The Entrepreneurial Dimension of The Cultural and Creative Industries

TheEntrepreneurialDimension
oftheCulturalandCreativeIndustries
December2010
HKU(2010),TheEntrepreneurialDimensionoftheCulturalandCreativeIndustries 1
TheEntrepreneurialDimension
oftheCulturalandCreativeIndustries
ThisreportwaspreparedbyUtrechtSchooloftheArts(HogeschoolvoordeKunsten
Utrecht,HKU)intheNetherlands.TheFacultyofArt&EconomicsandtheFacultyofArt,
Media&Technologycooperatedonthisstudy.TheresearchadviserwasProf.Giep
HagoortandhismanagingeditorwasReneKooyman.Thestudywascoordinatedby
DavidCrombieandtheresearchteammanagedbyEmmaTilquinwiththesupportofK2M
LtdandEurokleisS.r.l.
MoreinformationaboutHKUisprovidedintheAboutUssection.Formoreinformation
regardingthisreport,pleasecontactPierreMerschatHKUinthePirstinstance:
pierre.mersch@kmt.hku.nl.
Acknowledgements
Wewouldliketothankeveryonewhohelpedwiththisstudy.Firstly,wewouldliketo
thanktheexpertsintheculturalandcreativeindustrieswhoagreedtoparticipateinthe
studyandgaveuptheirtimeforquestionnaires,interviewsandworkshops.Secondly,we
wouldliketothankProf.JeroenvanMastrigt,DrGeorgeIoannidis,DrFrancescoBellini,
andDrsRogerLenoirfortheircooperationandexpertise.Thirdly,wewouldliketothank
ourresearchers,namelyMauroNavarra,MariaFeliceArezzo,PierreMersch,Giovanni
Giovinazzo,MarillaValente,SandratenZijthoff,ChiaraGerlich,ZameerRazack,Kwaku
AfriyieandLuzGutierrez.
Disclaimer
Thisstudyissubjecttoadisclaimerandcopyright.Thestudywascarriedoutforthe
EuropeanCommissionandexpressestheopinionsoftheorganisationshavingundertaken
thestudy.TheviewshavenotbeenadoptedorinanywayapprovedbytheEuropean
CommissionandshouldnotberelieduponasastatementoftheEuropeanCommission's
views.TheEuropeanCommissiondoesnotguaranteetheaccuracyoftheinformation
giveninthestudy,nordoesitacceptresponsibilityforanyusemadethereof.
Copyright
CopyrightisheldbytheEuropeanUnion.Personswishingtousethecontentsofthese
studies(inwholeorinpart)forpurposesotherthantheirpersonaluseareinvitedto
submitawrittenrequesttothefollowingaddress:EuropeanCommission,Education
Audiovisual&CultureExecutiveAgency,AvenueduBourget1,BOUR/BOU2*,BE1140
Brussels
Reference
HKU,(2010),TheEntrepreneurialDimensionoftheCulturalandCreativeIndustries,
HogeschoolvordeKunstenUtrecht,Utrecht.
Contents
ChapterOne:Introduction...................................................................................................................5
1.1.Overview,objectivesandstructureofthestudy.......................................................................5
1.2.Approachandmethodology..............................................................................................................7
1.3.TheCreativeEconomy..........................................................................................................................8
ChapterTwo:CreativeEntrepreneurship..................................................................................10
2.1.DePiningentrepreneurshipintheculturalandcreativeindustries...............................10
2.2.Characteristicsoftheculturalandcreativeindustries........................................................17
2.3.FeaturesoftheCCIsectors...............................................................................................................28
2.4.Crosscountryanalysisofregulatoryframeworks.................................................................44
2.5.Supportingculturalandcreativeentrepreneurship.............................................................51
2.6.Concludingremarks............................................................................................................................54
Chapter3:MainThematicOutcomes...........................................................................................56
3.1AccesstoPinance....................................................................................................................................56
3.2.Accesstomarket..................................................................................................................................66
3.3.IPRinstrumentsandCCISMEs......................................................................................................73
3.4.Entrepreneurshipeducation,skillsandtraining....................................................................78
