The creative industries as an economic factor
The specific characteristics of the creative industries make them an important partner for the economy along the entire value chain.
With regard to new working methods and models as well as the type of cooperation and innovation processes, the creative industries continue to play a pioneering role. The creative industries are young (about 39% of the enterprises are less than ten years old), have a small business structure (61% one-person enterprises) and are essentially based on their most important resource: (well-educated) human capital, which is also of the greatest importance for innovation processes in the creative industries.
The creative industries are closely interlinked with numerous other domestic industries as well as within the creative industries themselves and thus act as a dynamising factor for the national economy.
It provides a broad spectrum of typical creative industry goods and services as well as complementary goods and services. The creative industries require a relatively large number of intermediate inputs for their production and obtain these almost exclusively from Austria. This is one of the reasons why further growth of the creative industries would also help the Austrian economy to grow indirectly. Taking into account the wage-income-consumption cycle, growth in the creative industries also leads to a boost in domestic consumption. As can be calculated with the help of the input-output analysis, one euro of production in the creative industries generates an additional production in the entire
economy in the amount of 0.73 euros. For every euro of value added generated in the creative industries, an additional EUR 0.76 of value added is created in the rest of the economy. Each employee in the creative industries provides an additional 0.7 employees in the domestic economy.
With its services, the creative industries directly support production and investment activities in large parts of the economy.
A total of 61% of the output of the creative industries flows to customers from the economy, who need the goods of the creative industries both as intermediate inputs and as capital goods. In particular, the trade sector and business-related services are important direct customers. The length of the value chain, which indicates how often a good passes through a further stage of the production process before it is finally delivered to the final demand, is particularly high in the case of the creative industries (e.g. compared to the business-related services sector). If one traces the value chain of the creative industries to the final demand, it becomes apparent that with its deliveries it directly or indirectly supports, in particular, the investment activity and exports of the Austrian economy, thus contributing significantly to the competitiveness of the Austrian economy. In an alternative view, the supplier relationships according to the input-output table represent a vehicle for industry crossovers and indicate that these benefit not only the directly but also the indirectly downstream sectors. In this context, special reference should be made to the long-term and immaterial character of creative industry contributions to the investment activity of the Austrian economy, which act as an impulse for growth and productivity increases in the investing industries.
The structural data show that the creative industries have grown to a real economic size. Due to their more dynamic development (compared to the economy as a whole) and their innovation activities, they provide growth impulses and contribute to the competitiveness of the economy as a whole. In order to fully exploit this potential, the creative industries need suitable framework conditions, as they are also confronted with challenges due to their specific characteristics (keyword: small company size, intangible assets, non-technical innovations). As stated in the Austrian Creative Industries Strategy, framework conditions for dynamic, knowledge-based entrepreneurship are central: a well-developed digital and non-digital infrastructure, flexible working conditions and little bureaucracy for small businesses. Measures to boost investment and innovation financing are also relevant for the creative industries. The improvement of access to financing and the expansion of innovation financing for the creative industries (including venture capital) are central to this. It should be noted that creative industries companies often make other types of investments (e.g. in intangible capital such as brand equity, human and organisational capital) and, due to their specific characteristics, often do not offer traditional real collateral, which makes access to bank loans more difficult. One measure that addresses this issue is, for example, the Guarantee Fund of the European Commission and the European Investment Fund, which makes it easier for financial institutions to grant loans to small and medium-sized enterprises in the cultural and creative industries by providing a guarantee.
Factor creative industries in the innovation system
The creative industries are very active players in the innovation system.
A high proportion of the creative industries have their own innovation activities. In doing so, the creative enterprises often use specific, especially also non-technical innovation activities. 74% of the surveyed creative industries enterprises have introduced new products or services for customers, 57% new internal procedures and processes, 52% new internal procedures for the creation of products or services, 51% innovations in marketing and 21% business model innovations in the past three years. Overall, 91% of creative industries enterprises can be classified as innovation-active. R&D activities are also significant in the creative industries: 41% of the creative industries enterprises with innovation activities use systematic processes in the sense of their own research and development work for this purpose.
The creative industries act as drivers of the digital transformation.
Innovative design and technology application are the focal points of innovations in the creative industries. As a consumer of innovation, the creative industries also provide important impulses for innovation on the supplier side. 87% of the creative enterprises use novel products, processes or technologies developed by other enterprises in their own business. 69% use new types of software applications in their day-to-day business operations, including new Internet technologies, some of which have been newly developed or substantially adapted for them directly by the manufacturing companies. The most important resources for innovation processes in the creative industries are not only qualified employees (including further training) but also an appropriate corporate and team culture, an open, cooperative mindset, a suitable business environment with cooperation and business partners as well as sources of inspiration. In addition to internal company resources, the creative industries receive impulses for innovation in particular from cooperation partners, the media and new technologies.
Open innovation is "lived" in the creative industries.
The Austrian creative industries focus strongly on innovation cooperation. 44% of the companies carry out innovation activities together with cooperation partners, especially frequently with other companies from the creative industries. Most of the cooperation is event-related at the project level (73%), but long-term, strategic partnerships also play a central role for more than half of the cooperation in the innovation sector. The prerequisites for open innovation - the corresponding mindset, working approaches and methods - are typical characteristics of the creative industries. The creative industries also play a pioneering role in the field of other new forms of innovation, such as social innovations, service innovations or business model innovations. According to their own assessments, 44% of the creative industries enterprises have an innovative business model, and about one fifth have innovated their business model in the past three years. Overall, the results confirm that the creative industries are an important player in the innovation system or also an important partner for the introduction of innovations. Awareness of the innovation activities and problem-solving competencies of the creative industries must be promoted even more strongly in the economy as a whole (e.g. by means of best-practice examples and target-group-specific formats). Innovation promotion programmes that are geared to the specific needs of creative industries enterprises (aws impulse XS and XL) and, in particular, measures that focus on cooperation between the creative industries and the economy as a whole (e.g. aws Kreativwirtschaftsscheck) should be maintained or expanded in this sense. In terms of innovation policy, greater attention should also be paid to the way in which the creative industries contribute to the spread of innovations on the market - for example, as early adopters in the field of new digital tools and by supporting their customers in the use of these tools.
