Cultural Industries and the Production of Culture

Dominic Power, Allen J. Scott

• Publisher: Routledge
• Year: 2004
• ISBN:
  9781134329731
• Edition: 1
• Topic: Business
• Subtopic: Business Development
• Index: Business

Since the Second World War there has been considerable growth in the importance of non-manufacturing based forms of production to the performance of many Western economies. Many countries have seen increased contributions being made by industries such as the media, entertainment and artistic sectors.

Gathering together a leading international, multi disciplinary team of researchers, this informative book presents cutting-edge perspectives on how these industries function, their place in the new economy and how they can be harnessed for urban and regional economic and social development.

Part I: Introduction

1 A prelude to cultural industries and the production of culture

Dominic Power and Allen J. Scott

The rise of the cultural economy

Since the early 1980s, a so-called new economy has steadily risen to prominence as a focus of employment and output growth in virtually all the major capitalist societies. This new economy is represented primarily by sectors such as high-technology manufacturing, neo-artisanal consumer products and diverse services, all of which have a propensity to take organizational shape as complex value-added networks. The operating features of these networks rest on their doubly-faceted character as congeries of many small firms together with more restricted cohorts of large establishments, the latter, more often than not, forming units within even larger corporate conglomerates. At the same time, these networks are much given to high levels of organizational and technological flexibility, transactions-intensive inter-firm relations and the production of design-intensive outputs.

One of the most important segments of this new economy comprises a group of industries that can be loosely identified as suppliers of cultural products (Scott, 2000). The rapid growth and spread of these industries in recent decades is a reflection of the increasing convergence that is occurring in modern society between the economic order on the one hand and systems of cultural expression on the other hand (Lash and Urry, 1994). These industries produce an enormous and ever-increasing range of outputs. Examples of these, all of which figure prominently in the present book, are jewelry (Pollard), music (French et al., Gibson and Connell, Power and Hallencreutz), video games (Aoyama and Izushi), film and television (Coe and Johns), new media (Bathelt), fashion design (French et al., Santagata, Rantisi) and the visual arts (McRobbie, Valette and Bautès).

The industries that make up the contemporary cultural economy are bound together as an object of study by three important common features. First, they are all concerned in one way or another with the creation of products whose value rests primarily on their symbolic content and the ways in which it stimulates the experiential reactions of consumers (Bourdieu, 1971; Pine and Gilmore, 1999). Second, they are generally subject to the effects of (Ernst) Engels’ Law, which suggests that as disposable income expands so consumption of non-essential or luxury products will rise at a disproportionately higher rate. Hence, the richer the country, the higher expenditure on cultural products will be as a fraction of families’ budgets. Third, firms in cultural-products industries are subject to competitive and organizational pressures such that they frequently agglomerate together in dense specialized clusters or industrial districts, while their products circulate with increasing ease on global markets.

It must be stressed at once that there can be no hard and fast line separating industries that specialize in purely cultural products from those whose outputs are purely utilitarian. On the contrary, there is a more or less unbroken continuum of sectors ranging from, say, motion pictures or recorded music at the one extreme, through an intermediate series of sectors whose outputs are varying composites of the cultural and the utilitarian (such as shoes, eye-glasses or cars), to, say, cement or petroleum products at the other extreme. At the same time, one of the peculiarities of modern capitalism is that the cultural economy continues to expand at a rapid pace not only as a function of the growth of discretionary income, but also as an expression of the incursion of sign-value into ever-widening spheres of productive activity at large as firms seek to intensify the design content, styling and quality of their outputs in the endless search for competitive advantage.

