ARTSVICTORIASUBMISSION
February2008
TheRoleofArtsandCultureinLiveabilityandCompetitiveness
ASubmissiontotheVictorianCompetitionandEfficiencyCommission’sInquiryintoEnhancingVictoria’sLiveability
PreparedwiththeassistanceofDr.Chee-WahCheahMarionPowell
TABLEOFCONTENTS
1.EXECUTIVESUMMARY...... 1
2.INTRODUCTION...... 3
3.WHATISMEANT BY‘ARTSAND CULTURE’...... 3
4.ECONOMIC CHARACTERISTICS OFARTSANDCULTURE...... 5
4.1.PUBLIC/MERITGOODANDOPTIONDEMAND/EXISTENCEVALUE...... 5
4.2.EXTERNALITY...... 6
4.3.EQUITY...... 7
4.4.PUBLICEXPENDITUREONARTS...... 7
4.5.GOVERNMENT ROLE INARTSANDCULTURE...... 8
4.6.CULTURALCAPITAL...... 8
5.THEROLEOFARTSANDCULTUREINLIVEABILITYANDCOMPETITIVENESS9
5.1.CREATINGAUNIQUEANDDISTINCTIVEDESTINATION...... 12
5.2.CREATING‘SPACEANDPLACE’FORTHE‘CREATIVECLASS’...... 14
5.2.1.TheCreativeClassin Victoria...... 14
5.2.2.ImplicationsforRegionalVictoria’sLiveabilityandCompetitiveness...... 17
6.QUANTITATIVEANDQUALITATIVEEVIDENCE...... 18
6.1.QUANTITATIVEEVIDENCE...... 19
6.2.QUALITATIVE EVIDENCE...... 20
6.3.CONTINGENTVALUATION...... 21
APPENDIX A:VICTORIANGOVERNMENT’S ARTS PORTFOLIOCURRENTPOLICYINITIATIVE – CULTURAL PRECINCTS 22
A.1CULTURALPRECINCTS...... 22
A.2INFRASTRUCTURE ANDACTIVITY...... 23
A.3SOUTHBANKCULTURALPRECINCTREDEVELOPMENT–MELBOURNE’SCREATIVE CITYCOMPETITIVEADVANTAGE 24
A.4CULTURALPRECINCTSINREGIONALVICTORIAANDMELBOURNE’SGROWTHCORRIDORS 24
A.5CULTURALPRECINCTS–QUANTITATIVEEVIDENCE...... 25
A.6CULTURAL PRECINCTS–QUALITATIVEEVIDENCE...... 25
1.EXECUTIVE SUMMARY
Therearemanymeaningsof‘culture’rangingfromthebroadconceptsofa‘wayoflife’anda‘set of values, attitudesandwayofthinking’toanarrowerdefinitionwhichencompassesproductsandserviceswhichhaveeconomicvalueandaretradedinthemarketplace.
Thisnarrowerconceptofculture,whichiscommonlytoas“artsandculture”includesperformingarts,visualarts,literature,filmandnewmediaandculturalheritage.Governmenthasadirectinfluenceonthemarketsforthesegoodsandservicesand,inturn,hasanindirectinfluenceonthebroaderconceptsofculture.
Governmentsinterveneinthemarketforartsandculturalgoodsandservicesforsoundeconomicandsocialequityreasons.Therationalesfortheseinterventionsincludethecharacteristicswhichtheartsandculturedisplayasbothpublicgoodsandmeritgoodsandinordertoincreaseaccessonsocialequitygrounds.TheinterventionsbyGovernmentincludedirectprovision,subsidisationandregulation.
Liveabilityisabroadconceptwhichincludesacombinationofthesocial,cultural,economicandenvironmentalattributesofaplace.Theseattributesdeterminetheattractivenessofaplaceforbothresidentsandinvestors.
Theculturalattributesincludethequantity,qualityanddiversityoftheartsandculturalinfrastructure,activitiesandservicesonofferandareaccordinglykeyelementsoftheattractionofacityorregionasaplaceinwhichto“work,liveandinvest”.
Thereisincreasedcompetition,nationallyandinternationally,betweencitiesandbetweenregionstoattractnewresidentsandnewbusinesses.
Artsandculturecancreateacompetitiveadvantageforacityorregionspecificallyby:
•creatingormaintainingauniqueanddistinctiveimageforacityorregion;and
•increasingthe‘drawingpower’ofacityorregiontoattracttheso-called“creativeclass”.
Artsandculturecontributedirectlytothe“senseofplace”whichattractsbothresidentsandbusiness.Thereisamergingbetweentheattributesofacityorregionthatareseenbyindividualsasofferingthemabetterqualityoflife,orliveability,andthoseattributesthatareseenbyinvestorsorbusinessesasofferingthemcompetitiveadvantage,thatis,contributingtothecityorregion’scompetitiveness.
Vibrantanddiverseactivitiesareanimportantcontributiontothelivelinessandvitalityofanurbanenvironment.
Theartsalsocontributetowell-designedpublicspacemakingalocalenvironmentmoreattractiveandaccessible.Engagementwiththelocalcommunityinthedevelopmentanddesignofpublicartworkscreatespublicspaceswherepeople want to meet; enrichesurbanregenerationprojects;anddistinctlybrandsaregionorsuburbasadestinationfornewresidents,touristsandbusiness.
Thereisanincreasingbodyofevidence,bothquantitativeandqualitative,onthepositivecontributionofartsandculturetoacity’sorregion’sliveabilityandhencetoitscompetitiveadvantage.Inparticular,inregionalcentres,thepresenceofadiversifiedlifestyleandculturalchoices,isakeydriverofhigheconomicperformance.
ThereisfurtherevidencethatMelbournehasadistinctiveimageasaninternationalcentreofinnovation,includinginnovationinartsandculture.Melbourneiswell-placedtobuildfurtheronthissoundreputation,continuingtoattractnewresidentsandnewinvestment.RegionalcitiesinVictoriaarealsoinvestinginculturalinfrastructureandactivitiestocreatevibrantanddiverselocalculturalofferingsattractivetonewresidents.
RegionalVictoriaandMelbournescorewellontheRichardFloridaartisticandcreativityindicesindicatingafurtherstrongcompetitiveadvantageinattractingthe‘creativeclass’andtheconsequentpositiveeconomicflowon.
ArtsVictoria,theVictorianGovernment’sartsdevelopmentagencyiscurrentlypursuingpolicyinitiativesinsupportofthecontributionofartsandculturetoliveabilityandcompetitiveness.Investmentinculturalprecincts,includingamajordevelopmentinSouthbankandotherdevelopmentsinsuburbanandregionalareas,alongwithsupportforvibrantanddiverseprogramming,isenhancingthereputationandattractivenessofVictoriaasaplaceinwhichpeoplewanttolive,workandinvest.
Recommendation
ThissubmissionrecommendsthatVCEC:
1.includesaculturaldimensionintegratedwiththesocial,economicandenvironmentalelementsofaconceptualdefinitionofliveability;
2.incorporatesintoanymeasurementofliveabilityallfouroftheelements(social,economic,environmentalandcultural)andthewayinwhichtheseelementsareinter-related;
3.notestheevidenceoftheclearlinkbetweenthecontributionofartsandculturetoliveability,inparticular,inrelationto:
•strategicallypositioningMelbourneasaninternationalcentreforinnovationandasaculturaltourismdestination;and
•creating/maintaining Melbourne, suburban and regional communities asattractivetonewresidents,familiesandbusinesses;
4.notesthecontributionofartsandculturetohighqualityurbandesign;and
5.endorses thecurrent policyinitiativesbeingpursuedbytheVictorianGovernment’sartsportfolioinrelationtovibrantanddiverseartsandculturalprecincts.
2.INTRODUCTION
OneofthefocalpointsoftheVictorianCompetitionandEfficiencyCommission’s(VCEC)InquiryintoEnhancingVictoria’sLiveabilityisthelinkbetweenliveabilityandVictoria’scompetitiveness.
Thissubmissionfocusesonwhyandhow:
•Artsandculturearekeycontributorstoliveability.
•Victoria’sculturalassetsandresourcesshouldbeharnessedtofosterandenhancethecompetitivenessoftheStateinanincreasinglyglobalisedeconomy.
Thesubmissionisstructuredasfollows:
•Section3commentsontheconceptofartsandculture.
•Section4commentsontheeconomiccharacteristicsofartsandculture.
•Section 5 explains why and how arts and culture contribute to liveability andcompetitiveness.
•Section6providesexamplesofboththequantitativeandqualitativeevidenceonthepositiveimpactofartsandcultureintheeconomy.
•InformationontheVictorianGovernment’scurrentartspolicyforwardinitiativesinrelationtoculturalprecinctsisprovidedinAppendixA.
3.WHATISMEANTBY‘ARTSANDCULTURE’
Theconceptof‘culture’isamultifacetedone.
•Cultureasa‘wayoflife’
Cultureasa‘wayoflife’iscommonlyunderstoodasreferringtothelocaltraditionsofpublic/social life,festivals, creativeexpression,artisticactivities,skills,and traditionalknowledgeaswellasfood,sportandlanguagethatareapartofthelivesofpeople(andsocieties);andwhichprovideabasisforsocialengagementandenterprisedevelopment.
