Creative Industries as Part of a Sustainable Urban Development Strategy: Vilnius City Case

Abstract

The concept of a creative city is a post-industrial development strategy focused on urban economies. Based on this concept, many cities declared the importance of CI development as a sustainable urban development strategy. The long-term impact of CI development on the urban economy was not extensively studied. This study aims to explore the following research question: What are the critical factors that stimulate sustainable urban development through the development of creative industries (CI)? To answer this question, the case of the city of Vilnius was analyzed. Quantitative and qualitative research methods were used. For the quantitative analysis data, statistical data for the period 2009–2019 were analyzed. To gain a deeper understanding of the development factors of Vilnius’s CI, document analysis and interviews with Vilnius’s CI experts were conducted. Fuzzy-set qualitative comparative analysis (FsQCA) was used to analyze the impact of factors on Vilnius’ CI growth.

1. Introduction

Cultural and creative industries significantly contribute to the world economy—UNCTAD estimates that in 2020, creative goods and services represent 3 and 21 percent of total merchandise and services exports; provide 6.2 percent of all employment, generating nearly 50 million jobs worldwide; and employ more young people (15–29-year-olds) than other sectors [1] pp. 2–5. Creative industries affect an economy’s innovation activities both by developing and introducing innovations as part of their business activities and stimulating innovation in other sectors; the innovation output of creative firms constitutes a crucial input for the innovativeness of their business clients [2] p. 23.

The most actively discussed topic in the context of creative industries is the influence of creative industries’ discourse on cultural policy. The neoliberal policy is based on turning all economic goods into market efficiency and does not take into account the specifics of cultural products, but thanks to it, the discourse of the creative industry intervened in the political arena. Cities are understood as unique places for creative industries that thrive in agglomeration economies and complex ecosystems, creating a cycle of cultural consumption and production … “creative industries’ demand for new kinds of cities facilitated new kinds of creative milieus, new kinds of enterprises, and new kinds of subjects able to autonomously create and innovate” [3] pp. 3–4.

The creative city is post-industrial and, at the same time, a neoliberal development strategy focused on urban economies, including creative industries—“creative city policy derives in large part from the urbanisation of cultural policy” [4] p. 82. To become an economic driver, each city must build a development model focused on its comparative advantages (local history, urban economic structure, geographic location, transport infrastructure, industry specialization, etc.), available resources in the country, and even global context. The creative city concept also aligns with economic sustainability trends relevant to post-industrial cities and refers to practices that support long-term economic growth without negatively impacting the social, environmental, and cultural aspects of the community.

The notion of a creative city is grounded on an integral and inclusive approach that encompasses a wide range of domains. In this approach, creativity is understood as a fundamental component of all aspects of urban development. This wider notion of the creative city is associated with the names of Richard Florida and Charles Landry. R. Florida identifies a creative city that combines “talent, tolerance, technology”; that is, the city must provide a variety of economic opportunities and have a “stimulating atmosphere” that supports “many different lifestyles with their infrastructure” [5] p. 25.

Another concept of the creative city dates back to Ch. Landry’s research suggests capitalization of exclusivity as the basis of urban development. The creative industries are seen as the engine of the urban economy and are understood in an extremely broad sense: they are both capital-intensive digital cinema, television, video games, and labor-intensive crafts, arts, design, high fashion, software development and sales [6], and the ability to solve local community problems [7,8].

Creative cities, creative industries, culture-led development of cities, and similar topics on urban development and urban strategy are studied by many authors. Carl Grodach summarized the politics of the creative city by highlighting three narratives that treat arts and culture as assets for urban development: (1) art as an amenity to increase consumption, promote property development, and improve the image of the city; (2) creative industries that are vital to the “post-industrial economy” and as a “substitute” for the loss of manufacturing activity; and (3) the arts as a force for gentrification [4] pp. 82–83. Ann Markusen analyzed how policymakers and city planners (the idea of creative placemaking) have turned to arts and culture to revive city life and stimulate urban economics [9]; Allen Scott conceptualized changes in cities from the point of view of the structures of the new economy, that give rise to historically specific forms of economic and cultural innovation [10]. Urban regeneration policy rationales, based on creative city development, increasing urban (spatial) attractiveness by focusing on the development of space are presented by analyzing cultural clusters and quarters [11]; the use of cultural amenities as a tool for strategic planning and the incorporation of the symbolic value of within the frame of a large urban project [12].

Understanding culture as an instrument for entrepreneurial “creative city” aspirations within the ECOC (European Capital of Culture) program is represented in a book by Nils Wåhlin, Maria Kapsali, Malin H. Näsholm, and Tomas Blomquist [13]. An overview of policies and strategies in European cities integrating creative industries in urban development was presented by Jo Foord [14] and Bas van Heur [15]. A comparison of urban policies for the creative industries in Europe with a focus on the three Baltic states (the capital cities) was performed by Kǜlliki Tafel-Viia, Andres Viia, Erik Terk, and Silja Lassur [16] p. 17. Different cities and countries are based on different motives for implementing CI policies. Generally, economic goals prevail, but there are other policy objectives, such as promoting social inclusion, fostering social capital, creating community cultural programs, attracting tourism and visitors to the city, improving infrastructure, and establishing a city’s brand [16,17,18,19,20,21,22].

