# The Power of Place: A Case Study of Auckland’s Design Creative Industries

Authors: Lydia Kiroff
Journal: Urban Studies Research
 (2017)

---

## Abstract

Auckland is New Zealand’s largest city which also has the largest concentration of creative sector employment and businesses in the country. This study examines the spatial logic of firms in the design creative subsector in inner Auckland to gain better understanding of the ways in which place, space, and built form determine location choices. Firms’ attributes are also analysed with the aim of ascertaining whether firms with shared characteristics have similar spatial behaviour. Despite a high degree of spatial clustering, the unequal distribution of firms across inner Auckland suggests that some areas, such as Parnell, are favoured more than others. Parnell’s unique heritage built environment was identified as a location factor that has appealed to architects, designers, and advertisers and has contributed to the formation of the area’s creative clusters. The quality of Parnell’s built environment was associated with place reputation and image branding which was an important part of creating firm’s identity. A central location and the attractiveness of an amenities-rich local environment also played a role in the decision-making process. Furthermore, the results also suggest that firms that possess common characteristics have similar spatial logic and make similar location choices.


---

## Body

## 1. Introduction

“Creative sector a big star in New Zealand economy.” This was how a recent headline inThe New Zealand Herald hailed the emergence of the creative industries as a great success in the New Zealand national economy. The article went on to describe the growing importance of the creative sector to the New Zealand economy in terms of job creation and its significant contribution to the country’s GDP. But behind this headline is a more complex story concerning not only the rise of creative sector in helping to reshape the broader economy, but also its impact in those locations where it has become a growing presence. In New Zealand, this has been a story about the emergence of Auckland, in particular, as the epicentre of this growth within a revitalised inner city economy. Importantly, however, such developments do not operate in a spatial vacuum. Increasingly this sector is seen as a key driver of positive change in city economies and has become the focus of the new urban policy agendas seeking to capitalise on the shift toward its role in generating jobs and growth. Reflecting this, city planners around the world have identified the creative sector as a key target for active planning to support economic transformation [1–7]. However, there has also been a significant and highly critical body of research on the creative industries’ discourse and a widespread debate questioning whether creative industries clusters drive economic growth. The specific commercial, social, and cultural benefits potentially generated by the creative industries and their role in economic development, regeneration, and social inclusion are regarded with a certain amount of scepticism [8, 9]. Furthermore, in recent years the distinctiveness of the creative industries has become a contentious issue blurring the boundaries between creative and noncreative industries, the former seen more as sources of innovation and creativity that input into other sectors of the economy [8]. The “cookie-cutter” approach to pursuing the same culture/knowledge-based economic development strategy regardless of the specificities of the local context has attracted much criticism [9]. Moreover, the relationships among cultural facilities, industries, and area economic development remain elusive [10]. The use of location quotients to demonstrate the overrepresentation of certain creative industries in cities and regions fails to prove the causal impact on the share of job growth or property revaluation [11].This study focuses on Auckland’s design subsector (architecture, specialised design, and advertising), which is the largest, and makes the greatest contribution to the city’s GDP [12]. Empirical research in various urban contexts presents compelling evidence of the propensity of creative industry firms to cluster spatially especially in the central and inner city [13–18]. The built form of these inner urban areas, which are older and more established neighbourhoods, is a mix of former industrial and warehouse type buildings and older residential properties [16, 18]. This unique built form contributes to place distinctiveness and becomes embodied in successful place branding and marketing. The argument put forward in this study is that built form can also be considered as a key determinant of firm location, particularly for creative service industries, and is equally important to other economic drivers. The research examines the key determinants of firm location and the rationale behind spatial clustering. It also seeks to establish the possible presence of common firm characteristics that might have contributed to the location choices. Creative industry clustering is an extremely important and widespread phenomenon, and coclustering of creative industries is so significant and widespread that it could deserve as much attention as clustering itself [19]. Vorley et al. [20] emphasize the need for adopting an empirical approach able to deliver new empirical evidence to test existing presumptions and models when studying the creative industries Microlevel sectoral case studies of creative production clusters prove particularly useful in providing detailed data and hard evidence illuminating complex issues [21].


## 2. Background

### 2.1. The Power of Place and Creative Industry Clustering

Creative firms are highly clustered but the patterns of how industries are distributed in cities vary. The places where clusters locate are also different for different industries [19]. A significant body of literature presents arguments that the “power of place” continues to exert an influence [22], “distance is still very much alive” [23], and “place remains the central axis of our time” despite the realities of the global economy dominated by technological advancements, the World Wide Web, and high speed telecommunications [24]. The “death of distance” argument with regard to the creative economy [22, 25] and the assertion that “the city will dissolve in the Internet” [26] have proven groundless despite worldwide digitalisation and globalisation trends and advancements in ICTs. The “friction of distance” continues to have powerful effects on clustering of economic activity [27]. Space and place play an important role in creative industries clustering and as such require better understanding of relevant place-based factors to explain these patterns and to nurture the creative economy [28].Creative industry clustering linked to Michael Porter’s business model [29–32] and based on the principles of cooperation, knowledge exchange, and competition is also characteristic of the creative economy. However, these clusters have some specificities due to the nature of the creative economy they operate in, which is often associated with high levels of instability and volatility. Clusters in the creative and cultural industries tend to be vertically disintegrated networks of production units that can function flexibly but are highly dependent on the production and consumption value chain [7, 33]. The lack of vertical integration, which is often associated with other industries, is due to a “missing middle”—a combination of a small number of very large firms working internationally and a very large number of local firms, or single persons [34].The frequent workload fluctuations in the creative industries foster the rise of local labour markets offering a pool of diverse highly specialised skills. The type of work in these creative clusters is predominantly project based, temporary, and freelance and often part-time [7, 34, 35] underpinned by technology and a continuous need for upgrade and innovation [33]. It can provide choice, autonomy, and satisfaction but it also involves constant uncertainty, insecurity, and change [9, 17]. Unpaid work is not an isolated event and is often seen as the only possible entry route into employment in the creative industries [36].A number of studies argue that physical proximity and colocation of firms in clusters provide certain benefits, such as labour pooling, fast formation of project teams, and knowledge exchange across firms and projects, all factors which stimulate innovation. Furthermore, colocation creates the right environment for face-to face interaction and transmission of uncodified information [2, 22, 25–27, 37–39]. Successful creative industry clusters are “networked,” “knowledge-reliant,” and “founded on risk and trust” and “flourish through connectivity” [40]. Various studies refer to a range of advantages offered by creative industry clusters. Close geographical proximity creates opportunities to “meet and greet” and enhances collaborations [41]. A local climate of trust, socialization, knowledge exchange, and inspiration stimulates the development of a “critical infrastructure” able to function as an ongoing environment for cultural and economic innovation [42]. Creative industry clusters are predominantly colocated [19]. The colocation of firms also fosters idea generation and an increase in productivity [2, 43].The locational implications of creative industry clusters are in the “positive externalities” that they generate which contribute to a place’s quality of life, enhanced image, and prestige [44]. Therefore, it is suggested in the literature that these clusters boost local and regional economic growth [2, 40, 44, 45]. However, creative industry clusters also attract criticism mainly in the area of networking, interfirm linkages, and cooperation. The main argument is that colocation rather than clustering distinguishes these clusters and there are no interfirm linkages or locational benefits [46]. With respect to agglomeration economies which are at the core of the cluster concept, industries locate in proximity to each other to take advantage of the reduced marginal costs that occur as the area’s production increases. In contrast, colocation occurs naturally and without coordination through independent decisions of firms operating in their own interests [39].


### 2.2. Locational Preferences

The existing literature suggests that the creative industries have particular preferences for inner city locations [13–15, 17, 18, 28, 41]. The largest clusters in Europe are located in the central parts of the largest cities [19]. The attraction of inner city sites for creative industry clusters is determined by a range of interdependent factors, such as economic agglomeration, cooperation with local supporting industries, and opportunities for social networking and knowledge exchange [14]. Areas adjacent to the city centre often offer a quality amenities-rich urban environment: a mix of former industrial and warehouse type buildings and older residential properties [16, 18]. Creative industries often appropriate and transform former industrial and redundant areas thus presenting a potential for urban regeneration and job creation [28]. Such physical settings, often labelled urban “cultural quarters,” attract a high number of creative firms and turn into vital experimentation and innovation zones in advanced urban economies [15, 16, 18].The historical background of these areas and the specific cultural setting become part of a unique image which is projected to prospective clients and customers [13, 47, 48]. The look and feel, in particular the industrial heritage, grit streetscape, and street art, contribute to the area’s appeal [28]. Thus, successful place branding depends heavily on the distinctive characteristics of a place and is used as a powerful marketing tool associated with the creation of unique identities [49–52]. Firms in the creative service sector (architecture, design, and advertising) show powerful affinities for heritage buildings within inner city sites and choose their locations very strongly on the basis of “bare geographies” [15, 47, 53, 54]. In essence, the argument in this paper is that built form can also be considered as a key determinant of firm location for particular creative industries and is equally important to other economic drivers.


### 2.3. Auckland’s Design Subsector—The Main Focus of This Study

The primary focus of this study is on the design creative subsector comprising advertising, architecture, and specialised design. The economic significance of the creative industries was first identified in theSnapshot document in 2005 [55]. Auckland Council’s sustained interest in the creative sector has led to the setting of a specific target in The Auckland Plan to increase the number of creative sector employees from 26,900 in 2007 to 45,000 by 2040. A clear commitment to fostering and encouraging the development of the creative sector has been formulated in the report and attracting, retaining, and nurturing creative talent has been identified as the basic premise for future economic prosperity. The creative sector’s contribution to Auckland’s GDP was estimated at $1.80 billion by 2012, representing 2.3 percent of Auckland’s total GDP [12]. The greatest contribution was made by the design subsector, $566 million, representing 31 percent of Auckland’s creative sector GDP. In 2012 the Auckland Region had the highest concentrations of creative employment in New Zealand [12].The Auckland’s design subsector exemplifies the concept of the “missing middle” resulting in vertically disintegrated creative industry clusters discussed previously. The design subsector had only five large businesses with 100+ employees in the Auckland Region in 2012 (four advertising and one architectural), providing only a small share (11 per cent) of the sector’s employment. At the same time the market was dominated by small firms with fewer than 20 employees providing over 59 percent of creative employment; the average business size for the design subsector in the Auckland Region was 1.8 employees [12]. This average business size is comparable with the general profile of creative firms elsewhere, which tend to be small and agile operating within networked environments [41, 44, 46, 56, 57].


