The role of cultural industries in the economy at regional and national level

Simply put, culture influences economics in three dimensions. The first dimension concerns what is often called social capital or factor X and is about the importance of culture in the relationships,  networks and trust that connect the population of a region together. The second dimension sees culture as something that attracts outside visitors to the area. In this connection, this is most  likely to be historical monuments or scenery. Recently, the atmosphere and excitement created by those who live in the area have also come to have growing relevance for describing the value of culture. Berlin's eastern areas and London's markets are examples of this. When culture attracts visitors in these ways, it is considered a form of service export. Finally, the third dimension deals with how culture can influence objects and services that can be transported from the region and thereby raise export earnings.

This report deals with two aspects of measuring the economic influence of cultural industries. One describes how to capture direct and indirect effects of a cultural activity or an investment, and the other how to attempt to see cultural economy as part of national accounts.

The first section describes two studies that illustrate the information a regional actor should develop in order to assess the value of a cultural investment's influence on the local economy. We have focused on the most necessary calculations which need to be made to have at the least a primary material that can be as supporting documentation at local and regional level. Calculations of direct and indirect effects are necessary to determine a culture multiplier, i.e.,a form of return over a certain time. Here it is also important for the calculation to include the negative effects in  terms of leakage. For a small region, the greatest challenge is perhaps that of mobilizing local resources so that they can be used in a flexible manner. One of the main conclusions is that input goods and services should, as far as possible, come from the region.

The second section highlights the problems associated with measuring cultural industries and culture's share of GDP, or culture satellite accounts. Calculating the proportion of national accounts (NA) made up of culture, which is the purpose of culture satellite l accounts, means that one must be able to define both the value added by cultural production and the definition of cultural  activity. Experience from other countries demonstrates that certain improvements to the statistics will be needed in order to do this, something which will incur a cost, both in terms of time and resources. It is each country's economic statistical system that sets limits on how well economic activities that refer to culture can be identified. One difficulty is that, at present, countries use different definitions of cultural industries when calculating their culture satellite accounts. As a result, this decreases the ability to make comparisons between countries.

The role of cultural industries in the economy at regional and national level

Serial number: Report 2010:10

Reference number: 2010/012

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