Insight: Creative Cities India

In September 2012 the Martin Prosperity Institute partnered with the Institute for Competitiveness (the Indian partner of the Institute for Strategy and Competitiveness at the Harvard Business School) to start the Prosperity Institute of India. The MPI contributes to this partnership by engaging in research with the objective to help enhance current and future prosperity and competitiveness in India by examining the regional role of the creative economy. This began with the release of the Understanding the Creative Economy in India report which examined the current extent of the Creative Economy within India at the State and Union Territory level. Since then we have expanded our analysis to smaller geographic regions by analysing the creative economy in cities within India. Our new report Understanding the Creative Economy in India’s Cities presents some of the analysis and results from this research.

In 2007 a geographic shift occurred that saw for the first time the majority of the global population living within urban areas. This shift was part of an overall global trend towards urban population growth, but was fueled by the large rate of urban growth in highly populated, traditionally rural countries such as China and India. For example, Delhi, India’s largest city saw a 20.96 percent growth rate over the past 10 years. There are now more than 30 Indian cities with populations above 3 million and much of this growth has been fuelled by the urban economy. It is expected that by 2030 India’s cities could create the majority of all new jobs and the national GDP. With this large scale population and economic growth, it was important that we analyse the role of the Creative Economy in India.

The report examines the Creative Economy at the city level through the application of the Creativity Index and the Three T’s of economic development methodology. The cities used within the report are India’s 50 most competitive cities as determined by the Institute for Competitiveness. Due to a lack of comparable data at the city level, the metrics for the three indices used within this report are different from the state report. The metrics used are not ideal but are the best available. For a full description of the data used please refer to the full report.

Previous MPI Insights have shed light upon the creativity of entrepreneurs within India and their ability to create products that uniquely address certain needs through Jugaad innovations such as the MittiCool clay products or advanced IT projects such as redBus. Much of the documented innovation taking place in India is being found within its large cities. While the human capital share in these cities is quite low, there are many residents that do not hold a BA+ that are helping the urban economy grow, which is why it was crucial for us to examine Creative Class (CC) occupation shares. Exhibit 1 presents the CC share for the top 50 most competitive cities within India. When compared to other countries Indian cities generally have smaller CC shares, but due to a large informal economy and from data limitations, these numbers could be larger. Within India the cities found to have the largest CC shares are generally the larger urban centers such as Delhi, Hyderabad, and Pune. A number of smaller cities in regions such as Kerala and Punjab have also been able to develop their creative economy as they have comparably high CC shares. As Exhibit 1 also displays generally the cities in the Northern or Southern part of the country have the highest CC shares, while the cities within the middle of the country in traditional rural areas have the lower shares.

Exhibit 1: Creative Class Share

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Exhibit 2: Creativity Index

Exhibit 2: Creativity Index

Essential to CC theory is not only the CC share, but the Creativity Index which is an overall measure of regional economic potential that combines the three T’s of economic development (Talent, Technology and Tolerance). Exhibit 2 presents the Creativity Index for the 50 Indian cities. Mumbai was found to have the highest Creativity Index, followed by: Bengaluru, Delhi, Kolkata, Hyderabad, Chennai, Thiruvananthapuram, Pune, Kochi, and Ludhiana. As seen with the CC share, once again some of the smaller cities in states such as Kerala have quite high Creativity Indices as Thiruvananthapuram and Kochi were ranked 7th and 9th respectively. Overall though the strength of the large urbanized cities within India in regards to their quality of place, technology and talent have propelled them within the creative economy as the six largest cities have the six highest Creativity Indices. These large cities provide a great example of how India is transitioning within the knowledge economy and how this transition is being fuelled by the more urbanised, tech driven and talent cities.

Our previous MPI report on India shed light on the extreme divide between the urban and rural States and Union Territories within the country. While this Insight has displayed that there are numerous smaller cities that are performing quite well in the creative economy, a divide is still present. The link between scale and performance is noticeable as the large cities within India that are urbanising at a rapid pace are the regions that are leading the way in regards to quality of place, talent and technology, and positioning their potential within the knowledge economy well ahead of the rest. That being said, most of the cities examined have been experiencing recent urban growth and if the larger more urbanised cities have provided an accurate benchmark, then the others are most likely headed in the same direction. We here at the MPI will continue to examine the role of the creative economy within India as this is the second report in our ongoing series in partnership with the Prosperity Institute of India.

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The Martin Prosperity Institute at the University of Toronto‘s Rotman School of Management is the world’s leading think-tank on the role of sub-national factors — location, place and city-regions — in global economic prosperity. We take an integrated view of prosperity, looking beyond economic measures to include the importance of quality of place and the development of people’s creative potential.