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 6: Creative Labour Markets and Signalling

John Banks

Subjects: economics and finance, evolutionary economics


with John Banks 6.1 CREATIVE INDUSTRIES’ LABOUR MARKETS, UNCERTAINTY AND SIGNALLING Labour markets in all industries have their idiosyncratic features and structural characteristics and the creative industries are certainly no exception. We have already met one such feature in Chapter 4, namely the tendency toward extremes of wealth in winner-take-all markets (De Vany 2004, Potts 2006). Other features highlighted by Caves (2000) include the ‘motley crew’ aspect of ad hoc teams, the significance of the apprenticeship system, and the role of labour organizations such as guilds and unions. Furthermore, work in artistic labour markets (as a subset of creative industries’ labour markets) has consistently highlighted the lower-thanaverage returns to creative endeavour in proportion to human capital (Throsby and Hollister 2003, Menger 1999, 2006). Indeed, the peculiarities and challenges of arts, cultural and creative labour markets and careers is a common motif of the economic and sociological analysis of arts, culture and creative industries.1 Menger (1999) is worth quoting at length on this: Artistic labor markets are puzzling ones. Employment as well as unemployment are increasing simultaneously. Uncertainty acts as a substantive condition of innovation and self-achievement, but also as a lure. Learning by doing plays such a decisive role that in many artworlds initial training is an imperfect filtering device. The attractiveness of artistic occupations is high but has to be balanced against the risk of failure and of an unsuccessful professionalization. Earnings distributions are extremely skewed. Risk has to be managed, mainly through flexibility and .  .  . multiple-job holding at the...

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