Each cultural or artistic phenomenon has two incarnations   content and pragmatism.

The first one is about the aesthetic value, meaning and message it transfers personally to us.

The second is about the technology, i. e. the channels delivering the essence we need, and how much and what we have to pay for that directly or indirectly.

At various times, different leaders have tried to put one or the other above the “locomotive of progress.” Finally, they became tired and invented creative industries – a system where creativity and the social and cultural aspect are recognized as equally important.

For the entire past decade, the creative economy has, according to a group of experts from the World Economic Forum in Davos, been seen as a new growth model that requires relatively small initial investment in “soft” infrastructure.

Soft infrastructure primarily means an infrastructure of knowledge or human capital, including institutions, ideas, cultural norms, concepts and solutions.

This is something that does not just support the functionality of complex logistics systems, such as an airport, and the production of any solid objects   from a chair to an aircraft, but also makes these things more reliable and cheaper. This, in particular, gives meaning to the work of architects, designers or inventors, belonging to classic examples of creative industries.

At the present time, the most powerful part of the knowledge infrastructure is Google, Apple, Facebook, and other ground-breaking developers. They are also examples of companies with the highest rate of market capitalization. We can read about the rapid turn towards knowledge capital in the study of Ocean Tomo LLC: the intangible asset value of the S&P 500 grew from 17% in 1975 to 84% in 2015.

However, how can we determine the edge of the creative industry? Where and in what to invest – at least our time? What should be ignored?

There are several definitions of this phenomenon. The reference one is provided by a British Ministry, the Department for Culture, Media & Sport, “those industries which have their origin in individual creativity, skill and talent and which have the potential to create wealth and jobs by generating and exploiting intellectual property.”

Over the last decade, the creative industries have become a new model of economic growth in European countries. Photo: moderndiplomacy.eu

It is in the UK that special statistical codes were first used to set apart representatives of the creative industry from other economic agents. Currently, the majority of EU member states have adopted this practice.

However, the industry’s limits are changeable, just like life is, and they are determined in annual reports prepared by leading consultancy companies and universities at the request of the European Commission, national governments, local authorities, professional networks and associations.

ADVERTISING AND OTHER FORCES FOR PROGRESS

The recent report entitled Creative growth, prepared by Ernst & Young in 2015, focuses especially on the creative industry’s influence on smartphone sales statistics. It was found (EY’s & GfK’s data) that the indirect impact of cultural and creative content (music, films, games, and mobile apps) on the sales of smartphones is estimated at EUR 22.7 billion, and tablets   9.4 billion. So now advertising is not the engine driving trade.

However, advertising in the EU also belongs to the creative industries. Moreover, companies in this industry occupy second place with total revenue of EUR 93 million according to the results of 2014.

The products of the best advertising campaigns are very close to pieces of art, as they have sophisticated playwriting, highly-skilled photographers, cameramen, actors, and demonstrate an art house approach to execution. A selection of two-minute clips from the Cannes Lions Festival (so-called “Oscar” in the advertising and marketing field) is shown in theatres along with “real” films.

Whilst following the plots ordered by commercial brands, at a certain point you forget that the purpose was to boost the sales of furniture, shoes or gadgets. For example, the Christmas clip by Apple Misunderstood is more about human relations than devices. The Cannes Lions’ special category is dedicated to promoting innovations and social advertising.

Despite the vertical rise of digital technology, the “leader’s shirt” on the European creative stage still belongs to the visual arts.

According to EY, this combines the art market, museums, design, craftsmanship and the souvenir industry, coming to 1.231 million people employed and EUR 127 billion in gross income per year.

The potential of this mega industry is significantly tied to the development of cultural tourism. Visiting a museum shop of, for example, the Folkwang Museum in Essen, far from the level in the capital (to say nothing of such monsters as the British Museum or Tate Modern in London), will be enough to see why the lion’s share of the whole visual “pie” (EUR 46 billion by the end of 2014) is attributed to the arts and craft.

Folkwang Museum Building in Essen, Germany. Photo: plan-forward.de

The visual “wing” of the creative industry is also remarkable in that it has most of the small businesses, studios, galleries, workshops and self-employed people like artists and photographers.

The EU pays special attention to this aspect. Politicians produced at the level of Strasbourg and Brussels aim to ensure a diversity of creative expressions, openness, democracy and inclusiveness in the creative area by supporting small and micro enterprises (SME).

This is due to the fact that large companies employing hundreds of people often tend to monopolize markets, particularly in advertising, and film and game production, thereby deforming cultural space.

FIVE STEPS TO SUCCESS

Many programmes of varying scales   from UNESCO to the local level   are launched to enhance the creative industry.

Supporting the creative industry in fact comes down to the simultaneous development of five components:

1) developing policies and advocacy, activities of professional networks and associations;

2) strengthening organization potential, in particular, through special lifelong education and training;

3) operation of incubators and accelerators;

4) establishing clusters and hubs;

5) internationalization (i. e. focus on global markets and the global creative stage).

This infrastructure support provides stability and sustainability for the industry.

A textbook example of the development of all five components of the creative industry’s infrastructure is the United Kingdom, which has remained so for almost twenty years.

It was the first place to conduct a study of the creative industry’s potential   so-called mapping   and form the government development programme that included the establishment of support agencies, provision of facilities at reduced rates, grants and affordable loans, and the spread of the concept of business angels to creative entrepreneurship (private investors who invest their own money in unusual and promising projects when the company is established in exchange for a stake in their capital).

The results are tangible. Today, the creative industries in the UK are worth GBP 77 billion and provide 1.7 million work places. However, according to EY, the EU’s creative industry employs more than 7 million people in total.

The goals of the new framework programme called “Create UK – Industry Development Strategy till 2020” are more ambitious.