•Cultureasa‘setofvalues,attitudesandwayofthinking’
Cultureinthissenseofthewordreferstothesociologicalfactors(viz.thesetofvalues,beliefs,knowledge,andpractices)thatarecommontoorsharedbymembersofaparticulargroupataparticularlypointintime.1
1Theparticulargroup in questionmaybe delineated furtherintermsof politics,geography, religion, ethnicity orsomeothercharacteristics.SeeD.Throsby(2001)EconomicsandCulture,Oxford:CambridgeUniversityPress,p.4.
•Cultureasasetofproductsandservices
Thisviewofculturetakesafunctionalperspective.Allculturalproductsandserviceshavedefinableeconomiccharacteristics.Whatdistinguishesthemfromothergoodsandservicesisthattheirproductioninvolvessomeformofcreativityandthegeneration andcommunicationof symbolic meaning. Culturalproductsand servicesembody(orpotentiallyembody)someformofintellectualproperty.2
Thefocusofthissubmissionisonthethird conceptofculturewhichwillbereferredtointhissubmissionas“artsandculture”.TheVictorianGovernment’sartsportfoliohasadirectroletoplayinthepromotionanddevelopmentofculturesodefined,inparticularinrelationtoissuesofliveability.Althoughthefocusofthissubmissionisoncultureasasetofproductsandservices,itisacknowledgedthatGovernmenthasanindirectrelationshiptocultureasawayoflife,aswellasasetofvaluesandwayofthinking.
Theliteratureonculturaleconomicsmakesafurtherdistinctionbetweenartsandculturalsectors:
•theperformingarts,e.g.music,theatre,opera,dance,circus;
•thevisualarts,e.g.paintings,sculpture,artobjects;
•filmandnewmedia,e.g.,movies,televisionand,morerecently,productsontheInternetandhand-helddevices;
•literature,e.g.,books,magazines;and
•culturalheritage,e.g.museums,historicalbuildings,monumentsandsites,andtheircollections.
ArtsVictoriahasapolicyadvisoryandimplementationroleinallofthesesectorsoftheculturaleconomyofVictoria,theoutputsofwhichincludebothproductsandservices.
Specifically,ArtsVictoriaoverseesthestate-ownedArtsCentreandtheGeelongPerformingArtsCentre(intheperformingartssector),theNationalGalleryofVictoria(inthevisualartsandculturalheritagesectors),MuseumVictoria(intheculturalheritagesector),theStateLibraryofVictoria(intheliteratureandculturalheritagesectors)andAustralianCentrefortheMovingImage(inthenewmediaandculturalheritagesectors).
ArtsVictoriaalsosupportsthenon-Governmentsectorthroughfundingandothersupportprograms.Individualartistsandartsandcommunityorganisationsareassistedtocreateandpresentnewworksandtotourworkregionallyandinternationally.
Themeaningofculture,asitis(orbecomes)understood,evolvesandchangeswiththedevelopmentofaplace(i.e.acity,townorprovincialcentre).Forexample,therehasbeenapolicyfocusinMelbourneoncreating“hard”culturalinfrastructuresuchasgalleries,performancevenues(andevensportstadiums).Morerecently,thefocushasshiftedtoimproving andenhancing theattractivenessandquality of lifein Melbourne(suchasstreetentertainment,nightlifeandissuesofsecurityandsafety).VCEC’sinquirybearstestimonytothisshiftinpolicyfocus.
2Throsby,opcit,p.4. SeeV.A.Ginsberg(2001),“TheEconomicsofArtsandCulture”inN.SmelserandP.Baltes(eds.)InternationalEncyclopaediaoftheSocialandBehaviouralSciences,Amsterdam:Elsevier.
Thus,itisimportanttoembraceamultifacetedconceptofcultureinordertohaveabetterunderstandingofitslinkswithandcontributiontoVictoria’sliveabilityandcompetitiveness.
Inadditiontounderstandingwhatculturemeans,itisalsoimportanttoknow‘howto’workeffectivelyandstrategicallywithinthecomplexitiesofculture–namelytheneedtoidentify,celebrate and projectcultural pluralityand distinctiveness.These aspects of “soft” culturalinfrastructureencouragenetworkingandcreativity.
4.ECONOMICCHARACTERISTICSOFARTSANDCULTURE
Itiswell-establishedineconomicsliteraturethatthemarketcanfailtooperateefficientlywhentheproduct(orservice)inquestionhastheeconomiccharacteristicsofapublic/meritgood;orwhenthereareexternalitiesassociatedwithitsproductionorconsumption;orwhenthegoodhasanoptiondemand/existencevalue.
Oneoracombinationofthesecharacteristicsispresentinthecaseofmost(butnotall)artsandculturalgoodsandservices.
Asinthecaseofanyproductswithsuchcharacteristics,Governmentcanandshouldplayaroleinaddressingtheextantorpotentialmarketfailureinrelationtoartsandculturalgoodsandservices.Governmentcanandshouldalsoplayaroleinensuringequitableaccesstosuch goods andservicesbyallconsumers.Inthisregard,theform ofGovernmentintervention–whichincludesdirectprovision,subsidisationandregulation-shouldbeonethatwillorislikelytoresultinmakingsocietyasawholebetter-off,i.e.ensuringthatthesocialbenefitstobegainedfrominterventionexceedtheattendantsocialcostsofintervention.
4.1.PUBLIC/MERITGOODANDOPTIONDEMAND/EXISTENCEVALUE
A(pure)publicgoodisoneforwhichthebenefitsthatarederivedfromitsusageorconsumption(byanyperson)arenon-excludableandnon-rivalrous.
Non-excludabilitymeansoncethegoodisproduced,asupplierisunabletoeconomicallyexcludeortechnicallypreventthosewhodonotorarenotwillingtopayforthegoodfromenjoyingthebenefitsofthatgood.
Non-rivalrousmeansthatanynumberofpersonsmayenjoythebenefitsofthegoodwithoutreducinginanywaythebenefitsthatremainavailabletoallotherpersons.
Allartsandculturalgoodsarenon-rivalrous,andmost(butnotall)arenon-excludable.Thusanartsorculturalproductisapublicgood,orattheveryleast,aquasipublicgood(seeTable1below).Forexample,eventhoughonehastobuyatickettogainentrancetoanopera(i.e.itisexcludable),theattendanceofthispersondoesnotdiminishinanywaythebenefitsthatareprovidedandenjoyedbyeveryoneattendingthatopera(i.e.itisnon-rivalrous).
Table1.Consumptioncharacteristicsofaneconomicgood
Excludable / Non-excludableRivalrousconsumption / Privategood(e.g.ahamburger) / Commonpropertyresource(e.g.apublicbeach)
Non-rivalrousconsumption / Quasipublicgood(e.g.anopera,abook) / Purepublicgood(e.g.heritagebuilding)
Insofarasartsandculturalgoodsareintrinsicallydesirable,upliftingorsociallyvaluable,theymayalsobeconsideredas“meritgoods”forthesamereasonwhyeducationissometimesreferredto(intheliteratureonpubliceconomics)asameritgood;viz.agoodwhich,iflefttothedecisionofanindividual,maynotbeconsumedatthe“right”amountbecauseofthatperson’sinabilitytofullyevaluateandmakeaninformedchoiceaboutthebenefitsofthatgood.Similarly,ifallconsumersarelefttothemselves,theymaynotmakethe“right”choicestopurchasethe“appropriate”quantitiesofartsandculturalgoods.Governmentshouldthereforepromoteorsupporttheprovisionofartsandcultureasameritgoodforthereasonthatdoingsowouldimprovethecollectivewelfareofpeople insocietymorethanifrelianceweretobeplacedontheindividualchoicesofpeople.
Thereisafurthersubsidiaryfeatureof‘publicness’stemmingfromtheoptiondemand/existencevalueofanartsorculturalproduct.Onceanartsobjectorculturalproductiscreated,peopleplaceapositivevalueonitsexistence(overandaboveitseconomicorcommercialvalue).Forexample,apersonmayperceiveasymphonyorchestratohaveapositiveexistencevalueeventhoughthatpersonmayconsideritunlikelythats/hewillattendaperformance.
4.2.EXTERNALITY
Anexternalityisthedirecteffect(eitherpositiveornegative)thatoneperson’sactionsordecisions (with regardsto consumptionorproduction)haveonthe economic well-being ofotherpersons.Apositive(negative)externalityoccurswhensomeoneotherthanthepersonwhoconsumedorproducedthegoodreceivesabenefit(bearsthecost);andthatbenefit(cost)isnotreflectedinthemarketpriceforthegoodorservice.
Theconsumptionorproductionofanartsandculturalgoodwilldefinitelybenefittheindividualpersonwhoconsumesorproducesthatgood.Butitwillalsohavepositivesocialandeconomicrepercussionsonallwithinacommunity,e.g.strongerculturalidentityandsocialcohesion.3Ifthesebenefits(positiveexternalities)arenotfullytakenintoaccount,thentheconsumptionorproductionoftheartsandculturalgoodinquestionwilltendtobelowerthanthesociallyoptimallevel.4
Asanotherexample,majorartsfestivalsandeventsgenerateeconomicactivityintherelatedtourism,travelandhospitalitysectors.AnalysisofMelbourneWinterMasterpieces‘block-
3See,forexample,JDayton-Johnson(2000),What’sDifferentaboutCultural Products?:AnEconomicFrameworkOttawa:CanadianHeritage.
