CULTURE AND CREATIVITY AS DRIVERS FOR LSED

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APULIA REGION Unit for the promotion of territory, knowledge and abilities CULTURE AND CREATIVITY AS DRIVERS FOR LSED PIERLUIGI MONTALBANO SAPIENZA UNIVERSITY (ITALY) & SUSSEX UNIVERSITY (UK) [email protected]

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Transcript of CULTURE AND CREATIVITY AS DRIVERS FOR LSED

Page 1: CULTURE AND CREATIVITY AS DRIVERS FOR LSED

APULIA REGIONUnit for the promotion of territory, knowledge and abilities

CULTURE AND CREATIVITY AS DRIVERS FOR LSED

PIERLUIGI MONTALBANO

SAPIENZA UNIVERSITY (ITALY) & SUSSEX UNIVERSITY (UK)

[email protected]

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APULIA REGIONUnit for the promotion of territory, knowledge and abilities

Standard LD: A critique

P. Montalbano – SAPIENZA

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APULIA REGIONUnit for the promotion of territory, knowledge and abilities

Background: Limits of the traditional LD approach3

• Focus on productivity and attractiveness of firms and labor (Buck et al., 2005; Bristow, 2005, 2010)

• Consequences:

• ‘ubiquitification’ of regional development strategies (Bristow, 2005; Maskell and Malmberg, 1999);

• narrow vision of “competitiveness”

• Lack of resilience of local economies

• The recent global ‘credit crunch’ has highlighted the advantages of being less dependent upon globally footloose activities, having greater economic diversity, etc., Ashby et al, 2009; Larkin and Cooper, 2009).

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APULIA REGIONUnit for the promotion of territory, knowledge and abilities

Main assumptions of the dominant approach4

• Capital and labor completely mobile

• Business environment matters the most in attracting footloose investment and high skilled and creative labor.

• What’s wrong with it?

• factors of production are rarely perfectly mobile

• Innovation and creativity are not placeless

• Agglomeration

• Spatial inertia of the ‘new’ economy industries applying distance-shrinking technologies too (e.g. Rodriguez-Pose and Crescenzi, 2008).,

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APULIA REGIONUnit for the promotion of territory, knowledge and abilities

What’s new? Territories matter !5

• Trade is not placeless (from HOS to Gravity)

• Not all firms relocate • Relocation brings its own costs and upheaval • Local ties are too strong • Local institutions matter for business

• Territories have institutional and cultural specificitiesWe lack a deeper understanding of the causal effects of the endogenous processes that generate territory-specific economic and institutional framework (Harrison, 2006; Malecki, 2004).

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APULIA REGIONUnit for the promotion of territory, knowledge and abilities

Rethinking Local Development

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APULIA REGIONUnit for the promotion of territory, knowledge and abilities

Economic Theory knows already…

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• Since the seminal work of Arrow (1962), the role of knowledge has been a key driver for economic growth (i.e., marshallian externalities)

• From the Nineties the endogenous approach highlights the role of intangible factors as key drivers of growth and development (Barro, et al, 1995).

• Endogenous growth fosters additional externalities linked to the intangible assets (such as learning, networking, personal and social capabilities, etc.) that impact positively the productivity of factors.

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APULIA REGIONUnit for the promotion of territory, knowledge and abilities

Krugman (1997) ’s “rethinking” and the role of Geography8

• NP Krugman (1997) argued that the Silicon Valley cluster in California, owing its existence to ‘‘small and historical accidents that, occurring at the right time, set in motion a cumulative process of self-reinforcing growth’’ (no placeless competition)

• More recently, an evolutionary approach of regions’ development have drawn attention to their cultural, institutional and social contingencies that determine their ability to adapt to changing market conditions, the emergence of new technologies and competitors, and thus their capacity to create new development trajectories (Boschma, 2004; Boschma and Martin, 2007).

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APULIA REGIONUnit for the promotion of territory, knowledge and abilities

Hence: what role for culture and creativity?

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• Tacit Knowledge (Culture) is one of the key intangible assets for a self-sustaining process of consumption/accumulation of human capital that, among other things, fosters Local Sustainable Economic Development (LSED).

• In 1990s, the New Labour government’s Creative Industries Mapping Documents in Britain put the notion of creativity at the center of the debate.