The UK’s creative industries generate almost GBP 77 billion per annum

For example, it is planned to increase exports of creative products and services to GBP 31 billion compared to GBP 15.5 billion by the end of 2015, and the weight of industry in terms of foreign investment inflow – 10% to 15%. The British also aim to be in the top five countries with the best digital technology infrastructure.

And something completely unbelievable: to extend the durability of creative start-ups at the end of the first year of operation (currently only 3% to 5% of beginners remain on the market after the first year).

MASTER TO CLUSTER

To go from a general view to the most active emerging industries and separate clusters, we should consider a report prepared by PwC Netherlands & PwC Luxembourg consortium in 2013 at the European Commission’s request under Unit D5 – SMEs: Clusters & Emerging Industries.

The concept of clusters is used in this study in a geographical context. At the same time, each case of TOP-4 European clusters   Berlin, Catalonia, Inner London and North Holland   presented in the report, has the organizational component of local and regional policies and strategies.

As expected, the most powerful regional cluster of creative business in Europe is Inner London.

More than 386,000 local creative entrepreneurs generate around GBP 19 billion annually, which is 16% of the British capital’s economy. London occupies third place in film production, having a cinematographic year of about 14,000 shooting days.

The creative companies of Inner London generate 16% of the British capital’s economy.

On the international design map London is a huge red button, setting out major global trends.

According to PwC’s experts, the cultural field makes a very significant contribution to the economy and lifestyle of the city. Museums, theatres and concert halls attract over 15 million visitors from around the world every year.

Berlin, with 3.4 million residents, is the largest and the youngest city of the united Germany – 23.2 % of residents are under 25. There are about 24,000 creative companies in the city with 170,000 employees.

Berlin as a creative crossroads. More than 24,000 creative companies operate in the German capital today. Photo: architecturendesign.net

The capital of Germany is a leader in the music industry, and the third largest city in Europe by number of films and TV programmes shot and shown. The Berlinale is held here, one of the top events in world cinema.

Berlin attracts creative people and artists from around the world (around 477,000 foreigners from more than a hundred countries) due to its special atmosphere, openness to new things, high tolerance for otherness, and contemporary art with a fresh view of the world.

The Molecular Man Sculpture by Jonathan Borofsky on the River Spree in east Berlin

Debbie Davis of New York, an adviser to creative entrepreneurs on financial issues, opened a photography gallery in Berlin last year. She explains her decision by the fact that this city has atmosphere even more international than that in her native New York.

In addition, here is such a thing as project spaces, which New York lacks. It is spacious equipped rooms to be hired by creative thinkers for a short time so as to implement a project that immediately becomes available to the public.

“What we have in New York are mostly private studios. You can get them only by agreement with the owner, so the audience is confined,” said Debbie. “It is very comfortable here, the city reminds me of Brooklyn – in terms of the number of studios, restaurants and bars where you can spend your time with colleagues and friends, energetic artists inspired by their own ideas”, she adds.

According to PwC, one of largest Europe's clusters of creative industries is Barcelona (within the metropolitan district). The Catalan Institute of Cultural Enterprises is situated here. It is an institution that facilitates the activity of 140,000 creative businessmen represented in the region.

Together they create total added value of more than EUR 5.7 billion a year, which is 3.2% of the added value of all Catalonian products.

Cultural Landscape of Barcelona

Although Barcelona is consistently associated with Gaudi’s buildings, architecture and tourism do not constitute the main creative field in the city. Film production and the audio and visual industries are currently actively emerging there, including advertising and video game production. In addition, Catalonia is still one of the leading European regions for literature.

Creative Youth Hostel in Barcelona

To get examples of clusters as organizational units, you can consider the Trans European Hall bringing together organizations from culture centres, creative industries and social activism, located in revitalized industrial facilities.

It is worth visiting the Ruhr region of Germany (North Rhine-Westphalia), as it is a conglomerate of 50 densely populated cities. Zollverein is located here, which was one of the most powerful coking plants in old Europe till 1980, and is now a UNESCO World Heritage site spanning a total area of 100 hectares. Documentation for the nomination was prepared by Rem Koolhaas’s architects firm.

Zollverein Creative Cluster in the Ruhr region of Germany

The complex is visited by almost one million people a year from around the world, but the main audience is made up of citizens of the Ruhr region. The hottest and brightest period is summer, when there are various festivals here. For example, the Intercultural Food Fest in ZOLLVEREIN® Park.

Also the famous Red Dot Museum is situated here, which introduced one of the world's most prestigious awards in the field of design.

Zollverein is considered not only as a creative leisure place, but it also has more than 170 small enterprises and organizations employing over a thousand people. About 80% of them are directly related to the creative industries. Almost all the segments are represented here – from publishers and hand-made items to production studios and web-design.

However, Zollverein itself as a cluster umbrella organization is unprofitable, it is “fed” not only by the contributions of cluster members, but also by grants, including those from local authorities. This model, which is very common in Western Europe resembles, an exoskeleton that helps even physically weak persons to lift extremely heavy loads.

German Zollverein Cluster, a UNESCO World Heritage Site

Local authorities, government and regional bodies, and international donors view their financial spending on the development of creative industries as investments in job creation (especially for young people) and strengthening of the social fabric.

Neo- or post-liberal oriented economists and investors are actively critical of this approach because it, supposedly, develops infantilism and spreads too much bureaucracy around the support of creative industries.

The American model may serve as an effective alternative. It is more focused on entrepreneurial skills and resourcefulness.

Interaction with modern high-tech manufacturing industry is one of the key challenges for representatives of the creative industries. Only time, which now has the ability to speed up, will tell us which models are viable.

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The text was prepared by Ukrainska Pravda with the assistance of the EU-EaP Culture and Creativity Programme.

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