Professional Documents
Culture Documents
Suciu 2018
Suciu 2018
Abstract Intellectual capital (IC) and the creative-economy (CE) are topics of great
interest to the people professionally concerned with the future of the world in the
context of the challenges induced by the fourth industrial revolution. One of the
biggest challenges of our modern society is to address the differences in competi-
tiveness and economic performances among different countries and regions based on
core principles for a smart, sustainable and inclusive development. The main goal of
this chapter is to highlight the importance of a new way of thinking based on a
modern theoretical and strategic-operational framework dedicated to the analyze of
the key role of intellectual capital and creative economy as drivers for a knowledge
and innovation-based society. Some of the new international benchmarking methods
will be also taken into account, like the Beyond GDP metrics, Global Creativity
Index or Happy Planet Index. We will also look on some regional benchmarking
methods such as the European Innovation Scoreboard released in 2016 and the
Cultural and Creative Cities Monitor 2017. We consider that also the locally and
regional focus developed strategies have to be design such as to enhance intellectual
capital and creative economy. One specific objective of our chapter is to identify
which of the new benchmarking methods may mostly help policy-makers to orient
countries and regions’ efforts towards focusing on competitiveness and sustainabil-
ity. This will mean not only to improve the underperforming areas, but also to
explore the specific opportunities in order to establish and develop, mostly based on
a medium and long-run perspective, effective and efficient smart, creative and
innovative sustainable communities.
5.1 Introduction
Within the last decades, intangible assets in general and intellectual capital (IC),
knowledge and creativity in particular, have been acknowledged by international
experts as being important drivers of a smart, sustainable and inclusive economic
and social development. This is mostly due to the increasing contribution of intan-
gible assets for potential economic growth and development, as main ingredients
with an amplified role in the context of the digital era. During history of economic
thought economists used to think about national wealth in terms of the contribution
of traditional factors of production such as land, natural resources and capital
(Akpinar & Akdemir, 1999). In fact, IC, knowledge and creativity have always
been drivers of a smart, sustainable and inclusive economic and social development.
In today’s world based more and more on knowledge and innovation, intangible
assets are making the difference in how people choose to make use of their resources,
with an important focus on the contribution of intangible assets considered to have a
crucial and strategic role for a long run sustainable competitive advantage and thus
for a smart and sustainable development. One of the most important key factors of
competitiveness are intellectual capital (IC) and the use of the creative and innova-
tive potential of people and local communities as a prerequisite for a long run smart,
sustainable and inclusive development. This suggests a turning point in economics
from an exogenous based competitive advantage based mostly on tangible assets
and traditional factors of production towards an endogenous based competitive
advantage based mostly on intangible assets and on people core competence.
Smart, sustainable and inclusive development is considered one of the most
important challenges of our world and some authors (Zgrzywa-Ziemak, 2017) con-
sider that we need to face it in order to solve more complex issues such as poverty,
migration and pollution. Smart, sustainable and inclusive development should also be
considered from a human-centered perspective that would more focus on how we have
to orient and target our efforts towards creating a more equitable, clean and prosperous
world (Hopwood, Mellor, & O’Brien, 2005). At the core of fulfillment these kinds of
objectives we have to take into account people ability to use intellectual capital and
creativity in order to generate creative and innovative ideas and solutions that would
be than used in order to solve urgent and pressing matters.
Even for some people it might sound counter-intuitive, intellectual capital is not
necessary an attribute of only the dot com new economy. Intellectual capital has
always been a consistent and reliable source of wealth, prosperity and wellbeing.
The term seems to be initially used in 1961, but even so, if we look for a broader
sense of human resources, we may go back in the second part of the eighteenth
century, with Adam Smith acknowledging the human resource as a fourth produc-
tion factor (Becker, 2008; Smith, 1990). Now the meaning of intangible assets such
as intellectual capital, knowledge, creativity and innovation is tightly connected to
the new approaches regarding the modern perspective about long run competitive-
ness, progress, smart and sustainable development.
5 Intellectual Capital and Creative Economy as Key Drivers for. . . 69
Intellectual capital (IC) is indeed taking into account both individual people, and
group of people that interact within organizations and/or on the level of local
communities. Some authors consider also that we should rather focus on a more
individual-focus approach of intellectual capital, and not on the mezzo and macro-
levels of research and studies dedicated to IC. Actually, all the levels of real
economy (micro, mezzo, macro) are highly interconnected and there is a sort of
interdependency and synergic snow ball complex effect generating medium and long
run interactions and relations between all of these levels mostly concerning more
sensitive issues such as those concerning intangible assets. Someone may consider
also that by trying to develop models of estimating the contribution of IC, creativity
and innovation might be tricky, since intangible assets do not follow the traditional
rules of economics. Now the majority of economists recognize that, in order to better
understand different economic development patterns, then it would be a mistake to
rely only on the physical capital and not to go into a more deep analyze by trying to
assess how, why and when do people become creative enough such as to become
able and competent to face the challenges of transforming knowledge, IC and
creativity & innovation into key competitiveness factors that generate value added,
as a prerequisite of medium and long-term growth and development.
