Clusters in Cultural & Creative Industry: a Tool for Development and Partnerships

Gerardo Patacconi

Plenary Session 3: Global Cooperation and Cluster Internationalization

Clusters in Cultural & Creative Industry: a Tool for Development and Partnerships

Gerardo PatacconiChief, Clusters and Business Linkages Unit

Business, Investment & Technology Services Branch UNIDO

• UNIDO Cluster programme

• What is Cultural & Creative Industry and its impact on sustainable development

• Do Creative Industries Have a Natural Tendency to Cluster?

• Developing Clusters in Cultural and Creative Industries in the South-Mediterranean

• Conclusions

PRESENTATION OUTLINE

4

Poverty Reduction through Productive

Activities

Trade Capacity-Building

Environmentand Energy

UNIDO is the specialized agency of the United Nations that promotes industrial development for poverty reduction, inclusive globalization and environmental sustainability.

The mandate of the United Nations Industrial Development Organization (UNIDO) is to promote and accelerate inclusive and sustainable industrial development (ISID) in developing countries and economies in transition.

UNIDO is the only UN organization promoting the creation of wealth and tackling poverty alleviation through sustainable industrial development

Focus on three inter-related thematic priorities:

Development objectives:• Improve Competitiveness and profitability• Increase income, jobs and human/food security• Promote diversification and fair trade• Increase Value addition and integration (backward and forward linkages)• Ensure Consumer protection • Creating shared values pursuing Social, Economic and Environmental Sustainability

and addressing gender balance, Human Rights, anti-corruption

Inclusive & Sustainable Cluster development• Inter-firm and local institutions collaboration, • Collective efficiency and Innovation• Market Access, Profitability, compliance• Including SMEs as well as Livelihood-based businesses (pro-poor)• Integrating cluster policies in Countries legal and institutional framework• Developing vertical/horizontal linkages including buyers/suppliers integration• Promoting Cluster-to-Cluster partnerships and Export/Origin Consortia

UNIDO Cluster Development Approach

Developed and applied since mid-1990s in both emerging economies and LDCs: of industrial clusters in Asia, Latin America, Africa and Eastern Europe (textile, food, wood, construction, automotive, creative industries, tourism…)

Customized to local contexts (country, sector, size/type of enterprise etc.)

Fostered Cluster-to-Cluster and Suppliers/Buyers linkages (Slovenia/Russia, Italy/India-Vietnam, Mena Region/EU….)

Standardized approach (tools, network of experts and training packages/e-learning systems, M&E system…)

Knowledge Sharing of innovative cluster policy solutions (North-South and South-South, Triangular

It focuses on:

• formal industrial sectors (Competitiveness/market access)

• livelihood-driven conglomeration of micro enterprises/farms (pro-poor income generating approach including youth/women empowerment)

UNIDO Cluster Development Approach

Focus on building national human & institutional capacity through cluster Development Agents, stakeholders training/coaching, SMEs development and upgrading, policy advise, market access, linkages, access to finance…. Cluster mapping and VC analysis Direct Intervention at the cluster level and

value chain (also SMEs upgrading) Skill upgrading & development for local

associations, institutions, consultancies & policy makers

Facilitation of market access and linkages with buyers for fair and sustainable sourcing

UNIDO Cluster Development Approach

Cultural & Creative Industry & impact on sustainable development

Americans for the Arts DCMS

UIS Trade-related

WIPO Copyright

Concentric Circles

Symbolic Texts

Advertising X X X X X XFilm/Video (Recordings) X X X X X XMusic (Recordings) X X X X X XPublishing X X X X X XArchitecture/Architectural services X X X X XTelevision and radio X X X X XVisual and graphic art X X X X XDesign X X X XFashion X X X XPerforming arts X X X XVideo and computer games X X X XSoftware X X XConsumer electronics X XHeritage & Heritage services X XMuseums, libraries & zoos X XMusical instruments X XArt and antiques market XArts schools and services XAudiovisual equipment XAudiovisual services XBlank recording material XClothing, footwear XCollecting societies XCopyright royalties XCrafts XHousehold goods XInformation services XInternet XLiterature XNewspapers, periodicals XPaper XPhotocopiers & photographic equipment XSport XToys XSource: Throsby, 2007 Elaboration: By the author Elaboration by Rafael Dulbecco

CULT

URA

L &

CRE

ATIV

ITY

INDU

STRY

DEFINITIONS

CULTURAL & CREATIVITY INDUSTRY

when “creativity” is the main raw material

CULTURAL & CREATIVITY INDUSTRY

• Creative economy is one of the most rapidly growing sectors at a global level, as well as highly dynamic in terms of income-generation, job creation and export earnings.

