Creative Moscow: Ahead of Hong Kong and Melbourne, but Far behind Beijing and London

© HSE University

Moscow is not only Russia’s official capital, but its creative capital as well. 54% of the added value of the country’s creative industries is generated here. This was one of the findings presented in the report, ‘Moscow’s Creative Economy in Figures’, prepared jointly by HSE researchers and the Moscow Department of Entrepreneurship and Innovative Development.

On May 11, a presentation of the report, ‘Moscow’s Creative Economy in Figures’, was held at the Richtor mansion in Moscow, where representatives of HSE University and the City of Moscow outlined the study’s findings. The presenters included: Leonid Gokhberg, HSE First Vice Rector and Director of the HSE Institute for Statistical Studies and Economics of Knowledge (ISSEK); Evgeniy Kutsenko, Director of the ISSEK Russian Cluster Observatory; Mikhail Gershman, Director of the ISSEK Centre for Science and Technology, Innovation and Information Policies; and Alexey Fursin, Head of the Department Entrepreneurship and Innovative Development of the City of Moscow.

In recent years, the role of creative industries in the economy has grown significantly. In the United States and China, creative industries produce about 4.2% of GDP, in the UK they produce 5.5%, in Italy they produce 3.8%, and in Russia they produce about 2.2%, Leonid Gokhberg said. The creative industries most commonly include architecture, publishing, design, fashion, the visual and performing arts, music, film and animation, software and video game development, broadcasting, advertising, museum activity, and other forms of activity.

However, the role of creative industries is not limited to contributing to GDP and creating new jobs. Creative industries, the HSE First Vice Rector emphasized, create new concepts and set new trends in societal and economic development. Therefore, it is important to support them, especially in large cities and capitals. The pandemic had a negative impact on the contact-intensive sectors of the creative economy (theatres, museums, and cinema), but the high-tech sectors were able to master new business models, and those same theatres and museums were able to offer visitors new formats of interaction during the pandemic that will remain in creative industry’s arsenal in the future.

The report identifies the key indicators of the creative economy of Moscow, presents profiles of individual industries, and provides data on their performance in the global market, Mikhail Gershman said. The authors of the study relied on official data from Rosstat, customs and tax services, and the Spark-Interfax database. They also conducted micro-studies on individual organizations.

Moscow is not only Russia’s official capital, but its creative capital as well. 54% of the added value of Russia’s creative industry is generated here, said Mikhail Gershman. According to the study, the creative industry of Moscow is made up of 113,000 organizations and sole proprietors and employs 463,000 people. When representatives of other spheres who are engaged in creative work are taken into account, the industry includes up to 1 million people.

The creative sector in Moscow generates about 3 trillion roubles in total revenue a year. The leader in value added (340 billion RUB) is the IT and video game development industry. It is followed by advertising (306 billion RUB) and television and radio broadcasting (181 billion RUB).

The share of creative industries in the gross regional product is about 6.3%, which exceeds that of construction (3.9%). According to this indicator, Moscow is ahead of Hong Kong and Melbourne, but it significantly lags behind Beijing and London, where creativity accounts for 14% and 12.1%, respectively. This lag demonstrates the potential for possible growth of the creative segment in the capital's economy, the report notes.

Despite the high level of creative industry development in the capital, the balance of foreign trade in creative goods in Moscow remains negative, which shows the high potential of import substitution in this area, says Mikhail Gershman.

Evgeniy Kutsenko spoke about the location characteristics of creative business organizations in Moscow. The study found that close proximity to other companies in the sector and proximity to shopping and business centres are key factors for the location of creative industry firms. Other factors (proximity to the metro or universities and institutions of secondary vocational education that train specialists in the relevant fields) have a weaker effect on where creative industry companies choose to be located.

He believes that it is important to stimulate cooperation within certain spheres of the creative industry as well as cooperation with other sectors of the economy, including industrial complexes in other regions, in order to increase the creativity of the economy as a whole.

Alexey Fursin thanked the authors for their thorough preparation of the report. It is the first step, he said, which makes it possible to develop a support system that is both comprehensive and detailed. Creative entrepreneurship is different from traditional areas of the economy, so details and personalization are important. In order to provide targeted, clear and appropriate support, a portrait of each element of the sector is crucial, including self-employed workers, whose role has not yet been studied.

© HSE University

According to Alexey Fursin, the main takeaways from the report are the need for synergy, cooperation, and the withdrawal of part of the creative industry from the unobserved sector. This will make it possible to accelerate the growth of the Moscow economy even in the short term. The development of elements of the creative industries that are currently invisible can create new medium-term and long-term prospects.

Mr. Fursin added that in late May and early June, the first centres of public services for creative entrepreneurs will be opened. These centres will provide a forum where entrepreneurs can learn the principles and rules of business. The city authorities, he promised, will take a project-based approach in providing support, and they will focus this support on rapidly growing businesses. This will optimize the programme’s effect, including at the expense of entrepreneurs who do not create many jobs, but set trends in the development of the creative economy. Separate support measures will be developed for them.

Leonid Gokhberg emphasized the need to study areas of the economy that do not fit into the usual classifications. The report made it possible to create a system of elaborated measurements and quantitative metrics. He identified increasing competitiveness to be the most crucial factor in promoting creative industry growth. Not always do import substitution programmes operate effectively. What is more important is not direct substitution, but the development of their own potential at a high level.

‘The economy of Moscow and even the whole of Russia will not provide a sufficient market for the creative industries of the capital. We grew up in a cultural environment and we understand that Russian culture is a competitive, world-class product. The question is how to stimulate it,’ said Leonid Gokhberg. He suggested that Russia should strive for the status of an attractive jurisdiction not only for the IT industry, but also for the creative industry. He believes that innovation policy in Russia is not very effective due to the desire for universalization. Approaches that do not consider the specifics of certain types of businesses, strategies, and company size do not work.

However, Moscow approaches the support of the creative industry in a systematic and differentiated manner. If the capital prepares a portfolio of measures in which entrepreneurs in sensitive and complex areas receive support and services, this will give a new impetus to the development of the city's economy and extend these principles to stimulate the new economy throughout the country, said the First Vice Rector.

See the study