Creative industries & cultural science: A definitional odyssey

There are two overarching conceptual issues before us:

In this paper, I propose to address both by focusing on how they interrelate (and thus in the manner of Ormerod 2008). Toward this, I shall review the extant definition of the creative industries along with a series of recent endeavours by the CCi to redefine the creative industries from theoretical first principles. I then connect this to the program of cultural science, which I define as:

There are two problems here. First, with how these all fit together, which I will address in the section 3, and second, with the meaning of creative industries. This will be the subject of section 2. The methodological implication is that we cannot proceed to develop cultural science until we have first examined what is meant by creative industries. (Allowing of course that complexity theory, evolutionary economics and cultural and media studies are all reasonably well defined domains. This is a far from obvious statement, yet I shall not enter into such debates in this paper.)

An immediate observation and potential criticism of my cultural science definition is that the last element – creative industries – may be redundant. That is, its very definition may be bound up precisely with the interaction between the other three elements. As will become apparent, I am broadly inclined toward that interpretation, a great merit of which is that it then skirts one of our two problems – specifically, the definition of creative industries. Yet I shall nevertheless proceed with definitional examination in order to highlight the problem at issue, which is that creative industries has multiple and distinct definitions that draw attention to different aspects. Yet it is only by examining these definitions as a whole – and I have identified 18 (technically, 16+2) distinct definitions below – that we may appreciate the sense in which a cultural science approach may provide a deeper analytic foundation.

Definitional debates, along with methodological papers, have a bad reputation of being sterile or less worthwhile than ‘real’ research or inquiry. Yet the creative industries present a genuine definitional problem, such that the sets of economic activities that gather under its heading have multiple possible interpretations with very different implications. This paper will therefore attempt to review in brief the different definitions toward highlighting a coherent basis for cultural science foundations (as opposed to defining and classifying for the purposes of developing creative industries policy).

The standard origin story of the creative industries has been told many times. With variations, it goes something like this.

Once upon a time, there existed a broad swathe of economic activity called the cultural sector. This was well defined in its economic aspect by its persistent and utter failure to produce economic value. But that was okay, because it did produce cultural value, and was important because of this for social, political and cultural reasons. Its economic justification, however, was limited to spillovers associated with cultural tourism. Since the formation of the Arts Council in the UK and the National Endowment for the Arts in the US (both in the 1930s), a policy equilibrium has since been maintained in which the economic system transferred resources to the cultural system in proportion to this estimated cultural value.

But this equilibrium was disrupted in 1998, when a new view was proposed and foisted by the DCMS, a branch of the UK government, which sought to re-conceptualize the cultural economy into a new and broader industrial classification called the ‘creative industries’. The DCMS redefined this sector through an extensive inclusive classification that sought to gather all industries that have creativity as an input and intellectual property as an output. A new industrial sector was thus proposed as the creative industries, and thus defined so as to include in both industrial and occupational classifications: architecture, advertising, arts & crafts, design, fashion, performing arts, music, TV, film & video, digital games, publishing and new media, and interactive software.

The cultural industries is thus Definition #1: namely the set of economic activities that produce cultural goods and services. This is the definition that underpins in much political economy analysis, including extensions into analysis of cultural geography or media studies, and which is the default position in, for example, the Journal of Cultural Economics.

The modern definition of the creative industries – Definition #2 – is the standard DCMS (1998, 2001) definition of ‘creativity in – IP out’. This is the new definition, and is represented by, say, Hartley (2005), Cunningham (2006), and the Creative Industries Journal.

This is closely related to Definition #3: which is to define it in terms of the copyright industries, which is broader than creative industries in that in includes distributional channels as well. This definition emphasizes the intrinsically commercial nature of these industries and views intellectual property as its institutional basis.

Definition #4 (closely allied with #2) is the creative economy definition associated with the likes of John Howkins (see also Cunningham 2006). This definition is broader than the creative industries definition in that it is focused on creative activities across the economy, rather than with reference to a particular set of sectors. While this definition is inspiring, it has yet to receive a formal definition.

Definition #5 is a related hybrid definition that combines #2 and #4 into the Trident model definition (Higgs, Cunningham and Bakshi 2008). This combines both occupational and employment classifications to distinguish between embedded and core creative industries, both as distinct industries and as embedded occupations.