Technology, organization and work in the cultural economy

Over much of the twentieth century, the leading edges of economic development and growth were largely identifiable with sectors characterized by varying degrees of mass production, as expressed in large-scale machine systems and a persistent drive to product standardization and cost cutting. Throughout the mass-production era, the dominant sectors evolved through a succession of technological and organizational changes focused above all on process routinization and the search for internal economies of scale. These features are not especially conducive to the injection of high levels of aesthetic and semiotic content into final products. Indeed, in the 1930s and 1940s many commentators - with adherents of the Frankfurt School (e.g. Adorno, 1991; Horkheimer, 1947) being among the most vocal – expressed grave misgivings about the steady incursion of industrial methods into the sphere of the cultural economy and the concomitant tendency for complex social and emotive content to be evacuated from forms of popular cultural production. These misgivings were by no means out of place in a context where much of commercial culture was focused on an extremely narrow approach to entertainment and distraction, and in which the powerful forces of the nation-state and nationalism were bent in significant ways on creating mass proletarian societies. The specific problems raised by the Frankfurt School in regard to popular commercial culture have in certain respects lost some of their urgency as the economic and political bases of mass production have given way before the changes ushered in over the late 1970s and early 1980s, when the new economy started its ascent. This is not to say that the contemporary cultural economy is not associated with a number of serious social and political predicaments. But it is also the case that as commercial cultural production and consumption have evolved in the major capitalist societies over the last few decades, so our aesthetic and ideological judgments about their underlying meanings have tended to shift. The rise of post-modern social and cultural theory is one important expression of this development (cf. Jameson, 1992)

In contrast to mass machinofacture, new economy sectors tend to be composed of relatively disarticulatable production processes, as represented, for example, by various kinds of computerized and digitized technologies. Equally, and nowhere more than in segments of the new cultural economy, production is often quite labor-intensive, for despite the widespread use of electronic technologies, it also tends to make heavy demands on both the brain-power and handiwork of the labor force. Like most other sectors that make up the new economy, cultural-products industries are typically composed of swarms of small producers (with low entry and exit costs), complemented by many fewer numbers of large establishments. Small producers in the cultural economy are frequently marked by neo-artisanal forms of production, or, in a more or less equivalent phrase, to flexible specialization, meaning that they concentrate on making particular categories of products (clothing, films, games, etc.) but where the design specifications of each batch of products change repeatedly. Large firms in the cultural economy occasionally tend toward mass production (which would generally signify a diminution of symbolic function in final outputs), but are increasingly prone to organization along the lines of “systems houses” (Scott, 2002). The latter term is used in the world of high-technology industry to signify an establishment whose products are relatively small in number over some fairly extended period of time, and where each unit of output represents huge inputs of capital and/or labor. The major Hollywood movie studios are classic cases of systems houses. Other examples of the same phenomenon – or close relatives – are large magazine publishers (but not printers), electronic games producers, television network operators and, to a lesser degree, leading fashion houses. These large producers are of particular importance in the cultural economy because they so frequently act as the hubs of wider production networks incorporating many smaller firms. Equally, and above all in the entertainment industry, they play a critical part in the financing and distribution of much independent production. In addition, large producers right across the cultural economy are increasingly subject to incorporation into the organizational structures and spheres of influence of giant multinational conglomerates through which they tap into huge financial resources and marketing capacities. While these giant firms are absolutely central to the cultural economy, it is also important to note that some aspects of their power and reach may currently be under threat. There is already evidence of this occurring in the music and film industries where many new possibilities for disintermediation and distribution have been brought about by recent technological advances (see the chapter by French et al.). Indeed, one can imagine that at least some segments of the cultural economy – resting as it does on fluid and unpredictable trends and hard-to-protect intellectual property – may be entering into a new phase of development marked by yet more intense competition and reduced levels of oligopolistic power.

The actual work of production in the cultural economy is typically carried out within shifting networks of specialized but complementary firms. Such networks assume different forms, ranging from heterarchic webs of small establishments to more hierarchical structures in which the activities of groups of establishments are coordinated by a dominating central unit, with every possible variation between these two extreme cases. As analysts like Caves (2000) have observed, much of the cultural economy can be described as conforming to a contractual and transactional model of production. The same model extends to the employment relation, with part-time, temporary and freelance work being particularly prevalent. The instabilities associated with this state of affairs often lead to intensive social networking activities among skilled creative workers as a means of keeping abreast of current labor-market trends and opportunities and of finding collaborators, customers and employers (Scott, 1998). Within the firm, these same workers are often incorporated into project-oriented teams, a form of work organization that is rapidly becoming the preferred means of managing internal divisions of labor in the more innovative segments of the modern cultural economy (Grabher, 2002). By contrast, in sectors such as clothing or furniture, where low-wage manual operators usually account for a high proportion of total employment, piece-work and sweatshop conditions are more apt to be the prevailing modes of incorporating workers into the production process, though these sectors also have high-wage, high-skill segments.

