The City in the Experience Economy

Role and Transformation

Anne Lorentzen, Carsten Jahn Hansen

• Publisher: Routledge
• Year: 2013
• eBook ISBN: 9781135757878
• Topic: Physical Sciences
• Subtopic: Geography
• Index: Geography

The book develops a new approach to urban development in which leisure, pleasure or experiences are seen as key drivers. History, authenticity, urban qualities, local culture and leisure offerings or a vibrant retail sector are thus assets in local development also outside of the big cities. Globalization and high mobility are necessary aspects of the development, which entails the development of high urban profiles in a globalized and highly competitive world. Apart from experiential qualities a critical urban size, is also required. Experience qualities can be connected to urban design, where particular designs stimulate citizens' learning and activity in the urban space. They can also be connected to more tourist related large scale projects of experiential mass consumption with fun parks and shopping. A combination of the two approaches has been developed to promote for example car brands and cities through experiential car museums. New stakeholders, new network based forms of cooperation and new entrepreneurial strategies are connected to urban development in 'the experience economy'. In particular new network based approaches are needed if small and rural places should also reap the fruits of the experience economy.

This book was originally published as a special issue of European Planning Studies.

INTRODUCTION

The Role and Transformation of the City in the Experience Economy: Identifying and Exploring Research Challenges

ANNE LORENTZEN & CARSTEN JAHN HANSEN

ABSTRACT The article introduces the special issue on the role and transformation of the city in the experience economy and raises some research issues. The issue focuses on the transformative aspects that can be identified in relation to experience oriented planning and development. We show how experience economy is much related with affluence and the growth of leisure demand, and that place has a particular role to play in terms of amenities, narratives and identities. Places, and in particular cities, undergo development or commodification to attract leisure consumers, which are increasingly mobile. Both urban systems (the relative position and role of cities) and urban structures (the city fabric) change in the experience economy, and so does means and ends of planning, which can be seen to be increasingly entrepreneurial and stakeholder based.

Introduction

This special issue of European Planning Studies explores and discusses the emerging experience economy and its implications to economic geography, physical spaces, mobility, environment, culture, branding, planning and democracy. In particular, our research focuses and conceptualizes on the transformative aspects that can be identified in relation to experience-oriented urban development. Our overall hypothesis is that a range of different places are becoming integrated in the experience economy through the development of still more challenging leisure activities, new advertising and marketing strategies and through the capitalization and development of places. Rural and remote areas are, to some extent, part of the trend as tourist resorts or as locations for the production of specialties for the global market. However, cities are mostly involved due to the greater variety and density of activities and places hosted by them. This is illustrated by the fact that an increasing number of cities have embarked on strategies of experienceoriented growth. Hence, this issue focuses on the role and transformation of the city in the experience economy.

Our exploration departures from and involves different interrelated spatial perspectives. In the outset, we ask what implications the development of experience-based activities has for scales of economic geography. Does the emerging experience economy represent new opportunities for cities of different sizes and positions in the urban hierarchy? Furthermore, among the broad range of what has been termed “experience industries” (Tofler, 1970), we particularly consider place-bound or attendance-based industries because of their immediate role for local development, as well as for urban policy and planning. Hence, since planning is a force which is decisively intertwined with geographies, we have also asked: what is experience planning? Through what kind of strategies, projects and activities do planners contribute to the experience content of their local territory? and vice versa; how does experience-oriented development influence local policy and planning activities, and what are the physical, cultural and democratic consequences of this? In doing so, we consider and discuss several more specific consequential aspects, such as the relationship between the experience economy, the mobility of experience customers and the environment. Is there perhaps a contradiction between the low material intensity of experiences and the polluting global transportation? In addition, we explore into the characteristics and activities of stakeholders of the experience economy and the governance settings and practices related to experience-oriented planning. What are, for instance, the roles of civic, commercial and public sector stakeholders; do we see the formation of new relations and arrangements as well as a new topography of cooperation or “rules-of-the-game”?

