In the last post we looked at the converging economic forces that make creativity a hot property in the 21st century. Mature economies such as the US, Europe, and Japan, which previously shifted from manufacturing to knowledge work, are now relying more and more on creative work.

So people like Lou are having to update their c.v.s while people like Jack and Marla are in such demand they no longer need a c.v.

These changes have given rise to the idea of the creative economy.

The Creative Economy

One of the books that inspired me to specialise in consulting in the creative sector was The Creative Economy by John Howkins, in which he identifies creativity as central to the emerging 21st century global economy.

The creative economy consists of the transactions in … creative products. Each transaction may have two complementary values, the value of the intangible, intellectual property and the value of the physical carrier or platform (if any).  In some industries, such as digital software, the intellectual property value is higher. In others, such as art, the unit cost of the physical object is higher.
(John Howkins, The Creative Economy)

So the physical components of a DVD, laptop or Picasso are of trivial value compared to the intellectual property value of the film, design or art they embody. This means that the economic potential of the creative economy is enormous.

While data and knowledge are important resources, the creative economy represents a significant development from the familiar idea of the knowledge economy:

Today’s economy is fundamentally a Creative Economy. I certainly agree with those who say that the advanced nations are shifting to information-based, knowledge-driven economies… Yet I see creativity… as the key driver. In my formulation, ‘knowledge’ and ‘information’ are the tools and materials of creativity.
(Richard Florida, The Rise of the Creative Class)

The key difference is that in the creative economy it is not enough to store, process or analyse information – it must be creatively transformed into something new and valuable.