Creative industries, Innovation, and Digital Convergence


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Presentation within the MOSTI MSc on Service Innovation. What are creative industries? How do they innovate? What is digital convergence? why does it matter?

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Creative industries, Innovation, and Digital Convergence

  1. 1. Innovation, Convergence and Creative (Service) Industries Ian Miles [email_address] MOSTI service innovation seminar 8
  2. 2. Main Contents <ul><li>Creatives </li></ul><ul><ul><li>Who and What are the “Creatives”? </li></ul></ul><ul><ul><li>Creativity and Innovation – a paradox? </li></ul></ul><ul><ul><li>Understanding innovation in creative industries </li></ul></ul><ul><li>Convergence </li></ul><ul><ul><li>What is digital convergence? </li></ul></ul><ul><ul><li>Who does this affect? </li></ul></ul><ul><ul><li>How does it affect media, IT industries, other sectors… </li></ul></ul>
  3. 3. Remember the discussion of statistical operational definition of KIBs… <ul><li>Business Service sectors: NACE 71-74. KIBS - most of NACE 72-74 </li></ul><ul><li>• Architectural activities • Engineering activities </li></ul><ul><li>Technical testing and analysis </li></ul>Technical 74 74.2,.3 <ul><li>Secretarial and translation activities • Photography </li></ul><ul><li>Packing activities • Fairs & exhibitions </li></ul>Other 74.81-84 <ul><li>Security activities • Industrial cleaning </li></ul>Operational 74.6, 74.7 <ul><li>Labour recruitment and provision of personnel </li></ul>Labour recruitment 74.5 • Market research • Advertising Marketing 74.13, 74.4 <ul><li>• Legal activities • Accounting & tax consultancy </li></ul><ul><li>Management consulting </li></ul>Professional 74.11- .12, 74.14 • Research and experimental development on natural sciences and engineering • … on social sciences and humanities R&D 73 73.1, .2 <ul><li>• Hardware consultancy • Software consultancy </li></ul><ul><li>Data processing • Database activities </li></ul>Computer 72 72.1 – 6 <ul><li>Renting of transport, construction equipment, office machinery </li></ul>Leasing & renting 71 71.1, .2 Most important activities Business Services NACE Classification
  4. 4. We noted that there are, however, some other activities looking like KIBS: <ul><li>Services to specific sectors </li></ul><ul><li>Some parts of section M (training), N (veterinary), and O (Other community, social and personal service activities): Nace Rev 1 </li></ul><ul><ul><li>91.1 Activities of business, employers’ and professional organizations </li></ul></ul><ul><ul><li>92.1 Motion picture and video activities 921x </li></ul></ul><ul><ul><li>92.11 Motion picture and video production 9211x </li></ul></ul><ul><ul><li>92.12 Motion picture and video distribution 9211x </li></ul></ul><ul><ul><li>92.13 Motion picture projection 9212 </li></ul></ul><ul><ul><li>92.2 Radio and television activities 921x </li></ul></ul><ul><ul><li>92.20 Radio and television activities </li></ul></ul><ul><ul><li>92.31 Artistic and literary creation and interpretation (includes Technical Writing!) </li></ul></ul><ul><ul><li>92.40 News agency activities </li></ul></ul><ul><ul><li>92.51 Library and archives activities </li></ul></ul>
  5. 5. The notion of creative industries <ul><li>Has emerged and attracted significant attention in last decade </li></ul><ul><li>Somewhat contested – some commentators do not like notion of “industries” applied to some of these activities, some prefer older ideas of cultural sectors, etc. </li></ul><ul><li>Social and cultural significance is unarguable, but it is economic prominence that has attracted attention </li></ul><ul><li>(even in Japan – soft power like Manga as an economic resource) </li></ul>
  6. 6. DCMS - definition http:// /what_we_do/creative_industries/default.aspx/
