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BIJ
21,1 Performance measures and
metrics for the creative economy
D. Steven White and Angappa Gunasekaran
46 Charlton College of Business, University of Massachusetts Dartmouth,
North Dartmouth, Massachusetts, USA, and
Received 24 March 2012 Matthew H. Roy
Revised 15 April 2012
Accepted 15 April 2012
School of Education, Public Policy and Civic Engagement,
University of Massachusetts Dartmouth, North Dartmouth,
Massachusetts, USA

Abstract
Purpose – Creativity is becoming one of the most powerful sources of competitive advantage in the
modern economy. As more developed economies progress from the tertiary (or service-based) level to
the quaternary (or knowledge-based) level, successful nurturing of creativity and innovation provides
competitive advantages for industries and countries alike. The paper aims to discuss these issues.
Design/methodology/approach – Based on the extant literature, a set of performance measures
and metrics for the creative economy is proposed.
Findings – A conceptual framework for developing a creative economy is presented, and measures
and metrics to be used as a managerial tool for controlling performance in creative economies are
provided.
Research limitations/implications – Although the measures and metrics presented are based on
the best available research, they are not empirically tested. Thus, the measures and metrics must be
considered speculative and descriptive research is needed to validate their utility.
Practical implications – Utilizing the performance measures and metrics identified in this research
provides policy and decision makers with a foundation on which to build their local or regional
economies.
Originality/value – The research as presented contributes to the literature on the creative economy
and is unique in its contribution to said literature.
Keywords Strategy, Metrics, Performance measures, Creative economy, Strategic evaluation,
Techniques
Paper type Conceptual paper

1. Introduction
The past two decades bear witness to the emergence of knowledge-based, technology
driven economies (Yigitcanlar et al., 2008). Peters (2010) reports that the
knowledge-based economy is built on three pillars: the learning economy, the creative
economy and the open knowledge economy. Thus, the creative economy is an integral
part of the success of a knowledge-based economy. Regardless of the classification
scheme, in global market enterprise operations the capacity to develop creative solutions
Benchmarking: An International for product design and market development is a key factor for business success (Bakhshi
Journal and McVittie, 2009; The New England Council, 2001). Creativity is closely linked to
Vol. 21 No. 1, 2014
pp. 46-61 innovation and a symbiotic relationship between the two exists (Innovation & Business
q Emerald Group Publishing Limited Skills Australia, 2008; Julier, 2009). The creation and diffusion of new knowledge drives
1463-5771
DOI 10.1108/BIJ-03-2012-0017 innovation which in turn drives economic growth (Wolfe and Bramwell, 2008).
The common theme among all industries involved in the knowledge-based economy is Performance
the output of the creative sector, especially for initiating discontinuous or disruptive measures and
innovation (Robertson, 1967) which provides a highly defensible source of strategic
competitive advantage. metrics
The core of the creative economy is based on individual creativity, skill and talent.
Creative enterprises are catalysts for wealth and job creation. Howkins (2002) defines the
creative economy as “how people make money from ideas”. Components of the creative 47
economy include advertising, architecture, art, crafts, design, fashion, film, music,
performing arts, publishing, research and development, software, toys and games,
entertainment, television, radio and video games. Howkins’ (2002) book created a global
sensation and drew attention to the benefits creative economic activities. One result was the
development of rigorous surveys to determine the extent of the impact of the creative
economy on the overall economic health of a locale. According to one such study,
Florida (2002) estimated that there are 15 million super-creatives and 23.3 million
creative professionals in the USA, for a total of 38.3 million creative workers, translating to
roughly 30 percent of the total US workforce. The super-creative class includes computer
and math, architecture and engineering, life, physical and social science, education, training
and library, art, design and entertainment and sports and media occupations. Creative
professional occupations include management, business and financial operations, legal
occupations, healthcare practitioners, technical operations and high-end sales and sales
operations (Florida, 2002, 2005).
Once the creative economy established itself as a unique economic sector, research
concentration was diverted to the factors that attract and refine creative economic
output. Howkins (2002) views the establishment of a creative economy as an
entrepreneurial activity and, thus, concentrates on five critical success factors: vision,
focus, financial acumen, pride and urgency. Ball (2003) reports the basic requirements
for creative individuals to include excellent communication skills, networking skills
and team approaches to entrepreneurial tasks. Both researchers identify successful
creative entrepreneurs are those individuals who can work flexibly and who possess
good interpersonal and research skills.
Reviewing the literature available on performance measures and metrics in the
creative economy, it is readily apparent that little to no literature on the topic exists. Thus,
the impetus for this project: to address the need for the development of a foundational
framework of performance measures and metrics designed to explain creative economic
success. In addition, successful metrics provide a basis for studying the status, potential
and challenges unique to the creative economy. Finally, performance measures and
metrics should provide direction for developing creative economic industries taking into
account a regions’ specific characteristics. Considering the growing economic and social
impact of creative industries on the gross domestic product of countries and the limited
research on performance measures and metrics for the creative economy the task of
developing a foundational framework is challenging. Based on the available literature,
a conceptual framework for the creative economy is developed and performance measures
and metrics proposed.

