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Germany’s Creative Sector and its Impact on Employment Growth

A Theoretical and Empirical Approach to the Fuzzy Concept of Creativity: Richard Florida’s Arguments Reconsidered

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Jan Wedemeier

The creative sector is considered to impact on employment and creative sector’s employment growth. Using a fixed effects model with time-lags, evidence is found that the creative sector fosters the growth rate of employment in German regions. Large shares of creative professionals lead to an increase in employment, but also reduce the growth rate of the creative sector. However, the growth rates are unequally distributed between the regions. Initially large shares of creative professionals further push the regional concentration of those professions in highly agglomerated regions. Driving forces for the concentration are specific characteristics, i.e. knowledge spillovers and cultural amenities. Moreover, for the evolution of the creative sector current policy strategies for the promotion of creative cities are presented.

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1. Introduction

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Explanations for the competitiveness of regions are manifold. A central reason for the competitiveness is their ability to attract and hold high-skilled agents and creative pro- fessionals. A sophisticated and excellent regional skill structure is frequently regarded as a major condition for regional employment growth and economic welfare. In partic- ular, creative professionals - that is, economic agents working in the fields of education, engineering, science, and arts - are supposed to be attracted to the places that are the most beneficial to creative and innovative activities (see Florida 2002; Wojan et al. 2007). Moreover, today the most successful places seem to be particularly concentrated in idea- producing industries (see Glaeser 2008). The distribution of such places is unequal in space, which is one explanation for regional economic imbalances. Whether cultural amenities explain the unequal regional distribution of economic agents is inter alia investigated by Falck et al. (2009), Mo¨ller and Tubadji (2009), Shaprio (2006), and Wojan et al. (2007). Some of these authors conclude that local cultural amenities support regional evolution and help to explain regional growth disparities. By using an adjusted Roback (1982) model, Shaprio (2006) finds that around 60 percent of employment growth is affected by productivity growth, and the rest is explained by cultural amenities. Mo¨ller and Tubadji (2009) follow the hypothesis that a concentration of bohemians results in a higher concentration of creative agents. In contrast to Shaprio (2006), their findings for 323 German regions show no supportive results for this...

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