Definition #6 however is the pure labour market or creative class definition associated largely with the work of Richard Florida (2002, 2005, 2008) and recently Elizabeth Currid (2007). This model ignores the industry focus and instead concentrates on spatial competition (e.g. between cities). In this view the creative industries are defined in terms of an occupational class of economic behaviours (creative or knowledge workers). This subset of agents has preferences to live next to each other in order to realise positive externalities. The creative industries, in this view are a self-organizing phenomenon that explains, among other things, urban agglomeration and increasing returns. This definition shades into the work of endogenous growth economists such as Ed Glaeser.

Definition #7 is an older idea, and in many ways an outgrowth of definition #1, in terms of a core/periphery model of creative activities. This model, which is associated with the work of David Throsby emphasises the notion that at the core of the ‘cultural industries’ are the creators of pure art and culture. Moving out from that are layers of associated services and derived value industries that are ultimately ringed by the purely commercial aspects of the industry. In this model the cultural/creative core creates the value that others parts of the industry exploit.

Definition #8 is the special economics definition, associated with, for example Richard Caves (2000) or Art De Vany (2004) and at this workshop Paul Ormerod (2008). This is a perhaps strange definition, and not one that can serve industrial or statistical classification purposes, but what it does do is to highlight the systematically peculiar economic coordination problems involved in this sector (e.g. Caves from the transaction costs perspective, De Vany and Ormerod from the power law perspective). This aspect also invokes information economics arguments and knowledge economy arguments.

Definition #9 is perhaps less a definition as a useful categorical observation, namely that the creative industries are core parts of the service economy. This definition overlaps with notions of creative industries as illustrative of the knowledge economy, and also with definition #6 (creative class), definition #4 (creative economy) and also definition #8 (special economics). This conceptual discrimination has been widely made (see Metcalfe and Potts 2007) and leads to the focus on the role of the creative industries in not just the study of the production of services but also in the process of innovation in services. To the extent that innovation in services differs from that in manufacturing, this is a further research aspect of definition #8. This point also connects directly to new innovation system arguments in relation to creative industries definition (Cutler 2008, Mathews 2008, Potts 2007a).

Definition #10 relates to the role of the creative industries in the process of Schumpeterian economic growth and evolution. While this is not strictly a separate static definition, as the argument is constructed over definitions #2, #3, and #4, it does serve to redefine the creative industries in relation to growth dynamics. Potts and Cunningham (2008) advanced four models of creative industries growth that ranged over negative, neutral, positive and evolutionary. Evidence supports the latter two models, although this effect was conditional upon specific definitions. An important implication, however, was that for a broad range of definitions, the creative industries should be viewed in policy terms as more closely related to innovation policy than to cultural policy.

Definition #11 is closely related to definition #10, but instead puts the focus on the role of markets and market institutions. In this definition, the creative industries are understood by their felicity with market processes. The champion of this interpretation is Tyler Cowen (1998, 2002, 2005). This argument has been further developed toward Austrian and evolutionary economic views of market processes in Potts (2007a, 2007b, 2007c, 2008a), Chai, Earl and Potts (2007), and also in the work of Bruno Frey, Eric Jones, and indeed most economists (as opposed to political economists) who have ventured into the fray of the economics of the arts, culture and creativity. The key point here is that the institutions of markets (and market capitalism) are conducive to creative industries; indeed, they thrive under such conditions. The rise of liberal market globalization since the early 1980s correlates with the rise of the creative industries (Potts 2006, 2008). The purpose of this definition is to emphasise the notion that creative industries produce private goods with significant spillover, as distinct from public goods. There are immediate and obvious policy implications (and socio-political implications), but the point to emphasise is that the debate is about the nature of the economic value produced. Definition #11 insists that creative industries value is largely a product of markets working, not failing.

Definition #12 is the logical extension of this point by connecting it back to enterprise, namely the social network markets definition of the creative industries (Potts, Cunningham, Hartley and Ormerod 2008). This definition puts an entirely new dimensional construct into play, namely the measure of novelty bounded by creative origination and mature industry. In this definition, all industries went through a creative industries phase at some point, and thus the definition of creative industries as elements of a population is always changing, but the principles of the definition remain the same. These are the coordination of novel ideas in proto-markets of social networks, often in conjunction with systems of mature markets. The creative industries are therein defined as ‘The set of agents and agencies in a market characterized by adoption of novel ideas within social networks for production and consumption.’ The creative industries are thus the set of economic activities that involve the creation and maintenance of social networks and the generation of value through production and consumption of network-valorized choices in these networks.

