The definition of creative industries has been outlined by Britain's Creative Task Force as “those activities which have their origin in individual creativity, skill and talent, and which have the potential for wealth and job creation through the generation and exploitation of intellectual property” (Department for Culture, Media and Sport – DCMS 2001)
Creative industries have been identified as contributing to over 5 percent of GDP (DCMS 2001). A selection of some of these industries, for which data are available, generates £112.5 billion a year in revenues, of which £10.3 billion is through exports. Output growth in this set between 1997 and 1998 was a strong 16 percent, compared to 6 percent for the economy as a whole (Freeman 2002).
These industries are likely to be characterized by differentiated products, niche markets, vertical disintegration, and consumer externalities. Location also has the potential to act as a brand or image. It is estimated that 50 percent of all employees in the sector are clustered in London and in the South East of England. In addition, an important share of these jobs is to be found in SMEs. Creative industries have in particular received a fresh wave of attention as “London's Core Business” (Freeman 2002). Between 1995 and 2000, they produced the second largest source of job growth, the second largest source of output, and were the third largest source of jobs in the city.
What factors underpin the competitive success or otherwise of different urban areas? This question, clearly, is central to any debate over the fortunes of different towns and cities in the British urban system. Taking a long-term view, over the past 50 years, say, some cities have consistently prospered, maintaining or increasing their share of national employment and population; others have lost ground and have struggled to attract new investment and jobs. Generally speaking, it is the major conurbations and large cities that grew rapidly in the 19th century that have typically lost both population and employment. The smaller towns and new towns1 (particularly those in the south of England and close to London) have, on the other hand, gained both population and employment.
Many of these shifts in population and employment have persisted over decades, in fact, rather than years. In the 1970s and 1980s, these trends received much attention as inner-city areas in the declining conurbations experienced worsening economic and social problems and intense difficulties in adapting to a rapidly changing economic environment (Hall, 1981; Gudgin et al, 1982; Begg et al, 1986; Robson, 1988; Breheny, 1999). And despite the proliferation of highly targeted area-based regeneration policies, many of these problems remain. Arguably, in some cities they have actually intensified and spread to other parts of the city, including outer estates and suburbs.
In parallel with these processes of geographical restructuring, there have been major shifts in the economic base of different towns and cities. This includes the well-documented decline in manufacturing employment and the rise of new sectors including finance and business services, high technology and the new ‘knowledge economy’. These, in turn, have impacted differentially on different towns and cities as new patterns of locational preference have impacted on investment and disinvestment.
This study set out to establish fundamental information about the factors that help shape the competitiveness of cities and which determine patterns of growth and decline. The aim was to identify the particular attributes of different urban areas – what can be termed the ‘asset base’ of the city – that create competitive advantage.
The UK is a heavily urbanised and, compared with most of the other OECD countries, very densely populated country. Moreover, in some parts of the country, large and small cities are clustered close together, notably in the central belt of Scotland, the heartland of England from Liverpool in the west to Hull in the east, and around London. There is a preponderance of ‘older’ cities that grew rapidly in the 19th century as the country industrialised, many of which owed their expansion to the development of particular industries, such as textiles, coal and steel or heavy engineering. The briefest of looks at the map of urban Britain shows that the spatial pattern of urban Britain does not conform to an obvious central-place pattern. Instead, it can be argued that the geographical locations reflect characteristics that once provided competitive advantages for traditional manufacturing, such as proximity to coal, water or industrial raw materials, or ease of access to imported materials.
These characteristics are not, however, necessarily well suited to a national economy increasingly dominated by modern service industries, with the result that the competitiveness of many cities has diminished. Their history inevitably affects their prospects and the scope for policy to improve their functioning and competitive advantage. Cities cannot easily shed their historically determined institutional, economic, social and physical structures and the performance of a city in maintaining full employment and a high quality of life for its residents is crucially determined by this legacy.
The extent and nature of a city’s economic and social problems reflect not only the effective and efficient functioning of it as a place supporting the employment, income and quality of life of its residents, but also its competitiveness and role within the wider urban system. ‘Competitiveness’ (an abused term, Krugman , argues) is, however, an elusive and slippery notion that is capable of being interpreted in different ways (Kresl, 1995; Begg, 1999). Successful cities can be defined as those that function well and compete effectively with other cities for private and public sector resources (the sources of jobs, income and quality of life). Unsuccessful cities tend to be characterised by a population loss and lack of employment or by an inability to surmount evident social and economic problems.
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