Creative industries firms can struggle to demonstrate their ability to innovate, despite the fact that creative industries sub-sectors include some of the most high technology sectors of the economy, including video game design and architecture.
Please note: this paper has been accepted in Journal of Cultural Economics, DOI: 10.1007/s10824-022-09448-5
This problem can make it hard for creative industries firms to secure funding and investment into Research and Development (R&D). This is partly because 'innovation' is not a well defined concept in the creative industries. It is also because the systems that most firms use to access innovation funding for R&D, such as grants or investment funds, are not well tailored to the creative industries.
Instead, creative firms rely on their owners' individual ability to leverage personal relationships and their own sources of capital to successfully gain funding. This behaviour is possible due to the higher than average level of social and personal capital in creative industries workers.
These sorts of unique features, among others, of the creative industries means that specific financial instruments are required if we want creative industry firms to remain at the cutting edge of the UK's economy. And for this to happen, it is particularly important that we help creative firms access more R&D funding so that they can invest in more innovation.
This paper is based on a groundbreaking survey of 575 firms undertaken by the Creative Industries Council. It looks at the specific barriers that are preventing creative industries firms from accessing funding and investment. It examines the degree to which past innovative activities undertaken by firms provide a ‘signal’ to potential funders. It concludes that, due to the unique and specific features of the innovation landscape of the creative industries, tailored financial and policy instruments are needed in order to feed and sustain these high-growth, innovating industries.