Iceland and the increasing influence of the creative industries

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After the crisis in 2009, the icelandic women have taken the gears fo the economy.An interesting article in El País, explains the swift between masculine sector (as the aluminium) to more feminine sector (as the creative industries).

Los hombres se centran en cosas como la industria del aluminio. Nosotras hablamos de los sectores creativos. Hemos llegado a la conclusión de que las artes —en especial la música y la literatura— aportan tanto dinero al país como la extracción de aluminio. No creo que a los hombres se les hubiera ocurrido ni pensarlo”. Un dato que asombra en Islandia es que un país de 320.000 habitantes posea tal abundancia de talento artístico, sobre todo en la música, donde, aparte de una ópera nacional y una orquesta sinfónica nacional, existen numerosos grupos contemporáneos que producen todo tipo de cosas, desde la globalmente aclamada Björk hasta el trabajo experimental y esotérico de Kria Brekkan, que ha triunfado en Nueva York [...]

 

Source: El País (11-03-2012)

The knowledge-creating company: How japanese companies create the dynamics of innovation – Nonaka and Takeushi (1995)

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Summary of the book:

The knowledge-creating company: How japanese companies create the dynamics of innovation – Nonaka and Takeushi (1995)

  1. Introduction to knowledge organizations
  2. Knowledge and management
  3. Theory of organizational knowledge creation
  4.  creating knowledge in practice
  5. Middle-up-down management process for knowledge creation
  6. A new organizational structure
  7. Global organizational knowledge creation
  8. Managerial and theoretical implications

 

1.- Introduction to knowledge organizations

  • Three key characteristics of knowledge creation:
    •  Metaphor and analogy
    • From personal to organizational knowledge
      • Although we use the term “organizational” knowledge creation, the organization cannot create knowledge on its own without the initiative of the individual and the interaction that takes place within the group. –p13
    • Ambiguity and redundancy
    • Ambiguity can prove useful at time not only as a source of a new sense of direction, but also as a source of alternate meanings and a fresh way of thinking about things. In this respect, new knowledge is born of chaos – p14
    • Redundancy is important because it encourages frequent dialogue and communication. This helps create a “common cognitive ground” among employees and thus facilitates the transfer of tacit knowledge. – p14

 2.- Knowledge and management

3.- Theory of organizational knowledge creation

  • Epistemological dimension: explicit knowledge / tacit knowledge
  • Ontological dimension: knowledge level (individual/group/organization/inter-organization)
Tacit knowledge (subjective)

Explicit Knowledge (objective)
Knowledge of experience (body) Knowledge of rationality (mind)
Simultaneous knowledge (here and now) Sequential knowledge (there and then)
Analog knowledge (practice) Digital knowledge (theory)
  • Four modes of knowledge conversion
    • Socialization: from tacit to tacit
    • Externalization: from tacit to explicit
    • Combination: from explicit to explicit
    • Internalization: from explicit to tacit

TO

TACIT Knowledge

EXPLICIT Knowledge

FROM

TACIT Knowledge

Socialization

Externalization

EXPLICIT Knowledge

Internalization

Combination
  •  Contents of knowledge and the knowledge spiral
    • First, the socialization mode usually starts with building a “field” of interaction. .. sharing of member’s experiences and metal models. Second the externalization mode is triggered by meaningful “dialogue or collective reflection”, in which using appropriate metaphor or analogy…Third, the combination mode is triggered by “networking” newly created knowledge and existing knowledge from other sections of the organization, thereby crystallizing them into a new product, service, pr managerial system. Finally, “learning by doing” triggers internalization. – p71

 

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  • tacit knowledge if individuals is the basis of organizational knowledge creation – p72
  • The mobilized tacit knowledge is “organizationally” amplified through four modes of knowledge conversion and crystallized at higher ontological levels. We call this the “knowledge spiral” – p72
  • This process is exemplified by product development. Creating a product concept involves a community of interacting individuals with different backgrounds and mental models. – p73

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  • Enabling conditions for organizational knowledge creation:
    • Intention: (organization’s aspiration to its goals – p74)
    • Autonomy
    • Fluctuation and creative chaos (which stimulates the interaction between the organization and the external environment -p78). Chaos is generated naturally when organization faces areal crisis…. it can also be generated intentionally when organization’s leaders try to evoke a “sense of crisis”… by proposing challenging goals.
    • Redundancy
    • Requisite Variety

 

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  • Five-phase Model of the organizational Knowledge-creation process (p83)
  1. Sharing tacit knowledge
  2. Creating concepts
  3. Justifying concepts
  4. Building an archetype
  5. cross-leveling of knowledge
  • The truly dynamic nature of our theory can be depicted as the interaction of the two knowledge spirals over time. Innovation emerges out of these spirals.

