Urban Development and the Creative Economy in Berlin, Part 2

The Berlin headquarters of Universal Music © Georg Slickers

by Ares Kalandides

The first part of this article (Monday 5th March) was an introduction to the evolution of the planning discourse since German reunification (1990); part two (today) introduces the issue of Creative Industries (in the Berlin context) in quantitative and qualitative terms; part 3 (Friday 9th March) is about the spatial dimensions of the creative economy; and finally part 4 is a short presentation of a project (NEMONA) which tries to answer to the new challenges that the creative economy imposes on our understanding of urban space.

Discovering the Creative Economy

A similar shift can be seen in the approach to economic development: During the 1990s, the policy towards inward investment targeted the big international corporations. It was expected that the likes of Daimler or Siemens would come and open shop in Berlin, a policy that failed to materialize. It was again with the change of administration in 2001, that this strategy was (partly) abandoned. Instead, economic promotion started looking inward, discovering local businesses that had grown in the shadow of the large developments of the 1990s.  The new political business rhetoric was based on a notion of Berlin as “a laboratory for entrepreneurs”. City managers began to view Berlin as a business incubator. In the centre of focus appeared small (sometimes micro) businesses in the cultural and so-called creative sectors.  In an effort to measure these developments, the first Creative Industries Report was published in 2004, followed by a second one in 2008. This was the first systematic attempt to look at culture (and culture-related businesses) in economic terms, not only as expenditure, but as a generator of turnover, profit and jobs.

The approach was not totally new. The state of Nordrhein-Westphalia had undertaken a similar endeavour several years before, so that experts were acquainted with the methodology for such an analysis. At a European level, the Commission drafts the first  document titled „Culture, Cultural Industries and Employment“ in 1998. Berlin follows the definition of the German parliament (Deutscher Bundestag) for the Creative Industries: (CI) “The term Cultural Industries, or rather, Creative Industries, is generally and broadly applied to […] those cultural or creative enterprises … that predominantly operate commercially and are concerned with the creation, production, distribution and/or medial circulation of cultural/creative goods and services.“ (Creative Industries in Berlin Report 2008, p. 5).Nine submarkets are defined inside the Creative Industries: 1) Print media & publishing, 2) Television & radio, 3) Art market, 4) Software/games/telcos, 5) Music industry, 6) Advertisement, 7) Architecture, 8) Design and 9) Performing arts. I use this definition of the creative industries and its submarkets in the present article. Another important milestone in the same direction was the admission of Berlin into the UNESCO network of Creative Cities as a City of Design in 2006,an event of high symbolic value that went rather unnoticed by the media.  This recognition was not only awarded for the high quality of Berlin-based design, but rather because of the public policy – and governance structures – around it.

Table 1: An overview of the Creative Industries in Berlin. Source: SenWTF 2008 (click to enlarge)

Table 1 sums up some of the basic statistical information about the creative industries in Berlin. The first thing that becomes apparent is how different the submarkets function: Software, print media, film and advertising are the leaders both in revenue and total wage earners. A comparison between the architecture market and the software / games industry shows that even though the number of firms is quite similar (slightly under 3000 for both), the software industry generates ca. 13 times higher revenue. Also, the film, television & radio market with a much lower number of companies (ca. 2100) involves over 36.000 people, whereas design with a slightly higher number of companies involves under 2000. At a second glance, it is only ca. 1/3 of those involved in the film etc. industry that are employed (either as full employees or as “marginally employed”). Almost 2/3 of that workforce is freelance. In total, freelancers represent 44% of the workforce in the creative industries, a point I will come back to further below. There are several statistical problems with this report, which may be relevant in the individual submarkets, but do not alter the overall picture.

A look at the development of the industry since 2000, beyond the snapshot of table 1, reveals some interesting data:

2000

2006

difference (absolute)

difference (%)

Number of companies

17281

22934

5653

33%

Number of wage earners

168800

160500

-8300

-8,40%

Table 2: Trends in the CI between 2000 and 2006. Source: Creative Industries in Berlin Report 2008 (my own elaboration).

Even though between 2000 to 2006 the number of companies in the field of the CI increased by ca. 33%, in the same period there was a decrease in people involved in the industry (by approximately 8,4 %). In other words, since more companies now involve a smaller workforce (employees and freelancers), the average company is significantly smaller in size. This is a trend that can be observed in the CI and which has serious implications, especially if it is combined with the observation that was made above, that 44% of the workforce in the CI are freelancers. Different statistical data (based on a slightly different definition of what is a creative occupation and what is freelance work as opposed to self-employement) actually raise this percentage to almost 53% for Berlin. Table 3 below is a comparison between Berlin and the 6 major metropolitan areas in Germany.  It shows how self-employment is over-represented in the CI in every single area, in particular when compared with the relative small percentage of self-employment at a national level. Thus, while self-employment in the entire workforce in Germany is at 12%, it is almost 53% in the CI in Berlin. In that sense, the Creative Industries have at least one structural characteristic that distinguishes them from the rest.

 

Creative
professionals/
self-employed
artists

% of
entire
work-
force

Berlin

52,9

17,1

Six regions

38,6

13,5

Hamburg

44,0

15,0

Düsseldorf

32,4

12,1

Cologne

39,0

13,7

Rhine-Main

40,5

14,0

Stuttgart

35,7

10,8

Munich

38,5

15,9

Western Germany

36,6

12,4

Eastern Germany*

43,0

12,1

Table 3: Percentage of self-employed (as opposed to employed) professionals in Berlin as compared to other regions. Source: Creative Industries in Berlin Report 2008 (my own elaboration).

__________

The 2008 Creative Industries Report can be downloaded here: Creative Industries in Berlin 2008

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