• It has been seen as the occasion to revamping the notion of the economics of territories and promote new development strategies able to overcome the crisis of the mercantilist approach (Valentino, 2012).

• Information societies, knowledge economies, smart cities has become since then the key factors for a breakthrough of the spatial organization of towns, social relations and even political participation (Castells, 1996-1998).

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APULIA REGIONUnit for the promotion of territory, knowledge and abilities

However: culture and creativity are not synonymous…

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• Culture is generally understood as the set of knowledge, customs and levels of artistic and scientific development that defines an era or social group (EECS 102/2004) – e.g., information society---

• Creativity is specifically interpreted as the capacity to think in an innovative way, or to produce new ideas that bring together existing elements in a new way (be they processes, objects, knowledge, etc.). --e.g., Steve Jobs--

• Innovation refers more generally to processes and products developed from knowledge, techniques and tools. –e.g., ipad --

Who cares? 1. These concepts that are often blurred in current language;2. It highlights the deep interconnections between culture, creativity

and innovation; 3. the lack of a clear distinction makes it difficult to pinpoint a single

analysis approach

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2.6 % of EU-27 GDP5 million of people+ 3.000 euros trade surplus for EU-27+9% average world rate of growth99% of enterprise are SMEs

(EU, Green paper, 2010)

CCIs - Cultural and Creative Industries: What we talk about?

7% of EU-27 GDP14.4 million of people

862 billions of euros –contribution to EU-27 added value(TERA study, 2010)

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WHY FIGURES DIFFER?

• No a single and universal definition of CCI

• creative people are often brokers across disciplines and industries

• WE SHOULD ACKNOWLEDGE the distinction between culture, creativity and innovation

• At the same time, we should separate conceptualization analysis and governance of the creative processes

(KEA, 2009)

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APULIA REGIONUnit for the promotion of territory, knowledge and abilities

Please mix and match…13

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(UNCTAD, creativity report, 2008)

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EU SUPPORT TO CULTURAL AND CREATIVE INDUSTRIES“UNLOCKING THE POTENTIAL OF CULTURAL AND CREATIVE INDUSTRIES”…. WITH A PARTICULAR ATTENTION TO SMES.

- Communication from the Commission on a European agenda for culture in a globalizing world –10/05/2007

- Conclusions of the Council On the Work Plan for Culture 2008-2010 – 10/06/2008

- EC, The Green Paper COM(2010) 183- An European CCIs workgroup (to be established);- Sector studies (contribution of culture to creativity;

CCIs entrepreneurship;, contribution of culture tolocal and regional development, etc.)

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APULIA REGIONUnit for the promotion of territory, knowledge and abilities

Towards a cultural based LSED

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APULIA REGIONUnit for the promotion of territory, knowledge and abilities

A naïve cultural based LSED16

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cultural resources attract visitors

(external demand)

Visitors generate an expenditure

this expenditure is transformed into revenue

and capital for local

development

The revenue is partly transformed

into new demand for local production

(multiplying effect) and, partly, in new

imports (net value of exportable services)

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APULIA REGIONUnit for the promotion of territory, knowledge and abilities

A naïve cultural based LSED (cont.d)17

• Thanks to technological innovation and creativity it is nowadays possible to sell outside an increasing amount of cultural services associated to the same resources, and to foster a sustainable long-term process of growth:

• The impact on the local economy will be then multiplied and determined by: the net value of exportable services (i.e., the difference between the value of services sold externally and the costs of goods and services the area has to import in order to produce them)

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Creativityand

Innovation

New Cultural Services

New Externaldemand

Creativityand

Innovation

New Cultural Services

New externaldemand

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APULIA REGIONUnit for the promotion of territory, knowledge and abilities

A first set of Policy Recommendations…18

• Cultural resources are a necessary but not a sufficient condition to start a process of cultural based economic growth;

• Creativity & innovation are the key determinants of long-term growth.

• Hence: not the same thing but a self-sustaining process !

