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Cultural and creative industries – the emergence of neo-capitalism ?  Detlef Eckert European Commission Taipei, Taiwan April 26-27, 2008 Can you put a figure to creative value?

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cultural and creative industries the emergence of neo capitalism

Cultural and creative industries – the emergence of neo-capitalism ? 

Detlef Eckert

European Commission

Taipei, Taiwan

April 26-27, 2008

can you put a figure to creative value
Can you put a figure to creative value?

Creators often do not want to be associated with any business value; market should not drive artistic creativity it is believed

to be or not to be that is the question
“To be or not to be: that is the question”

First Approach: Neo-Classical Economic Theory

Labour and Capital could not explain growth, hence Technology was added:

Output = A*f(L,K,T); Labour, Capital, Technology

Where is culture if it is capital?

Possible to add culture to the equation if you can measure it.

Attempts exist to build a culture index/creativity index

For instance Technology, Talent, Tolerance (Richard Florida: “Why cities without gays and rock bands are losing the economic development race”)

the lesson from economic studies
The lesson from economic studies
  • Attempts have been made to measure the impact of Information and Communication Capital on productivity (various US studies, EU Klems)
  • Impact is measurable but it is concluded that the degree varies and depends on a number of “intangibles”
  • Cultural influence is a good candidate to explain some of the unexplained
  • Yet this is not the image of culture, mainly culture is supposed to be “uneconomic”, subject to subsidies, its function is “enlightenment”
so what is the meaning of culture
So, what is the meaning of culture?
  • Latin origin: cultura, from colere, meaning "to cultivate“:patterns of human activity and the symbolic structures that give such activities significance and importance (Wikipedia)
    • Cultural heritage
    • Anthropological Meaning*
    • Cultural (creative) industries

* From Greek: ἄνθρωπος, anthropos, "human being"and, λόγος, logos, "speech“

=> to talk about human beings

cultural heritage back to the future
Cultural heritage: Back to the Future
  • “Gifts” from the past
  • Archeological artifacts
  • Stock of art products
  • Architecture: historical buildings, monuments, traditional villages
  • Old traditions
  • The past influences the present: Today’s behaviour
anthropological meaning
Anthropological Meaning
  • Pattern of behaviour
  • Lifestyle
  • Values
  • Traditions
  • Probably key: language (e.g. anglo-saxon culture) and religion (e.g. hindu culture)
  • =>Cultural identity
  • Political objective: Cultural diversity
  • But also potential for conflicts (“Clash of civilisations”, Huntington)
cultural industries
Cultural Industries
  • The arts field including: visual arts (crafts, painting, sculpture, photography), performing arts (theatre, dance, circus) and exploitation of heritage (museums, arts and antiques market, libraries, archaeological activities, archives).
  • Audio-visual, entertainment, and information industries including film & video, radio & television broadcasting, video games, book & press publishing and music.
  • Creative sectors including design (fashion design, interior design, graphic design), architecture and advertising.
the economic value of this industry in the eu
The economic value of this industry in the EU
  • The cultural & creative sector generated a turnover of more than € 654 billion in 2003.
  • The cultural & creative sector contributed to 2.6% of the EU GDP in 2003.
  • The growth of the cultural & creative sector in Europe from 1999 to 2003 was 12.3% higher than the growth of the general economy.
  • The vast majority of the European cultural sector is constituted of micro-, small and medium sized enterprises
so again culture as capital to be or not to be
So again, culture as capital, to be or not to be?
  • “Capital Goods” are built up through gross investments minus depreciation and are economically exploitable
  • Heritage yes, but largely non-augmentable (exception excavation: example Pompeij), investment in preservation and economic exploitation => tourism
  • Civilization, yes and no, investments in education for instance, but slow changing societal pattern, yet powerful impact on economic performance (e.g. work attitude, money orientation, corruption, ethics, trust)
  • Cultural industries, yes and no, largely consumer goods, yet adding to cultural heritage (and exploitation), and in particular investment in industrial capacity (e.g. Hollywood Studios)
some characteristics
Some characteristics
  • Investment in culture often show (positive) “externalities”
    • Building a museum => catering, hotel, transport business benefits
  • Sometimes culture can create barriers (EU 22 languages, US mainly 1, leading to smaller markets vs one big market)
  • Culture a local development factor
    • High-skilled workers, entrepreneurs, academics, etc. want a culturally rich environment
  • Culture considered as a key factor for “creativity” (mind-opener, hi-culture)
    • Culture => Creativity => Innovation
    • Creativity is not confined to arts but arts are a driver of creativity
    • Emergence of a creative class (creative workforce)
the magic of creativity
The magic of creativity

Innovation is a process of creative destruction (Schumpeter).

Digital technologies (information society)have exacerbated this. Why?

