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First published by Allen Lane 2001
Published by Penguin Books 2002
Reprinted with updated material 2007
This revised edition published in Penguin Books 2013
Copyright © John Howkins, 2001, 2007, 2013
Cover photograph: Shop window in Clerkenwell © Carl Glover/Stone
All rights reserved
The moral right of the author has been asserted
Typeset by Jouve (UK), Milton Keynes
ISBN: 978-0-141-97704-1
Preface: Who is Creative, and Why?
1 When Orcs Walked Across Oxford Circus
2 The Tripod
3 The First Talent
4 Where Ideas Take Root
5 Managing Ideas
6 Owning Ideas
7 Search, Learn, Mix and Share
8 Heartlands: Art, Design, Media and Innovation
9 Cities: The Spaces In-between
10 My Brain, My Asset
Notes
Bibliography
Acknowledgements
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Who is creative? Who wants to be? Who can be? Everyone is born with a personal imagination and the raw instinct to test it by playing, asking questions and coming up with new ideas. Being creative is part of growing up and a sign of being normal. But then for years, when children went to school to be taught facts and how to behave, their creativity was relegated to the art class. Teenagers emerged more-or-less educated but their creativity was muted.
This downgrading of one of our most precious assets is no longer inevitable. School teachers are more willing to encourage self-expression and to answer questions, and more people go to university where they are expected to challenge conventional thinking. Companies want to hire people who have ideas. We are surrounded by crises of resources, energy, poverty and finance that desperately need clever, imaginative solutions. Creativity and its business-like cousin innovation are the most interesting and most profitable areas of the economy and the presiding genius of the internet. Creative thinking has become something that ordinary people want to do and are discovering they can.
When IBM asked 1,600 CEOs in 60 countries about leadership the CEOs said creativity trumps all other leadership characteristics and said it includes being ‘comfortable with ambiguity’, which is not something one associates with IBM. Samuel J. Palmisano, IBM’s CEO, who commissioned the survey, said it was ‘a wake-up call’.
You can sense the new mood in the people writing code and algorithms for dotcom businesses in California and in the digital start-ups and pop-up shops in London. It’s visible in the immersive theatre and video installations throughout Europe, the fashion, online blogging and design networks in Shanghai and the geeks and artists discussing open source healthcare, biomimicry and ubiquitous computing at the SXSW (South by SouthWest) Festival in Texas. It is happening in low-energy power schemes in India and in design rooms in the favelas in Brazil and among the under-privileged children playing in the Notes of Peace orchestra in Bogotá.
It’s in the mind of Cory Doctorow, online activist and novelist, who has a story and a research project about sending 3D printers to the moon to build structures for future landings. Instead of squirting ink on to a flat surface, 3D printers use plastic and other materials to build up a 3D object. His plan may seem far-fetched but the American army already uses backpack-sized 3D printers costing $550 in Afghanistan so soldiers can reproduce spare parts on the go. Audiences of Skyfall who watched James Bond’s beloved Aston Martin DB5 car explode in flames might have guessed it wasn’t a real car but few would have known the life-like model had been printed by a 3D printer in Germany instead of made out of traditional board and glue.
This book is about these people using their imagination and exploring the relationship between creativity and business and money. Creativity is not new and neither is economics but what is new is the nature of the relationship between them, and how the expression of one’s own ideas, whether in traditional media, online or with a 3D printer, can be a source of both pleasure and profit. In the ten years since the first edition of this book, the opportunities to share ideas have increased, the cost of doing so has dropped and markets have expanded.
This book is about what we want and what we are good at. We face a daily choice which is measured at one end by creativity and at the other by repetition. Which do we want? It is a choice between thinking and not-thinking, between learning and not-learning.
People with ideas – people who own ideas – have become more powerful than the people who work machines and, in many cases, than the people who own machines. Yet the relationship between creativity and economics remains almost invisible. I decided to see if I could bring together all these elements – creativity, management, capital, wealth and welfare – into a single framework.