2. Creative economy
Potts et al. (2008, p. 171) define creative industries as the “set of agents in a market
characterized by adoption of novel ideas within social networks for production
BIJ and consumption”. Markusen et al. (2008) define the creative economy as a collection
21,1 of industries revolving around a creative cluster, creative workforce and creative
community. Indicating the importance of establishing a creative culture in
knowledge-based economies, Venturelli (2000) argues that a nation without a creative
work force of artists, writers, designers, scriptwriters, playwrights, painters, musicians,
film producers, directors, actors, dancers, choreographers, engineers, scientists, researchers
48 and intellectuals cannot posses a knowledge base sufficient to survive in the
knowledge-based economy. The creative economy relies on ideas generated by human
intellectuality. The output of the creative economy generates technical innovations, which
impact the standard of living for all.
Please note that the creative economy is not a cohesive or discrete industrial sector.
It consists of a large proportion of non-profit organizations, small businesses and
self-employed practitioners who do not identify themselves as part of a major industry
(Coy, 2000). Although some researchers (DeNatale and Wassall, 2007) view the creative
economy solely within the perspective of the arts, it is a much broader concept.
As developed countries transition from tertiary to quaternary economies, the need for
fostering the development of creative economic activities takes on more importance. The
creative economy must remain diligently agile in order to meet the demands of the
twenty-first century marketplace. Agility is one of the strengths of the creative economy:
new software programs (including applications for mobile) and inventions are launched
daily. Lightly staffed factories produce sofas, breakfast cereals and cellular phones with
great precision and efficiency. The physical content of gross domestic product is slowly
disappearing whereas the contribution of knowledge content is increasing. Advanced
economies successfully produce food and physical goods at the scale and scope required to
keep prices affordable. These two factors have freed up the workforce to provide services or
produce creative abstract output such as data, software, news, entertainment and
advertising. Thus, the establishment and growth of creative industries is important for
national economic interest. According to Coy (2000), the turn of the century ushered in a
shift in economic focus from hamburgers to software. In the twenty-first century
knowledge-based economy, power, prestige and money flows to companies with
indispensable intellectual property. And, knowledge-based industries tend to be less capital
intensive than are manufacturing-based industries. For instance, once a computer program
is developed, the cost of distribution is negligible making its profit potential enormous.
The importance of developing good ideas creates all kinds of challenges for
corporations including copyright issues. Moreover, the theft of intellectual property is a
serious barrier to innovation. But strictly safeguarding intellectual property can slow
down innovation. To foster growth in creative economies, governments must find a
delicate balance between enforcing patents, copyrights, trademarks, and non-compete
clauses while preserving an environment and incentives conducive to stimulating
creative activities (Coy, 2000).
In the creative economy, the most important assets are people and the concept of
ownership is fuzzy. Corporations need to create environments that reward people for
innovative behavior and partner with them to ensure their ongoing success. Jones et al.
(2004) define creative industries as:
[. . .] those industries which have their origins in individual creativity, skill and talent and
which have a potential for wealth and job creation through the generation and exploitation of
intellectual property.
It is difficult to reach a consensus about the boundaries of creative industries and Performance
whether or not certain industries capture the true extent of creative endeavors. In order measures and
to be successful in creative economies, a need exists to link research and strategies for
measuring the economic impact of creativity to realistic, tangible and practical policy metrics
goals (Tepper, 2002).
In the twenty-first century knowledge-based economy, companies and governments
rely on idea-based assets. Companies exercise their power by sharing or withholding 49
crucial intellectual property. But with the free flow of information at the core of the
creative economy, those who choose not to share information do so at their own peril.
Public capital investment is moving from traditional manufacturing to
knowledge-based industries.
The emerging creative economy represents a major source of future economic growth
and its employment potential is indisputable. Hence, there is a need for research to better
understand the major building blocks or determinants of a creative economy and the
associated critical success factors. In the following section, a framework on which to
build a successful creative economy is offered.

