The creative city does not exist

Front matter

Marianna d’Ovidio The creative city does not exist.

Critical essays on the creative and cultural economy of cities Ledizioni Città, Società e Governo

© 2016 Ledizioni LediPublishing Via Alamanni, 11 – 20141 Milano – Italy www.ledizioni.it info@ledizioni.it The creative city does not exist. Critical essays on the creative and cultural economy of cities Marianna d’Ovidio Prima edizione: febbraio 2016 ISBN 9788867053995 Copertina e progetto grafico: ufficio grafico Ledizioni Informazioni sul catalogo e sulle ristampe dell’editore: www.ledizioni.it Le riproduzioni a uso differente da quello personale potranno avvenire, per un numero di pagine non superiore al 15% del presente volume, solo a seguito di specifica autorizzazione rilasciata da Ledizioni.

Chapter 3 Supporting the creative and cultural economy

An analytical framework 1 As largely discussed in the previous chapters, creative and cultural economy, being closely linked with local knowledge, creativity, art and culture, is now addressed as one of the main leading forces for the urban and local development. Such a topic has the power to stir the debate concerning cities - a debate that is filled with reflections, recipes and methods on how to make city areas and districts emerge from the shadows to become lively creative venues and innovation hubs. Politicians, scholars and consultants have been wondering whether, and how, politics would be fit to provide support to those sectors of the economy that are connected with culture and creativity. We believe that the debate on the creative and cultural economy is too often limited to discussing attractiveness elements or issues related to economic support. However, it should be focused on the plurality of forces that contribute to define the environment that is being studied, so that the topic in question can be observed within the social, economic, political and institutional context it belongs to.

One of the issues that is often neglected is the effective aim of policies and formal institutions, which are usually blurred in favour of the importance of the so-called “soft” factors 2 within a given economic sector. We feel that the intermingling of social, political and economic circumstances in our cities is making even clearer that the important role played by institutions in shaping local creative and cultural economy should be further investigated. If a comprehensive analysis is to be carried out, the institutional context that governs it cannot be ignored. To such purpose, we maintain that a wide range of subjects, procedures, organizations should be considered, especially the ones that operate locally.

Through such a contribution, we wish to suggest a closer analysis of the institutional context in order to identify some further issues that are hidden away in the many folds of the social fabric. Therefore, we build a tentative analytical framework that might be useful to organize the analysis of policies and their 1 An early version of this chapter has been published, in Italian, as: d’Ovidio, Marianna. 2009. “Le Istituzioni Dell’economia Della Cultura: Una Proposta Di Analisi.” In Nuvolati, G., F. Piselli (eds.) La Città: Bisogni, Desideri, Diritti. Sociologia Urbana E Rurale. Milano: Angeli. 2 Here the influence of Florida’s theories is massive (see chapter 1)

causal links with the creative and cultural economy locally. By considering seven case studies, a model is going to be introduced, that keeps into account three different areas that policies aim at: the cultural assets, the economic sphere and the sociality of the creative and cultural industries. In our conclusions, we are suggesting that a fourth dimension should also be considered in order to have the full picture, namely, to understand to what extent politics is able to provide support to local creative production as a social inclusion tool. 1 Cultural policies versus policies for the creative city The debate on cultural policies is far from being new, and the topics involved and their relevance within a public discourse are still important issues in public discourses.. By briefly drafting an outline of the relations between culture and politics, it is possible to identify three main phases where cultural strategies appear to have different meanings and to aim at different targets. Bianchini (1993) sketches a route that links policies to culture by considering the shift from a “culture for politics” approach to a “culture for the economy” one, up to a phase where culture is instrumental to urban and social regeneration. Those are the main trends and should be considered as such, keeping in mind that different places and contexts feature different routes and timings. At the end of the 1960s, culture made a forceful appearance in the political agenda, and became right away an extremely important item, as well as a much debated one. Urban social movements in 1968 had a clear cultural character, since they were associated with an “alternative” culture that would merge with politics (Mortimer, 2006). Community and local administrators then used culture as a mean to achieve political and social goals. In fact, several activities were developed to bring new life to local culture and, at the same time, some measures were also taken to expand culture’s reach to all social strata. Throughout the 1980s, a radical transformation took place. The shift toward a conservative and neo-liberal approach provided the ideal setting for the development of cultural policies aimed at achieving economic targets, and not social ones anymore. On the one hand, private investments in culture were encouraged, while, on the other hand, marketing and good management of local cultural goods became the main goals of government activities. During the 1990s, cultural policies’ objectives changed again and culture became a tool to promote some innovative urban regeneration strategies. Culture was then brought into the political arena in order to foster regeneration of depressed areas and city development programmes. Local authorities would then use to their advantage the opportunities offered by vast and abandoned industrial sites located in cities, as they were seen as ideal venues

