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

This paper is a mirror of the same paper published by SSRN, lodged with MPRA for completeness and for the historical record. It should be cited as: 'Freeman, Alan, Is Creation an Industry? A Constructive Critique of the Economics of the Cultural and Creative Industries (June 3, 2012). Available at SSRN: http://ssrn.com/abstract=2074338 or http://dx.doi.org/10.2139/ssrn.2074338' It is the earliest version of this paper and the most complete, illustrating the original thinking which went into the two subsequent revisions. These are lodged with RePec as (1) 'Culture, Creativity and Innovation in the Internet Age' ( http://mpra.ub.uni-muenchen.de/9007/) which was presented to a conference in IPR at Birkbeck University on May 23, 2008 (2) 'Creativity in the Age of the Internet' (http://mpra.ub.uni-muenchen.de/14903/) which was presented to a seminar held at the Science Policy Research Unit (SPRU) of Sussex University on October 31st 2008 It was originally prepared for a special issue of the Journal of Management Philosophy, but was rejected. It was submitted to the Creative Industries Journal, but never arrived in print. The 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.