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Culture as a factor of social and economic development - the Polish experience by Karolina Tylus

Karolina Tylus is Head of the Unit for European Funds at the Department of Cultural Strategy and European Affairs – Ministry of Culture, Poland

Culture as a factor of social and economic development

Polish experience with structural funds in the culture sector

as well as the future of EU regional policy in the context of the culture sector

 

At the present, culture is one of the most impotent factors of development.  The role of culture in development should be treated as multi-layered: on the one hand as an intrinsic value, on secondly as a real factor of regional development leading to increased attractiveness of regions for tourists, residents and investors, thirdly, as an active factor of social development based on knowledge, tolerance and creativity. Culture also belongs to a fundamental reference point in relation to metropolitan functions and the significance of cities in spatial, economic and social arrangements.

The purpose of this paper is an attempt to present culture as a factor of social and economic growth.  Examples related to Polish experience with implementation of structural funds depict the thesis of culture as a significant factor in development.  In the end, a development vision of European Union regional policy for the years 2007-2013 in the context of cultural related activities will be advanced.

Culture as a primary factor of social development

Currently observable changes in the economies of highly developed countries demonstrate the increased significance of social capital as a significant factor of economic development, which in large part determines the effective functioning of the economy.

Culture, which comprises one of the primary elements of preparation to life in society, plays a particular role in the development of social capital.  Culture related undertakings contribute to an increase in the intellectual potential of regions and the building of a conscious, open and tolerant citizen society. It should be emphasized that culture is a base for initiating cooperation and human communications, performing numerous education functions and thereby activating various layers of society.

Culture also comprises a link of social integration, preventing exclusions and social pathologies.  At the same time, culture helps to restore handicapped persons to social and occupational life (e.g. therapy through culture, but largely by changing the mentality and overcoming prejudices).

It should be emphasized that the social capital of a state is also created by institutions and increased by their capacity to work together.  The quantity and quality of these institutions impacts in part on the building of a society based on knowledge: creative, innovative, open to change, capable of educating permanent social and economic bonds.  One of the foundations of building such a society is investments in culture, and one of the primary sources of financing such investments are EU structural funds.

In general, culture comprises an important factor of social development:

 

Culture as a factor of economic development

Until recently, culture was perceived as part of social policy and was not tied to economics. This approach changes in the mid 1990s.  Since that time, a growing impact of culture on the economy is observable – three different trends are spoken of: the “economisation of culture”, “commodification of culture” and the “culturalisation” of the economy.  This is accompanied by a huge increase in the number of academic papers and programmes concerning the subject of the economy and employment in the field of culture.

Investments undertaken in the field of culture – besides intangible, social profits – frequently have an economic dimension as well.  The subsidy amount for cultural undertakings is multiplied, owing to culture industries, which contribute to increased employment and generate gross national product value.  It should be pointed out that investments in cultural infrastructure fulfil, just as other public expenditures, functions of development multipliers.

Two effects of investments undertaken in the field of culture can be distinguished.

One of them is the expansion of the regional economic base that comprises an impulse for further development. This development is expressed by improvement of the market and marketing situation of existing commercial entities (e.g. a positive change in a region’s image), improvement in the standard of living of residents (expansion of the cultural infrastructure and increased access to culture) as well as an increase in the number of jobs associated with the investment realization process, and then with the functioning of new elements of a region’s fixed assets.

The second effect results from the stimulating impact of public expenditures by income – demand multipliers.  Increasing the income of commercial entities and households, these expenditures stimulated additional demand, which has a large impact on local markets for goods and services.

Culture industries also have a significant share in the economic development of societies and regions.  One of the most common definitions of the notion of a “culture industry” relates to all private businesses and independent contractors active in publishing, artistic, music, film or audiovisual industries.  This definition can be expanded to other related products and services, for example to cultural tourism or the media.  Besides the subject of action on affiliation to culture industries, earnings related criteria are decisive.  The size of entities does not play a role here; they can be individual artists, small and mid-sized enterprises or large media concerns.

