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Dr. Lisa De Propris Birmingham Business School, UK 10 th European Week of Regions and Cities Brussels 8 th -11 th October 2012.

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Presentation on theme: "Dr. Lisa De Propris Birmingham Business School, UK 10 th European Week of Regions and Cities Brussels 8 th -11 th October 2012."— Presentation transcript:

1 Dr. Lisa De Propris Birmingham Business School, UK 10 th European Week of Regions and Cities Brussels 8 th -11 th October 2012 Rebalancing the economy: it is all about content

2 Content 1.Rebalancing… what? 2.Sector balance 3.Rebalancing or resetting 4.Re-inventing manufacturing 5.Policy issues

3 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

4 Sector imbalances NESTA 2010



7 In the UK CRESC, 2011


9 UK – creative industrie Regional trends

10 Recent research

11 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

12 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

13 Regional dimension

14 Publishing Software, computer games & e-publishing

15 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.

16 The impact of the recession Demand shrunk; e.g. advertising Public funding is disappearing More difficult access to finance WF: job losses

17 DCMS 2012

18 How do CIs impact on wider economy? direct impact indirect impact inter-sectorally (across creative and non- creative industries) geographically (regional spillovers)


20 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)

21 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

22 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


24 Table 1 – Firms in creative industries by type of innovation outputs (% of all firms; 2004/2006) Source: ONS. Note: NA*The finding in this cell cannot be disclosed for data protection

25 3. Can CIs aide rebalancing the economy and how? Rebalancing Recovery Prosperity Exports and Innovation

26 Seize the opportunity: Economic growth &technology shifts K1 K2 K3 K4 K5 1800 1850 1900 1950 2000s Indices of economic activity Steam Cotton Iron Railways Iron Steel Electricity Chemicals Autos Electronics Synthetics Petrochemicals Kondratievs Long Waves Knowledge economy Green biotech

27 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 Wood Textiles Paper Bio-refinery Bio-fuel and new materials Smart textiles Technical textiles Printed electronics Take 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.

28 New sectors- value creation High Value added Value chain R&D-Design assembly logistics marketing-advertising

29 New sectors- value creation High Value added Value chain R&D-Design assembly logistics marketing-advertising

30 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

31 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

32 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 co- location of the value chain

33 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 (Porters hypothesis)

34 Thank you for listening

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