Innovation and creativity are broadly used terms and Creative Economy concept is present in European and other countries policy documents, including EU policy, UNDP and other international organization strategies. In Latvia the use of the Creative Industries term increases, however the understanding of its implications often causes confusion, both among policy makers and the broader public. The aim of this article is to establish a better understanding of the principles of Cultural and Creative Industries and the concept of a Creative Economy using historical reasoning from relevant literature. Formal use of the term Creative Industries is quite recent (1994), marking the digital era of cultural industries and creativity. However there are roots back to the industrial revolution and urbanization, cultural industries from the 1930s, popular culture, ideology distributed through mass media and contra culture rebelling against the capitalist drive of mass culture.
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