3. A framework for developing a successful creative economy

In order to determine the critical success factors that contribute to the establishment of
a creative economy, one must build upon both applied and theoretical research. Using
the research on creative economies that exists to date, a framework that incorporates
known success factors is developed. This section provides an overview of how the
resultant framework emerged. Cunningham and Higgs (2009) propose a framework for
assessing the creative economy on an industry-analysis basis: specialist mode, support
mode and embedded mode. They identify these modes as the creative trident. Others
use pure economic analysis at the macro and micro levels as creative economic
indicators (Center for International Economics, 2009). Neither approach has been
widely adopted. A need remains for the establishment of measures and metrics for
creativity (Markusen and Gadwa, 2010).
The primitive step in developing this framework is identifying which factors
influence the successful establishment of creative economic activity. The identified
factors serve as the major building blocks in this framework. Previous research indicates
that eight such factors include education, leadership, infrastructure, culture,
government policies, technological innovation, cluster/network and diversity. The
Chartered Institute of Management (2004) studied and explained the power of the
aforementioned eight factors in fostering and managing creativity and identified
potential critical success factors. These factors identified include: promoting an
atmosphere where creativity can flourish, providing an infrastructure for encouraging
creativity, being open and stimulating in behavior, encouraging brainstorming sessions,
encouraging creative ideas and suggestions, allowing employees time and space to
“breathe” and think around ideas, and using flexible management systems such as
self-directed teams. Based upon the findings of the Chartered Institute of Management,
a conceptual framework for developing creative economic activities is offered below
(Figure 1).
The eight major factors are interdependent; the performance in one area affects the
others. In addition, the performance measures and metrics proposed are congruent
with the eight major factors highlighted to allow for the development of appropriate
BIJ
21,1 Education
Diversity Leadership

50 Cluster/ Creative
Network Economy Infrastructure

Figure 1. Technological
A conceptual framework Innovation Culture
for developing Government
creative economy Policies

strategies/tactics/technologies/techniques. In the ensuing sections, the rationale for

including the eight major factors is presented, followed by a discussion of appropriate
performance measures and metrics for each factor.

3.1 Education
Innovation is crucial for economic competitiveness and learning is crucial for
innovation (Peters, 2010). Stimulating creative minds in an open and flexible
environment is a basic essential requirement of a creative economy. In order to provide
a solid foundation on which to build creative output in the scale and scope necessary,
a structured approach to primary and secondary education is necessary. Developed
countries are pursuing this course of action by focusing on the development of science,
technology, engineering and mathematics (STEM) curriculum. Post-secondary
education is tantamount to compulsory in knowledge-based economies with options
including higher vocational education (community colleges in the USA) and higher
education. Developing an appropriately stringent and inclusive STEM-based
curriculum for both primary and secondary education is a work in progress, at best.
At the post-secondary level, more focus on vocational training for the jobs associated
with the knowledge-based economy is needed. And at the university-level, curriculum
and degree programs need to balance application and theory in a way that builds
expertise in communication, collaboration, critical thinking and creativity. As noted
earlier, creative industries include, among others, advertising, architecture, art-antique
markets, crafts, design, fashion, films, videos, software, music, computer games,
television and radio (DCMS, 2006), most of which require post-secondary education or
training. Highly educated and creative workers are critical success factors for creative
industries (Wolfe and Bramwell, 2008).
Carey and Naudin (2006) believe that creativity can be developed by stimulating an
enterprising culture and refining the way of thinking. Therefore, it is essential to
cultivate an enterprising outlook by preparing students for careers within creative
industries (Carey and Naudin, 2006). The need for entrepreneurial learning approaches
is apparent (Ravasi and Turati, 2005). Furthermore, Lundvall et al. (2008) stress that
the capacity to learn is as important for industries as is the need for an educated
workforce.
 In the creative economy, big cities have the advantage of possessing a variety of Performance
schools and research organizations designed to offer a range of degree programs and measures and
curriculum that encourage creativity. Smaller cities do not possess this advantage and
thus must focus on establishing alternative creative platforms and network metrics
relationships in niche markets that provide a competitive advantage such as research
centers, laboratories and business accelerators. These endeavors provide a platform for
generating creative output and intellectual property licensing opportunities. 51
3.2 Leadership
Leadership plays an important role in stimulating people to produce extraordinary
results. In the creative economy, the core task of leadership is to create a supportive
climate of innovation (Pinchot and Pellman, 1999). Identified as an innovation ecology,
this type of work environment enables, encourages, fosters, and catalyzes the generation
of ideas and creation of value from these ideas (Hale, 1996). An innovation ecology
supports individuals, teams and motivates the whole organization to work towards
sustainable growth and success that is based on continuous innovation (Dvir and
Pasher, 2004).
Dvir and Pasher (2004) identify the major tasks of leadership in creative economies to
be the management of 14 interrelated factors: time, organizational structure, physical
space, tolerance of risk, strategy, recognition and incentive systems, virtual space,
structured and spontaneous processes, knowledge management, financial capital,
diversity, attention to the future, challenge, and the unifying principle to foster
synergistic conversations. Clearly, creative economic endeavors require creative
leadership at the macro and micro levels. In terms of structural development, dividing a
nation’s creative economy into smaller regional economies, networking these regional
economies and providing open development resources and appointing regional
development leaders is a plausible way of organizing creative leadership. Thus, the
regional development leadership assumes responsibility for developing and
implementing location-based solutions organized around a unifying concept: to
improve the job potential via policies and practices that lead to better education, safety
and infrastructural facilities designed to promote the creative economy. Authoritarian
leadership has no place in the creative economy. Through relationships and vision,
regional development leaders should formulate policies and strategies that actively
involve schools, universities, governmental, quasi-governmental and non-governmental
organizations and businesses as partners in the establishment of creative endeavors.

