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BOOSTING INNOVATION AND PRODUCTIVITY THROUGH CULTURAL AND CREATIVE SECTORS (OECD)


Cultural and creative sectors (CCS) contribute to innovation in multiple ways. They create new products, services, processes, and business models. They also spur innovation and, in turn, productivity in other sectors through supply chain linkages, the movement of skills, and the sharing of ideas through collaboration, networking, and spillovers. However, innovation in CCS and their contribution to innovation and growth across the economy has not been sufficiently evidenced. Moreover, the rare studies that have attempted to measure these broader effects do not allow for country comparisons or benchmarking. Nor has the issue of CCS productivity been unpacked in a sufficiently detailed way. Better capturing the innovation performance of CCS and their contribution to innovation and productivity across the economy will demonstrate how the sector contributes to economic growth beyond the now well-established impacts on job creation, business growth, and international trade. This will help raise awareness and better recognition of the sector and its needs for relevant policymakers beyond the cultural field, private funders and investors, philanthropy organizations, skills providers, and other firms seeking collaboration. Moreover, reviewing extant innovation and productivity supports to CCS is an integral step in establishing effective policy responses to these issues.


Cultural and creative sectors (CCS) is a term used to describe a range of activities that have their basis in creativity and can typically be exploited through intellectual property rights. While international definitions of CCS do exist (e.g., UNESCO, Eurostat, etc.), most countries use their definition tailored to their specific cultural and statistical context. CCS includes the following sectors: Advertising, Architecture; Book, Newspaper, and Magazine Publishing; Dance; Design; Fashion; Film and Television; Libraries and Archives; Museums, Art Galleries, and Heritage Sites; Music; Radio; Theatre; Video Games; Visual Arts. Since the early 2000s, policymakers across the OECD and beyond have mapped the economic contribution of cultural and creative sectors to their nations, recognizing them as a driver of innovation and economic growth.


Innovation raises productivity and generates both economic and social value. Innovation can lead to new businesses, jobs, and ways of working and push the frontiers of human knowledge. Moreover, innovation is necessary to address urgent development challenges such as aging populations, health, and disease, reducing hunger and poverty, or responding to climate emergencies. Indeed, the global shocks of the past few years have highlighted the importance of innovation in, for example, creating vaccines for COVID-19 and developing green technologies to ease reliance on fossil fuels. Innovation and productivity are highly linked.


Productivity reflects the ability to produce more output by better combining inputs, owing to new ideas, technologies, and business models. Consequently, innovation is a central driver of productivity as it can generate more innovative and efficient use of labor and capital. Productivity growth is, therefore, significant as a driver of living standards, as more outputs can be produced for the same amount of inputs.

 

Cultural and creative sectors (CCS) are known to contribute to innovation capabilities, both through the outputs of the industry itself (such as innovations in videogames or visual art) and through their impact on other sectors of the economy (e.g., through skills such as product design or businesses collaborating on new applications of creative work). As such, we can think of CCS businesses as providing innovative outputs and outputs that become inputs into the innovation activities of other companies. In this way, CCS is an essential component of regional innovation systems.1,2 Countries across the OECD are increasingly focused on leveraging CCS to boost innovation and productivity in their countries, cities, and regions.

 

Innovation is a central component of work in CCS, but this innovation has historically been overlooked in innovation statistics. CCS businesses are highly innovative, creating new products, services, processes, and business models.

For example, evidence from the UK suggests that CCS businesses engage in more product, process, and organizational innovation than the rest of the economy3. Evidence from ten European countries indicates that CCS firms are more likely to produce product innovations than non-CCS firms.4 However, CCS businesses in the arts, entertainment and recreation sector (as well as businesses in sectors such as education, human health and social work), are generally not included in traditional business innovation surveys. 1 Moreover, the type of innovation that occurs in CCS is less easily captured by metrics such as patenting. Consequently, there is a lack of cross-country analysis to help countries benchmark the innovation performance of CCS and a paucity of sub-sector-level innovation data to help unpack the different dynamics underpinning innovation in CCS. Yet many ways of indicating innovation levels in CCS remain underexploited. For example, some sectors of CCS are included in innovation surveys at an international level, and some countries now also include the less market-oriented parts of the sector. Moreover, various alternative ways of indicating innovation in CCS, such as government and business spending on R&D in arts and humanities fields and design rights data, remain underutilized in capturing CCS innovation.

 

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