periods. Prior to the drafting of the CIGS report in 1998 and the
Craft CSP in 2005, the sector was driven by philanthropic investment. The CIGS
report and subsequent efforts have recognised the economic potential of the
sector. This is not to say that the community development aspects of the sector

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are ignored, but rather, the economic potential is recognised. The Craft CSP has
provided an industrial strategy, aligned to South African trade and industry policy
for the first time. This intervention will encourage government and the private
sector to engage with craft from the perspective of economic rather than social
development, and in so doing, enable the sector to move from a dependency on
grant-funded interventions to market led innovation.

Future Outlook for the Craft Sector

The value of the South African Craft Sector is its potential to contribute to the
following key government priorities and as such it will continue to enjoy
government support at all levels:

• Black economic empowerment.

• The empowerment of women.
• Rural and urban development.
• Small business development.
• Export promotion.
• Beneficiation.
• Poverty alleviation.

With regard to international trends that will impact on the sector, the following
were identified in the Micro-Economic Development Strategy (MEDS) for craft in
the Western Cape:

• The growth of fair trade practice and products as a niche market

especially in the European Union and its resultant impact on producer and
buyer relations.
• The increasing importance of cultural content in product development and
the application of handmade processes to ensure that products are easily
differentiated in the global markets.
• The continued importance of skills development to meet the existing skills
gaps of the sector and to ensure that access to new technologies and
market opportunities are assured.
• Increased competition from cheap imported products that flood the local
market and emphasise the need for product differentiation based on the
country’s unique cultural and heritage resources.
• Increasing market access is likely to lead to homogenisation which will
impact on the viability of craft products locally and globally.
• International and local trends in fashion and style will continue to have a
major impact on the sector, forcing it to keep abreast of these trends and
invest in regular market intelligence gathering exercises.
• Greater access to new materials and new technologies as tools for
continuous product innovation (Kaiser Associates, 2005).

Recommendations for Development

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The Craft CSP comprises a comprehensive set of development initiatives with a

budget of just over R30 million. The document identifies four core obstacles to
the growth of the sector:

• The lack of co-ordination of development activities in the sector as a result

of a weak organisational base, fragmented activities and a lack of reliable
data.
• A weak skills base and uncompetitive pricing strategies which are a
function of the informal nature of the sector.
• The lack of investment in research and development and infrastructure.
• The inability of the sector to capitalise on market opportunities given a lack
of market-focused product and enterprise development and a common
marketing strategy in the sector.

To overcome these challenges, the following programmes will be implemented:

• Craft and Design Sector Co-ordinating Body to ensure regular and

constructive engagement with the sector and development agencies.
• An enterprise development programme to drive the commercialisation the
sector and build its global competitiveness.
• A research and development programme to improve products, technology
and commodities in the sector.
• Integrated craft development hubs in the provinces and initiate a market
access programme to capture 5% of global trade in handicraft by 2014.

In doing so, the Craft CSP anticipates supporting 180 craft enterprises and over
5000 crafters, improving awareness of the importance of design and improving
expenditure on research and development and creating strong market linkages
between crafters and buyers and increasing market share and sales.

The Music Sector

The South African music sector is vibrant, displaying significant entrepreneurship

which is driving the success of genres such as kwaito and rock. The music sector
plays a particularly important role in national economic development and social
cohesion.

Definition

There are three unique components that comprise the music value chain:

• The recording sector, which concerns the production and consumption

of tangible music products such as CDs, cassette tapes, music videos
and internet downloads.

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• The performance sector, which focuses on live performance which is

the principal means of income generation for musicians in South
African and the rest of the continent.
• The multidisciplinary sector, where music is a component of a product
or performance such as audio-visual material (film, theatre
performance, commercials and tourism).

In South Africa this definition is particularly important as most musicians do not

earn a living from recorded music but rather from performance or working in
other creative enterprises (theatre, film, commercials). Local artists that are most
active in the live performance sector are also those who achieve the highest
record sales.

The first study on the music sector prepared as part of the CIGS report (CIGS
Music, 1998) focused principally on the recording sector and failed to assess the
other related sectors. Nevertheless this study formed the basis of subsequent
government interventions which have had a significant impact on the industry.
Following the release of the CIGS report, the Minister of Arts, Culture, Science
and Technology assembled a multi-stakeholder team, called the Music Industry
Task Team (MITT) to recommend strategies to address the problems facing the
South African music industry. The MITT released 37 recommendations aimed at
strengthening the industry.

At the same time the broadcasting industry was under the spotlight with the
Independent Broadcasting Authority, set up to govern the emerging independent
broadcasting sector, that issued regulations to radio stations to broadcast local
music.
.
This focus on music has continued in government with the Department of
Communication and Department of Trade and Industry adding their weight and
expertise to this sector.

International

The global music market is highly centralised although the wave of

agglomeration of global music sector players has given rise to the establishment
of small, niched independents. Technological changes such as digitisation have
revolutionised the nature, scale and performance of the music industry globally.

While physical music sales have declined in many international markets, digital
sales have again increased in 2006 with 586m digital singles downloaded and
28m albums downloaded representing a 60% and 103% increase respectively.
Digital sales include single track downloads, album downloads, music video
online downloads, streams, master recording ringtones, full track audio download
to mobile, ringback tunes, music video downloads to mobile and subscription
income. Figures in Table 11 were collected from International Federation of the

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Phonographic Industry (IFPI) members (physical sales); major record companies

(digital sales) and includes an estimate for non-reported sales. In general, the
growth in digital revenues partially compensated for the decline in physical sales
across major music markets.

Table 11: Total Music Sales Market 2006

Trade Values 2006 Retail Values13
2006
US$ % Change % Digital US$
US 6,497 -7% 17% 11,501
JAPAN 3,563 1% 11% 5,273
UK 2,054 -7% 6% 3,252
Germany 1,411 -3% 5% 2,091
France 1,126 -10% 6% 1,700
Canada 530 -9% 6% 719
Australia 403 -4% 5% 621
Italy 383 -11% 6% 598
Spain 327 -11% 5% 497
Mexico 236 -10% 4% 374
Netherlands 233 -5% 4% 396
Brazil 222 -25% 3% 333
Russia 210 4% 0% 407
Switzerland 182 -12% 3% 237
Belgium 162 0% 6% 331
South Africa 154 3% 2% 248
South Korea 153 n/a 56% 248
Sweden 141 -6% 6% 229
Austria 130 -6% 5% 266
Norway 120 -10% 4% 227
Other 1,350 -6% 8% 2,265
TOTAL 19,587 -5% 11% 31,813
Source: IFPI May 2007

Where data is gathered by private institutions such as representative bodies of

music recording companies this data is collected and formatted for their specific
needs and may not allow for appropriate comparisons. For instance, it may
under-estimate sales and profits or it may monitor sales according to artists
rather than where the sale has taken place in the region. Collection agencies

13
Retail sales are estimates based on a markup and represent combined physical and digital sales.

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may also not collect information according to countries in relation to royalties or

license rights payments.

There is no common methodology for data collection on the African continent

making comparability extremely difficult. In the absence of country specific
national data, sources such as the IFPI can shed light on the value of Africa’s
contribution to the music industry. These data sources however are hugely
problematic. The IFPI data for instance, is based on membership which on the
African continent is principally based on companies in South Africa (4), Nigeria
(1), Kenya (1) Ghana (17), Egypt (4), Malawi (1), Mauritius (1) and Mozambique
(1) with only South Africa, Nigeria, Kenya, Ghana, and Egypt having national
membership.

Table 12: Global Music Sales

Region Global sales Value $ 2001
contribution %
2001

North America 37 8.4-14.2 billion

Europe 34 13 billion
Asia 20 7.8 billion
Latin America 6 2.4 billion
Australasia 1.8 707 million
Middle East/ Turkey - 345 million
Africa 0.6 207 million

Although the data provided by the IFPI is welcome from a comparative point of
view (see Table 12), it fails to illuminate the structure of the music industry in
Africa. This industry is principally driven by live performance and informal
recordings often in the pirate market whereas the IFPI figures are collated from
formal recorded and mainstream music data.

Piracy is a global problem impacting on all role players from musicians,

composers, recording studio owners, sound engineers, record labels and
distributors. IFPI figures report that globally CD piracy is worth US$4.5bn per
year (IFPI, 2003) facilitated in part by technological advances and in part from
the massive over-capacity of CD manufacturing plants. This contrasts to trends in
the African region where cassette piracy predominates.

An important niche market for South Africa and the other developing countries is
the growth of World Music although it is still dominated by specialised record
labels located primarily in Europe. The South African music industry has not yet
benefited fully from the opportunity this growth represents for artists, composers
or independent record labels.

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Characteristics of the South African Music Sector

The South African music sector comprises approximately 0.8% of world music
sales although with local content requirements, deregulation of radio industry and
synergies between local and international musicians’ sales have grown
substantially since 1995. It is a fast growing market with a deep and diverse
musical heritage coupled with wide ranging music development programs. South
Africa has a strong industrial base in recording, manufacture, retail and
broadcast to ensure the sale of music and an increasingly wide range of
institutions representing most sectors with agglomeration (particularly in
Gauteng) facilitating easy industry interaction. Growth in unit sales and market
value has resumed over the last four year period while copyright collection
agencies are generating more revenue than any other African agencies.

Recording Industry of South Africa (RISA) figures (Table 13) show that music
sales (local and international music) are topping the R1bn-a-year mark despite
the rise of piracy and internet downloads. There is also significant growth in
sales for local artists with sales of 11.7m units amounting to R383m in 2005,
higher than the R349m sales in 2004. Sales of local music consistently
accounted for more than 20% of the total value of music sales between 1997 and
200214 and reached 37% in 2004/5 as can be seen from the table below (Table
13). It should be pointed out however, that South African music tends to be
bought on the lower value cassette format while international music is
predominantly purchased on the higher value CD format so that local music in
2002 for example accounted for 42.6% of total sales using unit sales rather than
value (Gostner, 2004).

Table 13: Music sales in South Africa

Year Unit Sales Value Local
artists

2002 - R704m R192m

2003 - R705m -

2004 20.6m R888m R349m

2005 22.6m R976m R383m

Source: Risa sales figures

Unlike many global markets, physical sales increased in South Africa in 2006
(3% according to the IFPI figures) and while there is growth in digital sales (2%) it
is significantly lower than that experienced by global markets. However the South
African music industry remains insignificant in global markets and of little concern
to the largest music producing companies.

14
Karl Gostner, ‘The South African Music Industry: trends, analysis and questions’ in Cultural Observatory documents available at
www.culturalobservatory.org.za

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Many of the South African research and policy reports on the music industry
have focused on a value chain analysis (CIGS, Cultural Observatory) which has
come under criticism for its focus on the supply side and consequent neglect of
demand. One of the problems with the value chain analysis is that inadequate
attention is paid to the consumer and patterns of consumption that would be
revealing about culture and identity with its emphasis on supply and the creation
of value through the production, distribution and exhibition cycle. The music
sector provides an interesting illustration of this in that the focus on value chains
may have generated a dichotomy in which music is either a commercial product
that is the culmination of an “industry’s efforts” or it is an art form and cultural
(Gostner, 2004).

Even though the value chain links the two critical moments – that of production
and consumption – the bulk of analytical work in the SADC studies and those in
South Africa itself have focused on the moment of production. This has led to
some distortions as to how successful certain genres of music have been in
South Africa. The Apartheid legacy and the concomitant racially skewed patterns
of income distribution have impacted on what genre of music is consumed. The
majority of the population listens to Gospel, Kwaito and Reggae while the highest
number of retail sales is in Rock and Pop music (Gostner, 2004).

Unlike the rest of the African music markets, international music dominates sales
in South Africa. Table 14 below shows the comparative share of domestic
repertoire in different jurisdictions.

Table 14: Comparative share of domestic repertoire15

Country Repertoire
United States Mostly local
Canada Increased by 12% due to Canadian Superstars
Western Europe (France, Germany, Italy, Spain Mix, strong efforts to promote local repertoire
and UK)
Eastern Europe (including Russia) Western European music mostly
Japan 75% domestic and regional
Latin America 70% domestic and regional
Middle East and Turkey Arab/Domestic 60%
Australasia International - historic effort to promote local
repertoire
Africa Local (65%)
South Africa 25% although share of local repertoire is growing

15
Figures sourced from IFPI, 2003 and table adapted from ‘Take Note! The (Re)naissance of the Music Industry in Sub-Saharan
Africa’ by Development Works (2004) and commissioned by The Global Alliance for Cultural Diversity, Unesco

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The place of South African music within global trends is distorted by economic
inequalities as genres in which the domestic industry is stronger (Kwaito and
Gospel) have tended to be the music of choice for black consumers with income
inequalities still applicable. The development of Kwaito to a large extent
contradicts the view that the commercialisation of music has a detrimental effect
on national identify as this music form has found creative and artistic expression
amongst South Africa’s marginalised youth contributing significantly to identify
formation. There is no doubt that social and cultural experiences shape the
genres that interest people such that during the Apartheid era in South Africa
musical trends rarely crossed over. Younger listeners are developing their
musical interests outside of this heritage. The power of the “Kwaito nation” was
the subject of a research report by YFM showing that in ten years Kwaito had
rivaled gospel as the top selling genre with 28% of the 239 best selling albums
between the fifth and the ninth South African Music Awards being Kwaito albums
(Yired, 2003).

Since the CIGS report there has been a significant increase in independent
recording studios and record labels allowing for more cross-over’s from
performance and the multi-disciplinary sector into the recording industry. At the
same time, the live performance sector supports the recording industry but it
remains un-regulated in terms of contractual arrangements, the protection of
intellectual property and lacks organisational capacity. Music festivals have
grown significantly in South African with more than 20 different festivals ranging
in styles from Jazz, Rock, Kwaito and classical music.

Upstream and Downstream Industries

It is clear that the music industry is closely related to other sectors such as
performing arts and festivals and has a direct link to tourism through live
performance (bars, restaurants, hotels, community halls, concert halls and
stadia) in Table 15 below.

Table 15: A qualitative map of the music sector

Core Activities Related Industries Related Activities IT and Telecomms
Live performance Music press Art & creative studios Music on demand
Production and sale of Broadcast, film and Manufacture of Music games
sound recordings advertising instruments
Administration of Theatre and dance PR companies Internet music sales
copyright
Jingle producers Multimedia music
Photographers Virtual music networks
Source: Northern Ireland’s Creative Industries: A qualitative map cited in Kristafor and Budhram ( 2003)

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Market Size

Production facilities; Cassettes, CDs and DVDs

Locally produced compact discs and DVDs have increased by 129% between
2002 and 2005 while Risa figures show that the sales value of cassettes has
declined from R87m in 2002 to R60.8m in 2005. DVDs have now overtaken
cassettes as the second best format after CDs. Cassettes still dominate in the
rest of Africa.

Retail
Formal retail outlets organised mainly by NuClicks (NCL) entertainment division
(Musica and CD Wherehouse) remains a significant player in music retail. The
best selling genre for local artists remains Gospel although Rock is emerging as
a favourite across all races and cultures while Hip-Hop and R&B are starting to
stagnate (Taunyane, 2006). There are also informal retail networks bringing
legal products to consumers (25% of the market share) in which wholesale
distributors sell to hawkers and small retail outlets such as Reliable and Jumbo
Cash and Carry (Development Works, 2004).

Broadcasting
Radio (commercial, public and community) is the primary broadcaster and the
primary consumption point for South Africans. Amended local content regulations
in August 2003 increased the airplay of SA music on commercial stations to 25%
and on public service radio to 40%. This is despite the submissions by
broadcasters in 2001 that it was not possible to demonstrate that increased
airplay led to a growth in sales of SA music. The radio broadcast industry
subsequently argued that there was insufficient broadcast quality local music to
meet the local music content. This view was echoed by industry with Gallo, for
instance submitting that “while there has been a noticeable increase in the sales
of local kwaito product, there has been no discernable difference in the fortunes
of South African pop and rock music. Local content quotas do not work for all
genres” (Kantor, 2004). The argument is that government needs to come to the
party as on-air quotas are only one part of local content regulation. Government
needs to invest in subsidising production, developing and supporting industry
training and international marketing efforts, and granting tax incentives. These
measures have been successful in regions such as France and Australia (Kantor,
2004).

Current music industry interventions

Moshito
Moshito Music Conference and Exhibition is a Section 21 company with a
mandate to stage the annual music industry conference, trade exhibition and
showcasing event. The event is a partnership between the Department of Arts
and Culture both national and Gauteng and the South African music industry. It is
broadly representative of the local music industry and its various stakeholders.

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The Moshito founders were aware of the limited access industry participants had
to credible business intelligence and music markets and established Moshito to
inform and inspire players in the South African music industry so that industry
can build a defendable competitive advantage for their companies.

Importantly, Moshito has been a catalyst for organisation within the music
industry. At the 2004 Moshito conference recommendations for an independent
record industry body were made to address the needs for the local constituents.
The Association of Independent Record Companies (Airco) held its first AGM at
Moshito 2006. Likewise the Composer’s Association of South Africa (Casa) was
incubated at Moshito 2005. International speakers such as Peter Jenner
(International Music manager’s forum) encouraged the local music managers to
organise themselves into a body, Music Manger’s Forum of South Africa
(MMFSA) that has now affiliated to the international body.