The Growth of Leisure Economies

In his book “Future Shock”, Toffler (1970) foresaw radical changes in the economic structures of the advanced economies. Under more affluent conditions, Tofler (1970, p. 220) suggests, we are recognizing the economy to deal with a new level of human needs. According to Tofler, the economy will become geared to the provision of “psychic gratification” and the “quality of life”. These changes are multifaceted, but since the basis of them is increasing affluence, it is relevant and useful to consider the history of this affluence, because it implies that today leisure and entertainment represent an important and increasing part of consumption patterns. Recreational goods and services represent luxury goods, which in economic terms is defined as goods with “income elasticity greater than unity”. By rising incomes, the share of such goods in consumption will rise. And, incomes have been rising in the industrialized countries for a long period of time. Between 1870 and 2002, this growth was 2.3% annually as a mean. In addition, the share of recreational consumption grew considerably as part of disposable incomes. An estimate of the OECD concludes that between 1975 and 2002 it grew from 8.1% to 10.3% in Denmark and in the UK from 5.9% to 13.2% (Andersson & Andersson, 2006, p. 42).

However, not only rising incomes, but also an increase in leisure time contributes to the growth in recreational consumption. It has been shown that, in the OECD countries, the number of annual working hours has been almost halved between 1870 and 1979 (Andersson & Andersson, 2006, p. 45). The shortening of the working day and the increase in the average vacation time contribute to this. This means that the constraints to leisure consumption related to income and time have been considerably relaxed. Never before have the opportunities for the consumption of leisure products and services been so great, just as expected by Tofler. Furthermore, demographic and educational changes contribute to the growth in leisure demand. In the advanced countries, people live still longer, and the average age of the population is likely to increase in the future. In addition, the birth rate drops, leaving more money in each household for leisure consumption (Andersson & Andersson, 2006, p. 48).

Then, what do people demand, and in particular, what influences this demand? The structure of demand for leisure activities depend on people’s education. This is because some leisure products and services require certain knowledge to be enjoyed. Generally, in OECD countries, the education level has increased considerably, from 2–3 years of school in 1870 to 11.6 years of school in 2000. This would, for instance, indicate a higher demand for knowledge-requiring consumption such as arts. Education levels still vary, and it has been shown that highly educated people tend to prefer museums, cinemas, live music performances and literature among others, whereas people with little education prefer amusement products and video recordings among others (Andersson & Andersson, 2006, p. 49).

Hence, the combined impact of income, time, demography and education factors means that leisure products and services represent a very important growth sector of the economy.

How Do We Conceptualize the New Development?

In economic terms, leisure products and services are then luxury products that people consume when they have a surplus of income and time, and (as indicated) the type of products preferred depends on the age, educational profile and family situation of the consumer. Tofler (1970, p. 227) provided “experiential production” as a term for the new segment of production directed towards luxury consumption. The industries were “experience industries” (Tofler, 1970, p. 221) and the producers “experience makers” (p. 219). Future consumers would be needing products and services that add beauty, prestige, individualization and sensory delight to the products or services (Tofler, 1970, p. 224). Experiences will even be sold on the market exactly as if they were things (Tofler, 1970, p. 226). “Psychic gratification” is the core of the new provision system (Tofler, 1970, p. 220).

In the 1990s, the sociologist Schulze (2005, p. 13) labelled the increasing focus on the non-material aspects of consumption as the aesthetication of everyday life. The significant role of the aesthetic appearance of products, human relationships and human habits shows how a larger part of people’s lives has turned into experience projects and the society into an experience society. Therefore, Tofler interprets the new trend as a new provision system, whereas Schulze (2005) sees it as a matter of lifestyle, or rather as related to the meaning of life. Recently, these ideas have also been developed by Lund et al. (2005) and by Vetner and Jantzen (2007). Experiences become important to the individual because they become part of the narrative connected to his/her life and identity. In the age of modernity, it is part of the freedom of the individual to create his/her own identity, and experiences become a means to achieve this.