• World aggregate trade of cultural and creative goods and services add up to US$ 624 billion in 2011.

• This amount doubled from 2002 to 2011; the average annual growth rate during that period was 8.8%, while developing countries exports of cultural and creative goods grew to a greater extent, averaging 12.1% annually over the same period.

Creative Economy: High potential for economic growth and jobs

• Employ high-skilled creative workers.

• CCIs also associated to a set of positive externalities entailed by their capability to enhance the image, prestige and quality of life of the area in which they are imbedded.

• Additionally, they feature a strong tendency to localize and are often place-related.

• Due to these specific characteristics of the CCI, policy-makers find them increasingly attractive as means to solve problems of urban and Local Economic Development.

Creative Economy: High potential for economic growth and jobs

Beauty is a perfect balance between tradition and

modernity..

Do Creative Industries Have a Natural Tendency to Cluster?

…….. UNIDO Research attempts to analyse the factors behind the natural agglomeration of Cultural

and Creative Industries…….

Specificities of CCI Clustering

Clultural and Creative Industry Clusters:

Geographical agglomerations of interconnected producers that employ inputs of a cultural and creative nature

to produce goods and services reflecting cultural and creative features

And are associated with support institutions related directly / indirectly to the CCI.

CCI clusters present characteristics that are unique to the sector: In general vertically disintegrated networks: highly skilled + relatively

unskilled workers part of the skills employed for production originates from a specific

cultural context that is often imbedded in a specific geographical location; a source of comparative advantage.

Tend to be composed by a large number of small enterprises making clustering particularly beneficial for this sector.

Tend to more social objectives like cultural development and inclusion.

limited bargaining power, lack of sufficient resources to encourage the development and subsequent purchase of specialized support services, little influence regarding the implementation of policies and support institutions.

Specificities of CCI Clustering

• European Neighbourhood and Partnership Instrument (ENPI) framework• 7 beneficiaries: Algeria, Egypt, Jordan, Lebanon, Morocco, Palestine and Tunisia• EU-funded regional project (3,5 years, EUR5,000,000)• Financial contribution of the Italian Development Cooperation (EUR600,000)• Label of the Union for the Mediterranean (UfM)

The project applies the UNIDO cluster methodology and the UNIDO creative industry development strategy for SMEs in CCI value chains to:

• Make Micro and SMEs more competitive and sustainable• Improve processes and products• Access national/regional/international markets• Develop partnerships with suppliers, buyers and other potential partners and foster cluster-to-

cluster linkages• To work on pliot clusters to demostrate effectiveness of the Cluster Approach and propose roll-up

STEP 1: CLUSTER MAPPING

Mapping parameters

• Mapping period: May-October 2014• Scope: 7 countries of the Southern Mediterranean (Algeria, Egypt,

Jordan, Lebanon, Morocco, Palestine and Tunisia)• Team: UNIDO HQ project team, UNIDO international mapping experts

and national mapping experts and support by UNIDO filed offices• Qualitative sources: over 500 persons interviewed with active

participation of support institutions, sectorial/professional associations, NGOs, companies, EU delegations…

• Quantitative sources: desk research and data mining• Focus: clusters and NOT individual businesses

• Critical Mass• Geographic

concentration• Same business segment• Value chain coverage • Oriented not only local

demand

Inputs/Activities Cluster Criteria Outputs

Clusters (potential cluster

initiatives)

Other economic realities or concentrations of

companies

• Ministries of Industry, Crafts and Culture

• Industrial Statistics• Secondary sources (pre-

existing studies, industry plans,..)

