There are numerous research streams surrounding creativity and management. Creativity operates similarly within each research stream, yet these similarities have not been compared nor amalgamated into an inclusive narrative. For example, seminal entrepreneurship thinkers note the role effectuation plays in entrepreneurial pursuit (Sarasvathy, 2003). A similar perspective can be found in creative industry literature by Townley et al. (2009). This perspective, though grounding itself more comprehensively in Bourdieu’s theory of capitals, notes a similar social dynamic to value construction. Both entrepreneurship and creative industries literature seemingly seek to reconcile a similar problem regarding creativity: how is the new creation socially constructed over time?
The goal of this dissertation is to lay the groundwork for such a narrative. This essay is guided by the proposition that taking a broader analysis of the relationship between creativity and the social system may provide us with similar characteristics that are applicable across research streams. However, a brief caveat regarding the term ‘social system’ may be warranted. Some use the term to move away from sociological perspectives that seek to formalize social reality, such as Giddens who uses the term social system as the end result of a reflexive ordering of practice across time and space (Giddens, 1984) or similarly Bourdieu’s Habitus conceptualized as a near infinite sum of actions and outcomes that reflexively shape the individual and social structure (Bourdieu, 1990). This essay finds these perspectives far more valuable than for example a Neo-Tardesian perspective, architected by Bruno Latour, that suggests technology can record and organize social reality in real time (Latour, 2010).
This broad, ant positivist position, makes it possible to explore similar characteristics surrounding the creation of new organizations and broader concepts alike such as the creation of value as it develops through time and space. Such a narrative will inevitably elude the scope of this dissertation and my current ability as a researcher to theoretically propose. I acknowledge the advanced understanding of theory building and testing I lack at this point of my intellectual development, however, it may be fruitful to determine whether such a narrative might be pursued in future research.
The Diversity of Creativity and Management Research. Creativity inspires diverse and promising research perspectives that span both creative industries and entrepreneurship literature. Some of these perspectives link creativity to the following: the core competitive advantage of knowledge production (Lampel et al., 2000), an aspect of economic growth (Mokyr, 1992), the driver of social change as ‘the possibility of a creative destruction for an entire epoch (Beck et al., 1994) among others. Alternatively, the integration of creativity into the economy has been criticized as a bourgeois mechanism for monetizing culture along with the corrosive element of mass cultural production and the encouragement of predatory labor practices (Horkheimer and Adorno, 2002, Baudrillard, 1994, Hesmondhalgh, 2008, Hesmondhalgh and Baker, 2010) Further research regarding creativity acknowledges its impact on organizational and sector structure whereas creativity underpins the following: the formation of value (Townley et al., 2009), the center of the ‘new economy’ (Work-Foundation, 2007), and a move toward flexible specialization employment practices (Piore and Sabel, 1984).
In creative industries literature, two departments, The University of St. Andrews and the Queensland University of Technology, take different theoretical perspectives. The Queensland University of Technology links the emergent nature of creativity to the critical realist stance implicit in social complexity to explore the macro-level impact of creativity (Potts and Cunningham, 2008, Potts et al., 2008). From this perspective, drawing heavily on Schumpeter’s creative destruction, creativity is seen as impacting a set of characteristics that pervade the greater economic system. The dominant perspective at the University of St. Andrews, however, sees creativity as core to the formation of value drawing from Bourdieu’s theory of capitals in the construction of a conceptual framework that includes both market and non-market processes (Townley et al., 2009).
These two leading creative industries perspectives seem to have similarities with entrepreneurship literature. The Queensland perspective explicitly draws from Schumpeter’s understanding of ‘creative destruction’ important in the development of a lesser known phrase, ‘the creative response,’ (Schumpeter, 1947, Schumpeter, 1942) to underpin their understanding of the impact creativity has on a broader socio-economic structure. Seminal thinkers in entrepreneurship literature echo this sentiment recently calling for an ‘artificial method’ that systematizes our understanding of the entrepreneurship process (Venkataraman and Sarasvathy, 2012) noting the role effectuation plays in the pursuit of new opportunity (Sarasvathy, 2003, Simon, 1996).
There seems an intuitive similarity between entrepreneurship and creative industries literature. They both surround similar paradigms central to management and economic theory such as economic growth and the non-market aspect of the formation of value and draw from prominent social theory (Sarason et al., 2006, Townley et al., 2009). However, as will be explored in this essay, competing socio-economic perspectives often are on two sides of an ontological divide – the teleological and the non-teleological or emergent (Buchanan and Vanberg, 1991).
Further complicating these similar yet unreconciled perspectives is the shift toward digital convergence driven by the move of all industries toward creative or symbolic production. For example, the rapid growth of innovation, such as 3-D printing, threatens to displace significant populations of manual laborers (Staff, 2011a). This essay considers the possibility that equilibrium based supply and demand fundamentals may be incapable of supporting a creative revolution.
By exploring the many different research streams that form our current understanding of entrepreneurship and creative industries literature it is possible to understand how creativity similarly underpins streams such as flexible specialization and creative destruction. Central to an inclusive narrative of these different streams is a broad understanding of the temporal and spatial boundaries of a created act. Through this perspective it is possible to bring creative industries and entrepreneurship literature squarely into the terrain of current ontological perspectives surrounding social systems.
Upon researching the different ontological perspectives underpinning these research streams, a common paradox comes into view. Creativity literature suggests a necessary relationship between creativity and the social domain it is integrated into (Csikszentmihalyi, 1999), yet the theoretical temporal-spatial boundaries of social systems are ill-defined. Further, the more socially constructed a theory becomes, the more difficult it is to place a temporal and spatial boundary on the organization or concept.
Four questions thus far have become pertinent: (1) what are the common elements between creative industries and entrepreneurship research? (2) How does creativity inform an understanding of the temporal-spatial boundary of social systems? (2) How does an understanding of the temporal-spatial boundary of social systems inform the knowledge of highly creative and symbolic organizations and industry sectors? (4) How does the temporal-spatial boundary inform an understanding of the ontological categories placed on organizations and industry sectors?
Dissertation Structure. This dissertation seeks to analyze themes of creative industries and entrepreneurship research using a lens developed from research into the temporal and spatial boundaries of social systems. The aim is that similar temporal and spatial characteristics will emerge across research streams. However, building a theoretical narrative is currently beyond the scope of this paper.
Keeping this in mind, each chapter engages with paradigm shifting perspectives in social and economic theory using the assertion that ‘mined’ resources are ordered fundamentally different than ‘mind’ resources or creative resources. The characteristics of ‘mind’ resources are ontologically, temporally and spatially different in that they necessitate organizational and sector boundaries that ever expand toward infinity. ‘Mined’ resources, on the other hand, are finite in nature as they are drawn from the finite natural world.
The first chapter provides a broad survey of the different research streams in creative industry and entrepreneurship literature. One similarity seems to emerge across different research streams: when creativity is introduced into an organization or sector, the temporal-spatial boundaries of the sector rapidly move toward infinite potentiality. For example, when an organization tries to balance rational considerations with creativity, the organizational boundary is often seen as constricting the creative potential of performers (Eikhof and Haunschild, 2007). For example, digital organizations such as the music distribution company Spotify brings the restricting nature of the finite boundary beyond issues of worker satisfaction and performance to a paradoxical relationship between supply, demand, and price. Spotify is explored towards the end of this dissertation.
In chapter two, this essay explores how the temporal-spatial boundary forms our understanding of social systems, specifically, the call for ‘temporal and spatial limits’ on social reality (Adams, 2006). The possibility emerges that such ‘limits’ could further our understanding of how creativity forms social systems or in other words how creativity expands the boundary of social systems ever toward ‘infinity’. Infinity or, as we are using the term ‘boundlessness’, becomes the temporal-spatial limit. This assertion is explored within the context of prominent ideas surrounding time, space, reflexivity, and social systems.
Chapters three and four prove most challenging. Here links are drawn between creativity, social systems theory, and Emmanual Levinas, a continental philosopher whose original contribution to philosophy notes that ‘ethics precedes ontology’ (Derrida, 1999). That is to say the creative perspective of the individual forms and re-forms the ontological perspective through time and space. This idea is explored as perhaps reconciling the teleological/non-teleological paradox of social construction. In chapter four, this perspective is used to critique the equilibrium/disequilibrium debate surrounding the function of the entrepreneur (Kirzner, 1999).
Finally, the dissertation moves toward the methodology and analysis chapters where a retroductive case study approach is used to examine five key organizational changes applicable to creative industries and entrepreneurship literature. These chapters attempt to relate creative industries and entrepreneurship concepts such as flexible specialization, economic growth, and symbolic production to the temporal and spatial ontological changes explored in the previous chapters. This essay explores the following organization and sector changes explored: 1. Spotify and infinite digital music sales, 2. Crowd funding and infinite new markets 3. Google, flexible specialization and infinite new market opportunities 4. Kindle and ever-expanding conceptual ‘Worlds’ and 5. 3-D printing and the symbolic and creative convergence upon manual production.
