Science and Public policy February 2010 0302-3427/10/010019-12 US$12. 00 Beech tree Publishing 2010 19 Science and Public policy, 37 (1 february 2010, pages 19 30 DOI: 10.3152/030234210x484793; http://www. ingentaconnect. com/content/beech/spp Adaptive foresight in the creative content industries: anticipating value chain transformations and need for policy action Fabienne Abadie, Michael Friedewald and K Matthias Weber This paper discusses the approach adopted to carry out a techno-economic foresight on the creative content industries, within the European Perspectives on the Information society project. The novelty of the methodology lies in the mix of tools used, the embedding in an adaptive foresight framework and the implementation of a real-time Delphi which lead to interesting methodological lessons. The project succeeded in defining scenarios for the creative content industries, offering distinct trajectories and raising different policy challenges. The impact of the foresight on policy was limited as it did not lead to direct policy measures, nevertheless, it confirmed some issues of major importance to the various stakeholders. HE INFORMATION AND communication technologies (ICT) sector accounted for about 5%of the size of the European economy and 3%of total employment in 2005 (Turlea et al. 2009) about 5%of the size of the European economy and 3%of total employment in 2005 (Turlea et al. 2009). ) In the period 2000 2003 this sector contributte to more than 25%of Europe's productivity growth, making it the leading sector in the EU econoom both in terms of labour productivity (almost twice the whole economy average ) and research and development (R&d) expenditure, thus contributing most to the development of the EU knowledge economy. At the same time creativity is a key driver of growth and competitiveness of the knowledge econommy In this context the creative content sector is expected to become a major source of nextgenerratio jobs across the world. The creative industrrie are estimated to account for more than 7%of the world's gross domestic product and in OECD countries they have an annual growth rate of 5 20%(figures include advertising/marketing, as well as cultural content)( United nations, 2004). The global entertainment and media industries were estimated to be worth US$1, 255 billion in 2004, North Ameriic leading with a 44.4%share, Europe, the Middle east and Africa coming second with a 33%share. New distribution channels, like broadband internet and wireless communications are driving growth in this industry. Furthermore Europe's strong cultural heritage provides a sound basis for this sector which is reflected in a 29%world market share (worth US$130 billion) in 2000 (Aho Expert Group, 2006). The growing adoption of ICT is having a momentous impact on all areas of the economy, changing the way goods are produced, distributed and consumed, transforming the creative content value chain (Marcus, 2005). ICT are an important driver for both the supply and demand side of the creative content industry. It is the symbolic, highly digitisable nature of the goods it produces combined T Fabienne Abadie (corresponding author) is at European Commisssio Directorate Joint research Centre, Institute for Prospectiiv Technological Studies, Edificio EXPO , C/Inca Garcilaso, s n, E-41092 Sevilla, Spain: Email: fabienne. abadie@ec. europa. eu; Tel:++34 954 488228: Fax:++34 954 488208. Michael Friedewald is at the Fraunhofer Institute for Systems and Innovattio Research Competence Center‘New Emerging Technologiees'Breslauer Strasse 48,76139 Karlsruhe, Germany; Email: michael. friedewald@isi. fraunhofer. de; Tel:++49 721 6809.146; Matthias Weber is at the Austrian Institute of technology, Departtmen Foresight and Policy development, Donau-City-Strasse 1, A-1220 Vienna, Austria; Email: matthias. weber@arcs. ac. at; Tel:++43 50550 4561. For acknowledgements see page 30. Adaptive foresight in the creative content industries Science and Public policy February 2010 20 with the creative environment in which content activiitie unfold that make the creative content sector a fertile ground for radical innovations or disruptions (Christensen, 1997; Rafi and Kampas, 2002. Those lead to significant changes both in everyday life and business models under the combined influence of technological, organisational and behavioural innovations. These features are at the origin of the dynamism that characterises the creative content sector and its ability to deliver new services globally. The adoptiio of novel or significantly enhanced ICTS may lead to new services which will become key to competiitiv advantage in a knowledge-based society, causing disruptions in selected markets or creating brand new markets, potentially changing the competiitiv environment of entire countries. Disruptions are therefore as much a threat to inflexible older businesses as an opportunity for more flexible new entrants. The current and likely future dynamics of the creative content industries represent a major challeeng for the application of forward-looking methood to underpin and inform policy-making. ICT evolution has become so fast and pervasive that it is increasingly difficult to predict the emergence of new technologies or the evolution of existing ones, making traditional forecasting inadequate to identify the visions for tomorrow needed to inform today's policy-making. As a consequence, future-oriented technology analysis (FTA APPROACHES like foresight have gained growing attention in recent years in the EU and worldwide, as a policy support tool used to inform and underpin strategy development and visioning, providing strategic forward-looking knowledge to policy-makers. However even methodollogie that have been developed to deal explicitly with a range of potential futures are reaching their limits in the face of the scope and pace of change in the creative content sector. Established FTA approaache tend to struggle with the double challenge of exploring future trajectories of extremely fastchanngin areas like creative content while providing the level of specificity needed to derive meaningful policy implications and conclusions. As explained above, the creative content sector is characterised by huge uncertainties in scientific-technological as well as in socioeconomic and institutional terms. When commissioning an FTA of the creative content sector in 2007 2008 the European commission was expecctin not only to