• Public Databases• Interviews with companies• Interview with experts• Information from Support

organizations • 500 interviews/contacts

Mapping methodology

Overview of identified clusters

144 clusters in 7 countries Algeria (17), Egypt (47), Jordan (11), Lebanon (14),

Morocco (21), Palestine (9), and Tunisia (25) Plus a list of important economic realities that are

not „clusterized“ Most Clusters are in the design-based industries, i.e.

furniture, leather accessories, jewelry,, carpets, home-ware and crafts

Other CCI sectors that do not qualifying as clusters ( e.g. Advertising in Algiers, Architecture in Amman, Publishing in Cairo, Cinema in Morocco, Festivals in Tunisia, etc.)

The rest of the businesses are often rich in almost all countries, yet the companies are not geographically concentrated, but spread around the territory.

Textile / Garments / Shoes / Jewelry

Furniture / Lighting

Home textiles / Carpets

Stone and marble / building materials

Architecture

Decoration / Art de table

Audiovisual

Film

Publishing

Advertising

Performing Arts

Music

General view of clusters identified

https://a.tiles.mapbox.com/v4/clusterdevelopment.j1e2jmdl/page.html?access_token=pk.eyJ1IjoiY2x1c3RlcmRldmVsb3BtZW50IiwiYSI6IklDbmQyRFkifQ.gCZpvW9wNTBRZigwJwzrYw#13/30.0718/31.2173

• Strong potential to increase private sector competitiveness• Both well-known and less-known economic realities• Almost all clusters convey very strong elements of heritage that can

evolve into one of the clusters’ main economic strengths• Some important clusters are losing the link to their heritage and skills• Other CCI sectors are growing and have strong potential (that still

needs to be realized)• Limited linkages between CCI and other economic sectors• Clusters often includes both artisans and SMEs

Mapping of clusters and related economic realities

STEP 2: CALL FOR PROPOSALS for CLUSTER DEVELOPMENT

As a pilot initiative with scarce financial resources, the project can only assist a limited number of clusters; to ensure a fair and transparent selection process, a competitive call for proposals was launched to invite companies, associations and institutions to propose a vision/strategy and request technical assistance:

134 Cluster development proposals received from 7 countries

A wide array of CCI sectors are represented, and often a support institution (e.g. chamber of commerce, association of artisans, etc.) played an important role to ensure the participation of the companies forming a cluster

Competitive call for proposals

PROPOSALS ASSESSMENTCRITERIA

PRE-IDENTIFICATION CLUSTERCRITERIA

EX POST CRITERIA

• Same business segment• Critical Mass• Geographic

concentration• Value chain coverage • Oriented not only local

demand

• Critical Mass• Competitive advantage• Economic Impact & Value

chain coverage• Sustainability and social

impact • Feasibility and potential

degree of success• Potential for access to

markets

• Prioritize Initiatives not supported by other programmes

• Time to market and market access potential

• Other issues

Evaluation criteria of Cluster Proposals

The technical evaluation was made exclusively based on the proposals.

Assessment criteria

Criteria Values Minimum (1) Maximum (5)

1) Critical Mass

1.1 Nº of companies 1-50 companies >500 companies

1.2 Typology of companies Only few companies of 1 typology Presence of more than 4 typologies

1.3 Nº of jobs <25 >25001.4 Turnover <1M USD >50M USD

2) Differentiation trough cultural heritage & competitive advantage

2.1 Competitive Advantage Very limited Unique

2.2 Creative Competitive Advantage Local skills / design element, no links to cultural heritage Specific local skills, design element, and high links to cultural heritage

3) Economic Impact & Value Chain coverage

3.1 Support entities Lack of support entities and lack of adapted programs

Presence of all kinds of identified support services, support institutions and programs

3.2 Factor conditions Very poor factor conditions Excellent factor conditions

3.3 Value Chain Coverage Bad coverage and no support institutions Very good coverage & includes sophisticated support institutions (eg. Banks) in the list of participants

4) Sustainability, social impact

4.1 Environmental impact Very limited answer while the sector is not-highly polluting Excellent description of environmental actions taken into account

4.2 Local economic development, employment and social inclusion Generic comments on job creation or local economic development Local economic development, job creation and social inclusion are

very well addressed and precisely targeted

5) Initiative feasibility and potential degree of success

5.1 Awareness of the initiative among local actors <10 local actors >100 local actors

5.2 Cluster objective and strategy Poor, incoherent and/or incomplete strategy Consolidated strategy, including strategic analysis, and coherent with cluster strengths and position

