Capital system, creative economy and knowledge city transformation: Insights from Bento Gonçalves, Brazil

•The generic capital system is a construct that allows the deployment of specific measures also for creative economy.•A systematic and integrative perspective for a city is fundamental to identify value-based indicators.•Identity capital was related to the attractiveness of its differentiation aspects to the creative class.•This is the first case in Brazil where the generic capital system taxonomy is being applied.

This study pursues the advancement in the research of the use of the generic capital system as a value-based tool by identifying the complete capital system of a Brazilian city—i.e., Bento Gonçalves. In doing so, it also aims at identifying its unique characteristics and the potential knowledge-leveraging capabilities for planning its development as a knowledge city. The context of the study is the creative economy considering that in Brazil cities are encouraged to embrace and accept its culture as a factor in their development. This paper builds on the points of conceptual convergence between the generic capital system taxonomy and the Brazilian model of creative economy. In doing so, it explores the potential value of this convergence for the development of an emerging knowledge city. This is the first case in Brazil where the generic capital system taxonomy is being applied. This exploratory study, carried out in a southern Brazil city of Bento Gonçalves, found viable economic development alternatives for communities with strong cultural tradition deriving from the Italian immigration of the 19th century. As a result, the case analysis indicates that identity capital could be considered as an inducing factor for development especially in social contexts strongly anchored in local culture.