Bernd Fesel
Bernd Fesel is active member of the team ‘Creative Industries’ for RUHR 2010, Capital of Culture
presentation:
Ruhr 2010 – Creative Industries: Project related to the Process
category: Culture and Economy
download the paper (pdf)
abstract
Introduction to the State of Debate in 2007
Culture as an economic activity is a daily topic for artists, who have
been culture entrepreneurs for centuries. For cultural and economic
politics, however, it is a new challenge that commercial culture
production has such large dimensions – being both larger than public
spending for culture and larger than many traditional economic fields
such as real estate, automobile production or the chemical industries.
The study “The Economy of Culture”, produced by KEA and commissioned by
the European Commission in 2006, is the latest piece of research in a
series of studies carried out in Northrhine-Westfalia, Germany, and the
UK since the 90ies.
The empirical results are similar all over Europe: The so called
“Creative Industries” produce at least 2,5% of GDP reaching up to a
stunning 7% in some countries. However, the definition which lines of
business are to be included and to what extent still differs from
country to country. Usually commercial activities in the performing
arts, music, visual art, literature, architecture, design, fashion,
film, tv, gaming, advertising and journalism are included. The role of
the public sector and cultural heritage is also calculated differently.
Furthermore there is no satisfactory data base yet – this is one of the
main results of all studies in Europe, be it on municipal or on
European level.
While the Economy of Culture reached the highest political attention so
far in 2007, it has also revealed its lack of empirical description and
understanding.
Understanding the Economy of Culture - What do we know?
1.) Markets of creative or culture products are inherently fragmented
(hidden information) and lack reliable foresight (hidden action). Since
we expect a culture production to surprise the audience with a new
idea, the acceptance of cultural products can not be foreseen. Such
markets are always high risk. Industrial products work the opposite
way: they constantly reproduce the same product and quality like a car
or a yogurt. Cultural and industrial products are inherently different
and follow different market laws.
2.) Beaumol’s law of cost disease prohibits earnings by economies of
scale. One hour of singing still needs one hour, while the production
of watches per hour increases from year to year. This implies two
results:
a) Individual incomes are limited in the cultural industries.
b) For some cultural productions, public spending should increase in
relation to other public spending topics, which are getting cheaper
each year due to increasing economies of scale.
3.) The fragmentation of cultural markets implies high costs of
information and of market orientation. Cultural markets (especially
cross-country) are expensive to work in both for the cultural consumer
and the cultural entrepreneur. This is the main reason why the European
common market is not working at its best for the cultural markets.
However, there is a second aspect which needs to be considered:
fragmentation is the economic counterpart of the diversity of culture,
which are in the end the spirit of the market and the fundament of
cultural identity.
4.) As conclusion we can learn that politics – whether from the culture
or economic department – has one option to promote cultural
entrepreneurs without damaging cultural diversity. It must not reduce
risk or increase foresight – this would attack the cultural identity.
It must in contrast reduce the costs of using markets, which means:
more information efficiency on the cultural markets and cultural
entrepreneurs. Politics must implement more information tools on
cultural markets – from public to private radio and television,
internet portals, magazines, fairs, audience development and – to begin
with: cultural education. In the European context this means first of
all budgets for translations and cross-country networks which support
commercial promotion for foreign products [1]. To sum it up: The time
to market must be reduced.
And what do we not know?
1.) Neither market makers nor researchers can predict how success in
the cultural markets works. The question, how to make a star or just
how to make a frequent demand, has no general answer. It seems it must
be “produced” artist specific. This is a great obstacle for artist
management and market efficiency.
Some scientists as well as the study “Economy of Culture” therefore promote a support of creative structures like
- production spaces,
- product mobility,
- market finance and
- audience communication
instead of supporting individual projects, productions or artists, whose success is not predictable.
2.) The development of creative quarters is not yet understood. Most
often they are recognized when their development is surfacing and not
when it is starting. Most researchers at least agree that a critical
mass of creative and cultural entrepreneurs is necessary. Most agree
that important persons of a sector motivate others to move into the
quarter. However, it is a secret who does the first step for which
reason (it is not cheap rents alone!) and who is the important person.
To sum it up: We know at least we need more research.
RUHR.2010: Promoting the Creative Industries - From Project to Process
RUHR.2010 is aiming to promote the approximately 20.000 creative
entrepreneurs in 52 cities of the Metropolis Ruhr by strengthening its
inherent market principles, focusing on the European Market
initiating an on-going cultural and economic process.