5.3 Milestones and expected results in the next 3 years No vision of expected results (only generic expected results described) Consolidated vision, coherent with current cluster strengths and

positioning and detailed milestones

6) Potential for access to markets

6.1 Competitiveness, market expansion, access to markets

Consolidation of competitive advantage, access to markets, and business expansion are limited

Consolidation of competitive advantage, access to markets, and business expansion are promising

6.2 Exports 0% 100%

14 „pilot“ clusters have been selected fot direct assistance

STEP 3: CLUSTER DEVELOPMENT AND MARKET ACCESS AND

PARTNERSHIPS

Work plan – Cluster initiative

Ramadan (18 June-17 July)

TECHNICAL ASSISTANCE FOR THE 2 PILOT CLUSTERS: FURNITURE IN NABLUS AND HANDCRAFTS IN BETHLEHEM

Feb. 2015 Mar. 2015 Apr. 2015 May 2015 June 2015 Jul. 2015 Aug. 2015 Sep. 2015 Oct. 2015 […] 2017

I - CLUSTER ANALYSIS & DIAGNOSTIC

Cluster meeting

Interviews – cluster agents

Cluster meeting

Action plan workgroups

Inception meeting

• Cluster analysis & diagnostic

• Industry analysis

Action lines interviews

10/02/2015 14/06/2015

Interviews – Cluster agents and experts

• Advanced buyers analysis

• International best references

• Strategic options analysis

• Action plan• Align support institutions• Governance

II - VISION BUILDING III – ACTION LINES IV - IMPLEMENTATION

PRODUCT DEVELOPMENT AND ACCESS TO MARKET

I – DIAGNOSTIC II – ACTION PLAN III – FIELDWORK & IMPLEMENTATION

5/10/2015

Cluster meeting

20/04/2015

Cluster diamond analysis: Nablus Furniture Cluster

Firm Strategy and Rivalry

Related and Supporting Industries

Factor Conditions Demand Conditions

• Domestic market is fairly open to all products from local or international origins

• Intense competition among local producers• Industry is boomin/well positioned against imported items • Informal sector is well present (as a low entry barrier

industry). • Government places sector among the top priority sectors

• Focus on modern designs in the Israeli market and modern products with classical infusions to the local market

• Increasing demand on local products especially by the Palestinians in the 1948 (Israel) for the combination of price and quality.

• Growing construction projects • Increasing sophisticated demand for tailor-made and/or

standard products• Demand is price sensitive with available room for informal

sector competition (limited yet present)

• Suppliers well present in the local market • Good level of collaboration and integration present among the

different players with the manufacturers • Geographical proximity is well present in the locality

• Experienced skilled labor is well present yet demand is higher

• TVET centers are outdated (skillful labor is trained on duty)• Newly established support mechanisms are in place with

focus on R&D • Government and international organizations support is

shifting focus to core issues rather than mere presence

• Weak information infrastructure lacking updated and credible information for local and international markets

• Missing needed regulations for design protection, business registration, export incentives, …

Porter 5 forces : Nablus Furniture cluster

The Furniture Industry Proves to be Highly Attractive (urban population, income availability and investment in construction worldwide)

yet very challenging for manufacturers (new entrants from low cost countries). Differentiation of products and forward integration into the value chain are key to

survival of the business and its development.

Rivalry among

competitors

Bargaining power of

buyers

Bargaining power of suppliers

Threat of substitute products or services

Threat of new entrants

Wood & Veneer

Furniture Workshops/

Factories

Wholesale Showrooms Domestic

Wholesale(WB)

Foreign Retail

Foreign Wholesale

JD ISR JDISRChain Actors

Des

ign

Serv

ice

Prov

ider

s

Mac

hine

ry

Impo

rters

Owned and/or External Showrooms for retail and/or wholesale

CuttingCarving VeneeringTinting PaintingUpholsteryPackaging

Tran

spor

t &

Logi

stic

s Se

rvic

e Pr

ovid

ers

BSOsNCCI, PIF, Paltrade

Banks/Financial Services

Local government institutions

Chain Supporters

Support Activities

Inbound Logistics Operations Outbound

LogisticsMarketing &

Sales Services

Local Retail Showrooms

International Sales

Customers

Fabrics

Accessories

Sponge

Other

S u

p p

l i e

r s

Government/MoNE

340 registered SMEs/WORKSHOPS

(of which 36 are with showrooms)