  7. 7. DCMS categories <ul><li>Advertising </li></ul><ul><li>Film and video </li></ul><ul><li>Architecture …. …. </li></ul><ul><li>Music …. …. …. …. …. </li></ul><ul><li>Art and antiques markets </li></ul><ul><li>Performing arts …. …. …. </li></ul><ul><li>Computer and video games …. </li></ul><ul><li>Publishing …. ….. …. . </li></ul><ul><li>Crafts …. …. . </li></ul><ul><li>Software … . </li></ul><ul><li>Design …. . </li></ul><ul><li>Television and radio . </li></ul><ul><li>Designer fashion …. …. …. </li></ul><ul><li>Million people in industries contributing c8% GDP </li></ul><ul><li>Another million professionals in these activities in other sectors </li></ul><ul><li>“ Creating  Producing  Distributing  Displaying  Archiving  Educating” </li></ul><ul><li>Long Tails – esp Creators </li></ul><ul><li>Agglomerations, creative centres </li></ul>
  8. 8. “ Creatives” in the UK – not all in creative industries, by a long shot! Source: NESTA, Beyond the Creative Industries
  9. 9. Disparate Activities, but some systematic thinking <ul><li>Beyond Cultural Industries, media and arts… </li></ul><ul><li>Creative Industries Task Force Mapping Document (1998) definition - creative industries are ‘activities which have their origin in individual creativity, skill and talent and which have the potential for wealth and job creation through generation and exploitation of intellectual property.’ </li></ul><ul><li>Reflecting service economy, knowledge economy developments; digitalisation; business-to-business creative flows…. </li></ul><ul><li>Economists and statisticians wake up: what about innovation research? </li></ul>
  10. 10. A Paradox <ul><li>In the UK, too, everyone stresses Innovation – BERR’s Innovation Nation </li></ul><ul><li>Everyone recognises the importance of the creative industries – DCMS’s Creative Britain: New Talents for a New Economy </li></ul><ul><li>Creativity and Innovation are rather closely related ideas… </li></ul><ul><li>But the creative industries are neglected where it comes to innovation studies, measurement, policy </li></ul>Innovation Nation: Background analysis: strengths and weakness of the UK innovation system Department for Innovation, Universities & Skills
  11. 11. Creativity and Innovation <ul><li>“ Imagine. Create. Innovate” </li></ul>
  12. 12. Free Newspapers Revenue Model Innovation Some examples of Innovation in Creative Industries
  13. 13. Internet Narrowcasting Innovation in service concept, design, delivery, interaction with (and among) clients
  14. 14. Digital Cinema (+3D) Innovation in Production, Distribution and Delivery, User Experience
  15. 15. Videogames Innovation in Delivery, content, user interfaces, user interaction (online games etc)…
  16. 16. Design Process Innovation – becoming product innovation (virtual prototyping etc)
  17. 17. Broadcast Media Content Innovation – routine (“fresh” content vs “novel” content) and generic (new content v new structures for content). Plus User engagement innovation
  18. 18. “ Content is King” Is the reason for the avoidance of this area a matter of these activities having been seen as nonessential luxuries – or is it the mysteries of content? (c)
  19. 19. Content is Kong ? <ul><li>Thinking about innovation in content gets dangerously close to aesthetic judgement or cultural and media studies - novel, fresh, genres… </li></ul><ul><li>Safer to stay with technological innovation! </li></ul>
  20. 20. Innovation in Creative Industries <ul><li>Content innovation is only part of the story… </li></ul><ul><li>Innovation in production, distribution, and delivery of creative products; involvement of “consumers” and relations between firms; business models and customer relationships </li></ul><ul><li>And much of this is HIDDEN. </li></ul>Many creative activities, & forms of innovation, are not captured in conventional metrics
  21. 21. Hidden Innovation in the Creative Industries
  22. 22. Case Studies <ul><li>Videogames Development </li></ul><ul><li>Industrial & Product Design </li></ul><ul><li>Independent Broadcast Production </li></ul><ul><li>Advertising & Communications </li></ul><ul><li>(esp. digital media) </li></ul>
  23. 23. Much evidence of innovation – both well-recognised and hidden <ul><li>Technological Innovation is pervasive – esp. IT tools, delivery, formats - Numerous examples of ICT use, investment and development across all case sectors </li></ul><ul><li>Conventional process innovation – using technology tools and new working practices </li></ul><ul><li>Conventional product innovation – including new content, repurposed content, improved products, products for new markets. </li></ul>