It was, however, the contribution of Pine and Gilmore (1998, 1999) that caused the rouse of a broader discussion and agenda-setting concerning the role of experiences. They seem to have been inspired by Tofler’s original ideas and developed them into a strategic tool of business development. In addition, they apply Porter’s idea that producers who apply more refined strategies of specialization, instead of just competing on price, will gain a more sustainable advantage on the market (Porter, 1990). Pine and Gilmore (1998, 1999) find that providers of goods and services increasingly compete on the basis of particular experience dimensions added to their product or service. The involvement of the consumer is a quality of the experience product or service: “ing the thing” e.g. canoeing, seal-viewing and dog-sledding (Pine & Gilmore, 1999, p. 15). From Tofler (1970, p. 225), they borrow the idea of memorable experiences. Success of a product or service is when the consumer keeps a pleasant memory of his/her meeting with the product or service. Two business perspectives can be deducted from their contribution. First, staging experiences becomes a business in itself in the future (Pine & Gilmore, 1999, p. 67), as exemplified by the increasing supply of leisure activities such as theme parks. And secondly, as a strategic management device experiences will become part of marketing or a potential add-on to all goods and services for final consumption, as seen in the efforts to aestheticize products and develop interesting relating narratives. In parallel to this, place branding can be understood as a strategy involving the aesthetication of places, the development of narratives about them and as the staging of the city as an experience.

What is an Experience Product?

Based on the above, experience products can be considered luxury products, which are consumed for pleasure. They are products that represent a narrative and some degree of involvement of the consumer, as an individual or as a group. Physical products as well as services can be enacted as experience products. These are either foot-loose (computer games), place-bound or attendance-based (a theatre play, a meal at a theme restaurant). As mentioned, this issue focuses on place-bound experiences, as places and activities can also be capitalized as experience products, directly or indirectly. Places may host experience services (stadiums, hotels) or they may in themselves represent attractive narratives, which motivate people to visit them (a historic castle, street of city).

However, common to the different categories of experience products is the appeal to the feelings of the consumer (Schulze, 2005, p. 421; Tofler, 1970). The definition of experience products is concerned with the relation between the consumer and the product. The litmus test is then if it appeals to the customer by creating an experience? This is not an immediately operational definition, and when empirically researching into issues of experience economy, researchers need to develop more specific approaches, depending on the context. What people, or rather consumers, consider an experience (a positive enjoyment (Jantzen, 2007)) is bound to be culturally, historically as well as sociologically specific. Therefore, it makes sense to focus on particular places, in particular historical periods when digging into the spatial importance of the experience economy. The empirical backbone of this issue is thus recent developments in Europe, and in particular, in Denmark.

What Does this Mean to Spatial Development?

It is not difficult to deduce the fact that leisure demand, luxury demand and the search for experiences is bound to be mostly concentrated in cities. One reason is that, in general, incomes are higher in or near the largest cities. Additionally, in cities, education levels are generally higher and families are generally smaller, often due to more career-oriented lifestyles. Furthermore, in a historical urban development context, experience- or leisureoriented activities tend to have been concentrated in cities. Urban dwellers, therefore, should tend to spend more money on leisure products and services than people in rural areas, and they should tend to purchase more knowledge-demanding types of leisure products, than rural dwellers would. It can be added that many experience productions represent considerable economies of scale. They may require large investment in physical amenities (concert halls, theatres, sport stadiums) and they require a very large and stable public to create sufficient income. Also, the creativity involved in developing experience products benefits from what we call economies of urbanization (Andersson & Andersson, 2006, p. 183). This refers to the diversity and the density of cities, which implies that the likelihood of creative entrepreneurs to spontaneously encounter tacit knowledge and learning is high (Desrochers, 2001). It has been shown how many of the worlds creative neighbourhoods exhibit particular conditions of diversity and density (Andersson & Andersson, 2006; Jacobs, 1985; see also Florida 2005).