Over 114 M$ of revenues

More than 1300 workers

(part of the figures come from activities in manufacturing

and sales through owned channels and are difficult to separate)

Value Chain: Nablus Furniture cluster

• Training & coaching for national Cluster Development Agents (CDAs);• Awareness Building, stakeholders engagement;• Cluster development strategy and formation - all stakeholders of the clusters and

key actors of the value chain defining a common vision/strategy towards developing a joint business plan/collective actions

• Product development– a team of local and international design experts work with selected companies of each cluster to develop new product lines and production processes highlighting cultural heritage

• Local capacity strengthening: creative hubs, trends observatories, cluster development units…

• Policy Review: cluster policies, CCI policies, handicraft & industry policies• Market access and business linkages with Buyers, market segmentation• Cluster branding and communication

Technical assistance to selected clusters

Action plan for Nablus Furniture Cluster 2015-2017KNOWLEDGE ON TRENDS

&CONSUMER PREFERENCES

FACILITATION OF ACCESS AND MOVEMENT CHALLENGES

IMPROVING AND TRAINING OF PRODUCT DEVELOPMENT

CAPABILITIES

BUSINESS DEVELOPMENT - ACCESSING LOCAL &

INTERNATIONAL MARKETS

STANDARDIZED QUALITY + OPTIMIZATION OF PRODUCTION AND LOGISTICS PROCESSES AND

DEVELOPMENT OF BETTER SERVICE TO CUSTOMERS

DEVELOPMENT OF A MARKETING – BRANDING – RETAIL STRATEGY

ACCESS TO FINANCE

PROVIDING NEW QUALIFIED LABOUR

WORKING & ENVIRONMENTAL CONDITIONS

# ACTION TITLE1 Market research about main preferences of end-consumers locally and in the near international markets2 Creation of design Hub linking together workshops, designers and other main design stakeholders3 Training new interior designers and promoting collaboration with local workshops4 Design hub activation. Ideation, prototyping and development of a new product line5 Study tour + B2B sessions together with companies in a selected furniture cluster6 Linking with main organizations and donors to collaborate in actions to improve access to market7 Identification and implementation of needs to facilitate movement of goods and businessmen to the region8 Market research on potential customers and strategies to enter markets like Jordan & Gulf markets9 Development of a temporary exhibition in the West Bank inviting main potential international customers

10 Business development mission for market development in Jordan & Gulf markets (incl. follow-up support)11 Training on communication and marketing to improve own brands and its awareness12 Training on retailing skills to deliver better service to end-consumers13 Study tour to learn about retail strategies in other international markets14 Knowledge of new materials + techniques and audit on processes / products where workshops can excel

15 Assessment on current technical capacities and identification of new machinery needed in the cluster16 Creation of a database of best local and international suppliers for new materials and components 17 Development of potential joint purchasing groups of raw materials among workshops of the cluster18 Training on ways to optimize production and logistics processes19 Training on main aspects of finishing and quality control for all workshops20 Development of a pilot project to connect local furniture workshops with main representative stores21 Training on decent labor and implementation of work improvements in small enterprises 22 Environmental assessment and recommendations in production process and waste management23 Linking with existing donor programs and local banks to ensure better funding conditions24 Areas of improvement of skilled labor current training system and collaboration with TVET centers25 Identification of TVET service providers in Nablus and creation of MoUs to implement pilots

Action plan for Nablus Furniture Cluster 2015-2017

• The Project covers only ~10% of the identified clusters’ actions• The cluster is assisted to raise funds for the remaining 90% of actions• Cluster Governance assured through a transition mechanism with UNIDO

National Cluster Development Agents (CDAs)

STRATEGIC ACTIONS + ENVIRONMENT REINFORCEMENT ACTIONS

Individually Through groups

Meant to begin implementing the strategic options by the companies.

Meant to improve the environment of the companies.

Recommendations to entities Through groups

Market access strategies

•Best potential markets, distribution channels and key buyers,•Review of trade barriers;•Strategic options: B2B or B2C, online/retail… market access •Zero-cost advertisement on specialized magazine/media

Advisory Board

•Assess and understand the requirements and opportunities to link with key buyers in the EU market•Convening a group advisory board composed of: key buyers, marketing experts, digital experts, designers, foundations….

