Culture and Economics

Various writers, researchers and consultants have put forward challenging arguments to outline the role of culture in the economies of cities, regions and countries where culture is seen as a major economic driver. For us here at Mirador, the issue is not whether culture has a positive role in economic development. We take that for granted although the case needs to be made!

I will be sharing various insights into this subject, which is attracting interest from a wide range of groups, to continually reaffirm our view that strategic investment in culture produces major benefits for the economy.

There are also some concerns. The first is about definition, ‘measurement’and validation of cultural concepts, their impact or outputs, contribution to wealth creation and the relationships between inputs and outputs, all aspects loosely described as the ‘evidence-base’ for culture. There are different views on what should be included and what should be excluded in the quantification or aggregation of cultural output. However, as long as the definitions are clearly stated and appropriate qualifications are provided, there is ample scope for developing the debate.

One of the most urgent concerns is how investment in culture can be secured to provide the greatest possible returns to the economy in terms of employment, value added, the creation of multiplier effects and the benefits that culture can deliver for the development of markets, the creation of economies of scale and through the forging of positive linkages in economies where culture is recognised as a major contributor to the gross domestic product (GDP).

There is a further challenge for agencies involved in the development and promotion of culture as a driver for economic development. Using the example of input-output analysis, there is perhaps scope for developing a model to project various levels of economic growth and to ascertain how different levels of investment in culture can be optimised to produce a given rate of return. Is the art or science of economic modelling able to provide such an analysis? If this was at all possible, perhaps people who campaign for investment in culture would be able to quantify the real benefits to the economy and society.

Many years ago the National Health Service used to say that they were investing £Xmillion in improving their service. Today, they report that an investment of £xmillion has yielded a specific number of hospital beds, operating theatres and a known increase of trained staff. In other words, the focus of reports has shifted from inputs to outputs. In the UK, where the developmental activities connected with increasing the capacity of cultural providers is mostly grant funded and the entertainment and leisure industries receive a combination of public and private sector investment, it should be possible to project the outputs that a given investment in culture should realise.

Critics of this argument may even justifiably say that you can only assess outcomes and outputs if you can measure them. A study of the economic impact of the Brighton Festival provides interesting conclusions. I hope to return to this later.

Cultural Planning in East London for 2012

The submission of a successful bid to host the London Olympics in 2012 has created unprecedented euphoria and enthusiasm. However, many 'nervous' observers on the sidelines may feel that the people and organisations in charge of planning and delivery may not be able to meet their targets. Of course, people who work in culture bring their own personalities, confidence and experience to bear on the challenges in which they are involved. It is not going to be easy to reach consensus.

Mirador sees its role as a neutral and objective observer and as a supportive commentator. In general, this blog aims to put forward fewer personal opinions and more of professional contributions. I do not have any privileged access to information and the reader is reminded to look again at the Disclaimer for this blog. 

How does Mirador see the exciting developments in the cultural arena during the next few years leading to 2012 and the legacy programme of the Olympics?  Mirador will offer commentaries by addressing the key needs and priorities. It most cases the observations will be generic in nature and will not be designed to offer advice or comments on the work programmes of any specific delivery organisation. Mirador may also work with a few of the agencies involved in cultural planning and delivery. In these cases, compliance to client confidentiality will override all other distractions.

 Here are some initial observations: 

• It would be very interesting to see how the five London Boroughs that are the ‘official’ hosts for the Olympics will review, develop and reconfirm their joint cultural policies and strategies during the next few months. This exercise should result in repositioning of cultural provision in the whole East London ‘region’.

• For ‘repositioning’ to be successful, the London Boroughs will also need to look at their markets differently. Traditionally, cultural services departments addressed their local markets that are confined to their boundaries. Success in 2012 will require that all service providers look at regional marketing plans for some services and national and even international marketing strategies for others.

• The participating boroughs will be best advised to look at their new challenges in terms harnessing their collective motivation and developing co-financing options, confirming joint structures for delivery in key areas and adopting shared performance management criteria where applicable.

• Investment in developing homegrown cultural productions must start now. For any local producers and presenters to have a reasonable chance of offering their services to the procurement and programming agencies for 2012, local producers will need to invest in strategies to make their outputs meet quality, cost and other competitive criteria.  Local arts and cultural producers may even need to review their aims and objectives, challenge their structures for delivery and then commit themselves to developing their capacity to deliver.

• Investment in developing capability should receive top priority. Many organisations will have the capacity to deliver but they may not be capable.

