EcDev Journal

The Creative Economy: How it accelerates growth to the local economy

Posted on Monday January 02, 2017
Councillor Michael Thompson

by City of Toronto Councillor Michael Thompson, Chairman of the Economic Development Committee

Sydney, Nova Scotia – September 2016 – At the Association of Municipal Administrators (Nova Scotia) in Wolfville, senior municipal leaders from Nova Scotia explored opportunities to innovate in challenging fiscal times.  City of Toronto Councillor Michael Thompson, Chairman of the Economic Development Committee, presented the importance of arts and culture in a community and some successful initiatives that originate locally and driven locally to stimulate the local economy.

The conclusion Toronto surmised is that waiting for other people to bail Toronto out was not working. It was not an option.  Toronto’s most important decision was to decide to own the economic growth issues, and do what it could to improve it.  The following article is based on excerpts from Councillor Thompson’s presentation.

Steps to accelerate economic growth – Arts and Culture sector

Our first step was to focus on our assets and not our weaknesses – to work with what we have and not dwell on what’s missing. We realized that since we had amazing knowledge and innovative thinking available to us in the community, we should put those resources to work for the City.

 We convened a blue-ribbon panel of business leaders under the banner “Toronto Prosperity Initiative.” We asked them to tell us what the City could do to improve our business climate and pave the way for growth, without massive expenditures of money or other resources.

The panel came back with a list of 12 things we could do right away at little or no cost, and a second list of things to do down the road.

Next, we convened an advisory group of arts and business leaders to share perspectives and make recommendations about what the City could do to maximize the economic potential of arts and culture. Arts and culture are among the most important drivers available to communities to accelerate economic growth.

They developed the “Creative Capital Gains” report, which outlined several things that the City could do to promote the growth and success of a broad spectrum of arts and culture ventures.

A by-product of the process was that when arts and culture leaders got together, they discovered opportunities to share resources in ways that made their organizations stronger and more efficient. Collaboration with the City led to collaboration among arts groups as well.

The City of Toronto accepted all the recommendations of both initiatives and we have implemented, or are working on implementing all of them.

These initiatives have brought government closer to stakeholders in both business and the arts, and created an ongoing spirit of collaboration among us all.

My point is that when local government, no matter how big or small it is, takes the lead in bringing business people, artists, culture leaders and other smart people together with a common focus, new energy is injected into the community. And both the economy and the society will grow stronger.

The Creative Economy

There is a consensus that Canada’s economic growth in the 21st century will depend on “the creative economy.” This refers to businesses whose principal assets are not factories and production facilities, but smart people.  The arts and culture sector plays an especially important and central role in a creative economy.  Cultural breadth and intensity enhances the appeal of an area as a place to locate a business.

In the new economy, business success depends on an ability to recruit skilled knowledgeable workers. The arts and cultural offerings available in a region are significant factors for both companies and their workers when deciding where to relocate.

Today’s talent seeks out creative environments.

Successful jurisdictions are increasingly turning to the development of creative clusters because they generate  significant economic advantages. They are labour intensive, nearly impossible to outsource to other places and have an economic multiplier equivalent to roughly one indirect job for each job directly created.

A few years ago, the conference Board of Canada reported that for every $1 dollar produced by Canada’s cultural industries, almost $2 dollars are added to the overall GDP.

As municipal executives, I am sure that you will be happy to hear that approximately 25% of the economic activity generated by the arts and culture sector goes back to governments as tax revenue.

Beyond their direct economic benefits, strong culture clusters help to attract and build other knowledge-based clusters, drive tourism, enhance local branding and improve the overall quality of life.

Toronto’s emphasis on supporting arts and culture is a major factor in our ongoing economic transformation. As in most North American cities, our manufacturing sector, which was a major part of our economy, has been in sharp decline over the past two decades.

However, we continue to offer a strong value proposition to business investors thanks in part to our strong performing arts and visual arts tradition, our embrace of the TV and film production industry and our support for the cultural events and activities of our various communities.

Toronto’s current economic foundation is made up of strong sectoral clusters that depend on creative and well-educated workers for their growth and success.

Our embrace and support of creativity carries over to our entrepreneurial sector, especially the small and medium-sized businesses that make up 97 per cent of our total number of enterprises.

You will find the same trend in other cities. Austin, Texas went all-in to become a “music city.” It is home to the South by Southwest Festival and a magnet for talented musicians to live and work. Its success in attracting, nurturing and exploiting its arts and culture community has enabled Austin to get the attention of major high-growth companies and establish a strong and expanding high tech cluster. Austin is growing rapidly and it all started with music.

Other cities are drawing on arts and culture to rise from the ashes. Cleveland, Ohio has based its renaissance on a revitalization of its downtown that includes the Rock and Roll Hall of Fame, new sports stadiums and dining and entertainment corridors. People who once abandoned the downtown for the suburbs are now returning to reclaim and renovate classic old homes and enjoy the energy of an urban lifestyle.

Perhaps the most surprising example of cultural salvation is Detroit. A few years ago, Detroit was the poster child for urban abandonment and blight. It’s population had dropped by half and whole neighbourhoods were empty and decaying.

An effort is now under way to transform the city core into a cultural and entertainment Mecca. There is art everywhere, not just in galleries and museums but in the subway and on the street. It has become one of the liveliest downtowns in North America.

