The loft space after conversion, with the circular window revealed
The loft space after conversion, with the circular window revealed, having been boarded up for years © Duke Studios
The loft space after conversion, with the circular window revealed, having been boarded up for years © Duke Studios

Cultural Heritage, Creativity and the Creative Economy

Part of the Heritage Counts series. 6 minute read.

Cultural heritage enhances creativity and supports the growth of the creative economy. Heritage, whether tangible or intangible, serves as inspiration for new creative works and innovation that can increase entrepreneurship and foster local economic growth.

On this page
  1. Additional information
  2. Heritage sparks creativity and economic development
  3. Creative industries concentrate in areas with high heritage density
  4. Heritage and cultural assets attract creative workers and support local economies
  5. Case study: The Observer Building, Hastings

This article shows how the presence of heritage represents a specific type of economic resource that can stimulate imagination and innovative capacity to produce positive economic outcomes.

Cities need old buildings so badly it is probably impossible for vigorous streets and districts to grow without them…. for really new ideas of any kind—no matter how ultimately profitable or otherwise successful some of them might prove to be—there is no leeway for such chancy trial, error and experimentation in the high-overhead economy of new construction. Old ideas can sometimes use new buildings. New ideas must use old buildings.

Jane Jacobs, 1961, in 'The Death and Life of Great American Cities'

Newly published evidence

Research by Silvia Cerisola provides further evidence that cultural heritage can positively influence creativity and local economic development. This study shows that where cultural heritage is abundant, the area performs better economically. For example, by stimulating entrepreneurial ventures and business innovation. The study uses econometric analysis to investigate the interplay between cultural heritage, creativity, and economic development in the NUTS3 regions of England.

What the research found

  • Cultural heritage exerts a direct positive influence on economic development: On average, a marginal increase in the cultural heritage is associated with a real GDP growth of 0.14%
  • Areas of higher cultural heritage are also areas which produce a larger number of trademarks, a measure of economic creativity: Areas with a higher density of listed buildings produce on average 0.01 more trademarks per 1000 people
  • Regions that are abundantly endowed with both economic and scientific creative talents, or with both economic and artistic creative talents perform better than the others in terms of GDP growth

Read the report

Multidimensional creativity as a mediator between cultural heritage and regional economic development in England

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Source: Cerisola, S. (2024)

Additional information

“Cultural ‘ecosystems’ underpin the operations of the real economy, affecting the way people behave and the choices they make. Neglect of cultural capital by allowing heritage to deteriorate, by failing to sustain the cultural values that provide people with a sense of identity, and by not undertaking the investment needed to maintain and increase our stock of intangible cultural capital, will likewise cause cultural systems to break down, with consequent loss of welfare and economic output”. (Throsby, 1999)

Like natural capital, the value from culture and heritage can be seen from the perspective of stocks and flows, using a systems approach.  Heritage functions as an enabling asset, enhancing the value and productivity of other types of capital, such as labour and technology. Rizzo and Throsby (2006) find that cultural capital generates ongoing benefits over time. These benefits include knowledge and inspiration.

For more information on this topic, visit the government CHC portal.

Heritage sparks creativity and economic development

Research demonstrates that our shared heritage can inspire curiosity, imagination, critical thinking and new perspectives. This enhances people’s innovative capacity; leading to greater productivity and economic growth.

  • Cerisola (2019) examines the effect of cultural heritage on different forms of creativity and on economic development. The study used a standard linear maximum likelihood structural equation model for 2 periods (2001 to 2004 and 2011 to 2014) for Italian provinces (NUTS3 level) with a total of 206 observations. The study finds:
    • Cultural heritage is a source of inspiration and a strong determinant of creativity. Creativity, defined as new ideas based on diverse talents, can be artistic, scientific, or economic in nature
    • The statistical analysis demonstrates that cultural heritage has a positive, significant effect on artistic creativity and a smaller but still positive impact on scientific creativity. It has no significant impact on economic creativity

The relationship between cultural heritage, creativity and economic development is summarised in the diagram below.

