The "Creative Sector": How could it contribute better to regional development and cohesion?

1. The "Creative Sector": How could it contribute better to regional development and cohesion? Prof. Dr. Andreas Joh. Wiesand, Executive Director, EuropeanInstitute for Comparative Cultural Research gGmbH (ERICarts) The ERICarts Institute, established 1993 and based in Bonn/Germany, is an independent provider ofempirical information and analysis to policymakers and other actors in the cultural field and related policy sectors (e.g. media; education; youth; regional development; economy; security). It relies on a network ofexperienced partner institutions and permanent correspondents in over 50 countries; many of them contribute to the Council of Europe/ERICarts “Compendium” (www.culturalpolicies.net). Recent studies for the EU include "The Contribution of Culture to Local and Regional Economic Development - Evidence from the Structural Funds" (with CSES), "Mobility Matters" and "Sharing Diversity".

2. A Challenging Topic, because… …culture and creativity "as a foundation for the establishment of a knowledge society and …one of the most dynamically developing sectors of the economy" (Polish Vice Minister for Culture, Monika Smolén) canmake important contributions to local/regional development and to the goals set in EU Agendas. However, it plays only a minor role in current EU priorities, especially as regardsStructural Funds (SF), and is also threatened by severe cuts of public budgets in some of the Member States. Let’s discuss a few perspectives and caveats!

3. How to Define the "Creative Sector"?A few examples of research reports & debates

4. 'Cultural', 'creative', business or scene:Can concepts translate into politics?

5. Informal Arts Activities(e.g. Amateurs, Communities) Design & Architecture(including Computer Games; other applied arts etc.) 3rd Sector Support & Services(e.g. Foundations; Associations) “Core“ Creative Workforce (Independent and employed artists, media professionals etc.) Public or sub-sidised Arts, Media & Heri-tageActivities (e.g. Museums; Theatres; Public Broadcasting) Private Culture & Media Industries(e.g. Books; Art Market; Film; Entertainment; Private Radio/TV) Related Industries / Crafts(e.g. Printing; Music Instruments; “Cultural Tourism”) Public Admi-nistration&Funding (incl. Arts Agencies) Cultural Education & Training(e.g. Art Academies; Music Schools) Mainly public funding Mainly commercial activities Mainly non-profit and informal activities The "Creative Sector" – a compromise?Arts, Media and Heritage and their “Creative Core” Economic trends/social conditions Demand from/interaction with the public Interaction with other sectors & "global players" (Cultural) Policy frameworks Source: Wiesand/Söndermann for ECF, 2005, based on proposals made at the Unesco-Conference “The International Creative Sector”, 2003

6. Results of Different Studies in the EU: In a number of EU Member States and candidate countries, the economic strength of the Creative Sector relies, first of all, on a successful "consumer culture" and its professional or industrial basis (cinema; design; music; the book market; games; etc.); In other countries, public infrastructures contribute markedly to this wealth (e.g. the well-developed library systems in the Nordic region that reach out into the smallest towns, or the large public theatre and opera infrastructure in Germany); As well, public broadcasting – generally with a "cultural" mission – is often on an equal level with commercial providers; Artists are frequently experimental drivers of innovation and new technological developments (hard- and software); In some Member and Candidate States, e.g. Cyprus, the Czech Republic, Greece, Italy or Turkey, the tangible/built cultural heritage is a major economic factor through its incentives for tourism and its importance for the labour market; In addition, the Creative Sector contributes markedly to the quality of life in urban and rural areas, fosters social cohesion or helps to regenerate economically degraded regions.

