[+57] Creative Colombia (Disseration)


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An innovative platform to NURTURE & PROMOTE the design & crafts sectors of the creative industry in Colombia. A business strategy based on strengthening the connection between creators, producers and consumers.

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[+57] Creative Colombia (Disseration)

  1. 1. CREATIVE COLOMBIA / The Value Of MakingHow can Business Design drive innovation into the countries’ creative and productive force?Felipe GómezJozeph ForakisMaster in Business Design Academic Year 2010-2011Milan, October 15 2011
  2. 2. [+57] CREATIVE COLOMBIAAbstractColombia has become a new important economy in the modern world. This South American Country is thefourth biggest economy amongst the Latin Countries (after Brazil and Mexico and Argentina) and holds thethird biggest market segment in the region. But the business environment in the region is changing, thepopulation number is rising fast and their buying power is also increasing. In order to keep the pace with itsstrategic markets and become more competitive; Colombia will need to understand how to generate value outof its creative industries, they are becoming a key asset to compete strategically and build the strength for thedeveloped and developing regions in this modern economy. The different sectors that compose the NationalCreative Industries could lead the development process of the country and transform it from its current andtraditional efficiency-driven model to a more innovation-driven one.The Colombian Creative Industries have a skilled and resourceful workforce; of craftsman’s, designers, smallproducers and entrepreneurs that are having great ideas and projects but are not being able to communicatetheir value and introduce their products to the markets. The local and creative value is underappreciated withinthe global society; therefore, the former needs to be addressed with a solution that equips the creative andproductive community with tools and channels in order to communicate and explore the cultural andeconomical value of their creative makings.Consequently, this project will use the power of a collaborative brand “[+57]”, that will unify theColombian creators, producers, and businesses communities through an online Open-sourced Magazine &Store where the content is generated to draw interest about Local Creative Makings.This model is conceived as an evolution of what a creative MEDIA-driven business model is (like the OneMONOCLE MAGAZINE follows). It goes even further by being a protagonist in the creative and businesscommunity, that by discovering new talents and driving strategic design research and business modeling withthem to collaboratively conceive new product lines, services and business models.Finally, the solution model seeks to connect and support the community of creators, makers, and businesses, bydriving innovation through a series of online networking, educational and collaborative strategies, allowingthem to learn, share and participate through out the whole process of creation and innovation. 3
  3. 3. TABLE OF CONTENTSIntroductionChapter 1: Background. A global and local view of the creative industries. 1.1. The Creative Industries definition and their value for development. 1.1.a. Current business models for creative organizations. 1.2. The challenge for innovation in developing areas, an overview of the present situation. 1.3. Local Context. Colombian creative power and the situation for local innovation. 1.3.a. Colombia; Socio-Economical frame of reference 1.3.b. Innovation competitive outline of the country 1.3.c. The local creative industries definition 1.3.c.1. Being a Colombian Maker. The local crafts sectors case. 1.3.c.2. Being a Colombian Creator. Local design sectors case.Chapter 2: Problem Definition. The under appreciation of the local creative value. 2.1. Introduction 2.2. Defining the players: Creators, Makers and Consumers 2.3. Problem general Overview: The Under appreciation of the local creative value 2.3.a. Generalized fear to take risks, a problem for innovation. 2.3.b. Low exposure of the “Creators” and their creations. 2.3.c. Scarcity of support and lack of business planning. 2.3.c.1 WAYRA network case study 2.3.d. Absence of collaborative spirit amongst the players.Chapter 3: A Design-Driven approach to help local creative businesses. 3.1. Business Design as transformation leverage for the local creative and productive forces. 3.1.a. Slow food case study 3.2. What is business design? A new approach for businesses innovation process 3.3. The value of the local creative force and their makings 3.4. Story telling, expressing the value of local creative makings 3.4.a. WALLPAPER case study 3.5. Driving Innovation into the creative and productive sectors through design. 3.5.a. COMMON case studyChapter 4: Precedent Studies. Existing Models that support creative outcomes. 4.1. Creative-Led Publications; an inspirational source for design 4.1.a. MONOCLE MAGAZINE / Print and online Content; Driving innovation into creative communities. 4.2. Online Design; Online Design Shops and Project Promotion. 4.2.a. FAB.COM / E-retailing and reselling of creative products 4.2.b. ETSY.COM / Community Sourced Platform for Handmade Products 4.2.c. KICKSTARTER / Crowd-Funding Creative Enterprises 4.3 Creative Networking and Crowd Sourced Innovation 4.3.a NAPKIN LABS / Virtual collaboration tools for creativity. 4.3.b Open IDEO / Challenging the creative community. 4.4 The design Brief what a new business should offer to Colombian creativity. 4
  4. 4. [+57] CREATIVE COLOMBIAChapter 5: The project. [+57] A Local Resource For Creativity 5.1 Introduction to [+57] 5.1.a Brand Identity and values 5.1.b A link between the Creators and the Consumers 5.1.c [+57] An On-line Magazine and Store for creative content. 5.1.d [+57] A Resource for local innovation 5.2 The strategy; introducing innovation into the local creative process. 5.2.a Phase 1: Gather & inspire the local creative power with education 5.2.b Phase 2: Discover & Communicate the new creative talents 5.2.c Phase 3: Draw attention towards the creative people and their offers 5.2.d Phase 4: Drive innovation amongst the creative players 5.3 The scenario, how does it work? 5.3.a The Inspirational Creative Maker; the one with a developed product 5.3.b The Inspired New Talent; the one that is developing an idea 5.3.c The Industrial Partner Seeking Inspiration; those who need new ideas 5.4 The Business model, how do we make money? 5.4.a Business model Overview and Business Positioning Strategy 5.4.b Key Activities and Key Resources 5.4.c Key Partnerships 5.4.d Revenues & Costs 5.5 Scalability & future developments 5.6 Final ConclusionsBibliography 5
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  6. 6. [+57] CREATIVE COLOMBIAIntroduction.The creative industries, and the different sectors that compose them, have become one of the fastest growingsectors in today’s international economy. This Industries have teach us their economical importance indeveloped countires, like England , where it was proven that in the city of London, this activities generate moreeconomic value than the one that is being produced by its entire finacial sector. Now is time to understand howthe activities realted to these industries can generate value, and become a trasformation leverage, for developingcountries like Colombia. In order to become more competitive and keep the pace of todays world, thiscoountires will need to overcome their traditional economical models based on the efficiency of their industrialpower and move to an innovation driven economy.Colombia counts with a skilled and talented creative force, this community’s count with a high tradition incrafts and cultural activities that are being complemented by a resent proliferation of the design disciplines thathas been occurring during the last decade; a rise of creative force is happening together with the economicalgrowth of the country. This creative force is generating a broad number of products, services and business withhigh levels of innovation and quality. Never the less there is a general under-appreciation amongst the globalsociety of the value of these Colombian creative makings, that are not reaching the local or international goodsmarket as their creators expect them to. The main reason for this, is that even tough the creative communitycount with a high number of well developed product concepts, they are not being able to achieve the same levelof business conceptualization and planning to communicate and distribute this values. This thesis explores theway in witch business-design, business modeling and design-thinking methodologies can assist this communityto overcome this problem and set long lasting and profitable business around their creative activities.It is possible to observe how around the world new communication channels and distribution strategies arebeing set to manage the value of creative communities. These strategies are facilitating channels that allowcreative products and ideas to reach a large mass of consumers, thanks to the networking power of the Internet,social media and communications. Now, new business models are supporting the creative communities fromthe first stages of conceptualization, where virtual collaboration has enabled people to share knowledge in away that was never seen before; to the final stages of implementation where ecommerce platforms have set newretail and distribution strategies to support and argument the public awareness of creative enterprises. Duringthis project this companies will be studied in order to understand how their business models and strategiccomponents could be articulated in a way that suites better the Colombian creative communities.In the final section of this document, I will explain my solution. A business strategy that uses the power ofstory telling and todays WEB 2.0 functionalities; to manage and promote the local creative power and theircommunities. Hoping to gather the creative force on a single platform that will be able to support andempower them with the required tools to communicate and distribute their creations. After this strategy hasachieved to draw attention and rise public awareness towards the local creative and productive communities itwill go farther by facilitating collaboration and innovation dynamics that will allow them to keep generatingnew products, services and business ideas and introduce the in the local and international markets. 7
  7. 7. Chapter 1: Background.A global and local view of the creative industries. 8
