Creative Economy of Kyrgyzstan: Many People, No Conditions

The notion of “creative economy” was first introduced into scientific use in 2000 by John Howkins (architect, member of the UN Creative Economy Advisory Board). Initially, it found its way into successfully developing creative business. It was a system where cultural, artistic, innovative products/services are created and where creators can come together, share ideas, freely present their creations and receive feedback.

This new approach rapidly resonated with a range of countries and the global turnover of creative products/services increased more than twice, reaching 624 billion dollars for 10 years.

The Global Innovation Index was introduced in 2007 as the average of two sub-indices:

• Innovation input (institutions, human capital and research, infrastructure, market and business sophistication),

• Innovation output (knowledge and technology outputs, creative outputs).

The research is held in 132 countries across the world by the experts of the World Intellectual Property Organisation, international business school INSEAD, and Cornell University. The economy of Switzerland was found to be the most innovative economy last year.

Kyrgyzstan ranked 81^st by its contribution to innovations, which is a bit higher than in 2020, but lower than in 2019. As to the innovation output, Kyrgyzstan ranks 119^th. This is lower than in previous years.

Kyrgyzstan demonstrates the best results in the category “Market development,” and the weakest in the section “Creative outputs.”

 7 basic indicators:

*Note: the maximum possible score is one

1. Market sophistication – 52
2. Human capital and research – 70
3. Infrastructure – 87
4. Institutions – 95
5. Knowledge and technology outputs – 102
6. Business sophistication – 107
7. Creative outputs – 120

In Europe, creative and cultural industries (mainly because of fine arts, advertising and television) create almost 2.5 times more jobs than the automotive industry.

• In the United Kingdom, for example, the creative sector is assessed at 76.9 billion pound sterlings per year: in other words, their hourly contribution to the national economy is as much as 8.8 million pound sterlings.
• In Italy, enterprises that decided to invest into creative projects in 2012 to 2015 increased their turnover by 3.2 per cent and created jobs for 1.4 million people.
• Nearly 100,000 jobs, mainly in creative industries, were created via Berlin start-ups.

The creative economy, according to foreign experts, makes 4.2 per cent of the European GDP; and creative industries are at the third place by the number of jobs created in Europe. This is one of the main industries that employs young specialists, that has proved its viability in the recession years, and that has an impressive capacity in the future.

The UN declared the year 2021 as the International Year of the Creative Economy. The sector, according to analysts, is growing every year by 15 per cent across the world. The most popular and actual product of the creative economy is a creative cluster. It is an online or offline space bringing together designers, architects, artists, musicians, directors, entrepreneurs from the artistic sphere. Such platforms help representatives of creative industries communicate with their like-minded fellows, implement joint projects and develop together. Most often, they are opened in the buildings of idle manufacturing plants.

The following can be called the most famous world creative clusters:

• In the USA – the DUMBO neighbourhood (local empty warehouses and plants in New York City transformed as workshops, galleries, and lofts);
• In Germany – Spinnerei (the largest cotton spinning centre in Leipzig has become a place for hundreds of studios and workshops of artists, potters, jewellers, fashion designers, architects, etc.);
• In Slovenia – the cultural centre “Metelkova Mesto” (art galleries, cinema halls, clubs and one of the best world hostels, Celica Art, can be found in the old barracks of Austro-Hungarian Empire at Ljubljana);
• In the United Kingdom – Live Theatre (once a criminal district on the Tyne riverside has become a creative neighbourhood where performances and concerts are held);
• In China – 798 Art Zone (exhibition halls, studios, galleries, stores, cafes, restaurants, residential premises are located at the site of Soviet-Chinese plant in Beijing);
• In Russia – “Etazhi” project (St. Petersburg), “Smena” gallery (Kazan), cultural centres “Garazh”, “Vinzavod,” “Flakon design plant” (Moscow).

Meanwhile, the regions of Russia are planning to create 30 new creative clusters at the sites of industrial areas.

It all started with forums of cultural and creative industries “Creative Central Asia”, which were held every year (from 2017 to 2019) with the financial support of the British Council. As a result of these events, a like-minded group created Creative Central Asia Network (CCAN) in 2021, an initiative group of cultural and creative entrepreneurs of Central Asia (Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan and Turkmenistan).

