The Economic Benefits of Cultural Built Heritage (CBH)

BurwoodThere is a wide variety of cultural heritage in society and because of its broad church, it is difficult to define. From a business perspective, it is not only about old and pretty things or the recognised physical monuments; it often involves powerful human emotions. Effective cultural heritage management adds value to business, social and personal interactions. It is critical to land usage and administrative operations over entire generational cycles. If not managed well, it can delay or even prevent critical social policy (Rio Tinto).

Cultural heritage management needs to be adapted to suit the needs of each individual situation i.e. the context, the place, the risk and policy outcomes.

Respect for another’s culture garners mutual support. However, cultural heritage is not static. It changes over time. Management approaches need to be dynamic and adapt with it. Effective cultural heritage management generates wide economic, social and environmental benefits (Rio Tinto).

CanberraAccording to UNESCO, “cultural heritage may be defined as the entire corpus of material signs – either artistic or symbolic – handed on by the past to each culture and, therefore, to the whole of humankind. As a constituent part of the affirmation and enrichment of cultural identities, as a legacy belonging to all humankind, cultural heritage gives each particular place its recognizable features and is the storehouse of human experience” (UNESCO, 1989, p. 57 from Iorgulescu et al pg 16). 

CBH is characterised by expansion and semantic transfer, resulting in the generalisation of its use. According to Vecco (2010), the concept extends in three directions, as follows; a typological and thematic extension in which objects which were not included in the traditional concept of heritage are now considered to be a part of it; the selection criteria of cultural heritage is extended by the inclusion of new factors (apart from historic and artistic values), such as cultural value, identity value or the capacity of the object to interact with memory; a change from a normative approach to one based on the capacity of an object to generate certain values and meanings. Heritage is no longer defined only from a material perspective, thus making it possible to recognize intangible cultural heritage within the general ambit of CBH.

A major issue in cultural economics is the distinction between economic and cultural value. Throsby (2001) considers that economic value is strongly connected to the marginal utility of an asset, while cultural value comes from the following sources: aesthetic value, spiritual or religious value, social value (giving people the sense of membership to humankind), historical value, symbolic value (acting as a depository of meaning) and authenticity value. Using cultural value as a starting point, Throsby defines the concept of cultural capital, as “an asset which embodies, stores or provides cultural value in addition to whatever economic value it may possess” (Throsby, 2001, p. 46 from Iorgulescu et al pg 17).

DunedinKlamer (2002) observes that the possession of cultural capital is gainful for both individuals and organisations. It engenders an axiomatic link between the cultural asset and economic profit. In his view, cultural capital is defined as ‘the capacity to inspire and be inspired’ (Klamer, 2002, p. 467) because it is able to give meaning to objects and ultimately, to human life. Klamer points out that, unlike economic capital, most of the cultural assets such as CBH are collective possessions which need to be shared in order to become meaningful. He concludes that economic goods are only instrumental because the ultimate goal of human beings is to obtain social and cultural goods.

Cultural heritage is a key resource that belongs to all humankind. Its value transcends money and the economic issues. CBH is a repository of knowledge and meaning that inspires and fulfils human beings. Investment in conservation and valorisation of cultural heritage is key. Yet, it should not fall solely to public authorities to take up the mantel. Given that cultural heritage generates a series of economic effects, it should be shared equally amongst its three constituents; government; private owners and; communities (Iorgulescu et al pg 30).

