Creativity and Space

Labour and the Restructuring of the German Advertising Industry

Joachim Thiel

• Publisher: Routledge
• Year: 2019
• Print ISBN: 9780815388296
• eBook ISBN: 9781351160780
• Edition: 1
• Topic: Physical Sciences
• Subtopic: Geography
• Index: Geography

Originally published in 2005. By examining the changing patterns of the German advertising industry from a spatial-economic perspective, focusing on the rise of Hamburg as the country's new creative capital, this book discusses the shifting relations between economic organization, social relations and spatial structures in the post-industrial economy. It argues that it is the professional labour market which drives the organization and the spatial structure of knowledge-intensive activities. It does not, however, only imply the increasing importance of labour as a factor of production, but also suggests an increasing uncertainty linked to the nature of knowledge - labour. Illustrated by in-depth empirical material, the book brings together debates on reflexive modernization and individualization with those on embeddedness and on the role of business services in regional development. It concludes that it is the labour market of professionals which provides a regional and social anchoring of economic activities, while at the same time pointing out the increasing importance of metropolitan regions.

Chapter 1

Introduction

The Issue: Creativity and Contexts

‘Creativity’ is en vogue. And it is not just the rise (and fall) of the ‘cool and creative’ (Gill, 2002) industries like old and new media that nurtures this current excitement, but the idea of a wider transformation of the economy as a whole, including the sources of competitiveness, the organizational patterns, but also the spatial structure of economic activities. The rules of the game in the knowledge-based economy have changed: ‘… we now have an economy powered by creativity’, as Richard Florida vigorously claims in his academic bestseller ‘The Rise of the Creative Class’ (Florida, 2002a).

The political and academic debates around this rise of creativity to a major asset of the knowledge economy on the one hand are very much about the individual. Creativity is a matter of ‘intrinsic motivation’; it is about ‘doing what you love and loving what you do’ (Amabile, 1997) and about creating ‘out of inner necessity’ (Caves, 2000), thus being directly linked with the personal identity (Helbrecht, 1998). Creativity also reflects a specific type of behaviour; it is about the unexpected and unadapted, thus involving a sort of reformulation and generalization of Schumpeter’s ‘creative response’ (Schumpeter, 1988a (1947)), as an action which, in contrast with the ‘adaptive response’, is undertaken ‘outside of the range of existing practice’. And consequently, creativity is about a specific personality, the ‘eccentric, alternative and bohemian’ (Florida, 2002b), or, again, about a reformulation and generalization of Schumpeter’s ideal type of a creative ‘entrepreneur’ (Schumpeter, 1988b (1949)), regarding it now as the mainstream character of a knowledge economy.

On the other hand, however, as with the role of the entrepreneur in innovation, it seems an ‘illusionary idea’ to conceive of creativity, regarding its importance as an input to business activities, merely as a ‘unique individual quality’ (Pratt, 2004). Also creative action relies on a structural context it is embedded in which can both ‘enable creativity to flourish’ (ibid.) and function as a constraint. Creativity thus naturally has to be read from the perspective of a ‘duality of structure’ (Giddens, 1984). In addition, and closely linked to that, also the growing importance of creativity in economic action must be understood in the wider context of structural change. Three main fields – and their corresponding debates – have to be emphasized which may frame the increasing demand for more creative individuals in the contemporary economy:

First, even though the new hype around creativity is based on a broad idea of socio-economic change it has to be discussed in view of the rising ‘creative’ or ‘cultural industries’ which are said to constitute somehow the institutional and organizational role model for the new creative economy (Thompson and Warhurst, 2004). The main point within the debates around creative industries is that there is an increasing convergence of the formerly separated spheres of culture and economy, with this argument drawing on the pioneering arguments of the Frankfurt School (e.g. Adorno, 1991), however coming to converse conclusions. Instead of identifying an increasing subordination of culture to the logic of capitalist mass production, many contemporary advocates of ‘creative industries’ hold to recognize a ‘cultural turn’ of the economy (Crang, 1997), thus focusing rather on a subordination of the economy to a cultural logic (Lash and Urry, 1994). Notwithstanding the questions about the validity of this position the approximation of two areas of society based on different ‘frameworks of action’ (Storper, 1997) has implications for the practice of economic life given that these different frameworks also involve production processes, organizational settings, ‘performance criteria’ (Girard and Stark, 2002) etc. Thus a growing degree of creativity may also comprise changes in the field of economic organization in that patterns inherent to cultural production encounter the ‘classic’ organizational and institutional setting of a capitalist market economy.