understand better the disruptive transformations the creative content sector is likely to face in the years to come, but also to provide novel and concrete recommendations on how to deal with the upcoming challenges. To address these demands, the EPIS project foressa the design and implementation of a combinatiio of methods to explore the future evolution of the creative content industries and also identify priorrit areas for R&d policy-making. The methodoloog developed was based on the adaptive foresight framework in order to do justice to both the explorrator and the policy-oriented nature of the exerccis (Eriksson et al.,2008). ) Moreover, rather than specifying all stages of the methodology in full detaai at the outset, a stepwise approach was allowed followwed It new insights on the nature of potentially disruptive changes, which had been generated in a previous stage, to be taken into accouunt and allowed the methods to be used in the next stage of the FTA PROCESS to be specified. In other words, the methodological details were adjusste in‘real-time'depending on the knowledge generated in the course of the process. The overall process was based on five main stages, which seemed best suited to deal with the uncertainties which characterise the sector and its evolution. The use of the scenario technique turned out to be essenttial as was the mix of both open participatory and restricted process elements to tackle sensitive policy issues. The high degree of uncertainty and the flexibility of the methodological approach also demanded that impact assessment (or even impact identification) became a crosscutting rather than a separate task in order to be able to adjust the methood to be used in the light of the deeper understanndin of likely impacts. This paper describes and assesses the FTA procees and methodology used to envision the future of the European creative content sector, as well as the quality of the main results achieved. Starting with a definition of the creative content industries we preseen our methodology, analysing its most important Fabienne Abadie is a scientific officer at the Joint research Centre Institute for Prospective Technological Studies workiin on techno-economic foresight studies and the impact of ICTS on the Information society. She is currently in charge of the SIMPHS project dealing with market and innovation dynamics around personal health systems. She is also invollve in research on the impact of ICTS on sustainability. She was responsible for the European Perspectives on the Information society (EPIS) project, a prospective study dealing with the future evolution of the creative content industtries She has worked also for many years in the field of electronic communications policy and regulation at Europeea level. Michael Friedewald is head of the business unit for informatiio and communication technologies at the Fraunhofer Instiitut for Systems and Innovation research, Karlsruhe, Germany. He is currently in charge of a study on ubiquitous computing for the German Federal Parliament and working on the German National foresight Process. He has coordiinate a project on EPIS and several studies on ambient intelligence for the European commission. Matthias Weber is the head of the Technology policy Unit at the Austrian Institute of technology in Vienna. He has worked for many years as a scientist and policy advisor on research, technology and innovation policy, both at national and European level. Much of his research work builds on foresight-type of approaches which aim to support the formattio of policy strategies and associated governance models. Among others, he has been involved in the Europeea projects FISTERA and EPIS, both dealing with the future of the information society. Adaptive foresight in the creative content industries Science and Public policy February 2010 21 elements and showing how the implementation of those elements in combination enables us to disentanngl the complexity of the disruptive forces influenccin a sector in turmoil. We also highlight some of the outcomes of our research and demonstrate how the FTA and methodology chosen succeeded in building strategic knowledge in support of a sustainabbl European creative content sector in the future. We further draw some lessons about the impact of using this particular FTA APPROACH on European commission policy-making, as well as about the lessoon learnt from the methodological approach devellope for dealing with fast and potentially disruptive changes of both a scientific-technological and socioeconomic nature. Delineation of the creative content sector The first challenge encountered when dealing with creative content industries is their diversity. The creative content sector comprises a wide range of heterogeneous activities with diverse levels of industrialiisatio and commoditisation (e g. ranging from sculpture to advertising), and radically dissimilar value chains. Because of this diversity, it is not possiibl to propose a general framework capable of capturring in a meaningful way the nuances and idiosyncrasies of this rich variety of activities. This has made it necessary to pragmatically select a subsse of them that appear to be particularly important considering the background of our project, with its focus on the impact of ICTS on the production and distribution of creative content goods. We therefore defined the creative content sector as the collection of activities involving the creation and distribution of goods with an intrinsic cultural, aesthetic or entertainment value, which appears linked to their novelty and/or uniqueness. This definittio (which, it should be noted, does not specify the direction of the linkage between‘novelty 'and‘value')makes it possible to adopt a tolerant characterissatio of our subject matter avoiding traditional differentiations between‘high'and low'cultural activities, or the use of attributes that are restrictive such as‘intellectual property'to identify them. It also establishes a clear separation between creative content and media industries (where the value of the content is linked closely to its accuracy and timeliness). As a result we have focused our analysis on the following sub-sectors (Mateos-Garcia et al. 2008): ) music recording and publishing, film production, broadcasting (radio and TV), computer games, publisshin (newspapers and books) and cultural spaces (museums and libraries)( see Figure 1). This looks actually like a heterogeneous