3.5.Accesstoinnovation...........................................................................................................................89
3.6.Clustersandcollaboration................................................................................................................99
3.7.Concludingremarks.........................................................................................................................108
ChapterFour:Recommendations................................................................................................109
4.1.Transversalrecommendations....................................................................................................109
4.2.AccessingPinance...............................................................................................................................110
4.3.Accessingthemarket.......................................................................................................................111
4.4.Bridgingtheentrepreneurialskillsgap...................................................................................112
4.5.Developingentrepreneurshipasnontechnologicaldriverofinnovation...............113
4.6.Supportinguseofdigitalisation..................................................................................................113
Appendix................................................................................................................................................115
Aboutus..................................................................................................................................................116
Bibliography.........................................................................................................................................117
ListofFigures
Figure1:TheOECD/EUROSTATFrameworkforDeterminantsofEntrepreneurship 13
Figure2:SizeofenterprisesbysectoracrossCCIs 19
Figure3:DistributionofTotalTurnoveramongIndustriespersizeclassofenterprise 19
Figure4:DistributionoftotalAssetsamongIndustriespersizeofenterprise 20
Figure5:PercentageoffulltimeemployeespersizeclassenterpriseinDec.2008 21
Figure6:PercentageofEmployeesperSector 23
Figure7:TotalTurnoverperIndustry 30
Figure8:PercentageofEnterprisesperSector 31
Figure9:USTradeWholesaleElectronicBookSales,20022010(1stquadrimestre) 37
Figure10:TheValuechainforculturalinstitutions 42
Figure11:SimplelifecycleframeworkforsupportingtheCCentrepreneurandenterprise 51
Figure12:EffectoftherecentPinancialcrisison2009turnover 57
Figure13:MostimportantPinancialsource20072008 57
Figure14:FinancialandEconomicplanning(Budgetandbusinessplan)forCCIs 58
Figure15:MainobstaclesforCCIstoaccessPinance 59
Figure16:MostadequatetooltoincreasePinancialopportunitiesforCCIs 61
Figure17:MostrelevantinitiativetoaccessPinanceforCCISMEs 63
Figure18:MostimportantkindofPinancialinitiativesbestassistingCCISMEs 63
Figure19:MostimportantphaseforPinancialsupport 64
Figure20:MostSuitableAuthoritytosupportaccesstoPinance 65
Figure21:MostimportantknowledgefactorimpedingCCIs 67
Figure22:Preferredphaseinthelifecycleforsupporttoaccessthemarket 71
Figure23:Mostappropriatephaseforcrossbordermarketsupport 72
Figure24:Mostappropriatelevelforsupportingaccesstomarket 73
Figure25:MostimportantregulatoryissuesfacedbyCCISMEs 73
Figure26:MostcommonlyusedinstrumentsfortheprotectionofcreativeoutputsinCCIs 75
Figure27:BestphasefortheprovisionofIPRadvice 77
Figure28:Mostimportantbusinessrelatedchallengewhenstartingacompany 78
Figure29:AgreementonsufPicientintegrationofentrepreneurshipineducationalsystem 79
Figure30:Mostusefulsupportforacquiringentrepreneurialpracticesinthestartupphase 85
Figure31:MostappropriatephaseforspeciPictrainingintechnologyandPinancialskills 85
Figure32:PreferredphaseforLLLinlifecycle 86
Figure33:NeedfordevelopmentofadviceandsupportcentresforCCIs 87
Figure34:PreferredlevelfordevelopingadviceandsupportcentresforCCIs 87
Figure35:PreferredlevelforLLLstrategies 88
Figure36:AimofCCIswheninnovating 92
Figure37:Mostimportantchallengesintermsofinnovation(Source: 93
Figure38:MostrelevantsourcesofknowledgeforCCISMES 94
Figure39:Waystoacquireknowledgeaboutresearchandinnovationinitiatives 95
Figure40:Mostimportantmeasuresforthepromotionofinnovation 97
Figure41:MostimportantphaseforinnovationsupportforCCISMEs 98
Figure42:PreferredLevelsforinnovationinvestmentsforCCISMEs 98