## 2.1. The Power of Place and Creative Industry Clustering

Creative firms are highly clustered but the patterns of how industries are distributed in cities vary. The places where clusters locate are also different for different industries [19]. A significant body of literature presents arguments that the “power of place” continues to exert an influence [22], “distance is still very much alive” [23], and “place remains the central axis of our time” despite the realities of the global economy dominated by technological advancements, the World Wide Web, and high speed telecommunications [24]. The “death of distance” argument with regard to the creative economy [22, 25] and the assertion that “the city will dissolve in the Internet” [26] have proven groundless despite worldwide digitalisation and globalisation trends and advancements in ICTs. The “friction of distance” continues to have powerful effects on clustering of economic activity [27]. Space and place play an important role in creative industries clustering and as such require better understanding of relevant place-based factors to explain these patterns and to nurture the creative economy [28].Creative industry clustering linked to Michael Porter’s business model [29–32] and based on the principles of cooperation, knowledge exchange, and competition is also characteristic of the creative economy. However, these clusters have some specificities due to the nature of the creative economy they operate in, which is often associated with high levels of instability and volatility. Clusters in the creative and cultural industries tend to be vertically disintegrated networks of production units that can function flexibly but are highly dependent on the production and consumption value chain [7, 33]. The lack of vertical integration, which is often associated with other industries, is due to a “missing middle”—a combination of a small number of very large firms working internationally and a very large number of local firms, or single persons [34].The frequent workload fluctuations in the creative industries foster the rise of local labour markets offering a pool of diverse highly specialised skills. The type of work in these creative clusters is predominantly project based, temporary, and freelance and often part-time [7, 34, 35] underpinned by technology and a continuous need for upgrade and innovation [33]. It can provide choice, autonomy, and satisfaction but it also involves constant uncertainty, insecurity, and change [9, 17]. Unpaid work is not an isolated event and is often seen as the only possible entry route into employment in the creative industries [36].A number of studies argue that physical proximity and colocation of firms in clusters provide certain benefits, such as labour pooling, fast formation of project teams, and knowledge exchange across firms and projects, all factors which stimulate innovation. Furthermore, colocation creates the right environment for face-to face interaction and transmission of uncodified information [2, 22, 25–27, 37–39]. Successful creative industry clusters are “networked,” “knowledge-reliant,” and “founded on risk and trust” and “flourish through connectivity” [40]. Various studies refer to a range of advantages offered by creative industry clusters. Close geographical proximity creates opportunities to “meet and greet” and enhances collaborations [41]. A local climate of trust, socialization, knowledge exchange, and inspiration stimulates the development of a “critical infrastructure” able to function as an ongoing environment for cultural and economic innovation [42]. Creative industry clusters are predominantly colocated [19]. The colocation of firms also fosters idea generation and an increase in productivity [2, 43].The locational implications of creative industry clusters are in the “positive externalities” that they generate which contribute to a place’s quality of life, enhanced image, and prestige [44]. Therefore, it is suggested in the literature that these clusters boost local and regional economic growth [2, 40, 44, 45]. However, creative industry clusters also attract criticism mainly in the area of networking, interfirm linkages, and cooperation. The main argument is that colocation rather than clustering distinguishes these clusters and there are no interfirm linkages or locational benefits [46]. With respect to agglomeration economies which are at the core of the cluster concept, industries locate in proximity to each other to take advantage of the reduced marginal costs that occur as the area’s production increases. In contrast, colocation occurs naturally and without coordination through independent decisions of firms operating in their own interests [39].


## 2.2. Locational Preferences

The existing literature suggests that the creative industries have particular preferences for inner city locations [13–15, 17, 18, 28, 41]. The largest clusters in Europe are located in the central parts of the largest cities [19]. The attraction of inner city sites for creative industry clusters is determined by a range of interdependent factors, such as economic agglomeration, cooperation with local supporting industries, and opportunities for social networking and knowledge exchange [14]. Areas adjacent to the city centre often offer a quality amenities-rich urban environment: a mix of former industrial and warehouse type buildings and older residential properties [16, 18]. Creative industries often appropriate and transform former industrial and redundant areas thus presenting a potential for urban regeneration and job creation [28]. Such physical settings, often labelled urban “cultural quarters,” attract a high number of creative firms and turn into vital experimentation and innovation zones in advanced urban economies [15, 16, 18].The historical background of these areas and the specific cultural setting become part of a unique image which is projected to prospective clients and customers [13, 47, 48]. The look and feel, in particular the industrial heritage, grit streetscape, and street art, contribute to the area’s appeal [28]. Thus, successful place branding depends heavily on the distinctive characteristics of a place and is used as a powerful marketing tool associated with the creation of unique identities [49–52]. Firms in the creative service sector (architecture, design, and advertising) show powerful affinities for heritage buildings within inner city sites and choose their locations very strongly on the basis of “bare geographies” [15, 47, 53, 54]. In essence, the argument in this paper is that built form can also be considered as a key determinant of firm location for particular creative industries and is equally important to other economic drivers.


## 2.3. Auckland’s Design Subsector—The Main Focus of This Study

The primary focus of this study is on the design creative subsector comprising advertising, architecture, and specialised design. The economic significance of the creative industries was first identified in theSnapshot document in 2005 [55]. Auckland Council’s sustained interest in the creative sector has led to the setting of a specific target in The Auckland Plan to increase the number of creative sector employees from 26,900 in 2007 to 45,000 by 2040. A clear commitment to fostering and encouraging the development of the creative sector has been formulated in the report and attracting, retaining, and nurturing creative talent has been identified as the basic premise for future economic prosperity. The creative sector’s contribution to Auckland’s GDP was estimated at $1.80 billion by 2012, representing 2.3 percent of Auckland’s total GDP [12]. The greatest contribution was made by the design subsector, $566 million, representing 31 percent of Auckland’s creative sector GDP. In 2012 the Auckland Region had the highest concentrations of creative employment in New Zealand [12].The Auckland’s design subsector exemplifies the concept of the “missing middle” resulting in vertically disintegrated creative industry clusters discussed previously. The design subsector had only five large businesses with 100+ employees in the Auckland Region in 2012 (four advertising and one architectural), providing only a small share (11 per cent) of the sector’s employment. At the same time the market was dominated by small firms with fewer than 20 employees providing over 59 percent of creative employment; the average business size for the design subsector in the Auckland Region was 1.8 employees [12]. This average business size is comparable with the general profile of creative firms elsewhere, which tend to be small and agile operating within networked environments [41, 44, 46, 56, 57].


## 3. Research Approach and Methods

The study employs a case study research approach focusing on Parnell backed up by quantitative background research which presented evidence for the different geographies of the three subsectors in the Auckland Region and in inner Auckland in 2015. The spatial distribution of architectural and specialised design firms in the Auckland Region exhibited two distinct spatial patterns: concentrated, primarily in inner Auckland; and more dispersed and less saturated, in suburban contexts. However, the advertising subsector was very different and demonstrated an extreme tendency toward spatial concentration only in inner Auckland. Auckland’s architectural, specialised design, and advertising firms were spatially clustered in both the CBD and CBD fringe areas. However, one CBD fringe area, Parnell, performed consistently across the three subsectors and had the highest number of firms in 2015: 23 architectural, 24 specialised design, and 13 advertising. The unequal distribution of firms across inner Auckland suggests that some areas are more favoured than others and implies a ranking order of the fringe areas in terms of preference. The case study research was considered most appropriate to uncover the main factors determining the choice of location.A variety of sources and data collection methods, such as fieldwork in Parnell, documentary research, and semistructured interviews, were used as part of the Parnell case study. A number of field trips were made in 2015 visiting all 60 design creative firms of Parnell with the aim of identifying their preferences in terms of buildings as business locations and taking photographs of the buildings’ exterior. The fieldwork resulted in a threefold photo classification of Parnell’s buildings occupied by the design creative firms. The fieldwork in Parnell directed the study to the area’s built environment and at capturing deep, contextual, and in-depth understanding of the local setting through the collection of diverse empirical data.Semistructured, face-to-face, in-depth interviews were the major method of empirical data collection that followed the fieldwork in Parnell. The aim was to identify the firms’ locational preferences as well as gather information about firms’ attributes in order to establish levels of similarities or differences among them. Quota purposive sampling was used to select participants from the architectural, specialised design, and advertising subsectors within Parnell. The sources of such data for the three subsectors were the corresponding professional bodies: the New Zealand Institute of Architects (NZIA); the Design Institute of New Zealand (DINZ); and the Communications Agencies Association of New Zealand (CAANZ). The data for the architectural subsector, which also corresponds to Class M69210, Architectural Services, from the ANZSIC06, were gathered through the 2015 Directories of NZIA Accredited Practices and for the specialised design subsector, corresponding to Class M69240, Other Specialised Design Services, through the 2015 online DINZ Directory. DINZ represents seven primary sectors: graphic design, spatial design, product design, service design, design education, design in business, and interactive media. This study focuses on these primary sectors and the DINZ registered designers and firms. The primary data for the advertising subsector, which corresponds to Class M69400, Advertising Services, were gathered through the 2015 online CAANZ Directory. All interview participants were selected based on their role within the respective organisation, relevant industry experience, and the ability to provide information to the research. This type of sampling ensured that each one of the three subsectors was adequately represented through the assignment of an interview quota. The individual quota for each subsector was calculated as a percentage from the total number of Parnell firms (60) and then used to determine the proposed number of interviews as part of the total number, 30. Semistructured, one-to-one, in-depth interviews were undertaken with 11 architectural (38.34% quota), 12 specialised design (40% quota), and 7 advertising firms (21.66% quota).All interviews were with the firms’ directors as they had decision-making power regarding the choice of firm location. Two additional criteria were used in conjunction with the quota sampling to mitigate any potential bias that the selection approach might create: dispersed, regarding the firm’s location; and diversified, regarding the building type. First, the 30 firms selected for the interviews were evenly distributed across the area in Parnell rather than concentrated in a single enclave. Second, the diversified criterion ensured a fair representation of all building types and that firms located in converted industrial buildings, purpose-built office buildings, and residential dwellings were interviewed. An interview question guide, divided into three sections, was used for the interviews starting with factual background type questions at the beginning, followed by survey questions using various scales, and concluding with open-ended questions.