4Thequantitativeliteratureusestheterm“leakage”torefertothebenefitsconferreduponthosewhodonotresideinthespatialareaorwhoare notmembersofthegroupforwhichthearts/culturalprojectisintendedtobenefit.Forexample,thebenefitsofalocalartsfestivalaccruetolocalresidents,butvisitorsandtouristswillalsoenjoythebenefits.Itisinthissensethattheartsfestivalissaidtohavegeneratedpositiveexternalities.
buster’exhibitionsattheNationalGalleryofVictoria,indicatesthatover$64millionofeconomicactivitywasgeneratedbythefirstthreeexhibitions:TheImpressionists(2004),DutchMasters(2005),andPicasso:LoveandWar(2006).5TheprivatebenefitsenjoyedbythosewhopaidforadmissiontotheseexhibitionsdonotfullyreflectthecollectivebenefitstotheVictorianeconomyandcommunityasawhole.Inotherwords,theartseventhasgeneratedapositiveexternality(orspillovereffect).
Itiswell-knownineconomicsthatwhenagoodorserviceis“under-priced”(i.e.pricedatalevelthatdoesnottakeintoaccountthefullbenefitsofthatgood),theproductionofthatgoodwillbelessthanthesociallyoptimallevelofproduction.
ThusGovernmentcanandshouldplayaroleinensuringthatthepositiveexternalitiesfromartsandculturalactivitiesaretakenintoaccountbytheorganisersandfundersofsuchactivities.
4.3.EQUITY
Giventhe public(and quasi-public) nature ofartsand culturalgoods, Government canandshouldforequityreasons,ensurethatsuchgoodsaremadeaccessibletoallconsumers,includingthosewithlowincomesandwhocannotaffordtopay(evenwhentheyarewillingtopay).
4.4.PUBLICEXPENDITUREONARTS
InasurveyconductedbyWithersetal,itwasfoundthattheAustraliancommunity(asawhole)acknowledgedandagreedwiththe“marketfailure”rationaleforpublicinterventionintheartssector:6
•Morethan75%ofrespondentstothesurveyacceptedthepublicgoods/externalitiesrationaleforarts.
•82%acceptedthemeritgoodrationale.
•Almostall(97%)ofrespondentsagreedwiththeoptiondemand/existencevalueargument.7
Itwasalsofoundthatmorethanhalf(53.2%)ofthepeoplesurveyedperceivedbenefitsfrompublicexpenditureson“artsandpublicbroadcasting”.Further,thesurveydatasuggestedtheAustraliancommunityis“willing-to-pay”morefor“artsandpublicbroadcasting”.“Informed”respondents(i.e.afterbeinginformedoftheiractualtaxliabilities)demonstratedawillingness-to-pay7%morethanwhattheyhaveactually“paid”asmeasuredbytheiractualtaxliabilities.
5MinisterfortheArts,LynneKosky,pressrelease,Melbourne’sWinterMasterpiecesattractonemillionvisitors,(22August2007)
6G.Withers,D.ThrosbyandK.Johnston(1994),“PublicExpendituresinAustralia”,EPACPaperNo.3,AGPS,Canberra,October2004.
7Someartisticorculturalgoodsorservicesmayhaveeconomicandculturalvaluesthatareyettobeevident.Hence theneedtokeepoptionsopenforthefuture.Existencevaluereferstothebenefits a communityderivessimplyfromtheknowledgethatagoodorserviceexists.
4.5.GOVERNMENTROLEINARTSANDCULTURE
Governmentplaysasupportingroleinthemarketforculturalgoodsandservicesusingpolicyinstrumentscommontootherareasofmarketactivitythataresubjectto‘marketfailure’;viz.
•Directprovision
MajorState-ownedculturalinstitutions,establishedandoperatingunderlegislation,curateanddisplayexhibitionsfromtheStatecollections.
•Subsidisation
Subsidiesareprovidedtonon-Governmentartsorganisationstoenableticketandadmissionpricestoremainlowtherebyincreasingaccesstothearts.
•Regulation
Localcontentrulesforcommercialtelevisiondramaandchildren’sprogramsandrequirementsforapercentageofmajorbuildingbudgetstobespentonpublicartworksaretworegulatorymechanismsforsupportingartsactivity.
4.6.CULTURALCAPITAL
Culturalcapitalreferstoanassetthatembodies,stores,orprovidesculturalvalueinadditiontowhatevereconomicvalueitmaypossess.AccordingtoThrosby(2002),culturalcapitalinitstangibleform(e.g.aworkofart,aheritagebuilding,location,sites,precincts,films,recordings,artefacts)iscreatedbyhumanactivity,lastsforaperiodoftime,candecaywithoutmaintenance,givesrisetoaflowofservicesovertime,canincreasewithinvestmentofcurrentresources,andcangenerallybeboughtandsold.8Forexample,aworkofartwillcertainlyhavecommercialvalue(irrespectiveofitsculturalworth),butitisimportanttorecognisethatthecommercialvaluemayormaynotbefullyreflectedintheculturalvalueintermsofitsaesthetic,symbolicorothercharacteristics.
Itisimportant,forreasonsofculturalheritageandidentity,thattheexistingstockofculturalcapitalis preserved, maintained and protectedforfuture generations to come.The conceptof“culturalsustainability”issimilartothatfortheenvironment,viz.meetingtheculturalneedsofthe presentgenerationwithoutcompromisingthecapacity offuturegenerationsinmeetingtheirownneeds.Likewise,theprinciplesofculturalsustainabilitymaybedrawninparalleltothosethatareappliedearnestlyinmanagingtheenvironment:
•Theprincipleofintergenerationalequity(i.e.treatmentofdifferentgenerationsovertime)imposesadutyofcareonthepresentgenerationinmanagingthestockofculturalcapitalthatistobepassedontofuturegenerations.
•Theprincipleofintra-generationalequity(i.e.equitywithinthepresentgeneration)impliesequalaccesstobothtangibleandintangibleculturalcapitalacrosssocialclasses,incomegroups,andlocation.
8D.Throsby(2002),“Culturalcapitalandsustainabledevelopment:Howdoesculturalcapitalpromoteurbandevelopment?”,unpublishedpaperpresentedataseminarintheFacultyofEconomics,SaitamaNationalUniversity,Tokyoon25November2002.
•Theprincipleofculturaldiversitywillaccordduerecognitionoftheoptionorexistencevalueofdiverseartisticandculturalservices.
•Theprecautionaryprinciplewouldsuggesttheadoptionofahighlyrisk-aversestanceinmakingdecisionsthatmaycauseirreversibledamagetothestockofculturalcapital,e.g.demolitionofhistoricbuildings.
Inparalleltotheconceptofculturalsustainability,therearestrongargumentsputforwardthattheartsandculturalsectoroperatesasan“eco-system”.Anyhealthyandvibrantartssectorrequiresadynamicbalancebetweenmajorinstitutions,establishedcompanies,risk-takingsmallerenterprisesandindividualartistsfromdiversebackgrounds.Characteristicsofasustainableartssectorincludeabalanceofscaleoforganisations,clearcareerpathways,asharedunderstandingofthedynamicsofthesectorandahealthyecologyatalllevelsencompassingeducation,communityengagement,fundedandcommercialactivities;andthecapacitytoproducearangeofhighqualityandvaluedartisticproductsandservices.9
5.THEROLEOFARTSANDCULTUREINLIVEABILITYANDCOMPETITIVENESS
As noted inVCEC’s Issues Paper, theconcept of liveability has“nopreciseor universallyagreeddefinition…mostpeoplecouldprobablyacceptthatliveabilityembracesnotionssuchasqualityoflife,the‘character’ofaplace,thehealthofcommunitiesandsustainability.Itisarelativeconceptandwillinvariablymeandifferentthingstodifferentpeople,butitembodiessocial,economicandenvironmentaldimensions”(p.4).
Thissubmissionagreeswiththispositionbut,importantly,withtheaddeddimensionofaculturalattribute.
Further,ratherthanarisingfromaspecific(orasetofspecific)attributes,thenotionofliveabilityofacity,suburbancentreorprovincialcentre,hasmoretodowiththecombinationofsocial,cultural,economicandenvironmentalattributes.
Theattributesofalocation(beitacity,town,regionalcentre)thatmakeitanattractiveplacetoliveinclude:
•tangiblefeaturessuchastheexistenceofpublicinfrastructure(publicspaces,urbantransit,availabilityofhealthandeducationservices,effectivemeansforprovidingcleanairandwater,efficientsanitationandwastedisposal);and
•intangiblefeaturessuchasasenseofplace,adistinctivelocalidentity,well-establishedsocialnetworks.
Furthermore,themanifestbehaviourofacity’spopulation,e.g.activecivicparticipation,andactiveculturalandrecreationalinvolvements(suchasartistic productionandconsumption)canbetakenassignsofresponsivenesstoaliveableenvironment.10Acitythathasacombinationofsocial,cultural,environmentalandeconomicattributesthatmeetsthe
9CHuntandPShaw(2008),Asustainableartssector:Whatwillittake?,PlatformPapersNo.15,CurrencyHouse.
10D.Throsby(2005),“Culturalheritageasfinancialassetinstrategiesforurbandevelopmentandpovertyalleviation”unpublishedpaperpresentedatInternationalConferenceforIntegratingUrbanKnowledgeandPrac-tice,Gothenburg,Sweden,May29-June3,2005.
aspirationsofitsresidents will,inturn,stronglyinfluencetheirperceptionofthequalityofthecity(metropolitanorregional)inwhichtheyreside.