bundle of activities, with very different historical roots. Howevver in most of the above sub-sectors there is a creatiiv effort aimed at the production of the master copy of a good, which is relatively easy to duplicate and distribute digitally (digitise), and as such they follow a publishing or broadcasting model. In general, this delimitation and definition of the creative content sector emphasises those types of creativity-based products and services that are characteerise by a high degree of commoditisation and industrialisation and that are addressed primarily to Free arts and crafts (painting, sculpturing) Applied arts (architecture, design, and computer games) Culture and media industries (books, film, entertainment, TV, radio) Related industries and crafts (printing, musical instruments) Informal arts activities (amateur communities) Support and service (foundations, associations) Public or subsidised arts, media and heritage institutions (museums, theatres, public broadcasting) Public administration and funding Cultural education and training (art academies) Creative workforce (independent, employed, freelancers) commercial public informal Figure 1. The creative content sector Source: adapted from Wiesand and Söndermann (2005) Adaptive foresight in the creative content industries Science and Public policy February 2010 22 a mass audience. This definition allows us, for instaance to distinguish the creative content sector from the production of individual pieces of art. Adaptive foresight applied to creative content Choice of methodology In order to achieve our objective of delivering forwaardlooking intelligence on the future evolution of the creative content industries, we opted for an adaptiiv foresight process: adaptive in terms of stressing the need to adapt to changing contextual developmeent (as opposed to stressing the ability to shape the future), in terms of assigning iterative monitoring and learning a central role in foresight, and in terms of adding a targeted strategy process to the usual open participatory processes of anticipation (Eriksson et al.,2008). ) This methodology consists of five main building blocks as shown in Figure 2: a sector analysiis a Delphi survey, a scenario process leading to an analysis of issues and a final policy analysis. A different level of participation was embedded at each stage of the above process. The sector analysis was carried out by the project team through literatuur review and expert interviews. The first findings were submitted then for assessment by a large numbbe of experts via a broad participatory tool, the Delphi survey. This fed into the scenario developmeent which was based on the close involvement of a restricted number of experts. The next stage was open to broader participation again through a validattio workshop where stakeholders from the varioou creative content sub-sectors and policy-makers were invited to give their views on the scenarios devellope in order to reach a consensus as to the most likely developments and critical issues for further policy discussion. The final policy analysis stage was restricted to discussions with the client, i e. the European commission. The varying degrees of particippatio enabled us to handle better the complexity and uncertainties regarding the evolution of the creatiiv content sector, as well as the diverse views of different stakeholders. An impact assessment was possible (and necessaary to a varying extent at every stage of the process: In the initial sector analysis, impact chains were studied, although not in a systematic way, so as to gain an in depth understanding of the sector and its transformation. The Delphi was meant to help reduce the uncertainntie associated with some of the impacts we came across in the analysis. Sector Analysis Realtime online Delphi Scenario development Policy analysis Issues analysis ICT key trends Trends in actor behaviour Transformation pressures in the CC value chain Scenario 1 Scenario 2 Scenario 3 Scenario 4 Policy implications Drivers, enablers, threats contextual factors Consensus vs controversial issues Scenario analysis Project team Broad expert participation Workshop (restricted experts) Workshop (stakeholders) Workshop (restricted, client) Impact assessment Figure 2. Overview of methodology building blocks Adaptive foresight in the creative content industries Science and Public policy February 2010 23 The scenarios aimed to synthesise the insights about potential impacts (including the differences in opinion about the impacts of some trends. In order to tackle the diversity of the creative content sub-sectors, the scenarios addressed two levels, namely the creative content sector in general and specificities of at least some sub-sectors. After the scenario stage, we extracted‘key issuees 'which in the end made up the main dimenssion for the overall impact assessment. In our case, these were mainly sub-dimensions of two sustainability dimensions, namely of the‘sociial and the‘economic'ones. These two dimensiion are regarded as particularly important and controversial in the case of the creative content sector. Moreover, in view of major uncertainties any attempt at environmental impact assessment would have gone far beyond the scope of the project. The policy analysis phase aimed to look not only at the issues as such and potential European policiie to address them, but also at differences in assesssment and interests of stakeholders. Each of the stages is explained in detail in the followwin sections. Step 1: Sector analysis The first step in our process is the analysis of the sector in terms of the actors, business models, technollog trends, societal developments, and user behavviou influencing the evolution of the sector. To start with we proceeded to define the scope of our research by analysing the characteristics of creative content goods. As mentioned earlier, the creative content sector being very diverse and heterogeeneou it was necessary from the outset to focus on a sub-set of activities most likely to be impacted by ICT innovation and where creativity and culture play an important role. This led to the selection of music books, video and films, games, museums and cultural spaces as the focus of our research. Within these boundaries, we then analysed the key characteristics of the creative content value chain in a generic manner, looking at the role of the various actors in the value chain (e g. publishers, retaai