Creative Industries and Economic Evolution

Creative Industries and Economic Evolution

New Horizons in Institutional and Evolutionary Economics series

Jason Potts

The creative industries are key drivers of modern economies. While economic analysis has traditionally advanced a market-failure model of arts and culture, this book argues for an evolutionary market dynamics or innovation-based approach. The book explores theoretical and conceptual aspects of an evolutionary economic approach to the study of the creative economy. Topics include creative businesses and labour markets, social networks, innovation processes and systems, institutions, and the role of creative industries in market dynamics and economic growth.

Chapter 1: Introduction

Jason Potts

Subjects: economics and finance, evolutionary economics

Extract

1.1 DYNAMIC VALUE AND THE ECONOMICS OF CULTURE This book offers a new way of looking at the arts, culture and the creative industries from the perspective of evolutionary economics. It offers a ‘new’ cultural economics, or better: an evolutionary economics of creative industries. The evolutionary economic approach to cultural and creative industries is new because it largely abandons the dominant neoclassical marketfailure model of welfare and subsidy that otherwise underpins modern cultural economics. An excellent survey of this is Throsby (1994). Instead, it offers a market-process model of innovation dynamics and economic and cultural co-evolution. This is not a new approach (Grampp 1989, Cowen 1998, 2002, Peacock 1993, 2006, Cowen and Kaplan 2004, among others) but more a new consolidation. I propose here a general framework to refocus the economic analysis of arts and culture away from marketwelfare arguments and cultural protectionism and instead towards openmarket arguments based on consumer and producer uptake of new ideas, innovation dynamics, and industrial evolution. This focus on evolutionary economic dynamics of arts and culture leads us to trace different economic mechanisms – specifically, the contribution of the creative economy to the innovation system. In turn, this leads to very different policy models. So this is a book about the economics of arts and culture but done so from the perspective of economic evolution. Let me be clear about my intentions from the start. I do believe that the arts, culture and creativity are all good things (that is, they are ‘goods’) and that...