## 4. Findings and Discussion

### 4.1. Parnell’s Unique and Distinctive Industrial Heritage

Parnell, which sits on the eastern side of the CBD and adjacent to the Auckland Domain volcano, appears to be the creative centre of inner Auckland (Figure1). It is practically using much of its historical industrial fabric. The area is a suburban entity that does not quite appreciate how significant the creative industries are till its creative economy. This is an affluent gentrifying area. The majority of Parnell residents are highly educated and are mostly in professional employment with high earning power, which is almost double than the Auckland Region average.Figure 1
Parnell’s location (source: Google Earth).Parnell is Auckland’s oldest suburb rich with history that dates back to 1840. TheNew Zealand Herald from 1950 reports on the industry invasion of Parnell that occurred during the early 1900s when factories and warehouses were slowly pushed out from the city into the lower reaches of Parnell. As a result of this industrial intrusion some parts of Parnell were gradually turning from residential into industrial areas undergoing a change of appearance. Well-defined industrial development took place especially in the lower extremities of Parnell. The area was slowly losing its residential character and dignity although it was still considered to be mainly residential [58].Ironically what was perceived as lost dignity, changed appearance, and deteriorating surroundings due to an industrial intrusion constitutes nowadays a unique industrial heritage that draws creative firms into the area. The parts with the highest concentrations of design creative firms near The Strand and at the lower ends of Parnell Rd and St Georges Bay Rd are abundant with character industrial buildings, such as former wool stores and textile and confectionary factories. The conversion of old industrial buildings into commercial spaces and residential lofts has redefined Parnell’s spatial character over the years. New attractive commercial environments have been created in the Textile Centre, 125 The Strand, 165 The Strand, the Axis Building, and many others of a smaller scale. Residential loft conversions also became a feature of the residential market in the area—the top storey of the Axis Building and Heards Residences, the Dakota Building, and the Ford Lofts. Parnell’s industrial core has gradually gentrified nowadays into mixed-use areas containing also new apartment blocks and semidetached residential units. Parnell is the only CBD fringe area with large-scale industrial buildings that have remained an integral part of the urban fabric. Parnell’s character is not replicated in other CBD fringe areas like Newton, Grafton, Eden Terrace, Ponsonby, Newmarket, and Freemans Bay that all seem to have lost more of their historic character and authenticity as a consequence of new motorway developments, undertaken in the period of 1950s–1970s, and modern and more intensive forms of urban intensification [59].The areas around the upper end of Parnell Rd are distinctly different in character due to the Victorian and Edwardian building heritage. A variety of shops, with a long-standing reputation, lining both sides of Parnell Rd—dairies, grocery, sweet, butchers, and florist shops, chemists, and bakeries [60]—were converted into an eclectic mix of upmarket restaurants, cafes, art galleries, designer clothing, and antique, jewellery, and many other specialty shops. The new iconic Parnell village that was created by preserving the old Victorian cottages was regarded as “a feat of imagination and conservation” [59]. It was considered as the catalyst for Parnell’s regeneration, a process that turned it into a desirable business location and also a prime residential area. Parnell has a unique ambience due to the successful blend of old traditions from the early settlement years with the commercial realities of modern life. The trendy suburb, popular among creative professionals nowadays, is a result of a 170-year period of urban regeneration that has transformed “the shabby commonplace of oldness” into a place having “some abstract value” [59]. Parnell has considerable historical value as one of Auckland’s oldest suburbs with aesthetic and physical attributes [61].


### 4.2. Economic Profile of Parnell

Parnell is characterised by an extremely high number of small businesses, around 1000, in retailing, jewellery, law, accountancy, banking and finance, the IT sector, insurance, health, marketing and research, property development and services, engineering, and architecture and design [62]. This unique and vibrant mix of local businesses operating in Parnell is predominantly located in the western parts of the area. The vast majority of these business activities are supported and governed by the local business association, Parnell Inc., previously known as Parnell Mainstreet. It currently represents over 500 businesses located along the main suburban axis—Parnell Road and Parnell Rise. Future plans aim to include all businesses based in the Parnell area. The area’s creative industries play a key role in promoting Parnell as Auckland’s creative quarter which is also the city’s largest art gallery precinct. The “Creative Quarter” brand, logo, and marketing campaign were launched by Parnell Inc. in July 2009. The brand story builds on the historical background of the area, which is Auckland’s “first suburb,” “a place that is inhabited with physical and emotional landmarks” and “rich with stories” [62]. These attributes create the unique identity of the area and make it fundamentally distinctive from any other neighbourhood in Auckland. A significant number of architectural, advertising, interior design, graphic design, fashion design, and publishing companies are located in Parnell. The largest concentrations of well-defined clusters are at the lower end of St Georges Bay Rd and at the lower end of Parnell Rd near Fraser Park (Figure 2).Figure 2
Spatial distribution of architectural, specialised design, and advertising firms in Parnell in 2015 (source: author; map based on Google Maps).Parnell’s creative clusters belong to the category described in the literature as “clusters of hybridised industries and firms,” which include architecture, industrial and graphic design, and advertising [63]. As such, they are an example of “an eclectic clustering of particular new urban economic activities,” which is a new tendency since the 1990s [64]. While the precise mix of industry sectors varies from city to city, these advanced industry clusters play a key role in promoting the value of the inner city as a unique zone for experimentation within the metropolis [63]. Similar inner city hybridised creative clusters are reported in London [9, 14, 28], Vancouver [54], and Shanghai [13, 65]. Parnell’s hybridised creative clusters are very similar to other inner city diversified creative clusters in a variety of urban contexts. Parnell is also known as Auckland’s home design hub as the area has more than 40 design suppliers ranging from bathroom ware and office furniture to textiles, ceramics, and stone: Spazio Casa, Metrix, European Ceramics & Stone, Heritage Tiles, Matisse, Kada, Textilia, and so on. A significant number of these firms are also concentrated at the lower end of St Georges Bay Rd near the intersection with The Strand.


### 4.3. Visual Analysis of Parnell’s Creative Clusters

Although Parnell’s location distribution map reveals well-defined spatial patterning in the area, it cannot go beyond a two-dimensional representation of clustering trends and does not have the capability to infer any relationship with the built environment. Empirical data collected from fieldwork has the potential to enrich the theoretical spatial analysis and add three-dimensional data to the discussion. Hence, the next logical step undertaken in the study was the field surveys of all Parnell buildings occupied by the design creative firms. The aim of the field observations was twofold: first, to ascertain whether there were any visual indicators of creative industries’ presence in the area and second, to establish the type of buildings in Parnell favoured by the creative firms as business locations. The results of the fieldwork in Parnell are presented in a threefold photo classification (Figures3, 4, and 5).Figure 3
Parnell’s converted industrial buildings occupied by design creative firms in 2015.Figure 4
Parnell’s residential dwellings occupied by design creative firms in 2015.Figure 5
Parnell’s purpose-built office buildings occupied by design creative firms in 2015.The buildings in Parnell occupied by the design creative firms were divided into three main groups: converted industrial buildings (Figure3), residential dwellings (Figure 4), and purpose-built office buildings (Figure 5). The findings of the field observations demonstrate an overwhelming dominance of the converted industrial buildings with a total of 39 firms, compared to just 10 firms located in purpose-built office buildings and 11 firms operating from home (residential—all owner occupation) (Table 1). The highest number of architectural (14), specialised design (15), and advertising firms (10) was located in converted industrial buildings showing a strong preference for this particular group.Table 1
Numbers of architectural, specialised design, and advertising firms across three main building types in Parnell in 2015 (source: author).
Creativesubsector
Convertedindustrial bldgs
Purpose-built office bldgs
Residentialdwellings
Total
Arch
14
3
6
23
Design
15
5
4
24
Advert
10
2
1
13
Total
39
10
11
60Some of the large converted industrial buildings, such as the Textile Centre in 1 Watt St, 125 The Strand, and the Axis Building in 91 St Georges Bay Rd (Figure3), have attracted a high number of firms across the three subsectors. The visual analysis of Parnell’s building stock suggests associations between design creative firms and the area’s industrial heritage. Similarly, a number of studies in the literature in different urban contexts (London, Vancouver, Singapore, and Shanghai) support the empirical findings of the fieldwork. The highest concentrations of design and creative-services firms are located in areas in the inner city characterised by diverse building types and scales, historic building sites, and distinctive streetscapes [13–15, 28]. The findings of these studies reaffirm the association between design creative firms and the unique heritage landscapes and imagery of the inner city. The development of such creative precincts in heritage sites has led to the conversion and modern utilisation of ordinary industrial buildings [65]. The specific characteristics of an area’s built environment seem “to nurture” creative clusters. Distinctive place-based factors, namely, industrial heritage, small grain development, cafes, and bars and vibrant nightlife, are major attractors to creative businesses and influence colocation [28].However, there were no visual indicators of creative industries’ presence in Parnell despite the high numbers of firms. The age of the industrial building stock in the area varies from very early 1900s to 1960s and 1970s. The exterior of the largest industrial buildings has remained intact and the style unchanged since their construction in the early 1900s. The same principle applied to the newer industrial building stock in the area.