etc.),investigating key aspects of the creative content goods, like the role of digitisation, intellectuua property rights (IPRS) or channel diversification. This provided a general framework which we could apply to each of the specified creative content subsecctor (see Box 1). As the next step we analysed the three dimensions of content creation, content distribution and user interaactio for each of the above activities (see Figure 3 enabled us to understand and describe the transitiio from traditional business models to online ones and identify the impacts of digitisation and other trends on the various steps in the value chain, as well as on the actors'strategies. Having defined the industrial, business and technoloogica characteristics of the creative content sector and its sub-sectors, we completed our understanndin with an assessment of the European positiio both in qualitative and quantitative terms, based on the analysis of company documents, business and policy reports. The first phase of our analysis gave us an understanndin of ways in which ICT innovations challeeng traditional value chain structures and business models, but further analysis was required to assess the role and impact of technology trends and user behaviour. This was done by reviewing emerging ICT innovations and identifying areas where these will have a significant effect on creative content. We described relevant technologies within our establisshe framework i e. classifying them within creatiion distribution and user interaction and we highlighted some essential trends of change, identifyyin opportunities and threats for the European indusstr in each of the sub-sectors. To complete the picture of the creative content sector, we analysed demand issues by using data from consumer surveys and developing case studies on failed instances of product introduction which helped to unveil the mismatch between consumer expectations and percepttion on the one hand, and the opportunities offeere by a technology on the other. The analysis was successful in providing a picture of emerging trends that impact the creative content sector. However the picture that emerged was one of uncertainty, with two potentially dominant future situations. The first is characterised by growing opportuunitie for the sort of small, flexible and talented players that populate the European creative milieus, thriving in an open environment where ICTS innovatiio enables direct communication with distant or nascent audiences. The second involves the emergeenc of proprietary and convergent platforms for content selection and distribution. The risk of the first situation is that the overall size of the market for content may be fragmented smaller, more, and subject to a lower rate of growth precisely because of the absence of platform (mass markets) and commodity orientation. The risk of the second situatiio is in the negotiation for access with the ensuing redistribution of revenue shares in favour of powerffu platform owners, essentially gatekeepers of audiennce in the new convergent context, thus excluding smaller players. On the demand side our analysis revealed the contrras between the relatively stable, unchanging nature of consumer demands and the radical changes brought into the creative content sector by digital technologies, as well as the shift towards networked communities whereby people, especially the younger generations, constantly look for means to maintain social relationships real-time, wherever they are. In this context, customer expectations need to be managed carefully for a company to remain successful and building trust and awareness are part Adaptive foresight in the creative content industries Science and Public policy February 2010 24 of the equation. While demographics show clear patterns for the younger generations, any extrapolatiio is fraught with risks, as their attitudes may evolve when they become adults. Finally, content is more important to consumers than the technologies necessary to access or use it, and companies should not lose sight of this when defining their strategies and business models. The above technology and social/societal trends and the way they interact with one another provide intereestin insights for market players devising business plans but they are equally relevant for policy-makers at the point of defining policies in support of the creatiiv content sector development. However, the uncertainntie over the direction of change and the radically different consequences this could have on social and economic sustainability of the sector in Europe made it impossible after the analysis stage to draw any initiia conclusions upon which we could base our policy analysis. The Delphi was therefore useful to address these uncertainties in more depth. In addition, as neithhe of the two possible future developments seemed to be more likely than the other it was necessary to add the (originally unforeseen) scenario process in order to address this systematically. Step 2: Delphi survey We used the Delphi method to elicit views from a wide-ranging audience on current and future trends Box 1. The creative content sector on the move Figure 3 shows the various stakeholders involved and the technology trends at work in the process of content creation, distribution and consumption in the case of video games. A similar analysis was carried out for books, music, audiovisual and cultural spaces. The results show variations in the interactions between technologies and actors along the various value chains for reasons inherent in the varying degree of digitisation in each sub-sector and the market structures that have prevailed in each domain until recently. Figure 3. Actors and key technological areas in the video game sub-sector Source Mateos-Garcia et al. 2008) Some key technology trends include: new business models with transformation of creative content goods into services; importance of communities of users as sources of talent, information, feedback and content via tools to create, access, reconfigure and share content; development of innovative tools for content creation, publication and online access; and increasing pressure on users'attention and increased difficulty to navigate content. Important user demand trends: new patterns of use induced by new content delivery platforms vs. more constant patterns (e g. sharing, social relationships, interactions; company customer interactions shift towards more interconnected