The cultural and creative industries (CCIs) are increasingly being recognised in South Africa, as in other countries, as wealth-creating, given appropriate investment, rather than primarily a non-market subsidized sector. However, national innovation policy is still predominantly focused on STEM (science, technology, engineering and mathematics) skillsets and related product markets. This paper analyses how the CCIs in the Cape Town cluster innovate by combining digital technology, creative inputs, and workforce diversity. Based on a similar study conducted in Brighton, UK, a cluster of innovative CCI firms was identified that are to varying degrees "fused", defined as combining digital technology and creative design in production. Fused firms have higher levels of innovation in business processes, goods and services. Fused firms were also more likely to employ demographically diverse people, adding insights from the South African mix to the UK studies on disciplinary diversity. While fused creative-digital firms employ greater diversity, a qualitative analysis of SA gaming and animation firms nevertheless demonstrates the challenges for improving diversity in a developing country context.
Although economies of scale are relatively well studied in the arts, economies of scope have received less attention. Yet recent trends toward freelancing and technological connectivity make scope economies especially timely in addressing structural challenges to artist-led incubators. This paper offers a conceptual framework for cooperative strategies that employ economies of scope both in the economic sense of joint production and in the financial sense of risk pooling. This framework distinguishes franchise, federation, and resource-sharing organizational structures as developed through case studies of two US-based organizations: ArtBuilt and REC (Resources for Every Creator), placed in a larger context of cooperative organizational strategy in the USA and Europe. The proposed strategies of cooperative networks (quasi-franchises, federations, or resource-sharing networks) also draw on a literature of spatial agglomeration in creative industries. The framework leads to more speculative ideas of "balance-sheet philanthropy" through credit backstopping by foundations, and of novel investment trusts that can be piloted across a range organizations including foundations, grant-makers, artist residency programs, and even for-profit companies engaged in reinsurance. The paper contributes managerial tools and strategies for the creative engagement of capacity building in arts organizations.