SWOT Analysis Status of Creative Industries at Pécs

„This project is implemented through the CENTRAL EUROPE Programme co-financed by the ERDF.”

Head of publication: János Keresnyei, president, CICC Association

Edited by: EURES Consulting Ltd., South Transdanubian Cultural Industry Cluster,

CICC Association, Stakeholder team of Pécs Creative Industry

First Published in 2010 by Cultural Innovation Competency Center

All right reserved.

Content

2.1 Short introduction (based on statistical data) ................................................................ 7

2.2 Brief description of the economy ....................................................................................... 8

2.3 General presentation of the administrative system .................................................... 10

2.4 A comprehensive attempt to promote culture and creative industries (cultural and creative industry related activities) ................................................................................ 11

3.1 Introduction to the major social, geographical and economical changes........ 15

3.2 Brief description of the economy, presentation ........................................................... 16

3.4 Brief presentation of the city’s cultural profile (cultural assets) ................................ 19

4.1 Demographical structure .................................................................................................... 21

4.2 Industrial structure .................................................................................................................. 22

4.3 Cultural structure.................................................................................................................... 27

5.1 Definition of the creative industry ..................................................................................... 29

5.2 The position of the creative industry ............................................................................... 30

5.3 The creative industry in Pecs according to statistical data ..................................... 33

5.4 The situation of the creative industry in the selected subsector .............................. 38

5.5 Summary .................................................................................................................................. 42

6.1 The definition of the public sector .................................................................................... 45

6.2 The position of the public sector ....................................................................................... 45

6.3 The size of the public sector ............................................................................................... 45

6.4The supported activities of the public sector ................................................................. 46

6.5. Summary ................................................................................................................................. 47

7.1 Strengths ................................................................................................................................... 49

7.2 Weaknesses ............................................................................................................................. 50

7.3 Opportunities .......................................................................................................................... 52

7.4 Threats ....................................................................................................................................... 53

7.5 Essence of the SWOT analysis (according to 20 questionnaire) .............................. 53

The professional questionnaire used by the analysis: ........................................................ 57

The list of organizations participating in the questionnaire analysis: ............................. 60

The main results of the structured database used in the evaluation of the statistical analysis (Source: Central Statistical Office): ......................................................................... 61

List of employed documents and electronic documents: .............................................. 65

1. Summary (Objectives, expectations methods)

The goal of the present study is the detection of the operational efficiency in

the creative industry in the city of Pecs and the preparation of a situation

analysis and SWOT analysis on behalf the sectoral work’s and the services’

coordination. The study is intended to seek more than a simple valuation. The

purpose of our survey is to serve as a basis for further analysis of sectoral

developments and lead to concrete results.

Almost two months of preparatory work preceded it the analysis, as during

the process of the situation analysis of both qualitative and quantitative

methods were used. The qualitative study was based upon the documents

regarding the sector analysis of the city, and on personal interviews carried

out by 20 people (all of them were professionals of the different sub-sectors)

After the data collection the survey questionnaires were recorded and then,

these was prepared to statistical database. In parallel with this process we

collected the available economic and statistical data of the companies

working in the local creative industry, of which 790 items, and nearly 10,000

data were prepared, which served as a basis for a quantitative study. During

the analysis process we debated the two different methods and finally we

came to the creation’s essence of the SWOT analysis. (See Figure 1!)

1. Figure Methodology of the analysis used in the study

2. The general profile of the country (administrative system, demographic trends, employment, economic development, and attempts to promote

culture and creative industries in the national indicators)

2.1 Short introduction (based on statistical data)

Hungary's key statistics are as follows:

Form of government: Republic (EU member since 2004)

Capital: Budapest

Area: 93.036 km² (CSO, 2010)

Population according to census: 10 198 315 persons (CSO, 2001)

Density: 107,5 persons/km² (CSO, 2010)

GDP (CSO, 2009a): 26 753 906 (Mio HUF)

Per capita GDP (CSO, 2009a): 2 665 (thousand HUF)

Hungary is located in the northern hemisphere temperate climate belt, in

Central Europe, at the middle section of the Danube River, enclosed by the

Carpathian Mountains. To the west, Austria to the north, Slovakia, to the

northeast Ukraine, to the east Romania, and to the south of the former

Yugoslavia, Serbia, Croatia and Slovenia bordering the country. The area of

Hungary is 93,036 square kilometres.

The total population of the country at the 2010th of September was 9 998

thousands (CSO Flash Report 2010 January-September), which since 1981 due

to the low birth rate and high number of deaths is decreasing and has an

aging structure. At the same time, 4,320,681 homes were held accountable in

the country (CSO, 2010a). It is considered relatively homogenous in terms of

nationality as 92.3% of the population declared themselves as Hungarians,

and the Hungarian language is spoken by 99% of the population (CSO, 2001).

Hungary's territorial administration has two main levels. At territorial level 19

counties and the capital (Budapest) while at the local level 3152 towns and

villages is found (CSO, 2009a).

Among the settlements there are 328 municipalities the rests are villages. The

cities include 23 provincial towns and the capital, and the latter is divided into

23 districts. Out of the villages there are 118 large ones. [16] These territorial

units possess their own municipality. In Budapest two-tier local government

system operates, which consist of the Metropolitan municipalities and district

authorities. There is no hierarchical relationship among the counties and

municipal governments. (CSO, 2009b)

Out of the two basic levels, there are two more territorial levels, the designing-

statistical region and the micro-region. Originally both were created for

statistical purposes and under the regional institutional framework, but they

form as well as the territorial basis of organizing some administrative and

municipal functions.

The 7 regions were established with the grouping of the counties and the

capital, and the 174 micro-regions within the boundaries of the counties with

the grouping of municipalities. Budapest forms a separate micro-region (CSO,

2009).

Regarding the Local Self-Government Act, the County Town Municipal

Council in its own territory - corresponding changes - assume their own

competence of the county government functions and powers. Cities with

County Rights however, are not allowed to form a distinct territorial

administrative unit; they are entitled only to specific municipal law.

2.2 Brief description of the economy

Hungary's economic system according to the constitution is based on a social

market economy, which has to ensure fair competition, and everyone

involved in state-guaranteed minimum economic security. Hungary is a

member of the advanced industrial countries comprising the OECD, on the

basis of the economic performance it belongs to the developed countries,

but in the European Union it has tended to count to the poor.

Gross domestic product (GDP) at current prices in 2009 was HUF 26 753 906

million (CSO, 2009a). The per capita gross domestic product is scattered

moderate. Among the regions of country in 2008, the wealthiest was Central-

Hungary (4 424 000 HUF / person), the poorest the South- Plains (2 398 000 HUF

/ person). (CSO, 2009a)

The average wages in Hungary, compared to the world standard is high and

but they are low in comparison to the European Union's average wage, gross

wages in 2008 averaged 213 thousand forint (HUF 129 thousand net). (CSO,

2008) The unemployment rate of 10,0% (CSO 2009d) is relatively low, but the

tendency is that the capital-intensive industries are developing, which

providing livelihood mainly for highly skilled workers. Among people with non-

marketable skills or low skills exist a high level of structural unemployment, and

poverty is also significant.

Hungary just as the other developed countries has an increasingly aging

population, and the rate of activity of 55% (CSO, 2010b) is extremely low, i.e.

a smaller working population producing high value, supporting many inactive

(student, retired, unemployed) people. Hungary consumes more goods that it

creates, ergo the state budget is showing a deficit, the public debt levels

equals about 78,3% (CSO, 2010c) of the annual gross domestic product

(GDP).

The role of the service sector is continuously increasing in the Hungarian

economy, and over the past fifteen years investments were flowing to the

transportation and other service sectors. Still, the economic structure can be

described as advanced industrial country. Regarding the development of the

Hungarian economy the predominantly multinational companies industrial

activity, manufacturing, mechanical engineering, automotive, electronics

goods are in terms of absolute importance. Some of those companies are

producing more than half of the exported products, and are paying more

than half of the tax revenue of the budget. Hungary's, a poor country,

regarding natural resources, the economy rely mostly on imports; balance of

payments and external balance is in deficit.

The aim of the Hungarian economy after 1989 was a transition from a

planned to a market economy. Hungary as a member of the European Union

the world's largest single market, in accordance with the objectives of the

European Union’s economic policy aspiring to replace the Forint to Euro to

achieve low interest rates, manageable fiscal deficits and government debt

levels to meet the requirement of the Maastricht criteria’s low inflation rate.

2.3 General presentation of the administrative system

Hungary's territorial administration has two main levels. At territorial level 19

counties and the capital (Budapest) while at the local level 3152 towns and

villages is found.

Among the settlements there are 328 municipalities the rests are villages. The

cities include 23 provincial towns and the capital, and the latter is divided into

23 districts. Out of the villages there are 118 large ones. [16] These territorial

units possess their own municipality. In Budapest two-tier local government

system operates, which consist of the Metropolitan municipalities and district

authorities. There is no hierarchical relationship among the counties and

municipal governments. (CSO, 2009b)

Out of the two basic levels, there are two more territorial levels, the designing-

statistical region and the micro-region. Originally both were created for

statistical purposes and under the regional institutional framework, but they

form as well as the territorial basis of organizing some administrative and

municipal functions.

The 7 regions were established with the grouping of the counties and the

capital, and the 174 micro-regions within the boundaries of the counties with

the grouping of municipalities. Budapest forms a separate micro-region.

