Traditionally there were four distinct stages in the Creative Industries supply chain (Figure 8). Often production and distribution are undertaken by the same organisation and, in some sectors e.g. craft, individual designers or sole contributors might undertake all of the tasks. Unlike many other industries, the f irst stage requires the greatest skill input and is arguably where the majority of the value is created. In the UK, organisations involved in the creative process are likely to be individuals, small companies or exist in vertically integrated supply chain entities. Further along the supply chain, it is larger companies that tend to undertake production and distribution tasks relying on standardisation and scale to make the business model work.

3.3.1 From supply chain to ecology

In the digital domain, there is a much more dynamic relationship between partners (Figure 9) and this has increased the relative influence of each component. Digital distribution processes are less a matter of straightforward logistics, in perhaps the way that physical distribution is, because of the feedback loop created by the data and connectivity involved. Consumer demand can feed back into content production much more rapidly and more accurately than in the past. The purely linear business model is giving way to a much more inter-woven environment, where cross-fertilisation of stimulus and response, data-driven supply and demand, and speed of communication enable a much more rapid evolution of product development and consumption.

As Charles Leadbetter and James Meadway [4] have emphasised, the Network effect is everything in the current market place. As we strive to stimulate technology innovation in the Creative Industries, the networked/connected nature of what we can achieve will be one of the key catalysts of change.