One of the issues we need to deal with is related to defining both intellectual capital
(IC) and the creative economy (CE), and to assess their impact on a smart, sustain-
able and inclusive development. In order to be able to evaluate and assess this
impact, one should be able to explain also the main characteristics and attributes
70 M.-C. Suciu and D.-F. Năsulea
of these concepts. As it happens in most new research fields, there are no singular
and universally accepted definitions for both IC and CE. This is not even advisable
since our target is more complex and goes beyond traditional definitions of concepts.
We are instead looking much more for identifying new horizons of knowledge and
discovery that should to be better explored by open-minded people who use to think
out of the box in order to better prepare the road for a smart, sustainable and
inclusive development.
One of the main challenging issues refer to better clarify the interactions between
these two concepts (IC and CE) and to identify the way in which these differ from
other concepts and approaches such as those dealing with intangible assets or
intellectual property (Chartered Institute of Management Accountant—CIMA,
2001).
IC is a complex concept that can be treated in a wide and broader sense which
usually includes three different types of capital: human capital, relational capital
and structural capital (CIMA, 2001).
• Human Capital refers to the knowledge, skills, experience, intuition and attitudes
of people within an organization (CIMA, 2001). It is mostly used by the organi-
zational theory in order to explain the key role of core capabilities of the people
who interact within a company in order to find the most valuable solutions for
solving problems and for obtaining, preserving and developing a long-run com-
petitive advantage. This kind of approach should be useful in the case of
knowledge-based organizations and mostly for learning organizations and for
their employees.
• Relational Capital illustrates the part of intellectual capital that is involved within
the company’s external relations (mostly those developed with stakeholders or
customers).
• Structural capital takes into account an organization’s strategies and policies with
a special focus on the intrinsic knowledge that usually remains within the firm.
Following these main ingredients of IC, Marr and Schiuma define IC as (Marr &
Schiuma, 2001):
The group of knowledge assets that are attributed to an organization and most significantly
contribute to an improved competitive position of this organization by adding value to
defined key stakeholders.
John Howkins had promoted the term in his famous bestseller book The Creative
Economy: How People Make Money from Ideas, where he defined it as (Howkins,
2013):
the transactions of creative products that have an economic good or service that results from
creativity and has economic value.
At the core of the creative economy we encounter the concept of creativity, a term
adopted by a wide range of social sciences and developed by Richard Florida as the
base-foundation of the newly concept of creative class (Florida, 2002). We consider
that creativity can be better understood in connection with the broader concept of
IC. Creativity is one of the most important human characteristics that refers to the
individual’s ability to use their knowledge and skills not only in order to generate,
but also to better manage and develop ideas and solutions that have an economic
value per se and that can be afterwards transformed into assets that bring additional
value for both individuals, organizations and local communities where these people
interact and communicate. As one of the pioneer of these new approaches in
economics, J. K. Galbraith has suggested in 1969 that intellectual capital would be
more accurately translated mostly as an intellectual action more than knowledge or
pure intellect (Galbraith, 1969). From this point of view, creativity performs in a
similar way, and on this basis we can estimate its contribution when it produces
outcomes evaluated mostly based on medium and long run performance. Part of
these performances can be identified based on different benchmarking methods used
in order to evaluate and rank countries and/or regions based on their competitive-
ness. As interesting as it might be, the creative potential that lies within any
individual person has yet to be better understood and analyzed.
Moving to the concept of sustainable development, one of the most spread
definitions was issued by the Brundtland Commission (WCED, 1987) and refers to:
The ability to make development sustainable—to ensure that it meets the needs of the present
without compromising the ability of future generations to meet their own needs.
Later on, the U.S National Research Council (USNRC) has clarified a bit more the
general directions of sustainable development, by identifying three of the major
categories of what needs to be sustained: nature, life support and community, and
three mostly important ideas concerning what has to be further developed: people,
economy and society (USNRC, 1999). These directions imply institutional efforts,
corporate responsibility but also individuals’ involvement, as transformation is a
continuing battle on all fronts. We believe intellectual capital is one important link
between what needs to be supported and what needs to be mostly developed such as
to fulfill the sustainable development goals. For these processes to happen simulta-
neously, human creativity potential have to be used and explored because making
the creative potential to manifest and to find creative and innovative solutions can
contribute a lot for a long run smart, sustainable and creative development both on
micro, mezzo and macro levels.
72 M.-C. Suciu and D.-F. Năsulea
Social and economic activities had always relied on both tangible and intangible
assets, such as knowledge, IC and creativity, in order to generate value and to
increase performance traditionally evaluated based on short run profits.
The success of a company depends also on its performance regarding the complex
process of managing resources, regardless of their nature (tangible and/or intangi-
ble). In the beginning, business relied mostly on tangible assets with intangible
assets representing only about 20% (Craciun & Scriosteanu, 2008). By 1999, about
80% of the assets belonging to most organizations were of intangible nature and
today, companies like Google or Microsoft rely almost completely on non-physical
and intangible assets.
Knowledge, creativity and innovation became the main drivers of social and
economic development, enhancing the role of intellectual capital in generating
sustainable growth and development (Cabrita & Cabrita, 2010). With the develop-
ment of the cultural and creative-economy, researchers have realized that at the
interface between culture, economics, technology and creativity we also find intel-
lectual capital (UNCTAD, 2008). IC is therefore mostly valued and intensively used
in the context of the CE because it has a high potential to generate value added and
income, but also to create new jobs and to contribute to the increase of living-
standards and quality of life.