We are living in extraordinarily creative and inventive times. I don’t mean today’s ideas are ‘better’ than yesterday’s but that there are more people being more creative, seeing it as part of their identity, than ever before. We can measure the change by the numbers of people involved (scale) and the reach of what they do (scope). The core creative sectors contribute over 12 per cent of Europe’s, America’s and Japan’s gross domestic product (GDP) and a higher proportion of their growth. America exports more value in terms of copyright than food, soft drinks, cars, computers and planes and Britain’s fashion industry employs more people and makes more money than do its car or steel industries. In China, creative sectors contribute a fast-increasing 4–5 per cent, rising to 10–11 per cent in Beijing and Shanghai. Over a hundred countries have national plans for their own creative economy and almost every major city in the world claims to be creative, with some interesting exceptions.
The scope is bigger, too. When artist Elaine Shemilt asked Scottish crop geneticists for some of their genetic data, they expected she would produce beautifully artistic patterns, but she did much more than that. She stripped the data to pure pattern and visualized relationships that gave meaning to what the scientists had dismissed as background noise. She enabled them to see gene sequences they had not previously noticed, provoking them to think new theories about how genes develop in pathogens. Shemilt’s use of her personal aesthetic to create new knowledge typifies the creative economy.
Creativity pops up anywhere one person, alone, taking a moment to think, comes up with a new way of doing something interesting. Sarah Collje in South Africa had the idea of adapting her grandmother’s use of hay boxes for retaining heat to invent a Wonderbag that cooks food and she aims to save tonnes of carbon within five years. Will Allen, who started Milwaukee’s urban farm movement, Growing Power, was being creative not only in his idea of building farms in the middle of derelict cities but also in his approach to hydroponics, his choice of crops and his invention of a new market.
The Scottish government has asked the ‘creative talent here in Scotland, including a couple of people from computer gaming, to study terrorism’. In this new world of start-ups and pop-ups, it did not surprise me to discover that America’s Central Intelligence Agency (CIA) has a venture capital arm whose first CEO started his career developing video games. In China, Li Wuwei, deputy chairman of the National People’s Consultative Conference and a leading champion of the country’s creative economy, asked the national committee for agriculture to implement creative thinking in farms nationwide.
When a sceptical official in China’s Ministry of Education asked me to sum this up in a few words I offered three propositions for what I call a creative ecology. They form a trilogy: everyone is born creative; creativity needs freedom; freedom needs markets. He liked the name and the principles. A week later I got a similarly enthusiastic response from the president of Time Warner Sports Merchandising in Los Angeles. Since then, these propositions have formed the core of my work on creativity and innovation.
By setting yardsticks of freedom and markets we can evaluate how people manage ideas and how they learn to do something better and we can also evaluate the impact on social welfare. One cannot have too much art (one can have too much bad art, but that’s a different matter) but when creativity grows in scale and scope and permeates society then it affects social welfare and equity. Freedoms can conflict. Markets can misallocate resources. Underlying these issues are the tensions between individuals who choose creativity as a way of life and those who desire familiarity and stability.
I start with an overview of the creative economy and show how creativity happens when an individual is trying to solve a problem (which word, which colour?) or to deal in something more personal and try to make their world more pleasing. I talk about people’s search for knowledge and beauty (the Twin Peaks) (chapter 1). I make Three Propositions (The Tripod): ‘Everyone is born creative’; ‘Creativity needs freedom’; and ‘Freedom needs markets’ (chapter 2). I show how creativity leads to ideas that are personal, meaningful and new and list some characteristics of creative people (chapter 3).
Nobody has ideas in a vacuum, so I describe a Creative Ecology and its four factors of change, diversity, learning and adaptation (the Quad). A creative mind is an Adaptive Mind, continually learning and adapting, trying to understand and improve. We manage this process through relationships that range from mimicry to collaboration, competition and conflict (chapter 4).
The second proposition includes the freedom to manage one’s relationship to an idea, so I explore management and how people work together and share ideas. The closer we get to markets and transactions, the more we need to negotiate contracts (chapter 5). I describe copyright, patents and other laws on intellectual property and show how they are changing in the light of new ideas about ownership and access (chapter 6).
Online markets are the fastest growing economy in the world, unaffected by the old economy’s crises in debt and finance and by the old world’s crisis of political governance. Many new developments in art, culture, media and innovation start online and only if they make sense online do they begin to have a physical presence. I describe what is happening with ‘big data’ and algorithms and the four basic demands of the online market (chapter 7).
These elements come together in the core markets of art, culture, design, media and innovation which I call the heartlands of the creative economy. I describe how these markets operate, their business models and value chains, and give market revenues (chapter 8).
