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Starving the golden goose? Access to finance for innovators in the creative industries

Lookup NU author(s): Dr Salvatore Di NovoORCiD, Professor Giorgio Fazio, Professor Jonathan Sapsed



This work is licensed under a Creative Commons Attribution 4.0 International License (CC BY 4.0).


© 2022, The Author(s). This paper extends research on innovating firms’ access to finance in the creative industries. While we know that entrepreneurial firms experience barriers to applying for funding and difficulties in securing positive outcomes, prior studies have shown that firms may use patents to signal innovative quality to potential investors. Yet these studies typically focus on R&D-oriented innovation in ‘traditional’ technological sectors. Creative industries firms have different innovation characteristics that may influence the funding process, including the uncertainty of content-based product markets, the highly-imbalanced information asymmetries between creative entrepreneurs and conservative investors, and the symbolic and intangible nature of their innovations. Using the UK‘s Creative Industries Council‘s unique cross-sectional survey data of 575 firms we analyse the extent to which innovating firms seek to apply to and achieve funding from a wide range of potential sources. We find little evidence that prior innovative activities provide a meaningful signal, positive or negative, to potential funders for creative industries firms. This suggests that the highly intangible and symbolic nature of innovation in creative industries businesses is unreliable as an indicator of quality. The reliance of owners on personal capital is congruent with recent literature on the high levels of social and personal capital among workers in the creative industries. We suggest that the specific challenges creative firms face may be addressed through new financial and policy instruments to feed and sustain these high-growth, innovating industries.

Publication metadata

Author(s): Di Novo S, Fazio G, Sapsed J, Siepel J

Publication type: Article

Publication status: Published

Journal: Journal of Cultural Economics

Year: 2022

Volume: 46

Pages: 346-386

Print publication date: 01/06/2022

Online publication date: 06/04/2022

Acceptance date: 09/02/2022

Date deposited: 20/04/2022

ISSN (print): 0885-2545

ISSN (electronic): 1573-6997

Publisher: Springer New York LLC


DOI: 10.1007/s10824-022-09448-5


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Funder referenceFunder name
AH/S001298/1Arts & Humanities Research Council-AHRC (formerly AHRB)