Economical power of culture

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Economical power of culture industries has been increasing. It is now imperative issues for the developed countries as well as developing countries as the culture grows to be the source of new economic power. Consequently, it becomes a significant concern of policy makers since 1980s. Some case studies also show that the proper initiatives foster the economic situation for the cities of countries. The center to this paper is to illustrate how culture juxtaposes with industry, and induces economical power to the cities. This tendency can be found in certain industrial areas for example fashion business in Milan and Movie industry in Hollywood. In order to demonstrate this modern inclination of cultural industries, Firstly, the culture industries will be assessed in terms of terminology, characteristics, economical power. Secondly, the rationale why this economical power (buzz) is brought within the certain areas (cluster) will be suggested. Finally, the case study of music industry in Manchester and Liverpool will be followed.


According to the UNESCO's Creative Industries Mapping Documents (1998 and 2001), which suggested that the industries produced £57 billion in 1998 and £112 billion in 2001 revenue (DCMS, Mapping Document 2001). The global market value of creative industries radically enlarged from US $831 billion in 2000 to $ 1.3 trillion in 2005. It is estimated to grow up by 10 per cent by year. Creative industries are growing to be imperative components of modern post industrial knowledge-based economies. The importance of research regarding the commercial production of culture should be taken more seriously.

Creative Industries

Creative Industries In The U.K.

As far as the government policy in regard to the creative industries goes, there is one term which associated with this movement: ‘Cool Britannia'. Actually, ‘Cool Britannia' was the song title by the ‘Bonzo God Goo Dah Band' in 1967. This term was later referred by rock bands, fashion designers, the Young British Artists and magazines. And, it turned into a media term that was used to describe the contemporary culture of the United Kingdom. In the 1990s, it became more prevalent during with the political movement of new Labour under Tony Blair.

The Labour's interest in the culture had initiated from 1960s (Black, 2006, p. 120). In 1964 Labour party promised ‘generous support for the Arts Council, the theatre, orchestra, concert halls, museums and art galleries' and in 1966 the Labour manifested that ‘access for all to the best of Britain's cultural heritage' as a hallmark of a civilized country'. But, it is not only Labour's preserve but also Conservative's awareness. In this regard, Conservatives argued that the country should compensate for deficit in private cultural sector and encouraged greater business generosity towards ACGB (the Arts Council of Great Britain). Since then, the government is interested in investing for Arts Council funding, regional initiatives, which was also a part of anxious not to lose ground on Labour (Carless, 1969, pp. 1 - 5).

Due to this political inclination of nurturing the culture sectors, the expenditure had been increasing by nearly 500% in 1960s (Black, 2006, p. 121). And, it is the biggest increase in state subsidy this country that has ever known (White, 1975, p.287). At first lots of subsidy flowed directly to the art sector such as the national museums and galleries. Later, the government spends the expenditure for the larger range of nurturing activities (e.g. educational purpose). This political concern became more solid throughout the years. In 1980s, while there was a downfall of conventional industries such as steel industries in Sheffield, textile industries in Liverpool, politicians and economists have seen the economical impact of the creative industries.

As Blair's labor party won the election in 1997, the important role of creative industries was firmly denounced by the government. Later on, the UK's DCMS (department of culture, media and sport) embarked on nurturing UK's creative asset and released Creative industries mapping study.

The U.K. government defined the creative industries as ‘those industries which have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property' (DCMS, 2001). The 2001 Creative Industries Mapping Document refers to the challenges in measuring the creative industries and included an undertaking to consider how to supply more appropriately and to investigate robust data on their activity. This groundbreaking DCMS work focused on the contribution to the economy from 1997 to 2000 and found out that there has been a 13 % annum growth in the industries over the period of 1997 - 2000. It also illustrated the increasing employment of the industries: IT & Communication (+14% p.a), Advertising (+10% p.a) and Design incl. fashion (+8%).

