The aim of the paper is to develop an analytical framework for understanding and measuring the impact of cultural industries and creative activities in local development. Despite the great debate on the importance of cultural and creative industries in policy, academic and business circles, we still lack a grounded theoretical model to understand how these activities contributes to local development and how far enhancement of culture-based creativity may be linked to certain social and economic configurations in these industries. In order to better understand the role of cultural industries in local development we propose a novel framework, which tries to depict the main actors and structure of local systems of cultural production and under what conditions such systems are able to generate and express creative atmosphere.