Creative Clusters – Urban Utopia or Regional Remedy?: A Nordic perspective on the role of the creative industries in regional development

The creative industries receive increased attention – including in peripheral areas – as municipalities, investors, and people who work in these industries hope that it will boost their region. Recently, a group of people from the creative industries in northern Norway and the University of Tromsø wrote a piece with the title Creative Industries Create a Unique and Sustainable North.

All translations are by the author.

However, is the concept of a regional creative cluster becoming a doctrine that is frequently repeated, but rarely examined? Porter (2000) defines a cluster as a geographic concentration of interconnected companies, highly specialised skills and knowledge, institutions, rivals, related businesses, and sophisticated customers in a particular nation or region. Although there is increased interest from policymakers and researchers in the creative industries, there is little research and knowledge on specific contexts and empirical insights into the specificities of the many different categories that in sum are called the creative industries (Boix Domenech et al., 2011).

Film production is one of these categories, and I use regional film production in Norway as an example in this article when discussing the relevance of film as a regional development tool. Regional film production in Norway relies on public funding, and policy development therefore has a major impact on its very existence. It is a political goal in Norway to keep a scattered population pattern, and it is therefore important to address the creative industries and their relevance in a regional context.

In the following, I introduce the creative industries discourse in an international context and present how regional film funding has developed in the Nordic countries. Then, I explain my methodological approach and empirical sources, followed by a discussion of Norwegian regional film policy in relation to regional development and clusters. I conclude by addressing problematic aspects regarding the creative industries discourse in a regional, Norwegian context.

Interest in the creative industries has grown, and numerous studies have discussed the creative industries as a concept, and in relation to economic growth, innovation, and development (Flew & Cunningham, 2010; Garnham, 2005; Hartley, 2005; Innocenti & Lazzeretti, 2019). The creative industries are at the centre of a multidisciplinary scientific debate that ranges across areas such as the economy of culture, local development, creativity, and innovation (Lazzeretti, 2013).

After a period of deindustrialisation in the 1980s, the cultural industries came to represent a new source of employment in Europe. New Labour in Britain introduced the term creative industries after its election victory in 1997. The definition was broad and encompassed, for example, architecture, advertising, fashion design, television, crafts, and film. The British government defined creative industries as “those activities which have their origin in individual creativity, skill and talent, and which have the potential for job creation through the generation and exploitation of intellectual property” (DCMS, 1998). Creative industries-policy meant bringing the creative arts into an economic policy agenda. The term was regarded as a “unifying” and “democratising” notion because it bridges the divide between “high” and “low” culture (Galloway & Dunlop, 2006).

Researchers have criticised the implementation of the creative-industries policy on the regional level in the UK. Jayne (2005) argues it lacked strategic planning, best-practice models, and empirical research to guide the policymakers. Oakley (2004: 68) argues that there is a gap between the rhetoric and the almost non-existent evidence base that supports these policies; for instance, the Labour government has been criticised for its unrealistic expectations regarding the British film industry as a provider of employment opportunities and knowledge-based jobs. According to Newsinger (2012), the introduction of the creative industries policies in the English regions have resulted in an audiovisual policy being determined by the needs of commercial interests, up to the point where regional cultural policy is virtually indistinguishable from economic policy.

As part of the process of regional renewal, the creative industries concept has also been adapted in Norway (Dahlström et al., 2005; Gran et al., 2015; Haraldsen et al., 2008). In 2001, the Ministry of Culture and the Ministry of Trade and Industry (2001) released a report focusing on the interaction between culture and business, describing it as a “tango for two”. It clearly indicates a new commitment on the business aspect of culture, and it discusses how culture-based businesses might contribute to regional development, including place promotion, tourism, branding, innovation, and job creation.

In Norway, the concept of kulturnæring [cultural business] emerged in 2004 in the first report that mapped culture-related business in Norway (Haraldsen & Flygind, 2004). An updated report followed in 2008, which describes cultural businesses as those “that produce commercialized cultural expressions that communicate through aesthetic symbols, sign, images, movements, forms, sounds, and stories” (Haraldsen et al., 2008: 16). The Norwegian definition of a cultural business is, like the British definition, very broad and encompasses architecture, cultural heritage, design, music, television and radio, artistic business, print media, market communication, and film, video, and photography (Haraldsen et al., 2008: 23). It is clearly inspired by the definition of the creative industries introduced by the British government in 1997. Norwegian policy tends to follow European policymaking trends (Pinheiro & Hauge, 2014: 90).

