100115 eace CCI Determinants

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EU Brussels presentation, creative economy, creative industries; determining factors for SMEs.

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100115 eace CCI Determinants

  1. 1. THE ENTREPRENEURIAL DIMENSION OF CULTURAL AND CREATIVE INDUSTRIES ESPECIALLY SMEs II: Determinants Of Entrepreneurship Rene Kooyman 15 January 2010
  2. 2. THE CULTURAL AND CREATIVE INDUSTRIES <ul><li>The core arts placed outside the industrial sectors ? </li></ul><ul><li>Only ‘potential copywrited works’ count ? </li></ul><ul><li>(‘One-offs ‘ and prototypes: design, architects, etc) </li></ul><ul><li>Discipline based ? (music, performances) </li></ul><ul><li>Individual artists are not entrepreneurs? </li></ul><ul><li>CCIs: diversity , not a homogonous group </li></ul><ul><li>From the Entrepreneurial point of view four main categories: </li></ul><ul><li>Creative service providers - design consultancies, architecture </li></ul><ul><li>Creative content producers - fashion designers, film, games </li></ul><ul><li>Creative experience providers - performers, opera, ballet, galleries, museums; </li></ul><ul><li>Creative originals producers - crafts people, visual artists, designer-makers, composers </li></ul>
  3. 3. THE POSITION OF SMEs <ul><li>The missing middle: </li></ul><ul><li>A few, large, international conglomerates </li></ul><ul><li>A lot, very small, entrepreneurs </li></ul><ul><li>Operating within networks of ‘intermediaries’ </li></ul><ul><li>The large ones (publishers, film producers, record comp): </li></ul><ul><li>Repreducables, new communication technologies, mass consumer markets, responsible for distribution, marketing, motivated by economic growth and competition </li></ul><ul><li>SMEs: </li></ul><ul><li>Producers of the creative originals, not so much primary motivated by growth </li></ul><ul><li>UNCTAD Creative Economy Report 2008 </li></ul>
  4. 4. ENTREPRENEURIAL DETERMINING FACTORS <ul><li>CCIs Drivers of success: </li></ul><ul><li>Technology </li></ul><ul><li>Demand </li></ul><ul><li>Design </li></ul><ul><li>Education and skills </li></ul><ul><li>Diversity </li></ul><ul><li>Public sector </li></ul><ul><li>Intellectual Property </li></ul><ul><li>Clustering </li></ul>
  5. 5. INDICATORS AND DETERMINANTS <ul><li>Entrepreneurial activities based upon opportunities, skilled people and resources </li></ul><ul><li>Affected by two dominant factors: </li></ul><ul><ul><li>regulatory framework </li></ul></ul><ul><ul><li>and entrepreneurial culture </li></ul></ul><ul><ul><li>OECD, Measuring entrepreneurship, 2008 </li></ul></ul>
  6. 6. Determinants of entrepreneurship <ul><ul><li>Capital and Access to finance </li></ul></ul><ul><ul><li>Technology and RD </li></ul></ul><ul><ul><li>Entrepreneurial capabilities </li></ul></ul><ul><ul><li>Market conditions </li></ul></ul><ul><ul><li>Regulatory framework </li></ul></ul><ul><ul><li>Culture </li></ul></ul>Start-ups, seed funds, stock markets Innovation Human and social capital Public involvement, competition All regulations and public rules Entrepreneur’s behaviour, attitudes
  7. 7. ACCESS TO FINANCE <ul><li>CCIs hold a different position towards financials: </li></ul><ul><li>Non-conventional employment; </li></ul><ul><li>full-time workers receiving regular pay are a minority </li></ul><ul><li>No level-playing field; small business face banks that become more risk-averse (financial crisis) </li></ul><ul><li>The ‘nobody knows’ effect of the CCIs </li></ul><ul><li>Access to debt financing: low tendency and ability of CC entrepreneurs of making full use of available finance, advice and expertise </li></ul><ul><li>Regular financial institutions often hesitate and offer little development assistance or expertise with regards to the CCIs </li></ul>
