DEVELOPING A CREATIVE ECONOMY IN THE BALTIC REGION
Challenges & Opportunities
Dr Tom Fleming, June 2011
This short paper provides a ‘think piece’ on how partners across the three Baltic states of Estonia, Lithuania and Latvia can operate as a major centre for the development of the creative economy.
A key aim here is to open up a policy debate about the drivers of the Creative Industries in the Baltic Region, and to understand the opportunities and challenges facing the sector. I have been working with partners in the Baltic Region for more than five years and during this time, partnership working between the three countries has not yet flourished into full and wide-ranging coordination of activities and the sharing of expertise/resources.
I believe that the economic downturn provides us with the opportunity for reflection and it opens the way for Baltic countries to develop a rich and robust approach to regional cooperation that plays to individual strengths and delivers profile and impact that would not be possible working individually.
I believe a Baltic approach makes sound strategic sense because of a set of economic, social and cultural reasons. Broadly, this involves:
• Recognising the diversity of the region; while capitalising on commonality and a interdependency.
• Highlighting key opportunities for growing the Creative Industries and maximising the sector’s wider value.
• Balancing approaches to growth with approaches to quality of life and wellbeing.
The paper does not focus on specific Baltic opportunities and challenges in any significant detail. Rather, it posits a set of more ‘global issues’ that have pertinence to the development of the sector at a regional and local level.
To establish a more detailed Baltic approach would require detailed research and consultation – at the heart of a wider ‘Green paper approach’ (applying a similar approach to the 2008 Creative Economy Green Paper of the Nordic Region). Indeed, I have for several years advocated that the three countries of the Baltic region commission a high level strategic project – such as a Green Paper – to catalyze policy development, coordinate thinking and mobilize real and effective partnership.
With each country emerging tentatively from the economic downturn, and with clear distinctive strengths as well as weaknesses apparent across the Baltic region, the time has come to work positively as a creative economy unit. The three countries of the Baltic region – Estonia, Latvia and Lithuania – have between them so much talent, rich and intertwined history, and emergent creative economy infrastructure (from improving cultural infrastructure to new workspace facilities).
Moreover, the three nations are ideally located to develop a strong creative exchange programme with the Nordic countries to the north, Russia to the east, and central Europe to the west and south. With a joined-up approach that connects assets, enables knowledge and skills to be exchanged across borders, develops a coordinated brand/identity, and embraces talent and risk as core ingredients for success, the Baltic region can become a major creative economy cluster with global reach and prominence.
Three Types of Logic
There are three types of ‘logic’ for developing a coordinated approach to the Creative Industries across the Baltic Region:
There is commercial logic: developing greater visibility to local, regional, national and global markets; connecting for scale; coordinating complementary strengths; increasing convergence opportunities with other sectors; and establishing leadership in sector specialisms –design and digital media.
There is a professional logic: exchanging knowledge; developing a richer research; building a larger skills base; and providing a bigger portfolio of investment propositions.
There is a cultural logic: building on intertwined histories; exploring common contemporary sensibilities; and exploiting links to the wider cultural sector.
If the Baltic Region can connect its assets, coordinate its support offer, and position the Creative Industries to the heart of a wider cultural agenda that links the ‘creative economy’ to the ‘cultural ecology’, then it will be well-placed to offer the type of environment attractive to creative businesses.
Over the following few pages, a set of three broad considerations and five broad opportunities are introduced – to provoke, stimulate and add to the dialogue that surround policy development for the creative economy across the Baltic Region.
Consideration 1: Intelligence & Target ‘Sub-sectors’
For effective strategic partnership and the development of a coordinated approach to the creative industries, we first of all need to establish a robust baseline. This is to understand the current scale of the creative industries but also to develop real intelligence on how it operates: its networks, markets, supply chains, locational preferences, cultural trends, favoured identities and so on.
To date, multiple mapping projects have been initiated across the Baltic region, but they are locally driven, rarely share the same methodology and are often commissioned with different strategic purposes in mind. The time has come for a coordinated approach to mapping that generates rich data and intelligence on the dynamics and potential of the creative economy across the region.