Pierluigi Sacco, Guido Ferilli, and Giorgio Tavano Blessi conducted an analytical review of the approaches to culture-led urban development models [23], while Hans Kjetil Lysgård also explored this topic in his research [24,25]. The latter author’s evaluation of creative industries as a cultural strategy for cities is quite critical—the commercial, market-based nature of creative industries restricts the possibility of generating diversity in urban culture, especially in small cities. The Neo-Marxist approach uncovers systemic issues in implementing creative strategies and criticizes the neoliberal concept of the creative city and creative class as a justification for neglecting the priorities and needs of the majority in urban development. The neoliberal model is viewed as promoting the social differentiation of urban communities, reducing social programs, and favoring the interests of creative minorities while relying on market self-regulation [26].

Narrative on creative industries strategically position the cultural sector next to ICT as a set of related industries defined by knowledge and innovation—the creative industries try particularly emphasize the economic importance of these sectors emphasizing Intellectual Property Rights. This has been a particularly powerful discourse in the UK as part of the broader national economic agenda around knowledge and innovation [27,28]. Under the 1998 Creative Industries Taskforce, the Department for Culture, Media, and Sport (formerly the Department of National Heritage) defined 13 creative industries sub-sectors [29].

Some authors, while emphasizing the importance of ICT for creative industries, draw attention to the role of creative industries in the development of a “smart city” strategy, thus supplementing the rather technological concept of a “smart city” with the concept of a “cultural creative ecology” [30]. When discussing “smart city” strategies, it is proposed to use design thinking and a human-centered approach to innovation [31] while developing measurable and action-oriented principles of public sector innovation planning and management (the role of smart cities in the wider context of urban innovation and e-government); alternative management methods are also proposed [32]. If the focus of the “creative city” concept is city culture, then the “smart city” defines a new urban environment, one that is designed for performance through information and communication technologies.

The Directorate-General for Education, Youth, Sport, and Culture and the European Commission has developed an open and accessible evidence base, The Cultural and Creative Cities Monitor [33]. The Monitor is a tool to be used in the formulation, decision, and planning of municipal cultural policies and strategies; to help identify local strengths and keep culture and creativity at the heart of the municipal policy agenda; and to measure a city through scores and rankings, based on 29 individual indicators, relevant to nine policy dimensions, which reflect three main facets of the cultural and socioeconomic vitality of a city: cultural vibrancy; creative economy and enabling environment [33] pp. 20–21. According to The Cultural and Creative Cities Monitor, the ‘ideal’ cultural and creative city in Europe would have the cultural venues and facilities of Weimar (Germany); the cultural participation and attractiveness of Florence (Italy); the creative and knowledge-based jobs, the human capital and education, and the local and international connections of Paris (France); the intellectual property and innovation of Eindhoven (The Netherlands); the new jobs in creative sectors of Budapest (Hungary); the openness, tolerance and trust of Glasgow (United Kingdom); and the quality of governance of Aarhus (Denmark). Of these seven cities, four have less than 500,000 inhabitants, namely Weimar, Florence, Eindhoven, and Aarhus [33] pp. 28–29.

As already mentioned, creative industries, as part of the urban strategy to develop a creative city, has two forms. One is the relatively broad understanding that culture and industry should perhaps be understood as integrated spheres; therefore, this relationship should be explored to create attractive urban communities [34]. The focus is not necessarily on the creative industries as such but rather on the creativity and learning outcomes that can be released in the area, as well as the interaction between culture and business. The second form of the urban development strategy is a more rigid, restricted, and in general commercial perspective, in which the development of enterprises and employment within the category of creative industries is seen as the new and future economic basis of cities [35,36].

The first strategy prioritizes positive and creative learning processes that are not necessarily based on measurable goals related to establishing new businesses and employment. In this approach, creative industries are viewed as a means of enhancing the attractiveness of a place for residents and visitors. These industries are mainly focused on local consumption, have relatively low costs and risks, and can be exemplified by the development of specific attractions and entertainment, as well as the provision of services such as restaurants, bars, and accommodations. While this approach creates jobs and generates value within the community, its impact is limited to the local and tourist clientele.

The second strategy is more demanding as it involves creating economically sustainable enterprises that offer employment, increased value creation, and new growth to a city. Typically, this approach follows a sector-based approach that groups creative industries into specific sub-sectors based on industrial classification [37]. The focus is on developing production environments for culture-based products that can be sold on a global scale. This approach has the potential for high-value creation as it is mainly based on mass production and intensive, global marketing. However, it carries significant risk as it involves high production costs and heavily relies on a product’s market success, for example, fashion, music, films, and computer games sold in formats using copying or storage technology [37,38].

Based on the literature analysis, a theoretical framework for further research was constructed. The theoretical framework includes a statement that high urban CI development could have a positive impact on a sustainable urban economy. The high growth of urban CI sub-sectors could be influenced by demand factors (local and foreign demand) and supply factors (availability of human resources, companies, the competitiveness of the companies, and strategy availability). The composition of factors influencing the high growth of urban CI sub-sectors was not extensively studied.

This study aims to explore the following research question: what are the critical factors that stimulate sustainable urban development through the development of creative industries (CI)?

2. Materials and Methods

The case of the city of Vilnius was analyzed to determine the factors of the sustainable development of the city’s CI. Vilnius is a post-industrial city with more than half a million inhabitants and where the vast majority of Lithuanian creative industries are concentrated. In 2009, Vilnius was nominated as the European Capital of Culture. In 2010 “The Guidelines for Changing the State cultural policy” were prepared active measures that promote the creative economy in the knowledge society. In this context, in 2010, the conducted mapping study of Vilnius’s CI showed the great potential of CI development as a sustainable city development strategy. The authors of this publication actively participated in the research and conducted a detailed analysis of the Vilnius CI sector in 2010 [39]. After more than ten years, in 2021, the situation of Vilnius’s CI was analyzed and compared with 2010 collected data to determine the development trends and factors of Vilnius’s CI development.

