Presentation of slides describing the methodology and results of 'Creativity: London's Core Business' (GLA 2002). The presentation was given to the London School of Economics on the 15th of December 2002. Please see the second slide for further bibliographical information

1. Is Creativity an Industry?
Alan Freeman
GLA Economics
LSE 15 December 2003

2. These slides present the findings and methodology of Creativity:
London’s Core Business, the first Greater London Authority report
on London’s Creative Industries, which can be found at
http://www.london.gov.uk/mayor/economic_unit/docs/create_inds_re
p02.pdf.
They supplement a second presentation, also on Slideshare, which
contains all the colour graphics from the report.
The information in this presentation is mainly for historical interest.
There have been four subsequent updates on London’s creative
industries, which supersede the data presented here. They will in due
course be posted at the author’s open access repository page on
http://ideas.repec.org/e/pfr102.html

3. Why it matters

Culture, creation and intervention
Commodification has redefined ‘culture’
Creative Industry: ‘Culture that makes Money’

Search for an evidence base
–
Uses two ‘standard’ economic classification systems



Standard Occupational Classification: what the workers do
Standard Industrial Classification: where they do it
But what does ‘Industry’ mean?

4. The research cycle
Analysis
Action/Observation
Data

5. Where we are at
•Industrial Classification (SIC)
•Occupational Classification (SOC)
•An ‘initial hypothesis’
•A new phase of cultural commodification
•(A) new branch(es) of the division of labour
•Something in common – but what?

6. A qualitative rise in demand…

7. UK cinema admissions

8. Trade in computer and information services

9. Trade in audiovisual and related services

10. Leading to a qualitative reshaping of supply

11. London’s output growth (per cent per year, 1995-2000)

12. And a new regional industrial structure
jobs
growth

13. London: CI job
growth 1995-2000

14. Borough
Is there a
pattern of
specialisation?
Havering
Barking and Dagenham
Waltham Forest
Harrow
Greenwich
Bromley
Newham
Bexley
Hillingdon
Ealing
Croydon
Enfield
Kingston upon Thames
Hounslow
Redbridge
Merton
Lewisham
Sutton
Brent
Richmond upon Thames
Wandsworth
Barnet
Tower Hamlets
Westminster
Lambeth
Hammersmith and Fulham
Hackney
Kensington and Chelsea
Southwark
Camden
Islington
Haringey




2,744
1,948
6,566
10,517
7,688
16,098
7,072
5,003
9,961
17,849
12,256
8,638
11,237
9,536
7,432
9,995
10,726
9,549
12,721
18,232
27,495
20,093
9,434
21,213
20,237
19,341
11,467
18,410
15,146
24,555
15,426
18,169
4,147
3,587
6,900
8,443
4,939
9,654
4,295
3,337
9,420
14,523
12,713
6,544
9,657
5,094
8,338
8,905
10,557
7,337
10,794
13,535
22,574
15,791
9,121
15,893
17,561
14,931
10,285
14,641
14,390
19,257
12,234
13,750
6,610
5,074
11,726
16,466
10,851
21,558
9,417
6,848
15,874
26,446
20,149
11,844
16,153
11,300
11,953
14,089
15,780
12,435
17,068
22,736
35,658
25,479
12,912
25,479
25,767
23,344
14,756
22,243
19,565
28,665
17,854
20,495
281
461
1,740
2,494
1,776
4,194
1,950
1,492
3,507
5,926
4,820
3,338
4,741
3,330
3,817
4,811
5,503
4,451
6,447
9,031
14,411
10,405
5,643
11,627
12,031
10,928
6,996
10,808
9,971
15,147
9,806
11,424
 
3,866
3,126
5,160
5,949
3,163
5,460
2,345
1,845
5,913
8,597
7,893
3,206
4,916
1,764
4,521
4,094
5,054
2,886
4,347
4,504
8,163
5,386
3,478
4,266
5,530
4,003
3,289
3,833
4,419
4,110
2,428
2,326
4%
9%
15%
15%
16%
19%
21%
22%
22%
22%
24%
28%
29%
29%
32%
34%
35%
36%
38%
40%
40%
41%
44%
46%
47%
47%
47%
49%
51%
53%
55%
56%

15. A brief conceptual geology


‘Data’ is not neutral
Taxonomy accumulated over time
–
–
–
Agriculture - Physiocrats
Manufacturing – Industrial Economists
Services - Financial Economists

16. Principles used in constructing NACE and followed
in SIC (2003)
1. The main criteria employed in delineating divisions and groups
(the two and three digit categories, respectively) of NACE
concern the characteristics of the activities of the producing units.
The major aspects of the activities are:
(i) the character of the goods and services produced,
(ii) the uses to which the goods and services are put, and
(iii) the inputs, the process, and the technology of production.
11. An activity is said to take place when resources such as
equipment, labour, manufacturing techniques, information
networks or products are combined, leading to the creation of
specific goods or services. An activity is characterised by an
input of products (goods or services), a production process
and an output of products.