  8. 8. [+57] CREATIVE COLOMBIA1.1 The Creative Industries definition and their value for development.In order for any country to keep up with today’s market and trading pace, it is necessary to understand theircreative value and work to make use of them as a main national asset. As it was stated by the OECDeconomies, the creative industries are one of the fastest growing sectors in today’s international development.They “have an expected compound annual growth of over 9%, generate 7% of the global GDP, employing onaverage 5% of the workforce and Representing 4% of the world trade” according to the United NationsConference on Trade and Development (United Nations , 2009)These industries are mainly conformed by different subsectors: Performing Arts, Arts, Television &Radio, Film & Video, Music, Publishing, Advertisement, Antique, Crafts, Design, Fashion and Software.Besides the definition of these types of industries have been sketched by some governments andorganizations and can change depending on the source. From the UK Government’s Department for Culture are: ‘Those industries which have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property.’ (Parrish, 2008) And, Defined by UNESCO as: ‘industries that combine the creation, production And commercialization of contents which are intangible and cultural in nature; these contents are typically protected by copyright and they can take the form of a good or a service.’ (Parrish, 2008)These industries vary in level, and because of their unclear definition it’s hard to understand how they areconformed and the true value that they could represent. Normally it’s difficult enough to understand thedifference between creative and cultural industries and what characterizes each of these. Therefore, in order todefine the types of categories in thesis industries it was useful to apply the economic model that was developedby Professor David Throsby to classify and describe the economic inter-dependencies between them. (TheWork Foundation, NESTA, 2007)His model describes concentric circles with the ‘cultural value of cultural goods’ being passed outside the coreto broader economic categories which further commercialized those cultural goods. In the center we can findthe Core Creative Fields with the expressive value of creation, where pure creative content is the outcome.This is the domain of the author, painter, filmmaker, dancer, composer, performer and software writer.Although the creator seeks an audience and market, their activity is the pure expression of personalized value inwhich both creator and users have a unique relationship from which both gain. It is the most intensely feltexperiential form of both delivering and consuming expressive value. It can be generated by the artist as sole 9
  9. 9. trader, as part of the content generation of a large company or via public support; in whatever structure specialcare has to be taken to ensure that that creator has the opportunity to experiment and constantly innovate.Because of being a personal expression in most cases it is hard to ensure the intellectual writes(rights?) andproperties at this level, but special care has to be taken to this issue at this or any other level where contentcreation of any of the creative Industries can be found. f The Econ Rest O omy The dustries & Act e In ivi ativ tie Cre s ral Industri ltu es Cu Core Creative Fields Possess a high degree of expressive value and generates commercial outputs. Small copyright protection. Ac Ex p f gh n o tiv ie ct io it re s i n t ss d u ri ive v o l v e m a s s re p ro o py outp nc Th u ts b a se d o eu o lt se ti a of e en M th e xp e ss an u p e r re s s i v e v a l u e i s e c t o r s lo it th fact fo r m a s xp e e uri n ce o f t h e s e d e ies n n xp res g and m a ustr sive s e r v i ce t fro d outp sectors bene ative in re uts gen erated b y the c 1.1 Image1: Creative Industries Classification (The Work Foundation, NESTA, 2007)At the next level we find the Cultural Industries - which focus primarily on the commercialization of pureexpressive value. Here we would find things such as music, television, radio, publishing, computer games andfilm in business and organization. These industries normally work according to a vertical integrated modelwhere everything is done inside the organization, like EMI Music, but lately is starting to give way to morenetworked forms of organization. In the UK television production is increasingly organized this way. Channel 4was founded on the basis that it would solely commission independent production companies to delivercontent. And during the last years with the power of crowd sourced initiatives this collective behavior has goneeven farther. Now the development of a videogame can be completely sourced by the crowd and thanks to thenew web-based technologies and how they have been empowering the use of the crowd, creative people aregetting more involved with the producers. But whatever organizational models it uses to gather the content; theheart of the business model is generating copyrightable acts of origination of expressive value representedunder an organizational model.The next circle refers to the focus of the Creative Industries, here activities like architecture, design, fashionand software based services are located. In this group the market offerings pass both an expressive andworkability value. They are composed of both an expressive and functional content, responding to the study orforecast on needs and demands based on the consumer. They represent a linking stage between the culturalindustries and the rest of the economy, and are now very closely related to the consumer driven ones such asmanufacturing and service providers. 10
  10. 10. [+57] CREATIVE COLOMBIAIt is then that the relation of this rich productive force with this project becomes visible and relevant, where theapplicability of business design and a design-driven holistic approach to generate outcomes of creativity andcultural relevance that can empower the conventional creative sector to make them market successful. Anyexpressive and valuable creative activity should embody the culture but it is useless if the products don’t countwith a sustainable development and support in the industrial fields it cannot succeed. Fashion products have tobe culturally in the vanguard but wearable and in pace with the contemporary and global manufacturing andretail directions.The application of creative and cultural values into the industries doesn’t stop at this kind of level. It’s reallyobvious how they have also been introduced and are present in The Rest of the Economy, the last sector ofthis model. And thats where the term, “creative business” becomes visible. It’s where creativity starts playingan important role in the innovative creation and organization of new business models that can influence therest of the economies. Be it the manufacturing, financial or service sectors that start gaining expressive valuethanks to promoting creative methodologies into their commercial activities. In this way, companies such asApple have been able to introduce creativity, not only in terms of technology and product, but also into itsretail and communication model. For example the Apple Stores have taken the company to a highercommercial level, thanks to creative outcomes and creative strategies its been possible for them to innovate inthe retail experience and now they are able to offer costumers creative value in all their activities, not just in afiscal way but each time in a virtual and long distance dimension.Even though these sectors have been of great benefit to mankind since its first cultural expression, theindustries of this nature where not defined as part of traditional economic models and sectors until lately. Theold models that where followed came from the industrial era, and worked, based on the productive levels, whatcould be achieved just by the transformation of work and matter in order to give them an extra value and makethem profitable. Based on those models, the only way for a country to achieve economic development was togo through an industrialization process to produce and gain enough infrastructure and capital to become awealthy country. These models are quite adverse to the realty of some undeveloped economies, such asColombia, that would by no chance be able to compete on a market set over those conditions and because ofthis reason are becoming more dysfunctional. Where productive monopoles are already established anddistributed amongst a few, the market for ideas and innovation rises as a new path to economic wealth andprogress and are driving the way in which things are happening.1.1.a Current business models for creative organizations.We should also understand the classification of the creative business based on their business model; in order tounderstand how is possible to generate value. A clear business model classification of the organizations thathave a creative value was made by the Center For The Creative Business (Centre For Creative Business,University Of the Arts of London). This categorization depends on the value preposition that the differentbusiness dealing with creativity offer make to the market and there are three basic ways to do this. The firsttype of model would be the Creative Product Driven Business, that are those firms that create a replicableproduct that can be protected by intellectual property. Normally this companies address their creation to final 11
  11. 11. consumers (B2C). For this enterprises intellectual property, creation of a brand and a well established instinctfor winning market products is the key. In this area we can find companies such as Zara, Ikea and Nespressothat drive their innovation strategy toward the development of creative products. 1.1.a Image1: Creative Business Model (The Work Foundation, NESTA, 2007)Then they are the Creative Process Business. These are mainly professional services enterprises that delivercreative services to clients. They are mainly business-to-business driven and need to develop strongrelationships and trust with their clients. Design driven consultancy agencies, like IDEO and innovation hubsare some examples of this nature. They use creativity to drive their clients initiatives into the market and makethem succeed.Finally there is the Media Based Business that uses recurrent media to deliver creative outcomes to acommunity of consumers or businesses that also work to keep them informed or entertain them. Driven by thenew possibilities that are available with new media and the internet this firms are able to distribute a large rangeof creative content being develop by their creative community really facts, and that the key for them. Newstartups such as KickStarter.com and Eatsy.com are based on this model.This three business model typologies, all are based on the commercialization of creative value. Be it on a skill,talent, process or organization of the creative force, its possible to generate value. Today we see a lot how bigcompanies are directly related to their creative preposition. Mapping this companies allows us see how having acreative business model and how they manage to create creative products, process and media, hybrids of thethree main models, and how they achieve to complement them to get a better market position, basingthemselves in their creative not only at one level but in a multiple way. 12
