A distinctive feature of creative enterprises is that they thrive best in each others’ company, in places that have both a strong local identity, and are also open to the world. In the creative economy, place matters. At every level, from the media centre in a small town to global centres like Hollywood, creative enterprises gather together in visible hot-spots which, when fully established, become self-sustaining clusters of creative activity.
The creative industry ecology is one of whales and plankton: a handful of high-profile global players, stars and multinational companies, dependent upon vast shoals of project-based micro-enterprises. From the surface, only the bigger players are visible, but these big fish are wholly dependent on the small fry further along the supply chain.
New value is created in this sector when technical innovation, artistic creativity and business entrepreneurship are deployed together to make and distribute a new cultural product. Content-creating enterprises must be quick to respond to changes in fashion and technology. Their assets are invisible and volatile: reputation, skills and brands. They operate in global niche markets. They evolve by getting better rather than by getting bigger. Key players are rewarded by lifestyle and reputation as much as by money. A good deal of their critical infrastructure is external to the firm. All this adds up to a business profile that is not widely recognised by banks, investors or government.
Although new creative content tends to be made by small enterprises, most of the distribution channels are controlled by large multinationals. Many of these are household names: Fox, Time Warner, Sony, the BBC. Because of the disparity in size and scale between creators and distributors, communication along the supply chain is often problematic.
The principal strategy that the creative sector as a whole adopts to address these structural issues is to pool resources and band together: into networks, clusters, quarters and other kinds of partnership. The usual definition of a business cluster is Michael Porter’s, in The Competitive Advantage of Nations:
…geographic concentrations of interconnected companies, specialised suppliers, service providers, firms in related industries, and associated institutions (for example, universities, standards agencies, and trade associations) in particular fields that compete but also co-operate.
Silicon Valley in the United States is often cited as an example.
Across the world, economic development agencies have identified the Creative Industries as a growth sector, and most are supporting them through some form of cluster-based economic development strategy. But Porter’s model is proving problematic.
The UK’s Department of Trade and Industry notes that ‘dividends from creative clusters can be enormous in terms of civic image, training and engagement in the economy as well as purely economic terms.’ However the sector also faces special challenges: ‘creative clusters are not the same as other clusters, and common strategies will not work’. In other words, the creative sector is booming, but not thanks to mainstream economic development strategies.
A cluster of creative enterprises needs much more than the standard vision of a business park next to a technology campus. A creative cluster includes non-profit enterprises, cultural institutions, arts venues and individual artists alongside the science park and the media centre. Creative clusters are places to live as well as to work, places where cultural products are consumed as well as made. They are open round the clock, for work and play. They feed on diversity and change and so thrive in busy, multi-cultural urban settings that have their own local distinctiveness but are also connected to the world.
More Key Concepts: Creative Industries | Creative Economy