In order to better understand the connection between IC, CE, and sustainable
development we consider it is necessary to rethink the traditional structure of IC
presented briefly within the previous section. Scholars have developed broader and
holistic approaches that highlight the important role of cultural-creative industries in
nourishing the revitalization of IC and CE, by taking into account the diversity of
countries and regions (Cabrita & Cabrita, 2010).
We suggest as one possible way to approach IC in the framework of a creative
economy and knowledge & innovation-based society is to identify the connections
between CE and IC. To better understand the interplay between IC and CE we use
the IC model developed by Edvinsson and Malone (Edvinsson & Malone, 1997).
Figure 5.1 shows how different types of intellectual capital are interacting by
supporting the development of human, relational and organizational capital.
We consider that creativity and innovation can be seen as the bridge that links
innovation capital, process capital to the social capital. If innovation and social
capital can be applied to the way organizations/cities/people adapt and renew their
human, relational and organizational capital (Wibowo, 2016) so they can develop in
accordance with the challenges that arise and amplify in the context of the knowl-
edge, innovative and digital contemporary era. Therefore, we have added the
connection between creative-economy (CE) and the IC Model. We believe that
cultural-creative industries allow intellectual capital to foster the positive outcomes
expected to be obtained and developed in the context a sustainable development
5 Intellectual Capital and Creative Economy as Key Drivers for. . . 73
Fig. 5.1 A possible model for illustrating the connection between IC and CE [Authors adaptation
based on Edvinsson and Malone (1997)]
driven based on knowledge & innovation. Furthermore, we believe that both IC &
CE could work together developing further the framework designed to a better
understand the key driven factors and resources that support a long-run sustainable
and inclusive development. In a knowledge-and innovation driven economy, where
we have to face also some “cultural difference” and diversity (UNESCO, 2015), we
consider that, by developing new creative and innovative industries, based mostly on
intangible assets such as intellectual capital we may assure a broader and solid
foundation for a sustainable development that joins and explores the multiple
interconnections between the social, cultural and environmental dimensions of
development (Faucheux, 2010). The goal of sustainable development and its nor-
mative directions is to guide the use of creative economy and intellectual capital in
order to find the best efficient and effective solutions for some complex issues such
as energy, climate change, pollution, migration, ecosystem resilience, food security
and many others that require a cross disciplinary. In order to assure the best use of
intellectual capital and creative economy, and also to enhance the high potential for
competitiveness & sustainability, we have to apply the principles of the culture of
excellence.
The culture of excellence is based on dialogue and cooperation between policy
makers interacting at all the levels of economic activities (microeconomics, local,
national and international levels). A highly core competences set have to be applied
in order to assure and support the efficient and effective implementation of the mix of
socio-cultural, economic and environment policies at all the levels of economic
activities.
74 M.-C. Suciu and D.-F. Năsulea
IC and CE seem to be considered by many people as quite abstract concepts that are
difficult to be applied concretely and operationalized regardless of the proper
organizational form where we focus our analyze. Estimating the intellectual capital
contribution on the national level requires the identification of a set of variables that
can help discovering the so called invisible wealth of a country (Bontis, 2004). In the
following sections we will focus especially on estimating the contribution of crea-
tivity based on its interaction with IC in the broader framework of a smart, sustain-
able and inclusive development. For this purpose it is not necessarily to take into
account all the variables that make up IC.
A great part of the academic literature dedicated to the IC theory deals with
measuring variables from a financial perspective, concentrating on firms and orga-
nizations (Bontis, Dragonetti, & Jacobsen, 1999). More recently, theorists have
expanded the initial models to include also the national perspective (Bontis, 2004).
Bontis (2004) argues that
The expectation from finding reliable measures of knowledge assets is that such measures
can help governments better manage the intangible resources that increasingly determine the
success of their economies.
We would also add that these estimations can first of all help both governments
and citizens to better understand how they can be ranked and compared to other
nations. Afterwards, we can estimate if public policies in the field of IC and CE
actually contribute to the improvement of the living standards or not. Sustainable
development requires a strong social partnership between private and public insti-
tutions, and individuals. The most important results of these kinds of partnerships
have to be seen within the broader framework of development according to the long-
term strategies and policies that might improve people wellbeing and the sustainable
development (considered from a social, economic and environmental point of view).
All these approaches can be supported both on the local and national level. We
believe that intellectual capital and the creative economy are important steps towards
achieving the sustainable development goals. It is also important to highlight that the
ideas developed within the knowledge & innovative based economy have the ability
to find appropriate responses to complex social-cultural and economic issues.
UNESCO experts have addressed the idea of culture as one of the key part of
sustainable development (UNESCO, 2012). From their perspective, IC, knowledge-
and know-how as main components of the creative economy, can become important
assets for promoting values and wealth through dialogue, but also by supporting
autonomy and critical thinking. In order to assure the best prerequisites for a smart,
sustainable and inclusive development, mostly developing countries should benefit
from their rich cultural heritage and great people’s core competences and creative &
innovative potential by better use the potential of cultural-creative industries in order
to enhance social inclusiveness, innovation and entrepreneurship (UNESCO, 2012).
