>> 1.4 CONTEXT AND CONTOURS OF THE CREATIVE ECONOMY
Modified policy responses are needed when addressing the creative economy as it differs from other economic sectors. Policy-making in this field has tended to follow generic industrial models, despite the fact that the creative economy functions differently. There is still too much of a cookie-cutter approach in this field, which harms regional and local specificity.10 Hence, there are few current policy frameworks that are well positioned to encourage such an approach. The creative economy differs from other sectors through its organizational forms and the market risk associated with new products. Micro-enterprise is more common in this sector than in others, particularly in developing countries; Yet even there, three layers are to be found: small independent producers; quasi-independent subsidiaries serving larger firms; and very large companies (often mul tinationals) in fields, such as film-making and publishing.
The creative economy is simultaneously linked to the public, the not-for-profit and the informal sectors in ways that make it a complex hybrid. Moreover, only one aspect of the creative economy is expressed in price information and income, while other critical parameters of its success are more bound up with intrinsic values and identities. Its governance, then, requires an awareness of a kind of complexity that cuts across a range of policy concerns.
It also requires new approaches to the loosely configured, emergent networks of cultural producers and consumers that drive innovation. All of these are very different from the large-scale and highly visible institutions and interests that most cultural policies still tend to focus on, and which continue to be the source of subsidies and support.
Because the creative economy is difficult to manage and highly risky, larger organizations that can spread risk across a portfolio of products and services will find it easier to flourish. With physical goods, huge economies of scale are afforded to production and to the control of distribution systems, and are a significant barrier to entry. In most creative economy activities, real income comes from bulk selling and smaller and new entrants find it very difficult to break into established markets. Given the first-mover advantage enjoyed by the global North, this presents daunting challenges to any new entrant, especially in the global South, but it is also true that markets are created around goods and services that embody local idioms and motifs. In other words, the cultural and creative industries are naturally idiosyncratic, and benefit from the dynamics of imperfect competition. Yet, across all developing country settings, historical links, relationships and path dependencies are all crucially significant factors of success.