The dissertation concludes with the beginnings of a narrative coming into view. The narrative may be explored in terms of several paradigm shifting perspectives surrounding creative and management research. First, the equilibrium/disequilibrium debate that helps form the supply-demand foundation of our understanding of ‘mined’ resources, agriculture, natural resources, etc., may not be applicable to ‘mind’ resources or creative resources. The key insight here is that ‘mined’ resources have a finite temporal-spatial boundary, while ‘mind’ resources are seemingly governed by infinitely creative possibilities. Second, this novel perspective may contribute to the theoretical perspective put forth by Townley et al. (2009) by showing how creativity forms the temporal-spatial boundary of social systems. Townley et al.’s (2009) conceptual framework might now be applied specifically to organizational structures. Lastly, we offer that the temporal-spatial boundary of a socially constructed organization can be measured in space and time by the distance between its creation and re-creation. It is possible this measurement proves more salient in regards to ‘mind’ resources than the equilibrium/disequilibrium debate, which currently forms the foundation of our understanding of entrepreneurship within the ‘Queensland’ creative industries perspective.
Creativity and Infinite Organizational Boundaries
In the following section, creativity is explored in major streams of research surrounding entrepreneurship and creative industries literature, with the intention to find one point of reference that can capture their similarities. This chapter begins with a general introduction of competing perspectives in creative industries and entrepreneurship research.
One characterization noted by Townley et al. (2009) is that digital convergence makes it difficult to keep the sector definition of the creative industries confined to the thirteen organizations listed by the (DCMS, 2001). For example, how does one separate the symbolic nature of a virtual marketplace, programmed using symbols, retaining ‘inherent unknowability’, low barrier of entry, and demand uncertainty (Caves, 2002) from its traditional industry classification as a retail outlet?
The notions of reflexive or liquid modernity seem to support this characterization that the transience of the creative and cultural industries pervades the most utilitarian industry sectors and the most rigid institutions. Liquid Modernity envisions a form of modernism that, through digital communication, has reached a temporal limit in regards to speed of change (Bauman, 2000). Reflexive modernity draws on Schumpeter’s creative destruction to characterize change as the near constant creative destruction or ‘re-embeddedness’ of social structures (Beck et al., 1994).
Seminal researchers in entrepreneurship and creative industries literature echo this perspective. In entrepreneurship literature, an artificial method is proposed as an alternative method to the scientific method and as a means to systematize entrepreneurship (Venkataraman and Sarasvathy, 2012, Sarasvathy, 2003). These ideas tend to form the theoretical foundation that the great breakthrough seemingly looms on the horizon, when our society penetrates the glass ceiling of economic growth allowing us to manifest our creative will (Anthony, 2012).
Hartley (2008) notes the possibility of ‘integrating the study of economic and cultural systems and processes’. By doing so, he offers that we may be able to reconcile often competing economic and cultural values throughout system change and development (Hartley, 2008). This is a monumental claim if we consider the historical inquiry into reflexive social reality and identity, a prerequisite level of understanding economic and cultural systems, dates back to the pre-Socratics (Jeremiah, 2012).
The desire for creative industries literature to move beyond an industrial classification is articulated by others within the field, who see industry sectors taking on the characteristics of the creative industries put forth by Caves (2002) such as uncertainty, infinite variety, etc. (Potts and Cunningham, 2008, Potts et al., 2008). This perspective, identified as the ‘Queensland’ perspective, sees the economy as a whole, also having similar characteristics of social complexity such as an autopoietic or emergent nature of organization (Potts et al., 2008, Potts and Cunningham, 2008). Social complexity is seen as ontologically ‘emergent’ and some suggest there is promise for its application to social and management theory (Stewart, 2001, Thrift, 1999, Denning, 2013, Chesters and Welsh, 2005).
All these perspectives, the Queensland perspective, Townley et al. (2009), Caves (2002) and the entrepreneurship perspectives formed by creative destruction seem to be similarly underpinned by their relationship to creativity, but there is not an inclusive set of characteristics explicitly noted across research streams.
Creativity and Value. Theoretical and empirical literature surrounding the tension between commercial and creative logics, form one core theme of creative industries literature. On a macro cultural level, critical theorists tend to depict this relationship in a negative light. The economic or market value supersedes the cultural value (Horkheimer and Adorno, 2002, Featherstone, 1991) whereas recent perspectives see some aspects of intellectual property to be a form of cultural, bourgeoisie imperialism (Hesmondhalgh, 2008).
This tension has been explored at a micro, organization level with empirical studies into how the logics of creativity and rationalization represent a possible source of uncertainty and conflict in artist management, consumption patterns, and organizational identity (Eikhof and Haunschild, 2007, Tschang, 2007, Glynn, 2000).
Another interesting perspective regarding creativity and value, sees value as socially constructed or created (Hines, 1989, Hines, 1988). This perspective has been used in arguments that move away from shareholder value and towards more inclusive systems of value to include social and ecological value (Miller, 2008) and further arguments that distinguish between ‘market’ and ‘non-market’ value (Snowball, 2008).
In this research stream, there is less of an ambiguity regarding the creative element of the cultural or organizational structure and more so involving the temporal-spatial boundaries of the structure itself and how it limits the potentiality of creativity. For example, the critical theorists note a pervasive yet evasive holistic global socio-economic structure (Deleuze and Guattari, 2004, Wallerstein, 2004) that seeks standardization and ‘sameness’ rather than ‘the other’.
The artists see an organizational boundary that is collapsing into their creativity, the consumers a market with not enough product, and the value theorists a system of value that does not expand enough to include ecological and social value. It seems that once the nature of the system has been identified as creative, the temporal-spatial boundaries of the social system creativity ingrates into are inevitably constricting.
In the analysis section to come, an exploration of Spotify, a digital organization who offers nearly the entire catalogue of sellable music for a fixed price, raises significant problems with value when the organizational boundary moves ever increasingly to an infinite limit. In Spotify’s case, supply and demand may no longer be applicable to its pricing model. We also explore an initiative by Amazon’s publishing division called Kindle World that establishes a licensing scheme allowing authors of ‘fan fiction’ to write and sell works that take place in settings or that use characters from original authors.
Creativity and New Markets. Research into new market or industry creation unfolds similarly. Some perspectives relate new market formation to research into population formation and growth and legitimacy claims (Aldrich and Martinez, 2010, Aldrich and Fiol, 1994) through effectuation (Sarasvathy and Dew, 2005, Simon, 1957, Coase, 1988). Sarasvathy and Dew (2005) note Coase’s (1988) description of supply, demand, and institutions shaping a very poor understanding of new market creation and the ‘boundaries’ necessary in the social construction as articulated by Simon (1957). In other words, Townley et al.’s (2009) comprehensive perspective surrounding the capitals of value formation may be applicable to new market formation, which at this point, seems to exist more in economic literature than creative industries literature.
Markets are seen as ‘a social structure for the exchange of rights’ … whereas ‘the notion of structure accounts for the fact that a market exists over time’ (Aspers, 2009). The artificiality of markets and the reflexive nature of markets are recognized implicitly whereas the identity of the creators are shaped throughout the process of market formation (Aspers, 2009).
Literature surrounding new market creation also encounters paradigm shifting ontological debates. One perspective notes the difference between the ‘new self-organizing paradigm’ as opposed to the ‘newtonian paradigm’ (Buchanan and Vanberg, 1991):
‘The fluctuations, mutations, and apparently random movements which are naturally present in real complex systems constitute a sort of ‘imaginative’ and creative force which will explore around whatever exists at present’.
The above statement seems to acknowledge the impact of creativity on complex systems, though I hold that Buchanan and Vanberg’s (1991) understanding of ‘complex systems’ may be too positivist for my taste. The nature of creativity is characterized as producing ever more creativity, ever-more perspectives or inventions. The relationship between the temporal and spatial bounds of the new creation is expressed through the nature of its social construction.
Others suggest the formation of new markets have a decidedly sociological turn (Fligstein and Dauter, 2007) and revolve around the application of embeddedness to economic behavior (Granovetter, 1985). Buchanan and Vanberg (1991) note the scale of these differing paradigms by exploring their ontological roots.
In the analysis section to come, we explore crowd funding as a mechanism by which infinite new markets are formed daily and with few capital restrictions. An interesting tension seems to arise: does capital move toward the production of necessary resources or to the automation of the production of necessary resources? What happens when infinitely new product markets are formed? How does this rapid expansion change the worth of capital?
Creativity and Flexible Specialization. There are many perspectives regarding flexible specialization such as those who use the concept to describe a process of ‘post-Fordism displacing Fordism’, others who see flexible specialization as a process ‘to reflect capitalism in crisis restructuring itself so as to preserve the wage relation’, or finally those who explore the concept at an organizational level (Ursell, 1998). Among characteristics such as vertical disintegration, brokers, (Miles and Snow, 1986) novelty and interrelatedness (Ursell, 1998), flexible specialization sees the craft sector as having different labor characteristics than mass production, which perhaps is used as a starting point to conceptualize structural economic change (Piore and Sabel, 1984, Berger, 2012).
The perspective regarding flexible specialization seems to be associated with research into different organizational and labour perspectives such as: ‘the boundaryless career’ a career that is more dynamic in time, requiring greater time periods of learning and project segmentation (Arthur and Rousseau, 2001), and the conglomeration of the business landscape into a ‘dynamic network’ to ‘accommodate complexity at network levels’ (Miles and Snow, 1986).
Broad discussions surrounding the causes of flexible specialization tend to drift toward societal meta-change such that change in labor requirements move the ‘industrial society’ toward a ‘knowledge society’ (Drucker, 1993). These discussions also conceptualize the ‘systems through which knowing and doing are achieved’ (Blackler, 1995) or even perhaps a more comprehensive perspective of the ‘Information Age’, which synthesizes temporal and spatial technological innovation across economics, communication, digital convergence and social practice (Castells, 2000).