Market Segmentation

•Fair trade parallel market of distribution and sales buyers•High-end and luxury distributors and buyers•Mainstream middle range•Local/regional markets•Museums and art galleriese….

Points of leverage

•Ethical and sustainable sourcing/CSR•Highly skilled/local culture based handicraft•Low labour cost for skilled artians•Strategic option to gain buy-in from artisans in the cluster•High visibility•Clusters: quantity and sustainability

Market Access

STEP 4: INSTITUTIONALIZING CREATIVITY AND FOSTERING

INNOVATION

Creative clusters development

• Product & design

• Trends analysis and feeding of the creative process

• Cultural Database

• Linking Creative Departments in SMEs with Universities, Design Schools, Technical schools

• Buyer Requirements

Creative Process

DiagnosisObservatory

of Trends

Creative HubLinkages to the Market

CREATIVE HUB

Conclusions and Policy Implications for making CCI Inclusive and Sustainable

• Cluster Development is an optimal solutions to develop Cultural and Creative Industries

• Institutional partners, service providers and support services/centres are specific to foster creativity and access to markets

• Suitable development programs or methodologies require a sound understanding of the system (i.e. the cluster and the ecosystem) in which they are intended to be implemented.

• To reinforce and better adapt policies, and thus increase the probability of a positive effect on the system’s functioning, the elements and forces acting over and affecting the system, or in other words the CCI clustering explanatory factors, must be identified and comprehended.

• The identification of the forces behind clustering processes within the CCI helps to understand the reasons why the economic activities within the sector are attracted towards a given spatial location.

Conclusions

Policy actions are needed to:1. promote and support cluster development2. encourage the local talented individuals (i.e. creative human

capital) to stay, and ultimately succeed to preserve the workforce pool, promoting the co-location of the creative business.

3. Develop inter-sectoral collaboration4. Develop the conditions conducive to the establishment of creative

ecosystem and to cluster development5. Strengthen and promote creativity and skills in education and

technical training6. Nurture creativity and foster innovation in support institutions

Policy Implications to foster Clusters in CCI

www.unido.org/clusters - www.clustersfordevelopment.org - www.cci-clusters.org

Special thanks to Rafael Dulbecco that prepared the master thesis on THE EXPLANATORY FACTORS OF CULTURAL AND CREATIVE INDUSTRIES CLUSTERING PROCESSES: POLICY IMPLICATIONS during an internship with the UNIDO cluster Group; Olivier Stoullig, International Coordinator CCI clusters in South Mediterranean at UNIDO and Lluis Ramis and his Team at the Cluster Developmentnet Company in Barcelona.

THANK YOU 감사합니다 g.patacconi@unido.org

ANNEX: Relation clusters and CCI

• Based on the leading work of Boix, Capone & Lazzaretti (2009) and Scott & Power (2009), four main sets of explanatory factors for the CCI clustering have been identified:

1. Agglomeration economies 2. Human Capital Externalities3. Cultural heritage 4. The Creative Class

We tested the Model: 4 Variables to be assessed

Set of positive economic externalities entailed by the co-localization of productions units and actors within a geographical space. • Localization Economies : the co-location or spatial agglomeration of firms belonging to a specific economic

activity – The specialization of industry results in the specialization of the labor market, which gives companies a

high-skilled creative workers reservoir that helps the former to guarantee a high quality level of process and products.

– Institutional specialization: the specialization within technical education and technology centers (e.g. art schools and design hubs) along with other public-private institution (e.g. cultural centers) may foster the unique and advanced skills needed by companies in order to guarantee a high quality level of process and products as they enhance the sector’s knowledge base.

• Urbanization Economies: co-location of companies belonging to different economic activities – New product combination is an essential feature of the creative and cultural economy; thus intra-sector

collaboration linkages are significantly important within the CCI– The diverse labor demanded by companies enables the existence of a skills-rich reservoir of workers.

Labor force diversity enhances radical innovation as well as entrepreneurship. – Diversity of institutions and infrastructure that urban areas procure : make available a wide array of

new skills, knowledge and information for the creative industry and labor market

Agglomeration economies

• Productive and creative individuals attract other productive and creative individuals:– The subsequent dense and high quality human capital stock not only attracts

industry but it also generates it.