Definition #13 is in part an aspect of definition #12, but it is also a broader point about economic classification in the notion that the creative industries represent the attention economy. This concept is associated with a number of scholars in different ways: e.g. Earl and Potts (2004), Lanham (2005), Hartley (2007), Currid (2007), Ormerod (2008). The central idea here is that the creative industries are defined in terms of the aspects of economic activity that derive value from the creation, fabrication, maintenance and operational use of the scarce resource of attention. This in part draws analytic attention to the institutional and infrastructure aspects, but at the same time to the nature of the human mind and its cognates. Fashion is perhaps the leading part of the attention economy (Hartley 2008), but this can be very broadly defined (Potts 2007c).

Definition #14 – multiple games & identity – is more in the realm of speculation at this stage (Banks and Potts 2008), but involves a variation on definition #12 that is interesting because it feeds directly into cultural science. It is an entirely microeconomic definition, and thus different from #12, which is meso and macro. The idea is that creative industries are defined by contexts of simultaneous economic choice and cultural choice over the same proposition. This implies that a single choice must accommodate both aspects of identity (Akerlof and Kranton 2000, Davis, 2005, Hermann-Pillith 2008, Potts 2008e). This definition thus seeks to identify the creative industries with a class of human behaviour that is simultaneously cultural and economic. This complex behaviour is, I suggest, at the core of the definition of cultural science.

Definition #15 comes from attempting to find a better definition of creativity. This thus eschews the industry focus, and seeks to identify the essential economic and cultural aspects of the creative industries in terms of the mechanisms of creativity (Potts 2007). This definition involves the merging of concepts such as entrepreneur, artist and, in general, human creative activity. This dimension is well studied in neuroscience, anthropology, history, psychology (cognitive, behavioural and social), sociology, and business studies. Even economists are now becoming interested in this (Gallen 2005, Magee 2005).

Definition #16 proceeds from the intellectual property aspect of definitions #2 and #3, but inverts the logic. Economists (e.g. Boldrin and Levine 2002, 2005, 2008; Romer 2002; Klein et al 2002, Lerner and Tirole 2002) have become increasingly noisy in opposition to intellectual property (as have others, e.g. Benkler 2006). The basis of this argument is examined in Montgomery and Potts (2008) and which points toward a definition of the creative industries as: the set of industries, due to global context, for which IP is a problem to be solved, not a solution to a problem. The basis of this argument is that creative industries are not only competitive industries (as in Boldrin and Levine 2002) but also global industries, re-use industries, and adaptive industries in respect of business models. While this relates to definition #8, and also to definition #10, it introduces the new aspect of asset value and market creation (i.e. business model).

Definition #17 is arguably the most contentious but, at least, the most straightforward: it says simply there is no definition, or more pointedly, that there is nothing here to define. This definition views the creative industries as essentially a political movement bent on rent seeking or rent protection. This definition does not include critics of creative industries (definition #2) who are still supporters of definition #1. It includes only those that reject all above definitions. The standard caricature is the neoclassical, or Treasury, economist. There central argument is, essentially, that nothing is special, and that economic activity is economic activity. While they may allow that there are interesting economic puzzles in particular aspects of creative industries operations, they insist that there is no a priori reason to favour these industries with special treatment. In Potts and Cunningham (2008) this is model 2: the ‘just another industry’ model.

In sum, we have the following definitions of creative industries:

Perhaps there are also other definitions as well.

John Hartley (2007: Berlin paper) defines: Creative Industries as Art – generates a ‘negative’ economic model; creativity as a domain of market failure. Art requires subsidy from the rest of the economy. The policy response is a ‘welfare’ model. This corresponds to ‘residual’ culture. Creative Industries as Media and Industry – generates a ‘neutral’ economic model. Media and industries require no special policy attention other than ‘competition’ policy. This corresponds to ‘dominant’ culture. Creative Industries as Market and Knowledge/Culture – generates a ‘positive,’ or an ‘emergent’ economic model. Here the creative industries are indeed a special case, the locus for evolutionary growth at the fuzzy boundary between social networks and economic enterprise, where markets play a crucial role in coordinating the adoption and retention of novelty as knowledge (Potts et al 2008). They require ‘growth’ and ‘innovation’ policy. This corresponds to ‘emergent’ culture.