4.- Creating knowledge in practice

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5.- Middle-up-down management Process for Knowledge Creation

  • Simply put, knowledge is created by middle managers, who are often leaders fo a team or task force, through  a spiral conversion process involving both the top and the front-line employees (i.e. bottom). -p127
  • Middle managers are the key to continuous innovation. -p127

 

 

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Knowledge-Creating Crew

  • In fact, creating new knowledge sis the product of dynamic interaction among the following three players: (1) knowledge practitioners, (2) knowledge engineers, and (3) knowledge officers. -p151
  • (1) knowledge practitioners: front-line employees and line managers
    • high intellectual standards
    • strong sense of commitment to re-create the world according to their own perspective
    • wide variety of experiences, both inside and outside the company
    • skilled in carrying a dialogue with customers and colleagues
    • open to carrying out candid discussions as well as debates with others -p154
  • (2) knowledge engineers: middle managers
    • capabilities of project coordination and management
    • skilled at coming with hypotheses in order to create new concepts
    • ability to integrate various methodologies for knowledge creation
    • proficient at employing metaphors in order to help others generate and articulate imagination
    • engender trust among team members
    • ability to envision the future course of action based on an understanding of the past
  • (3) knowledge officers: top managers
    • ability to aerticulate a knowledge vision in order to gicve a copany’s knowledge-creating activitiesa  sense of direction
    • capability to communicati the vision, as well as teh corporate culture on whi it is based, to project team members
    • capability to justiofy the quaklity of hte created knowledge based on organizatuionap criteria or standards
    • uncanny talent for selecting the rioght project ledaer
    • willingness to create chaos within the project team by, for example, setting inordinately challenging goals
    • skillfulness in intearctign with team members on a hands-on basis and soliciting commitment from them; and
    • capability to direct and manage the total process of orgnaizationasl knoweledge creation. -p158

6.- A new organizational structure

In search of a synthesis – the hypertext organization

  • A business organization should have a nonhierarchical, self-organizaing structure workign in tandem with its hierarchical formal structure. This potin is particularly important for organizaational knoledge creation -p166
  • …hypertext organization is made up of intercoinnected layers or contexts: the business ssystem, the project team, and teh knowledge base. -p167

 

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  • The central layer is the business layer in which normal, routine operations are carried out. Since a bureacratic structure is suitable for conducting routine work efficiently, this layer is shaped like hierarchical pyramid. The top layer is the “project team” layer, where multiple project teams engage in knowledge creating activities such as new product development… at the bottom is the “knowledge base” layer, where organizational knowledge generated in the above two layers is recatergorized and recontextualized. This layer does not exist as an actual organizational entity, but is embedded in corporate vision, organizational culture, or technology…. While corporate vision and organizational culture provide the knowledge base to tap tacit knowledge, technology taps the explicit knowledge generated in the two other layers… -p168
  • the key characteristic of the hypertext organization is the ability of its members to shift contexts –p170
  • the efficiency and stability of the bureaucracy is combined with the effectiveness and dynamism of the task force in a hypertext organization. Moreover, it adds another layer, the “knowledge base”, that serves as a clearinghouse for the new knowledge generated in the business system at the project team layers.
  • A hypertext organization should not be confused with a matrix structure, which is used to actually two or more different tasks in a conventional hierarchical organization. P170
  • in the matrix structure, and organization member must belong or report to two structures at the same time. In contrast, an organization member in a hypertext structure belongs or reports to only one structure at one point in time.
  • matrix structure is not primarily oriented toward knowledge conversionin a hypertext organization, knowledge contents are combined more fixedly across layers and over time.
  • Since deadlines are set for the projects, the resources and energy of the hypertext organization can be used in a more concentrated manner to fulfill the goal of the project during the project period.
  • … in a sense, a hypertext organization fosters middle-up-down management

 

7.- Global organizational knowledge creation

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8.- Managerial and theoretical implications

