Transcript Slide 1

10th European Week of Regions and Cities
Brussels 8th-11th October 2012
Rebalancing
the economy:
it is all about
content
Dr. Lisa De Propris
Birmingham Business School, UK
[email protected]
Content
1. Rebalancing… what?
2. Sector balance
3. Rebalancing or resetting
4. ‘Re-inventing’ manufacturing
5. Policy issues
Rebalancing… what?
•
•
•
•
•
Sector balance: Finance vs. Manufacturing
Regional balance: north vs south, rural vs. urban
Public Vs. Private sectors
Balancing public finances: deficit reduction
Balancing the current accounts
Sector imbalances
NESTA 2010
NESTA 2010
NESTA 2010
In the UK
CRESC, 2011
UK - Employment trends
2500000
2000000
1500000
KIBS
High tech
CI-DCMS
1000000
500000
0
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
UK – creative industrie
Regional trends
No. employees
600000
500000
East
East Midlands
400000
London
North East
North West
300000
Scotland
South East
South West
200000
Wales
West Midlands
100000
Y&H
0
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Recent research
1. What are creative industries?
DCMS classification includes:
Advertising, Architecture, Arts and antique
markets, Computer and video games, Crafts,
Design, Designer Fashion, Film and video, Music,
Performing arts, Publishing, Software, Television
and Radio
Why do CIs matter?
No firms up 5% and increasing (from 4.86% in 2009 to 5.13% in
2011)
Employment
• DCMS: up slightly for a total of 5.1% of tot UK
• WF: down 10% during the recession- back to pre-recession levels
in 2020
Exports in 2009 accounted for 10% of total UK (publishing,
advertising & film/video)
GVA just below 3% of UK total- stable in 2008-09
Regional dimension
Publishing
Software, computer
games & e-publishing
Employment in creative industries
Great Britain, France, Italy and Spain
Boix R., Lazzeretti L., Capone F., De Propris L.,
and Sánchez D. (2012) The geography of
creative industries in Europe. Comparing
France, Great Britain, Italy and Spain, in (eds)
Luciana Lazzeretti, Creative industries and
innovation in Europe - Concepts, measures and
comparatives case studies, Routledge.
The impact of the recession
•
•
•
•
Demand shrunk; e.g. advertising
Public funding is disappearing
More difficult access to finance
WF: job losses
DCMS 2012
How do CIs impact on wider economy?
• direct impact
• indirect impact
• inter-sectorally (across creative and noncreative industries)
• geographically (regional spillovers)
Understanding innovation
in creative industries
Innovation in services
Services: “their intangibility, co-production with customers, simultaneity,
heterogeneity and perishability” (Nijssen et al., 2006:242).
Broader def of innovation as “the implementation of a new or
significantly improved product (good or services), or process, a new
marketing method, or a new organisational method in business
practices, workplace organisation or external relations.” (Oslo Manual,
OECD, 2005:46)
Innovation in creative industries
 aesthetic, artistic, stylistic or soft innovation (Schweizer, 2003;
Handke, 2006; Stoneman, 2008 Castaner and Campos, 2002)
 soft innovation is “innovation in goods and services that primarily
impacts upon sensory perception and aesthetic appeal rather than
functionality.” Stoneman (2008:2)
 Recently, innovations at the content-generation stage vs. forms
of innovations that intersect other sectors’ value chains
(Stoneman, 2008:2-3)
Further...
What measures?
 a proxy of soft innovation
 intellectual property rights, such as trademark or
copyrights , (Mendoca et al 2004, Stoneman, 2009)
 CIs tend to be more innovative than the rest of the
economy in terms of technological innovation and
organisational and marketing innovation (Miles and
Green, 2008), due to forms of ‘hidden product and
process innovations’.
 What linkages between creative industries and the rest of
the economy?
 economic sectors that sell to and/or buy from creative
industries are more innovative Bakshi et al. (2008)
 Frontiers Economics (2007) shows that creative
industries generate high spillovers in terms of products,
knowledge and networks
NESTA 2010 report
Types of innovation: product innovation, process
innovation, categories of innovation, management
related changes
NESTA 2010 introduces the creativity index:
it captures firms’ use of formal (registration
of design, patent, trademark, copyright,
confidentiality agreement) or informal
(secrecy, lead-time advantage or complexity
of design) IP protection methods.
