Creative Industries
All countries have around the world have significant sectors that contribute to the economic sustenance and overall growth of the nation. There is the primary sector, which comprises of agriculture and mining, and a secondary sector, which encompasses manufacturing and processing new products. The tertiary sector is third on the list and is composed of the service industry, such as communication and transportation. However, the service industry has seen itself rise unprecedentedly through speed, cost reduction, and reliability to the customers (Daniels 2014, 111).
In this paper, I will discuss the theory of service and the creative industry. I will highlight the connection between the two terms, the evolution of the service and the creative industry, and the significance that the industry has to the economy of a nation. I will also expound on the characteristics that make up the service/creative industry as well as the limitations that the industry faces in pursuit of competitive advantage.
Question 1
Theoretical Argument of the Nature of ‘Creative Industries’ Today
The service industry comprises of minor but vital agents that boost the economy such as banking, tourism, social services, and education. In this sector, employers and employees utilize the available resources like suitability, assistance, knowledge, and skills to propel the services. The service industry provides customers and enterprises with service and aim for some profits after delivering the package (Daniels 2014, 111). Services may include transportation/shipment of goods, delivery, or product sale from manufacturers to consumers. In comparison, the creative industry involves the use of a person’s talent, skills, and creativity to create jobs and wealth by exploiting their intellectual capabilities. Creative industries include music, publishing, art, design, architecture, film and video, games, fashion, media, literature, and performing arts (Hartley 2014, 15). Other scholars suggest that creative industries do extend to other businesses such as health, education, engineering, and technology.
Today, technology has advanced, and it may be time to rethink how we define creative industries. For instance, we have more sustainable and environmentally friendly biofuels and biochemicals. Also, businesses have advanced from brick and mortar systems to online marketing and transactions. These businesses cannot be classified as art-based, but they involve creativity, skills, and innovation (Hartley 2014, 15). The world today demands for creative minds who can develop quality products and services in any business sector. We are looking at improving everything from agriculture to medicine and infrastructure, just to mention a few. Therefore, creative industries or rather creative economy is needed more than ever in the current world.
Comparing Creative Industries and ‘Traditional Ones’
Since the 19th century, scholars have grown interest in studying and reviewing the creative industry. Nonetheless, studies show that the creative industry began long ago before world wars one and two. During World War II, countries would send secret agents to other countries that they thought were a threat to them (Daniels 2014, 111). The spies had a hard time sending and receiving information, which made it a lot harder for waring countries. Communication during this time was not difficult for governments only but also citizens. Reaching out to loved ones would take a lot of time. Today, all people need is to press a button and talk to anybody around the world (Yang, Cheng and Lin 2015, 827).
Transportation today is faster and convenient, and so are the manufacturing industries. One cannot compare the kind of healthcare and education system that existed about fifty years ago with what we have today. Even the entertainment sector has its advancements to show. Through creativity, all industries in all sectors have improved how they operate in the business, and the advancements have led to positive outcomes. Before, people could walk to the market and roam for a long time searching for the items they need. Today we have malls and even online shopping for almost everything. Some traditional industries focused on upholding the culture and social heritage of what existed while the others offered required services to people. On the other hand, creative industries used the inspiration of the traditional ones to create the monetary value of the services they give (Gibson, 2014). Bottom-line is that creative industries have broadened and not only fall in art but also other sectors.
Characteristics of Creative Industries
Intangible
Creative industries have distinguished features that differentiate them from other industries. The services offered by creative industries are intangible as compared to other sectors contributing to the economy of a country. The industry provides experiences to suit customer interests through actions as compared to tangible products produced by manufacturers (Hartley 2014, 10). For instance, a company that manufactures a new product such as phones and releases them to the market remains the sole and rightful owner of the products. People can touch and see the product. However, creativity cannot be felt or seen but only manifests itself in products. For instance, the internet cannot be touched, seen, or tasted, but we use it for businesses, entertainment, and other transactions.