(CSO, 2009c)

Regarding the Local Self-Government Act, the County Town Municipal

Council in its own territory - corresponding changes - assume their own

competence of the county government functions and powers. Cities with

County Rights however, are not allowed to form a distinct territorial

administrative unit, they are entitled only to specific municipal law.

2. Figure Mid-level administrative structure of Hungary

2.4 A comprehensive attempt to promote culture and creative industries

(cultural and creative industry related activities)

The Cultural Industry makes up the 3.1% of the active population, generates

2.6% of GDP in the European Union although the EU wouldn’t even spend 1%

of the average GDP on the broader culture.

At the end of the 1990’s the share of culture was approximately 3% of the

GDP, decreasing slightly during the decade. The structure of the funding has

been thoroughly changed lately. By the mid-decade, a multisectoral cultural

institutions were established, in which, properly in a market economy, the

culture market oriented part was dominated More recently 70% of the cultural

spending was cost and fee income (including public budgetary institutions

such as the museum's revenue), 17% of the state (budget) support, 13% in

various non-profit organizations, foundations, associations, public utility

companies, performance value, (a significant part comes from large public

foundations, which also benefited from the budget). The big national cultural

developments are tending to be real estate development projects to cover

the time being.

3. Presentation of the city – The general demographic geographic and economic situation

Pécs situated in Central-Europe in the Carpathian Basin. From the north it is

bordered by the Mecsek mountains, from the south flat terrains. The city is

close to the Croatian border in the southwest part of the country. The south

part of Pécs is relatively flat, while the northern part is creeping up the

southern slopes and valleys of the Mecsek. The position of Pécs is extremely

favourable from climatologic point of view at the border of a still quite

forested area.

In sultry summer evenings cool air flows and cleans the city launched from the

Mecsek Mountain. The city is open from the south, protected from the north

by the ridges of the Mecsek, which is emerging suddenly from average of

120-130 meter high flatland of Pécs , and reaches the height of 400-600

meters.

In the western part of the Mecsek the 592-meter high Jakab hill; just right

above the city in the Central-Mecsek the 612 meter high Tubes, the 535 meter

high Misina is to be found. [18] The settlement’s sections stretch up to the

slopes of an average height of 200-250 meters.

The Mecsek is dissected by various valleys, which improves significantly the

climate of our city which doesn’t possess any warm water reservoir or lake in

the vicinity. Water coming from the slopes of the Mecsek is gathered by the

Pécsi-víz flowing of the NE-SW direction drives it to the Fekete-víz (Black-

water), which flows into Drávába.

At the analyses of Pécs it is necessary to examine the values of the past. The

sudden and shocking loss of the traditional industries determine the present

economical situation for example the leather industry, coal, - and uranium

mining, and the traditional machinery production. From the creative

industries’ point of view it can be established that one of the most famous

creative product of Pécs is the Zsolnay porcelain, which gets its special

metallic colour and glitter from the usage of eosin enamel.

31 bank and insurance company’s branch and regional management

functions in Pécs. Recently the Municipality of Pécs established new industrial

areas. First, in the immediate interior of the city - a long tradition of

representatives of local industries: machinery, leather and the precision

engineering – then in the eastern and southern industrial areas with fully

recultivation. Thus was established the Pécs Industrial Park area of 50 hectares

near the main highways.

Demography

For quite a long time, the city's population has grown more dynamically than

the national average (in the 1970s, peaked), from the early '90s, however, it

has been started significantly decreasing. Between 1985 and 2005 the

population of Pécs decreased by 12.3% (20,988 persons). In Pécs , similar to

nationally representative rates, the number of women is higher than men. The

proportion of older people is more than 3% of young people (14 years).

Two city of Pécs , is one of the most important centre of officially recognized

national minorities in Hungary: the Germans and the Croats. It is interesting to

note that while the entire population of the city is decreasing, the number of

minorities increased slightly over the last few decades, although it is applies

mostly to the Gypsies. The number of Germans in 1980 were 996, in 1990 were,

1704, so it had increased. The number of Croats also slightly increased: in

1980, there were 629 of them, in 1990, 637 people, and in 2001, 820 people

declared themselves Croat nationality in Pécs. We should note though that

slight growth in number in the statistical data, is due to the changing of social

atmosphere and the new census questionnaire.

3. Figure The age pyramid of the city of Pécs

3.1 Introduction to the major social, geographical and economical changes

The post-Communist times severely affected the city, the industrial plants

almost without exception were closed by the reason of uneconomic, the new

industrial location remained an insignificant level compared to the former

times, and unemployment has grown enormously. In the 1990s the proximity of

the Yugoslav war set back the tourism industry considerably as well.

Although during the past decade and a half the city's economic structure has

changed - more and more of the knowledge, health, cultural industries came

into focus - but what has not changed was that Pécs remained a multi-

faceted town, where the ethnic traditions, values merged. It also helped in

the effort to materialize, that Pécs has won the 2005th 19 October 2010

European Capital of Culture (ECOC) title (ahead of Miskolc and Eger), which

has sparked real big development projects in the city. As the large-scale

projects, such as a Concert-hall, the knowledge-centre and the Zsolnay

Cultural Quarter hasn’t finished yet for the first half year of 2010,

Pécs arranged alternative sites for the programmes (Pécs National Theatre,

the University of Hall of the Medical University, and the Synagogue). The M6

and M60 motorway, which connects Budapest with Pécs was completed and

with the V/C corridor it has developed one of the most important regional

traffic line. In this year, the life of whole city has been heavily astir due to the

ECC investments. In addition, a spectacular increase has been realised at the

number of tourists in our city. According to researches and data of the TDM

the tourist occupancy rate increased by 25 percent compared to the

previous year’s March and April.

3.2 Brief description of the economy, presentation

In Numbers (CSO, 2010):

� GDP 1.557 billion HUF

� GDP/person: 1.596.000 HUF

� Investment 90 566 million HUF

� Registered number of businesses: 24 268 pcs. (2006)

� Number of nonprofit organizations: 162 pcs. (2006)

� Unemployment: 14%

� Number of registered unemployed (2009): 41,9 thousand person

The economic performance of the South-Transdanubian region over the past

few years was positioned at the breaking point of the Hungarian regional

differences, moving away from the dynamic territories and towards the

lagging regions of. The eastern part of the country.

In the region each element which determining the dynamics on a territorial

growth, the gap rather widened and the negative marks ruled:

– The rate of employment and the rate of the GDP/employed persons are

relatively deteriorated;

– The foreign presence in the region's economy is very weak;

– The economic structure is out of date and there was no appreciable sign

of modernization - in addition the weak manufacturing were producing

mainly into the domestic market, and was weak in export, there wasn’t

any major industry or company to which the regional development –

such as industry clusters form could be supported

Pécs according to its size of population and the role it fulfils in the regional

settlement structure the largest city in the Transdanubian and the main town

and country planning centre. The city’s regional centre's role is based upon

it’s traditionally fulfilled duty, far radiating intellectual base, its university which

was the first founded university in the country, cultural attractions, and

significant economic potential.

Pécs is a service centre, the three quarters of the earners are working in the

tertiary sector, and the rate of intellectuals is dominating. In the last decade

several international commercial companies established in the city, and quite

a lot of firms built up here its storage and distribution centre at national level.

Thus, the previously mainly industrial nature of the local economy is now

converted to services-based trade and logistics economy.

Pécs with its economic, cultural, scientific performance is one of the most

dynamic, progressive and the best quality of life providing city, whose spiritual

radiance reaches far beyond the region and the country's borders. The city

tries to achieve according to its concept of urban development planning to

- become the pole of the national and international knowledge-based

economy development;

- be a major player in the field of the culture, education, science at national

level;

- have an effective and competence promoting infrastructural environment;

- fulfil further on its regional role with the very important principle of

partnership;

- be a city of its well organized administration providing its inhabitants a good

quality of life.

4. Figure Sectoral composition of economy based on the number of employees in Pécs

3.3 Brief presentation of the city in the European hierarchy and networks (main

junctions)

Pécs so far hasn’t played an important role in the Euroregional network, which

partly due to its structural position within Europe, and partly the external

periphery of the country's transport occlusion is linked.

The Danube-Drava-Sava Euroregion was established in 1998, which was the

first important step toward the broadening relations of the city. The city's

incorporation of the European territorial network has a strategic importance in

the economic and cultural terms as well. The speciality of the present situation

is that linkage into the economic bloodstream, the economic reversal of

subsidence depends on the success of today's cultural record: the cultural

and intellectual heritage and continuity could be the dimension, which is a

real opportunity for the city to the spatial structure of European integration,

and to become a real investment and travel destination.

The EKF provides considerable and non-recurring potential to Pécs , to get

integrated into Europe's economic and intellectual-cultural fabric. Luckily,

and certainly not by chance that Istanbul-Pécs-Essen are the three European

Capitals of Culture 2010. This east-west axis gives visibility and structural

possibility for the three cities and the around organized spatial dimensions

(partner cities, countries) to improve their position.