  24. 24. Much evidence of innovation – some well-recognised <ul><li>Product and Process Innovation is also pervasive (much involving ICT use directly or indirectly) </li></ul><ul><li>Advertising – electronic direct marketing services; campaign tracking services </li></ul><ul><li>Independent Broadcast Production – on-line-only drama and comedy programming </li></ul><ul><li>Product Design – new service products: ‘full-package solutions’ - production consultancy and management </li></ul><ul><li>Videogame Development – educational packages, mobile games </li></ul>
  25. 25. Some innovation is more ‘hidden’ <ul><li>Organisational and Business/ Revenue Model Innovation (again pervasive but rarely perceived or presented as innovation per se) </li></ul><ul><li>Outsourcing and offshoring – common for some forms of activities in all sectors </li></ul><ul><li>Supply chain repositioning and strategic partnering - ‘moving up’ the value chain – providing consultancy and higher value services </li></ul><ul><li>New business and revenue models – novel ways of securing payback for creative products – ‘shared risk and reward’ strategies; ‘own brand’ products </li></ul>
  26. 26. More ‘hidden’ innovation <ul><li>Innovation in provision of experiences – and sometimes in consumer role in co-production </li></ul><ul><li>Hidden innovation – beyond usual product & process categories, and not captured by existing R&D or innovation surveys </li></ul><ul><li>Innovation management is challenging – various types of knowledge and creativity – and often not formalised </li></ul><ul><li>Some examples… </li></ul>
  27. 27. Innovation and innovation management <ul><li>Rarely an “R&D management” model (except some “makers” and technology services) </li></ul><ul><li>Mentoring, groupwork, professional communities </li></ul><ul><li>Novel methodologies for research in relation to tastes and preferences (vital in shaping new products!) – a key locus of activity </li></ul><ul><li>Combinatorial innovation – re-combination and re-purposing of existing technologies, processes and (especially) content – re-packaging of content for use on new platforms or in new products </li></ul>
  28. 28. CREATIVE FIRM PRODUCTION & PREPRODUCTION PRODUCT COMMUNICATIONS USER EXPERIENCE 1 General administration & financial management 6 Back-office/ back stage production processes, design process 11 Product format (“cultural product”, performance features of product) 5 Internal communications, Management of HR & work organization 2 Revenue Model 3 Value Chain Location 7 Transaction (purchase, lease etc.) 4 Communications with suppliers, collaborators, supply chain partners etc. 8 Marketing and customer relationship management 15 User Capabilities & Media (e.g. Consumer Electronics) 12 Delivery of Product 13 User Interface with Product 14 User Interaction, including supply & configuration of content 9 Content of Product (cultural concept etc.) 10 Performance and production processes Areas of innovation Innovation = doing new things (or old things in new ways) – with or without new technology and technique FRONT STAGE BACK STAGE
  29. 29. Recommendations <ul><li>Management of innovation – relationship management, systematising innovation and evaluation </li></ul><ul><li>Research and Measurement – case study work – detailed understanding. Improved instruments - surveys and sampling (Coverage of Creative Industry firms [SIC codes], Inclusion of smaller firms); Investigating wider range of forms of innovation; make questions comprehensible to “creatives” </li></ul><ul><li>Training and Skills issues – limited knowledge, new competencies </li></ul><ul><li>Policy : needs for better evidence, awareness. Ensure that policy-makers are kept abreast of rapid change and development in the innovation landscape. Targeted and sympathetic support programmes – extend existing supports (Tax Credits?). Creative environments (City level?) </li></ul>