  • A summary of our major findings
  1. tacit and explicit knowledge
  2. interaction between tacit and explicit knowledge is performed by an individual, not by the organization itself
  3. the core of the organizational knowledge creation process takes place at the group level, but the organization provides the necessary enabling conditions. The knowledge spiral: invention, autonomy, fluctuation and creative chaos, redundancy, and requisite variety
  4. organizational knowledge duration is nonlinear and interactive. Is a never-ending iterative process
  5. middle up down management
  6. hypertext organization
  7. we need to integrate the merits of both the Japanese and Western methodologies to develop a universal model of organizational knowledge creation
  • practical implications
  1. create a knowledge vision
  2. develop a knowledge crew
  3. Build high density field of interaction at the front line
  4. Piggyback on the new product development process
  5. adopt middle-up-down management
  6. switch to a hypertext organization
  7. construct a knowledge network with the outside world
  • theoretical implications
  • false dichotomies
  1. tacit / explicit
  2. body / mind
  3. individual / organization
  4. top-down / bottom up
  5.  bureaucracy / task force
  6. relay / rugby
  7. East / West

 

OTHER SUMMARIES and COMMENTS:

Seguiment de les eleccions generals a Espanya

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La meva aposta per la porra organitzada pel Casal Català del Québec és:

  • Partit dels socialistes de Catalunya (PSC) * Nombre d’escons: 19 (25 el 2008)
  • Convergència i Unió (CiU) * Nombre d’escons : 13 (10 el 2008)
  • Partit Popular (PP) Nombre d’escons : 12 (8 el 2008)
  • Esquerra Republicana de Catalunya (ERC) * Nombre d’escons:  2 (3 el 2008)
  • Iniciativa per Catalunya – Verds (ICV) * Nombre d’escons:  1 (1 el 2008)

No és el resultat que desitjaria però el que crec que pot ser el que doni les urnes.

Al final a Catalunya, els resultats han sigut (00h42 del dia 21Nov)

  • CiU                 16
  • PSC-PSOE     14
  • PP                    11
  • ICV-EUiA     3
  • ERC                 3

Estar clar que no he considerat la davallada del PSC-PSOE en la seva justa mesura.

Creative Ecologies: Where thinking is a proper job – John Howkins (2009)

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Reference:

Creative Ecologies: Where Thinking is a Proper Job
Published by UQP in 2009, Transaction (USA) in 2010

Author’s web: creativeeconomy.com

Introduction

  • The old question ‘Where do you want to live?’ is now ‘Where do you want to think’ – p2
  • Modern ecology is part of the shift in thinking generated by quantum physics and system theory, from the old view based on reductionism, mechanics and fixed quantities to a new view based on holistic systems where qualities are contingent on the observer and on each other – p3
  • Creative or repetitive? – p5
Creativity Repetition
Diverse / variegated Unified
Implicit Explicit
Unstable (challenges/questions) Stable (safe/ answers)
Fluid/emerging Rigid/ settled
Feedbcka Little feedback
Learning Education
Networks Hierarchies
Desires beauty Desires irder
Access Control
High automnmy / low dependence Hidh dependence / low autonomy
Complex Simple
Self-orgnaising Closed, shielded
Quality Quantity
Systemic / whole Fragmented / parts
Analogue Digital (especially binary0
Cyclical Linear
Process / collaboration Event / Competition
Mind Body

The Challenge

Learning to look

  • Vincent van Gogh’s nine weeks with Gauguin in his studio were astonishingly creative for both of them. Van Gogh produced 49 oil paintings, several watercolours and hundreds of drawings and Gauguin about one-third as many. – p8

Definitions

  • Creativity is the use of ideas to produce new ideas. The input, the original idea, may be novel or familiar…. The output’s commercial value may depend on this uniqueness …or on how easily it can be copied. – p9
  • This raw creativity is not the same as talent, which is a kind of expertise, usually learned and repeatable. – p9
  • Creativity is not the same as innovation. Creativity is internal, personal and subjective, whereas innovation is external and objective. Creativity often leads to innovation, but innovation seldom leads to creativity – p10
  • Business has seen creativity and innovation as specialist functions. I call this repetitive economy. –p10
  • But while the commodities and manufactures goods in a classical economy are physical and quantifiable, the inputs and outputs of a creative economy are subjective and qualitative –p11
  • A creative ecology is a niche where diverse individuals express themselves in a systemic and adaptive way, using ideas to produce new ideas; and where others support this endeavor even if they don’t understand it. These energy-expressive relationships are found in both physical places and intangible communities; it is the relationships and actions that count, not the infrastructure. –p11