Castells (2000) makes a meta-claim that, ‘all major social changes are ultimately characterized by a transformation of space and time in the human experience’ and goes on to elicit his belief that time and space are subjective. These perspectives are argued much more rigorously by others; nevertheless it is worth mentioning the temporal and spatial turn of flexible specialization literature.
Other perspectives explore the relationship between Elias’ functional interdependence, power, and the limitations of Foucauldian discourse to develop an empirical understanding of the reflexive nature of social networks (Blair, 2003). Empirical perspectives regarding the nature of power in social networks include research into gender equality in film and television production, class equality and creativity in ad agencies, and the absence of learning structures for freelancers (Grugulis and Stoyanova, 2012, McLeod et al., 2009, Grugulis and Stoyanova, 2011).
Flexible specialization seems to begin to draw together some of the concepts this essay has considered so far in that the move toward flexible specialization accompanies organizational practices where the organization must expand its boundaries to encompass the infinite creative perspective only to re-create itself rapidly and nearly entirely as ‘projects’ change. In the analysis section to come this essay explores Google’s ‘twenty percent’ scheme as a way in which flexible specialization may be seen as an organizational structure that is able to expand the creative potential of its labor force toward infinite possibility and rapid re-creation.
Creativity and Economic Growth or Wealth Creation. Creativity is seen by some theorists as linked to an aspect of economic growth (Mokyr, 1992). Scott (2006) offers a comprehensive analysis of creative destruction and economic growth to contextualize his understanding of the complex and ‘multi-scalar’ dependencies of the geography of innovation and economic growth (Scott, 2006). An empirical example, again offering an introductory section that explores innovation and economic growth, seemingly confirms the assertion that ‘fast growing’ firms create jobs (Wong et al., 2005). These empirical perspectives in turn seem to confirm Mokyr’s (1992) original link between creativity and economic growth.
This is perhaps the research with the most quantitative empirical research.
Recent studies suggest innovation may increase per capita income and generally bring economic growth to society at large (Ahlstrom, 2010) or that a ‘breakthrough invention’ ‘creates wealth and surplus resources’ (Ahuja and Lampert, 2001).
There are some organizations that compile data surrounding entrepreneurship and then relate that data to economic growth (GEM, 2013). Most perspectives seemingly draw from the promise of Schumpeter’s claim that ‘creative destruction’ through innovation acts as the central engine of economic growth (Schumpeter, 1942).
This assertion, seemingly empirically backed, that creativity in the form of entrepreneurship grows the economy is conceptually similar to the tensions we have discussed previously. The impact of entrepreneurship is that it expands the economy. However, this notion proves troubling when we consider that both Schumpeter and Kirzner considered the entrepreneur in terms of moving toward equilibrium or moving away from it (Kirzner, 1999).
If the equilibrium-disequilibrium debate necessitates a definable temporal and spatial boundary, how can entrepreneurship expand that boundary? Perhaps Schumpeter argues that disequilibrium is that expansion. However, this paper takes the perspective that the temporal and spatial boundaries of the economic system were simply ill-considered in Schumpeter’s and Kirzner’s perspectives.
Nevertheless, it can be noted again that this characteristic of entrepreneurship as ever expanding the spatial boundary of the economy is similar to conceptualizations put forth by other streams of research. It is easy to assign a value to ‘mined’ resources, when the sum of their production is known or at least estimated. Finite sets of resources can be seen in an equilibrium-disequilibrium perspective as their supply and demand can be regulated by price. But what happens when the supply of resources becomes infinite? This is the case regarding creative resources and this paper argues that price no longer can regulate the supply and demand of creative resources.
Because this essay explores price in other organizations such as Spotify, we explore the possible ramifications the ‘mind’ resources may have on technological unemployment. 3-D printing provides a glimpse whereas creative production might displace significant portions of the labor force.
There are other streams of research, which I have left out due to scope and time limits in writing this paper. It is possible that copyright, as its primary use changes from industrial manufacturing to Internet automation of labor, could be characterized as again ever expanding its boundaries to an infinite temporal and spatial limit. In other words, the current copyright scheme might have been applicable when the amount of patent applications were small in number and could be processed by a regulatory system. However, as more creativity enters the system, it threatens to expand the boundary so quickly that the regulatory system is no longer capable of processing and enforcing the amount of copyright issues it receives so that only those with access to large sums of legal power can exploit the copyright system. The ‘web of things’ movement, which is used to describe the process of attaching everyday objects to the internet, might be an interesting organization to explore in the form of copyright regulation.
It is possible that when creativity is introduced as a concept or characteristic of a macro or micro level organizational structure, it has an observable effect on the characterization of that structure. It destabilizes the temporal and spatial boundaries so that immediately once appropriate boundaries of the social structure are no longer capable of encompassing the potentiality of the creative elements. Further, the more creativity is introduced, the faster the organizational boundary moves towards temporal and spatial infinity or boundlessness.
This postulation necessitates an exploration into time and space as boundaries of social systems, theories surrounding social structures and social systems, and a further critique of Schumpeter’s creative destruction recasted to include a defined temporal-spatial boundary.
Creativity and Social Systems: Infinite Time and Space as Boundary Limits
The previous chapters began to consider an ontological problem regarding ‘mined’ resources as opposed to ‘mind’ resources. This chapter seeks to reconcile the ontological problem by synthesizing research in social systems, reflexivity, time and space. However, before venturing into modern sociological debates surrounding critical realist and structuration perspectives, it is important to clarify how this research is applicable to management perspectives.
The field of sociology currently seems engaged in fundamental positivist and anti-positivist debates (Bhaskar, 1979). Leading perspectives note the challenge of causal sociology and raise the possibility of empirical methods that combine qualitative and quantitative methods (Savage and Burrows, 2007, Savage and Burrows, 2009) though this perspective quickly becomes radicalized in the face of ‘digital traceability’ and Tarde’s ‘quantification’ whereas data is collected and synthesized in real time and whereas subsequently the social sciences are considered even more positivist than natural sciences (Latour, 2010). It is interesting to consider this debate in the light of government digital monitoring programs such as PRISM though this is not the subject of this paper. This paper moves away from the positivist perspective, taking into consideration the reflexive nature of the researcher (Cunliffe, 2003, Cunliffe et al., 2004).
This paper engages with time using Cunliffe et al’s (2004) perspective as a guidepost:
‘… time is experienced subjectively and narratives are spontaneous acts of meaning-making that take place and interweave through many moments of discursive time and space. If we accept this is so, then narrative research takes a different form – as a negotiated, synchronic, and polyphonic process in which we experience duration and connection in moments of narrative performance (speaking, listening, and reading). In other words, narrative research is reframed as a collectively constructed process over time – fluid, dynamic, and open to the interpretations of its many participants (Cunliffe et al., 2004).’
This is important to clarify because our heavy use of social systems concepts could give the impression that I seek a formal representation of reality or that creativity can lead us to a formal representation of reality. This is not the case. While I may be after temporal and spatial ‘limits’ of the organizational boundary, I conceive of those limits to be infinite in nature. In other words, I am moving away from conceptualizing ‘mined’ resources that have a positivist bend to ‘mind’ resources that are decidedly anti positivist.
The creative nature of ‘mind’ resources may necessitate a social constructionist turn because separating creativity from its social context may be impossible by its very definition. Current perspectives view creativity to exist in social domains (Csikszentmihalyi, 1999). Further, Maslow explores assumptions regarding creativity in psychoanalysis whereby creativity is observed in relationship to other people (Maslow, 1974).
The nature of creativity seems to be a ‘reflexive’ process necessitating a duality or dualism between subjective and objective reality. This paper furthers the link between creativity and social systems by suggesting that creativity simultaneously casts the totality of the social system. Initially, this seems appropriate taking Bourdieu’s definition of reflexivity as the following:
‘Reflexivity is the capacity of an actor to construct practical understandings (workable, everyday models) of the location of self within a social system, to act accordingly (strategically and tactically) and to reflect further and refine understandings in response to events and the consequences of actions taken’ (Maclean et al., 2012).
In creative industries such as music, television or film production, the market boundary is determined by the sum of creative works. This is not the same in agriculture or natural resource production whereas the market size is determined by how much the natural world provides. Coming into view is an economic reality whereas the boundaries are socially constructed instead of bounded by the finite natural world.
Other perspectives that seemingly interrelate creativity, time and space, and social reality include the following: Bourdieu’s notions of field and capital, Schatzki’s field of practices or ‘the total nexus of interconnected human practices’ where practice is shaped by ‘timespace’, and ‘Wenger’s’ sharing of practitioners stories through communities of practice (Higgs et al., 2011).
Reflexivity and Social Systems. One of the first concepts that helps inform our understanding of what a social system entails is reflexivity. Though the concept has uses in management research and practice (Cunliffe, 2003, Cunliffe and Jun, 2005), it has also been used more broadly to describe social reality as a place where ‘individuals, words, and things are not ontologically separate but co-emerge’ (Iedema, 2007). A characterization of this holistic yet dynamic social reality notes both the expansiveness of reflexivity across disciplines, but also the feature of reflexivity that suggests it is ‘paradigmatically circumscribed’ or that we are ‘constantly constructing meaning and social realities as we interact with others and talk about our experience (Cunliffe, 2003, Iedema, 2007). ‘Radical reflexivity’ suggests ‘we construct intersubjectively the objective realities we think we are studying’ (Cunliffe, 2003).