Culture industries are characterised by a high level of innovation and creativity in the market, where most goods and services cannot be properly substituted.  Culture industries create jobs outside the public sector.  Various culture industry sectors in which mid-sized and small enterprises dominate, have large employment potential and are strongly anchored in local communities and regional networks.  Cultural industries are the sector of the economy with the highest employment factor.  They generate a large number of jobs, in an age of cooling off or even stagnation of the world economy.  The sector of culture industries is today, after undergoing difficulties caused by over-investment in the dotcom and computer-network sector – the most dynamically growing branch of the world economy.  It creates strong economic incentives due to the high level of final product transformation.  Thus, it requires a highly qualified workforce, professionals of specific specializations, employing university graduates of various majors, creating developmental conditions of society educated at a high intellectual potential.

It should be emphasized that the EU encourages Member States to cooperate for the benefit of promoting culture industries and to consider the role of the culture sector in creating new jobs.  At the same time the EU draws attention of the European Commission to the need to take culture industries into consideration in Community activities and programmes, as well as to popularize information on the potential that structural funds have for culture industries. This is demonstrated by EU interest in creating the largest support potential for culture industries, especially in the framework of structural funds.

According to recent surveys, the share of added value generated in the culture sector in GDP in Poland equals 5,5%, and the sector share in creating GDP about 4,5%.  Even more so, in papers of the European Commission, the culture sector and culture industries are also perceived as the fastest growing sector of the economy, generating jobs and significant income.  According to European Commission reports, some 3,5 million persons worked in the culture sector in European Union countries, and the share of this sector in creating GDP ranges between 3-5 %.

According to the report titled Exploitation and development of the job potential in the cultural sector in the age of digitalisation, in 1999 as much as 7,2 million workers were employed in the culture sector.  In the year 1995-1999 the number of persons working in this sector increased on average by about 2,1% annually, whereby the growth rate reached 4,8% annually in the case of persons working in jobs directly related to creativity. The potential offered by the fast growing media and digital technologies market for the culture sector warrants particular emphasis.  It is expected that increased employment in culture sector jobs will be characterised by continuously high trends – due to the growing demand for products and services generated by the culture sector.

According to the Eurostat Labour Force Survey data from 2002, employment in the field of culture equalled 2,5% of the total number of employees in the EU.  The employment level in the field of culture rates from 1,4% in Portugal and Slovakia to 3,7% in Estonia.  Furthermore, 40% of those working in the culture field have a university education, which means – in comparison to 25% in other sectors – that people working in the culture sector possess better education than the remaining workers in the EU.

According to the above data, workers in the culture sector comprise a high percentage of persons working in the EU, which translates into a significant share of the culture sector in generating GDP.

In general, culture as a significant factor of economic growth

 

EU activity to support culture

According to article 151 par. 4 of the Treaty Establishing the European Community: “The Community shall take into account cultural aspects in its activity on the basis of other provisions of this Treaty, especially in order to respect and support the diversity of its cultures.”  This provision imposes on the EU the duty to consider priorities from the scope of culture in activities it undertakes.

The EU undertakes various initiatives to contribute to the development of all aspects of culture.  Nevertheless, most of them are soft in nature and directed towards development of cooperation between member states.

Investment projects in the scope of culture can be realized in the framework of structural funds and Community initiatives. Warranting mention here is the European Regional Development Fund, European Social Fund, European Agriculture Guidance and Guarantee Funds and the Financial Instrument for Fisheries Guidance. Community initiatives that offer the possibility to carry out culture related projects are, in turn: INTERREG III, URBAN II, LEADER + or EQUAL.

Worth pointing out is the fact that demand of the culture sector for funds to realise undertakings, including large investment projects, is very large, and every invested euro creates high added value. It should be emphasized that structural funds are the most important instrument to finance culture by the European Commission in the EU Member States.  According to surveys conducted in the previous budgetary period, cultural projects were 82% financed from structural funds, for every 10 euros spent for the benefit of culture by the European Commission, as much as 8 euros came from just this source.  Cultural projects co-financed from structural fund resources are treated as investments having a direct impact on social-economic development of regions, strengthening their competitiveness and raising widely understood quality of life for residents.