Quantitative and qualitative research methods were used. For the quantitative analysis data, statistical data for the period 2009–2019 provided by the Lithuanian Department of Statistics were used. Data were provided based on Lithuanian Classification of Economic Activities (EVRK rev.2) codes. Lithuanian EVRK coding is synchronized with the European NACE classification of economic activity, and it could be compared with other European countries. For Vilnius’ CI, UNCTAD creative industries classification was applied and linked with the EVRK (see Appendix A).

The UNCTAD CI classification was chosen for a broader perception of CI and for the sake of continuity with the 2010 feasibility study “Vilnius creative industries map”. This classification includes both “Traditional cultural activities” (“upstream activities”) and “New activities of creative industries” (“downstream activities”). Such a broader perception of CI is important in the context of urban CI development. According to the UNCTAD classification, creative industries consist of four groups with different characteristics: “Heritage”, “Arts”, “Media”, and “Functional creation”. “Heritage” and “Arts” belong to the group of “Traditional cultural activities”. “Media” and “Functional creation” are applied to the group “New activities of creative industries”. The “Heritage” group includes activities such as “Cultural sites”, “Crafts”, and “Traditional cultural expressions”. The “Arts H” group includes such activities as “Visual” and “Performing arts”. The “Media” group includes activities such as “Publishing and printed media”, “Audio-visuals”, “New media”, and “Design”. The “Functional creation” group includes “Creative services” and activities such as “Cultural sites”, “Crafts”, and “Traditional cultural expressions”.

In order to determine trends and development factors, Vilnius’s CI statistics of 2009 were compared with 2019 data according to the number of companies, number of employees, and revenue. Vilnius’s CI data were also compared with other economic sectors such as manufacturing, construction, wholesale and retail trade, transportation, and storage. For a deeper understanding of the development factors of Vilnius’s CI, qualitative analysis was conducted. It includes an analysis of the documents relevant to Vilnius’s CI development and interviews with 23 Vilnius’s CI experts.

Fuzzy set qualitative comparative analysis (FsQCA) was used to analyze the impact of factors on the growth of Vilnius CI. The FsQCA method was applied to combine statistical data on Vilnius’ CI development and data obtained from the quantitative analysis (document analysis and interviews). The analysis of FsQCA aimed to produce theories that refer to a pattern of multiple independent factors/variables that together are related to a dependent variable [40]. Complementarity logic focuses on a synergetic relationship [41] and assumes that the effects of the factors could be mutually enhanced [42]. The FsQCA allows us to estimate the complexity of the interdependence relationship between each variable to establish the configurational path that leads to the outcome variable. The FsQCA method is relevant to our study, as Vilnius’ CI growth could be influenced by combinations of several factors/variables.

3. Results

3.1. Quantitative Analysis of Vilnius’s CI for the Period 2009–2019

According to the data of the Lithuanian Statistics Department, the cultural and creative industry (CI) is concentrated in the capital of Lithuania, Vilnius. In 2019 there were 5390 CI companies, with EUR 2.3 billion in revenue, and over 37 thousand people were employed in these companies (see

Table 1. Share of Vilnius’s CI companies in Lithuania.

Indicators	Total in Lithuania	In Vilnius City	% of Vilnius City
Number of CI companies	10,852	5201	47.9
Number of CI employees	66,861	37,101	55.5
Revenue generated by CI companies (in billion Eur.)	3.3	2.3	68.3

Source: Lithuanian Department of Statistics.

). Vilnius’s CI companies accounted for 47.9 percent of all companies that operated in Lithuania, 55.5 CI employees, and 68.3 percent of revenue. Such concentration of CI in Vilnius, the capital of the country, has remained unchanged since 2009.

Compared to other economic sectors, the CI sector of Vilnius occupies a significant part of the city’s economy (see

Table 2. Comparison of indicators of CI companies operating in Vilnius with other economic sectors in 2019.

Sectors of Economy	Number of Companies	Number of Employees	Revenue (in Billion EUR)	Number of Employees per Company	Revenue per Company (in Thousand EUR)	Revenue per Employee in Thousand EUR)
Creative industries	5201	37,101	2.3	7.1	439.3	61.6
Manufacturing	2039	39,160	3.5	19.2	1708.6	89.0
Construction	3180	32,454	2.7	10.2	844.4	82.7
Wholesale and retail trade	9017	101,921	20.5	11.3	2275.2	201.3
Transportation and storage	2441	52,006	6.0	21.3	2451.0	115.0
Information and Communication Technologies	3850	33,000	N.A.	8.5	N.A.	N.A.
Total:	21,878	262,642	35.0	12.0	1597.6	133.1

Source: Lithuanian Department of Statistics.

). According to the number of companies, Vilnius’s CI sector is almost twice as large as manufacturing and construction. In terms of the number of employees and revenue, Vilnius’s CI sector is similar to the manufacturing, construction, and ICT sectors. Nevertheless, companies in the CI sector are smaller, both in terms of number of employees and revenues. In 2019, on average, one of Vilnius’s CI companies generated 439.3 thousand EUR in revenue and employed 7.1 employees. For comparison, one manufacturing company generated an average of 1708.6 thousand. EUR revenue and employed 19.2 employees. The construction sector company e, on average, generated EUR 844.4 thousand in revenue and employed 10.2 employees. The transportation and storage sector, respectively, generated EUR 2451.0 thousand in revenue and gained 21.3 employees. The revenue of the CI sector per employee was the lowest compared to other sectors and amounted to only EUR 61.6 thousand.

