On who’s in and who’s out: Part 1 –Creative Industries

Since my last post, I’ve been having a series of discussions about this tricky, slippery term, the creative industries.

The first was with Gavin Bowman who pointed out that industry definitions exist to include or exclude things; things like businesses, occupations or people. We draw boundaries around these things because it helps us make sense of them, but also because there’s usually a more specific purpose in mind. We want to lobby, to form alliances, to compare etc.

In this sense, a definition of the creative industries is indivisible from its purpose. Or perhaps the logic behind any definition can only be understood by how it’s applied. A government policy, for instance, might limit its definition due to budgetary restraints. A trade union might apply the widest possible definition in order to attract the most members.

All this made me wonder if I knew what an industry was. In my last post, I proposed a definition of creative industries that excluded activities without a commercial intent (which would include hobbyists and not-for-profit entities).

I did this in part because I had one eye on entrepreneurialism and the looming question about where that resides in the creative industries, but I was also wondering just how industrious one has to be to be part of an industry. Does membership of an industry require you to have a commercial intent? My colleague Ben Fletcher of this fine establishment here thought not; profit and not-for-profit activities sat together within an industry, each being of competition to the other.

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A quick sidestep to the mighty Australian and New Zealand Standard Industrial Classification (ANZSIC) as maintained by the ABS since 1993, in an attempt to define what an industry is.  It says,

The objective when developing an industrial classification is to identify groupings of businesses which carry out similar economic activities. Subject to certain criteria being met, each such grouping defines an industry and the similar economic activities which characterise the businesses concerned are referred to as activities primary to that industry. (my emphasis)

So if an industry definition only makes sense when you understand its purpose, we know the ABS’s is to “identify groupings of businesses”, for administrative ease in use by government, businesses and um, citizens, I suppose. A kind of Dewey decimal system for industry classification.

It goes on to confidently assert:

When the classification is completed, any individual business can then be assigned an appropriate industry category on the basis of its predominant activities. (my emphasis)

And it agrees with Ben, by saying:

The term business is used in its widest sense to include any organisation which provides goods and services, including companies, non-profit organisations, government departments and enterprises.

The first classification of ANZSIC looks like this:

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Which seems straightforward enough, but take it down a level and the complexities start to show. Take “R Arts and Recreation Services” as an example:

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And so on down through the superstructure until we hit individual occupations such bird reserve operation, journalistic services, netball club operation and bookmaking operations. All part of good ship “R Arts and Recreation Services”.

Any industry definition is obviously going to have its oddities and miscellaneous items. I suppose the point is that as much as they seek to include and exclude, they are also contestable and are, no doubt, contested.

Naturally enough, the creative industries (as defined by, take your pick, but let’s say the UK’s Department for Culture, Media and Sport) are scattered throughout sections J, M, R and probably others too. Which is apt for a term which places architects next to actors and fashion designers next to games designers and says, you lot… you all do kind of the same thing.

Another regular and robust conversationalist is Tony Shannon who reminded me that back in the day, we used to wonder about whether it was the “creative industries” or the “creative industry”. If we took the ABS at its word, it’s an industry singular, because we can identify a “grouping” of businesses, no matter how diverse and call them an industry. Even though its own library catalogue on the subject tells us that to get to that catch all term, we have to collate businesses from across a range of industries. If anything, it’s a creative cross-section.

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This whole “creative industries” malarkey started when a politician had a need to name it as such, as Australian academic Justin O’Connor points out in his literature review on the topic:

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In its genesis, then, the term “creative industries” was not a literal term, but a political one, designed, at least in part, to win votes and increase support for a government. It was invented to make sense of a group of businesses which existed across industry lines, but had a shared meaning to government and presumably, voters. It continues to be reinvented, but still, it has come to mean something which is broadly understood as a collection of organisations and individuals which create products and services. After that though, its boundaries blur, defying more precise definition.

