The Experience Economy and the Innovation System


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This ppt. was used to present the paper in the Regional Studies Association conference on the 27th -29th May 2008 Prague, Czech Republic. This working paper is the first step to study the entrepreneurs within the experience economy in the provincial municipality of Frederikshavn, Denmark. The research assumes that the
"experience economy" could change a city/region's competitive advantage. Some of the challenges of understand the concept of the experience economy and the effect of the current economic slowdown on it are discussed. The author suggests that smart businesses and cities should be aware that products, services and experiences coexist in the marketplace. The paper affirms that the public sector can play a crucial role in offering experience activities through intrapreneurship. The author proposes that the experience economy is quite related to
innovation. Finally, the paper considers the innovation system concept and a matrix is proposed to analyze the entrepreneurial dynamics in a region.

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  • The Experience Economy and the Innovation System

    1. 1. The experience economy and the innovation system. Entrepreneurial Dynamics in Provincial Towns Lucio Carlos Freire Regions: The Dilemmas of Integration and Competition 27th -29th May 2008 Prague, Czech Republic
    2. 2. Outline <ul><li>Experiential activities in the marketplace </li></ul><ul><li>Critics against the experience economy </li></ul><ul><ul><li>& more critics against provincial cities </li></ul></ul><ul><li>Experience economy and the basics of economics </li></ul><ul><li>The concept of the system of innovation related to the experience economy </li></ul><ul><li>Different scopes of public & private sector within the marketplace (products-services-experiences) </li></ul><ul><li>Suggested matrix to study entrepreneurship in different “economies” </li></ul><ul><li>Entrepreneurship and Intrapreneurship position </li></ul><ul><li>Conclusions </li></ul>
    3. 3. <ul><li>“ There are some sorts of industry, </li></ul><ul><li>even of the lowest kind, </li></ul><ul><li>which can be carried </li></ul><ul><li>on nowhere but in a great town” </li></ul><ul><li>Adam Smith (1776) </li></ul><ul><li>“ Could it be possible, </li></ul><ul><li>that one of the highest industries, </li></ul><ul><li>could be better carried </li></ul><ul><li>in a provincial town?” </li></ul><ul><li>Author (2008) </li></ul>
    4. 4. Source: Pine & Gilmore, 1999
    5. 5. The offerings coexist in the marketplace Source: Pine & Gilmore, 1999 Source: Author EXPERIENCES PRODUCTS SERVICES
    7. 7. the experience economy can help: <ul><li>Businesses : </li></ul><ul><ul><li>Realize there are marketable experiences </li></ul></ul><ul><ul><li>Experiences can be combined with products and services </li></ul></ul><ul><li>Local/Regional Governments : </li></ul><ul><ul><li>Retain population </li></ul></ul><ul><ul><li>Attract new citizens </li></ul></ul><ul><ul><li>Attract tourism income </li></ul></ul>
    8. 8. the experience economy can help: <ul><li>Businesses : </li></ul><ul><ul><li>Realize there are marketable experiences </li></ul></ul><ul><ul><li>Experiences can be combined with products and services </li></ul></ul><ul><li>Local/Regional Governments : </li></ul><ul><ul><li>Retain population </li></ul></ul><ul><ul><li>Attract new citizens </li></ul></ul><ul><ul><li>Attract tourism income </li></ul></ul>What about a provincial city?...
    9. 9. Current gurus say: <ul><li>Richard Florida : “Cool cities” = Creative people = Creative economy. Cool cities are always big size regions. (2002, 2005). Innovation is driven by megaregions, should not worry about small towns. (2007, 2008) </li></ul><ul><li>Joel Kotkin : Cities have to go beyond the “cool” thing. First make the economy work, the rest will follow afterwards. -- Let the markets work. (2004, 2008) </li></ul><ul><li>A city’s goal is to have a good infrastructure and good situation for industry. Small towns need to attact big firms in order to survive (2008 ) </li></ul><ul><li>Author agrees cultural and entertainment activities are important for citizens and tourism, but cities should not forget about key economic factors. </li></ul>
    10. 10. <ul><li>“ One important note: while the imperative for authenticity may dominate managerial attention, it is not an absolute. Companies such as (…) should not be focusing on rendering anything authentic or staging experiences when they are still flailing around for an effective supply chain, maintaining high cost structures, or providing lesser-quality products. Such companies should concentrate on the basics.” </li></ul><ul><li>(Gilmore and Pine, 2007 ) </li></ul>Gilmore and Pine, in the introduction of “Authenticity” (2007)
    11. 11. The concept of System of Innovation encloses: <ul><li>Institutions </li></ul><ul><ul><li>private one ( financial institutions, research centers, etc. ) </li></ul></ul><ul><ul><li>from the public sector ( laws, education- at 3 levels , infrastructure, etc. ) </li></ul></ul><ul><li>University: “antenna” & “ innovation hub ” (Youtie & Shapira, 2006) </li></ul><ul><li>Other government agencies </li></ul><ul><li>Customers </li></ul><ul><li>Producers constitute “a variety of actors reaching from small service producing firms, networks of firms, multinational corporations, urban planning authorities, civic organizations and fiery souls” </li></ul><ul><li>(Lorentzen 2007, 2008, referring to place bound experiences) </li></ul><ul><li>Note I use a generic SI, as the key to success can be local or international links. </li></ul>
    12. 13. Entrepreneurship Table: “under construction” Note: these types of ”economies” are not supposed to enclose the whole economy (past or current), only fractions of it .
    13. 14. Entrepreneurship-Intrapreneurship Matrix Corporate Social Responsibility (CSR), NGO’s continous projects, institutional entrepreneurs, community entrepreneurs, etc. corporate entrepreneurship, corporate venture, new businesses units, etc. intrapreneurs foundations, social entrepreneurs, creators of ngo's, etc. common firms, informal economy, illegal businesses, etc. entrepreneurs non-for profit for profit  
    14. 15. Conclusions <ul><li>Products, services and experiences coexist in the marketplace </li></ul><ul><li>Experience economy is a concept that can help businesses & governments </li></ul><ul><li>Always keep in mind the “city health” and/or the “basics of business” </li></ul><ul><li>With the experience economy, new actors and links can emerge in the system of innovation </li></ul><ul><li>The public sector can play an important role in the offering of experiences </li></ul><ul><li>Entrepreneurial characteristics, networks, etc. can vary in the experience economy when compared to other “economies” </li></ul><ul><li>Intrapreneurship from the public sector has a crucial role in the experience economy </li></ul>