Igniting a (Sustainable) Boom

New York, Berlin & The Global Creative Economy

In 1974, New York City was flat broke. No bank would lend her money. Years of white flight, a stagnant economy and liberal social spending had dug the city deeper and deeper in debt. Mayor Abraham Beame begged the US government to save the city from collapse, only to get the cold shoulder from President Gerald Ford. The Daily News headline said it plainly: “Ford to City: Drop Dead.”[1,2]

A year later, the public-private Municipal Assistance Corporation pulled off an economic miracle, restructuring New York’s debt and starting an infusion of cash.[3] In contrast to the US as a whole, New York is now operating in the black.

Today, however, it is New York’s creative economy that could be flat-lining. Decades of rising property values have made work and life much harder for the visual and performing artists, writers, editors, designers, architects, and other people who make up her creative core.[4] Work and living space is now so expensive that an emerging artist or entrepreneur needs access to inordinate amounts of capital just to make a start. Before the real-estate boom of the past 25 years, newcomers could arrive in New York – and native artists could emerge – with more talent and drive than money. That’s no longer the case.

“If You Can Make It Here…”

Many of the artists and entrepreneurs who once would have staked a claim in New York are now choosing cities with lower costs of entry, cities like Austin, Philadelphia, Toronto – and Berlin. Ironically, while many of New York’s creative workers have watched commercial and residential property values rise beyond their reach, it was largely through their efforts that their neighborhoods became so attractive.

Policymakers from London to Shanghai have begun to acknowledge that a vital creative sector provides a strategic advantage and competitive edge to help their cities stay ahead in a global economy. A rich and creative environment attracts talented people and innovative businesses, creates jobs, transforms neglected neighborhoods, and enhances quality of life. Peter Hewitt, chief executive of the UK’s Arts Council, predicts that in ten years the knowledge-based creative economy will account for half of the UK’s economy. [7]

The Mayor of London’s agency for creative industries, Creative London, has identified a lack of “property on reasonable terms” as a critical bottleneck to the success of creative enterprises. And while the property bottleneck is much tighter in New York, one is also forming in Berlin, with land and property prices rising in and around the city center. The looming shortages of suitable working and living spaces are largely due to investment and speculation, but the loss of rent-controlled atelier-studios has also contributed significantly to the problem. [8]

Importantly, Berlin offers what economist Richard Florida has identified as three critical human needs for creative talent: diversity, low entry barriers, and the ability to be oneself. [9] Affordable space to live and work, a tolerant and cosmopolitan city center, and a solid technological infrastructure make Berlin particularly attractive to many of the brightest new talents from around the world. And although – perhaps because – local government funds are limited, the city has managed to attract a good deal of corporate money to finance its creative sector.[10] Berlin must find more ways to sustain operating support for a thriving creative sector, however, if it will reap the benefits of a creative economy along with more affluent cities.

At the same time, New York desperately needs greater capacity to foster emerging talent at a reasonable cost, within easy reach of audiences and markets. When people have the drive and talent to emerge at P.S. 122, Galapagos Art Space, or Richard Foreman’s Ontological-Hysteric Incubator, they should be able to live and work close by and meet up easily with potential collaborators and audiences.

Something New in the World

Could Berlin improvise an effective, sustainable means of exploiting rising real estate values while maintaining her vital arts infrastructure? One possible solution emerges from a novel concept presented in April 2006 by Fernando Espuelas, at the Center for an Urban Future’s “Creative New York” conference.

Creative Incubators for a Sustainable Real-Estate Boom

• Develop existing multifloor buildings, which could be abandoned schools, factories – any feasible structure.
• On the first floor plant a business and art environment that pays the rent, drives traffic, and connects with an overarching revenue-producing structure (e.g., hotel, condominium).
• On the upper floor(s), offer affordable ateliers where an entrepreneur/artist can take advantage of collective services (back office, accounting, high-tech, marketing, etc).
• When a company breaks out, it can join the first floor and support new business/artistic endeavors above.