With this innovative research, DCMS selected thirteen segments as the creative industries:

; Music and theatre production

; The motion picture industry

; Music publishing

; Book, journal and newspaper publishing

; The computer software industry; photography

; Commercial art

; And the radio, television and cable broadcasting industries.

DCMS's Mapping Research has been investigating the data continuously which will be a reflex of the crucial decision about policy-making. In order to discuss further regarding these industries, we will look at the term of Culture industries and Creative industries, and the feature of the industries.

Culture Industries And Creative Industries

The term culture industry has its origins from two prominent German philosophers: Theodor Adorno and Max Horkheimer. Even though the term may have been used before, their essay regarding culture industry in 1940s has astonishing impact on the scholars as well as societies (Hesmondhalgh, 2002, p. 15). The concept of ‘culture' in the nineteenth and twenties centuries associates with culture in the context of art, impression, and special human creativity. In the tradition of Hegelian philosophy, art could provide a utopian vision of how it could be the possibilities for the better life. However, the two philosophers used the term in the critique of the commercial production of mass culture. From their point of view, the entire practice of the culture industry transformed the profit motive naked onto cultural structures (Adorno, 1991, p. 87. In other words, the art lost its utopian function because it had become commodified and available to be sold and bought. Culture and industry were supposed to be opposites but in modern capitalism view they juxtaposed together.

By the late 1960s, it was clear to observe that culture, business and society became more intertwined than ever and this tendency which cooperated with mass media took on ever greater social and political significance. This phenomenon turned people's ideas to make sense of these changes. The term The Culture Industry became widely used in diverge aspects. Since then, the term was converted to the plural cultural industry which is currently employed throughout. This transforming which is lead by French sociologists and activists has a significant meaning. Adorno and Wax used the singular term in order to illustrate a united field where all the different forms of cultural production which exist together are assumed to comply with the same logic. Instead, French activists were concerned to suggest how complex they are, and to identify the diverged logics within different types of cultural production. In Miege's opinion, for an instance, the editorial models of broadcasting companies could be expressed in different formats such as publishing, radio, or recording industry (Miege, 1987, p. 12). Consequently, they preferred to call it plural term the cultural industries.

Furthermore, the advent of technology came into the industrialization of cultural product, and it did lead to increasing commodification which also led new directions and innovations. This process of variation was more complex than Adorno's cultural pessimism. Adorno assumed that culture would be unresisted one to the industrialization, and it has been already subsumed by capital. However, French intellectuals saw the cultural industries continuing struggle due to its complex, ambivalent and contested nature.

The point here is related to our assessment the cultural industries. Although Adorno's idea provides general matter of industrialization of mass culture, it is short of evaluating the alteration of cultural industries and its effects on economy and modern life style.

Regarding Creative industries, ‘Cultural industries' and ‘Creative industries' are terms which are likely to be used interchangeably by policymakers. However their meanings and employment differs. As we discuss above, the term ‘cultural industries' is originated from decades' discussion between German scholars Adorno and Horkdimer, and French sociologists and politicians.

Initially, the term ‘cultural industry' is to define the distinction between creative arts, and industrially commodified cultural products. In contrast to this scholarly debate, ‘creative industries' was adopted by political intention. Whereas ‘culture industries' refers the classic cultural industries of film, recording, broadcasting and publishing industries; ‘creative industries' was adopted by Britain's New Labour government in order to bring the creative arts into an economic policy agenda. Actually, New Labour purposely adopted ‘creative industries' to substitute ‘cultural industries' since it was regarded to have a ‘democratising' and ‘unifying' notion (Galloway, 2006, p. 35). They intended to bridge the separation between ‘art' and ‘industry'. And, it also connected high and low culture in the forms of commercial use. Repeatedly, although the term ‘creative industries' was initially adopted by political purpose, ‘Cultural industries' and ‘Creative industries' are currently used interchangeably.

In the next chapter, we will exam the characteristics of culture industries in following chapters in order to see this complexity of the issue regarding cultural industries and to aid for the further discussion.

