Creative supply-chain linkages and innovation: Do the creative industries stimulate business innovation in the wider economy?
Hasan Bakhshi
National Endowment for Science, Technology and the Arts, London United Kingdom
Eric McVittie
Experian, London United Kingdom
PP: 169 - 189
Abstract
Knowledge transfer between businesses is facilitated by their supply-chain relationships.
Creative businesses in sectors such as advertising, architecture and software are heavily engaged in business-to-business activity. This opens up the possibility that the creative industries, as a focal point for creativity, stimulate and support business innovation in the wider economy.
This study combines data on business-to-business relationships between creative and non-creative sectors, based on input-output tables for the UK, and firm-level data on business innovation, taken from the Community Innovation Survey, to explore whether the creative industries support innovation through this channel.
Keywords
creative industries, supply-chains, innovation
Article Text
Nobody doubts that the creative industries make important contributions to the artistic life and cultural wellbeing of all countries. Their products give pleasure, stimulate ideas and convey meaning. Some - though not all - of these benefits are reflected in commercial value. A growing number of statistical reports document the very significant contributions the creative industries make to the UK's economy (for example Andari et al. 2007; OECD 2006).
There is also extensive quantitative evidence available on the sources and impacts of innovation in the UK (DTI 2006). While a great deal of innovation research has emphasised technical and science-based research and development activities, policymakers and academics increasingly recognise the importance of creativity and design activities to the process of innovation too (Cox 2005; DTI 2005; Acha 2007). There is a widespread belief that the creative industries in particular, as a focal point of creative activity, have an important role to play in innovation throughout the economy (Potts 2007). But robust quantitative evidence to support this belief has been lacking.
Theory suggests a number of mechanisms by which the creative industries may support innovation in the wider economy (Andari et al. 2007). This paper examines one particular mechanism: whether creative businesses stimulate innovation through the supply chain relationships which link them to businesses in other sectors.
We base our quantitative analysis of creative supply chain linkages on data extracted from the Input-Output tables for the UK published by the Office for National Statistics. The resulting measures are then brought together with quantitative data on innovation performance taken from the fourth UK Community Innovation Survey (CIS4). Our methodological approach is to estimate benchmark econometric models of business innovation of the sort regularly used in the innovation studies literature, and then to test whether variables capturing supply chain relationships with creative businesses have additional explanatory power.
We provide formal evidence for the first time that businesses with stronger links to the creative industries appear to be more innovative, at least in terms of their product innovations. This suggests that the creative industries may play a more important role in the UK's ecology of innovation than has previously been recognised.
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