Where does entrepreneurship intersect with this ambiguous term? Surely its definitional boundaries are even hazier than those of the creative industries. Perhaps as I talk more about entrepreneurship as a personal trait (that’s Part 2, you see), it is the individual creatives which become more important than how they classify themselves. As Tony remarked to me, perhaps what we’re talking about here is creative entrepreneurs, rather than entrepreneurship in the creative industries.

References:
Australian Bureau of Statistics 1993, 1292.0 – Australian and New Zealand Standard Industrial Classification (ANZSIC), viewed 6 May 2017, http://www.abs.gov.au/Ausstats/abs@.nsf/2f762f95845417aeca25706c00834efa/5BD72C7D74F64C6BCA25697E0018FD27?opendocument
Australian Bureau of Statistics 2006, 1292.0 – Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 (Revision 2.0) viewed 6 May 2017, http://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/1292.0Contents12006%20(Revision%202.0)?opendocument&tabname=Summary&prodno=1292.0&issue=2006%20(Revision%202.0)&num=&view=
Department for Culture, Media & Sport, Creative Industries Economic Estimates January 2015, viewed 6 May 2017, https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/394668/Creative_Industries_Economic_Estimates_-_January_2015.pdf
O’Connor, Justin (2010), The cultural and creative industries : a literature review [2nd ed.].
Creativity, Culture and Education Series. Creativity, Culture and Education, London.

Exploring and exploiting: a creative management paradox

This article has the brain bending title Managing exploration and exploitation paradoxes in creative organisations, which might suggest a discussion far removed from the practicalities of running a business in the creative industries. But in fact, it’s talking about a fundamental tension which lies within most, if not all, creative enterprises.

That tension arises from the inherent difference between the concepts of creativity and industry. Creativity is about exploration; producing new products through the creative process. That’s often long, unpredictable and difficult to control.

Industry (perhaps better described as the commercialisation of those products) is about exploitation. Make a product repeatable, divine a business model which generates profit and you have the basis of a sustainable business. The skills needed to manage these two disciplines are both contradictory and necessary. Therein lies the paradox.

I’m familiar with the need to balance the creative and the management aspects of a business through my work with creative industry companies, but I’ve not seen it expressed as neatly as the explore/exploit paradox. Within organisations large enough to employ staff, this paradox is often managed through compartmentalisation of roles (a design studio, for example, may well divide staff between creative, production and sales roles) and recruitment (employing people with the appropriate skills for each). For this reason, creative industry companies can often be melting pots of personality types.

Individual creatives and sole traders though have to manage this paradox by and within themselves. They must be both explorer and exploiter. How do creatives manage this without going mad? (And though I use that term flippantly, I think there is a considerable mental strain in having to be both those very different things).

I think that creatives who build successful businesses procure the management skills they need in certain ways. They can find those skills within themselves, lying latent until employed by necessity. They can acquire those skills through training and personal development. Or they can find others to undertake those tasks for them. But somehow, they must access those skills.

The authors then say there are a “three responses that individual managers can have to paradox: acceptance; differentiation/integration; and accommodation”

Acceptance involves embracing conflict without seeking to resolve it… Differentiation and integration is a cycling process whereby managers iterate between alternative patterns. Differentiation involves delineating alternate domains and serving each one separately, whereas
integration involves re-connecting domains into a meaningful whole… Accommodation reconciles both elements of opposition in “novel, creative synergy”… For example, Rothenberg (1979) suggested that creative artists like Mozart merged paradoxical demands to create new conceptions.

The option which seems closest to what I see in practice is differentiation/integration. Even within large organisations, there’s usually a CEO who started out as a creative (which I talk about here) and who needs to practice the flipping of modes between explorer and exploiter on a personal level all the time. They are, I guess, practicing an internal version of differentiation/integration on an hourly basis. Perhaps that’s one of the hallmarks of creative entrepreneurship.

Ref: Eric Knight , Will Harvey , “Managing exploration and exploitation paradoxes in creative organisations”, Management Decision, Vol. 53 Iss: 4, pp.809 – 827