Creative entrepreneurship
Encyclopedia
Creative entrepreneurship is the practice of setting up a business – or setting yourself up as self-employed - in one of the creative industries
. The focus of the creative entrepreneur differs from that of the typical business entrepreneur
or, indeed, the social entrepreneur in that s/he is concerned first and foremost with the creation and exploitation of creative or intellectual capital
. Essentially, creative entrepreneurs are investors in talent – their own and/or other people’s.
The most renowned creative entrepreneurs have combined creative flair with entrepreneurial ability to build multi-million dollar business empires. Examples include Rupert Murdoch
, Madonna
and Richard Branson
.
– artisan jewellery making
dates back to 7000 BCE and there were professional poets
(scôps) in Pre-Norman Britain – the subject of creative entrepreneurship is a relatively new area.
Since the mid 20th century, commentators have observed the move towards a knowledge economy
or information society
where the old rules of manufacturing-based business
no longer apply, or at very least need to be reconsidered (Machlup 1962; Drucker, 1969; Lyotard, 1984). But the creative sector, an instrinsic part of the knowledge economy, has received relatively little attention.
In recent years, due to significant economic growth in the sector (prior to the 2008/9 downturn), there has been a surge of interest in the creative industries, and the issue of creative entrepreneurship has been pushed to the fore. In parallel with (and no doubt partially motivated by) general enthusiasm from policy makers and support agencies, creative entrepreneurship has grown as an academic discipline, Creative entrepreneurship courses are becoming widely available, and seem increasingly popular with students.
A new body of work has emerged with writers such as Richard E Caves, John Howkins
, Richard Florida
and Chris Bilton all championing the creative industries and addressing the specific skills needed to succeed in them.
In 2001, the Harvard economist and academic, Richard E Caves, made the following observation:
“The preferences or tastes of creative artists differ in substantial and systematic (if not universal) ways from their counterparts in the rest of the economy where creativity plays a lesser (if seldom negligible) role.”
Caves listed seven basic economic or “bedrock” properties that he believes distinguish creative activities from other sectors of the economy:
(1) Demand is uncertain
(2) Creative workers care about their product
(3) Some creative products require diverse skills
(4) Differentiated products
(5) Vertically differentiated skills
(6) Time is of the essence
(7) Durable products and durable rents
The body of Caves’ work makes a division between “artists” and “gatekeepers” and focuses on the issue of contracts between the two. In his analysis, it is the “gatekeepers” (art dealers, agents, managers, publishers) who “decide whether the prospective value of [an artist’s] creative output warrants the cost of humdrum inputs needed to place it before final buyers”.
Today, with the onset of Long Tail
economics, Caves’ division of labour might be seen as increasingly irrelevant: the artist can take his/her product direct to market via the Internet
and is no longer dependent on a third party to negotiate access; thus his/her entrepreneurial and business abilities are ever more crucial.
, coined the term ‘entrepreneur’ in the late Eighteenth Century to describe a person who unlocks capital tied up in land and redirects it. Howkins makes this observation on the creative entrepreneur:
“Entrepreneurs in the creative economy…operate like Say’s original model entrepreneur but with an important difference…they use creativity to unlock the wealth that lies within themselves. Like true capitalists, they believe that this creative wealth, if managed right, will engender more wealth.” .
Howkins goes on to observe that, despite lack of recognition from economists and politicians, and traditional lack of support from society (although this is changing), creative entrepreneurs tend to be bright and to value their independence above all else. The freedom to manage their own time and abilities compensates for the unpredictable nature of their working environment, and irregularity of their income:
“These people instinctively think for themselves, instinctively network, instinctively keep several balls in the air at once. They are the shock troops not only for new ideas about our culture but for new ideas about working in it.”
, which, at the time, was the driving force of the UK's gross domestic product
.
Now, as then, the majority of people working in the creative industries tend to be self-employed – either freelance or running their own business. These people have the potential to be a key driver of the creative economy, but few see themselves as ‘creative entrepreneurs’.
Figures show that only a handful of self-employed creatives in the UK have gone on to start a company or employ other people - the US, by contrast, has a relatively high number of business start-ups. (Howkins, 2001)
As Howkins and others (Caves, 2000; Davies, 2007) observe, there has generally been a lack of support for creative entrepreneurship in the UK.
Howkins (2001) lists 11 rules for successful creative entrepreneurs. These rules include: invent yourself, prioritise ideas over data, be nomadic, learn endlessly and, most importantly, have fun.
Creative industries
The creative industries refers to a range of economic activities which are concerned with the generation or exploitation of knowledge and information...