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APULIA REGIONUnit for the promotion of territory, knowledge and abilities

Consequences:

Cultural based LSED:

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a) does not produce any relevant effect if an area is poor in terms of services

b) Its rate of growth depends crucially on creativity & innovation (human capital/skills)

c) It requires a “critical mass” of demand (to cover the start-up production)

d) It is driven by specialization and comparative advantage (The higher the level of dependence of the area on the outside the lower will be the multiplier for the internal income)

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APULIA REGIONUnit for the promotion of territory, knowledge and abilities

The Apulia Strategy and empirical initiatives In accordance with the LSED conceptual framework, Apulia strategy developed some

empirical initiatives in terms of key components of the cultural based model for LSED.APULIA STRATEGIES FOR LSED  EMPIRICAL INITIATIVES 

 1) enhancement of new cultural services; 

‐ ENVIRONMENTAL AND CULTURAL SYSTEMS (ECS) ‐ URBAN LABORATORIES ‐ INHABITED THEATRES ‐ INTRAMOENIA EXTRA ART and CONTEMPORARY CIRCUIT 

 2)  promoting  cross‐activities:  creativity  & innovation (human capital/skills)   

‐ ACTIVE PRINCIPLES INITIATIVE ‐ LIVING LAB and SMART CITIES (ECS)  

3) The attraction of a critical mass of external demand mainly by a strong financial and technical support to a number of local cultural activities and initiatives 

 ‐ PUGLIA EVENTS (Night of Tarantula music festival)  ‐ APULIA FILM COMMISSION BIFEST – BARI INTERNATIONAL FILM FESTIVAL and the FILM FOUND ‐ PUGLIA SOUNDS and THE MEDIMEX   

4)  Exploiting  the  local  comparative advantage by  investing  in  the entire value chains  of  live  entertainment,  cinema, audio‐visuals and visual arts value chain. 

‐ APULIA CREATIVITY DISTRICT  ‐ PUGLIA SOUNDS and THE MEDIMEX ‐ APULIA FILM COMMISSION FILM FUND 

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APULIA REGIONUnit for the promotion of territory, knowledge and abilities

The cultural based system of revenue21

• the expenditure allocated to the purchase of locally produced goods and services is transformed: • partly into revenue (wages, profits and unearned income)• partly in an additional demand for other production sectors

located in the same area (spill over effect)• partly in additional imports;

• the demand, deriving from the additional revenue and from the new local production is, in turn:• partly transformed into income and new demand for the local

production sectors (multiplying effect)• partly, in new imports and so on…

…………………………………………………………up to the point where the initial impetus is exhausted.

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APULIA REGIONUnit for the promotion of territory, knowledge and abilities

How cultural based LSED works…

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Elaborated by P.A.Valentino

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APULIA REGIONUnit for the promotion of territory, knowledge and abilities

Conclusions23

• The cultural based LSED must be sustained both by internal demand and demand external to the area and this, in turn, crucially depends on the availability of new services fostered by innovation and creativity.

• Local demand plays a strategic role in the determination of the critical mass necessary for the startup of the entire process, but the external demand (e.g., tourism) represents the real “engine” for development.

• While the economic impact associated with tourism is commonly considered the most significant one, it is the entire cultural chain who contributes to the growth of income levels and to that of local employment.

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APULIA REGIONUnit for the promotion of territory, knowledge and abilities

It is worth stressing the irreplaceable role of cultural industry in :

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• Promoting “local identity”,

• Supporting pluralism and cultural diversity;

• Contributing to a better quality of life;

• to tolerance and to countering behavior contrary to human dignity, to integration and to visitor capacity

• and, generally speaking, to individual and collective capabilities and all the multidimensional facets that collectively constitute the sustainable livelihoods of local communities (Sen, DFID, Unctad).

P. Montalbano – SAPIENZA

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APULIA REGIONUnit for the promotion of territory, knowledge and abilities

Policy Recommendations

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APULIA REGIONUnit for the promotion of territory, knowledge and abilities

The final set of Policy Recommendations26

1. Need of a better definition of the culture and creativity sector and more accurately statistics;

2. Focus on four key determinants of a cultural based LSED: services, innovation, critical mass of demand and comparative advantage;

3. Look at the start-up phase as a peculiar stage characterized by the need of a greater amount of local input (goods, services and human capital);

4. Overcoming the approach of individual attractors by strengthening the relation btw landscape, history, environment and cultural immaterial assets;

5. Reverting the approach of the scarce added value of cultural and touristic events by:

1. Properly assessing “ex-ante” the local culture base system of revenues, building a local strategy based on comparative advantage

2. Evaluating “ex-post” the impact of public investments in culture and creativity by taking advantage of the most recent evolvements in matching econometrics for counterfactual analysis

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