Procedia - Social and Behavioral Sciences 109 ( 2014 ) 552 557

1877-0428 2014 The Authors. Published by Elsevier Ltd.

Selection and peer review under responsibility of Organizing Committee of BEM 2013.
doi: 10.1016/j.sbspro.2013.12.506
ScienceDirect
2
nd
World Conference On Business, Economics And Management- WCBEM 2013
The Role of Cluster and Social Capital in Cultural and Creative
Industries Development
Enkhbold Chuluunbaatar
a
*, Ottavia
b
, Ding-Bang Luh
c
, Shiann-Far Kung
d

a
Institute of Finance and Economics, Department of Business Administration, Ulaanbaatar, Mongolia
b
Institute of Creative Industries Design, National Cheng Kung University, Tainan, Taiwan
c
Deparment of Industrial Design, National Cheng Kung University, Tainan, Taiwan
d
Department of Urban Planning, National Cheng Kung University, Tainan, Taiwan
Abstract
Cluster is a crucial concept for developing industries, including cultural and creative industries (CCI). Cluster concept, which is
heavily based on economic geography, is widely used to explain the drive behind CCI development, neglecting the social aspects
of creative talents working in the CCI. This study integrates the social aspects to the cluster theory to explain the key drivers to
CCI development from social capital perspective. Taking the case of Mongolian circus industry, this study proposes that CCI
development is not only dependent on a predetermined cluster; the social aspects of creative talents, as the active contributors of
CCI development, aid significantly to the industries development, hence should not be neglected.
Keywords: Circus industry, cluster, creative talents, cultural and creative industries development, social capital;


* Corresponding Author: Enkhbold Chuluunbaatar. Tel.: +976-9505-5083
E-mail address: chboogii@gmail.com