### 4.4. Key Location Factors Contributing to Parnell’s Creative Cluster Formation

A short questionnaire was embedded in the firms’ interview question guide following the collection of background information on firm size, area of specialisation, age of the firm, and involvement in the redevelopment/upgrade of own office space. One question listed nine location factors and used rating scales for each one from 1 (very unimportant) to 5 (very important) asking the participants to rate the key determinants of firm location in Parnell. The output was ordinal quantitative data representing the respondents’ attitudes and perceptions of the importance of various identified factors and attributes. Table2 summarises the survey results of the rating scales for nine location factors arranged in a rank order.Table 2
Rating of location factors by the 30 Parnell architectural, specialised design, and advertising firms (source: author).
Location factors
Weighted number of responses
Rank order
Overall quality of the built environment in Parnell
144
1
Well-designed urban spaces
142
2
Building stock with appropriate design qualities
138
3
Relative affordability of business premises
138
4equal
Proximity to the CBD
136
5
Availability of suitable office premises
128
6
Better access to various amenities (cafes, restaurants, recreation & leisure)
126
7
Proximity to existing and potential clients
116
8
Better access to parking
112
9Based on the survey data, the overall quality of Parnell’s built environment was identified by the interviewed firms as the top location factor, followed closely by two other related factors: the well-designed urban spaces and the building stock with appropriate design qualities (Table2). The survey results suggest a broad explanation of why Parnell is the area having the highest number of firms across the three creative subsectors. Twenty-three of the thirty interviewed firms were in converted industrial buildings, which are the most prolific building type in the area, four in purpose-built office buildings, and three in residential dwellings. Overall, the majority of firms were pleased with their location choices. The relative affordability of business premises was 4th equal, followed closely by the proximity to the CBD. Finding an affordable space in the area for leasing seemed of relative importance for the interviewed firms. Most firms were happy with their firm’s central city location and the benefits it could offer. The above two factors would be probably equally important in any one of the CBD fringe areas but it is their rather unique combination with the top three location factors: unique place characteristics, urban spaces, and building stock, that could be identified as the key location determinants in the make-up of Parnell’s design creative cluster.The least important factors identified by the interviewed firms in Parnell were the proximity to existing and potential clients in 8th place and better access to parking in 9th place. Most of the interviewees explained that their clients came from anywhere in the Auckland Region and were not from the immediate area, which is why locating in Parnell was not determined by this factor; it was rather the central location that was deemed crucial. The parking situation in the city fringe areas, including Parnell, is generally much better than the city centre and most interviewed firms reported that they provided enough free parking spaces for their clients. In addition, plenty of restricted and free parking is available in the nearby areas for the staff. Overall, the proximity to clients and parking were not seen as issues that would determine the choice of firm location.The qualitative data gathered through the semistructured interviews underpin the analysis that follows highlighting issues specific to Parnell. It begins with establishing whether clustered firms possess common characteristics. The benefits of a central location with better accessibility to clients and customers and strong place branding are discussed next as they emerged as important factors influencing the choice of location. Then Parnell’s creative industry clusters are examined along the production and consumption value chain associated with successful creative industries clusters in the literature.


### 4.5. Typology of Parnell’s Architectural, Specialised Design, and Advertising Firms

The study’s results regarding design firm size in a city fringe area, such as Parnell, suggest that medium-sized design firms from two categories, 10–19 and 5–9 employees, tend to dominate Parnell’s business landscape. However, Parnell’s employee numbers are higher than the general creative industry profile of small-sized firms, reported in the literature. Creative industry clusters consist predominantly of small, agile firms engaged in creative work, which is contractual and part-time and often subjected to wild fluctuations [44, 46, 56, 57]. A number of empirical studies of various creative industry sectors report consistently on their small firm size: Amsterdam’s and Rotterdam’s architectural firms [66]; London’s design [67], advertising [68], and jewellery firms [69]; Sydney’s visual entertainment industries [70]; Vancouver’s film industry [71]; Hollywood’s motion-picture industry [72, 73]; and music clusters in Toronto and Halifax [74], New York, Los Angeles, and Nashville [75].All 30 interviewed firms across the three subsectors had a number of areas of specialisation that could cater for a wide range of clients and jobs; none of the firms was narrowly specialised in just one field. They were well-established and in operation in Auckland for over 5 years; there were no new or start-up businesses in the interview sample. Similar findings on the age and stability of creative industries businesses including design and architecture are reported in the literature [41]. There was a significant variation in the firms’ length of time operating from premises in Parnell, from 1 to 26 years, which could be explained with the low property ownership. The two main reasons cited by the interviewees as insuperable obstacles to property ownership were the high property values in Parnell and also the possible implications of co-owning an investment property with the other firm’s partners. This finding could be explained with the economic and employment profile of creative firms, characteristic of “structural weaknesses which include a shortage of financial capital (working and investment) … and below-average earnings” [46], and of general “instabilities,” such as “part-time, temporary and freelance work being particularly prevalent” [44]. The implications of the dominance of leased premises are twofold. Having a much greater degree of flexibility over choice of location is definitely a positive upside of this trend in case rents become unaffordable or the firm contracts in size due to a reduced and fluctuating workflow. However, a significant downside is the inability or lack of incentive to engage in major design renovations with a measurable impact on the buildings’ aesthetics.The interview data suggests that the make-up of Parnell’s creative clusters consists of medium-sized, broadly and highly specialised, more mature and well-established firms that have been in business for over 5 years and have low business property ownership. There were no differences among the three subsectors. The empirical evidence suggests that Parnell’s design creative firms, which made similar location choices, possessed common characteristics.


### 4.6. Geographical Location and Fringe Benefits

In terms of preferred location, CBD and city fringe areas are seen as the prime location that attracts the highest concentrations of creative firms [13, 16, 28, 41, 56]. Parnell and the wider inner Auckland area in general are no exceptions to this rule. A further refinement of the location concept is offered by Hutton [15] who distinguishes the “new economy of the inner city [with creative industry clusters] from the dominant office economy of the central business district (CBD).” In Auckland’s case this new economy is represented by an extremely high number of architectural, specialised design, and advertising firms located in the inner city areas which are also one of the most expensive. The economic differentiation between the city centre and city fringe was elaborated by one of the interviewees.“The businesses in the CBD, for instance, are probably dealing with more corporate larger clients. So, it is corporate to corporate. They are more at the institutional level”. A significant number of the interviewed firms considered the aesthetic characteristics of their business premises as part of the company’s identity, market differentiation, and image branding.“Traditionally, advertising and design companies like to be in areas that are slightly different from the corporate world.…It’s very arty [here]…We could have got some cheaper places in the city centre but we wouldn’t have had that creative outlook”(Advertising firm director).Parnell’s central location offered clear benefits such as better accessibility of firms to clients and customers; this factor was equally important for all three subsectors. However, the survival of the businesses did not depend on locating in close proximity to existing and potential clients. There was also no reliance on chance encounters with potential clients coming through the door without prior appointments. The director of an architectural firm commented:“I guess the realisation is that no one does window-shopping and goes down the street and says, oh, let us use this architect.” Similarly, another interviewee said:“Most people call before they come, they don’t usually just come in. It is pretty much, I think, our reputation, which is strong enough.” Choosing Parnell as a business location was perceived as beneficial not just for clients but for the company staff as well. The director of a design firm commented:“I think that the quality of Parnell’s environment applies to image branding, effectively to our clients, but it also applies to our staff. Our staff is probably happier because the quality of the environment is nicer and just more uplifting.”


### 4.7. Place Branding

In the context of the contemporary city, place branding is considered inherently geographical as it is associated with spaces and places and used as a powerful marketing tool associated with the creation of unique identities [50, 76–79]. Inner city locations close to the CBD which have undergone urban redevelopment and renewal and represent “prestigious and symbolic urban landscapes” are particularly favoured [64]. Parnell is a city fringe area with a strongly articulated sense of local identity. Parnell Inc., the local business association, promotes passionately a unique brand for the area: “Parnell–The Creative Quarter.” The brand story builds on the historical background of the area, which is Auckland’s “first suburb,” “a place that is inhabited with physical and emotional landmarks” and “rich with stories” [62]. Successful place branding depends heavily on the distinctive characteristics of a place [13, 28, 50]. Parnell’s unique Victorian colonial heritage plays a key role in the area’s place branding as a self-identifying process. In addition, in Parnell’s case, place branding can also be considered as an engineered process, aiming at marketing the area and leading ultimately to its commodification. Hence, the rich historical background of the area has contributed to the creation of its authentic identity, which differentiates it from the other CBD fringe areas. In the case of place branding, heritage plays a key role by evoking images of a nostalgic past through the use of cultural and historical references thus creating a unique ambience [80].The analysis of the interview data suggested that place branding and place reputation could be qualified as business factors rather than personal preferences, which had contributed immensely to the choice of firm location. The association with the Parnell brand was highly desirable in business terms as part of the firm’s image building and presenting this image to clients and employees.“Part of why we wanted to move was the image that we would project to our clients. We never considered the CBD” (Director of an architectural firm). The director of an advertising firm shared the same sentiments:“I thought we could get a really funky space that would fit our image and that would be a nice environment for our staff to work in.” Similarly, the associate director of a large architectural firm commented:“We wanted to be somewhere that represented our values. So, we would like to see ourselves as being quite creative, very design orientated; Parnell is part of the image branding.” Having a trendy image was equally important to the firms across the three subsectors and the specific location within Auckland played a huge part in the building of this image. Creative firms try to make a statement with their location; thus, particular spaces and neighbourhoods play an important role in the firm’s business success and image branding [13, 28, 47].Parnell’s creative brand, vibe, and quirkiness were seen by the director of an architectural firm as the reason why many creative businesses had relocated to the area.“We like the vibe of Parnell and it has growing creative industries. They tend to like something a bit more quirky, with a little bit more character.” A design firm’s director added:“We like the industrial feel of the area, which is unique and stays as it is, raw.” Similar comments were made by the director of an advertising firm:“The brand of the suburb is hugely important. Parnell is funky; it has always been kind of funky. It’s a great place for design to be. It is kind of exciting and dangerous and edgy, that’s a huge part of what it’s all about.” Design creative industries are attracted to unique places, which have their own “spirit, or personality or state of mind” and have the ability to forge professional linkages [48]. As a creative quarter, Parnell is similar to other districts in renowned world cities with high concentrations of advertising, graphic design, and publishing or fashion design industries, which are the epitome of “organic continuity” between them and the place-specific settings (streetscapes, architectural heritage, and cultural infrastructure) [44].Branding and architecture have developed in recent years a strong, mutually beneficial relationship: on one hand leading brands employ architecture as a marketing strategy, and on the other, architecture and urban planning utilise branding as a means of place differentiation [52, 81]. Architecture starts to play an extremely important role in creating and promoting city and place branding as a strategic tool for economic and cultural transformation and as a catalyst in creating unique identities [49, 51, 52]. A significant number of the interviewed firms considered the aesthetic characteristics of their business premises as part of the company’s identity, market differentiation, and image branding.“All the buildings available for lease had no character, no soul, they had just modern prefabricated bland character. And also in our business we deal with lots and lots of money because clients spend lots of money. So, it is quite serious business; you have to have a building that makes you look serious. It can’t be too funky and too jazzy. So, it’s kind of getting the right balance between funky, jazzy and boring but also solid and reliable”(Director of an advertising firm). Creating memorable experiences and feeling was seen by the creative director of an advertising company located in a character building as part of the image that the firm wanted to project to their clients.“For us it is not just about four walls. The whole ambience, the whole feeling of the building, the quality of the building matter and it is not just a place where you want to sit and work” (Director of an advertising firm).