SUPPORTING THE CREATIVE AND CULTURAL ECONOMY for residential, commercial and cultural developments – also thanks to some new kinds of public-private partnerships that were taking shape. Such new districts promptly became very useful instruments to encourage international competition amongst cities. International tourism, the European Capital of Culture programme, and foreign investments, are all fine examples of the sort of competition that started in those years. Bilbao represents a perfect example of such a significant change3. At the turn of the century, culture has increasingly been considered by policy makers as a cure-all remedy for any weak segment of city or community life4. Urban regeneration strategies make now ample use of culture and new city districts have been developed around contemporary culture “temples”, such as theatres, exhibition centres and museums (Vicari Haddock, 2004). Policies focusing on economic restructuring of cities are aimed at attracting the “creative class” (Florida, 2002; Peck, 2005; Pratt, 2008) in order to improve culture industry and, consequently, enhance cities’ wealth5. What has been observed is, on the one hand, the rising number of players involved, whereas on the other hand, quite paradoxically, politicians and consultants seem to favour local policies that boast a massive communication impact, but whose real effectiveness is unclear. 2 The rules of the game Undoubtedly, investigating the role of institutions in society’s economic life has by now become an important issue in social sciences. Institutions matter is a motto that forcefully entered the social science debate (Jessop, 2001)6. Since the 1980s, a new trend has been emerging in the study of economic activities, i.e. a “sociological neo-institutionalism” that mainly focuses on the analysis of organizations and institutions. The core idea underlying neo-institutionalism is identifying a sociologically specific nature of organizations by conceptualising them as set within a historical and social context that should not only 3 Bilbao’s regeneration - that changed the former industrial centre into a cultural destination - has been studied by many scholars who provided contrasting interpretations. See, for example, the debate on the effectiveness of urban regeneration strategies through investments made in cultural infrastructures and urban marketing (Gómez, 1998; Gómez and Gonzalez, 2001; Plaza, 2006, 1999). 4 The term “cultural economic policy”, that made its appearance in literature toward the end of the 90s (Gibson and Kong, 2005), reflects the attention that local governments devoted to strengthen the link between culture and economy. 5 See the first chapter for a vast and critical literature review 6 In his paper, while differentiating three kinds of “ institutional turn”, the author outlines the debate’s evolution and discusses several types of definitions to be used for institutions and related analytical approaches.

consist of material restraints, but that should also be made up of legal provisions and cultural rules consolidated throughout history; a context where other organizations having similar aims operate too (Regini and Ballarino, 2007, p. 15) [Translation by the author] The above approach also aims at understanding institutionalization procedures related to “organizational fields” (Powell and DiMaggio, 1991), i.e. the set of similar organizations that are part of a given context, by analysing informal rules and social relationships too - and not just formal coordination and control mechanisms. Similarly, North refers to scaffoldings erected by humans defining them as the formal rules and informal principles that fix the rules of the game (North, 2005). A renewed interest in institutions that constrain society has been emerging in recent years. What characterizes the current analysis is a growing attention for any kind of institutions, not just for those ones that are traditionally considered government institutions. Such a new trend concerns the whole set of formal and informal institutions, as well as relations and rules. Contemporary economies are increasingly governed by the relationships existing between public players, economic institutions, together with informal elements - The focus falls on building the wealth of regions (not the individual firm) with upgrading of the economic, institutional and social base (Amin, 1999, p. 370). In our opinion, not enough attention is being paid to the role of institutions within the cultural economy as far as empirical research is concerned, even though the issue is often emphasized in theoretical investigations. Authors such as Scott, Rantisi or Pratt stress the need to consider formal or informal institutional levels as well. While analysing the links existing between regional and urban economies and the creative sector, Scott feels the need to point out that the economic sphere of a creative city is closely linked to the institutional and political domain (Scott, 2006, p. 8). Moreover, Pratt and Jeffcutt (2011) emphasize that creativity needs an institutional context which should be able to feed it. According to them, such a context consists of individuals, institutions and government since creativity is a process that brings together different players. Consequently, they conclude that it is necessary to understand how creativity is considered and expressed within different institutional contexts. Finally, Leslie and Rantisi (2006) assert the importance of a study able to tackle the role of institutions, since economic development is more and more linked to institutions’ ability to adjust to changes within an increasingly complex society governed by a multitude of public and private subjects. Our contribution is aimed at responding to such requests by providing a theoretical and methodological framework that may be used to investigate and