These features of the new economy in general (and the modern cultural economy in particular) differentiate it quite markedly from the older model of mass production. In contrast to what was often seen as the dispiriting and endless uniformity of the outputs that flowed from the mass-production system, the new economy is marked by extremely high levels of product variety. As a corollary, the new economy is associated with a major transformation of market structures, with monopolistic competition à la Chamberlin (1933) becoming increasingly the norm. Chamberlinian competition, which resembles in some respects imperfect competition as formulated by Robinson (1933), is based on the notion that distinctive market distortions appear when producers have strongly-developed firm-specific characteristics. Under a regime of monopolistic competition there may be many individual firms all making a particular class of products, but each firm’s output also has unique attributes (design, place-specific associations, brand, etc.) that can only be imitated by other firms in the form of inferior reproductions, or can at best be copied only after a significant time lag. The increasing importance of cultural and symbolic content in contemporary patterns of consumption means that monopolistic competition has become an ever more feasible option for firms throughout the new economy. The constant rebranding and repackaging characteristic of product markets today is helping to usher in an economic system where even small firms can sometimes vie with goliaths in the creation of virtual product monopolies.

The chapters by Rantisi and Santagata highlight some of the critical issues here, and, in particular, the important interconnections that run between innovative performance, fashion and styling, and market dynamics in today’s cultural economy.

Place and production in the cultural economy

Cultural-products industries with attributes like these almost always operate most effectively when the individual establishments that make up them exhibit at least some degree of locational agglomeration. In fact, the most common leitmotif that connects the following chapters together is their emphasis in one way or another upon the persistent tendency of producers in the cultural economy to cluster together in geographic space.

This tendency follows at once from the economic efficiencies that can be obtained when many different interrelated firms and workers lie in close proximity to one another so that their complex interactions are tightly circumscribed in space and time. But agglomeration also occurs for reasons other than economic efficiency in the narrow sense. It is also partly a result of the learning processes and innovative energies that are unleashed from time to time in industrial clusters as information, opinions, cultural sensibilities, and so on, are transmitted through them, and these processes are usually especially strong in cases where transactional intensity is high. Moreover, outputs that are rich in information, sign value and social meaning are particularly sensitive to the influence of geographic context and creative milieu. This point is strongly echoed in the chapters by Rantisi, Bautès and Valette, McRobbie, Bathelt, Power and Hallencreutz, and Pollard. In the same way, Molotch (1996) has argued that agglomerations of design-intensive industries acquire place-specific competitive advantages by reason of local cultural symbologies that become congealed in their products, and that imbue them with authentic character. This intensifies the play of Chamberlinian competition in the cultural economy because monopolistic assets now not only emerge from the productive strategies of individual firms, but also from their wider geographic milieu.

The association between place and product in the cultural industries is often so strong that it constitutes a significant element of firms’ successes on wider markets. Place-related markers, indeed, may become brands in themselves that firms can exploit to increase their competitive positions, as exemplified by the cases of Parisian fashions, Jamaican reggae, Danish furniture or Italian shoes. Successful cultural-products agglomerations, as well, are irresistible to talented individuals who flock in from every distant corner in pursuit of professional fulfillment, in a process that Menger (1993) has referred to as “artistic gravitation.” The gravitational forces exerted by agglomerations of creative industries and their associated cohorts of workers are often of considerable power. In the present book, McRobbie writes of artists gathering together in creative hubs in London, and Rantisi alludes to the pull of New York’s fashion industry on clothing designers. Gravitational forces such as these mean that the labor pools of dynamic agglomerations are constantly being replenished by selective inmigration of workers who are already predisposed to high levels of job performance in the local area. Local supplies of relevant skills and worker sensibilities are further augmented by the specialized educational and training institutions that typically spring into being in productive agglomerations.

These remarks indicate that a tight interweaving of place and production system is one of the essential features of the new cultural economy of capitalism. In cultural-products industries, as never before, the wider urban and social environment and the apparatus of production merge together in potent synergistic combinations. Some of the most advanced expressions of this propensity can be observed in great world cities like New York, Los Angeles, Paris, London or Tokyo. Certain districts in these cities are typified by a more or less organic continuity between their place-specific settings (as expressed in streetscapes, shopping and entertainment facilities, and architectural background), their social and cultural infrastructures (museums, art galleries, theaters, and so on), and their industrial vocations (advertising, graphic design, audiovisual services, publishing or fashion clothing, to mention only a few). Such cities often seek to promote this continuity by consciously re-organizing critical sections of their internal spaces like theme parks and movie sets, as exemplified by Times Square in New York, The Grove in Los Angeles or Potsdamer Platz in Berlin (Zukin, 1995). In a city like Las Vegas, the urban environment, the production system and the world of the consumer are all so tightly interwoven as to form a virtually indivisible unity. The city of work and the city of leisure increasingly interpenetrate one another in today’s world.