In 2005, the Ministry of Culture and Church Affairs (2005) announced a new policy labelled Kultur og næring [Culture and business]. The goal was to explore how cultural businesses could contribute to innovation and economic growth, particularly in the regions. Promoting the business aspect of culture is now a clearly stated policy goal. As Pinheiro and Hauge (2014: 87) note, “commercial intentions have become an accepted (legitimate) policy objective also when using the creative industry discourse to promote regional development”. Examples of this development are reports trying to measure creative industries and economic impact, for instance how film production can have local-economic effects (Gran et al., 2015; Stene et al., 2013).

In 2005, the report Film and Regional Development in the Nordic Countries was published. It was carried out by Nordregio, a Nordic and European research centre for regional development and planning, in cooperation with the Swedish Film Institute. The report shows that the economic aspects of regional film production is what motivates local and regional funding, especially the power of improving employment prospects (Dahlström et al., 2005).

Film i Väst was the first regional film fund in the Nordic countries, and it was founded in 1992 in western Sweden. The county council initiated the fund, and the goal was to encourage professional film and media production and contribute to revitalising the area, which struggled with unemployment, economic distress, and post-industrial decline (Hedling, 2012). Film i Väst, since its beginning, has had remarkable success and has attracted numerous international directors and actors (hence its nickname, Trollywood). In contrast to the regional film funds in the neighbouring countries, Film i Väst has changed the geography of film production in its home country. During the second part of the 1990s, film production has decentralised into the three regional film production centres in northern (Filmpool Nord), southern (Film i Skåne), and (especially) western Sweden (Film i Väst) (Dahlström & Hermelin, 2007). The capital Stockholm received a regional film fund in 2007.

Finland followed seven years after Sweden with the establishment of the Northern Film and Media Foundation (POEM), an audiovisual production resource centre that aims to promote and develop the audiovisual culture and industry in northern Finland (Lähteenmäki-Smith, 2005: 132). In 2013, POEM's project portfolio was transferred to BusinessOulu, a public utility of the City of Oulu, which is responsible for implementing the city's industry and employment policies. Norway's first regional film fund, Film 3, was established in Lillehammer in 2001. Inspired by Film i Väst, local investors and authorities established Film 3 in an area where the film business was almost non-existent, hoping it would boost the area (Sand, 2016). There are now three regional film funds in Norway. The first regional film fund in Denmark, Den Vestdanske Filmpulje (DVF), was also inspired by Film i Väst and was established in Aarhus, Jutland, in 2002. Its intention is to strengthen the local film industry and increase the number of productions. Like regional film industries in the other Nordic countries, Aarhus struggles with keeping their talents, who tend to relocate to the capital area where there are more working opportunities (Chow & Sand, forthcoming). Denmark now also has regional film funds called FilmFyn and Copenhagen Film Fund.

To secure activity in the region, regional film funds operate with territorialisation clauses. These clauses may vary from fund to fund, but usually include one or more of the following: the production must be located in the area; the producer must have an office there; a certain amount of the employees must be locals; and the production company should spend a certain percentage of the regional investment in the vicinities. These clauses are meant to secure development in the area, including money spent and work opportunities for local film workers.

Iceland is an exception to the other Nordic countries. Due to its small size, it is difficult to concentrate film production to any particular region (Skúladóttir, 2005: 181). However, Iceland has offered a tax rebate since 1999. The tax incentive is now 25 per cent, which means that film productions are eligible for a 25 per cent reimbursement on production costs. Foreign film productions take place on various locations and represent working opportunities for the local film workers (Skúladóttir, 2005: 188). Iceland is now a popular destination for film tourism, especially because some of the scenes in the fantasy television series Game of Thrones were shot on the island. Today, both Finland and Norway have incentive arrangements, but Denmark and Sweden still do not have a national government-funded film and television filming incentive. However, Film i Väst announced a pilot production tax-rebate programme in 2019, financed by the region.

I have analysed the two latest Norwegian film policy documents (Ministry of Culture, 2007, 2015) to see how these texts address regional film. I have focused on how the government views regional film production as a contributor to regional development. Thematically, I have focused on parts in the documents that address regional film, and especially economic motives for supporting regional film. What are the goals that the government wants to achieve regarding regional film? It was White Paper no. 22, Veiviseren (the Pathfinder, inspired by the Sámi-Norwegian Oscar-nominated film with the same name), which introduced the government's support and financial commitment to regional film production in 2007. An entire chapter was dedicated to “Filmsatsing i hele landet” [“Film initiatives throughout the country”].