SUPPORTING THE CREATIVE AND CULTURAL ECONOMY analyse the role of policies and formal institutions in relation to the creative and cultural economy. Therefore, we intend to draft a multidimensional interpretation thread which should facilitate the observation of institutional actions through the effects they produce on the creative and cultural economy. By following the neo-institutionalist approach, we intend to set the cultural industry within the institutional context it refers to, and to identify the kind of effects institutions bring about on local cultural and creative production. To such purpose, we need to clarify the terms that are going to be used in this paper. By the term “institutions” we refer to what was stated by North who called them the rules of the game . Therefore, by “institutions” we mean the regulatory systems which govern and prescribe individual or collective behaviours through a range of incentives and sanctions mechanisms (North, 2005, p. 75). Secondly, when we state that we are aiming at identifying the kind of effects that institutions bring about on local production, we mean that we wish to investigate how an implemented action (or a group of actions) may work on the local cultural and creative production. That is in terms of financial performance improvement, of the sector’s innovative and creative power, of the kind of subjects involved, and of the extent of their involvement. Hence, we are aiming at suggesting an institution analysis model that should be fit to investigate the causal effect of institutions on the single domains of the creative and cultural economy. 3 The capitals of the creative and cultural economy First of all, before proceeding with our presentation of the methodological picture that we are suggesting, let us recall here the debate we proposed in the first chapter on the creative and cultural economy. This will help us to break the concept down into its main features in order to better grasp the role of supporting actions.

In the first chapter, we briefly traced the history of cultural consumption and we emphasized some of the main transformations in the urban economy: this allowed us to observe that the creative or cultural economy features products (goods or services) whose value is determined by their symbolic and cultural content, rather than by their actual material worth. Moreover, we can add here that a cultural object may be split into three spheres: the innovative and creative aspects that characterize it; the economic setting it belongs to; and, the professional mix that contributed to its creation, or that is involved in other ways. In fact, economic players, cultural agents, creative professionals and innovators are all included, as well as the peculiar streams of knowledge and knowhow that flow amongst the different players concerned. This particular field is often more thriving when the three aspects (culture, economy and relationships) are intertwined to produce a special mix made of art, business and player networks (Scott, 2006). Borrowing from traditional social sciences language, we may say that cultural economy’s products derive from a mix of cultural, economic, and social capitals. 3.1 Cultural capital The value of a cultural product originates from the cultural, symbolic and artistic content that makes it up, rather than from the physical material it is made of. For example, paper and ink do not determine a book’s value, but rather the content of its pages does. Similarly, whenever we buy a perfume, we are aware that its price is not given by the alcohol and fragrances that were used to produce it, but by the whole set of symbols, status and images that are linked to such a perfume.

When all those cultural, artistic and creative elements undergo a commercialization process, they are subject to market rules. One of the consequences of such a shift is what Harvey (1990) called symbolic inflation - i.e. the process through which every object needs to be continuously re-invented, re-covered by symbols, or re-assembled in order to stand the many challenges of a market that is unceasingly searching for novelties. The endless transformations of fashion styles, intellectual currents and star-system trends are only some of the visible results produced by symbolic inflation. Therefore, to ensure cultural economy’s success, it is essential to keep on launching new products on the market, and to create new signs and symbols all the time (Molotch, 2003; Negus, 1997). Hence, cultural capital can be defined as the ability to imbue products with symbols and immaterial value, to continuously innovate and to offer newer and more original products. 3.2 Economic capital Creative professionals, artists and cultural workers operate according to market logics too, and not only in response to their creativity drive. Financial soundness seems to be especially crucial in the cultural domain, due to at least three kinds of reasons. First of all, competition is particularly harsh in a market that changes very quickly, and that is subject to symbolic inflation (Hirsch, 2000; Pratt, 2006). Secondly, since goods are judged according to their symbolic and aesthetic value, when a new product is launched on the market it is very difficult to predict its success (Entwistle, 2000). Finally, the creative and cultural economy is often characterized by very high production costs, against very low reproduction costs (Bassett et al., 2002). That is the