Cunliffe (2003) makes two important critiques of reflexivity. These critiques make note of how ontology interacts in time. First, she points out the possibility that ontological oscillation is necessary in sense making (Cunliffe, 2003). Second, she describes social reality as being constructed while it is being studied (Cunliffe, 2003):
How can we study ever-emerging discursive realities, which we as researchers have a part in creating? At the extremes, reflexive scholars criticize conventional research strategies for their mindless objective empiricism, and positivists criticize reflexive strategies for their groundless solipsist relativism. How may we avoid both while remaining sensitive to reflexive paradoxes (Chia, 1996b)?
Reflexivity is fundamental to understanding what constitutes a social system. But further, reflexivity helps to point out the temporal and spatial nature of our social systems (Antonacopoulou and Tsoukas, 2002). By categorizing social reality into a subjective and objective dichotomy, we imply that reality is moving through time and space informed by both perspectives. Reflexivity helps us to conceive of an organization, industry sector or for that matter the sum of multiple organizations or sectors as operating with similar general principles – namely the interplay between subjective and objective perspectives.
The relationship between temporal-spatial boundaries and reflexivity is explored explicitly in the work of Adams. Adams (2003) notes the changing nature of temporality in the context of industrial and reflexive modernity noting the ‘move towards temporal limits for the economy, politics and ‘global’ society’. When a temporal limit is reached, the ensuing direction of the social organization is wildly unpredictable (Adam, 2003).
The reflexive nature of temporality is also explicitly noted by John Urry (2003) as he notes that time is understood in some fields as dynamic or ‘multiple and unpredictable’, perhaps both relative to the observer and irreversible. Social Complexity is seen as ‘repudiating the dichotomies of determinism and chance, as well as nature and society, being and becoming, stasis and change’ (Urry, 2003). Beck (2003) further notes the dynamic that time and space play in relationship to ontology whereas ‘the transition from pre-modern to modern society should be reconceived in a similar way: as a transition between different sets of basic ontological categories, and centrally those of time and space (Beck et al., 2003).
Coming into view is a discussion of the central role time and space play in relationship to the ontological perspective and how this ontological reality informs the boundaries placed on social change. These perspectives can apply directly to management by suggesting ‘ontological categories’ inform our perception of time and space. This in turn forms the boundaries placed on how businesses and industry sectors form. In this context, a fundamental ontological distinction can be made between ‘mined’ and ‘mind’ resources.
The Temporal and Spatial Boundary of Social Systems. This chapter has so far explored the relationship between time and space and the ontological perspective. It may be fruitful to next move toward a more rigorous conceptualization of a social ‘system’, so that we can view organizations and sectors as social systems. This section explores social systems in the context of Giddens and two similar competing perspectives, the critical realist perspective and actor-network theory. Bourdieu’s notion of Habitus also proves worth exploration.
An important argument this dissertation seeks to make is that creativity is the variable necessary to conceptualize socially constructed systems. By surveying these sociological perspectives, we see ‘scraps’ of concepts like infinity, temporal and spatial limits, and how a teleological conceptualization of socially constructed systems leaves us on shaky ground as articulated by ‘ontological oscillation’
Giddens puts forth a basic understanding of what constitutes a social system:
The basic domain of study of the social sciences, according to the theory of structuration, is neither the experience of the individual actor, nor the existence of any form of societal totality, but social practices ordered across space and time (Giddens, 1984).
Further, Giddens (1984) defines the social system as: ‘reproduced relations between actors or collectivities, organized as regular social practices’, structuration as ‘conditions governing the continuity or transmutation of structures, and therefore the reproduction of social systems’ and system integration as ‘reciprocity between actors or collectivities across extended time-space (Giddens, 1984).
Structuration theory seems able to provide a reflexive and socially constructed account of social systems that move away from the long standing sociological goal of formalizing social reality inherent in some early writers (Hassard, 1993). Incorporating a reflexive social reality is important to conceptualizing social systems that are influenced heavily by creativity. Further, Giddens conceives the social system as operating through time and space, which may go unrecognized at first glance as a significant departure from a teleological perspective.
Bourdieu’s notion of habitus is similar and pervaded by the concept of infinity. Though time constraints on this dissertation prevent building a structuration-habitus conceptual framework, it is possible that future research might reconcile these perspectives.
Bourdieu (1990) describes his notion of habitus as:
‘…a feel for the game … what enables an infinite number of ‘moves’ to be made, adapted to the infinite number of possible situations which no rule, however complex can foresee’ (Bourdieu, 1990).
Shortly thereafter, Bourdieu (1990) makes an insight into the nature of how the ‘habitus’ unfolds as:
‘This word, strategies, evidently has to be stripped of its naively teleological connotations: types of behavior can be directed towards certain ends without being consciously directed to these ends, or determined by them. The notion of habitus was invented, if I may say so, in order to account for this paradox.’
Later this essay will consider the turn away from teleological ontological perspectives as conceptualized by Emmanuel Levinas whereas ‘ethics precedes ontology’ (Derrida, 1999). It is important to note how Bourdieu mentions explicitly the move away from teleology and at the same time characterizes ‘habitus’ as infinite.
One critique of Giddens, however, is that although he notes the importance of time and space in ‘the interdependence of structure and action’ he fails to consider time as a variable (Archer, 1982). Archer’s (1982) perspective again is similar to ‘systems theorists’ that take a more positivist turn than this essay is comfortable with. This essay argues that it is possible to consider time and space as non-formalized variables. That is to say they have ‘limits’, but those limits act simply as bounds or locations rather than a mathematical version of social reality. The movement in between those locations is socially constructed and based upon the creative will.
In this brief analysis of social theory, this essay postulates that the differences in ontological perspectives between the critical realist and the structuration perspectives can be reconciled by the notion that the temporal and spatial boundaries of a social system supersede its ontological existence. Can a conceptualization of social systems at times be emergent or non-teleological and at other times teleological or structured?
Establishing a temporal-spatial boundary to the social system, which is a creative act similar to what is described by Csikszentmihalyi (1990), may be the first moment of experienced social reality. The re-creation of the temporal or spatial bound may provide us with a means to triangulate the relative boundaries of a social system reconciling a critical realist approach with Cunliffe’s (2004) ‘narrative temporality’. In the next chapter we explore the possibility that this idea has philosophical precedence in the divergent work of Emmanuel Levinas.
‘Ethics Precedes Ontology’
Claims regarding the uniqueness of Levinas’ work are grand, but worth consideration. Infinity and Totality is said to exist distinct from the entire history of philosophy in one key area: prior metaphysics is a metaphysics of sameness while Levinas’ is a metaphysics of otherness (Derrida, 1999). We are less concerned with the validity of this claim and more concerned with understanding why Levinas’ perspective, though at first glance seemingly unconventional in a management dissertation, proves important as a unique paradigm by which to understand social reality.
The first relevant claim of Levinas is the assertion that metaphysics precedes ontology (Levinas, 1979). A short treatment of Infinity and Totality is warranted. Being is framed by the preconception of infinity inherent in perceiving the other (Levinas, 1979). In Levinas’ metaphysics, the prerequisite for being is the conceptualization of infinity as opposed to conceptualization within reality. Prior philosophers have mostly used the later as their starting point. In other words, this suggests that the temporal and spatial boundary, which is ‘bounded’ by infinity forms ontology. It is not ontology that forms the temporal and spatial boundary, which some suggest has not been questioned until Levinas.
One further concept becomes important – the notion of transcendence and the relationship between transcendence and creativity. Levinas defines transcendence as ‘what cannot be encompassed’ (Levinas, 1979). Regarding creativity Levinas says, ‘one may speak of creation to characterize entities situated in the transcendence that does not close over into a totality (Levinas, 1979).
As we are confronted with the other, we immediately and simultaneously establish the temporal-spatial boundary of our social reality, i.e. the totality of the system, which is bounded by infinity. Creativity is the process by which we move back in forth between infinity and totality.
Levinas anticipates Adam’s (2003) call for temporal limits on social reality and Cunliffe’s (2004) call for narrative temporality. What allows the recreation of the ontological totality is the transcendence of the moment or the drawing of each moment from infinity. The relationship among creativity, infinity, and totality is vital to an understanding of how creativity is integrated into social systems. This essay seeks to suggest that it is creativity that shapes social systems: it is the creative act that moment by moment gives boundary to a social system.
The first premise is elicited by Levinas: infinity bounds the finite. The creative act frames the social system giving it a finite position in time and space. However, it is the exhalation of the creative act, its recreation that dissolves the finite position of the social system into infinity and then recasts the boundaries giving it once again finitude.
From this assertion it is logical to postulate that the movement of any social system is to move toward infinity until the boundaries are simultaneously dissolved into infinity and recreated. It is the boundlessness of creativity from which we are able to bound social systems.
This assertion exists outside the critical realist / structuration / positivist debate regarding social systems. Apparent is simultaneously a law-like assertion, the trajectory of all social systems are to recreate themselves, that doesn’t impinge upon the reflexive nature of the social system. This is an assertion that allows for the existence of Archer’s (1982) concept of ‘Elision’ or time as a variable and Giddens’ (1984) inter-societal subsystems. In other words the emergence and reduction of the social system simultaneously.