and less predictable behaviours; influence of user demographics (e g. age and gender) on use patterns; and usability, interoperability, communication and attention. Adaptive foresight in the creative content industries Science and Public policy February 2010 25 and related variants, uncertain issues, potential disrupttion and the likelihood of possible identified trends/issues. The EPIS-Delphi was implemented as an internetbaase real-time Delphi (RT Delphi)( Gordon and Pease, 2006; Gordon, 2007. Like in a classical tworooun Delphi survey, experts participated in a surveey in which they had to assess topics based on statements about the future. In a RT Delphi, the particiipant not only judge twice but they can change their opinion as often as they like when they see the aggregated results of the other participants. The RT Delphi is a way of addressing the problem of the generally large dropout rate in online surveys and alloow all the answers to be taken into account until the end of the survey. An initial concern was the difficcult of controlling the sample and that more actiiv persons might be able to influence the sample in an above-average way. However our experience shows that results from RT Delphis tend to be robust. Theses were developed in a rather conventional way using a mixture of analytical desk research and expert workshops by delineating and structuring the field, resulting in a set of 36 uncertain issues and open questions in six thematic blocks (see Table 1). Experts were asked to assess the importance of each thesis in different dimensions (economic, scientific, society, quality of life) and the possible actions that could speed up or strengthen the realisation of the thesis. We invited 1, 111 experts with a focus on creative content to participate in the Delphi survey that ran during June 2007. Of this total 426 experts visited the Delphi website (38.3%)and 288 of them (25.9%)started filling out the questionnaire. Out of these experts 124 (43%)returned to the questionnaair at least once in order to review the results and change their assessment as necessary (Friedewald et al, 2007). In a nutshell, the Delphi survey revealed only a small number of topics where experts did not reach a consensus about the likely future development. This information served as input for our subsequent scenario development. The following issues turned out to be the most controversial: IPRS: the relevance of the current IPR concept under changing conditions, new ways to protect IPR and the issue of technical protection means like digital rights management systems; the structure of the creative content sector and the fundamental transformation process it is undergoinng of particular importance is the question of how new, innovative enterprises that experts regaar as the drivers of technological and business changes can be supported in an environment that is currently dominated by a few globally active corporations; the relationship between voluntary and professioona content creation activities and between profit-oriented businesses and cultural diversity (as represented by‘core'cultural activities and education; and the open issue of the likely development and importtanc of virtual worlds (like Second Life) and multiplayer online games (like World of Warcraft. On the other hand, a consensus was reached on wellknnow factors such as universal access to broadband networks, computer literacy and ICT skills, which Table 1. Extracts from Delphi theses Media digitisation Eight theses, e g. (2) Most people are engaged actively in participatory entertainment like interactive TV (3) More than 20%of all books are purchased in electronic form and not as printed copies Mobile media use Eight theses, e g. (10) Most users of audiovisual content regularly consume them on mobile devices (11) Speech is the predominant means to interact with data and media capabilities of mobile devices Navigating in a digital world Four theses, e g. (18) Individuals can reliably separate personal communications from advertising messages User-created content Five theses, e g. (23) More than 20%of commercially offered video and music are produced user Business in a digital world Five theses, e g. (28) Cable TV and satellite TV network operators are the predominant distributors of video-on-demand over the internet (30) Content creation for educational purposes (e-learning) reaches a 20%share of the entire creative content market in Europe Political and legal issues Six theses, e g. (32) Most media users accept digital rights management because it helps them to conveniently use and reproduce content legally (34) Most digital creative content is distributed under‘open'licenses such as the Creative Commons License or GNU General Public License Note: No consensus could be reached for the theses printed in italics Adaptive foresight in the creative content industries Science and Public policy February 2010 26 remain crucial for the future success of the creative content sector. With hindsight a Delphi survey was possibly not the ideal research instrument, since it could not identiif radically new developments. In this respect the use of techniques to identify weak signals would have improved the farsightedness of the theses although it would have increased the risk of including unrealistic topics in the survey. To achieve such an objective a method based on identifying weak signals would be required a domain which is still in its infancy (Mendonça et al. 2004; Ilmolaa et al. 2006). ) Step 3: Design of scenarios for the future The sector analysis carried out as the first step of the process and complemented by the Delphi survey served as an input for a scenario building workshop. The addition of a scenario process emerged at that point as a necessary new building block to our adaptiiv foresight methodology. A few selected experts with a background in the creative content industries and/or scenario building were invited to join the projeec team for a two-day workshop. It started with a general brainstorming on global trends and other socioeconomic considerations that may characterise the context in which creative content will unfold in the future. As a second step possible dimensions for the scenarios'axes were discussed and an agreement was reached on the two dimensions that would characteeris meaningful and sufficiently differentiated scenarios. Split into smaller groups, the participants were asked to sketch a storyline and identify