The tasks of the new community were: 

• Development of unified approaches for effective national policy in this sphere, classification of creative industries, study of mainstream trends;
• Making a platform for communication and sharing experience between representatives of the sector both within and outside the country;
• Support of creative and cultural entrepreneurs, independent cultural organisations in building a dialogue between the state and business;
• Creation and update of the single database of all representatives of cultural and creative industries in Central Asian countries for further cooperation;
• Support of educational initiatives and projects in the field of creative economy;
• Assistance in popularisation of Central Asian creative services in the region and abroad;
• Development and promotion of the development tools of creative and cultural entrepreneurs on the part of the state and private investors.

By results of 2021, 727 people joined the initiative group and just over 2,000 people across Central Asia left their contacts in the database of creative entrepreneurs.

The CCAN researchers identified top five sectors of creative economy in Central Asia, which have the biggest share in the market:

• Fashion, design and crafts – 38 per cent;
• Modern art – 17.5 per cent;
• Television, radio, new media and digital culture – 15.5 per cent;
• Advertising, etc. – 13.5 per cent;
• Shows and mass events – 12.4 per cent.

Experts have identified a few problems that hinder the development of creative industries in Central Asia:

• There is no “creative” entrepreneur as such, there is a person who tries to earn money;
• Creative business in Central Asia is just an additional income;
• 58.5 per cent of creative business representatives is just one person (freelancer, self-employed entrepreneur, or private entrepreneur);
• 38 per cent of creative business representatives work in fashion, design and crafts spheres;
• Not all creators think they are creative entrepreneurs;
• There is a need for a more detailed division in the sector of fashion, design and crafts;
• There is no clear definition of “what makes the industry creative?”;
• Some sectors are closed, their representatives does not publish information about them;
• There is distrust to reporting information upon database compilation.

Thereafter, a like-minded group CCAN has developed the roadmap for all countries to help them shape common rules on the creative industries market. The essence of recommendations was that representatives of relevant bodies focus more on the peculiarities of national economies rather than foreign ones, whose experience they are planning to adopt. In highly competitive environment, experts have urged the countries to come together, learn to trust each other, and make joint projects in the region.

Thus, a new Association of Creative Industries emerged in Kyrgyzstan, which was registered with the Ministry of Justice in October 2021. So far, it has 20 companies, but the founders are planning to increase their quantity at least fivefold involving not only legal entities, but also self-employed entrepreneurs working both under patent and under certificate.

The amount of the monthly membership fee is 1,000 som (nearly 12 dollars), and the amount of the single entry fee is 3,000 som (nearly 36 dollars). They plan to create the fund out of single entry fees, which will be spent only for development, for example, for the national award of the year “Creative Awards” (to award the most distinguished representatives of creative industries).

Nazgul Kubakaeva, head of the Association, said that this format would lead to synergy. The main mission of the association is to create opportunities for the intersectoral collaboration as creative industries are created at the intersection of various scopes of activities.

“Even today, when you say, ‘Let’s unite,’ some people wonder, ‘Why should I unite? My job is fine and I earn money.’ But if we want to speak about the scope, we should have this mindset that will make out country’s perception as a creative one. If the state started to promote its policy in this regard, representative of creative industries would feel this support and say, ‘Yes, I will be working and developing on behalf of the country’,” Kubakaeva said.

Today it is difficult to determine accurately how many people work in the creative economy of Kyrgyzstan. We can only suppose, not assert that YouTubers, bloggers, illustrators, designers, artists are representatives of creative industries. This is because there is still no concept that would clearly define the status of creators, and there is no methodology to calculate the indicators that would make it possible to assess their real contribution to the development of the domestic economy. Although representatives of this sector in Kyrgyzstan become the best ones in foreign markets.

For example, last year the children’s educational channel on YouTube called D Billions received the diamond button for the first time among the former Soviet republics. Today, it has over 15 million subscribers and nearly 15 billion views. It’s the Kyrgyzstanis who create this popular content for the whole world.

Representatives of the Ministry of Economy, expert and business community of the country, with the support of international donors have developed the first concept of creative economy development for 2021-2023 and in May 2021 submitted it to the presidential administration of the Kyrgyz Republic. However, the document was returned for improvement a few months later.

According to Nasirdin Shamshiev, head of the macroeconomic analysis department of the office of macroeconomic policy of the Ministry of Economy and Commerce of the Kyrgyz Republic, the problem is in the constantly changing structure of the government. At first, the Ministry of Economy was the core body, but after reorganisation, Ministry of Investments became the core body. Then, the agency was merged with the Ministry of Finance, and later it was separated. Now it is reorganised into the Ministry of Economy and Commerce.