Though the boundary of the social system may be ever recreated, at one snapshot of reality its temporal nature is measurable in relationship to its next recreation. In other words, the lifetime of the social system is measurable. Once we have arrived at a temporal boundary, we are able to garner a spatial boundary as the set of characteristics that will be recreated in time.
Further, it is possible to conceptualize an understanding of social systems that is both autopoietic and structural, in other words where both agents and structures themselves have the capability to move the system through time and space. Perhaps in this regard we move closer to Bourdeiu’s habitus (Arnsperger, 2000).
Beyond pinpointing a temporal and spatial boundary, it may be possible to determine a speed by which this creation and re-creation occurs. It is possible to move closer to systematizing the entrepreneurship process whereby creating a new business venture or invention is the easy part, but integrating it into the economy is measured not by an obsolete supply-demand paradigm, but by the speed of creative production.
It seems very difficult to predict the speed at which innovation or invention happens. Here we turn the tables so that we do not seek a specific time that it takes for inventions or innovations to occur, rather these inventions or innovations can occur at any time. This begs the question: is everybody a genius restricted by the temporal and spatial boundary of a social system?
The Creative Agent, Schumpeter, and the Creative Industries
The intellectual heavy lifting is almost over. To bring these very abstract ideas into the management perspective, it is important to offer a critique of Schumpeter’s ‘creative destruction’. In management literature Schumpeter’s creative destruction seems to stand at the nexus of creativity as an abstract concept and its manifestation in the form of something tangible. However, there are many broader cultural perspectives that see a turn toward creativity playing a central role in cultural formation.
For example, Illya Prigogine (1997) provides an indicative quote that highlights how pervasive the notion of creativity is becoming to our cultural perspective:
We are observing the birth of a science that is no longer limited to idealized and simplified situations but reflects the complexity of the real world, a science that views us and our creativity as part of the fundamental trend present at all levels of nature (Prigogine, 1997).
Other perspectives, however, seem to question the assumptions we make regarding creativity, in particular, the progressive shift in eliminating the conditionality of creativity to the point where most action is an act of creation (Mason, 2003). The shift from Bergson’s creative evolution to Schumpeter’s creative destruction to Russell’s creative verse possession oppositionality is indicative of creativity becoming a pervasive cultural value rather than our understanding of what creativity is (Mason, 2003). New formations, such as a child’s painting, may not have significance but are considered creative with the assumption that creativity, as an act of self-development, is always a positive thing for either the society or the individual (Mason, 2003). The afore example might better be referred to as individualization rather than creativity (Mason, 2003).
Koestler’s (1964) bisociation, distinguished from associative thinking, as the means by which we combine previously uncombined perspectives in creating thinking, seems to address the question of what constitutes creative thinking as opposed to individualization (Koestler, 1964). Koestler is forced to confront the social and systematic aspect of creativity and perhaps would benefit from an explicit discussion of reflexivity as shaping this system in which creativity forms and is then disseminated. Nevertheless it is the inevitable link between creativity and the conceptual system, articulated by Csikszentmihalyi (1999) that contextualizes creativity’s influence on how a social system moves through space and time.
As we have discussed in the previously section, this essay takes the position that creativity is the intellectual act that moves back and forth between finitude and infinity and thus answers the call to define creativity in terms of ‘what it really is’ and not its output. By reevaluating both Schumpeter’s ‘creative destruction’ and creative industries literature in this light it is possible to resolve gaps in each perspective’s treatment of how creativity is integrated into the economy such as how the action and the structure combine to birth a new business venture.
Critique of Schumpeter. It is helpful to contextualize creative destruction using another less familiar term called, ‘the creative response’. ‘Whenever the economy or an industry or some firms in an industry do something else, something that is outside the range of existing practice, we may speak of ‘creative response’ (Schumpeter, 1947).
It is this ‘creative response’, which seemingly underpins the competing viewpoints between Schumpeter’s perspective of disequilibrium and Kirzner’s perspective that the entrepreneur re-equilibrates market errors. The Kirznerian perspective notes the recognition of price differences as the defining characteristic of the entrepreneur (Kirzner, 1999).
Kirzner (1999), considers the many heretofore interpretations of this difference in entrepreneurship literature, however, it is only until long after his initial work that he extends an understanding of his entrepreneur to suggest the following: ‘the futurity that entrepreneurship must confront introduces the possibility that the entrepreneur may, by his own creative actions, in fact construct the future as he wishes it to be’ (Kirzner, 1999). He seems to be noting that the temporal nature of the entrepreneur’s reality is preceding the ontological position taken by himself and Schumpeter.
This continues spatially as he notes: ‘we can describe the market as always being in a state of disequilibrium with respect to the infinity of knowledge that is beyond contemporary human reach’, for example the horse and carriage which seemingly during the height of its performance is disrupted by the automobile (Kirzner, 1999).
The golden nuggets that are important to us are not what perspective of entrepreneurship to take, we agree with Kirzner that they can co-exist (Kirzner, 1999) but the relationship between uncertainty, the future construct, and the temporal-spatial nature of how we view economic reality.
We argue that Schumpeter’s critique or Kirzner’s critique does not position the equilibrium-disequilibrium debate within an adequate definition of the temporal-spatial boundaries it is situated within. The price function of a marketplace becomes paradoxical when the product moves further away from necessary to our survival as humans, such as agriculture, metal manufacturing used for homes, etc., and closer to luxury such as consumer electronics, data monitoring, games etc.
In other words, it is the distinction between the finite marketplace of the mined resource, which is not created, and the mind resource, which is created, that necessitates a temporal-spatial boundary that renders the Schumpeter-Kirzner equilibrium based definitions obsolete. The working of the economy as a social system is not formulaic, that is to say it is not equal, because it is ever expanding. Systematizing the entrepreneurship process means not formalizing creativity. Creativity is inherent in existence. The ‘creative response’ is not working for or against the gale of equilibrium, it is the social system that is working against creativity.
Lastly, it is important to acknowledge that the same earlier similarity postulated around creative industry research streams, that the organizational boundary restricts the creative actions of the individuals, provides a common element between creative industries literature and entrepreneurship literature. It is this observation that may form the foundation for a future inclusive narrative that merges entrepreneurship and creative industries literature.
The tone of this essay thus far has attempted a ‘retroductivist’ perspective. That is to say this essay has tried to synthesize broad socio-economic concepts, recognizing that differing ontological perspectives may be reconciled or pluralized through time and space. This essay may not advocate one ontological position because the ontological position may change through time and space.
At first, the methodology employed is challenging. Because theoretically this paper argues for the possibility of changing ontologies through time and space, it is difficult to find a similar research methodology. For example, if we ‘focus on the contingent relationships between phenomena and structures’ we concede a realist perspective whereas the order of things is ‘mind independent’ (Latour and Woogar, 1989). Further a constructivist might take a ‘generative’ notion of how organizations change through time and space (Latour and Woogar, 1989).
The retroductivist approach, though problematically from the critical realist perspective, seems the best possible route. Retroduction is described as offering ‘mixed method triangulation’ which is defined as using different methodological or theoretical perspectives to analyze data (Downward and Mearman, 2006). Further, it is described as the ‘mode of inference in which events are explained by postulating (and identifying) mechanisms which are capable of producing them’ (Downward and Mearman, 2006).
This essay thus far has laid the groundwork for ‘theoretical triangulation’. By exploring how creative industries and entrepreneurship literature is reconciled, this essay is employing a form of ‘theoretical triangulation’. For example, the notion of infinity boundary is a characteristic perhaps originally discussed by Caves (2003/2002), then explored in social theory by multiple theorists. By applying those perspectives to entrepreneurship literature and social theory, it is possible to conceptualize a narrative that identifies the changing temporal and spatial ontological mechanisms.
The retroductive perspective justifies my effort to engage with the unreconciled research streams of entrepreneurship and the creative industries. Each case we explore may be seen temporally or spatially from a variety of different perspectives. Also, the critical realist perspective allows us to envision a world that moves beyond causal relationships toward the ‘grand sweep’ of the social structures as they move through time or ‘ the linking of evidence (induction) and social theory (deduction) in a continually evolving, dynamic process’ (Saether, 1998). Retroduction can ‘build bridges between deep structures and empirical patterns in single cases (Alvesson and Skoldberg, 2000), which emboldens this paper’s efforts to analyze broad case studies. We draw from an atheoretical case study perspective to allow the flexibility to pursue descriptions of cases so that may be used in future theory building (George and Bennett, 2005).
This hybrid atheoretical-retroductivist case study methodology allows us to seek broad explorations into creativity as a ‘mechanism’ that pushes the temporal and spatial boundaries of the social system toward infinity. Because we are informed by the various theoretical perspectives in creative industries and entrepreneurship research, we are not seeking data that validates or disproves these particular theories, but data which ‘triangulates’ these theoretical perspectives with the mechanism of creativity. The ‘data’ in this sense becomes the ‘paradoxical’ situations where the boundaries of systems developed to regulate ‘mined’ resources are no longer applicable to ‘mind’ or creative resources.
Spotify and the Brick and Mortar: Price and Totality
This section explores the basic conceptualization of how an organization is viewed in the marketplace – as either a ‘mined resource’ or a ‘mind resource’, in other words whether the value comes from its service, offering a marketplace to consume music, or its improvement of an existing service, the value of its ‘re-creation’.
