Salford April 14 2010


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Innovation and Value Creation in the Creative Industries

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Salford April 14 2010

  1. 1. The Creation and Articulation of Value in the Creative Industries Salford, April 14 Ted Fuller Lorraine Warren Giles Lane
  2. 2. Data: Creative industries within EPSRC CREATOR Project <ul><li>Empirical research: Tracking co-creation in projects between groups of technologists and artists </li></ul><ul><li>Proboscis’ Sensory Threads project (people, their health, the local geographic context …) </li></ul><ul><li>http:// </li></ul><ul><li> </li></ul><ul><li>Gesture and Embodied Interaction workshops at Newcastle and Cambridge </li></ul><ul><li> </li></ul><ul><li>IT-Innovation, a company involved in developing a new business model for a portal in the post-production rendering industries in Soho </li></ul><ul><li> / </li></ul>
  3. 3. Creative industries as engines of innovation <ul><li>Emergence of VALUE </li></ul><ul><li>Disruptive and incremental innovation </li></ul><ul><li>Major source of innovative ideas for new products and services </li></ul><ul><li>Offer services that may be inputs to innovative activities of other endeavours </li></ul><ul><li>Intensive users of technology, often demand and create adaptations and new developments, takes technology forward </li></ul><ul><ul><li>Muller et al 2009 </li></ul></ul>
  4. 4. Purpose <ul><li>Engender new behaviours </li></ul><ul><li>Seek new business models in Digital Economy </li></ul><ul><li>Disruptive industry change -> how might this emerge? How might we capture emergent value [or increase likelihood of capturing emergent value] </li></ul>
  5. 5. Key questions <ul><li>How can we conceptualise the deeper dynamics underlying the anticipation and emergence of value in creative technological processes </li></ul><ul><li>How can the ‘value spectrum’ be articulated so that the contribution of small creative arts groups is recognised and rewarded </li></ul>
  6. 6. Conceptual Framework <ul><li>A METHODOLOGICAL CHALLENGE: </li></ul><ul><li>How “entrepreneurship” and innovation are causally connected </li></ul><ul><li>How to research ‘emergence’ </li></ul><ul><li>How to capture multiple observations at multiple levels of analysis over time </li></ul>
  7. 7. Theory <ul><li>Emergence perspective on entrepreneurship and innovation…informed by… </li></ul><ul><li>entrepreneurship theory (e.g. effectuation, bricolage, opportunity, entrepreneur, network), complexity (emergence, attractors) and critical realism (e.g. morphogenetics, structures, causal mechanisms) </li></ul><ul><li>… interlinked processes of interactions between agents and structure produce emergence </li></ul><ul><li>… ontology is as significant as process (by agents) to the production of innovation (changes in structure) </li></ul><ul><li>Cf. Ephemeral and stable ‘ emergents’ (Sawyer 2005) </li></ul>
  8. 8. <ul><li>Individual (Level A) </li></ul><ul><li>Intention, agency, personality, cognitive process </li></ul><ul><li>Interaction (Level B) </li></ul><ul><li>Discourse patterns, symbolic interaction, collaboration, negotiation </li></ul><ul><li>Ephemeral Emergents (Level C) </li></ul><ul><li>Topic, context, interactional frame, participation structure; relative role and status </li></ul><ul><li>Stable Emergents (Level D) </li></ul><ul><li>Group sub-cultures, group slang and catchphrases, conversational routines, shared social practices, collective memory) </li></ul><ul><li>Social Structure (Level E) </li></ul><ul><li>Written texts (procedures, laws, regulations); material systems and infrastructures (architecture, urban design, communication and transport networks) </li></ul>The Emergence Paradigm (Sawyer 2005, p211), showing the ‘circle of emergence’ (p220), i.e. that area which is subject to social emergence
  9. 9. Methodology <ul><li>Gaze on empirical emergent (ontological) properties that have an influential effect on the shape and sustainability of the system we are observing. </li></ul><ul><li>In practice, this means keeping an eye on the group of actors foregrounded in the study and on the artefacts, discourses and exchanges produced. </li></ul><ul><li>Our analytical perspective is value creation; how is value created / captured? </li></ul><ul><li>This is ongoing research (Cf. ‘future research) </li></ul>
  10. 10. Sensory threads <ul><li>Proboscis: publicly authored work where events and installations are designed to enable people to use emerging technologies in new and exciting ways, creating and sharing knowledge that is often location-based (IRO) </li></ul><ul><li>Group expedition through a city using wearable sensors and real-time audio feedback </li></ul><ul><li>The ‘Rumbler’ a gallery-based interactive soundscape ‘player’ [pic] </li></ul><ul><li>Queen Mary, Nottingham, Birkbeck </li></ul>