Moshito also initiated the setting up of an export council for South African music
products, the South African Music Export Council (SAMEX) which recently held
its first annual general meeting. SAMEX has already been involved in National
Pavilions at international music markets and exhibitions, Midem, Popkomm and
Womex. Midem is a key networking event in any music industry practitioner’s
calendar. It brings 9400 professionals from 92 countries together for 5 days to
explore business opportunities, and learn about the future of the industry. The
tradeshow floor has over 9000m² of stands and business services with 46
national and regional pavilions representing over 1600 companies. Popkomm is
an annual event attracting over 15000 trade visitors, 800 exhibitors and 2200
media people from 41 countries. Visitors include record companies, export
councils, managers, agents, press, promoters and publishers. WOMEX, the
world music expo, is exclusively dedicated to world, roots, folk, ethnic, traditional,
local and diaspora music. 2006 was the 12th edition of WOMEX which took place
in Sevilla, Spain attracting over 2100 delegates and 150 companies from 84
countries with 44 showcases of music of more than 500 artists on 4 stages.

SAMEX – South African Music Export Council

The DTI has now included the creative industries (including Music) as a growth
industry although recording company executives report frustration in attempting
to access government supply-side measures. DTI has also supported the
establishment of Samex, the South African music export council. The idea for an
export council began with informal discussions in early 2000-2003 with Midi
Trust, the industry stand at Midem in 2001 and 2002 and the formation of
SAMICI in 2003. The Moshito conference took a Local Market Development
resolution in 2004 to develop music exports. This led to the first South African
national pavilion at Midem in 2005 and the establishment of links with other trade
fairs such as Popkomm and WOMEX).

SAMEX represents the association of Independent Record Companies of South

Africa (Airco), the Creative Workers Union of South Africa (CWUSA), the

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National Organisation of Reproduction Rights in Music (NORM), the South

African Music Promoters Association (SAMPA) and the Southern African Music
Rights Organisation (SAMRO). The Departments of Arts and Culture and Trade
and Industry are supportive of the initiative as are the South African embassies in
France and Germany. SAMEX is working to involve the National Association of
Broadcasters (NAB), ICASA and the Departments of Communication and
Foreign Affairs.

The objectives of SAMEX are to prepare new labels for the biggest music market
through professional advice and mentoring, market readiness programmes and
principally to facilitate deal making and associated research.

Key challenges facing growth

Some of the key challenges facing the growth of the music industry include:

• The perception of the music industry as an ”art form” rather than as a

business and related to this is the lack of understanding of the business of
music and the inter-relatedness between segments of the value chain.
• The limited ability of role players to capitalise on international markets.
• A lack of management, technical skills and abilities throughout the sector.
• Limited resources to ensure the quality of recording and promotion of
artists.
• A small domestic market limiting resources available for investment.
• Lack of a co-ordinated strategy for the development of the industry.
• Lack of statistical data about potential markets.
• Legal disputes over copyright payments and artists’ contract: There is a
general lack of protection for intellectual property (IP) relating to culture
and a lack of awareness of artist’s rights and IP rights across the value
chain which results in both an abuse of rights and losses in income in
recording contracts (Seligman, 2001)
• Huge losses due to piracy: Estimates are that the industry lost R500m a
year to piracy (Du Plessis, 2006). South African collections societies such
as SAMRO and SARRAL have taken the lead in cross-border co-
operation in the absence of government or SADC although UN agencies
such as UNESCO and WIPO have provided assistance to governments.
• Insufficient attempts to understand and respond to segmented local
markets in terms of product and promotion.
• Unclear adequacy and effectiveness of copyright protection and revenue
collection measures.
• High unemployment rates.
• Direct and indirect effects of HIV/Aids.
• Unavailability of effective social security products for musicians.

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Future outlook

• The opportunity from the international growth of World music which has to-
date not been adequately exploited although the challenge will be to
ensure that the commercial value is retained in the country (Development
Works, 2004).
• The increased popularity and exposure of local genres and the changing
income distribution in South Africa will give impetus to genres other than
rock and pop.
• A growing number of tourists visiting the country from major music
markets around the world, facilitated by access to information and music
via the internet.
• The continued growth and success of festivals as live music avenues.
• Increasing industrial and institutional density provide the foundations for
co-ordinated industry growth with the general economic growth rate acting
as an impetus for expansion. In addition, growth in developing markets is
predicted to accelerate.
• Technological advancement which is facilitating market access, the
opening of new avenues of retail and distribution and is also converging
aspects of the value chain, reducing production costs and shortening the
value chain significantly.
• Continued support for local content quotas as a policy tool to support
audience development and the growing number of independent record
labels supporting local music production and dissemination.

While it has not been confirmed, there are indications that the DTI will initiate a
CSP process for music in 2008 which will provide a much needed framework for
co-ordinating responses to the challenges faced by the sector.

The Performing Arts Sector

A definition of the Sector

The performance arts sector deals with theatre, dance, orchestra, opera, music
theatre to various multimedia performances and musical forms. The sector
generally relies on some form of state subsidy given the high production costs,
the lack of paying audiences and the operational costs of specialist venues such
as theatres and opera houses. The core activities include the production and
presentation of performances in theatres by both local and overseas art groups.
The table below (Table 16) outlines some of the key activities and related
industries.

Table 16: A qualitative map of the Performing Arts Sector

Core Activities Related Industries Related Activities Peripheral Activities
Content Origination TV Radio Tourism Merchandising

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Core Activities Related Industries Related Activities Peripheral Activities

Performance production Design Pubs and Restaurants Catering
Music, dance, drama Music Soundtracks
Touring Film Programme publishing
Costume design Publishing
Lighting Special effects
Source: Northern Ireland’s Creative Industries: A qualitative map cited in Kristafor and Budhram (2003)

Theatre includes performers and directors of contemporary drama, classical

theatre, stand-up comedy, pantomimes, political satire and cabaret, theatres,
costume-makers, set builders, accommodation for out-of-town performers, music,
sound and lighting technicians, design (posters, programmes), newspaper
advertising, catering and restaurants in theatre spaces.

Dance includes different genres such as contemporary dance, Spanish dance,

ballet, African traditional dance, hip-hop and others, as well as the companies
that practice these, educational institutions and private teachers who provide
training in these, commercial dancers and dance-related festivals and events. It
also includes music, equipment, costume-making and hire and transport and
accommodation when touring.

Opera and musical theatre would include foreign and local operas, and foreign
musicals such as Mama Mia and Cats and local musicals such as Umoja and
African Footprint. It is important to note that these products are generally
reasonably large, often requiring full orchestras and chorus, and as such are
expensive to stage.

In South Africa, the performing arts and dance comprises about 19% of the
creative industries (CreateSA, 2003). For the purposes of this report four
segments are the focus:

• Dance
• Theatre
• Festivals
• Technical Production

Sector products and services

The performing arts cover a non-market sector which in general does not make a
profit. Funding for the performing arts and privately-owned theatres comes
mainly from public subsidy or corporate sponsorship. The performing arts are still
not a mass-produced product and derive their income through three primary
sources: box office, government funding and corporate/private sponsorship.

There are four essential typologies of “producers” in the performing arts arena:

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• Commercial producers that stage local and international shows to

generate maximum income for the promoters.
• Theatres that have varying amounts of public and private sector support
that are able to produce or commission work, but which are generally
regarded as “receiving houses” that act as venues for productions.
• Festivals that provide opportunities for the production of new work..
• Independent theatre, dance and opera companies that apply for funding to
the lottery, the National Arts Council, provincial funding bodies and the
private sector for support for their work.

Dance

Professional dance and movement arts in South Africa have gone through many
changes in recent years to arrive at their current position in the sector. The
transformation of the Performing Arts Councils (PACs) after the publication of the
White Paper on Arts, Culture and Heritage in 1996 has left lasting scars on the
sector (PANSA, 2005). Over the last few years private dance companies,
emerging from the remains of the companies that were state funded prior to 1996
have begun to emerge.

Dance is a relatively small sector with limited employment opportunities provided

by a small number of companies although South Africa is well respected
internationally for its dancers and choreographers, for example Robyn Orlin and
Boyzie Cekwana. Compared to many other arts practices, the commercial
industry is also small and artistically limited. There is anecdotal evidence to
suggest that performing arts audiences are declining and in the dance world,
concern that contemporary dance is particularly affected. In general, dance
artists undertake the highest number of years of training of all artists but tend to
earn reasonably low incomes (PANSA, 2005).

Festivals

The National Arts Festival, held annually in July in Grahamstown, Eastern Cape,
is one of the largest and most diverse arts gatherings of its kind staged in Africa,
rating favourably with similar international festivals. It showcases southern
African talent in all arts disciplines. There is also growing interest and
participation from artists in other African countries and from the rest of the world.

The Klein Karoo Nasionale Kunstefees is a vibrant festival for the performing
arts, presented mainly, but not exclusively, in Afrikaans. It is held annually in
Oudtshoorn in the first quarter of the year. Disciplines include drama, cabaret
and contemporary and classical music. The Arts Alive International Festival, held
in Johannesburg, is an annual festival of music, dance, theatre and performance-
poetry. Heritage-reclamation festivals are also emerging at local level in
communities destroyed by apartheid, such as Vrededorp (Fietas) in
Johannesburg. The Mangaung Cultural Festival (Macufe) is gaining status as

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one of the biggest cultural tourism events in southern Africa. Aardklop held
annually in Potchefstroom, is inherently Afrikaans, but universal in character. The
festival provides a platform for the creativity and talent of local artists (Pocket
Guide to South Africa, 2003).

Other festivals that attract visitors at both national and international level are the
Joy of Jazz International Festival; Oppikoppi, The Calabash; The One City
Festival in Taung, North West; the Awesome Africa Music Festival in Durban; the
Spier Summer Festival at Spier Estate in the Western Cape; and the Windybrow
Theatre Festival in Johannesburg. In addition the DAC, the NAC, provincial arts
councils and provincial government departments support numerous festivals
throughout South Africa, including the Cape Town International Jazz Festival,
Port St. Johns Festival and Splashy Fen Music Festival in Durban (Pocket Guide
to South Africa, 2003).

Theatre

Theatre is an activity that deals with core life issues in both the production of
work and the purpose built venues that house them. It is about ceremony,
community, change, imagination and stories. There is a sense, however, that the
gulf is widening between artists and audiences causing audiences for the
performing arts to decline. While there has been no research to quantify or
explain this, it is generally thought to be because of competition for leisure
business and particularly a loss of competitiveness in the face of music and film
products.

According to research conducted by the Performing Arts Network of South Africa

(PANSA) in 2005, there are approximately 100 theatres in South Africa offering
35 shows per year on average. Half (50%) are privately owned, 30% are
supported by the three spheres of government and 20% are located within
educational institutions.

Basic Enterprise Characteristics

The primary characteristic of the activities and the enterprises is the transient
nature of economic activities. While there are a core of small companies such as
dance companies and festivals organisers in the landscape the bulk of activity
occurs, much like film, in the context of a production, a venue or an event. The
exception to this is theatres which employ a core staff to maintain the venue and
specialist technicians to ensure that the space functions.

As such, performing artists work on an irregular, self-employed basis, with

periods of unemployment between engagements being a normal feature of their
working lives. Their situation can perhaps more accurately be described as
underemployment. Artists have a responsibility to know their rights and through
collective bargaining can educate and lobby government to provide the

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necessary framework to formally structure the industry. Most developed countries

have strong, active unions, which are effective in looking after the interests of
performers. In developing countries, South African included, union structures are
weak and unorganized (Lebethe, 2003).

This pattern of activity in the performing arts sector goes a long way towards
explaining why there is such a high proportion of small or micro-enterprises in the
sector. Under these circumstances, it is hardly surprising that relatively high
numbers of performing artists are engaged in activities across the spectrum of
their particular art, or also have jobs in other fields. Members of successful choirs
and orchestras, for example, are often employed in quite different occupations
and come together for rehearsals and performances. The nature of performing
arts activities is not likely to change, particularly as funding is tight.
Consequently, the patterns of employment are likely to remain fragmented and
intermittent. Training can help to prepare performing artists, and those who are
considering a career in the performing arts, for the conditions of their
employment, in particular, by developing business and organisational skills. At
the same time, there are opportunities for those who can use their business skills
to promote and organise the work of performing artists.

Recent Sector Developments

• As part of gambling license obligations the establishment of new theatres

at casinos around the country, most recently the venue at Monte Casino in
Johannesburg.
• Increase in budgets over a 10 year horizon for state institutions and the
declaration of the Market Theatre as a cultural institution.
• Creation of PANSA, a network of performing artists, to advocate for the
sector.
• Publishing of PANSA policy document outlining recommendations to
develop the sector.
• The introduction of company funding by the NAC and the Gauteng Arts
and Culture Council (GACC) to support these organisations over a three
year period.
• National Theatre Indaba in 200616

Upstream and downstream industries

Television and video activities are closely linked, both in terms of technology and
social practice. There are also close links between video and motion picture
activities, not only in methods of production, but also because motion pictures
usually become available on video and watching videos or television is often
considered an alternative to visiting the cinema. Tourism is also a significant
contributor.

16
As yet no report on the proceedings of the Indaba has been made available.

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Key statistics

The majority of companies in this sector are small with a few companies with a
staff complement of 20 and above. These tend to be the large state supported
theatres such as the State Theatre, Artscape and the Market Theatre. Even the
larger commercial theatres have a staff complement of less than 10 employees.

Research in the Western Cape in 2003 revealed that the performing arts are the
smallest sub-sector of the creative industries in the province (Table 17)
representing 1.08% of total businesses operating under the definition of the
creative industries. The sector employs a total workforce of 534 in 65 enterprises
in the provinces. Some 89% of businesses employ between 1 to 10 people,
which represents 54.31% of the total workforce in the sub sector. The average
earnings for an individual working in the sector is R4, 881 (Kristafor and
Budhram, 2003).

Table 17: Summary of findings of Performing Arts in the Performing Arts sub-sector in the Cape
Peninsular
Summary Value
Total number of businesses 65
Total number of employees 534
Average monthly earnings nationally R4881.11
Location of the largest concentration of businesses Cape Town (51.69%)
Location of the second largest concentration of Goodwood (8.05%)
businesses
Largest employee grouping 1-10 (290)
Largest number of employees for a single business 92
Source: Kristafor and Budhram (2003)

Market size

In South Africa, the performing arts sector as a whole depends on public funding
and private sponsorship, and also on both public service and private/commercial
broadcasting companies. The live performing arts also receive direct if small
revenue from their audiences. The dependence on public funds and private
sponsorship are very old European traditions, based on a complex web of beliefs
about the value of the arts in terms of national prestige and their social benefits.

Performance: historical, current and future

Theatre

A number of significant issues face South African theatre today. These are
identified in various and intersecting ways, but broadly address questions of

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relevance, societal challenges and changes, funding structures, enabling policy

and leadership abilities.

Dance

These are some of the issues facing the sector today:

• Film and multimedia are growing strongly which can positively affect
dance. They provide new arts media and audiences. Dance translates well
to multi-platforms of technology and presentation; the non-verbal, non-
linear nature of dance means there is great distribution potential in the
digital environment, in public space installations and the use of other non-
traditional spaces. These all have the potential to increase the
marketability of dance.
• The country’s dancers are highly trained and have achieved significant
international recognition, however the sector is leaking talent because it
cannot sustain careers domestically.
• Community dance is a growing area of practice. There is a growing
recognition of conditions for effective community dance work, including the
benefits of long-term commitment (money and time). The practice includes
but is much more rich and complex than the notion of audience
development. It is recognised that as a sector dance is more community
based than other art forms; youth or community dance participation may
be a pathway into the industry.
• With such a small network of ongoing organisations, most not terribly well
resourced, the sector has limited employment opportunities and most work
is on short-term contracts. There is a danger of the various companies
being in competition rather than working together: any schism between the
“haves and have nots” is counter-productive.
• The pressure on funding agencies both to sustain levels of subsidy on the
one hand and support increasing diversity on the other leads to many
initiatives being under-resourced.

Future outlook for the Performing Arts Sector using a STEEP analysis (Table 18):

Table 18: STEEP analysis and possible future of the performing arts sector
Trends and drivers Possible future of the performing arts sector
Sociological
Patterns of employment Part-time work, short-term contracts and self-employment have long been
a characteristic of the performing arts, and they are becoming more
pronounced.
. The already high proportion of micro-enterprises will increase further.
Technological
Digitisation of content in This enhances the possibilities for promotion and marketing among micro-

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Trends and drivers Possible future of the performing arts sector

combination with transmission enterprises; however, it also places transmission in the hands of wealthy
through the Internet media groups.
Economic
Dependence of live There is a tendency for public funding and private sponsorship to be
performing arts on public directed towards more established and prestigious activities, i.e. towards
funding, private sponsorship ‘high culture’. In many countries, public service broadcasters become
and public service more commercial and, when they are not, they have fewer resources for
broadcasters the performing arts.
Audiovisual sector as a This is the favoured direction for public support of performing arts. It leads
source of employment and a to new buildings for live performing arts and helps small companies in
means of urban regeneration their start-up phase.
Globalisation A few groups are becoming increasingly powerful across the whole range
of media.
Environmental
There are no distinctive or important environmental issues in the
performing arts at present.
Political
Political environment In many countries, there are strong political and social forces in favour of
protecting traditional culture, as well as an ethos of public support for the
arts. However, these are curbed, to some extent, by financial pressures
and are also being crowded out by the interest in audiovisual technology
as a source of employment.
Source: McCarthy, Brookes, Lowell and Zakaras (2003)

The Visual Arts Sector

Definition

In visual arts, the individual (the artist) uses various elements or material to
express his or her feelings, emotions and differing perceptions of the world that
surrounds him or her. The result of this work is judged mainly by the sense of
sight. Painting, drawing, sculpture in various materials, printmaking, photography,
plans, maps, performance art, installation art, mail art, assemblage art, body art,
textile arts, fashion design, multimedia, video art, web design, web art, digital art,
graphic and product design are some expressions of visual arts (Kristafor and
Budhram, 2003).

