THE ECONOMY OF CULTURE

PROPOSAL FOR A EUROPEAN STRATEGY

Berlin 4th May 2007

• “The Community shall contribute to the flowering of the cultures of the Member States, while respecting their national and regional diversity and at the same time bringing the common cultural heritage to the fore. […]”

• “The Community shall take cultural aspects into account in its action under other provisions of the Treaty, in particular in order to respect and to promote the diversity of its cultures.”

Article 151 of the EC Treaty.

State Aid to Cinema

2001 Communication on cinema and audiovisual production:

• Reserved to cultural films (Definition?)

• Territorialisation level of max. 80%

• Set a limite of 50% aid intensity (of the production costs of a film)

• Up to 100% aid intensity for « difficult and low » budget films

“Creative people do not get the backing they deserve because you can’t put a figure on creative value”.

Ian Livingston, Creative Director Eidos

EU Support to culture & innovation2007-2013

• STRUCTURAL FUNDS: € 308 billion

Innovation:

• FP7: € 53 billion

• CIP: € 3.6 billion

Content:

• CULTURE: € 400 million

• MEDIA: € 755 million

Total: € 56.6 billion Total: € 1.1 billion

Quantifiable socio-economic impact of the cultural and creative sector

TURNOVER More than €654 billion in 2003

VALUE ADDED TO EU GDP

2.6 % of EU GDP in 2003

CONTRIBUTION TO EU GROWTH

In 1999-2003 growth 12.3% higher than the growth of the general economy.

EMPLOYMENT In 2004 5.8 million people employed.

= 3.1% of total employed population in EU25.

Leonard da Vinci: Study of proportions (1487)

« Le Peer-to-Peer opère comme une subvention au déploiement des infrastructures de distribution. »

Olivier Bomsel, Economist, École des Mines,

Paris.

Rembrandt: Self-Portrait (1669)

Guggenheim Museum, Bilbao, Spain

“Not everything that counts can be measured, and not everything that can be

measured counts.”

« Culture will help us to counter the growing imbalance between the rational and the

emotional sides of European affairs. This imbalance fuels a sense of indifference and

distance towards Europe among our people. »

Commission President Barroso

“You just can’t get the same level of comfort with creative investment as you can with something like semiconductors, say that you can see and touch”.

David Carratt, Kennett Ventures

EIB lending programme for innovation: i2i (2000-2005)

€ 34.8 billion

€ 105 million

Digital Shift in € million (EU25 )

Market size in terms of revenues 2005 2010

VOD Market 30 1,269

Digital Music (online – mobile) 196.3 1,794

Games (online, mobile) 699 2,302

Publishing 849 2,001

Radio 15 250

Source: European Commission, Study on Interactive content and

convergence: Implications for the information society .

From a market valued at € 1,7 billion in 2005 to € 8.3 billion by 2010 (400% growth)

Proposal for a Creative Europe

• Develop statistical information

• Support digital shift / Better arbitration of ressource allocation

• Improve investment in the sector (EIB)

• Culture to become a main element of EU’s cooperation, trade and development policies

51 rue du Trône1050 – Brussels

Tel: +32 2 289 26 00

PDF file of the study available on www.keanet.eu

Blog: www.keablog.com

Local Development Creative cities London

• 6% annual growth 1997-2002 (3% general economy)

• Second largest business sector (29 billion GDP annual turnover)

• Third largest sector of employment

Source: GLA 2002 “Creativity: London’s Core Business Report”, 2004 Report on London’s Creative Sector

P. Picasso, Dora Maar With Cat (1941).

70 million EUR in 2006.

“The fallacy of innovation is that it is all about spending on R&D and information technology”.

Diana Farrel, Director of the McKinsey Global Institute

Country Number of film production companies

Number of companies producing

maximum 1 film

Percentage

Belgium 55 50 90%

Czech Republic 55 50 90%

Estonia 18 18 100%

Finland 30 25 83%

France 156 125 80%

Greece 100 90 90%

Italy 422 325 77%

Spain 160 130 81%

Sweden 56 52 92%

UK 217 186 85%

Film companies in Europe (Size)

The Digital Shift: outlook for digital distribution

• Online content distribution: TV programmes, radio, music, movies, games, publishing

• EC study predicts over 400% growth for creative content online in five years in the EU

Source: DG Infso study on Interactive content and convergence 2006