Exploring the Potential for Growth and Innovation of CCIs in European Non-Urban Areas

The IN SITU project is pleased to announce the release of its latest report, which assesses the potential for growth and innovation within specific subsectors of Cultural and Creative Industries (CCIs) in six non-urban areas across Europe. Through a comprehensive regional analysis, the report identifies key drivers behind CCI growth, highlighting sectors with the highest transformative potential for both local economies and societal well-being.

The analysis was led by IN SITU partner Mondragon Innovation & Knowledge (MIK), Mondragon University (Spain) and entailed a set of collaborative tasks aimed at identifying factors driving innovation and transformation in the CCIs across rural Europe.

The specific goals of the report are:

1. To identify innovation drivers in CCI subsector growth.
2. To assess financial sustainability and participative practices.
3. To develop a Growth–Development Matrix.

The Growth–Development Matrix in this report was developed using frameworks from strategic business modelling, including concepts from Slywotzky, Morrison, and Andelman’s The Profit Zone (1997), and Osterwalder and Pigneur’s Business Model Generation (2010).

These frameworks focus on growth potential, sustainability, and innovation capacity, enabling a detailed analysis of the CCI subsectors’ potential in rural and peripheral European regions.

Beyond its role as an analytical tool, the matrix is designed to serve as a strategic resource for policy-makers, industry stakeholders, and community leaders. By categorizing CCI subsectors according to their innovation and growth potential, the matrix offers a clear and actionable overview of the regional landscape. It not only aids in identifying high-potential areas but also provides guidance for targeted interventions and investments to unlock the full potential of each subsector, fostering sustainable growth across diverse regions.

Key Insights from the Growth–Development Matrix

The results of the Growth–Development Matrix highlight which subsectors within CCIs are best positioned for future development in the six non-urban European regions examined, classifying the subsectors into four categories:

• High Innovation, High Growth: Sectors that show substantial innovation potential and the ability to sustain future growth.
• High Innovation, Low Growth: Areas with high innovative capacity but limited current growth, which could benefit from additional support to reach their potential.
• Low Innovation, High Growth: Areas poised for growth, but requiring innovation enhancements to maintain competitiveness.
• Low Innovation, Low Growth: Sectors with limited growth and innovation, indicating a need for strategic intervention.

The subsectors with the highest potential, such as textile crafts and video games, showcase a strong ability to expand their market presence while maintaining sustainable practices. These subsectors effectively combine traditional techniques or cultural elements with modern technologies and global consumer trends, making them key drivers of both economic development and cultural preservation in regions like Valmiera County (Latvia), the West Coast and Baltic Sea Archipelago (Finland), and Western Coastal Periphery (Ireland). 

Conversely, subsectors like heritage tourism and ceramics demonstrate high sustainability but face challenges in scaling and market expansion. While these industries are vital for maintaining local culture and attracting niche markets, they may require strategic support through digitalisation, collaborative initiatives, and financial incentives to unlock their growth potential.

At the lower end of the matrix, subsectors such as furniture making and certain traditional crafts face dual challenges of low growth and sustainability. These areas require targeted interventions, including investment in modern production methods, digital marketing, and collaborations with other creative sectors to enhance their appeal. 

Regional Highlights

Across the six IN SITU Lab regions, this report highlights several CCI subsectors with considerable potential for sustainable development. As already mentioned, the analysis identifies subsectors such as textile crafts, digital gaming, and heritage tourism as consistently exhibiting strong innovation potential and deep community integration. The findings emphasize the pivotal role of community-driven initiatives and participatory processes in strengthening the resilience and relevance of CCIs, particularly in rural areas. These locally rooted approaches not only foster innovation but also ensure that CCIs remain vibrant and responsive to the needs of the communities they serve.

More specifically, regional insights of the analysis include:

• Valmiera County (Latvia): Known for dynamic creative agents and strong community engagement, this region’s CCIs would benefit from improved financial frameworks and more targeted investment in technology skills.
• Azores (Portugal): Heritage tourism and artisanal crafts show strong growth potential, with digital skill development and regional funding mechanisms seen as key to unlocking innovation.
• West Region (Iceland): Known for its rich cultural heritage and access to modern technologies, the region benefits from a structured cultural policy that prioritises funding for CCIs. A five-year action plan system, reviewed annually, ensures sustained support.
• Western Coastal Periphery (Ireland): A vibrant cultural scene focused on traditional arts faces challenges related to infrastructure and youth retention. Investment in these areas could foster a more sustainable innovation ecosystem.
• West Coast and Baltic Sea Archipelago (Finland): Strong intersectoral collaboration and a well-integrated cultural ecosystem make this region a model for CCI development, although discrepancies in innovation across the region suggest the need for balanced support.
• Šibenik-Knin County (Croatia): Rich in historical and cultural heritage, tourism-related CCIs show significant potential. A strategic focus on infrastructure investment could unlock further growth and sustainability.

Strategic Priorities for Innovation and Sustainability

The report also outlines several cross-regional priorities to enhance the innovation potential of CCIs in non-urban areas across Europe:

1. Investment in Infrastructure and R&D: Many regions require increased infrastructure and R&D investment to bridge the gap with more developed areas and foster dynamic innovation ecosystems.
2. Strengthening Financial Mechanisms: Financial sustainability is a common challenge for CCIs, and stronger funding frameworks—such as grants and investment funds—are essential for long-term resilience.
3. Encouraging Intersectoral Collaboration: Promoting collaboration between different sectors can catalyse innovation, create synergies, and foster a more dynamic creative ecosystem.
4. Addressing Skills and Knowledge Gaps: Targeted educational and training programs can bridge skills gaps, enhancing the workforce’s capacity for innovation and growth.
5. Leveraging Regional Cultural Assets: Each region possesses unique cultural resources that can be used to differentiate its CCI subsectors, stimulate niche markets, and boost local economic development.
6. Promoting Talent Retention and Engagement: Retaining local talent, particularly among young people, is critical for sustaining innovation. Creating opportunities for youth engagement in CCIs will ensure long-term viability and growth.

This analysis demonstrates that while CCIs in non-urban regions face particular challenges, they also hold considerable potential to drive innovation and contribute to local socioeconomic growth. The Growth–Development Matrix offers a practical framework for identifying high-potential subsectors and supporting tailored policy recommendations and strategic interventions. Finally, this report provides actionable insights for fostering resilient, innovative, and community-oriented CCIs in Europe’s peripheral regions.

For further information:
Nancy Duxbury – IN SITU Project Coordinator
Centre for Social Studies (CES) at the University of Coimbra, Portugal
Email: in-situ@ces.uc.pt
Tel: +351 239 855 570
Web: https://insituculture.eu

The “IN SITU: Place-based innovation of cultural and creative industries in non-urban areas” project combines research and experimental actions to advance the innovation-related practices, capacities, and potential of cultural and creative industries (CCIs) based in non-urban areas of the EU. The project is funded by the European Commission under the Horizon Europe Program (project no.101061747). It began on July 1, 2022, and will run for four years. The IN SITU project consortium comprises 13 Full Partners from 12 countries, consisting of 11 research institutions, a European-wide cultural network, and a national cultural foundation.