To reach these aims we are adopting a bottom-up as well as a top-down
strategy which is sector specific as well as sector integrating. Here
are some examples:
Aim 1: Strengthening inherent market principles within the European Market
Example 1: Improve Finance / Capital Market Access
Top-Down: The NRW Bank is setting up a Creative Capital Fund while
resorting to a creative industries expert circle to determine promising
projects
Bottom-Up: Enable local business banks in the 52 cities (seminars,
coaching, and statistics) to give loans to creative entrepreneurs.
Both actions are initiated and supervised by or coordinated with RUHR.2010.
Example 2: Music / Live Entertainment
Top-Down: The
Loveparade moved from Berlin to the Metropolis Ruhr. More than 1.0
million visitors joined the Loveparade and the Love Weekend in August
2007 and generated business with a spending of almost 100 Euros per
visitor.
Bottom-Up: A forum of all music clubs in the Metropolis Ruhr has been
established and a regular hearing of the music market has been started.
Now the music entrepreneurs and the music market start to re-organize
their marketing, European exports and local communication – being
coached and cross-linked by the team Creative Industries at RUHR.2010.
Currently a European export strategy is being developed.
This example is almost a blue-print for increasing market efficiency:
The costs of information are reduced by market hearings and
commissions. The actors are acting – and are thus automatically
planning for more than just a single event in 2010.
Creative Industries RUHR.2010 is acting as a moderator and
information-broker – not only in the music sector, but also in other
sectors of the creative industries; not only in the field of finance,
but also in others fields such as digital communication and journalism.
Aim 2:Initiating an on-going cultural and economic process
The Creative Industries RUHR.2010 has also top-down lead projects – which also aim at enabling actors.
Example 1: We are planning the first ever database of creative
entrepreneurs in all 52 cities of the Metropolis Ruhr. This initiative
is a cooperation with the business promotion departments of all 52
cities – after many day long meetings – and the Metropolis Ruhr
Business Promotion Office.
Example 2: We are promoting the development of Creative
Quarters. This is coordinated with four cities and includes a research
project about what an “artist residence” in the future might be.
Today’s Artist Residences are mostly located in quite centralized
cities or capitals. The Metropolis Ruhr has a different, more
decentralized structure. It is also a mixture of larger and smaller
cities. The Metropolis Ruhr plans to be a model for how creative
quarters might work outside the capitals.
The Team Creative Industries RUHR.2010 is acting as an advisor to the acting cities and entrepreneurs in the Metropolis Ruhr.
[1] This is much more then artist mobility. Short-time mobility
does not make a long-term audience and does not guarantee an on-going
promotion and communication effect.
Website: http://www.essen2010.net, www.creative-economy.eu
CV
Bernd Fesel (born in 1962) works as an independent cultural events organiser and cultural-political advisor. He studied Economics and Philosophy in Heidelberg and Bonn from 1983 to 1990 and graduated with an economist degree. In 1997 he became Managing Director of Federal Association of German Galleries. During this time he launched a presentation portal for German galleries, organised the first online art fair with the support of the Deutsche Telekom and developed an educative CD-Rom on the art of the 60s, which was distinguished by the European Commission. From 2000 to 2004 he was honorary spokesperson of the German Arts Council, the federal umbrella association of 20 arts federations. Since 2002 he has been board member of the German Council for Cultural statistics and from 2003 to 2005 chairman of the expert committee “Taxes” in the German Cultural Council.
In 2003 Bernd Fesel initiated the national conference on cultural industries in Berlin, which is organised every year in cooperation with the Friedrich Naumann Foundation, the German Council for Cultural Statistics and the German Cultural Council. The fourth conference in 2007 was focused on creative industries in Europe and part of the German EU-Presidency (www.creative-economy.eu)
Bernd Fesel supervises the seminar serials “Strategies in the arts
market” and occupies teaching positions at the University in Hagen
(since 2004), the Friedrich-Wilhelm-University in Bonn (2006) and the
University of the Arts in Berlin (2007). Since 2007 the Office for
Cultural Policies and Industries is cooperation partner of the training
programme „Management in the Art Market” at the Freie Universität in
Berlin, the biggest advanced training centre in Germany. This is the
first advanced training dealing with the arts market which closes with
a certificate.
References (selection 2007)
- Creative Industries Advisor for the European Capital of Culture Ruhr 2010
- Advisor of the German UNESCO Commission and the German Federal Foreign Office
- Member of the advisory board of the Bundesakademie Wolfenbüttel
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