Do “the creative industries” really matter for city economies?

That bloody elephant in Nantes again. Image: Getty.

Creative industries have long held a special place in economic development. But recent discussions that I’ve been party to in relation to the industrial strategy have underlined to me how confused the thinking on the creative industries is. Here are three areas where this is particularly apparent.

The definition of the creative industries itself is a source of confusion. According to DCMS, it is a combination of nine different industries ranging from architecture to fashion design, and including crafts, libraries and museums in between. This creates confusion on two counts.

The first is the mixing of highly productive industries like computer programming with much less productive activities like artistic performance. One sells to international markets, while the other is much more likely to rely on public subsidy to make ends meet. For a policymaker concerned about increasing productivity, one is much more relevant than the other.

The second is the mixing of industries (e.g. architecture, computer programming) with employment in cultural amenities, such as museums. By grouping cultural amenities in with businesses, we very quickly get into boosterist language about the supposed economic impact of such institutions in order to justify their grouping with the industries.

This is positively encouraged by the government, which requests that bids for things like City of Culture status set out the economic impact they will have. So in order to get funding, bidding bodies need to play the game. The result? We get grand proclamations on the economic impact of a City of Culture programme, no doubt sourced from the pages of a report written by a handsomely-paid consultant (the same is true of lower productivity industries in the definition too).

But this sadly distorts objectives and unfairly expects cultural institutions or activities to do something that they just aren’t able to deliver. Investment in a library is not done for any direct economic benefit, while investment in a museum should not be expected to bring about culture-led regeneration. Yet all these things are all too regularly confused, with April’s House of Lords report on seaside towns being the latest example.


Crucially, playing on these terms means that this is an argument that advocates of culture, in particular, are likely to lose. There’s no way we should expect libraries, crafts or museums to be making a direct contribution to improving the UK’s productivity. The data shows that not only do these activities have below average productivity, it’s actually lower today than in 1990 (as we should expect). And yet strangely exactly these arguments are being made about activities that are simultaneously reliant on public sector subsidy to make ends meet.

Losing this argument is a shame because cultural investment is important – it is likely to have impacts on things like civic pride and it exposes people to new ideas and experiences, for example. These are worthy aims that all policymakers should be attempting to achieve. But we should be clear about the reasons that we are making such investment, and be reasonable regarding the impacts we expect it to achieve. In terms of the industrial strategy, increasing productivity is not one of them.

A final source of confusion is the conflation of creative industries and creativity.

In response to the critiques above, the conversation usually then segues into the importance of creativity in the economy. This is exactly right. Creativity and new ideas are what drive innovation, which in turn drives long-run productivity growth. And policy should look to support this.

But let’s be clear. Despite being similar in name, the creative industries have no exclusivity over creativity. And it is not clear that supporting these specific industries through a sector deal, for example, improves the creative capacity of a local or national economy. Instead, improving education across the country would seem like a much more direct way to do so.

I don’t say this to be unkind or because I have any particular issue with the creative industries; although I’m sure there are many that will take umbrage with the above. I instead say this in the hope that we can bring clarity to what it is that we’re trying to achieve with different policy interventions – be that productivity, cultural engagement or civic pride. Because if we don’t have this clarity of thought, we’re all just going to end up disappointed when our expectations don’t get met.

You can hear more on this topic on our latest podcast.

Paul Swinney is head of policy & research at the Centre for Cities, on whose blog this article first appeared.

 
 
 
 

To see how a city embraces remote work, look to Helsinki

A deeply rooted culture of trust is crucial to the success of remote work. (Sean Gallup/Getty Images)

When I speak to Anssi Salminen, an account manager who lives an hour outside Helsinki, he’s working from a wooden platform on the edge of a Finnish lake. With a blanket laid out and his laptop set up, the sun low in the sky, Anssi’s remote work arrangement seems blissful. 

“I spend around half of my time working somewhere else other than the office,” he says. “I can work from home, or on the go, and I also travel to the Netherlands once a month and work from there.

“The emphasis in my work has always been that it doesn’t matter when or where I work, as long as I get things done.”

For many people around the world, the shift to remote work was sudden, sparked by the coronavirus pandemic. Finland, however, is finding the transition much less significant. Before Covid-19, the Nordic nation already displayed impressive levels of remote working, with 14.1% of its workforce reporting usually working from home. Only the Netherlands has a comparable percentage of remote workers, while the UK lagged behind at 4.7%, and the US’s remote workforce lingered at around 3.6%

Anssi works for one of many Helsinki-based companies that offers its employees flexible policies around when and where they work. That arrangement is in part due to the Finnish capital’s thriving start-up scene. In spite of being a relatively small city by global standards it is home to over 500 technology start-ups. These companies are leading the way when it comes to keeping employees connected wherever they choose to work.

