A few remarks on financing of culture

1. A few remarks on financing of culture European Parliament Brussels, 22nd November 2011 Public investment in culture and communications. A key challenge for Europe

2. Specificity of cultural goods Cultural goods and services: • require creativity, • generate and transmit symbolic meanings, • effects are covered by intellectual property rights. (D.Throsby) COST DISEASE in the performing arts (W.Baumol & W.Bowen) CREATIVE DESTRUCTION (J.Shumpeter) → Public goods (P.A. Samuelson) → Merit goods (R. Musgrave) Specificity of cultural goods justifies the use of public funds

3. How much state in culture? • The crisis of traditional welfare state model • Criticism of the extreme (neo-liberal and social democratic) models • The third way concept The non-profit sector is situated between public and private sector.

4. Trends in organising and financing of culture in Europe • Public financing of culture dominates over the private one; • The role of local authorities and NGOs increases; • The indirect financing of culture disseminates; • State encourages private financing; • State intervenes in the field of cultural industries; • New sources of funds for culture (lotteries, EU funds) are sought after; • State supports institutions, projects and artists; • Public cultural institutions become autonomous and financially stable.

5. Culture financing models AMERICAN MODEL: Culture is, above all, a matter of private responsibility and a subject of charity. EUROPEAN MODELS: • Nordic - based on social-cultural traditions, • Anglo-Saxon - with domination of global markets, • Mediterranean - strongly based on cultural heritage, • French - the last example of central planning in Europe, and • German - indicating the evolution from welfare state to information society.

6. Public expenditure on culture in chosen European countries Source: Council of Europe/ERICarts: "Compendium of Cultural Policies and Trends in Europe", 12th edition 2011. <http:// www.culturalpolicies.net>, ISSN: 2222-7334

7. Media market Source: EBU Guides, Information Pack, Volume 4: EBU Members’ key financial and personnel data, December 2003 The way, money is raised by the private broadcasters is similar in all EU countries. In terms of access to public funds, they are usually treated as regular enterprises. They operate, nearly in 100%, thanks to ads generated income.

8. Financing of culture in Poland In the Polish model of culture financing, like in other European ones, public sector is a main but not sole funding source. Private funds are complementary, not alternative to public ones, though. Source: Central Statistical Office, ‘Public expenditure for culture in 2010’

9. Source: Central Statistical Office, ‘Public expenditure for culture in 2010’

10. Definitions of culture Comparison of cultural domains covered by European and UNESCO frameworks Source: Project Essnet Culture, final report, October 2011

11. Industrial Design CREATIVE INDUSTRIES AND ACTIVITIES Education Consumer Electronics CULTURAL INDUSTRIES Film and Video Performing Arts Books and Press User Generated Content CORE ARTS FIELDS Tourism Advertising Luxury brands Visual Arts Fashion Design Heritage Video Games Television and Radio Music Telecommu-nications Design Software Architecture RELATED SECTORS Source: KEA European Affairs

12. Private sector In Europe, culture is a field financed by public authorities only in part. Therefore, it is extremely important to supplement public funding with private one. • Donations and sponsorship • Households expenditure • Cultural and creative industries • Non-profit sector

13. *Source: Eurostat, ‘Cultural Statistics Pocketbook’ 2011 edition ** Source: Council of Europe/ERICarts: "Compendium of Cultural Policies and Trends in Europe", 12th edition 2011

14. Cultural and creative industries 2 240 bilion $- the value of global creative economy in 2000 by John Howkins 6 100 bilion $ - the value of global creative economy in 2020 according to the prognosis of J.Howkins 654 bilion € - the sales of cultural and creative sector in EU countries in 2003 by KEA report ‘The Economy of Culture in Europe’ (2006) 2.6% - the added value to the EU GDP 19.7% - increase of added value of the creative sector in 1999-2003 (more than overall economy growth) Different countries provide research on the economic value of creative sector, however due to differences in definitions used, the results are often incomparable.

15. Creative Partnerships / Public-Private Partnerships / CSR Krystyna Janda Foundation for Culture • Private theatre operating as a foundation • 1.3 mln € from public funds in 2005-2010 (municipal grants - about 4% of income) • 300 performances per year • 2 theatres (260 and 450 seats) • 20 full-time employees • 260 000 viewers per year 17 public theatres in Warsawget ca. 22 mln € from public subsidies. 12 private theatres in Warsaw get 2.2 mln €. Deutsche Bank Polska „Views” - competition for young Polish artists organised in cooperation with Zachęta National Gallery of Art Media Cluster in Łódź • Over 50 engaged entities and over 20 projects in various fields • Investment value estimated at 150-200 • Aim: creation of 25 000 new jobs by 2010 and 40 000 by the end of 2015