3.3 Infrastructure
The infrastructure needs of the creative economy are consistent with the regular needs of
developed economies: housing, schools, hospitals, communication systems, security
systems, transportation, cultural facilities and hospitality firms. Quality of life is
important and serves to attract creative people. Information and communications
technologies are essential infrastructure needs for linking global resources, libraries,
research laboratories, centers of excellence and universities. Access to information is vital
as serves as the link between space, knowledge and capital (Peters, 2010). Organizational
management falls under this category as well as under leadership. Organizations lacking
sufficient flexibility, and thus inhibiting responsiveness to opportunities, create climates
of vulnerability, distrust and paranoia, overdependence on and over conformity to
BIJ organizational dictates, inhibit creativity (Pratt, 2000; Powell and Ennis, 2007). Pratt
21,1 (2000) identifies the following management factors in collaboration with infrastructure as
important enablers of creativity: sensitizing, networking, showing concern for welfare,
coaching, and workspace design.

3.4 Culture
52 Rice (2003) presents a conceptual framework that explains how the process of knowledge
creation in firms is influenced by cultural variables. Typically, creative enterprises are
more innovative, information-rich, dynamic, flexible, non-hierarchical and more
dependent on local clusters and networks than are their counterparts (Lash and Urry,
1994). A vibrant regional culture fosters the emergence of cultural entrepreneurs. Cultural
entrepreneurs are identified as those directly involved in the production of cultural goods
and services, products whose value is symbolic, derived from their function as carriers of
meaning in terms of images, symbols, signs and sounds (Banks et al., 2000).
The workplace environment is crucial to developing successful creativity that leads
to profit-making innovation. The creative community is benefiting financially from the
democratization of creative production and distribution. Artists are major
ambassadors for their cultures, operating in a collaborative environment that
recognizes the distinctive differences between cultures without threat to regional or
indigenous expression (Hicks, 2007).
Culture is defined by a set of characteristics and values that provide an essential
quality of life; as the construction of global meaning through localized experience; and
as an expression of national identity. Creativity is being harnessed and wealth creation
without concern for national borders has become a real possibility for a whole
generation of creators, particularly in newer economies. Large urban areas provide the
benefit of diversity in terms of culture, business and people which leads to creativity
and therefore, improvements in the creative economy. Smaller cities, often limited
opportunities in terms of diversity, need to foster the development of identifiable niches
in order to successfully promote the development of creative enterprises. The
development of a creative culture may be enhanced by providing suitable institutional
recognition and reward of new ideas and new designs. Some smaller cities offer
locational advantages over larger urban areas in terms of quality of life. Advantages
enjoyed by these smaller cities include benefits such as access to nature, lower cost
accommodations, beaches and distinct regional cultures that impact perceived quality
of life. Regardless, creativity requires both people and environments supportive of new
ideas and the spirit of innovation.