17. A Health warning about
Hierarchical Classification
Tractors or food?

18. Leontieff on industry


'any national economy can be described as a system of mutually
interrelated industries or - if one prefers a more abstract term interdependent economic activities
...the whole system has been subdivided into 50 sectors
comprising
–
–
–
–
–
–
agriculture,
various extractive and manufacturing industries,
electric public utilities,
three kinds of transportation,
trade
and other types of service industries.

19. Some problems

Why?
–
–
–
–

are ‘Electric’ utilities different from any other?
is agriculture as a whole considered to be an industry?
Is manufacturing treated as a set of distinct industries?
are there three kinds of transportation and not two, or four?
Some problematic illustrations
–
–
–
–
–
Wood (construction, materials, or agriculture?)
Ships (coracles to supertankers)
‘Oil’ - one product?
Chemicals process
Moonboots and slippers

20. Some other agendas



Innovation and the use of science (Pavitt,NSA)
Use of information (OECD, etc)
Agglomeration externalities (Porter)

21. Pavitt and innovation



Rejection of ‘industry-based’ classification
Subject is ‘innovative behaviour’
Everywhere innovates
–
–
–


GM
Flower-selling and tropical fish
Car industry
Industrial taxonomy is inadequate
Need ‘cross-cutting’ taxonomy

22. Typical industrial sectors of
Pavitt’s Categories
Category
Traditional
Emerging
Supplier Dominated Textiles, Foot-wear
Tourism
Specialized
Suppliers
Machinery and
instruments
Software
Science-Based
Chemicals, Electrical Bio-engineering, Space
Scale Intensive
Automobiles
Software, Hotels
Food-chains
Information
Intensive
Banking
Retailing, Insurance

23. Where did industrial classification
come from?



Marx – social reproduction
Marshall – origin of products
Leontieff – interrelations of purchase and sale

24. Kondratieffs and paradigms



Industries present themselves
Specialisation is a driving force
K-waves throw up new forms of organisation
–
–
–
–
–
Manufacturing = ‘the factory’
The Age of Steam ‘technology’
The Age of Steel and Electricity ‘power’
The Age of Oil and Air ‘transport and communication’
The Information Age - ?

25. Period
Successive Techno- Industrial
Economic
organisation
Paradigms
Typical industries
Pavitt's
category of
firms
1770-1830
Early Mechanisation
Growing importance
of small
manufacturing firms
Textiles, Potteries,
Machinery
Supplier
dominated
1840-1880
Steam power and
railway
Separation been
producers of capital
and consumption
goods
Mechanical
engineering, Steel
and Coal
Specialized
suppliers
1890-1930
Opportunities
associated to
scientific discoveries
Emergence of large
firms
Chemicals,
Science based
Electrical machinery,
Engineering
1940-1980
Fordist and Taylorist
revolutions
Oligopolistic
Automobiles,
competition for mass Synthetic products,
consumption
Consumer durables
Scale intensive
1990-
Information and
communication
Networks of firms,
strong user-produces
Information
intensive
Microelectronics,
Telecoms, Software

26. Why isn’t there a science industry?

Science is a component of everything
–
–
–

Science not commercialised as a product
–
–
–

But so is land
And so are buildings (factories or offices)
So is power
‘Tacit’ knowledge
Public goods
Not abstractly transferrable
There are few if any ‘science factories’
–
Research lab is typically either public or subsidiary

27. Can there be a Creation Industry?







Product differentiation is all
Tailored to exact specifications
‘One-off’ or short run
Timing of the essence
Planning newness
Supply-dominated
Human ‘capital’ as a universal resource

29. A technological reversal
Innovations are in short run production
•High tech, High complexity, Growing formalism
The New Economy of Agglomeration
•Principal investment = human capital
•Stone farming
Success is a product of failure
•Risk-pooling