Characteristics of visual artists and their work

The general characteristics of visual artists include the following:

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• Visual artists generally perceive themselves as creative individuals, and

not as business people. Their focus is much less on skill or craftsmanship,
and more on artistic talent, creativity and aesthetic appreciation.
• They may have a formal education in the arts, or may be completely self-
taught.
• Artists can be successful in terms of both artwork and personality.
• Art works are non-functional, emotional, social, political, traditional and
cultural statements. They are not greatly affected by commercial sector
constraints.
• Art sells in galleries and exhibitions, art fairs, and through commissions.
• Art prices have their basis in aesthetic values and artistic success, not in
material or labour costs.
• Local communities regard artists as special, and as having high social
status.
• Export markets do not easily distinguish between artist and artisan.
• Export markets categorise much artwork from developing countries as
décor.
• Visual artists promote their work by reputation, through media critics,
press releases, websites, culture publications, film and television.
• Enterprise sponsorship of exhibitions is commonplace (Canadian
Conference of the Arts, 1998).

Arts workers tend to be a highly mobile class of worker, and are most commonly
self-employed, offering their services in a highly competitive commercial market.
The contemporary visual arts and craft sector is largely unregulated, and arts
workers are generally unable to access the types of support other workers enjoy
on a day-to-day basis. Within the sector there are high levels of volunteerism,
and a general absence of employment-related benefits and union representation.

Galleries are generally privately-owned small businesses that operate on a

commission basis, generally taking 35-50% of the sales of artists’ works. In
addition, a few highly specialised companies, mainly based on Johannesburg
and the Western Cape account for millions of Rands in art sales and auctions
annually (DTI, 2005a).

Corporate collections are major sources of sales for artists, and companies like
Sasol, Sanlam, Rand Merchant Bank, MTN, Standard Bank and ABSA have
large curated collections. For artists, income is highly irregular and many depend
on grant funding from various agencies to cover their costs while working
towards an exhibition or a major opportunity to sell their work.

Major global trends

The global art economy generated $23,5 billion in total sales of paintings,
sculptures, photography, etc in 2001 with Europe and the USA accounting for

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92% of the value of art that changed ownership globally during that year. In
Europe, trade in visual arts directly created more than 73 000 jobs spread across
28, 600 businesses while in the USA 35,300 jobs were created across 8,800
businesses (Kusin and Company, 2002).

Since the sales of art are regarded as luxuries, they do well when the economy is
on the rise, when individuals have disposable income. Internationally, art
competitions, art residencies, prestigious biennales and art libraries (works of
artists are bought and the public may lend these works to hang in their homes)
are important sources of income for artists, or ways of developing new markets
for their work.

Future Outlook for the Visual Arts Sector

Technology

As technology will become less costly and more available over time:

• There is greater use of technology in production and dissemination of

work. This will challenge infrastructure, equipment and skills.
• Even for traditional arts practice there will be a significant impact on artists
in the way they run their business. The professionalism of artists is
increasing.
• Artists will create audiences and co-create work with audiences.
• There will be greater use of online dissemination of opinion and critical
discussion, but in a global environment there will be greater competition
for space to be heard.
• Commercial galleries could be bypassed by artists in direct dissemination
of their work and direct relationships with audiences online.

Artists

• Rather than vocational careers, artists have careers valued for adding
economic and creative benefits to other sectors.
• Multi-skilling is becoming a feature of the sector.
• There will be a convergence of art forms.
• Artists are required to justify themselves in non-creative terms (such as
economic benefits to a region, or cultural tourism).
• There is an emphasis on value for audiences, rather than value to artists
and their practice, with the potential danger of overlooking the producers
of culture in favour of consumers of culture.

Art Organisations

• These are suffering low morale resulting from fewer rewards and declining
audiences.

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• Financial pressures may result in possible closures and mergers.

Arts education

• There is a decline in the number of tertiary courses and increased

specialisation, creating pressures on arts schools to increasingly provide
niche education.
• A range of new qualification in the vocational system will provide new
skills avenues.
• There are gaps in arts education which is not fulfilling professional needs
and requirements.

Opportunities and competition

The concept of art holidays has boomed internationally, but has not taken off in
South Africa despite the rise in tourism. Art holidays are package tours created
for international collectors and buyers to visit local galleries, museums and
studios and to purchase art, but also to learn new skills if they are themselves
artists. Studio space could be provided for artists and this could make it attractive
for their families and friends to follow as visitors.

Art as an investment market has also not been tapped in this country, and
together with the possibility of investments in art via initiatives such as Art
Banks17, potential exists for the development of a more robust art market. Of
concern however, is the lack of investment in procurement budgets for heritage
and arts institutions, thus decreasing one of the traditional markets for art works.

Cross-cutting Sectors

Design

Design is a process of purposeful creative thinking, planning and work used to

identify and make opportunities that lead to commercial and cultural advantage.
Design gives tangible dimension, shape, colour, pattern and character to
products, information, communications, spaces and services. It is a strategic
means of making knowledge, technology and future orientated thinking
accessible, understandable and “ownable” by end users. It is physical evidence
of the integration of philosophy and action (Haythornthwaite, 2001 cited in
Massey University, 2002).

The design sector is closely associated with the arts in the perception of the
community, industry and government. This stems from both the historical
ancestry of the industry and from its unavoidable concern with the areas of

17
Art Banks are institutions that procure art and then make it available to businesses and the public sector on loan for a fixed period
and cost. The City of Johannesburg has recently established the country’s first Art Bank.

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aesthetics and fashion. Design is a significant contributor to the creative and

broader economy by providing services, goods and outputs that increase
economic competitiveness, enrich and improve the quality of life and express
cultural identity. Products, environments and communications produced as a
result of design services generate overseas earnings and thus contribute to a
growth in GDP. The purpose and advantage of design as a commercial strategy
is to create products or services that:

• Anticipate and satisfy the requirements of the customer and hence meet a
demand through improving existing solutions or developing new ones.
• Embody and clearly communicate distinct marketable points of difference
over competing offerings, in terms of form, function, usability, new
technologies, environmental sustainability and quality and hence generate
demand preference and ideally, command a price premium.
• Are capable of efficient, consistent and cost-effective delivery so as to
ensure their demand can be fulfilled profitably.

Research conducted by the MAPPP-SETA in 2006 identified the following skills

needs in the design sector:

• Business management and administration.

• Operations management including contract and intellectual property
management.
• Marketing and research.
• Specialist skills, especially related to keeping abreast with developments
in technology, presentation and product development (MAPPP-SETA,
2006).

Heritage

A country’s cultural heritage comprises the whole of the intangible characteristics

of the people that have lived there over time and the physical artifacts that have
been inherited from the past. The concept is deeply connected with the
conservation, preservation and management of the places, things, stories and so
forth for the benefit of current and future generations. The primary focus of South
Africa’s policy is on physical or “tangible” heritage represented by buildings,
monuments and places. Internationally however there is a move to include
“intangible heritage”, such as Indigenous Knowledge Systems (IKS) into the
policy arena.

The relationship of the heritage sector to the creative industries is a long standing
and complex one. The simplest way to describe it is to state that heritage is the
underpinning factor for content creation which is the primary commodity
produced by the various sectors. Content can draw on traditions, costumes or
practice; it can be a response to a particular time, place or practice or can be a
distinct departure from the past. It is this process that makes cultural goods and

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services unique and is regarded as the most critical factor in the competitiveness
in products. In some countries, most notably Canada and Australia there is a
great deal of effort going into the establishment of geographic and heritage
“markers”, in other words specific indications that prove the authenticity of the
product, particularly in the craft sector.

It is important to note that the trade in cultural heritage globally flows in reverse to
those of other cultural product (such as film, media, visual arts, music or books).
The developing world is largely an exporter or supplier of cultural products to the
developed world in more marginal sectors of cultural production such as craft or
cultural heritage. The exchange of cultural products is characterised by
significant structural inequities resulting from the discrepant economic and social
value attributed to cultural products that come from the developed and
developing countries. Developing countries have needed to curtail the movement
of cultural goods that have symbolic importance for their society by introducing
legislation to control traffic in heritage and to protect both tangible and intangible
heritage resources from damage, loss or export without control (Joffe et al, 2003).
What developing countries deem worthy of preservation is coming under
pressure from expanding trade networks such that what is inherited from the past
and what is deemed worthy of preservation is being determined by economic
prerogatives rather than for older symbolic reasons18.

Cultural Tourism

Cultural tourism can be defined as:

“Tourism that facilitates an experience of the arts, culture, history,

heritage, way of life, and uniqueness of people in a given region.”
(ComMark Trust, 2005)

Data from the South African Tourism Agency (SATOUR) shows that the country
produces over 55 million trips, both domestically and internationally per annum.
The ComMark report estimates that between R500 million and R1 billion is spent
on the consumption of cultural products and services per annum(ComMark Trust,
2005). It is thus a very large market for the creative industries that appears to be
largely untapped in many sectors and regions.

It is important to note that there is delicate balance to be struck between

exploiting the tourism market and being led by the market in this regard. Attempt
to match cultural product and services purely to the tourism market can devalue
the cultural, aesthetic and heritage importance of goods and services and
critically alienate them from the local market.

18
In this way communities have fond it necessary to protect cultural products which should not, according to the rules of their
community, be sold to cultural outsiders such as secret cultural rituals or intellectual property that should be kept within a specific
culturally-defined community or restricted to some (adult men) within that community. See Joffe, A, et al, (2005) pg 12

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Chapter Three: The Demand for Skills

The Nature of Work in the Creative Industries

The nature of work in the creative industries can be described as project-based.

This form of organisation has the following characteristics:

• Temporary, with only a limited time period of working together.

• A diverse range of skilled people engaging in the execution of a well-
defined, but complex singular task or job (MAPPP-SETA, 2004).

Furthermore, the project-based organisation is defined as a form of configuration

of resources and capabilities in the production process where co-ordination of
knowledge and activities are obtained by a mix of governance relations and
economic incentives, which typically are characteristics of both relations of
collaboration and of the market. For that reason, there is a growing use of
organisational rewards such as participants’ portions of expected rent or
particular forms of (spot) contracts or optional contracts. Simultaneously,
elements of collaboration such as trust and mutual reciprocity may provide
possibilities for the project participants for gaining a reputation, which is
fundamental to collaborative work.

The creative industries thus operate on a strong inter-personal, rather than inter-
firm basis. This has a critical influence on the establishment of organisational
structures, associations or representative bodies because it is often individuals
more loyal to their project or network (community/peers) than to the firm, who are
engaged in the projects. Knowledge interactions are thus intensely personal, and
not based in the enterprise, making the creative industries people- and not
product-centered. Reputation, and “know who”, in the community are of critical
importance, and more significant for success than “know what” and “know how”.
Finally, an important developmental issue is that the project-organised structure
provides potential for many spin-off possibilities for new firm start-ups.

It is important to note that within this project structure, the artist, either a person
or a group, is at the core. The artist cannot, however, create economic activity
without the other actors, for example producers, studios, marketing, management
and publishing. Each aspect is interdependent and connected to the other’s
activities and naturally, each other’s capabilities. The availability of the
capabilities does not in itself create anything, whereas the focal structure made
possible by the presence of the artist makes things possible. The business
landscape of the creative industries is thus characterised by individuals or groups
that can be formally organised and able to create a brand, intellectual property
and enterprises.

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For individuals in the creative industries; whether contractual or full-time

employees and whether working in the for-profit or not-for-profit sectors;
employment conditions appear to be very difficult, characterised to a large
degree by:

• Poor pay levels.

• Excessively heavy workloads.
• Lack of full-time work.
• Overwork.
• High performance expectations despite insufficient training and support.
• The requirement to multi-function, leading to poorer quality work and crisis
management.
• Lack of opportunities for advancement.
• Lack of security and benefits.
• Devaluation by Boards, employers, government and the general public.

There are a large number of occupations within the creative industries, many of
which are specific to individual sub-sectors. In general, the majority of
occupations in the creative industries are found in higher skilled jobs, at
professional, technical or managerial level. Almost all occupations of managers
are taken up by specialist managers, who are expected to have creative and
technical skills closely allied to the professional and technical occupations which
comprise the bulk of employment opportunities in the creative industries. The
creative industries have comparatively low levels of staff involved in sales,
administration or elementary occupations (CreateSA, 2003).

It is important to note that the following issues impact significantly on the ability of
the creative industries to recruit and retain high levels skills:

• Working conditions which often are stressful because of the project based
nature of work with strict deadlines and the lack of capacity, resources and
equipment.
• Employment requirements which require flexible specialisation and a
range of “soft skills”.
• The instability of organisations, given the small turnovers of organisations
and the instability of the grant funding environment.
• Turnover and mobility of experienced workers who are able to find more
lucrative opportunities in other fields.
• Succession and the lack of adequate planning to “upskill” younger
generations.
• The high attrition of cultural managers due to working conditions, the lack
of opportunities, limited compensation, little recognition and support and
the lack of professional development opportunities.
• Acute capacity problems facing historically disadvantaged communities,
especially those in rural areas.
• The lack of adequate art curriculum and teacher training at school level.

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There are many in the creative industries that are self-taught or have been
trained informally. Even those who have qualifications may continue to educate
themselves as they push back particular boundaries in music and media.
However, there are some fundamental skill issues that go across the different
sub sectors of the creative industries.

• Higher-level technical and creative skills are needed in all sectors.

• Multi-skilled staff as well as specialists are needed in all sectors.
• Business related skills are needed for enterprises to survive.

The above bullet points highlight an essentially contradictory trend in

employment in the creative industries. Job roles in the arts and entertainment
sub-sectors are increasingly demanding a combination of often quite highly
developed specialisations. Two contradictory trends are apparent: an increasing
specialisation of job roles, especially for freelancers, and a need for ”magnificent
generalists” - people with high-level skills and experience that cross boundaries.
The result of this contradiction is that arts workers need to constantly update their
specialist art-form knowledge whilst keeping abreast of changes in such areas as
government legislation (particularly copyright, data protection, health and safety
and contract law), and new technology (particularly multimedia, digitisation,
Internet opportunities and sound and lighting equipment).

The Nature of Skills Gaps in the Creative Industries

Recruitment difficulties and skill gaps are defined as:

• Hard-to-fill vacancies (i.e. scarce skills) are employer defined and may arise
for a variety of reasons that are not due to an aggregate lack of skills in the
external labour market (such as the company paying low wages). A specific
sub-sector of hard-to-fill vacancies are skill shortage vacancies, which are
those where there is an excess of demand over supply of required skills in the
external labour market, and are attributed to a lack of applicants with the
required skills, a lack of applicants with the required qualifications and/or a
lack of applicants with the required work experience;
• Internal skill gaps (i.e. critical skills) are skills shortages amongst the existing
workforce and are defined as being a divergence between an organisation’s
current skill levels and those which are required to meet organisational
objectives.

It is possible that the incidence of skills shortages is under-reported, because of

unreported skill gaps which occur because employers fail to recognise (or own
up to) shortages which occur with respect to their existing business strategies,
technologies and work organisation; and latent skill gaps are additional
deficiencies which would emerge if businesses altered their strategies or set

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higher goals to achieve better performance. These gaps may also occur because
of the lack of regular labour market research in the creative industries.

Each of the creative industry sectors included in the profile report the existence
of hard-to-fill vacancies (see Table 19). Specific points to note on hard-to-fill
vacancies are that:

• They can be very sector specific: for example in the film and television sector
production accountants remain a very scarce skill across an occupation highly
specific to the sector.
• They can be geographically limited, with provinces such as the Western Cape
experiencing scarce skills differently to the rest of the country.

The hard-to-fill vacancies (Table 19) are having a range of impacts on employers
including:

• Preventing businesses from moving forwards in terms of developing new

products and services and refining existing products and services.
• Maintaining quality standards.
• Loss of business opportunities and increased operating costs.

Table 19: Sector Specific Hard to Fill Vacancies19

Sector Occupation
Visual Arts, Photography & • Curators
Design • Public Arts Practitioners and Managers
• Technical Producers
• Arts Development Practitioner
Craft • Sector development specialists
• Product Developers and Designers
• Craft Entrepreneurs, Agents and Brokers
• Operations Managers
• Master craftspeople/Technicians
• Specialist packers and shippers
Heritage • Sector development specialists
• Heritage Product Developers and Designers
• Heritage Managers
• Heritage Administrators and Assistants
• Heritage impact assessment practitioner (HIA
• Tour Guides
• Curators
• Outreach Officers (community liaison)

19
While the music and performing arts sectors did not report on any scarce skills per se, the skills needs of the sectors are pervasive.

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Sector Occupation
Film • Producers from previously disadvantaged backgrounds
(especially in the Western Cape.
• Women directors.
• Production accountants.
• Internationally accredited 1st Assistant Directors.
• Experienced script and screen writers.
• Editors from previously disadvantaged backgrounds.
• Sound design, editing, schedules, post-production supervisors in
Gauteng.
• Continuity personnel.
• Beta cam operators, along with a general shortage of crews,
especially in KwaZulu-Natal
• Unit publicists, especially in the Western Cape.
Source: MAPPP SETA Arts and Culture Sub-Sector Skills Plans for 2004, 2005 and 2006

Internal skill gaps are skills shortages amongst the existing workforce. Given the
lack of formal training discussed in the previous chapter these are possibly the
most reported skills needs. Once again, the experience of these varies
enormously across the creative industries but in general over 70% of employers
that participated in the National Skills and Resources Audit in 2003 reported to
experiencing skills gaps of this nature (CreateSA, 2003).