  12. 12. [+57] CREATIVE COLOMBIA Creative Product Business Creative Process Creative Media Business Business 1.1.a Image2: Creative Business Models In Todays Companies (positioning map).1.2 The challenge for innovation in developing areas, an overview of the present situation.Innovation climates in developing countries are, by nature, problematic, characterized by: poor business andgovernance conditions, low educational levels, and mediocre infrastructure. This makes clear how thoseenterprise wanting to innovate in this areas are in need of a package of support – technical, financial,commercial, legal, and so on. There is a need to think about innovative approaches adapted to the needs andpossibilities of developing countries. These economies are in need of technological innovation but also otherkinds of non-technological, such as organization innovation and creative innovation, in order to introduce newkinds of products and services in the markets that won’t required of big inversions but can produce new jobopportunities and benefit the local Communities.The creative sectors lack of innovation is produced by a series of weaknesses that are present at individual,organizational, social and governmental levels. The low technical and managerial capabilities of these regionsare the most visible obstacles for innovation to take place in these areas. There is also an absence of educationin the different social leaves. In the preindustrial sectors, where craftsmen and a big portion of the locale workforce is, education is in need of basic literacy and better implementation. In the industrial sectors, moreprofessional and medium-level skills are required. And in the post-industrial phase, where designers thatnormally have been educated in a university are, there is a need of entrepreneurship and leadership attitudesthat could lead initiatives to share more knowledge with the part of the population that is not having access toeducation, a more collaborative spirit.A week business environment also characterizes the innovation process in developing countries. Thebureaucratic climate and poor definition of intellectual property and creative markets, makes hard to 13
  13. 13. entrepreneurs to self-start their own business. For this the creators that want to start a new endeavor have toface a lot costs and waste of time.There is a lack in infrastructure and technological capabilities, and this problem is more visible for newbusinesses that don’t count with financial power or business planning. The access to new communicationchannels and low development of Internet business connectivity creates barriers to penetrate the market. Itstrue that the Internet has created a new era for the commercialization of ideas, goods and services, and if itcould be accessible to more people, they will find easer to promote their product and expand their reachablemarkets, this makes part of the lack of exposure that local “makers” and “creator” and their creations have andthat better explained in champed two.There is a little support in research and development for creators. They don’t have access to studies orknowledge that could support their work, something that is very important to innovate not only intechnological terms but also to know the market, trends, legal, etc. Also, Innovation systems are reallyfragmented, there is a high number of small-enterprises some of them operating in informality with a greatcapability to produce but they are completely disconnected from a small number of local and foraging-basedfirms that hold the main markets.In general, these areas are more efficiency driven and their implementation of innovation is in an early stage,but a maturing process has begun and it’s growing fast. Its amassing how globalization and the sharing ofinformation is making this areas develop, and to keep this going; it will be necessary to find solutions to theprevious problems in order to accelerate the innovation level of the countries that present this conditions, notonly in Colombia. The general conditions in a lot of these areas are becoming more positive; education isbecoming more accessible in this days, as well as technology. The new creative business models are giving newpossibilities to establish better collaboration and less vertical organizational models. But for developingeconomies to generate innovation new models with local identity and that are not just implementation of thoseexisting in developed countries need to be established. This new models will need to address the specific needsand the reality of this areas in order to developed their own innovation models, of course it should not beforgotten the rapid pace in with things are evolving in this areas and how already existing models that havedriven innovation in other countries can be used as inspiration for those that haven’t been able to do so.1.3 Local Context. Colombian creative power and the situation for local innovation.How innovation and creative industries are behaving as economic development accelerators in developed areascould also happen in developing economies if the correct direction is visualized and followed by the creativetalent that is emerging from those areas. But for this, a series of strategies should be developed in order tooverpass as much of the problem explained in the last section, that are characteristic of the creativedevelopment of a region. As a specific case study of how this could be proven, in a scenario of contemporaryeconomy, this project will be focalized in the South American Country of Colombia. This is a rising economywith a deep need to organize, develop and make value out its creative industries in order to continue itseconomic growth and become a sustainable economy. 14
  14. 14. [+57] CREATIVE COLOMBIA1.3.a Colombian socio-economical frame of refenceColombia is one of the richest countries is the region, South America. It has a total population of 53 millioninhabitants that makes it the third most populated country in Latin America, with really young population thatrepresents 62% of the country. This nation has been witnessing and experiencing an economic change and anindustrial development process, that has make possible a series of improvements in: quality of life,infrastructure, life stile and purchasing power (Departamento Nacional de Planeación, 2010)The country’s social fragmentation is critical, with an accumulation of richness between a few in a high levelclasses, that represent 3,1% of the population, a rising middle class that represents 33,4% and a majoritarianlow income population, 63.5% (Departamento Nacional de Planeación, 2010)As Raul Almeda Ospina defined in the article “The Socio Economic Pyramid in Colombia” (Ospina, 2007) thethree different classes are marked by a series of unique characteristic and are defined based on the purchasingpower and quality of life that locals have. Those on the top of the pyramid can make salary that goes over$3.000 USD. They own their own business and have high acquisition power. Normally consume importedgoods and poses a high education level, they studied at national private universities and some of them wentabroad to international institutions mainly in the United States and Europe, they speak English and in mostcases a third language. They are consumers of Internet and are used to buy online from international and localwebsites, they also download content from the web and are members of social networks.Then there is the people from the rising middle class, they are becoming each time more rich and numerous,whit a meddle salary that goes between the $1,500 USD and $3000 USD, salary that is normally produced bywork or owning a small enterprise. At this level we would find small producers, politicians, executives, teachersand other positions that require certain type of education, that they received from a national private or publicinstitutions, they normally have English as a second language. They are starting to have access to secondnecessity products such as cars and consumer technologies; in general they count with a relative good quality oflive. They have Internet access from their homes and participate in social networks also.Finally the majority of the population is considered to have a low-income level. They are the segment of thepopulation earning a salary below the $1.500USD. They are mainly employed by a company to do differenttypes of work or are really small producers working in informal markets. A small part of this group has accessto technical level education and a big part of it hasn’t even finished primary level education, they don’t speak asecond language. They just have access to fundamental products and posses a low access level to Internet ormedia based services with the exception of television and radio. Most of them are considered to live in extremepoverty and have acces to governmental subsidy plans.In terms of national trading on the last year there where estimated exports for $39 billion in 2010 and importsfor $41billion. The trading structure and positive economic growth of the country is very dependent on the bigamount of international investment done in the country that as a percentage of GDP was around 28% in mid- 15
  15. 15. 2011, higher than the numbers reported by Brazil and Chile during the same year. This has been possible afterthe normalization of the local political climate and governmental policies that has been happening during thelast decade, and thanks to a series of campaigns that where launched by the government and industrial sectorsto promote the reestablishment in the national territory of international companies working in the region andto win the trust of international investors. Its main commercial partner is the United States, representing about41% of exports and 27% of its imports. Being Colombia the third-largest export market for the United States inLatin America, behind Mexico and Brazil, there is a high consumption of imported goods. Its major exports arepetroleum, coffee, coal, nickel, cut flowers, and bananas, normally sold to the American and Europeancountries.In the last years Colombian government has also set a series of diplomatic endeavors to open new markets. Thelocal administration has concluded or is pursuing free trade agreements with the U.S., EU, Canada, Switzerland,Turkey, Panama, South Korea, and Japan in addition to its existing trade agreements with Mexico, Chile,Central America, the Andean Community of Nations, and Mercosur.1.3.b Innovation competitive outline of the country 1.2.2 Image1: Colombian Competitive mapping matrix ((World Economic Forum, 2010)Colombia stands out for a large-scale mismatch between the size of its economy and level of economicdevelopment, on the one hand, and on the other the low performance that it has in what has to do withinnovation, and markets developmentIn terms of size, Colombia is a relatively important new economy in the world. When ordering the countries ofLatin America, a region who’s market is considered as one of the most import rising markets of the last decade 16
