The Impact of Culture and Creativity on the Economy of the City

Creativity is an important component of the economy for modern cities, and necessary condition for it is the qualitative understanding of the economic theory science. In the global competition, it plays an important role for the economic growth dynamics, which is directly related to human resource role in the modern economy. The competitiveness of the territories depends on their attractiveness to economically active individuals and the opportunities they provide with economic growth. When considering the creative and cultural industries as potential economic development factors in the urban economy, culture can be considered as a new stage in urban development based on quality of life, creativity, which provide a level of degree for balance and determine the stability of the growth potential. The development of supporting urban infrastructure is identified as one of the drivers for expansion of the cultural and recreational domains both for the political and economic development. They reflect the specific characteristics of each city, the competitiveness versus attractiveness potential, and demonstrate the potential shift from the environment for production to a potentially new consumer environment with a higher “symbolic value”. The creative industries today can serve as an urban development domain tool, creating a modern approach to economic activity in various sectors of the economy. The authors draw attention to the cluster link between creative and cultural industries in urban planning. The authors propose a methodology for assessing revenues and costs, as well as recommendations for the work of cultural organisations and institutions involved in creating a creative urban environment. The article presents data and modelling results of the economic impact calculations for two imagined cities in order to theoretically approbate the methodology, which would help assess the socio-economic effect of the development of certain clusters. The aim of the research is to identify the impact of culture and creativity on the economy of city. The calculated information for decision makers would help formulate recommendations, evaluate potential developments of the urban environment, assist in planning and networking in urban agglomerations, based on clusters of creative and cultural industries, as the post-industrial city needs to make changes in order to achieve economic growth. The development of urban cluster of creative and cultural industries has a certain multiplicative effect, i.e., impact on the development of other types of economic activity.