Spatial analysis of new firm formation in creative industries before and during the world economic crisis

Most empirical research on the effects of the economic downturns has been a-spatial and overlooked the location choices of creative industries (CIs). The present study addresses an open debate on whether economic downturns have pushed a change in the relative importance of resilience-based versus traditional CIs location factors. Considering the location choices of 6332 CIs Portuguese start-ups in the period 2005-2012, we found that: (1) the crisis brought changes in the relative importance of location factors, enhancing traditional CI location factors such as technology and diminishing the relevance of resilience-based factors related to regions industrial specialisation; (2) resilience-based factors, such as industrial diversity, higher education, cultural and social networking and traditional CI factors, namely lower social inequality and life quality, were robust drivers for the emergence of new start-ups all over the period; and (3) although cultural policy significantly and positively support the emergence of new CIs start-ups in the crisis period, the austerity period reversed that role. Our results suggest that the sustainable development of regions implies encompassing public stimulus to the generation of a diversified, interdependent network of creative activities, able to enhance innovation through their own synergies and linkages with the rest of the economy.

Automated summary

Empirical research on the effects of economic downturns on creative industries' location choices revealed changes in the relative importance of location factors during the crisis, with a shift towards traditional factors over resilience-based ones. Cultural policies positively supported the emergence of new creative industry start-ups during the crisis, but this role was reversed during the austerity period. Public stimulus towards a diversified network of creative activities is crucial for sustainable regional development and innovation.