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.

While all these factors are clearly influential, it is the authors’ contention that they are not easily separable but rather highly related. For example, contingencies such as industrial characteristics and the nature of the knowledge used often shape resource allocation, which in turn prioritizes incentive schemes. Birkinshaw et al. (2002) argues that system-embedded knowledge (i.e. knowledge that is a function of the social and physical system in which it exists) is a strong predictor of organizational structure. The success of KM systems is thus contingent upon the fit between the reward systems and the organizational roles, structure (formal and informal), along with sociocultural factors such as culture, power relations, norms, management philosophy and reward systems (Zack, 1999), as well as industry dynamics.

This introductory article raises a methodological challenge for scholars of technical change and innovation, on the one hand, and historians of technical change, on the other. We ask to what extent have economists and historians of technical change engaged in cross-fertilisation with regards to methods and the identification of relevant questions. We then provide an overview on the use and methods of history within the field of Economics of Technical Change and Innovation Studies (ETIS), which is traditionally considered as ‘history-friendly’. We locate the work and intellectual heritage of Nick von Tunzelmann among that of a small group of scholars in which history and economics of technical change have co-habited happily. We reflect on the variety of historical methods proposed by the contributors to this special issue, who were invited to respond to the above methodological challenge. Finally, we propose a way ahead in terms of the identification of relevant questions and pertinent methodological approaches.