From north to south the Scandinavia-Budapest-Ploce (V/ C corridor) axis is

getting increasingly updated and real in the EU, which involving Hungary into

the European transport network, to which Pécs also will have the transport

links. In the cross section of these new (transport, economic, cultural) axes,

and opportunities the city has to find its development directions, which

hopefully would moderate, and may be stop the South-Transdanubian

Region breaking off from the more dynamic regions, and promote the

economy, increase social cohesion, stop the migration from a thousand years

old cultural centre, and make it again an attractive and successful city.

It has to be examined, whether these axes are considered also to be of

strategic importance in the partner countries, so the economic terms of Pécs,

in particular, may become a driving force particularly in the tourism.

Examined the potential for the development of cooperation with those

countries (including those specific cities, regions, institutions and investors) that

lie along this axis, focusing on tourism and increasing investment, and that

along these axis Pécs become an increasingly growing important link and

intermediate pier.

3.4 Brief presentation of the city’s cultural profile (cultural assets)

Pécs is one of the most ancient and rich city in national monuments, the

administrative and spiritual centre of the Southern-Transdanubian region. The

city’s cultural life is prominent in the field of the music and fine arts wide-

ranging accepted in the country. There are 59 galleries, museums and

exhibition halls in the city of Pécs according to our survey. Larger collections -

Modern Hungarian Art Gallery, Csontváry Museum, Ferenc Martyn Museum,

Museum of Victor Vasarely, Amerigo Tot Museum, Schaár Elizabeth: "Street" -

urban and private galleries are offering the full, and unique presentation of

the 20th century’s Hungarian art. The National Theatre of Pécs has theatrical,

ballet, musical comedy and opera section as well. Beside the National

Theatre are operating the Croat Theatre the University and the Third Theatre

too, but the student acting has got decennial tradition too. A symphonic

orchestra operating, the concert life is rather significant even in national level.

Pécs is also quite unique as it owns a independent puppet theatre.

The city traditionally characterized by vibrant intellectual life that is home to,

inter alia, the University of Pécs Days, Days of University, the Pécs’ days or the

Pécs National Theatre Festival (PNTF) and the Cinepécs International Film

Festival as well. Here operates country largest university regarding the number

of students, with 31 thousand of them attending the various courses.

In 2010, together with the city of Essen and Istanbul – Pécs is one of Europe's

cultural capitals. The title is awarded to the 2010 year, a number of

investments made possible by the European Union. The Pécs2010 Cultural

Capital of Europe project has four investment priorities: Conference and

Concert Centre, South-Transdanubian Regional Library, Knowledge Centre,

and the Zsolnay Cultural Quarter. They also complement the revitalization of

public spaces and parks.

There are three cinemas now in Pécs. The Apolló movie theatre in the

downtown is the permanent cinema in the city. Here one usually project art

films in two separate halls. The second oldest cinema is the Urania, which was

the first cinema in the country built in Bauhaus style. The cinema is the

member of the ArtMovie-network and the Europa Cinemas supports it as well.

There is a multiplex movie in the city, which can be found in the Pécs Plaza

the so-called Cinema City. There they project commercial type films in ten

different halls.

The first concert hall of the city, which bears the name of Zoltán Kodály, will

be opened at the 16th of December 2010. The conference and concert hall is

designed to accommodate as many as 1000 visitors was built in the Balokány

quarter near the Zsolnay China Factory.

Since 2009 has been held the Festival of Literature in May. At the time of the

four-day festival the elite of the Hungarian literature life appear in the city.

Then book readings, book presentations, interviews with authors are taking

place in a public festival atmosphere, in public squares, streets and in cultural

institutions. Actors recite poems and besides tale telling afternoons for the kids

it can be seen drawn illustrations from fairy tale as well. The concert and

festival to host cross-border stitched journals, from a series of literary, which

holds the title of literature caravan. The literature heritage of the city has been

promoted by the professional organizations since the renaissance poet and

bishop Janus Pannonius. It shows the significance of the literature’s creative

aspects that in our city there are 87 companies involved printing and editing

or press activities. The Jelenkor publisher is quite significant in the whole

country.

Pécs is one of the pop musical centres of Hungary since the 1960’s. The most

famous band from Pécs is the “Kispál és a Borz”, which created a tradition as

well as a style. With the accented presence of the popular music is coherent

the high number of pop festivals, international music entertainments. The pop

festivals are connected with the other type of festivals so one can emphasize

the following programs: Fishing on Orfű, Student days in the Pécs University,

the Heritage festival, the Rockmarathon, Mediterranean Autumn, and the

Batta Deam.

4. Development

4.1 Demographical structure

Pécs city's population on the 1st of January 2010th was 157 680 people, but

the permanent population is about a thousand fewer because of the

differences was made up by people who are living in the city on a temporary

basis and the ones who are only commuting elsewhere, but normally they are

Pécs citizens. There hasn’t made any survey yet what was composition of the

two groups but it is quite possible that the majority living in the city temporarily

are university students. It is also assumed that the others living elsewhere are

also mostly students, but the rate of the people living temporarily out of the

city due to work is also significant. Between the two groups there is a

significant difference. After completing the university the majority of students

leaving Pécs, but in turn those who were due to work elsewhere rarely move

back to Pécs. Since young people are involved in both cases, a very bad age

structure triggers the formation. The effect is similar to the one mentioned in

the agglomeration section previously. The moving out most of the city is

typical among the 30's, 40-year-olds who’s existential situation is stable, and

already possessing the necessary resources to build single-family houses and

the needed one or two vehicles as well.

In Hungary, the aging index of approximately 100%, i.e. there are the same

numbers of inhabitants over 65, as the 15 years of age. Pécs situation is not

much better. There are some settlements belong to the agglomeration of

Pécs where, this figure is significantly better than the national average. The

ones moving out belong to the most active age groups, and of course they

take the kids with them too, while the parents usually stay in Pécs, thereby

providing the family a kind of "double-residency".

Here, however, should take into account that the ethnic composition of the

settlements’ population also affects the index value. The vitality index shows

that out of the number of 18-59 year-olds how many per cent belong to the

age group of 18-39 years. This indicator is 53.70% of national context. The

value of the country's big cities - except for Pécs - is placed above the

national average. The vitality of the region’s county’s seat hardly differ from

each other, but all three are below the national average. The variance of the

settlements belong to the Pécs agglomeration is quite significant.

4.2 Industrial structure

Decades before the change of regime Baranya County belonged to the

major industrialized counties. Obviously the mining as well as the processing

industry selling products to the CMEA market included the food and textile

industry played an important role of that success. After the old system had

collapsed these sectors were cutting down, and out of the resources the old

capacities only a few of small and medium-sized enterprises were created.

The result was that by the end of the 90’s Baranya (Pécs is also included) fell

behind to the end of the line in the field of industrial production in the country.

(PBKIK Data line, 2009)

The per capita industrial output value of the Baranya County according to

the CSO yearly editions in 2005 was 697,400 HUF only Szabolcs-Szatmár-Bereg

county reached weaker results than that. The national average that time was

1,623,000 HUF per person, while counting the most industrialized county

Komárom-Esztergom 7,584,400 HUF was produced. The production value per

employee all the region has achieved better results then Baranya, which

indicates that the productivity was extremely low. The county’s - and thus the

city of Pécs’ - competitiveness of the industry is one of the weakest ones. Out

of the industrial sale only 24.4% is the export, only Tolna County has got lower

ratio. Csongrád, Hajdú-Bihar counties have similarly poor export ratio whereas

the productivity indices slightly better.

There are three sector which plays a major role of the industrial development’

performance in Baranya county: the electricity, gas, steam, water supply,

food, beverages, and tobacco productions, and mechanical engineering.

Sale gives more than 20%, electricity, gas, steam and water supply gives 38%

of the industrial production. Major representatives are the companies

belonging to the PannonPower Holding (electricity and heat production), the

E. ON group of companies: the South-Transdanubian Electricity Supply

Company Ltd. and the South-Transdanubian Gas Supply Co. (electricity and

natural gas sales), Pécs Waterworks Co. (water production and sales), and

the PÉTÁV Ltd. (district heating). The energy sector companies employ a total

of more than 4 thousand people, and, more than 1,800 employees directly in

the city. The annual production value is nearly 55 billion, the sales is 139 billion

HUF, respectively. This sector sale only for the domestic markets, and plays an

important role of energy supplies in the region's economy. The operation

provides employment for many SMEs, however, this sector won’t play a

leading role or boost the local economy. Food, beverages and tobacco

production ensure close to 40% of the annual production and 26.8% of total

sales. Only 13.16% of the turnover came from abroad. According to the

production data it is the strongest, but also the most vulnerable sector in Pécs.

The sector indicators have deteriorated because of the negative trends of

recent years (closing down the MIZO dairy company and the integration into

the South-Pick Szeged Meat Co.). Marketing problems facing the American

Tobacco BAT (the high rate of smuggled goods sold in our country), Pécs

Brewery Co. (low market share and high production costs). We cannot

expect positive change in the near future. This sector won’t play a leading

role in the economy’s stimulation of the city and the region either.

The machine industry provided the 20.9% of the total production value of the

whole industrial production accounted for. This sector took part in the

industrial sales by 16%. The export share within the sales was 85.33%,

respectively. The leading companies within the sector have a very important

role in both the county and city life of Pécs. Primarily the fact that they

provide jobs and regular income for nearly 6 thousand employees, and work

for more than a hundred SMEs mainly in the service area. For those SMEs

belonging to this sector only the Hauni Hungary Machinery Ltd. Provides gives

supply orders. This kind of activity is an energizing effect for the economy, but

today makes only a very small share of the industry's performance. The larger

Elcoteq Hungary Ltd. doesn’t strive for creating such kind of supplying network

with the local firms, instead of that it tries to solve all stages of the production

in the plant itself, or within its own group.