Melbournehasestablishedandmaintaineditsreputationforartsandculture,asshownbytheresultsoftheBrandHealthSurvey1996-2007(conductedbyRoyMorganResearch):11
•Melbourneisseenastheleadingcapitalcityfortheatresince1996.
•Since 2005, Melbourne has the reputation of being the leading “city-host” ofinternationalsportingandculturalevents.
•MelbournehasabettercitynightlifethanSydney.
•Melbournehas(nexttoSydney)interestinganddiverseregionalexperienceswithin1.5hoursfromthecity.
Generallyspeaking,the“identity”ofacity(likeMelbourne)hasverylittletodowiththeeconomicandcommercialfunctionsitspecialisesinorthephaseofitsgrowthanddevelopment.Acityisconsideredtobeamoreattractiveandrewardingplaceto“work,liveandplay”becauseofthequantity,qualityanddiversityofculturalactivitiesandservicesinthecity.12
Furthermore,acityismorethanjustaplace“towork,liveandplay.”Itisalso,fromtheperspectiveofeconomicgrowthanddevelopment,aplace“toinvestinandtomakemoney”.Thismeansthattheattributesthatareattractivetoindividualsarealsoattractivetobusinesses.
Artsandculturecontributesdirectlytothat“senseofplace”whichattractsbothresidentsandbusiness.Vibrantanddiverseactivitiesareanimportantcontributiontothelivelinessandvitalityofanurbanenvironment.13Artsandculturaleventsandcelebrationsformpartofadiversemixofcommercial,hospitalityandcommunityactivitycreatinganactivestreetlifeandgenerallymakingaplacefeel“alive”.
Theartsalsocontributetowell-designedpublicspacemakingalocalenvironmentmoreattractiveand accessible.
Publicartisaspecificmeansofenhancingthebuiltenvironment(“hard”infrastructure)inawaythatengageslocalresidentsbycreatingpublicspaceswherepeoplewanttomeetandcreatenewsocialconnections(“soft”infrastructure).
Publicart,andgoodurbandesign,canalsohavepositiveeconomicspin-offscreatinglandmarksthatattracttourists,aswellasresidents,enrichingurbanregenerationprojectsandcontributingtothebrandingofcities,townsandsuburbs.
11TheBrandHealthsurveyconsistsofaseriesofquestionsonaRoyMorganCATI(ComputerAssistedTelephoneInterview)omnibusrunover2weeksinJune.The2007surveyisbasedonanationallyrepresentativesampleofapproximately1,400respondents.
12SeeAllenJ.Scott(2004),“CulturalProductsIndustriesandUrbanEconomicDevelopment:ProspectsforGrowthandMarketContestationinGlobalContext”,UrbanAffairsReview,39:461-490.
13J.Montgomery(2007),TheNewWealthofCities,CityDynamicsandtheFifthWave,Ashgate(p.271)
Engagementwiththelocalcommunityinthedevelopmentanddesignofpublicartworksensuresthatthereisstrongownership ofandpridein public spaces.Sitespecificartworkscreatedistinctivelocations,therebybuildinglocalidentityandneighbourhoodcharacter.Adistinctlybrandedregionorsuburbbecomesadesirabledestinationfornewresidents,touristsandbusiness.
ResearchbyVicHealth,basedontheArtsandEnvironmentScheme,indicatesthatwell-designedpublicspace,inwhichcouncilsengagedwithartistsandthelocalcommunities,hadapositivecontributiontosocialcohesionthroughcreativeprojects.Inparticular,byengagingwiththemarginalisedorthevulnerableinthecommunity,thesepeoplehavebeengivenavoiceinplanningdecisionsthathadanimpactontheircommunity.14
Anotherexampleofpublicartcontributingtohigh-qualityurbandesignisatMelbourneDocklands.Theurbanartspolicyhascreatedasseriesofmajorsculpturesrespondingtoandreflectingthelocalenvironment,inparticularthewaterfront,Indigenousheritage,culturaldiversity,industrialhistoryandurbaninterface.ThroughactiveandcreativeengagementwiththelocalenvironmenttheartsareakeycontributortotheDocklandsgrowingattractivenesstonewresidentsandnewbusinesses.15
Itisinthissensethatthereisamergingbetweentheattributesofacitythatareseenbyindividualsasofferingthemabetterqualityoflife(i.e.thecity’sliveability)andthosethatareseenbyinvestorsorbusinessesasofferingthemcompetitiveadvantage(thecity’scompetitiveness).Foraninvestor,acityisattractivebecausethepresenceandavailabilityofhighlyskilledandcreativeworkers,whoarethemselvesattractedtothatcitybythequalityoflifeandworkenvironment.
AccordingtoBayliss(2004),theGovernmentofDenmarksuggestedacloserinteractionbetweenandevenconvergingcultureandindustrybecauseofitspotentialto“triggeranewsocialdynamic,whichwill,atoneandthesametime,strengthencultureandthearts,offeringnewopportunitiesfordevelopment,andaddimpetustoindustrialdevelopmentmarkedbyinnovation,creativityandresourcefulness”.16
Inthefaceofanincreasinglyglobalisedeconomy,Victoria(andMelbourneinparticular)mustthereforecontinuetotransformitselfeconomicallyandculturally.Inadditiontotheconventionalthinkingofimprovingacitybyimprovingits“hard”infrastructure(intheconventional economicsectors suchastransport, aswellas“hard”infrastructure intheartsandculturalsector),seriousconsiderationneedsalsotobegiventoimprovingthe“soft”artsandculturalinfrastructureoftheState–servicesandactivitieswhichidentifyandcreateexpressionsof culturaldistinctivenessand vibrancy;andencouragenetworkingandcreativity.
14VicHealth,ArtsandEnvironmentScheme,VicHealthwebsite(accessed11February2008)
15DocklandsAuthority(2001),Spirit:IntegratedUrbanArtPolicy.
16Page 4ofaDanishGovernment’sreportDenmark’sCreativePotentialcitedinD.Bayliss(2004),“Denmark’sCreativePotential-TheRoleofCulturewithinDanishUrbanDevelopmentStrategies,”InternationalJournalofCulturalPolicy,10.
Therearetwoprimary(butnotnecessarilydistinct)waysbywhichtheartsandcultureof,andin,Victoriacancontributetoenhancingliveabilityandfosteringcompetitiveness:
•Create/maintainauniqueanddistinctiveimage.
•Increasethe‘drawingpower’ofacityortowntoattracttheso-called“creativeclass”(asdefinedbyRichardFlorida17).
5.1.CREATINGAUNIQUEANDDISTINCTIVEDESTINATION
Inthisapproach(drawingfromthelessonsofEuropeanexperience),theVictorianGovernmentshouldharnessalloftheexistingculturalresourcestorevitaliseregionalcentresand/ortofosteramoreattractivecitylifeinMelbourne.18Itispremisedonthecontributionofcultureasproductsandservicestothewideranthropologicalconceptofcultureas“awayoflife”.Culturalresourcesincludeallthetangiblesandintangiblesthatcontributeto“themakingofaplace”,suchasarts:culturalheritage;localfestivals;localproducts; local crafts andcompetencies;public spaces; architecture; image.19
ArtsandculturehavethepotentialtoplayacriticalroleinstrategicallypositioningMelbourneasaninternationalcentreofculturalexcellence,asadynamiccentreofcreativityandinnovationandasaninternationaldestinationforculturaltourism.
The“CitiesofCulture”programinEuropehasbeenpursuingthisrationalesince1985withstand-outsuccessesforcitiessuchasGlasgowin1990,andDublinin1991.20
EvidenceshowsthatMelbournehasalreadydemonstratedacompetitiveadvantagewithincreasingrecognition,withinAustraliaandNewZealand,asacentreofcultureandasignificantculturaltourismdestination.MarketresearchfocussedontouristswhopatronisedMelbourne’sartsandculturalvenuesconcludedthat:21
•MelbourneiscurrentlyenjoyingareputationasAustralia’smostvibrant,creativeand‘edgy’city.Locals,interstateandyoungerinternationalvisitorsdescribeMelbourneasacitythatcelebratescreativityandstimulatesthesenses.
•Avibrant,youthfulsub-cultureemergesasacriticalcomponentofthisreputation,whichisinturn,drivenbythenetworkof‘groovy’barsandpubs,andlivemusicscene.
•Beyondthisanddrawinginawideraudience,liesitsreputationforstaging‘bigevents’(sports,springcarnival,GrandPrix)andblockbustermusicaltheatre/shows.
17R.Florida(2002),TheRiseoftheCreativeClass.NewYork:BasicBooks.
18F.BianchiniM. Parkinson (eds.) CulturalPolicyandRegeneration:TheWestEuropean Experience. Manchester:ManchesterUniversityPress.
19C.Landry(2006),TheArtofCity-Making.London:Earthscan.
20J.RGoldandM.MGold(2005),Citiesofculture,StagingInternationalFestivalsandtheUrbanAgenda,1851-2000,Ashgate.
21CulturalParticipation,OpenMindResearchGroup,June2005
•Melbourne’sreputationforexcellenceinfoodandfashionremainshigh,despitetheeffortsofotherAustraliancities.
•Authenticity,theideathatpeopleinMelbourne(unlikemanyotherplaces,includingSydney)genuinelyparticipateforenjoymentrather than justtobe seen, emergedas animportantdifferentiator.