These definitional differences turn on major analytic points of focus. For other sciences and domains – such as anthropology, psychology, cultural studies, sociology, history, business studies, economics, complexity theory – to engage with this domain the first thing that is required is a clear definition of what is being engaged with. The problem of course is that that is far from clear and showing no signs of becoming so: instead, as with Potts and Cunningham (2008), Potts, Cunningham, Hartley and Ormerod (2008), Potts (2007a, 2007d), Banks and Potts (2008), and Potts and Montgomery (2008), the issue is becoming more complex, not less.

So, it would seem that a better definition is needed to capture the full dynamic reality of the creative industries and their role in value creation and the growth of knowledge. This is certainly a defensible proposition; indeed, it is perhaps the new mainstream.

However, there is an alternative position, which is perhaps best defined as the inverse of definition #17, namely that there is something there to understand, but that this requires not a specific definition of creative industries but rather a new science. This is definition #18: the cultural science definition.

The proposition underlying cultural science is that economic and cultural evolution may be far more similar processes that previously appreciated. This means that cultural and economic analysis may be homologous with respect to evolutionary and complexity theory. This leads to the formula: cultural science = cultural studies + economic studies + evolutionary and complexity analysis.

The question remains, however, whether creative industries are an additional element of this definition or an endogenous aspect. Either way, it follows that a unified scientific framework is appropriate as it serves to extract the set of interactions between these domains that in toto define cultural science.

Cultural science is defined about questions related to how the economic system interacts with the cultural system, and vice versa; and how economic evolution drives cultural evolution, and vice versa. These are all good questions about which we know relatively little, and of which many smart people – e.g. A Smith, K Marx, A Marshall, J Schumpeter, FA Hayek, K Popper, T Schelling, A Sen, etc, and also R Williams, M Sahlins, P Bordeau, E Jones, R Dawkins, etc – have thought long and hard. Yet into this fray, we might propose a way forward that has eluded others. This is the model of cultural science as based on a synthetic evolutionary complexity definition of the creative industries.

In this view, Cultural science is composed of three core analytic elements:

The creative industries in turn are a conjoint aspect of all three, not a separate analytic element. What these three analytic domains have in common is the study of complex, self-organizing open-system processes centred about the growth of knowledge. Complexity is the structure of the growth of knowledge. Culture is an aspect of this process, as is economics. But only some aspects of cultural studies and economics intersect with this definition, namely those aspects associated with open system (complex) processes of novelty generation and the coordination there-of. Cultural science therefore deals with the effect of cultural and economic novelty as the outcome of complex systems processes.

Cultural science is thus an evolutionary science (in the Popperian sense). It is concerned with the dynamics of culture as an open system process. This analytic framework is then supported with dynamic models of media, communications and culture along with dynamic models of the economic system in terms of markets, entrepreneurship and innovation. This framework may or may not require micro foundations or detailed models of agents. It also may or may not extend to well-defined macro implications for the cultural system, or the economic system as a whole. But it does always involve (meso) analysis of complex systems processes.

Cultural science is not the study of individual people making meaning or money, although this micro aspect is certainly part of the story, but rather the study of cultural processes that emerge from the complex interactions of many individual agents. These are meso level phenomenon. In turn, these cultural processes (meso trajectories) form the components of the macro cultural system and economic system. Importantly, cultural science does not view the cultural system and the economic system as abstractly distinct separate domains of analysis. Rather, cultural systems and economic systems are different aspects of the same underlying dynamic of the growth of knowledge process.

Cultural science therefore seeks to focus on points of dynamic interaction between cultural and economic systems in the growth of knowledge process. It does so with evolutionary/complexity-based analysis. Examples include consumer-producer co-creation in open source production and innovation (Quiggin and Potts 2008; Banks and Potts 2008; Potts et al 2008a), and social network markets (Potts et al 2008b). These involve analysing how cultural and economic behaviours interact to form new complex cultural-economic systems (such as markets and organizations) and also how this works as an open-system ‘creative destructive’ process as described in terms of ‘Schumpeter meets Williams’, or more generally in terms of how cultural and economic evolution co-evolve.

Cultural science is, in this view, a new hybrid science that combines elements of several extant sciences and studies to focus directly on a particular domain of analysis, namely the intersection of cultural dynamics and economic dynamics that has previously been only at the margins of mainstream cultural and mainstream economic analysis.

Cultural science is a synthetic science: a hybrid of models. The power of this synthetic focus is that it enables a better understanding of the general dynamic processes that affect almost all domains of inquiry into the human world. By focusing tightly on complex systems dynamics of social networks, this enables a much broader analytic reach across a great span of subject phenomena ranging from Elizabethan proto-journalism to globalized media networks across cultural and economic aspects of behaviour and the emergent systems that result. Cultural science thus provides a dynamic framework for the integration of many previously unrelated dynamic observations and theories.