Creative industries concentrate in areas with high heritage density

Historic buildings offer flexible, distinctive, and characterful workspaces that attract businesses to local areas. Research indicates that heritage workspaces can uniquely spark curiosity, exploratory thinking, and imaginative ideas. From this foundation, creativity, invention and innovation can emerge supporting and growing local creative industries.

  • Graves et al (2017) found that a 1-unit increase in the density of heritage assets (within a local authority area) led to 0.04-unit increase in the concentration of creative industries. The researchers also found that prior local-level investments into culture, heritage, and sports (1 and 2 years prior to the time period in question) were associated with an increase in the relative concentration of creative firms in the area
  • Detailed mapping showed nearly 26% of UK creative firms operate in conservation areas (Colliers International, 2018). Excluding central London, listed buildings attract significantly more creative firms than non-listed buildings
  • Increases in cultural events and heritage assets correlate with rises in firm density and creative industry density (Graves et al, 2017)
  • The National Lottery Heritage Fund (2013) found creative and cultural industries are more likely to operate out of a listed building than in a non-listed building in England. This difference is particularly pronounced in England’s core cities. These findings support the premise that innovation and new products/services flourish best in cities with abundant historic, distinctive buildings (Jacobs, 1993)
  • Only 7% of 155 European cities in 2019 with circular economy plans explicitly mentioned cultural heritage. The lack of emphasis on cultural heritage in European cities, including UK cities like London, represents a missed opportunity to support the creative economy (Foster and Saleh, 2021)

Heritage and cultural assets attract creative workers and support local economies

Research demonstrates that cultural heritage and creative industries have a mutually beneficial relationship in attracting creative workers and businesses.

  • Research by Cerisola and Panzera (2021) sought to determine the effect of cultural vibrancy, cultural heritage and the local creative economy on other economic outputs. The study found that cultural heritage and creativity are linked together and to development, especially at the territorial level
    • The mere presence of cultural heritage and cultural facilities is not enough to trigger a spillover mechanism that significantly impacts regional output. Rather, it is the “activation” of material cultural heritage through participation that generates a positive effect on the regional economy
    • The authors conclude that heritage, both built and natural, is a driving factor for both social cohesion and profitable long-lasting development
  • Backman and Nilsson (2018) provide evidence that a 1-unit growth in heritage sites per capita induces an increase of approximately 50 more highly educated people in the short term (2001 to 2006) and 80 in the long term (2001 to 2010)
  • Kourtit and Nijkamp (2018) demonstrate that heritage and cultural assets are a pull factor for creative actors (individuals), especially in the arts sector, because of their inspiring effect. The research is based on cross-sectional regression analysis of 370 observations in Dutch municipalities in the period 1994 to 2009

In the Journal of Regional Studies, Kourtit and Nijkam (2018) define creative actors as creative businesses and creative workers. They argue that the synergetic relationship between the following factors attracts creative actors into an area:

  1. Heritage and cultural assets - cultural and heritage assets attract creative actors because of their inspiring effect
  2. Urban size and scale are accompanied by the accumulation of social capital and by larger employment opportunities
  3. Urban agglomeration and externalities - cultural and creative sectors benefit from proximity because it enables them to access highly talented workers and suppliers. Economies of scale in urban agglomerations also reduce costs

The synergetic interrelationship between these 3 factors leads to what the authors call the configuration for a creative-cultural complex.

Kourtit and Nijkamp (2018) applied an ordinary least square regression analysis to 370 observations in Dutch municipalities in 1994 to 2009. The research demonstrates that heritage and cultural assets are a pull factor for creative actors, especially in the arts sector.