SUPPORTING THE CREATIVE AND CULTURAL ECONOMY case of film industry, where production is very expensive, whereas consumers pay a small price to enjoy films. That is what makes investments in culture much more significant compared to the ones of traditional industries, where economies of scale allow for some remarkable cost reduction. 3.3 Social capital The role and influence of social capital have been evaluated by many authors in relation to any social aspects, from politics to economy, from family to social movements (see Andreotti, 2009; Woolcock, 2001 for an overview of the debate on the topic). However, both theoretical analyses and empirical researches show that this kind of capital is peculiar (even though not exclusively) to creativity- or culture-based economy. First of all, more significantly than other industries, the cultural domain is organized into networks that tend to expand both horizontally (if interaction occurs amongst same-level operators) and vertically (when operators from different levels cooperate to produce a given product). Moreover, one of the crucial aspects of the creative and cultural economy is the development of co-presence conditions, or face-to-face relationships. Evidence gathered shows that such relationships can actually work as useful tools to foster creativity (Becker, 1982; Molotch, 2002), to establish trusting relations (Banks et al., 2000), to provide legitimacy and recognition (Storper and Venables, 2004), and to secure new appointments and projects (Pratt, 2000) much more than in other industries. We discussed the issue extensively in the first chapter. In chapter four we will deeply explore the relation between social capital (expressed in thick relational networks) and the creative and cultural economy of Milan, Italy.

The model that we wish to put forward for the study of institutional impacts on the creative and cultural economy is based on such a breakdown into different capitals, and it suggests that the way institutions act on each capital should also be investigated, and broken down into the effects produced on cultural, economic and social capitals. 4 Seven case studies to build an analytical framework The starting point of our work is a cross-section secondary analysis of seven case studies found in literature where a set of policies and actions by formal institutions have been assessed. The case studies in question were then broken down and reassembled by applying the suggested analytical model. Such case studies are not meant to be representative samples for any possible case, nor did we mean to provide a sort of taxonomy, but, as examples of institutional support, they can be considered as some good starting points upon which we tried to build our analytical proposal. Out of the seven case-studies, four of them are public-led institutions, while three of them are private organizations (although one is owned by a public body). 1) Centre National de la Cinématographie (France). CNC is a public organization which supports the French film industry in different ways: through offering loans, by supporting several training and educational activities, by sponsoring the Cannes Film Festival, by organising a number of events to provide social contact opportunities to producers, directors, operators and so on.

Special attention is devoted to technology innovation through the work of an ad hoc commission, the Commission Supérieure Technique de l’Image et du Son (CST), which focuses on sustaining research in the field of technology innovation and audiovisual applications (http://www.cnc.fr [Last accessed on September, 2015]). 2) Provincial Tax Credit Programme (Canada). It is a special programme developed by Quebec’s Département de économie, innovation et exportations aimed at granting tax credit to companies based within Quebec. The companies wishing to benefit from the programme should use the services offered by qualified designers for various applications, such as industrial design, fashion, furniture production, and so on (http://www.economie.gouv.qc.ca [Last accessed in September, 2015]). 3) Société De Développement Des Entreprises Culturelles (SODEC) (Canada) is a Montreal’s province agency directly supervised by the Canadian Ministry of Culture. It offers support services for marketing and distribution of products manufactured by artisan-style, or almost artisan-style, companies. It also operates as a commercial bank (http:// www.sodec.gouv.qc.ca/fr/home [Last accessed on September, 2015]). 4) During the annual competition known as Commerce Design Montreal (Canada), organized by Montreal’s municipality as one of IDM’s programmes, several prizes are awarded to public venues that renew their interiors through innovative design efforts by using local designers (Leslie and Rantisi, 2006). 5) Institute of Design Montreal (IDM) (Canada) is a non-profit organization set up by Montreal’s municipality whose official mission is “to promote design as an economic value and have Montreal become a design centre of international calibre” (Leslie and Rantisi, 2006). Amongst its programmes, it is worth mentioning the Institute’s active role concerning the organization of workshops and conferences, scholarships and internships offered to design university students, financing solutions devised for young designers to start-up their businesses, and the support given to companies to integrate production with design.

