CULTURAL ECONOMICS AND CREATIVE CITIES. NEW PARADIGMS FOR INNOVATION AND GROWTH
LUIS PALMA MARTOS.
DEPARTMENT OF ECONOMICS AND ECONOMIC HISTORY. UNIVERSITY OF SEVILLE. MIEMBRO DE OIKOS
ABSTRACT:
The paper presents from the cultural economics perspective the shift that this area of economic analysis has experimented in the last years from “cultural economics” to “economics of creativity”. In this framework we analyze the role of cultural industries and the proper concept of creativity from three axes.
The first one is focused in the study of creative industries in the light of the new paradigm of “cultural capitalism”. The second one tries to place cultural industries in a new organizational paradigm: the so called “liver model”, in order to confront this with the former “ovarian model”.
Finally we integrate these entire concepts in the urban development field taking as referential one the “creative city”. We are mainly interested in the capacity of public policies in order to generate innovation processes based on culture and creativity.
KEY WORDS: Cultural Economics, Economics of creativity; Creative cities; innovation based on culture and creativity
1. INTRODUCTION
The present work explores new paradigms in the analysis of innovation and considers both culture and creativity as its very basis. The territorial context we use as framework for the analysis has the urban environment as boundary, the creative city – as a concept – is at the core of our work.
The structure of this work has six main points –other than the introduction and conclusions; we also included a list of references. In the first point we approach the concept of culture from the point of view of cultural economics, emerging sub-discipline we deal with in the third point. We will sketch a concept and its realm, the increasing relevance of the discipline and – something crucial to our work – we will show the shift in the conceptual core with the result that the alternative idea of creative economy is gaining momentum.
Within this conceptual framework we will incorporate, in point four, the analysis of creative industries and their basic features. We will try to go beyond the traditional concept of cultural industries even if both have common features and characteristics, and both are cases in point of innovation.
We pointed out that the aim of our work is to explore new paradigms in the domain of innovation. With this purpose in point five we will carry out a comparative analysis between classical industrial and commercial capitalism and new cultural capitalism; this new approach will enable us to integrate the new paradigm that can be appreciated in the cultural or creative sector. We mean what Rausell (2009) call “liver model”, one that substitute the so called “ovary model”. We will do it in point six.
Last point integrates the above conceptual elements in the analysis of the linkages between creativity and urban development; in this analysis is relevant the concept of creative city which we will approach making a comment on the notion of creativity. Also, we will deal with the concept of cultural district and its critical elements if we take into account the new technological reality.
With the help of Towse (2005) we will eventually attest a certain conceptual immaturity on creativity and the environments in which it is generated. We will give support to the strength-idea of deepening in the analysis of creativity and its causal connection with economic activity, the one generating urban development.
2. AN APPROACH TO THE CONCEPT OF CULTURE
David Throsby (2001), in his now classical “Economics and Culture”, points out the difficulty of approaching the concept of culture. Among other reasons because of the very wide range of notions, from a number of perspectives, and also because it is a concept that has been evolving throughout the time.
However, Throsby, trying to contribute to the construction of the intellectual corpus of cultural economics as a discipline, pointed at two wide approaches. Firstly, what he calls anthropological or sociological, conceptualizes culture as the group of activities, beliefs, convictions, customs, values and practices common to any human group.
However, in operative terms and as a reference concept for cultural economics, he made an approach that he called functional: activities carried out by the people and their derivative products about intellectual, moral and artistic features of life.
Culture, from this functional point of view, has according to Throsby (2001) a series of interesting characteristics given the nature of our work. Firstly, the production of culture involves some kind of creativity. So, the concept of creativity underlies as well as determinates the one of culture. Secondly, the production of culture generates and conveys a symbolic content; the cultural good or service goes beyond the good or service in itself, something UNESCO has pointed out in several major documents on cultural policies and development[1]. Finally, Throsby says that the outcome of those activities represents, at least potentially, a kind of intellectual property.