No Accurate Price
Service industries do not have an accurate price for the services they offer. It would be difficult to measure the costs incurred by comparing the outcomes of services and that of manufactured products. It is difficult to determine the actual cost of units of services, time spent, and inconveniences and relate to the quality of services provided with the price to be awarded. The manufacturing industries have a record of unit OD productions, which they use to dictate the price of their product to gain profit (Gibson, 2014). This existing difference between manufacturing and service industries calls for the creation of models to evaluate the worth of services provided.
Inseparability
Inseparability means that a manufacturer produces a product, and the customers consume the product simultaneously without storing it for future use or access. In the secondary industries, manufactured goods take time to reach the clients. On the contrary, some services in the creative industry require the customer’s presence for the service to be executed and an agreement to be reached. As such, creative service industries ought to ensure that their services are high-quality and timely delivered (Hartley 2014, 11). Customer feedback is one of the main factors that determine the success of a creative industry.
Perishable
Services are considered perishable and cannot be kept for future use or reuse. This means, when a client receives a service, it is impossible for the customer to reuse the service later in life (Yang, Cheng and Lin 2015, 830). For instance, medical equipment manufacturers can produce equipment that can be stored and be used at the time of need even after a long time. On the contrary, a patient who needs surgery and is operated on by the surgeon cannot reuse the services. It is impossible to save or re-administer the surgery.
Variability
Services offered by the creative industries vary and are unique from each other. Creative service providers do not follow any universal guidelines or standards to create uniformity of the services (Yang, Cheng and Lin 2015, 830). The interpretation of this characteristic is different among individuals. Some argue it as a challenge facing the creative industry as there no limit to what is offered and how it is served. Others see it as an advantage as it allows the providers the freedom to explore and introduce diverse services to their clients. Otherwise, why is it called creative if there are limitations?
Impact of Policies
Every sector has policies that balance the operations in the industries. Similarly, the creative industry has policies and procedures, although some come with controversies, which need to be straightened. The governments control how policies are made and the way they are implemented. For instance, licensing and certification are key for any business. Therefore, if some creative industries do not have proper documentation, it could lead to conflict within the sector. Standardization is another form of policy in the service industry, and it puts into consideration the resources utilized, geographical location, population, and other factors (Hartley 2014, 15). By now, we understand that creative industries contribute so much to the other sectors and are indispensable for they contribute to a better future. Therefore, there is a need for State interventions in formulating and implementing effective policies.
Question 2
Significance of Cluster Theory to Creative Industries
The cluster theory is a representation of a business strategy that focuses on concentrating specialised industries with a locality. Cluster business comes with advantages such as less competition hence high profits and unchanged customer base, hence a steady income (Sharma and Sonwalkar 2016, 120). The creative industry within service industries is among the domineering industries as it connects other industries, hence a huge contributor to the economy. The primary industries produce raw materials that have no value to the consumers. The secondary industries process the raw materials and develop products that can be used by consumers. These products cannot reach the customers without the service industry being involved (Gibson, 2014). Creative industries provide a medium between the producers/manufacturers and the consumers. As such, the service industry is a link that serves the needs of both consumers and producers in that the consumers will receive services that suit their needs and interests while the producers gain profits.
It is evident that 95% of the world’s economy is dependent on creative service industries for the acquisition and supply of products and services (Sharma and Sonwalkar 2016, 110). With time, governments have realized the role of creative industries and have invested in them. For instance, ten years ago, innovative clusters did not exist in London, and it was clear that development and entrepreneurial ventures were lagging behind. Then policymakers empowered Shoreditch, which later bore the seeds that spread across North East London. Today, London is blooming with fashion, product, and web designers as well as software start-ups. (Armstrong, 2019). This shows the potentials or creativity among individuals with a free-flowing and team-based culture. With little recognition and organization from the government, countries will be able to overcome many challenges facing them and their citizens.
