Public policy is best served when envisaged in colors
Over two years after the COVID-19 pandemic rampaged country after country and left the global supply chain in tatters, the world economy seems in a challenge yet again.
A lot can be done to counter the difficulties surrounding us, if we see uncertainties as solvable problems and act fast.
Public policy can bring about positive change and elevate our socio-economic conditions by focusing on activities associated with different sectors. It has the power to create widespread change in a short period in whichever color economy we talk about — gray, orange, purple, or silver.
Transforming the gray list
Most people are still unaware of its impact. For instance, most people think a gray economy consists of activities that are considered as unofficial and undisclosed economic activities, such as tax evasion, black market sales, and undeclared payments. However, such an economy is associated with poverty, unemployment, and slower economic growth.
Nonetheless, this is half of the story. The other half resembles an economy that is vital for many economies. The size of the gray economy may vary from country to country, but it is estimated to account for a significant proportion of the global gross domestic product. Hence, policymakers must focus on supporting informal activities that contribute to the economy.
Public policy can help level the playing field for companies to compete with legal firms fairly and enjoy improved chances of success.
It can also solidify consumer protection in the gray economy. Many consumers are unaware of their rights when dealing with informal businesses. This gap can lead to such businesses taking advantage of unsuspecting customers.
By introducing policies that improve consumer protection, well-intended companies can build consumer trust and ensure fairness. It is also crucial to create an environment conducive to businesses operating legally. This approach includes creating regulations that are not overly burdensome and aiding companies so they can comply with the law.
Finally, many businesses in the gray economy cannot obtain loans from traditional financial institutions due to their lack of formal documentation. Therefore, public policy should promote access to financing to ensure all informal businesses have the right to grow and expand.
Orange in all things creative
The orange economy describes the growing impact of the creative sector on the economy. The industries involved have the potential to support a country’s efforts toward sustainable economic growth.
Public policy can play a crucial role in shaping the creative economic landscape. Governments worldwide are moving up to the potential of this economy and introducing policies for further development.
In Ethiopia, the Jobs Creation Commission proposed various strategies in the Plan of Action for Job Creation 2020–2025 to support creative industries like fashion, music, films, fine arts, and photography. These include creating a physical, creative space, introducing an arts education curriculum, reducing taxes for artists, and providing them protection.
Similarly, Indonesia established the Creative Economy Agency in 2015 to create jobs and alleviate poverty by promoting the growth of the orange economy. In addition, several policies were implemented to market cultural goods and services.
The purple hue of pop culture
Public policy affects this economy by dictating what types of funding are available for arts and culture initiatives.
We may have heard about the US National Endowment for the Arts, which uses 40 percent of its program dollars to fund arts agencies nationwide. This agency’s budget is determined by Congress every year. The 2022 financial year budget of $201 million is a massive increase from last year. Therefore, decisions about allocating these funds can significantly impact the arts and culture programming available to the public.
In this context, public policy decisions about whether to fund museums, orchestras, or theaters can significantly impact the types of arts and culture the public accesses. Lastly, public policy regulates the sale of creative works, impacting artists’ ability to make a living from their creative endeavors. Copyright law, for instance, governs how creators can profit from their work.
Prospects of silver lining
The term “silver economy” refers to the growing market of products and services marketed to and used by seniors. This market is estimated to be worth trillions of dollars, and it continues to grow as the population of seniors grows.
The public policy regulates how companies can market their products to seniors and what their standards should be. This system helps protect seniors from being taken advantage of by businesses.
Moreover, the government may fund programs that help seniors stay active and engaged in their communities under public policy. The US government-funded Meals on Wheels is an excellent example of delivering meals to homebound seniors. The government also funds senior centers, providing a place for the elderly to socialize and participate in activities.
Public policy can also affect the silver economy indirectly. For example, the Affordable Care Act made it easier for seniors to obtain health insurance and access healthcare services.
There are several areas where the government can support gray, orange, purple, and silver economies. Prudent government activities and initiatives can open spaces for citizens and companies to nurture the color economy.
Appropriate policies in the purple economy can support gender equality, equal opportunities, and expansion of social care services, while the gray economy can promote self-employment in unregistered firms.
Similarly, positive contributions to the orange economy can promote the growth of creative sectors.
The government may also create strategies for the gray economy to overcome novel challenges related to the aging population, especially those surrounding the use of technology for health monitoring. These combined efforts will ultimately lead to economic development and social progress, and we are here for it.
• Saud Al-Gheraimil is the digital ecosystem relationships manager at Digital Cooperation Organization.