Polish experiences concerning realisation of projects in the scope of structural funds

The share of structural funds in the development of the cultural infrastructure in the EU Member States indicates just how important these funds are for Polish culture. In the programming documents prepared in Poland for the years 2004-2006, comprising the basis for using structural funds, culture was guaranteed large chances for obtaining European funds.

The opportunities for culture were guaranteed in four of six operating programmes:

1)      Integrated Regional Operational Programme (IROP);

2)      Sector Operational Programme Restructuring and modernisation of the food sector and rural development:;

3)      Sector Operational Programme Increased Competitiveness of Businesses;;

4)      Sector Operational Programme Development of Human Resources.

In the framework of these programs, relevant for each scope, the realization of various projects from the scope of culture is possible, e.g. the building and expansion of the cultural infrastructure of artistic education at all levels, development of the information society infrastructure, support of cultural education as well as culture industries.

Integrated Regional Operational Programme (IROP)

The Integrated Regional Operational Programme should be acknowledged as the most important for the culture sector.  As one of the activities it states Development of tourism and culture (Activity 1.4) and ensures the possibility to realize cultural projects of various natures also in the framework of other activities (activity: 1.5 Infrastructure of an informational society, 3.1 Rural areas, 3.2 Areas subject to reorganisation, 3.3. Degraded urban, post-industrial and post-military areas).  By 30 September 2005 in the framework of the Integrated Regional Operational Programme, some 140 culture related projects were selected for realization for a total sum of 212 million euro.

Among these projects, the most were selected in the framework of activity 1.4: Development of tourism and culture (48 projects, which equals to 34,5% of total culture related projects). Remaining culture related projects that were selected by voivodeship boards include:

1)      in the framework  of activity 3.1: Rural areas - 33 projects (which is equal to 23,7% of all culture related projects)

2)      in the framework of activity 3.3.1: Degraded urban, post industrial and post military areas  - 30 projects (which is equal to 21,6% of all culture related projects)

3)      in the framework of activity 3.2: Reorganised industrial areas – 19 projects (which is equal to 13,7% of all culture related projects)

4)      in the framework of activity 1.5: Infrastructure of the information society – 5 projects (which is equal to 3,6% of all culture related projects)

5)      in the framework of activity 1.3.1: Regional educational infrastructure – 4 projects (which is equal to 2,9% of all culture related projects).

These projects differ from high ranking investment projects such as construction of the Kraków Opera, Concert Hall of the Music Academy in Poznań and Katowice, Museum of Modern Art in Toruń, modernization and restoration of the Pomeranian Dukes Castle in Szczecin, to projects of a local nature such as renovation of the Local Cultural Centre in Biskupiec (Warmińsko-Mazurskie Voivodeship) or revitalization of the palace in Podkowa Leśna (Zachodno-Pomorskie Voivodeship).

Up to 31 January 2005 the value of applications submitted for realization in the scope of culture in the framework of activity 1.4 Development of tourism and culture covered 91% of all allocations for this activity through 2006 and 389% of 2004 allocations. This show just how needed these funds are.  It is worth reiterating that these were applications for culture only, since there was no open call for proposals for tourism in 2004 due to the lack of notification.  The following voivodeships have approved the most projects from the scope of activity 1.4 as of the current date: Wielkopolskie Voivodeship (7), Mazowieckie Voivodeship and Dolnośląskie Voivodeship (6 projects each).  Most of the projects concerned the renovation of historical monuments and construction of new properties (34 projects from activity 1.4 – projects valued over one million euro), in later positions were projects related to revitalization (14 projects from activity 3.2 and 3.3).

It should be remembered that structural funds are not only funds for “building” investments – but also funds for investment in the scope of development of an information society.  Libraries have been very successful in acquiring funds here.  To give a few examples: a digital library in the Kujawsko-Pomorskie voivodeship, and in the Lubelskie Voivodeship the municipal library in Puławy will be computerized.