Research conducted by the MAPPP-SETA since 2004 has consistently identified

a range of internal skills gaps as listed in Table 20 below as well as sector
specific skills shortages as listed in Table 21 below:

Table 20: Internal Skills Gaps in the Creative Industries

Identified Skills gaps Components
Business Management Planning, Financial Management, People management, Project
Management, Productivity, Fundraising, Costing & Pricing,
Negotiating, Contracts and Agreements, Intellectual Property
ICT Basic and advanced computer literacy
Operations/Production Planning, Quality Management, Productivity & Time Management
Management
Business Administration Accounting, Record Keeping, System of Recording Information
related to the product, Administration skills
Marketing Marketing, market research, product placement, distribution,
sales, customer communication, events management
Product Design & Development Developing the right product for the right market, creativity,
specialist technical skills
Training and Mentorship Skills transfer to employees, training of new entrants in industry

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Identified Skills gaps Components

training provision or educational context
Generic Writing
Communication
Presentation
Source: MAPPP SETA Arts and Culture Sub-Sector Skills Plans for 2004, 2005 and 2006

In addition skills issues for small businesses in the creative industries centre on
the skills businesses need to survive. Many in the creative industries have
creative talent, and are well established in their field, but they lack the following
skills:

• Marketing.
• Distribution.
• Legal knowledge, specifically an understanding of intellectual property.
• Fundraising and sponsorship.
• Public relations.
• Research.
• Project management.

In all creative industry sectors, the growth of education and training as a

profession has been noted, leading to a severe shortage of skilled trainers and
mentors with industry experience and/or indeed operating within the industry.
There is also emerging evidence that retention of staff may be an issue for
employers. Of the enterprises participating in the CreateSA survey almost all
reported that they have experienced turnover in the last 3 years. Respondents
attributed 41% to resignations in the creative industries, 36% due to redundancy,
18% due to ill health, and 5% due to dismissals. Redundancy could be linked to
financial sustainability of a business, particularly small and micro enterprises
(CreateSA, 2003).

Table 21: Sector Specific Skills Shortages

Sector Skills Shortages
Visual Arts, Photography • Entrepreneurship, leadership and networking
& Design • Financial management
• Business skills development
• Market research
• Production and product planning
• Quality control and management
• Product development
• Information technology especially Computer Aided Design (CAD)
• Career management
• Negotiation and networking

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Sector Skills Shortages

• Time management
• Creativity, decision-making
• Technical skills
• Computer literacy

Craft • Marketing: understanding the market

• Technical skills: e.g. understanding colour
• Literacy skills
• Numeracy skills
Life skills such as communication, self-esteem, negotiation, conflict
resolution
• Production: producing quality products; managing time in production
• Quality control and management
Design skills: using innovation and creativity to design new products that will
appeal to the market
• Financial management
Heritage • Networking between tour operators
• Heritage Risk Management (to protect sites, sensitive areas, installations,
objects from fire, visitors, flooding damage, seismic movements)
• Preservation
• Repatriation of lost heritage artifacts
• Heritage impact assessment skills (HIAs)
• Report writing
• Proposal writing
• Business attitude
• Cultural Diversity awareness
• Researchers
• Curators
• Management and Marketing skills
• Environmental Awareness
• Computer skills
• Tour Guide skills
• Heritage Development
• Client Relationship Management
• Life skills training
• Quality trainers
• Writing for various purposes & audiences
• Heritage conservation

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Sector Skills Shortages

• Conservation Management Planning

• Archiving (paper, audiovisual, electronic)
• Unit standards
• Knowledge of indigenous languages

Music • Communication skills (including client/staff relations, groups,

• interpersonal and presentation skills, and public speaking)
• Finance (including budgeting, freelance, taxation / accounting, and charity)
• Administration / Organisation (including time management and fundraising)
• Technical skills & knowledge
• Flexibility (including multi-functionality and diversification)
• Management
• Business skills & awareness
• Industry & sector knowledge
• Marketing
• Performance
• Creativity
• Information technology
• Leadership (including creative direction, encouragement, and crowd control)
• Legal skills & knowledge
Performing Arts • Knowledge of new technologies for dance [and other] teaching
• Physical theatre skills
• Dance skills for working in multicultural and community contexts
• Entrepreneurial; self promotion and job creation skills
• Business development, liability and copyright knowledge; risk management
skills & occupational health and safety (OHS)
• Management skills and knowledge including accounting, small business
practice, contractual arrangements, tender processes and writing
submissions, entrepreneurial skills, project management
• IT skills and knowledge
• Broad performance skills
• Skills in working with people with disabilities
• Industry liaison skills
• New technologies, e.g. multimedia; cross media skills; new media; games
development
• Specialist performance skills
Technical Production • Entrepreneurial; self promotion and job creation skills
Services • Business development, liability and copyright knowledge; risk management

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Sector Skills Shortages

skills and OHS
• Management skills and knowledge including accounting, small business
practice, contractual arrangements, tender processes and writing
submissions, entrepreneurial skills, project management
• IT skills and knowledge
• Industry liaison skills
• New technologies, e.g. multimedia; cross media skills; new media;
• Specialist technical skills including:
o Set construction and design
o Production management
o Stage management
o Lighting and sound
o Rigging
Film • New technology or equipment (general)
• Digital or computer-based technology / formats
• Increased knowledge and understanding of high definition / video
• Ability to work within tight budgets and tight schedules / timetables
• Keeping abreast of specific changes to post production / editing skills
• Keeping abreast of specific changes to art / design skills for example
computer aided design (CAD)
• Business administration
• The nature and business of film-making
• Deal-making
• Distribution
• Pitching and proposals
• Financial skills from book keeping to production accounting
• Business writing
• Legislative compliance
• Organisational and inter-personal skills
Source: MAPPP SETA Arts and Culture Sub-Sector Skills Plans for 2004, 2005 and 2006

Influences on Future Demands for Skills

There are a number of key drivers that will influence the future demand for skills,
which include:

• Economic factors.
• Changing patterns of demand in the market place through local and export
market growth.
• Changing patterns of doing business.
• Public subsidies for cultural activities.

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The overall level of economic growth is a fundamental driver in the demand for
the products and services provided by enterprises in creative industries. The
overall demand for staff in the creative industries is clearly related to the overall
health of the economy, with an assumed relationship in that the faster the rate of
overall economic growth the greater the expansion of demand for staff. It is
important to note that this is not a linear relationship in the creative industries.
The pattern of increased demand will depend on changes in the pattern of that
demand and the way in which companies do business.

Technological change is perhaps the most important driver of skill demand,

which is changing the ways in which companies produce their output. The move
towards digitisation means that there will be more digital communication between
communication firms and their clients and much less face-to-face
communication. This is particularly important because it increasingly means that
certain services such as design, post production, editing and so on can be
carried out anywhere in the world where prices are most competitive or where
the creative skills base is concentrated. Often this new technology is expensive
to invest in, but it is difficult to meet customer demands without its adoption. The
pace of change is such that any new technology relatively soon becomes
outdated. Smaller firms in particular are under enormous competitive pressure.

Many of the sub-sectors comprising the creative industries are heavily dependent
on public sector investment. This is especially true for the heritage and
performing arts sectors. Any growth in these sectors, and resultant demands for
labour, are dependent on increased public sector investments.

Changing skills Needs in Key Sub-Sectors

Content development and management

In the entertainment aspects of the creative industries, the defining competence

of the digital era will be the mastery of content. As the value of content grows,
because of the increase in convergence of distribution channels, there will be
greater scope for the re-usage of creative assets. This makes the role of content
management all-important. Technological changes have already created a raft of
new occupations within large ”traditional” companies and small and specialist
companies alike. In the area of content production, a specific feature is the
interdisciplinary, team-based nature of the work, often requiring a combination of
technical, creative and business skills. Many of the new jobs in the creative
industries will require hybrid skills whose development is not currently
accommodated by higher and further education provision.

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Managing a small firm, freelance and casualised workforce

The creative industries are typified by a few large companies and a large number
of small organisations. In addition, the sectors covered have relatively high levels
of ”non-traditional” employment patterns, with flexible forms of employment
contract often in use in the creative industries. Most make wide use of freelance
workers. This industry structure has many advantages. The creative industries
are highly dynamic and highly entrepreneurial. The challenge is to maintain these
characteristics whilst bolstering the skill base in other areas that may not be as
strong, particularly management, commercial and customer service skills. There
is a need to add on to the creativity an ability to manage their businesses.

Portfolio careers

The notion of a ”graduate level” job and a linear career path are no longer
realistic expectations for the 21st century graduate in creative industries as many
create their own enterprises, work on a freelance basis or work for SMMEs.
“Portfolio” based careers have complex career paths with individuals managing
several in different fields, often simultaneously. These careers emanate from or
result in self-employment. In addition to the skills generally associated with the
creative industries or individual sub-sectors, new entrants will require the ability
to interact (i.e. communication, interpersonal skill and team work) and have
personal capabilities including problem solving, analytic, critical and reflective
ability, flexibility and adaptability as well as risk taking (Harvey, Locke and Morey,
2002).

In summary, the implications for the future are that graduates, whether working
as employees, entrepreneurs or freelancers, will need to:

• Network effectively to promote themselves and generate income

opportunities.
• Have the skills to plan their careers and manage diverse activities.
• Be able to communicate effectively, manage interpersonal relationships
and conduct research.
• Integrate themselves into organisations in a very short space of time, work
well with others and assume responsibility very early on in their careers.
• Be able to manage time and work with very little input and supervision
(Bell, 2003).

It is clear that continuous professional development, whether formal or informal is

paramount to successful “portfolio” careers in the creative industries.

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Chapter Four: The Supply of Skills

The Nature of Skills Supply

Enterprises in the creative industries most often get the people and skills that
they need from other employers in the sector, or in closely related sectors. Most
people who obtain a job do so from the position of already being employed. New
entrants are obtained from a range of different sectors including:

• Initial supply from formal education, although this will mainly be at degree
level.
• External supply sources, either through potential employees engaged in
other occupations or sectors.
• Existing employees able to acquire new skills.

The basic requirements are for people with excellent generic skills in
communication, networking and teamwork, individuals who can work flexibly with
good interpersonal and research skills and of course the requisite creative and
technical skills that apply to particular occupations. Recruitment of people,
particularly those who have come straight from the education system (but by no
means exclusively these) will generally be accompanied by some employer-
based training.

In terms of recruiting, employers participating in the 2003 National Skills &

Resource Audit report the following challenges:

• Finding workers who will share the vision of the organisation or sub-sector
and a passion for the creative work, which will sustain and bolster them in
the face of dismal pay and working conditions.
• Finding qualified people with the right skills sets, resulting from a
combination of both education and on-the-job experience.
• Finding workers with cross-over skills, particularly a combination of artistic
or technical and ”soft” skills especially in new media (CreateSA, 2003).

In general, despite a range of scarce and critical skills, the creative industries are
oversupplied with new entrants in particular. Given the small business base
however, some of these skills are absorbed into self-employment opportunities.

History of Education & Training Provision in the Creative Industries

Until the late 1980s arts education was provided for primarily in previously whites
only schools and promoting primarily western art forms. Where arts education
programmes were offered by segregated departments such as the Department of
Education and Training (DET), it was under-resourced and an imitation of that
run in the curricula of white schools. As a result, access to and investment in arts

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education for the majority of South Africans was limited. In 1994, for example, out
of 72 schools in Soweto, serving over 70 000 learners, only two offered matric
DET arts curriculum.

Prior to 1986, arts and craft subject, primarily in the form of simple crafting were
offered in some DET primary schools. Unfortunately even this basic tuition was
halted when the controversial Skills and Techniques Project (TEP) was
introduced. The primary aim was to promote manual labour skills within DET
schools with the aim of producing a low-skilled, low-wage work force. This
project, which ran for almost 9 years, was forced to close after the
recommendations of the first Arts Education Curriculum Revision Committee in
1994 (DAC, 2005). At tertiary level there were a number of institutions with arts
programme, however the focus of this tuition was Eurocentric and very few black
students had access to this form of education.

Given the neglect of community-based arts education, the 1970s and 1980s saw
the proliferation of a number of community based arts centres that operated
outside of the formal schooling framework. These centres provided a strong
focus on training within black communities. Primarily funded by international aid
organisations, these NGOs mobilised minimal resources to bring arts education
and training to thousands of black South Africans. As a result, many arts
practitioners today received informal training which did not result in any
certification or accreditation. Many were thus prevented from studying further
through formal channels because of the lack of recognition by educational
authorities of this form of training.

Since 1994 there has been a great deal of progress in relation to the
development of a framework and delivery system for arts education and training.
These developments include:

• Policy development including:

o The Education White Paper (1994)
o The White Paper on Arts, Culture and Heritage (1996)
o The National Skills Development Strategy (1997)
o The Integrated National Disability White Paper (1997)
o The Further Education and Training White Paper (1998)
o The Skills Development Act (1998)

• The development of the National Qualifications Framework (NQF), the

establishment of the South African Qualifications Framework (SAQA) and
the resultant subject area based National Standards Bodies (NSBs) and
Standard Generating Bodies (SGBs).

• In the training environment the National Skills Development Strategy

(NSDS) and the institutions created to oversee, guide and deliver training,

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the National Skills Authority (NSA) and the Sector Education and Training
Authorities (SETAs).

It is important to note that there have also been a number of setbacks. Arts and
Culture remains a neglected area in the school curriculum, despite commitments
in the White Paper to a balanced curriculum. Funding resources for the arts from
international sources are dwindling, and local sources are inadequate to meet the
demands of an increasingly large and fragmented Arts and Culture sector (DAC,
2005).

Formal Education and Training

In-School Arts Education

Research conducted by the CSIR and the Department of Education in 2003

presents a bleak picture of arts curriculum at schools. The report, as yet
unpublished, represents the findings and recommendations drawn from Phase 1
of this national audit, which included surveying a sample of about 3 000 public
schools in the General Education and Training (GET) and Further Education and
Training (FET) bands. 2 000 of these are schools from the twenty-one education
poverty nodes as defined by the Department of Education, and the balance are a
non-representative sampling of non-nodal schools.

The study findings generally presented a dismal picture in terms of current levels
of provision in nodal schools. Most schools do not have sufficient or appropriate
facilities, equipment or materials for school arts and culture programmes. In
many cases, this situation would appear to primarily relate to the lack of financial
resources to acquire and maintain a reasonable level of access to the basic
infrastructure required to deliver effective programmes (Department of Education,
2004).

The issue of the provision and capacity of educators who are involved in offering
arts teaching is also a major constraint facing schools, with most schools
indicating that there is a major gap in appropriate staffing of both curricular and
enrichment programmes. Barriers to accessing these opportunities include poor
information access, funding, availability of educators (both in terms of number of
educators as well as time available to educators), and inadequate systemisation
and accreditation of such training so that programmes are structured and amount
to a [career] qualification (Department of Education, 2004).

Although schools would appear to be enthusiastic about the importance of

enrichment programmes as measured in a survey of attitudes and perceptions in
this study, learner participation in both curriculum and enrichment programmes in
schools is mediocre at best. This finding is particularly disturbing in view of
curriculum policy mandates which are clearly not being met, probably because of
school capacity and/or inclination. Many schools also indicate wanting to offer

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more programmes than they are currently able to (Department of Education,

2004).

A recurrent theme appeared to be that of limited and contested funding

resources in schools, with funding in arts and culture largely being treated as a
slush fund even in the proportion of cases where such budgets were initially
allocated for these areas. Sponsorships and community participation in
supporting school enrichment programmes are both lacking, although some
schools indicate greater success with these than others (Department of
Education, 2004).

In general, although limited comparison could be made, it would appear that non-
nodal schools20 are likely to be faring better in all respects (facilities, equipment,
number of offerings, participation, staff provision and development, sponsorships,
etc.) than nodal schools – a preliminary finding that should be tested in
subsequent research. High levels of frustration and need were indicated by
schools and provincial officials, primarily calling for policy and support
interventions. The problems that attach to school enrichment programmes in the
arts are in many respects the general problems that beset schooling in South
Africa:

• Poor physical infrastructure.

• Poor human resource base.
• Inadequate supply of in-service educator training.
• Limited curriculum time versus the challenges of implementing a radically
transformed national curriculum.
• Poor supply of appropriate and relevant learning materials.
• Problems in coordination between levels of government.

In the case of school enrichment programmes for the arts there are clearly a
number of exacerbating factors:

• The historical absence of art from the curriculum in most schools: many
schools are implementing arts and culture as part of the curriculum for the
first time, without trained educators and appropriate resources.
• The additional infrastructural and physical resource requirements of
curricular and school enrichment programmes.
• The complex demands placed on educators by the arts and culture
curriculum (requiring the integration of multiple arts disciplines).
• Lack of a specific policy framework for school enrichment programmes.
• Lack of a co-ordinating body for arts and culture in schools (this is
certainly a significant concern on provincial levels, and there is a need to
clarify stakeholder roles in and between all spheres).

20
Nodal schools are those identified for priority interventions by the Department of Education (DoE).

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The research has, however, also highlighted a number of positive opportunities

and resources:

• Increasing recognition within government of the role of the arts in identity

formation and the development of value systems; recognition of the
importance of creative thinking in all areas of learning and work; and the
role of arts and culture as a driver of creativity.
• Positive perception of the arts and understanding of its importance in the
education of learners and the development of schools as learning
communities.
• The existence of many strong local traditions of music, dance and
performance on which both school enrichment and curricular programmes
can draw.

