Definition
Creativity is the cognitive capacity to produce outputs that are novel (not direct repetitions of inputs), useful (fitting some goal or aesthetic), and original to the producer. Hofstadter's account in GEB Topic 18 and Fluid Concepts and Creative Analogies (1995): creativity is the product of fluid concept manipulation — tentative representations, concept slippage, and analogical recognition combined.
Why it matters
How it works
A creative process maintains multiple tentative representations of a problem, lets them compete and combine, allows concepts to slip into neighbors, recognizes analogies between the current problem and previously-solved ones, and tests candidate outputs against context. The discipline of creativity is not just to produce variations but to keep representations open long enough for unusual recombinations to emerge.