Creative spill-over supporting economic and social innovation (Issue 1) – Cities in competition, high quality cultural offer improves attractiveness

Cities in competition – high-quality cultural offer improves attractiveness (Issue 1)

Many European cities are confronted with industrial delocalization, economic transformation and its corollary unemployment. Globalisation, the economic and financial crisis and post-industrial constraints are drawing cities into intense competition to attract and develop economic activities. Cities are setting up departments to recruit foreign investors, they pamper local companies with a variety of incentives, set up hubs, clusters and industrial parks to encourage entrepreneurship, they invest in broadband connections and transport infrastructure to remain connected.

Importantly cities take care in ensuring an attractive quality of life with a cultural offer and social animation which stand out. The soul of a city, its capacity to be festive, to make noise is a crucial parameter of attractiveness in the competition to attract industries and talents. First class theaters, operas, orchestras, music, film or street festivals, restaurants and bars, concert halls and sporting events are imperatives to the destiny of cities. The art scene has made the reputation of cities such as New York, London, Paris, Berlin or Vienna. New York’s Mayor Michael Bloomberg says that cultural activities and quality of life are a key part of maintaining competitiveness: “I have always believed that talent attracts capital more effectively and consistently than capital attracts talents”. This justified the 42 million USD investment to guarantee the lease of artists’ studios and millions of subsidies to save Broadway or the Brooklyn Academy of Music.

Asian and Latin American capitals looking to internationalize are busy developing first rate cultural infrastructures often relying on European talents to run the show in the absence of a strong local performing cultural sector.

The health of a city is recognized by the atmosphere, the parties it is able to stage. The success of the application process to become European Capital of Culture is another testimony of the importance of culture in delivering attractiveness.

The cultural policy of cities has adapted to this intrinsic link between cultural offer and economic attractiveness. Successful cities are cities that integrate culture and creative industries in their development plan. As a result culture policy is no longer about funding art institutions alone or preserving the cultural heritage to attract tourists. It is a policy that aims at:

• Preserving social cohesion through participatory cultural events
• Re-appropriating urban spaces through artistic interventions or localization of creative activities
• Promoting imagination and creativity by stimulating the practice of art
• Developing entrepreneurship and economic activities by supporting cultural and creative organisations whether in the not-for-profit or profit sectors.

Culture and creative industries represent more than 10% of economic outputs in a large number of cities today (Berlin, Barcelona, Paris, Milan, Vienna or Amsterdam). London estimates that the sector is the second largest employer after the financial sector.

Similarly a large number of medium-sized cities have turned around their image and have become attractive destinations for visitors as well as for enterprises thanks to their investment in art, artists and creative industries: Nantes, Eindhoven, Lille, Bilbao, Copenhagen, Helsinki, Graz, Edinburgh, Ljubljana, Warsaw, Tallinn and Tartu in Estonia to name a few.

New economic drivers rely on the intangible and the cultural

Today economic drivers are linked to the development of the digital economy, health and environmental sustainability. Consumers on the other hand are buying more than products. They are looking for brands, entertainment, meanings or experiences. Services delivering aesthetic, comfort, poetic metaphors, entertainment and social status generate new consumption patterns.

People buy the “Nespresso coffee drinking experience” by stepping in luxury retail environment. The “Virgin Atlantic in-flight entertainment experience” invented by music business entrepreneur Richard Branson has become the norm in the air-transport business. Steve Jobs has shown the value of marrying technology with art to make Apple stand out from other technology companies. Apple’s branding, product design and its entertainment offers are related to culture-based-creativity.

Itunes, the hub to access entertainment is churning out 5 billion USD of revenue each quarter. Google is as much an entertainment giant, disseminating cultural products through its networks and search engine, than an engineering company. These are obvious examples of creative spillovers between culture and creative industries with other economic sectors.

This form of innovation, born from the interaction between art, aesthetic, design and entertainment, is benefiting a wide range of economic activities and enterprises that wish to remain competitive. Creativity is essential for companies to expand or survive. Large fashion brands have understood the need to link up with artists, designers, crafts and art to give higher luxury status to handbags, perfumes and catwalks. The fashion industry has benefited tremendously from this interaction. It is no longer just about selling garments but it is about providing dreams, emotions and social meanings.

Increasingly other industries are following the production models of the fashion industry. Products are designed to be replaced for little additional functionality but to enable customers to remain “in” as a sign of social status, network connection or brand celebration. The packaging (the form, the brand) is as important as the content. More emphasis is given to the appearance, the colours, the shape, the message and the user experience from an anthropological and cultural sense. Importance is given to traditional craftsmanship or indications of origins to provide authenticity as well as to give consumption a cultural value.

Reliance on aesthetic, design, entertainment, metaphors gives importance to skills from artists, cultural organisations, and creative professionals. The latter helps businesses to differentiate themselves whether in product innovation, branding, or communication. This form of non-technical innovation is a feature of post-industrial economies.

Cities – the best places to generate creativity

Industries are increasingly outsourcing creative and innovation (R&D) activities. To control costs industries have become essentially financial and distribution centres relying on smaller, decentralized units to develop products or services. The development of such products and services is taking place in universities, labs, clusters, hubs or co-working spaces often established in large urban centres as the latter offer the facilities and lifestyle conducive to creative or R&D activities.

Indeed you are more likely to find creative professionals in an urban context offering networking opportunities, social interactions with peers or investors and cultural enrichment. Cities are places with abundant cultural resources ready to be mined by artists and creative professionals. Cultural resources take the form of historical and heritage sites, languages, natural landscapes, geography, museums, performing art organisations, food, social behaviours, literature, music or audiovisual . They are essential sources of disruption and differentiation in a world where product life is shorter and consumers in demand of customisation.

Cultural resources are the raw materials that nourish culture and creative industries. In parallel cities, through their cultural assets, whether local or international, have become essential places to generate innovation.

The development of culture and creative industries is intertwined with a city’s cultural and creative ecosystem. Urban ecosystems which privilege the establishment of culture and creative businesses in combination with a strong cultural offering elevate cities to the status of “creative cities”, cities of destination as well as cities enabling the emergence of new economic activities linked to the digital, sharing and experience economy.

Background information:

Creative SpIN is a network of 9 Cities, including Birmingham (Lead Partner) Rotterdam, Essen, Bologna, Tallinn, Mons, Kosice, Kortrijk and Obidos. The Cities will test how creative skills and competence can spillover to drive innovation in other key economic sectors.

Take a look at the Smart Guide to Creative Spill-overs.

Philippe Kern

Lead Expert