A Response by: Dr Sukhpreet Singh, R&D Manager, CREATe.
In a timely post in the Managing Culture section of the Tafter Journal, Pierre-Jean Benghozi and Elisa Salvador from Ecole Polytechnique Paris, argue that despite an increase in interest in the strategic and economic dimensions of creative industries (CIs) and their business models, the issue of managing R&D in the creative industries is severely neglected, with most organizations providing for poor investments in the R&D function. They cite innovations such as, the sound recording by Edison/ General Electric in the early 20th Century, the Walkman by Sony, and, the Appstore by Apple, where disruptive innovations strategically changing the landscape of a creative industry have come from outside the industry, and where creative firms have not managed to control their innovation. This has been attributed to poor investment in the R&D function within CIs.
Benghozi and Salvador use this post to report on their latest research in strategic management in the book publishing industry. They argue that “the e-book diffusion has fostered publishers to an increased attention towards appropriateness of R&D and technological innovation: the revolution in printing, formats, e-readers, tablets and PDAs, are at the origin of several changes in the publishers’ strategy and new investments.” As a result, book publishers are defining and implementing new commercial strategies only in response to innovations from outside their industry, and thereby such non-intrinsically developed business models are not working effectively. Digital libraries, publishing-related community blogs, social media and social networking sites are emerging as key tools for attracting new clients and fostering the diffusion of e-books – but publishers do not appear to be playing a pivotal role in these technologies!
Of the several reasons, Benghozi and Salvador attribute to this lack of innovation leadership from the publishing industry, including (i) the smaller size of companies within the CI sector, leading to difficulties in financing the R&D function, and (ii) encumbrance from existing commercial and aesthetic risk of creating new content (CIs do not find taking on additional technical risks as attractive).
While this research provides valuable insights into strategic management of the CI sector, it is worthwhile to look at the above problem from another perspective. While CI companies may not be good themselves with technological innovation, the successful use of technological innovations such as sound recording, the MP3, or the e-book, all do point to the premise that CI companies are successful users or applicators of technological innovation. Thus, where the R&D function is poorly resourced, the presumption is that the position is compensated through investments in production, distribution and marketing functions to a degree where they are able to successfully bring technological innovations from outside the industry into the industry fabric. Herein lies a clue for researchers embarking upon the study of the production and marketing processes of companies within the CI sector.
The Tafter Journal is an online open access journal which deals with cultural policy, heritage, architecture and town planning and the use of new technologies in the cultural policy field. It’s mission is to foster critical debate and to publish contributions by researchers, experts, practitioners, organizations and people working in the cultural policy field.