Growth rates of creative industries in Vilnius from 2009 to 2019 were moderate (see

Table 3. Dynamics of Vilnius’s CI in 2009–2019.

Indicators	2009	2019	Growth from 2009 to 2019 (%)
Number of CI companies	3127	5201	66
Number of CI employees	35,331	37,101	5
Revenue generated by CI companies (in billion Eur.)	1.2	2.3	97

Source: Lithuanian Department of Statistics.

). In terms of revenue generated by CI, the growth rate was an average of 9.7% per year. When taking into consideration the average inflation rate of 2.3% for the period, the real growth rate was only about 7.4%. There was almost no growth in the number of CI employees. The growth rate was, on average, 0.5% per year. The CI sector did not become a driving force in the creation of jobs in the city of Vilnius.

Analysis of the results of creative industries in Vilnius in 2009 and 2019, according to the UNCTAD classification, shows that the largest growth in the number of companies was in “Traditional cultural expressions” activities. The number of companies grew more than two times (see

Table 4. Dynamics of the number of Vilnius’s CI companies (2009–2019).

Title of CI Activities According to UNCTAD Classification			Total Number of Companies in 2009	Total Number of Companies in 2019	Change in the Number of Companies 2009–2019	Change in the Number of Companies 2009–2019 (%)
1. Traditional cultural activities	1.1. Heritage	1.1.1. Cultural sites	43	11	−32	−74
		1.1.2. Crafts	80	81	1	1
		1.1.3. Traditional cultural expressions	99	355	256	259
	1.2. Arts	1.2.1. Visual arts	62	146	84	135
		1.2.2. Performing arts	169	187	18	11
2. New activities of creative industries	2.1. Media	2.1.1. Publishing and printed media	308	280	−28	−9
		2.1.2. Audio–visuals	160	299	139	87
		2.1.3. New media	432	1149	717	166
		2.1.4. Design	105	277	172	164
	2.2. Functional creation	2.2.1. Creative services	1669	2416	747	45
Total:			3127	5201	2074	66

Source: Lithuanian Department of Statistics.

) from 99 companies in 2009 to 355 companies in 2019. This activity includes such activities as “Activities of excursion organizers” (15 companies in 2009 and 46 companies in 2019), “Activities of attractions and theme parks” (8 companies in 2009 and 20 companies in 2019), and “Other entertainment and recreation organization activities” (66 companies in 2009 and 289 companies in 2019).

The rapid growth of the number of companies is observed in the “Design” activity group. The number of companies grew from 105 companies in 2009 to 2277 companies in 2019. The number of “New Media” companies also grew more than twice (from 330 companies in 2009 to 1149 companies in 2019). The group of these activities includes computer game publishing (4 companies in 2019), other software publishing (20 companies in 2019), computer programming activities (1028 companies in 2019), and Internet gateway service activities (97 companies in 2019).

The biggest decrease (74%) was in companies operating cultural sites (from 43 companies in 2009 to 11 companies in 2019). These activities include such activities as: “Library and archive activities” (20 companies in 2009 and 4 companies in 2019), “Museum activities” (11 companies in 2009 and 4 companies in 2019), and “Historical sites and buildings and operation of similar places visited by tourists” (12 companies in 2009 and 3 companies in 2019).

There is a noticeable decrease (9%) in the “ Publishing and printed media” activity group (from 308 companies in 2009 to 280 companies in 2019). This activity includes activities such as “Book publishing” (111 companies in 2009 and 89 companies in 2019); “Publishing of directories, catalogues and address lists” (14 companies in 2009 and 3 companies in 2019); “Newspaper publishing “ (33 companies in 2009 and 21 companies in 2019); “Publishing of magazines and periodicals” (88 companies in 2009 and 70 companies in 2019); and “Other publishing” (62 companies in 2009 and 97 companies in 2019).

The greatest increase in the number of employees in absolute numbers in the 2009–2019 period (see

Table 5. Dynamics of the number of Vilnius’s CI employees (2009–2019).

Title of CI Activities According to UNCTAD Classification			Total Number of Employees in 2009	Total Number of Employees in 2019	Change in the Number of Employees 2009–2019	Change in the Number of Employees 2009–2019 (%)
1. Traditional cultural activities	1.1. Heritage	1.1.1. Cultural sites	2773	109	−2664	−96
		1.1.2. Crafts	649	344	−305	−47
		1.1.3. Traditional cultural expressions	708	1654	946	134
	1.2. Arts	1.2.1. Visual arts	240	2070	1830	763
		1.2.2. Performing arts	2139	1737	−402	−19
2. New activities of creative industries	2.1. Media	2.1.1. Publishing and printed media	4713	1532	−3181	−68
		2.1.2. Audio–visuals	2639	1876	254	10
		2.1.3. New media	4266	10,380	5097	119
		2.1.4. Design	793	1533	740	93
	2.2. Functional creation	2.2.1. Creative services	16,411	15,867	−544	−3
Total:			35,331	37,101	1770	5

Source: Lithuanian Department of Statistics.

) was in “New media” (5097 employees), “Visual arts” (1830 employees), and “Traditional cultural expression” (946 employees). The largest decrease in the number of employees in absolute numbers in the period 2009–2019 is observed in “Publishing and printed media” (3181 employees), “Cultural sites” (2664 employees), and “Crafts” (305 employees). The number of employees growth in “New media” was mainly due to growth in the number of employees in “Computer programming”. In this activity, the number of employees increased by 6714 employees from 3298 employees in 2009 to 9614 employees in 2019.

