creativecities.eiu.comFuture cities: Driving growth through the creative economy

PGIM Skip to Content PGIM.com Home Austin Berlin Mexico City Mumbai Seoul Toggle navigation PGIM Skip to Content Home Austin Berlin Mexico City Mumbai Seoul PGIM.com Future cities: Driving growth through the creative economy A special feature from Prudential Investment Management, produced by The Economist Intelligence Unit From one end of the globe to the other, a growing number of cities are emerging as creative forces thanks to burgeoning arts and culture sectors. Based on the collective strength of their creative industries, these cities are driving new business, spurring innovation, attracting talent and investment and, in the process, accelerating urban development and improving the overall quality of life for their residents. While not every city can assume a leading role on the global stage, a remarkable number are working to identify the creative strengths and characteristics that define their appeal and attract attention. In this special feature, The Economist Intelligence Unit (EIU) showcases five forward-looking cities—Austin, Berlin, Mexico City, Mumbai and Seoul—each with a distinctly vibrant creative economy that produces cultural goods and services in fields such as art, media and music. This list is by no means exhaustive, which is why we spotlight other cities making progress in this area in a digital slideshow . Focusing on our five cities, we highlight a range of creative fields, such as music and technology (Austin), visual arts (Berlin), contemporary art and television (Mexico City), film (Mumbai), and gaming and digital media (Seoul). In an animated video , we explore key historic moments or "creative pivots" that influenced these cities' direction. In a separate video , we feature interviews with experts from each city, sharing their views on the role that creative talent plays in driving growth. We also examine whether these five cities are evolving to position themselves for future growth or whether their current accomplishments risk being temporary. Taken together, these stories offer a glimpse into diverse economies and complex creative ecosystems—in short, dynamic cities that are geared for success. Austin Country musician Willie Nelson closed 2014 performing a sold-out show at the 2,750-seat Moody Theatre in downtown Austin, Texas. This arena is the new home of Austin City Limits, the longest-running music series in the history of television–and the show that in its 1974 debut featured Mr Nelson singing "Whiskey River". The new upscale venue exemplifies just how far the TV programme–and the city itself–has evolved over the last four decades. Austin's leaders have long recognised that music is a defining characteristic of their city–and, as a result, integral to their efforts in shaping the city's growth and prosperity. "Music is incredibly important," says Will Wynn, Austin's mayor from 2003 to 2009 and a big music fan himself. "It's the spice in the chili that makes it taste so good." Indeed, Austin boasts more than 200 live music venues, which helps drive the city's burgeoning tourism sector. But music is just one critical piece of Austin's creative economy, which includes some 50,000 arts-related jobs in areas that span film and television, gaming and other visual arts. Despite the 2008 recession that hurt so many cities, Austin continues to add population and jobs. Music and other creative industries have particularly benefited from an expanding population and job base stemming from the technology sector. Austin's tech boom dates from the 1980s when the city lured two tech-based consortia–the Microelectronics and Computer Technology Corporation and SEMATECH (Semiconductor Manufacturing Technology). In both bids, Austin beat other locations around the country by offering a mix of financial incentives (such as subsidised leases) and support from local universities. Already the manufacturing home of IBM, Texas Instruments, Motorola and Advanced Micro Devices, winning these two site competitions "ultimately put Austin on the map–into a small group of rising intellectual cities–and it kept rising from there," says Mr Wynn. This infusion of capital and tech talent helped attract other new businesses, including high-profile players Apple and Samsung, as well as spurring start-ups and additional research-and-development (R&D) activity. Yet, as Mr Wynn notes, the new investments did not supplant the city's creative vibe. Quite the contrary. "As these young, intellectual, educated tech minds came, there was always the presence of creativity," he says. "The technologists didn't create the image–the image was already there." “ The technologists didn't create the image–the image was already there. ” In fact, just at the time when the city landed SEMATECH, the first South by Southwest Festival (SXSW) kicked off in 1987. What began as an ad-hoc music gathering in a sleepy university town has since grown into a massive conference-cum-festival that includes music, film and technology. According to a study by the consultancy Greyhill Advisors, in 2014 SXSW attracted more than 370,000 attendees and generated more than US$315m for Austin's economy. The event also strengthens the city's status as a trendsetter at the intersection of art, music and digital technology. An animated illustration of a man and woman in formal wear, facing the viewer at a gallery event. Without SXSW, Austin's economy may have taken a different turn. Between 2000 and 2002, after the dotcom bubble of the late 1990s burst, the city lost more than 25,000 tech-sector jobs. Austin responded by moving aggressively to drive growth. Remarkably, until then, the city never had its own economic development office. Expand In 2002 (as council member) and 2003 (as newly elected mayor), Mr Wynn oversaw a task-force on the economy to recommend and implement changes. The "business-friendly" initiatives included easing restrictions on small businesses and working with the Greater Austin Chamber of Commerce to develop incentives and other programmes to recruit major employers to the city. The most visible part of the task-force was its emphasis on Austin's "cultural vitality"–measuring the city's creative economy, investing in arts-related initiatives, and including musicians and other arts-minded citizens in the conversation about economic development, as well as making culture an integral part of the city's direction and policy decision-making. "[We said] Austin's image was already disproportionately music, so let's recognise the importance of cultural vitality as we design a way forward," Mr Wynn recalls. One sign of this new direction was to formally adopt a city slogan. "Keep Austin Weird" became the catchphrase for the city's commitment to creativity–and a reminder that urban growth should not drive out the cultural assets that shaped Austin's identity and appeal. Mr Wynn describes the mindset: "We didn't want to become another city in the United States of 'Generica' ... not to disparage other cities, but by God, no matter how big we grow and our industry clusters merge and change, we are going to be a unique American city." The data underscore Austin's progress. Employment in creative industries has boomed, growing by 25% in 2005-10. The growth trends have continued, benefiting from the rise of digital media, a nearly US$1bn gaming industry, the continuing strength of the music industry and Austin's position as one of the top magnets for small business and the much-desired 25- to 34-year-old demographic. It is no wonder Austin's real-estate market is flourishing, and driving up home prices. In addition to the 37-story W Hotel next to the Moody Theatre, the burgeoning downtown area boasts the 56-story Austonian, the tallest residential building in Texas, and a brand-new 34-story JW Marriott; a 50-story Fairmont Hotel is expected in 2016. On the edge of the downtown area, the Waller Creek project aims to create an expansive urban park and other related developments. Add...