Higher education

As an increasingly high proportion of entrants into the media and creative

industries are graduates, the higher education system is a key supplier of new
people and skills into the sector. This number has decreased in the face of
general policy and funding priorities shifting to a science and commerce focus.
The longer-term outlook is for continued expansion, albeit small, year on year,
achieved by more graduates coming from a broader range of backgrounds, both
socially and educationally.

It is important to note that there are sectoral variations in the nature of skills
supply in the sector. In the design sector for example, the main avenues for
education and training in the sector are private colleges, FET colleges,
independent colleges and technikons. The same is true for film and television.
The entry level starts from NQF 3 in some FET colleges and independent
colleges to NQF level 4 in technikons and independent colleges. Courses range
from 3 to four year diplomas. In the performing arts and music sectors, a similar
picture emerges with education and training provided by FET colleges,
technikons, HET institutions. In the craft and visual arts sectors, informal training
is the primary source of skills. In craft in particular, there has been enormous
investment in vocational education and training through the MAPPP-SETA and
DAC Investing in Culture Programme.

An analysis of HEMIS data from 2003 and 200421 shows a consistent downward
trend in arts discipline enrollments and completions across approximately 28
applicable fields (see Figure 6). This is generally attributed to the low levels of
financial aid available to human sciences in comparison to the business and core
sciences.

21
It is important to note that this data is not consistently reliable across the 3 year period for which statistics are available and as such
a two year analysis was conducted for this report.

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Figure 5: Enrollments and Completions at HET & FET Institutions (2003 – 2004)

30000

25000

20000

15000
Enrollment
10000 Completions

5000

0
2003 2004 2003 2004

FET HET

Source: HEMIS 2003 & 2004 (Own analysis)

As the figure below shows (Figure 7), universities have the lion’s share of output,
but completion rates as a function of enrollments are better at the FET level. In
fact, between 2003 and 2004, there was a 34% increase, representing over 450
learners in the FET band. When differentiated to a subject level however, the
FET band produces an almost equal number of graduates in communication and
more graduates in the so-called “industrial arts” which includes graphic design.
Visual arts, performing arts and language graduates are primarily university
educated. Based on enrollments it is clear that qualifications in language and the
arts are the most popular and also have the highest completion rates.

It is important to note the declining level of enrollment in arts related subjects

between 2003 and 2004. There is no documented research that explores the
reasons for this decline, however anecdotal evidence obtained from educators in
both FET and HET sectors attribute this, and the low completion rates, to
gradually declining funding for arts students in favour of those in scientific and
commercial disciplines. The lower enrollment figures may also be due to the
development of technical and vocational training which provided fully funded
opportunities for learners in both 2003 and 2004, unfortunately, there is no
evidence of any research or discussion on this issue.

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Figure 6: Comparison of Enrollment & Completion in FET and HET Bands (2004)

16000 2500
14000
2000
12000
Enrollment FET
10000 1500
Enrollment HET
8000
Completion FET
6000 1000
Completion HET
4000
500
2000
0 0

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.
Source: HEMIS 2004 (Own analysis)

There is anecdotal evidence to suggest graduates of Further and Higher

Education (FE & HE) institutions may leave equipped with a degree, but they
have little understanding or knowledge of the industry they believe they are ready
to enter. This is supported by international research from countries such as the
United Kingdom, Canada and Australia (DAC, 2005).

Technical and Vocational Education and Training

Technical and vocational education and training was primarily offered in a very
small way and in very few disciples through technikons and some universities
across the country. The National Skills Development Strategy (NSDS) and the
complimentary legislation have created a sophisticated system for the
development and implementation of demand-led training across the country. The
framework and the institutions it created are dedicated to the development of
skills in the country and are funded by a tax on employers.

When the national training system was being established, DACST recognising
that the NSDS provided a significant opportunity for training provision in the arts,
initiated a research process to attempt to quantify the needs and scale of the arts
and culture sector as a whole. With this research DAC proposed to the
Department of Labour that a SETA be established for the sports, recreation, arts,
and culture sectors. The Minister of Labour ruled against this proposal, arguing
that the four sectors could not sustain a SETA based on their combined wage
bills.

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In a subsequent demarcation process, the arts and culture were included under
the aegis of the MAPPP-SETA. Despite the inclusion of the arts and culture into
a SETA, it was apparent that because many of the companies that comprise the
sector have wage bills of far less than R250 000 per annum, training initiatives
would continue to overlook the needs of creative workers and producing
organisations. As such, DAC and the MAPPP-SETA submitted a proposal to the
National Skills Fund (NSF) to initiate a project dedicated to the creative
industries. The project, initially entitled the Creative Industries Skills Development
Programme (CISDP), re-branded CreateSA in 2002, was awarded R117 million
over a three year period.

This project constituted the first major technical and vocational training initiative
in the history of the broader arts and culture sector. An evaluation of the project
in 2005 showed that the project provided training in skills programmes and
learnerships for over 5400 learners across the country (CreateSA, 2005). A small
sample learner tracking survey conducted as part of the evaluation found that in
general learners were satisfied with the training experiences. The survey
revealed that:
• 62% reported that their employment circumstances had changed.
• 36% reported being offered an employment opportunity, 11% reported that
they had started their own companies, 8% that they had access to
freelance opportunities. All learners directly attributed this change to the
training received.
• 11% of learners have experienced an improved income stream that is
directly attributed to the training provided.
• 89% indicated that they believe the training offered is directly relevant to
their employment situation.

Feedback from employers showed that while they were generally satisfied with
the quality of training received and were impressed with the motivation and work
ethics of learners, they argued experiences was the most critical factor for
success. As such workplaces called for greater workplace components and an
improvement in incentives for workplaces to place learners. Research conducted
in 2005 to assess the impact of the National Skills Fund projects on Micro and
Small enterprises notes that entrepreneurs that completed learnerships within the
CreateSA framework were enormously positive about the experience. These
entrepreneurs directly attributed the successful launching of their enterprises to
the training they received. While generally positive about their training
experience, respondents felt that facilitators needed to have specialist skills in
the creative field to ensure a positive learning experience for SMMEs in the field
(Mcgrath and BEES Development Organisation, 2005).

To date, the MAPPP-SETA has registered 22 qualifications with the South

African Qualifications Authority and 8 new qualifications are currently under
development. The table below (Table 22) outlines the qualifications registered
since 2002. With regard to enrollment, it is estimated that just over 3700 learners

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were enrolled registered in learnerships based on these qualifications between

2003 and 2006.

Table 22: Qualifications registered by the MAPPP-SETA

Qualification NQF Status Learnership Learnership
Level Enrollment (2003
– 2006)22
FETC in Live NQF 4 Registered FETC in Live Events 262
Events Technical SAQA ID: 48669 Technical Production
Production
FETC in Heritage NQF 4 Registered FETC in Heritage 194
Practice SAQA ID: Practice
48812
FETC in NQF 4 Registered FETC in Performing Arts 213
Performing Arts SAQA ID: 48808
FETC in Arts and NQF 4 Registered FETC in Arts and 262
Culture SAQA ID: 48818 Culture Administration
Administration
NC in Arts and NQF 5 Submitted to SAQA for NC in Arts and Culture 55
Culture Enterprise evaluation and Enterprise
registration
NC: Craft NQF 2 Registered NC: Craft Production 1033
Production SAQA ID:48806
FETC: Craft NQF 4 Registered FETC: Craft Enterprise: 678
Enterprise SAQA ID: 48809
NC: Craft NQF 5 Registered NC: Craft Operations 205
Operational SAQA ID: 49119 Management
Management
FETC: Design NQF 4 Registered FETC: Design 165
Foundation SAQA ID: 49127 Foundation
Design Degree NQF 6 Public comment
SAQA ID: 48810

FETC: Music NQF 4 Registered FETC: Music Sound 45

Sound Technology SAQA ID: 48811 Technology

22
These figures include the large NSF project CreateSA and learners funded directly through MAPPP-SETA discretionary funding.
This is primary avenue of access to learnership opportunities in the sectors, given the low levels of workplace based activity, the non-
existent training budgets and limited interaction with the NSDS through mandatory grant funding.

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Qualification NQF Status Learnership Learnership

Level Enrollment (2003
– 2006)22
NC in Music NQF 5 Registered NC in Music Industry 80
Industry Sound SAQA ID: 48671 Sound Technology
Technology

FETC Music NQF 4 Replaced by Arts and FETC Music Business: 206
Business: Culture Management (A & C Admin)
(A & C Admin) NQF 4
SAQA ID: 48818
FETC in Film, NQF 4 Registered FETC in Film, Television 280
Television and SAQA ID: 49120 and Video Production
Video Production Operations
Operations
NC in Radio NQF 5 Registered NC in Radio Production
Production SAQA ID: 49125
NC in Radio NQF 5 Registered NC in Radio Station 65
Station SAQA ID: 49122 Management
Management
NC in NQF 5 Registered NC in Broadcasting
Broadcasting SAQA ID: 48792 Engineering:
Engineering • Radio or
Television
• Broadcast
Contribution
• Broadcast
Distribution
• Broadcast Head-
end-Systems
• Spectrum
Management
NC in Interactive NQF 5 Registered NC in Interactive Media
Media SAQA ID: 4912
NC in Scriptwriting NQF 7 Registered NC in Scriptwriting 20
SAQA ID: 49317
NC in Film and NQF 5 Being developed NC in Film and Video
Video

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Qualification NQF Status Learnership Learnership

Level Enrollment (2003
– 2006)22
NC in 3D NQF 5 Submitted to SAQA for NC in 3D Animation
Animation evaluation and
registration
NC in 2D NQF 5 Submitted to SAQA for NC in 2D Animation
Animation evaluation

Where no learners are enrolled, this is an indication that the qualification was
registered in or after 2006.

The new qualifications that are currently under development include:

• National Certificate in Heritage Management (NQF 5)

• Further Education and Training Certificate in Performing Arts (NQF 5)
• National Certificate in Visual Arts (NQF 2)
• National Certificate in Visual Arts (NQF 3)
• Further Education and Training Certificate in Visual Arts (NQF 4)
• National Certificate in Visual Arts (NQF 5)
• National Certificate in Craft Manufacturing (NQF 3)
• Further Education and Training Certificate in Arts and Culture
Development Practice (NQF 5)
• National Certificate in Intellectual Property (NQF 5)
• Further Education and Training Certificate in Music (NQF 4)
• National Certificate in Music (NQF 5)

Informal Arts Education and Training

Much of the informal arts education and training that was a feature of arts
development prior to 1994 remains. There are numerous organisations
principally engaged in arts education and hundreds that are involved in all arts
development activities. Education and training continues to be embedded in the
community arts and other sectors. A recent study by CreateSA showed that 23%
of organisations and individuals surveyed reported that they were involved in
education and training activities (CreateSA, 2003).

A study conducted for Interfund in 1999 revealed that community-based arts

education and training organisations view their role as follows:

• To prepare and educate arts educators to make a valuable contribution to

arts development.
• To develop a sense of competence and self-reliance amongst the youth
and other targets groups.

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• To facilitate innovation and development in the arts practices of black

South Africans.
• To be relevant and responsive to the needs of the affected community.
• To facilitate access to other education and training opportunities either
formal or informal.
• Promoting co-operation between NGOs and schools (Hagg, Walgrave,
Ntolwane and Malishe, 2003).

The community-based education and training sector has made a major impact on
the current arts curriculum offered in schools. Despite various interventions and
the involvement of the informal arts education community at various levels in
policy and programmes, the following factors constrain the development of the
informal arts education and training environment:

• A lack of adequate and co-ordinated administration, support and

governance from all spheres of government, state institutions and the
private sector.
• The lack of capacity for accreditation of providers and training
programmes.
• The lack of adequate research to inform planning and programmes, and
advocacy and funding activities.
• A general lack of human resource development including practitioners,
teacher development, managers and administrators.
• A critical lack of equitable and well managed funding from all stakeholders
in the donor funding environment (Hagg, Walgrave, Ntolwane and
Malishe, 2003).

In January 2002 DACTS commissioned the Human Sciences Research Council

(HSRC) to audit the 41 community arts centres, which had been established
under the DACST “Culture in Community Programme”, funded by the
Reconstruction and Development Programme (RDP) Fund. The audit report
reported that the centres’ performance was inhibited by the following problems:

• Lack of appropriate policy for arts centres.

• Lack of capacity within government and arts centres.
• Limited understanding of context among stakeholders in the sector.
• Limited and often inappropriate service delivery by arts centres.
• Older arts centres were ignored during planning of RDP centres.
• RDP centres operate in isolation.
• Shared responsibilities between local and provincial government have not
been resolved in many cases.
• Lack of funding in most provinces (Hagg, Walgrave, Ntolwane and
Malishe, 2003).

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Employer-based training

New entrants to the sectors, particularly those who have come straight from the
education system but by no means exclusively these, will generally receive some
employer-based training. In addition, employers are aware of the changing
nature of skill requirements and many do provide on-going training. The MAPPP-
SETA sector skills plans for the last few years reveal that the number of
companies in the sector that submit Workplace Skills Plan in order to claim
mandatory grants is very low.

There would appear to be considerable scope for increasing and promoting

levels of human resource planning within the creative industries. At an overall
level it would appear that the majority of enterprises do not engage in human
resource planning and in addition, because of their small size and relatively low
wage levels, most fall below the ceiling prescribed by the Skills Development
Levies Act for mandatory levy contributions. Regardless of the actual level of
training provision, there are a number of common themes which appear to hold
true across all the sectors, in that employers are more likely to offer their
employees training if they:

• Are larger: the bigger the employer the more likely that training activity
takes place.
• Have business and training planning/human resource management
mechanisms in place;
• Have an IT and technology base that is relatively sophisticated.

Access to training and the demand for new competencies

The preceding sections have highlighted that there is considerable access to

training at many levels and through a wide range of institutions. Specific
challenges relating to skills upgrading range from training opportunities not being
available or appropriate to the sector, not being delivered in a way that they can
be used or flexible enough to adapt to the needs of learners and generally being
too costly in terms of time and money.

The weaknesses with existing training opportunities include a lack of awareness

or knowledge of the value of what exists, the lack of format to meet the needs of
creative industry career characteristics (including the high degree of self-
employment), and a perceived lack of the value of training in the eyes of
management.

The Concept of “Employability”

It is useful to ponder the nature of what makes one entrant more able to earn
employment than another. Feedback from employers in the CreateSA project
evaluation process clearly indicated that experience is what counts (CreateSA,

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2005). The primary issue at stake is the degree to which current skills supply
mechanism actually contribute to the “employability” of new entrants or people
already active in the creative industries. In the United Kingdom for example,
research has been done to examine how trends in higher education and the
labour market are having an impact on the future employability of graduates in all
subjects of study (Dumelow, MacLennan and Stanley, 1999). Widening
participation means that students are now entering from diverse employment and
training backgrounds, many with experience of the workplace. More needs to be
made of the fact that, increasingly, students are arriving with valuable workplace
skills, and those that don’t are very likely to seek part-time work throughout their
courses to survive financially. This experience gives students a basic
understanding of the workplace, is potentially enhancing for their futures but is
not always acknowledged by the educational system as being important. The
vocational system, through the Recognition of Prior Learning (RPL) has a
mechanism for this but its practice is not as widespread it could be.

For planning purposes it is essential to understand that employability of

graduates from educational or training systems is not just about what graduates
have to offer in terms of their degree subject, personal attributes, skills, values
and aspirations. It is a learning process. It is also influenced by external factors,
such as the economy and trends in the workplace. So a matrix of factors impact
on the employability of the graduate and a linear progression of (traditional)
graduates through the higher education system to employment is no longer a
suitable model, given recent changes in the workplace, changes in the student
population and factors affecting them as they progress (Harvey, Locke and
Morey, 2002).

The growth in education provision has led to large numbers of young people
studying ”relevant” courses, but there is concern about the quality of some of the
courses. Anecdotal evidence shows that employers in the creative industries
believe that there are too many courses and qualifications that do not have a
direct link to occupations and workplaces. In this regard there are a number of
issues that need resolving:

• The demands in the world of work are changing rapidly, but the
qualifications are not changing in response, or if they are changing they
are not changing fast enough. There is a growing gap between the
qualifications and the skills needed in work.
• Course content needs to be more flexible, perhaps with an increased use
of modular components to allow a ”pick and mix” qualification.
• Greater employer contribution is vital. Employer input needs to be
integrated into courses in a much quicker fashion and employers must be
encouraged to increase participation.
• Given the range of differences that can be seen across the sectors, it is
unlikely that courses or qualifications could be standardised across the
sectors.

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• There are more students currently studying for entry into the sector than
will ever be able to work in it and as such, employers question career
planning, counseling, research and intake processes.
• Professional development opportunities are lacking across all sectors..

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Chapter Five: Sector case studies

The following chapter comprises a range of individual case studies from the film
and craft sectors that are intended to illustrate some of the issues raised in the
sector profiles in Chapter 2 and highlight the skills challenges faced by many
enterprises and organisations from enterprises to development agencies.

ENTERPRISES IN THE CREATIVE INDUSTRIES

The Gauteng Creative Industries Co-operative

The Gauteng Creative Industries Cooperative (GCI) was founded by master

crafter Peter Mthombeni for craft producers in February 2007. The GCI is
currently comprised of groups of companies located in all five regions of Gauteng
and has eighteen founding members and twelve other enterprises waiting to be
incorporated although it intends to become nationally active. Most of the
enterprises are registered as close corporations with many owner/managers
multitasking across the value chain from design, production, marketing and
sales.

The vision of the GCI is “to be the preferred partner to

make a significant contribution to the economic
growth and development of the Cultural Industries,
with a current focus on the Craft Sector in Gauteng,
but looking nationally in the medium term” 23.