SUPPORTING THE CREATIVE AND CULTURAL ECONOMY 6) Langhe Consortium (Piedmont, Italy). The Consortium represents an example of what Santagata (2004) defined “institutionalized cultural districts” to identify those local productive contexts where a special brand is adopted by producers to preserve the quality standard of their goods. Another example of such a phenomenon can be found in the Chianti region, in Tuscany. Within those contexts wine production is protected through a DOC label ( Denominazione di Origine Controllata – Controlled Designation of Origin) which ensures the high quality of grapes and production methods (http://www.langhe.it [Last accessed in September, 2015]). 7) Banca Etica (Italy). It is a commercial bank whose activities are based on ethical finance principles (transparency, credit access right, efficiency, and attention for non-economic consequences of economic activities) (www. bancaetica.it [Last accessed on September, 2015]). Amongst its different credit activities, the bank offers loans to theatre companies working in jails, or working with ethnic minorities, disadvantaged groups and so on (Cliche et al., 2002). Tab. 1 Case studies Institutions Public/private Description Centre National de la Cinématographie (CNC) (France) Public Backing offered to French movie industry. 2 Tax Credit Programme (Canada) Public Tax credit granted to companies using the services offered by designers. Société Général des Industries Culturelles (SODEC) (Canada) Public It supports marketing and production of artisan-style products and companies. 4 Commerce Design Montreal (Canada) Public Prizes awarded to public venues featuring innovative design. Institute of Design Montréal (IDM) (Canada) Private It provides support on Montreal’s design industry. 6 Langhe Consortium (Italy) Private Adoption of protective measures to safeguard local production. 7 Banca Etica (Italy) Private Financial solutions offered to associations dealing with social inclusion through cultural activities.

5 Institutions at work The seven case studies investigated here can be rearranged keeping in mind the analytical framework that was introduced above - i.e. by considering where they mainly affect the economic, social or cultural capital of the given segment in the creative and cultural economy. Therefore, for example, Banca Etica acts on the economic capital, likewise the Centre National de la Cinématographie in France. On the other hand, the Commerce Design Montreal has an effect on cultural capital, whereas the Montreal’s Institute of Design deals with social capital.

Such a description does not produce great benefits, as it seems to provide nothing more than a taxonomic kind of classification. Nevertheless, one advantage that such a model may offer is an in-depth analysis of their impact on individual cases. In fact, apart from investigating the area where they directly influence, it is also possible to study indirect effects brought about by such actions, and that is exactly what we are going to illustrate in the following pages. Supporting actions implemented by formal institutions and policies may encourage local cultural production, or they might have unpredictable results in other areas, or even hinder such a production. Let us now start with an analysis, which takes into account both the direct and indirect impacts of institutions. Firstly, we can look at two institutions sustaining a whole local sector of the economy - i.e. CNC in France, which promotes film industry’s initiatives, and IDM in Montreal, which fosters the design industry.

CNC’s action has been analysed by Scott (2000) in a research on the French film industry. First of all, Scott explains how the main role of CNC is that of acting as a sort of coordination agency that contributes to establish some useful links amongst the different subjects involved, by providing financial support where needed on the one hand, and by creating relationships on the other. Moreover, through a specific commission called CST (Commission supérieure technique de l’image e du son) it promotes technological development too. Therefore, CNC’s action can be seen as directly aimed at strengthening economic capital (tax load reduction), as well as at enhancing innovation capital (mainly through CST) and, finally, social capital too. In particular, the latter level of activity can be considered as the key one, since the pluralism of the different subjects involved is actually the strongest point of the French film industry (Benghozi, 1989). IDM’s official aim concerns acting on the economic sphere of the design industry. To such purpose IDM operates to establish player networks, both between institutional and private players, and amongst private operators