 

  • Maslow spent years clarifying and refining what he meant by self-fulfillment, and in 1970, just before he died, he replaced the term with two others: the ‘aesthetic (appreciation of the beauty) and ‘cognitive’ (desire for knowledge and particularly understanding knowledge). – p18

 

  • Network economy, knowledge economy… all these labels miss something vital. … We need to treat people not as an economic unit but as autonomous, thinking individuals…. The theory of creative ecology … tries to answer:

 

  • What is the nature of creativity?
  • What is the nature of creative work and the creative economy?
  • What is their relation to other factors of change, such as innovation?
  •  What should governments do, if anything?

 

First Ideas

  • DCMS : thirteen industries: advertising, architecture, art and antiques, crafts, design, designer fashion, film and video, interactive leisure software, music, performing arts, publishing, software and computer services, and TV and radio. – p22
  • My own added R&D and toys and games, and I referred to ‘core’ industries with significant multiplier effect, especially in media, advertising, design and software. – p23

Individuals and occupations

  • The nature of creative work means that industries are not the main characters in  the story… the large number of people who are full-time creative workers but work outside an industry requires an economic model based on individuals and what people do… -p25
  • Florida’s approach generates a more subtle and more multi-dimensional approach and helps us to relate creative work to demographic and socio logical conditions that facilitate it.

Cores and circles – p26

  • Britain’s BOP Consultants: 1) creative Originals (i.e. art) ; 2) creative content (music); 3) creative experiences (live performances); 4) creative services (advertising)
  • NEFA: core, cultural periphery and creative industries
  • Kern European Affairs (KEA): 1)  Cultural products that are non-industrial; 2) Cultural industries whose outputs are exclusively cultural; 3) Creative industries and activities that incorporate elements of 1 and 2; 4) related industries specializing in equipments to facilitate the use of copyright works.
  • Ambiguity of these descriptions…blurred relationship….

Relationships

  • …the economic conundrum (infinite need, limited resources) collapses. – p30
  • Whereas Schumpeter focused on the entrepreneur’s skills in fomenting creative destruction, the creative ecology treats all individuals as potentially creative, thus generating greater scale and scope. – p31

 

 

Scope and scale

  • We enjoy crossovers between art and science, between fashion and technology, between fact and fiction (i.e. Tusquets and Krasu in auditorium in Grand Canaria) – p37
  • McKinsey consultants: “45% of British jobs require the workers to exercise their tacit knowledge, or talent… 70% of new jobs in Britain and America require personal judgment – p38
  • Everyone can go. The creative ecology has very low barriers to entry
  • Although creativity has few barriers to entry except education and ambition, some creative businesses can face very high barriers of talent, capital, regulation and market power… few large companies that dominate distribution, especially where they can achieve significant economies of scale.
  • Exponential variety: … varied because they express personal meanings and contradictory because there is virtually no consensus.
  • These two factors, low barriers to entry and exponential variety, result in high level of volatility. Life in an ecology requires rapidly adaptive behavior of an organism ist o survive, let alone develop. – p40
  • Autonomy and openness… diversity and collaboration. Compared with previous emphases on institutions and mechanics, there are themes of fluidity and fuzziness, and of emergent thinking. – p42

The adaptive mind

  • By including an awareness of the self and perception, deep ecology is especially relevant to creativity. – p45
  • Four aspects of ecological thinking relevant to creativity and innovation:

1. Diversity: tolerance (Florida)
2. Change: theory of evolution

  • There is not a gene for creativity however “there may well be genetic sequences that predispose people towards characteristics that assist creativity, such as reasoning, memory and spatial awareness. P50
  • Whereas biological evolution precedes by increasing divisions into separate species, cultural change occurs by borrowing and mixing; and whereas evolution is Mendelian (inherited, digital), cultural change is Lamarckian (learned, analogue), – p51

3. Learning

4. Adaptation

  • Imitation
  • Communities
  • Collaboration
  • Competition

 