Creative people have a voracious appetite to know what is new and interesting, and the best way to do this is to work together. I show how cities provide hot-house clusters for creativity and how the move from factory-sized production lines to brain-size thinking is changing the city’s mood (chapter 9).
Creativity and innovation do not fit into conventional business models and there is a worrisome gap between conventional wisdom and what is actually happening. I suggest a way forward based on the three propositions and an understanding of ecology, and describe how we manage relationships between our own ideas and other people’s ideas, which I characterize as a relationship between an individual voice and group power (chapter 10).
In 2009 the Mayor of London changed the way people crossed the city’s busiest shopping interchange at the junction of Oxford Street and Regent Street. On that day, instead of huddling on narrow pavements squeezed around the edges, they were invited to walk diagonally across the middle. When Boris Johnson first proposed the idea, everyone laughed. Oxford Circus has over half a million visitors a day and is notorious for non-stop traffic. The idea of heading into its centre was absurd or, as Boris Johnson himself admitted, bonkers. Why would it work?
City Hall was confident because of the ingenuity of two people on opposite sides of the world, a film-maker in Wellington, New Zealand, and a fire-fighter in Los Angeles.
If you’ve read J. R. R. Tolkien’s novel The Lord of the Rings or seen Peter Jackson’s film trilogy, you’ll remember the Orcs. Tolkien described them as ‘squat, broad, flat-nosed, sallow-skinned, with wide mouths and slant eyes … degraded and repulsive’. To bring this mob to life for the opening film, The Fellowship, Jackson hired Stephen Regelous, the founder of a local New Zealand animation company called Massive Software.
Jackson and Regelous knew there were too many Orcs to draw by hand, as could be done for the main characters, and the then available crowd-replication software was primitive. Regelous realized he had to develop a new software algorithm that would give each one its own artificial intelligence and fuzzy logic so it could make its own decisions, enabling each Orc to appear to react to its neighbours and navigate its own path. Each Orc moved as if it was alive in its own way and with its own thoughts.
Tolkien’s fans had been apprehensive but global audiences paid $871 million at the box office to see The Fellowship. The trilogy made $2.9 billion at the box office and about $2.2 billion from home video, totalling well over $5 billion. Film-makers voted The Fellowship 13 Oscar nominations and four wins, including one for Best Visual Effects.
The Fellowship heralded a new kind of film-making. Its script had four credited writers and about seven non-credited ones. Peter Jackson ran seven film units, nine music units and a production crew of 2,400. Some of the music was recorded in Watford, a small town outside London not noted for its musical talent but with the advantage of a disused town hall close enough to the London Symphony Orchestra. There’s a story that Jackson never saw the third film from beginning to end until he was sitting in the Embassy Cinema, Wellington, for the world premiere on 17 December 2003. But what happened next had implications beyond film-making.
After the trilogy was completed, Stephen Regelous and his CEO Diane Holland could have put their software on the shelf and waited for the next producer to come calling. But they knew Warner’s New Line production company had no interest in developing it. Hollywood likes to stay focused on its core business and seldom invests in technology. It prefers to sub-contract and out-source technology to others.
In every creative process there’s a moment when an idea jumps out of its skin and takes root somewhere else. Peter Jackson said that his jump moment with The Lord of the Rings happened when instead of trying to make films that looked like The Lord of the Rings he realized it would be much better to go ahead and simply make The Lord of the Rings itself. The moment when Massive’s new algorithm took off was when CEO Diane Holland had the idea of moving it from the world of film-making to real life.
She was living partly in a commune in Los Angeles and wanted to ‘skim this idea into as many hands as possible’. So she contacted Ove Arup, one of the world’s largest construction companies, which had a special unit to develop sustainable ecologies in Europe and China, and Ove Arup introduced her to Nate Wittasek.
Nate Wittasek is not a film-maker and does not see himself as creative. His mother used to buy him earlier film versions of the Hobbit and he remembers going to the local cinema with his family to see The Fellowship of the Ring but that was years ago. He had joined the Los Angeles Fire Department, where he specialized in fire safety, before moving to Ove Arup. He used computer models to show how people behave when they had to evacuate a building quickly but, like Regelous, he knew his existing software wasn’t really good enough. It could show how wind or smoke flowed around an object but it could not map what happened if large numbers of people start to behave in irrational ways, as they do under stress. He was delighted to meet Diane Holland and for the opportunity to re-model Massive’s algorithms to save people’s lives. In a remarkably short time, the software became the global standard for designing buildings and enclosed spaces like air terminals and railway stations to take account of how people move when they find themselves in a strange place and have to get out quickly and start to panic. Then city planners came calling from Tokyo and London to ask if the model could be used to make street crossings safer.
