Germany’s Creative Sector and its Impact on Employment Growth

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.