Creative places

  • Instruction will be replaced by dialogue in which listening ia a respected and enjoyable as speaking. Since it is impossible to anticipate a new idea or the appropriate group to develop it, you will have access to many different groups and the ability to form an indefinitely large number of new ones. –p72
  • This process can flourish in large organizations so long as they operate as a network of small groups. ..p72
  • A creative dialogue is informal –p72
  • My own RIDER system consists of Review, Incubation, Dreams, Excitement and Reality Checks – p74
  • Cities have become icons of the creative economy: their startling new building. Their crowds, clusters and cultural diversity, their elite stars and industry gatherings, … p74
  • Cities: Creative magnets (p76)….CREATIVE CITIES
  • Cities score high in our four indicators of a creative ecology: diversity, change, learning, and adaptation. – p78
  • Urban-based collaboration is one of the most powerful forces in contemporary social change -p79
  • Architect Jaime Lerner, the charismatic mayor of Curitiba in southern Brazil, invented the idea of “Acupuntura Urbana” to describe the insertion of building-as-events into the urban landscape to spice it up. (Joern Utzon, Gehry, Zaha Hadid, Starck, Moneo..)
  • In ecological terms, cities are prime energy exchangers. They attract people that are both producers and buyers –p81
  • The focus now is on sustainability. Can cities,,, lead in creating sustainable eco-systems? – P82
  • The internet: The world’s most adaptive market –p82
  • The internet’s greatest impact is on individual autonomy and network collaboration. These may seem mutually incompatible. –p85

Negotiating uncertainty

  • If we want to turn an idea into money, we have to negotiate a contract.
  • The ten factors in these negotiations are:
  1. Serial change
  2. Niches
  3. The personal difference
  4. Novelty
  5. Meaning is uncertain
  6. Value is uncertain
  7. Demand is uncertain
  8. The network office
  9. Copyright is currency
  10. Mixed portfolios

The way forward

  • Schumpeter rejected the classical assumption that supply and demand would always resolve themselves around equilibrium point. ….He was more interested in the process of moving from one state to another. – p106
  • The claims for today’s creative ecology rest in Schumpeter’s first claim about creative destruction being right and his second claim about hostile intellectuals being wrong. – p107
  • An economic system that consists entirely of state- or oligarchy-owned resources of land, capital and labour dos not prevent creativity but it does prevent a creative ecology. – p108
  • In some European countries, the creative ecology is seen as the side-effect of a a decline in manufacturing,
  • Japan’s weakness is its uniformity –p110
  • China: its main vulnerability is its dislikes of diversity,. Perhaps matched by the current shortness of creative talent, but its creative ecology has grown faster than any other country, ever.
  • East and West: Western companies emphasize the novelty of what is produced and sue ‘breakthrough’ and ‘disruption’ as words of praise….There are signs of change on both sides. –p114

New places, new policies

  • A government’s job is to know and to control, but creativity is often not knowable and never controllable. – p117
  • Governments that want a creative ecology will carry out a policy audit  on their laws and regulations to ensure that they are fit for the ecology… Three examples: learning to learn, copyright (balancing ownership and access) and international trade. – p120

 

Three steps to growth

  1. Everyone is creative
  2. Creativity needs freedom
  3. Freedom needs markets
  • In this sense, freedom is a primary tool that enables one to use other tools such as technology and money.
  • A market of some sort is a necessary condition for economic activity.
  • Creativity needs an indefinitely large number of market-places: social marketplaces… Commercial marketplaces… -p134

The new billion

  • There will always be a tension between private creativity and the public transactions that result, between the individual and the group, and between freedom and regulation.
  • Looking for a job: every few years, a billion young people are looking for their first job (thinking is a proper job).

 

Some references:

http://create2009.europa.eu/about_the_year/documents_of_the_year.html

European Ambassadors for Creativity and Innovation : Manifesto

http://create2009.europa.eu/fileadmin/Content/Downloads/PDF/Manifesto/manifesto.en.pdf

 

Creative Industries : Contracts between Art and Commerce – Richard Caves (2000)

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Reference: Creative Industries : Contracts between Art and Commerce – Richard Caves (Harvard University Press, 2000)

