New Challenges of Economic and Business Development – 2014 May 8 - 10, 2014, Riga, University of Latvia 262 Ieva Moore EXPLORING THE CONCEPT OF CULTURAL AND CREATIVE INDUSTRIES Ieva Moore, University of Latvia, Latvia 1 Abstract Innovation is a main economy driver in the 21st century and in recent years has shifted from a primarily technological ‘information society’ mantra to one describing broader non-technological innovation and intellectual capital. In any case this current approach is more suitable for a service-based sustainable society. The creative and cultural economy in the digital environment is a growing part of the global economy. Trade based on creativity, knowledge and information generates jobs, wealth and cultural engagement. According to a UNDP report Cultural and Creative Industries (CCI) contribute up to 7% of GDP and is the fastest growing sector of many economies. In Latvia the term Creative Industries (CI) has been used since 2005 and similarly to other Baltic States Latvia has accepted the CI definition provided by the British Department of Culture, Media and Sports (DCMS). Despite that, broader entrepreneurship policy support for CCI is used very little. In spite of the lack of attention by economic policy makers, creative industries in Latvia exist, therefore it makes sense to talk about them and analyze their economic condition as a means of understanding more deliberately their economic potential. The aim of this paper is to explore the concept of CCI with the method of literature review and to establish an understanding of the describing terms and theories. This is crucial because the amount of literature is large and many sources express policy formulations which could be questioned with respect to their academic strength. This research paper has three main themes – (a) key descriptions of CCI and related concepts; (b) statistical perceptions and the limitations of existing statistical frameworks; and (c) some interesting theories of how to perceive CCI. Key words: creative industries; cultural industries, cultural economics; innovation; cultural statistics, social networks JEL codes: Z1, O14 Introduction Innovation has remained a source of development of the post-industrial economy and in the 21st century still is the main driver of economic growth. The EU 2000 Lisbon Strategy aimed to "make Europe, by 2010, the most competitive and the most dynamic knowledge-based economy in the world". It was based on new opportunities of the Internet and digitalization. However the results of the Lisbon strategy imply more failure than success because Lisbon was based on the concept of linear innovation, pushing technological development through R&D investment. More recently the concept of innovation has been replaced with the more complex thinking that knowledge accumulation does not necessarily flow easily from supply side R&D and R&D does not automatically lead to innovation. Note that innovation occurs when someone (or the innovator) assimilates and uses the knowledge to do something new with a practical application of that knowledge. Therefore, the cultural aspects of the dissemination of 1 Corresponding author – e-mail address: moore@latnet.lv