Table of Contents

  • During the Finnish EU Presidency in 2006, measures were taken to reform the Northern Dimension (ND) policy. The ND Summit of 24 November 2006 adopted new basic documents for the Northern Dimension: a political declaration and a framework document, which took force on 1 January 2007. With the reform, the Northern Dimension being a regional expression of the EU-Russia Four Common Spaces with full participation of Norway and Iceland has become an efficient political tool for the implementation of the four road maps in matters relevant to the Northern Dimension area.

  • The primary aim of the study was to provide knowledge and material for the Northern Dimension Ad Hoc Expert Group's endeavors to build instruments in order to support cultural cooperation in the context of the Northern Dimension. The study aimed at finding answers to questions on what is generally called creative business in Russia, how it is defined and whether creative business networks exist in Russia. The study was conducted at the Center for Markets in Transition (CEMAT), hosted by Helsinki School of Economics, in the summer of 2009. The overall responsibility for the research work was carried by Prof. Riitta Kosonen, director of CEMAT. The authors of the study were Dr. Päivi Karhunen, Dr. Katja Ruutu and Aleksander Panfilo. We thank Marianne Möller and Mikhail Gnedovsky for their valuable input to our research.

  • The topic of this study is the state of the art of the cultural or creative industries in Russia1, particularly in Northwest Russia. However, it is difficult to generalize the state of the creative economy in Russia because of the relative novelty of the field of creative industries in Russia. Like the United Nations' report on creative economies states, the economies in transition have particular economic and cultural circumstances. These countries share the common problem of how to deal with cultural assets that were formerly state owned and that are now in the domain of the private sector. Like many other countries in transition, Russia has not yet wholly understood the economic aspects of creativity and the way it contributes to entrepreneurship, fosters innovation, enhances productivity and promotes economic growth. However, Russia could have great potential in the creative industries because the word "creativity" is associated with originality, imagination, inspiration, ingenuity and inventiveness, which all suits very well into Russian cultural tradition.

  • As noted earlier, there is a lack of statistical information on the creative sector in Russia. However, the UNCTAD's Creative Economy Report gives some estimations of the size of the creative industries and their contribution to the national economy for Russia among other countries. According to the definition used by UNCTAD, creative industries are "cycles of creation, production and distribution of goods and services that use creativity and intellectual capital as primary inputs. They comprise a set of knowledge-based activities that produce tangible goods and intangible intellectual or artistic services with creative content, economic value and market objectives." Figure 1 demonstrates the share of creative industries in gross domestic product (GDP) in Russia and other countries covered by the UNCTAD report.

  • After giving an overview of the Russian creative industries in terms of market indicators, we next discuss the regulative environment for cultural activities in Russia. In this chapter, we introduce the state actors responsible for culture in Russia, and give an overview of the basic laws and Federal programs on culture.

  • Russia has been characterized by protective attitudes towards cultural policy and heritage in the 21st century. The nation-building and identity formation have affected the domestic as well as the foreign policy. Russia has wanted to restore its status as great power (deržava) in world politics. The cultural policy has been part of this policy and lacked of clear strategic visions. After the year 1994, the state budget expenditure on culture fell significantly. (This will be discussed more in detail in Chapter 5.) At the same time with cutting the public money some institutional changes went through. The cultural organizations started to be characterized as governmental, non-governmental and commercial organizations.

  • As discussed earlier in this report, the cultural sector in Russia is relatively dominated by state organizations. Respectively, the state is a major funding source for cultural organizations. It has been typical that the state cultural institutions can get budget allocated money without much effort. The state funding for cultural organizations has, however, been drastically reduced in the post-socialist era. Real reductions in government spending on culture began after 1994. The amount of government funding in constant prices dropped by almost half by 1998, reaching just 53 percent of the 1992 level, then it rose to 72 percent in 2000. In 2001 it fell below the 1998 level, to 45 percent. There are no available statistics on culture as share of total central government spending, but government expenditure on culture per capita was 30.87 euro in 2005. The share of spending on culture by central government was 30.95% in 2005.

  • The UNCTAD Creative Economy report 2008 states that over the period 2000-2005, international trade in creative goods and services experienced an annual growth rate of 8.7% and the future growth of that sector is expected. Nowadays, in the most advanced countries, the creative industries are emerging as a strategic choice for reinvigorating economic growth, employment and social cohesion. Also some developing countries, mainly in Asia, have started benefiting from the dynamism of the global creative economy and are enhancing their creative industries. China, which is eading this process, became the world's leading producer and exporter of value-added creative products in 2005. However, the large majority of the developing countries are not yet able to harness their capacities for development gains because of the combination of domestic policy weaknesses and global systemic biases.

  • A number of Russian experts in the field of creative industries were interviewed for this study. This section summarizes their views concerning the future development perspectives and current challenges of creative industries in Russia.

  • We conclude the report by summarizing the main findings of the study and presenting a SWOT analysis of the Russian creative industries. Figure 20 presents the strengths, weaknesses, opportunities and threats that we identified in the study.

  • Leontief Centre (www.leontief.ru) is an international research center, which was founded in 1991, by the mayor's initiative of St. Petersburg. The center is an independent, non-profit research and consulting organization, which has over the years grown into a significant research center. Since 1996 Leontief Centre has been responsible for the organization, management and monitoring the Strategic Plan for St. Petersburg. It has played a major role in the development of SME's as a key element in economic and social reform, including the setting up of support funds and other infrastructure institutions. Leontief-centre participated in the Tacisproject "Creative Industries Development Partnership", together with the cities of Helsinki, Manchester and St. Petersburg. The project was carried out during the years 2000-2003.