Figure43:Preferredlevelforpartnershipbetweenprivatebusiness,publicinstitutionsandCCISMEs 99
Figure44:Cooperationwithotherenterprisesinthesamesector 100
Figure45:Cooperationwithenterprisesinadifferentsector 100
Figure46:Typeofnetwork 101
Figure47:NeedfordevelopmentofadviceandsupportcentrespeciPicforCCI 105
Figure48:Useofcollaborativebusinessenvironment(clusterorincubator)withinCCIs 105
Figure49:Preferredphaseforcollaborativebusinessenvironment 106
Figure50:NeedforcrosssectoralSMEcooperation 106
Figure51:Preferredlevelfordevelopingcollaborativebusinessenvironmentinitiatives 107
Figure52:NeedforanincreaseincrossregionalcooperationtoimprovegrowthofCCISMEs 107
ListofTables
Table1:PercentageofeconomicturnoveroftheCCIpercountryinseveralEuropeancountries 16
Table2:DistributionofEnterpriseamongIndustriespersizeclass 18
Table3:ClustersintheCCIs 29
Table4:DigitalCinemasitesandscreeninEurope(20032008) 36
Table5:MostimportantregulatorymeasuresfacedbyCCIs 44
Table6:Clusteringbycountrycharacteristics 46
Table7:EuropestopregionsforCCIemploymentclusters 50
Table8:Personalmotivationinentrepreneurship 53
Table9:CCISMEssupportforthedigitalmarket 70
Table10:Waysofacquiringentrepreneurialskills 81
Table11:WaystogetadviceandsupportwhenstartingaCCIcompany 104
ChapterOne:Introduction
1.1.Overview,objectivesandstructureofthestudy
Europeiswidelyrecognisedashavingarichdiversityinitsculturalheritageandcultural
expressions.However,inrecentyearsEuropehasbeenconfrontedwithseveralmacro
economicchallenges,suchasthePinancialcrisisandastrongerglobalcompetition,aswell
asinternalsocioeconomicchallenges.TheEurope2020Strategyhighlightedtheneedfor
ourcontinenttotakeaninnovativepathtorespondtothesechallengesbybuildingupon
oneofEuropeskeystrengths;itstalentedanddiversecreativepopulation:1
Smartgrowthmeansstrengtheningknowledgeandinnovationasdrivers
ofourfuturegrowth.Thisrequiresimprovingthequalityofoureducation,
strengtheningourresearchperformance,promotinginnovationandknowledge
transferthroughouttheUnion,makingfulluseofinformationand
communicationtechnologiesandensuringthatinnovativeideascanbeturned
intonewproductsandservicesthatcreategrowth,qualityjobsandhelpaddress
Europeanandglobalsocietalchallenges.But,tosucceed,thismustbecombined
withentrepreneurship,Ninance,andafocusonuserneedsandmarket
opportunities.2
Theimpactofcultureandcreativityorculturebasedcreativity 3hasattractedmuch
attentioninfosteringandunlockingthepotentialofaEuropeancreativeeconomy.The
increasingfocusontheculturalandthecreativesectorhasresultedinmanystudies,such
astheUNReportonCreativeEconomyin2008,whichwascollectivelypublishedbyPive
internationalorganisations(UNCTAD,UNDP,UNESCO,WIPOandITC):
Theinterfaceamongcreativity,culture,economicsandtechnology,asexpressedin
theabilitytocreateandcirculateintellectualcapital,hasthepotentialtogenerate
income,jobsandexportearningswhileatthesametimepromotingsocialinclusion,
culturaldiversityandhumandevelopment.Thisiswhattheemergingcreative
economyhasalreadybeguntodoasaleadingcomponentofeconomicgrowth,
employment,trade,innovationandsocialcohesioninmostadvancedeconomies.4
Inrecentyears,theEUCouncilalsofollowedthemovetorecognisethepotentialofthe
culturalandcreativeindustriesincontributingtotheLisbonobjectives,5actingas
catalysersofEuropesinnovativepotential.Similarly,intheMaastrichtTreaty(theEU
LisbonprocessforstrengtheningtheeconomicgrowthinEurope),aswellasinthe
UNESCOConventionontheProtectionandPromotionoftheDiversityofCultural
Expressions(hereafternamedUNESCOConvention),6theroleoftheculturalandcreative
industrieshasgainedgreaterattention.7Inparallel,severalEuropeaninitiativeshavebeen
undertakentopromotetheideaofthecreativeeconomy;forexample,2009was
designatedtheEuropeanYearofCreativityandInnovationandtherecentGreenPaperon
Unlockingthepotentialoftheculturalandcreativeindustries(hereafterreferredto
astheCCIs)solidiPiedthisrecognition.8
1ECCommunication,(March2010b),Europe2020:AStrategyforSmart,SustainableandInclusiveGrowth,COM(2010)
2020,p.7.
2Ibid.,p.10.
3KEA,(2009),Theimpactofcultureoncreativity,KEAEuropeanAffairs:Brussels
4UNCTAD,(2008),TheCreativeEconomy,UNCTAD/DITC/2008/2,p.iii
5EUCouncilConclusions,(2007),ContributionoftheCulturalandCreativeSectorstotheAchievementoftheLisbon
ObjectivesAdoptionoftheCouncilconclusions,9021/07,DGI2A,Doc8635/2/07CULT25REV2
6TheEuropeanCommunityispartytothisConvention.
