At its heart this book is about innovation and the innovation process. On the way, it considers aesthetics, design, creativity and the creative industries, and a number of other similar topics. Much of the existing economic literature on innovation has taken a particularly technological or functional viewpoint as to what sort of new products and processes are to be considered innovations. One of the key things this book shows is that there is a type of innovation, here labelled 'soft innovation', primarily concerned with changes in products (and perhaps processes) of an aesthetic or intellectual nature, that has largely been ignored in the study of innovation prevalent in economics. Examples of innovations that, as a result of this refocusing, are here placed at the centre of the analysis include: the writing and publishing of a new book, the writing, production, and launching of a new movie, the development and launch of a new advertising promotion, the design and production of a new range of furniture, and architectural activity in the generation of new built form designs. The realisation of the existence of soft innovation means that, not only is innovation more widespread than previously considered, but that it may also take a different form than commonly considered. Soft Innovation addresses key issues such as: * The measurement of the rate and extent of soft innovation, * The determinants of the rate and direction of soft innovation and its diffusion, * The impacts of soft innovation and diffusion upon outputs, productivity, employment, firm performance, trade, and economic welfare, * Policy, considering whether there is a rationale for government intervention in the soft innovation generation and diffusion processes, and if so what instruments can be used in such intervention? Soft Innovation breaks new ground in the study of innovation, and will be key reading for academics and researchers of Innovation, Marketing, and Design, as well as consultants, practitioners, and policy-makers concerned with the creative industries.
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List of Abbreviations
Ch. 1 Introduction 1
Pt. I The Nature and Extent of Soft Innovation 13
Ch. 2 Defining Soft Innovation 15
App. A2.1 The Market-based Approach to Valuing the Significance of Soft Innovation 42
App. A2.2 The Creative Industries 47
Ch. 3 Aggregate Measures of Soft Innovation 58
Ch. 4 Soft Innovation in the Creative Industries: Books, Recorded Music, and Video Games 82
Ch. 5 Soft Innovation Outside the Creative Industries: Food, Pharmaceuticals, and Financial Services 113
Pt. II The Economic Analysis of Soft Innovation 135
Ch. 6 The Economic Analysis of TPP Innovation as a Foundation for the Analysis of Soft Innovation 137
Ch. 7 The Supply of Soft Innovations 159
Ch. 8 The Diffusion of Soft Innovations 192
Ch. 9 Soft Innovation and Uncertainty: Variant Proliferation, Insurance Markets, and Finance 219
Ch. 10 Soft Innovation, Intellectual Property Rights, Competition, and Welfare 241
Pt. III Impacts and Implications 271
Ch. 11 The Impact of Soft Innovation upon Firm Performance 273
App. 11.1 Productivity, R&D, and patents: an empirical overview 294
App. 11.2 Profitability, R&D, patents, and diffusion: the empirical evidence 297
Ch. 12 Soft Innovation and Government Policy 301
Ch. 13 Conclusions and Future Prospects 328
References 336