Innovation, Creativity and Cities

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Creativity leads to innovation that drives progress. But what drives creativity in the first place? An innovative spirit is helpful, as is collaboration. Imagination also has a part to play in aiding creativity. Understanding what increases both creativity and innovation is essential to understanding the range of problems that we have in society, and Nesta, the UK leading charity for innovation,  is attempting to better understand creativity and innovation. In a working paper for Nesta, Neil Lee and Andres Rodriguez-Pose (2013) explain that while the creative occupations have long been considered to be an innovative sector, location also has a fundamental component to play in creativity and innovation. In fact Lee and Rodriguez-Pose outline how there is little hard evidence to support the fact that creative industries are any more innovative than other industries or that urban industries are especially innovative.

As Lee and Rodriguez-Pose explain, there is little work that has been carried out at a firm level to attempt to understand the important links that exist between the creative industries, occupations, cities and innovation. Their paper works to address the problem by reviewing more than 9,000 small and medium sized businesses based in the UK. The findings of the study are very interesting, and as Lee and Rodriguez-Pose point out, they find:

“…no support for the hypothesis that urban creative industries’ firms are particularly innovative… [but that] creative occupations are used in cities to introduce product innovations learnt elsewhere.”

In particular it is interesting that there is no “urban effect” found as Lee and Rodriguez-Pose put it. In fact, they describe how creative occupations are used both in urban and rural areas to come up with new, innovative products. However, it does appear to be the urban companies that modify and take products from elsewhere and introduce them into new markets. In addition to this creative occupations were found by Lee and Rodriguez-Pose to be a major driver of learned innovations in processes.

Of course, as Lee and Rodriguez-Pose assert all of this has important implications for government policy. In particular they question where UK government support for innovation would be best placed. There are questions pertaining to whether it should be targeted in urban areas, or instead whether it should be used to help companies to be able to hire people that are innovative. Interestingly in the UK it was not found that creative industries are more innovative in cities or that they are more innovative in large cities either.

This means an idea that “London is more creative than other areas” is essentially inaccurate according to the results of Lee and Rodriguez-Pose. That cities were found to be more creative in terms of the exchange of learned processes was argued to be driven by the fact that people move between companies, sharing the information that they have learned with new companies and introducing these ideas there. It is explained that for example, schemes like those funded by the European Regional Development Fund need to be better targeted to be able to really aid innovation. Additionally the other characteristics of the actual firm may be a more important indicator than its location of its level of creativity.

Innovation is complex

An important finding that is raised in the paper, and that should come as no surprise is as Lee and Rodriguez-Pose suggest, “Innovation is complex”. Creative industry innovation is hard to measure because it is somewhat more abstract than other types of innovation. As Lee and Rodriguez-Pose point out, there is rarely formal research and development or patenting of creative work. This makes it a challenging area of study. Overall the study has important implications for the perceived idea that cities are more innovative or that the creative industries are more innovative per se.

Lee and Rodriguez-Pose carried out their research using the Annual Small Business Survey of 2007/8 that was conducted by the UK Department for Business, Innovation and Skills. The companies included in the study were those that had less than 250 employees, and were randomly selected from the survey results. It was found by Lee and Rodriguez-Pose in their review of literature and other research that in 2009 there were nearly two million people working in “creative employment” in the UK. Of these, 1.15 million worked specifically in creative industries while others were creative working in different types of business, such as the example given of a graphic designer working in a manufacturing firm.