Introduction

Creative Cluster Policy: The Story So Far

Introduction to the Creative Clusters Conference
Simon Evans Creative Company A distinctive feature of creative enterprises is that they only thrive in each others company. Whether they are artists in Manhattan lofts, film-makers in Bollywood, fashion designers in Milan or animators in Seoul, creative enterprises gather together in visible hot-spots which, when fully established, become self-sustaining clusters of creative activity. This happens at every level, from the media centre in a small town to global centres like Hollywood. The purpose of the Creative Clusters Conference is to understand why the sector develops in this way, and to examine the consequences for development policy. As we do this it becomes apparent that the lessons learned have wide application across other areas of social and economic development. Why Clusters? Clustering is not confined to the creative sector. Specialist markets, neighbourhoods devoted to particular trades and region-based industries have always existed. Clusters develop naturally, often linked historically to a natural advantage, and they persist as long as it is in the interests of new enterprises to join them. There is a substantial literature analysing clusters, from Alfred Marshall in 1920 to contemporary economists like Michael Porter and Michael Enright. Broadly they agree that clusters confer competitive advantage on their constituents because: Proximity sharpens competition, driving up standards They encourage collaboration and diffusion of good practise between firms A sophisticated local market stimulates innovation. Better access to suppliers and resources gives small companies some of the advantages of larger ones An infrastructure of specialised professional support services is encouraged to develop Clusters become a focus and a magnet for investment Creativity and Clusters There are some special reasons why clustering occurs in the creative sector. Whilst creative people are highly mobile, the big producers and distribution companies on which they ultimately rely are not, and so creative talent is drawn to the places where distributors are located. Creative businesses need this pool of specialist labour to scale up to cope with big projects like films and games. In its turn, this talent pool of creative people and services encourages a discerning local market, which is essential for creative producers to understand new trends and fashions, the engine of innovation in this sector. A sophisticated local market is an key component of a creative cluster: they are clusters of both production and consumption. Reputation is a critical and often overlooked factor. No matter how much intellectual property their past work 1 has generated, a creative enterprises future prospects are determined by its reputation. The best place to build and manage reputation is at the centre of the action, amongst discerning peers and customers eager to spot new trends and talent. The reputation of the cluster itself is also important. Everyone associated with a successful cluster shares in its reputation, and so new arrivals get a free gift, a small boost to their kudos, just for turning up and joining in. A clusters reputation is the key indicator of its sustainability. These are the factors that explain the peculiar dominance of places such as Hollywood, London and Paris in their respective creative sectors. Cluster Policies and Programmes With creative industries in the developed world showing double-digit growth, and at the same time offering developing economies the prospect of a quick route to wealth, it is no wonder that governments everywhere are looking to develop their own creative clusters. The evidence of the last two Creative Clusters Conferences is that the goals of such policies is invariably to attract and retain the next wave of creative entrepreneurs by: Encouraging the local market Developing a distinctive local offer Building identity and reputation Improving connectivity Establishing institutions and networks for collaboration The essence of a cluster policy is that interventions are made at the level of the cluster: they do not favour one firm over another. A wide range of programmes from around the world have been presented: Co-location schemes: workspaces and zoning policies Championship, visibility, evidence, community buy-in Sales support: directories, trade missions, standards agencies, expositions Entrepreneurs networks, within and between clusters Shared resources and services Public realm works Training for new skills and aptitudes Commercialisation schemes for research and development Specialised investment instruments This years Conference puts two of these areas under the spotlight: skills development and investment. To deliver these programmes, development agencies of many kinds have been set up. Within government or outside it, these agencies generally act as champions, gatekeepers to public resources, they collect data and evidence and are an interface with policy-makers.

Introduction

may be a reluctance to commercialise cultural products, particularly from creatives used to the non-profit sector. The Specificity of Place However, cluster thinking has in many cases not been well understood. In their rush to compete, many places are adopting policies and programmes from other locations without making the effort to adapt them to local circumstances, and so what should be a localityspecific approach becomes a copycat exercise. The most important lesson of our two conferences so far is that policy for cluster development must go with the grain of local cultural and business conditions. Policies that try to force development down a path that is at odds with local conditions will not work. In this of all sectors, an off-the-shelf approach is doomed to failure. Common Pitfalls Here are some more common pitfalls: Wishful thinking policy clusters Bias towards hi-tech activity (new media, mobile content, animation, games) Ignoring traditional, local strengths Losing sight of creative entrepreneurs, letting the development agency become the cluster Too small a geographic area Too many buildings, too few people Misunderstanding reputation and intellectual property Defining a sector on output, not on activity Trying to pick winners and big names, not building shared infrastructure Focus on the short-term and quick wins Poor data collection and project evaluation Neglecting the local market Misunderstanding creative development: better can be as important as bigger Supporting firms to produce, not to find customers Underestimating the effects, and the opportunities, of globalisation Business Engagement Many cluster programmes find it hard to win the support of existing businesses. Local firms may discourage incomers and tend to prefer closed networks to open clusters. Larger firms may not take part at all, or will use cluster programmes to consolidate their position. There The root of the problem is that creative enterprises are in business not for economic development, but for their own ends, and so arguments couched in broad development terms will not win them round. But the engagement of creative people is essential to the success of any cluster programme, and a key task for the cluster manager is to find the programmes, and the language, that will make allies of them. Key Features of Creative Clusters Creative clusters are hard to develop (and perhaps harder to define), but the characteristic features of successful clusters are widely agreed: Connectivity to the world: creative entrepreneurship thrives where local and global cultural forces interconnect Cultural diversity, free trade and free expression: openness and a through-flow of new people, new ideas and new products Production and consumption: the beginning and end of the supply network (maybe not the middle) More than business: art, education, culture and tourism The Bigger Picture Finally, some exciting big picture insights from the last three years begin to show how policies for the creative industries are relevant to all sectors of the economy: Places without strong creative clusters will lose their creative people and businesses to places with them. Locally rooted creative clusters are highly resilient to global competition. A key survival strategy for non-knowledge based firms is to anchor themselves to local creative industries. Building creative clusters requires that cultural and economic development come together. Cultural diversity is an economic asset and a source of competitive advantage. I hope you enjoy Creative Clusters 2005, and I look forward to developing with you our shared understanding of this fascinating sector.

Simon Evans Conference Director

Creative Clusters is an international conference and network for people interested in policy for the development of the creative industries. We are interested in regeneration and development projects that deliver outcomes in both cultural and economic terms. Our goal is to help people engaged in the development of creative industries to communicate and share resources with one another, and to influence development policy. Find out more, and join our network, at www.creativeclusters.com