Case study: The Observer Building, Hastings

The Observer Building in Hastings sits within the Hastings High Street Heritage Action Zone, a £3 million regeneration programme that has been funded by Historic England since 2019. The programme aims to enhance the high street, or the Trinity Triangle, by re-using historic buildings to stimulate the local creative economy. The Observer Building, originally built in 1924 as the home for production of local news, has been abandoned and unoccupied since 1985. Thanks in part to High Street Heritage Action Zone funding, it was able to reopen, breathing new life into the local area. Now, the Observer Building is home to over 60 jobs often specialising in creative industries and containing a creative tech hub. The restored Observer Building is helping to support and grow Hastings' creative economy. Key facts and figures demonstrating this include:

  • Over £6.7 million of investment leveraged, including £3 million from the Heritage Action Zone grant
  • 64 co-working workspaces and a historic board room restored for meetings and events
  • 94% of tenants in the Observer Buildings report being ‘in good company’ offering opportunities for collaboration
  • Creative tech hub capable of hosting 40+ bespoke events, talks and other activities
    • Creative technology workshops engaging vulnerable youth in creative skills development
    • Creative technology talks on AI and the arts
    • LIDAR 3D scanning tech and 2 3D printers
  • Bringing over 2,100 square meters of vacant commercial space back into use across the whole of the High Street Heritage Action zone

References

  1. Backman, M. and Nilsson, P. (2018) ‘The Role of Cultural Heritage in Attracting Skilled Individuals’. Available at: https://doi.org/10.1007/s10824-016-9289-2 (Accessed: 05.10.23)
  2. Cerisola, S. and Panzera, E. (2021) ‘Cultural and Creative Cities and Regional Economic Efficiency: Context Conditions as Catalyzers of Cultural Vibrancy and Creative Economy’. Sustainability, 13(13), pp.7150–7150. Available at: https://doi.org/10.3390/su13137150. (Accessed: 10.10.23)
  3. Colliers International (2018) ‘Creative Industries in Historic Buildings and Environments’. Available at: https://historicengland.org.uk/content/docs/research/creative-industries-summary-report/  (Accessed: 05.10.23)
  4. Cerisola, S. (2019) ‘A new perspective on the cultural heritage–development nexus: the role of creativity’. Available at: https://doi.org/10.1007/s10824-018-9328-2 (Accessed: 30.10.23)
  5. Foster, G. and Saleh, R. (2021) ‘The Adaptive Reuse of Cultural Heritage in European Circular City Plans: A Systematic Review’. Available at: https://doi.org/10.3390/su13052889 (Accessed: 12.10.23)
  6. Graves, A., Rowell, A., Vardakoulias, O., Arnold, S. and Evans, G. (2017) ‘The role of culture, sport and heritage in place shaping’. Available at: https://www.gov.uk/government/publications/the-role-of-culture-sport-and-heritage-in-place-shaping (Accessed: 21.09.23)
  7. Jacobs, J. (1993) ‘The death and life of great American cities’. Vintage Books. New York: Random House
  8. Kourtit, K. and Nijkamp, P. (2018) ‘Creative actors and historical–cultural assets in urban regions’. Available at: https://doi.org/10.1080/00343404.2018.1541077 (Accessed: 03.10.23)
  9. Rizzo, I. and Throsby, D. (2006) ‘Chapter 28 Cultural Heritage: Economic Analysis and Public Policy’. Handbook of the economics of art and culture, pp.983–1016. Available at: https://doi.org/10.1016/S1574-0676(06)01028-3 (Accessed: 28.10.23)
  10. The National Lottery Heritage Fund. (2013) ‘New ideas need old buildings’. Available at: https://www.heritagefund.org.uk/about/insight/research/new-ideas-need-old-buildings (Accessed: 25.10.23]
  11. Throsby, D. (1999) ‘Cultural Capital’. Available at: https://doi.org/10.1023/A:1007543313370 (Accessed: 20.10.23)
  12. Cerisola, S. (2024) 'Multidimensional creativity as a mediator between cultural heritage and regional economic development in England'. Available at: https://historicengland.org.uk/content/docs/research/cultural-heritage-development-through-creativity/ (Accessed: 16.08.24)

Also of interest

Culture and Heritage Capital
Place Development
The Economic Value of the Heritage Sector