Locating Innovation in the Urban Creative Economy: The Case of Toronto

Creative industries are an important source of income and employment in practically every major urban area, and many policies and program initiatives have been put in place to promote development of these industries.  But innovation in the creative industries is much less well understood than R&D-based technological innovation, and important debates are taking place about how the creative industries grow and affect the broader economy.  This paper examines four generic innovation pathways (Frontier Economics, 2007) that affect the urban creative economy, illustrated with examples from Toronto’s cultural and creative sector.  In the commercialization pathway, creative goods and services are purchased as inputs in adopter firms.  In the knowledge spillover pathway, creative industries develop unique capabilities through adoption of advanced ICTs.  In the product spillover pathway, creative products and services induce demand for complementary products and in other industries.  In the network spillover pathway, creative districts induce changes in the surrounding environment.  I conclude with some reflections on the implications for innovation management and policy in the creative industries.