Innovation and creativity are widely researched topics in contemporary urban economic literature.  

Less evident is research on the role of cities as stimulators of design, a critical ingredient in the causal chain linking creativity on one hand and innovation, productivity and business performance on the other.  

To understand the role of cities in design, it is helpful to understand the role of design in the creativity – innovation –productivity continuum.   Two reviews of creativity, design and business performance in the UK conducted by the Cox Commission (2005) and the Dept of Trade & Industry (2005) provide a useful framework for thinking about design.  

Creativity and design are overlapping concepts and so it is helpful to think about the articulation between them.  Borrowing from the Cox Commission (p2), the concepts of creativity, design and innovation can be defined in economic terms as follows:

• Creativity is the generation of new ideas – either new ways of looking at existing problems, or of seeing new opportunities, perhaps by exploiting emerging technologies or changes in markets.
• Innovation is the successful exploitation of new ideas.  It is the process that carries them through to new products, new services, and new ways of running the business or even new ways of doing business.
• Design is what links creativity and innovation.  It shapes ideas to become practical and attractive propositions for users and customers.  Design may be described as creativity deployed to a specific end.

Borrowing from the DTI (p3), creativity and design can be linked to business performance through:

• The ‘traditional’ R&D channel, where improvements in productivity and business performance stem from innovation through advances in scientific knowledge or new technology.  This is particularly evident in the higher tech, hard science sectors of the economy.
• The design channel, where improvements in productivity and business performance can come about from advancements delivered through process design, branding and marketing.  This is more evident in sectors without substantive R&D.  
• The ‘less-traditional’ creative climate channel, where advances in business performance can occur as a result of environmental factors like organisational culture.  

Conceptually these channels can be mapped as follows (see Figure 1 below, quoted in DTI, p 3, 2005).  

If the activity of design is thus defined as shaping new ideas (generated by creativity) into practical and attractive propositions to be successfully exploited (as innovation), it logically leads the urban analyst to explore where the practice of design occurs within the urban employment and economic structure.  

Again, borrowing from DTI, at one end of the spectrum, design is evident in the production of goods and services with a high content of expression and symbolism, associated with industries such as graphics and fashion which have a strong artistic base.  At the other end, design is evident in the production of goods and services that are more obviously functional and material, such as engineering and component manufacturing, which have a strong scientific base.  

Within this spectrum lie a number of industry sectors which the Queensland Smart State Council has attempted to define in a recent submission to the Queensland Government.

References: Cox Review of Creativity in Business: Building on the UK’s strengths, Nov 2005; DTI Economics Paper No. 15: Creativity, Design and Business Perfomance, Nov 2005; Smart State Council (2008) Smart State = Design State, prepared by a working group of the Smart State Council