Creative Industries: Aligning Entrepreneurial Orientation and Innovation Capacity

The creative industries consist of profit-oriented enterprises involved in the creation, production, and distribution of arts, cultural, and creative goods and services. Scholars examining the creative industries have largely focused on the characteristics of individual art-entrepreneurs or the macroeconomic benefits of creative clusters, but have not explored potential antecedents to firm-level performance. Employing data from architectural design organizations, we examine entrepreneurial orientation (EO) and innovation capacity (IC) as potential antecedents of two measures of firm performance; individual project success (PS) and overall firm competitive advantage (CA). In the context of the creative industries, EO takes the form of entrepreneurial approaches, strategies, and actions taken by firm managers, while IC represents the organizational environment that supports the development and maintenance of the firm’s innovative capabilities. Our results suggest that IC mediates the EO – performance relationship for both individual projects and in terms of achieving competitive advantage. This implies that to be successful, creative industry firms must be able to both recognize opportunities and develop and manage the right mix of creative capabilities to exploit those opportunities.