The city alongside with the competitive Pole Project’s planning identified

three important sectors the environment industry, the health industry and

creative industry. One of the most important sub-branches of the health

industry is the biotechnology, which has an accredited cluster. In that cluster

one can find spin-off companies from the university as well as private

companies with significant export activities.

Pole matrix (Source: PBKIK, 2010)

Should be evaluated positively, however, that the Elcoteq Hungary Ltd.

devotes more and more emphasis on product development, and has

developed its own division, where more and more young engineers are able

to find jobs.

In the field of non-metallic mineral products the Zsolnay Porcelain

Manufactory is relevant. In this essay we are not going to deal with the

company's financial and economic situation. The company's products, it’s

reputation, tradition, and the industrial heritage and through the projects of

the European Capital of Culture in the near future it provides hopefully an

important factor in the local economy.

In summary, the industrial enterprises have an important role in the economy

of Pécs and Baranya County, their energizing role, however minor. They are

not considered classically innovative. The possibility of future development is

to be searched rather at the present still not highly appreciated so called

"novel" non-traditional sectors, which could improve significantly the

population's quality of life, such as the environmental industry, health industry

and cultural industry. Their relevance is clearly demonstrated by the

Pécs and South Trensdanubia, the pole of life quality

Healthindustry Environment industry Cultural industry

R&D&I infrastructure

Clusters

Training , learning

ScienceBuilding

PEIKWine research I.

Knowledge Centre

Zsolnay CulturalQuarter

Kodály CentreCreative IncubatorHouse

BIBNet

CreativeCluster

RÉKThermeCluster

EnvironmentindustryclusterBuilding engineering

cluster CeramicCluster

TDMPTE AOK

University of

Kaposv ár

PTE ETVocationaltraining

PTE TTK PTE MK

Vocationaltraining

Pannonlaserresearchinstitute

34 Billion Ft investment so far in

31 projects

(140 MRD)

Bikal ren aissance city

Memorial Park in Mohács

Mecsekextr ém

Castle of Sikl ós

Castle of Pécsvárad

Castle of Szigetv ár

Beremend

Mecsek -Dráva

biomass

PTE clinic

University of Kaposvár agricultural research institue

University of Kaposv áragricultural research institue

international trends, and the strategy for competitiveness 2020 of the EU

(ec.europa.eu/eu2020)

4.3 Cultural structure

Considering the cultural sector we have to separate the civil, private, and the

institutional sectors. The rate of the three special structural units characterizes

the dynamism of the creative industry, which still could be characterized with

the dominance of the institutional and civil sector. According to our survey

790 company operate in the field of creative industry, which is still quite a low

proportion (4,15% of the other branches). The big cultural infrastructures are

operated by government or state institutions, which situation hasn’t been

changed by the new institutions created through the ECC project. The

creative enterprises are only small-scale suppliers to the institutions, which

prevents the real development of the creative industry. At the analyses of a

city’s creative economy in the past these subject were only marginal issues

mentioned just as breakout points. In the 21st century we have to approach

this subject with a different attitude. One cannot count on the governmental

support that it is possible to get those cultural services for free or at a minimal

cost. The marketing of the culture has started, and we have to recognize that

the culture is not much different from any other goods in the market, that

means the rules of the macroeconomic apply too. In the future – according

to the excellent aptitudes – can become one of the most significant

branches of the economic development of Pécs.

5. The state of the private and the civil sector

The skills knowledge and experience of the local cultural civil society actors is

not sufficiently utilized. The civilian sector in particular is facing difficulties of

sources and capacity, although that is a national-scale problem, still there is

no suitable effort to highlight and support local, talented and worthy

organizations.

- The NGOs further on have communication and infrastructural difficulties;

therefore, they find it difficult to utilize their values, and multiplying them.

- They don’t have a strong system of relationship, their collaborations are

under motivated, promotion opportunities are limited, the absence of

adequate knowledge of cultural values can be difficult to manage, and

expose as a product.

- Communication among the civil society organizations and cultural

institutions is weak; there are duplications in certain sub-areas, whose

demand would be qualitatively and quantitatively better satisfied by the

civilians.

- The region's civil society is rather diverse, including those found in the service

of self-motivated and advocacy organizations. In May 2010 according to

official figures of the CSO, 1,547 non-governmental organizations were

established in Pécs one third of the registered ones were dealing with cultural-

recreational activities. On the average approximately the number of non-

profit organizations in Pécs is 9.8 per 1000 inhabitants.

- The local non-governmental cultural sector in the underground is swelling

with energy in almost all areas of arts and culture, the dedicated players are

waiting only for a call to get invited and share experiences tasks and

opportunities. Many of them have already turned to be professional, and

able to work under pressure with high cost efficiency so the cooperation with

them could bear strategic importance. Notable amateur orchestras: e.g.

Mecsek Dance Ensemble, the Tanac Misina Dance Group, which are

characterized by the efforts to preserve the Hungarian folk dance treasure

and promote it’s achievements and further elaboration of the Hungarian folk

culture, partly through modernization. Priorities: preserving values, and

heritages and enforcement of the new values, as well as the city's cultural

enrichment with the current supply of micro-programs. According to the

database it can be stated that the number of social enterprises in the field of

cultural services in Pécs are only 4 pcs.

The turnover of one out of the four was between 51-300 million HUF; the rests

had less than 20 million HUF. The largest organization employs between 5-9

people, the other three are one each respectively. 65 enterprises carry out

publishing activity. All of them employed less than 50 people, in fact all but

three were micro enterprises employing less than 10 people. Three companies

have reached a turnover between 51-300 million HUF, seven fell under the

category between 21 - 50 million HUF, and the others had fewer than 20

million.

The number of enterprises engaged in research and development is relatively

high compared with other creative industries, currently operates 115 such

companies. One of these sales exceed 300 million HUF, between 51 to 300

million were six companies, another six realized between 21 to 50 million, while

102 firms had less than 20 million HUF. On the headcount basis 3 companies

belong to the small business category (the number of employees were

between 10 to 19), the majority however micro-enterprises with only one

employees, respectively.

5.1 Definition of the creative industry

The creativity and the exploitation of their culture-related industries, the

expansion is not only the result of socio-cultural movements. It is also a

strategy is strengthening European competitiveness. New markets with new

services are badly needed to provide development. It is no longer good

enough to do something well, or do better than the competitors, now they

must work together to gang up on groups that can withstand the growing

competition.

The creative industry is including 13 different sectors, which today is one of the

world’s most dynamic industries. It contains lots of different branches like

heritage, arts, leisure as well as web development. The defined "creative

class" member is projected to soon exceed the number of workers in

traditional industrial sectors. The importance of cultural industries, however,

gives not only the number of jobs in a city, or even in the region, but also the

percentage rate with it contributes to the economy's performance. Where

the cultural industry is well developed, there is a higher level of quality of life, a

greater ability to retain the workforce of the settlement, even the highly skilled

ones, and an ability to retain younger generations. The concept of cultural

industry is a somewhat narrower definition then the creative industries’. The

creative industry also implies that in the presence of an appropriate density of

a particular locality or region it could create such a creative milieu, which in

today's knowledge-based economy the prerequisite of the innovation, and

therefore the means and guarantee of the region's ability to attract capital.

Enterprises operating on the previously defined fields are usually categorized

of the methodology based upon their business activities are as follows:

Categories

1 Arts, Crafts, Performing arts 2 Film production, Cinema

3 Journalism, News agencies, Publishing

4 Museums, Expositions 5 Cultural Trade 6 Architecture 7 Planning, design 8 Advertising

9 Software-, Interactive Leisure Development

1. Table Subsectoral areas of the Creative Industry

5.2 The position of the creative industry

The most important goal of the creative industry is the strengthening of the

income producing capability of the creative and cultural activities, to

generate such creative industry processes which have innovative and

economic potential, which can result the quality development of the service

systems through the economy generating effects.

TOLERANCE: The visibility and recognition of the creative industry with the

wide range of the society and other developing and/or driving force industrial

branches.

TECHNOLOGY: Introducing the utilization and recycling option namely the

connection of the creative industry to the industrial production,

biotechnology, environmental projects, communication and financial

services.

KNOWLEDGE: Operation of a regularly communicating and cooperating

network, which is able to draw up the common interests, and to decrease the

insensible inside market competition. Building up systems and its transfers.

It has to be introduced into the cultural industry the elsewhere well-

established consumer oriented market methods.

CLUSTERING: Our cluster is the first such creative industry coordinating

organization, which was established by government support through the

Baross project, financed by the DDRFÜ and the NKTH in 2006.

• The mission of the cluster is that it could become the management of

the change of paradigm where it could achieve the more effective

application of the creative industrial capacities and the export of their

products and services. According the surveys on the average 10-12

EURO (Pécs University, 2007) equals to the local purchasing power and

this as a demand isn’t balanced with the supply on the other side. The

local market is significantly distorted by those concerts and

performances which are highly supported by the state or government.

The Southern Transdanubian Cultural Industrial Cluster manages and

generates several forward looking and creative industrial cooperation.

