Lessons on Cultural Led Economic Development Practice 2010

Since the mid 1990s, two worlds have been somewhat reluctantly colliding. Far from this being a universal and magical cosmic event, the fusion of culture into economic regeneration has been controversial and has split opinion on both sides.

“Mozart is Mozart because of his music and not because he created a tourist industry in Salzburg…. Picasso is important because he taught a century new ways of looking at objects and not because his paintings in the Bilbao Guggenheim Museum are regenerating an otherwise derelict northern Spanish port…..” John Tusa, as Chairman of the University of Arts (1999)

Whilst some in the cultural sector feared being swallowed up into the mainstream and a watering down of artistic integrity by buying into wider agendas, many with a traditional economic perspective espoused that the cultural sector is not a major driver for economic growth as it generates little new wealth and is a by-product of people having more disposable income and more leisure time.

Historically, it has been difficult to quantify the value of artistic goods, as value is often derived entirely from the perception of the buyer, museum/gallery or critic, which makes it difficult to calculate potential returns on investment. Many artistic goods such as films or performances have very high investment costs up front and relatively short life spans with which to generate a return, hence the concern behind the planned demise of the UK Film Council. This makes it extremely hard to calculate what the demand for particular artistic goods might be and increases the risks on investment (the historic reason why much investment in the arts is in the form of public sector or charitable grants).

Long standing economic arguments about the role of culture in economic development have also criticised the levels of public subsidy required within the sector. There is a view that subsidy to the arts is largely geared towards audiences that are relatively well off, and that it is neither broadening the ‘market place’ place for the arts, nor acting as a genuinely re-distributive form of public investment. More commonly this argument centres on the suggestion that resources may be more productive if invested elsewhere within the economy, for example in manufacturing.

Throughout the 1990s however, there was a growing discourse about the role culture could play in Economic Development and Regeneration. As the millennium wore on the service sector increasingly globalised, technology turned information into products and the consumption economy expanded. On the back of change and momentum, the Economic Development profession began to buzz with a growing interest and appreciation of the creative and cultural industries, which seemed to epitomise a new regional economic confidence.

Across the UK, cultural and regeneration agencies invested in upgraded and new iconic cultural facilities, very noticeably in the Midlands. To name but a few examples, the Midland Arts Centre in Birmingham, Curve in Leicester, Nottingham Contemporary and Broadway Cinema in Nottingham, QUAD in Derby and The Public in West Bromwich. New cultural quarters were designated; major festivals initiated and public spaces upgraded which, assisted by a loosening of licensing laws, were colonised by coffee shops and trendy bars.

The creative sector was increasingly seen as the spearhead of the knowledge-based post-industrial economy, with booming exports in popular culture built around Brit flicks, music and broadcasting. Universities up and down the country developed new courses in Computer Games Design, Popular Music and Cultural Economy studies. Richard Florida became an economic guru and the economic development profession toyed with how to attract the creative classes to their back yards.

However, during the cultural regeneration heyday, some across the cultural sector overlooked the need to address underlying economic narratives and radically transform a generally weak and intangible evidence base. We now find that the good old days of public sector cultural investment are being increasingly consigned to history. The creative industries across the board have suffered markedly from the recession, many cultural venues and attractions are looking at life on the brink over the next few years and the big wheels and outdoor ice rinks that have graced our public spaces may not be a long term feature.

Since the recession, it is easy to re-appraise much of this investment as having being built on shaky foundations. Personal disposable income has fallen off drastically and what was an everyday activity such as a trip to the theatre now seems more like a luxury treat. The squeeze on the public purse is major knock-on effect on a broad range of cultural attractions. Now, as a double whammy, public investment is looking like being a second ‘financial lemming’, with budget cuts looming from both Local Authorities and the cultural agencies that so far have survived the quango shuffling at Whitehall.

Subsequently, a renewed clamour has begun to prove the economic value of the cultural sector. However, in dusting off many of the original business plans, maximising economic impact was often seen as an add-on to the project, not its raison d’etre. A paucity of locally based evidence meant extrapolations from national data sets were the norm, allowing creative accounting in calculating some of the impacts. The evidence of impact has either been brash arguments with little evidence, or brash evidence with little argument. This has allowed the age old economic arguments to resurface about a Cinderella sector having little place in a serious 21st century economy.

In the brave new world of ‘doing something with nothing’ economic development, it is all too easy to throw out the baby with the bath water. Our ‘new’ economic paradigm revolves around exports to emerging markets, wealth generation and job creation, welfare to work reform, a high tech manufacturing renaissance, economic localism and a strong third sector delivering public services.

The truth is of course, apart from rhetoric, micro economic policy has changed little; therefore all the potential that the creative and cultural sector can offer hasn’t dissipated either. Manufacturing still needs high quality design and cultural resonance, the new ‘staycation’ phenomenon will need more than just a good donkey ride and a stick of rock to attract high spending urban elites and in terms of encouraging exports to emerging markets, we can no longer bank on Cool Britannia or a reputation for building successful global companies such as British Airways, BP and RBS to get us a gig! The starting point for our reputation within developing nations has never been fantastic and now we are classed as one of the main exporters of the current economic crisis.

The fact of the matter is now we have some serious economic questions to answer; there probably hasn’t been a time that the creative and cultural sectors have been more important to national and local economies. When the inevitable creative destruction process has subsided, the remaining leaner and meaner cultural and creative sector ought to be a massive asset to our profession.

Culture and creativity still has a major role to play in defining the distinctiveness and quality of place, particularly as once again, the Midlands and northern Britain de-regionalise and fight for attention from under the shadow of London. Within the annual Place Survey, culture is always seen as a major priority for investment, especially in the more affluent localities within the Midlands. Whilst this may be a reflection of social harmony and a more educated electorate, it does also reflect a thirst for a rich and varied cultural life from the regional bourgeoisies.

It is also often overlooked that, probably with the exception of a certain Swedish furniture shop, catchments for leisure purposes are much broader than those for retail. Cultural and leisure facilities, along with festivals and events, have a major role to play in re-positioning and attracting new audiences back into city centres, including those that were lost before the recession. Many cultural venues have shown significant innovation to sustain and develop audiences during the recession. S4W’s work with Derby Festé is providing new and localised evidence to articulate the role the festival is playing in attracting occasional visitors into the city centre from areas that really should be well within Derby’s retail catchment.

Creativity and innovation will also need to be revisited if tailored exports to new markets are to be an enhanced economic platform for the future. Products and services will need to be responsive to new circumstances and a new emphasis on design within supply chains will be critical. In terms of the Creative Industries, 78% of firms within the sector are active innovators with 52% attributing increases in their turnover to new and improved products, compared to 40% for other sectors (Creative Britain: New Talents for the New Economy (2008)). Cultural exchange will also be critical in opening up new markets, either in terms of attracting inward investment (these days just as likely to be overseas students) or outward missions.

Equally in terms of enterprise, where there is a clear and sustainable market opportunity, the creative sector represents an opportunity to increase the local enterprise base as businesses are increasingly outward focused and are actors in national and international markets. There are also high rates of self employment within the sector (in the East Midlands it has been estimated at 25% of the business base). From an economic development perspective, this traditionally has been seen as a structural weakness, but may provide a latent talent pool from which to develop and grow larger businesses from sole traders. In terms of working with our ‘doing something with nothing’ profession – a sector that has low barriers to entry, soaks up skilled labour and is not dependent on expensive imports to complete its product/service offer – ought to be an attention grabber!