Saturday, October 21, 2006

Creativity and business

As a first task for the "Managing dynamics: creative content business" we have to discuss about John Hartley's introduction to "Creative industries" (2005) book. This introduction gives reader a short view on creative industry itself and the problems emerging from the fuzziness of the industry compared to traditional manufacturing or service industries. It also introduces and explains the various terms used when speaking of creative industries.

The introduction starts with an essential question: “What is creativity?” The first description of creativity that popped to my mind was that it is an ability to create something. However that doesn't seem to match the respect creative person seems to get. In a way I guess all people have ability to create something, even my nephews create a loads of pictures, decorative items etc. I guess one thing that should be remembered from creativity is that it should result in something unique, something that has never been done in that way, and something that is not the most obvious solution.

This leads us to Schumpeter's idea of innovations and new markets:

Invention -> innovation -> imitation

First there is an invention to start with, this is commercialized and turned into an innovation. The product will be successful on its market so there will be many imitations and so a new market has been created out of creativity.

So is creativity an ability to create an invention or an innovation. If the viewpoint is from business side, I guess the innovation would be an outcome of creativity. We're looking for commercial inventions, innovations. Creativity may play its part in thinking up the invention or in using an old invention in a new, innovative way. Creativity in art, as I understand it, is more in the way an artist promotes his works to a broader audience than in the creation of that particular art piece. At least modern art makes me think this way. Well, I just don't understand art.

These success stories of creativity are not as usual as stories about technical breakthrough or technical innovations. These are harder to report, harder to spot than easily specified technical advancements. Still there are many examples, latest was just few days ago when Google bought YouTube with $1.65 billion.

Google bought a company that displays videos uploaded by normal people on the internet. The income for YouTube came from advertisements and in fact it wasn't producing much profit mainly because the constant growth of users and videos required a lot of investments on the computing power and storage capacity of servers. The company was creative. The company relied on customer created content and it was extremely successful in it, even though a large number of videos on the site are copyrighted for someone else. The point is that the technology behind YouTube is not very innovative.

YouTube has also created a new ways to advertise on internet. A Finnish TV channel SubTV advertised its upcoming comedy series by uploading few short clips from it and then spreading a word about them. The most popular one of these clips has been watched for 128 095 times in one month. Public TV channel Yle has taken a completely different approach to YouTube, even going as far as suing the people that uploaded small clips of their copyrighted work to YouTube. So the broadcaster would be suing its own customers.

Well anyways, creativity, an ability to see differently, do things differently, and think differently, "is now the decisive source of competitive advantage" according to Richard Florida (The Rise of the Creative Class, 2002) that was quoted by Hartley in his introduction. I must agree that. There is a global market for new kinds of services and products available through internet for anyone creative and active. The business model could start evolving from just starting a weblog and publishing ads on it. Now all I need is to get few thousand visitors to make the advertisers happy and to make some income from writing about my readings, courses and thoughts...

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