The Distinctive Features Of Cultural industries

Compared with conventional industries, the culture industries have unique characteristics in many aspects. So, knowing these facts is imperative in order to make proper policy for the industries. In the light of work by research so far, it is possible to sketch the distinctive features of cultural industries which are to be compared with other forms of conventional industry production. These are summarized as below:

Value for ‘meaning'

Risky business

High production costs and low reproduction costs

Individual and Industrial Business

These four keys can be both main feature and the distinctive problems at the same time. Dealing with these matters has important implications in the rest of this paper. Furthermore, it helps to elucidate recurring strategies of cultural-industry companies in terms of how the companies manage and produce cultural production. First we will look at the first issue: value for ‘meaning'

Value For ‘Meaning'

Lawrence's idea of cultural products is that those are goods and services which are valued for their meaning (Lawrence, 2002, p. 431). Cultural products are not evaluated by the physical function such as heaters which can protest the consumers from the cold or move the consumers to the certain point. Rather, the products are valued because the consumer or others can understand them in a way of valuing by the consumer. The products are consumed in way of interpretation rather than being used to solve some practical problem. The products of conventional industries are consumed materially but rather symbolically. The consumers of cultural products are satisfied by the meaning of the products. Regarding this respect, the issue raised here is that the ‘meaning' has been changing by times and spaces.

Accordingly, managing cultural industries is not about proficiently producing a product, but about creating the needs of the consumer and maintain an organization which can produce ‘meaning' But, the point is that although cultural industries produce cultural products, ‘meaning' is not a type of utility like any other. Conventional goods have a utility such as it can transport people from A to B or it can heat the house. Regarding cultural products, however, some products have only ‘meaning' without physical function, others have the both, and the others has the utility which can be interpreted as ‘meaning'. This complexity brings about the uncertainty of the success of the business. Furthermore, the ‘meaning' has been changing rapidly in times and places (Lawrence, 2002, pp.431-432).

Consequently, policy makers and management researchers should create innovative structure in order to deal with a new type of organization which is not a capital or knowledge-intensive commerce, but a symbolic-intensive. In this regard, Connor's research has emphasized a fundamental understanding of local cultures and global change. Also, he stresses the importance of receptiveness and flexibility to associate with symbolic flows in local and global context (O'Connor & et al).

Risky Business

In a traditional theory of the economics, the principle function of the entrepreneur is to bear risk for the chance of a profit (Knight, 1927). Accroding to Knight's famous distinction, ‘risk' is interconnected with a probability of success or failure as such can be calculated and expected. The implication is that this ability to measure risk is turning into entrepreneur's key role in order to control the company. However, in culture industries, the conventional consideration cannot be adopted because managing cultural industries needs to be conducted in a new mingled way of thoughts: through the economic, political, and cultural and artistic concerns (Dempster, 2006, p. 2). Due to this complexity, cultural-product industries are usually managed in high level of uncertainty and risk. (Caves, 2002, 146-147).

Furthermore, as we discussed above, the ‘meaning' of the culture products are fragile (Lawrence, 2002, pp.431-432). In this regard, Cave explicates that this risk is mainly due to the uncertain demand of consumer tastes. Consumers' demands for new goods and services are very time-sensitive in varying degrees. This unpredictable variety plays a dominant role in the consuming market. Accordingly, manufacturer and vendor are facing difficulties of selecting and dealing in quantities and time. Additionally, because of the fact that major firms and small independent producers competing for the market share, cultural-product industries have a tendency to be disintegrated (Hirsch, 1997). This trend also accelerates the risky aspects of the cultural industries. Another risky factor is that production cost is relatively higher than other business.