“Our company has a completely location-free working policy,” says Kasper Pöyry, the CEO of Helsinki-headquartered software company Gapps. “All meetings are made available for online participants and facilitated accordingly. Some employees have worked extensively from abroad on a working holiday, whilst others prefer the comfort and social aspects of the well-stocked office. Whatever works for our employees is what works for the company.”

Like Gapps, many Helsinki-based firms are deeply preoccupied with providing the necessary technology to attract talent in a vast and sparsely populated country. Finland has only 15 inhabitants per square kilometre, and companies understand that in order to compose teams of specialised expertise, they may have to seek talent outside of the city. Local governments take a similarly proactive stance toward technological access, and Helsinki offers free, unrestricted, high-speed Wi-Fi from city-wide hotspots, while the country as a whole boasts some of the best coverage in Europe. 

But encouraging remote work isn’t just about optimising the potential of Finland’s workforce – companies in Helsinki also recognise that flexibility has clear benefits for both staff and employees. 

“The idea of a good work-life balance is ingrained in Finnish culture,” says Johannes Anttila, a consultant at organisational think tank Demos Helsinki. “It goes back to our rich history of social dialogue between labour unions and employers, but also to an interest in delineating the rules of working life and pushing towards people being able to enjoy their private life. Helsinki has been named the best city in the world for work-life balance, and I think that this underlies a lot of the mentality around remote work.” 

For Peter Seenan, the extent to which Helsinki residents value their free time and prioritise a work-life balance prompted his move to the city ten years ago. He now works for Finnair, and points to Finland’s summer cottages as an example of how important taking time to switch off is for people in the country. These rural residences, where city residents regularly uproot to enjoy the Nordic countryside, are so embedded in Finnish life that the country boasts around 1.8 million of them for its 5.5 million residents

“Flexible and remote work are very important to me because it means that I don’t feel like I’m getting stuck in a routine that I can’t control easily,” he says. “When I’m working outside of the office I’ll go down to my local sauna and go ice swimming during the working day, typically at lunchtime or mid-morning, and I’ll feel rejuvenated afterwards… In winter time especially, flexibility is important because it makes it easier to go outside during daylight hours. It’s certainly beneficial for my physical and mental health, and as a result my productivity improves.”

The relaxed attitude to working location seems to pay off – Finland is regularly named the happiest country in the world, scoring highly on measures such as how often its residents exercise and how much leisure time they enjoy. With large swathes of unspoiled countryside and a national obsession with the outdoors, sustainability is at the forefront of its inhabitants’ minds, leading to high levels of support for measures to limit commuting. In January, Finland passed a new Working Hours Act, the goal of which was to help better coordinate employee’s work and leisure time. Central to this is cementing in law that employees can independently decide how, when, and where they work.

Yet enacting the new ruling is not as simple as just sending employees home with their laptops. For Kirsimarja Blomqvist, a professor of knowledge management at LUT University, perhaps the most fundamental feature that remote work relies upon is a deeply rooted culture of trust, which Helsinki’s residents speak of with pride. The anecdotal evidence is backed up by data which suggests that Finland boasts one of the highest levels of trust and social cohesion in Europe, and equality and transparency have always been key cornerstones of political thought in the country.

“Trust is part of a national culture in Finland – it’s important and people value it highly,” she explains. “There’s good job independence, and people are valued in terms of what they do, not how many hours they work for. Organisations tend to be non-hierarchical, and there is a rich history of cooperation between trade unions, employers, and employees to set up innovative working practices and make workers feel trusted and valued. 

“It’s now important that we ensure that this trust can continue to be built over technology, when workers might have been more used to building it face-to-face.”

As companies begin to look hopefully toward a post-Covid future, the complexities of remote work are apparent. Yet amid issues of privacy, presenteeism, and social isolation, the Helsinki model demonstrates the potential benefits of a distanced working world. The adjustment to remote work, if continued after the crisis, offers a chance to improve companies’ geographical diversity and for employers to demonstrate trust in their workforce. On these issues, Blomqvist believes other cities and employers can learn a lot from Helsinki.

“People are now beginning to return to their workplaces, but even as they do they are starting to consider the crisis as a jumping point to an even more remote future,” she says. “The coronavirus pandemic has been an eye-opener, and people are now interested in learning from Finland’s good practices… We are able to see the opportunity, and the rapid transition to remote work will allow other countries to do the same.”

Katie Bishop is a freelance writer based in Oxford.