Organizational -

methodical

Market Creative

Industrial

Cluster members

Joint Project Organizing

Scientific – Innovation

related

Southern Transdanubian Cultural

Industrial Cluster

ECC expert’s materials

and advising activities Pécs Lexicon Film Fund

Southern Folklore

Association

Dombóvár Cultural

Strategy CULTourist Pécs Registered projects

Tourist Cluster of

Szigetvár

Conferences and Events Communications

platform

Zsolnay Cafe Cluster organization

methods

Equestrian Cluster of Siklós

University courses

Regional media sub-branch and the adjoining Film Fund

Accredited special

curriculums

Organizing Conferences, software

development

Sub-sectors surveys,

Databases

From the creative point of you the national situation isn’t too promising. At the

present even the Central Statistic Office doesn’t collect data, which is

appropriate for a creative industrial survey, the latest data is from 2002. The

latest data are supplied by the GFKI (according to the CSO data) and by the

Cultural Innovation Competence Centre (based on TEÁOR) – locally.

According to the CSO data the summarized added value of the creative

industries equals 987 billions of HUF in 2002, which was the 6,7% of the GDP.

The 7% of total number of employment in the country comes from the

creative industries. The national situation is equals to the Capital’s

concentration though, the provincial creative industrial bases producing a

very low figure, and contribute to the GDP and to the employment rate

marginally. In the ECHO magazine at the issue of October 2005 Mr. Zsolt

Szokolay an expert of the field examined the number of the people

employed in the creative sector and its position. According to his survey

approximately 4000 persons are engaged in the Creative sector at the time of

writing. The concentration of the creative class – which is so important for the

development of the creative industry – is rather low in the Southern

Transdanubia, and the added value is lower than the national average.

Therefore the most important motivating factor for the colleagues of the

Southern Transdanubia Cultural Industrial Cluster is the enhancement of the

competitiveness of the Region and the development of knowledge based

creative industry.

5.3 The creative industry in Pécs according to statistical data

The cultural industry’s current state in the city of Pécs is presented on the basis

of statistical data, which is an important complement to methods based on

qualitative analysis. The full analysis was performed of the latest available

2007-2008's period. The number of enterprises operating in Pécs and their

classification are found in the 2. Table below:

Number of registered enterprises Number of operating

enterprises

Agriculture Industry, Building Industry

Service Total

Out of the total, joint

venture

Per thousand inhabitants

Total

Out of the total, joint

venture

Per thousand inhabitants

Branch

2008 2007

1 348 2 710 21 618 25 676 11 272 164 13 622 7 653 87 2. Table Number of enterprises in Pécs (CSO)

25,676 enterprises were registered in the city in 2008, of which 11,272 worked

in the form of joint venture. The operating firms in 2007 according to the

figures are slightly more than half of all enterprises (53%).

To determine the magnitude of the operating creative industry in Pécs we

acted in accordance with the methodology set out in subsection of 5.1. We

have been acquired from the Central Statistical Office (CSO) the public

records of those companies, which are classified as creative industries

according to classification of sub branches1.

The database contains the data of 790 company / institution. For the

companies temporarily out of business or don’t operating ones was used to

detect the expired public debts, so surely the number of operating businesses

in the sector 565 pcs.

The number of industrial enterprises in the creative sector compared to all

active companies in the city we have got the following figure:

5. Figure The rate of the businesses operating in the creative industry in Pécs (CICC Association Data)

The rate of creative businesses operating in the City is approximately 4% to,

but it is absolutely necessary to emphasize that among the creative

businesses is much higher (71.5%) the proportion of still operating enterprises

then as it is generally experienced in other sectors (53%).

The number of examined businesses divided to sub-sectors is as follows:

1 The analyses cannot be considered as complete and reliable according to the following methodological problem

– the classification could be determined due to the reported and possibly not the real activity – but it still could

be extremely useful to present trends and order of magnitudes. The database used to the analyses can be found in

the appendix section.

6. Figure The division of the particular activities among creative industry businesses (CICC Association Data)

Most of the registered companies operating in the field of the arts, performing

arts, but the feature of this sub-sector is that most actors working on his/her

own as individuals, so under this category the lowest the proportion of the

corporations, only 40.2%. It is also a high the number of architecture firms, and

the lowest registered businesses one can find in the film production, cultural

trade and software development’s territory.

In the next table we present the form or type of enterprises in the sub-sectors

respectively:

Sub-sector Types of Businesses

Total

Unlimited Partnership

Ltd. Chamber, cooperative

Private Enterprise

Joint stock company

State, Local government Institution

Arts, Performing Arts

Frequency 76 15 134 1 226 Distribution 33,6% 6,6% 59,3% ,4% 100,0%

Film production, Cinema

Frequency 18 18 1 1 38 Distribution 47,4% 47,4% 2,6% 2,6% 100,0%

Journalism, News agencies, Publishing

Frequency 43 48 2 1 94 Distribution 45,7% 51,1% 2,1% 1,1% 100,0%

Museums, Expositions

Frequency 20 7 1 30 58

Distribution 34,5% 12,1% 1,7% 51,7% 100,0%

Cultural Trade

Frequency 14 6 2 22 Distribution 63,6% 27,3% 9,1% 100,0%

Architecture

Frequency 70 117 2 189 Distribution 37,0% 61,9% 1,1% 100,0%

Planning, Design

Frequency 30 53 1 1 85 Distribution 35,3% 62,4% 1,2% 1,2% 100,0%

Advertisement

Frequency 31 36 67 Distribution 46,3% 53,7% 100,0%

Software-, Interactive leisure development

Frequency 2 8 1 11 Distribution 18,2% 72,7% 9,1% 100,0%

Frequency 304 308 1 140 7 30 790 Distribution 38,5% 39,0% ,1% 17,7% ,9% 3,8% 100,0%

3. Table Type of businesses in the creative industry in Pécs (CICC Association Data)

The most popular form of business in the arts, performing arts category is the

private enterprises, or the unlimited Partnership form, which are the

characteristics of industries where the number of persons employed are small

(or self-employment is expressly made), respectively, there is no specific cost

of production. Local museums, exhibitions, are typically operating as state, or

local governmental institutions.Further examine the type of businesses we can

state that mainly in the sectors of Software, and Leisure development, the

Design, and Architecture exist more business activities, and higher

employment.

Reviewing the economic data the following trend can be established (See 7.

figure!)

7. Figure Trends of industrial statistic data 2007-2009 (Data in Thousand HUF (CICC Association Data))

The shock caused by the economic crisis of course can be detected in the

creative industries primarily (we will see later) in the field of architecture. The

industrial enterprises' capital reserves lose weight significantly, but after the

more than 50% decrease in sales in 2008. Year, in 2009, almost 20% increase

observed.

8. Figure Trends of average employment in the creative industry of Pecs 2007-2008 (ps) (CICC Association Data)

In accordance with the foregoing a tendency to decrease in employment in

2008 could be traced as well, the industry's average employment number,

which is in the year of 2009th already shows an increase, still won’t reach the

level of 2007.

9. Figure Distribution of creative industry businesses by sales categories (CICC Association Data)

The 9th figure chart shows that the vast majority of industrial enterprises are

belong to the category under 20 million annual revenue levels. It can be

evaluated as a positive result that almost every tenth firm HUF generates sales

of between 20 million and 50 million HUF annually, 3.6% of them even more.

Over 300 million revenue there is only one company the Zsolnay Porcelain

Manufactory.

5.4 The situation of the creative industry in the selected sub-sector

Out of sub-sectors presented in the previous section I would emphasize three,

one each of the largest, the medium and the smallest proportional operating

areas, covering about two thirds of the whole business sector.

10. Figure Rate of the priority sub-sectors (CICC Association Data)

28% of the creative industrial firms in Pécs have public debt. (See Figure 8!)

Broken down it into the examined three sub-area, we can see that the film

production and film companies are under this ratio, while the journalism, news

agencies, publishing sub brunch is rather in deep trouble.

11. Figure The rate of businesses with expired public dept ratio

Finally, let us examine the main economic indicators of the sub-sectors in the

following table:

Cultural Industry Sector

Equity (2007)

Equity (2008)

Revenues (2007)

Revenues (2008)

Number of employees

Film production,

Cinema

16.959 17.707 21.608 20.555

Journalism, News agencies, Publishing

20.048 19.188 40.231 41.413 5,83

Architecture 308.061 63.861 137.503 29.743 3,75Average total 198.708 47.147 99.993 34.091 4,64

4. Table The main economy indicators in the priority sub-sectors (2007-2008)

We have seen that the architecture composed the quarter of all creative

industrial enterprises in 2007; both equity and magnitude of net sales

exceeded the average size of the enterprises in the other two sub-sector.

Since the economic crisis affected most right that sub-sector - due to the loss

of real estate development and declined investment demand - so clearly,

the average turnover dropped more than 100 million HUF and the companies

used up their reserves (this indicates 80% decline of the equity). The other two

sub-sectors, however, kept itself in spite of the crisis, businesses linked to the

film industry realised an average of 20 million, the media-related companies

could make even double of that revenue. It is also worth to highlight that the

highest employment readiness we find in journalism, news, and publishing

field!

