Creative and Innovative Management - part 1

Business is one of the most creative activities ever. It creates ideas. Both creativity and business can go together, they are not mutually destructive as the majority believes. The economics of creativity deals with two system values. One concerns the physical products, which are tangible. The other is based on intellectual property, which is intangible. Managing creativity involves knowing when to exploit ideas and then when to assert intellectual property rights.

Despite the fact that business is meant to make a profit, free-riding, which means benefiting from another person’s ideas without paying, occurs. Free riding can be seen as a cost for the creative economy. Some of the most self-explanatory costs of creative economy are broadly described in the second last part of this paper. People use free-riding to enhance their own knowledge and skills. From a supplier’s point of view, free-riding shortens technological and product life cycles. Being first to market is a major advantage but an innovator has only a short time to establish a new product before others begin to compete. But, in order for some people to benefit, others must go without. Debate has gone on about this exchange. Some economists argue that any constraint on idea hampers creativity slows down economic development; others consider that monopoly is necessary to reward innovation and to better allocate resources.

The Recognition, Protection and Classification of Creative Products - Part 3

Human beings are called homo creator, but creativity does not always lead to a creative product. The creative equation deals only in creative products, not creativity, and differentiates between a creative product and a transaction. It states that the creative economy (CE) is equivalent to the value of creative products (CP) multiplied by the number of transactions (T); that is, CE=CPxT. Creativity itself cannot be quantified. The number of creative products can be quantified, but the multiplicity of products and the confidentiality of many deals may hamper the process of making an accurate account.(1)

Apart from the creative products and the transactions incurred which come to a fore when talking about creative economy, management plays an important role in the deployment of the creative activity. Thus, a creative and innovative management system best suits a creative and innovative activity.

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(1) HOWKINS, John, “The Creative Economy. How people make money from ides”, London Allen Lane, The Penguin Press, London, 2001, p. xi-xiv

Copyright, patent, trademark and design

Copyright law covers an individual’s creative expression. It accrues automatically to any qualifying work and does not need to be registered. It normally lasts for the author’s lifetime plus seventy years. Patent law originated in the need to protect inventions of new industrial products and processes. It gives the inventor a monopoly in the making of the new product, typically for twenty years. Whereas copyright accrues automatically, a patent has to pass stringent tests before being approved. It must be novel, non-obvious and useful. None of these tests applies to copyright. Once registered, a patent gives stronger protection than does copyright. A trademark does not require any artistic or creative expression or any expert skill. It is a mark or symbol that represents an organization or trade. Trademarks are registered, they have to be actively traded and to pass tests of type and uniqueness. A design is a shape or symbol that, like a trademark, has the character of being distinctive and unusual. Legally, it is a hybrid. It often qualifies for copyright; it may also qualify for a special design right (as in Britain); and it is usually registered like a trademark.

These systems can overlap. An artist’s working sketch for a trade-mark qualifies as an artistic work and merits copyright protection quite separately from the trademark itself being registered as a trademark or a design. Computer programs which automatically qualify for copyright may in some countries also be awarded a patent.

The copyright industries consist of all industries that create copyright or related works as their primary product – advertising, computer software, design, photography, film, music (publishing, recording and performing), performing arts, publishing, radio and TV, and video games. The International Intellectual Property Alliance (IIPA) distinguishes between the “core” copyright industries and the total copyrights industries, which also include the manufacturing of products which depend upon copyright goods (computers, TV receivers).

The patent industries consist of all industries that produce or deal with patents. The dominant ones are the pharmaceuticals, electronics, information technology, industrial design, materials, chemicals, engineering, space and vehicles. The dominant activity is scientific research and development which is carried out by commercial companies, technical laboratories and universities. The US, Japan, Germany, France and UK are only some of the most prolific countries in this field. Patents registered by the US and UK Patent Office by country of applicant in 1999 can be found in the appendix section

The trademark and design industries are more widespread, and their size and diversity make them less distinctive. It is possible to identify the creativity involved in the creation of a trademark, but it is less easy to calculate its economic value or to identify the economic gains attributable to the trademark in the total product mix.

Together, these four industries constitute the creative industries and the creative economy. The creative economy consists of the transactions in these creative products. Each transaction may have two complementary values: the value of the intangible, intellectual property and the value of the physical career or platform. This creative economy covers a wide range of branches, and money made out of them reach significant figures. To have an idea, the market size of the creative economy in 1999 is depicted in the appendix section.