Understanding innovation capabilities in the creative and cultural industries: Towards a new framework for managing innovativeness in places

The importance of innovating for regions and places to stay competitive and to manage the digital transformation of society and the economy has been widely acknowledged. However, some organisations prove to be better at reproducing innovation success than others. In literature, the differences in innovation success have been explained through innovation capabilities. Innovation capabilities can be broadly defined as a firm's abilities to “identify new ideas and transform them into new/improved products, services or processes that benefit the firm” (Aas and Breunig, 2017). While a lot of research has investigated innovation capabilities to explain innovation output of different industries and firms, there is a lack of research that looks at innovation capabilities of firms of the creative and cultural industries (CCIs).
At the same time, the CCIs have been already widely acknowledged as a driver for innovation in regions creating spillover effects in both academia (e.g. Fleischmann, Daniel and Welters, 2017) and by policy makers (e.g. Cooke and De Propis, 2011). This is also the case for Wales and the Cardiff Capital Region (CCR). In 2016, the CCR City Deal was established by the UK and Welsh Governments and the ten local authorities in South East Wales to generate significant economic growth to the region through investment, upskilling, and improved physical and digital connectivity. The CCIs are one of six major target sectors of the City Deal.
This article argues that research into innovation in the CCIs is however needed, due to the specific characteristics of the sectors, which are highly reliant on project-based work and is constituted of a large freelance workforce. Additionally, the cultural value and public subsidies for the CCIs creates different innovation processes. Besides, understanding creative innovation is challenging, since creativity and innovation are particularly important organizational phenomena for the CCIs. At the same time while the CCIs is increasingly targeted by policy makers as local innovation driver, the approaches to increase their innovation capabilities is still embedded into “old” policy paradigms for innovation in other sectors.