However, experience economic growth and innovation may also take place beyond the metropolises (Bell & Jayne, 2006), based on local initiative and public–private partnerships. One example is the successful branding of the Swedish region of Skåne as a food region, with the logo of “the spirit of food” (Baltic Sea Solutions, 2006). This logo was based on an emerging food cluster, the development of a food university and the active development of related narratives. In the INTERREG programme, research has been undertaken to analyse and support the role of small and medium-sized historic towns in Europe. The conclusion is that these towns bear a particular potential for stimulating regional competition through supplementing culture and leisure functions, which can serve urban development in economic as well as non-economic terms. The towns provide soft location factors for investors, they are attractive for tourism in the experience economy and, finally, they are anchor points for local and regional identity. Such towns may even serve as magnets for the creative and talented people who are the basis for creative industries. This is seen as a perspective even for peripheral, rural areas. One point, however, which is of utmost importance to such towns is their physical connectivity, but perhaps even more so their relational connectivity (Nagy et al., 2007). Being physically connected to other places through high-rated transport infrastructures, such as motorways and airports, does not guarantee success. Additional relations are often required for a town or small city to be able to compete and develop.

This is also why another important aspect is the positioning of the city on the “market”. The city is only attractive if it is not like any other city. It has to have a different profile. The positioning of cities is not as easy as the positioning of products, due to the many stakeholders of the city. The positioning of the city through branding is, therefore, both an internal process through which key stakeholders need to agree on the identity or image they want to promote, as well as an external process of communication with the different “markets” (Christgau & Jacobsen, 2004; Løkke, 2006). Similar to this discussion, Zukin (1995) suggests that cities have a “symbolic economy” on the basis of which they compete. The symbolic economy is the look and feel of cities. Since the 1970s and following the industrial decline, the image of the city has become a product that is sold on the national and even the global level. Private enterprise is responsible for a large share of the offer, of which much is “entertainment”, aiming at attracting a mobile public of cultural consumers (Zukin, 1995, p. 19). This changes the culture, the cultural policy and the urban development policy of cities. Instead of being a welfare good, culture becomes a globally marketed good (Freestone & Gibson, 2006). See also the next section.

Furthermore, Romein (2005) discusses the relationship between, on the one hand, the development of the urban system and, on the other hand, the activity system of leisure. An increasing part of the urban economy consists of the production of symbolic goods, such as entertainment and decoration, just as Tofler, Schulze and Pine and Gilmore claimed concerning the economy in general. Much of this is attendance-based, as it needs to be consumed in situ. By producing such products, the cultural (or experience) industries potentially contribute to both the quality of leisure and the quality of place in cities. This can be to the benefit of the citizens of the particular place. However, there is also a risk that it may contribute to, for instance, a theme orientation in urban spatial development that excludes certain citizen groups or creates new social divides between citizens.

Another aspect of importance to urban spatial development, or the urban system, is that today people invest time and money in travel to pursue their leisure interests. The attendance-based and place-bound characteristics of many experiences mean that leisure consumption and travel are often closely connected. This influences mobility patterns, often through increases in mobility, which again puts pressure on urban infrastructures and the environment. In addition, the combination of increasing mobility and the individualization of tastes implies the emergence of new communities of shared preferences regarding consumption and leisure. This again may imply the emergence of a certain division of labour between leisure activity suppliers in different places. Certain outdoor activities, such as wind surfing and skiing, concentrate in particular places depending on the natural circumstances. Some cities are known for music festivals of rock (Roskilde) or classical music (Århus, Salzburg), shopping (London) or amusement parks (Billund).

The consequences of the above reflections on urban spatial development are that the centre of large cities tend to transform into spaces of consumption for fun and enjoyment (Mullins et al., 1999). However, the establishment of shopping malls, mega dance halls, sport stadiums, multiplex cinemas, integrated entertain...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Contents
• 1. Introduction: The Role and Transformation of the City in the Experience Economy: Identifying and Exploring Research Challenges
• 2. Cities in the Experience Economy
• 3. The Geography of the Experience Economy in Denmark: Employment Change and Location Dynamics in Attendance-based Experience Industries
• 4. The Experience City: Planning of Hybrid Cultural Projects
• 5. Experience Spaces, (Aero)mobilities and Environmental Impacts
• 6. Experiential Strategies for the Survival of Small Cities in Europe
• 7. The Experience Economy and the Transformation of Urban Governance and Planning
• Index