400 participants from 27 EU member states gathered in Berlin on May 3^rd and 4^th 2007 to discuss the potential of cultural and creative industries in Europe and to confer on the opportunities and challenges to face. Public and participants were mostly composed of politicians, cultural managers and people involved in the arts and culture. The different experiences of European ministers as well as the present situation of the specific branches (film, literature, music, print media, TV, design, architecture etc.) constituted the base for the elaboration of concepts and instruments that would allow a more coherent policy on European, national and local level and the development of more appropriate conditions for the creative industries.

 

 

In the creative industries the number of independent entrepreneurs and micro businesses is constantly increasing, especially in Berlin. But the financing of these enterprises proves to be difficult. Often enough the creative entrepreneurs are lacking of knowledge concerning support programmes and of sufficient capital resources to start their businesses. Very rare are those who obtain credits from banking houses; the funding volume is too low to be profitable to the financiers. Furthermore creative businesses are often based upon ideas and creative processes estimated to be too insecure for investment. Consequently there is a great need for players who mediate and network between banks, administrations and enterprises. How to remedy the lack of adequate financing tools for creative micro businesses? The panel aimed at presenting and discussing different financing models and methods for young creative entrepreneurs.

 

a.) Financing model from Sweden

The Swedish "Nätverket för Upplevelseindustrin" accompanies and supports small businesses involved in design, music, fashion, film, games, new media, gastronomy und tourism. In particular it arranges contacts with potential financiers. According to project manager Anders Sjöstedt credits are, much more than investments, fostering a sense of responsibility and self-confidence. The network advises the young entrepreneurs, develops their personal and professional competences, especially through training programmes in business start-up and administration, and assists them in the definition of their costumer focus.

 

b.) Financing model from Berlin

The Land Berlin initiative “Projekt Zukunft” [“Project Future”] is cross-linking the media, IT and cultural industries with the science, political and administration sectors. Through projects, public-private-partnerships, events, information campaigns and publications it contributes to promoting cultural innovation. According to Mrs Walther it is essential to develop new creative tools – not based upon public financing – in order to support, develop and network creative micro businesses. The intention is to create new instruments linking venture-capital and private resources and to simplify the application procedure.

 

c.) Financing model “micro-credits”

The “Deutsche Mikrofinanz Institut” [German Micro-finance Institute] rapidly and simply supports small businesses by providing credits amounting up to 10.000 Euro. The Institute examines the applicant and recommends him to the financial backers, thus reducing the latter’s risk. Once the loans granted, it also accompanies the business creation and thereby guarantees the credit refunding. If the cooperation is successful, a second credit – amounting up to 15.000 Euro – can be allocated. The institute works with financiers such as the European Social Fund, economic funds, ministries as well as the GLS Bank, the KIW banking group and private financiers.

 

d.) Financing model “capital fund”

The Art Estate Fund in Hamburg wishes to encourage potential buyers’ interest in artistic works and in that way also intends to support gallery owners’ activities. The Fund enables people who are interested in acquiring art but are not capable of buying an entire work to invest in parts of works. The investors participate in the purchase of 25 works by internationally renowned artists like Gerhard Richter, Georg Baselitz and Andy Warhol; while their share at buying is rather low, their share in profits after reselling is rather important.

 

All panel participants agreed that the debureaucratisation of the funding application procedure, the reduction of costs linked to the allocation of credits and at the same time the development of private funds are essential to the financial support of micro businesses in the creative industries.