As a service, Spotify seeks to offer access to the sum of the market of music consumption. In addition to the sale of music, the service offers third party applications and social media integration to aid in the discovery of music and the social consumption of music.
This analysis comes at a time when Spotify is in the press consistently regarding its flat – rate subscription model. Some levy contempt at Spotify (Townsend, 2013) for essentially lowering prices and subsequent artist revenue (Hawking, 2013). The issue of price seems self-evident; Spotify’s catalogue seems to expand consistently with the addition of new music, while the price remains the same. Currently Spotify has 24 million active users, who generate a limited amount of revenue through advertisement and 6 million ‘paid’ users at two different price points (Roberts, 2013). As of November 2012, Spotify received a 3 billion valuation from Goldman Sachs (Jones, 2012). Spotify claims to give out 70% of its revenue in royalty (Spotify, 2013) though these royalties are often much lower than an artist might receive for the sale of a compact disc or digital audio file.
Putting Spotify in context, the entire music industry is said to have generated 16.5 billion dollars in annual revenue in 2012, down from a peak of 38 billion dollars in 1999 (Pfanner, 2013). Currently, there are approximately 20 million users of similar services including Spotify (Pfanner, 2013).
Spotify makes two claims regarding their current low royalties. The first is self-evident, if the company obtains more paid subscribers, say 20 million which is what Netflix has, the royalty payments would be similar to ITunes (King, 2012). The second claim seems more conceptual, Spotify’s ‘artist in residence’ claims that Spotify is thinking in long term periods of time in royalty payment, in other words, an artist would obtain royalty not just in the first couple weeks a new cd or digital download is shipped/available, but in terms of year by year revenue (Dredge, 2013).
There are many perspectives regarding the impact of Spotify on an artist’s livelihood and the record industry at large (Dredge, 2013), however it is important to isolate one aspect of these perspectives captured by Spotify’s above rhetoric.
The boundary of the company’s catalogue is ever increasing. Compared to a brick and mortar shop, who because of the spatial limitation of the storefront, can only offer a set, finite amount of items, Spotify can offer an ever increasing amount of tracks. From February 2010 to present the total amount of tracks available has risen from approximately 7 million to over 30 million (Pansentient, 2013).
The case of Spotify suggests that it is ultimately the turn toward an organization structure with infinite boundaries, expressed in the size of catalogue, which poses challenges for Spotify’s pricing model. The price seems to be determined with the sum total of consumers in mind as opposed to demand per song or per album. In part this might happen because the demand is not for a particular song, but for the service Spotify offers – the demand is for Spotify.
It is helpful to consider that Spotify’s current value seems to be based on the re-creation of the distribution scheme rather than its sales. If Spotify’s value is determined by its sales, which in part could be gleaned by considering its royalty payment to authors, it may have less value per listen than a brick and mortar shop might offer. Herein lays the paradox of creativity in an economy set up to exploit ‘mined’ resources. The profit motivation, assumed in Kirzner’s and Schumpeter’s perspective on entrepreneurship, does not incentivize all party’s to innovate until a certain amount of usability has been reached. Certainly if Spotify were to obtain users in the range of one hundred million, the price per play might be higher and more comparable to current royalty payments.
In any case, the radical creativity of Spotify in redefining the music distribution scheme ontologically, that is to say redefining the temporal and spatial boundary of the distribution scheme, moves the industry formation away from traditional supply and demand pricing.
Crowd Funding, Systematic Entrepreneurship and Economic Growth: Breaking Through the Glass Ceiling?
The ‘crowd-funding’ sector grew 81% in 2012 raising 2.7 billion dollars and funding more than one million campaigns (PRNewswire, 2013), inspiring documentation (Baeck and Collins, 2013) and a platform aggregator called ‘crowdingin’ to direct funding seekers to the right niche platform (CrowdingIn, 2013). Projected growth in 2013 is expected to reach anywhere from 5.1 Billion (PRNewswire, 2013) in 2013 to 500 billion annually (Thorpe, 2012).
Some initial research includes: attempts to draw similarities with crowd-funding and open innovation initiatives such as open source project development (Freund, 2010), the motivation of crowd-funders (Gerber et al., 2013), potential dangers of limited regulation in crowd-funding (Heminway and Hoffman, 2010, Griffin, 2012), and studies that explore geography of investment (Agrawal et al., 2010).
More salient perspectives, however, include crowd funding’s’ potential impact on film production as credited producers raise significant funding to redevelop a cult followed television series into a feature film (Staff, 2013c) and a poignant article that points out the difficultly in giving an accurate price disclosure with the explosion of internet based startups in part caused by crowd funding platforms (Palmiter, 2012) . However, there is little research into broader management perspectives such as creative destruction and creative industries literature in relationship to crowd funding.
Of the different types of crowd funding, the platform ‘funding circle’ (FundingCircle, 2013) raises perhaps the biggest question in crowd funding. It advertises a full service process for small investors to provide loans to small organizations claiming to have funded over 132 million pounds so far. Such organizations move crowd funding, which is often just a series of donations that fund projects to crowd investing, whereas the investor might receive a profit for his investment.
A core assumption in Schumpeter’s (1942/1947) creative destruction or Kirzner’s (1999) conceptualization of the entrepreneur is that the movement between disequilibrium and equilibrium will generate growth. But the measurement of disequilibrium becomes skewed when the rate of the ‘creative response’ moves quicker than a re-creation can become established in the marketplace.
In other words, crowd funding seems to inspire a lot of people producing similar feature sets. Once the project has been published, though research is not available to confirm this, it is possible groups may seek to innovative based off the project posting. A better idea could be generated before the original project idea ever reaches the marketplace. When projects are donation based, the effect is seemingly benign. But if investors lose money betting on businesses that are creatively destroyed before they enter the marketplace, the result could be quite absurd with investors having to take on the risk not only of the quality of the organization, but whether or not somebody might creatively destroy their product before it even reaches the marketplace.
Again, the nature of crowd funding or crowd investment seems to be a temporal-spatial organizational boundary that moves toward infinity. As discussed in prior chapters, supplanting the equilibrium/disequilibrium measurement in favor of the creation/re-creation measurement might prove fruitful. It is conceivable to form organizations around the re-creation of the innovation instead of the Kirznerian price discovery. The supply and demand of creative resources or ‘mind’ resources seems to be socially constructed with little mechanisms in place to ‘direct’ innovation efforts.
Essentially it is possible to conceive of an infinite number of innovations. Very simply, if everybody worked on the innovation of a mission to Mars and nobody worked on the construction of new buildings, there might be an economic problem. How do we regulate the socially constructed expansion into new markets without supply and demand principles as we know them?
Google: Employment Structure, Flexible Specialization, and New Market Creation
Google’s employment structure consists of allowing some software developers to dedicate a portion of their time and resources to their own projects, while maintaining full time employment with the company, known as 20% time (Page and Brin, 2004). Further, Google is rumored to dedicate a small group of its employees to the development of large scale initiatives such as the Web of Things which is the connection of everyday devices such as microwaves and refrigerators to the internet to perform automated tasks for its owners (Miller and Bilton, 2011) , or the already confirmed driverless cars (Markoff, 2010). The later initiated is rumored to be called ‘Google X’.
The Caves’ (2003/2002) perspective seems tested by Google. A central argument of Caves is that the characteristics of the creative industries, such as demand uncertainty and the complex nature of expertise found in creative productions lead to changes in organizational structure. Caves (2003) notes: ‘It turns out that the organization of the arts and entertainment industries depends heavily on the contracts that link creative and humdrum agents’ (Caves, 2003).
It was suggested that Google’s 20% time accounted for nearly 25% percent of its revenue with services like AdSense coming out of the initiative, yet the company seems to be moving away from the initiative due to bureaucratic strain (Mims, 2013). Google has centralized this initiative with Google X, in other words, a smaller group of engineers get to work on innovation while most ‘Googlers’ are unable to find resources to support their 20% projects (Mims, 2013). Google is rumored to be discouraging 20% time by requiring project approval instead of automatically approving the time and subsequently management is said to be clamping down on what projects are approved (Mims, 2013).
Though at this point, the nature of 20% time and Google X are merely rumors, a tension regarding the boundary of organizational structures arises. If Google would put their full economic and management weight behind all employees’ 20% projects, they might expand their temporal and spatial boundary toward infinity, however, they would risk antitrust litigation, which is already problematic for the organization (Kanter and Miller, 2013).
In other words, the temptation to mobilize the world’s best web services engineers toward innovative digital projects may be outweighed by the constricting legal structure of the organizational boundary. It is important to note that this essay is NOT advocating deregulation nor the ever expansion of current corporate boundaries. Rather I note the absurdity of the legal system formed to regulate the monopoly of ‘mined’ resources when regulating ‘mind’ resources. Both possibilities, regulation in the form of vertical disintegration and deregulation, seem to constrict the desire for the organizational boundary to move toward re-creation. Both initiatives do not solve the root problem which is the regulation of social construction without supply and demand.
This essay does note that current antitrust legislation against Google is caused by their 20% scheme and does not intend to suggest that more legislation would be brought forth if employees were to generate more innovations. The current antitrust legislation seems to question the power of Google to manipulate search results in favor of their own services (Arthur, 2013). It is plausible to consider this would be exacerbated should Google create an ever expanding set of innovative features.
