Culture and creativity: the productivity gains hiding in plain sight

Ideas and creativity feed the productivity Australia sorely needs.

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Motion capture and virtual reality, first developed for entertainment, are now used across education, health, science and aviation. Sam Elsom, a fashion designer, co-founded the world’s first business cultivating Asparagopsis algae at a commercial scale to fight methane emissions. These examples show how creativity breeds innovation.

It’s no secret that Australia has a productivity problem, and it’s not a new one. So let’s think about an approach that is out of the ordinary, predictable mix. A number of research reports by A New Approach, the think tank I chair, have shown it’s time for culture and creativity to be part of our national productivity conversation.

Australia’s productivity has been slowing: today, the Productivity Commission’s dashboard shows our multifactor productivity performance is below its five-year average – sitting at just 0.07 per cent. Our urgent need for “ambitious and collaborative”, “practical and pragmatic” reform to defend our economy against increasing volatility was the focus of Treasurer Jim Chalmers’s June address to the National Press Club.

New solutions to this problem are hiding in plain sight. When you know our cultural and creative industries, it’s easy to see how they foster innovation capabilities that in turn spur productivity. Less well known is the evidence demonstrating that they also positively influence the determinants of Australia’s future productivity. Crucially, our work also shows they can help Australia develop an adaptable workforce and a dynamic business sector – two things the Productivity Commission says will make or break productivity.

Economic benefits of cultural and creative engagement include building self-confidence, increasing education outcomes and supporting job transitions. OECD research also suggests that it makes cities, suburbs and towns more attractive for workers and investors, encouraging inward labour flows and private investment. ANA has been contributing to the OECD’s current two-year, large-scale project, Boosting Innovation and Productivity through Cultural and Creative Sectors, drawing on our 2023 research report, Accelerate: Reframing culture’s role in productivity. With our cultural and creative industries attracting $160bn and employing more than half a million people in 2021, it is clear that culture and creativity support economic wellbeing and contribute significantly to Australia’s gross domestic product and gross value added.

Sam Elsom at his Sea Forest facility in Tasmania. Photographer Credit: Melanie Kate

Cultural participation can also build creative skills, or the capacity to generate, evaluate and improve original ideas. Results from the Program for International Student Assessment show that creative skills complement academic performance in reading, maths and science. Although our students lag behind other nations in the three fields, they have some of the best creative skills in the world: we ranked fourth of 64 economies by this measure in PISA 2022. Australian Council for Educational Research data shows this was also true for remote and regional schools, whose principals feel teachers value their students’ creativity.

Surely this may help answer the Productivity Commission’s question of how we can build a more skilled workforce, especially because our research and analysis show creative skills are important for all sorts of jobs.

Valuing and growing culture and creativity, and ensuring we have a system that delivers for all Australians, is not a nice-to-have, but necessary for our future productivity and in the national interest. The August Productivity Roundtable should explore how tax – and other productivity reforms – can support our creative skills pipeline through access to high-quality creative education and training, strengthening cultural partnerships and increasing labour mobility. Tax reforms are already a focus of industry conversations, and will be discussed at the NSW government summit, The Art of Tax Reform, in September.

ANA research has confirmed that cultural and creative engagement positively impacts our cohesion, health, security and sustainability. Through leveraging it, Australia can gain an edge in reforms that withstand the productivity headwinds, including worsening health, ageing populations, fragmented communities and environments under pressure. There are low- and no-cost ways to do this: according to our research our governments can adopt measures that complement direct funding, from reducing red tape for festivals to export strategies and tax concessions. These may prove to be cheaper and easier than direct cultural funding.

A national focus group study we ran from 2020 to 2022 showed Australians already believe culture and creativity encourage them to think in new ways, help them adapt to change, and are essential to innovation throughout their lives. These perspectives are reflected in ABS data showing our nation has high levels of cultural and creative participation compared to other Western countries.

It’s time to think differently about what drives productivity in the 21st century. As Dr Chalmers said: “Productivity matters, reform matters.” With the federal government embedding productivity at its core, let’s make sure culture and creativity are on the agenda.

Rupert Myer is chair of the national arts and culture think tank, A New Approach (ANA).