However, for this to play a genuinely meaningful role, it is important first of all for partners across the region to agree on answers to the following:
A. Which parts of the creative industries are we focusing on?
Different parts of the Creative Industries sector have different business models, markets, supply chains and locational characteristics. It is unlikely that in the Baltic Region we can major on all areas of the sector. While we might measure / map the whole sector, it is important at the outset to develop a sense of our priorities – so that we can ‘dig deeper’ to generate rich intelligence on such activities.
We also need to embrace the way different parts of the Baltic region have different strengths (and weaknesses). Therefore, we need to consider carefully the current dynamics and profile of the sector and identify where the greatest opportunities lie.
This does not necessarily mean we should focus on those higher growth activities: other activities may play a substantial ‘value-adding role’ – in tourism, place-shaping, and in improving the competitiveness of the wider economy.
B. Different parts of the Region have a distinctive profile and offer.
How do we link different assets while celebrating distinctiveness? A real strength of the Creative Industries sector in the Baltic region is its diversity: from pioneer micro creative businesses (such as in visual arts and design) in the university towns (e.g. Kaunas and Tartu), to emergent clusters of media businesses in the larger cities (e.g. Riga, Tallinn and Vilnius). The role of the sector varies by context, as do the environmental factors that help it to prosper.
An effective strategic approach needs to embrace that diversity or make a clear distinction between the areas of the sector it is able to most effectively support, and thus the priority places for sector development. This might mean that a set of complementary strategies (and mapping approaches to inform the strategies) need to be developed: such as a series of hubs, each with their own specialism. when connected as a whole, these could operate as a dynamic creative economy cluster for the whole Baltic Region.
C. Is it a wider ‘creative workforce’ agenda?
“Look into the toolbox – creativity is the only tool we have left … and it’s important to see it in the round: creativity is a new drug, or a better engine for cars – we shouldn’t get trapped in a narrow definition.” (Lord Puttnam).
Is the main goal in the Baltic Region to support the growth of the Creative Industries sector, or is there a wider opportunity here to develop an agenda in creativity that cuts across different sectors, with a ‘creative workforce’ the main prize? In some areas of the region (smaller cities, rural areas, under-connected areas), the Creative Industries is unlikely to be a large sector. However, if it can influence the practice and culture of the wider economy – such as by introducing creative skills to different disciplines, then the overall outcome may be far more significant. Options here include smart commissioning and brokerage initiatives that connect creative industries businesses to other parts of the economy; and a wider embrace with creative skills development through the learning and skills sector.
D. How do we grow from what we have and indeed grow what we have?
In strategy it is often tempting to develop aspirations that stretch far beyond that which is achievable. There can also be a tendency to seek attributes that another place has without fully considering the attributes already ‘in place’. A starting point should always be to develop from the existing qualities and assets, growing the sector where possible. The next step should then be to engage existing assets to develop a complementary set of assets – i.e. incoming businesses and markets. Do we have a clear view in the Baltic Region of the assets at our disposal?
E. What is achievable locally Vs approaches that require, regional (i.e. pan-Baltic) and international (e.g. with the Nordic countries, Russia etc.) approaches?
It is important to identify what can make a difference at a ‘local’ Baltic level. Many of the ‘hygiene factors’ for creative businesses are dependent on influences that are international in their scope. This means interventions may need to be developed in partnership with, for example, Russia and / or the Nordic Countries. At the same time, it will be important to develop locally relevant approaches that connect with the sector at a grassroots level.
Put simply, it will be necessary to develop a multi-tiered approach that flexibly links local activities to national and international programmes.
F. How do we measure impact – Outcomes for business Vs Outcomes for strategists?
It is important when setting out ambition for a sector that desired outcomes are identified. These can of course change, but without a set of ‘key performance indicators’ (KPIs), how are we to judge the impact of intervention? Key here is the co-creation of KPIs with the sector: they should not be enforced ‘from above’.
For example, a strategic outcome might be increased profile for the Baltic region (and the individual countries), a more successful visitor economy and the attraction of inward investment for infrastructure projects. An outcome for a business might be more trade, better working conditions, and/or improved skills. A joined-up strategic approach will need to identify and agree these outcomes at an early stage so that the sector and its supporting agents work together seamlessly.