  30. 30. Summing Up <ul><li>Hidden innovation: may mean that innovation policy overemphasises some types of activity, focuses support on particular approaches and skills </li></ul><ul><li>Creative industries have multiple innovation trajectories. Disruptive change may occur in many of these. IT can enable - but social and ‘cultural’ inventiveness is critical </li></ul><ul><li>Promote better understanding of practice, trajectories, emerging challenges and opportunities: awareness, shared awareness, skill and knowledge. </li></ul>
  31. 31. On to part 2 - Convergence <ul><li>Creatives </li></ul><ul><ul><li>Who and What are the “Creatives”? </li></ul></ul><ul><ul><li>Creativity and Innovation – a paradox? </li></ul></ul><ul><ul><li>Understanding innovation in creative industries </li></ul></ul><ul><li>Convergence </li></ul><ul><ul><li>What is digital convergence? </li></ul></ul><ul><ul><li>Who does this affect? </li></ul></ul><ul><ul><li>How does it affect media, IT industries, other sectors… </li></ul></ul>
  32. 32. Convergence <ul><li>We often hear about computer/ telecommunications “convergence” - or is it collision?? </li></ul><ul><li>Held by many to be a defining feature of new IT , e.g. Kobiyashi “IT=C&C” … and related to common underlying technologies (microprocessors, digitalisation) </li></ul><ul><li>But more industries and activities “converge” than just data processing and communication </li></ul>
  33. 33. Digital Convergence <ul><li>Distinct industries have dealt with hardware, software, telecommunications, broadcasting, print, recorded music, images, other media </li></ul>
  34. 34. Digitalisation <ul><li>Text </li></ul><ul><li>Photography </li></ul><ul><li>Moving Images </li></ul><ul><li>Sound </li></ul><ul><li>Instruments </li></ul><ul><li>Doc. Processing </li></ul><ul><li>Digital cameras </li></ul><ul><li>“ ” , DVDs etc. </li></ul><ul><li>Digital Recording </li></ul><ul><li>Digital display, measurement </li></ul>(photochemistry) (phonography, electronics…) (mechanical, electromechanical) (printing) New storage devices and displays – ebooks, CDs, MP3/4 players, etc; Web publishing Analogue     Digital Publishing, broadcasting, etc
  35. 35. Digital Convergence <ul><li>Distinct industries have dealt with hardware, software, telecommunications, broadcasting, print and other media </li></ul><ul><li>They have varying assets, capabilities and types of content - and regulatory and IP systems </li></ul><ul><li>But now they have increasingly shared underlying technologies (microelectronics, optronics, software) </li></ul><ul><li>All types of data and information potentially captured, processed, communicated, stored, displayed digitally via new IT </li></ul>
  36. 36. A Three-Dimensional Media Universe Moving over Space - Telecommunications Storing over Time, Reproducing- Published Media (Broadcast Media) Transforming, Processing - Computation 1 to 1 1 to many Information CONTENT INTERACTION CHANNELS PROCESSING COMMUNICATION
  37. 37. A Growing Market Space… Increasing size of markets
  38. 38. … Within which the offerings of established industries expand == == === =Increasing = == proliferation of = == === = products
  39. 39. The Expanding Media Universe Communications Computation Content Time The three “trumpet” shapes represent telecommunications, computer, and broadcast & print media fields. Over time the product space to which they contribute, and its market size, expands, and the three fields overlap increasingly.
  40. 40. Early Industrial Society INFORMATION GOODS & SERVICES COMPUTATION (TELE) COMMUNICATIONS Paper-based communication : Stationery, Post. C19th - telephone, telegraph Mechanical information processing : very limited till C20th - punch cards, calculators Paper-based information products - books, newspapers, etc + live consultation & entertainment + mechanical recorded media (gramophone etc) All (but telecomms) based on PHYSICAL TRANSPORT
  41. 41. The mid-1950s BROADCAST + PUBLISHED MEDIA COMPUTERS Telephone Telegraph TV (mainly monochrome)AM radio, LP records, valve amplifiers Very few, very large, valve-based electronic computers; Keyboard calculators TELECOMMUNICATIONS PHYSICAL TRANSPORT plus increasing electronic delivery (telecomms, TV, radio, etc.)