The competitive advantage comes from being different (Nordström/Ridderstraale)

Cut through the hype of “everything new, the death of everything, cyber world, etc”

What is really behind:

The Internet allows innovation at the edge of the networks (it is easy to be on the net, but difficult to be successful, you need to be lucky and creative)

Computers are a powerful tool (“The Matrix”) but still with severe limitations (cognitive capabilities), creative programming

Knowledge and ideas are globally accessible and shared: you need to be creative to transform this potential into profitable business.

once upon a time we spoke about the information superhighway
Once upon a time we spoke about the information superhighway
  • (Premium) content was seen as prerequisite for investment in a “national information superhighway”
  • The winner is ……
  • …… Internet and Mobile Communication
    • communication (chats, email), information (online news), user created content (youtube, facebook), business transactions, peer to peer networks, etc
    • Online advertising is making big money, not video on demand
    • Modest but growing online content market (music downloads, video on demand, games, publishing) estimated at in 2005 at 1.9 bn Euro and supposed to grow to 8.3 bn Euro by 2010.
  • Today again we speak of New Generation Networks. Learning from the past?
cultural policy in europe
Cultural policy in Europe
  • Article 151 (4) of the EC Treaty states that “the Community shall take cultural aspects into account in its action under other provisions of the Treaty, in particular in order to respect and to promote the diversity of its cultures”.
    • Culture as a distinct policy
    • Culture as a horizontal task for all policies
    • Policy Paper in 2007
    • A number of specific initiatives and programmes
digital library initiative
Digital Library Initiative

Initiative to make European cultural and scientific heritage better accessible online

European Digital Library: multilingual access point, combined sources

Challenges: different materials, large volume, preservation (including digital preservation), copyright

2 millions item by 2008, 6 millions by 2010, yet even this is only a small proportion

2.5 bn books and periodicals

~ 50 million hours of film

70% of the material at risk

research in digital libraries and content
Research in digital libraries and content

Part of a major European Research Programme

2007 – 2013 timeframe

Digital libraries and technology enhanced learning: 102 million € over the last two years

Intelligent Content and semantics: 102 million € over the last two years


Follow-up of 2001 – 2004 eContent

2005 – 2008 timeframe

Objective: “to make digital content in Europe more accessible, usable and exploitable”.

Geographic information

Educational content

Digital libraries

Overall budget: 149 million €

2008 budget: 42.5 million €

Open for 3rd country participation

oscar and award winners
Oscar and Award Winners

Life of the Others

Die Fälscher

oscar and award winners23
Oscar and Award Winners

The March of the Pinguins

all of them supported by the media programme
All of them supported by the MEDIA Programme

2007 – 2013 timeframe

Overall Budget: 755 million €

Pre- and postproduction support

US films have an average budget of 45 mio €, in the EU 4 to 5 mio € in average, UK films are highest with about 8.5-9 €


Half of the European films are shown with the support of MEDIA.

MEDIA supports the distribution of 9 out of every 10 feature films in Europe that are distributed outside their originating country.

2.5 million cinema-lovers watch over 15,000 European screenings in more than 100 festivals funded by MEDIA

Every year 300 new European film projects are supported by MEDIA.


Digital Cinema


Motivation to watch non-US films

International co-operation possible under certain conditions

culture programme
Culture Programme

2007-2013 timeframe

Budget: 400 million €

To enhance a common cultural area and promote European citizenship

Support for cultural actions

Projects (mobility, dialogue, creativity)

Specific support measure such as European Capitals of Culture

Support for cultural bodies

Analysis and dissemination activities

Cooperation with 3rd countries on the basis of cultural agreements

culture and international cooperation
Culture and International Cooperation
    • Convention on the Protection and Promotion of the Diversity of Cultural Expressions
  • WTO
    • Cultural exception
  • What interest in co-operation?
    • Understanding/Tolerance
    • Economic benefit (trade, tourism)
    • Inspiration
beyond cultural exchange
Beyond cultural exchange
  • Traditional cultural exchange (e.g. visit of a dancing group)
  • Online access to culture in principle global
    • But barriers such as language, lack of understanding of the meaning, lack of interest: how to overcome?
  • Stimulation of trade and cooperation in cultural industries (e.g. co-production in or bil-lateral promotion of movies, potential of IPTV)
  • Inspirational projects
    • Internships
    • Art techniques
    • Management style
conclusions 1
Conclusions (1)
  • Culture is capital, introduction into economic models is needed, but difficult to measure
  • Investments in culture generate positive externalities
  • Digital technologies vastly increase capability to produce and distribute content including cultural relevant content: Creativity is key to exploit this potential
  • Economic productivity gains which are possible through digital technologies are in turn largely influenced by the societal pattern of culture
  • “Successful” cultures can dominate other cultures: Conflict with cultural identity /diversity objective requires to find a balance
conclusions 2
Conclusions (2)
  • People can have different cultural identity, in fact the ability to accept different cultural roles will be an essential element of success in the world economy.
  • “It is only culture, by uniting diversity that will give us a true European conscience” Yehudi Menuhin (14 March 1999, Le Monde)

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