1. Introduction
The current fashionable concept to explain cultural and creative industries (CCI) development is the cluster concept.
The cluster concept is heavily-based on economic geographic concentrations of interconnected people or companies
to create collaboration and competition (Porter, 2000). The authorities mostly predetermine the development of
clusters and clusters are believed as the supporting environment for industrial growth. Despite its popular use,
however, the cluster concept has not fully grasped the underlying reasons behind CCI development. This concept,
emphasizing on geographical proximities, has failed to cover the process of how the CCI actually emerge and how
individuals in CCI actually operate and interact (Evans, 2009; Jayne, 2005; Motoyama, 2008), hence the lack of the
social aspects and individual perspectives in current theories about CCI development. Therefore, this study attempts
to integrate the social aspects to have deeper understanding on how CCI is developed and aims to: 1) identify the
roles of cluster and social capital to CCI development in the case of Mongolian circus industry; 2) weigh the
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2014 The Authors. Published by Elsevier Ltd.
Selection and peer review under responsibility of Organizing Committee of BEM 2013.
553 Enkhbold Chuluunbaatar et al. / Procedia - Social and Behavioral Sciences 109 ( 2014 ) 552 557
importance of cluster and social capital factors that will be useful for formulating policies and strategies for further
development of the Mongolian circus industry.
2. Literature review
2.1. Cultural and creative industries development
UK DCMS (1998, 2001) defined the cultural and creative industries (CCI) as those industries which have their
origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the
generation and exploitation of intellectual property. According to this definition, CCI relies on individuals
creativity, skill, and talent to create jobs and produce wealth through the generation of creative work. For an
industry to develop, it has to demonstrate the growth from the micro to the macro levels from the development at
personal level, business level, to industry level. The growth of the abilities and capacities of creative talents will
bring the growth in their business, and when collective growth of all creative businesses in one field will bring the
industry to develop. Following the DCMS definition, it is appropriate to measure the CCI development by the
progress of knowledge, skill, talent, wealth accumulation, and job creation in CCI.
2.2. The role of cluster in industrial development
Industrial clusters can be understood as geographical concentrations of economic actors from the same or inter-
related sectors along the value chain. Cluster evolves based on geographical proximity, develops over time, boosts
competition and collaboration resulting in innovation, and potentially creates greater economic benefits through
higher productivity, better knowledge management, and entrepreneurial opportunities. Cluster has the tendency to
generate both higher incomes and rates of employment growth (Campbell-Kelly, Danilevsky, Garcia-Swartz, &
Pederson, 2010), urban growth and economic benefit (Stern & Seifert, 2010; Tien, 2010; Zhao, Watanabe, & Griffy-
Brown, 2009), creativity and innovation (Gwee, 2009; Zhao, et al., 2009), knowledge creation and transfer (Maskell
& Lorenzen, 2004; Watson, 2008). Furthermore, recent studies supported the evidence that clustering based on
spatial proximity has positive impact on entrepreneurship (Rocha, 2004; Rocha & Sternberg, 2005) and promotes
economic development (Garavaglia & Breschi, 2009; Scott, 2006).
2.3. The characteristics of cultural and creative industries (CCI)
Unlike traditional industries - manufacturing, the main capital or resources of CCI are knowledge (know-how),
creativity and talent (Potts & Cunningham, 2008). Creative industries are grounded in personal ideas, talent,
experience and work (Hartley, 2005, p. 107). Social capital and networking play important roles in CCI. In CCI,
various self-employed individuals or small businesses owners work together for the duration of a collaborative
project. CCI have two distinctive characteristics: creative workers are mostly self employed (Carey & Naudin, 2006;
Christopherson, 2004; Kong, 2011; Pratt, 2002) and creative works are project-based (Bettiol & Sedita, 2011;
Manning & Sydow, 2007). Talented people and the interactions among them mainly highlight CCI. Creative
workers do social exchange and the interplay among the main players, the supporters, and related personnel are
inevitable in the production of creative work (KEA, 2006) , hence emphasizing the importance of social capital.
Clusters could endorse CCI development, but social interactions are essential for the existence of cluster. By the
nature of business, creative workers act as bohemian entrepreneurs. Their entrepreneurial activities are not only
guided by economic factors agglomeration, but also social factors network externalities (Minniti, 2005),
foresight (Fuller & Warren, 2006), financing and political support (Chapain, Cooke, Propris, MacNeill, & Mateos-
Garcia, 2010) and social capital (Arefi, 2003; Ulhi, 2005).
2.4. The role of social capital in CCI development
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Even though the cluster concept dominates the theories related to industrial development, recent studies brought
light on the importance of social capital perspective to analyze the industry development (McCann & Sheppard,
2003). In the case of CCI, analysis of the creative industries fits easily into the framework of social network models
of both production and consumption (Potts, Cunningham, Hartley, & Ormerod, 2008, p. 178). Nahapiet & Ghoshal
(1998) identified three dimensions of social capital structural, relational, and cognitive dimensions. Structural
dimension refers to the overall pattern of connections among actors, such as network size, structural holes, tie
strength, and centrality. The relational dimension of social capital captures the personal relationships that actors
have with their contacts, which have developed through a history of interactions and included trust, norms,
obligations and expectations and identification in the relational dimension. The cognitive dimension of social capital
refers to resources providing shared representations, interpretations and systems of meaning among parties.
Cognitive social capital is embodied in attributes such as shared representations and shared codes that facilitate
communication in a group (Tsai & Ghoshal, 1998). The social structure the actor is embedded in represents
structural dimension of social capital (Hauberer, 2011). Therefore, cluster represents the structural dimension of
social capital in a particular industry. However, apart from the clusters function to facilitate interaction, cluster
literature is weak on the relational and cognitive dimensions of social capital (Jayne, 2005; Kong, 2009).
3. Methodology
Qualitative research was conducted to reveal the characteristics of social capital in Mongolian circus industry.
Two circus experts in Mongolia were interviewed and the results identified four social capital factors that are
important to the Mongolian circus industry: complementary role, trust, need to create, and shared vision. All
interviewees confirmed the results. Figure 1 shows the complete framework of this study.