The route from film-making in Auckland to fire prevention in Los Angeles to pedestrian crossings in London could have failed at any point if the people involved (and I have mentioned only a few of them) had been too busy or not interested, or given any of the familiar excuses people use for not doing something. But each person in the chain thought the idea was interesting and meaningful for what they were doing. Diane Holland took an idea from one context and applied it somewhere else. Nate Wittasek made the all-important connection between her idea and his job. This is how creativity happens. Someone takes a decisive step to grab an idea that seems interesting and can solve a problem or make something better. What matters is the picture, the meaning, you have in your head, first privately and then publicly. The link between what is desirable and what, suddenly, becomes possible.
I use creativity to describe a process of using ideas to produce a new idea. It happens whenever a person says, does or makes something that is new and interesting, either in the sense of ‘something from nothing’ (which is relatively rare) or in the sense of giving a new meaning to something. Creativity occurs whether or not this process leads anywhere; it is in the thought and the action. It is present when we dream of paradise; when we design our garden; and when we start planting. We are creative when we write something whether it is published or not; or invent something whether it is used or not.
Creativity has been part of the language of art for so long that the two words have become almost synonymous but they refer to different things or rather to different parts of the process. Artists do not have more ideas or better ideas but work with specific aesthetics and technologies which lead to specific kinds of work.
Creativity leads to innovation as often as to art. Both artists and scientists use the same thinking process to imagine (to visualize) and describe (to represent) their view of reality. Colin Ronan introduces his Cambridge Illustrated History of the World’s Science with these words: ‘To engage in science requires a vivid creative imagination, tempered by firm discipline based on a hard core of observational experience’, which is a good description of creativity. Biologist Edward O. Wilson, one of the most distinguished scientists of the 20th century, defines creativity as ‘the ability of the brain to generate novel scenarios and settle on the most effective’. He goes on to quote Nobel Laureate economist Herbert Simon: ‘What chiefly characterizes creative thinking from more mundane forms are (i) willingness to accept vaguely defined problem statements and gradually structure them, (ii) continuing preoccupation with problems over a considerable period of time, and (iii) extensive background knowledge in relevant and potentially relevant areas.’ Simon summarized these as daring, obsession and knowledge. The difference between artists and scientists comes in why they choose to think like this, how they present the result to the world and how they protect its economic value.
Innovation is a new product or process that can be exactly repeatable by anyone. Whereas creativity is personal and subjective and cannot be exactly repeated even by the original creator, innovation is public and objective and repeatable by anyone. Creativity often leads to innovation but innovation seldom leads to creativity. Innovation requires agreement whereas creativity is independent and often ambiguous (in economics, it is an exogenous variable). My own quick test for innovation is that it is creativity that has been cleared by a committee.
An ecology is a place with an identifiable population and a set of resources and nutrients (assets). Ecologies can be measured by the relationships and flows between members of the population; it is the relationships that matter and give an ecology its special nature. A creative ecology is a place where a population has sufficient resources and flows to be able to interact purposively to use ideas to produce new ideas. Creative ecologies can be measured by four criteria: change, diversity, learning and adaptation. They are the seedbeds for creative economies and like all seedbeds need tender care.
An ecosystem is a unit in ecology. Two of the most common ecosystems are habitats and niches. A habitat is an environment where many different populations live. A niche is a place within a habitat that is suitable for a specific population.
Creativity by itself has no economic value until it takes shape, means something and is embodied in a product that can be traded. This, in turn, needs a market-place with active sellers and buyers, some ground-rules on laws and contracts, and some conventions about what constitutes a reasonable deal.
A creative product is an economic good, service or experience resulting from creativity whose main economic value is based on creativity. It may have other characteristics of beauty, knowledge or other symbolic, intangible virtues but these are optional. The defining characteristics are twofold: it results from creative activity and its economic value is based on creativity.