Consideration 2: Industrial Policy Vs Civic Boosterism
What are we trying to sell? Some creative and cultural strategies are more akin to place-marketing documents than industrial or sector-based interventions. For example, much of Richard Florida’s work in the ‘Creative Class’ assumes that highly skilled ‘knowledge workers’ are attracted to an area because of a mix of quality of life factors. This is presents places as objects to be consumed.
Too often, this assumption is extended to Creative Industries strategies – where the sector is understood to be attracted as much by the identity and perceived vibrancy of a place than a set of business development factors.
This approach is too simplistic. Yes creative businesses are attracted by the perceived cultural life of a place – they are in the business of creating meaning, so the more stimulating and compelling a place, the more attractive it becomes. However, they are also undertaking industrial activities. This means they are equally attracted by a mix of practical factors – such as workspace, finance, access to skills and markets. Therefore, a sector strategy should complement but not be dependent on ‘cultural’ and ‘quality of life’ factors. It should be about production and not only the ‘consumption’ of place.
Consideration 3: Supporting the ‘Exceptional’ Qualities of Creative Businesses
Broadly, and very crudely, creative businesses play by the 80/20 rule. For 80% of the time, they operate just as any other business: they have products and services to sell, profits to make, margins to consider. For 20% of the time, they operate in ways that render them different, or in some cases ‘exceptional’ (NESTA 2009). To some extent, they reflect a set of wider shifts evident across the economy – in the practice of doing in business, in the location of value in business, and the trajectory of career paths. In other ways they continue to pursue a path unfamiliar for most other types of business. For strategy this means a bespoke approach might be needed to support the ’20% exceptionalism’ of the creative industries.
This ‘exceptionalism’ can be found in the following:
Creativity Vs Business: Many creative businesses are ‘creatives first’ and ‘businesses second’. They may be motivated as much by the creative act as its commercial application. This has implications for the types of skills needed to develop businesses while retaining creative integrity. It also affects the style and culture of support offer needed for many creative businesses: a standard ‘one-size-fits-all’ approach has too many built-in assumptions on growth, management expertise and levels of entrepreneurialism to effectively embrace the diversity of creative businesses.
Portfolio & Project Focused: Many creative businesses and the practitioners which run them are dependent on high levels of flexibility and mobility. Their careers are run on a project by project basis and their core market may shift regularly over time. To prosper as a creative business therefore requires access to rich networks of complementary activities. We call these ‘privileged creative networks’, where access to skills, potential new markets, and critical knowledge on trends and innovations, are made accessible and legible. Good quality sector support opens up access to such privileged networks, brokers connectivity across the networks, and supports creative businesses to develop projects from a position of confidence where it is reasonably obvious where the next project may come from.
Low Tangible Assets
For many creative businesses – large and small – the asset base is relatively intangible. This is because it is tied up in the skills base and creative production potential of the workforce. This makes access to appropriate finance more difficult and it increases a dependency on trust (and risk) to develop deals and mobilise investment. Here, access to the above-mentioned ‘privileged networks’ offers a key means of building trading and investment relations. In addition, it increases the need for a brokered system of attracting investment to the sector. This is where processes of ‘investor readiness’ (nurturing investor relationships and reducing the risk profile of creative businesses) are key complements to ‘investment readiness’ (supporting businesses to develop management skills, business models and risk profiles that make their assets – however intangible – attractive to appropriate forms of investment).
‘Prosumption’ & Place
Creative businesses are in many ways more embedded in place than other sectors. ‘Location’ is just one factor in determining decision-making; with the cultural dynamics of place at least equally important. Creatives are ‘place-makers’: they ‘produce in place’ and in turn ‘reproduce place’ through its consumption. In other words, the act of developing creative work in a place is also an act of consumption because a place needs to be ‘consumed’ for new ideas to be produced. Correspondingly, we need to consider the cultural and environmental features of places across the Baltic region if the overall region is to be attractive to different creative businesses; and we need to support creatives to give them a strong and visible role in place-making.
