Introduction

This research examines a case study of government creative industries development interventions in South Australia [SA]. The intervention was focused specifically in improving firms (such as those in advertising, art, crafts, design, fashion, film, music, publishing, video games and TV) which use digital media tools. O'Connor and Greene (2007) suggest that government intervention in entrepreneurship is grounded in two schools of thought. The first addresses information asymmetry and adopts a resource-based view (Barney, 1991), while the second relates to market failures (Parker, 2004) where government intervention substitutes for, or simulates, a market response.

The resource-based view of government intervention follows the argument that governments need to provide resource support to fill knowledge-gaps. These knowledge-gaps may include a lack of awareness of available resources or poor capabilities due to insufficient experience, skills or knowledge to undertake certain tasks or capitalise on opportunities. By contrast a market failure occurs when there is knowledge but insufficient incentive for a market response. O'Gorman and Kautonen (2004) have argued that market failure policy measures, such as those that respond to a financing market failure for early-stage ventures, for instance, are ineffective without the entrepreneurs who perceive or discover market opportunities. This suggests that there may be interdependencies between the knowledge-gaps and the market failure policy drivers. For example, knowledge-gaps or information asymmetry such as poor entrepreneurial capability may underpin the failure of a market response. That is, the market will respond without knowing there is a capability gap. Similarly, failures of market response may exacerbate a knowledge or capability gap or deficiency that remains unfulfilled while there is no market driver. This opens up the need to analyse government interventions by adopting a systems perspective.

We analysed the case study using system perspectives to show how government interventions interlink to support the financial, relational, physical and human resource gaps/market failures. We argue that government plays a critical role in facilitating links between resource sources that would not connect without a structural system and incentive to bring them together. Further, by conducting a systems analysis we highlight the need for strategic engagement between stakeholders which provides focus, intent and competitive direction.