The Labour Party formalised the state's involvement in regional film, but the latest film policy, En framtidsrettet filmpolitikk [A forward-thinking film policy] was introduced by the Conservatives and Progress Party in 2015. This document has a stronger focus on regional film, and I compare the two documents to see how this political shift has affected film policy.

To contextualise and interpret how these two policies address regional film, eight reports on the creative industries and film production, and two policy documents on creative industries, are additional sources. Together with the two film policy documents, reading these documents contributes to identifying prominent themes, concepts, and interrelated ideas, allowing for an examination of meaning. The reports contribute with knowledge that informs policymakers, researchers, and people in the industry. In Norway, reports from the research company Ideas2evidence have clearly influenced national and regional film policies. The reports on regional film funds in Norway (Ryssevik & Vaage, 2011) and the economy and cash flow in the national film industry (Ryssevik et al., 2014) are especially important. For instance, the latest film policy shows that the government has followed many of the recommendations from these reports. Furthermore, film reports trying to measure economic results may have a great impact on local and national authorities’ interest in film, including the willingness to contribute financially.

Already in 2001, local investors and politicians initiated the first Norwegian regional film fund, Film 3, in a region that struggled with creating new working opportunities after the Olympics in 1994. However, Lillehammer was home to the national film school and therefore had some expertise on film and television. Oppland county supported the fund financially, based on positive results from Film i Väst. The county hoped Film 3 would result in new working opportunities and branding of the region, but also a spill-over effect on other creative environments (Kongsrud, 2013). In 2005 and 2006, four new regional film funds were established, all of them a result of local initiatives: FilmCamp in Troms county, northern Norway (2005); Filmkraft in the south-west (2006); Midtnorsk filmfond (2006) in mid-Norway; and FUZZ in western Norway (2006). In 2012, Filmfond Nord was established, covering the three northernmost counties. In 2007, the regional film funds were implemented in Norwegian film policy as a pilot arrangement, when the Labour Party introduced its new and ambitious film policy. The regional film funds would contribute with new and fresh capital, since they had to equally match the funding from the state. This arrangement furthered interest in regional development and the economic benefits of film production (Ministry of Culture, 2007; Sand, 2017).

In 2011, the company Ideas2evidence evaluated the regional funds on behalf of the Ministry of Culture. The report concluded that the funds had contributed with more money to the film industry and strengthened the local film businesses, but they had not challenged Oslo's position within the industry (Ryssevik & Vaage, 2011). In 2013, the Conservatives and the Progress Party formed a new government and, based on the positive results from the report, made the regional funds into a permanent arrangement.

The new 2015 film policy represents a much stronger emphasis on regions than the previous policy, but it also shows some fundamental changes (Ministry of Culture, 2015). The government demanded that the number of funds should be reduced from six to three. This was based on recommendations from the Ideas2evidence’ report, which underlined that the regional film business was small and fragmented and that clustering in certain areas was necessary. This change could also be seen as in line with the government's other regional political ambition – a debated regional reform which involved reducing the number of counties from 19 to 11. It was approved by Parliament in 2014. An important argument was to create more economy of scale, which is also a rationale behind having fewer film funds. The allocation of funding from the state changed from being democratically divided between the funds, to rewarding those who had more activity and better economic results. The new film policy represents a stronger commitment to regional funds, but also reveals a centralisation within the regions. Secondly, it shows that the business aspect of film has become increasingly important.

As in the other Nordic countries, the rationale behind local and regional authorities and private investors’ interest and support of Norwegian regional film is mostly economic. In addition to supporting the regional film funds, regional counties have established two film commissions in Norway: Western Norway Film Commission in the west and Nordnorsk filmkommisjon in the north. Both aim to lure productions to the area, hoping for film-induced tourism and working opportunities for local film workers.

In the Nordic countries, there have been several attempts to create film tourism and measure its impact. Wallanderland in Ystad, a small town in southern Sweden, is an example of how film tourism can develop around an author like Henning Mankell and his books and films about Inspector Kurt Wallander (Sjöholm, 2013). From 2004 to 2008, the financial gains from tourism in Ystad increased 10 per cent per annum (Hedling, 2010). In Aarhus, Jutland, the Danish crime series Dicte (2013–2016) is a result of close collaboration between the municipality of Aarhus, the broadcaster TV 2, the local film commissioner DVF, and the production company Miso Film, which had “strategic intentions of promoting Aarhus as the regional centre for media production, a metropolis in itself and a tourist attraction” (Hansen & Waade, 2017: 140). According to a report from Edmund Consulting (2016), initiated by DVF, the third season of Dicte has generated DKK 137.5 million (including branding, commercial value, public relations value, and local spending). However, many of the reports trying to measure the impact of film are initiated by regional film funds. It is not in the interest of the film business to search for negative aspects, and positive results may affect allocation of public funding and film policy development.