Second, the way the individual as a creative subject is conceptualized points to a generally wider understanding of economic action beyond the atomized, fully informed and rationally acting ‘homo oeconomicus’. The fact that creative action involves the very personality – and not just abstract skills – implies that, with an increasing importance of creativity, also the social basis of this personality increasingly contributes to its economic or professional activity. This socially informed perspective of the economy is even more valid when looking at the narrower field of the creative industries: As cultural production strongly depends ‘on inter-personal norms, methods, languages and so on, in order to achieve communicability’ (Scott, 1999a, p.808), a high degree of social underpinning appears to be a necessary feature of the creative economy also from an output-perspective. That is to say, dealing with creativity requires dealing with the wider debates on the recontextualization of the economy in a post-industrial era, respectively on its embeddedness in networks of social relations (Granovetter, 1985), dominating big parts of industrial sociology, innovation economics, regional science and economic geography etc. during the last about 30 years.

Third, one important feature of the debates on recontextualization has always been its spatial dimension, based on the fact that even in an increasingly globally connected world economies of localization and urbanization, that is, forms of economic success based on short-distance relations, do not only survive but seem to increase in importance. The creativity discussions tend to accentuate this idea of a ‘compulsion of proximity’ (Boden and Molotch, 1994) even more strongly. As with the recontextualization this has two dimensions: On the one hand, the social underpinning of creative activities is manifested in space, given a spatially selective crystallization of ‘inter-personal norms’, conventions and institutions in the related industries (Scott, 1997, 1999a; Cristopherson and Storper, 1986). On the other hand, the socio-spatial environment, which involves social relations, institutional settings, but also the materially built environment, can both support and hinder creative action (Helbrecht, 1998; Florida, 2002a; Drake, 2003). That is to say, the rising importance of creativity closely interacts with the spatial structure of the economy, shaping it by reconfiguring the pattern of prosperity and decline, in turn however also being shaped by a variety of socio-spatial contexts influencing individual creative action in different ways.

In sum, thus, discussing the rise of creativity as a characteristic trait of the contemporary knowledge-based economy requires approaching this economy in a multifaceted way: neither focusing on the capabilities of single creative individuals nor simply stressing a ‘duality of structure’ leads to the point given that the structural context of the knowledge-economy is more complex than the corporation-centred pattern of the post-war era (Chandler, 1977). Dealing with a creative economy thus necessarily implies dealing with the intricate interplay between increasingly individualist action and the context it is embedded in, but also taking into account that this context is shaped by the interrelations between economic organization, social relations and spatial structures.

The Arguments: Labour Markets and Space

This book is precisely about the outlined complex duality of individualism and context, focusing on the seeming paradox that the current structural change towards a knowledge-based economy fosters both an ‘individualization’ of the economy, that is, a ‘disembedding’ of individuals from traditional structures, and the growing importance of its social and geographical underpinning, that is, their obvious ‘re-embedding’ in new socio-spatial configurations (Giddens, 1990). Thereby its approach on the one hand substantially differs from the neoclassical accounts of the economy based on the ‘atomized’ actor and the assumption of a market obstructing effect of underlying social mechanisms. On the other hand, it argues also against the mainstream work on the socio-spatial embeddedness of economic activities having come up in the last 25 years and emphasizing the concurrence of economic specialization, socio-cultural inclusiveness and spatial proximity as the new prime model of production organization in a post-industrial or post-Fordist world (Piore and Sabel, 1984; Sabel, 1989, among others). Obviously the interwovenness of economic organization, social relations and spatial structures both functions in a more complex manner and it interacts with a secular process of social individualization, that is, it is driven and shaped by increasingly ‘reflexive’ individuals acting independently from given structures both regarding their work context and their lives (Giddens, 1990, 1991; Lash and Urry, 1994).