. The focus of the creative entrepreneur differs from that of the typical business entrepreneur
Entrepreneur
An entrepreneur is an owner or manager of a business enterprise who makes money through risk and initiative.The term was originally a loanword from French and was first defined by the Irish-French economist Richard Cantillon. Entrepreneur in English is a term applied to a person who is willing to...
or, indeed, the social entrepreneur in that s/he is concerned first and foremost with the creation and exploitation of creative or intellectual capital
Intellectual capital
The value of an enterprise is made of physical assets, various financial assets and, finally, intangible assets, i.e., intellectual capital . The term intellectual capital conventionally refers to the difference in value between tangible assets and market value. ....
. Essentially, creative entrepreneurs are investors in talent – their own and/or other people’s.
The most renowned creative entrepreneurs have combined creative flair with entrepreneurial ability to build multi-million dollar business empires. Examples include Rupert Murdoch
Rupert Murdoch
Keith Rupert Murdoch, AC, KSG is an Australian-American business magnate. He is the founder and Chairman and CEO of , the world's second-largest media conglomerate....
, Madonna
Madonna (entertainer)
Madonna is an American singer-songwriter, actress and entrepreneur. Born in Bay City, Michigan, she moved to New York City in 1977 to pursue a career in modern dance. After performing in the music groups Breakfast Club and Emmy, she released her debut album in 1983...
and Richard Branson
Richard Branson
Sir Richard Charles Nicholas Branson is an English business magnate, best known for his Virgin Group of more than 400 companies....
.
History
Although, technically, creative entrepreneurs predate the industrial revolutionIndustrial Revolution
The Industrial Revolution was a period from the 18th to the 19th century where major changes in agriculture, manufacturing, mining, transportation, and technology had a profound effect on the social, economic and cultural conditions of the times...
– artisan jewellery making
Artisan
An artisan is a skilled manual worker who makes items that may be functional or strictly decorative, including furniture, clothing, jewellery, household items, and tools...
dates back to 7000 BCE and there were professional poets
Minstrel
A minstrel was a medieval European bard who performed songs whose lyrics told stories of distant places or of existing or imaginary historical events. Although minstrels created their own tales, often they would memorize and embellish the works of others. Frequently they were retained by royalty...
(scôps) in Pre-Norman Britain – the subject of creative entrepreneurship is a relatively new area.
Since the mid 20th century, commentators have observed the move towards a knowledge economy
Knowledge economy
The knowledge economy is a term that refers either to an economy of knowledge focused on the production and management of knowledge in the frame of economic constraints, or to a knowledge-based economy. In the second meaning, more frequently used, it refers to the use of knowledge technologies to...
or information society
Information society
The aim of the information society is to gain competitive advantage internationally through using IT in a creative and productive way. An information society is a society in which the creation, distribution, diffusion, use, integration and manipulation of information is a significant economic,...
where the old rules of manufacturing-based business
Manufacturing
Manufacturing is the use of machines, tools and labor to produce goods for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale...
no longer apply, or at very least need to be reconsidered (Machlup 1962; Drucker, 1969; Lyotard, 1984). But the creative sector, an instrinsic part of the knowledge economy, has received relatively little attention.
In recent years, due to significant economic growth in the sector (prior to the 2008/9 downturn), there has been a surge of interest in the creative industries, and the issue of creative entrepreneurship has been pushed to the fore. In parallel with (and no doubt partially motivated by) general enthusiasm from policy makers and support agencies, creative entrepreneurship has grown as an academic discipline, Creative entrepreneurship courses are becoming widely available, and seem increasingly popular with students.
A new body of work has emerged with writers such as Richard E Caves, John Howkins
John Howkins
John Anthony Howkins is a widely-cited British author and frequent international keynote speaker on the Creative Industries with particular expertise in the development of this economic sector in China...
, Richard Florida
Richard Florida
Richard Florida is an American urban studies theorist.Richard Florida's focus is on social and economic theory. He is currently a professor and head of the Martin Prosperity Institute at the Rotman School of Management, at the University of Toronto. He also heads a private consulting firm, the...
and Chris Bilton all championing the creative industries and addressing the specific skills needed to succeed in them.
In 2001, the Harvard economist and academic, Richard E Caves, made the following observation:
“The preferences or tastes of creative artists differ in substantial and systematic (if not universal) ways from their counterparts in the rest of the economy where creativity plays a lesser (if seldom negligible) role.”