Cultural industries and local economic development policy

Cultural-products industries are growing rapidly; they tend (though not always) to be environmentally-friendly; and they frequently (though again not always) employ high-skill, high-wage, creative workers. Cultural-products industries also generate positive externalities in so far as they contribute to the quality of life in the places where they congregate and enhance the image and prestige of the local area. Moreover, as noted above, they tend to be highly localized and often place-bound industries. This fact has made them increasingly attractive to policy-makers intent on finding new solutions to problems of urban redevelopment and local economic performance.

A sort of first-generation approach to the systematic deployment of cultural assets in the quest for local economic growth can be found in the aggressive place-marketing pursued by many municipal authorities since the early 1980s (Philo and Kearns, 1993). This activity is often based on a local heritage of historical or artistic resources, but it also assumes the guise of energetic redevelopment programs. One of the most remarkable instances of the remaking and marketing of place in recent years is furnished by the Guggenheim Museum in Bilbao, an initiative that has turned an old and stagnant industrial area into a world-renowned tourist center and a new focus of inward investment. Other examples of similar phenomena can be found in Seville’s Expo or in the promotion of tourism in a number of old British industrial cities (notably Liverpool and Manchester) on the basis of their roles as popular music centers. A striking example can also be found in the case of the Ruhr region where the repackaging of an old industrial landscape has helped to spark off major new cultural developments (Gnad 2000). O’Connor’s chapter on the cultural economy of St. Petersburg provides further insights into the role of place-marketing in local economic development. One of the dilemmas of this approach, as highlighted by O’Connor, is the mismatch that sometimes occurs between the exigencies of the tourist trade and local cultural aspirations and attitudes. Of late years, an alternative (or, rather, a complementary) second generation of policy approaches has come increasingly under the scrutiny of local authorities. In this instance, the objective is less the construction or redevelopment of facilities that will entice visitors to flock into a given center, as it is to stimulate the formation of localized complexes of cultural industries that will then export their outputs far and wide. The evolving Leipzig media cluster, described in Bathelt’s chapter, is one example. In Leipzig, policy-makers have sought to (re)build a network of media firms that are strongly anchored to the local area through tightly-knit firm-to-firm links and institutional infrastructures. Equally, Pollard shows how the jewelry industry of Birmingham is being revitalized – though not always with unqualified success – by concerted attempts to upgrade skills and product quality within an intricate social division of labor. Even more than in the case of place-marketing approaches, this alternative line of attack is critically dependent on a clear understanding of the logic and dynamics of the agglomeration processes that shape much of the geography of the modern cultural economy.

For any given agglomeration, the essential first task that policy-makers must face is to map out the collective order of the local economy along with the multiple sources of the increasing-returns effects that invariably emanate from its inner workings. This in itself is a difficult task due both to the problems of defining just where the cultural economy begins and ends, and to the intangible nature of many of the phenomena that lie at the core of localized competitive advantages (see Pratt’s chapter). That said, it is this collective order more than anything else that presents possibilities for meaningful and effective policy intervention in any given agglomeration. Blunt top-down approaches focused on directive planning are unlikely in and of themselves to accomplish much at the local scale, except in special circumstances. In terms of costs and benefits and general workability, the most successful types of policies will as a general rule be those that concentrate on the character of localized external economies of scale and scope as public or quasi-public goods. The point here is both to stimulate the formation of useful agglomeration effects that would otherwise be under-supplied or dissipated in the local economy, and to ensure that existing externalities are not subject to severe misallocation as a result of market failure. Finely tuned bottom-up measures are essential in situations like this.

Policy-makers thus need to pay attention t...

Table of contents

• Cover Page
• Routledge Studies
• Title Page
• Copyright Page
• Contributors
• Part I: Introduction
• Part II: Trends and Opportunities in the Cultural Economy
• Part III: Creativity, Cities and Places
• Part IV: Clustering Processes in Cultural Industries
• Part V: Peripheral Regions and Global Markets