The key motivation to establishing the co-operative was the many common
problems facing the members from administration to design, from sourcing
material to accessing markets. The companies that comprise the co-operative
are diverse, ranging from survivalists to well established micro-enterprises. As
Peter Mthombeni says “the inception of this cooperative is aimed at elevating
these entities to be economically sustainable and viable and to unleash the vast
potential of the creative industries”.

The founding members of the GCI have pooled their resources, expertise and
talent for the benefit of the craft sector as a whole. They regard the GCI as
“under development” and aim to eventually locate together in premises to pool
resources and conduct training for other crafters: “We’re planning to have a
centrally placed hub where everything we need will be based centrally – be it a
meeting place, a workshop place, training, a place to have coffee, a gallery
where people can display their products, a conference centre. It would be in
Johannesburg at this stage, in the city”.

23
The Gauteng Department of Arts and Culture commissioned research for their Audit of Craft Assets: The research consultants under
the direction of the CCDI conducted an interview with Peter Mthombeni in August 2007. All quotes, unless otherwise stated are from
this interview.

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Members of the GCI produce in the following categories: ceramics; glassware;

home ware and décor ware; clothing and textile; jewellery; foodware; packaging
and sculpture and fine arts. GCI is currently exploring leather work and
woodwork.

Key constraints facing crafters in the GCI include basic logistics such as access
to transport. Only 3 of the 18 founding members have their own transport causing
huge delays in sourcing materials and supplies as well as delivery. As Peter
Mthombeni reported, “I remember one time I was taking public transport a few
years ago to meet a client and I was ten minutes late. I lost R3500 just like that.
You have buyers who don’t want to know about problems you might have with
transport”. Those with cars or other resources such as kilns are able to help
other crafters in the co-operative. Currently members of the co-operative such as
Mthombeni are exploring sourcing basic material from China and adding designs
and finishing to the product to make a quality product.

One of the principles of the GCI is to buy in bulk as raw materials for craft can be
expensive and are often difficult to source. Most beads, some ceramic material
and ceramic colours as well as leather tools are imported. Buying in bulk qualifies
the GCI for discounts and eases the cash flow burden of any one craft enterprise.
An important function in the value chain is the showcasing and selling of craft
which is typically done by merchants and retailers. In their assessment of this
part of the value chain (often referred to as the “middle-man”) the GCI is
attempting to reach the client or customer directly by creating a membership
pool. The GCI aims to “continually be marketing ourselves and finding out what’s
going on in various places” to improve self-empowerment of all craft members.

The GCI have found it particularly valuable to form strong

relationships with municipalities and provincial
government to showcase their work at events, hire
venues for exhibitions, provide a catalogue for corporate
gifts and source funds for training. In Sedibeng for
instance, the municipality provided the city hall for crafters to showcase their
fashion products.

The poor image of local craft in the media is being addressed by the GCI who
want to use the media to raise awareness about local craft particularly amongst
black South Africans. The GCI believe that the media could play a vital role in
showcasing quality craft and raising the profile of crafters. Websites have been
rejected because of a fear of copying in favour of a more direct relationship with
boutiques, gift shops and some cultural sites and museums for one-off
exhibitions.

The areas where government support would be welcomed includes assisting with
market access, corporate gift buying, developing a direct and loyal local market,

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infrastructure to work and network from, ICT support and support to crafters and
financial institutions to better understand each other’s requirements.

The GCI can take credit for a number of achievements in its short history such as
hosting and facilitating workshops, co-ordinating, facilitating and setting up of
exhibitions (Design Indaba; Rand Easter Show, BBBEE conference, Gauteng
Legislature; Beadex, Rooms on View; Tourism Indaba and Import/Export Africa),
holding talks with international buyers from all over the world and running a
capacity building programme with the National Productivity Institute.

One of the primary challenges in the co-operative is a general lack of skills

especially in the business and management domain and the management of the
variable skills base of members. In the case of the CGI the formal education and
vast experience of the master crafts person is combined with the skills levels of
other members deliberately to ensure empowerment. The draft Gauteng
Implementation Strategy for Co-operatives Development Policy argues that the
challenges facing co-operatives in the province include:

• A lack of business planning.

• Lack of access to capital.
• The low levels of institutional capacity.
• Marketing.
• Access to production space.

Co-operatives, while theoretically able to draw on the wide and differential skills
base of their members will still face significant challenges driven by the need to
be flexible and to adjust to the changes in the market by constantly innovating,
dealing with complex problems inside and outside of the enterprise and applying
the necessary insights to their business models. The training provided to
members and leaders should thus emphasis entrepreneurship as well as the
necessary technical and creative skills required for work in the creative
industries. The real challenge is to ensure that “bee hiving” or having nodes of
skills within the organisation is not a model that persists, given that many
individuals will need to have multiple skills and work in a clustered or even
matrix-based environment.

T.O.M. PICTURES

T.O.M Pictures (TOM) is an independent film production company based in

Johannesburg. Independent production companies are the businesses that
producers set up to make content. Funding and finance for content production is
only provided to such legal entities. TOM produces work in the following areas:

• Film &Television production.

• Television Commercials & Corporate Videos.
• Education & Consultancy.

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• International facilitation.

TOM was selected for this case study on the following basis:

• The company is independent in that it is not wholly or partially owned or

financed by a broadcaster or distribution house or any other institution. This is
a typical company structure in the film industry where ”the main body of the
production sector is made up of small and macro enterprises – close
corporations, sole proprietors, joint ventures etc set up for freelancers to work
from job to job and hand to mouth“.
• It is a majority black owned company (66%).
• The partners are presently, as of 2007, making a living, earning a salary out
of the company business, which is not often the case, however sustainability
is the biggest challenge.
• The human capital component of the company, the expertise and experience
of the partners, is believed to be an important, even vital factor contributing to
their present ability to win contracts, and potential ability to survive.
• The focus of their business strategy in relation to financial survival.
• Producers play an important role in production companies, turning ideas into
profitable films, persuading others to share in this commercial and creative
vision and ensuring that the creative talent of cast and crew can flourish.

History

TOM was founded in 2003 by Robbie Thorpe, Akin Omotoso, and Kgomotso
Matsunyane with the name signifying the first letter of each partner. The
company is 66% empowered. The partners met through their individual work in
the film and television industry and developed a friendship as they discovered
that they had common ideas and approaches to the industry. They formed the
company to formalise a strong relationship between like minded professionals,
respecting each others experience and expertise. As Matsunyane says, “We
could have started the company 6 years ago but we were not ready”. The
development towards the establishment of the company was organic, through a
shared ethos, a similar creative approach to projects, as well as to financing.

The primary focus at present is to develop projects which are exclusively South
African based and financed. ”Our ethos is to make content that reflects the true
nature of our African identity, and to contribute to and participate in the growth
and celebration of South Africa and the African continent,“ says Omotoso.

According to Thorpe, while he had been around in the film and television
business for a long time it was the similarity in the partners thinking and
approach, the creative focus which worked for him and for the three together.
This he considers is their strength. Matsunyane agrees that all three partners are
very similar and are primarily focused on the creative side of the business,
focusing on the stories rather than the business side of things. The focus of

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TOM’s content is stories which are authentic. They believe that good stories are
the basis for success. Thorpe having concerns regarding the partners’ level of
vital business skills.

TOM’s present aim is to raise their profile through producing good, high quality
product, which will ensure that they are taken seriously in the industry, and also
to remain as independent as possible, both creatively and also in regards to
finance and financial control. Omotoso believes that flexibility was, and is the
key.

Human capital

Robbie Thorpe has worked in film and television, firstly as an editor and later as
both a producer and a director for over 20 years. After studying Film Production
at the Pretoria Technikon, he worked as an editor in London for four years. After
returning in 1990 he worked primarily on international feature films as well as
local and international documentaries - quickly earning a reputation as one of the
finest editors around. Looking for new challenges Thorpe went on to become a
producer working in television, film and commercials. Thorpe produced the
feature film Gums & Noses for TOM which won numerous awards at film festivals
around the world. In the Shadow of a Saint a South Africa/Canada co-production
starring Djimon Hounsou (Blood Diamond) is currently in development. Recent
television productions include the comedy series Sorted, which has been
nominated for an Emmy Award in New York, and the drama series A Place
Called Home.

Thorpe believes that he has brought the depth and variety of industry experience
into the company having been in the industry for a long time in different
capacities. A particular advantage which has borne fruit is that he started his
career as a technician. He was an editor for a long time. His actual hands-on
production experience has enabled him to understand the film and television
production processes and this has been very valuable, particularly in developing
budgets, managing production processes and timelines, and crew.

Thorpe is the only one in the partnership who has been to film school. Although
the Pretoria Technikon was politically conservative and a grim place, it was the
only film school in the country at the time and sparked a broad interest in the film
industry, across its many facets. He believes that this encourages a holistic view
of the industry. Unnecessary compartmentalisation inhibits team work and
effective and efficient cooperation which is the basis for the successful realisation
of any film or television project.

Akin Omotoso is one of a new breed of young talented actors and directors who
are carving a niche into the small, selective South African film and television
industry. He won the ”Standard Bank Artist of the year award 2007”. Omotoso
made his acting debut on stage at the University of Cape Town’s Drama School.

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He has appeared in productions such as Isidingo on SABC 3, Big Oakes and

most famously on Generations where he became a household name in South
Africa. In 2000 he wrote, directed and produced his debut feature film God Is
African. In 2003 he, together with Matsunyane and Thorpe started TOM and has
since produced and directed film & television, including Nomzamo (a sitcom on
SABC1) Gathering the Scattered Cousins (documentary selected for the Toronto
Film Festival) and Rifle Road (short film selected for the Cannes Film Festival).

Kgomotso Matsunyane graduated with a major in International Relations from

Carleton College in Minnesota, U.S.A. She interned with the Washington offices
of the BBC before taking on a full time position with the CBC as a line feeds
recordist. On her return to South Africa, Matsunyane worked extensively as a
documentary director and producer, making her mark with such pieces as the
Moon in My Pocket, Sins of the Father and Heavy Traffic- a Steps for the Future
film which was nominated for an award at the Banff Rockies Festival in Canada.
Heavy Traffic has also been screened at the 21st Festival International Film du
d'Amiens in Paris November 18th 2001, World Summit in Johannesburg in 2002,
and in FESPACO in 2003. She directed several inserts for the award winning
Takalani Sesame series. She was a writer on the award winning second series
of Yizo Yizo. From 2001 – 2003 Matsunyane was employed as a drama
commissioning editor for SABC 1, during which time she oversaw the production
of over 500 hours of local drama for the channel.

After a stint as the editor of O Magazine, one of only two in the world, she joined
TOM and is producing the multi-award winning children’s educational series Soul
Buddyz. Matsunyane says, “I learned at both the SABC and at O Magazine so
much which has set me up for this business. At the SABC I learned about the
inside track. This included how the broadcaster functions, what are required, and
such things as how to write a good proposal – there are so many bad ones
around. At O Magazine I learned about how to be a professional business person
within a creative framework.”

Craig Freimond joined TOM in 2005. He completed his Drama degree at Wits
University in 1988. Since then he has worked as a writer and director in theatre,
television and film. His theatre works include Edmond, the Chalky White Show,
The Great Gatsby, Jump, Pygmalion, Macbeth, Sweet Phoebe, Talk Radio,
Gums & Noses and The King of Laughter. His TV credits include Not Quite
Friday Night, Soul Buddyz, Scoop Schoombie, Gazlam and Sorted. In 2004
Freimond wrote and directed his first feature film Gums & Noses which was
adapted from his play of the same name. Gums & Noses was produced by TOM
and it was because of the very successful working relationship he enjoyed with
this company that he joined them. Gums & Noses won the Apollo film festival
award for best feature in 2004. His play The King of Laughter won three Naledi
awards in 2004, including best new play, best director and best supporting actor.
His most recent television work was co-creating and directing two seasons of the

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improvised comedy series Sorted. Freimond has since finished his new
screenplay Stiff which is being developed by TOM.

Finance
The company was started without any capital, and no financial backing.
According to TOM partners, there is little or no understanding in the corporate
sector of the film industry as a business, and there is no clear model or system
that offers reasonable guarantees for ongoing income, other than a few long
running broadcast contracts such as soap operas, talk shows etc and that
accounts for the few medium enterprise production companies (IPO, 2007).. The
company had no assets and their first furniture and office equipment was bought
with the profits from their first job. This first job was run from a very small office,
which was supported by the production budget of this job.

Although there was no master plan the partners have been systematic in their
strategy over the four years of the life of the company. In the beginning, for the
first 18 months to 2 years Thorpe, was alone in running the company. In the first
year he had a salary for 5 months only, a position he was able to maintain due to
the fact that his wife is a regular earner. Omotoso was later able to join the
company as there was an additional project contract, which meant the company
was able to afford him, however neither partner was paid every month. Omotoso
relied on acting work as additional revenue.

The company has up until recently only employed staff when in production. Their
aim is to remain as small and as light as possible. They have only recently
employed the first full time staff member, a line producer. Otherwise all staff is
hired in as required per project contract. All company earning was and still is
project based. All costs are covered from budgets of projects which are financed.

The company has progressed to a point where they have won sufficient project
contracts and raised sufficient project finance to be able to, as of January 2007,
pay themselves monthly salaries. However the salaries are considered to be
below market rate and the partners consider their financial position fragile and
are concerned about sustainability. TOM requires around R2million turnover per
annum to stay up and running.

TOM, like many other production companies, depends on the national

broadcaster SABC for the bulk of their work. It is their “bread and butter”. The
team regularly pitches projects, primarily to the SABC. The company has no real
business plan with targets such as a number of projects per year, or income
growth targets, but exists from production to production in terms of funding and
finance. This project reliance is unstable as it depends on financed project
contracts or projects in order to cover costs. TOM projects have been financed
by a combination of public and private funding. For example they are presently
engaged on a feature film project which is being funded by Anant Singh.

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Typically the production sector relies largely on the three broadcasters and in
particular the SABC’s commissioning process which takes the form of briefs
being issued 2 – 4 times per year. It operates on a model where it is a service
provider to the broadcasters. SABC is currently the primary consumer of local
content and has a very tough one-sided terms of trade in that they contract for a
very limited period, take all intellectual property rights in the product, pre-
determine and fix profit margins, stipulate various conditions for production and
delivery (the producer takes all the production risks), and yet there is almost
never a pre-agreed roll-over on the contract should all the requirements be met.
Thus no matter how well a company performs it remains at the mercy of the
broadcaster for handouts with no chance to sustain or even build and
independent business. While there are a handful of medium size enterprises
which are sustainable due to long running contracts, they are building no assets
as all equity belong to the broadcaster. Producers are also unable to access
capital for research and development as there is currently no potential for a
return on this investment. Thus the reliance on the broadcaster is considered a
risk.

The TOM partners believe that they need to know and understand how to break
into the corporate sector, and to move beyond the purely creative. They would
like to move away from the dependence on the broadcaster to a 70-30 scenario,
which then is gradually reduced further. As Matsunyane says, “we are hired
hands, ant workers. We continue to struggle every month. We would like to have
the flexibility to get more work into the company, work more smart, work in a
more profitable area such as corporates and parastatals. Commercials are too
over-exposed. We have been in a situation where we have been without money
for 5 months. We need to find long term projects”.

At present the company is focused on building a name for themselves, a

reputation rather than making profits, believing this to be the key to opening
doors and other opportunities. The company’s target is to become successful
locally if possible, either through television or also through feature films, short
films and documentaries. However distribution is a problem as there is a lack of
outlets for product. International film festivals are considered to provide exposure
for product and talent adding to the credentials and company profile. The
company has had some success with Gums & Noses on the film festival circuit.
This has been one of their primary calling cards. Festivals also provide essential
networking opportunities to identify potential partners and to raise project finance
particularly from international sources.

Industry knowledge
Omotoso believes that to be successful, knowledge of the industry and industry
trends are vital and that one has to go and get it. The partners have made it their
business to watch a large body of material from all over the world and read
relevant literature and scripts. Time is invested in this. As with any business,
there must be knowledge of the market. Every opportunity to participate in local

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and international film and TV events are exploited to gain this knowledge.
Approximately 40% of TOM’s time is spent on networking.

TOM believes that vital to growth and development, and success in the industry,
is a mixture of creative and business knowledge. Each person must be an expert
in their area and must ensure that they have regular access to the relevant
information on the industry. The key ingredients in the industry besides talent are
skills, networking and sharing of information, as well as discipline. TOM feels that
there are insufficient platforms for the development of each of these factors in the
country. The industry is seen to be segmented in terms of skills with little or no
cross-over accepted between industry sectors from drama to commercials.

Training
TOM feels that training in South Africa is unco-ordinated, fragmented and
myopic. There is inadequate design of training opportunities which allow for
progression in the industry and further development and upskilling according to
the level of the trainee or professional. Training programmes are often ad-hoc
and once off initiatives such as film finance workshops and editor training. Some
initiatives are launched and then cease to exist due to a lack of support and
coordination or exist within a very fragile economic framework, such as AVEA
which offered training for producers and FRU that offered training on distribution.

Omotoso believes that there should be a season of master classes to provide

continued growth and access to interaction and talent. Film schools are vital
platforms to develop film literacy, as well as to provide access to top expertise
and talent, such as world renowned directors and script writers. Approximately 60
- 70% of crew on TOM productions comes from AFDA graduates or even
students. As with the international industry South Africa is on the brink of the new
media explosion which will push content creators into the centre of the value
chain, but also demands that practitioners in the industry have access to
technology and are technologically literate.

