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Reaping the economic benefits of cultural heritage

Cultural heritage should not be viewed as a cost, but rather as an investment that can yield short-term and long-term economic benefits to the city.
Hello, everybody. Today we will look into the economic impact that cultural heritage can produce. Economists argue that cultural heritage should not be viewed as a cost, but rather as an investment that can yield short-term and long-term economic benefits to a city. Let’s see how economists calculate the short-term economic impact of cultural heritage. They distinguish the direct effects, the induced effects, and the indirect effects. Let’s take the example of a museum. Its direct effects correspond to the employment and the income generated thanks to the activities run by the museum, such as ticket sales or the revenues of the museum shop. The induced effects correspond to visitor consumption, such as for transport, food, accommodation.
Gifts that benefit the businesses in the surrounding of a museum, such as restaurants, hotels, shops. Other induced effects are those related to the jobs. Linked to restoration and hospitality, for example, but also to the publication of books. The indirect effects are multiplier effects, based on the idea that all of the above spending will be in part spent locally. As for the long-term economic impacts of cultural heritage, they are usually more difficult to calculate. First, cultural heritage can increase the attractiveness of a city. Recognitions, such as UNESCO World Heritage list or landmark cultural projects, have been shown to raise cultural tourism, which generates higher spending.
Besides, they can contribute to encourage residents and businesses to settle in the city by raising the quality of life. Second, cultural heritage fuels urban creativity. It provides knowledge and ideas, which can be reinterpreted and generate spillovers in the local economy. And third, cultural heritage is a key component to urban regeneration. In numerous formal industrial neighbourhoods in crisis or central areas in decay, the focus on cultural heritage has accelerated the revival of urban life. The problem with notions of economic impacts or effects is that they suggest a mechanic process. Whereas local development relies really on how cultural heritage relates to the local social and economic system.
Let’s take the example of heritage trails, which consist in tagging a route with a certain purpose and meaning to create an educational experience for visitors. These trails are usually indicated by markings on the ground or through a map. They can be large-scale routes. Such as the path of progress national heritage tour, which is a 500-mile route in southwestern Pennsylvania. Including parks and heritage sites and enhancing the industry of the area. But they can also be smaller-scale, like the walled city walk along the no longer visible town walls of Norman Bristol. This appears as a light and low-scale kind of initiative and can generate several benefits. Such as attracting more visitors for longer stays and diverting flows from congested areas.
But more important is the collaboration that such projects can trigger. Between heritage sites and service providers, between different local governments, or among nonprofit organisations, all gathered around a common objective and a common cultural identity.

In this video, we discuss the economic benefits that cultural heritage can bring to cities.

Economists have developed numerous works to account for the short-term economic impacts of cultural heritage, as well as its long-term impacts. In this video, we stress the importance of the collaborations that cultural heritage projects can trigger within the local socio-economic system.

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Cultural Heritage and the City

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