Wednesday, 26 September 2012

What's Creativity got to do with it? 11.9.

"Creative Industries" is a term adopted and defined by the Creative Industries Task Force set up by Tony Blair in 1998: "Those industries that have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property. Main criticism directed at this concept, and all theories linked to it (e.g. "creative economy") is that it excludes social creativity, creativity as a shared characteristic - which instead is a fundamental property of the functioning of actual global economy. See for instance Matteo Pasquinelli and ICW - Immaterial Civil War, and Marion von Osten and Unpredictable Outcomes: A Reflection After Some Years of Debates on Creativity and Creative Industries.

So instead we listed concepts such as "new economy" or "information economy" or "immaterial production" or "information capitalism" or "cognitive capitalism". And especially Yann Moulier Boutang's (draft) article "Cognitive Capitalism and Entrepreneurship", a paper in which MB examines how the shift to cognitive capitalism relies more and more on the capture of "positive externalities" outside the traditional boundaries of the firm, and on production of public(s) rather than production of good to be sold at a market, and how this changes the classical nature of entrepreneurship. Below a short resume.

Classic entrepreneur is "an innovator who reshapes patterns of production and distribution by developing new products and processes, by opening new markets and sources of supply and by devising new forms of organization", "one who manages and assumes the risk of a business or enterprise". Classical properties of entrepreneurship are:

a. "birth of possessive individualism" i.e. "personal pecuniary motives" = entrepreneur is interested in making money. S/he is market and business oriented, practical and experimental minded.
b. entrepreneur seeks opportunities and rapid growth.
c. s/he makes strategic decisions and is familiar with industrial processes (technologies), which however are subordinated to chances of profit and behavior of the market.
d. knowledge of risk not known beforehand, no complete rational picture - use of intuition, rapidity of decision, opportunism.
e. "spirit of entrepreneurship": introduce new products, innovate
f. conquest of ownership important, also control and incorporation of the physical resources and assets within and outside the firm (physical positive externalities)
g. entrepreneur as a manager is more a risk taker than the owner of capital.
h. s/he is a master in organization processes, has control over the internal organization.
i. and a master in making decisions and choices in incomplete and big organizations.

Already for the classical entrepreneur knowledge is an important thing - he has need of intuition, categorizations, schematization, judgement for practical purposes and for choice. The entrepreneur is the first to cumulate intellectual capital. However, entrepreneurship is not developing in a continuos way, but there is a huge transformation taking place because of globalization and cognitive capitalism.

What is cognitive capitalism?

1. a huge change is labor processes because of the  massive spread of ITCs
2. immaterial production is becoming hegemonic, immaterial assets have the greatest value and potential
3. new kind of property and property rights - ownership is challenged by the right to use by new practices but also new economic models of doing business or organizing production, consumption, saving and investment.

Cognitive capitalism is a "type of accumulation", resting on management of knowledge and production of innovations, on immaterial investments. Capture of returns from knowledge and innovation play crucial role in the creation of profits. Main institutional and organizational issues concern questions of IPR, location within networks and alliances, and management of projects.

22 characteristics of cognitive capitalism:

1. Virtualization of economy and increasing role of information (knowledge)
2. Because of ICT and internets, producers are more interconnected. Digital information needs to be/ can be gathered into knowledge goods and practical knowledge activities.
3. ICT-related innovation is still going strong.
4. Production of material goods replaced by production of knowledge through means of knowledge, and the living activities of interconnected brains (human beings...)
5. continuous innovation - science and knowledge directly embodied in production of value, and are becoming the hegemonic part of the accumulation system.
6. classical division of labor becomes a hinder, not a way to efficiency and productivity. Cooperation more important than separated specialization.
7. Autonomy and intelligence become the main source of value. (Intelligence: production of repetition but with a difference). Exploitation of the innovative force more important than exploitation of labor force.
8. Material production is not the core of the production or accumulation system any more.
9. The meaning and content of "value" changes: general human properties such as intelligence, care for others, social relations, communication etc. represent the core of wealth.
10. Consumption is mingled with production. Market precedes production.
11. From importance of individual performance to the importance of the team, local governance, territory, whole society - global performance.
12. Traditional divisions of capital and labor are blurred.
13. Each good is produced with four components: hardware, software, wetware (activity of living brain = human beings), netware.
14. Emergence of models of social productive cooperation, p2p etc.
15. Netware and networks form a third space between markets, and firms and states.
16. Labor is a living activity and cannot be reduced to machines.
17. Situated and implicit knowledge cannot be reduced to machines or information. Commodifying knowledge involves two kinds of problems: knowledge goods are quasi public goods, and their private appropriation can only be achieved through social conventions (e.g. defining shared cultural goods as private property involves ideology and politics); digitalization challenges the technical fences to property rights.
18. Separation of work from personal life becomes blurred.
19. Standard forms of employment decline, there is a constitutional crisis of the salary system.
20. In complex systems interactions and sharing expand, which boosts the value of "positive (or negative) externalities". 
21. Externalities determine the the general conditions of growth, investment and redistribution of revenue.
Here the example of bees, to clarify what is meant by "positive externalities". In classic outlook, what bees do = produce, is honey. This can be likened to the firm that produces goods - thus, to get better value one needs to make the production of honey more effective. But, bees have far more important role than production of honey, and that is pollination. Pollination is a "positive externality" - it is external to the production of honey, yet, it is far more significant and creates more value than production of honey.
22. From decreasing returns we go to increasing returns.

... still updating, missing the NEW properties of entrepreneurship... manifold are the ramblings of economical scientists... 

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