Is Creation an Industry? A Constructive Critique of the Economics of the Cultural and Creative Industries

Abstract

This paper offers a suggested framework for formulating economic policy for the cultural and creative industries. It argues that both the cultural and (recently-defined) creative industries are not a recent phenomenon but historically central to the development of the modern industrial economy.

It shows that, in terms of conventional economic theory, these industries are a 'proper economic sector': they have a distinctive resource, production process, and output. There are therefore sound theoretical reasons to explain their present dynamism, notably the productivity revolution brought about by remote and multiple service delivery (internet, telecomms, broadcast etc).

It defines this distinctive resource, process and output. The 'product' is culturally differentiated goods and services. They are therefore central to the reproduction of culture and hence have to be the object of policy whether or not there is market failure, because culture is a legitimate area of social and political concern.

The production process is 'flexible production of short life cycle goods to an abstract or imperfect specification' which reverses the paradigm of Fordism. Cities, particularly global cities, have become the decisive location for this new form of industrial organization and special attention has to be given to the the city’s cultural and creative infrastructure.

The primary resource is creative human labour. This is a necessary resource and special attention has to be paid (in policy) to catering for it and creating the infrastructure it needs to function.

Keywords: Creative Industries, Cultural Economics, Industrial Classification, Innovation, Design

JEL Classification: Z10, Z11, L8