3.5 Government policies

Governmental policies related to industrial development, socio-economic diversity,
education, technological innovation, infrastructure and safety play a major role in
establishing an environment wherein creativity flourishes. Economic growth in these
creative economies is dependent upon innovative activities. In globally linked cities,
these activities, especially those in service and the creative industries, concentrate more
in high-tech clusters and thereby self-perpetuating through synergistic interaction.
Yusuf and Nabeshima (2005) explore the impact of government policy on innovation
and suggest that well-defined policies and institutions can create an environment
that supports innovative activities, which in turn leads to rapid growth.
Hicks (2007) admonishes the lack of governmental commitment to developing a Performance
creative economy and refers to this oversight as obstructionist. Reheis (2006) measures and
highlights the basic principles of the ecology of time. Creative endeavors, although
often pushing for quick action, are cautioned about the destructive potential of haste. metrics
Governmental structure and policy should provide an environment that stimulates
innovation, protects intellectual property and ensures the growth of creative activities.
53
3.6 Technological innovation
Innovation and creativity are inextricably linked (Styles and Seymour, 2006). Innovation is
essential for the growth of the creative economy. Systems and structures must stimulate
individual creativity in a way that is responsive and flexible. Small firms make up a
majority of firms in the creative economy. Small firms have access to fewer resources than
do larger firms, but are exceptionally flexible and innovative. Providing such companies
with adequate access to technology, including both hardware and software, promotes
creativity and in turn contributes to the economy. Governments can support smaller
creative enterprises by providing technological incentives designed to enable these firms to
overcome resource limitations, allowing them to compete and thrive in the creative
economy. Openness is a new mode of social production and is a leading source of innovation
(Peters, 2010). Peters (2010) reports that the integration of technological innovation and
infrastructure allows for decentralization in creative enterprises. Crowdsourcing and the
use of open source materials depend heavily on technological innovation.
In order to identify suitable performance measures and metrics regarding the
impact of technological innovations on the creative economy requires the measurement
of crucial factors such as availability and number of skilled knowledge workers,
software developed, hardware designed, businesses successfully launched from
incubators, grown from accelerators, growth of start-up high-technology companies
and patents and intellectual property generated.

3.7 Creative cluster/network

A new structure is needed in order to stimulate the establishment of creative clusters.
The creative class is moving away from traditional corporate communities to creative
centers (Laakso and Kostiainen, 2009). This new structure goal requires all firms to use
a common and open platform so that the creativity will develop regionally. Social
network analysis provides a market-based interpretation of these clustered creative
industries (Potts et al., 2008).
Regionally based innovation clusters are the new model (Davis et al., 2009; Wolfe and
Bramwell, 2008). This type of agglomeration provides opportunities for synergistic or
collaborative innovation (Currid, 2007; Julier, 2009; Wolfe and Bramwell, 2008;
Yigitcanlar et al., 2008) The establishment of formal structural support programs, such
as creative worker forum, establishment and encouragement of synergistic networks of
creative companies and the development of special economic zones for creative
industries are a critical and necessary. These special economic zones concentrate
creative firms in close proximity and facilitate better communication and access to the
resources that ultimately improve the creative economy. Another benefit of establishing
a creative cluster network is the added value of dissemination of information via
cross-fertilization. This knowledge spillover has a positive impact on creative
innovation (Wolfe and Bramwell, 2008).
BIJ 3.8 Diversity
21,1 Diversity in people, culture, industries, economy, education and skills serves as a
competitive advantage when seeking to establish creative enterprises. Diversity
stimulates culture and serves as a beacon to attract talent from all over the world. The
premise is that human capital, rather than money, drives social and economic growth
(Yigitcanlar et al., 2007). In addition, diversity fosters and encourages cross-fertilization
54 and the dissemination of innovative ideas, products and services. Cross fertilization can
occur between industries, artists, scientists, etc. Closely related to diversity, mobility of
people is essential for cross-fertilization and, in turn, creative ideas.