“Moreover, new procedures of documentation have been adopted. Therefore, the concept was returned to us to make it coherent with the latest changes. The changes did not affect the contents of the document. We have just changed the old names of ministries to new ones given the changes in their functional duties. And we again submitted the concept for approval just before the new year,” the official said.

The concept of the development of creative economy of Kyrgyzstan for 2021-2023 is based on the experience of Great Britain. Project developers have determined the list of 12 creative industries in the country.

According to the analysis of the concept authors, the advertising industry in Kyrgyzstan has been mostly developed. It includes activities of advertising agencies and media outlets in this sphere. The second place belongs to publishers of books, newspapers, magazines and periodicals. And the last one in the top three are the people of art.

The leader of creative industries development in the regions of Kyrgyzstan is Bishkek. 48.89 per cent of total number of registered companies carry out their activities here.

Among 938 registered enterprises by kinds of economic activity, 798 companies have direct or indirect relation to the creative industry, according to the new concept. However, the majority, 513, is represented by private sector.

Private sector dominates in the country’s regions with more developed infrastructure, technologies and consistently high economic activity, while state participation prevails in less developed regions, according to the project authors.

The proportion of women employed in the creative industries sector is nearly 41.01 per cent of total number of employed. At that, the majority of women are involved in Art, Entertainment and Leisure (50 per cent) and the least women are involved in the sector of “Professional, research and technical activity” (35 per cent).

However, it was not possible for analysts to estimate tax revenues and exports in advance due to the lack of more detailed data on sector-based specialisations. Once the concept is adopted, experts are planning to develop a more precise methodology for the calculation of creative industries indicators.

As it became known later, in addition to the new concept, another document is being developed – the new draft law on creation of the creative industries park. It became known at the opening ceremony of the first State Innovation Centre at Kyrgyzpatent, when one of the authors presented the new document. Initiators (representatives of the business community, officials and experts) suggest taking a successful model of a domestic hi-tech park, which grows approximately by 50 per cent every year, as the basis. Only one worker there, according to the leading business coach Valery Grishin, generates 20 thousand dollars a year. This figure is comparable to the indicators of the mining industry.

The reason of the increasing number of residents and growth in revenues of IT companies is the special tax regime, which they ask to apply to creators. The latter have the same potential and they also do not need expensive logistics, according to the draft law initiators.

The only difference between the creative industries park and the hi-tech park is that there is no export demand regarding creators.

“The hi-tech park (HTP) is not the state support. The HTP is when they say they won’t take our incomes. This is not the support, this is the exemption from the state burden. And when we speak about the creative industries park, we say the same, “Give us freedom! Give us freedom to live and act here. Do not make us leave the country,” one of the draft law authors, Daniyar Amanaliev, said during his speech before the participants of the forum “Digital Ishker” (December 4, 2021).

By the way, this document is already under consideration of the Ministry of Economy and Commerce. According to Nasirdin Shamshiev, head of the macroeconomic analysis department of the office of macroeconomic policy of the relevant agency, a working group was created to discuss all suggested innovations. The investment policy office, which is not yet complete, will be in charge of this question, said Shamshiev.

In connection with the latest changes, participants of the creative sector have gone somewhat quiet trying to understand if the members of the new government are interested in this question because in summer 2021 the then minister of economy and finances, and current head of the cabinet of ministers, Akylbek Zhaparov, expressed some scepticism about new ideas and projects on creative economy.

“I am tired of listening to advices and ideas that are not realised for 30 years. Now the new cabinet of ministers and those who would want some renewal and development have a hard task to do. We’ve taken possession of Kumtor, and we have to make 19 more Kumtors in Kyrgyzstan in the next 2 years. We don’t have time to hesitate,” said Akylbek Zhaparov to the questions of journalists after the report on the national economy condition (June 2021).

Back then, the official promised that all those who work in the IT sphere of Kyrgyzstan will be paying the same taxes as the residents of hi-tech park.

Meanwhile, Great Britain having placed stakes on the creative economy a long time ago is preparing for over a million jobs in the country by 2030. Back in 2018, the British Council launched the five-year programme, Creative Spark, which will be developing entrepreneurial skills in the seven countries of the world – Kazakhstan, Kyrgyzstan, Uzbekistan, Azerbaijan, Armenia, Georgia and Ukraine – which are required for creators, and the creative economy itself with the support of the United Kingdom. In Kyrgyzstan, grants were given to the centre of extended education of AUCA in partnership with City, University of London, Kyrgyz National University in partnership with Middlesex University, resource centre of the Central Asian Association in support of crafts in partnership with Coventry University.