When analyzing dynamics, such as the number of employees in “Audio-visuals” media in 2009–2019, we see that the number of employees in the film industry has grown significantly. The number of employees in motion picture, video, and television production activities more than doubled from 418 employees in 2009 to 871 employees in 2019. There was a significant increase in the number of employees involved in the Screening of motion pictures” (108 percent) and “Distribution of motion pictures, video films, and television programs” (418 percent). For the period 2009–2019, a very large drop in the number of employees was observed in “Preparation and broadcasting of television programs” (from 1643 employees in 2009 to 276 employees in 2019). The number of employees of “Radio Program Broadcasting” also fell significantly (from 163 employees in 2009 to 70 employees in 2019).

According to the data of the Lithuanian Statistics Department, in 2019, Vilnius’s CI sector companies generated EUR 2.28 billion in revenue (see

Table 6. Dynamics of the revenue of Vilnius’s CI companies (2009–2019).

Title of CI Activities According to UNCTAD Classification			Revenue in 2009 (Million EUR)	Revenue in 2019 (Million EUR)	Change in the Revenue 2009–2019 (Million EUR)	Change in the Revenue 2009–2019 (%)
1. Traditional cultural activities	1.1. Heritage	1.1.1. Cultural sites	2.9	3.5	0.5	19%
		1.1.2. Crafts	10.5	9.4	−1.1	−10%
		1.1.3. Traditional cultural expressions	24.8	176.6	151.7	611%
	1.2. Arts	1.2.1. Visual arts	3.4	34.1	30.7	898%
		1.2.2. Performing arts	18.8	56.0	37.1	197%
2. New activities of creative industries	2.1. Media	2.1.1. Publishing and printed media	157.4	68.7	−88.7	−56%
		2.1.2. Audio–visuals	141.4	183.7	42.3	30%
		2.1.3. New media	122.9	767.6	644.6	524%
		2.1.4. Design	11.1	49.2	38.1	343%
	2.2. Functional creation	2.2.1. Creative services	666.8	936.1	269.3	40%
Total:			1160.2	2284.9	1124.8	97%

Source: Lithuanian Department of Statistics.

). Compared to 2009, income in the CI sector grew by 97 percent (EUR 1.12 billion). The highest growth in absolute numbers in the 2009–2019 period was in “New media” (EUR 644.6 million), “Creative services” (EUR 269.3 million), and “Traditional cultural expression” (EUR 151.7 million). The highest rates of revenue growth in the period 2009–2019 were in “Visual arts”, “Traditional cultural expression”, “New media”, and “Design” (898%, 611%, 524%, and 343%, respectively).

The biggest decrease in absolute numbers in the 2009–2019 period was observed in “ Publishing and printed media “ (EUR 88.7 million) and “Crafts” (EUR 1.1 million). In “New media”, revenue growth was mainly due to revenue growth in “Computer programming activities” (from EUR 114.0 million in 2009 to EUR 668.4 million in 2019).

3.2. Qualitative Analysis of Vilnius’s CI Development

Analysis of documents related to the Vilnius strategy for the period 2009–2022 shows that Vilnius’s CI sub-sectors were considered important but not key sectors for the city’s economy. For the period 2002–2011, Vilnius City has set a broad goal for its CI policy, such as building linkages with other sectors and including the wider public, not merely the actors in the CI sector. The city’s main strategy document, “Strategic Vilnius City 2002–2011 Plan”, makes use of the concept of a creative city and has set up four strategic development priorities: international competitiveness, new economy, progressive society, and communication system [38]. The “Strategic Action Plan for 2020–2022”, which was approved by the Vilnius City Council in 2020, focuses on foreign direct investment projects, increased competitiveness, and a high concentration and diversity of service companies. Following it, the Vilnius City cultural policy strategic guidelines for 2021, however, prioritize promoting a higher quality culture that is accessible to Vilnius residents; enhancing Vilnius’s international reputation as a cultural destination; preserving and promoting its multicultural identity; and improving the efficiency of cultural sector management. The guidelines plan takes a broad approach to the creative industries, emphasizing the need to promote competitiveness and growth within the creative industries sector as an integral component of the overall creative economy [43].

The qualitative study conducted on Vilnius’ CI sub-sectors identified both opportunities and challenges. Four main factors have been identified: Availability of the strategy, local demand for Vilnius” CI, foreign demand for Vilnius” CI, and competitiveness of Vilnius” CI sub-sectors. A summary of the findings of the qualitative study is presented in Appendix B and used for the FsQCA analysis. One of the most significant issues is the size of the local market, which affects the economics of scale. As an example, despite the good economic indicators and growth of the Lithuanian film industry, which provides film production services to foreign producers, it is acknowledged that there is a limit to growth due to limited local resources, including human and infrastructural. In the global market, entrepreneurship, participation in global distribution networks, and the ability to attract the attention of the global film community are crucial factors, rather than just local talents and high-quality work culture, which are valued by foreign film producers. It can be assumed that creative industries alone, as the economic ground of the city, may not be enough to ensure the sustainable development of the city.

According to CI experts’ interview, Vilnius can become a regional “hub” of the film industry, which in turn would create great economic value for the city and strengthen its international fame and picturesqueness. The following could be achieved:

By strengthening marketing, Vilnius could present itself more widely in the international context and help attract the major players in the global film industry.

