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Can anyone tell me how, in the past, economists have defined the idea of an 
industry? Alternative words that have been used are 'sector', 'branch of 
production' and 'industrial sector'. 
 
I mean this in the sense of a branch of production such as one finds in an 
input-output matrix or in an industrial classification scheme (NACE or in 
the UK, Standard Industrial Classification). To be precise, I refer to the 
Make matrix, the matrix of activities, as opposed to the Use matrix, the 
matrix of products. The concept of Product is perhaps better defined 
(though not wonderfully so) as there is, implicitly, the notion of a range 
of commodities which are in some sense substitutable for each other, as 
possessing a related utility. But the concept of Industry is much more 
opaque, unless one reduces it to a collection of actvities that result in a 
Product. But, in that case, why distinguish an Industry from a Product? 
 
The reason I am taking part in a seminar on the 'Creative Industries' based 
on empirical work that we did at the Greater London Authority, and I want 
to put forward an argument that the Creative Industries (as defined in the 
UK 
by the Department of Culture, Media and Sport) are coming to constitute an 
industry in the same sense as, say, the oil industry. That is, I think they 
are an industry in the making. I want to argue that they possess a 
commonality defined by the emergence of economically specialisated 
production units drawing, increasingly, on common resources, forming 
geographical clusters in Michael Porter's sense through economies of 
agglomeration, and producing a range of interrelated products instead of a 
single product. Therefore, though they are apparently disparate, and the 
classification of Creative Industries is put together like a patchwork 
quilt of SIC and SOC definitions, actually, they are coming to constitute a 
single economic entity in the same way as the motor industry, the 
electronics industry, etc. 
 
But in the process of developing this argument I found that most people 
just seem to take the idea of an industry for granted, and do not subject 
it to critical examination. Thus Leontieff simply writes 'any national 
economy can 
be described as a system of mutually interrelated industries or - if one 
prefers a more abstract term - interdependent economic activities...the 
whole system has been subdivided into 50 sectors comprising agriculture, 
various extractive and manufacturing industries, electric public utilities, 
three kinds of transportation, trade and other types of service industries. 
Foreign countries are treated as a separate industry. Households and 
government... constitute the two large non-industrial sectors of the 
system'. But what is the rationale for this classification? Why, for 
example, separate out the electric utilities from the other utilities? Why 
is agriculture as a whole considered to be an industry, but manufacturing 
is treated as a set of distinct industries? Why are there three kinds of 
transportation and not two, or four? And so on. 
 
There must be some abstract intellectual idea that an economist or 
statistician has in mind when speaking of industries because so many of 
them do. Morever it must be quite operational, since there are passionate 
arguments about the standard industrial classification, about where the 
distinctions should lie, and so on. But I can't find anywhere, on an 
admittedly quick and superficial search, that this idea is analytically 
defined. 
 
Here is the DCMS definition of the Creative Industries: "We define the 
creative industries as those industries which have their origin in 
individual creativity, skill and talent and which have a potential for 
wealth and job creation through the generation and exploitation of 
intellectual property.  This includes advertising, architecture, the art 
and antiques market, crafts, design, designer fashion, film and video, 
interactive leisure software, music, the performing arts, publishing, 
software and computer games, television and radio." 
 
Through the empirical work we did, I am convinced that these apparently 
disparate activities are in fact an industrial sector. However, this is not 
a question about the Creative Industries (or the debate will never stop). 
It 
is a question about industry. 
 
Alan 
 
 
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