A creative economy is a system for the production, exchange and use of creative products. Economics deals with the problem of how individuals and societies manage to satisfy their wants, which are infinite, with resources which are finite, and is primarily about the allocation of scarce resources. I calculate a creative economy’s market value by looking at the number and value of transactions. In some markets, like music, fashion and computer code, copying is central to the process but in the arts the physical object or experience is usually more precious.
Many creative outputs, although not all, qualify as intellectual property (IP) with intellectual property rights (IPR). Governments and the courts define the nature of the property and an owner’s rights. Intellectual property is not the same as any idea or bit of knowledge that we may happen to have but what a law says we know or have. The three most common kinds are copyright, patents and trademarks. Copyright law covers the expression of an idea in a qualifying work rather than the idea itself. Copyright accrues automatically to any qualifying work and does not need to be registered; it normally lasts for the author’s lifetime plus 70 years.
A patent protects an invention and gives a monopoly which typically lasts 20 years. Whereas copyright accrues automatically, a patent has to pass tests of being novel, non-obvious and practical, none of which apply to copyright. Once registered, a patent gives stronger protection than copyright. A trademark does not require any artistic expression (as does copyright) or any expert skill (as does a patent) but covers any tradable symbol. Like patents, trademarks have to be applied for. Unlike patents, they can last for ever. Internet domain names are a form of trademark.
There are several ways of categorizing a creative economy. I use markets because I want to focus on how people sell and buy ideas and markets are the closest to what is actually going on. I am interested in whether people have access to markets, how markets work and if they are fair (or if regulation is required). Looking at markets allows us to look at supply and demand and to compare markets in different countries. It enables us to draw parallels with ecosystems as both depend on deciding where the boundaries lie and how permeable they are. Like ecosystems, markets are a map of how things relate to each other. They are both neither good nor bad, they just are. There is a tendency to say all ecologies are good and all markets are bad but this is sloppy thinking.
The term creative industries owes its popularity to the British government’s decision in 1998 to award the title to 14 sectors: advertising, architecture, art, crafts, design, fashion, film, music, performing arts, publishing, leisure software, toys, TV and radio, and video games (regrettably excluding innovation). The list was a wake-up call to Britain and became a global standard, although almost every country tweaks it to promote its own success stories. China includes trade shows, Thailand includes food and spas, and America’s lists usually include home furnishings.
It is now in danger of becoming a barrier to our understanding of how creativity and innovation actually operate. It ascribes industrial qualities to processes that are personal and subjective and not industrial at all. Only a few of the sectors are industries in the sense of making copies on an industrial scale, such as publishing, music, TV, film, fashion and games, and the growth of online media weakens even these industrial qualities. Art, crafts and design are not industries. It also assumes all creative people work in creative industries which is manifestly untrue. The Tripod principles say everyone has a creative capacity. As a result, Britain is now focussing less on creative industries and more on every job’s level of creative intensity.
The World Intellectual Property Organization (WIPO) has a model of copyright industries, as does the US-based International Intellectual Property Association (IIPA), and there are lists of patent industries. I seldom use these terms because copyright and patents are only one factor in assessing value. The term intangible industries similarly singles out one factor but does not provide a complete picture. The people who print books and assemble smartphones and sell materials for 3D printers are also part of a creative economy.
There are many reasons why creative economies are expanding so fast in so many countries but the most compelling is the way we evolve as humans. The American psychologist Abraham Maslow suggested our needs ascend up a hierarchy starting at the base with our physiological needs for air and food and then, when they are satisfied, our physical needs for shelter and safety. Next come our psychological needs for love and belonging and emotional needs for self-esteem, respect and achievement. At the top, Maslow put our need for self-fulfilment. As each need is satisfied, so people become more conscious and desirous of the next one up. Linus Torvalds, who pioneered Open Source software, has a crisp modern variant: ‘Every human motivation can be classified under survival, social life or fun’.
Towards the end of his life Maslow split the high-minded but possibly self-obsessed idea of fulfilment into knowledge (he used the word ‘cognition’) and beauty (aesthetics). I refer to these two fulfilment needs as Maslow’s Twin Peaks. The need for knowledge is the need to understand and perhaps to be in control. The desire for beauty is more subjective and ranges from colours and shapes to that quiet satisfaction that something is well done and well made and cannot be bettered.
