The Role of Creative Industries in Industrial Innovation

The paper empirically analyses the role of Creative Industries in affecting an economy’s innovation performance. We distinguish three such roles: First, Creative Industries are a major source of innovative ideas and thus contribute to an economy’s innovative potential and the generation of new products and services. Secondly, they offer services which may be inputs to innovative activities of other enterprises and organisations within and outside the creative industries. Thirdly, Creative Industries are intensive users of technology and often demand adaptations and new developments of technology, providing innovation impulses to technology producers. Creative Industries are defined as those economic activities that strongly rest on individual creativity, skill and talent and predominantly produce intellectual property (in contrast to material goods or immediately consumable services). In order to identify enterprises in the Creative Industries, we combine a sector classification approach (as used by most authors so far) with an analysis of an enterprise’s degree of creativity in terms of creativity of employees, creativity of products, and creativity of processes. We define creative enterprises as those belonging to a Creative Industry sector and predominantly conducting creative economic activities. The empirical study is based on a survey of more than 2,000 creative enterprises from Austria. We show that the creative industries are not only - by definition - a source of creativity, but they also show a strong performance in technological innovation and thus directly contribute to the level of industrial innovation in the economy in terms of technologically new products, new processes and results of own R&D efforts. They support innovation in a variety of other sectors through creative inputs, such as ideas for new products (i.e. innovation content), supplementary products and services (such as software) or marketing support for product innovations. What is more, they are also an important user of new technology and demand innovations from technology producers, particularly information and communication technologies. Own innovative activities are a key driver for supporting innovation. Creative industries are no homogenous sector, however. While software and advertising show the strongest links to industrial innovation, architecture and content providers contribute rather little to industrial innovation. A main barrier to fully utilising the innovative potential of this sector is the lack of time at the side of creative entrepreneurs which reflects the small average firm size and the high share of sole traders. Innovation policy in support of creative industries should thus design programmes that are suitable for micro firms.

Schopen, Kathrin, Christian Rammer and Johannes Trüby (2008), The Role of Creative Industries in Industrial Innovation, ZEW Discussion Paper No. 08-109, Mannheim, published in: Innovation: Management, Policy & Practice.