The Caves’ (2003/2002) perspective, namely his characteristics of creative industries, seems helpful at a foundational level to understand how flexibility is desirable in highly creative initiatives. Google’s move to decrease 20% time supports the argument for flexibility. However, when we consider Google X as exploring radically new markets, we have a paradox. It would be difficult for a small company to pursue innovations like automated cars because such an initiative might take decades to develop. Should we only pursue small scale innovations? Of course not!
The difficulty with flexibility at a medium or long term level and at scope is that the ‘discovery’ of supply and demand is a contradiction in terms with creativity. Creativity is not ‘discovered’ but is a social construction. Further research into the scalability of the film industry might prove enlightening. The demand of films generally dictates the budget. Yet a large portion of the sector work in small budget productions ‘for experience credits’ that are never seen. Is this is a waste of resources? This paper does not seek to offer answers to such questions, rather point out the challenge of considering supply and demand as socially constructed or as created.
3-D Printing and Industrial Revolution: Displacement, Demand, and Price
Three dimensional printing refers to the following process: a digital model is printed using stereo lithography or the construction of an object by adding material in layers (Petronzio, 2013). The layers are then fused together (Petronzio, 2013). The market for 3-D printing is currently said to be 2.204 billion dollars in 2012 with 27.4% growth over the past three years (Park, 2013). However, to date only 28.3 percent of the market size is used for printing ‘final parts’ whereas the majority is the creation of prototypes (Staff, 2013d).
There are two potential limitations of the 3-D printing application. First is the materials used and second is the size of the printer (Plafke, 2013). However, the limitation of materials has been recently overcome with advances into wood and nylon based substances (Plafke, 2013).
The wide application possibilities of 3-D printing suggest that the process may pervade a significant portion of all manufacturing sectors, if not the majority portion. Some examples of its application are the following: weapons manufacturing (Palmer, 2013), bone replacements, stem cell manufacturing, clothing, buildings and potentially food to name only a few (Boylan-Pett, 2013).
A typical example of the scope of impact of 3-D printing is how General Electric used a 3-D printer to manufacture a nozzle that previously took a 20 part assembly process to complete (Staff, 2013d). The 3-D printed version is said to be more durable, significantly lighter, reduces scrap waste, and cuts down on supply chain costs (Staff, 2013d). By 2020 GE estimates 100,000 of its engine parts will be made with 3-D printing processes (Staff, 2013d).
Ramifications of 3-D printings have been heralded as ushering in an industrial revolution (Staff, 2013a, Staff, 2013b) but also as having a strong impact on employment (Staff, 2011a). These perspectives ascribe the ease of copying blueprints and the challenge of copyright protection as fundamental characteristics of the 3-D industry as well as worker displacement noting that the printing process is jobless beyond the manufacturing of the printer, which could theoretically be 3-D printed itself (Staff, 2011a).
The notion of ‘complexity is free’ is used to consider the ease of embedding technological into 3-D printed objects which is foreseen to lower expense and allow for more complex objects to be dreamt up without cost consideration (Staff, 2013d). An example of this might be embedding computer technology inside closed material areas, which would otherwise have to be enclosed and sealed rather than simply printed layer by layer.
3-D printing is perhaps the most radical technology that we have discussed thus far because it suggests a significant displacement of all manufacturing sectors. Of course, this is a long way off. Nevertheless it brings manufacturing production into the realm of the characteristics of the creative industries, namely creative and symbolic production, infinite differentiation, and high levels of uncertainty drawn from Cave’s (2003/2002) narrative. Further, the nature of 3-D printing as ‘mined’ resources seems to diminish as more synthetic materials are lab created.
The possibility of technological unemployment is long considered and almost immediately acknowledged as difficult to consider from a statistical perspective (Stern, 1933) with recent perspectives suggesting the usual suspects such as poor copyright and immigration laws and mal-investment in critical infrastructure might offer solutions to technological unemployment (Staff, 2011b).
Conventional economic wisdom holds that compensation mechanisms can create new jobs, decrease prices, generate extra profits, decrease wages and increase incomes, and generate new products (Spiezia and Vivarelli, 2000). It is suggested that market processes can ‘counterbalance’ the ‘labor-saving’ effect of new technology (Spiezia and Vivarelli, 2000).
This essay concedes this may be true, however, seeks to make note that economic theory treats technological unemployment as a positivist price discovery instead of a process of social construction. Likewise, theorists taking a ‘counterbalancing’ approach to technological unemployment might concede the possibility of a ‘perfect storm’ whereas the counterbalance effect does not adequately account for the amount of labor saving brought on by innovation or invention. This essay puts forth that the faster the invention or innovation expands the technological boundary of the economic system, the less effective counterbalancing effects will be in offsetting labor saving.
In the previous section, the idea of some sort of regulation of social construction was briefly mentioned. In its context, the idea seems scary. But in this section, we consider that the alternative might be scarier – the perpetual inability for employment to catch up with technological advances. Again a similar paradox is noted: how do we re-consider basic economic assumptions in light of creativity?
Kindle Worlds is a self-publishing platform that secures rights from media groups such as Warner Bros to allow authors of fiction using previously copyrighted material to publish and receive compensation for their original work (Kindle, 2013c). What is interesting is that licenses have been secured for popular teen fiction and respected literary fiction alike with subsidiary authors able to write stories in Kurt Vonnegut’s ‘worlds’ (Kindle, 2013b). This is a fairly new development with Vonnegut’s license only announced at the beginning of August 2013 and the platform itself launched in May (Kindle, 2013b).
There seem to be two royalty schemes Amazon offers regarding fiction. The first scheme is for works between 5,000-10,000 words, which offers authors 20% of the royalties and the rest going to the holders of the ‘world’ rights (Kindle, 2013a). Longer works, above 10,000 words will give 35% of the royalties to the author and the rest to the ‘world’ license holders (Kindle, 2013a).
Kindle Worlds seems to note that after rights are originally purchased, the original world owner would be able to use elements of the story in other works ‘without further compensation’ (Harbison, 2013). This seems concerning to fan fiction authors who might want to create their own ‘worlds’ upon the success of an original piece of fan fiction such as Fifty Shades of Grey which was originally uncompensated fan fiction within the Twilight world.
Culturally the idea of ‘Worlds’ seems to represent a similar turn toward expanding temporal-spatial bounds of thought, as has been a theme in this work. The boundary of the ‘World’ is ever expanding to incorporate new characters that interact with established characters, new thematic elements, etc., it is a cultural structure that seems to mirror the turn toward expanding temporal-spatial boundaries of economic reality.
The major development seems to be that Kindle Worlds is giving part ownership to created content and that the platform is willing to make distinctions between original work crated by the ‘world’ author and original work created by the ‘subsidiary’ author. Ultimately it seems to be a competitive advantage for the original license holder to authorize Kindle Worlds because it allows them to expand the reach of their characters without any further labor. It is further interesting to consider this copyright feature in the context of other industries such as the development of web services feature sets. Would it be possible to consider an organization such as Facebook that purchased features for an equity ownership stake? Similar developments are already happening in video game production with the recent release of ‘Disney Infinity’, which lets users create their own hybrid ‘worlds’ drawing from the catalogue of Disney characters (Molina, 2013). In other words, the video game lets users explore the relationship of characters from different Disney stories (Molina, 2013).
However, the initial excitement of ‘world combining’ gives way to a more sobering problem surrounding organizational boundaries. As the common theme suggests, the more creativity the more the organizational and sector boundaries desire to expand to infinity in their temporal and spatial bound. If price and wage are formed around supply and demand it is possible to conceive that seminal fictions will generate most of the profit and the creation of new ‘worlds’ would become less desirable. Again the regulatory system of ‘mined’ resources constricts the creativity of the ‘mind’ resource.
A cultural paradox similarly seems to emerge. There are simultaneously less regulatory restrictions placed on authorship, but more ‘self-regulatory’ restrictions placed on authorship by the nature of supply and demand. It still remains to be seen how Kindle Worlds impacts the types of stories authors write, however, there is a strong possibility that it could decrease the diversity of storytelling.
In our analysis of the five organizations and industry sectors presented, an argument has been presented that it may be beneficial to further investigate the distinction between ‘mined’ resources and ‘mind’ resources as forming basic temporal-spatial ontological categories. These distinctions may be radically different from each other and necessitate the formation of new values that support an economy based on ‘mind’ resources or social construction as opposed to the positivist ‘discovery’ turn.
I started this dissertation attempting to explore industry sectors and organizations using the narratives of Cave’s (2003/2002), Schumpeter’s creative destruction (1947/1942), Townley et al. (2009), and the Queensland perspective of Potts et al. (2008). The problem with this approach proved that these perspectives did not necessarily offer a fair comparison with each other or with the perspective of Levinas (1979) briefly discussed in chapter four.
Though I have critiqued Schumpeter (1947/1942) and Kirzner’s (1999) perspective surrounding the equilibrium / disequilibrium function of the entrepreneur, I still cannot determine whether the creation / re-creation perspective would prove more efficient. From the current analysis, such a reinterpretation would necessitate fundamental changes in economic theory, which I am currently not capable of putting forward.