Cultural science is not the study of culture at the micro level. It is not the study of cultural behaviour or of the cultural mind. It is not concerned with why culture matters to people, nor with how it manifests. Yet, nor is it the study of culture at the macro aggregate level. It is not the study of the culturesphere, the cultural system, or of culture as any form of summation (e.g. Jones 2005, Sen 2006). Rather, cultural science is concerned with the study of culture as a form of knowledge dynamic: as the processes that create and destroy ‘culture’. This is a meso level analysis (see Potts and Dopfer 2008b).

In my conception of cultural science, then, the model for this comes from complexity theory and evolutionary economic analysis, both of which deal with open dynamic systems analysis and the study of the origination, adoption and retention of novel ideas. This, of course, does not imply a straight-forward colonization of new subject area (cultural dynamics and structure) by a new technological power (complexity theory, evolutionary economics). If so, it would not be ‘cultural science’, but rather ‘applications of complexity theory’. Yet that is not cultural science, at least as I envisage it. Instead, both economic and cultural analysis bring distinct models, data, findings, theories and methods that can be processed (involving both exchange, production and innovation) into new models via complexity/ evolutionary theory to seek to exploit the best of both analytic bases. Cultural science is the simultaneous study of cultural and economic dynamics.

In this sense, it is possible that cultural science could be done badly, were it to combine the worst aspects of cultural studies and economics. This might, for example, involve cultural models of economic systems (Marxism) or economic models of cultural systems (behaviourism, utility functions), thus emphasising driving statics subject to transitory dynamics. Yet cultural studies done well is the opposite: namely analysis of driving dynamics over transitory statics. Doing cultural science well therefore involves recognising that analytic domains will range over micro, meso and macro analysis, but that the fruitful common ground (i.e. dynamics: cf. process and structure) are centred about meso. As Potts and Morrison (2007) and Dopfer and Potts (2008a) argue, meso dynamics define economic evolution. It is my central contention in this paper that meso dynamics also define cultural science (and that micro meso macro is the appropriate framework of cultural science, Potts and Dopfer 2008b).

If so, meso dynamics are the proper definition of cultural science (and therefore the proper basis for selection among the 18 creative industries definitions). Cultural science, in other words is not a micro study of complex cultural or economic behaviour, nor a macro study of complex cultural or economic systems, but a meso study of this complexity. There can of course be sharing of micro and macro ideas in cultural science, but these are normally impossible because of the analytic gulfs that separate the different forms of analysis. Meso dynamics thus provides a common basis for subsequent development of micro and macro concepts and analysis.

Bridges between micro analysis in cultural studies and economics are not direct, but pass through the station of meso analysis. The same is also true of macro analysis, which also cannot be compared or integrated directly, but only via meso analysis. Complexity and evolutionary theory provides this analytic bridge. It is this analytic system of exchange and production between economics and culture, connected by the meso hub of complexity theory, that I think best defines the domain of cultural science. Cultural science thus aims to explain the dynamics (and thus structure) of this co-evolutionary process (Mathews 2008). It seeks, therefore, to develop integrated micro models of human behaviour and macro models of emergent human systems by drawing on both economic and cultural analysis as processed through, or coordinated by, complex systems theory, which includes evolutionary theory.

I have sought to address two questions in this paper: (1) What is creative industries?; and (2) What is cultural science? I have argued that the answers are interrelated. The upshot of this paper is the notion that a general analytic framework and subsequently theory of cultural science is an objective worth pursuing. The potential payoff is not just better economic analysis, better cultural analysis, or new applications of complexity theory, but a new scientific paradigm for the analysis of human behaviour and society. Cultural science emerges from the study of the creative industries. And the creative industries, in turn, emerge from the co-joint study of economics, culture and complexity. This is why definitional debates in the creative industries matter to the definition of cultural science.

A cultural science (Kulturewissenschaft) manifesto thus follows in which we may propose a general analytic framework for cultural science as constructed from a generalization of the generic micro meso macro framework proposed by Dopfer and Potts (2008a). This analytic methodology is explained in Potts and Dopfer (2008b) as in Appendix A below. Cultural science is not just the interdisciplinary hybrid of several extant domains (economics, cultural studies, complexity), but rather a new analytic foundation based upon the study of novelty and society, or, in other words, the growth of knowledge.