  16. 16. [+57] CREATIVE COLOMBIAand one of the more active during the last years of economic recession. By the size of gross domestic product,Colombia is in fourth in the region, behind Brazil, Mexico and Argentina. In the classification the GlobalCompetitiveness Report (GCR) (World Economic Forum, 2010) published that and that classify the trade,social and technical characteristics of the majority of nations. Colombia is ranked as the country number 32 formarket size, between 139 tested in 2011, and in Latin America is only surpassed by Brazil and Mexico.However, in the Global Competitiveness Index Colombia ranks 68 and is the seventh country in Latin Americaafter Brazil, Chile, Mexico, Costa Rica, Panama and Uruguay. As for the efficiency of its goods market, thecountry is ranked 103. As for his technological readiness is number 63 and in innovation is in position 65among the 139 countries surveyed.This report uses the Michael Porter’s theory of stages (Porter, 1990), and situates Colombia as a efficiency-driven economy, meaning that it competes with its unskilled labour and natural resources as main assets. Thecompanies localized in these countries normally tend to compete on the basis of price and are characterized byhaving low productivity and innovation levels; caused by a lack of industrial, technologies advantages and anumerous but poorly educated working force. Colombia counts with a market that in terms of size is big butcounts with low efficiency levels of its goods and service markets. But by the other hand it has goodsophistication level of its business. The stability in the macro-economical environment also stable and countswith a healthy and young workforce that need more access to education and knowledge in order to be moreproductive and creative. In definition the country looks to be ready to start the transition stage from beingefficiency driven to innovation driven. For this it will need grow in terms of innovation and take advantage ofits big market size by applying new strategies that allows it to raise the not so good efficiency of its goodsmarket. Its typical to companies that operate in this economic transition to start innovating for the local marketas a reaction to the fact that the general purchasing power of the consumer rises and in this way it results muchmore difficult to compete as a producer on terms of price.Chile is a case of a country that because of the inversion done for research and investigation, and good marketconditions have started to be part of this transitional stage. It ranks 44 in the innovation indicator and 28 in theefficiency of its goods market.So innovation and market developing becomes a requirement for any economy to enter in an innovation-drivenstage, where some countries known for their creativity and innovation superiority as the United Kingdom andItaly are. At this point wages will have risen by so much that the local business will only be able to satisfystandard of living of the consumers only if their businesses are able to compete with new and unique products.At this stage, companies and organizations must compete by producing new and different goods using the mostsophisticated production processes, incubating innovation and collaborating with other key players to addressthe savage market. 17
  17. 17. 1.3.c the local creative industries definitionAs it was mentioned before, the development of innovation and of the goods and service markets is required.Parallel to this it was also pointed that the creative industries are a key driver of progress in developing areas.Reason way its important to understand how these industries operate in the local level and how they compereand develop amongst the global market for creativity. 1.3.c Image1: Contribution of the creative industries to the economy today.Creative business represent only the 2% of the countries GDP, a disappointing number if we cross thisinformation with the number of people being employed in this sector, that represents around 6% of thecountries total workforce (Revista Dinero, 2010). The situation is not positive, considering that some othercountries of the region, with similar development and cultural conditions as Chile and Peru count with moreproductive creative industries. The ideal situation would be something similar to what Peru has achieved, thisneighbor country has been able to generate more value out of this industries (4% of GDP) using just a smallpart of it work force 2,5%, as it was published by Keith Nurse, in her report about the “Creative sectors in theCaribbean Community” (Nurse, 2009).The development of this type of business inside innovation driven countries, such as the United Kingdom,Korea or Italy shows the relevant contribution done by a well-established creative industries to their economiesand their innovation models are showing a great performance. In the specific case of the United Kingdom, acountry known by its good design and crafts culture, the creative industries had reached a considerable level ofproductivity. Thanks to the support that these industries had been counting with for the last decade, they havebecome a pillar of the U.K economy, producing 7% of the country’s GDP and employing 5% of the country’sworkforce. These sectors have overpassed some of the most typical and traditional sector of English economy,as David parish quote form the 2003 Financial Times Newspaper: “the creative industries in London are nowmore important than financial services to the economy. Employment in the creative industries (includingfashion, software design, publishing, architecture and antique dealing) has topped 525,000 and is still rising,compared to a mere 322,000 and falling in financial services” (Parrish, 2008).This Makes obvious the need for the Colombian development, and transition towards an innovation driveneconomy, to take advantage of the high number of workers used by the creative sectors and start producing 18
  18. 18. [+57] CREATIVE COLOMBIAmore value out of it. How these industries sectors are contributing to the economy and how they are able toproduce and operate inside the markets must be understood in order to accelerate the local development ofcreative value.The lack of conscience about the relevance of defining and promoting the local creative industries by thegovernment and industry is proven by the absence of actualized data and indicators about the performance anddistribution of the creative sectors in the country. Some international institutions have been collecting dataabout this topic for the benefit of the inversion coming from private and public enterprises from their nationsbeen done in Colombia. Based in the studies done by the British Council, in Colombia the subsectors that havea bigger number of enterprises conforming the creative industries go like this: Crafts (35.5%), Fashion Design(21,44%), Editorial y Publishing (6,38%), Advertisement (5,79%), Architecture (4.82%). Then the subsectors ofInterface & Software Design, Graphic Design, Industrial Design, Textile Design, Antique, Film & Movies,Radio & Television, photography and music, are small players with less than a 4%. (Docherty, Shackleto, &Morales, 2008) ) 4% . Cr (30 Fashion (21%) aft rs s (3 Othe Interface Design (3,9%) 6%) Graphic Design (3,8%) Industrial Design (3,4%) Textil Design (1,5%) Others: ,Advertisement (5,79%), Architecture (4.82%). Editorial y Publishing (6,38%) - Antique, Film & Movies, Radio & Television, photography music (less than 4%.) De sig n (∑ 3 3,6 %) 1.3.c Image1: The creative industries distribution by number of business per sector (Docherty, Shackleto, & Morales, 2008)So the local creative industries are manly composed by the crafts sector, what is a consequence of the high localcultural tradition in this kind of skilled and talent driven activities. Different kinds of business are seated aroundthe local artisanal work. It goes from the individual reproduction of a local technic, the reproduction of aproduct with cultural DNA or it become more sophisticated as an specialized retail surface for this type ofcreations, like the one promoted by the organization “ARTESANIAS DE COLOMBIA” that runs a series ofstores to commercialize the local craftsmen productions.Then the country’s creative industries are going through an expansion of its design related industries, lead byfashion. Together all the design disciplines (Fashion Design, Graphic Design, Interface & Software Design,Industrial Design and Textile design) represent 33.6% of the creative industries, similar to the Crafts sector.Together they represent a 69.5% o the creative industries. 19
