Paper to be presented at the DRUID Summer Conference on "Industrial Dynamics of the New and Old Economy - who is embracing whom?" Copenhagen/ Elsinore 6-8 June 2002 (Theme A-E) INNOVATION? THE FUZZY CASE OF POP MUSIC INDUSTRY Lars Frederiksen Department of Industrial Economics and Strategy (IVS) Copenhagen Business School (CBS) Howitzvej 60, 6, DK-2000 Frederiksberg Denmark Phone: + 45 3815 2993 lf.ivs@cbs.dk Learning Lab Denmark Emdrupvej 101, 2400 Copenhagen NV Denmark (First draft) 10 th . May 2002 Abstract: The entertainment industries are experiencing above-normal economic growth. Yet, industrial dynamics as, for example, innovation is neither well-described nor analysed in the context of the particularities of these industries. The specificity of the industries proliferates from the close relation between the sphere of business and the sphere of the artistic. Using the music industry as an illustration, the paper deals with the concept of innovation. The paper looks both at innovations within the industry as such; technological and organisational changes but also at the tension between creativity and innovation as novelty. More precisely, by outlining Schumpeters notion of innovation and relating it to certain characteristics and conditions of products created in the music industry, it is concluded that a Schumpeterian concept of innovation is to narrow to capture the wide range of changes in the music industry especial regarding matters of artistic change. Keywords: Entertainment industries, The music industry, The concept of innovation, Creative products, Schumpeter JEL - code(s): L82, O30