4. Performance measures and metrics in creative economy

Performance measures and metrics play a major role in forming strategic, tactical and
operational level decisions. For the managers to make informed decisions, performance
measures and metrics serve as a basic managerial tool and assists companies to
achieve their financial and non-financial objectives. In the following sections,
performance measures and metrics are offered for strategic, tactical and operational
decision-making. The performance measures and metrics offered are based on the
framework described in the previous section. The performance measures and metrics
suggested are both tangible and intangible. Table I presents sample performance
measures and metrics designed to assess important factors critical to the success of a
creative economy. In addition, some strategies/tactics are listed for developing the
creative economy.

4.1 Education
In any city or county, flexibility in education and training is very much essential for
creativity. Government investment in education is a necessary and critical factor for
the development of a skilled workforce. Formalized mass education, highlighting
curriculum in STEM, provides workers with the foundation needed in order to succeed
in the creative economy. In addition, education in and exposure to the arts, design and
the creative process foster success in creative enterprises. Government supported
formalized education is an investment in the future economic health of a region.
Revising primary and secondary education curriculum and focusing higher education
degree programs on the formation of entrepreneurial creative enterprises requires the
involvement of the entire community.
Performance metrics that revolve around the technological and cultural diversities
must include the number of degrees and diplomas awarded/earned per year, number of
academic programs in creative industries, student retention and graduation rate,
number of patents registered, number of PhDs produced, number of new
entrepreneurial ventures launched.

4.2 Leadership
The creative economy engine is primitively driven by the leadership. If this leadership
does not have apt vision, policies and programs, things will not move forward. New
concepts in leadership should encourage collaborative, innovative work environments
and creative activities. The performance metrics offered in Table I include the number
of new jobs created, number of new products developed/introduced, business growth
and business valuation.
Critical success
factors Performance measures Performance metrics Strategies/tactics creative economy

Education Flexibility in curriculum, technology Student retention, number of new programs New primary and secondary education
embedded curriculum, research degrees, introduced, number of patents registered, curriculum, funding for higher education and
diversity in curriculum, adult learning number of secondary school and college research, close working relationships between
graduates academic and business communities
Leadership Economic growth, business growth, Number of new jobs created, number of new Visionary leadership and foresight,
employment potential, housing, crime rate, products launched, number of events government, academic and industrial
tax rate, organizational hierarchies, network organized, number of initial public offerings, leadership, education and training
structure, distributed environment, flexible valuation of creative enterprises
structure
Infrastructure Housing, healthcare, quality of life, safety, Number of airports, number of railway Develop housing, roads, transportation such
information and communication technologies, stations, number of ports, number of as airports, railroads, ports, provide open
networked systems, transportation, schools, universities, number of homes, number of access to information, adequately fund
higher educational institutions restaurants and skilled workforce, number of schools, colleges and universities, establish
hospitals, access to information and center for innovation and excellence
communication technologies
Culture Recreation venues, restaurants, night clubs, Number of cultural events, number of Establish cultural centers, public recreation
museums, beaches, theaters, malls, cinemas, theaters, museums, zoos, temples, night clubs, venues, museums, cultural celebrations/
zoos, cultural diversity, religious diversity restaurants, population diversity events, celebrate diversity
Government policies Flexibility in starting new business, support Economic growth, GDP, number of jobs Creative economy as a part of socio-cultural-
to start new business, policies for creative created, number of news companies, number economic policy, creativity as a major
economy, education budgets, labor policies, of tourists, number of immigrants component of government policies
taxation
Technological Number of software and hardware companies, Number of patents, number of high-tech Provide tax breaks for high-tech companies,
innovation incubators, accelerators, start-up companies, companies, number of creative companies establish centers of excellence, and recognize
patents the innovation by firms
Creative cluster/ Creative workers forum, network of creative Number of creative companies, number of Provide financial support to create/establish
network companies, alignment of companies with events, number of new products, number of creative industries cluster, establish special
business interests, cross-fertilization, special new services economic zones to encourage creative
zones for creative workers and knowledge industries to enhance their business activities
workers
Diversity Culture, people, industries, economy, income, Number of people immigrated to the region, Encourage immigration of highly educated
education, skills household income, number of types of talent, support cultural activities, public
industries, number of graduates and PhDs, celebrations of diversity, promote and make
cultural demographics tolerance a cultural priority
Performance

and metrics in creative

economy
Performance measures
metrics
measures and

55

Table I.
BIJ 4.3 Infrastructure
21,1 The primary infrastructure concern is the establishment of synergistic network
connections. Adequate investment in information and communication technologies,
access to information and communication technologies and the establishment of open
systems serve to stimulate the growth of creative enterprises. Investment in traditional
infrastructure (transportation systems and facilities, schools, colleges, hotels, hospitals,
56 parks, theme parks, restaurants, museums, theaters) is important as well.
Corresponding metrics should include investment in information and communication
technologies, number of airports, number of ports, number of schools and universities,
number of hotels, number of restaurants, bars, average commuting time, etc.
Connectivity is key for the establishment of creative economies.