  19. 19. 1.3.c.1 Being a colombian Maker. The local crafts sectors case.Making is something that we can all do, but when making becomes part of the local identity like in the case oftraditional crafting, the outcome counts with a great cultural and expressive value that on this days have startedto be more present in the mind of the consumer. The use of natural resources that these types of creatorsmanage also becomes really attractive for the present markets. The quality of handmade is something that thesecommunities dominate. During years the local craftsmen force has become of making a critical aspect forsurviving, and they have achieved a developed skill to produce objects that are very rich in esthetics, materialsand meaning. With a high capacity to adept their development process to a surroundings environment and alimited access to technology and information.The definition use by the National Government or this discipline is: “Crafts is the creative production ofobjects made predominantly manually with the use of simple tools and machines with an individual outcome,determined by the environment and historical development” (Artesanias De Colombia).In Colombia the craft sector is the productive force, composed of people and their capacity for knowledge andtechnology, in which the craft is generated within a geographical, historical, social and cultural development.This productive force is not all of the same kind and can be classified based on criteria such as education,geographical origin, cultural identity and type of trade practiced. Lets start from those coming from the mostrural parts of the country to the more urban ones.With the implementation of low technology and industrialization processes in the typical sectors and theestablishment of making technics from outsized the country, making has become one of the main resources forproducing wealth and involves a big part of the local workforce, from the majority of the population that arethe poorest; those who live in the jungle and those who live in the big cities. A classification of the differentproductive characters that make part of this productive and craft based force; was done in the month of August(2011), in an observation process and analysis done together with the designer Cecilia Arango (Arango, 2011),who is an expert in local . The following are the description of them and their main characteristics from themore rural to the more urban ones:The IndigenesThis kind of creator is who lives and produces his creations inside an indigenous Community. In Colombia,these cultural groups are numerous and each of them is really linked to the surrounding context of theircommunity. The transformation of natural resources into functional objects makes part of the close bond thatthese people have with nature, and the domain of certain technic (like basketry) is more than a trade activity buta cultural and social custom. Because of this, this specific type of makers are really devoted to their hand-madeproduction process, “they count with the patience that characterises those who live surrounded by nature andwhere rise away from the perversions of civilization”. (Arango, 2011)The problem of working with The Indigenas is that due to their in-land and remote location it is hard to establisha stabile commerce relationship between them and the main cities where the markets are concentrated. Thisgroups don’t count with any technical education so all what is expected should be communicated in an oral or 20
  20. 20. [+57] CREATIVE COLOMBIAgraphic way, but of course that the complexity of a technical drawing wouldn’t be understood by them in caseof outsource of collaboration.1.3.c.1 Image1: Indigena Maker - Name: Sirahi Paniza /Age: 42 /From: Kuna People, Golfo de Uraba /Education Level: Primary School / Technics: Molas & Textile based CraftsThe CampesinosThey are not part of an ethnic group but still live in remote and in-land locations. Normally they use crafts as aparallel activity to their agricultural labours. They live in more modern and big communities, small towns orvillages. They are used to trade with more populated urban areas transporting their products to offer them intrade and make money out of their production.1.3.c.1 Image2: Campesino Maker - Name: Ramiro Bautista /Age: 49 / From: Guacamays, Boyaca /Education Level: No Formal Education / Technics: Fique (Basket Weaving)Urban EmigrantThese types of makers are from the same origin as the Compassions. The main difference is that because oflocal conditions (as violence or lack of opportunities), they where forced to move into mayor urban areas. Theylearned their talents where they where born, and now in the city use them to generate an economic income.They work for formal manufacturers and some times have their own workshops where they work for designersor final costumers. 21
  21. 21. Gypsies & HippiesThey were born in urban or rural areas, but have no craft tradition in their family or community. Normally, theyare travellers who operate in an informal commerce, going from town to town looking for fairs or local marketswhere to sell their production. They are innovators, in the way that they normally use traditional crafts technicsas seed craving (Tagua) or bags knitting, to produce new products that combine those technics with new shapesand colours in order to make them more appellant to the urban market.They are not as detailed with their technics, its more about being free and making money out of a personalexpression for them. Contacting them and controlling the production that they do is easer than with ruralcraftsmen. Normally their products involve low cost material as natural fibbers, seeds and cheap metals and thelabour cost they charge is also low. 1.3.c.1 Image 4: Gyssies & Hippies - Name: Camila Toro / Age: 23 / From: Tunja, Boyacá. / / Education Level: High School Drop Out/ Technics: Leather work, weaving and others.Urban CreatorsUrban creators come from metropolitan areas, and it was there where they were instructed in the labour theyrealize. Their knowledge was acquired by one of three different ways: Learning by doing, knowledge transferform a more experienced craftsman or from formal technical education institution. There education level, beingthe more advanced between craftsmen, allows them to follow a higher degree of specification, and theprocesses they use are normally more technology based than those used by the other types of craftsmen. Theyalso tend to charge more for their work. They work for small, medium and large manufacturers and are willing 22
  22. 22. [+57] CREATIVE COLOMBIAto work for designers and final costumers if they count with an own workshop and if the clients are capable ofpaying what they demand. `1.3.c.1 Image 5: Urban Creators - Name: Segundo Morales / Age: 48 / From: Bogota, Cundinamarca. /Education Level: Technical Degree / Technics: Leather Work, Shoemaking1.3.c.2 Being a colombian Creartor. Local design sectors case.Design culture in Colombia is just becoming relevant. This discipline is relatively new and still hasn’t penetratedin the Colombian cultural DNA. The first design practice done in Colombia were done by a few industrial andgraphic designers that were educated in international schools and then came back to start their own companiesmainly in the furniture, graphic and editorial sectors. A few designers in the sector had become recognizedfigures in the local design world, and have been able to reach international markets by developing high qualityproducts thanks to the good adaptation of productive technics and a descent product development that allowsthem to offer a good quality product to the international market. A company such as SERIES, created by theindustrial designer Mauricio Olarte, has been present in the local furniture design business from around twodecades and had been able to introduce their products to international markets, like the United States, Europeand Middle East.Fashion is the most advanced design discipline in the country. It represents 21% of the creative companies ofthe country and produces around 2% of the country’s GDP. Then there are also other sector with activities thatrelate to design such as: Industrial design, web an software design, interior design, graphic design, textile design,interaction and experience design and branding.The first characteristic of the companies in the national design industries is that they are normally small andnew companies. They are small enterprises run by a single individual or a small group of people. In the fashionindustry 90% of the business are constitute by single owners, in industrial design business 76% of them areconstituted in the same way and 18% are constituted as a commercial corporations. In the graphic design areathe number of commercial societies is higher, 47% of them follow this characteristic and a single individualowns 51%. The majority of companies that were studied by the British council (Parrish, 2008), with the 23
  23. 23. exception of the graphic sector that is more established with companies that had been functioning for morethat 5, the companies in the rest of the design sector are mainly early stage startups with no more than 1 year inthe market, In the same way most of this enterprises are characterized by their low value, their assets andliabilities are not superior to $10.000 US.In general the design driven business are mainly focused on the product they offer, little consulting is done forthose that are starting projects that count with poor support tools to develop their products for the business orconsumer market. In the same way that we were describing the creative business models based on the valuepreposition that they offer to the market we could do the same analysis for the local design drivenorganizations of the country: Creative Product Business CECILIA ARANGO Creative Media Creative Process Business Business 1.3.c.2 Image1: Creative Business Models In Todays Colombian Companies (positioning map). 24
  24. 24. [+57] CREATIVE COLOMBIAChapter 2: Defining the problem.The under-appriciation of the local creative value. 25
  25. 25. 2.1 Introduction to the problem.First we explored the creative industries and what have made of them an important force for todays economicgrowth of developed economies and how they can signify transformation leverage for developing countries.Their capacity to generate economic and cultural value and their ability to drive innovation and generate asignificant amount of jobs are; just some of the evidences, that more cultural developed economies like theUnited States and the United Kingdom have taught us. We explored the subsector of this industries and classifythem, understanding that they are not just cultural industries but because they also deliver an expressive andfunctionality value, responding to the study or forecast on needs and demands based on the consumer, theyrepresent a perfect breach between the market, defined in a cultural context, and the traditional industries thatoperate in the middle of this same context .Subsequently we explored the problem of innovation in developing areas, a series of complications that areslowing down the maturation process of this type of industries in regions that are not able to link innovationand industry. What took us to a specific case study, Colombia.We sketched this Latin American countries’ socio-economical context, and were able to draw a competitivenessmap of it, understanding that innovation should be the solution to overcome a series of problems that areaffecting the countries’ development process. It was patterned a low efficiency of its cultural industriesgrounded on the little economic contribution they do to the countries’ productive indicators and the highamount of workforce that they employ. Going then deeply into their productivity data to understand what arethe key sectors to propose any transformational strategy; getting to the conclusion that there is a big tradition inthe crafts disciplines that are normally composed by a poor but numerous and talented human resource, theproductive force. And a rice of the design related disciplines, which are not well articulated with the traditionalindustries.At this point the problem is to general; it will be needed to understand in a systemic approach how the playersare being defined and how they interact amongst themselves and with the reachable consumers. Why are thedesigners not being involved in the productive sectors of the country? Way the traditional industries andinstitutions are not reaching the expected innovation levels and why their goods markets efficiency is so bad?Can the efficiency-driven model that characterizes the country’s economy be transformed into an innovation-driven model with designers as leaders of this transformation? This are just some of the questions left after theobservation done during chapter ones, here we will try to spot the problem inside the two sectors and theconsumers complex ecosystem, going to lower level to understand possible approaches that could give theanswers to this questions.2.2 Defining the players: Creators, Makers and ConsumersThree different types of clusters compose the normal system in which new creative outcomes are conceived:the consumers, the creators and the makers. The three of them are interconnected during different steps ofthe creative process: create, produce and commercialize. 26