SUPPORTING THE CREATIVE AND CULTURAL ECONOMY (Leslie and Rantisi, 2006). Therefore, its activity is devoted to social capital with an aim at increasing economic capital through feeding innovation. In fact, IDM offers a special scheme to allow designers and small/medium-size companies link up with each other, by promoting designers on the one hand, and, on the other, by organising consulting services to identify those aspects of product definition that should be improved. IDM organizes conferences and brainstorming sessions where designers, trade operators, scholars and politicians are invited to ponder and discuss various topics related to design industry.

The following two institutions, by directly supporting the economic capital, contribute, indirectly, also to the development of cultural innovation: indeed, we will see that in Italy, theatre activities are facilitated through some new kinds of cooperation between private companies and third-sector organizations; whereas in Montreal, artisan-style companies are encouraged to express their creativity by establishing a self-supporting “virtuous circle”. Banca Etica in Italy acts directly on the economic capital by lending money at low interest rates to theatre companies operating in non-conventional circumstances (e.g. ethnic/language minorities, situations of social marginalization). Through its activity, the bank sustains a network of private, public and third-sector players that would not be able to survive otherwise. The networks generate a strong social capital that produces innovation in theatre production. It has been observed (Cliche et al., 2002) that cultural production originating from such social capital is extremely innovative and radical, with the capacity even to enhance theatre production at large. Hence, it might be plausible to assume that, in addition to a direct impact on economic capital, such institutional activities can further strengthen social capital too, that, in turn, generates cultural capital for the broader sector. SODEC is a state-run company that plays a role which is similar to the one performed by Banca Etica. In fact, it provides financial support to companies by funding internships and training programmes, or by acting as a proper bank. Nevertheless, its actions are directed toward helping small, artisan-style companies devoted to creative and cultural activities which are the very hub of local creativity and innovation (Leslie and Rantisi, 2006). Even when SODEC operates as a bank, it shows a remarkable ability to appreciate the economic value of creativity featured by cultural products and, consequently, it tends to apply low interest rates. So, its explicit actions are directed toward economic capital, which then translates into support for innovation capital. In the Langhe consortium’s case, institutional cultural districts produce both positive and negative effects in relation to backing local production and improving its performance (Santagata, 2006).

The main resulting virtuous effects can be summed up as follows: a) community culture protection for a given area through the creation of a special brand that can only be used by local producers; b) protection against unauthorized reproduction of local assets, and incentives aimed at promoting high-quality production; c) enhancement of local producers’ networks and fostering of information exchange; d) definition of quality standards that, in turn, attract new producers that are able to maintain the same standards and prevent unfair competition; e) finally, as a consequence of the above chain reactions, prices increase backed by an improvement of product quality. Institutional local districts originate from the formalisation (institutionalization) of network of local players and, therefore, stem from local social capital. The effects of such a background can be appreciated in terms of improvement and increase of cultural capital (in this instance capital originates from local culture) which, in turn, is reflected on economic capital too. However, some negative effects have been identified in the institutionalized cultural districts in general, and regarding the Langhe consortium, too. Indeed, such institutions may encourage free-rider behaviour, if individuals or groups of local producers that use the consortium’s brand offer low-quality goods (Santagata, 2006). In such circumstances, it may also happen that agents interested in the quality of local production do not use the brand and exit the consortium, damaging the specific culture even more seriously. Such situations arise when the institution in question weakens, i.e. when the social capital that originated the same institution diminishes. In that case, players that are only interested in economic capital take advantage of the institution for such a purpose to the detriment of culture capital. Commerce Design Montreal , for instance, achieves some rather scarce positive goals, and is not able to provide a truly sound support to the design industry (Leslie and Rantisi, 2006). From some points of view, the programme was a success – public areas gained visibility and reputation; work opportunities increased for designers; people’s curiosity for design was aroused; and tourism, too, benefited from the scheme. Nevertheless, results were more linked to city revamping and tourism, rather than to design industry support. Such an activity that mainly focuses on transferring money, and only partly on enhancing designers’ and public area’s social capital, appears unable to produce positive results in terms of cultural capital.