creative Industry and Innovation

CREATIVE INDUSTRIES AND INNOVATION

BY HUGHO DEOGRATIUS

The Creative Industries are regarded as one of the most promising fields of economic activity in highly developed economies, having a great potential to contribute to wealth and job creation. Their activities rest upon individual creativity, skill and talent, i.e. factors of production for which high-income countries have a comparative advantage. In contrast to most other industries, their main output is intellectual property rather than material goods or immediately consumed services. Demand for such immaterial output, which is often tailored to the specific requirements and preferences of individual users, is likely to increase with growing per-capita income. Being a cross-sectional industry which serves a large number of other sectors as well as public organizations and consumers, the creative industries profit from a diversified mix of customers and may stimulate growth in a variety of other sectors by providing creative inputs.

Besides the contribution to growth and employment, another key interest in research and policy making is the role of the Creative Industries for an economy’s innovation performance.

We assume that this role is twofold. On the one hand, the Creative Industries may develop and introduce innovations as part of their business activities, thus directly contributing to an economy’s innovative output. Such innovations include new products and services offered to their customers (product innovation) as well as new technologies, procedures and routines within their business that raise efficiency or quality of their output (process innovation). An example for product innovation may be a new marketing approach offered by an advertising company which has not been used by this company before. On the other hand, the Creative Industries support innovation in other industries through creative inputs. These inputs can either be downstream, i.e. creativity produced in the Creative Industries is used by customers in their innovative efforts, or upstream, i.e. the Creative Industries demand innovative inputs from their suppliers (e.g. technology producers).

Creative inputs need not necessarily coincide with the Creative Industries’ own product innovations but may also relate to standard (i.e. non-innovative) activities of creative enterprises.