### 4.8. Networking and Collaboration

The empirical evidence revealed that Parnell’s cluster was characterised by the absence of interfirm collaboration and technological and knowledge exchange. These findings are in contrast with some studies which report high levels of collaboration for production, information sharing, idea generation, and innovation as part of a supply chain in the production process [41]. However, they are in line with the colocation category of creative clusters described in the literature which lack real clustering and networking effects [56]. The likely explanation of colocation is based on accessibility and amenity rather than by intersector interactions [82]. In general, there is a marked difference between the specialised industry clusters described in the literature and creative clusters. The knowledge sharing within specialised industry clusters stimulates economic specialisation and leads to the development of localised capabilities that benefit the cluster firms [83]. However, in the case of creative clusters the absence of interfirm collaborations has given rise to arguments that these are not “viable economic clusters” [56], only cases of colocation and proximity.Parnell’s unique brand and place-specific characteristics were the key determinants of firm location which led to the colocation of firms with common characteristics. This finding is similar to a Dutch study which found that city reputation and urban amenities attract fashion design entrepreneurs [84]. However, paradoxically, creative industry firms still recognise some advantages in being close to each other. A possible explanation of this paradox is that colocation affects economic success indirectly by facilitating networking and the informal exchange of information [37, 84]. While fierce competition for jobs in a relatively small market was prevalent in the context of Parnell’s cluster, the findings of this study also suggested that there were three alternative types of collaboration that took place—complementary, designer, and incidental (Table 3).Table 3
Typology of creative collaboration in Parnell (source: author).
Rank
Type
Main characteristics
1
Complementary
When a firm offers related but different skills (advertising firms working with graphic designers, photographers, illustrators, or PR personnel or architectural firms working with furniture designers and project managers)
2
Designer
When dealing with local design suppliers (bathroom ware, office furniture, textiles, ceramics, and stone)
3
Incidental
When using local service providers (printing and courier services)Working with professionals from related but different fields was given as an example of complementary collaboration by the director of an advertising firm:“We compete with many of them [other advertising firms] but we work with a few designers, public relations people, photographers, illustrators, people who complement our services.” The director of an architectural firm echoed the same sentiments:“Not necessarily with architectural firms because we are competitors but the related ones, say project managers or there might be furniture designers that we use for our interiors.” The designer type of collaboration in Parnell is very strong and area-specific. Mostly, architectural and interior design firms reported using local design suppliers, such as Spazio Casa, Metrix, European Ceramics & Stone, Heritage Tiles, Matisse, Kada, and Textilia to take clients to look at samples. The formation of such local business relationships was seen as beneficial. The number of these auxiliary businesses or design suppliers in the area, from bathroom ware and office furniture to textiles, ceramics, and stone, is quite substantial, more than 40 firms, which is why Parnell is also known as Auckland’s home design hub. There is a high level of business interaction, networking, and collaboration between Parnell’s design creative firms and these local design suppliers.However, the boost to the local businesses was limited to the design field only. Local legal, accounting, and financial services were not utilised with all interviewed firms reporting on using firms from either the CBD or anywhere else in Auckland or in some instances even from Wellington or Sydney. Often the reason was a long-standing loyal business relationship with a law or an accounting firm. This finding is in contrast with other studies reporting close business relationships between creative industries firms and local service providers which are based on face-to-face interactions and built on trust [41]. Only local printing and courier services were utilised to a degree by some firms as part of the printing. There is also an implied hierarchy in the importance of the three types of collaboration with the lowest level being the incidental one, as these services are easily substitutable.


### 4.9. Creative Buzz Environment

The colocation of firms in Parnell’s cluster enabled the circulation of tacit knowledge through face-to-face interaction and informal socializing and was beneficial for the enhancement of so-called “buzz,” in current parlance. A number of authors use qualifications such as a feeling of buzz when describing the vibrancy of specific locations with high concentrations of creative clusters [38, 83, 85]. Vivid creative scenes play an important role in creating a “local buzz” of place-based innovation and entrepreneurship [86]. The high concentration of colocated design creative firms within a relatively small area in Parnell creates the premise for informal face-to-face social interaction.“We have a small practice group made from Parnell-based consultancies, something like a lunch group. We have a drink and discuss whatever the issues. It is sort of networking” (Architectural firm director). For another one this type of informal social interaction was not just about building business relationships but also about catching up with friends.“We have lunches with various architectural practices around here, which is very good. So, we catch up with our business colleagues from a business point of view and with our friends from a friendship point of view.” In fact, there is “a marked blurring of the social worlds of work and lifestyle” for many creative workers [14]. Intensive social networking is quite common among creative professionals due to the unstable nature of creative work and as a way to keep up with current market trends, permanent or contract work availability, and potential job opportunities [4, 13, 37, 44, 57, 87].Colocation enables the firms of a cluster to understand local buzz in a meaningful way; buzz is by nature spontaneous and fluid [83]. The mutually beneficial business relationship created between the architecture and interior design firms and the numerous design suppliers in the area is a key ingredient of the local buzz. These informal kinds of social interaction, which are in fact “more than just fun and games … [are] critical to the operation of this economic sector” [88]. They could take the form of negotiations with local suppliers, phone calls during office hours, having lunch with other employees, attending gallery openings, or exploring nightlife [83, 88]. This “social milieu” or “social realm” is not just characteristic of a particular place but it is also the main feature of the creative economy [88].Interviewees from the three creative subsectors described knowledge exchange as informal and happening at social events such as peer group meetings and lunches. Knowledge exchange, in terms of internal connectivity among the firms in a creative industry cluster, takes the form of social interaction and information exchange that occurs mostly through the local buzz. Popular informal forms of communication are chatting, gossiping, brainstorming, in-depth discussions, and problem analysis [83].“Knowledge exchange happens at our peer group meetings and our discussions and we talk about issues and clients, you know, when we just bump in socially or have lunches, we just talk” (Architectural firm director). Such tacit knowledge transfer, characteristic of the highly skilled industries, is confined to local milieus as it requires high proximity and takes place in an uncertain buzz environment [37, 38, 83].


### 4.10. Parnell’s Consumption Distinctiveness

Parnell’s consumption distinctiveness is embodied in the variety of local amenities, especially in the historic Parnell village, such as designer boutiques and fashion stores, exquisite restaurants, and pavement upmarket cafes. Fast food chains and warehouse type mass production shops are nonexistent in the area with its fine grain distinctive colonial character. The creative industry employees are also the consumers of the area’s local amenities, such as cafes, lunch bars, and restaurants especially at lunch time, thus enhancing its consumption distinctiveness. The presence of dense creative industry clusters in the area with a high number of employees who are also the consumers of the area’s amenities is what sets the area apart from an ordinary residential neighbourhood with a local shopping strip. According to the interview data, the use of local amenities for business lunches with clients was also part of everyday business life.“I think Parnell is an attractive environment. Amenities such as cafes, bars and restaurants always help businesses. Businesses like to be around this sort of things that are vibrant”(Architectural firm director).The availability of diverse amenities in certain neighbourhoods such as cafes, restaurants, and bars attracts creative professionals and contributes to the creation of vibrant urban scenes. Moreover, these places are not just sites for consumption; they are sites of meaningful social and economic interaction, or “nodes of creative exchange,” used by creative people to advance their careers and ultimately the cultural economy [89]. With the extension of work into the semipublic and public realm, these “extended workplaces” reveal particular patterns of space use especially characteristic for areas with creative industry clustering [28]. Audretsch et al. [86] maintain that subculture rather than mainstream culture such as museums, theatre, and cinemas spur local entrepreneurial activity. Particular subcultural types of amenities such as bars, music clubs and street art and culture as well as distinctive consumption patterns are seen as conducive to creativity inspiring entrepreneurs.Parnell’s consumption distinctiveness is based on a diversified consumer base, which consists of local but also regional residents, business people with a high percentage of creative industry professionals and tourists, national and international. There is a marked difference though in the place consumption characteristics across the area. Parnell village is about extravagant place consumption and commodification in a unique heritage Victorian urban setting and not about mundane everyday consumption practices. It caters for specific urban consumption groups: the business professionals in the area with a relatively small percentage of creative industry people; international tourists and out of area visitors; and affluent local residents. This description falls within the place characteristics that according to Florida [90] attract creative professionals to the area: “vibrant street life,” “café culture,” and “interesting architecture.” Similar contemporary urban consumption patterns consisting of restaurants, cafes, and bars in London’s city fringe areas of Clerkenwell and Hoxton are representative of “a distinctive geography of amenity which complements the intensive social interactions of the New Economy” [14]. The lack of suitable office premises in close proximity to the Parnell village though has restricted the number of creative firms at the expense of the grittier areas with the industrial building stock. The place consumption and commodification in those areas is underdeveloped with limited choices that also target different urban consumption groups: the business professionals in the area with a very high percentage of creative industry people and local residents.


## 4.1. Parnell’s Unique and Distinctive Industrial Heritage

Parnell, which sits on the eastern side of the CBD and adjacent to the Auckland Domain volcano, appears to be the creative centre of inner Auckland (Figure1). It is practically using much of its historical industrial fabric. The area is a suburban entity that does not quite appreciate how significant the creative industries are till its creative economy. This is an affluent gentrifying area. The majority of Parnell residents are highly educated and are mostly in professional employment with high earning power, which is almost double than the Auckland Region average.Figure 1
Parnell’s location (source: Google Earth).Parnell is Auckland’s oldest suburb rich with history that dates back to 1840. TheNew Zealand Herald from 1950 reports on the industry invasion of Parnell that occurred during the early 1900s when factories and warehouses were slowly pushed out from the city into the lower reaches of Parnell. As a result of this industrial intrusion some parts of Parnell were gradually turning from residential into industrial areas undergoing a change of appearance. Well-defined industrial development took place especially in the lower extremities of Parnell. The area was slowly losing its residential character and dignity although it was still considered to be mainly residential [58].Ironically what was perceived as lost dignity, changed appearance, and deteriorating surroundings due to an industrial intrusion constitutes nowadays a unique industrial heritage that draws creative firms into the area. The parts with the highest concentrations of design creative firms near The Strand and at the lower ends of Parnell Rd and St Georges Bay Rd are abundant with character industrial buildings, such as former wool stores and textile and confectionary factories. The conversion of old industrial buildings into commercial spaces and residential lofts has redefined Parnell’s spatial character over the years. New attractive commercial environments have been created in the Textile Centre, 125 The Strand, 165 The Strand, the Axis Building, and many others of a smaller scale. Residential loft conversions also became a feature of the residential market in the area—the top storey of the Axis Building and Heards Residences, the Dakota Building, and the Ford Lofts. Parnell’s industrial core has gradually gentrified nowadays into mixed-use areas containing also new apartment blocks and semidetached residential units. Parnell is the only CBD fringe area with large-scale industrial buildings that have remained an integral part of the urban fabric. Parnell’s character is not replicated in other CBD fringe areas like Newton, Grafton, Eden Terrace, Ponsonby, Newmarket, and Freemans Bay that all seem to have lost more of their historic character and authenticity as a consequence of new motorway developments, undertaken in the period of 1950s–1970s, and modern and more intensive forms of urban intensification [59].The areas around the upper end of Parnell Rd are distinctly different in character due to the Victorian and Edwardian building heritage. A variety of shops, with a long-standing reputation, lining both sides of Parnell Rd—dairies, grocery, sweet, butchers, and florist shops, chemists, and bakeries [60]—were converted into an eclectic mix of upmarket restaurants, cafes, art galleries, designer clothing, and antique, jewellery, and many other specialty shops. The new iconic Parnell village that was created by preserving the old Victorian cottages was regarded as “a feat of imagination and conservation” [59]. It was considered as the catalyst for Parnell’s regeneration, a process that turned it into a desirable business location and also a prime residential area. Parnell has a unique ambience due to the successful blend of old traditions from the early settlement years with the commercial realities of modern life. The trendy suburb, popular among creative professionals nowadays, is a result of a 170-year period of urban regeneration that has transformed “the shabby commonplace of oldness” into a place having “some abstract value” [59]. Parnell has considerable historical value as one of Auckland’s oldest suburbs with aesthetic and physical attributes [61].


