South African Cultural Observatory

The Overlaps Between The Digital And Creative Sectors: Innovation And Technology In The Creative Economy

BY 02.04.20

This research sought to examine the nexus between digital technologies, innovation, intellectual property, and diversity in the cultural and creative industries (CCIs). It is part of an international collaboration between the SA Cultural Observatory and researchers at the UK’s Coventry and Newcastle Universities.

Despite the growing interest in the contribution of CCIs to growth and job creation in South Africa, innovation is still mostly focused on STEM (science, technology, engineering and mathematics) sectors, with little existing research on how digital technology has influenced innovation, particularly in the increasingly evident overlaps between the digital and creative sectors, and how such firms create, use and protect their intellectual property.

A pilot study of CCIs operating in the Cape Town metropolitan area cluster in South Africa was conducted. The research design was based partly on a similar study conducted in the UK in the Brighton cluster (Sapsed and Nightingale, 2013), which enabled interesting international comparisons.

The results of the study show strong evidence of a cluster of CCI firms in Cape Town that are “fused”, that is, they combine digital technology with creative inputs to produce goods and services. They are also an interdisciplinary cluster, with high levels of innovation in business processes, goods and services. More than a third of firms are start-ups, having been founded in the past 5 years.

While most firms are small (median number of employees was 4, and 23% were owner-operated with no employees), they have the ability to draw on a wide range of external skills around specific projects (median of 5 freelancers employed per firm in the previous financial year). This business model allows them to be agile and productive in the volatile, project-based world of the CCIs.

Although fused firms in the Cape Town cluster are not yet showing the superior growth performance found in the UK, results suggest that the Draft Science, Technology and Innovation Policy of South Africa, currently very heavily biased towards STEM sector firms, could profitably include the CCIs. This is particularly the case for sectors like the Design and Creative Services and Audio-Visual & Interactive Media domains, which are most likely to use innovative technologies and contribute the largest share of the creative economy’s part of GDP. Similarly, the current South African White Paper on Arts and Culture could pay more attention to a broadened definition of “innovation” and offering support to firms combining digital technology and creative inputs. A suggestion is that the current Arts and Culture Venture Capital Fund be used to finance digital innovations and to offer support in registering innovations so that IP can be more effectively protected and capitalised on.

Although the ownership and employment demographics of firms in the Cape Town cluster were not representative of the population, fused firms were more likely to be inclusive and diverse, both in terms of ownership and employees, than unfused firms. Support for these kinds of firms would thus also further the social justice and transformation agenda.

Read more: www.southafricanculturalobservatory.org.za/download/472

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