7. Success Stories The Culture-based Strategy of Lille (FR) The Strategy of Lille leading up to and following its year as European Capital of Culture in 2004, has many components. One is the development of the Lille Art Museum with €11 M eligible expenditure and the creation of a “Maison Folie” within the broader framework defined in part by Lille’s co-ordination of the URBACT network “Cultural activities & creative industries, a driving force for urban regeneration” – a pan-European project examining the physical, economic and social aspects of using culture as a driver of urban development. 7

8. Meisterstrasse (AT) This Leader+ project focuses on the conservation and enhancement of a rural region through the exploitation of local traditions in craftsmanship. The development of quality standards and marketing show how a relatively small scale project can act as a model for other areas and have direct impacts on rural areas. Musikpark Mannheim(DE) A project in Germany supported by the ERDF provides an interesting model in helping start-up SMEs in the music sector. The nature of the support provided gives an illustration of how creative industries can benefit also from business support.

9. Kunstwerk(t) - Art Works(NL) An ESF/Equal project where Artists work with 4 target groups: prisoners, illiterate migrant women, youth at risk, people with disabilities. Different methods (theatre performance, choir presentations, etc.) are employed to develop skills and competencies and promote the integration of these groups. The effectiveness of this project has been proven by a study of the University of Amsterdam. The "Guggenheim-Effect" in Bilbao (SP)Integrated city developmentin an "old" industrial setting, inspired by an architectural highlight for the arts, the Guggenheim-Museum. 9

10. Some Statistics: All is relative……but some countries could indeed do more for culture or the Creative Sector, using Structural Funds opportunities!

11. Results of a 2011 Survey on National Culture Budgets during the Financial Crisis The survey, presented by Péter Inkei in April 2011 at the Council of Europe Steering Committee for Culture, indicates that the impact of the crisis on public budgets is less uniform than expected, some countries even acting "countercyclical": • 9 out of 21 countries with comparable results stated, between the years of 2009 and 2011, losses in regular budget plans ranging from -4% (Austria) to -26% (Greece). - On the other hand, 9 countries actually reported increases in their financial appropriations for the arts and heritage, ranging from ca. +5% (Germany, national level and Belgium, French Community) to +38% (Ukraine). - In three countries, the regular budgetsremainedat their previous level. Similar trends are registered in city budgets (Eurocities 2011)

12. The Global Finance Crisis Nightmare……and its impact on the Creative Sector A. The crisis has important or extreme consequences in countries,1.where the financing of non-commercial cultural infrastructures depends mainly on sponsors or the box office, and2. where the private arts & media markets with their volatility and global imbalances are not being complemented by public action. B. The impact of the crisis on cultural life in Europe may be less dramatic in countries, where 1. public or non-commercial institutions & initiatives remain an important part of the cultural infrastructure;2. where cultural financing is a "complementary" task of governments, also vis-a-vis private cultural business;and3. where public funding in the arts and media is shared between different actors (e.g. local, regional, national). Based on the Council of Europe/ERICarts “Compendium of Cultural Policies & Trends in Europe” and other sources

13. The Creative Sector: Success and failure go hand in hand… Success: • Management by owners – the typical scenario in the micro-structured Creative Sector – helps to boost motivation and to generate ‘fringe capital’; • Local cultural roots and their ties with regional economic cycles help to sustain diversity: the lifeline of the Creative Sector; • Complementary relationships between private and public structures serve both – and the public (e.g. in broadcasting). Failure: • Undercapitalization blocks investments (e.g. into marketing); • Global imbalances hinder market access (e.g. film and music); • Failure to assist in a gradual development of diverse market forces can threaten domestic production, especially in the new EU member states; • General trade cycles strongly affect the consumer-related provision of goods and services in the Creative Sector. In other words: "Boom times" cannot be taken for granted!

14. Beware of Unrealistic Growth Fantasies!Quotes from the PricewaterhouseCoopers ‘Global Entertainment & Media Outlook’, 2008, 2009, 2011 UK editions June 2008: “PricewaterhouseCoopers predicts that the entertainment and media market in the UK will grow by 5.8% compound annual growth rate for the next five years to reach $152 billion by 2012” [compared to $92 billion in 2008 – AJW] One year later, June 2009: “PwC's findings show that the UK's entertainment and media market will experience a cumulative 7% decline in revenue from 2008-2010, from $92 billion to $85 billion… However, from this point, entertainment and media will flourish, with consumer spend and advertising driving the market to $98 billion in 2013.” Finally, June 2011: “The UK continues to be a dominant force in the entertainment and media market, and is predicted to be worth £59.6billion [= $92 billion] in 2015.”