  26. 26. [+57] CREATIVE COLOMBIAThe first group, The Consumers, is composed by the community of people that are interested in buyingartifacts, goods or services with a creative component. They are driven by a necessity or desire that influencesthem to acquire creative content with an intangible and emotional value. The market for these creativeoutcomes can be found in a local or international frame, each of under specific circumstances. This people arelooking for expressive content, goods and services; to please their necessities of differentiation and self-fulfillment. With new media, Internet, social networks and new technologies the access to creative content hasbecome easer for this people. Now they have access too much more information about what they consume,information that talks to them in a personal way in order to influence its decision making process. Now itseaser for them to find new ideas and have access to them, internet retailing, blogs and a complete new series ofchannels being use by this crowd to spot newness .Then there are the Creators; those eclectic people capable of creating innovative ideas using a design-drivenapproach to problem solving are the ones in this group. They are the ones who feed the system with non-conventional problems, spot opportunities, and find directions and solutions. Being a “Creator” demands aholistic approach to problem solving and a non-linear way of thinking, in order to find innovative ideas. In this group we find two different types of subjects: the “Designers and the Amateurs”. In the designers cluster we find leading designers, people with certain level of experience in the design industry and who have been able to introduce their product to local or international consumer driven markets in a successful way and/or have been able to work for international brands, as the fashion designer Silvia Tcherassi1(see 2.2 Image:1), who’s name is known in the fashion world at an international level, being part of the international runways in Milan, N.Y, and Paris and who’s design has reached international apparel manufacturers as PAYLESS SHOWSOURCE2.2 Image1: Colombian Fashion During the development of previous projects they have been able to explore theDesigner , Silvia Tcherassi, forPayless Shoesource markets and along the way have established different kinds of relations with the manufacturing and services sectors (the makers). Next. there is the other kind of designers; the “New Designers”. They are new in the industry, with a resent degree in a design related discipline, they are seeking ways to gain exposure amongst the consumers and learn how to deal and create business relations with providers and manufacturers, but because of the their lack of experience and contacts they are struggling to launch their professional carriers and scale their ideas. The case of the local design studio DosUno, with base in Bogota, leaded by the 29 years old Israeli Assaf Waxter, who moved to Colombia in 2009 after 2.2 Image 2: Industrial Designer associating with the Colombian designer and industrial engineer Pablo Fog. Assaf Waxter from DOSUNO Together they have conformed a multidisciplinary tam to develop locally DESIGN STUDIO1. See more about the Colombian fashion designer Silvia Tcherassi at: http://www.silviatcherassi.com/enter.html 27
  27. 27. produced products with a high content of innovation and awareness about sustainability, one of their mainphilosophical drivers. Now they are trying to get in the market by introducing their products in small shops andfinding promotion of local media and magazines. Parallel to this they participate in local and internationaldesign competitions to sustain themselves. They are also interested in promoting their creations in internationalmarkets, but they don’t count with the distributional channels to promote the products outside. Recently thepossibility of going into distributions design networks as KICKSTARTER and ETSY was discussed with them.This discussion took place during the interview (Fog, 2011) to discuses their strategies; they were reallyinterested but new little about these support systems and how they work, but after explaining them thediscussion led us to the conclusion that introducing the products in this channels would be possible but it iscomplicated since they normally don’t connect their money manage system with Colombian bank accounts,requiring them to not only solve logistic problems of distributing to international clients but also how tomanage payments from the Country from where this networks operate.Then the “Amateurs”; are the people that by trade or hobby had become honorary members of the “Creators”cluster. People who during their work as craftsmen or manufacturers had achieved innovation by applying aseries of design-driven processes to their productive systems. For example the case of a carpenter who hasachieved a high level of innovation by developing a costume made series of tools, or found the way to apply anew material in order to generate a unique and innovative product. In both cases they are people with a skill tomanage and drive creative process during their work, even though if its on an unconscious way, and areconstantly seeking to come out with new creations and not limit themselves to the reproduction of a talent, skillor process. This seeking for “new stuff” allows them to identify and solve problems in such way that theircreations can be considered as innovative achievements.Finally the Makers; composed mainly by small and medium sized enterprises from the commercial,manufacturers and craftsmen industries. Are those who had established a productive system, based on an old(thread and needle) or new (3D printing station) technology to transform materials or work into goods andservices? Their value is generated by re reproduction of a certain talent, a skill or technic to produce big orsmall series of certain product. Here we would find the local artisans, small and medium size enterprises fromthe productive and manufacturing industries. Makers can be innovation-driven manufacturers or efficiencydriven. 2.2 Image 3: Industrial The Players Definition; Consumers, Creators, Makers 28
  28. 28. [+57] CREATIVE COLOMBIA2.3 Problem Overview. The under appreciation of the local creative value.There is a collective ignorance in the country about what its creative value can offer. The country ignores howdesign, creativity and innovation can become transformation drivers for the country’s economy and how can itsignify a leverage of change for local industries. As it was mentioned before, the value of creativity is of greatimportance for the development and introduction of innovation amongst creative and productive processes.Unfortunately in Colombia the innovation performance of these industries is not positive and new strategieshave to be conceived if it wants to stop being behind the main region competitors, such as Peru and Chile, thatin terms of value, achieve to generate much more out of their practice of creativity; reflected by thecontribution that their creative industries do to their GDP and how much jobs they offer amongst the localworkforce (see 1.3.c Image 1).There is a significant amount of people being employed by the creative industries, but they are not being able togenerate the enough value out of their creations, lacking the opportunity to introduce their creations as winningproducts on the market. This problems comes from a series of factors: a) Generalized fear to take risks, a problem for innovation. b) Low exposure of the “Creators” and their creations. c) Scarcity of support and lack of business planning amongst entrepreneurs. d) Lack of collaborative spirit amongst the players.2.3.a. Generalized fear to take risks, a problem for innovation.According to Tim Brown, founder of IDEO and one of the world’s foremost proponents of design thinking,there exist two main obstacles in the path of every disruptive idea: “Gaining acceptance in one’s ownorganization and getting it out into the world… More good ideas die because they fail to navigate thetreacherous waters of the organization where they originate than because the market rejects them. Any complexorganization must balance numerous competing interests, and new ideas… If it is truly innovative, it challengesthe status quo. Considering all of these potential obstacles, it is a wonder that new ideas make through at all”(Brown, 2009).And the case amongst the local manufacturers and organizations in the local context is exactly that they resistto aloud innovation into their productive structures. As it was mentioned in chapter one, the innovation levelof the local manufacturing industries is not good. In general terms producers, most of them small and mediumones, still believe that their productive systems should be based on the efficiency of their processes and directedto set their competitive strategies so they can compete in the arena of price, and quantity; a typical behavior indeveloping economies. As a result to this; they are resisting to involve designers that at the end are the key forinnovation, into their productive systems.The relationship between the design and manufacturer sector is fragmented because of this generalized fear.Characterized by a few amount of opportunities for new designers to get a job at their companies. Not onlythere are little chances for designers to get a job, but also for those who find one will have to work under reallybad salaries and working conditions that will kill their creativity. The industrial designer Cesar Augusto 29