Lastly, the perspectives of Townley et al. (2009) and the Queensland School (2008) are hard to compare because of different reasons. The Townley et al. (2009) perspective, which will be discussed further in a moment, is not a conceptual framework for the temporal-spatial boundaries of creativity as it interacts with social systems over time. It is a conceptual framework for the formation of value and seems no way mutually exclusive to the perspective put forth in this paper. The Queensland school (2008) is perhaps the least effective in offering a new theoretical perspective despite trying to empirically demonstrate the pervasiveness of creative destruction from a macro-economic perspective. Also, the pervasiveness of creative destruction maybe argued more effectively from the perspective of digital convergence.
A Novel Conceptual Framework. The first key insight is that the temporal and spatial distance between the initial creation and the re-creation might better serve the articulation of ‘mind’ resources than equilibrium-disequilibrium. In other words, through time the initial creation will inevitably be re-created. In the business and management sense we might say that the re-creation would inevitably be more efficient, less costly, etc., than the previous incarnation. The creation – re-creation paradigm is not governed by natural resources, but the creative will and the initiative of the collective economy. In such a conceptualization supply, demand, and price seem difficult to establish and become ‘normative’ rather than ‘discovered’.
I see the equilibrium-disequilibrium debate surrounding entrepreneurship and the push toward defining a ‘creative industries’ sector as attempting to reconcile the problem of placing a temporal-spatial boundary on a socially constructed organization or phenomenon such as value. The creation – re-creation paradigm offers a way to ‘triangulate’ the temporal and spatial boundary of a social construction.
The major problem of social construction seems to be to measuring its rate of change. The production of ‘mined’ resources moves through time in a more easily measured way than radical entrepreneurship or ‘mind’ resources, which is subject to radical or discontinuous innovation or invention. Social construction may be more effectively understood by anticipating the point in time when the product or serviced would be re-created. Again this might be ultimately understood as an ‘emergent’ way of considering economic change.
For example, in software feature development, there seems to be a new ‘gold rush’ whenever one set of features becomes popular. After the social network became popular, developers have created a social network for everything. There is a flood of developers creating the same features. This may be equated not to a group of miners all looking for gold, but a group of miners looking for the same piece of gold and disregarding all others. After all, the amount of time users can spend on similar social networks is finite. A more efficient way or perhaps an ‘emergent’ way to incentivize production may not be the price function of the entrepreneur (Kirzner, 1999) but the collective push toward the re-creation of the social network.
Understanding a spatial boundary then becomes eliciting the characteristics within the organizational boundary that will be inevitably re-created. One of the problems of assigning spatial boundaries to organizations, especially flexible specialization observed in creative industries, seems to be that the spatial boundaries are reflexive, that is to say they are constantly changing when considered from different perspectives. Simply agreeing on the organization’s mission, such can be observed by Google’s desire to open entirely new markets, becomes challenging when one organization can engage in infinitely different ‘mind’ opportunities or creative endeavors. A sector classification of organizations seems constricting. But again the ambition of this paper exceeds our expertise as these perspectives may necessitate a radically different structure of employment altogether.
Unleashing Townley et al. (2009). It took almost a year of study to fully grasp the importance, but also the uniqueness of Townley et. al’s (2009) perspective. In comparison to the literature that I have come across, the perspective is one of the only perspectives that seem to offer a conceptual framework for a socially constructed understanding of value. If indeed digital convergence changes a significant portion of the economy to require symbolic and creative production, then Townley et. al’s (2009) perspective becomes the guidepost for understanding how value forms in a socially constructed way, as opposed to a positivist or natural way.
The notion of temporal and spatial ‘triangulation’ may solve a problem of socially constructed reality – its intersubjective nature – whereas the temporal and spatial ontological categories, so elusive and plural in socially constructed realities, are agreed upon. Once the temporal and spatial ontological boundary is in place, then the conceptual framework may be exploited as a resource, much in the same way the drill is used to mine for natural resources. We concede that this is probably not the author’s original intention and probably would not move forward with this argument without reassurance of our interpretation. Nevertheless, the ‘tools’ of the ‘mind’ resource becomes our conceptual normative frameworks.
We conclude our dissertation with a brief mention of our shortcomings and a possible future research direction. Traditionally, this paper might not be considered a success by any stretch of the imagination. We are unable to neither offer strong qualitative empirical observation nor even produce a theoretical or conceptual framework. Nevertheless, we believe we have explored previously unexplored paradoxes in creative industries and entrepreneurship literature and put forward novel ideas that position central tensions and characteristics into larger ontological, sociological, and perhaps philosophical debates.
I have ‘cherry-picked’ some radically different organizations and sector changes that seem to confirm the advanced perspective. Though I did not set a ‘control’ case, as recommended in case study literature (George and Bennett, 2005), I did acknowledge how the organizations in question may be different from ‘mined’ organizations.
Finally, it is important to consider our original research questions.
What are the common elements between creative industries and entrepreneurship research? This analysis seems to suggest the possibility that one common element between creative industries and entrepreneurship research is the movement of the temporal and spatial boundaries of the organization or theoretical phenomena over time. This movement seeks to ever expand the boundary toward infinity.
As observed in the case studies, digital convergence, which I see as the radical integration of creative and symbolic production into all industry sectors, necessitates a scheme where the boundary desires to ever expand. It is interesting that this expansion seemed to express itself in divergent ways for example culturally as explored in Kindle Worlds and as employment structure as explored in Google.
How does creativity inform an understanding of the temporal-spatial boundary of social systems? The work of Levinas (1979) proved the most difficult yet salient way of conceptualizing how the act of creativity triangulates the boundary of social systems. His perspective necessitates a 180 degree change in how we consider reality to form. What if supply, demand, and price are not discovered, but created or socially constructed? It is in this one divergent work of Levinas that we find a theoretical foundation to suggest that infinite possibility is not a scary unknown, but actually forms the boundary of our social reality. Such an economic system might set its price, supply, and demand around the creative act which is completely opposite to the current structure which tries to view the creative act as fitting into the pre-established boundaries of an economic system.
At first glance, such a ‘normative’ process seems ‘communist’, but its practice may not seem so constrictive. Using the creation – re-creation paradigm, the temporal and spatial boundaries of the economy are envisioned with respect to what creative resources can provide during a specific period of time. Though the thought of conceptualizing the totality of creativity in such a normative way seems ‘communist’ or even worse ‘fascist’, we cannot forget we already do this every day with finite resources. The supply of finite resources is estimated over time and the price is set from there, though that is far too much of a simplification of how the process unfolds.
Nevertheless, setting price, supply, and demand around the creative potential is still possible. The first thought that comes to mind is that society sets creative goals and then sets the value of those new markets, products, or services using conceptual frameworks such as Townley et al. (2009). It is interesting to consider that this creative-centered approach might make it easier to ever expand the basic level of services that society can offer because there is always a point when the temporal and spatial ontological boundaries of the economic system must be ‘re-created’ and new creative goals imagined.
At the risk of sounding too positivist, a complexity theorist at Stanford University has proposed the concept called ‘ongoing normative assessment’ which argues that our understanding of time must change so that the future is considered as the present (Dupuy and Grinbaum, 2005, Dupuy and Grinbaum, 2006). This is similar to what I am proposing though attempting to ground my research in the creation – re-creation paradigm and in rigorous social and management theory. Dupuy and Grinbaum’s (2006/2005) conceptualization is developed to understand the radical uncertainty of regulating nanotechnology.
How does an understanding of the temporal-spatial boundary of social systems inform the knowledge of highly creative and symbolic organizations and industry sectors? The temporal and spatial boundaries seem central to the explored research streams surrounding entrepreneurial opportunity pursue (Shane and Venkataraman, 2000), flexible specialization (Piore and Sabel, 1984, Blair, 2003), and the social construction of value (Hines, 1989, Hines, 1988). These arguments explore how the temporal and spatial organizational or conceptual boundaries are in need of expansion to include different work structures, new business formation, and non-market forms of value. It is possible research into narrative practices in management research may provide a foundation for exploring eliciting qualitative data surrounding how these boundaries are perceived (Cunliffe et al., 2004).
How does the temporal-spatial boundary inform an understanding of the ontological categories placed on organizations and industry sectors? This is perhaps the most salient question we can ask because its implication supersedes management and economic research. As this paper has shown, there are many diverse perspectives coming out of hard and soft sciences alike that suggest creativity is replacing discovery as the dominant ontological perspective. The temporal and spatial distinction between infinity and totality, necessitate not just an understanding of how temporal and spatial boundaries form in the ‘social’ world, but necessitates a holistic perspective of social reality.
This perspective might have equal ramifications for governmental organizational structures and social change. This seems noted in the notion of ‘reflexive modernism’ (Beck et al., 1994). Governmental structures can no longer be viewed as isolated or oppositional, but are one aspect of the total governmental organization. It may be possible to trace how policies of one country impact very similarly peoples of different nations when we consider the holistic turn. Generally, the holistic turn was underexplored in this paper. This is because the holistic turn is generally associated with systems theory, which I have argued is not the most promising research perspective to explore social phenomena.
In conclusion, the potential next stage of researching the ideas presented thus far might be to comprehensively elicit a research agenda that includes the following: 1. A conceptual framework to explain the temporal and spatial ontological boundaries of the reflexive social system 2. The application of the conceptual framework to the distinction between ‘mined’ and ‘mind’ resources and its ramifications with respect to principles of free market capitalism and 3. The empirical testing of such claims, which might be best explored through retroductive analysis.
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