Comparison between CIs with engineering-based
manufacturing, other manufacturing, KIBS and
other services
Table 1 – Firms in creative industries by type of
innovation outputs (% of all firms; 2004/2006)
Advertising
Architecture
Arts and Antiques
Designer Fashion
Film, Video and Photo
Publishing
Softwarre
Total Creative Industries
Engineering-based Manufacturing
Other Manufacturing
Retail & Distribution
KIBS
Other Services
All industries
Good
innovation
Service
innovation
Process
innovation
product or
process
innovation
Index of
creativity
NA*
11%
11%
31%
10%
30%
38%
26%
28%
20%
NA*
18%
19%
55%
NA*
17%
10%
NA*
9%
14%
26%
26%
32%
23%
32%
20%
35%
59%
65%
61%
33%
57%
45%
62%
81%
17%
32%
32%
13%
9%
6%
14%
30%
14%
14%
18%
26%
16%
18%
16%
21%
23%
8%
18%
6%
12%
34%
39%
40%
21%
31%
18%
26%
57%
63%
59%
34%
53%
27%
41%
Source: ONS.
Note: NA*The finding in this cell cannot be disclosed for data protection
3. Can CIs aide rebalancing the
economy and how?
Rebalancing  Recovery
Prosperity
Exports and Innovation
Seize the opportunity:
Economic growth &technology shifts
Steam
Cotton
Iron
Railways
Iron
Steel
K1
K2
Electricity
Chemicals
Autos
Electronics
Synthetics
Petrochemicals
•Knowledge
economy
•Green
•biotech
Indices of
economic
activity
1800
1850
Kondratiev’s Long Waves
K3
1900
K4
1950
K5
2000s
Premium manufacturing
• PwC 2011 report on clusters “by 2040 auto assembly clusters will
move to Nanjing and Tianjin.”
• Which cars?
• Those cars still have to be invented.
• Who will invent them? Radical innovation will come from auto
clusters in Europe.
• High tech manufacturing
• Manu-services
• Personalised manufacturing
Take
Wood
Textiles
Paper
Bio-refinery
Smart textiles
Printed electronics
Bio-fuel and new materials
Technical textiles
Vinnova Reeport 2011 Ready for an early Take Off? International Evaluation of the VINNVÄXT Initiatives in early stages
De Propris L. and Cooke P. (2011) A Policy Agenda for EU Smart Growth: the Role of Creative and Cultural Industries, Policy Studies,
Vol.32, No.4, 365-375.
Bailey D. and De Propris L. (2011) UK Cluster Policy, Sviluppo Locale, Vol. XIV, No. 36.
New sectors- value creation
High
Value
added
R&D-Design
assembly
logistics
Value chain
marketing-advertising
New sectors- value creation
High
Value
added
R&D-Design
assembly
Value chain
logistics
marketing-advertising
Create & anchor new sectors – new markets
• Prepare for the 2050 socio-economic challenges
– Energy, pollution, aging urban congestion
– New industries: genetics/biotech; new materials;
digital; renewable energy; green car
• Rebalancing the economy
– Designing, making and doing
– Anchoring skills, people and industries in
European regions
– Translating traditional sectors in industries for the
problems of tomorrow
Design public policies that are
ambitious and bold, but ‘cheap’
• It is not only about money, but rather about
 creating a vision, converging ambitions
 taking the risk, sharing the risk with businesses
 trusting and endorsing the ambition
 used to leverage other funding
• Public policy can mobilise local and regional
stakeholders
• Set goals, but above all be present along the
process
Crucial Issues
• Target creative activities and new technologies
• Nurture talent and anchor it – human capital
• Triple helix: research institutions; government and
firms
– National innovation eco-system = national innovation
system (Sweden and Finland have been investing about
4% of GDP in public R&D in 2009 vs 1.8% for the UK)
– Appetite for a clear steering
• Re-capture the value chain: onshoring and colocation of the value chain
Policy for EU prosperity
EU policy must remain a beacon of foresight for
growth and jobs
Key drivers
• Investment in ‘infrastructure’
• Universities basic research for new innovations and
skills
• Public procurement  create and secure new markets
• Regulations  upgrade standards and push innovation
(Porter’s hypothesis)
Thank you for listening