The two principles of knowledge and beauty can complement each other. Astronomer Fred Hoyle said that when Albert Einstein announced his theory of relativity, ‘He put an issue of style ahead of all the confusion of detail … Of course, physicists never admit to style because the word brings a picture of Beau Brummell. But style it is.’ They fight each other when musicians and artists portray beauty in ways that others find ugly. Cézanne, Van Gogh and Renoir were refused admission to the Paris art shows and Duchamp’s original Fountain was thought to be a joke by him as well as others and thrown away (copies now sell for over $1 million). Damien Hirst provoked us to think about death by putting a dead cow’s head and a swarm of buzzing flies in a cage together. Ugly stuff. We have no idea what future generations will find useful or beautiful.
Our basic physical needs are universal and clear-cut and we either do or don’t have a roof over our heads but at each higher level a need takes on more of the quality of a want, which is desirable but not necessary. Some people want art, some people do not. People vary in their need, or want, for understanding and beauty. Air is a need; art is a challenge.
We should not be surprised if people whose material needs are largely satisfied and who have a high level of disposable income remix their ambitions and put a premium on these matters of the mind. It is also not surprising that markets emerge to meet these needs. Market economies are skilful at meeting people’s various needs, especially in the field of entertainment where needs are so passionate and evanescent.
On the supply side, automation in the manufacturing industries and, to a smaller extent, the service industries has cut the demand for manual labour, so young people are looking elsewhere for work. Many turn to the creative sectors, which offer an attractive lifestyle and above-average economic rewards. New markets have arisen around digital technologies, each with its urgent needs for skills and ideas. Suppliers have become adept at charging for pleasure.
On the demand side, most rich countries spend more on culture and recreation than on food or clothing; only housing and energy cost more. Americans spend proportionately less, because they spend more on private education and healthcare. The Japanese spend more on entertaining themselves than on clothing or healthcare, and most clothes are chosen more for pleasure than for utility. From 2000 to 2010 the annual growth rate of the creative economy in rich countries exceeded that of the rest of the economy.
The greatest growth is not in the creation of new products but in their distribution and sale. The creative economy has been midwifed by digital technologies as well as by the upsurge in selling and retailing skills. Digital technologies have created new opportunities for content, a new universe of online networks, user-generated content and interactive media, hungry for information, images and stories. The low costs of digital technology allow people to make, distribute and exchange their own material alongside and increasingly inside corporate markets.
These desirable skills of individual creativity are being copied and borrowed throughout society. The use of the imagination, the management of intellectual capital, the best way to incentivize and reward creative people, the short time-scales and the response to success and failure, which only recently have got on the agenda of mainstream business, have always been the stock-in-trade of the creative person. Two trends are interwoven. Creative people are becoming more business-like; and business is becoming more dependent upon creativity.
I summarize these trends in three propositions. The first is that every normal child is born with the raw material of an imagination and an instinct to use it. The second proposition is that everyone needs freedom to exercise their imagination. The third proposition is that, if we want to make money, we need markets which allow an exchange of information and enable prices to reflect supply and demand.
The propositions are three links in a chain. The first deals with the brain and our inner life. The second deals with making ideas public. The third deals with economics.
Our understanding of a normal healthy baby is someone born with a set of mental faculties that include consciousness, reason, emotion and memory. A baby’s ability to respond to external sense data, search for explicable patterns and adjust future behaviour are basic indicators of being alive and well.
In the first few years of life, a child makes 700 new neural connections every second, mostly through give-and-take and serve-and-return interactions with other people. Children move from a fixation with the intimately here-and-now, seeking immediate gratification, to a more conscious awareness of alternatives, remembering past choices and trying to avoid repeating mistakes. They are quick to mimic and play, swinging from delight to puzzlement to despair as they try to make things more comfortable for themselves. Childhood expert Tina Bruce says children’s creativity develops in several stages, starting with a playful attitude to all activities, not just in formal play, and then moving to developing specific ideas and to making creative things. She suggests that when people feel nostalgic for childhood they are remembering this joy of learning what is new and interesting and recapturing the wonder of creativity.
Children develop by testing what is possible in a blurry mix of physical, emotional and mental sensations, searching for meanings. They become acutely sensitive to how things are, and then how things might be different and better. Gradually they become aware of the difference between what they feel and think and then in what they can say. Their creativity levels peak on average around ages three and four (Picasso said: ‘The problem is how to remain an artist once we grow up’). Their consciousness of choices to be made continues to develop as does their confidence to choose between different possibilities. Gradually they learn how to manage outcomes and how to reconcile differences. The moment when a child begins to be conscious of this process and begins to think about specific meanings is the starting point of their own creativity.