How Creative Industries Represent the Sector
A creative economy report done by the United Nations and UNESCO (2013) stated that the creative industries have greatly boosted the economy of the world. Creative industries have access to all forms of business, and their rapid growth has greatly transformed the world’s income. The research shows that between 2002 and 2011, the world’s annual growth in creative exports increased by 12.1% (UNESCO, 2013). Despite boosting the economy, creative industries have created employment for many hence a reduction in the poverty index. Individuals in the reactive industry are also believed to have high levels of self-esteem, a better quality of life, and contribute to the wellbeing of their communities through culture. Creative industries also use innovation and creativeness to build the primary and secondary sectors (UNESCO, 2013). As such, the creative industries fully represent the sector.
Limitations Faced by Creative Industries
The creative industries have faced many challenges from the beginning until now. Among the challenges is the rapid change of environment. The creative service industries face rapid changes in the environment based on the dynamics of changing technologies such as globalization, digital migration, and the internet. This has led to the loss of jobs. An example is that people in the 20th century used the mailing corporation to send emails, but today, the email transition made those that worked in the corporation to lose their jobs (Gibson, 2014). Another challenge that faces the industry is the lack of funds to support the creative companies. The banking sector lacks experts who can analyze the business models of creative industries and support their production. Creative industries require funds to facilitate their services, and without support from banks, they may not be able to perform to full potential.
Creative service providers are people, and they face personal problems linked to national and linguistic lines. One of the independent surveys conducted revealed that customers preferred services from a provider who has the same nationality and a similar language as theirs. With this trend, customers tend to lean on particular providers leaving out the rest even though they may have better services (Sharma and Sonwalkar 2016, 118). Such consequences may lead to creative producers exiting the industry, which will have a huge negative impact on the future creative industry. In addition, some creative industries lack the knowledge of creativity and how to meet the interests of the consumers. As such, they end up offering low-quality products and services hence low customer satisfaction. This could lead to mistrust from consumers.
The creative service industries also lack a sufficient number of trained personnel to match up to the advancing technology. Technology is rapidly changing, and there is a need for skilled individuals who can quickly adjust to the changes and meet the needs in the market with ease (Dhar 2015, 425). Most individuals in the creative industry are trained in institutions where they acquire high theoretical and creatives skills but lack technical skills. The industry needs people with all three skills for it to last in the market. Lastly, the government fails to recognize and invest in creative industries, which degrades its potentials and makes it look like a venture for peasant citizens.
References
Armstrong, C., 2019. Clusters are at the heart of the creative economy. British Council. Retrieved from https://creativeconomy.britishcouncil.org/guide/clusters-are-heart-creative-economy/
Daniels, P.W., 2014. 4 SERVICE INDUSTRIES: SOME NEW DIRECTIONS.Progress in Industrial Geography (Routledge Revivals), p.111.
Dhar, R.L., 2015. Service quality and the training of employees: The mediating role of organizational commitment. Tourism Management, 46, pp.419-430.
Gibson, C. ed., 2014. Creativity in peripheral places: Redefining the creative industries. Routledge.
Hartley, J., 2014. Renewing Place, Knowledge, Economy, Culture–The creative industries agenda for the global, digital era. In A Study of Creative Industries: “The Queensland Model” (pp. 1-21). Economic Science Press.
Sharma, V. and Sonwalkar, J., 2016. Consumer retention strategies for telecom service industry in India: a theoretical perspective. Journal of Management Research and Analysis, 3(3), pp.110-121.
UNESCO. (2013). Creative industries boost economies and development, shows UN Report. Media Services. Retrieved from http://www.unesco.org/new/en/media-services/in-focus-articles/creative-industries-boost-economies-and-development-shows-un-report/
Yang, C.C., Cheng, L.Y. and Lin, C.J., 2015. A typology of customer variability and employee variability in service industries. Total Quality Management & Business Excellence, 26(7-8), pp.825-839.