5 Intellectual Capital and Creative Economy as Key Drivers for. . . 75
Creativity & innovation are important prerequisite of culture and they have the
advantage of being a transversal asset that impacts all the issues of development
considered from a broader perspective by taking into account the complex interac-
tions between the economic, socio-cultural and environmental dimensions of devel-
opment. UNESCO (2012) suggests the way towards sustainable development should
foresee the integration of culture and creativity into the complex issues regarding the
decision-making process, in order to assure the capitalization of the cultural-creative
sector’s input and their importance for the socio-cultural, economic and environ-
mental point of view that highly contributes to a smart and sustainable development
and to the reduction of poverty. Based on the use of local knowledge, creativity and
technology experts from different scientific disciplines consider that, in order to
attain a multidimensional sustainability (based on its economic, socio-cultural and
environmental dimensions) we have to use also culture as an important promotor of
social cohesion.
One of the biggest challenges is to address the differences in competitiveness and
economic performances among the countries and regions of the world, but also to
keep in mind the broader goals of sustainable development. However, in order to
design a model on the bases of which we can estimate IC contribution for develop-
ment, it requires that we first assess the component parts and next to determine which
of the variables have a higher impact on the economic, socio-cultural and environ-
ment dimension of development with a corresponding projection on long-run sus-
tainability. In the following part of this chapter we will analyze different
benchmarking methods that try to address the so called invisible wealth issue in a
non-conventional manner.
methodologies that may highlight better the foundation for assessing the importance
of IC and CE to a smart, sustainable and inclusive development.
Beyond GDP is an initiative of the European Union and its purpose is to develop
indicators “as clear and appealing as GDP, but more inclusive of environmental and
social aspects of progress” (European Commission, 2017a). Today’s understanding
is that GDP, the most important variable in measuring the health of a country’s
economy, cannot necessarily grasp the wellbeing of a nation nor the sustainability of
the existing set of socio, economic and environment dedicated policies.
The indicators suggested by the initiative are grouped into five main categories
comprising 41 indicators developed by different private organizations and govern-
mental agencies. Pioneers in this search for new ways of capturing prosperity,
wellbeing and wealth are countries such as the United Kingdom, Belgium,
Australia or Canada, who have already developed frameworks for new measure-
ments. Beyond GDP indicators can be used by the political actors to adopt new
approaches of managing resources (Demailly & Chancel, 2015) directed towards a
smart, sustainable and inclusive development. However, it is not enough to develop
new indicators as it is to use them effectively and efficiently such as to favour their
integration into political initiatives, no matter the several obstacles that we may have
to face. But in order to facilitate this complex and dynamic process, sound method-
ologies have to be created.
Since ancient times, Aristotle (The Politics, n.d.) expressed humanity’s purpose
as:
. . . to consider what form of political community is best of all for those who are most able to
realize their ideal of life.
measures the extent to which countries deliver long, happy and sustainable lives for the
people that live in them.
HPI is based on three core indicators, as following (Happy Planet Index, 2016).
The Social Progress Index (SPI) is also part of the broader international “Beyond
GDP” international movement towards new benchmarking methodologies to better
estimate competitiveness and sustainable development. SPI measures the social and
environmental elements of countries performances. SPI is based on a three dimen-
sions framework that includes 50 indicators regarding:
• Basic Human Needs (Nutrition and Basic Medical Care, Water and Sanitation,
Shelter, Personal Safety)
• Foundation of Wellbeing (Access to Basic Knowledge, Access to Information
and Communications, Health and Wellness, Environmental Quality)
• Opportunity (Personal Rights, Personal Freedom and Choice, Tolerance and
Inclusion, Access to Advanced Education)
In Table 5.1 we look at the ranking of the top first ten countries according to the
Happy Planet Index (2017), including also Sweden and Australia since these
countries are considered to represent some of the well-developed nations of the
world that had obtained a relatively high quality of life and living standards. We
have also added for comparison the Social Progress Index (2017) as being one of the
most comprehensive measurement tools developed recently. In the same time we
had also included the Corruption Perception Index (Transparency International,
2017) as being one part of the Beyond GDP initiative and one of the most reliable
indicators on which some of the international research are based on.
According to the available data, there is a visible discrepancy between HPI, SPI
and CPI regarding the top different performance of the top ten countries. According
to HPI, the first three countries are: Costa Rica, Mexico and Columbia. These three
countries are ranked very poorly in terms of GDP/capita, and correspondingly to the
Corruption index-they also have a high perception of the corruption level. One of the
biggest challenges these countries are dealing with is related to poverty and disre-
spect regarding basic human needs. As showed in Table 5.1, HPI is somewhat
78
Table 5.1 The performances of top ten countries, plus Sweden and Australia according to the Happy Planet Index (HPI) and their comparative analysis with
other ranking systems based on GDP/capita, Social-Progress Index (SPI) and Corruption Perception Index (CPI) (Authors adaptation using data from Happy
Planet Index, Social Progress Index, Corruption Perception Index)
HPI Average life Average Footprint Inequality of HPI GDP/capita SPI SPI CPI CPI
rank Country expectancy wellbeing (0–10) (GHA/capita) outcomes (%) score (SPPP) score rank score rank
1 Costa Rica 79.1 7.3 2.8 15 44.7 $9733 81.03 28 58 41
2 Mexico 76.4 7.3 2.9 19 40.7 $9703 71.93 48 30 123
3 Colombia 73.7 6.4 1.9 24 40.7 $7885 71.72 49 37 90
4 Vanuatu 71.3 6.5 1.9 22 40.6 $3158 N/A N/A N/A N/A
5 Vietnam 75.5 5.5 1.7 19 40.3 $1755 N/A N/A 33 113
6 Panama 77.2 6.9 2.8 19 39.5 $10,139 74.61 40 38 87
7 Nicaragua 74.3 5.4 1.4 25 38.7 $1780 64.17 81 26 145
8 Bangladesh 70.8 4.7 0.7 27 38.4 $859 54.84 97 26 145
9 Thailand 74.1 6.3 2.7 15 37.3 $5918 68.51 62 35 101
10 Ecuador 75.4 6 2.2 22 37 $5702 69.97 55 31 120
61 Sweden 81.8 7.6 7.3 6 28 $57,134 89.66 8 88 4
105 Australia 82.1 7.2 9.3 8 21.2 $67,646 89.3 9 79 13
M.-C. Suciu and D.-F. Năsulea
5 Intellectual Capital and Creative Economy as Key Drivers for. . . 79
distorted because of the emphasis put on the ecological footprint score which doesn’t
really tells us anything about the wellbeing of a society, since being heavily
industrialized is not incompatible with having non-polluted air or a high standard
of living.
