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This paper examines the definition and management of creativity in the ‘creative industries’. Initially the paper sets out the economic and cultural context for the emergence of the creative industries, before going on to argue that there are gaps in our understanding of the role of creativity and particularly the management of creativity within these industries. Based on research undertaken with new media SMEs in the North West of England, the paper then explores the ways in which creativity is defined and managed within this sub–sector. It is shown that the meanings attached to creativity are variable and contested and that the precise definition and management of creativity is strongly determined by the internal workplace culture, and the external social and economic conditions within which firms operate. It is further suggested that while creativity is often seen as a ‘must have’ attribute for new media firms it may also, conversely, be considered a barrier to commercial success. The paper concludes that if we are to understand work and production in the creative industries, and offer institutional support for firms to develop and sustain creativity for competitive advantage, it may be necessary to develop a more detailed understanding of the role of creativity and creative management as both a general and specific, socially embedded process.