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

Outline Experiential activities in the marketplace Critics against the experience economy & more critics against provincial cities Experience economy and the basics of economics The concept of the system of innovation related to the experience economy Different scopes of public & private sector within the marketplace (products-services-experiences) Suggested matrix to study entrepreneurship in different “economies” Entrepreneurship and Intrapreneurship position Conclusions

Experiential activities in the marketplace

Critics against the experience economy

& more critics against provincial cities

Experience economy and the basics of economics

The concept of the system of innovation related to the experience economy

Different scopes of public & private sector within the marketplace (products-services-experiences)

Suggested matrix to study entrepreneurship in different “economies”

Entrepreneurship and Intrapreneurship position

Conclusions

“ There are some sorts of industry, even of the lowest kind, which can be carried on nowhere but in a great town” Adam Smith (1776) “ Could it be possible, that one of the highest industries, could be better carried in a provincial town?” Author (2008)

“ There are some sorts of industry,

even of the lowest kind,

which can be carried

on nowhere but in a great town”

Adam Smith (1776)

“ Could it be possible,

that one of the highest industries,

could be better carried

in a provincial town?”

Author (2008)

Source: Pine & Gilmore, 1999

The offerings coexist in the marketplace Source: Pine & Gilmore, 1999 Source: Author EXPERIENCES PRODUCTS SERVICES

The marketplace EXPERIENCES PRODUCTS SERVICES

the experience economy can help: Businesses : Realize there are marketable experiences Experiences can be combined with products and services Local/Regional Governments : Retain population Attract new citizens Attract tourism income

Businesses :

Realize there are marketable experiences

Experiences can be combined with products and services

Local/Regional Governments :

Retain population

Attract new citizens

Attract tourism income

the experience economy can help: Businesses : Realize there are marketable experiences Experiences can be combined with products and services Local/Regional Governments : Retain population Attract new citizens Attract tourism income What about a provincial city?...

Businesses :

Realize there are marketable experiences

Experiences can be combined with products and services

Local/Regional Governments :

Retain population

Attract new citizens

Attract tourism income

Current gurus say: 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) 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) 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 ) Author agrees cultural and entertainment activities are important for citizens and tourism, but cities should not forget about key economic factors.

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)

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)

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 )

Author agrees cultural and entertainment activities are important for citizens and tourism, but cities should not forget about key economic factors.

“ 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.” (Gilmore and Pine, 2007 ) Gilmore and Pine, in the introduction of “Authenticity” (2007)

“ 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.”

(Gilmore and Pine, 2007 )

The concept of System of Innovation encloses: Institutions private one ( financial institutions, research centers, etc. ) from the public sector ( laws, education- at 3 levels , infrastructure, etc. ) University: “antenna” & “ innovation hub ” (Youtie & Shapira, 2006) Other government agencies Customers 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” (Lorentzen 2007, 2008, referring to place bound experiences) Note I use a generic SI, as the key to success can be local or international links.

Institutions

private one ( financial institutions, research centers, etc. )

from the public sector ( laws, education- at 3 levels , infrastructure, etc. )

University: “antenna” & “ innovation hub ” (Youtie & Shapira, 2006)

Other government agencies

Customers

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”

(Lorentzen 2007, 2008, referring to place bound experiences)

Note I use a generic SI, as the key to success can be local or international links.

Entrepreneurship Table: “under construction” Note: these types of ”economies” are not supposed to enclose the whole economy (past or current), only fractions of it .

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

Conclusions Products, services and experiences coexist in the marketplace Experience economy is a concept that can help businesses & governments Always keep in mind the “city health” and/or the “basics of business” With the experience economy, new actors and links can emerge in the system of innovation The public sector can play an important role in the offering of experiences Entrepreneurial characteristics, networks, etc. can vary in the experience economy when compared to other “economies” Intrapreneurship from the public sector has a crucial role in the experience economy

Products, services and experiences coexist in the marketplace

Experience economy is a concept that can help businesses & governments

Always keep in mind the “city health” and/or the “basics of business”

With the experience economy, new actors and links can emerge in the system of innovation

The public sector can play an important role in the offering of experiences

Entrepreneurial characteristics, networks, etc. can vary in the experience economy when compared to other “economies”

Intrapreneurship from the public sector has a crucial role in the experience economy