The Global Creativity Index (GCI) was developed by Martin Prosperity Institute
under the main supervision of Richard Florida. GCI aims to offer an alternative
benchmarking for advanced economic growth and prosperity. The fundamental
approach for GCI is the three T’s (Talent, Technology and Tolerance) theory
pioneered by Richard Florida (Florida, Mellander, & King, 2015). The six main
indicators used for GCI are:
• Technology: Global R&D Investment and Global Innovation (World Develop-
ment Indicators—WDI)
• Talent: Global Creative Class (International Labour Organization) and Global
Educational attainment (WDI)
• Tolerance: Global tolerance toward ethnic and racial minorities and Global
tolerance toward gay and lesbian people (World Poll—Gallup Organization)
One interesting fact about GCI is that it also employs five distinguish estimations
of economic and social development measured based on productivity, competitive-
ness, global entrepreneurship, human development, urbanization and income
inequalities. Therefore, GCI becomes more than a measurement of “creativity” as
its name says. CGI is also touching on sustainability, as innovation, creativity and
tolerance are prerequisites for a long-run smart, sustainable and inclusive develop-
ment. For example, one of the indicators used by CGI is the Human Development
Index which is one of the most well-known indicators of evaluating wellbeing of
countries since 1990. However, similarly to the criticism brought to the human
development index (Maccari, 2014), CGI lacks the environmental component, as it
mostly focuses on “the three T”. GCI is nevertheless a step towards creating some
meaningful benchmarking methods.
We consider that a step further would be to include also the environmental
variables as to assure a more holistic vision of sustainability by the interactions of
its multi dimensions perspective (socio-cultural, economic, environment).
GCI is an aggregate indicator based mostly on the use of national statistical data.
The problem is not necessarily GCI’s methodology but the use of indicators based on
national data, although a broader explanation of the reason that lead to the choice of
measurements is also in order. For example, there is a problem with emergent
countries, such as Romania, where the NACE system (Nomenclature des Activités
80 M.-C. Suciu and D.-F. Năsulea
Économiques dans la Communauté Européenne) does not include all the occupa-
tions considered creative in Western countries (INCFC, 2016).
Prepared by Maastrich University under the guidance of the European Commis-
sion, the European Innovation Scoreboard (2017) is an annual publication that
offers a comparative analysis of European countries and neighbouring countries
regarding innovation performance. EIS is based on a four-dimension framework of
measurements split into different indicators regarding:
• Framework Conditions (Human Resources, Attractive research systems,
innovation-friendly environment)
• Investments (Finance and Support, Firm investments)
• Innovation Activities (Innovators, Linkages, Intellect assets)
• Impacts (Employment impacts, Sales impacts, Sales of new-to-market and new-
to-firm product innovations)
What makes EIS a different and more interesting measurement tool is that it is
continuously improving and changing the indicators used according to our more
complex and very dynamic society. For example, the 2017 measurement framework
excluded youth with at least upper secondary education since it was already
measured by another indicator and replaced with the lifelong learning indicators.
Other new indicators the 2017 version includes are broadband penetration,
opportunity-driven entrepreneurship, enterprises providing training to develop
ITC skills of personnel and private co-funding of public R&D expenditures.
Adapting indicators to the real-life changes that happen in both the private and
public environment is a complex task. In order to remain up-to-date and to provide
also a useful measurement tool, we consider that there is a high need to provide
continuity of research in the field. For example, the changes in the open-source
movement mean that intellect assets cannot only be measured through the number of
patent and trade-mark applications. People working in cultural-creative industries
start to offer their products or services for free, as the financing and business models
are also transforming.
The Cultural and Creative Cities Monitor (C3) is another new tool developed by the
European Union, which covers 168 cities from 30 European Countries (EC, 2017b).
CCCM is comprised of 29 indicators that reflect three main categories (EC, 2017b, p. 15):
• Cultural Vibrancy—measuring cultural venues & facilities; cultural participation
& attractiveness
• Creative Economy—measuring the creative & knowledge based jobs; intellectual
property & innovation; new jobs created by the creative sectors
• Enabling Environment—quality of governance; local & international connec-
tions; openness tolerance & trust; human capital & education.