Figure 1. The research framework

Following the work of Nahapiet & Ghoshal (1998), complementary role and trust fit easily under the relational
dimension; the need to create and shared vision fall under the cognitive dimension of social capital. In addition to
the social capital factors, the success of players in Mongolian circus industry were indicated by the development of
talent which can be measured by the reputation, the number and the duration of the contract, the amount of
compensation for the performance, and the number of visits to foreign shows; the development of business which
can be measured by the number of people included in the show, the frequency of shows, the lifespan of the show,
owners investment in the show, and the number of audience; and the development of the industry which can be
measured by the number of businesses in the industry, the number of job types, the attractiveness of industry, the
opportunities offered by the industry, and the cooperation with other industries.
The study used survey as the tools for data collection. Two types of questionnaire were distributed. The first type
of questionnaire was distributed online to the general creative talents in circus industry using the Likert-scale of 1-7,
which resulted in 122 responses. The second type of questionnaire was the pair-wise comparisons of factors aimed
Proximity
Linkage
Critical mass
Interactions
Complementary
roles
Trust
Need to create
Shared vision
CCI development
Development of
talent
Development of
business
Development of
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555 Enkhbold Chuluunbaatar et al. / Procedia - Social and Behavioral Sciences 109 ( 2014 ) 552 557
for decision-makers in Mongolian circus industry, targeted to 10 senior decision-makers to identify the importance
weight of the factors to each level of circus industry development.
4. The results
4.1. Factors important to the development of Mongolian circus industry
Factor analysis and reliability tests were conducted to purify the measurement scales and check the reliability of
the factors. Factor loadings were greater than 0.7, the total variance explained for all factors were high (more than
60%), and the reliability test showed that all variables possessed high internal consistency as the Cronbach value
of each factor were greater than 0.7. The multiple linear regression result showed a strong relationship between the
overall structural, relational, and cognitive factors to circus talent development (Adjusted R2 value= 0.837, Fvalue=
78.951***); circus business development (Adjusted R2 value= 0.767, Fvalue= 50.784***); and circus industry
development (Adjusted R2 value= 0.694, Fvalue= 35.294***). The factors, which were found significant to talent
development, are shared vision (cognitive dimension), trust and complementary role (relational dimension), and
linkage (structural dimenstion). For business development, need to create (cognitive dimension) and critical mass
(structural dimenstion) were significant. None of the factors under relational dimension was found significant to
business development. For industry development, the most significant influence was found from the structural
dimension factors, with positive influence from critical mass and proximity; no significant influences were found in
the relational and cognitive dimension factors.
4.2. The weight of importance of the factors
The Analytic Hierarchy Process (Saaty, 2003) was used to analyze the responses of factors comparisons to
develop Mongolian circus industry provided by decision-makers (expert-view), as shown in Table 1.


Table 1. The importance weight of factors for talent, business, and industry development

Development in talent level Development in business level
Development in industry level
Rank Factor Weight Rank Factor Weight
Rank Factor Weight
1 Complementary role 24.98% 1 Complementary role 21.97%
1 Interaction 18.59%
2 Shared vision 24.61% 2 Shared vision 19.36%
2 Need to create 17.39%
3 Need to create 14.31% 3 Interaction 14.76%
3 Complementary role 15.72%
4 Trust 14.15% 4 Trust 13.68%
4 Shared vision 14.19%
5 Critical mass 8.66% 5 Need to create 13.61%
5 Trust 12.07%
6 Interaction 6.98% 6 Critical mass 9.75%
6 Critical mass 10.85%
7 Linkage 3.68% 7 Linkage 4.09%
7 Proximity 6.19%
8 Proximity 2.63% 8 Proximity 2.78%
8 Linkage 5.00%

For talent development, the decision-makers assigned more weights on complementary role, shared vision, need
to create, and trust; putting less emphasis on the role of linkage and proximity in the development of talent. For
business development, complementary role, shared vision, interaction, trust, and need to create were found
important; while critical mass, linkage, and proximity were found less important. For industry development, the
importance weights were distributed almost evenly among interaction, need to create, complementary role, shared
vision, trust, and critical mass; with less weights found in proximity and linkage.
5. Conclusion
This study complemented the cluster concept by incorporating the social aspects into the analytical framework of
circus industry development as one sector of CCI. This study identified the relational and cognitive dimension
556 Enkhbold Chuluunbaatar et al. / Procedia - Social and Behavioral Sciences 109 ( 2014 ) 552 557
factors related to circus industry. The structural, relational, and cognitive dimension factors were found to be valid
and reliable. The roles of cluster and social capital factors were identified in relevance to Mongolian circus industry
development. This study revealed that: 1) complementary role, trust, and need to create are important for talent
development; 2) linkage and shared vision play important roles in business development; 3) proximity and critical
mass have significant influence in industry development. The importance weight of cluster and social capital factors
were retrieved from the Mongolian circus experts. They placed more importance on the relational and cognitive
dimension factors for talent development, business development, and industry development. In order of importance,
the pair-wise comparison showed that: 1) complementary role, shared vision, need to create and trust are important
for talent development; 2) complementary role, shared vision, and interaction are important for business
development; 3) interaction, need to create, and complementary role are important for industry development.
Therefore it is concluded that complementary role is the most important factor in all levels of circus industry
development. This research is the first study, which addressed Mongolian circus industry development and brought
together the cluster and social perspective to analyze the CCI development. This research suggests that Mongolian
circus industry decision-makers and policy-makers should focus more on strengthening the social capital among
circus talents to boost the talent and business development. Instead of competing fiercely with each other,
Mongolian circus talents should have shared vision and collective strategies to exploit the foreign market, solving
the problem of limited market size inside Mongolia.
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