One local literary magazine - at national level is also important -, formulated

the following difficulties, and certainty for future opportunities during the

interview:

Uncertain. There are fears of what will be after the ECC, because these

innovative ideas and proposals could be implemented without exemption

from tendering sources. It is a major challenge to the MIH (House of Arts and

Literature) that how it can operate at the same level after the ECC.

� The most stable source is the public support; the magazine has the most

respect and works best there too.

� The cooperation with the other actors of the cultural industry. E.g.

cooperation with the “Trafik”, “Kultúrkert”(Culture Garden), Sophiane

Heritage Non-profit Ltd. for, synergies are created, everybody brings

their own audience

� The Zsolnay Culture Quarter can hold a positive contribution, but still

there is a certain distancing, even mistrust

� Advertising and marketing activity is weak

� In the PR, the public feedback does not work properly

� The professionalism, and outstanding dedication of the staff

� Institutional diversity, for example House of Arts and Culture doesn’t

exist elsewhere in Hungary

� Serious literary tradition

5.5 Summary

During the interviews with our stakeholders we put four such closed questions

to the interviewees, in which we asked them to set out the allegations on a

scale of assessment of one to five, where the five meant the most favourable

outcome. The result are shown in the chart based on average values of some

of the responses2:

12. Figure The average values given by the interviewees on the questions

It is clear that the respondents considered the cultural situation of Pécs the

best (3,4) and the city's economic situation is considered the worst (2,1). At

the two responses the two standard deviation values are also low; it is the

unanimous opinion of the respondents confirmed. The frequency and

efficiency of the cooperation within the cultural and creative industries were

considered medium (3) by our interviewees. It has resulted a very mixed

outcome that the respondents’ professional activities or project how fit to the

cultural season program series or how much support it has got through it. In

any case, the given a 2.8-value rather damning nature of this area.

Overall, we can make up very mixed picture in the separately tested areas,

because regarding the sales revenue, employment and economic stability

2 The statistical analyses was based on the 20 questionnaires that means it cannot be viewed as a representational

assay. The questionnaire used during the interviews and the list of the organizations which were took part in the

survey can be found in the appendix section.

the media-related companies have performed well, this very same group has

the highest tax debt. The architectural firms’ turnover and reserves have fallen

significantly due to the crisis, while the film production companies may be

subject to a small number of significant changes in their operation which is

hardly ca be detected.

It can be emphasized in the field of employment and competitiveness the

software, and interactive leisure (game) development, design and

advertising activities, but these are the overalls a small size of scale.

6. The state of the public sector

6.1 The definition of the public sector

Many people think that to distinguish between "State" and "non-state" cultural

organizations are artificial and the discrimination is held purely on formal

grounds. According to the legal background governmental financial support

involves the following activities: museum, archives, and theatrical activities.

These institutions are part of the national cultural infrastructure. The rate of the

governmental support varies with genre and institutions, but always

proportional with the local (county and/or municipal) support.

In our analysis, those organizations are considered to belonging to the public

sector’s , which are entirely or predominantly public and / or activity funded

by local government sources.

6.2 The position of the public sector

In Pécs the local municipality operates the cultural Institutions though

continuously increasing income-generating obligations. Their operation is at

the present a serious burden on the already ailing local authorities and other

major threat is the operation of the new institutions established during the

ECC project. The city received government support promises at the start of

ECC developments for the necessary operation of the institutions (national

institutional status), but unfortunately is still needed to lobby to redeem the

promises. So here we can expect further significant shifts in the expected rate.

6.3 The size of the public sector

It is quite a difficult methodical task to determine the size of the public sector,

the financing structure is difficult to comprehend, but typically the museums

and in press area active institutions and organizations are run (indirectly) by

the government or local self-government. The vast majority, over 80% of the

staff number and revenue of museums are belonging to the public sector

alone.

The state intervention and assistance are mostly palpable by the program

funding of the ECC. After completing the cultural season however, the

central government resources are going to fall back and the maintenance

costs will fall to the local government. Thus, in the future we can count on a

significant shift of rate. Pécs, despite the difficulties, can realize a significant

profit by the end of the 2010 year, as it succeeded to bring together and

coordinate many attractive and colourful performances, and programs to

the city. It is also noteworthy because the economic crisis is felt in a very

eloquent way in the European Capital of Culture success rate. The capital of

Lithuania, Vilnius was deeply affected by the crisis despite the series of events;

the revenue from cultural tourism dropped by 15 percent drop while another

European Capital of Culture 2009, Linz, Austria could realize only slightly, 11.4

percent increase in hotel room bookings during the ECC year. The Hungarian

experts say the signs are favourable for Pécs, and it is conceivable that results

of the Hungarian city even surpass Linz’s.

6.4The supported activities of the public sector

The biggest problem regarding the cultural events according to one of our

interviewee a contemporary artist of Pécs, that there is a sort of dilettantism

from the part of leadership, they don’t dare not undertake true artistic events,

and partly the decisions are made from above by people who have no

serious artistic background, so they don’t even has any credibility from the

professionals. The standard of the programs are only reached the level of the

junk mass media. With that mentality we won’t be taken seriously in any

national and especially in international forums. Moreover, without adequate

infrastructure framework, we cannot appear in the European audience, as

there are no large spaces where with high-quality events, exhibitions can be

held. It appears that the city waived the fine arts, because it carries little

value for the politics, does not provide sufficient opportunity for the politicians

to appear in public. Although Pécs is a cultural stronghold partly because,

there were and there are internationally recognized artists as well.

They must find the opportunities how to capitalize on the economic benefit of

art, how to make profit on it. Unfortunately we have limited the capacity of

the current structure; there is nobody who has still the energy and free

capacity to achieve these goals. We have a gallery, which is vegetating, and

it is unable to fill the new functions with a 30-year backwardness. The

university has no proper exhibition area, and the judgment of culture is quite

mixed. The young generation rather holds the potential, which are more open

to contemporary art.

Another interviewee, who deals with crafts, sees the possibility of

development to the growth of tourism and to connecting to tourism

development efforts due to the ECC. He sees the need for increasing the

purchase of local products, a growing support for the local arts and

craftsmen. Further highlights the importance of joint lobbying. It highlighted

the importance of strengthening tourism in the region, the appreciation of the

growing number of world heritage sites.

6.5. Summary

Nowadays it is quite apparent that the role of the cultural sphere has

increased, has become essential in the social redistribution Together with the

change of the culture’s role it’s importance has also increased as on the one

hand according to the consequence of globalization our shared responsibility

for future generations to preserve and pass them those values that dominate

our identity - the role of how it generates processes has a great importance -

and thereby enrich our cultural heritage, on the other hand investments into

knowledge is actually either theoretically or practically produce profit. The

acquired knowledge, which becomes the property of the individual, has a

positive impact on society as a whole. The economic and cultural spheres

mutually affect each other: a creative, open-minded, "civilized" labour-force

who can live independently with the freedom of choice; in the economic

sector also have an invigorating effect. In addition, our responsibility is to take

advantage of the region's intellectual capital, which is rooted in the distant

past’s traditions and possibilities offered by the present - the culture should be

the driving force of the service sector.

According to the opinion of our interviewee who is employed in the public

media we don’t have the possibility to be more innovative as our whole

structure very centralized every decisions are made in Budapest, and they

deprived of even the slightest independence from us. They won’t provide any

resource for marketing activity. The support of the culture is still very Budapest

oriented, which makes for the provincial institutions even the daily operation

at higher quality impossible or extremely hard.

7. SWOT analysis

This analysis carried out in two distinction methods. In the first part the

evaluation and the analysis of the SWOT can be found thanks to the joint

work of the invited experts and the colleagues of the cluster. In the second

part we summarize the outcome of the SWOT analyses of the stakeholder

interviews. At the end of the chapter we aggregate the weighted results of

the two methods in a table.

7.1 Strengths

Pécs’ feature as a student-city is quite determining, the university here has the

largest number of students in the country; there are numerous arts institutions

and many nationwide famed cultural events.

Pécs is main regional centre within Hungarian spatial structure:

• Intellectual, cultural and educational centre

• Health Centre,

• Service and commercial Centre

• Technology, R & D Centre

• Administrative Centre,

• Spiritual and Episcopal Centre

• Multiplayer sector system inside the creative industry

• Operating a regional network (Cultural Industry Cluster)

• Existing knowledge-base

• Motivated players in the sector

• Existing program and event systems

• One of the legs of the Pole Project is the development of the cultural

industry

• Pécs ECC Project

• Extensive Institutions

7.2 Weaknesses

As the creative industry and the cultural sphere couldn’t be treated

separately from the social and economic processes, therefore among the

weaknesses we emphatically display the above. The indicators can be

interpreted through the creative industry-planning phase as important base

data.

• According to the CSO data for the first of January 2009 the number of

inhabitants compared to the previous year decreased by 7.1 thousand

to 953 thousand in the region.

• In this region can be found the smallest villages (353) where fewer than

500 persons are living. More than 2/3 of the settlements of Baranya and

half of the ones in Somogy fall into this category

• The aging structure of the population is still a characteristic. On the

base of age structure counted "dependent population ratio" is lower

than the national average in terms of child-population, and higher in

the case of the elderly population.

• The Southern Transdanubia belongs to the less economically developed

regions of the country where the per capita gross domestic product

only makes the 68.3% of the national average and ranks to the 4th

place out of 7 (in 2007).