•Melbourne’svisualspacesarealsokeytoitscharmsandreputation(itsarchitecture,parks,distinctprecinctsandcitywalks)andtendtobethefulcrumaroundwhichbothlocalsandvisitorsstructuretheircityexperiences.
Tellingly,othercitiesinthewiderregion,suchasHongKong,SingaporeandShanghai,havebeen makingsubstantialinvestmentsinartsandculture through newinfrastructure,fundedactivitiesandeventsandthedevelopmentofculturalpolicieslinkedtofutureeconomicwell-being.Forexample,theChiefExecutiveofHongKong,inhis2007-08PolicyAddressincludedinhisfivemainareasforthefuturedirectionofHongKong:“10majorinfrastructureprojectsforeconomicgrowthincluding…theWestKowloonCulturalDistrict;…developingaqualitycitywithqualitylifebyimprovingthelivingenvironment,enhancingheritageprotectionandrevitalisinghistoricbuildings,promotingculturalandcreativeindustries.…”22
Anotherinterestingexampleofacityusingculturetopositionitselfgloballyintothenextcenturyisa$27USbilliondevelopmentprojectbeingundertakeninAbuDhabiintheUnitedArabEmirates.Aswellasincludinghotels,resortsgolfcoursesandhousing,theprojectincludesthreemuseumsanda“sprawling,partspaceship,partorganism”performingartscentre.Oneofthemuseums,designedbyFrankGehry,isintendedasabranchoftheGuggenheim Museumin New York; another museum is undernegotiation as anoutpostoftheParisLouvreMuseum.23
InVictoria,seriousconsiderationisnowgiventointegratingartsandculturewiththesocialandeconomicdevelopmentprogramsinurbanandprovincialareas.Theartsandculturecomponent(e.g.artsfestivals,eventsandpublicartschemes)playsacatalyticroleincreating(orrediscovering)thedistinctivenessofboththe‘spaceandplace’ofacityortown.Thiswill,inturn,heightenthecommunity’sawarenessandappreciationoftheurbanorprovincialdevelopmentprogramasawhole.ThecurrentpolicyinitiativesbeingpursuedbytheVictorianGovernmentinrelationtoculturalprecinctsarepresentedinAppendixA.
Furthermore,itisnowacceptedthatlocalculturalactivitiesarethesourcesofeconomicremunerationandtherearemanylocalcommercialandbusinessactivitiesthataredirectlyorindirectlydependentonthe‘soft’infrastructureanddistinctive“culturalenvironment”ofalocalplace.
Thereisoverseasevidencethatsuchanapproachcanandhascontributedtoeconomic(competitiveness)andsocial(liveability)developmentsimultaneously:byenhancingthedistinctiveimageofacityortowntoattractinvestorsandtheskilledworkerswhofollowintheirtrain;andbyincreasingthevisibilityofacityortowntovisitorsfromotherareasand
22HongKongMonitorNo5(2007)(AjointpublicationoftheHongKongEconomicandTradeOffice(HKETO),HongKongTradeDevelopmentCouncil(HKTDC),HongKongAustraliaBusinessAssociation(HKABA)andHongKongNewZealandBusinessAssociation(HKNZBA).
23HFattah(2007),“CelebrityArchitectsRevealaDaringCulturalXanadufortheArabWorld”,TheNewYorkTimes,1February2007.
boostingtourismrevenue(withmultipliereffectsontheincomeoflocalbusinesses).Examplesofthecontributionofartsandculturetoliveabilityandcompetitivenessinclude:
•TheBayreuthWagnerFestival24,theInternationalFestivalofGeographyatSt.Dié-des-Vosges,25orNewOrleans’sMardiGras;26
•Theannualliteraryfestival(andthegrowthofasecond-handbookssector)inthesmallWelshmarketofHay-on-Wye;27
•TempleBarprecinctinDublin28;and
•The‘placemarketing’oftheartsandcraftstraditioninKinmen,Taiwan.29
5.2.CREATING‘SPACEANDPLACE’FORTHE‘CREATIVECLASS’
ThecentralpremiseofRichardFlorida’s(2002)theoryisthat,inthecontextofaknowledge-economy,acity’seconomicperformanceisaffectedbyitsappeal/amenitytoanew‘creativeclass’ofhighly-educated,well-paidprofessionalsinavarietyofindustries(includingthearts).These professionals sharecommonvalues ofcreativity,individuality,differenceandmerit.Theyareattractedto placesthatprovideopportunitiesforcreativeworkandqualityoflifeamenities,andoffersorareacceptingofcertainlifestyleoptions.RichardFlorida’s“creativecities”arecentresofinnovation(becauseofthe“talent”thatisbeingattracted)thatarealsocapableofavoidingindustrialstagnationor“institutionalsclerosis”(bycontinuallyadjustingtothefastpaceofglobalchange).
5.2.1.TheCreativeClassinVictoria
TheStateoftheRegionsReport2002(authoredbyNationalEconomicsfortheALGA)providedananalysisofthecomposition(byoccupationalclasses)ofeachState’sworkforce.InthatReport,the‘creativeclass’comprises‘creativeprofessionals’and‘supercreativeclass’,where theformerincludes professionalsintheareas ofmanagement,businessand finance,law,healthcarepractitionersandtechnical,high-endsalesandsalesmanagement;andthelatterincludesprofessionalsincomputerandmathematicaloccupations,architectureandengineering,life,physicalandsocialsciences,education,trainingandlibrary,arts,design,entertainment,sportsandmedia.
24F.Spotts(1994),Bayreuth:AHistoryoftheWagnerFestival,NewHavenandLondon:YaleUniversityPress.ForasummaryandreviewofSpotts,seeT.J.Saunders(1995),"ModernEurope--Bayreuth:AHistoryoftheWagnerFestivalbyFredericSpotts", Canadian Journal of History, April 1995 (accessible at
25G.BenkoandU.Strohmayer(1993),“The1993InternationalFestivalofGeographyinSaint-Dié-des-Voges,France”,GeoJournal,31(4),December1993.
26K.F.Gotham(2002),“MarketingMardiGras:Commodification,SpectacleandthePoliticalEconomyofTourisminNewOrleans”,UrbanStudies39:1735-56.
27A.V.Seaton(1996),“Hay-on-Wye,TheMousethatRoared:BookTownsandRuralTourism”,TourismManagement,17:379-82.
28J.Montgomery(2007),TheNewWealthofCities,CityDynamicsandtheFifthWave,Ashgate.
29M.C.Yang,andW.C.Hsing(2001),“Kinmen:GoverningtheCultureIndustryCityintheChangingGlobalContext”,Cities18:77-85.
AsshowninTable2below,37.4percentofthetotalworkforceinMelbourne’smetropolitanareas(i.e.theareascoveredunderthedescriptivelabel“InnerMelbourne”whichincludetheCBD,StKildaandthePortofMelbourne)areconsideredtobeinthecreative class of occupations.This proportion isaboutthe same asthat in ‘Global Sydney’(37.9percent),whichcoversawidermetropolitanareathanInnerMelbourne.30TherespectiveproportionofcreativeclassworkersinInnerMelbourneandGlobalSydneyissignificantlyhigherthanthenationalaverage(25.2percent).
Table2.Compositionofworkforcebyoccupationalclass(inpercent):MelbourneandSydney
OccupationClass / InnerMelbourne / GlobalSydney / NationalaverageCreativeclass / a.Creativeprofessionals / 24.9 / 25.4 / 16.3
b.Supercreativeprofessionals / 12.5 / 12.5 / 8.9
1.Totalcreativeclass(=a+b) / 37.4 / 37.9 / 25.2
2.Agriculture / 0.1 / 0.1 / 3.4
3.Service / 48.4 / 47.1 / 47.8
4.Workingclass / 14.1 / 14.6 / 23.6
Total(1+2+3+4) / 100 / 100 / 100
Source:StateoftheRegionsReport2002
Itcouldbesurmised,onthebasisofFlorida’stheory,thatthesemetropolitanareashave(respectively)moreofthecombined“spacesandplaces”acceptingofalternativeviewsandadiversityoflifestyles(relativetootherAustraliancitiesandurbanisedareas).Moreimportantly,thisfindingsuggeststhatMelbourneandSydneyareequallycompetitiveintermsofthetypesofbusinessesthatdependonandareattractivetoespeciallythesupercreativeclassofworkers.
Table3belowcontraststheworkforcecompositionintheurbanisedandsomecountryareasofVictoria.Asonewouldexpecttofind(onthebasisofRichardFlorida’stheory),theproportionofcreativeclassworkersishigherinurbanisedareas,viz.MelbourneEastandMelbourneSouth,thaninanyotherareasofregionalVictoria.
30GlobalSydneyincludesSydney’sCBD,therestoftheCityofSydney,theinnerNorthShore(Chatswood)andtheEasternSuburbs(BondiJunctionandairport).