High Production Costs And Low Reproduction Costs

Many of the costs incurred in creative industries have both high fixed costs and variable fixed costs (Caves, 2000, p. 223). Fixed costs do not diverge with the the quantity of the products. For an instance, a music record cost a lot to produce because of all the efforts and the time that should go into composition, recording, mixing, and mastering to get the correct sound for the potential audience. However, after ‘the first copy' has been made, all subsequent copies are relatively cheap to be reproduced. Unlikely, nails, for example, have a low devising input to make the first nail and each copy costs not much less. The point here is the ratio between production and reproduction costs. The higher ratio of fixed costs to variable one indicates that huge hits are extremely profitable (Hesmondhalgh, 2002, p. 19). The reason is that once beyond the break-even point, the profit from the sale of every extra unit can be relatively significant. In addition the profit can compensate for the inevitable misses that bring about as a consequence of the unpredictable and volatile nature of customer's demand. This tendency leads to an intense orientation towards ‘audience maximisation' in the cultural industries (Garnham, 1990, p. 160).

Individual And Industrial Business

In order to develop and foster the creative industries, the policy should be devised and considered in both personal and industrial aspects. The reason is that the sources of cultural industries are induced from individual creativity, whereas the driving force of industrialization is from the management of the company or organization.

As stated in the British DCMS's definition about ‘creative industries', the government policy is to construct an industrial value form the individual creativity. For example, the core idea of music, film, or fashion is made by individual efforts not by the systematic machines or organization. But, the industrialization power is to produce goods or services from the idea.

The purpose of the British DCMS's policy is for increasing the productivity. In general, the policy can be interpreted as the investment for a profit. If the investment is not profitable, that is a failure in economical terms.

However, in case of Japanese government (as well as other countries), the Cultural affairs' policies focused on subside for artistic activities in the private sector and for the operation of traditional facilities at the local government level. The most of the policy was for maintaining or keep the value at the lower (or individual level), not for the profitable value in the commercial market. (Yoshimoto, 2003, 6)

But, as the researchers carry out broadly regarding the productivity of creativity in terms of policy-making and marketing, the trend has been changing in order to create the market value. For instance, policy-makers now plan an infrastructure for non-profit creative activity as incubators, and designed a profit circulating structure in which goods and services create a profit. And in turn which the profit will be reinvested in private creative sector.

Other features

There are other considerations regarding cultural industries as below:

Tasks in the industries are undertaken in the project-based format. The project members are not working like normal office worker who are doing routines daily or monthly. The working force is embarked temporary contract basis such as composers, writers, actors etc. Generally, workers are chosen from specialists list or acquaintance individually. Consequently, there are more self-employment workers in cultural industries than other industries (Bilton, 2007, p. 27). Another matter here is that the work forces are not easily replaced.

There are not perfect substitutes for creative workers. This can be explained with Michael Kremer's O-Ring theory. In His suggestion, the quality of substitutes should be as good as the original one in order to produce goods and services. However, the artists or culture itself, as a resource for the culture industry, cannot be replaceable effortlessly. In that case, the risk of the business will be higher and the imperfect substitutes bring failure to the business (Kremer, 1993).

And, this culture or trends can be circulated throughout the regions or countries. Moreover, culture as well as knowledge has a tendency to be cumulative. In other words, new creative product or discovery leads a potential inspiration to other potential products (Scott, 2006, p. 16).

Time is of the essence. The performing arts and creative activities involving complex crews or teams obviously require a sort of temporal coordination of their activities (Caves, 2000, p. 8). For instance, cinema filming is efficiently shot in a certain sequence over a few weeks, and music concert should be announced and prepared to take place at a particular time, during that all creative inputs must be available when needed.

Culture industries engross ‘a much wider range of economic activities' (Christopherson, 2004, p. 17). Christopherson stersses intra-regional co-operation in the creative economy. This movement is knotted with arts, technological innovation, and local and regional marketing. In order to make successful outcome, not only understanding the artistic aspects of cultural product as a source is necessary, but also proper quality of economic development need to be followed.