  42. 42. The mid-1970s BROADCAST + PUBLISHED MEDIA COMPUTERS Telephone Telegraph Telex TV (colour) AM and FM transistor radio, LP records, transistor amplifiers Numerous mainframe computers Pocket calculators TELECOMMUNICATIONS Increasing role for electronic delivery, but little integration of media
  43. 43. Telephone Answering Machines, Mobile phones, Pagers, Business Fax Machines Videorecorders, audio CDs, cable and satellite TV, Teletext Numerous Personal Computers, Home Computers and videogames, Electronic wristwatches Electronic mail Bulletin boards Videotex Online databases for business & science Recorded information services BROADCAST + PUBLISHED MEDIA TELECOMMUNICATIONS COMPUTERS Some integration of media, emergence of optical media, increasing digitalisation The Mid/late-1980s
  44. 44. Turn of the Century Digital mobile phones, Widespread use of Fax, pagers Videorecorders, audio CDs, digital recording cable and satellite TV Numerous PCs, laptops. notebooks, pocket organisers, etc. Numerous home computers and videogames Electronic mail, SMS Mobile data comms CD-ROM publishing Cable telephony Audiotext Internet World Wide Web COMPUTERS TELECOMMUNICATIONS BROADCAST + PUBLISHED MEDIA Increasing integration of media, use of optical media, digitalisation
  45. 45. Digital mobile communications in wide use - pervasive communications MP3 and PVR, Digital Broadcast TV digital videorecording High definition TV Pervasive computers, in many types of device (e.g. Personal Digital Assistants, smartphones) Internet telephone VoI, Internet videotelephony Internet TV Video on Demand Interactive TV WiFi, Next generation of Internet & WWW, Web2.0, Video telephones and conferences DVD-R+, interactive video Now  2010? COMPUTERS BROADCAST + PUBLISHED MEDIA TELECOMMUNICATIONS
  46. 46. <ul><li>Successful products/applications/triggers </li></ul><ul><li>Design paradigms/platforms </li></ul><ul><li>User implementation </li></ul><ul><li>Emergence and take-off of markets, market structures </li></ul><ul><li>Product spaces </li></ul><ul><li>Capabilities and industrial structure </li></ul><ul><li>Governance of content (news, porn, gambling) and property rights ( intellectual property) </li></ul><ul><li>Other governance issues (crime, security…) </li></ul>Uncertainties
  47. 47. Regulators <ul><li>UK system change </li></ul><ul><li>OFTEL (Telecommunications Act, 1984, on “deregulation”) + Cable Authority + ITC …. </li></ul><ul><li>OFCOM (Communications act, 2003) </li></ul>
  48. 48. 1990 2003 spectrum Radiotelecommunications Agency Broadcasting Standards Commission But not print media – Press Complaints Commission etc. 1991 networks Oftel 1984 1996?
  49. 49. Jong-Seok Kim: mobile phone companies 2 nd generation, digital services – earlier 1990s generation was analogue 2.5 generation 3rd generation 128k – 2m /sec 64k /sec 14.4k/sec
  50. 51. Convergence <ul><li>Blurring industry boundaries </li></ul><ul><li>New convergent services </li></ul><ul><li>Much scope for innovation in new services, improved service design </li></ul><ul><li>New players </li></ul><ul><li>Diversification, vertical integration (?) </li></ul><ul><li>Requirement for new strategies, capabilities, organisation </li></ul>
  51. 52. Not just Media <ul><li>New categories: </li></ul><ul><li>e.g. chematronics, mechatronics, watch this space for bio and nano categories… </li></ul><ul><li>Converged products: </li></ul><ul><li>e.g. “smart house” converges consumer electronics, telecomms, utilities, construction… </li></ul>
  52. 53. Key Features of New Media: <ul><li>CONVERGENCE and COLLISON: </li></ul><ul><li>digitalisation </li></ul><ul><li>blurring boundaries </li></ul><ul><li>new modes of delivery and use of existing (types of) content </li></ul><ul><li>repurposing and repackaging of content </li></ul><ul><li>New types of content (eg MMORG) </li></ul><ul><li>INTERACTIVITY: </li></ul><ul><li>promises and realities </li></ul><ul><li>differential development of applications and competences on both - user and supplier sides </li></ul><ul><li>Sometimes technically demanding – sometimes “democratic” </li></ul><ul><li>innovation around types of content, interfaces, delivery and “display” systems </li></ul>
  53. 54. Some implications <ul><li>Standard classifications of creative industries may be destabilised </li></ul><ul><li>Importance of users and intermediaries, continually challenging IP systems and assumptions – not just driven by “piracy” (though this may often predominate) </li></ul><ul><li>Liable to be continual dialectic between established players and newcomers, established consumption and production modes and new styles. </li></ul><ul><li>Much creativity and innovation will not be managed in any recognisable way! </li></ul><ul><li>But much will be, as major new markets are created and accessed. </li></ul>
  54. 55. <ul><li>End of Presentation </li></ul>
  55. 56. End of Presentation