4.4 Culture
Looking at the creative success of big cities such as New York, Boston, Los Angeles
and San Francisco, one can clearly see the significant impact of cultural diversity on
the success of creativity. The following measures of culture have an impact on the
establishment of a creative economy: entertainment firms, night clubs, museums, zoos,
theaters, malls, religious facilities, cinemas, and recreation facilities. Some of the
metrics may include number of cultural events, numbers of tourists and number of
restaurants.

4.5 Government policies

Creative economic growth is strongly influenced by government policies. These policies
should be developed in a way that facilitates the stimulation of creativity among
individuals or groups of people. Knowing that proper policies are a major stimulator of
creative economic endeavors, governments should take care to formulate policies and
programs so that they positively contribute towards the establishment of creative
industries. Ease of starting businesses, support for new businesses, small-business
friendly labor polices, taxation policies and governmental investment in technology
make the climate for establishing creative enterprises more appealing for entrepreneurs
and investors. The performance measures and metrics for this area include number of
jobs created, number of new companies, number of tourists, number of immigrants, etc.

4.6 Technological innovation

As discussed earlier for the creative economy to grow, technological innovation is
essential. Performance measures and metrics for technological innovation include
number of software and hardware companies, patents registered, investment in new
technology, percentage of people employed in high-tech industries, access to the internet,
number of centers for technological excellence, number of patents, number of high-tech
companies established, number of design or engineering firms, number of new products
introduced, cultural arts produced and distributed via information technology. The
viability of a creative economy is directly correlated to the establishment of a supportive
climate for technological innovation.

4.7 Creative cluster/network

A creative cluster network consisting of people, firms or both supports the pooling of
common resources (contributing to the infrastructure) and the cross-fertilization
of ideas. Networked clusters should include special economic zones for creative Performance
industries, research and knowledge workers and creative companies. The following measures and
performance metrics can be employed to study the impact of creative cluster/network
on the economy: number of creative companies in the region, number of conferences metrics
organized, number of new products and number of new services developed, among
others.
57
4.8 Diversity
Diversity of people, technology, industries and culture are very much essential to the
establishment of creative enterprises. To redirect the focus on diversity in a way that
enhances the growth of a creative economy, performance measures should include:
number of artists migrated to the region, household income, number of type of
industries, ethnicity-mix of the people, number of cultural facilities and activities, etc.
Big cities have the added advantage of the size and mix of people and variety of
businesses, plus availability of leisure activities including artistic, recreation and
entertainment facilities. Some of the best practices that have been employed in big
cities can be used by smaller cities and towns to create a condition wherein the creative
products and services could be produced. Benchmarking the success of some regions
and cities in different countries will form the basis for identifying the nature of
diversity required and its potential impact on the creative economy in a region.

