In the globalized world, large and small cities compete with each other in attracting new investments, capital and inhabitants. In the search for successful paths by cities, the cultural sector has been seen as a chance by western countries since the 1970s. In the post-socialist countries, a growing interest in the cultural sector in the context of the socio-economic development of cities and regions has been also observed in recent years. The studies on the impact of culture on economic development focus mainly on largest cities, while smaller cities more and more often attempt to implement patterns based on the cultural sector to their own strategies. They take such actions because the cultural sector is generally considered to have a positive impact on socio-economic development through, among others, the creation of new jobs, the improvement of city image, the attraction of new investments, the increase in the residents’ quality of life, etc. The main aim of this study is the analysis of the expectations and the potential impact a cultural event may have on the development of a small city from the perspective of local business. For the purposes of the study we have chosen a small city located in Central Poland, named Gniewkowo, with population number amounting to 7.5 thousand inhabitants. In the small city the festival of progressive rock has been organized cyclically since 2007. It should be emphasized that progressive rock, which was created in the 1960s and originated from psychedelic rock, is addressed to a relatively small group of people. Despite the above-mentioned fact, the Tomasz Beksiński Festival of Progressive Rock in Gniewkowo annually attracts many fans not only from Poland but also from abroad. This cultural event is a classic example of a local grass-root initiative because the inhabitants of Gniewkowo are the initiators and the organizers of the festival. They have also created a non-governmental organization based only on their fascination with this kind of music and their own intellectual capital. In order to realize the aim of the study we have conducted interviews with representatives of local governments supporting the event. In the interviews we asked questions about the expected economic benefits for the city. We have also carried out a questionnaire survey among the owners of selected firms active in the field of hotel, catering and trade services in Gniewkowo in 2014. The survey refers to the assessment of the impact of the analyzed festival on the financial condition of these firms. The collected data will enable us to confront the expectations of local governments with the real impact of the festival on the development of local firms. The study reflects a research trend describing the cultural sector in the economic development of cities and regions (culture-led development). The results of the study will contribute to recognizing the role of culture and the significance of non-governmental organizations for the sustainable development of the smallest cities