Sector Operational Programme: Restructuring and modernisation of the food sector and rural development

Projects related to activity Village revival as well as maintenance and protection of cultural heritage in the framework of the Sector Operational Programme Restructuring and modernization of the food sector and rural development enjoy large interest.  In the first recruitment, a total of 2350 projects were submitted for a total sum of about 507,5 million zloty.  The most projects were submitted in the Pomorskie (289), Wielkopolskie (249) and Mazowieckie (211) voivodeships.  Procedures are underway in most voivodeships to approve applications for further realization – we will know the results of these proceedings shortly.

Promise of the Minister of Culture

In order to support the most interesting projects from the scope of culture, the Minister of Culture established an Operational Programme Promise of the Minister of Culture.

The programme is based on providing financial support by the Minister of Culture of the national contribution to selected cultural projects, realized in cooperation with European funds.

The Promise of the Minister of Culture is – in other words - a promissory agreement to co-finance projects realized with European funds provided that relevant authorities select them for realization.

Since the start-up of the Programme the Minister of Culture has co-financed 118 projects for a total sum equalling 87 million zloty.  The total value of the projects that received support in the framework of the Promise of the Minister of Culture equals nearly 723 million zloty (2004- 378 million zl, 2005- 345 million zloty).  In the III edition of the Promise of the Minister of Culture programme in 2005, projects seeking financial support related to the following activity comprise a particularly large group: Village revival as well as maintenance and protection of cultural heritage (Sector Operational Programme Restructuring and modernisation of the food sector and rural development) concerning building and modernization of rural homes and cultural centres, libraries, regional culture chambers etc.  Among the most interesting projects that received a Promise of the Minister of Culture, Paderewski Centre – Kąśna Dolna, Creation of a Regional Chamber in Stryszowa (Małopolskie Voivodeship), Słowinski Centre of Regional Culture in Kluki all deserve mention.

In total most of the approved promises concern activity:

The most promises for projects went to Wielkopolskie (19), Pomorskie and Małopolskie (16 each) voivodeships.

The future of EU regional policy for the years 2007-2013 in the context of culture related activities

In the current programming period, no fund or EU initiative treats culture as a priority.  Culture becomes part of other activities, aimed at regional development, rural and urban development, realization of projects related to tourism and transborder cooperation.

In connection with the above, and considering the profits that structural funds bring for culture, as well as the continually growing interest of various subjects in realizing culture related investment projects, Poland has strived to ensure that culture has a relevant place in the framework of structural funds in the new financial perspective of the EU for the years 2007-2013.

European Regional Development Fund

In July 2004 the European Commission published part of a legislative package concerning new financial perspective for the years 2007-2013, including a Regulation establishing the European Regional Development Fund. In this project culture was treated in a marginal manner, left in the shadows of tourism.  In connection therewith, taking into consideration the huge needs of the culture sector, Poland took efforts towards including a separate area of intervention concerning culture alone in the aforementioned regulation that would permit realization of projects in the scope of:

After much negotiation, the Luxembourg Presidency consented to including a provision called for by Poland, which contains all the above elements.  This provision was sustained by the British Presidency.

It should be emphasized that the Polish initiative was supported by many EU Member States.  At the present time the draft Regulation establishing the European Regional Development Fund is under discussion at the forum of the structural actions working party of the European Union Council.  It is expected that the project will be accepted before the end of the current year.

Community Strategic Guidelines (CSG)

In June 2005 the European Commission published the Communication titled Cohesion policy in Support of Growth and Jobs. Community Strategic Guidelines, 2007 – 2013, and, in their framework, the priorities for a cohesion policy at the community level. The CSG shall comprise a strategic document designating the directions for realizing EU cohesion policy for 2007-2013 and the basis for Member States to prepare strategic and programme documents, at the same time realization of development activity co-financed with structural funds.

Taking the above into consideration, Poland will undertake efforts for the benefit of highlighting the role of culture also in the framework of this document.  In connection with the fact that the document essentially overlooks cultural related activity in the new period of programming, Poland will stress that culture is ascribed to objectives laid out in the CSG, both as one of the factors contributing to achievement of Lisbon Strategy objectives, and also as a factor of social-economic development.  In connection with the above, Poland will call for the following activity to be considered in the framework of cohesion policy in the period 2007-2013:

It should be stressed that negotiations over the CSG are underway – at the present time it is difficult to state what support the Polish initiative will have.  As expected, work over the CSG is intensifying after acceptance of regulations in the framework of the new financial perspective legislative package.