Opportunity 1: The Intersection
What is needed are not new or adapted instruments for knowledge transfer, but something quite different: the spaces in which interactions can take place” (Geoffrey Crossick, A lecture to the Royal Society of Arts).
Can we establish the Baltic region as a region of social and cultural connectivity? Can Estonia, Latvia and Lithuania become places recognised for the ways they broker relationships between different creative businesses; stage opportunities for knowledge to be exchanged; open up their cultural and learning infrastructure to develop new knowledge; and provide a mediating role for creative producers and consumers from other parts of Europe?
This will mean developing a strategic approach where proposed interventions focus on enabling the intersection for our creative industries:
– Brokered networks with access to ‘privileged knowledge’, services and markets.
– Flexible co-created workspace & activity space; where the formal relaxes into the informal and client-facing activities co-exist alongside creative exchange activities.
– Plug-in opportunities for mobile creatives – where the towns and cities of the Baltic region are places to flow through, connect in, move on and then return to.
– A role for cultural infrastructure – the spikes & ‘sticky spaces’ – commissioning new boundary-crossing content; inspiring creatives to work with different sectors; bringing producers and consumers closer together so they participate as one.
Opportunity 2: The Connected
Next-generation, super-fast broadband will be a vital part of the emerging creative economy’s infrastructure, enabling dramatic improvements in connectivity and offering new possibilities for businesses, public services and local communities.
How in the Baltic Region are sector strategies being aligned to investment and development of digital infrastructure? Speed and connectivity are key to attracting the growth orientated and highly mobile creative businesses, as well as to growing existing businesses. Estonia has taken a lead here and Tallinn is one of the most connected capital cities in the world. It is important here to develop corridors of connectivity – just as with transport infrastructure. Parts of the Baltic region are considered under-connected – mostly due to poor transport links. With fast broadband, such areas can rapidly become highly connected – offering the space and quality of life to slow down while delivering the connectivity required in business to speed up.
Opportunities also exist here to increase the pervasiveness of connectivity: with greater connectivity across public spaces and buildings, enabling mobile creatives to connect as they travel through the region. With hotspots of connectivity – in creative workspace and cultural buildings – the entry costs for creative practitioners are reduced and the sector is relatively ‘democratised’, enabling multiple micro enterprises to take part and compete.
Fast broadband also provides the impetus to develop new brokerage and network tools. Knowledge can be provided to creative businesses as part of a wider cultural development push that streams content / knowledge across multiple platforms & channels. This opens up the space for different types of collaboration and will enable businesses in the Baltic Region to work freely with businesses internationally.
Opportunity 3: The Convergent
Creativity’ is the generation of new ideas – either new ways of looking at existing problems, or of seeing new opportunities, perhaps by exploiting emerging technologies or changes in markets.
‘Innovation’ is the successful exploitation of new ideas. It is the process that carries them through to new products, new services, new ways of running the business or even new ways of doing business.
In the Baltic Region, do we provide the enabling conditions for creative practice to deliver innovation – both within the Creative Industries and across the wider economy?
On the Baltic region, with the mix of cultural infrastructure, an expanding higher education sector and growth in network activity across the creative industries, it is possible to nurture and ecology of creativity and innovation. Here creative businesses will work across different sectors and creativity is championed as a pervasive force across the economy.
This requires the curation of collaboration activities, with interdisciplinary working celebrated. It would also be accelerated by the opening up of higher education institutions as brokers of convergent knowledge; the smart collaboration of creatively-driven projects that operate in the spaces between core activities; and an embrace of risk as a necessary counterweight to core business activities.
There could be major opportunities here. The Baltic region is still relatively industrialised and rapidly re-industrialising. This means opportunities exist to connect the assets of the creative industries to other sectors – such as in manufacturing and agriculture.
The region is also home to an increasingly open and connected higher education sector, with strong research and knowledge development potential. Here creative disciplines – such as in art and design, could explore beneficial collaborations with disciplines in science and technology – to develop new business models and nurture a more creative workforce overall.
It will be important, in any strategic approach, to identify where the interactions are currently taking place; and explore how institutions and organisations can operate as brokers of collaborative activity that connects different disciplines and seeks practical outcomes from creative processes.