Bowitz and Ibenholt (2009) maintain that the following economic effects are produced by investment in CBH;

  • Direct effects that are the straightforward result of investment such as sales, value added and employment. 
  • Indirect effects such as input/output effects derived from the fact that the investment project may require deliveries of goods and services from the local economy. Such demand generates an increase in local production and local revenues;
  • Multiplication effects such higher local revenues which generate an increase in the demand for local goods and services;
  • Acceleration effects which occur only in the investment phase during which the project may require increased deliveries from local suppliers which will boost the input/output effects and the multiplication effects;
  • Ancillary spending such as visitors to a cultural heritage site who spend money in the local area for food, accommodation, retail goods etc. This spending further increases the input/output effects and the multiplication effects;
  • Derived effects which can be attributed to the investment project i.e. cultural heritage may be an important factor for organizing festivals and cultural events which attract tourists from other areas. It may also trigger an increase in the export of local goods and services to other areas;
  • Gravitation effects in which an increase to the attractiveness of the area, resulting in an increased number of inhabitants and an increased number of companies established in an area become associated with a positive image of CBH which is then used as a marketing tool to make the area even more attractive to invest in. 
  • Counteracting effects which refer to the costs generated by investing in CBH that are borne by the local economy. There are three main types of counteracting effects: the displacement effect i.e. imbalances on the regional labour market, reduced profitability for some of the local companies, the deterioration of cultural heritage due to opening it to the public and the need for investment in infrastructure in order to provide cultural tourists and local visitors with adequate public services (Iorgulescu et al pg 19, 20).

On the job front, Greffe (2004) indicates that the valorisation of CBH leads to the creation of new jobs. He identifies four types of jobs which owe their existence to heritage;

  • Direct jobs in which people are employed in heritage institutions;
  • Indirect jobs in which people work in allied fields of conservation and restoration of heritage;
  • Induced jobs in which people who use heritage as a source of activity and inspiration - mostly in the cultural industry;
  • Jobs in the tourism sector as a result of heritage tourism development.

Greffe explains that in France there are an estimated 525,250 (approximately 2.4% of the active employed population) that are generated by CBH (Iorgulescu et al pg 18).

activityNSW received almost 9.5 million international (1) and domestic (2) cultural and heritage visitors in 2012, up by 10.7 % on the year ending 2011. Visitors spent nearly 56.3 million nights in the State - up by 3.0 % on the year ending 2011. Cultural and heritage visitors spent an estimated $7.9 billion (in cl package expenditure by overseas visitors) in NSW - up by 1.8 % on the year ending 2011 (1) Source: International Visitor Survey, YE Dec 12, Tourism Research Australia (2) Source: National Visitor Survey, YE Dec 12, Tourism Research Australia.

Cultural and heritage travellers represented 58.2 % of visitors and 62.4 % of nights by all international travellers to NSW. Compared with year ending December 2011, the share of visitors was down by 0.7 % pts and the share of nights was down by 1.1 % pts. The State received 61.1% of visitors and 32.7 % of nights by cultural and heritage travellers in Australia. Compared with the year ending December 2011,, the share of visitors was down by 0.4% pts and the share of nights was  down by 2.0% pts.

Paul Rappoport - Heritage 21 - 27 March 2015
 

MelbourneSources for this article

World Bank - Intergovernmental Fiscal Relations: accessed 14 July 2014.

Why cultural heritage matters - A resource guide for integrating cultural heritage management into Communities work at Rio Tinto: accessed 9 October 2014

Considerations regarding the Valuation and Valorization of Cultural Heritage - Theoretical and Applied Economics Volume XVIII (2011), No. 12(565), pp. 15-32 - Filip Iorgulescu, Felicia Alexandru, Georgiana Camelia Creţan, Meral Kagitci, Mihaela Iacob

UNESCO, Draft Medium Term Plan 1990-1995, 25 C/4, 1989

Vecco, M., A definition of cultural heritage: From the tangible to the intangible”, Journal of Cultural Heritage, Volume 11, Issue 3, July 2010, pp. 321-324

Klamer, A., Accounting for Social and Cultural Values, De Economist, Volume 150, Issue 4, 2002, pp. 453-473

Bowitz, E., Ibenholt, K., Economic impacts of cultural heritage – Research and perspectives, Journal of Cultural Heritage, Volume 10, Issue 1, January 2009, pp. 1-8

Greffe, X., Is heritage an asset or a liability?, Journal of Cultural Heritage, Volume 5, Issue 3, July-September 2004, pp. 301-309

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