Table3. Composition of workforce by occupation class (inper cent): RegionalVictoria
Occupationclass / Agriculture (%) / Serviceclass(%) / WorkingClass(%) / CreativeClass(%) / Total(%)MelbourneEast / 0.1 / 49.7 / 22.1 / 28.0 / 100
MelbourneSouth / 0.1 / 47.1 / 27.1 / 25.4 / 100
Loddon / 6.1 / 49.2 / 24.3 / 20.3 / 100
Ovens-Hume / 6.9 / 46.2 / 26.1 / 20.9 / 100
Mallee-Wimmera / 19.8 / 39.6 / 23.5 / 17.0 / 100
VicWest / 20.0 / 39.7 / 23.5 / 16.8 / 100
Source:StateoftheRegionsReport2002
Table4belowsummarisestherelativenationalrankingsofsomeofVictoria’sregionsbytheirArtisticIndexandCreativityIndex.31The‘ArtisticIndex’,basedontheso-calledBohemianIndex(originallydevelopedbyRichardFlorida),isameasurederivedfromtheproportionofregion’sworkforceemployedinartisticallycreativeoccupations,dividedbythenationalaverage.The‘CreativityIndex’isacompositemeasureincorporatinghigh-techoutput, proportion of population bornoverseas, patent applicationsand artisticallycreativepeople.Asproportions, theseindicesaccountfordifferencesinoverallpopulationsizesofeachcentre.
Table4.CreativityIndices
Region / ArtisticIndex / ArtisticRank(1-64) / CreativityIndex / CreativityRank(1-64)GlobalSydney / 2.0 / 1 / 992 / 1
InnerMelbourne / 1.85 / 2 / 985 / 2
MelbourneEast / 1.09 / 7 / 519 / 10
MelbourneSouth / 1.30 / 11 / 606 / 12
Mallee-Wimmera / 0.42 / 61 / 7 / 62
VicWest / 0.53 / 54 / 8 / 58
Loddon / 0.68 / 38 / 163 / 35
Ovens-Hume / 0.76 / 29 / 98 / 37
Source:StateoftheRegionsReport2002
31TherankingreferstowhereeachofVictoria’sregionstandamongthe64SORSregionsofAustralia.
ItistheviewofthissubmissionthattheArtisticIndexismoreinformativeofthepossiblelinksbetweenartsandculture,andliveabilityandcompetitiveness,howevertherankingsaccordingtoeachindexareverysimilar.
Nationally,GlobalSydneyhasthehighestArtisticIndexof2.00,which(byitsdefinition)suggeststhattheproportionofGlobalSydney’sworkforceemployedinartisticallycreativeoccupationsistwiceaslargeasthenationalaverage.InnerMelbourneisrankedsecondwithanArtisticIndexof1.85,i.e.InnerMelbourne’sartisticallycreativeworkforceis85percenthigherthanthenationalaverage.Intermsofnationalranking,thecountryregionsofLoddonandOvens-Homearesomewhere“inthemiddleofthepack”,whereasVicWestandMallee-Wimmera(inparticular)aretowards“thetail-endofthepack”.
Amore“like-with-like”comparisonof Melbourne’scompetitivenessrelative toSydney’s,usingtheRichardFloridacreativityindexapproachisprovidedbytheMelbourneCreativityreportfortheNationalEconomyAdvisoryBoardoftheDepartmentof Innovation,IndustryandRegionalDevelopment.32ThisreportmeasuredtherespectiveCreativeIndexforthethreedistinctsub-regionsofMelbourne,viz.MelbourneCentral,MelbourneInnerandMelbourne Outer;andlikewiseforthe comparablesub-regionsofSydney,viz.SydneyCentral,SydneyInnerandSydneyOuter.Accordingtothefindingspresentedinthereport:
•MelbourneCentralscoredhigherthanSydneyCentralontheCreativityIndex.
•BothMelbourneCentralandSydneyCentralscoredwellinternationally,bothbeingranked4thcomparedtoUSregions.
•AustraliascoredhigherthantheUnitedKingdomforinnovationandcreativeclassgrowthbutisjustbehindontheproportionofthoseemployedinhighskilledandcreativeoccupations.
5.2.2.ImplicationsforRegionalVictoria’sLiveabilityandCompetitiveness
Onepractical(andpolicy-related)implicationofRichardFlorida’stheoryisthat“spaceandplace”needtobecreatedtoconveythemessagethat“creative”peoplearewelcomeandaccepted.Thecongregationoflike-mindedcreativeworkersincloseproximityandaccesstoaudiencesandmarkets(andperhapsevenfundersandsponsors)will,inturn,createthe“take-off”conditionsforinnovativeandcreativeideas,andtheresultanteconomicandsocialbenefitstoallwholivein thatcityortown.Thissuggests thatGovernment’sprograms forthedevelopmentofcountryVictoriashouldavoidanarroweconomicfocus,andinsteadapplyanintegrativeapproach thattakesinto accounttheinteractionsandlinkagesbetweenlocaleconomic,socialandcultural‘spaceandplace’incountryVictoria.
Thecrucialbasesforcompetitiveadvantagearelocalandincludethepresenceofaskilledworkforce(inadditiontotheotherfactorsofproductionthatarealreadypresent).AsnotedbyRichardFlorida,theskilledcreativeclasshasapropensitytoseekoutandcongregateinplaceswherethereareopportunitiesforstimulatingworkandqualityoflifeamenities(includingartsandculturalactivities).
Thusonewayofincreasingthe‘drawingpower’ofcountryVictoriaistoextendtheconceptof‘clusterdevelopment’(i.e.interrelatedindustriesinwhichtheregionspecialisesin)toincludetheartsandcultureof,andinthatregion.Anapproachthatopensupopportunities
32NationalInstituteofEconomicsandIndustryResearch,tradingasNationalEconomics,MelbourneCreativity,areportfortheInnovationEconomyAdvisoryBoard,February2004.
foramorevibrantculturalenvironmentwillnotonlycomplementtheextantefficiencies(i.e.scaleeconomies)ofindustryclusters,itwillalsohelptocreatethesynergiesnecessarytoattracttalentsandinvestors.Thesesynergiesmaynotnecessarilyfeeddirectlyintothe(muchvaunted)innovativeprocesses,buttheyareindispensableinthefood-chainofcreativityandinnovation.
Thereisstrongevidencethatvibrantculturalofferingstoregionalcommunitieshaveapositiveimpactoneconomicperformance.Anationalsurveyofregionaleconomicperformancehasconcludedthatregionalcentreswhichhavesuccessfullyhelpedimprovetheeconomicperformanceoftheruralregionhavebeenthosewithhighemploymentgrowthrelativetopopulationgrowth.Akeydriverofthispopulationgrowthwasthepresenceofadiversifiedlifestyleandculturalchoicesforresidents(StylisedFactEight).33
Inaddition,theculturalsector,initsownright,isalreadyanimportantelementofmanyregionalVictorianeconomies,suggestingastrongbasefromwhichthereareopportunitiestogrow.TheculturalandrecreationalservicessectoroftheeconomyhasdemonstratedthesecondhighestgrowthrateinVictorianregionalareas(afterpropertyandbusinessservices)between1991and2001.34ThissectordemonstratedthehighestgrowthrateinGeelongoverthatperiod.35
ItisimportanttonotethattheroleofartsandcultureincontributingtocreatinganattractivelocationfornewresidentsandnewbusinessisfundamentallythesameforbothMelbourneandforregionalVictoria.Theremayhoweverbedifferencesofscale,targetpopulationsandrangeofculturalofferings.
6.QUANTITATIVEANDQUALITATIVEEVIDENCE
Muchcan(and has beensaid in theextantliterature)thatliveability (or thequalityoflife)shouldbemeasuredinamultidimensionalway—economically,socially,environmentally,aswellasculturally.Thismeansthatinpractice,itisnotsufficienttoonlyevaluatewhetheracity,town,orregioniseconomicallyviable,butalsowhetheritisenvironmentally,socially,andculturallysustainable.
Justascommercialenterprisesmustconstantlyimproveproductsandservicestoremainviable,vibrancyisakeycharacteristicofculturalsustainability.Sustainableartsorganisationsmustbe“artisticallyoutstanding,servetheirdiversecommunitieswithimaginationandverveandare,attheendoftheday,financiallysolvent.”36
Twoextensivereviewsofboththequantitativeandqualitativeempiricalevidencethathavebeencollectedoverseasontheimpactofartsandcultureinaneconomyare:
•G.EvansandP.Shaw(2004),“TheContributionofCulturetoRegenerationintheUK:AReviewofEvidence”,aReporttotheDepartmentforCultureMediaandSport,LondonMetropolitanUniversity.
33AustralianLocalGovernmentAssociation/NationalEconomics,StateoftheRegionsReport2004-05.
34MovingForward:MakingProvincialVictoriatheBestPlacetoLive,WorkandInvest,VictorianGovernment,2005.
35ProvincialVictoriaEmergingtrendsinjobsandpopulation,VictorianGovernment,2005
36CathyHuntandPhyllidaShaw,ASustainableArtsSector:Whatwillittake?,PlatformPapersno15,January2008.
•J.Ruiz(2004),ALiteratureReviewoftheEvidenceBaseForCulture,theArtsandSportPolicy,ScottishExecutiveEducationDepartment.
Inthefollowing,thesereviewsaredrawnupontobrieflyillustrateboththequantitativeandqualitativeapproachestomeasuringtheeconomicandsocialimpactofartsandculture.
