In this report the mapping of CCIs is undertaken in order to depict patterns of spatial clustering in terms of provinces, metros and selected cities. A comparative analysis between the clusters is also presented.
Report 3 of this study considered the contribution of CCI industries towards the South African economy in terms of impact measured by individual indicators such as GDP, employment and capital utilised. Since there is no direct distribution of CCI domain activities on a provincial basis, a primary objective of this report, Report 4, was to study the provincial size and distribution of the CCI activities in South Africa again in terms of the macroeconomic indicators of Report 2.
Due to the fact that information is also provided regarding the usage of production resources by CCI activities within provinces, this can assist in the optimisation of scarce resources such as capital and labour at the regional level. For example, in South Africa, with its structural unemployment issue, CCIs with high labour/capital ratios should be given preference for investment and expansion.
A second objective was to consider the concept of clusters in the context of CCI domains. Due to the close correspondence between the ideas of a cluster and a domain these two concepts are used interchangeably in the second part of this report. It is argued in the report that for a cluster or a hub of activity data at a municipality level is more relevant than data at the provincial level. In general, creative and cultural industries tend to concentrate mainly around Metro’s as well as around large and medium-sized cities located in various local municipalities, forming creative local production systems. Consequently, a number of municipalities were chosen (16 in total), based on their size (metros) and other smaller cities/large towns known for their arts and cultural festivals.
In order to refine the data further two concerns were considered by applying a Delphi technique. The first concern relates to the fact that in some cases there is not a clear equivalence or correspondence between the SIC definition of sector and the CCI definition. A second concern relates to the fact that in some cases the presence of government (national or provincial) may distort the data in that the presence of government may result in a higher value for a specific cluster component.
The results of the study are presented in terms of absolute rand values and relative indices reflecting the significance of the various clusters as well as the importance of the clusters in the local municipalities.
Technically, the importance of a cluster is measured in terms of the extent of which it has a higher or lower contribution to the economy, relative to the average contribution of the cultural and creative industry of that specific geographical location (local municipality). The economic importance of the various clusters, as well as the importance of the cultural and creative industry itself of a local municipality, are measured in terms of the percentages that they have in relation to the specific clusters or in the case of the culture and creative industry, their impact on the total economy. This exercise was repeated for the various SIC sectors in a specific main cluster.
The next step is to estimate a relative importance index for the various clusters (domains) in the broader cultural and creative industry of a specific geographic location. This is done by dividing the percentage importance of a specific cluster by the percentage importance the total of the cultural and creative industry to the economy. Qualitatively, the relative importance index is expressed by different colours (green, red and white) with green indicating a value above the average of the index, red below the average and white representing a neutral reading of the index for the 16 geographical regions. The green coloured CCI sectors, for example, would indicate which sectors are performing well in a particular location.
In order to gain further insight into the clusters and to move closer to the traditional definition of a cluster, a backward linkage analysis was conducted. In the context of this study, the emphasis is the direct (on-site) linkages and not on indirect linkages connected to entities outside or away from the location and area of the cluster. The reason for this is that such linkages reflect leakages away or from or out of the local area. By providing these linkages local authorities will be in a position to determine which non-local sectors and industries should potentially be encouraged or enticed to relocate or for new enterprises, to locate at a particular area.
There are a number of directions in which the study could be refined. Some other definitions of clusters could be considered for analysis. Although this study suggests that UNESCO’s domains represent, to a large extent, various clusters within CCI domains, we recommend that consideration be given to the idea of using techniques such as those employed by Cheruiyot and Vom Hofe to undertake more sophisticated cluster analysis that will identify and quantify the linkages that exist between CCI activities within CCI domains, and, more importantly, between CCI activities and activities in other non-CCI sectors of the South African economy. This possibility has not been pursued in this study as a result of time and budget constraints.
Further, the analysis in this report was based on turnover or production of CCI industries for provinces and clusters. The analysis can also be extended by considering the employment and capital impact of clusters. The creation of clusters of CCI activities can assist in identifying development opportunities. Micro business studies will contribute to the identification of CCI clusters with the objective of developing strategies that will enable the identified clusters to perform more effectively. It is important to note that the development of a specific CCI cluster will not only create jobs in its own right, but will also have positive effects on broader economic growth and job creation through backward and forward linkages. Furthermore, micro studies can also identify CCI clusters within specific provinces that are not operating efficiently so that strategies can be developed to optimise the workings of these inefficient clusters.
The cluster analysis conducted in the 2020 study, differs from the 2017 study in that the mapping of the backward linkages are provided and also quantified It provides a indication of the opportunities to produce locally more of the commodities that serves as inputs to the specific clusters , that are currently imported from other locations in South Africa and abroad.
Further recommendations that stem from the research are that it may be sensible to separate cultural and creative activities and that each warrant a study on its own. It is also likely that drivers of these two groups may differ in important ways and that different indicators should be involved for different types of clusters.
Another recommendation is that more attention be given to the availability and quality of data at provincial and local levels.
Finally, reflection is required regarding the definition of clusters in the present context. It is clear that ways at which to look at clusters are changing and that old definitions may not capture reality. A new and different definition will likely contain elements from the current understanding of clusters as indicted by agglomeration of industries, an industrial complex definition or sectoral network models and other definitions.