This given, the first basic argument underlying the following chapters is that it is essentially the labour market of ‘post-industrial professionals’ (Bell, 1974) through which the intricate interaction of increasingly individualist reflexive action with its different economic, social and spatial contexts is shaped. The labour market of reflexive activities thus constitutes so to speak the key ‘arena’ of the knowledge-based economy and the key ‘anchor’ which makes contemporary economic action and organization increasingly interwoven with its social and spatial environment. This is not to say, the economy merely ‘obeys’ the growing importance of labour as an input to production in a straightforward way. First, it is rather the concurrence and interaction of strategies undertaken by knowledge firms and knowledge workers on the labour market, regarding the optimization of quality and cost of production, the successful recruitment of labour, but also regarding biographical plans and professional identities which drives the organization and structure of knowledge-intensive activities. Second, and more importantly, this complex interaction and the increasing involvement of the whole person in professional activities do not only raise the importance of labour, but also the uncertainty regarding its actual performance. This ambivalence of importance and uncertainty is driven by the nature of labour as a ‘fictitious commodity’ (Polanyi, 2001 (1944)), that is, by the fact that labour is not produced for being sold on a market but actually consists of human beings within the relational contexts of their individual biographies.

The second argument takes up this fundamental ambivalence characteristic for creative knowledge labour, holding that it is precisely the uncertain nature of labour markets its social and, even more importantly, its spatial underpinning is based on. Unlike other accounts emphasizing firm location and spatial development as being based on good opportunities or ‘factor endowments’ we thus consider the spatial context of the knowledge-based creative economy, at least to a significant extent, as a means to support the diverse economic actors’ strategies of dealing with the uncertainties, respectively with the ambivalences inherent to an increasing labour orientation of the economy. And it seems to be that urban or metropolitan environments with a sufficient degree of socio-cultural diversity prove most suitable to provide this support. Without aiming to get into any determinism as to a particular spatial form of the economy we do thus conclude arguing that an increasingly creative knowledge economy tends to be also an increasingly urban economy (Glaeser, 1998).

These general arguments are to be substantiated and illustrated by an in-depth empirical study of advertising as a service industry on the one hand paradigmatic as to the encounter of different economic ‘action frameworks’ and organizational patterns, the embeddedness of professional activities in dense networks of social relations, and its spatial concentration and inherent urbanness. On the other hand these different contextual fields are shaped by and interact with an exceptionally reflexive workforce of creative professionals essentially having to generate output ‘outside of the range of the existing practice’ in order to attract consumers’ increasingly scarce ‘attention’.¹ Given that the advertising labour market thereby exemplarily reflects the intricate interaction of creativity with its contexts it is likely to anticipate future patterns of the economy particularly well.

The Structure of the Book

The bulk of this monograph consists of the empirical study about the restructuring of the German advertising industry during the last about 25 years, focusing above all on the rise of Hamburg as the country’s new ‘creative capital’ as well as on the role of labour market mechanisms as catalysts of this change. Three out of the six chapters present the results of both extensive secondary data research and intensive fieldwork including about 30 semi-structured interviews and thorough documentary analysis having been carried out since 2000, including a concentrated work period in the years 2000 and 2001. Yet, as might have become clear in the preceding introductory sections, the book aims to offer more than just a case study of a particular business service, intending to contribute to the current debates on socioeconomic change by stressing the critical role of the labour market both as ‘arena’ of this change and as ‘medium’ of its socio-spatial underpinning.