6.1.QUANTITATIVE EVIDENCE
Thequantitativeapproachtoassessingtheeconomiccontributionofartsandculturalactivitiestothelocalandwidereconomyincludecost-bestanalysis,financialassessment,andinput-outputanalysis.Theeconomiceffectsareusuallymeasuredintermsofthenetoutputandemploymentgeneratedorexpenditureincurredasaconsequenceofthearts/culturalprojectinquestion.Netoutput,employmentorexpenditureismeasuredusingwhateconomistsreferto asthe“with”and“without” framework,i.e.whathasresultedfromantheartsorculturalactivityorprograminquestioncomparedtothehypotheticalofwhatwouldhavehappenedwithoutthatactivityorprogram.Specifically,theeffectsthataremeasured:
•“leakage”,whichreferstothebenefitsconferreduponthosewhodonotresideinthespatialareaorwhoarenotmembersofthegroupforwhichthearts/culturalprojectisintendedtobenefit.ThisconceptissimilartothatofpositiveexternalitiesreferredtoinSection4.2above;
•“deadweight”,whichreferstotheoutcomesthatwouldhaveoccurredwithoutthearts/culturalproject;and
•“displacement”and“substitution”effects,i.e.theextenttowhichthebenefitsoftheprojectareoffsetbyreductionsofoutputoremploymentelsewhere.
Example:DundeeContemporaryArts
ThefindingsofaneconomicimpactevaluationoftheDundeeContemporaryArts(DCA)CentredemonstratedapositiveeconomicimpactthatextendedbeyondtheboundariesofDundee.37Theanalysisshowedthat:
•DCA’spayrollof£561,507generatedanetimpactofanadditional£3,620,000intheTaysideeconomy–aleverageratioofalmost6.5to1.
•Anestimatedthat258fulltimeequivalentjobshadbeengenerated,comparedwiththeoriginalestimateof58,andbusinessdevelopmentaccountedforapproximatelytwo-thirdsofalladditionaljobsgenerated.
•LocalcraftproducersbenefitedfromDCA’sshop,with39.5%ofitsturnoverbeingcraftwork.
•Thecafébarsignificantlyexceededexpectationsbyahugemargin,andprovidedturnover-basedloyaltiesofover£120,000in2001/2comparedtotheoriginalprojectionof£9,000.
37S.Westbrook,“EconomicImpactEvaluationofDundeeContemporaryArts”,2003.
Example:West KowloonCulturalDistrict
AneconomicimpactstudyofthedevelopmentoftheWestKowloonCulturalDistrict38found,aftertakingintoaccounttheleakage,deadweightanddisplacementeffectsdescribedabove,that:
•thedistrict will bring $HK 2,660 million valueaddedcontribution toGDPonopeningrisingto$HK5,280millioninyear16;
•9,980jobswillbecreatedonopeningrisingto20,080byyear16;and
•2.4milliontouristswillvisitinthefirstyearandwillthengrowatanannualrateof2.2%over30years.
6.2.QUALITATIVEEVIDENCE
Qualitativeapproachestoassessingtheimpactofarts/culturalprojectsrelymoreonsurvey,andanecdotaldata.For example, the contributionof an arts/cultural programto liveabilitymaybeevidencedby:
•Achangeinresidents’perceptionsoftheplacewheretheylive
•Greaterindividualconfidenceandaspiration
•Aclearerexpressionofindividualandsharedideasandneeds
•Increasedsocialcapital–‘thenormsandnetworksthatenablecollectiveaction’(WorldBank)
•Greaterparticipationandcontributionbyvolunteers
•Achangeintheimageorreputationofaplaceorgroupofpeople
•Strongerpublic-private-voluntarysectorpartnerships
•Newapproachestoevaluation,consultationandrepresentation
(Notethattherearemanyelementsoftheaboveindicatorswhichcanalsobemeasuredquantitatively.)
In theDCAcase example(summarised above),qualitativeresearch wasalsoundertaken toassesstheroleofDCAasaculturalandsocialcreativehubandnetworkingvenue;thedevelopmentofacentreofinternationalexcellenceinexhibitionsandcinema;aboostinconfidencetoDundee;theroleofDCAinthedevelopmentofa‘culturalsector’inthearea;anditssynergywithDundee’stwouniversitiesandcolleges.
Othersourcesofqualitativedataontheimpactoftheartsincludeoverseaswork:UseorOrnament(Comedia).LocalstudiesincludeCreating Community,Celebrations, Arts andWellbeingWithinandAcrossLocalCommunities(TheGlobalismInstituteVicHealth)andStrengthening
38EconomicAnalysisandBusinessFacilitationUnit,FinancialSecretary’sOffice,EconomicimpactofdevelopingtheWestKowloonCulturalDistrict,ExecutiveSummary,May2007.
localcommunities,ArtsinCommunitySettings,TheEvaluationofTwoCommunitySupportFundedArtsPrograms(DepartmentforVictorianCommunitiesArtsVictoria).
6.3.CONTINGENT VALUATION
Thecontingentvaluationmethod (CVM) involvesdirectlyaskingpeople, ina survey,howmuchtheywouldbewillingtopayforsomethingspecific,contingentonaspecifichypotheticalscenario.39Inthecaseofartsandculture,anexample couldbe howmuchoneiswillingtopayforpreservationofaheritagebuildingormonument.Alternatively,peoplemaybeaskedfortheamountofcompensationtheywouldbewillingtoacceptto“giveup”theheritagebuildingormonument(i.e.allowsthebuildingormonumenttobedemolished).
CVMtechniqueshavebeenincreasinglyappliedtomeasuringthevalueofservicesprovidedbyculturalcapital,particularlyitemsofculturalheritage.40Neverthelessithastobeunderstoodthattheseanalysesyieldestimatesinpurelyeconomicterms.Suchestimatesareimportant,butbytheirnaturetheycannotcapturethoseelementsofculturalvaluethatarenotexpressible infinancial termsorthatcannotbe sensiblyrenderedin termsofindividualwillingnesstopay.
39Economistsrefertocontingentvaluationasa“statedpreference”method,becauseitaskspeopletodirectlystatetheirvalues,ratherthaninferringvaluesfromactualchoices(asitisdoneinthe“revealedpreference”methodology).
40Forsomeexamples,seeS.NavrudandR.C.Ready(eds.)(2002),ValuingCulturalHeritage:ApplyingEnvironmentalValuationTechniquestoHistoricBuildings,MonumentsandArtifacts,EdwardElger:Northampton,MA.;orD.Noonan’s (2002) annotated bibliography, accessible at:
APPENDIXA:VICTORIANGOVERNMENT’SARTSPORTFOLIOCURRENTPOLICYINITIATIVE–CULTURALPRECINCTS
A.1CULTURALPRECINCTS
The Victorian Government’scurrentarts policystatement,Creativecapacity +, arts forallVictorians,isundertakingafiveyearreviewwhichincludesextensiveconsultationwithindustry,othergovernmentagenciesandthecommunity.
Thereviewismaintainingtheoverallarchitectureofthepolicy.Creativecapacity+adoptsatriple-bottomlineapproachwiththreegoals(social,economicandcultural)andfourstrategiesasfollows:
Asignificantlevelofartsindustryandcommunityconsultationhasbeenundertakenaspartofthisreview.Changestotheartsenvironmentsincethelaunchofthepolicyhavebeenidentifiedandnewinitiativestorespondtothesenewcircumstanceshavebeenproposed.
OnemajorpolicyinitiativearisingoutofthisreviewisanemphasisonculturalprecinctsasameansofmakingtheartsanintegralpartofthelifeandeconomyofeverycommunityintheState.
Contemporarycitiesplaceincreasingemphasisonamenity,liveability,innovationandeffectiveinfrastructureandservicesmakingfulluseofthepotentialofinformation,inter-network,andknowledgeasprogressivekeydrivers.
Harnessingthecreativepotentialwithinthecommunityisoftenthekeyaspectofacity’scompetitiveadvantage.Characteristicsofacreativecity,amajorityofwhichispresentinMelbourne,include:
•astrongartsfabric,evidencedthroughacommunitythatcelebratesartistsandhasstrongculturalinstitutions;
•artists’thatlookattheworldinnewwaysandstretch,broaden,liftanddeepentheunderstandingofthesocietiesinwhichwelive;
•iconicbuildings(suchastheArtsCentre);
•strongcommercial cultural sector(design,galleries,architecture, broadcasting, filmandfashion);
•freespacestothinkandpromoteknowledgesharing(suchaswi-fispaces);
•programmingwhichreflectsthediversityofthecommunity;
•adiversecommunity;and
•amixofinfrastructure(heritageandcontemporary).
Creativeenvironmentsarecriticalincreativecitydevelopment.Networkingandprojectdevelopmentbetweencreativecitieswillbepivotaltofutureglobalsuccess,intercitycompetitivenessisnotasustainablefuturepractice.
Culturalprecinctsacrosstheworldhaveproventobeanimportantcivicinvestmentandamajorsteptopromoteculturalandartisticactivitiesandsupportthelongtermdevelopmentofregionsascreativeeconomiesandworldcities.Precinctsbringaboutsubstantialtangibleeconomicoutputsandemployment,andalsovarioussignificantintangiblebenefits.
Thetangibleelementsincludevalueaddedandjobopportunities,venueoperationsandprograms.Theintangibleincludesfosteringthedevelopmentofaknowledgebasedeconomy,invigorationofcreativeindustriesandinnovationrelatedactivities,nurturingandpoolingtalent,attractinginvestors,raisingthequalityoflifeandenhancingacity’sbrand,positionandprofile.Creativeprecinctdevelopmentalsoassiststoupgradesoftinfrastructuresuchasnetworking,culturaldistinctivenessandvibrancy,allqualitiesofamodernworldcity.