Many top skills and talent across the value chain have been lost to television and
the feature film industry because there are no big budget productions any more.
There is no money. The industry is not able to lure or retain key artistic talent or
management and technical skills as it does not offer financial rewards
comparable to advertising, international production or the financial and IT
sectors, and does not offer sustainability and growth. Television budgets are
getting lower and lower so the productions are unable to attract real experts as
they move across to the more lucrative business such as commercials.

According to TOM there is no facility for training on the job and growing
experientially in a progressive way such as the system of apprentices who then
worked their way up the ranks. The budgets in TV are so low that there is no
possibility of including an assistant on a production, thus no opportunity for a
learning space. If an assistant or trainee is brought onto a production they are

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expected to work for no fee. Sound assistants, for instance, are frequently
eliminated from the budget with the result that there are perhaps 2 – 3 fully
qualified, expert sound editors in the country. Very few seem to be concerned
about this trend, but these professionals are gone. There is also a real shortage
of editors. In the last 5 – 10 years there has been the drive to make things
cheaper, particularly within the broadcaster and thus we have lost quantities of
professionals and potential professionals (including directors, sound engineers
and sound editors, directors of photography and editors amongst others). There
are few writers who live off their craft, as they cannot afford to do so. But this
then means that they do not develop either. There is a lack of investment in the
research and development process.

Technological change and development has facilitated access through cost

effectiveness although there are many who now believe it is sufficient to be able
to work the technology and ”do the job”. There is no longer the opportunity, the
interest or the sense of obligation to learn the craft. This is exacerbated by
budget constraints. The partners believe that there is a misperception amongst
South Africans that anyone can make a film, when in fact it requires considerable
talent, expertise and experience.

Government support
TOM expressed concern that government support is presently not seen to be
providing any of the appropriate support at all. The company argues that
government must fund the SABC’s public mandate as one cannot expect
programmes that have a non-commercial value and are fulfilling the public
service mandate to be profitable. .

TOM is of the view that it is not possible to make top quality documentaries
regarding our history. The broadcaster considers such product as not having any
commercial value so that they put extremely little money towards their
production. The impact of this is to attract only those companies and individuals
with little experience rather than more experienced companies with more
substantial projects which would ultimately have some commercial potential. The
broadcaster does not really function as a public broadcaster whose mandate
should be to support the diversity and vibrancy of the independent production
sector.

There are two key reasons for government support of the film industry:
• The cultural imperative to change the country with regard to its history and
social customs
• Promoting cultural identity so that it is not an American culture. Government
has to do this so that South Africa can compete in the world market.

Thorpe believes the government should note the incredible success the national
party had in promoting their culture through their support of feature films (albeit in
a negative way), and other forms of cultural expression such as music and

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television programming. The audience has remained incredibly loyal to their

Afrikaans music and television content pulling solid audiences to this day. Leon
Schuster launched his career in this way. He made his first films on government
subsidy, which then enabled him to build a brand, which is now commercially
viable.

According to TOM the institutions which have been set up by government are
confused as to their role and are not making a real difference. They lack finance
and are trying to take over the role of production companies amongst other
things. The NFVF Production Funding criteria demands that the production
funding they put into a project is seen as an investment which must be paid back
to the funder. While the NFVF will consider supporting the production of films and
documentaries either through repayable loans or grants, DTI support
mechanisms are not available to the average production company due to the
high budgetary threshold as a requirement for access.

The industry is also hampered by the fact that there are no credit facilities for the
film sector. TOM believes that there is no space for failure in the South African
industry. Failure is not accepted, and is seen as a reason to not offer finance,
project contracts etc. Success is expected at an early stage, even though there is
insufficient and inconsistent development support, creating enormous and
unrealistic pressure.

High points
According to Thorpe, Matsunyane coming back into the company full time has
been the biggest highlight as it has given TOM the chance to build the capacity of
the company. He notes that she has contributed enormously to the company’s
ability to win project contracts in the drive to become more sustainable.

For Matsunyane the high point in the company was when Gums & Noses was
screened. This was the first project of TOM Pictures. It was a very small budget
and because of the individual reputations of the partners crew ”came to the party”
and worked for free because they were hungry to get involved in feature films
which are few and far between. The film went successfully around the world
particularly on the international film festival circuit. Says Matsunyane, “I get
thrilled every time one of our projects airs on TV and I see our name at the end.”

TOM partners believe that amongst the major advantages of the company is the
fact that they have an excellent balance of race. They work as a tight cohesive
group and also invest in people, having trained and mentored many young
people. They feel that they have gained so much from the country and that it is
good to give back. The have seen the benefits from this all along the way.
Between the three main partners they have an impressive collective experience,
from the institutional to some business acumen, and they are an equal
partnership. This shows up there in the way they work. There are no restraints
between the partners and they are very supportive, ”carrying the torch” for each

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other. “We started as friends and we respect each other and each others work”,
says Matsunyane.

TOM is an example of a ”typical” independent film production company which,

although in its 4 years of existence has managed to build up a body of work
which they are proud of and which represents their important calling card,
however remains fragile due to their dependence on contracts primarily from the
broadcaster. Their success has been entirely due to their own experience in the
business as individuals, as well as their combined expertise, their
professionalism and dedication to gaining knowledge and additional experience.

TOM’s vision is “to meet the needs of the new era of communication and
increased requirements we need to have a production industry that is reliable,
solid, innovative, accountable and smart”. This means businesses with both
creative and business skills. It means businesses that are incentivised to up-skill,
to invest in technology and to invest in intellectual capital so as to provide content
– efficiently, reliably and accountably.

DEVELOPMENT AGENCIES

CCDI - the business of craft24

The Cape Craft and Design Institute is now “a leading institution in the
development of the craft sector in South Africa” It has been a very successful
example of a public-private partnership since its inception in 2001 and has been
accepted by the DTI as the best practice craft development facility in South
Africa. The CCDI is registered as an Association Not for Gain under Section 21
of the South African Company’s Act and is governed by a Board of 12 directors
who are broadly representative of the role-players and stakeholders in the sector.

Background
The Cape Craft & Design Institute (CCDI) began its operations on 1 November
2001 as a joint initiative of the Cape Peninsula University of Technology (then the
Cape Technikon) and the Provincial Government of the Western Cape with
significant start-up funding from the National Department of Arts & Culture. In
the 18 months before its official launch on 12 June 2003, a number of activities
and pilot programs were implemented to test proposals and assumptions in the
detailed research report and founding business plan that gave rise to the
establishment of the Institute. These documents, as well as the lessons learnt
from the implementation of pilot programmes served to inform much of the
program development of the CCDI.

24
With thanks to Erica Elk, CEO of CCDI for discussions, documents and detailed notes.

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Vision

The vision is reflected in Table 23 below.

Table 23: CCDI Vision 2014
CCDI 2014 Vision
Develop People There is a NEW generation of designers and craft artists; and professional,
well-informed, pioneering craft entrepreneurs across the value chain.
Develop Enterprises There are many profitable businesses operating in a competitive sector, using
appropriate technology that covers the whole province and makes a valuable
contribution to GDP.
Develop Products The WC has an identifiable signature that is influenced by our heritage, and is
recognised globally for its design and innovation.
Develop Markets There is a strong local market, developed niche international markets, with
increased value/appreciation for hand manufactured products.
Develop Environment The sector is industry-led with a discernable craft community and a strong fair
trade practice.
Develop Institute The CCDI is a globally recognised sector development body and a centre of
excellence.

The CCDI mission is to be a best practice institute developing people to build

profitable enterprises with marketable product for global markets in an enabled
environment. It provides support to the craft and hand-manufacturing SMME
sector, informs and lobbies for an enabling policy and regulatory environment
and acts as a catalyst within the tertiary education environment.

A small administrative and financial management unit supports the five core
programs of the CCDI which were developed over 2-3 years.
o Programme 1: Networking, Communication and Sector Marketing
o Programme 2: Market Access
o Programme 3: Enterprise Development & Training
o Programme 4: Research & Resource Development
o Programme 5: Design & Innovation

The organisation has more than doubled in size in the last 12 months and two
new support positions (Programmes Manager and Office Co-ordinator) have
been added to the staff complement to ensure alignment of programmes and
efficiency in day-to-day functions.

Currently the CCDI has a very flat organisational structure. Each program is
staffed by a manager or program leader who currently reports to the executive
director. The increased institutional capacity within the CCDI and the internal
restructuring required will provide more depth to the organisation making it more
effective in its impact on the sector. The challenge will be for the Institute to

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maintain its creative and innovative solution and needs driven approach to sector
development.

The five interlocking core programmes, their objectives, structure and

achievements are described below in Figure 10.

Figure 7: Five Interlocking Programmes

Cape Craft & Design Partners & Collaborators

Institute
Cape Peninsula University of Technology, Provincial Government
Western Cape, City of Cape Town, Department Trade & Industry,
Department Arts & Culture, Department Science & Technology, Cape
Mac, Red Door, CTRU, UCT Graduate School of Business

Administration & Finance

Fabrication
Laboratory

Design & Innovation

Centre for
Innovation
Research & Resource
Development

Product
Craft Enterprise Development
Development Clinic

Market Access &

Development

Communication & Marketing

GIFT Raw Materials Production
Warehouse Bank Clusters

Achievements:
Over the first six years of its operations, the CCDI has influenced and changed
the landscape in the Western Cape in the following ways:

o Created a visual presence for the sector, providing a referral and marketing
resource and contributes to the developing a provincial identity
o Established a physical presence and point of reference which facilitates
brokering and match-making from a credible and impartial resource
o Retained institutional memory so that knowledge and information sits in an
institution that is accessible and open to all
o Collated baseline information on craft enterprises in the Western Cape
providing accurate and intricate levels of information which assists with
planning and measuring impact and growth.

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o Increased and broadened the marketability and market access opportunities

by looking beyond the traditional definitions of craft to niche markets such as
Homeware & Décor, Jewellery & Fashion Accessories, Craftart, Traditional
Craft, and Novelties & Gifts.
o Raised the profile and status of people and products by showing them in new
places and in new ways; taken seriously as an economic sector & increased
product value.
o Established a benchmark of excellence through transparent and clear
processes which in turn has impacted on improved product ranges, product
quality and business sustainability.
o Impacted on income generation directly through sales at events and indirectly
through creating platforms for enterprises to present themselves to the
consumer and trade markets.
o Developed a unique market-driven, product development process with strong
market links and a training component leading to sales that can be sustained
by the enterprise as skills are transferred.
o Implemented accredited and multi-faceted approach to skills training, with the
MAPPP-SETA, that is market-driven and responsive to crafters needs and
working conditions.
o Built capacity in people and enterprises across the value chain; resulting in
increased confidence; businesses maturing and stablising; more people
choosing the sector; and increased growth and sustainability.
o Laid the foundation for a representative community of Western Cape craft
entrepreneurs; breaking down isolation and individualism; crossing racial and
class divides; and increasing sharing and collaboration.

Specifically, in 6 years the CCDI has increased both its sphere of influence and
impact and participation in its programmes as can be seen in Table 24.

Table 24: CCDI Achievements

Sphere of influence and impact 2001 2007
Funders 3 15
Enterprises 60 969 (778 active)
Retailers 10 358
Service providers 5 261
Associate stakeholders 10 877
Programme participation 2002 2005
Enterprise development 4 54
Training programmes 23 156
Local events & exhibitions 68 294
International events & exhibitions 5 50
Product development clinic 0 66

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The 2006/7 CCDI commissioned impact study measured the effect of the
organisations programmes and activities in the period November 2001 – March
2005 (Western Cape Craft Sector Newsletter, 2007).. It showed that the CCDI
had impacted on a wide range of people in a very positive way with 53% of
respondents’ increases sales from improved products; 37% moving from home
based production to a formal workplace and 38% with higher income. Many more
felt they had learnt new skills (94%), understood markets better (86%) or
experienced better access to markets (85%). Interestingly, more than 70% said
they would not accept regular equivalent paying jobs in place of their craft work
revealing a solid entrepreneurial focus among the targeted beneficiaries. The
impact study also revealed that the CCDI was having minimal impact on the two
extremes of the spectrum – the least developed and best developed
entrepreneurs. Table 25 below summarises the key findings of the impact
research.

Table 25: Summary of Key Findings of Impact Research for CCDI

Key Areas Findings
Enterprise development • 94% leant new skills
• Of the 43% who did NOT have a costing a pricing strategy, 92% now do
• 76% knows what their product costs to make
• 73% know what they make on each product
• Almost 77% who experienced an increase in sales felt that CCDI had
contributed to this increase (53% said yes and 24% said somewhat)
• 70% of those who felt CCDI had contributed to their sales increase stated it
was because of better market access; 17% attributed it to having better
products, 13% because of access to information sharing
• 85% have maintained a profit, moved from making no profit or not being in
craft previously to making a profit, or realised they are making a profit since
being involved with CCDI,
Market Access • 85% have experienced a positive change in market access
• 86% say CCDI has improved understanding of their markets
• 56% have experienced a growth in regular customers
Product Development • 63% have improved their product
• 58% with new products indicate an increase in market access
• 66% have been helped to make new products
Employment/ Jobs • 37% have moved from home to a formal workplace
• 45% attribute increase or change in staff numbers to CCDI support
Personal Income • 38% have a higher income since CCDI intervention
• 63% have experienced positive growth in personal income
Personal Impact • 84% felt that their working life had improved since attending CCDI
programmes and activities

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Key Areas Findings

Entrepreneurship • 73% said they would NOT accept regular, equivalent-paying jobs in place of
their own craft work
Sustainability • 31% claim CCI has helped sustain their businesses, and would not be
running without CCDI
• 31% claim CCDI has helped them manage their money better
• 68% have experienced a positive growth in sales
• 60% have moved to a higher income bracket after CCDI intervention
• 70% of those who have moved to a higher income bracket cite the market
Access programme as a contributing factor
Collaboration • About 50% of service providers who responded through that their general
networks in the craft sector had increased on the whole.

The CCDI has since its inception been an empowering force in the growth and
development of the craft sector in the Western & Northern Cape. Commitments
from city, local and national government have allowed for the creation of a stable
and sustainable base from which to support emerging and established craft
entrepreneurs and to create the means of linkages between these enterprises.
The first four years of operation have yielded some important lessons for the
CCDI.

o Partnership & collaboration is a foundation stone of the way the CCDI

works and will work in the future.
o Capacity has been built through a base of service providers; a key
challenge remains finding sufficiently qualified BEE providers.
o The CCDI operates in a business environment and thus operates along
business principles.
o The craft sector is more than an adjunct to cultural activity of tourism; it is
a complex manufacturing industry with a wide range of players at each
level of the value chain.
o The CCDI aims to not only assist craft entrepreneurs but to make a
meaningful impact in supporting job creation and income generation and
improving the functioning along the entire value chain.
o The CCDI will work toward an environment of fair trade where growth in
craft entrepreneur’s knowledge is an important step toward addressing
power imbalance in the sector.
o Based on pilot programs initiated by the CCDI a number of specific
lessons were also learnt.
o The CCDI can only provide support to craft enterprises not take
responsibility for them.
o The CCDI has a powerful role to play as a catalyst and relationship
broker.

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o A multi-tiered approach to trade support needs to be offered to

support emerging crafters.
o Training takes time and there is no short route to resolving the
knowledge gap.
o The building of social capital within the craft sector is a key
imperative.
o The best training takes place on the job and in the studio.
o Time out of a business is money lost, crafters require something
meaningful in return for their time.
o The biggest untapped market is local consumers.

It is clear that the CCDI is an effective development agency in the craft sector.
Given its unique sectoral focus, the staffing demands of the organisation are for
highly skilled specialists aligned to specific programmatic areas. The MAPPP-
SETA Sector Skills Plan update for 2007/08 indicates that sector development
specialists are a scarce skill despite the long history of development work in the
craft sector. In addition, there appears to be very little research conducted on the
skills needs of development workers in the sector.

Greater St Lucia Wetlands Park25

The Greater St Lucia Wetlands Park was the first declared World Heritage Site in
South Africa. Located in northern KwaZulu Natal, the Park borders encompass
over 300 000 hectares of land over 230 kilometers of coast line. The unique
environment, its unique and diverse fauna and flora and cultural heritage of the
area led to its proclamation under the World Heritage Act in 2000. Bordering both
Mozambique and Swaziland, the area is host to a Spatial Development Initiative
(SDI) that facilitates cross-border relations between South Africa and its
neighbouring states.

An important factor in the management of the park is that about 60% of land has
been reclaimed by communities as part of the country’s land restitution system. A
wide variety of stakeholders, not just the state, thus have a direct interest in the
development and management of the Park. The Greater ST Lucia Wetlands Park
Authority was established to manage the site. Working in partnerships with the
KwaZulu-Natal conservation agency the Authority comprises a small team of
approximately 36 people recruited specifically for their commitment to the value
of the Park and the World Heritage Convention Act. The Authority has both a
conservation and transformation agenda which is at times a complex balancing
act for the Authority, its staff and stakeholders. The agenda is driven by three
board areas:

• Management of the environmental resources such as wildlife.

• Commercial activities such as tourism development.

25
This case study is based on internal documentation, project plans, project proposals and presentations provided during the drafting
of a cultural strategy for the Park.

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• Programmes to improve the lives of communities in and around the Park.

It is in the latter area that the Park began to engage with culture and the creative
industries specifically as a development tool in support of the broader objectives
of the heritage site. Through a dedicated community development programme
the Park has initiated a range of projects with the aim of ensuring that the
communities in the Park are able to take advantage of the income generation
opportunities presented by tourism and other Park activities.