Caves listed seven basic economic or “bedrock” properties that he believes distinguish creative activities from other sectors of the economy:
(1) Demand is uncertain
(2) Creative workers care about their product
(3) Some creative products require diverse skills
(4) Differentiated products
(5) Vertically differentiated skills
(6) Time is of the essence
(7) Durable products and durable rents
The body of Caves’ work makes a division between “artists” and “gatekeepers” and focuses on the issue of contracts between the two. In his analysis, it is the “gatekeepers” (art dealers, agents, managers, publishers) who “decide whether the prospective value of [an artist’s] creative output warrants the cost of humdrum inputs needed to place it before final buyers”.
Today, with the onset of Long Tail
Long tail
Long tail may refer to:*The Long Tail, a consumer demographic in business*Power law's long tail, a statistics term describing certain kinds of distribution*Long-tail boat, a type of watercraft native to Southeast Asia...
economics, Caves’ division of labour might be seen as increasingly irrelevant: the artist can take his/her product direct to market via the Internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
and is no longer dependent on a third party to negotiate access; thus his/her entrepreneurial and business abilities are ever more crucial.
Definition
The policy consultant and author, John Howkins, observes how the French economist and journalist, Jean-Baptiste SayJean-Baptiste Say
Jean-Baptiste Say was a French economist and businessman. He had classically liberal views and argued in favor of competition, free trade, and lifting restraints on business...
, coined the term ‘entrepreneur’ in the late Eighteenth Century to describe a person who unlocks capital tied up in land and redirects it. Howkins makes this observation on the creative entrepreneur:
“Entrepreneurs in the creative economy…operate like Say’s original model entrepreneur but with an important difference…they use creativity to unlock the wealth that lies within themselves. Like true capitalists, they believe that this creative wealth, if managed right, will engender more wealth.” .
Howkins goes on to observe that, despite lack of recognition from economists and politicians, and traditional lack of support from society (although this is changing), creative entrepreneurs tend to be bright and to value their independence above all else. The freedom to manage their own time and abilities compensates for the unpredictable nature of their working environment, and irregularity of their income:
“These people instinctively think for themselves, instinctively network, instinctively keep several balls in the air at once. They are the shock troops not only for new ideas about our culture but for new ideas about working in it.”
Contribution to the Economy
In 2007, the UK's creative sector was growing twice as fast as the rest of the economy and generally considered to be equally important to the financial sectorFinancial services
Financial services refer to services provided by the finance industry. The finance industry encompasses a broad range of organizations that deal with the management of money. Among these organizations are credit unions, banks, credit card companies, insurance companies, consumer finance companies,...
, which, at the time, was the driving force of the UK's gross domestic product
Gross domestic product
Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....
.
Now, as then, the majority of people working in the creative industries tend to be self-employed – either freelance or running their own business. These people have the potential to be a key driver of the creative economy, but few see themselves as ‘creative entrepreneurs’.
Figures show that only a handful of self-employed creatives in the UK have gone on to start a company or employ other people - the US, by contrast, has a relatively high number of business start-ups. (Howkins, 2001)
As Howkins and others (Caves, 2000; Davies, 2007) observe, there has generally been a lack of support for creative entrepreneurship in the UK.
Specific Skills
Creative entrepreneurs need to master specific skills: an understanding of intellectual property is essential, combined with the ability to manage cashflow, key talent and the creative process effectively.Howkins (2001) lists 11 rules for successful creative entrepreneurs. These rules include: invent yourself, prioritise ideas over data, be nomadic, learn endlessly and, most importantly, have fun.
Further reading
- Howkins, JohnJohn HowkinsJohn Anthony Howkins is a widely-cited British author and frequent international keynote speaker on the Creative Industries with particular expertise in the development of this economic sector in China...
, “The Creative Economy: How People Make Money From Ideas”, Penguin, 2001 - “Creative Britain: New Talents for the New Economy”, DCMS, 2008
Publications/ Media
- “Seeing The Possibilities”, Davies, Robert, 2007
External links
- “Creative Arts: Overview”, Graduate Prospects, 2007
- British Council Young Creative Entrepreneur (YCE) programme. The largest programme of awards celebrating the achievements of young entrepreneurs working within the creative sector. Nine international awards are awarded annually in the communications, design, fashion, interactive, music, performing arts, publishing, screen and visual arts sectors. The awards focus on emerging economies, winners have come from Brazil, Colombia, Estonia, Ghana, India, Indonesia, Kenya, Lebanon, Morocco, Mexico, Nigeria, Poland, Venezuela and Yemen. The programme began in 2004 and now includes both international and UK awards. http://www.creativeconomy.org.uk/