Introduction: Economic Properties of Creative Activities

  • Basic Economic Properties of Creative Activities
    • Demand is Uncertain : “nobody knows”
    • Creative workers care about their product: “art for art’s sake”
    • Some creative products require diverse skills: “motley crew”
    • Differentiated Products: “infinite variety”
      • A is better than product B, what an economist calls vertically differentiated
      • Two songs or… may be quite similar in the character and quality that consumers see in them, but they are not identical. In economic terms they are horizontally differentiated – p6
    • Vertically differentiated skills: “A list / B list”
    • Time is of the essence: “time flies”
      • Along the motley crew property, temporal coordination implies a hold-up problem: an indispensable input demanding better terms ion the threat of withholding its services at the last moment. – p8
    • Durable products and durable rents: “ars longa”
      • The legal duration of the copyright
  • Theory of contracts
  • Complete contract, bounded rationality, incentive contracts, reputation, implicit contract, switching costs, asymmetrical information, decision rights, nexus of contracts,

Part I: Supplying Simple Creative Goods

  1. Artists as Apprentices

  • Schooling and artist’ tasks and values
    • Visual arts students
      • This problem-solving process is both task and reward of the artist. Student asked why they make art invariably invoke “rewards not from the work but in the work, rewards derived not from the product but obtained in the process of production” –p22
      • Overall, success rides on the ability “to relate conscious tasks to deeply felt subconscious issues in novel ways” –p23
    • Music students
    • Creativity and craft
  • Apprentice stage and the selection process
    • Sometimes agglomeration economies stem from the complex production process that requires coordination of many creative and humdrum inputs… IN other cases agglomeration arises in order to facilitate artists’ training and development processes and gatekeepers’ filtering activities. – p26
    • Getting one’s work known
      • The logic of agglomeration comes clear from the nature of the apprentice’s task and search procedure.
      • The artist spends time looking at the work of other artist …. Continuous dialogue takes place to establish what are the major issues and new ideas…. Plugged into the latest ideas about what is valid and important, even before this dialogue is embodied in new worlds of art on viewed in the galleries and glossy magazines – p26
      • Contacts with dealers, visibility, public exposure
      • I.e. Warhol
    • Apprentices’ economics choices

 

  • The logics of art centers
    • Creative work and centripetal pull
    • Art centers’ built-in turnover
    • Location among cities

 

  • Apprenticeship and gatekeeping in other art worlds
    • Writers, agents and publishers
    • Popular musicians, managers, and record companies
    • Classical musicians and the contest circuit

 

2. Artists, Dealers, and Deals

  • Relationship between artist and dealer
    • Promoting the artist’s career
    • Ideal and attainable contracts
    • Cooperation in practice
  • The ecology of art galleries
    • Dealers’ Qualifications
    • Hazard and strategies
    • Vertical differentiation
    • Dealer-artist links and turnover

3. Artist and Gatekeeper: Trade Books, Popular Records, and Classical Music

  • Author, agent, and publisher
    • Agents as intermediary
    • Author and publisher
    • Editor and publisher
  • Dealings between artist and record company
    • Terms of recording contracts
    • Implications for incentives
    • Governance of contracts
  • Agents and job-Matching
    • Whose side are you on?
    • How many agents?
    • Agents in classical music

4. Artists, Starving and Well-Fed

  • Artists’ success : superstardom
    • Stars and emerging artists
    • Scope for superstars
    • Superstars in history
    • Stardom and talent
  • Artists’ incomes and their distribution
    • Artists’ labor supply
    • Evidence: level and composition
    • Dispersion of artists’ earnings and employment

Part II: Supplying Complex Creative Goods

5. The Hollywood Studios Disintegrate

  • The studio system’s heyday
    • The studio system and talent contracts
    • The studios’ assembly lines
  • Transition to spot production
  • Flexible specialization
  • Evidence of flexible specialization
  1. Production outside of studios
  2. More specialized service firms
  3. Smaller specialist firms
  4. Agglomeration economies
  5. Part-time work
  6. Craft union roster
  7. Increased deal-making entrepreneurship
  8. Sources of studios’ profitability
  9. Repeat business
  10. Training and film schools
  11. Festivals as film markets

 

6. Contracts for Creative Products: Films and Plays

  • The feature-film deal and its contract structure
    • Contract structures: the screenplay
    • Assembling the creative team
    • Contingent compensation in film deals
    • Finance and distribution contracts
    • Strategic accounting
    • Finance and efficient incentives
  • Assembling Broadway plays
    • Sticky terms unstuck
    • Complex task, uncertain product

7. Guilds, Unions, and Faulty Contracts

  • Origins of creative guilds
    • Actor’s equity
    • American federation of musicians
    • Hollywood talent unions
  • Creative talents and A list / B list rankings
  • Still ranked inputs in complex creative projects
    • Talent pools and diversity
    • Vertical differentiation and staffing creative projects
  • Talent guilds and craft unions: the ongoing deal
    • Hold ups
    • Talent guilds and pay differentials