Can a creative knowledge transfer network be established?
Is it possible to introduce a smart commissioning programme that invests across the boundaries of sectors that don’t traditionally connect with one another?
Do we need to stage collaborations through events and festivals – to showcase the opportunities enabled through convergent activity?
Is it clear where knowledge and creative capacity currently rests or do we need to work harder to unlock talent and build connections?
Opportunity 4: The Pioneering
Different parts of the Baltic region have, in recent years, become attractive places for pioneering creative practice. Tallinn, for example, is today recognised as an emergent ‘centre’ for digital media and design; Riga is a leading fashion and media hub; and Vilnius has strong visual arts and emergent digital media sector activities. As a relatively ‘low cost’ and ‘high skilled’ economy with an improving cultural offer, it is likely that the creative industries will play a more and more substantial role in the ongoing transformation of the overall Baltic economy and society.
Here, the creative industries is often understood as the ‘creative pioneer’ that leads processes of creative in-migration to be swiftly followed by other, more commercially driven creative activities. This means the creative industries of the Baltic Region might be understood as leading wider processes of economic change, regeneration and renewal.
The challenge now is to build from this base: enabling more creatives to develop their practice in the different parts of the Baltic region, while attracting and nurturing a wider mix of creative businesses, some of which will be ‘migrants’ from other parts of Europe and beyond, and some will be returning creatives who have made their fortunes and developed networks and markets elsewhere.
If the Baltic region is to be a welcoming and open place for pioneering creative activity, then we need to fully explore the answers to the following questions:
1. Is the brand identity of the region and its creative centres clear and accessible, and does the creative sector feel a sense of ownership for the message it is trying to convey?
2. Are creative businesses fully understood by those providing business support and other key intermediaries such as educationalists, investors and planners?
3. Does the region have sufficient capacity to develop certain business models in the creative industries – e.g. those that require large and accessible local markets?
4. Is there an effective mix of workspace and activity space in and across the region in which creatives of different ‘shapes and sizes’ can flourish? Are these spaces internally and externally connected?
5. Does the cultural and educational infrastructure of the region provide the stimulation and inspiration for creativity to flourish; plus a more structured set of services and facilities that encourage creativity to be staged for commercial as well as cultural reasons?
6. Does the business culture of the region enable micro creative businesses to grow? How best to overcome bureaucracy, low levels of entrepreneurialism, and limited access to skills development?
7. Is the Baltic region somewhere that encourages risk, that champions the unconventional, that celebrates new ways of thinking and doing?
Opportunity 5: The Smart & the Slow
“It’s about the speed in our lives and how it can only result in a crash“ (Hussein Chalayan).
The whole ‘creative industries discourse’ is predicated on the rhetoric of growth. For over a decade now the sector has been presented as the fastest growing in the world, offering major opportunities for job creation and delivering a panacea for some of the more entrenched social problems.
While the creative industries is undoubtedly a growth sector (or at least parts of the sector are), and that growth is likely to recapture its pre-downturn pace in the near future; growth is not likely to be universal and the sector (as with any sector) will grow faster and play a bigger role in some places over others.
It is clear that parts of the Baltic region will be the beneficiaries of sector growth that keeps pace, even outperforms other parts of Europe. However, there is an alternative, equally attractive opportunity for parts of the region where growth will be ore difficult to achieve:
Can some parts of the Baltic region become the places in northern Europe that combine opportunities to slow down and develop smart, carbon neutral, progressive creative businesses; while offering the speed to connect and do business with regions elsewhere?
Can rural areas and smaller cities become known for how they balance quality of life with creativity? Can they become micro ecologies of a locally embedded, globally conscious application of creativity that prospers through the activities of social innovators and smart creatives? In the Baltic region, if we work together, can we take a balanced approach where wellbeing and economic growth go hand in hand?
The Baltic region, with its diverse and youthful countries, has already made significant progress in nurturing its creative industries and developing a broader creative economy. Indeed, with each of the region’s capital cities hosting the European Capital of Culture title over a five year period, awareness of the region is at an all time high.