Crossover effects of the creative industries
The creative industries generate a variety of crossover effects...
... which contribute to innovative and intelligent solutions for other sectors, the public sector and society as a whole. The Council of the European Union (2015) defines "... crossover effects between the cultural and creative sectors and other sectors as a process [...] in which the knowledge and skills characteristic of the cultural and creative sectors are combined with knowledge and skills in other sectors to generate innovative and intelligent solutions to today's societal challenges." Three relevant areas can be distinguished: "industry crossovers", "network crossovers" and "knowledge crossovers". "Industry crossovers" refer to vertical, value chain-related, or horizontal, cross-sectoral effects in terms of productivity and innovation for the economy and society. "Network crossovers" are effects that arise due to the presence of a high density of creative industries enterprises in a particular location (cluster or cultural quarter). The positive effects range from increasing regional economic growth to enhancing regional attractiveness and identity. "Knowledge crossovers" refer to new ideas, innovations and processes developed in creative industries enterprises that have an impact on the overall economy and society. This is the case, for example, when new forms of organisation, ways of working and techniques of the creative industries are adopted in other economic sectors.
Industry crossovers: The creative industries contribute to increasing the innovation and competitiveness of a wide variety of sectors.
The creative industries act as a link between sectors and, with their specific services (e.g. design, layout, IT and communication services), can contribute to making other economic sectors more attractive, promoting their marketing, improving business processes and advancing digitisation. A central crossover effect of the Austrian creative industries is the strengthening of the innovation performance of other companies. Almost 40% of the creative enterprises support their customers in introducing innovations, whereby the innovation contributions do not remain in the creative industries, but predominantly (62%) benefit industries outside the creative industries. The creative industries make contributions to the entire innovation process, but more so in early phases such as idea generation (71%) and design (69%).
Industry crossovers: creative industries support business model innovation and the management of structural change.
As the case study of the cooperation between the design agency moodley and the bakery Auer Brot presented in the report illustrates, the creative industries not only support innovation among their customers, but also contribute to the innovation of entire business models and the repositioning of brands - even in traditional industries. It provides strategies for coping with structural change - structural transformation - by supporting both digitalisation and the attractiveness of locations and business premises, and by positioning itself as an attractive employer. Essential to this is the use of (holistic, longer-term) design processes that serve to stage business models, simplify purchasing processes, make spaces and workplaces more attractive and create an experience.
Network crossovers: strengthening regional value creation and innovation systems through the creative industries.
Due to their strong regional anchoring, the creative industries unfold their transformative effects especially in the regional context - for example with regard to the attractiveness of cities and regions, the growth and revitalisation of the economy, and the promotion of tourism. The case study of the Werkstätte Wattens presented in this report illustrates how the integration of the creative industries into a business and start-up centre strengthens the local value-added and innovation systems and leads to a cross-fertilisation of traditional leading local businesses, technology companies, start-ups and the creative industries. The attraction of the created multidisciplinary creative centre creates crossover effects such as new company settlements, new jobs and a more attractive image for the region.
Crossover effects of the creative industries for the modernisation of administration and the solution of social challenges:
43% of Austrian creative enterprises count public institutions among their important clients. About a quarter of the creative enterprises support public institutions in their innovations, and another 16% of the creative enterprises cooperate with partners from public institutions in their innovation activities. Creative business inputs benefit in particular the implementation of New Public Management and e-government solutions. As illustrated by the case study Anne Eli in this report, the creative industries can also provide innovation impulses for the health care sector. Through the collaboration of creatives from different disciplines and the application of (human-centered) design, an app with an appealing design and communication concept was developed to improve pregnant migrant women's access to health knowledge as well as communication between migrant women and health care institutions. In this way, the creatives not only provided innovation impulses for the health sector, but were also able to contribute approaches to solutions for complex social problems (the challenge of migrant women's health) as well as for the social inclusion of the target group. The example also shows that the potential of crossover effects in the health care sector is still expandable and that the public sector could recognize or perceive the added value of service design and its exemplary function in this area even more strongly.
As the results of this report show, Austria has a good basis for the crossover effects of the creative industries. Many successful initiatives illustrate the potential for success that lies in the increased exploitation of crossover effects. However, there are also many challenges that can be traced back to a lack of awareness, silo thinking in sectoral and political areas or a lack of opportunities for cross-sectoral cooperation. The increased extension of innovation policy and support to types of innovation beyond those of traditional manufacturing sectors and high-tech industries is also a concern that should be further pursued to promote crossover effects. The inclusion of non-technological, service-based forms of innovation in innovation and R&D policy and the establishment of a broad concept of innovation require efforts at all political levels - regional, national and EU. In a further step, open-topic programmes could also be considered that further develop existing specific funding such as the aws Social Innovation Call, the FFG Services Initiative or aws impulse.
The removal of existing barriers as well as the setting of further incentives for crossover effects (as also proposed in the Creative Industries Strategy for Austria) can contribute to increasing the innovation and competitiveness of the Austrian economy via crossover effects and to developing new innovative solutions for today's societal challenges.