By strengthening the training of local talents (through scholarships, competitions, and creative workshops) and attracting creators from abroad (e.g., implementing a residency program and holding international film industry events), the city could help reduce the risk of a shortage of film industry specialists.

• The Vilnius City municipality could invest in the establishment of a modern film studio in the city of Vilnius—the development of this infrastructure would strengthen the regional competitiveness of the city’s audio–visual sector.
• The qualitative study found that from 2002 to 2011, it was expected that the CI sector would act as a catalyst and driving force for sustainable economic growth in Vilnius, even without active support from local and central government initiatives. At that time, the CI sub-sectors were considered “very good sub-sectors” as they were able to grow on their own without external interference or stimulation. However, later it became clear to CI experts that Vilnius’s CI sub-sectors were mainly oriented toward local (Vilnius and other Lithuanian) consumers, and the growth of Vilnius’s CI is limited by the local demand. The local demand growth for CI goods and services was stimulated by the growth of local consumption, which in turn was influenced by the growth of the Lithuanian economy.
• The example of the Vilnius film industry shows a big gap to be competitive in international markets. In order to bridge the gap, most of Vilnius’ CI sub-sectors are not able to be without active and focused strategic support from the local or central government. From this perspective, Vilnius’s CI sub-sectors are no longer considered “very good sub-sectors” because they require support and compete for resources with other sectors, such as manufacturing, transportation, education, and healthcare. According to CI experts, no long-term programs currently focus on bridging the gap for Vilnius’s CI sub-sectors to compete in international markets. At least two sub-sectors, film and design, are facing strong demand for such a program.

3.3. Fuzzy-Set Qualitative Comparative Analysis

For the analysis of FsQCA as an outcome variable, the Vilnius CI revenue growth rate for the period 2009–2019 was chosen. It is assumed that a higher growth rate of revenue indicates more successful sector development. This study examined seven factors/variables: the availability of the Vilnius CI strategy (STRATEGY), the local demand assessment of the Vilnius CI (LDEMAND), the foreign demand assessment of the Vilnius CI (FDEMAND), the competitiveness of the Vilnius CI sector assessment (COMPETIT), the growth of the Vilnius CI number of employees for the period 2009–2019 (EMPLOYEES), the growth of the Vilnius CI number of companies for the period 2009–2019 (COMPANIES), and the export of Vilnius CI in 2019 (EXPORT), which form the causal conditions leading to the growth of the Vilnius CI.

This FsQCA analysis was performed in three steps using FsQCA4 software. First, a calibration selection was performed. Second, an analysis of the necessary conditions was performed. Third, the calibrated fuzzy data sets were compiled into a truth table and analyzed.

Data calibration: The data calibration requires all data to be transformed in such a way that the resulting values range in the [0, 1] interval. For data calibration, the direct calibration method was applied using statistical minimal, average, and maximum data set values. Only statistical data for each Vilnius CI sub-sector were calibrated. Data obtained from qualitative research were not calibrated as they were based on binary evaluation [0, 1]. The initial and calibrated data are presented in Appendix B.

Analysis of necessary conditions: Following the selection of the calibration, an analysis was performed to identify all the necessary conditions, that is, the state of ‘presence’ or “absence” (~), to achieve the desired result. According to C. Ragin [44], for a construct to be considered necessary, it must have a consistency score of 0.80 or 0.90.

Table 7. Analysis of necessary condition.

Condition	High Vilnius’ CI Sub-Sectors’ Growth Rate Intention		Low Vilnius’ CI Sub-Sectors’ Growth Rate Intention
	Consistency	Coverage	Consistency	Coverage
STRATEGY	0.729	0.480	0.516	0.520
~STRATEGY	0.271	0.268	0.484	0.733
FDEMAND	0.633	0.417	0.579	0.583
~FDEMAND	0.367	0.363	0.421	0.638
LDEMAND	0.922	0.607	0.390	0.393
~LDEMAND	0.078	0.078	0.610	0.923
COMPETIT	0.410	0.810	0.026	0.190
~COMPETIT	0.589	0.291	0.937	0.709
employees	0.775	0.927	0.264	0.485
~EMPLOYEESc	0.570	0.336	0.960	0.867
companies	0.605	0.666	0.375	0.632
~COMPANIESc	0.666	0.410	0.802	0.757
EXPORTc	0.466	0.652	0.319	0.684
~EXPORTc	0.775	0.426	0.838	0.706

Notes: (~) absence of the condition.

summarizes the conditions necessary to achieve a high and low Vilnius CI growth rate for the period 2009–2019. The results obtained (see Table 7) suggest that (1) the presence of local demand (LDEMAND) is a necessary condition for the outcome of the high Vilnius CI growth rate intention, and (2) the absence of conditions for the Vilnius CI number of employees growth (~EMPLOYEESc), Vilnius’ CI number of companies growth (~COMPANIESc), and the Vilnius CI export (~EXPORTc) are necessary conditions for the result of the low Vilnius CI growth rate intention.

Analysis of the truth table algorithm: The next step of the analysis is to identify all possible combinations of conditions that are present in the data and evaluate how each combination is consistent with the outcome. This requires calculating the frequency of all possible combinations for the presence (over 0.5) and absence (below 0.5) of the conditions. The cut-off value was set as 0.8 for both the presence and absence of high Vilnius CI growth rate intention. As mentioned previously, this study examined seven factors/variables that form the causal conditions for the high growth rate of Vilnius’ CI growth rate. For the development of the truth table, the calibrated data were converted into a fuzzy score of “0”, “low”, and “1”, “high.” Therefore, in

Table 8. Truth Table and Composite for Outcome of Vilnius’ CI growth rate intention.

