Digital Content and Applications in Australia: Insights from the Creative Industries Cluster Study

1
Digital Content and Applications in Australia
Insights from the Creative Industries Cluster
Study

• David Kennedy
• General Manager, Analysis Branch
• National Office for the Information Economy

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• What Im going to talk about
• What is changing, and how?
• Why does it matter?
• How are governments responding?
• Key findings of the Creative Industries Cluster
  Study Stage 1 report
• joint DCITA/NOIE effort
• Where to from here?
• Where is all this taking us?

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• What is changing and how?
• The beginning of big changes in content
  production and distribution
• A major technology shift from analog to digital
• growing commonality in the digital
  infrastructures for distribution
• Growing economic value and market power in
  content and services
• Boundaries between cultural and commercial are
  blurring (further)
• digital content becomes an input to service
  sector innovation
• Globalisation is being accelerated by digital
  networking and the chase for economies of scale
• end game a global digital value chain

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• Why does it matter?
• How do we position Australia within a global
  digital value chain?
• Creating a digital infrastructure for production
  and distribution
• pivotal role of telecommunications and digital
  broadcasting
• Linking creative industries into the services
  sector innovation system
• arts support as an innovation policy
• Positioning in an internationalised marketplace
  (the global political economy)
• threats and opportunities marginalisation
  versus integration
• developing capabilities, networks AND capacity
  (clusters)
• structural dimension and traditional market
  failures cant be ignored

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• Why does it matter?
• Pivotal point understand the nature of the
  problems!
• Market failures
• address market failure directly e.g. an
  innovation policy
• Structural problems
• Structural problems require structural
  solutions
• Promoting capabilities, linkages and capacity
• cluster policies
• Not all problems are cluster problems

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• How are governments responding?
• Were not alone e.g. Scotland, Canada, UK,
  Ireland.
• In Australia, a cluster of reviews, inquiries and
  (ultimately) strategies
• Creative Industries Cluster study (cluster
  business production issues)
• Broadband Advisory Group and telecommunications
  changes (investment and structural issues)
• Framework for the Future ICT industries
  (capabilities in related industries, global
  market positioning)
• All addressing the area of digital media and
  services

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• Key findings of the Stage 1 report
• Its early days, we are still at the beginning of
  the structural change process
• Cluster dynamics are still weak, with few
  exceptions
• cross-industry linkages still weak - legacy
  industry silos are strong
• film, games are the exception, not the rule
• Key drivers are growing demand for digital
  services and falling technology prices
• Key barriers are industry fragmentation, unknowns
  in digital business models, unknowns and
  under-investment in DRM, weakness in specialised
  capital markets, need for new and better business
  and technology skills
• Yes, cluster analysis and strategy are relevant
  to these problems (but they are not the whole
  answer)

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• Where to from here?
• Data sources
• Exploring pathways to a statistical framework
• Capabilities, linkages and capacity
• what are our capabilities?
• industry-level studies of the dynamics of growth
  and development
• Structural issues
• distribution channels - new threats and
  opportunities - scope for bypass?
• new sources of business-related demand - new
  channels for digital content and applications

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• Where is all this taking us?
• Early days, but some obvious issues
• Cultural policy and industry policy objectives
• the cluster study is squarely focussed on
  industry policy approaches
• cultural policy objectives remain important and
  distinct
• clearly scope for industry development and
  cultural policy objectives to be complementary,
  but a thoughtful approach is needed
• Existing support mechanisms
• Does the scope of innovation and cultural
  policies need to refocus or widen?
• How will different kinds of strategies -
  innovation, cluster, structural - be integrated
  with established support mechanisms and agencies?