15. Crisis Ahead: Eurostat Turnover Index for selected CI branches 2005-2009

16. France: CI setback in times of crisis2003-2006 growth of turnover / No. of companies / employees in French culture industries (in comparison with the general economy, in %)

17. Structural Conditions to be Adressed:1. Micro-business structures dominant2. Work conditions often precariousad 1: % of micro-businesses in publishing(Eurostat 2011)

18. UK: Micro-structures even in Film-/AV-Production…

19. ad 2: More short-term employmentfor less money? The fate of free-lancesin France(Source: Caisse de congés spectacles/Cesta/Deps 2010)

20. Differentiated Strategies Needed in the EU What was missing in the renewed 'Lisbon Programme – An Agenda for Growth and Jobs' (2005) and in the Europe 2020Strategy is at least being addressed in the 2007 Communication 'A European agenda for culture in a globalizing world'of the EU Commission: The potential strength of the European Creative Sectorwithinputs from millions of creative individuals, arts initiatives and media companies: 1. In times when business activity flourishes, the "creative industries" contribute – via direct or indirect revenues and employment – to the economic, social and cultural development of cities and regions, especially in regionswith "old industries" and high migration flow. 2. Arts & designare crucial for securing innovation and diversity: - Media content, entertainment and even technological progress depend on artistic work or on creative experiments; - Artists arenot afraid of “intercultural dialogue”, provide attrac- tive role models and can motivate large sections of the public. Consequently, new political strategies start to promote the arts and the culture industries more on regional levels, based on differing merits, needs or goals – not just because of hoped "side-effects".

21. A New Paradigm: "Think regional - Act global"Action to start on local / regional levels • Transparency first! (e.g. community analysis; reports) • Coalition building (public bodies; business; media; artists‘ initiatives; banks; personalities; etc.); • Link policies and programmes (economic; urban; social; research; cultural; etc.) in a complementary way; • Provide sound financial backing(including EU Structural Funds, where available); • Develop strategic programme or "Action Plan"; • Implement special measures to develop or sustain a di-versity of actors (e.g. micro-credits, marketing assistance); • Provide independent evaluation (& revise Action Plan); • Citizens & investors relations: Talk about success!

22. EU Frameworks: What needs to be done? Action to be taken by the EU and national or regional governments in favour of the Creative Sector should be based on realistic perspectives for both traditional and emerging markets. Policies and instruments include, but are not limited to: • recognising creative potentials and cultural values inStructural Funds and other EU programmes (in the words of a EP Resolution of 2008: In implementation plans for current and future Structural Funds, “pride of place" should be given to culture and the creative industries); • protecting regional diversity and addressingunequal chancesin global markets (requiring ‘multi-levelgovernance’ strategies, as is currently being tested in the Nordic countries); • improvingfinancial and investmentconditions for the "Micro Business" structures in the Sector; • providing training chances that fit occupational needs; • enhancingtransparencytrough researchand expertise; and • harmonisinglegal, social and VAT frameworks.

23. Speaking of VAT for Creative Professionals: A European mess that really calls for action…

24. Some Final Conclusions: • Cultural diversity in Europe, including diverse traditions, passions and infrastructures, must be seen as an asset; • Empirical research shows that citizens keep pace with growing diversity: cultural preferences and practices have broadened over the last 40 years, regional strengths are more appreciated; • This calls for differentiated strategies in the Creative Sector, also as regards public funding priorities or instruments; • On the other hand, some basic conditions for creative work need to converge (e.g. taxes, social security), so all actors can fully benefit from the emerging “European Cultural Space”; • Arts institutions and public media should sharpen their profile as service providers in the public domain: Adopting commercial strategies endangers their status, also with regard to EU rules.