Norway has, so far, no success story to tell regarding film tourism, but the interest is definitely there. A report from 2016, initiated by Kunnskapsverket (a national centre for cultural industries), emphasises that film can result in considerable value creation, also in smaller cities, if film production is exploited commercially (Opdal et al., 2016). The report emphasises how film can be an instrument for achieving non-cultural objectives, and focuses on how Norwegian film production can learn from Disney, which has managed to commercialise film and create spin-off products such as theme parks, clothes, and toys. However, the report only emphasises what are described as opportunities, based on extreme examples such as Star Wars, while it does not discuss whether a huge mass media and entertainment conglomerate like Disney is a relevant example in a Norwegian, regional context.

Although the report on regional film funds in Norway reveals that these funds have boosted local film production, the report and the latest film policy underline that too much regionalisation is not sustainable (Ryssevik & Vaage, 2011). It is argued that the film industry in Norway is small, and that it is necessary with a certain amount of infrastructure, companies, and competence. In other words, the issue of size and cluster is important. In 2014, the Conservatives and Progress Party government initiated a report on the national film industry, and the goal was to uncover the cash flow and economic situation. The report emphasised the importance of critical mass – there has to be a certain amount of companies for the industry as a whole to thrive (Ryssevik et al., 2014). Like the report from 2011, this report states that neither the domestic film market nor the amount of public funding is sufficient to develop sustainable film businesses all over the country. Therefore, the report concludes, the government should prioritise those regions with the biggest film businesses and the greatest production activity.

To secure enduring clusters, several researchers argue that size is important: sufficient critical mass of skilled people; a certain amount of people and companies that work in related businesses; a steady flow of productions; and recycling of surpluses because of commercial success (Bondebjerg & Redvall, 2011; Turok, 2003). Many studies show that the creative industries, including film and television production, tend to cluster in cities and urban areas (Hutton, 2015; Scott, 2019; Turok, 2003). Michael Porter (2000) argues that geographic proximity allows for advantages like access to other companies and competent people, network building, exchange of information, and powerful incentives. However, Porter is vague on the issue of scale; his notion of cluster ranges from a small area to a city, or nation. His focus is on the firm and its ability to be competitive, but his analysis “is less helpful for a public agency concerned with an industrial system” (Pratt, 2004: 53).

Skoglund and Jonsson (2012) argue that the cultural and creative industries can be a strong contributor to employment and business activity in remote regions. According to their article, these industries contribute over 8 per cent of the county's gross regional product in the small county of Jämtland in northern Sweden. However, it is difficult to say how much the film business contributes, as it is one of fifteen subcategories. In a study of the cultural industries’ contribution to Scandinavian economies and labour markets, Dominic Power (2003) argues that the cultural industries have become an important contributor to the economy, regional development, trade, and consumption activity. This study also involves fifteen categories, and it highlights general patterns rather than specific details by category. It is problematic that studies fail to account for the fact that creative industries exist within specific and different contexts. For instance, the film business is project based and many film workers live in big cities, but relocate during project periods (Dahlström & Hermelin, 2007).

Although Norwegian film policy aims to promote film production outside the capital Oslo, hoping it can be a vehicle for growth in peripheral areas, it simultaneously shows a commitment to regional centralisation and clusters. The latest film policy states that the government wants “regional power centres” that can be a “real counterweight” to the dominant film industry in Oslo (Ministry of Culture, 2015: section 2.4, para. 5), but it doesn’t elaborate on what this means. Research on clusters often emphasise big cities as a precondition for the creative industries to thrive, and Norwegian film policies reveal how definitions of size, or critical mass, are unclear. Size is an important context-based factor in the Norwegian film industry, since it is largely concentrated in the capital area and because the country has a scattered population pattern. So far, none of the regions outside of Oslo have changed the strong centralisation of the film industry.

Many of the regional film companies in Norway have few employees, and the owners are often involved in everything from management and marketing to creative processes. Research addressing film production in big cities and studies of large media conglomerates like Disney are therefore not necessarily transferable to a regional and Norwegian context. Film production in Norway is largely subsidised, and public funding plays an important role. There is a risk of policymaking that fails to account not only for the differences within the creative industries, but also for the local and national specificities of these industries, a situation that may result in unrealistic expectations not only for policymakers, investors, and local authorities, but also for the industry itself.