the key characteristics of their respective scenarios. The projeec team completed a full-blown scenario descriptiio with the input from all participants after the workshop because of time constraints. Four future scenarios In developing the four scenarrio the workshop participants considered the impaac of ICT innovation, user behaviours and other factors on the transformation of the creative content industries. In particular the following elements were deemed to play a fundamental role in shaping the creative content industries of tomorrow: global trends, like the growing importance of Asian economies and their attitude to creative content; European lifestyles, which are characterised by a decline in national identities but the persistence of regional differences; demographics and digital divide issues; and the role of ICT as enablers for ubiquitous creativity. Although they share the same basic assumptions, the four scenarios differ qualitatively from one another. We considered the framework conditions and technoloogica characteristics (e g. magnitude of sunk costs) that determine economic relations in the creatiiv content sector, on the one hand, and the prevailiin social values as reflected in attitudes towards (and thus demand for) new creative content products and services, on the other, as most pertinent and have chosen therefore those for positioning the four scenarios (see Figure 4). The boundaries between the scenarios are fixed not. They can represent situatiion which occur sequentially. The economic framework (competitive markets and entrepreneurialism vs. oligopolistic and‘walled off'markets) and social values (positive public attituud of potential users towards and high demand for new creative content products and services vs. negatiiv public attitude and lack of demand ) were derived therefoor as the axes used to define the four scenarios: Incumbents take it all: a closed and regulated market which is dominated by a few globally actiiv companies. Open innovation society: a situation where all Figure 4. Positioning of the four scenarios Competitive business environment Oligopolistic business environment Negative public attitude towards creative content, lack of demand Positive public attitude towards creative content, demand Incumbents take it all Incumbents take it All the open innovation society Society meets industry IT is not cool, get a life Adaptive foresight in the creative content industries Science and Public policy February 2010 27 promises associated with user created content, sociia software and Web 2. 0 are realised. Society meets industry: intermediate scenario between the previous two assuming that the creatiiv content sector is transformed rather than revolutionised. Information technology is not cool: a future in which negative effects of ICT-based media producctio and distribution (e g. spamming) have resullte in a widespread loss of popularity for the internet. Each scenario was described focussing on common elements like global context, infrastructure, practices of content production, distribution and use, and interacction The scenarios led to a modification and further specification of our initial list of issues relevaan to the assessment of the impact of future sociotecchnoeconomic trends on the sustainability of the creative content sector. The key point about these issuue is that impacts will differ according to scenarioos as illustrated in more detail in the subsequent section. Step 4: Analysis of issues The fourth step of our methodology consisted of the analysis of the scenarios with a view to identifyyin issues that may have an impact on the future sustainability of the sector and may therefore requuir policy measures or could at least have policy implications. In order to reach our objective we made use of another workshop, which was attended by around 25 stakeholders, including representatiive from some sub-sectors of the creative content industries, academia, policy-making etc. To structuur our discussion we followed the common elemeent used in step 3 to systematically describe our scenarios (global context and key drivers infrastruccture practices of content production and distribuution practices of content users, interaction, interfaces and institutions. We therefore not only presented the scenarios'broad outlines but we also highlighted those key featuure likely to have implications for factors such as industry structure, players'strategies or the legal environnment should a particular scenario be realised. This approach was very helpful for stimulating discusssions However, depending on the creative conteen sub-sector the stakeholders represented and their role and relative position on these sub-sectors, they assessed the outcomes of the varying scenarios differeently Thus, the workshop was successful in identiffyin problem areas, raising concerns and eliciting different views, which in turn meant that no consenssu on the future of the creative content industries could be achieved. This is probably a logical outcoom in the light of the diversity that characterises the creative content sector and its sub-sectors, its current state of transformation and the uncertainties it is facing. Nevertheless, the workshop helped us identify the most important issues (usability, user empowermmen etc. which would lead to different outcoome depending on which scenario were to be realised, with varying consequences for the developmmen of the creative content industries, in particcula in terms of growth, jobs, social inclusion or cultural diversity, and for the actors in the sector. Consequently, our impact assessment focused on four categories of issues (technology, regulatory, market and user related), each encompassing a number of sub-issues. Key issues for the future success of the creative conteen industry Even though the scenarios reflect differrent often contradictory trends and uncertainties about the future of the creative content industry, a number of important issues can be highlighted by looking across the scenarios. These issues may be technological, regulatory, market-related, userrellate or of a broader societal nature. They will be decisive for the future pathway of the creative conteen sector. It is thus important to understand those factors and mechanisms that influence market uptaak and diffusion along the creative content value chain (see Figure 5), and what obstacles need to be removed to strengthen the position of European actoor in