5 Intellectual Capital and Creative Economy as Key Drivers for. . . 81
As stated in the EU Commission’s Report, the C3 index is the result of all the
common efforts of assessing the value of cultural and creative assets at the regional
and local communities level. This task remained quite challenging, considering the
lack of shared definitions or metrics (EC, 2017b, p. 18).
Analyzing why creative people choose to live in certain cities and local commu-
nities requires a broader understanding of those cities from a cross disciplinary
perspective with a high focus on the economic, cultural and social life, as important
prerequisites for sustainable development. Florida (Florida, 2003) believes that cities
are not blessed with certain attributes that make them attractive, but they become so
because of the creative class decision to move to a certain location. Nevertheless,
certain cities have become vibrant and interesting for young creative and talented
people and that is mostly the result of different underlying more complex and
dynamic factors.
C3 is mostly the result of 200 indicators that combine official national and EU
statistics, international university rankings but also data from TripAdvisor or the
Directorate-General for Regional and Urban Policy (EC, 2017b). Adding private,
review-based platforms, such as TripAdvisor is a major step forward in order to
better understand the new challenges the technological digital era is also bringing.
From this perspective, the C3 index becomes a quite interesting benchmarking
method because it looks at cities and local communities from a wide angle.
According to the specific target of one research we can adopt and even simplify
our analyze by focusing on only one issue, so that we can better understand what can
we learn from cities that score better on one of the indicators based on a deeper
analyze of these communities best practices. Furthermore, one of its achievements is
that we do not have to focus necessarily on the rankings, but mostly on the different
factors that might better contribute to developing a city’s ability to produce and
disseminate cultural & creative content (EC, 2017b). It is also important that C3 has
not to be designed as a static indicator. If future developments go further by
incorporating data coming from non-conventional sources, such as AirBnb or
Uber, we consider that the C3 index might even become more accurate in offering
an overview of what can determine cities to become more and more attractive and
accessible.
We consider that, due to a more obvious focus on IC and EC perspectives
regarding a long-run sustainable and smart development, all indexes and
benchmarking methods have and will have to continue to improve and develop.
82 M.-C. Suciu and D.-F. Năsulea
The issue of how to define and quantify creativity’s economic value is a relatively
new topic on the European Union Agenda. Starting with the European Parliament
Resolution on Cultural Industries (European Parliament, 2003) the EU tried to create
5 Intellectual Capital and Creative Economy as Key Drivers for. . . 83
To better understand this new Agenda, different countries and organizations have
taken the lead in developing strategies that promote creativity, diversity and devel-
opment (British Council, 2010). The United Kingdom has definitely been one of the
pioneers in creating and sharing the expertise and knowledge in the IC and CE fields.
Creative Britain, one of the most popular initiatives regarding the creative
economy has its roots in the Secretary’s Chris Smith 1998 book in which he
predicted the economic force and value of cultural-creative industries for United
Kingdom (Smith, 1998).
The British Council is one of the agencies committed to develop the cultural-
creative economy and promote the shared values of diversity, freedom of expression,
84 M.-C. Suciu and D.-F. Năsulea
equity and sustainability. One of their main publications reveals new ways of
quantifying the economic value of CCIs. According to their research, one of the
most useful tools in understanding the creative-economy is mapping, as the creative
sectors based on intellectual capital are non-traditional in the sense that they do not
follow the classifications public institutions usually use (British Council, 2010).
Mapping projects help raising awareness on the economic value of a community,
city, region or country while providing also with the means of planning for future
growth through well-designed policies. Researching a changing sector comes also
with different and complex issues and challenges. For example, the problem with
reliable data that are not yet being available publicly. Therefore, we consider that
more studies and research in this field should include data collection through trade
associations, NGOs, private companies or universities.
It is also important to select the areas of policy interest, as they can be place-
based, national, industrial and innovative policies or related to cultural policy, but
also domains focus policies.
As a part of the EU’s initiatives on promoting the intellectual capital and the creative
economy, we consider that Romania needs also to set up an initiative of developing
strategies adapted to the knowledge and innovative-based economy and society to
contribute to a smart, sustainable and inclusive development (Europe 2020 Strat-
egy). Improvements in this field have been started in the last few years. The main
national actor working on advancing the knowledge in these sectors is the National
Institute for Research and Cultural Formation (The National Institute for Research
and Cultural Formation—NIRCF), subordinated to the Ministry of Culture and
National Identity whose objectives are researching and publishing of statistics
regarding the cultural sector. Furthermore, national agencies dealing with invest-
ments are focusing more and more on collecting and distributing data on cultural-
creative industries, as key strategic investment sectors. For this objective, different
approaches are applied, measuring not only characteristics of the labor market but
also cultural consumption in the form of concerts, festivals and other performances
with a high impact on human development. Besides national and local efforts
targeting the development of a more comprehensive framework for understanding
the importance of cultural and creative industries, the EU is providing with a
multitude of resources meant at discovering new ways of assessing the potential of
innovative sectors, moving from a country-type perspective to a more regional view
on creative cities.