EnhancingculturalassetsthroughprecinctdevelopmentcancontributetoGDPorGSP,encourageemploymentopportunitiesandawidespectrumofeconomicsectors,includingartsandculture,designandpublishing,advertisingandmarketingandtouristrelatedindustries.Touristsareattractedtoattendingexhibitionsandartsperformancesandculturalexperiences.
Inthisregard,theGovernmentiscurrentlyinvestinginthedevelopmentofamasterplanfortheSouthbankareabetweenStKildaRoadandSturtStreet,fromtheYarraRivertotheMalthouseTheatre.
A.2INFRASTRUCTUREANDACTIVITY
RoodhouseandMontgomery41pointoutthatartsprecinctswhichsuccessfullydeliverbenefitstolocalcommunitiesaremorethancollectionsoflandmarkbuildingsorheritageinstitutionslocatedinaparticularvicinity.Redevelopedand/ornewmajorbuildingsmaybeanimportantstartingpoint.
Successfulprecinctsprovideandsupportarangeofartistic,economicandcommercialactivitieswithintheprecinct,includinglocally-generatedartsenterprisesandcreativebusinesses,an evening‘foodand beverage’ economy,anda diversityof content includingcontent‘imported’fromoutsidethelocalarea.
41J.Montgomery(2007),TheNewWealthofCities,CityDynamicsandtheFifthWave,AshgateandS.Roodhouse(2006),
CulturalQuarters,PrinciplesandPractice,Intellect.
A.3SOUTHBANKCULTURALPRECINCTREDEVELOPMENT–MELBOURNE’SCREATIVECITYCOMPETITIVEADVANTAGE
TheSouthbankCulturalPrecinctRedevelopmentprojectidentifiesandaimstostrengthentheprimaryCityartsdistrict,apivotalcitylocationandtoreinforceitspresenceandlinkageswithotherkeyareas.Over15culturalvenueswillbeconnectedtogetherwithintheculturaldistrict.
TheprojectwillaffirmMelbourne’scommitmenttobeingoneoftheleadingcreativecitiesandmaintainingaleadershippositionthroughenhancingitsexistingculturalassetsanditsculturalicons.Itwillreinforce,andcontinue,Melbourne’spositioningasthepreferreddestinationinAustraliatoexperiencethebestofthenation’sartsandculture.
Theprecinctwillbeamajorcontributortothe“hard”and“soft”artsinfrastructureofMelbourne.Theareawillbehometomajorperformingartscompaniesandinstitutions(theArtsCentre,MelbourneRecitalCentre,MelbourneTheatreCompany,MalthouseTheatre,MelbourneSymphonyOrchestra,ChunkyMovecontemporarydancecompany,TheAustralian Ballet), major visualartsorganisations (NationalGalleryof Victoria,AustralianCentreforContemporaryArt)andnationally-recognisedartseducationorganisations(VictorianCollegeoftheArts,TheAustralianBalletSchool).Venuesintheprecinctwillbehiredforperformances by thesmall-to-medium sectorcompanies.The diverseand vibrantworkofthisrangeofartsorganisationswillcreateavitalityandrangeofofferingswhichwillbeunequalledintheregion.
TheprojectwilldeliveraninternationalprecinctthatonlyMelbournecandeliverenrichingtheentirecommunityandconfirmingMelbourne’splaceamongtheworld’sgreatcities.
A.4CULTURALPRECINCTSINREGIONALVICTORIAANDMELBOURNE’SGROWTH CORRIDORS
ArtsprecinctshavethepotentialtoimproveliveabilityinregionalVictoriaandinMelbourne’souter-suburbs.
KeyregionalVictorian cities suchasGeelong, Bendigo and Warrnamboolareestablishingthemselvesasgrowthareasfornewresidentsseekingthe“treechange”or“seachange”lifestyle.Theyalsohavescopetoestablishthemselvesasmajorculturalandtourismdestinations.
AnetworkofartsprecinctsatMelbourne’sprincipalouter-suburbanactivitycentreswillcomplementSouthbankandsupportingandextendingMelbourne’sreputationasaliveablecitybeyond the inner-city.
BuildingonVictoria’snationally-recognisednetworkofartsinstitutions,workforceandprogramsbothinMelbourneandregionalVictoria,inclosecollaborationwithLocalGovernment,localartsprecinctswillintegratetheartsintothelifeandeconomyofeverycommunityintheState.
Inadditiontosupportingnewandre-developedculturalinfrastructure,Governmentinitiatives–throughtheMovingForward42ProvincialStatementandtheArtsintheSuburbs43
42RegionalDevelopmentVictoria,VictorianGovernment(2005),MovingForward:MakingProvincialVictoriatheBestPlacetoLive,WorkandInvest(alsoknownastheProvincialStatement)
432007-08VictorianBudgetfactssheet(availablefromArtsVictoriawebsite)
initiative–buildonthatstrengthandaddresses“gaps”inbothprogramdeliveryanddiversityofcontentavailabletocommunitiesoutsidethecapitalcity.
Supporttoorganisationstodevelopworkforthetouringcircuitwithafocusondeliveringnewproductintonewareas–acrossregionalVictoriaandMelbourne’sgrowthcorridorswillfocus onbroad, supporting programming frommain stage theatre, orchestrasandvisualarttosmallscaleinnovativeworksacrossallartforms.
Inaddition,producerswillbeencouragedtoworkwitheducatorsandcommunitygroupstoprovideoutreachprogramsthatengagewithnewaudiencesandfosterabetterknowledgeofanddemandforallartforms.
Theprogramfocusesonincreasingaccessibilitytoqualityculturalproductbyprovidingprogramswherepeoplelive.ItaimstoprovideequityofaccesstotheartsatthelocallevelparticularlyinnewgrowthareasonthesuburbanfringeandwillsupportotherwholeofgovernmentinitiativesunderbothM2030andTransitCitiesthroughthedevelopmentofculturalfacilitiesandprogramsinkeysuburbanactivitycentres.
A.5CULTURALPRECINCTS–QUANTITATIVEEVIDENCE
RefertotheWestKowloonCulturalDistricteconomicimpactstudyabovewhichdetailstheemployment,tourismandeconomicflow-on effects ofthe constructionof a majorculturalfacilityinaninternationalcity.
Forregionalprecinctdevelopment,refertotheStateoftheRegionsreport2004-05whichdemonstratestheimportanceofdiversityofculturalofferingsinregionalareasasadriverofpopulationgrowthandhenceregionaleconomicperformance.
A.6CULTURALPRECINCTS–QUALITATIVEEVIDENCE
TouringVictoriaisacrossartformfundingprogramthatprovidescommunitiesinouter-metropolitan,regionalandruralcommunitieswithaccesstoprofessional,artisticandculturalexperiences.Theone-offprojectgrantsadministeredthroughArtsVictoria’sTouringVictoriaprogramprovidefinancialassistancetoartistsandartsorganisationstooffsetthecostoftouringperformancesorexhibitionswithinVictoria.Toursincludedrama,music,comedy,contemporarydance,craft,photography, ballet,heritageandcontemporaryvisualart.
Toursplayanimportantroleindevelopingtheculturalandsocialandlifeofacommunity.
RecentevaluationoftheseArtsVictoriatouringprogramshaveprovidedqualitativeevidenceoftheimportanceofvibrantculturalofferingstotheattractivenessofregionalandsuburbancentres.Thisevidenceisintheformofthepositivefeedbackfromvenuemanagers,andmembersoflocalcommunities.
Affordableandaccessibleexhibitions/performancesforVictorianslivinginouter-metropolitanandruralareas
“Forruralandremoteareasitprovidesaccesstoartsexperiences,particularlywiththedrought,thattheydon'thavethemoneytotraveltoregionalcentrestosee”(Venue)
“Bringstheatreouttothesuburbs”(Venue)
“Weprovideprofessionalentertainmentthatthecommunityenjoysanditcombatsregionalisolation”(Venue)
Opportunitiesforsocial interactionanda senseofcommunity
“Theyareentertainedanditaddstotheirsenseofcommunity,itenhancestheirwellbeingbecausetheygetoutandhavealaugh”(Venue)
“Providingqualityentertainmentonaregularbasistoimprovetheliveabilityofthecity”(Venue)
“Weprovideprofessionalentertainmentthatthecommunityenjoysanditcombatsregionalisolation”(Venue)
Anexample:
TheCafeConcertSeriestoursculturallyandmusicallydiverseacts,suchascabaret,jazzandCubantosmallerandintimatevenuesaroundVictoria.
TheSnowyRiverArtsNetworkinOrbosthasbeenhostingthisseriessince2002andrecentlyreportedthat:
“Inasmallandattimesaverydividedcommunitysuchasourstheseopportunitiestobringpeopletogetherinapositiveandpowerfulwaycannotbeunderestimatedforthestrengtheningeffecttheyhaveonrelationshipsinthecommunity.Orbostisanisolatedcommunitythathaslittleculturaldiversity.Experiencingartsistoexperiencehumanity:whenwelistentothepowerfulsongsofKlezmermusic,dancetopotentAfricanrhythms orthrilltothebittersweet stories oftheIrish,wecomealittleclosertobeingopenandacceptingofpeoplewhomaynotbelikeus.TheCafeConcertSeriesisthesinglebiggestcross-culturalexperienceregularlyavailabletoourcommunity.”