## 4.2. Economic Profile of Parnell

Parnell is characterised by an extremely high number of small businesses, around 1000, in retailing, jewellery, law, accountancy, banking and finance, the IT sector, insurance, health, marketing and research, property development and services, engineering, and architecture and design [62]. This unique and vibrant mix of local businesses operating in Parnell is predominantly located in the western parts of the area. The vast majority of these business activities are supported and governed by the local business association, Parnell Inc., previously known as Parnell Mainstreet. It currently represents over 500 businesses located along the main suburban axis—Parnell Road and Parnell Rise. Future plans aim to include all businesses based in the Parnell area. The area’s creative industries play a key role in promoting Parnell as Auckland’s creative quarter which is also the city’s largest art gallery precinct. The “Creative Quarter” brand, logo, and marketing campaign were launched by Parnell Inc. in July 2009. The brand story builds on the historical background of the area, which is Auckland’s “first suburb,” “a place that is inhabited with physical and emotional landmarks” and “rich with stories” [62]. These attributes create the unique identity of the area and make it fundamentally distinctive from any other neighbourhood in Auckland. A significant number of architectural, advertising, interior design, graphic design, fashion design, and publishing companies are located in Parnell. The largest concentrations of well-defined clusters are at the lower end of St Georges Bay Rd and at the lower end of Parnell Rd near Fraser Park (Figure 2).Figure 2
Spatial distribution of architectural, specialised design, and advertising firms in Parnell in 2015 (source: author; map based on Google Maps).Parnell’s creative clusters belong to the category described in the literature as “clusters of hybridised industries and firms,” which include architecture, industrial and graphic design, and advertising [63]. As such, they are an example of “an eclectic clustering of particular new urban economic activities,” which is a new tendency since the 1990s [64]. While the precise mix of industry sectors varies from city to city, these advanced industry clusters play a key role in promoting the value of the inner city as a unique zone for experimentation within the metropolis [63]. Similar inner city hybridised creative clusters are reported in London [9, 14, 28], Vancouver [54], and Shanghai [13, 65]. Parnell’s hybridised creative clusters are very similar to other inner city diversified creative clusters in a variety of urban contexts. Parnell is also known as Auckland’s home design hub as the area has more than 40 design suppliers ranging from bathroom ware and office furniture to textiles, ceramics, and stone: Spazio Casa, Metrix, European Ceramics & Stone, Heritage Tiles, Matisse, Kada, Textilia, and so on. A significant number of these firms are also concentrated at the lower end of St Georges Bay Rd near the intersection with The Strand.


## 4.3. Visual Analysis of Parnell’s Creative Clusters

Although Parnell’s location distribution map reveals well-defined spatial patterning in the area, it cannot go beyond a two-dimensional representation of clustering trends and does not have the capability to infer any relationship with the built environment. Empirical data collected from fieldwork has the potential to enrich the theoretical spatial analysis and add three-dimensional data to the discussion. Hence, the next logical step undertaken in the study was the field surveys of all Parnell buildings occupied by the design creative firms. The aim of the field observations was twofold: first, to ascertain whether there were any visual indicators of creative industries’ presence in the area and second, to establish the type of buildings in Parnell favoured by the creative firms as business locations. The results of the fieldwork in Parnell are presented in a threefold photo classification (Figures3, 4, and 5).Figure 3
Parnell’s converted industrial buildings occupied by design creative firms in 2015.Figure 4
Parnell’s residential dwellings occupied by design creative firms in 2015.Figure 5
Parnell’s purpose-built office buildings occupied by design creative firms in 2015.The buildings in Parnell occupied by the design creative firms were divided into three main groups: converted industrial buildings (Figure3), residential dwellings (Figure 4), and purpose-built office buildings (Figure 5). The findings of the field observations demonstrate an overwhelming dominance of the converted industrial buildings with a total of 39 firms, compared to just 10 firms located in purpose-built office buildings and 11 firms operating from home (residential—all owner occupation) (Table 1). The highest number of architectural (14), specialised design (15), and advertising firms (10) was located in converted industrial buildings showing a strong preference for this particular group.Table 1
Numbers of architectural, specialised design, and advertising firms across three main building types in Parnell in 2015 (source: author).
Creativesubsector
Convertedindustrial bldgs
Purpose-built office bldgs
Residentialdwellings
Total
Arch
14
3
6
23
Design
15
5
4
24
Advert
10
2
1
13
Total
39
10
11
60Some of the large converted industrial buildings, such as the Textile Centre in 1 Watt St, 125 The Strand, and the Axis Building in 91 St Georges Bay Rd (Figure3), have attracted a high number of firms across the three subsectors. The visual analysis of Parnell’s building stock suggests associations between design creative firms and the area’s industrial heritage. Similarly, a number of studies in the literature in different urban contexts (London, Vancouver, Singapore, and Shanghai) support the empirical findings of the fieldwork. The highest concentrations of design and creative-services firms are located in areas in the inner city characterised by diverse building types and scales, historic building sites, and distinctive streetscapes [13–15, 28]. The findings of these studies reaffirm the association between design creative firms and the unique heritage landscapes and imagery of the inner city. The development of such creative precincts in heritage sites has led to the conversion and modern utilisation of ordinary industrial buildings [65]. The specific characteristics of an area’s built environment seem “to nurture” creative clusters. Distinctive place-based factors, namely, industrial heritage, small grain development, cafes, and bars and vibrant nightlife, are major attractors to creative businesses and influence colocation [28].However, there were no visual indicators of creative industries’ presence in Parnell despite the high numbers of firms. The age of the industrial building stock in the area varies from very early 1900s to 1960s and 1970s. The exterior of the largest industrial buildings has remained intact and the style unchanged since their construction in the early 1900s. The same principle applied to the newer industrial building stock in the area.


## 4.4. Key Location Factors Contributing to Parnell’s Creative Cluster Formation

A short questionnaire was embedded in the firms’ interview question guide following the collection of background information on firm size, area of specialisation, age of the firm, and involvement in the redevelopment/upgrade of own office space. One question listed nine location factors and used rating scales for each one from 1 (very unimportant) to 5 (very important) asking the participants to rate the key determinants of firm location in Parnell. The output was ordinal quantitative data representing the respondents’ attitudes and perceptions of the importance of various identified factors and attributes. Table2 summarises the survey results of the rating scales for nine location factors arranged in a rank order.Table 2
Rating of location factors by the 30 Parnell architectural, specialised design, and advertising firms (source: author).
Location factors
Weighted number of responses
Rank order
Overall quality of the built environment in Parnell
144
1
Well-designed urban spaces
142
2
Building stock with appropriate design qualities
138
3
Relative affordability of business premises
138
4equal
Proximity to the CBD
136
5
Availability of suitable office premises
128
6
Better access to various amenities (cafes, restaurants, recreation & leisure)
126
7
Proximity to existing and potential clients
116
8
Better access to parking
112
9Based on the survey data, the overall quality of Parnell’s built environment was identified by the interviewed firms as the top location factor, followed closely by two other related factors: the well-designed urban spaces and the building stock with appropriate design qualities (Table2). The survey results suggest a broad explanation of why Parnell is the area having the highest number of firms across the three creative subsectors. Twenty-three of the thirty interviewed firms were in converted industrial buildings, which are the most prolific building type in the area, four in purpose-built office buildings, and three in residential dwellings. Overall, the majority of firms were pleased with their location choices. The relative affordability of business premises was 4th equal, followed closely by the proximity to the CBD. Finding an affordable space in the area for leasing seemed of relative importance for the interviewed firms. Most firms were happy with their firm’s central city location and the benefits it could offer. The above two factors would be probably equally important in any one of the CBD fringe areas but it is their rather unique combination with the top three location factors: unique place characteristics, urban spaces, and building stock, that could be identified as the key location determinants in the make-up of Parnell’s design creative cluster.The least important factors identified by the interviewed firms in Parnell were the proximity to existing and potential clients in 8th place and better access to parking in 9th place. Most of the interviewees explained that their clients came from anywhere in the Auckland Region and were not from the immediate area, which is why locating in Parnell was not determined by this factor; it was rather the central location that was deemed crucial. The parking situation in the city fringe areas, including Parnell, is generally much better than the city centre and most interviewed firms reported that they provided enough free parking spaces for their clients. In addition, plenty of restricted and free parking is available in the nearby areas for the staff. Overall, the proximity to clients and parking were not seen as issues that would determine the choice of firm location.The qualitative data gathered through the semistructured interviews underpin the analysis that follows highlighting issues specific to Parnell. It begins with establishing whether clustered firms possess common characteristics. The benefits of a central location with better accessibility to clients and customers and strong place branding are discussed next as they emerged as important factors influencing the choice of location. Then Parnell’s creative industry clusters are examined along the production and consumption value chain associated with successful creative industries clusters in the literature.