Nova Scotia, with its strong local arts and culture tradition, has an opportunity to grow its economy by leveraging its creative resources.

Don’t let size hold you back. The opportunity for growth is there if you take advantage of the creative and entrepreneurial spirit of your people.

Nova Scotia is rich in arts and culture assets built on your unique history and strong sense of place.

You hold festivals as diverse as Stanfest, Liverpool International Theatre Festival, Festival de l’Escaouette, The Gordie Sampson Song Camp, Shakespeare by the Sea, Halifax Jazz Festival, Granville on the Green, Celtic Colours, Acadian Days, Festival Antigonish, and countless others that showcase Nova Scotia to the world and attract tourists.

Musicians from all over love the province for its quality of life and collaborative culture. David Myles, Dean Brodie, Matt Andersen, Thom Swift, and Amelia Curran have all moved here from other provinces, and you are producing a steady stream of emerging “export ready” artists and arts businesses.

Your universities and community colleges have developed courses to serve Nova Scotia’s emerging creative economy. Halifax’s DHX Media, Copernicus Studios, and Lunenburg’s HB Studios hire all Halifax animation course graduates each year, and supplement them with talent from around the world.

Your provincial government is also helping out. Its new $2 million Creative Industries Fund launched in May is helping creative sector businesses to expand their reach into new markets.

The province is also tapping the knowledge and experience of the local arts community through the Creative Nova Scotia Leadership Council.

If you haven’t already done so, I urge you to read the Council’s 2014 report “Culture: Nova Scotia’s Future.” The report provides an excellent blueprint on how Nova Scotia can maximize the cultural sector’s potential as an economic and social driver.

While cultural development momentum has been slow to build in the province, I understand that local communities, many of whom are represented here, have independently adopted strategies to develop their own culture sectors and creative clusters.  Keep up the good work and be sure to share your experiences with your colleagues in other communities.

In keeping with the spirit of collaboration, I would like to share a little of what we have learned about leveraging arts and culture as an economic driver.

Lessons learned 

The first lesson we learned was to take the initiative. Take an inventory of your local arts and culture assets and bring together arts, culture and interested business stakeholders to devise a plan for growth. Make sure the bulk of the plan is do-able within the scope of local resources, and where provincial or private sector resources are needed, develop a process to engage them.

Second, you should consider building a local creative cluster. If your area is known for artisan furniture, devise a plan to encourage more furniture-makers to set up in your community. The same approach applies to musicians, potters, sculptors, fashion designers, violin makers, stained glass artists, glass makers, Celtic dancers and so forth. Figure out what environment creators need to create. Then get your community together to provide it.

If your community is too small to host a cluster on its own, consider getting together with your neighbouring municipalities to create a cultural or creative region. Pooling resources will enable you to offer artists and artisans a more compelling environment and broader choices of location to set up and grow.

Pooling is an especially useful strategy for developing and staging a festival. Festivals are popular and successful in Nova Scotia because they are great ways to spotlight a community’s unique character and prevailing culture, and a great way to market your industries and your municipal brand. From lobsters to apples, from potatoes to architecture, seasonal holidays or sail boating, festivals create local energy, attract tourists and generate revenue for local businesses. When communities get together to create a regional festival, they can punch well above their individual weights in economic and social returns.

There are plenty of things you can do that won’t cost a lot of money. Be innovative and open to new ways of looking at old problems. Find ways to make things happen and not reasons to maintain the status quo.

Like rural areas across Canada, many smaller Nova Scotia towns have steadily lost population to larger cities over the last several decades. This often leaves unutilized or underutilized buildings in the community that could be made suitable for artists’ studios, rehearsal halls or fabrication space.

Make an inventory of these places and develop a plan to transform them into creative spaces. Artists, artisans and other creative workers often prefer to operate in rural settings if the space is affordable, the community is welcoming and the quality of life is appealing.

We all know that the Internet has changed everything. It is now feasible for many knowledge workers to work away from population centres in more affordable and livable communities without compromising the quality of their work or their access to the tools they need to excel. There may be skilled, creative people in your communities today who, under the right conditions, could stay in town to work and not have to move to the city.

It would be wise for all communities, no matter how rural, to ensure that its people and businesses have access to high bandwidth, high speed connectivity to the Internet. No creative community today can operate without it.


Finally, I want to emphasize what I believe is the key principle for successful local economic development. It is summed up in one word – collaboration.

Decades of unbridled competition across the business and social spectrum has created winners and losers and alarming levels of social and economic inequality.

Unfettered competition has not served the best interests of our society, our country, or nations and people around the world, for that matter. Collaboration, on the other hand, is the gathering tide that will raise all boats.

In a municipal context this means collaboration with businesses and service clubs, collaboration with arts and culture groups, collaboration with neighbouring municipalities and collaboration with the province. You will achieve economic strength by finding new, innovative and better ways of working together to build it.

We are all partners in growing Canada’s economy, and your success in Halifax, Sydney, Port Hawkesbury, Bridgewater and across Nova Scotia will contribute to the economic success of Calgary, Vancouver, Toronto and the rest of Canada.

Nova Scotia is beautiful, vibrant and creative. I wish you the utmost success in building on the province’s considerable assets to bring prosperity to every village, town and city from Yarmouth all the way up to Meat Cove. Thank you.