However, with the economic downturn, the region also suffered: financially, of course; but also in terms of its reputation – with the fragility of the economy plain for all to see. This raises the stakes: it is clear that greater diversity is required across the regional economy – to reduce dependency on traditional industries and to attract more ‘value-adding’ activities. It is also clear that the creative industries provide an opportunity to grow more quickly from the downturn, lifting he Baltic region into growth once again.
Yet to date, strategy and then policy for the creative industries is under-developed across the Baltic region. The debates that surround the sector have not changed significantly in over five years. Sector definitions are not settled. Policy options are under-formulated. Senior political and strategic figures seem unconvinced of the merits of a ‘creative approach’ or of the type of value it will deliver to the economy and wider society.
Individually, the countries of the Baltic region are small, with tiny domestic markets, limited capacity and challenges in developing a critical mass of infrastructure, skills and capital. For many areas of sector strategy, a ‘scaled up’ regional approach provides far greater potential than a national approach. This is particularly the case for sector knowledge development – e.g. introducing a robust and consistent approach to mapping and the evaluation of strategic impact.
It is also the case for how we share resources, connect assets and project ourselves to external markets. Here a Baltic approach will have greater visibility and it will deliver greater capacity to the sector. The choice now for partners in Estonia, Latvia and Lithuania, is whether to ‘go it alone’ or work together for mutual benefit.
CREATIVE INDUSTRIES AND THE ESTONIAN OFFICE OF THE NORDIC COUNCIL OF MINISTERS
Creative industries, which is a concept that is developing strongly right across the world, creates employment and a general sense of well being in society through intellectual property. For this reason the Nordic Council of Ministers (NCM) has made the development and better use of creative industries one of its most important missions, both in Nordic countries as well as Estonia, Latvia, Lithuania and north-western Russia.
The NCM offices in the Baltic States, along with experts in the creative industries, developers, institutions and politicians have exchanged ideas and expertise on how best to make use of the unique characteristics of a small cultural sphere in the context of the world stage. The NCM Estonian Office has devoted itself to the concept of creative industries since the end of 2008. To introduce the concept, the council held a series of lectures with inspiring examples of Nordic success stories in the areas of contemporary jewellery, the music industry, media, advertising, festivals, textiles, marketing cities, cuisine and so forth.
The NCM supported the creation of the Tartu Centre for Creative Industries in a strategic capacity for a year and a half. The centre was ultimately opened in spring 2009. It has received support from the Nordic-Baltic Mobility Programme for Business and Industry and has shared its expertise with colleagues from Finland, Norway, Sweden, Lithuania and Latvia. The creation of a network of contacts involving Nordic and Baltic creative businesses and creative industry developers is currently in progress. In addition to funds for enterprise and industry cooperation, it is also possible to apply for funding from the public administration mobility programme. The creation of the cooperation network is also supported by the Nordic Culture Point and the Nordic Culture Fund.
In addition, the NCM in cooperation with the Estonian Ministry of Culture and KreaNord – an initiative of the NCM that unites all branches of creative industry – organised an international conference in Tallinn in 2009 titled “Creative Industries in the Nordic and Baltic countries”. As a result of the conference new cooperation networks, both at the political and project level, cropped up indicating that the creative industry is a worldwide phenomenon that is most productive when synergies are created.
In 2010, the NCM helped organise a round table on music exports at Tallinn Music Week. Music agents from Finland, Sweden and Iceland spoke about music export strategies and marketing support systems in their countries.
The NCM is working in cooperation with the Estonian Creative Industries internet portal Creative Estonia (Loov Eesti), which publicises Nordic success stories and news. In addition, the NCM has helped Creative Estonia invite creative industry experts from the Nordic countries to marketing seminars.
In the future, the NCM Estonian Office will continue to present the views and know-how of Nordic experts, as well as support the creation and continuation of networks of cooperation.
In organising activities the NCM relies on:
• The Guidelines for Nordic–Baltic cooperation 2009–2013
• The European Union Strategy for the Baltic Sea
• The Northern Dimension Cultural Partnership
• The Creative Economy Green Paper for the Nordic Region