The cultural programme has been a part of the Park since its inception, as have
development initiatives for crafters. Even before the Park was proclaimed a
World Heritage Site, in 1999 a cultural festival was held to facilitate economic
activity to the benefit of communities in the Park and act as a tourism draw card.
The festival was hosted in partnership with the local tourism industry, the
KwaZulu Natal Tourism Authority, uThungulu Regional Council, the KZN
Department of Economic Development and Tourism, the KwaZulu Natal Nature
Conservation Services, the National Department of Arts, Culture, Science and
Technology, and the KZN Department of Education and Culture. This partnership
approach to activities has characterised most interventions. The table below
(Table 26) presents a summary of the initiatives that have formed part of the
Park’s interactions with the creative industries:

Table 26: Summary of Key Interventions at the Greater St Lucia Wetlands Park Authority
Nature of Number of Output
Intervention Beneficiaries
Tourism 110 individuals • Training in tour guiding, assistant chefs and
development hospitality
• Development of cultural packages and tours/walks
• A handbook on the Park covering environmental
issues, culture and heritage information about the
Park and its people as well as the biodiversity of
the park in an integrated manner
• Establishing links with industry for work placements
and employment opportunities
• Mentoring
Craft 25 craft groups • Training in product development, costing and
Development pricing, marketing and understanding their markets,
identifying markets and creating linkages,
facilitating access to high end markets, managing
group dynamics, managing buyer relationships and
mentoring.
• Creation of relationship with Mr Price Home Stores
to supply products.

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Nature of Number of Output

Intervention Beneficiaries

• Establishing craft markets at Park gates

Cultural 5 Performing arts • Training in the following areas: Performing arts,
Programme groups Arts management training
• Performance products reflecting the unique cultural
heritage of the area.
• Exchange programme
• Marketing skills/entrepreneurial freelancers
• Mentoring
• Cultural heritage and contemporary exhibitions
• Music CD compilations

The multi-sectoral focus that the Authority has chosen is an important one,
recognising that there are opportunities for development in a wide range of fields
and also that communities need to have a diverse range of products in order to
meet the demands of the cultural tourism market. The investment in culture is not
only based on an economic rationale however, the Authority recognises the value
of cultural interventions in community development, the development of identity
and pride and improving relations. The cultural festival for example, is recognised
as a major milestone in improving race relations in the area between
communities and the predominantly white-owned tourism businesses.

Reflecting on the lessons learned over the 8 years of creative industry

development in the area in a recent presentation, the Authority management
recognised the importance in the craft sector of product development, managing
production schedules and delivery processes, costing and pricing, the
importance of ensuring access to raw materials and managing inter-group
conflicts. One of the biggest challenges facing the management system at this
juncture is the formalisation of the current groups of crafters into business entities
with clear roles and functions that can begin to create market linkages without
the need for direct facilitation by the Park management given the development
context of the Park.

While there is still great potential for tourism development in the area, visitor
numbers to the Park are growing slowly but steadily, and as such the market for
cultural products in the Park itself is growing slowly. The Park has been
innovative in its approach to utilising culture in other social programmes however.
Performance groups, for example, have been used in various awareness
campaigns to promote messages about safety with regard to wildlife and other
social messages. In addition, these groups have also been used in branding and
marketing exercises hosted by the Park.

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Beyond this the communities and the Park management face challenges relating
to market access and linkages given the physical distance from major towns and
cities, the development of appropriate support mechanisms, the continued
development of buyer relationships and ensuring that the market is aware of the
unique cultural and heritage value of the products. One of the primary constraints
is the lack of funds available for the further development of the programme.

From the perspective of creative producers in the area, the Park management
has identified the following skills gaps:

• Product development skills, particularly in the craft sector.

• Business and entrepreneurial skills.
• Tour guiding.
• Hospitality and related fields.
• Conservation.
• Multi-skilled creative producers that can freelance in a variety of ways.

These skills needs mirror those of the sector themselves (as discussed in
Chapter 3 which examines the demand side for skills). Much like CCDI above
however, some consideration needs to be given to the skills needs of the Park
management in order to effectively facilitate programmes of this nature. At
minimum, the skills requirements for managing a portfolio of development
activities such as this would include:

• Research, strategy development and reporting.

• Financial management.
• Project and programme management.
• Planning and fundraising.
• Contract management as a great deal of work is managed through
outsourcing.
• Facilitation and conflict resolution.
• Technical and creative skills in a range of areas to act as a market
facilitator.
• Education and training skills given the focus on skills development.
• Team work and communication.

This once again illustrates the contradictory demands of the sector which will
require a vast range of general and specialist skills in one unit of a larger
management system.

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Chapter Six: Conclusion

Synthesis of findings

This report has found the following characteristics across all the creative
industries:

Enterprises and Organisations

• Small and micro-enterprises predominate – the sectors are all comprised

of micro and very-small enterprises employing fewer than 50 people..
• The project-based nature of creative industries enterprises – the bulk of
opportunities in the sector are one-off, isolated or commissioned projects
or contracts that have a set duration and price.
• Supply side emphasis – the sectors and development initiatives are
dominated by enterprises involved in the production and origination of
content; and education and training which supports the supply side of the
value chain; by contrast there are far fewer enterprises involved in the
distribution of content indicating a bottleneck in supply to markets.
• It is a young and growing industry – most enterprises in the creative
industries were established in the last 10 years and have not yet achieved
stability.
• Freelance & contract work predominates – given the inherent nature of the
sectors much of the work is freelance, contract or piece based; most
enterprises contract in up to 50% of capacity when needed; while this is a
strength in that it allows for flexibility; it could also be a weakness
hampering stability and development.
• Many enterprises and organisations are self-sustaining but operate with
low margins and often enterprises and organisations are overly reliant on
government and international grant funding to survive.
• In general levels of business skills are low – while the education levels of
the creative owner-entrepreneurs are quite high, the low profitability of
enterprises in the sector is partly attributable to the lack of key skills in
marketing, entrepreneurship, management and general leadership..
• Dependence on grant funding – large amounts of grant funding are
disbursed across the sectors; this is necessary to support particularly the
process of origination which can be costly and without immediate returns;
however there are times when grant funding creates unnecessary
dependencies which in turn can be paralysing.
• Evidence of gender equity – the creative industries provide significant
employment and management opportunities for women of all races..
• Black economic empowerment – the majority of employees are black
(68%) and there is a relatively high percentage of black managers (40%);
there are no figures on black ownership of enterprises although indications

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are that this could be quite high given the predominance of owner-
managed enterprises.

Value chain dynamics

Chapter two of the report makes it clear that the term creative industry
encompasses a vast array of companies, products and services. Some are at the
core of the copyright industries while others produce physical products for sale
directly to consumers. In South Africa given the nature of research that has been
done there is a reasonable understanding of how the value chains operate.
However, to-date these have never been quantified and as such estimates
relating to the contribution of the creative industries to broader macro indicators
such as GDP are difficult to generate. This does not detract however from the
value of these sectors to the South African economy and society. It is typical of
the creative industries that many companies operate within both vertical and
horizontal value chains. This has enormous consequences for skills development
in that owner/managers and staff are expected to be infinitely flexible and
knowledgeable.

The largest gap in the knowledge base relates to the market for creative
industries product and services in the local environment. This relates to
consumption preferences and trends as well as audience development. These
feedback loops are critical to the growth of the creative industries.

The Outlook for the sector

Annual world trade in literature, visual arts, cinema, photography, music, radio,
television and electronic games grew from $95 billion to more than $387 billion
over a period of 2 decades. Figures from a variety of sources indicate annual
growth of at least 3 times average economic growth in a range of creative
industry sub-sectors (UNESCO, 2000).

The major domestic sector markets for creative industry products and services
are the tourism, services and retail sectors – all of which are showing significant
growth in South Africa, in most cases above average national growth. Research
shows that most products and services emanating from the creative industries
are consumed at a local and provincial level with a small percentage accessing
national and export markets (CreateSA, 2003). This reflects both the untapped
market potential for local products and the absence of skills and resources in
marketing and distributing products nationally and internationally. In South Africa
the outlook is equally positive given:

• General economic growth, contributing to increased leisure spend as

mentioned above.
• Focused attention through documented strategies of government
intervention in a range of sectors.

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• General and consistent increased in budgets for arts and cultural activities
across all spheres of government.

The constraints to development

There are a number of key challenges facing the creative industries as follows:

• Competition for discretionary income has never been greater in some

sectors, and it is often difficult for locally produced work to compete with
internationally produced work, such as films, created with large budgets.
• Given the low income levels for creative workers in many sectors, a large
number are dependent on income from other employment to support
themselves. This reduces the overall capacity of the sector to create and
innovate, with only the most dedicated managing to continue long enough
to create viable careers.
• There is a gap between the large number of graduates from arts and
creative industries disciplines and the limited number of opportunities in
the sector. There is little connection between the tertiary sector and the
arts industry regarding employment and future career prospects for
professional arts workers.
• The small size of domestic markets for the products and services of the
creative industries.
• The unstable base of the creative industries given that most enterprises
are small and micro that, in some sectors at least, have very low income
levels.
• The lack of co-ordination between government departments at levels in
their development efforts.
• The low levels of investment in the creative industries.
• The lack of access to conventional business finance opportunities.

Research into the size, value and extent of the market for South African creative
industry products is virtually non-existent, except for a few isolated sector specific
studies mainly in the performing arts sector. Business Arts South Africa (BASA)
has conducted regular studies on the adult arts market in South Africa. These
studies, conducted in 2001 and 2004 began to track levels of interest in the arts
sector broadly, the degree to which brand recognition through the arts is
achieved and the attendance at arts events. Some comparative highlights of this
research are documented in Table 27 below:

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Table 27: Attendance at arts events

Event Times per annum (2001) Times per annum
(2004)
Attend the theatre 1,4 1,6
Attend art exhibitions 1,0 1,2
Go to the cinema 5,4 7,0
Attend contemporary dance event 1,3 1,2
Visit a museum 1,6 1,4
Attend a festival 2,0 1,8
Attend a traditional dance show 2,0 2,0
Source: BMI Sports Info report MusicTrack 2001 & ArtsTrack 2004 (own comparison)

The research conducted by BASA shows that there are relatively consistent
attendance rates over time and argues that a significant deterrent to attendance
is the cost and a perception that these activities are becoming more costly.

The importance of the nature and focus of industrial policy in South Africa cannot
be ignored. Coming from a long history of mainly demand-side initiatives, since
1994 the general approach to industrial policy was to focus on supply-side
issues; something that most industrial policy and sector development strategies
have faithfully implemented. New thinking on the role of industrial policy, and
particularly the role of government in this arena, argues that industrial policy
should encompass both aspects and most importantly the role of government as
a catalyst in these areas should be interrogated (Rodrick, 2007).

This is particularly the case in the creative industries where the policy
environment is broadly developmental, focusing on preservation, conservation
and cultural value with the strategies for economic development attempting to
locate themselves in this domain as well. The nature of the industry is such that
government investment, primarily through institutions and grant funding, is a
mainstay of many of the sectors that comprise the creative industries but the role
of government is seldom interrogated beyond that. The policy environment
guiding this investment is weak, and as such, government activity in the creative
industries is unfocused, inconsistent (except with regard to statutory institutions),
largely unmanaged and unmonitored. The nett result of the CIGS process was to
advocate for government to focus on the creative industries as a growth area,
which it has succeeded in. The challenge now is to create the policy environment
that supports the growth and development of the creative industries and ensure
effective implementation.

The creative industries are non-traditional sectors that require innovative

development support, however if the successful creative economies such as the
United Kingdom and other countries in the European Union have proved
anything it is that sustained and consistent intervention over decades is required.

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Looking at the South African policy environment as a function of a range of core

cultural policy components it is clear that there is a mismatch when compared to
international benchmarks as outlined in Table 28 below.

Table 28: Comparison between international policy benchmarks and South African cultural policy
Facilitating market access for small players. This is facilitated in some sectors, i.e. craft and film
through the DTI sector plans but for most of the
sectors is managed on a project basis.
Assisting creators in receiving equitable rewards for The IP framework in SA is generally seen to be out
their creativity (proper IP legal framework, of date and enforcement is weak although a great
enforcement) deal of attention is being paid to piracy.
Education & skills (management and technical The education framework is in place to ensure skills
skills). supply, however the funding at all levels is
problematic.
Support the digital shift. There are no current policy initiatives for the sector
in this regard especially with regard to the ability to
take advantage of new digital technologies.
Support institutions/networks/facilities. The bulk of support in this regard is invested in state
institutions established for the development and
promotion of non-commercial arts. Other than the
CCDI and film commissions which are highly sector
specific there are few development initiatives in this
regard for other sectors such as film and craft.
Finance (subsidies, tax incentives, and private The primary investment in the sector is through
investors). grants for the non-commercial arts. The DTI does
have a range of financial mechanisms available;
however enterprises in the sector have generally
found then difficult to access.
Encourage public-private sector partnerships. Public private partnerships are generally project
oriented or sector specific.
Establish intermediary institutions to forge While there is support through DTI for co-operatives
collaboration among various stakeholders and sporadic support for sector-based initiatives
(producers’ associations, cooperatives…) such as Moshito, the funding environment is not
stable.

The role of skills shortages

There are a number of important factors to take into consideration when

establishing whether the skills supply matches the demand including:

• Factors influencing “employability” in the sector.

• The demand for specialist and generalists.

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• The nature of careers in the sector.

The nature of employment and the fundamental shape of enterprises in the

sector are changing. Enterprises have a need to be more flexible and more able
to engage with a broad range of activities. As such, the current constraints to
training, which are primarily the time and budgets for training are likely to be even
more apparent in the creative industries. From a skills perspective the critical
factor for enterprises will be access to continuous professional development
opportunities. This training will need to develop specialisation within fields and
also allow for the development of competencies that can be applied in different
sectors.

The nature of skills, occupations and careers in the sector are changing rapidly,
primarily due to technological developments and the inconsistent nature of the
funding environment. For individuals entering and working in the sector they will
be expected to be both generalists and specialists. In addition, many will have
“portfolio” style careers, in other words a working life composed of numerous
project-based or short-term engagements. All training will need to have an
emphasis on self-employment whether in the commercial or non-commercial
aspects of the sector.

Current educational and vocational efforts tend to focus on the entry level to the
market, and while the vocational aspects do include experiential training, it is
clear that employers would like to see more and more experiential learning in the
profile of potential applicants. In addition, training needs are changing so rapidly
that in addition to the need for formal training, more informal training, which can
be adapted rapidly to meet these gaps, should be supported by institutional and
government funding mechanisms.

Policy recommendations

The developing world contributes very little to the global market for the creative
industries. As such there is significant potential to develop the market share of
these countries in identified niche markets globally and enhance the share of the
creative industries in the local market.

The creative industries are comprised mainly of small and micro-enterprises, the
support base for which is weak and generally not customised to meet their
needs. While some agencies that provide grants-in-aid have included enterprises
in their criteria, the general lack of finance available is severely inhibiting the
establishment and growth of businesses.

An engagement with the impact of digitisation on the industries as a whole, and

the identification of critical government interventions aligned to the national
innovation strategies must be initiated.

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The general lack of business and entrepreneurial skills must be engaged with.

The primary challenge relates to the implementation of policy. South Africa is one
of the few countries in Africa that has an enabling environment comprising policy,
resources, capacity and appropriate linkages to other important policy arenas
and yet the impact of this policy is inconsistent across the creative industries and
would appear to be too generic to deal with the unique needs of the different
sectors. A lack of clear coordination, overlapping responsibilities in different
spheres of government resulting in duplication at best and confusion at worst,
and a constituency base that feels it is excluded from government policy making
seems to typify the creative sector in South Africa. Core problems still relate to
the lack of careful and precise evaluation of outcomes of the various policies and
interventions that have been developed and the clear lack of seamless
government with working relationship between various government departments
and spheres of government as well as governance issues in many of the
dedicated government agencies, from the National Arts Council to the MAPPP-
SETA.

The creative industries are able to achieve many government objectives from
social and developmental objectives to economic objectives (see Table 29).
These two sets of objectives may well be contradictory and conflictual with the
focus on social inclusion; nation building, traditional knowledge and preservation
of cultural diversity being predominant. Typically trades and industry departments
are more concerned with economic viability and profitability in industries while
arts and culture are concerned with social cohesion, cultural diversity and artistic
development. There is no doubt that these two departments should work together
to ensure no one particular programme is expected to achieve all these
objectives and that the appropriate mix of programmes are developed for the
creative industry sector as a whole.

Table 29: Policy Implications of Broad Arts Support

Social and developmental objectives Economic viability and profitability

Database, inventories of cultural assets Mapping, data statistics

Support for artists and arts SMME business development finance
Benevolent fund or social insurance for artists IPR, Copyright legislation and enforcement
Conservation of tangible and intangible cultural Expansions of digital capacity and know-how
heritage
Education and training of creative workers and Market development, both domestic and in the
artists in artistic expression, project management export sector
and organizational development Education and training of creative workers in
enterprises and arts and culture management
Appreciation of art forms and of cultural heritage Industry assistance (both direct and indirect)

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Perhaps the DAC policy review process will address many of these issues. It
would appear however from the discussion document circulated at the policy
review workshop (May 2007) that the sections engaging with creative industries
are underdeveloped and do not make sufficient reference to clear policy
interventions required. The development of the customised sector programmes
for craft and film hold great promise for the development of these sectors, and in
time, the extension of developments of this nature across the creative industries
would be highly desirable. Including the creative industries in national growth
strategies is a positive indication of the political will to support the sector, and
this, combined with tailor-made and well resourced developmental interventions
that are sensitive to the unique nature of these sectors will significantly contribute
to their development and enhance their potential for growth.

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