The structure of the book reflects this double objective of thoroughly examining a particular industry and sustaining thereby a more general argument. Chapter 2 elaborates the outlined concept of the recontextualization of economic activities in the post-industrial economy as an intensified interaction of economic organization, social relations and spatial structures in more detail. The approach is developed by means of three major academic debates of the last 25 years having provided clues as to an understanding of how post-industrial economic activity interacts with its social and spatial context: the discussion on ‘new regionalism’, trying to explain the surprising success of specialized firm clusters in previously rural or semi-rural regions, the ‘new centrality’ debate stressing the persistent importance of agglomeration economies in a globalized economy, and the recent work on the ‘creative economy’ mentioned above. The arguments put forward in these debates are confronted with a ‘subject-centred’ concept of recontextualization, drawing mainly on Giddens’ (1990, 1991) as well as Lash and Urry’s (1994) arguments about an increasing need for ‘reflexive’ individual action, implying a larger degree of freedom, yet also of uncertainty, for individuals in both work and life of modern societies, thereby bringing about a ‘convergence’ of both spheres. This ‘convergence of work and life’ in turn however tends to accentuate the ‘commodity fiction’ characteristic for labour (Polanyi, 2001 (1944)) given that it also approximates its two contradictory dimensions as commodity and human being. It is this ‘conflicting convergence’ our key claim is based on: that the labour market of reflexive activities, respectively the process of filtering the convergence in this labour market, essentially shapes the functioning of the post-industrial economy.

In Chapter 3, Chapter 4 and Chapter 5 the results of the empirical work are unfolded from three different perspectives, in the course of which the analysis is increasingly directed towards the ‘subjects’ within the advertising industry. Chapter 3 provides a more general overview, at first of advertising as an economic activity and the general structural change the industry has undergone since the end of the 1970s, generally labelled as the transition from the ‘first wave’ to the ‘second wave’ of global advertising, and subsequently outlining the peculiarities of the German advertising market and the territorial structure of its production system. The chapter chiefly concentrates on how the general change of global advertising is reflected in the German space-economy, emphasizing the shift to the favour of Hamburg and offering a first explanation of this shift: On the one hand it is derived from the changes in global advertising towards a more creative ‘second wave’ style which, on the other hand, could be adapted to the German market by a group of Hamburg based pioneer agencies. Drawing on Storper and Walker (1989) we conceive of the performance of these pioneers as a process of innovation in which the leading actors are provided with a high degree of ‘locational freedom’, being likely to locate outside existing centres and to ‘produce’ their own regions.

Chapter 4 focuses on the firm, respectively on advertising agencies as key actors of the national industry, thereby examining this innovation process in a more exhaustive way. The ‘substance’ of innovation is presented by portraying the story of the most significant pioneer agency, Springer & Jacoby, which managed to create a new product, that is a more entertaining advertising style, by decentralizing the organization of the firm thereby both enhancing individual responsibility and mobilizing the internal labour market. Subsequently the general impact of this ‘entrepreneurial’ innovation on the German landscape of advertising agencies is discussed, outlining the changing ‘action frameworks’ of five different types of agencies varying in market size and innovativeness which make up this landscape. The chapter concludes with a comprehensive interpretation of the innovation process, launching the argument that the change within the advertising industry can be conceived of as a mutual bridging of two separate worlds it consists of: the world of business services and the world of popular arts. The innovative pioneers contributed to this bridging by both adding to the importance of the popular arts world and proving to be successful even in terms of the business performance criteria. Thereby they tended to shift the key arena of competition in the industry to the labour market of creative professionals.

In Chapter 5 this labour market is taken under closer scrutiny, in two steps: First, we discuss it as the key to understanding the innovation process. Enhancing the importance of creativity presupposed getting access to ...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of Figures
• List of Tables
• Acknowledgements
• 1 Introduction
• 2 The Economic, the Social and the Spatial: Framing the Post-Industrial Economy
• 3 The General Perspective: Changing Advertising and the West German Space-Economy
• 4 The Firm Perspective: Reading the Restructuring of German Advertising as an Innovation Process
• 5 The Labour Perspective: The Creative Professional in the Restructuring of Advertising
• 6 Space and the Ambivalence of Reflexive Labour
• Bibliography
• Index