Creative Industries

In Creative Industries, Harvard economics professor Caves explores the complex and idiosyncratic structure of the "creative industries": visual and performing arts, motion pictures, sound recordings, book and magazine publishing, fashion, and even toys and games. Using the theory of contracts and industrial economics, he analyzes the underlying organizational logic of these industry sectors. Important economic properties, he writes, are inherent to understanding their organization: demand is uncertain; workers care about their products and require diverse skills; products are differentiated; and the timing of their creation is often crucial to their success. In addition, many creative endeavors have durability or lasting economic significance, as in royalties resulting from copyright agreements. Caves begins by examining simpler industries that require single creative inputs, including art galleries and concert booking agencies, and moves effortlessly to more complex operations, like cinema and TV filmmakers and distributors, characterized by diverse creative inputs and production processes with large-scale distribution channels. It's a commendable effort to understand and explain a segment of the economy that, says Caves, rarely gets the intellectual attention accorded "serious" industries like steel, pharmaceuticals, and computer chips.