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Lessons from the Industry of Entertainment Published: Sunday, January 12, 2003 By: Dr. Manuel Ángel Morales

Doing creative work is the best way to ensure that any job will not become devaluated. Is like my distinguished colleague Ulises Pabón says, almost by definition, creativity (the production of new and unique goods and services) cannot be duplicated and cannot be imitated. Creativity is the intellectual and emotional fuel and energy that will make the next economy run properly.

But the flip side is that creative work or anything on the cutting edge is chancy almost by definition. Any creative endeavor, from software programming to scientific research to art and design, and even a marketing campaign, runs the risk of not working.

Many companies invest large amounts of financial resources on research that never pans out. This is the nature and the characteristic dynamics of this complex and competitive game. I remember that when I studied at the University of California, at Berkeley, there was a very prestigious learning, academic and professional resource called: “The Journal of Experiments that Failed…”. The title speaks for itself…

The relationship between the high-uncertainty and high return nature of creativity shows up most clearly in the entertainment industry. This industry has become a powerful driving force of growth in the U.S. economy. Since 1980, entertainment and recreation have climbed from 6% to almost 10% of consumer spending, adjusted for inflation. Entertainment has become one of the biggest job creators of the economy. The movie industry alone added 200,000 direct jobs between 1993 and 1996. The actual number of job created was far higher. Actors, directors and screenwriters are often engaged as independent contractors for a particular project.

The entertainment industry is in a hot period in these days, driven by the same forces of trade and technology that are creating the next economy. In terms of trade, entertainment is profiting from the exploiding global appetite for American movies, TV programs, and other related products. In 1995, Hollywood earned revenues of $7 billion from overseas sales. At the same time it is riding the tide of new technology such as CD-ROM’s, high-tech computer graphics, and 3-D virtual reality are creating new forms of entertainment.

Entertainment companies are luring educated and creative people with well –paying jobs. Productions companies are willing to pay actors, writers and directors millions of dollars, including creative comedy writers who were supposed to come up with new hit shows for the network. The broad mass of entertainment employees is also well paid. Average annual earnings for Hollywood are about $48,000, 50% higher than the average to manufacturing employees.

For creative work is very hard to predict how technology and trade will play out. There is no precise way to know which technology will catch on with consumers and which one will be a dud. Beyond that, creative work is the epitome of managing uncertainty…

 


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