Polish implementation system for cohesion policy for the years 2007-2013

European funds will be implemented in the countries in the framework of national systems.  On 6 September 2005 the Polish Council of Ministers accepted the project of National Development Plan for the years 2007 -2013. Within the confines of the National Development Plan is the Operational Plan Cultural Development and maintaining cultural heritage.

Emphasizing the benefits of culture as a factor to social-economic development, the programme aims to contribute to:

The programme will be realized by three priorities:

1)       development of the cultural infrastructure and protection of cultural heritage with a wide regional significance,

2)       development of the artistic education infrastructure,

3)       technical assistance.

It should be stressed that the programme is complementary with other operational programmes in the framework of the National Development Plan.

The programme will be financed from funds of the European Regional Development Fund.  The anticipated allocation for its realization equals 350 million euro from the ERDF.

Currently, the social consultation process has begun over the NDP that will last until December 2005.  Only then will we get to know the final shape of the NDP for the years 2007 -2013.

Conclusions

Culture is one of the most important factors of growth.  Contributing to social-economic growth of Europe, culture should possess the appropriate place for itself in the most important EU documents.  On one hand, increased awareness by politicians and societies alike will contribute to this, that culture actually fulfils an important role in development; on the other – the inclusion of references to culture in the most important legal acts of the European Union as well as programme documents will contribute to the acquisition of funds for culture.

Poland’s experience in the scope of implementing structural funds for the benefit of culture indicates that interest in realizing cultural projects is very high.  Demand far outstrips the quantity of available funds, which indicates the need to undertake efforts to obtain greater funding for culture projects.  Polish activity at the European Union forum is proof of the fact that culture can find a place for itself in the framework of cohesion policy.  It should be emphasized that there was considerable support of EU Member States for the Polish initiative, which means that with the appropriate promotion of culture as a factor of development, it is possible to set up networks of cooperation between various entities to act at the EU forum for the benefit of culture in the framework of cohesion policy.

 

Bibliography

1) Treaty establishing the European Community in the Nice Treaty version, “European Documents volume IV” work by A. Przyborowska – Klimczak, E. Skrzydło-Tefalska, Lublin 2003

2)      Council Conclusions of 17 December 1999 on cultural industries and employment in Europe (2000/C 8/7)

3)      Proposal for a regulation of the European Parliament and of the Council on the European Regional Development Fund (COM (2004) 495 final)

4) Communication from the Commission: Cohesion Policy in Support of Growth and Jobs: Community Strategic Guidelines, 2007-2013 (COM (2005) 299 final)

5) Exploitation and development of the job potential in the cultural sector in the age of  digitalisation, European Commission DG Employment and Social Affairs, Munich, 2001

6) Deklaracja z Essen: 10 aksjomatów dla przemysłów kultury w Europie /Declaration from Essen. 10 axioms for cultural industries in Europe/ .

7)      Narodowa Strategia Rozwoju Kultury 2004-2013, document accepted by the Council of Ministers in September 2004.

8)      Kultura jako czynnik rozwoju regionalnego – analiza wykorzystania funduszy strukturalnych na rzecz kultury w krajach Unii Europejskiej, Ministry of Culture, Warsaw, 2004

9)      Program Operacyjny: Rozwój kultury i zachowanie dziedzictwa kulturowego, document serving the realisation of the National Development Plan 2007-2013, Minister of Culture, Warsaw 2005

10)  A. Etmanowicz, J. Sanetra – Szeliga, Kultura w programach i funduszach Unii Europejskiej, Contact Point for Cultural Affairs, Ministry of Culture, Warsaw 2003

11)  A.J. Wiesand, Rozwój przemysłów kultury – doświadczenie niemieckie i europejskie, IbnGR, 2002

12)  In-house papers of the Minister of Culture concerning implementation of structural funds and the Operational Programme Promise of the Minister of Culture

13)  http://www.europa.eu.int/comm/culture/portal/index_en.htm

14)  http://www.mk.gov.pl

15)  http://www.funduszestrukturalne.gov.pl

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