So far, we have looked through the features of the cultural industries. These characters are the factors which can distinguish it from conventional industries. Without experimenting on these factors, policy-makers in a nation or management department in an organization cannot produce efficient way of nurturing or managing the culture industries. But, the importance of the policy-maker is more important than a strategy department in an individual organization because new economical power of culture is not producible without the background or an infrastructure as a foundation which costs enormously. For, it is true that private capital has no intention for making this expensive groundwork. Although this construct can induce the potential value to the society, this outcome is not directly connected to the investor and it also takes time to see the output.

Creative Clusters And Local Development

The outstanding feature of creative industries is that it tends to be developed in a certain district. In other words, creative industries have locality. In this respect, one congregation is referred as a ‘cluster'. This modern phenomenon of clusters in one form or another has been explored in a range of research. However, it cannot be anyalized by the border theory of competition or the competition theory in a global market because it has more complex organism inside (Scott, 1997).This congregating tendency is prevalent throughout the world. It is vital to observe how the congregation of creative sources has been developing to a cluster in order to make proper policy and nurture the industries.

As the creative sources congregate, this creative concentration takes the both external and internal advantages. In external advantages, there are localization economies and urbanization economies. These two economies are geographical synergies for the congregation. Regarding internal advantage, there is so-call ‘Buzz' power. This ‘Buzz' refers energy which results from the Face-to-Face contact among individuals or small groups within the creative area. These advantages of the both sides make the area have locality and also nurture itself.

The External Advantages Of Creative Congregation.

Among the three factors of production (which are land, labor, and capital), the roles of location have been diminished due to the changes in technology, transportation and competition. Capital, resources, technologies and other inputs are efficiently sourced in global market. Companies can access motionless inputs via corporate and globalized networks. It is no longer necessary for them to locate the factories near markets to supply the goods and services. This trend has been accelerated as culture and creativity have been commercial factors. In this respect, clusters have a prominent role (Porter, 1998, p. 2). Porter defines that ‘clusters are geographic concentrations of interconnected companies, specialized suppliers, service providers, firms in related industries and associated institutions'. In that, institutions are such as universities, national agencies, organizations, trade associations etc.

The clusters have two geographical synergies: one is in terms of localization economy, the other of urbanization economy. It seems to be similar notions. But, it is not. The discourse is now important in order to see the geographical influence over clusters economy. We need to exam the existence of systematic differences in the clusters that arise in small town or in urban regions. We shall sketch it out in this section.

Localization Economies

The concept of ‘localization' denotes clustering of economic activity that is interconnected with product offer and knowledge base and the notion ‘localization economies' tells the positive externalities firms would take an advantage from such co-location. Localization economies are related to regional specialization and include various positive outcomes from local labour market, institutional specialization, and related firms. This unique feature of localization results in many positive outcomes (Frederiksen, 2008, p. 155).

First, there are the static externalities (Henderson, 1998) and flexible specialization (Piore, 1984). In other words, firms have relative stable alliances through the existence network. Due to the similarity of the business, they are likely to have chance to work together (temporary or project-based as we discussed above in chapter 1 3.5), and in this value chain, firms are very likely to exploit each other as specialized and capable subcontractors and customers. During this co-operation of the business, knowledge about products and marketing can be shared.

Second, competition for customers and labour may encourage efficiency: the local concentration will increase the current productivity, the capacity of cluster participants for innovation growth, and motivate new business platform which leads innovation and enlarge the cluster (Porter, 2000, p. 21). But, in some cases, the price of labour arises as local competition is getting fierce (Lorenzen, 2008, p.158).

Finally, the adjacent firms in clusters are able to take an advantage from the specialized institutions. In an area of highly specialized industrialization, there are formal institutions in the forms of public or semi-public services. This public agencies such as educational, technology centers and other knowledge-based institutions may provide firms with deepen skills within a specialized fiend. Additionally, there also exist informal institutions. Within a certain region, a lot of similar firms are gathering together. Their specific demands due to the features of the business generate another business. For example, where there are lots of film productions, there is a film-developing company. These non-public institutions will help the firms to save cost and time.