• Many of the major arts and cultural organisations in the East London- North East London axis have excellent track records, they have secure command of resources and show clarity of vision. Most of these organisations are attractive candidates for incremental funding that should be tied to regional parameters for delivery and new programme development based on an expanding market. It will be very interesting to see how arts organisations develop during this exciting period.

• There is scope for investing in the renewal of at least a dozen town centres. Mirador hopes to express its views on how new ‘cultural hubs’ may better serve the needs of visitors and residents during the next ten years.

• Community engagement and participation is going to be vital. There are interesting proposals on the ground and a few recent initiatives have demonstrated merit. However, there is no substitute to developing and adopting community consultation plans which are fully inclusive and flexible.

• Cultural provision and skills development will go hand in hand. How is the region going to review its skills agenda and which agencies are going to be taking the lead in planning and delivery? Investment in lifelong learning should provide the discipline and content for the key outputs relating to the skills agenda for 2012.

The worst-case scenario is unacceptable

The worst-case scenario is unacceptable. Instead Mirador aims to work with its present and future clients and partners to address the following:

• Innovation and creativity. The markets for culture are changing  and the challenge in the next ten years is to resist a culture of providing ‘more of the same’.

• New entrepreneurialism.  Local authorities and their partners will need to be much more entrepreneurial than has been the case in the past.

• Competition. Audiences, especially new audiences, can be very selective about where they spend their money.

• Investment in education and skills. Cultural providers and their staff will require access to lifelong training.

The worst-case scenario

The worst case scenarion presents major losses to the local cultural economies if cultural planning was to fail and local provision is not enhanced to meet the demands of new or expanding markets.  A worst-case scenario prevails where:

• arts and cultural producers, community groups, local authorities, arts funders and business sponsors fail to analyse and scrutinise their options for growth by promoting culture as a driver for the local economy 
• cultural planners are unable to attract skilled workforce or invest in their training 
• lack of strategic planning frustrates the development of future capacity to deliver cultural output 
• cultural programmers may be driven to procure new artistic work from other countries at the expense of alienating local producers 
• lack of investment in partnerships fails to leverage resources into the economy 
• lack of planning fails to identify co-dependencies, namely the delivery of secondary services such as catering  
• lack of development of culture as a cross-cutting agenda precludes new investment from builders and planners

Addressing our key programmes for cultural diversity

Mirador is interested in developing a series of productions to implement its own programmes for addressing cultural diversity in London. The main components of our projected programme for delivery are:

 ·         Social inclusion

·         Capacity building through partnerships

·         Modernisation of delivery mechanisms to undertake large scale work

·         Creating effective links with learning and skills development

·         Investing in more viable structures for delivery

·         Confirming the basis for monitoring and evaluation

·         Developing co-financing options 

The above aspirations are also connected to the process for the determination of a major events strategy for London from 2006 to 2012.

Making London’s Creative Capacity to work

Cultural planners and providers, arts organisations, community groups and individuals working in this exciting area of  London’s economy have the creative capacity to deliver a wide range of marketable outputs and services, all of which can add value. However they must engage with delivery organisations and invest in audience development more than ever before in order to develop their capability to deliver.  What are the key actions that London must prioritise to facilitate joint development of culture during the next ten years? How can a case of strategic investment in culture be sustained?  Culture is a key driver for London’s economy but what is its present share of London’s gross domestic product (GDP)? What is the potential for incremental growth by the time the Olympics are held? What types of  legacy programmes can be achieved for the ten year period after the Big Event in 2012? A case for investing in a programme of long-term investment is clearly sustainable. However, it must be realised at the outset that no single organisation can deliver the desired results on its own. This is especially a key issue for local authorities – they have been supporting culture in London and have a variable record of achievement. But their role must change from being funding-led providers to strategic developers of partnerships.

A Major Cultural Events Strategy for London?

Need to address another challenge

Mirador hopes to influence the process of developing a major cultural events strategy for London 2012. Such a strategy can help to generate maximum benefits for audiences and providers.

It would eliminate wasteful competition between providers, provide better choice to audiences and help to forge long term and sustainable partnerships.

However, culture also operates in a free market and a case could equally be made for self-selection of events where producers recognise the benefits of competition to generate excellence and provide other benefits such as:

·Generating programmes to reap benefits of targeting productions at regional markets around London
·Introducing schemes to maximise economies of scale by supporting a small group of skilled producers.
·Introducing schemes for audience research and development and development

These are, as yet, early days and it is possible that a cultural events strategy could emerge in the future. There will be further coverage of a case for examining a cultural events strategy in this blog during the next few months.