Why culture is an economic location factor

Skilled workers do not choose a region by salary alone, but by whether they want to live there. A lively cultural setting — places, events, encounter — is part of that decision.

Where culture disappears, a reason to stay disappears. And with the people goes the economic substance.

A place that tends its history, its festivals and its institutions creates an attachment that no campaign can manufacture. That attachment carries businesses too — through custom, through loyalty, through the sense of being part of something.

Economy and culture do not compete for the same means. They depend on one another.

Before discussing culture as a soft location factor, it is worth noting that it is first of all a hard one. In 2023 Germany's cultural and creative industries generated gross value added of 123.2 billion euros — 3.3 per cent of total German gross value added. Turnover stood at 204.6 billion euros, up 5.3 per cent on the previous year.

Around 2.0 million people work in the sector, some 1.1 million of them in socially insured employment. It rests on roughly 238,000 companies — almost entirely small units, not corporations.

Anyone filing culture as an expenditure item to be weighed against business development is filing it in the wrong place. It is an economic sector with its own value added, its own workforce and its own growth.

What these figures do NOT show belongs here just as much: they evidence the economic scale of culture, not its effect on where people choose to settle. That a place with a theatre and festivals holds on to skilled workers more easily than one without is plausible and widely reported — but that is not the same as demonstrated cause and effect. Anyone citing this article should keep the two statements apart.

To strengthen a region, you cannot support its businesses and leave its culture to fend for itself. The family firm and the landmark belong to the same economy.

Culture is not a luxury for good times, but a foundation on which good times arise in the first place.

German Federal Ministry for Economic Affairs: Monitoringbericht Kultur- und Kreativwirtschaft 2024, reference year 2023. Source of the gross value added, share, turnover, workforce and company count. Available at bundeswirtschaftsministerium.de.

For context: the cultural and creative industries are defined more broadly than the word culture suggests — they include software and games, advertising, press and architecture. The figures therefore describe a sector definition in which the local theatre is included, not the local theatre itself.

For the link between cultural provision and the decision to stay in a place, I am not aware of a robust causal study. The article therefore presents it as an observation, not as a finding.