Conspicuously, localization economies are not located in the core of city regions. Firms managed to make use of relatively lower labour and land cost. Compared with city region, new industrial spaces are exposed to the new regulations in which local government made for the purpose of fostering the business sectors (Lorenzen, 2008, p.158).

Urbanization Economies

As we mentioned above, the benefits of localization economies is the advantages that results from co-location. Contrary, ‘urbanization economies' denotes the positive externalities enjoyed by firms that are located in a ‘city', rather than a particular place (one cluster). These economies depends upon a range of place-specific and ideographic factors that are invariable urban. Even though such urbanization has higher cost due to urban congestion such as high wages, land prices, restricted regulation, the benefits of urbanization can compensate for the expenses (Lorenzen, 2008, p.158).

The compensation is from a city's diversity of industry: the co-location of firms producing vary products and having dissimilar knowledge bases arises from the collaboration of diversities that do not work together in value chains or alliances. This movement in a city encourages innovative collaboration within firms, which bring on new forms of business. During the innovation, spillovers between unrelated knowledge bases are being assets of other firms (Shefer, 1998, p. 187). Shefer suggests that high-tech knowledge of one firm would be codified while cooperation is being processed. This documented information of know-how of the industry could be a potential cost of the owner. However, this will create new products, new markets, and new pioneering competition. This new business model is attractiveness for the capital investment that will boom and enlarged the industries economies. Due to the evolution of business models, there would be abandoned facilities of declining industries that may constitute cheap sites for emerging business.

Furthermore, another advantageous factor of urbanization phenomenon is a diversity of labour. In cities, there are diverge labour markets within a multitude of clusters. High skilled workers along with continuous educational organization flow into cities. The intelligence in clusters boosts innovation in incumbent firms as well as entrepreneurship. Immigration of the brain reforms the economic boundary (Storper, 2004, p. 7).

As we discussed above, the main point regarding urbanization is the diversity and progress of ideas and skills. Universities and other expert higher-level educational and research institutions are mostly urban. The wealthy and globally connected universities not only produce deepening skills and ideas, but also offer new knowledge; information and ideas go into the local industry and labour market (Lorenzen, 2008, p.160) (Storper, 2004, p. 8). In cities there are also public and semi-public institutions. The institutions generate similar aid as the institutions in a cluster do (in localization economies). However, compared with that of localization ecologies, there exist huge public infrastructures in the urbanization economies such as airports and a harbor. These infrastructures are not found in the localization features because it is not profitable and regulations are not supported.

The internal synergy inside creative clusters

In the geographical agglomeration of creative industries, the creative cities have the both benefit of localization economies and urbanization economies. In the creative cities, several clusters convene and share the benefit from both urban dynamic and from each other through temporary or long-term knowledge co-ordination. This ‘face-to-face' co-operational contact creates ‘buzz' (Storper, 2004, p. 14). The term ‘buzz' refers the invisible economic power that makes the improvement of cultural product and brings effectiveness of creative production. This interconnected and intangible source is emphasized especially in modern economy system. Contrast to the conventional economics, the crucial notion regarding enterprises is ‘productivity, rather than the scale or dimension of the enterprises (Porter, 1998, p. 6).


In this regard, Storper analyzes this face-to-face contact ‘buzz' in terms of cause, function, effects, and outcomes. The summery of the research is below:

The first function of the F2F (face to face) activity is communication and transmitting. Through this stage, communicating will be efficient especially tacit knowledge.

The second one is receiving and observing. F2F will lead correct respond under uncertainty when a message is intended.

The third effect is coordination. Each person will increase the ability to trust and union where messages and their contents are vague.