## 4.5. Typology of Parnell’s Architectural, Specialised Design, and Advertising Firms

The study’s results regarding design firm size in a city fringe area, such as Parnell, suggest that medium-sized design firms from two categories, 10–19 and 5–9 employees, tend to dominate Parnell’s business landscape. However, Parnell’s employee numbers are higher than the general creative industry profile of small-sized firms, reported in the literature. Creative industry clusters consist predominantly of small, agile firms engaged in creative work, which is contractual and part-time and often subjected to wild fluctuations [44, 46, 56, 57]. A number of empirical studies of various creative industry sectors report consistently on their small firm size: Amsterdam’s and Rotterdam’s architectural firms [66]; London’s design [67], advertising [68], and jewellery firms [69]; Sydney’s visual entertainment industries [70]; Vancouver’s film industry [71]; Hollywood’s motion-picture industry [72, 73]; and music clusters in Toronto and Halifax [74], New York, Los Angeles, and Nashville [75].All 30 interviewed firms across the three subsectors had a number of areas of specialisation that could cater for a wide range of clients and jobs; none of the firms was narrowly specialised in just one field. They were well-established and in operation in Auckland for over 5 years; there were no new or start-up businesses in the interview sample. Similar findings on the age and stability of creative industries businesses including design and architecture are reported in the literature [41]. There was a significant variation in the firms’ length of time operating from premises in Parnell, from 1 to 26 years, which could be explained with the low property ownership. The two main reasons cited by the interviewees as insuperable obstacles to property ownership were the high property values in Parnell and also the possible implications of co-owning an investment property with the other firm’s partners. This finding could be explained with the economic and employment profile of creative firms, characteristic of “structural weaknesses which include a shortage of financial capital (working and investment) … and below-average earnings” [46], and of general “instabilities,” such as “part-time, temporary and freelance work being particularly prevalent” [44]. The implications of the dominance of leased premises are twofold. Having a much greater degree of flexibility over choice of location is definitely a positive upside of this trend in case rents become unaffordable or the firm contracts in size due to a reduced and fluctuating workflow. However, a significant downside is the inability or lack of incentive to engage in major design renovations with a measurable impact on the buildings’ aesthetics.The interview data suggests that the make-up of Parnell’s creative clusters consists of medium-sized, broadly and highly specialised, more mature and well-established firms that have been in business for over 5 years and have low business property ownership. There were no differences among the three subsectors. The empirical evidence suggests that Parnell’s design creative firms, which made similar location choices, possessed common characteristics.


## 4.6. Geographical Location and Fringe Benefits

In terms of preferred location, CBD and city fringe areas are seen as the prime location that attracts the highest concentrations of creative firms [13, 16, 28, 41, 56]. Parnell and the wider inner Auckland area in general are no exceptions to this rule. A further refinement of the location concept is offered by Hutton [15] who distinguishes the “new economy of the inner city [with creative industry clusters] from the dominant office economy of the central business district (CBD).” In Auckland’s case this new economy is represented by an extremely high number of architectural, specialised design, and advertising firms located in the inner city areas which are also one of the most expensive. The economic differentiation between the city centre and city fringe was elaborated by one of the interviewees.“The businesses in the CBD, for instance, are probably dealing with more corporate larger clients. So, it is corporate to corporate. They are more at the institutional level”. A significant number of the interviewed firms considered the aesthetic characteristics of their business premises as part of the company’s identity, market differentiation, and image branding.“Traditionally, advertising and design companies like to be in areas that are slightly different from the corporate world.…It’s very arty [here]…We could have got some cheaper places in the city centre but we wouldn’t have had that creative outlook”(Advertising firm director).Parnell’s central location offered clear benefits such as better accessibility of firms to clients and customers; this factor was equally important for all three subsectors. However, the survival of the businesses did not depend on locating in close proximity to existing and potential clients. There was also no reliance on chance encounters with potential clients coming through the door without prior appointments. The director of an architectural firm commented:“I guess the realisation is that no one does window-shopping and goes down the street and says, oh, let us use this architect.” Similarly, another interviewee said:“Most people call before they come, they don’t usually just come in. It is pretty much, I think, our reputation, which is strong enough.” Choosing Parnell as a business location was perceived as beneficial not just for clients but for the company staff as well. The director of a design firm commented:“I think that the quality of Parnell’s environment applies to image branding, effectively to our clients, but it also applies to our staff. Our staff is probably happier because the quality of the environment is nicer and just more uplifting.”


## 4.7. Place Branding

In the context of the contemporary city, place branding is considered inherently geographical as it is associated with spaces and places and used as a powerful marketing tool associated with the creation of unique identities [50, 76–79]. Inner city locations close to the CBD which have undergone urban redevelopment and renewal and represent “prestigious and symbolic urban landscapes” are particularly favoured [64]. Parnell is a city fringe area with a strongly articulated sense of local identity. Parnell Inc., the local business association, promotes passionately a unique brand for the area: “Parnell–The Creative Quarter.” The brand story builds on the historical background of the area, which is Auckland’s “first suburb,” “a place that is inhabited with physical and emotional landmarks” and “rich with stories” [62]. Successful place branding depends heavily on the distinctive characteristics of a place [13, 28, 50]. Parnell’s unique Victorian colonial heritage plays a key role in the area’s place branding as a self-identifying process. In addition, in Parnell’s case, place branding can also be considered as an engineered process, aiming at marketing the area and leading ultimately to its commodification. Hence, the rich historical background of the area has contributed to the creation of its authentic identity, which differentiates it from the other CBD fringe areas. In the case of place branding, heritage plays a key role by evoking images of a nostalgic past through the use of cultural and historical references thus creating a unique ambience [80].The analysis of the interview data suggested that place branding and place reputation could be qualified as business factors rather than personal preferences, which had contributed immensely to the choice of firm location. The association with the Parnell brand was highly desirable in business terms as part of the firm’s image building and presenting this image to clients and employees.“Part of why we wanted to move was the image that we would project to our clients. We never considered the CBD” (Director of an architectural firm). The director of an advertising firm shared the same sentiments:“I thought we could get a really funky space that would fit our image and that would be a nice environment for our staff to work in.” Similarly, the associate director of a large architectural firm commented:“We wanted to be somewhere that represented our values. So, we would like to see ourselves as being quite creative, very design orientated; Parnell is part of the image branding.” Having a trendy image was equally important to the firms across the three subsectors and the specific location within Auckland played a huge part in the building of this image. Creative firms try to make a statement with their location; thus, particular spaces and neighbourhoods play an important role in the firm’s business success and image branding [13, 28, 47].Parnell’s creative brand, vibe, and quirkiness were seen by the director of an architectural firm as the reason why many creative businesses had relocated to the area.“We like the vibe of Parnell and it has growing creative industries. They tend to like something a bit more quirky, with a little bit more character.” A design firm’s director added:“We like the industrial feel of the area, which is unique and stays as it is, raw.” Similar comments were made by the director of an advertising firm:“The brand of the suburb is hugely important. Parnell is funky; it has always been kind of funky. It’s a great place for design to be. It is kind of exciting and dangerous and edgy, that’s a huge part of what it’s all about.” Design creative industries are attracted to unique places, which have their own “spirit, or personality or state of mind” and have the ability to forge professional linkages [48]. As a creative quarter, Parnell is similar to other districts in renowned world cities with high concentrations of advertising, graphic design, and publishing or fashion design industries, which are the epitome of “organic continuity” between them and the place-specific settings (streetscapes, architectural heritage, and cultural infrastructure) [44].Branding and architecture have developed in recent years a strong, mutually beneficial relationship: on one hand leading brands employ architecture as a marketing strategy, and on the other, architecture and urban planning utilise branding as a means of place differentiation [52, 81]. Architecture starts to play an extremely important role in creating and promoting city and place branding as a strategic tool for economic and cultural transformation and as a catalyst in creating unique identities [49, 51, 52]. A significant number of the interviewed firms considered the aesthetic characteristics of their business premises as part of the company’s identity, market differentiation, and image branding.“All the buildings available for lease had no character, no soul, they had just modern prefabricated bland character. And also in our business we deal with lots and lots of money because clients spend lots of money. So, it is quite serious business; you have to have a building that makes you look serious. It can’t be too funky and too jazzy. So, it’s kind of getting the right balance between funky, jazzy and boring but also solid and reliable”(Director of an advertising firm). Creating memorable experiences and feeling was seen by the creative director of an advertising company located in a character building as part of the image that the firm wanted to project to their clients.“For us it is not just about four walls. The whole ambience, the whole feeling of the building, the quality of the building matter and it is not just a place where you want to sit and work” (Director of an advertising firm).


## 4.8. Networking and Collaboration

The empirical evidence revealed that Parnell’s cluster was characterised by the absence of interfirm collaboration and technological and knowledge exchange. These findings are in contrast with some studies which report high levels of collaboration for production, information sharing, idea generation, and innovation as part of a supply chain in the production process [41]. However, they are in line with the colocation category of creative clusters described in the literature which lack real clustering and networking effects [56]. The likely explanation of colocation is based on accessibility and amenity rather than by intersector interactions [82]. In general, there is a marked difference between the specialised industry clusters described in the literature and creative clusters. The knowledge sharing within specialised industry clusters stimulates economic specialisation and leads to the development of localised capabilities that benefit the cluster firms [83]. However, in the case of creative clusters the absence of interfirm collaborations has given rise to arguments that these are not “viable economic clusters” [56], only cases of colocation and proximity.Parnell’s unique brand and place-specific characteristics were the key determinants of firm location which led to the colocation of firms with common characteristics. This finding is similar to a Dutch study which found that city reputation and urban amenities attract fashion design entrepreneurs [84]. However, paradoxically, creative industry firms still recognise some advantages in being close to each other. A possible explanation of this paradox is that colocation affects economic success indirectly by facilitating networking and the informal exchange of information [37, 84]. While fierce competition for jobs in a relatively small market was prevalent in the context of Parnell’s cluster, the findings of this study also suggested that there were three alternative types of collaboration that took place—complementary, designer, and incidental (Table 3).Table 3
Typology of creative collaboration in Parnell (source: author).
Rank
Type
Main characteristics
1
Complementary
When a firm offers related but different skills (advertising firms working with graphic designers, photographers, illustrators, or PR personnel or architectural firms working with furniture designers and project managers)
2
Designer
When dealing with local design suppliers (bathroom ware, office furniture, textiles, ceramics, and stone)
3
Incidental
When using local service providers (printing and courier services)Working with professionals from related but different fields was given as an example of complementary collaboration by the director of an advertising firm:“We compete with many of them [other advertising firms] but we work with a few designers, public relations people, photographers, illustrators, people who complement our services.” The director of an architectural firm echoed the same sentiments:“Not necessarily with architectural firms because we are competitors but the related ones, say project managers or there might be furniture designers that we use for our interiors.” The designer type of collaboration in Parnell is very strong and area-specific. Mostly, architectural and interior design firms reported using local design suppliers, such as Spazio Casa, Metrix, European Ceramics & Stone, Heritage Tiles, Matisse, Kada, and Textilia to take clients to look at samples. The formation of such local business relationships was seen as beneficial. The number of these auxiliary businesses or design suppliers in the area, from bathroom ware and office furniture to textiles, ceramics, and stone, is quite substantial, more than 40 firms, which is why Parnell is also known as Auckland’s home design hub. There is a high level of business interaction, networking, and collaboration between Parnell’s design creative firms and these local design suppliers.However, the boost to the local businesses was limited to the design field only. Local legal, accounting, and financial services were not utilised with all interviewed firms reporting on using firms from either the CBD or anywhere else in Auckland or in some instances even from Wellington or Sydney. Often the reason was a long-standing loyal business relationship with a law or an accounting firm. This finding is in contrast with other studies reporting close business relationships between creative industries firms and local service providers which are based on face-to-face interactions and built on trust [41]. Only local printing and courier services were utilised to a degree by some firms as part of the printing. There is also an implied hierarchy in the importance of the three types of collaboration with the lowest level being the incidental one, as these services are easily substitutable.


