Do creative industries enhance employment growth? Regional evidence from Colombia

ABSTRACT

Do creative industries have positive spillovers for the local economy in middle-income countries? While in high-income countries several studies have shown that creative industries are highly innovative and productive, positively impacting the local economy, the evidence is scarce for middle-income countries. Using employment data, we studied the agglomeration patterns of creative industries in Colombia between 2008 and 2017. We found a positive relationship between creative industries’ agglomeration and employment in non-creative services industries. However, using a shift–share instrumental variable approach, we found no significant causality of an increase in creative industries’ employment on employment growth in other industries.

KEYWORDS:

• creative industries
• agglomerations
• relatedness
• employment growth
• Colombia

JEL:

• D62
• O00
• Z18

ACKNOWLEDGEMENTS

The authors would like to thank the seminar participants at the workshop held at the Inter-American Development Bank (IDB) Headquarters, Washington, DC, USA, 30–31 January2020. We also thank Fernando Vargas, Matteo Grazzi, Simone Sasso, Daniel Goya, Alejandro Rueda Sanz, Luis H. Gutiérrez and Juan Miguel Gallego for their helpful comments and suggestions. Finally, we thank Horacio Coral Díaz, John Alexander Díaz Mosquera and Laura Tatiana Ocampo Isaza from DANE for providing helpful assistance with the data. The information and opinions presented in this paper are entirely those of the authors and do not necessarily reflect the views of the IDB, its Board of Executive Directors or the countries they represent.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the authors.

Notes

1. For some evidence, see Quartesan et al. (2007), Benavente and Grazzi (2017), Correa-Quezada et al. (2018), de Santana Ribeiro et al. (2020) and Goya (2022).

2. There are important differences that may limit the potential impact of creative industries in middle-income countries. These countries tend to have a larger share in agriculture and other less productive sectors and may have less diverse economic activities in their cities. The creative industry in middle-income countries is often smaller and more concentrated, with a higher number of small and micro-enterprises and informality. Additionally, the way in which firms are linked to the rest of the economy may differ. For instance, Ault and Spicer (2020) find that entrepreneurship differs in kind, rather than just degree, across countries, with informality in high-income countries being ‘growth-oriented’ and in middle-income countries being ‘subsistence-oriented’. Lastly, middle-income countries have fewer capabilities and therefore less potential to benefit from spillovers from creative industries, compared with high-income countries, which may have more favourable conditions for generating positive externalities between sectors.

3. The Jaccard index has been widely used as a similarity measure to detect co-occurrences of data in different fields (e.g., Boschma et al., 2014; Utkovski et al., 2018; Campi et al., 2020, 2021).

4. This strategy, which was originally implemented by Bartik (1991), has been increasingly used to isolate labour demand shocks in urban economics. For more applications of this identification strategy, see Moretti (2010), Bartik (2014), Ciarli et al. (2018), Diamond (2016), Hornbeck and Moretti (2018) and Adao et al. (2019).

5. We also did the estimations for the sample of cities with LQs < 1 and ≥ 1. The results lead to similar conclusions, but we prefer to use samples with a balanced number of cities.

6. We must highlight that Colombia has a large informal sector, estimated to have been between 62% and 65% in 2013, which is not considered in this paper (ILO, 2014). The consideration of informal employment could generate changes in the employment share of creative industries.

Additional information

Funding

The authors acknowledge funding from the Innovation Division of the Inter-American Development Bank (IDB) under the project ‘Creative Economy, Innovation and Economic Development’. Tommaso Ciarli acknowledges funding from the European Union Horizon 2020 Research and Innovation Programme [grant agreement number 101004703 (PILLARS)].