  8. 8. ACCESS TO R&D AND TECHNOLOGY <ul><li>Digitisation changes all aspects of the CCIs: </li></ul><ul><li>concept creation, production, distribution, retail </li></ul><ul><li>Technology as a driver: new services, </li></ul><ul><li>distribution channels, business models and </li></ul><ul><li>driving the emergence of significant new sectors </li></ul><ul><li>Digitisation and IP: open source and collaborative platform development </li></ul><ul><li>R&D: </li></ul><ul><li>Much activities in the CCIs involve R&D, yet not described as such </li></ul><ul><li>University/Industry interface geared towards large firms with lasting relationship networks </li></ul><ul><li>Given their large premises, staff, technical resources, skills these dominant enterprises set the research agenda </li></ul>
  9. 9. ENTREPRENEURIAL CAPABILITIES <ul><li>Weaknesses in business skills: CC entrepreneurs </li></ul><ul><li>lack the skills for business proposals attracting </li></ul><ul><li>external investors </li></ul><ul><li>Lack of entrepreneurial skills: professional educational institutes lack the affinity and attention for entrepreneurial aspects </li></ul><ul><li>Traditional Business Education does not fit: </li></ul><ul><ul><li>many self-employed and independent SMEs do not wish to grow </li></ul></ul><ul><ul><li>the business plan is the wrong metaphor for entrepreneurship </li></ul></ul><ul><ul><li>Is weakens on the entrepreneurship model being valued in a non-business context (public services, non-profit, governmental) </li></ul></ul><ul><ul><li>Undervalues the importance of networks: ‘know-who’ </li></ul></ul><ul><ul><li>The culture of business schools is derived from corporate models </li></ul></ul>
  10. 10. ENTREPRENEURIAL CULTURE <ul><li>Personal characteristics and sector differences: four different sets of ideals: </li></ul><ul><li>Entrepreneurial Success: gaming and media </li></ul><ul><li>Professional Achievement: Architecture, </li></ul><ul><li>Sound Technician, Camera Man, Photographer </li></ul><ul><li>Art Creation oriented: Art professions, Design, Film, Architecture, Visual Arts </li></ul><ul><li>Career oriented: IT, Advertising, Sales Professions within the CCIs </li></ul><ul><li>Culture and size: </li></ul><ul><li>Micro and start-up businesses: Artisan, Creative Partnership, Solo </li></ul><ul><li>Small businesses: Business Partners, Licensing Partners </li></ul><ul><li>Medium sized: Business Partners, Entrepreneur/Investor relations </li></ul>
  11. 11. MARKET CONDITIONS <ul><li>Markets volatile and unpredictable, demand </li></ul><ul><li>will increase with exposure, business strategies </li></ul><ul><li>that are embryonic, provisional, highly responsive; </li></ul><ul><li>'intuitive' and 'emotional' knowledge as much as </li></ul><ul><li>standard market research, unpredictable demand ‘nobody knows’ </li></ul><ul><li>Competition and anti-trust laws: </li></ul><ul><li>Competition and entrepreneurship have links both ways: </li></ul><ul><ul><li>Entrepreneurship is contribution to competition </li></ul></ul><ul><ul><li>Competition is an important driver of entrepreneurship </li></ul></ul><ul><li>CCIs specific position: </li></ul><ul><ul><li>Excluded from international trade agreements </li></ul></ul><ul><ul><li>National countries autonomy to support CCIs </li></ul></ul><ul><ul><li>Improving market dynamics and access to markets by minimizing public involvement (governmental activities and regulation) </li></ul></ul>
  12. 12. REGULATORY FRAMEWORK <ul><li>CCIs face: </li></ul><ul><li>Administrative Burdens (entry and growth) </li></ul><ul><li>Costs of starting up an enterprise </li></ul><ul><li>Bankruptcy Legislation </li></ul><ul><li>Safety, health, environment and product regulation </li></ul><ul><li>Labour Market Regulation </li></ul><ul><li>Social and Health Security </li></ul><ul><li>Income Taxes </li></ul><ul><li>Business Taxes and Fiscal Incentives </li></ul><ul><li>Wealth and Bequest Taxation </li></ul>
  13. 13. QUESTIONS / REMARKS / DEBATES <ul><li>Which determinants are dominant ? </li></ul><ul><li>What is their importance? </li></ul><ul><li>De you recognize the image sketched here ? </li></ul>
  14. 14. THE ENTREPRENEURIAL DIMENSION OF CULTURAL AND CREATIVE INDUSTRIES ESPECIALLY SMEs II: Determinants Of Entrepreneurship Rene Kooyman 15 January 2010

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