SUNDAY TIMES - 'Soft' creative sector need not be economy's hard sell
Sunday Times Business By PALESA VUYOLWETHU TSHANDU, 2017-03-12 00:00:00.0

'Soft' creative sector need not be economy's hard sell

Khanyi Mbau, Mmabatho Montsho and Renate Stuurman star in 'Happiness is a Four-Letter Word', which generated more than R2-million in its opening three days last year.

The founders of creative agency Fort, Shukri Toefy and Amr Singh, perch on their mahogany conference table and piece together a wooden jigsaw puzzle in the shape of Africa.

"We like to call ourselves Africa's experts," said Toefy, holding a piece of Ethiopia in his hand.

The advertising and production company, which has hubs in Kenya and Nigeria and has done business in 17 African countries through partnerships, is all about building Africa's creative economy.

Toefy, CEO of the company which launched in 2006, said that in South Africa the creative economy was often misunderstood because people saw the softer aspects of it, and not the job- generating potential.

"But that needs to be corrected," he said. "The world is increasingly technologically driven, which helps us to craft, create and make and tell stories about what we do and where we are."

A 2014 study by the Department of Arts and Culture reported that cultural and creative industries accounted for 3.6% of jobs in South Africa.

Zimasa Velaphi, the chief director of communication and marketing at the Department of Arts and Culture, said in an e-mail this week: "The total contribution of entities and organisations within the creative industries sector is between R90-billion and R107-billion in direct output (turnover) per annum. It is estimated that in 2014 the creative industries contributed 2.9% to the country's GDP."

Velaphi said the creative economy had the potential to be one of the key drivers of the economy, following traditional sectors like minerals, financial services, manufacturing and infrastructure.

Suhana Gordhan, the creative director at advertising agency FCB, said creative industries in South Africa had always struggled to win acknowledgement for their contribution to the mainstream economy.

"It's an industry that is the most difficult to understand and often we face perception and credibility issues because our language is different and our product is sometimes so intangible," she said.

Gordhan, who is also a judge at the Cannes Lions International Festival of Creativity, said: "Ours is the business of brand-building, and brand-building in turn builds the economy.

But this requires time and investment, and often major businesses cannot see the value that creativity has in building a brand over time."

For shoe and handbag designer Maria McCloy, part of formalising the fashion industry requires cementing relationships with big local retailers.

McCloy, who herself recently signed a deal with a local retailer, said creative industries had always played a part in consumers' lives.

"Someone has always been designing clothes and designing shoes, but people don't want to be seen as creative because it's seen as if you are going to be selling in the flea market, when actually the creative economy is everywhere," she said.

"We need to work hand-in-hand with major corporates, it's not two different things, we need each other."

According to Toefy, South Africa's big banks and parastatals each spend hundreds of millions of rands on marketing and communication every year, but some of this money goes to foreign-owned advertising agencies.

"The majority of the companies in our creative economy are foreign-owned and no one is jumping up and about to say that is unfair, or there needs to be a charter," he said.

Data from an All Media and Products Survey showed that in the 2012-13 financial year, the five major South African banks spent a total of R1.75-billion on marketing. The single biggest spender was FNB, at R562.3-million.

The local music industry appears to be booming.

According to a study last year by PwC, entertainment and media companies in South Africa recorded revenue growth of 10.8% in 2015 to R125.7-billion. PwC forecast the figure would reach R173.3-billion by 2020.

Randall Abrahams, a music industry and radio executive, said the local creative industry was quite formalised.

"There are a number of listed companies with radio and television assets and they may in time incorporate other types of creative businesses like touring, movie-making and music labels into their broader businesses," said Abrahams.

Technology is at the forefront of the creative process.

Gordhan said: "Where archaic ways fail us, we can look to creativity to solve simple problems like housing, lack of running water and unemployment.

"Imagine if we invested in creatives who create new products? We could start to serve our economy and inspire new industries at the same time."

But for industry players such as Toefy and Singh, who are toying with the idea of a listing on a local bourse, building critical mass will be important to capitalise on growth in the creative economy.

"Things have changed in the last couple of years and going public was certainly seen as the apex of any businesses journey for a very long time," said Singh, the chief creative officer at Fort. But times are changing and the entire creative industry is changing."