5 Intellectual Capital and Creative Economy as Key Drivers for. . . 85
In the last years, in Romania there are a few studies that are focusing on cities’
cultural vitality, using Richard Florida’s theory of the creative class to create a
national mapping creativity based on five core indicators (Voicu & Dragomir, 2016):
• Cultural Infrastructure—measuring 18 indicators comprising the cultural infra-
structure (libraries, museums, performance institutions, artistic groups, cultural
centers).
• Cultural Participation—cultural consumption measured through the number of
people attending movies, opera performances, music performances, theaters,
museums and cultural centers.
• Budget for Cultural Activities—measuring the funding offered by the local
authorities.
• Specialized Human Resources—for these indicators the authors have collected
data from primary artistic schools, arts high schools and colleges in order to find
out the number of students studying arts, the number of professors teaching such
subjects and the number of young people involved in artistic centers,
• Cultural-creative industries—measuring the number of employees in CCIs, the
income and profit of companies activating in CCIs.
For the 2016 Report, NIRCF (2016) experts computed the cultural vitality index
for four Romanian cities (Voicu & Dragomir, 2016), with a population of more than
50,000 people (excluding Bucharest, as it would have distorted the results, being a
capital city placed highly above other cities by cultural production and
consumption).
Table 5.2 presents the ranking of the first 15 Romanian cities according to their
cultural-vitality performance during the period 2010–2015.
One of the most intriguing results is revealed when analyzing the year-to-year
differences. We should keep in mind that data is aggregated according to the
corresponding population of each city. For example, the same cultural infrastructure
owned by two cities does not generate the same index, since results are divided to
different population. Therefore, the way data is collected can bring some less known
cities in the foreground as illustrated in Table 5.2 (Voicu & Dragomir, 2016).
For some people it may seem intriguing to observe how cities from the Ardeal
(Transilvania) region of Romania occupy the first five positions in the ranking. This
may be the result of having more diverse ethnic groups which bring their own
contribution to the cultural diversity of their cities. This is even more visible when
looking at the participation and cultural consumption ranking (Table 5.3).
Their methodology is very interesting as they have gathered data locally, through
city halls, local associations (The National Cinematography Center for example) and
statistics regarding firms published by an independent, private IT company. Their
results show a quite similar pattern for the first four cities that experience a relatively
high level of stability on the cultural arena on all levels, from the human resources to
people’s involvement in the cultural-creative sectors. The study has also concluded
86 M.-C. Suciu and D.-F. Năsulea
Table 5.2 The ranking of the first 15 cities based on the Cultural Vitality Indexes for 2010–2015
(Voicu & Dragomir, 2016)
Average cultural-
vitality index 2010–
Rank City 2015 2010 2011 2012 2013 2014 2015
1 Cluj- 1.212 1.220 1.2 1.272 1.2 1.219 1.16
Napoca
2 Alba Iulia 1.022 1,332 1.192 1.181 1.374 0.673 0.383
3 Miercurea 0.989 0.980 0.884 0.952 1.123 1.046 0.949
Ciuc
4 Târgu 0.871 0.737 0.821 0.826 0.911 1.062 0.869
Mureș
5 Sibiu 0.854 0.897 0.937 0.957 0.819 0.841 0.673
6 Timișoara 0.616 0.72 0.636 0.583 0.543 0.627 0.585
7 Sfântu 0.491 0.403 0.464 0.442 0.466 0.578 0.596
Gheorghe
8 Târgoviște 0.488 0.475 0.455 0.426 0.442 0.482 0.648
9 Craiova 0.44 0.285 0.244 0.293 0.379 0.686 0.752
10 Botoșani 0.422 0.331 0.451 0.378 0.31 0.603 0.462
11 Iași 0.405 0.522 0.379 0.443 0.322 0.379 0.386
12 Tîrgu Jiu 0.292 0.266 0.232 0.207 0.199 0.412 0.437
13 Satu Mare 0.257 0.176 0.34 0.295 0.158 0.202 0.373
14 Brașov 0.248 0.255 0.229 0.217 0.223 0.188 0.376
15 Bistrița 0.204 0.131 0.044 0.383 0.444 0.246 0.236
Table 5.3 Ranking of the first five cities according to The Cultural Participation Index (Voicu &
Dragomir, 2016)
Rank City Population Cultural Participation Index
1 Cluj-Napoca 321.427 1.042054787
2 Sibiu 169.82 0.957281856
5 Târgu Mureș 151.129 0.663380458
15 Alba Iulia 73.979 0.121638305
17 Miercurea Ciuc 42.359 0.073448155
that some cities experience a form of partial cultural vitality when one of the five
factors increases as a consequence of some external influencing factors. Further-
more, the analysis shows that cities with diverse creative sectors have a vitality that is
directly correlated to the cultural consumption and involvement.
Pros
• Gathering data locally. Finding new ways of collecting data on cultural con-
sumption and creative cities is important for creating a reliable research. Cross-
referencing the data with official statistics can help us understand what variables
matter and what kind of correlations can be identified between economic growth
5 Intellectual Capital and Creative Economy as Key Drivers for. . . 87
and the development of the creative economy or its different sectors such as
cultural and creative industries.
• Offering policy recommendations. The study offers a set of recommendations for
cities according to their ranking on the different indicators. Public authorities can
therefore assess the impact of financial incentives for CCIs by looking at their
evolution throughout different time periods analysed by their authors.
• Including local NGOs or small firms activating in the cultural creative sectors.
