How Creative Industries Strengthen Regional Innovation Systems and Make Regions Future-ReadyThe Regional Impact of the Creative Industries
Regions today are facing profound changes. Digitalization, a shortage of skilled workers, climate change, and structural economic shifts are increasing the pressure to innovate. Competitiveness no longer stems solely from infrastructure or production capacity. What matters most is whether regions can combine knowledge, creativity, entrepreneurship, and collaboration into high-performing innovation systems. This is precisely where the creative industries have their greatest impact. They connect businesses, academia, public institutions, and civil society; bring creative expertise to traditional industries; and generate new value. As a result, they become an important component of regional innovation systems.
The strength of the creative industries lies in the diversity of the regions.Vienna is a hotspot—Austria is a hub for creativity
Vienna is the hub of Austria’s creative industries. 37% of all companies in the creative industries are based in the nation’s capital—significantly more than Vienna’s share of the overall economy (24%). In addition, Vienna-based companies generate about half of the revenue of Austria’s creative industries. At the same time, however, an equally important picture emerges: 63% of all creative industries companies are located outside Vienna. Lower Austria (14%), Upper Austria (12%), and Styria (12%), together with the other federal states, form strong regional hubs for the creative industries. Each region is developing its own creative profile. While Tyrol and Vorarlberg are above average in architecture, Vienna has a particularly high share of the art market. Other federal states focus on different areas, such as advertising, design, or software and games. These specializations reflect the economic, cultural, and social strengths of the respective regions.
The Effect
Although the creative industries are particularly concentrated in Vienna, their impact is felt throughout Austria. Successful regional development does not result from a one-size-fits-all model, but rather from the targeted development of regional strengths. Creative industries highlight this potential, combine it with innovation, and thus contribute to the competitiveness of all regions. (The data cited refers to 2023 and has been updated in this article compared to the study.)
Innovation doesn’t just happen in urban areas.18% of creative industries operate in rural areas
About 18% of creative industries companies are located in rural areas. The growth trend is particularly noteworthy: Between 2008 and 2010, the number of creative companies in municipalities with low population density grew by more than 10%, a rate higher than in more densely populated regions. The study sees this as a sign of ongoing structural change toward knowledge-intensive services and previously untapped regional development potential.
The Effect
Creative industries do not emerge only where innovation already exists. They tap into new sources of innovation and actively contribute to the economic development of rural regions.
Case Study
Regional development is particularly successful when the creative industries systematically collaborate with a region’s key industries.
In Vorarlberg, CAMPUS Dornbirn actively connects creative companies with industrial and commercial enterprises. As a result, creative expertise becomes an integral part of industrial innovation processes and strengthens the competitiveness of the entire region.
Innovation requires regional networks.66% view their region as their immediate economic environment
Although more than half of the creative industries could, in principle, operate from anywhere, 66% view their region as their immediate economic environment. Their most important clients and partners are also usually located in the same region. At the same time, only about 17% are planning to relocate. The study thus reveals a strong regional attachment despite a high degree of geographical flexibility.
The Effect
Innovation does not arise solely from geographical proximity, but rather from stable regional networks. Creative industries connect companies, institutions, and people to form high-performing regional innovation systems.
Case Study
Regional innovation systems need places where people can come together. Creative industries create precisely these spaces for co-creation.
The Open Technology Lab (OTELO) creates accessible spaces where people from the fields of technology, media, design, and society can experiment together. Here, innovation doesn’t arise within individual organizations, but through openness, collaboration, and shared learning.
The Effect
Creative industries make regions more attractive to talent, entrepreneurs, and innovative companies. In doing so, they strengthen a region’s long-term competitiveness.
Attractive regions attract innovation.60% view a creative environment as a key to success
For six out of ten companies in the creative industries, an open, tolerant, and creative environment is a key factor for success. Equally important are quality of life, suitable workspaces, and efficient infrastructure. The study thus shows that economic success increasingly depends on soft location factors.
Successful regional development requires tailored strategies.4 Types of Locations and Companies within the Creative Industries
The study identifies four distinct types of creative industries companies, each with its own location requirements. The analysis makes it clear that different regions require different strategies.
- 28% of rural creatives
- 31% of intrinsically motivated urban creatives
- 24% of creative businesses based in the city
- 17% of creative companies operate across borders.
The Effect
There is no one-size-fits-all solution for creative industries policy. Successful regions develop measures that are tailored to their respective strengths, businesses, and development goals.
Case Study
Creative industries have an impact not only through many small businesses. Individual creative pioneers can inspire entire regions and open up new paths for development.
KAPO demonstrates how design, quality, and creative collaboration can have an impact far beyond the company itself. As a regional flagship company, it strengthens the region’s image, drives innovation, and highlights creative value creation.
Regional innovation systems emerge through the active involvement of the creative industries.Successful regional development requires the creative industries
Regions do not become innovative simply because creative industries exist. Regions become innovative when creative industries are actively integrated into regional innovation and development strategies. Successful regions share one key factor: they view creative industries as partners in regional innovation and development processes. Creative expertise is purposefully linked with business, academia, regional management, and the public sector, thereby becoming an integral part of the regional innovation strategy.
The Effect
Successful regional policy creates the conditions in which the creative industries can thrive. Policy on the creative industries is therefore always also innovation, location, and regional policy.
The special report “The Creative Industries as a Regional Factor” was prepared by KMU Forschung Austria in collaboration with the Austrian kulturdokumentation, Kingston University (UK), and Oxford Research Sweden on behalf of Kreativwirtschaft Austria and published as the focal point of the Fifth Austrian Creative Industries Report. It examines the regional roots of the creative industries, their location factors, their significance for regional innovation systems, and national and international examples of successful regional development. The study combines statistical analyses with Austrian and international case studies and derives recommendations for action in regional and innovation policy.