The next HR challenge for India: The creative economy

Hold your breath for this one – In its 12th Plan report, the Indian Planning Commission estimates that 45-48% of India’s employment will come from the Culture and Creative Industries (CCIs). This means that nearly half our jobs will be rooted in sectors such as design, film, performing arts, music, heritage, publishing; industries whose products are often the direct result of human creativity. This also means that there are newer employee management challenges for HR in store – ones that resonate with words such as portfolio careers, project-based work, creative millennials and flexi hours, among others. We decode the next HR challenge for India – the creative economy.

HR Challenge for India - creative economy

Welcome to the age of the ‘Creative Economy’!

The ‘creative economy’ is the intersection of entrepreneurship, creativity, technology, innovation and the economy. It is the trade of goods and services in 15 industries, including advertising, events, publishing, heritage, theatre, film, dance, music, gaming, design, and software.

It is glowing bright in world economic statistics, with a 2011 United Nations Conference on Trade and Development (UNCTAD) report stating that with a $2.2 trillion valuation, 7% of the world’s GDP now comes from this sector. The most recent UNESCO Creative Economy Report (2013), found that 10% of the BRIC countries’ GDP came from trade in goods and services such as art-crafts, audio visuals, design, new media, performing arts, publishing and visual arts, the ‘creative services’ (including advertising and architectural services), and their ‘related industries.’ Now many countries also have extensive economic policies based in supporting business needs and labour structures of the CCIs.

How is this changing the shape and form of business?

Spread across the continuum from product manufacturing to end customer service, the creative economy permeates most stages of the business process. “You are seeing more and more products and jobs in the market today that are centred around this economy — from cab services to food tech companies,” explains financial expert Deepak Kashthawal, former CFO with both Cleartip and Ola Cabs.

For instance, take the financial sector: In today’s market, a bank can simply not survive on just its core financial services of customer accounts, financial management and insurance products. In order to grow, it needs to up its game to match consumption and behavioural patterns of costumers. The customer wants 24-hour banking, any time money and online FOREX money transfers, all from their mobile phone. To facilitate this, it needs to create a comprehensive well-designed app, operational across platforms, a secure and well-functioning web portal with excellent user interface and smart looking ATMs. Enter the graphic design firms, the web developers, and heavier advertising budgets. Here, the creative industries intersect with the traditional financial industries to help expand markets and generate more customers. While such jobs thrive in the growing CCIs, many companies are also absorbing these profiles within their traditional organisational structure.

This leads to a mixed labour dynamic that the HR sector will need to deal with to stay ahead. In doing so, the HR teams must examine the needs of these employees closely – delineate the aspects of the millennial generation and how it intersects with the broader creative economy – and identify skill gaps and bring the workforce up to speed in order to eventually gain a competitive edge in this market.

Understanding employees and developing structures

A Business Week article stated that the differentiator for success in the creative economy is going to be people and ideas: “In the Creative Economy, the most important intellectual property isn’t software or music or movies. It’s the stuff inside employees’ heads. When assets were physical things like coal mines, shareholders truly owned them. But when the vital assets are people, there can be no true ownership. The best that corporations can do is to create an environment that makes the best people want to stay.”

And in order to create this environment, HR must understand how the creative individual functions in this environment. “We are dealing with the millennial generation that has different intrinsic motivations – flexible working hours, higher pay and growth possibilities,” explains Ashutosh Thatte, HR Manager at Aranca Research. He further stresses the need to understand the workplace evolution of this new generation.

Millennial generation – new priorities

Structures will need to be developed, keeping in mind how the “Google generation” functions as academic P Fleming puts it. The notion that “work should be creative and fun” can backfire if it is entertained as a trend. A close examination of the intrinsic motivation of employees is critical.

In collaborative study with the National Association of Software and Service Companies (NASSCOM), Founder of Unfold Consulting, Puja Kohli noted: “The need to build skills and competencies, and freedom and empowerment are the topmost priorities for the youth in this sector, followed by recognition and appreciation.” Subsequently, new structures of laissez-faire, balanced with traditional team structures, can be developed with an eye on managing innovation for long-term growth.

Impact on skills

Acceding to Shashikiran Rao, entrepreneur and start-up mentor, this is also the age that requires interdisciplinary skills to survive, develop new products, and pre-empt industry challenges. “Technology has given people the opportunity to develop multiple avatars of sorts… a dentist in the morning, and a stand-up comedian in the evening.” The millennial generation is learning at breakneck speed – and skills across the spectrum from digital to soft skill sets need to be continuously developed in the workforce.

One of the key challenges is going to be managing and retaining a diverse workforce, as the creative economy thrives on the innovation that diversity fosters. To manage a multi-generational workforce – HR will need bring all employees up to optimum skill levels, develop better mechanisms to reduce redundancy of older employees, and optimise the potential of the rising number of women in the workforce. As the SIRM Foundation noted, companies struggle to maximise the potential of women, who are dramatically under-represented at the top of major companies.

The creative economy will also have, well, creativity and communication as indicators of competitive advantage. The lack of soft skills such as interpersonal communication, adaptability and creativity is a key skill concern within South Asia. As the Global Talent Index pointed out, 52 % of Asia Pacific respondents themselves felt that “limited creativity in overcoming challenges” is an acute problem in the workforce, and can deem many employees ‘unemployable’.

However, the creative economy also brings a level of uncertainty; with fast paced products, high value projections and swiftly changing market trends. In this market filled with the unexpected, the differentiator will be human resource – what Cox calls “the IP that is inside people’s heads”. This new economy presents an opportunity for HR to be an agent of change, rather than a facilitator of it. HR now has the opportunity to step up and navigate business opportunity by proactively responding to market dynamics and its changing workforce, instead of merely reacting to market change.


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