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This Glossary of Terms is intended to explain some of the key concepts and ideas which are useful to creative entrepreneurs.

 

Please contact us if you would like to suggest other terms to be added.

 

Balance Sheet. This financial document shows the net worth of a business or organisation at a particular point in time by stating its assets and liabilities.

 

Balanced Scorecard. A technique for measuring the performance of an enterprise in four equally important areas: financial; internal systems, creativity and innovation; customer satisfaction and retention; and the learning and growth of staff.

 

Business Formula. Your unique mixture of particular products/services at which you excel, carefully selected customers or target markets, which can combine to produce the desired financial result, consistent with your Values.

 

Cash Flow. The cash flow report states where money came from and went to over a particular period of time. A cash flow projection indicates when cash inflows and outflows are expected to occur in the foreseeable future.

 

Competitive Positioning is the technique of analysing where you currently fit in amongst competing businesses, deciding where you should be and identifying your own ‘high ground’ on the competitive battlefield.

 

Co-opetition. Sometimes competitors can also co-operate as partners in projects or joint ventures. ‘Co-opetition’ is the result of bringing together competition and co-operation to form not just a new word but also a new partnership.

 

Creative Industries are “those activities which have their origin in individual creativity, skill and talent, and which have a potential for job and wealth creation through the generation and exploitation of intellectual property.” (Department of Media, Culture and Sport. UK Government.)

 

Emotional Intelligence (EQ) is an ability to manage ourselves and our relationships with other people effectively, by understanding our own and other people’s feelings, recognising that we human beings have an emotional as well as a rational side to our make-up.

 

External Analysis. An assessment of the forces in the changing world which the enterprise cannot control yet can affect the organisation positively or negatively as opportunities or threats. Also knowns as Environmental Analysis.

 

Four Ps of Marketing – see Marketing Mix.

 

ICEDRIPS. An acronym serving as a checklist for External Analysis. The letters stand for: Innnovation; Competitors; Economics; Demographics; Regulations; Infrastructure; Politics; and Social Trends.

 

Income and Expenditure Account. This shows the profit (or ‘surplus’) made over a particular period of time, usually one year. It is also sometimes called the Profit and Loss Account or Income Statement.

 

Intellectual Property (IP) is the product of creative ideas, expressed in works.

 

Intellectual Property Rights (IPR) are the legal powers associated with the ownership, protection and exploitation of creative ideas expressed in works.

 

Internal Analysis. An assessment of an enterprise’s strengths and weaknesses. Creative enterprises can use the PRIMEFACT checklist to help this process.

 

Market Segmentation is the process of dividing actual or potential customers into groups with similar characteristics, for example geography, gender, age, needs, industry or whatever is most useful or relevant.

 

Marketing Mix. This is a blend of the Four Ps of Marketing: Product, Price, Promotion and Place (which really means Distribution).

 

Mission describes what we are going to do to achieve our Vision. A ‘mission statement’ is simply a specific description of what the organisation actually does – its contribution to the world and society – so that employees, customers and other stakeholders understand what the business needs to excel at.

 

PRIMEFACT. An acronym serving as a checklist for internal analysis of strengths and weaknesses of a creative enterprise. The letters stand for: People; Reputation; Intellectual Property; Market Information; Ethos; Finances; Agility; Collaborators and Talents.  more >>>

 

Profit and Loss Account – see Income and Expenditure Account

 

Risk Analysis. The technique of listing all risks facing the enterprise and ranking them according to their likelihood of happening and the potential negative impact on the business. The point, of course, is to minimise the risks, focusing first on those risks that score high on both counts and making plans to make them less likely to happen and/or have a lesser impact if they do.

 

SWOT Analysis. A review of the internal Strengths and Weaknesses of a business or organisation and the external Opportunities and Threats in the changing world in which it operates.

 

Triple Bottom Line. As well as the traditional financial ‘bottom line’, the Triple Bottom Line approach also measures the social benefits and environmental impact of an enterprise.

 

Values describe how we are going to conduct ourselves along the road to success.

 

Virtual Organisations can be ‘invisible’ insofar as there is no identifiable headquarters; its members might be geographically remote and probably connected through the Internet.

 

Vision describes where we are going – the ‘promised land’. The vision is the enterprise’s ‘dream’ of the future, a picture painted in words, which is intended to inspire people by appealing to the heart as well as the head.

The ‘creative industries; have been defined by the UK Government’s Department for Culture, Media and Sport (DCMS) as: ‘Those industries which have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property.’

The term ‘cultural industries’ is also used by some agencies, though this term relates to a more specific range of industries and can be regarded as a subset of the creative industries. The cultural industries are defined by UNESCO as ‘industries that combine the creation, production and commercialisation of contents which are intangible and cultural in nature; these contents are typically protected by copyright and they can take the form of a good or a service.’

There are thirteen sub-sectors under the term ‘creative industries’ and these are: advertising; architecture; the art and antiques market; crafts; design; designer fashion; film and video; interactive leisure software; music; the performing arts; publishing; software and computer games; and television and radio.

According to DCMS research, the Creative Industries accounted for 8.2% of Gross Value Added (GVA) in 2001 in the UK and the sector grew by an average of 8% per annum between 1997 and 2001. Exports from the UK by the creative industries contributed £11.4 billion to the balance of trade in 2001. This equated to around 4.2% of all goods and services exported. Exports for the creative industries grew at around 15%per annum over the period of 1997-2001. In June 2002, creative employment totalled 1.9 million jobs and there were around 122,000 companies in the Creative Industry sectors on the Inter-Departmental Business Register (IDBR) in 2002.

According to the Financial Times , “a report from the (UK) Government’s Strategy Unit has concluded that the creative industries in London are now more important than financial services to the economy. Employment in the creative industries (including fashion, software design, publishing, architecture and antique dealing) has topped 525,000 and is still rising, compared to a mere 322,000 and falling in financial services.”

Internationally, the creative industries are one of the fastest growing sectors in OECD economies, employing on average 3-5% of the workforce according to the United Nations Conference on Trade and Development . The global value of creative industries was expected to increase in the years from 2000 to 2005 from US$ 831 billion to US$ 1.3 trillion, a compound annual growth of over 7% .

This astounding figure is achieved by creative businesses, most of which are small or medium sized enterprises and in reality are very small or ‘micro-enterprises’, including individual practitioners. The British Council points out that this scenario is typical internationally and works to support international co-operation since creative businesses move more quickly to international markets than many other forms of enterprise, often using the Internet.

The creative industries are the only sector which has been identified as a priority area by all of the countries and regions of the UK. This is reflected by the number of agencies supporting the creative sector, such as CIDS (Creative Industries Development Service), CIDA (Creative Industries Development Agency), Inspiral, and Creative Kernow.

The first of these to be established in the late 1990’s was Merseyside ACME (Arts, Culture and Media Enterprises).

References

Mapping Document. October 1998. Creative Industries Unit and Taskforce. UK Government Department for Culture, Media and Sport (DCMS).

UNESCO, Paris. 2000. Culture, Trade and Globalisation: Questions and Answers.

Source.UK Department of Culture, Media and Sport (DCMS).

Source: Financial Times. 4 July 2003.

Source: UNCTAD, Geneva. 2004. Creative Industries and Development. Howkins, John. 2001. The Creative Economy: How People Make Money from Ideas. Allen Lane, London.

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