• "Public" services (public administration, education, health and other

community services)

produces the 26.5%, of the region's gross domestic product which is4.3%

points higher than the national average. This originates from the lower

economic state of development.

• According to the most recent CSO data the 2009th I-III. quarterly

industrial production was 14.6% less than the same period last year

• The industrial production of those South-Transdanubian organizations

employing more than 4 people made up only 4.9% of the national’s.

The largest decline in production volume was the in Baranya County by

25.3%, while in Somogy by 11.3%, in Tolna by 4.5% fell the production

level compared to the previous year.

• The employment rate was 46.1%, the participation rate was 51.8%, the

former by 3.1%, the latter by 2.9% point below the national average.

The unemployment rate was in the 2009 in the region at an average of

11.0%, which was 10.0% of the country as a whole during the same time

of period. The number of employees was 191.7 thousand during the first

three quarter of 2009, which was 4.4% less than last year. In Baranya

2.9% in Somogy 6.8%, in Tolna3.4% was the reduction in the number of

employees compared to the year before.

• In the first three quarter of 2009 in the region the number of employees

significantly declined in the private sector (8.7%) compared to the

same period of the previous year, in the government sector, however

had been a 4% rise. The "Way to Work" scheme that attempted to

expand employment with public work programs tried to compensate

the negative trends characterized by the whole economy.

• . The gross monthly earnings in the region grew by just 0.2%, so the 162.9

thousand HUF regional averages are only 82.9% of the national one.

• The number of registered unemployed was 69,738 people in Southern

Transdanubian, which was 20.5%, or 11,852 people more than in the

previous year. In 2009 the growth was 27% nationwide which is higher

than in the region.

• Among the registered unemployed regarding the monthly average of

6,266 qualified job seekers were career starter in 2009, which is 16.2%

more than a year ago. The ratio of the job seekers was 9% of the total

and that is by 0.3% less than in 2008. Value loss, but 0.2 percentage

points higher than the national average.

• The new methods and ways to stimulate cultural activities and

innovation are weak. The cultural institutions partly reproduce passivity

and the new initiatives, often remain isolated.

• The year by year repeated research called “Youth” has shown that in

the past four years there were an important shift characteristic to the

atomized societies so much in the way of leisure activities at home

including, in particular that of passive TV watching: In Hungary, the

young people spend their free time mostly at home, in front of the

television.

• Further on is very important to take account of:

• Our region situated far from the “development corridor” of Vienna-

Budapest,

• The driving forces of the economy before 1990 economic are vanished,

and new ones have never replaced them.

• The central city of the region acquired during the past 20 years only a

few percent of foreign capital invested in Hungary, which is by far the

lowest among all regions.

• The weakness of the coordinated cooperation system

• The knowledge-base doesn’t support the demand related training and

innovative developments

• Weak and scattered infrastructure

• There isn’t any income producing creative industry

• The cooperation of the actors of the tourist and cultural industry is

embryonic

• The appropriate innovation chains don’t exist in the sector

• The sustainability and the contents of the innovation projects are not

proven

• Pécs and Baranya centricity

• The demand isn’t standardized and not developing

7.3 Opportunities

• Strengthen the knowledge-based economy (within this the University

development program, the local economy partner’s program, and the

establishment of the cultural industry employment supporting

• Creating the innovations chain with the help of the cultural cluster and

methods

• Through the training and advisory system building establish income

generating abilities

• Generating innovation activities – developing products and services

• Effective business operation through the coordination and cooperation

• Utilization of the ECC 2010’s development results and infrastructure

• Demand oriented operation

• Development of the youth tourism

7.4 Threats

• The bureaucratic systems prevent the development process

• The Pécs 2010 wouldn’t meet the expectations

• Due to the coordination the negative attitude of some actors

• The radical and quick changes of the demand

• Without the appropriate resources the Pole project cannot carried out

• Clusters and innovation chains are not able to cooperate

• Half of the youngster in the age group between 15-29 haven’t been in

a classical concert, in museum, theatre and in parallel appears the

stratum of the mass-media passive and not a participant, not

reproducing consumers.

• The largest population (31%) is the group of deprived whose way of life

does not appear in any form the cultural activity significantly

• The operation of the institutional network is dysfunctional, there are

unnecessary duplications, parallels, and there are units with unbearable

costs employing large number of people and burden the system over

of its capabilities.

7.5 Essence of the SWOT analysis (according to 20 questionnaire)

During the interviews, respondents were also asked to give their own areas of

expertise those the parameters, which are later, used to carry out the SWOT

analysis, of which we would highlight just a few thoughts:

Strengths:

• The business based intension for cooperation is high

• Increasing clustering process

• Art qualities of Pécs

• Coordinated operation and cooperation of the new ECC institutions

• All of the creative sub-branches are exist

• Identifiable development directions in the Creative Industry (Heritage,

AV Industry, Event organization)

Weaknesses:

• Lack of implementing the long-term cultural strategies

• Disproportionate appearing of enterprises, civil organizations, institutions

in the market

• Trainings, development programs, governmental daily decision-making

are completely diverging in the cultural field

• The lack of international marketing of the cultural sphere- there is only

the domestic market. (Tourism, country brands);

• Budapest oriented even the cultural sector in Hungary

• Lack of an homogenous city picture, monuments and advertising are

unregulated

• Consumer approach of the culture (entertainment), instead of the

producing approach (subsistence)

• Imperceptible professional involvement of the local government

Opportunities:

• Dynamic relationship with the consumer base- including the

involvement of young people

• Increasing clustering process, joint lobbying

• State operation effectively coordinate the training and development

programs, the conditions of the daily operations;

• Exploit the ECC effects and the economic interpretation of the ECC

project

• Increasingly strong support for the purchase of local products in certain

circles

• Strengthening, and upgrading the region's tourism, growing number of

World Heritage sites

Threats:

• Deteriorating external, ownership conditions of the state and local

government-run organizations, the internal reserves have been already

exhausted

• The expected erosion of vocational training at the middle-level in Pécs

• The dominant personalities give up the fight

• Lack of the regional and local decision making and resource allocation

• After the year of ECC 2010 the sustainability of attention is decreasing

• Contemporary architectural solutions come to prominence against the

heritage protection

• Strengthening the competitive positions the too many organized

thematic routes EU projects) would put out each other, would cause

too much competitions in vane

• Cultural industry exist only in words among the decision-makers, its

handling is rather negative

8. Summary of the SWOT analysis

The factors identified are summarized in the table below:

Strengths (internal)

- Existing rich cultural heritage, - Natural resources, - Road access, - A rich cultural program selection, - Key projects of infrastructure in the ECC, - Endowments of the city of University, - Unique products, ability to meet

individual demands - Quality - Flexibility - Artistic qualities - Creativity - Improvement ability

8 4 10 6 10 5 4 6 4 6 7 6

Weaknesses (internal)

- Population Issues (migration) - Adverse economic conditions - Lack of appropriate marketing activity - Dissension among the industry

participants - Lack of financial resources - Lack of lobby control - Lack of accessibility by rail, plane

internationally - Budapest orientation - Low employment potential of creative

industry businesses - Lack of resources - Lack of proper Industry competences

-10 -8 -5 -5 -10 -8 -7 -10 -10 -4 -4

Opportunities (external)

- External and internal growth in tourism - Active involvement of university students - Connecting possibility to the tourist

developments due to the ECC project - Strengthening the knowledge-intensive

economy - Settling in cluster joint lobbying, - Strengthening the region's tourism, the

appreciation of the growing number of World Heritage Sites

- Industry Organization

6 8 10 6 7 7 10

Threats (external)

- After years of attention to the ECC, sustainability, cultural, local government sources will decrease further

- Lack of interest, industry demand for services (especially cultural consumption) decrease

- The expected erosion of vocational training at the middle-level in Pécs

- The dominant personalities in the industry give up the fight

- The extinction of the traditional craft industries

- The mismanagement of the cultural industry both at local and at state level

-6 -6 -8 -5 -3 -10

5. Table Summary of the SWOT analysis

Attachments

The professional questionnaire used by the analysis:

Within the project of Creative Cities we prepare SWOT analysis of the creative industry. For this to work ask for your kind assistance.

Questionnaire for research purposes

Filling up voluntarily

1. General Information

1.1 Name of

Business/Organizatio

ns

1.2 Address

1.3 Statistical number (Prime

number, sector, county)

1.4 Statistical headcount - 2009

(Number of employees)

1.5 Company net – 2009 year

(please write in letters)

1.6 Name of the filler,

Position,

Phone number,

e-mail address

2. Estimate the situation of Pécs according to the following criteria (1 – 5 score)

2.1 Judgement of Pecs’s economic condition based on the operation of their own business (1-very bad, 5-very favourable)

2.2 Judgement of Pecs’s cultural condition based on the experience on their own field (1-very bad, 5-very favourable)

2.3 Frequency and efficiency of cooperation in the creative, cultural sector (1-poor, 5-excellent)

2.4 The opportunities to join with the ECC2010’s projects, the level of professional support to their own project implementation (1-poor, 5-excellent)

3. Development, cooperation

3.1 Do you know the leading up program of the European Capital of Culture? What kind of project idea of yours related to the ECC program? (brief description)

3.2 Do you know the cultural “pier” of the Pole project? Please express your opinion briefly!

3.3 Your institution’s existing innovative service, and/or product, and method linking to the operation ( brief description)

3.4 What kind of development ideas do you have in the next 3-5 years? (Please express briefly)

4. Evaluate the situation of your sub-sector - brief textual commentary

Opportunities (external)

�

Threats (external) �

Strengths (internal)

Weaknesses (internal)

Thank you helping us in the research!