The market analysis allowed the researchers to include information about local
efforts in enhancing creativity especially among the youth.
Including data about dance clubs or music centers that are not usually the
subject of national data can shape a more realistic image of the cities.
Cons
• Un-official activities. Regulating the creative economy can be a challenge. A lot
of the activities contributing unofficially to the country’s economic prosperity
take place illegally. This is mostly an attribute of artistic activities, such as street
dance performers, singers or painters who are free lancers, bringing a type of
economic value that is difficult to be included in official statistical data.
Private funding. The study does not include data about private funding of the
creative sectors. Artists and performers are often financed by different private
individuals sponsors, mecena or companies.
One of the most effective and efficient way of understanding IC’s & CE’s contribu-
tion in the general growth is to research in-depth qualitative case studies on different
activities. In Romania, NIRCF experts drew a set of coordinates for future research
by going into more details of different industries. For example, one of their studies is
focusing on the Romanian movie industry as part of the global film production. They
analyze the needs of production companies, from financial constraints to taxation
and economic incentives in the time period 2005–2009. Their results show that
Romania ranks the fourth in within the main East-European film producers
(Table 5.4).
Table 5.4 The main five 2005 2006 2007 2008 2009
East-European film producers
Czech Republic 31 45 30 39 45
Cojanu (2015b)
Poland n.a n.a n.a 45 42
Hungary 26 46 28 30 27
Romania 20 18 14 15 19
Slovakia 8 3 n.a n.a 18
88 M.-C. Suciu and D.-F. Năsulea
600 300
500
500 450 250
400 200
280 150
300
210
200 149 100
110 120
100 60 50
15 30
0 0
Budget (thousand lei) Participants
Fig. 5.2 Ideo Ideis budget and participants 2016–2015 (Cojanu, 2015a)
2017c). We consider that this fact might be mostly the result of a great number of
creative and knowledge-based workers and new jobs created in the creative fields,
especially in new-media & communications. Bucharest also has an excellent result
90 M.-C. Suciu and D.-F. Năsulea
Fig. 5.5 Romanian cities ranking in the C3 index (European Commission, 2017c)
Given the way data is collected for creating different methodologies for measuring
IC and CE, our research does not and cannot include all measurement tools devel-
oped internationally.
We have tried to focus on the latest developments in this field, as creative
industries do not represent a static topic, but one that evolves rapidly. Therefore,
we have considered only indicators that are somehow comparable to those nationally
or locally-developed.
Nonetheless, we consider that all indicators can and should be improved annu-
ally, as new factors tend to disrupt the traditional views we still use to assess aspects
related to IC. For example, open-source platforms have grown exponentially in the
last years, making the traditional way of measuring innovation less accurate. Now-
adays individuals give their work away for free online. As the funding model has
changed, so too has the behaviour of creative individuals. Many indexes rely on
patent registration as a yardstick for innovation while registering patents has simply
stopped being the norm in many fields.
Another limitation stems from the availability and accessibility of information.
Some of the data sources used in the methodologies described in this chapter are
5 Intellectual Capital and Creative Economy as Key Drivers for. . . 93
either non-transparent or inaccessible, making it hard to correlate the data and the
indexes to each other. Even in cases where data is accessible it’s quite common for
the information to take some time before it becomes available. Given the highly
dynamic nature of the field of IC this often means the data becomes available long
after other indexes have already been updated to a newer version.
Despite constant advances in information distribution technologies and a con-
tinuing push towards open-access research, in the global market for information not
all countries are equal. Access to information is still restricted or harder to obtain in
certain parts of the world. This doesn’t only make it harder for research to be turned
into policy in disadvantaged places, but it also has the inverse effect of making it
harder for socio economic data about those same places to be fed back into the
research, thus making it harder to have a truly global picture of IC and CE.
One of the issues regarding academic research on the IC & creative economy is the
lack of quantitative studies on the topic, the result of not having a standardized
measurement methodology that would allow for comparative studies (Guilherme,
2017).
Since this is the case, we suggest there are some local-examples that can help with
finding new ways of measuring IC and the creative economy with relation to a smart,
sustainable and inclusive development. Even if cases like the ones from Romania
cannot be replicate in other environments, they are useful for local communities
wanting to enhance and promote their cultural-creative activities.
However, this should not mean we should stop finding common criteria that allow
for comparisons between cities, countries and regions. The Cultural-Creative Cities
Monitor C3 is probably one of the most accurate and sound tools developed until
now, because it comprises unconventional data expressing a relatively clear image of
how an ideal city looks like and why are some cities more attractive than others.
Incorporating data from private organizations and companies can help future
research to create those comparable measurement studies that are so needed.
One set of recommendations academics in this field agree on is related to the issue
of having a common framework for defining the cultural-creative industries and
creating a classification of its sub-sectors. At this moment, using the framework
suggested by the European Union or UNESCO can be a step towards creating more
comparable databases.
Furthermore, we suggest including up-to-date indicators such as those selected by
the C3 index in national or local data-gathering for obtaining more accurate and
useful results, but also consider the 2030 Agenda and the sustainable development
goals established by international bodies.
Another way of supporting the development of the cultural-creative economy is
by encouraging universities to integrate creative skills into their curriculum and
94 M.-C. Suciu and D.-F. Năsulea
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