Saying ‘everyone is creative’ does not imply that everyone is talented, which would be as silly as saying everyone who can walk can be an athlete or anyone who can write can write a best-selling novel. It simply implies that everyone is born with the instinct, the desire, to search for new possibilities that they personally find interesting and useful. Noam Chomsky and Steven Pinker interpreted children’s aptitude for speech to argue persuasively that everyone is born with a ‘language instinct’ (Pinker) and a ‘deep, universal grammar’ (Chomsky). The same functional Magnetic Resonance Imaging (fMRI) techniques that supported their ideas have been used to suggest that children have a ‘creative instinct’ or ‘deep universal creativity’ that pushes them to make sense of what they see and, if they don’t like it, to try to improve it. Turning this private, self-contained creativity into talent or achievement requires determination and hard work just as children need to work hard to learn how to write.
A good indicator of this creative instinct is that people answer ‘Yes’ to my Dreaming Questions:
Do you dream, do you have fantasies?
Do you think about how things might be different?
Do you often think of a better way of doing something?
Do you want to think of a better way?
Do you take pride in doing things your way?
If our inborn creativity is to flourish, we need to be free to explore the ideas we want to explore and to do so without having to justify what we are doing. So the second proposition is that creativity needs freedom. We need internal freedoms of self-expression and external freedoms of circumstance. We need freedom to ask questions, believe or disbelieve, learn, explore possibilities, discover what is new and then adapt our thinking and our behaviour accordingly. It includes freedom from physical constraints such as hunger and poverty (Maslow’s most basic needs) as well as from prejudice, censorship and interfering governments and other threats to the human rights of free speech and freedom of expression. One might add unhelpful schools to the list.
It can be summed up in the freedom to manage one’s relationship to an idea so that we are able, first, to select which ideas we want to have a relationship with and, second, to manage the relationship in the way we want. We need freedom to be in charge of the journey because if we make our own discoveries we feel more involved (children who are forced to read a book at school often dislike the author for the rest of their lives).
Steve Lee and Sebastian Thrun at the secretive Google-X lab, which is researching artificial intelligence and the driver-less car, among other projects, talk about data that is unstructured and unlabelled. This proposition is about the freedom to choose data that is unstructured and unlabelled and to choose what to call it.
If we truly want to manage our relationships to ideas we have to be strong enough to get rid of bad ideas as easily as we embrace new ones. Personal enthusiasms can be blinding and dispiriting. There is nothing worse than being seduced by a bad idea.
I sometimes refer to the creative economy as an ‘economy of failure’, which can be a shock to people who are focused on success. The truth is that anyone who is free to play around with what is possible and what might be interesting, taking the next imagined step, will get it wrong more often than they get it right. Anyone who gets it right every time isn’t really trying (or very lucky).
One person’s favourite idea may seem ridiculous to another. Henry Ford and Walt Disney failed several times before they founded the companies that bear their names. Disney invented Mickey Mouse because he was angry he had lost the copyright to his earlier Oswald the Rabbit and had to start again. Bill Gates’s first company was not a success although it wasn’t entirely his fault. Rudyard Kipling was told by the Editor of the San Francisco Examiner that ‘You don’t know how to use the English language’ only eight years before he won the Nobel Prize. Elvis Presley failed auditions and was advised to go back to driving a truck but changed his style and two years later got his first number one hit.
This freedom includes not only the familiar but the unknown. The principle of free speech encompasses the right to say things that others may disagree with or find stupid or even shocking. Voltaire reportedly said, ‘I disapprove of what you say but will defend to the death your right to say it.’ It is possible Voltaire himself never wrote these words, although they certainly reflect his views, and a more likely author is S. G. Tallentyre, who was actually an English woman, Evelyn Beatrice Hall, writing under a male pseudonym. Her pretence gives it added piquancy. We need freedom to be ourselves.
