European innovation policy must recognise the importance of "culture-based creativity" as well as economic and technological innovation if the EU is to fulfil its creative potential, argues a new study published today (16 July).

Cultural industries have a major impact on developing new products and services, driving technological innovation, stimulating research, branding and communicating values and inspiring people to learn, found the study, carried out by KEA European Affairs on behalf of the European Commission. 

Calling on the EU executive to help brand Europe as "a central place in the meeting of influences and ideas," the study laments that "culture lies on the fringe of the European project". Instead, it should be "at the heart of innovation goals and the development of new economic and social paradigms". 

KEA believes that EU innovation policy, epitomised by its flagship Lisbon Strategy, was "developed as an amalgam of science and technology policy and industrial policy," resulting in Europe's failure to fully harness culture's "huge potential" to serve the economy. 

'Culture-based creativity'… 

To emerge in Europe, "culture-based creativity" requires a combination of personal abilities (like the ability to be imaginative) and technical skills (like artistic skills or craftsmanship), coupled with a supportive social environment, the PA firm found. 

Stimulating cultural creativity requires an education system that fosters imagination and intuition, and an economy that rewards such thinking with investment, the study argues. 

It points to culture's ability to generate "intangible, symbolic and spiritual" economic and social values, which in turn lead to innovation. 

The study highlights the central role played by digital technologies in this "intangible economy," providing "new forms of social exchange" and contributing to "new expressions of creativity". 

However, much cultural production is hosted by free and open-source software and services, such as Wikipedia and file-sharing via social networking websites, KEA point out, warning of "trends that prefigure an economy in which sharing and exchanging knowledge and skills is not principally based on securing financial gain". 

…as a driver of the 'experience economy'

To combat this, industry must "meet and create new kinds of demand that are not based merely on the functionality of a product but are instead rooted in individual and creative aspiration," the study claims. 

KEA highlight the success of companies like Apple in creating "empathy" for its products, singling out the company's 'Think different' advertising campaign featuring cultural icons like Picasso, Einstein and Gandhi. 

Similarly, Virgin Atlantic was the first airline to offer its customers in-flight massages or multiple choice of music and films, becoming a company that does "more than just transport people from place to place". 

"Businesses […] must ensure that what they are selling offers a rich and compelling experience," the study argues. This new "experience economy" is "less about ‘making things’ [and] more about providing a service," it says. 

The EU institutions and national governments should review the Lisbon Strategy to "mainstream" culture into policies aimed at driving innovation, the KEA study concludes, calling for EU funding to be directed at boosting cross-border cultural cooperation and supporting creative entrepreneurs, enterprises and research centres.