Pécs, 2010………………………………………………………………….

Southern Transdanubian Cultural Cluster

The list of organizations participating in the questionnaire analysis:

Number Organization Industry

1 Erla Lp. Film production, Cinema

2

Organ building Manufactory

Musical Instruments Manufactory

3 Dupla Ltd. Architecture

4 Marckon Ltd. Software-, web development

5 Mediátor Performing Art

6

Sophiane Hearitage Non-

profit Ltd.

Heritage

7 Pecs Encyclopedia Advertisement

8 Arts School Performing Art

9 Pecs Gallery Museums Galleria

10

Zsolnay Heritage Nonprofit

Ltd..

Heritage

11 Jelenkor Journalism, Press, Publishing

12 Hungarian Radio Journalism, Press, Publishing

13 Képzőművész Fine Arts

14 PTE Arts Faculty Fine Arts

15 Tele Paks Non-profit Ltd. Film production, Cinema

16 Partners Pécs Ltd. Advertisement

17 Film Fund Non-profit Ltd Film production, Cinema

18

Pecs Philharmonic Orchestra

Performing Art

19 Pecs National Theater Performing Art

20 Fair Expo Ltd. Advertisement

The main results of the structured database used in the evaluation of the

statistical analysis (Source: Central Statistical Office):

Codes used in the database:

Classification Type of business Black list

1 Arts, Performing Arts 1 Unlimited Partnership 1 Yes

2 Film production, Cinema 2 Limited liability Company 2 No

3 Journalism, Press, Publishing 3 Foundation

4 Museums, Expositions 4 Chamber, Cooperative

5 Cultural Trade 5 Private Enterprise

6 Architecture 6 Joint Stock Company

7 Planning, Design 7 Public, Municipal Institute

8 Advertisement

9 Software-, Interactive leisure development

In the database are not listed the names of the individual companies and

other sensitive information (tax number, residence...).

Cultural Industry Sector

Equity (2007)

Equity (2008)

Equity (2009)

Revenue (2007)

Revenue (2008)

Revenue (2009)

Number of employees(2007)

Number of employees(2008)

Number of employees(2009)

Marts Performing Arts

Average 2057,67 2036,55 192,00 3333,56 3909,25 70199,44 1,00 1,48 6,26

Frequency 27 29 2 25 28 18 4 27 82 Deviation 2626,509 2508,420543,058 2921,153 3435,115270275,622 1,414 1,784 44,085Film Production, Cinema

Average 16959,68 17707,72 21608,88 20555,05 1684,00 ,00 1,88 1,26

Frequency 19 18 17 19 3 5 17 27 Deviation 43010,899 40431,689 43456,50237597,571 1725,392 ,000 2,998 1,403Journalism, Press, Publishing

Average

20048,69 19188,33 40231,65 41413,30 2934,25 5,83 4,74 4,47

Frequency 48 48 48 47 4 6 39 77 Deviation 41155,122 38868,882 70488,33568208,849 2296,417 6,178 6,029 7,801Cultural Trade Average

1,25 3,00 1,50 Frequency 16 7 16 Deviation ,577 4,761 1,095Architecture Average

308061,92 63861,81 -225,00 137503,71 29743,35 29743,35 3,64 Frequency 110 112 4 112 20 20 86 Deviation 2916819,875387200,205852,696 686961,08044187,295 44187,295 7,494Planning, Design

Average

41723,11 109,75 5,44 3,07

Frequency 9 4 36 14 Deviation 81874,188 200,250 6,050 4,047Advertisement Average

9327,33 ,67 1,47 1,51

Frequency 3 3 19 59 Deviation 5084,596 ,577 1,577 1,685Software-, Interactive Leisure development

Average

503,00 187836,33 6,00 ,75

Frequency 1 3 1 4 Deviation , 156023,731 , ,500Total Average

172681,07 40827,84 ,30 88030,81 26678,04 47370,75 21,82 3,48 3,73 Frequency 204 207 23 202 114 60 22 146 365 Deviation 2142518,808286218,205369,610 514876,72551739,163158108,139 86,854 4,918 21,510

Cultural Industry Sector Business form FrequencyDistributionArt, Performing Arts Unlimited Partnership 76 33,6 Ltd. 15 6,6 Private Enterprise 134 59,3 Joint Stock Company 1 ,4 Total 226 100,0Film Production, Cinema Unlimited Partnership 18 47,4 Ltd. 18 47,4 Chamber, Cooperative 1 2,6 Private Enterprise 1 2,6 Total 38 100,0Journalism, Press, Publishing Unlimited Partnership 43 45,7 Ltd. 48 51,1 Private Enterprise 2 2,1 Joint Stock Company 1 1,1 Total 94 100,0Museums, Expositions Unlimited Partnership 20 34,5 Ltd. 7 12,1 Joint Stock Company 1 1,7 Public, Municipal Institution 30 51,7 Total 58 100,0Cultural Trade Unlimited Partnership 14 63,6 Ltd. 6 27,3 Joint Stock Company 2 9,1 Total 22 100,0Architecture Unlimited Partnership 70 37,0 Ltd. 117 61,9 Private Enterprise 2 1,1 Total 189 100,0Planning, Design Unlimited Partnership 30 35,3 Ltd. 53 62,4 Private Enterprise 1 1,2 Joint Stock Company 1 1,2 Total 85 100,0Advertisement Unlimited Partnership 31 46,3 Ltd. 36 53,7 Total 67 100,0Software-, Interactive Leisure Development

Unlimited Partnership 2 18,2

Ltd. 8 72,7 Joint Stock Company 1 9,1 Total 11 100,0

Cultural Industry Sector FrequencyDistributionArts, Performing Arts Yes 31 13,7 No 195 86,3 Total 226 100,0Film Production, Cinema Yes 7 18,4 No 31 81,6 Total 38 13,7Journalism, Press, Publishing Yes 44 86,3 No 50 100,0 Total 94 18,4Museums, Expositions No 58 81,6Cultural Trade Yes 9 100,0 No 13 46,8 Total 22 53,2Architecture Yes 60 100,0 No 129 100,0 Total 189 40,9Planning Design Yes 34 59,1 No 51 100,0 Total 85 31,7Advertisement Yes 37 68,3 No 30 100,0 Total 67 40,0Software-, Interactive Leisure development Yes 3 60,0 No 8 100,0 Total 11 55,2

Cultural Industry Sector Frequency Distribution Valid distribution

Arts, Performing Arts 0-20 Mio HUF 84 37,2 96,6 20-50 Mio HUF 1 ,4 1,1 50-300 Mio

HUF 1 ,4 1,1

Over 300 Mio HUF

1 ,4 1,1

Total 87 38,5 100,0 Total 226 100,0Film Production, Cinema 0-20 Mio HUF 24 63,2 92,3 20-50 Mio HUF 1 2,6 3,8 50-300 Mio

HUF 1 2,6 3,8

Total 26 68,4 100,0 12 31,6 Total 38 100,0Journalism, Press Publishing 0-20 Mio HUF 55 58,5 76,4 20-50 Mio HUF 16 17,0 22,2 50-300 Mio

HUF 1 1,1 1,4

Total 72 76,6 100,0 22 23,4 Total 94 100,0Museums, Expositions 58 100,0Cultural Trade 22 100,0Architecture 0-20 Mio HUF 35 18,5 89,7 20-50 Mio HUF 3 1,6 7,7 50-300 Mio

HUF 1 ,5 2,6

Total 39 20,6 100,0 150 79,4 Total 189 100,0Planning, Design 0-20 Mio HUF 11 12,9 78,6 50-300 Mio

HUF 3 3,5 21,4

Total 14 16,5 100,0 71 83,5 Total 85 100,0Advertisement 0-20 Mio HUF 49 73,1 81,7 20-50 Mio HUF 8 11,9 13,3 50-300 Mio

HUF 3 4,5 5,0

Total 60 89,6 100,0 7 10,4 Total 67 100,0Software-, Interactive Leisure Development

0-20 Mio HUF 1 9,1 100,0

10 90,9 Total 11 100,0

List of employed documents and electronic documents:

Analysis for the Strategy of the Cultural Industry of the Southern Transdanubian

(Authors: Bozóky Anita, Keresnyei János, Dr. Tarrósy István, Vendler Balázs)

Pecs the Pole of the Quality of Life - Pecs Pole 2006

Enyedi György: The cultural economy of the cities. É.N. http://www.sulinet.hu/oroksegtar/data/ipar_es_gazdasagtortenet/A_magyar

_varosok_kulturalis_gazgasaga/pages/002_az_elmelet.html

Cultural developments from the perspective of the cohesion policy (Authors:

Dr. Nagy Mihály - Hannibál Zsolt) É.N.

Desszi Gavrilova: Public and non-governmental cultural sector in Bulgaria

http://www.ketezer.hu/menu4/2004_kulonszam/gavrilova.html

http://www.scribd.com/doc/25066246/Az-EKF-jelent%C5%91sege-Pecs-varos-

eleteben

www.pecs.hu

www.pecs2010.hu

www.ksh.hu