Composite for Outcome of Vilnius’ CI Growth Rate Intention
STRATEGY	FDEMAND	LDEMAND	COMPETIT.	Companies	Employees	EXPORTc	REVENUESc	Cases	Raw Consist
high	low	high	low	low	high	low	high	1	1
high	high	high	high	high	high	high	high	1	1
low	high	high	high	high	high	low	high	1	0.956
high	low	high	low	low	low	low	low	1	0.455
low	high	high	high	high	low	high	low	1	0.193
high	high	low	low	low	low	low	low	1	0.142
high	low	low	low	low	low	low	low	1	0.094
low	high	low	low	low	low	low	low	1	0.080
low	low	low	low	low	low	low	low	1	0.053

, the truth table contains all composite conditions that reflect the intention of Vilnius’ CI growth rate.

Table 8 indicates nine composite indicators as predictors of Vilnius’ CI growth rate, including three composite indicators for the intention of the CI growth rate of “high” Vilnius and six for the intention of the CI growth rate of “low” Vilnius.

FsQCA results are derived from intermediate solutions that incorporate core and peripheral conditions into the output of the high/low Vilnius CI sector growth rate intention. C. Ragin [44] suggested that the analysis results are acceptable and relevant if the consistency and coverage values exceed 0.75.

Table 9. The FsQCA results leading to high/low Vilnius’ CI sub-sectors growth rate intention.

Configurations Conditions	High Vilnius’ CI Sub-Sectors’ Growth Rate Intention		Low Vilnius’ CI Sub-Sectors’ Growth Rate Intention
	C1	C2	C3	C4	C5
STRATEGY	•
FDEMAND		•		•	•
LDEMAND	•	•	×
COMPETIT		•			×
EMPLOYEESc	•	•		×
COMPANIESc		•		•	•
EXPORTc				•	•
Raw Coverage	0.54	0.27	0.61	0.27	0.22
Unique Coverage	0.40	0.13	0.59	0.03	0.01
Consistency	1	1	0.92	0.86	1

Note: Black circle (•) indicates the presence of condition; symbol with “x” (×) indicates absence of conditions; blank space indicates “don’t care”.

illustrates the results of the fsQCA to establish a high/low Vilnius CI sector growth rate intention. Based on the results, two configurations were identified as associated with a high Vilnius CI sector growth rate intention (overall consistency of 1.0 and coverage of 0.76) and three with a low Vilnius CI sector growth rate intention (overall consistency of 0.90 and coverage of 0.86. Consistency of all configurations exceeds 0.86, and raw coverage exceeds 0.2. This indicates that all causal conditions configurations are appropriate to form a high/low Vilnius CI sector growth rate intention. The C1 configuration is more relevant to form a high Vilnius CI sector growth rate intention, and the C3 configuration is more relevant to form a low Vilnius CI sector growth rate intention.

According to Table 9, each high/low Vilnius’ CI sector growth rate intention solution configuration is unique and different. The configurations consist of the conditions of presence (*), absence (~), and do not care (blank space). The first configuration (C1) consists of causal conditions of STRATEGY*LDEMAND*EMPLOYEESc* and do not care conditions of FDEMAND, COMPETIT, COMPANIESc, and EXPORTc with a consistency of 1.0 and raw coverage of 0.54. This configuration represents Vilnius’ CI sub-sectors, such as visual arts (0.95 membership) and new media (0.53 membership). The second configuration (C2) consists of causal conditions of FDEMAND*LDEMAND*COMPETIT*COMPANIE Sc*EMPLOYEE Sc do not care and the conditions of STRATEGY and EXPORTc with the consistency of 1.0. and raw coverage of 0.27. This configuration represents Vilnius’ CI sub-sectors, such as traditional cultural expressions (0.55 membership) and new media (0.53 membership). C1 and C2 configurations indicate that to achieve a high Vilnius CI growth rate for the period 2009–2019, two factors, high local demand (LDEMAND) and a high number of employees growth (EMPOYEESc), are important. In the C1 configuration, the availability of the strategy (STRATEGY) is an important factor. In C2 configuration, the availability of strategy (STRATEGY) is not an important factor unless high competitiveness (COMPETIT), high foreign demand (FDEMAND), and the high number of company growth (COMPANIESc) of a CI sector are ensured.

The third configuration (C3) consists of a causal condition of ~LDEMAND with all do not care conditions with a consistency of 0.92 and raw coverage of 0.61. The fourth configuration (C4) consists of causal conditions of FDEMAND*COMPANIESc*~EMPLOYEESc*EXPORTc do not care and the conditions of STRATEGY, LDEMAND, and COMPETIT with a consistency of 0.86 and raw coverage of 0.27. This configuration represents Vilnius’ CI sector, the creative services (0.82 membership). Furthermore, the fifth configuration (C5) consists of causal conditions of FDEMAND*~COMPETIT*COMPANIESc*EXPORTc do not care and the conditions of STRATEGY, LDEMAND, and EMPLOYEES with a consistency of 1.0 and raw coverage of 0.22. This configuration represents Vilnius’ CI sector, the creative services (0.86 membership). Configurations C3, C4, and C5 show that the availability of the strategy (STRATEGY) ultimately did not lead to the high growth rate of Vilnius CI in 2009–2019. Lack or insufficient local demand (LDEMAND) negatively affected the Vilnius CI growth rate for most of the Vilnius CI sector. The lack of the number of employees (EMPLOYEES) in configuration C4 and the lack of competitiveness (COMPETIT) could have a crucial negative effect on the high growth rate of the Vilnius CI sector.