  29. 29. Zambrano who is a local teacher at Universidad Nacional De Colombia and an important opinion voice forethe national design industry, during the interview done for this project expressed: “During a series ofinvestigations I was able to figure out that in average, a Colombian designer gets pay something between 70%and 80% of what any other average professional, like an engineer or a lawyer is getting paid” (Zambrano,About work conditions for Colombian designers, 2011). Also by crossing information found on ones ofZambrano’s economic reports about the national design sectors (Zambrano, How much designers make incolombia, 2010), that stated an average salary of $12.000 US per year for a new designer, that then comperedwith the data published in the Survey of Design Salaries 2011 (AIGA, 2011), saying that the same kind ofdesigner gets an average of $40.000 US in the United Stated, clearly pictures with numbers how the localindustry underestimates the value of local designers.There for those who accept this poor salary conditions, comes the other problem. The manufacturingindustries, mainly those of small or medium size, prefer to copy design coming for other countries, mainly theUnited States and Europe, than developing new products. The normal behavior in the fashion and furnitureindustries is to find nice and trendy American or European design in magazine and internet and adapt it to thecapabilities of their industries, then sell it as their own creation to local markets or what is worst as imitationsbranded with the name of the original international brand. This is making designers to get demotivated, theylike to create not to copy, and because of this lack of creative motivation they won’t stay for long working for asame company , what at the end will affects the innovation process of the company by not allowing them toestablish a lasting design team able to generate a corporate design identity.But the fact is that with the development process that the country has been going through, the opportunitiesfor those who won’t take the risk and innovate are becoming rare. The economic development in the country ischaracterized by a general rise of wages, there is now access for the masses to acquire better and less basicproducts that the ones they could afford before, but most of what they are consuming at the moment areimported goods brought to overfill the local demand and lack of “Colombian Made” products to consume.This situation has brought out the need for producers to develop new strategies that will allow them to comeout with new and better products to satisfy and address this new demand being able to compete withinternational brands established in the local market. A dark future waits for those who won’t accept to take thisinnovation challenge.Some few examples of good practice of innovation and how this can make the local design industries moresustainable in the actual markets are present in some of the leading design-driven companies of the country,that demonstrate the benefits of overpassing this fear to change. One of them is the case ofMANUFACTURAS MUÑOZ2 (MUMA), a local furniture producer with more than 40 year in the market.They are the only company in the country that has ever been awarded with the REDDOT DESIGN AWARD- with their Menta chair (MUMA, 2011). The company has been a pioneer in innovation and has always beenin the hart of the local design industry, since it developed the first chair in polypropylene - the Mariposa chair,until now. Thanks to its philosophy that establishes design as a key wining strategy for their commercialactivities, they are always working in how to apply last generation materials and 100% Colombian creativity,2. See more about MANUFACTURAS MUÑOS at: http://www.muma.co/ 30
  30. 30. [+57] CREATIVE COLOMBIAcoming out of its designers team, merging them together to generate an innovative product that is connected toglobal and local trends and will allow them to reach the top of the local market and be known for its quality andfair price amongst international buyers.Cases as the one of MANUFACTURAS MUÑOS are strange amongst local manufacturers, innovation hasstarted to show its advantages in some of the leading and big companies but is not the case amongst the smalland medium size ones, those who don’t count with this creative conciseness and are not willing to take the riskand innovate because they think that creating new thing is expensive and that those creative people don’t knowenough about the market to assure the success, and that doing it would take a lot of resources that are alreadyassigned. And in fact it is expensive if we understand the limited economic capacity of this companies, in mostcases they don’t count with the available money to hire good designers, something that is evident in the lackoffers available for designers, that are supposed to be innovation drivers, to work in national industries.2.3.b. Low exposure of the “Creators” and their creations.The “creators” and small “makers” are lacking access to potential markets. The majority of them will say thatthis is because they don’t count with the means to run expensive communication campaigns or set themselvesin stores in the main commercial spots of the city, but the problem is more complex than that.The main problem is that the small enterprises started by “creators” and “makers” normally don’t have theaccess to physical or virtual channels to reach clients. This narrows the offer amongst the market that in settledaround the geographic location of the company. Most of this business are unique placed, the majority countingonly with a workshop or home business as their unique commercial establishment, some few with a store thatrepresents big part of their overhear expenses and that in most case are not able to support due to high price ofcommercial establishment in the country. As the studies done by the British Council to define the typology oflocation in which the creative companies in the city of Bogota operate revels; In the crafts sectors, 93.9% countonly with one commercial establishment and just 6,1% have multiple selling points, 9% of them work and dobusiness from their place of residence. In the industrial design sector, almost all of the business 98% countswith one single commercial establishment and just 2% have multiple selling points and 11% of them work anddo business from their place of residence. In the fashion business a total of 100% are unique locations and 30%of them wok in their residence place. And similar with graphic design business were 92% of them count withjus one commercial point, from which 22,6% are established in the same place were the owner lives (Parrish,2008).This looks like a strong explanation of why the creations are not reaching the markets, they have centralizedpositions with low ace to potential buyers. Obviously this not the only reason found along this investigation,and maybe if would have been during a market analysis done before the Internet boom that characterized ourcontemporary lifestyles. Its obvious that the only way that a producers can set distribution channels is not byhaving a store, they could establish commercial relationships with retails or apply new media based channels asInternet and Social Networks, those that have been changing the ways consumers use to purchase newproducts and have been making things easer for the producer not only to promote themselves but also togiving them that chance to complete a commercial transaction in a virtual way. 31
  31. 31. This web-solution looks really convenient for small producers, the Internet has become an ideal channel toreach clients located far from the location of the businesses. But in the local context the situation is far away ofbeing like this, a restricted access of business to these technologies is reducing their possibilities to access thisweb market. On average of 100 companies dedicated to the craft production and commercialization only 6 ofthem have a computer in their working place and just two of them count with access to internet. Of course isbecause a lot of them are located in rural areas of the country that don’t count with the communicationinfrastructure and the money to afford acceptable level of connectivity. In the design related sectors thesituation is less dramatic but stills bad, on average every company has three computers and one of each two hascomputers is alto 6 for each 100 and just 4 of them are connected to Internet.To generate new organizational models and communication strategies to scale the size of their ideas in themarket, with limited economical resources, is the challenge. The ideas are good but need more than FacebookFront Pages and fans lists to make themselves popular. The creative forces of the country are in need offiguring out better ways to communicate the story of their creations to the public and set the proper channelsthat could aloud them to deliver this message to a wider group of people. The technological barrier has to beoverpass and new field need to be explore.2.3.c Scarcity of support and lack of business planning amongst entrepreneurs.The slight job opportunities available in the market for designers and the bad conditions, under which thosethat found one have to work, is creating a big entrepreneur wave to rice amongst the young creators. A seriesof multidisciplinary design studios like DOSUNO DESIGN3 and IONN GROUP4 are beginning to befounded by young designer that because of the lack of opportunities in the job market decided to go solo,create a multidisciplinary work team and start looking for new clients, inspired by the design-thinkingphilosophy, something that is not easy to introduce to the market more if the possible clients in the industry arenot open to introduce innovation to their companies as it was mentioned before. For this reason the youngstudios are struggling to find adequate revenue streams. The independent designers and design studios arebeing forced to lead and develop their own ideas, something that requires money and time they don’t countwith. Since the financial and legal support available in local backs, companies, private and public institutions arenot normally available they are drifting.The support networks available for these start-ups or early stage-business are rare. There is a lot of internationalinvestment going on in the country as well as local investment done by the private sectors of the industry butnone of them is getting to the designers, it goes to the industry, an industry that is not welling to involve design.This kind of funding is also distributed by a series of venture capitalist and business angels in the region, butthey normally assign these funds strictly to some specific industries such as telecommunications, software andpharmaceutics and more advanced ventures. Like the Spanish telecom company TELEFONICA, that justlaunched WAYRA5, a private initiative that promotes local technological development in the areas of mobile orweb communications that could represent them a benefit for their own establishment in the local market.3. To see more about DOSUNO DESIGN go to: http://www.dosunodesign.com4. To see more about IONN GRUPO CREATIVO go to: (http://www.ionngroup.com)5. See (2.3.c.1) WAYRA case study. 32
