The purpose of this paper is to provide economic modeling and its implications to government policy in promoting and financing innovation in the creative industries. First, we develop a rational expectation model with emphasis on network externalities (NE) within the creative industries, and on the moral hazard problem due to the presence of asymmetric information in a loan market for innovation. Interactions between firms' and banks' expectations play an important role in determining which of the two equilibria occurs: one with low NE and the other with high NE. Then, we show the effectiveness of policies that critically depend on the current equilibrium and how discrepancies between the expectations converge to a new equilibrium. This paper develops a theoretical model and also empirically tests some implications of the model using OECD country level data (2000–2013). The theoretical results show that policies aiming at promoting innovation in the creative industries actually decrease the equilibrium level of innovation as well as banks' confidence and network externalities in low NE equilibrium even with the presence of the positive effect of lowering the critical mass; the opposite outcomes are observed in high NE equilibrium. Other implications of government policies are also discussed.
Disassembly and reassembly: An introduction to the Special Issue on digital technology and creative industries
This Special Issue analyzes the dynamics of disassembly and reassembly unfolding in selected creative industries through the advent of digital technology. It argues that a full understanding of the much-observed organizational or sectoral lock-in effects on the one hand, and the possibilities for transformation and innovation on the other is only gained by analyzing jointly how institutional logics, business models and creative processes are affected by digital technology and how they interrelate in producing stability or change. These three dimensions provide a framework for reviewing the findings of the papers comprised in the Special Issue and for integrating their insights towards a research agenda. This introduction starts with a reflection on creative industries classification systems and related possibilities for generalization and discusses how digital technology acts as a driver for disassembly and reassembly. It concludes by highlighting three avenues for further research.
Fashion industry professionals’ viewpoints on creative traits and, strategies for creativity development
Through in-depth interviews, the study explored fashion industry professionals’ viewpoints, on creativity, focusing on traits of creative people and how creativity can be developed. Four creative, traits were identified, including different thought processes, determination, having an open mind, and, risk taking. About one-third of participants believed that creativity is innate, and therefore, some, people were born creative whereas others were not. Another third of participants maintained that, everyone has some creative potential that can be further developed. The remaining fashion, professionals distinguished artistic creativity from creative problem solving. Suggested strategies for, creativity enhancement and development included (1) practicing creative thinking strategies, (2), formal training, (3) diverse experiences and exposure to the world; and (4) creating a safe, yet, challenging environment.
The role of cultural regeneration as means of social and economic development has been a widely investigated yet controversial topic. This paper focuses on a specific research question within the wider literature in the field: what is the relationship between regeneration, in particular flagships cultural projects, and the creative industries?
Part of the argument behind cultural regeneration and public investment in flagship buildings and new cultural institutions in Europe is that they will foster the economic development of the city, not only in terms of tourism development but also supporting the growth of the creative industries. Nevertheless, little research has addressed what are the real dynamics linking public investments in culture and regeneration and the potential development of local creative industries. Somehow, this connection has been taken for granted and in many policy document there is the assumption that flagship investments and regeneration will encourage and support local creative industries.
The paper presents the result of a 2 year fieldwork undertaken in the context of Newcastle-Gateshead and the North-East region of England. The paper presents the result of the interviews conducted with local creative and cultural producers and highlights the weak connection between local practitioners and local cultural flagship developments in the region. Finally it calls for reconsideration by public policy of the importance of reconnecting creative industries and cultural regeneration to explore the real potential of this relationship.
Global scripts and local translations: The case of cultural and creative industries (CCIs) in Norway
Cultural and creative industries (CCI) have, in recent years, been a prominent feature of policy initiatives across Northern Europe. This paper approaches CCI as a global, hegemonic ‘script’ or ‘myth’ that has spread across national boundaries and policy circles and, as a result, been translated in the light of historical trajectories, local dynamics, and strategic imperatives. In doing so, we shed critical light on ongoing dynamics across the Nordic countries, and more specifically, in the Norwegian national context, by illustrating how CCIs have – in the last decade or so – permeated policy frameworks and strategic initiatives at the national, regional and local levels. The paper concludes with some suggestions for future comparative research studies within Europe and beyond.
Does a better cultural milieu make a city more livable for residents and improve its business environment for firms? I compute a measure of cultural specialization for 346 U.S. metropolitan areas and ask if differences in cultural environment across cities capitalize into housing price and wage differentials. Simple correlations replicate standard results from the literature: cities that are more specialized in cultural occupations enjoy higher factor prices. Estimations using time-series data, controlling for city characteristics and correcting for endogeneity weaken the magnitude of this effect. Even though the arts and culture might be appealing to some people and firms, such determinants are not strong enough to affect factor prices at the city level.
Cultural Economy – which analyses the production, distribution and reception of symbolic contents - is dominated by the economics of welfare. This way of thinking marginalized the role of creativity and closed the corresponding analysis in a very static framework. Face to the need of an economic thought adapted to the creative economy, we should took this opportunity to distillate a more dynamic approach in cultural economics. Three examples are given (artistic markets, artistic skills, and macro-cultural policy) that demonstrate how cultural economics and creative economics should merge for their mutual benefit.
The term “creativity” is quite often used around us, especially lately, as today most people strive to be creative. The main reason for this is that creativity seems to represent an advantage in front of others. Entrepreneurs are extremely proactive and it is this orientation towards action which leads to their success in business, but also in their personal lives. The “creative entrepreneurship” has become a term which refers to the business activity of entrepreneurs belonging to the creative industries. The creative entrepreneur is the type of entrepreneur concerned with the creation and exploitation of creative or intellectual capital. He or she is an investor in his or her talent, but also in that of others. The aim of this paper is twofold: to offer an overview on creativity and creative entrepreneurship, and to make a comparative literature review of the creative entrepreneurs’ characteristics.
This study analyzes how hard and soft conditions influence the development of entrepreneurship in cultural and creative industries (CCIs). The study further examines what influence the context has on the effect of these conditions. A multiple multivariate regression analysis examines the importance of both the hard and soft conditions to explain the differences between the United Kingdom and the Mediterranean countries of Portugal, Spain, and Greece. The sample comprises 123 entrepreneurs from the four countries. The use of this method represents an important contribution to the understanding of entrepreneurship dynamics and for the further fine-tuning of entrepreneurship policies in CCIs in different contexts.
This paper assesses the coping mechanisms of creative SMEs in the context of recent economic downturns. It argues that such industries develop various forms of micro-resilience anchored in three main dimensions: production, space and people. By using the case of Digbeth and the Custard Factory as a lens to focus the discussion, it posits the argument that micro-resilience rests upon competitive advantages, including corporate reputation and the capacity of those industries to be flexible, adaptable and entrepreneurial. It also notes that space and locality, as intangible resources, act as leverages to provide an adequate working environment, allowing financial viability and clustering. Finally, it points out that creative workers and their informal networks favour a range of tactics allowing micro-resiliency.
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