In Espuela’s vision, such incubators “take advantage of government infrastructure, but are primarily driven by either artists or entrepreneurs who want to create a shift in society and who want to create value – whatever that means for them.”[11] They could offer a win-win-win situation, a hat trick initially for the three principal parties, but then also for the larger society. The property owner would gain revenue from the overarching residential structure. Established artistic/business ventures would obtain a stable venue. Emerging artists and entrepreneurs would get affordable living/working space, audience exposure, and access to collective services. The city as a whole could stand to gain additional vital benefits, including:

• Immediate revenues (instead of losses) from unused properties.
• Enhanced cultural offerings from an influx of global talent.
• Added incentives to businesses and people from around the world, creating jobs, attracting students, retaining businesses, transforming neighborhoods.
• A strategic advantage and competitive edge in an emerging global creative economy.

Collaborative Competition

Following success in one city, the Berlin incubator model could be exported abroad, creating opportunities for consultation and collaboration with other cities and governments. Moreover, with inter-city exchange programs for artists and entrepreneurs and transfer of knowledge and technology, the model could become richer as the participants learn from a growing number of environments and more varied audiences around the world.

Investment for a Berlin incubator model could come from anywhere, but particularly from New York, whose need for solutions provides great incentive to fund such models “offshore” – where property costs are not as great as in her white-hot, perhaps overpriced, real estate market.

Projects like the Galapagos “world performance clock” could jump-start the learning process. Galapagos Art Space has proposed an expansion in Brooklyn, potentially opening venues in Berlin, Mumbai (Bombay) and Beijing. In director Robert Elmes’ concept, “Each Galapagos would curate and present a week of programming with a different artist from each city. At the end of the first week, click, everyone moves one position. The New York artists travel to Berlin, Berlin goes to Bombay, Bombay goes to Beijing, and Beijing comes to New York. Suddenly it’s China in New York.” [12] After the fourth week, everybody comes home, with new knowledge and new audiences.

Plato got it right, necessity is the mother of invention. New York, Berlin, and the emerging global creative economy need simple, powerful, and sustainable solutions to attract and grow vital talent. Talent often does not hit the ground with huge bags of money, and the constant quest for capital can distract from the hard, time-consuming work of cultural production. If the ideas presented here seem reasonable to you, and likely of success, feel free to run with them. And if you would like to work together to help make them a reality, call or send me email at avery@williamaveryhudson.com

References

1. Haberman C. Surviving Fiscal Ruin (And Disco). New York Times. January 25, 1998 [http://www.nytimes.com/specials/nyc100/nyc100-8-haberman.html] Accessed 11 June 2007.
2. Stein RB. The New York City Budget: Anatomy of a Fiscal Crisis. Federal Reserve Bank of New York Quarterly Review. Winter 1976 [http://www.ny.frb.org/research/quarterly_review/1976v1/v1n1article1.pdf] Accessed 11 June 2007.
3. Rohatyn FG. The Fall and Rise of New York. The New York Review of Books. November 8, 1990.
4. Center for an Urban Future. Creative New York. December 2005.
5. Center for an Urban Future. Creative New York. December 2005.
6. Souccam MK. Brooklyn theater lobbying for new artist aid. Crain’s New York Business. June 22, 2006.
7. Hewitt P. Arts in the core script - writing ourselves in. The Smith Institute Arts Lecture. New Statesman, July 17, 2006.
8. London Development Agency. Creative London. Creative Spaces – Study Tour Berlin. May 2005 [http://www.creativelondon.org.uk/upload/doc/Berlin_City_profile.doc] Accessed 11 June 2007.
9. Florida R. The Rise of the Creative Class. New York: Basic Books, 2004 (Paperback Edition)
10. Glenn D. Lowry, Director, The Museum of Modern Art, Transcript of Creative New York Conference. April 4, 2006 . Sponsored by the Center for an Urban Future, The City of New York, The Rockefeller Foundation and the Partnership for New York City.
11. Developed from a concept presented by Fernando Espuelas, Chairman & CEO, Voy, LLC, Transcript of Creative New York Conference. April 4, 2006 . Sponsored by the Center for an Urban Future, The City of New York, The Rockefeller Foundation and the Partnership for New York City. [http://www.nycfuture.org/images_pdfs/pdfs/Full%20transcript%20of%20Creative%20New%20York%20Conference.pdf] Accessed 11 June 2007.
12. Elmes R. Galapagos wants to expand. [http://www.galapagosartspace.com/expansion.html] Accessed 11 June 2007.

First published at williamaveryhudson.blogsome.com (29 September 2006)