5. Challenges in creating economy

Now that performance measures and metrics impacting the establishment of creative
economic endeavors are known, the focus shifts to the challenges associated with the
perspective of implementing the creative economic framework and related managerial
implications. The major characteristics of modern enterprises include replication,
specialization, hierarchy, extrinsic rewards, functional integration, restructuring,
business process reengineering, enterprise resource planning, supply chain
synchronization and customer relationship management. To highlight the importance
of technology and diversity in the innovation economy can be defined by flexibility
through outsourcing, fostering choice by providing information and customized goods,
making firms become content oriented, market infrastructure that enable quick changes,
choice enhanced through multiple channels, competitiveness based on differential content
and added value, and intangible resources and increasing returns (Voelpel et al., 2006).
Lack of diversity, lack of tolerance and the lack of a knowledge-based business
cluster leads to a brain drain of talent to more attractive creative communities
(Holzheimer, 2006). According Florida’s (2002) index of the creative class, the overall
creativity index is based on four factors: creative class share of the workforce based
largely on occupational characteristics, innovation as measured by patent activity,
high technology share of the economic base, and diversity based on indexes related to
sexual orientation, cutting edge arts and culture and diversified population.
The following are areas of focus when developing creative economies:
.
Develop infrastructure to promote creative activities and an economy that is
based on local economic and cultural characteristics.
.
Local government should establish a unit (special task force) or division to
develop more structured policies and programs to support the growth of creative
industries.
BIJ .
Establish special economic zones to encourage creative activities and growth of
21,1 such industries.
.
Identify the strengths of local higher education organizations and develop them
further to support the creative economy.
.
Develop primary and secondary educational curriculum in order to promote
creativity among individuals in areas such as arts, music, dance, and design in
58 order to support the growth of creative industries.
.
Making use of the whole day for doing business, including night time activities.
.
Globalization of recruitment efforts to encourage creative people to join the team.
.
Fostering diversity to promote creative economy.

6. Costing systems for creative economy

The objective of developing a costing system is to provide the right information about
the costs and benefits including how various creative resources are utilized for
contributing to the creative economy. It is difficult to estimate the value of a creative idea
in monetary terms. Accurately doing so depends on the successful commercialization of
similar creative ideas that lead to financial return. The costing systems in creative
economies have multi-purposes:
.
whether the investment in creating ideas (intangibles) results in tangible and
intangible benefits (goods and services);
.
determining the value of creative products such as ideas and designs;
.
determining the optimal ideas-mix for maximum return; and
.
investing judiciously in creative activities.

Costing systems for creative products might be similar to costing systems for research
and development or innovation. Due to the nature of intangibleness, the estimation of
service value is difficult in comparison to tangible products. In general, creative fees
are a small fraction of total job costs.
Creative enterprises are considered to be high-risk businesses. The nature of the
business is that most creative ideas will never achieve technical success and even fewer
will result in commercial success. Seldom does a company survive long-term without
investing in creative ideas to improve upon its current products and business practices
in a process of continuous innovation. Given the high failure rate of investment in
creativity, cost estimates are unstable thus financial support for creative ideas may
suffer. An effective partnership between technology and commercial managers is
critical to ensure the successful fruition of creative ideas.
The bottom line for any proposed costing system is that it is difficult to estimate the
value of a creative idea until the technical/commercial success is realized. Thus, the issue
of cost control in creative activities is a challenge. No companies want to invest in creative
activities unless they present significant potential for commercial success. The decision to
invest or not in creative activities requires a careful cost/benefit analysis. Costing of a
creative product/service can be calculated using traditional or activity-based costing that
accounts for labor, material and overhead costs. An alternative costing scheme is
market-driven pricing: the price that creative products/services command from the
market. This is more difficult to calculate and is best used post launch.
7. Conclusion Performance
In this paper, a review of the existing literature on the creative economy in used to measures and
develop and identify its major determinants. First, the background and scope of the
creative economy is presented. Next, definitions of the creative economy are offered. metrics
Section 3 provides the proposed framework for better understanding the creative
economy. Section 4 provides performance measures and metrics with which to assess a
creative economy and that may be used to assist policy makers in their development of 59
strategies, tactics and programs for developing creativity in economy. Sections 5 and
6 deal with challenges associated with establishing and valuing creative economies.
Directions for future research include:
. Refining the conceptual model (Figure 1) for fostering the growth of a creative
economy.
.
Validating the model via multiple case studies or empirical research.
.
The suggested performance measures and metrics (Table I) are worthy of further
scrutiny and development in order to provide more concise measures and
metrics.
.
The performance measures and metrics offered need to be tested empirically.
.
The appropriate costing system for the creative economy is not clear yet.
However, a suitable costing system may be developed in line with activity-based
and value-based costing systems, rather than using a traditional total absorption
costing system. The price of a creative product/service can be estimated using
the market price, but only post launch.

In summary, the performance measures and metrics identified provide a starting point
for understanding the creative economy and the factors that influence successful
creative endeavors. Subsequent research may focus on identifying critical success
factors in order to assist relevant stakeholders to evaluate the impact that their policies
and programs might have on establishing successful creative economies. Although the
performance measures and metrics discussed in this paper are not tested, they
highlight the importance of developing appropriate measures and metrics as a
managerial tool for controlling performance in creative economies.

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