A market tests value by enabling people to allocate resources of information, attention and money. In even the most basic street-market we make several decisions before any money changes hands. We discover it is taking place; we decide to spend time; we turn up; we wander around. We pay attention to what is on offer and look around for what is interesting. All markets are markets of time, attention and information before they are markets for buying. Herbert Simon and later Kevin Kelly came up with the idea of an attention economy in which people pay as much attention if not more than they pay money. It is revealing that we use the same word to pay attention and to pay money, and we always pay attention before we pay money (well, not always, but it is wiser to do so).
The histories of markets and economies are intertwined and support each other. The creative economy is as much about buying as about making. It is true that individuals can be wonderfully creative on their own, and state rulers and wealthy patrons have commissioned outstanding art, but a functioning economy needs many open market-places in multiple shapes and sizes. The exchange of ideas has low resource costs and low transactional costs as well as very fast transactional speeds. Many innovations in design, media and entertainment succeed as much because they create a new market as because they create a new product.
The totalitarian command economies in the USSR and in China from 1949 to 1979 stifled creative economies because they prevented people from developing and sharing their ideas unless those ideas were in line with the ruling interests. Thinking, asking questions and taking intellectual risks were seen as disloyal and stupid. Governments tried to control all data and all ideas in order to support their own policies instead of allowing individuals to check the truth.
The presence of an interventionist government by itself is not a problem if a country has a resilient public sector, independent institutions and a free press, and the government works in partnership with these and respects their freedoms, as the governments of Japan and Germany demonstrated when they built up their post-war economies. There is a strong case for saying that Japan and Germany recovered so quickly and became such major exporters because of their determined government. There is also a strong case for saying that they excel in innovation rather than in creativity for the same reason.
We can judge a market by three criteria: openness, fairness and efficiency. An open market allows access to all-comers of all nationalities whereas a closed market has barriers to entry against foreigners. These barriers may be explicit, such as an import tax or visa conditions, or more subtle ones, such as bureaucratic and regulatory hurdles that foreign companies find difficult to overcome.
A fair market is one in which all companies can compete on equal terms and on the merits of their ideas. Companies that are monopolies or have a dominant position (absolute monopolies are rare) have considerable power to tilt the market in their favour, such as cutting prices below costs to stop a newcomer getting a foothold, known as predatory pricing. Many incumbent companies try to distort markets in their favour. A few countries, notably America, Britain and Germany, have strong pro-competition, anti-trust laws but these are difficult to apply when technology is developing fast and market boundaries are blurred.
The third criterion is efficiency: can creators find buyers and can buyers find what they want? An efficient market allows a full exchange of information about a product’s qualities, functions and price and brings together sellers and buyers (or users and users). If buyers are well informed about what’s on offer then their purchases will have the effect of resolving the demand and supply curves and lead to optimal pricing. In practice, this level of transparency is rare because suppliers are adept at managing market information in their favour and are more interested in maximizing revenue by strengthening their market position or maintaining a brand’s exclusivity than in giving people full information.
The economic crises in America and Europe have muted our enthusiasms for markets. The ideal of a free market has been found wanting and it is felt that many markets are neither open, fair nor efficient. The market freedoms which enabled economies to grow from the 1980s onwards, led by the growth of advertising, the liberalization of media and telecoms and the growth of financial data, expanded the range of what was on offer. Many companies exploited these market freedoms to encourage people to spend beyond their incomes and to buy things they did not fully understand and, it might be argued, did not need (although buying things one doesn’t need is hardly new). As markets are part of the problem so a better understanding of how they work and how they can be regulated is part of the answer. Currently, especially in Europe, governments have hardly begun to reform their market regulations on competition policy, tax, consumer protection and intellectual property to fit a creative economy.
By looking at markets, we can evaluate the size and nature of transactions. What is the market for art in China? What is the market for a singer-songwriter in America? In Brazil? Is the design business in Europe growing faster than in America? What is the market for an architect in China? We can see where markets allow competition and where new companies are squeezed out. Market analysis enables us to see the effects of copyright and patent laws on creativity and innovation, and to judge whether regulation is a help or a hindrance.
We can look at new developments. What is the market for self-published novels? How do the markets compare for physical books and e-books? What is the market for crafts in Indonesia? What is the market for ‘frugal’ housing? According to Bill Gross of Idealab, who has developed a cheap $2500 WorldHaus, it is $424 billion. What is the market for solar-powered lighting? According to the World Bank, 1.5 billion people have no electricity in their homes and unit prices are $8–20, so that’s a $20–30 billion market.