100115 eace CCI Determinants

THE ENTREPRENEURIAL DIMENSIONOF CULTURAL AND CREATIVE INDUSTRIES

ESPECIALLY SMEs

Rene Kooyman15 January 2010

II:

Determinants

Of Entrepreneurship

Rene Kooyman: Determinants Of Entrepreneurship

THE CULTURAL AND CREATIVE INDUSTRIES

• The core arts placed outside the industrial sectors ?• Only ‘potential copywrited works’ count ?

(‘One-offs ‘ and prototypes: design, architects, etc)• Discipline based ? (music, performances)• Individual artists are not entrepreneurs?• CCIs: diversity , not a homogonous group

From the Entrepreneurial point of view four main categories:• Creative service providers - design consultancies, architecture• Creative content producers - fashion designers, film, games• Creative experience providers - performers, opera, ballet, galleries,

museums; • Creative originals producers - crafts people, visual artists, designer-

makers, composers


THE POSITION OF SMEs

The missing middle:• A few, large, international conglomerates• A lot, very small, entrepreneurs• Operating within networks of ‘intermediaries’

The large ones (publishers, film producers, record comp):• Repreducables, new communication technologies, mass consumer

markets, responsible for distribution, marketing, motivated by economic growth and competition

SMEs:• Producers of the creative originals, not so much primary motivated

by growth

UNCTAD Creative Economy Report 2008


ENTREPRENEURIAL DETERMINING FACTORS

CCIs Drivers of success:

• Technology

• Demand

• Design

• Education and skills

• Diversity

• Public sector

• Intellectual Property

• Clustering


INDICATORS AND DETERMINANTS

• Entrepreneurial activities based upon opportunities, skilled people and resources

• Affected by two dominant factors:

• regulatory framework

• and entrepreneurial cultureOECD, Measuring entrepreneurship, 2008


Determinants of entrepreneurship

o Capital and Access to finance

o Technology and RD

o Entrepreneurial capabilities

o Market conditions

o Regulatory framework

o Culture

Start-ups, seed funds, stock markets

Innovation

Human and social capital

Public involvement, competition

All regulations and public rules

Entrepreneur’s behaviour, attitudes


ACCESS TO FINANCE

CCIs hold a different position towards financials:

• Non-conventional employment;

full-time workers receiving regular pay are a minority• No level-playing field; small business face banks that become more

risk-averse (financial crisis)• The ‘nobody knows’ effect of the CCIs• Access to debt financing: low tendency and ability of CC

entrepreneurs of making full use of available finance, advice and expertise

• Regular financial institutions often hesitate and offer little development assistance or expertise with regards to the CCIs


ACCESS TO R&D AND TECHNOLOGY

• Digitisation changes all aspects of the CCIs:concept creation, production, distribution, retail

• Technology as a driver: new services, distribution channels, business models anddriving the emergence of significant new sectors

• Digitisation and IP: open source and collaborative platform development

R&D:• Much activities in the CCIs involve R&D, yet not described as such• University/Industry interface geared towards large firms with lasting

relationship networks• Given their large premises, staff, technical resources, skills these

dominant enterprises set the research agenda


ENTREPRENEURIAL CAPABILITIES

• Weaknesses in business skills: CC entrepreneurs

lack the skills for business proposals attracting

external investors• Lack of entrepreneurial skills: professional educational institutes lack

the affinity and attention for entrepreneurial aspects• Traditional Business Education does not fit:

• many self-employed and independent SMEs do not wish to grow• the business plan is the wrong metaphor for entrepreneurship• Is weakens on the entrepreneurship model being valued in a non-

business context (public services, non-profit, governmental)• Undervalues the importance of networks: ‘know-who’• The culture of business schools is derived from corporate models


ENTREPRENEURIAL CULTURE

Personal characteristics and sector differences:four different sets of ideals:

• Entrepreneurial Success: gaming and media• Professional Achievement: Architecture,

Sound Technician, Camera Man, Photographer• Art Creation oriented: Art professions, Design, Film, Architecture,

Visual Arts• Career oriented: IT, Advertising, Sales Professions within the CCIs

Culture and size:• Micro and start-up businesses: Artisan, Creative Partnership, Solo• Small businesses: Business Partners, Licensing Partners• Medium sized: Business Partners, Entrepreneur/Investor relations


MARKET CONDITIONS

Markets volatile and unpredictable, demandwill increase with exposure, business strategies that are embryonic, provisional, highly responsive; 'intuitive' and 'emotional' knowledge as much asstandard market research, unpredictable demand ‘nobody knows’

Competition and anti-trust laws: • Competition and entrepreneurship have links both ways:

• Entrepreneurship is contribution to competition• Competition is an important driver of entrepreneurship

CCIs specific position:• Excluded from international trade agreements• National countries autonomy to support CCIs• Improving market dynamics and access to markets by minimizing

public involvement (governmental activities and regulation)


REGULATORY FRAMEWORK

CCIs face:

• Administrative Burdens (entry and growth)

• Costs of starting up an enterprise

• Bankruptcy Legislation

• Safety, health, environment and product regulation

• Labour Market Regulation

• Social and Health Security

• Income Taxes

• Business Taxes and Fiscal Incentives

• Wealth and Bequest Taxation


QUESTIONS / REMARKS / DEBATES

• Which determinants are dominant ?• What is their importance?• De you recognize the image sketched here ?

THE ENTREPRENEURIAL DIMENSIONOF CULTURAL AND CREATIVE INDUSTRIES

ESPECIALLY SMEs

Rene Kooyman15 January 2010

II:

Determinants

Of Entrepreneurship

100115 eace CCI Determinants

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