5 Value Drivers of the Creative Economy

More creatives than ever before are meeting with angel investors, prospective sponsors and financial institutions to raise money for new ideas. But before they get in the game, potential funding partners want to better understand the creative business model and the local creative economy.

What’s a simple way for an independent creative to share with a business person the big picture growth opportunities in a creative business, using shared language?

First of all, it’s good to reinforce that the creative industries are not just sexy, they’re potentially big business.

So now that we’ve established there’s money out there, the next step is to show how your venture is gonna create value. One way to discuss the opportunity is to show where the growth opportunities are and how you’re poised to maximize on them with your big bad creative idea.

Existing research details rich and complex mappings of the structure of individual industries such as music or film. But for a simple conversation starter on how value is created in any creative industry, here are 5 key value drivers that promote growth and profitability:

Creative businesses generally focus on one or multiple of these 5 drivers. They create IP, produce it, promote it, distribute it and finance their growth. I’ve found this model universal in outlining where value is created within any company in the creative industries for 4 reasons.

It’s not always a straight line though. Depending on your starting point, the order of the process may be different. One creative’s output e.g. a book or song often becomes raw material inputs for new products e.g. a movie or a theatrical production. If this loop is closed, this framework is less of a straight line and more of a circle. But the steps are pretty much the same.

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