this sector. By their very nature, the issues raised tend to be assessed in differing ways by the various actors in the creative content sector reflecting their respective interests and perspectives. The high degree of diversiit of the creative content sector represents an added difficulty in taking an EU-wide perspective, as diversity hinders the formulation of broad and coherren initiatives. However, in spite of the diversity of the various creative content sub-sectors, the convergence of digital content and media has given already way to a growing convergence of future issues in these subsecttors Many of the challenges and obstacles are similar for all sub-sectors. Many are also related to similar or crosscutting technological solutions as in the case of seamless (IPR-based) networks or mobile communications. There are also cultural challenges implying that content is not a product like any other but also a cultural good and an expression of diversiit in Europe. Among the multitude of factors that are potentiaall important for successful future development of the content sector the following deserve particular attention: technology issues (e g. usability, methods and tools for multi-channel production; regulatory issues (e g. balance between monopoly and competition, digital rights; market-related issues (e g. development of new, sustainable business models; and societal sustainability issues (e g. user empowermeent cultural diversity. Adaptive foresight in the creative content industries Science and Public policy February 2010 28 Step 5: Policy analysis Our adaptive foresight on the creative content industrrie was concluded with a policy analysis, aimed at deriving policy options for a thriving creative conteen sector in Europe in the future. This was done in closed discussion with the client, i e. European policy-makers who were involved in the various workshops throughout the process, and at the end of the process to assess the results of the exercise. The overall objective of the FTA had been to provide the policy-making process with strategic intelligence by taking a prospective view towards the evolution of ICT and in particular, identifying the potential for disruptions, leading to policy formulaatio and recommendations for European and national policies, in particular R&d policy. While all the steps leading to the policy analysis revealed important findings on potential directions of change and consequently possible challenges for policy-making, the main difficulty encountered was to tailor the results to some of the specific needs of the client, i e. R&d policy setting. In fact many of the issues identified in our research relate to policy areas which are not specific to the R&d agenda, and those that are related R&d may already be tackled through EU Framework programmes or other European commission initiatives, although in a wider context than that of the creative content sector alone. Nonetheless, we feel that the issues identified are crucial to ensure a thriving European creative content sector in the future and they needed to be brought to the attention of our client. In that sense the policy analysis stage fulfilled its objectives to a large extent. However, the above finding raises the question of the appropriateness of carrying out a FTA on such a diverse sector with a specific policy area like R&d in mind. Many of the policy issues linked to the evoluttio of the creative content industries are of a crosscutting nature (e g. skills cultural diversity, three-dimensional technologies, next generation networks etc. and are dealt with in different areas of the European commission. Challenges for policy-making The challenge for policy-makers and regulators is to help create an enviroonmen which facilitates the potentially positive developments identified in some of the scenarios, while protecting citizens and consumers from the potential disadvantages. In other words, an environmeen that balances unimpeded access to content and fair remuneration between categories of rights holdeer while fighting the fragmentation of the creative content sector, a fragmentation partly justifiable due to language and national identity barriers. Awarenees of the issues and challenges raised subsequently will be decisive for fulfilling this task. The policy issues that have been identified incllud fostering ICT and creative skills: new initiatives to provide incentives for ICT trainiin and skills development; promoting study programmes and curricula combinnin technical, business and creative skills; teaching the teachers; encouraging women to engage in creative content activities; raising awareness, especially among younger generattions of the value of creativity; and Figure 5. Creative content goods, impact on industrial structure and key technologies Source: Mateos-García et al. 2008) Adaptive foresight in the creative content industries Science and Public policy February 2010 29 mediating between skills and demand for skills. They also include fostering innovation, for instance: supporting R&d for infrastructure; facilitating mobile content development; accelerating broadband penetration; developing mechanisms to monitor trends and measure impacts; promoting further innovation-oriented public procureement and adopting further measures to encourage new entrants. Conclusion The methodological setup of the FTA described and analysed in this paper is anchored in the adaptive foresight framework, which enables us to reconcile the exploratory nature of the exercise (i e. envisioniin the future of a sector in disruption such as the creative content sector) with the need to derive conclussion for policy-making. Generally, we can concllud that the methodological design, based on a series of stages whereby each new stage is adjusted based on the findings of the earlier stage worked rather well. As illustrated by the case study analysed in this paper the methodological setup succeeded in generating forward-looking perspectives on the creatiiv content sector, building on a consolidated understtandin of how the sector works and likely future trends. It also made it possible to adapt successsfull to changing requirements and insights duriin the process, for instance by adding a scenario development phase late on in the project. This becaam necessary because the range of possible futures turned out to be broader than was expected initially. However, the well-justified and adapted combinatiio of methods