 

8. The Nurture of Ten-Ton Turkeys

  • Role of the option contract
  • Failed Motion pictures
    • The bonfire of the vanities
    • Heaven’s gate
    • Sources of disasters
  • Mammoth first printings, giant returns

 

9. Creative Products Go to Market: Books and Records

  • Informing potential buyers
    • Methods of sales promotion
    • Return privileges and resale price maintenance
    • Promoting blockbusters
  • Best-seller lists and top 40 hits
  • Physical distribution of books
    • Decline of independent bookstores
    • Litigation over quantity discounts
  • Promotion, distribution, and concentration of producers
  • Distribution transformed?

10. Creative Products Go to Market: Films

  • Film distribution and deals with exhibitors
    • Exhibition contracts
    • Bidding, blind selling, and block booking
  • Promotion of films and ongoing distributor-exhibitor dealings
    • Distributors’ options for promotion and exhibition
    • Governance of distributor-exhibitor relationships
  • Arm’s-length deals and vertical integration

 

Part III: Demand for Creative Goods

11. Buffs, Buzz, and Educated Tastes

  • Creative consumption as rational addiction
  • Creative consumption in its social context
    • Herd behavior and information
    • Information in social discourse
  1. Word-of-mouth is far more powerful transmitter of information on creative goods than on goods that lack their cachet as a social catalyst –p181
  2. Herd behavior has a motive unrelated to eliciting information before a purchase.
  3. The superstar effect is intensified
  4. The value of less popular (more specialized) creative goods will depend on how easily persons with shared interests make contact with one another. –p181
  • Fashion. An application
  • Fame and fads: an application
  • Buffs and casual consumers
  • Pop culture and high culture

12. Consumers, Critics, and Certifiers

  • The market for critical opinion
    • Objectivity and interest
    • Critics and dealings in the art market
  • Prizes and awards
    • Academy awards
    • Ecology of prizes
  • Sellers who certify: book clubs

13. Innovation, Fads, and Fashions

  • Innovation: character and consequences
    • Innovation and creativity
      • Innovation is the visible tip of the iceberg of everyday creativity – those creative efforts that strike the market as unusually distinctive, satisfying, and /or productive in opening new ground. – p202
    • Sources and consequences of innovation
  • Innovation and organization in popular music
    • Sources of innovation
    • Turnover among record companies
    • Country music goes to town
  • Innovation in toys and games
    • Innovation and turnover
    • Innovation and toymakers concentration
    • Video games
  • Innovation in the visual arts
    • Abstract expressionism
    • The armory show

 

Part IV: Cost Conundrums

14. Covering High Fixed Costs

  • Fixed costs in creative activities
  • Nonprofit organizations and the fixed-cost problem
    • Contract failures and nonprofit organizations
    • Contract failures with creative inputs
    • The “cost disease”
      • Because productivity advances art uneven rates in different industries, this process alters the relative process of goods, cheapening those with the greater opportunities for productivity advance. The performing arts, goes the argument, are the losers in this game, as the labor hours required to perform Beethoven string quartet remain exactly what they were when Beethoven wrote it. – p229
      • This analysis has been put forth as an argument for public subsidy to the performing arts. –p229
      • Some art producers and consumers, the ones not favored by new technologies, are worse off. –p229
  • Nonprofit organization in the performing arts
    • Incidence of nonprofit firms
    • Nonprofit ‘ policies and motives

 

15. Donor-Supported Nonprofit Organizations in the Performing Arts

  • Organization of music performance
    • The American scene
    • The entrepreneurial nonprofit organization
    • European patterns
    • Fixed costs and upgraded quality
  • Creating and sustaining nonprofit organizations
    • Motives of potential donors
    • Donations in social context: nineteenth-century Boston
    • Charity and implicit contracts
    • Corporate charitable contributions

 

16. Cost Disease and Its Analgesics

  • Effects on real costs and quantities of creative product
  • Broadway and regional theater
  • Substitute creative products
  • Other adjustments on Broadway
  • Cost squeeze In the theatre
    • Regional and noncommercial theatres
    • Off- and –off-off-Broadway
  • Cost squeeze and the symphony orchestra

 

