In order to flourish creative enterprises increasingly group together in Creative Clusters, pooling together resources into networks and partnerships to cross-stimulate activities, boost creativity and realize economies of scale. In some countries, such as the UK, the government and public policymakers have realized the social and economic potential of this development and are playing an important role in creating an enabling environment for these clusters to grow.

In 2004 UNESCO's Global Alliance for Cultural Diversity launched the Creative Cities Network, linking cities around the world in order to harness their creative potential for social and economic development. The Creative Cities Network supports the concept of Creative Clusters.

A new creative economy

The world's biggest companies in 1950 were all industrial manufacturers and raw materials suppliers: Ford, Standard Oil, General Electric, Philips, General Motors. Today the corporate landscape has changed; leading companies include cultural industries like music and entertainment firms, publishers and broadcasters as technology has combined with content to create giant groups such as Time Warner, Disney, Bertelsmann, News Corporation.

To remain competitive in today's economy, where manufacturing can be outsourced to other countries, what counts is creativity, design and innovation. Companies are therefore trying to distinguish themselves and their products by focusing on their creative skills and by building cultural value into their products.

More and more, international companies sell lifestyle, creativity, style and image. Companies like Nike are less and less involved in the actual manufacture of their goods. Their real value lies in the design and cultural 'message' that their products convey.

Creative and cultural industries

Government policy makers around the world are increasingly aware that cultural industries are important drivers of economic, artistic and social value. They generate jobs, create profit and promote local identities thereby ensuring cultural diversity.

The structure of the creative industries is marked by a small number of large global conglomerates, which often depend upon hundreds of smaller micro-enterprises for the supply of creative innovation. These smaller companies or cultural actors are often highly specialized niche players that create new value by bringing together technical innovation and creativity to design new cultural products.

'Their assets are invisible and volatile: reputation, skills and brands and they evolve by getting better rather than by getting bigger', explains Simon Evans, a cultural entrepreneur and Director of Creative Clusters, an innovative UK company that promotes networking between actors in the creative industries and promotes the concept of clustering.

'A good deal of their critical infrastructure is external to the firm. All this adds up to a business profile that is not widely recognized by banks, investors or government', says Evans, 'the principal strategy that the creative sector as a whole adopts to address these structural issues is to pool resources and band together: into networks, clusters, quarters and other kinds of partnership'. Silicon Valley is the classic example of a cluster region.

The usual definition of a business cluster is Michael Porter's, in The Competitive Advantage of Nations: '...geographic concentrations of interconnected companies, specialized suppliers, service providers, firms in related industries, and associated institutions (for example, universities, standards agencies, and trade associations) in particular fields that compete but also co-operate'.

Creative Clusters

Many countries have already recognized the importance of creative industries and are supporting them through public-sponsored policies including cluster promotion. Nevertheless Porter's model is proving problematic according to Creative Clusters.

'Creative clusters are not the same as other clusters, and common strategies will not work. A cluster of creative enterprises needs much more than the standard vision of a business park next to a technology campus', says Evans.

'A creative cluster includes non-profit enterprises, cultural institutions, arts venues and individual artists alongside the science park and the media centre. Creative clusters are places to live as well as to work, places where cultural products are consumed as well as made. They are open round the clock, for work and play. They feed on diversity and change and so thrive in busy, multi-cultural urban settings that have their own local distinctiveness but are also connected to the world'.

Such a broad concept of the role of clustering requires a significant amount of coordination and the intense participation of local government to link-up the wide range of cultural actors, public agencies, sources of funding and the private sector in order to exploit the cultural opportunities that exist in towns and cities.

Creative Cities Network

In October 2004 therefore, UNESCO's Global Alliance for Cultural Diversity launched the Creative Cities Network. The Network connects creative cities so that they can share experiences, know-how, training in business skills and technology on a global level. This facilitates local capacity building that encourages diversity of cultural products in domestic and international markets, employment generation and social and economic development.

The Network has focused on cities because they are increasingly playing a vital role in harnessing creativity for economic and social development. Cities harbor the entire range of cultural actors throughout the creative industry chain, from the creative act to production and distribution.

As breeding grounds for creative clusters, cities have great potential to harness creativity, and connecting cities can mobilize this potential for global impact. Cities are small enough to affect local cultural industries but also large enough to serve as gateways to international markets.

Creative cities have managed to nurture a remarkably dynamic relationship between cultural actors and creativity, generating conditions where a city's 'creative buzz' attracts more cultural actors, which in turn adds to a city’s creative buzz.  This virtuous cycle of clustering and creativity that is shaping the foundation of creative cities is also perpetuating the evolution of the 'new economy'. 

The new economy is quickly taking shape, giving rise to mass production and consumption of unique experiences, and cities that can effectively harness human creativity are at the heart of this evolution.  Cities play an integral role in the transition toward a new economy because they harbor clusters that are essentially hubs of creativity with the potential to shape global demand for a city's local offering.

The Network taking form

In order to better target the development needs of specific sectors within the cultural industries, the Creative Cities Network has devised seven fields from which cities can choose to specialize their efforts, namely literature, cinema, music, folk art, design, media arts and gastronomy.

So far the following cities have been appointed to the Creative Cities Network: Aswan, Egypt (UNESCO City of Folk Art, Buenos Aires, Argentina (first UNESCO City of Design), Santa Fe, New Mexico (UNESCO City of Folk Art),  Popayan, Colombia (first UNESCO City of Gastronomy) and Edinburgh, Scotland (first UNESCO City of Literature). Many other cities have announced their formal interest and are putting together their candidacy files.

Edinburgh was the first city appointed to the Network and has taken an energetic lead in building partnerships and collaboration with other cities around the world. The city held Edinburgh's UNESCO Cities of Literature Seminar on 19-21 August, designed to bring together delegates from cities which may become future Cities of Literature in order to plan and develop projects and exchanges.

With participants from Alexandria in Egypt, Vancouver in Canada, Amsterdam in The Netherlands and Krakow in Poland, the seminar allowed Edinburgh's City of Literature management team to showcase the city's achievements under the Creative Cities framework and share invaluable experiences that will help other cities that are undergoing the application process.

Cities and Clusters – combining to promote cultural entrepreneurship

In coming years creative clusters are expected to play a prominent role as the Creative Cities Network takes shape.  This very modern approach to uniting creativity, business and growth is already gaining significant recognition as key to success in the new economy of culture and will be a vital component in allowing cities to exploit their creative potential to the full.