7 FeselB.,Sndermann,M.,(2007),CultureandCreativeIndustriesinGermany,UNESCOBonn
8ECGreenPaper,(April2010),UnlockingthePotentialofCulturalandCreativeIndustries,COM(2010)183
TheabundanceofstudiesontheCCIs,suchasthoseundertakenbyKEA,9NESTA,10 the
EuropeanClusterObservatory,theworkonDesignasadriverofusercentredinnovation,
11thereportsproducedrecentlybytheEuropeanPlatform,andtheExpertWorkingGroup
onCCIs12(setupaspartoftheEuropeanAgendaforCulture),havehighlightedthecritical
impactofCCIsongrowthandemployment,13andacknowledgedtheirgreateconomic,
social,culturalandinnovativepotential.CCIactivitiesactasimportantdriversof
economicandsocialinnovationwithinthesectorbutalsooutsidetheCCIsector,14
contributingtoEuropesstrengthsintimesofchallengesand,assuch,areinlinewiththe
EU2020Strategy.Withimaginativesolutionssuchastheintegrationofusercentred
approaches,thedevelopmentanduseofICT,thedesignofnewservicesfor
increasedsocialinclusion,CCIscontributetodrivedynamicchangeintheeconomyas
wellascontributingtobroaderculturaldiversity.
Withnewprocesses,productsandservices,CCIsmayprovideinnovativeinputforother
sectorsoftheeconomy.15Asinnovationisnowacknowledgedasencompassingmorethan
justtechnologicalandscientiPicchanges,16 theCCIsoffertheopportunitytobringessential
changeinnontechnologicalinnovationforproducts,servicesandprocesses,contributing
toamoreinventiveEurope.Externalfactorssuchasglobalisationandthedigitalshift
haveopenedopportunitiesandenabledgreaterculturaldiversityandaredriversof
furtherdevelopmentfortheCCIs.17Additionalfactorshavetobetakenintoconsideration
toexamineconduciveenvironmentsforunlockingtheentrepreneurialdimensionof
CCIs.FosteringentrepreneurshipintheCCIsmeansstrengtheningEuropesculturaland
creativediversitybyreinforcingtheabilityofculturalandcreativeentrepreneursto
efPicientlycarryouttheiractivitiesandproposenewproductsandservices,andthiscan
actasanontechnologicaldriverofinnovation.
Thisstudyrespondstothegrowingimportanceofthecreativeeconomyandmore
speciPicallytotheroleoftheCCIsasameanstotacklefuturechallengesinthecontextofa
globalisedeconomy.18Thefocusonknowledgeintensiveproductsandservicesandthe
needtocreatealevelplayingPieldforentrepreneursinCCIswasputforwardintherecent
GreenPaperthroughafocusoncreativityandinnovation.19
ThestudyaimstoprovideabetterunderstandingoftheoperationsandspeciPicneedsof
theCCIs,especiallysmallandmediumsizedenterprises(hereafterreferredtoasSMEs).It
willhighlightthetransversalproblemscommontoalltheseculturalandcreative
industries,andindicatespeciOicchallengesthatcouldhamperinnovationandprevent
CCIsfrombenePitingfromtheinternalmarketandnewtechnologies.Thisreportprovides
anoverviewofthemaincharacteristicsoftheCCIsandconsidersnational
environmentalfactorsthatinOluencethedevelopmentoftheseenterprises.Afterthis
overview,thestudysurveysthekeydeterminantstostrengtheningentrepreneurship
forCCIssuchasaccesstoPinance;accesstomarket;intellectualpropertyrights;education
andtraining;accesstoinnovation;andcollaborativeprocesses.
9KEA(2006),TheEconomyofCultureinEurope,Brussels:KEAEuropeanAffairs;KEA,(2009),TheImpactofCultureon
Creativity,Brussels:KEAEuropeanAffairs
10Seehttp://www.nesta.org.uk/publications
11ECStaffWorkingDocument,(2009a),Designasadriverofusercentredinnovation,SEC(2009)501
12EuropeanPlatformonthePotentialoftheCulturalandCreativeIndustriesandtheOpenMethodofCoordinationExpert
WorkingGrouponMaximisingthePotentialofCulturalandCreativeIndustries,inparticularthatofSMEs.Reportsavailableat
http://ec.europa.eu/culture/ourpolicydevelopment/doc2240_en.htm.