4. Discussion

Vilnius’ CI case analysis demonstrated that two main stages in CI development could be identified: initial and international. The initial development stage could be called “CI as very good sub-sectors”. At this stage, the main factors stimulating CI growth are related to local demand growth, which is stimulated by the growth of local consumption and influenced by the growth of the state/region economy. At this stage, CI’s sub-sectors were considered “very good sub-sectors” as they were able growth by themselves without active external interference/stimulation.

At this stage, CI could be considered a catalyzer and driving force for sustainable urban economic development and will become a fast-growing industry. This stage of CI development is in line with such studies as the Department for Culture, Media and Sport [29] and the Organisation for Economic Co-operation and Development (OECD) [35,36]. Moreover, it is in concordance with authors such as Howkins, J. [6]; du Gay, P. and Pryke, M. [34]; Potts, J. and Cunningham, S. [37]; Scott, A.J. [10]; Lorentzen, A. [38]; and Wåhlin, N. et al. [13].

The international development stage could be called “CI as not very good sub-sectors”. At this stage, CI’s sub-sectors were considered “not very good sub-sectors” as they require focused strategic support from the local or central government and compete for funding with other sub-sectors such as manufacturing, transportation, education, health, etc. At this stage, CI has reached the limits of local demand growth and needs to enter the international market. However, there is a big gap between being competitive in local and international markets.

The case of the Vilnius film industry shows that is a big gap to be competitive in international markets. To bridge the gap, most of Vilnius’ CI sub-sectors are not able without clear, consistent, and focused strategic support from the local or central government. On the governmental level, the creative industries’ idea increased the status of the cultural policy field—culture began to gain the reputation of being both a high expense but also a high-revenue sector [43,45].

The main factor stimulating the growth of creative industries (CI) is the growth of local consumption, which is, in turn, influenced by the growth of the state/region economy. At this stage, CI can be considered a catalyst and driving force for sustainable urban economic development. This stage of CI development is consistent with the findings of R. Florida [5], C. Landry [7,8], and P. Rutten [18].

In Vilnius City’s strategic plans, creative industries are not identified as a crucial foundation for the city’s economic development. Vilnius City cultural policy strategic guidelines [46] prioritize the preservation of cultural heritage and multicultural identity and advocate for a traditional view of high-quality culture. However, the narrative of creative industries is typically associated with popular or mass culture, whereas the cultural policy rationale is oriented towards cultural democracy and cultural democratization rather than neo-liberal agenda. Business and job creation are not considered traditionally a cultural policy priority.

In the main city’s strategic documents, there are no formulated creative industries development agenda and vision of how creative industries can promote urban development—the challenge is that it simultaneously includes social planning, urban planning, planning of culture, and economic planning in a single field [24]. One of the reasons why there is no consistency in understanding creative industries as a kind of commercial (popular) culture and how culture can stay the driver of urban economic development; it lacks a theoretical debate on what makes culture important in the development of economics and about the premises upon which the production of culture builds [25].

It appears that the key to integrating creative industries into the sustainable development of the city is to bridge the gap. Most CI sub-sectors are unable to thrive without active and focused strategic external support and significant investments. At this stage, a long-term program must be developed to bridge the gap from local to international completeness. As a long-term program requires substantial investment, priority funding could be given to only the most critical CI sub-sectors.

5. Conclusions

At the beginning of the study, we staged the following research question: what are the critical factors that stimulate sustainable urban development through the development of creative industries (CI)? Our exploration based on Vilnius’ CI development has led to the following insights and findings:

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The combination of the two factors was important for the high growth rate of Vilnius’ CI—high local demand and a high number of employee growth. Strong local demand and high employee growth were necessary but not sufficient factors.

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Two configurations were identified for the high CI sub-sector growth. The first combination consists of high local demand, a high number of employees, growth, and availability of strategy. This configuration is the most important and represents such high-growth Vilnius CI sub-sectors as visual arts (0.95 membership) and new media (0.53 membership). For the second configuration, the availability of the strategy is not important unless there is high foreign demand, high competition, and a high number of companies are present;

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Three configurations are identified for the low Vilnius CI sub-sector growth rate. In the first configuration, the lack of local demand negatively affects the growth rate of the CI sub-sector. This configuration represents such low-growing sub-sectors of Vilnius’ CI as publishing and printed media (full membership), crafts (full membership), and cultural sites (full membership). The second configuration shows that the lack of employees can negatively affect CI growth even in the presence of foreign demand, exports, and growth in the number of companies.

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For the third configuration, lack of competitiveness hurts CI growth, even in the presence of foreign demand, exports, and the number of companies. It also shows that the availability of the strategy ultimately does not lead to high growth in the CI sub-sector.

Practical implications and limitations. The results of the study could be used in practice to stimulate the high growth of the CI sector. For this, it is important to develop long-term strategies for each CI sub-sector, taking into account the sector’s stage of development (initial or advanced). The results of the study show that strong local demand is important for both stages of development, so strategies could include measures to stimulate local demand. At an advanced stage of development, a long-term program could be developed to bridge the gap from local to international comprehensiveness. It is also essential to ensure the availability of human resources to meet local and foreign demands. This requires close coordination and co-operation with the educational institution. The main limitation of the study is that it is based only on the analysis of the Vilnius CI case. Additional research in other cities is needed to verify the results.