## 4.9. Creative Buzz Environment

The colocation of firms in Parnell’s cluster enabled the circulation of tacit knowledge through face-to-face interaction and informal socializing and was beneficial for the enhancement of so-called “buzz,” in current parlance. A number of authors use qualifications such as a feeling of buzz when describing the vibrancy of specific locations with high concentrations of creative clusters [38, 83, 85]. Vivid creative scenes play an important role in creating a “local buzz” of place-based innovation and entrepreneurship [86]. The high concentration of colocated design creative firms within a relatively small area in Parnell creates the premise for informal face-to-face social interaction.“We have a small practice group made from Parnell-based consultancies, something like a lunch group. We have a drink and discuss whatever the issues. It is sort of networking” (Architectural firm director). For another one this type of informal social interaction was not just about building business relationships but also about catching up with friends.“We have lunches with various architectural practices around here, which is very good. So, we catch up with our business colleagues from a business point of view and with our friends from a friendship point of view.” In fact, there is “a marked blurring of the social worlds of work and lifestyle” for many creative workers [14]. Intensive social networking is quite common among creative professionals due to the unstable nature of creative work and as a way to keep up with current market trends, permanent or contract work availability, and potential job opportunities [4, 13, 37, 44, 57, 87].Colocation enables the firms of a cluster to understand local buzz in a meaningful way; buzz is by nature spontaneous and fluid [83]. The mutually beneficial business relationship created between the architecture and interior design firms and the numerous design suppliers in the area is a key ingredient of the local buzz. These informal kinds of social interaction, which are in fact “more than just fun and games … [are] critical to the operation of this economic sector” [88]. They could take the form of negotiations with local suppliers, phone calls during office hours, having lunch with other employees, attending gallery openings, or exploring nightlife [83, 88]. This “social milieu” or “social realm” is not just characteristic of a particular place but it is also the main feature of the creative economy [88].Interviewees from the three creative subsectors described knowledge exchange as informal and happening at social events such as peer group meetings and lunches. Knowledge exchange, in terms of internal connectivity among the firms in a creative industry cluster, takes the form of social interaction and information exchange that occurs mostly through the local buzz. Popular informal forms of communication are chatting, gossiping, brainstorming, in-depth discussions, and problem analysis [83].“Knowledge exchange happens at our peer group meetings and our discussions and we talk about issues and clients, you know, when we just bump in socially or have lunches, we just talk” (Architectural firm director). Such tacit knowledge transfer, characteristic of the highly skilled industries, is confined to local milieus as it requires high proximity and takes place in an uncertain buzz environment [37, 38, 83].


## 4.10. Parnell’s Consumption Distinctiveness

Parnell’s consumption distinctiveness is embodied in the variety of local amenities, especially in the historic Parnell village, such as designer boutiques and fashion stores, exquisite restaurants, and pavement upmarket cafes. Fast food chains and warehouse type mass production shops are nonexistent in the area with its fine grain distinctive colonial character. The creative industry employees are also the consumers of the area’s local amenities, such as cafes, lunch bars, and restaurants especially at lunch time, thus enhancing its consumption distinctiveness. The presence of dense creative industry clusters in the area with a high number of employees who are also the consumers of the area’s amenities is what sets the area apart from an ordinary residential neighbourhood with a local shopping strip. According to the interview data, the use of local amenities for business lunches with clients was also part of everyday business life.“I think Parnell is an attractive environment. Amenities such as cafes, bars and restaurants always help businesses. Businesses like to be around this sort of things that are vibrant”(Architectural firm director).The availability of diverse amenities in certain neighbourhoods such as cafes, restaurants, and bars attracts creative professionals and contributes to the creation of vibrant urban scenes. Moreover, these places are not just sites for consumption; they are sites of meaningful social and economic interaction, or “nodes of creative exchange,” used by creative people to advance their careers and ultimately the cultural economy [89]. With the extension of work into the semipublic and public realm, these “extended workplaces” reveal particular patterns of space use especially characteristic for areas with creative industry clustering [28]. Audretsch et al. [86] maintain that subculture rather than mainstream culture such as museums, theatre, and cinemas spur local entrepreneurial activity. Particular subcultural types of amenities such as bars, music clubs and street art and culture as well as distinctive consumption patterns are seen as conducive to creativity inspiring entrepreneurs.Parnell’s consumption distinctiveness is based on a diversified consumer base, which consists of local but also regional residents, business people with a high percentage of creative industry professionals and tourists, national and international. There is a marked difference though in the place consumption characteristics across the area. Parnell village is about extravagant place consumption and commodification in a unique heritage Victorian urban setting and not about mundane everyday consumption practices. It caters for specific urban consumption groups: the business professionals in the area with a relatively small percentage of creative industry people; international tourists and out of area visitors; and affluent local residents. This description falls within the place characteristics that according to Florida [90] attract creative professionals to the area: “vibrant street life,” “café culture,” and “interesting architecture.” Similar contemporary urban consumption patterns consisting of restaurants, cafes, and bars in London’s city fringe areas of Clerkenwell and Hoxton are representative of “a distinctive geography of amenity which complements the intensive social interactions of the New Economy” [14]. The lack of suitable office premises in close proximity to the Parnell village though has restricted the number of creative firms at the expense of the grittier areas with the industrial building stock. The place consumption and commodification in those areas is underdeveloped with limited choices that also target different urban consumption groups: the business professionals in the area with a very high percentage of creative industry people and local residents.


## 5. Conclusions

The three subsectors demonstrated a high degree of spatial clustering in Parnell with medium-sized firms from two categories, 10–19 and 5–9 employees, dominating the business landscape. They all had a number of areas of specialisation; were well-established and in business for over 5 years; and had low property ownership. The findings of this study suggest that firms that possess common characteristics have similar spatial logic and make similar location choices.Parnell’s unique built environment is a location factor that has appealed to architects, designers, and advertisers and has contributed to the formation of the area’s creative clusters. Parnell’s design creative firms were attracted to the heritage buildings of the area, unique imagery, and local brand, suggesting that location factors could be creative industry sector-dependent. Place branding and place reputation had contributed immensely to the choice of firm location. The association with the Parnell brand was highly desirable in business terms as part of the firm’s image building and presenting this image to clients and employees. Having a trendy image was equally important to the firms across the three subsectors and choosing Parnell as a business location played a huge part in the building of this image. In Parnell’s case, the demand for physical space instigated the process of postindustrial real estate development through the adaptive reuse and repurposing of former industrial buildings. As such the creative industries can be characterised as key players in the upgrade of postindustrial built form and as facilitators in the process of inner city urban regeneration. Consequently, incidental colocation took place rather than relocation driven by the benefits of agglomeration economies. However, the resulting clusters have the unintended consequence of creating networking opportunities that support agglomeration economies. A number of additional themes emerged through the interviews: a central location offering great advantages and the attractiveness of an amenities-rich local environment. Parnell, being one of the inner city areas which are the backdrop of Auckland’s new economy and are some of the most expensive, was seen as a prime business location that attracted a high number of creative firms.The study has wider implications that could be applicable to various urban contexts. The methodological implications refer to the use of semistructured interviews in conjunction with document analysis and fieldwork within a case study to collect primary data on the locational preferences of firms in the creative sector. This research approach proves invaluable in explaining microlevel spatial patterning. Conducting the interviews with the firms’ directors is equally important as they are the ones with decision-making power.The theoretical implications concern the debate in the literature about agglomeration economies and urban amenities. Parnell’s unique place-specific characteristics were the key determinants of firm location which led to the colocation of firms rather than clustering. It challenges prevailing spatial orthodoxy within the urban studies literature that clustered firms benefit from agglomeration economies. Rather, urban amenities and the overall quality of the built environment drive location choices. Furthermore, the empirical data of this study suggests powerful affinities and strong associations between Parnell’s design creative industries and the area’s built environment (heritage industrial built form and well-designed urban spaces). Therefore, the nexus between industry and built environment proved to be as equally important as the socioeconomic factors that shaped the formation of the district’s industry clusters. Hence, character buildings have enhanced the degree of agglomerative effects in areas like Parnell. These findings, which are specific to Parnell’s design creative clusters, may apply to other urban contexts especially in large metropolitan areas. More empirical studies are necessary, with particular focus on comparative studies of small regional cities. Furthermore, the findings could be relevant to other creative industry sectors clustered in inner city areas.The policy-related implications focus on place-making and place-marketing. Since urban amenities and a strong local brand are the key determinants of firm location, policy-makers should make them a priority for investment to improve the aesthetic appeal of districts and develop a sense of place and unique identity. The unique and distinctive industrial heritage of inner city areas needs to become the focus of renewal as it attracts creative firms and contributes to the areas’ economic development. In that respect, urban design has a role to play to understand the complex relationship between creative industries and place and ultimately add to the appeal of such creative production environments. Local governments, professional bodies, and local business associations should play an active role in promoting their local creative industries in order to boost economic growth. In conclusion, these results emphasize the importance of examining the spatial rationale of the creative industries which plays a major role in the choice of firm location. Such analyses provide the context for a better understanding of the complex relationship between design creative industries and the built environment.



---

*Source: 8952965-2017-11-16.xml*