UNESCO (2002), in the preamble of the Universal Declaration on Cultural Diversity, defines culture as a set of distinctive spiritual, material, intellectual and emotional features of society or a social group, and that it encompasses, in addition to art and literature, lifestyles, ways of living together, value systems, traditions and beliefs
3. SOME ELEMENTS OF CULTURAL ECONOMICS AS A DISCIPLINE
3.1. Background. A definition
Although the interest of economists for the world of culture is not new, as Goodwin (2006) has pointed out, it can be said that since the seventies the approach of economists to art and culture as a matter of study has been done with a higher analytical rigor and a wide use of the tools of economics as a science.
We can point the existence of a sub-discipline or specialized field, cultural economics (Ginsburg, 2001; Seaman, 2009). This sub-discipline has a seminal book, an international association and a specialized journal (Throsby, 2001).
The seminal book “Performing Arts: The Economic Dilemma”, authored by William Baumol and William Bowen, dates back to 1966. The authors observed an economic dilemma in the scenic arts, later know as “the cost illness”, that suggested an economic policy prescription: the Government must subsidized those activities[2].
In 1973 was established the Association for Cultural Economics, whose charter was modified later in 1993, adopting its current name: Association for Cultural Economics International (ACEI)[3]. Since 1978 ACEI organizes a biannual international conference on cultural economics. Up to date there have been 16 editions. The first issue of the Journal of Cultural Economics (JCE) was published in 1977[4].
In 1976 Mark Blaug made the first compilation of articles on the subject: “The Economics of the Art: Selected Readings”. These readings focused on public funding for the arts and its justification.
The first states of the art were published by Throsby (1994) in the Journal of Economic Literature (JEL) and Blaug (2001), in the Journal of Economic Surveys. In 1991 JEL classification put intellectual production into category Z – other especial topics – in category Z1: intellectual economy, and in 2001 was established Z11: economics of arts and literature (Towse, 2003). In 2003 Towse published “A Handbook of Cultural Economics” and in 2006, within the series handbooks in economics edited by K. Arrow and M. Intriligator was published the “Handbook of The Economics of Arts and Culture”, edited by V. Ginsburg and D. Throsby.
After showing the background that supports the existence of this discipline of the economic science we are able to choose a definition among those proposed. We have chosen Towse’s (2003): “the application of economics to the production, distribution and consumption of all goods and cultural services”.
3.2. Analytical framework and domain of cultural economics. From cultural economics to creative economics.
Table 1 shows the domains of cultural economics although we have also incorporated essential elements of creative economics with the aim to sketch both disciplines simultaneously and better gauge the shift from primitive cultural economics to new creative economics.
Table 1. Analytical framework and domain of cultural economics
Activities/
topics / Topics of particular interest / Transversal topics
Cultural economics / Scenic
arts / Attendance, demand / Demand for scenic arts / “The cost illness” (Baumol and Bowen 1966; Baumol, 1987), gust formation (McCain, 1979), rational addiction (Stigler and Becker 1977; Becker and Murphy, 1988), consumption learning (Lévy-Garboua and Montmarquette, 1996), cultural capital (Throsby, 1999), cultural value (Throsby, 2001), organizational and management patterns of artistic institutions (Netzer, 2003), artist job markets (Throsby, 1994; Menger, 1999; Benhamou, 2003; NEA, 2008), studies on the economic impact of culture, (Seaman, 1987; Snowball, 2008), economic valuation of heritage (Mourato and Mazzanti, 2002; Throsby, 2003), statistics of the cultural sector (UNESCO, 1986 and 2008; KEA, 2006)
Visual
arts / Demand for arts on aesthetic grounds and demand as an asset or financial tool
Demand of arts on aesthetic grounds and demand as an asset or financial tool / Auction and art work prices
Cultural built heritage / Valuation, conservation / Contingent valuation, economics of museums and cultural festivals
Cultural industries / Industrial organization, localization, cluster, cultural district / Book economics, film economics,
art cities
Cultural policies / Why cultural policies? Is it necessary the government intervention in artistic and
cultural markets?
