The city of Sheffield is working hard to become a thriving centre of music, photography and film-making. By Louise Jury
The vision is to create something like the Temple Bar district of Dublin. Hip and happening, young and arty, with a smattering of galleries augmented by a selection of trendy bars and restaurants and a strong commercial base.

Sheffield is the latest city where cultural development is proving the successful key to inner-city regeneration.

Within a few years, planners and arts entrepreneurs hope to have transformed the run-down area stretching from the railway station to the shops into a thriving Cultural Industries Quarter, bringing new prosperity to a city which has taken more than its fair share of economic blows.

Already video and film-making, music-recording, photography and broadcasting are rivalling the city's traditional steel industry in the numbers they employ, thanks to a strategy to promote them launched by the city council in 1988.

In the Cultural Industries Quarter, 600 small businesses house video producers, graphic artists and the Red Tape recording studios, where once the cutlery business thrived. "This area is booming," says Carol Maund, director of the Site Gallery.

Site is itself part of the regeneration. It has just re-opened, completely revamped. The inside has been gutted to create new galleries, with offices, an education area, darkrooms and digital technology facilities above. Instead of a dingy 1970s' conversion, there is now a fresh white gallery with stylish glass front.

Originally founded as a photography gallery 20 years, Site, under its old name, Untitled, was one of the first organisations to move into the Cultural Industries Quarter. When Ms Maund became its director four years ago, she changed the name as a sign that it was moving with the times.

Photography has changed, and the gallery with it, radically transformed by the advent of digital technology and a growing awareness of photography as art rather than straightforward photo-journalism.

Ms Maund had been working on the East Midlands art board before she moved to Site. Site had not had a director for about five years and the management had fallen apart. "It was a good time to come," she says.

"The arts boards were changing and their power was being taken away. It seemed there was no way I could have the effect I had been having so it was good to get my teeth into one place."

In a way, it helped that the gallery was at its lowest ebb. "It was on its knees, and that made it easier to grab it and give it a new direction and a much broader remit."

The whole area was already buzzing with the words "cultural industries" and the momentum has, if anything, increased. Immediately opposite Site, the pounds 15m National Centre for Popular Music is under construction, due to open next year.

The aim is to attract up to 600,000 visitors annually to what is being billed as "the world's first visitor and education centre celebrating the art of popular music".

Next door is the Workstation, an office development that houses producers, designers and commercial artists. At the corner is the Showroom, a cinema, and conference centre.

The Site Gallery has been transformed thanks to a pounds 1.3m lottery grant and money from the European Union's urban regeneration programme which regards South Yorkshire as one of Europe's most deprived regions.

The pounds 1.8m total investment has been further boosted because the UK Year of Photography and the Electronic Image (of which The Independent's 98 on 98 images of the century was also a part) chose Site to receive one of its 10 commissions on the theme of "the nature of Europe and its changing political, economic and cultural identities".

Site's re-opening exhibition, which runs until 13 June, is by the acclaimed Belgian artist, Marie-Jo Lafontaine, who has produced a dozen large and striking portraits of young Belgians from different ethnic backgrounds.

Carol fears the prestigious start may prove something of a handicap. "Now people think we have money, which we don't," she says. The public also expect more. "There's a sense that we'll be putting on more prestigious shows."

But she is trying not to let the lack of cash limit her vision. After Marie-Jo Lafontaine, she has devised an exhibition inspired by a ground- breaking show at the ICA in London in 1968 called Cybernetic Serendipity which looked at computers and creativity.

Yet she is conscious, too, of the need to be an accessible part of the growing community in the Quarter, where 600 homes plus more bars and restaurants are expected to breathe a domestic life into what has been a commercial sector until now.

"I would love to just be able to open the doors, put on shows of artists I really, really want - that would be wonderful," she says. But, acknowledging a kind of compromise, she adds: "There are lots of reasons why you work in a gallery."

Paul Skelton, head of Sheffield city council's cultural industries team, says the new hi-tech Site is exactly what the area is all about. "It's a very important small part of the jigsaw," he says.

The Quarter grew out of research which told the council that the leisure, entertainment and music and film sectors were the growth areas worldwide and that the UK was very dominant in them. The council then discovered there were whole hosts of people already with these skills in Sheffield, but many were leaving because there was no way to use or advance them.

The Cultural Industries Quarter has changed all that. "We set about providing the equipment and work space necessary to keep them here and support them," Mr Skelton says. Seventy-six local craftsmen and technicians were employed on The Full Monty, during six months' filming in the city. Members of the local actors' co-operative took part too.

Success clearly encourages success. Over the next two years, a pounds 220m investment will be coming into the Quarter and more than 40 companies are waiting accommodation in the next development phase. Four thousand people are expected to be employed there by the millennium.

"Up until 18 months ago, people were still saying 'if it happens...'," Mr Skelton says. "Now they're saying, 'It's a question when'. We're pretty confident we can't fail."

And he includes the Site gallery in that. "I think it has a very rosy future," he says.