Through this process, they will select the most excellent partners. First-mover advantages in innovation and learning

This induces the effectiveness of poroductivity, creativity, inventiveness, and energy

The first two outline the general advantages of F2F communication. Unlike other forms of communication, it allows individuals make clear the exchanges of their communication. This F2F contact has an imperative role in this area due to the fact that there are various firms and business that get together in such place. As Christopherson explained, creative industries engross ‘a much wider range of economic activities' (Christopherson, 2004, p. 17). For instance lots of specialists are demanded to make one movie. The process of filming has to be done under the cooperation of each expert's ideas and knowledge. Therefore, buzz is essential to the transmission of complex and tacit knowledge (Storper, 2002, p. 14).

With regard to this cooperation, various individuals work through the commitment relationship. At first the each workers or teams works in a vague situation however as they bond together, they develop trust. To put it another way, inside one creative industry, a range of participants are engaged to complete one project. At the beginning, one section is working in a vague situation since the section does not have the knowledge on other's area. As they cooperate together, the trust in collaboration covers the vague situation and brings confidence and union.

The forth function of buzz is that it allows individuals to enter into certain communicational processes in the first place: the recognition of partners and their socialization with those partners. They spend time meeting with people who would satisfy a range of criteria. Some of these set by formal screening system (e.g. audition or education). This screening and selecting process makes the industries evolved itself.

Among the five effects of the buzz, the last one has a different notion from other four factors. The last outcome could be the mixture of other four outcomes. However, whereas the first four factors are the outcomes due to the interactive intention of the buzz, the last one is being psychologically produced (Storper, 2004, p. 17). It is often explained with Scitovsky's theory, that is, the object of desire creates a cycle of rising and then diminishing pleasure, and renewal comes through additional consumption of use (Scitovsky, 1976, p.29). In short, the subjective desire of human being is a strong motivator, and this desire is at once imitative and educational in some social contexts: competitive. Face-to-Face contact makes the strongest, most personified signals of such desire. In other words, buzz is a strong motivation in a sense that is psychological and bio-physical: ‘it leads to the formation of desires and to the mobilization of effort to realize them' (Storper, 2004, p. 17).

Local Innovation (Why Cluster)

Mature industries such as steel, furniture, and vessel industry locate in non-urban areas because the industries rely upon product variety, flexibility and incremental innovation. They also benefit from localization economies. Comparatively, other industries reckon on both localization and urbanization economies. These industries are demanding new knowledge such as information and communication, needing to access education institutions, new workers, and easy access to industries locating in global cities.

Creative industries belong to this category. Moreover, due to the fact the industries have innovating patters oscillating among variety and radical components. This pioneering dynamic is the main explanation for why creative industries cluster in a particular place.

Product Innovation.

There are a lot of possible competitions which lead product innovation: some are being innovated in order to reduce the price of the products; others innovated in order to improve the quality of the products. Regarding productive innovation in the creative industries, the competition is not price based, but instead based on ability to create consumer experiences (Pine and Gilmore, 1999, p. 185). It is parallel to Lawrence's idea that cultural products are valued for their meaning (Lawrence, 2002, p. 431). In order to offer customer value, cultural products has to include elements of aesthetics, design and narrative content (Lawrence, 2000, p8). However, the three elements are vague and various in the context of customers' taste. Moreover, product cycle is relatively shorter than classic products and nobody knows the quality or quantity of demand for cultural products (Caves, 2002, p.146). Although the cleverest methods from marketing and producing forecast, productions and publishers still release many unsuccessful products in the market (De vany, 2004, p. 65).

However, in this unstable trend, product innovation is being processed. (why p8)

Local music policies in Manchester and Sheffield

1. Local music industries in the U.K.

2. The scheme of Manchester music industries

3. The music policy in Sheffield

Music Industry In The U.K.

6 8500

7 9500

8 10500

9 11500

10 12500

Cities have always played a privileged role as cores of cultural as well as economic activity (Scott 1997 P323). They have an evident capacity both to bring about high levels of economic innovation and growth, and to generate culture in the form of art, music, styles and attitudes. This tendency of the convergence between the cultural and economic development has been occurring tensely as time goes by. This inclination is also one of the distinctive characteristics of cotemporary urbanization development in general.


 Price Waterhouse Coopers 2003