  32. 32. [+57] CREATIVE COLOMBIAA weak establishment of copyright laws and the lack of incentives and governmental funds directed to thecreation of this kind of start-ups, shows that the problem is not only at a industrial or organizational level butalso in a more macro way, national support for this creative initiatives is also needed. The government hasexpressed the necessity to promote innovation and entrepreneurship and is working to define the game rulesfor this challenge. There has been some initiatives like the one achieved by creating the law 1014 on 2006(Universidad Autonoma De Occidente, 2007), for the establishment of a entrepreneur culture as they call it, and thecreation of Ley Lleras (Reyes, 2011) (being studied by congress at this moment for its approval) that seeks todefend the copyrights of content, creators and creative works. These initiatives are creating the legal bases for anew beginning. But the truth is that the applications of these laws that seek to promote and protect the creationof new business and the introduction of creative minds in the traditional ones is far away of the country’s reality,now there has to be a creative boom able to build over this the new national reality.But limited financial, strategic and legal support are just the external problems making more difficult to new“Creators” and “Makers” with innovative ideas to prosper. There is an internal reason inside their own way ofplanning and executing their ventures that needs to be solved before any external intervention can generate apositive and disruptive impact.They are lacking a winning strategy to fulfill their purposes, or as Alexander Osterwalder defined in his bookBusiness Model Generation, they are lacking a business model: “ the rationale of how an organization creates,delivers, and captures value” (Oswalder). Since the first problem that was mentioned in this section, the lack ofgeneralized fear amongst the industries and productive sectors to take risks can be explained in the reducedcapacity of “creators” to define a clear value preposition and use it to build strong customer relations. And thesecond problem spotted shows this as well, the lack of exposure that new “Creators” and small “Makers” aregoing through, can be reduced to the lack of having defined the proper communication channels to address apoorly defined customer segments.In general it could be said that the creative and productive main forces of the country lack education in how toset their business going and the tools that exists for this matter. An important figure reveled inside the studydone by the British Council amongst the Colombian creative industries (Docherty, Shackleto, & Morales,2008) shows for example that in the crafts sector only 36,2% of the business count with a updated and properbalance sheet of their activities and 26% of them don’t have any financial record of their businesses. In thedesign related industries the situation is slightly better; in the fashion sector only 27.5% have a balance sheet, inthe graphic design and industrial design sectors, they area a little more aware about this issue, maybe because ofits personal counts with a better level of education, but still only 58% and 51% respectively have balance sheets.What gives us a picture of the poor business planning that is going on here.Related to this business planning lack it becomes interesting that fact that in The Global CompetitivenessReport 2010–2011 (World Economic Forum, 2010), Colombia business sophistications is mentioned to beone of the competitive advantages of the country but this is not the case of the creative industries. Why is this?The only reason that comes to my mind is the same that is being argued here and its that in general the creativesectors of the country are badly supported and poorly educated in business terms, it would be much more easerif the creative and productive new enterprises counted with the same level of strategic and business support 33
  33. 33. that telecommunications start-ups are counting with. They are in need of business planning and if they can’tafford to outsource this job they will need to be instructed and supported by those who know how, and arecreating “sophisticated business” as the world economy forum said, in order to do it by themselves.2.3.c.1 WAYRA case study Wayra is a private initiative made by Telefonica, a Spanish telecom company that operates in Colombia. Its objective is to promote technological startups in the Latin American Region.Thanks to the high entrepreneurship environment that they were able to spot during their previous activities inColombia, the Spanish company decided to start this model in Colombia, and after finishing the firstconvocation, they decided to move into other countries as Peru, Chile, Mexico and Argentina.For those that have a new idea in the technological area, developing a new website or a mobile basedapplication, this campaign offers financing, management consultancy, technical support and physical space towork. As a benefit in return, Wayra is entitled to a share of up to 15% of the capital of the new company.In the first edition of this initiative, that took place on the month of July 2011, a total of 487 ideas werepresented and a total of 10 were selected to develop. The selected project will count with six months at theWayra Academy, a physical space of 400 square meters, were they will be assisted to develop their ideas and willcount with the support of strategic partners that Wayra has found in the region, like: Endeavor Colombia,HubBog, and some other private and public institutions. The winners will also count with a capital that couldgo from $30.000 USD to $70.000 USD depending of the maturation and necessity of the initiative. After theseeding period is completed, a new convocation will be available and hopefully the number of ten selectedprojects will be raised. The projects that are successfully developed during this period will still be promoted andwill receive support to find business angels for the future stages.Some of the winning proposals during the 2011 convocation were:-Yimup, a marketing, distribution and diffusion system for the national musical industry. With this platformartist will be able not only to distribute and promote the ideas but also develop their creation by themselveswithout the help of any 3rd party producer.- Cubby.Co, a cloud based platform for the administration and management of customer relationships for thesmall and medium size local enterprises that is really easy to use.As Telefonica’s president to the Latin area, Jose Maria Alvarez (Academia Wayra inicia operaciones con sus10 seleccionados , 2011) Wayra initiative shows how the creative talent in technological development ispresent in the country, and what is more interesting is that it protects the development and acceleration ofprojects, motivating the creators to stay in the country, and promoting the sustainable development of localtechnologies. 34
  34. 34. [+57] CREATIVE COLOMBIA2.3.d. Lack of collaborative spirit amongst the players.As we keep exploring the problems amongst the players and start studying the systemic relationships thatinterconnect the parts of the system we are able to find a generalized individualism and disarticulation of eachpart. The business people and some local industries count with business sophistication and by the other handthe designers and small producers are lacking business knowledge. The designers count with access to newmedia and are experienced in innovation processes but lack the workforce and financial support to start, andthe same time the small and medium size producers are lacking the access to this new communicationschannels, need to apply more innovation-driven strategies and have what designers are missing that is theproductive force. So it seems as each player is lacking something that the other player haves.As Tim Brown “Challenge your organization to think about how it can spend more time doing collaborative,generative work that will produce a tangible outcome at the end of the day—not having more meetings…Make it as productive and creative as possible. Building on the ideas of others is a whole lot easier when thebuilding is happening in real time and among people who know and trust one another. And it is usually a wholelot more fun”There is a need for those who have a higher education level to share the knowledge that they have with thoselacking it. There is little or none involvement of the design community with the crafts community, and theycould really help them to give momentum to their technics and business by proposing new formal expressionsand how to empower their productive capacities to develop new solution produced in a more efficient way, thisway the artisans could stop being known only for their technical capacities and really explore new businessscenarios. Universities and industries need to involve more design to create new business prepositions andshare more of their previous collected knowledge and capital with the new entrepreneurs and creative minds, asTELEFONICA did with WAYRA6. In this way they could open new markets for themselves, be it a big orsmall idea or a small or large business, putting together the creative and productive classes will only driveinnovation in each of the involved parts.These collaboration strategies should promote multidisciplinary relations that can find new opportunities anddevelop truly innovations, there is a high necessity to connect the players in a creative atmosphere were newideas can come to life and what is more important that recognizes to each player its part. If the resistancepreventing the “Creators” of being hired by the industries internal organizations persists, maybe they don’tneed to incorporate them permanently maybe they just need create cooperation policies together with designersand design studios to assist them during their innovation process, like happens in tally between the designers,entrepreneurs and the manufacturing industries, and that has always been one of the biggest innovation driversfor this European country.6. See (2.3.c.1) WAYRA case study. 35
  35. 35. Chapter 3:A Desing-Drived Aproacch to support the local creative business 36