In case it is necessary which
is the best way? / Public funding for culture (Robbins, 1963; Baumol and Bowen 1965; Peacock, 1969; Cwi, 1979; Van den Haag, 1979; Banfield, 1984; Frey, 1999), fixed book pricing (Appelman, 2003; Palma and Palma, 2008), copyrights (Towse, 2006, 2008)
Creative economics / Creative industries / Culture as an innovation factor / Advertising,
graphic design, fashion, architecture, video games, software, R+D / Creative industries (DCMS, 1998; Caves, 2000 and 2003), creative cities (Cooke and Lazzeretti, 2008), creative class (Florida, 2002)
Creativity / Innovation, productivity, economic growth / Places of high cultural density foster the creativity shown in greater innovation, increased business activity and higher economic growth / How creativity is produced and fostered? (Lazzeretti, 2009; KEA, 2009)
Source: adapted from Herrero (2002)
First column shows the five traditional domains of cultural economics, from the restricted notion of arts (visual, scenic); heritage, both sites and immaterial heritage (festivals, traditions); cultural industries and also the analysis of cultural policies with a mention to the role of Government in the world of culture from an economic perspective. Second column includes some topics of interest and the effort deployed with the aim of applying economic analysis to culture, something that noticeably contributed to literature extension in this sub-discipline. We can point out the increasing application of valuation economics, such as contingent valuation, to the economic analysis of museums, historic sites and festivals of a varied nature. In the domain of cultural industries those of the books and films have a decisive role in the principle of cultural industries. In the domain of cultural industries, those of books and movies play a prominent role due to their relevance in the mass cultural consumption.
Third column offers a wide array of transversal topics that in our opinion constitute a major contribution of the sub-discipline and enable a better understanding of the working of the cultural sector. Among other we have “the cost illness” and its implications for cultural policy; the modelling of gust formation by cultural goods and services; the concepts of cultural capital and values; the analysis of organizational and management forms in cultural concerns or the crucial issue of the building of parameters and statistics that enable a more rigorous approach – from the point of view of modern economic analysis – to the cultural sector.
As it can be seen, second segment shows that the interrelation between economics and culture has been extended (Lazzeretti, 2009). At the core of cultural activities is creative work. The connexion between creativity, new technologies, production structures and more flexible job markets establishes a new panorama. This approach considers innovation as the main engine for growth and creativity the key input in the processes of innovation. Also, they could be linked cultural education since childhood with creative activities that foster innovative entrepreneurship (Lasuén and Aranzadi, 2002). Creativity could be considered as well as a way of innovation that promotes entrepreneurship, increases productivity and is a source of economic growth (UNCTAD, 2008, 3); in addition, creativity generates an area of economic activity itself: the creative industries (Pratt, 2004).
Summarising, the appearance of creative economics and its inter-relationships with cultural economics as traditionally considered has left a series of subjects for further research, among them: culture as a source of innovation; culture as an input of creative processes; human capital and the generation of the creative class; culture and creativity in the innovation processes; creative districts; or the merging of the territorial dimension with the concept of creative city as a paradigm of urban development; we will come back to this subject.
3.3. Circumstances that foster the increasing importance of the cultural sector and its analysis.
We want to finish this point – intended to offer some elements of cultural economics as a discipline – with an inquiry on the circumstances that are making that – from the academy, the business world, politics, or the society itself – an increasing attention is being paid to the sector of culture and leisure for its role in the building of better societies.
It cannot be understood the steady growth of the cultural sector without taking into account the shift to service economy that has extensively happened in most world economies. This economy transformation could be put into relationship with the development processes that have provided the population with higher levels of income that enable the expenditure in non-peremptory goods[5].
Other factors that have enabled an increasing demand for culture and leisure, also related to the development processes, are the higher educational levels of the population and the higher availability of free time due to the sustained reduction in working time. Also, we have the fact of the increasing health levels in the elderly population at the age of retirement that enable them to enjoy a richer older age insofar as the consumption of goods and services is concerned. This demand, with its particulars needs, should not be ignored in the setting up of the offer of culture and leisure in developed societies.