An individual may derive extrinsic benefits such as recognition and financial gains, and intrinsic benefits, such as satisfaction with one's work and a feeling of accomplishment. Also, creative accomplishments can open the door to further opportunities, creating a positive effect of expected future gains. However, there are also costs to creative work. First, there are pecuniary costs such as time and resources expended during the work. Though often considered under the term of constraints, time is surely the most precious of human resources. Second, there are psychic costs such as emotional wear and tear of overcoming the obstacles often encountered in creative work. The initial negative reaction that often accompanies creative work may affect one's self-confidence or task motivation. Psychic costs may furthermore include social isolation for one's 'deviant ideas'. Peers, whose own work is devalued by the appearance of the new, creative ideas, may seek to punish or ostracize the person who calls established dogma into question, ultimately devaluing it if the novel idea is accepted.
There are opportunity costs as well: the individual could have been pursuing other projects that may have provided some positive results themselves. Finally, there are transaction costs - costs that the creative person pays to a third party to facilitate the exchange with the audience. These transaction costs may be tangible, such as a commission paid to art gallery owners for displaying an artist's work, or intangible, such as limitations that one places on one's thinking to express ideas within the implicit rules of a discipline. In addition to the costs already mentioned, there are 'taxes' that are collected after a creative success. For example, following a creative success a scholar may be asked to review grant proposals or articles, serve on administrative committees, or give presentations summarizing previous work, which all take time from future creative work.
Parallel to the level of individual creators, there are also costs and benefits to creative work at the societal or macroeco-nomic level. The benefits of creativity include an enhanced quality of life for the society in general, as well as possible stimulation in the economic sphere. Each creative idea may have a trickle-down effect in which new supplementary products and services result from an initial idea. For example, the invention of the microcomputer fostered the emergence of many new computer-related services that have enhanced economic growth in recent times. The costs include direct financial costs and the use of physical and human resources. The opportunity costs refer to foregone advancements on other activities of the society (e.g., maintenance of roads). Opportunity costs also include the foregone advances on alternative creative domains. For example, given limited societal resources, if scientific creativity is promoted then artistic creativity may suffer a lack of advancement. Some historical analyses suggest that the value of creative work varies across disciplines and societal domains, over time. For example, political creativity may be valued during the emergence of a new society or religion, but less valued afterwards, scientific and technical creativity may be valued during times of war or facing a lack of environmental resources, requiring new technologies.
In this first part of the article, we reviewed some economics concepts that shed light on creativity. In the next section, we review some economic theories that incorporate creativity as a basis of economic activity.
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