Absa at WEF
The Art Market in the Fourth Industrial Revolution
Prepared by Aspire Art Auctions
The world is facing a massive revolution in the nature of work and industry. If the first and second industrial revolutions were focused on mass production and the building of mass infrastructure, the third industrial revolution shifted the focus to electronic communication and the human use of digital technology to achieve tasks and to power the global economy.
Now, the fourth industrial revolution presents us with the Internet of Things - the machine-to-machine based communication systems extending worldwide and enabled by sensors and remote-driven technologies, backed by Big Data. The first response most people have to the Internet of Things phenomenon is how it will make human work obsolete. Recent studies have estimated that up to 47% of total US employment is at risk due to automation, and not simply blue collar jobs that can be superceded by much cheaper robotics options. Now, more and more cognitive tasks, and fairly complex ones too, can be accomplished by artificial intelligence and machine learning.
However, creativity remains largely outside of the impact of automation. As studies have pointed out, creativity is a composite of different human abilities and cognition - and, crucially, involves many psychological processes too. Often it’s the human processes and linking together of novel ideas, and combining that with an understanding of human value systems and a store of cultural knowledge, which comprises human creativity - and it’s exactly this that algorithms cannot replace.
When we understand the individual creative endeavour as a collective economic enterprise, recent developments prove interesting. The so-called ‘creative economy’ - in which value is derived from creative and imaginative qualities instead of capital, land and labour - has been steadily expanding in the last 20 years, especially in developing countries. One of the chief advantages of the various disruptions caused by the fourth industrial revolution is that of scale. It provides artists with the opportunity to access not only resources, but also to access a potentially global audience. The World Economic Forum itself has suggested that by next year, creative thinking will be third on the list of the most important skills needed to survive and thrive in the fourth industrial revolution, and artists can harness these opportunities to drive creative thinking in other areas such as design.
This is also good news for South Africa where the creative economy currently employs close to half a million people and contributes around 2.9% to our GDP. For this to grow and develop, artists, practitioners, consultants, researchers, administrators and others involved in it need to start behaving like an industry.
From the point of view of the business of art itself, what remains unique about the endeavour is the singular nature of each work of art. Works of art are by definition not generally mass produced and are therefore not commodities in the same way as other ‘products’. Their uniqueness provides much of their value in the gallery and global auction market, and the few attempts that AI programmes have had at making art are yet to convince, although the first AI painting to come to auction sold at Christie’s in New York for $432 000 late last year, perhaps as much out of novelty value as anything.
The singularity of works of art often complicates how they are marketed and sold worldwide, with collectors mostly keen on seeing the works in the flesh before committing to buying. But the use of digital technology not only to communicate visually, but to provide secure transaction platforms is leading to the scalability in the art industry in line with the access to a global audience that artists themselves can enjoy. While online sales have been around in the art auction industry for some time, there is now much more of a ready adoption of the technology to facilitate the viewing and selling of art around the world. Hiscox reports that the online art sales sector increased almost 10% year on year, and now totals almost $5bn.
At Aspire, a bold experiment this year shows the potential of the fourth industrial revolution to provide sales channels for the rareified world of buying art at auction. The company’s Online&Live platform combines all three available sales channels – live bidding in the room, or online through its website or affiliated partner sales platforms, or finally through its bespoke mobile app - to make for a seamless technology-driven real world art experience.
Bidders compete against both online and other live collectors in an insight into the global reach and scale that these technologies provide, even for an industry and product as singular and unique as art. The sales format brings a wider range of art to a wider collecting audience - offering such gems as an early David Goldblatt photograph and ‘jazz series’ prints by market favourite Sam Nhlengethwa, all of which sold for substantial amounts.