• CCI production of goods and services employs inputs of a cultural and creative nature that are mainly originated by individuals.

• Thus, the spatial concentration of the cultural and creative human capital plays an important role in CCI clustering since the individuals that form that human capital also populate the cultural and creative industries.

Human Capital Externalities

• Geographical spaces are linked to a set of cultural realities, i.e. traditions, memories, symbols, values and so on; which can be, to some extent, the sources of inspiration for artists, designers, crafts workers, and other creative individuals

• These sources of inspiration may be conceptualized as cultural and creative inputs that ultimately integrate the CCI products

• Reputation of being unique –this reputation is the outcome of the usage of a unique set of traditional skills, materials and know-how. – This uniqueness translates into a competitive advantage for the companies imbedded in

that particular geographical space, encouraging them to locate in it, thus encouraging a clustering process.

• Reputation of successful CCI agglomerations: highly attractive to talented individuals in pursuit of professional fulfillment, in a process that has been called “artistic gravitation”

• Spaces as they are perceived to be abundant in elements of inspiration, stimulation or “creative buzz” encompassing diverse and complex prompts, ideas, trends and fashions

Cultural heritage

• The creative class theory (Florida, 2002) goes beyond the economic externalities (entailed by CCI clustering) to understand why the individuals working within this sector (e.g. architects, designers, artists) choose to concentrate within geographical spaces

• This creative class can be divided in a “super-creative core” and a periphery:– The former is composed by scientist, engineers, university professors, poets, artist,

entertainers, actors, designers and architects, along with the “thought leaders”, – Orbiting around the core, in the periphery, there are “creative professionals” who are

individuals working in knowledge intensive industries that are engaged in creative problem-solving and characterized by a high level of education.

• The creative class is attracted to regions that embrace 3Ts: technology, talent, and tolerance. This gives rise to creative geographical centers where the creative individuals are able to preserve their cultural identity and life style, can easily find opportunities and build on their ideas.

The Creative Class

• Case studies were developed to verify that the proposed explanatory factor are actually observed on the studied clustering processes.

• This attempt of verification was conducted through the analysis of historical, geographical economic and social information concerning different CCI clustering processes.

• The cases studied are 3 of the 14 clusters selected by the CCI Clusters in the Southern Mediterranean project, namely:– Design cluster in Cairo, Egypt; – Mosaic art cluster in El Jem, Tunisia; – Artistic tableware and decoration cluster in Nabeul, Tunisia

• A world class cluster was also selected:– Bollywood film industry in Mumbai, India

Case Studies

Case Study Results

Existence Observation

Agglomeration Economies YesSpecialized institutions and infrastructure: art schools, universities, design hubs & workshops

Human Capital Externalities YesConcentration of architects and workers with previous experience in the wood and textile manufacturing sectors

Cultural heritage YesTraditional aesthetics motifs, Traditional production techniques & traditional raw materials

The Creative Class Yes Creative districts (Zamalek and Mohandesin)

Habitat Design Cluster Cairo - Case Study Results

Case Study ResultsMosaic in El Jem – Tunisia - Case Study Results

Existence Observation

Agglomeration Economies YesSpecialization of industry, labor market and institutions & Proximity to traditional input suppliers

Human Capital Externalities YesInternal transmission of techniques & know-howConcentration of mosaic artists

Cultural heritage Yes Historical existence of a mosaic art cultural reality

The Creative Class No

Case Study ResultsBollywood– India- Case Study Results

Existence Observation

Agglomeration Economies Yes

Specialization and diversity of industry, labor market & institutions Intra-sectorial synergies that arise from related varietyIntra-sectorial capital flows

Human Capital Externalities Yes Concentration of film industry-related labor force

Cultural heritage Yes Inclusion of cultural realities such as language (Hindi), traditional music and dance.

The Creative Class Yes Mumbai first in the Indian creative index list

Creativity as a tool for enterprise creation and development

SOCIAL AND OTHER ENVIRONMENTAL IMPACT

Educational impact, openness to new experiences, encouragement of creativity, seeing things differently, curiously, independent thinking,

persistence….

CREATIVITY and INNOVATION

Competitive advantage, strategy weapon, embedded philosophy, contributing to employer

and employees motivation, problem solving, performance improvement….