was not completely appropriate to answer some of the client's ambitious policy-related demands. For instance identifying activities and business models likely to contribute to creative conteen growth in the future and deriving conclusions for R&d policy turned out to be beyond the reach of the approach. This is as much due to the inherent limitations of our abilities to look into the future and of the possibilities of what FTA can deliver as it is to the client's unrealistic expectations. It is essential to accept that the future is opaque, uncertain and unpredicctable and that we must learn to handle uncertaiinty in particular in fast changing sectors like the creative content sector. Pretending to be more preciis than serious FTA allows would be both methodologgicall questionable and unethical. A second observation is that it proved to be necesssar to engage with practitioners early on in the process of data gathering and analysis to ensure that the research focus reflected their main priorities. However, practitioners may try to preserve the status quo, depending on their market position. The challeeng is to grasp the current situation and emerging trends by involving those who know best, the practitionners while ensuring a plausible new picture of the future can be shaped which they themselves may not be willing to accept at the outset. In other words, one has to find the balance between the‘feasibility'and‘surprise'dimensions, which is crucial in rapidly changing sectors like the creative content sector, where the fast pace of change can rapidly make any foresight outcomes obsolete. As to the adequacy of the methodology for shapiin a vision of the creative content sector as such, we can conclude that the process helped raise key issues and controversies relevant to the sector as depicted by the four scenarios. Although exploratory in nature, the latter reflect major differences of opinion among the stakeholders over the expected and desiire future of the sector. As such, the process is, in part, responsible for making these differences expliici and bringing them to the surface. They relate to technology market, regulatory, user-related and socieeta issues. For instance, the role of incumbents compared to that of user-based communities is seen differently by different stakeholders. Associated with this are opposed the often views on management of IPRS and the challenge that loosening them could pose for prevailing business models, while opening up opportunities for small enterprises and amateurs to develop innovative products and services. Recent developments regarding digital content copyrights will further influence the assessment of this issue. Another important example concerns content quality and, as reflected in the scenarios, the extent to which quality is expected to determine the future of several segments of the creative content sector. Such differences make it difficult to draw clear unequivocal policy implications. Controversial positiion may call into question current political agendaas and make the definition of new ones difficult. It is therefore no surprise that the FTA policy impact was limited rather in the sense that it did not lead to any direct policy measures or specific initiatives. This is coherent with the methodological approach of adaptive foresight that foresees a phase of internal debate of policy implications by the client (or other stakeholder), and thus leaves the drawing of consequeence (e g. revising agendas) to their discretion. In this case, particular attention was paid to the implicattion of the exercise on European research policy priorities. On certain areas a consensus on their importtanc for the future was easy to reach like with display technology, human computer interfaces or creativity enhancing tools. The need for standardisatiio and technical platforms to facilitate research and innovation in certain thematic areas was accepted also widely, even if the associated IPRS issues are still controversial. The next step, however, on the need for European research) policy action in these areas, would require looking at expected market and systte failures, an issue that is difficult to address in view of the uncertainty characterising the sector. Adaptive foresight in the creative content industries Science and Public policy February 2010 30 With regard to the impact assessment aspect of the methodology we can conclude that it is unrealistti to have fixed a framework from the outset when dealing with a sector in flux and where uncertainties are so high that even experts have trouble imagining impacts (as the strong discrepancies in trend impact assessments show). In this sense, addressing emergiin issues and their potential impact throughout all stages makes sense as it helps improve our understanndin step-by-step. Finally, the creative content sector foresight becaam a particular challenge because of the high degrre of uncertainty in all (technological, economic, social and structural) dimensions, which were very difficult to capture. Existing methodologies, even when combined in innovative ways and adjusted in the course of the process, reach their limits and point to the need for new approaches for exploring the futuur of such fast-changing areas. This need to expllor new methodological inroads becomes even more pressing if an FTA is expected, as in our case, to generate knowledge and insights to feed directly into formulation of current-day policy options. Acknowledgements The authors wish to thank Prof W Edward Steinmueller, Dr Aldo Geuna and Juan Mateos-Garcia from SPRU (University of Susseex UK) for their key role in the EPIS research and more particulaarl their analysis of the creative content sector, and Michael Rader for his overall contribution to the EPIS project. They would also like to thank Jan Bierhoff (ECDC), Vladi Finotto (University of Venice), Gill Ringland (SAMICONSULTING), Susanne Giesecke (Austrian Institute of technology) as well as Knud Boehle Andreas Gräfe and Robert Hauser (all from the Reseaarc Center Karlsruhe, ITAS, Karlsruhe) for their contributions to the scenario building exercise. Finally, the authors are grateful to Ioannis Maghiros and Corina Pascu (IPTS) who contributed throughout the EPIS project. The EPIS research project was funded by the European commission. The opinions of the first author do not necessarily represent those of the European commission. 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