Part V: The Test of Time

17. Durable Creative Goods: Rents Pursued through Time and Space

  • Durability of creative goods and its implications
    • Physical preservation
    • Taste value of durability
    • Trade in durable creative goods
    • Durability and creative inspiration
  • Spatial markets for creative goods: the trip through the galaxy
    • Explaining the sequence
    • Licensing spin-offs
    • Rights to visual artists’ works
    • International movement of creative goods

18. Payola

Payola is a bribe paid in order to influence a gatekeeper’s choice among competing creative products. … it does have a special affinity for creative goods. That is because infinite variety tends to ensure a large number of creative goods clamoring at the gate, nobody knows which the ultimate consumer will prefer, and the creative good’s cost is mostly fixed and sunk.– p286

  • Logic of Payola
  • Payola and the Sound of Music
  • Music Publishing
  • Payola and Radio Airplay
  • Consequences of Payola and Its Regulation
  • Payola in Other Settings
  • Vertical Corporate Mergers: Capitalized Payola

19. Organizing to Collect Rents: Music Copyrights

  • Intellectual Property Rights in Creative Activities
  • Songwriters and Royalty Sources
    • Mechanical Royalties
    • Performance Royalties
    • Other Sources
  • Copyright collectives
    • Assembling the Coalition
    • Negotiating Royalty Payment
    • New Music-Distribution Technologies
    • Structure of ASCAP’s Charges and Disbursements
    • ASCAP faces competition
    • Ongoing Negotiation and Rivalry
    • Songwriters’ and Publishers’ 50-50 Split
  • Creative Work without Copyright: British Novelists in Nineteenth-Century America
  • Copyright in Perspective

20. Entertainment Conglomerates and the Quest for Rents

This chapter explores how the distinct properties of creative industries interact with the activities of conglomerates – p314

  • Creativity and Bureaucracy
  • Rents, Auctions, and Media Conglomerates
    • Conglomerates versus Arm’s-Length auctions
    • Conglomerates’ Role in Practice
      • Predominance of auction values
      • Competition among publishers
      • Conglomerates’ publishing operations
      • Conglomerates’ Longevity
  • Vertical integration: Rent-Seeking or Trap-Avoiding
    • Merging with a  Gatekeeper
    • Vertical Mergers in Media Industries

21. Filtering and Storing Durable Creative Goods: Visual Arts

  • Collectors as Gatekeepers
    • Behavior Patterns of Collectors
    • Corporate collections
  • Intermediaries: Auctions and Secondary Dealers
    • Charges to sellers and Buyers
    • Rivalry for major collections
    • Auctions and Secondary dealers
  • Museums and their policies
    • Museums as donor-supported nonprofit organizations
    • Museums’ Choice of policies
    • Competition among museums

22. New versus Old Art: Boulez Meets Beethoven

  • Stocks and Flows of Visual Artworks: Some Relationships
    • Art Stocks, Fashion, and Relative Prices
    • Art Market and Boundaries of Collecting
    • Museusm, old Art, and New art
    • Museums as absorbers of art
    • Plunder
  • Musical Masterpieces and the Hardening Repertory
    • Entry to the Music Repertory
    • Composer’s plight

Epilogue

  • Ecological forces in themarket determine the organizationof gatekeepers themselves – p363
  • The many would-be creative workers who suffer reejctino either toil in dedicated poverty or settle for humdfrum work, while thopise who experience creative success reap adulation and wealth in what tend to be winner-take-all contests – p363
  • Unfairness for the artist…. The artist can demand decision rights over subsequent stages, but at great cost in what the next-stage fabricator will pay for her work. – p364
  • The prevalence of nonprofit arts organizations is  well explained by the pressure of high fixed costs , whose effect is amplified by the cost-disease problem.- p365
  • Although both high and popular culture serves both buffs and casual consumers, the scale of investment in cultural consumption capital is on average much higher than for high culture. Regular customers are les numerous… and the fixed costs more pressing.

 

 

OTHER REVIEWS:

http://www.complete-review.com/reviews/cavesre/cindusts.htm#summaries

http://www.complete-review.com/reviews/cavesre/cindusts.htm#ours

http://www.timeshighereducation.co.uk/story.asp?storyCode=159587&sectioncode=9

http://www.hup.harvard.edu/catalog.php?recid=27264&content=reviews

Author’s profile:

http://economics.harvard.edu/faculty/caves