  11. 11. Methods <ul><li>Participant observation during team meetings </li></ul><ul><li>Analysis of the Basecamp project archive (which included specific reflections on value emerging from creative and technological discourse ) </li></ul><ul><li>Informal ad hoc conversations with project participants </li></ul>
  12. 12. Emerging value <ul><li>Do we know what future ‘value’ might look like? </li></ul><ul><ul><li>As in ‘The Rumbler’?? </li></ul></ul><ul><li>Relationship between co-produced knowledge (novelty of ideas/concepts) and ‘value’ (exchangeable value within an ecology of actors) </li></ul><ul><li>Relationship between human and social capital <-> symbolic and economic capital </li></ul><ul><li>How do relationships maintain their generative power -> communities of practice? </li></ul>
  13. 13. Value Creating <ul><li>Individual – personal research strengths, , new connections, levels of trust (high-level gains) </li></ul><ul><li>Project team – manage complex collaborations, reputational ecosystem, articulate the value of arts/academic projects in research in bridging research cultures *not* just adding a bit of stimulus </li></ul><ul><li>Temporal dimension -> technical/creative->academic->economic and wider societal impact </li></ul>
  14. 14. -> Value capture: Business Models <ul><li>“ it creates value and it captures a potion of that value. It creates value by defining a series of activities from raw materials through to the final consumer that will yield a new product or service with value being added throughout the various activities. The business model captures value by establishing a unique resource, asset or position within that series of activities, where the firm enjoys a competitive advantage” </li></ul><ul><ul><ul><ul><li>Chesborough et al, 2006 </li></ul></ul></ul></ul>
  15. 15. Value capturing (or Business model challenges) <ul><li>Innovation takes place across distributed networks [poor correspondence with linear ‘business plan’ models, value chains  value networks/value ecologies (Hearn & Pace, 2006) ] </li></ul><ul><li>New network configurations present challenges to traditional modes of monetisation and value capture </li></ul><ul><li>High uncertainty </li></ul><ul><li>Values issues regarding interchange of artistic, cultural, social capitals, particularly where creative output is critical of powerful groupings </li></ul>
  16. 16. Business model challenges: creative industries <ul><li>Values clashes </li></ul><ul><li>Tensions between first and second order activities [Thelwall] </li></ul><ul><li>Potential for amplification </li></ul>
  17. 17. Outcomes: ‘Stable emergents’ in creative ‘value creating systems’ (coarse grained analysis) <ul><li>Inter-activity between agents was the way that values associated with creativity or technicality interacted with economic value... (e.g. reputational value) </li></ul><ul><li>… possible trajectories were identified and tested out, either as thought experiments, shared mental models, or sometimes as rough working prototypes…. </li></ul><ul><li>…‘ ephemeral emergents’ were narrowed down to the most promising variant: at this point the transition from ephemeral to stable occurs. </li></ul><ul><li>… this is the point at which discussions shift from value creation to value capture. (Warren, Fuller et al, 2009) </li></ul>
  18. 18. Conclusion (one of many): value creation and value capture…3 types of model <ul><li>“ The first is a model that creates the conditions for creativity and reputation by establishing attractors; typically resources for co-operation. </li></ul><ul><li>The second is a model that stabilises the emergent properties of the first; typically the creation of codified knowledge. </li></ul><ul><li>The third is one that enables the exchange of monetary value for this codified knowledge, and is more recognisable as a business model by investors </li></ul><ul><li>Attract/amplify <-> stabilise <-> realise value </li></ul><ul><li>(Fuller, Warren et al, 2009) </li></ul>
  19. 19. Final thoughts <ul><li>Attract/amplify <-> stabilise <-> realise value </li></ul><ul><li>ROLE OF HEIs/Government/organisations </li></ul><ul><li>IF ANTICIPATION OF VALUE STABILISES EPHEMERAL EMERGENTS, THEN HOW IS THAT ARTICULATED? </li></ul><ul><ul><ul><li>[Engines of innovation & anticipatory thinking in a creative milieu] </li></ul></ul></ul><ul><ul><ul><li>[worth, usefulness, merit vs. power, habits, harm] </li></ul></ul></ul><ul><ul><ul><li>[Social contract] </li></ul></ul></ul>