The creative industries have received much attention from economic geographers
and others, both for their propensity to co-locate in urban settings and their potential to
drive urban economic development. However, evidence on the latter is surprisingly
sparse. In this paper we explore the long-term, causal impacts of the creative industries
on surrounding urban economies. Adapting Moretti’s local multipliers framework, we
build a new 20-year panel of UK cities, using fixed effects and a historic instrument to
identify effects on non-creative firms and employment.
We find that each creative job generate at least 1.9 non-tradable jobs between 1998
and 2018: this is associated with creative business services employees’ local spending,
rather than visitors to urban amenities such as galleries and museums. We do not find
the same effects for workplaces, and find no causal evidence for spillovers from
creative activity to other tradable sectors, findings consistent with descriptive evidence
on the increasing concentration of creative industries in a small number of cities. Given
the small numbers of creative jobs in most cities, however, the overall effect size of the
creative multiplier is small, and shapes only a small part of non-tradable urban
employment change. Overall, our results suggest creative economy-led policies for
cities can have positive – albeit partial – local economic impact