13EuropeanClusterObservatory,(March2010),PrioritySectorReport:CulturalandCreativeIndustries,Stockholm:
EuropeanClusterObservatory,p.13.
14ECGreenPaper,(April2010),op.cit.,p.3.
15ECCEInnovation,(July2009),MappingInnovationOpportunitiesStemmingFromCollaborationbetweenCreative
IndustriesandOtherIndustries,Stuttgart:ECCEInnovation,p.11.
16ECCommunication"Europe2020FlagshipInitiativeInnovationUnion",(October2010),COM(2010)546Pinal
18ECCommunication,(March2010b),op.cit.,p.2.
Derivingfromthesekeychallenges,thestudysuggestsgeneralapproachesfor
developingaconduciveenvironmentforCCIsaswellasspeciOicrecommendationsto
providesupportforeachdeterminant,highlightingbestpracticesandtakinginto
considerationsectordifferences;thedifferentlevelsofauthority;andthedifferentlifecycle
developmentphasesinwhichtheCCIsPindthemselves.
Chapter2providessomeunderstandingofthecommonfeaturesofallsectorsoftheCCIs
andthedifferencesinspeciPicsectors,aswellasdescribingthegeneralenvironmentin
whichtheyoperate.ItPirstlydePinestheconceptofculturalandcreativeentrepreneurship
asadistinctfeaturefromthegeneralideaofentrepreneurship.Thisbuildsuponthe
discussionofthecommoncharacteristicsandproblemsofCCIscomparedtoother
industrialsectors.Inordertoaddressthecommonissues,thedeterminantsof
entrepreneurshipareconsidered.Moreover,asCCIsdonotoperateinavacuum,thestudy
providesanoverviewoftheclustersofcountriesaccordingtothegeneralregulatory
frameworkthatshapesthecontextinwhichtheCCIsoperate.Inordertodiscusssupport
fordevelopingentrepreneurshipintheCCIs,aframeworkofanalysisbasedonthe
entrepreneuriallifecyclewasdevelopedtoexaminethedifferentlayersofsupportoffered
bylocal,regional,nationalandEuropeanauthorities.
Chapter3looksatthesixcorefactorsfordeterminingentrepreneurshipintheCCIs,
namely;accesstoPinance;accesstomarket;intellectualpropertyrights(IPR);education
andtraining;accesstoinnovation;andcollaboration,networksandclusters.SpeciPic
attentionisgiventotheeffectofdigitalconvergenceanditsinPluenceoninnovationand
theCCIs.
Thestudyaimstoprovideapackageofrecommendationstotakeintoconsiderationwhen
lookingatthecomplexrequirementsofCCIs,withafocusonmicroSMEs.Thisisnot
intendedtobeacomprehensiveoverviewbutrathertoofferasnapshotofthe
currentsituation;toshedsomelightontheareaofcreativeentrepreneurshipthat
remainsrelativelyunexplored;andinChapter4toprovidesomepolicysuggestions.
Throughoutthisreport,around40BestCasesillustratekeyapproachesandinitiatives
(Appendix1).Similarly,anonymisedcommentsfromthemanyexpertsinterviewedduring
thestudyarepresentedwhereappropriate.Abibliographyofsourcescanbefoundatthe
endofthereport.
1.2.Approachandmethodology
Thegeneralapproachofthisstudyhasbeentoapplyablendofmethods,linking
secondarysourceanalysiswithprimaryqualitativeandquantitativePieldwork.Different
methodsofdatacollectionhavebeenused:bibliographicalresearch,comprehensivepolicy
scans,quantitativestatisticalanalysesofCCIs,expertonlinequestionnaires,expert
interviews,onlinesurveys,casestudiesandvalidationseminars.
IntermsofthestatisticalanalysisoftheCCIcharacteristics,thedatabaseuponwhichour
analyseswereconductedisbasedondatafromnationalChambersofCommerceinthe
EU27for2007.Statisticsfor2008werenotavailableatthetimeofthestatisticalanalyses
in2009.ThewholedatabaseoftheEuropeanUnioncontains13millionregistered
companiesinEurope.Fromthis,companiesregisteredasactiveandresidinginoneEU
countryandundertherealeconomy(notPinancial)wereselected,whichleftadatabaseof
7.117.559enterprises.Fromthiscompaniesforwhichtheprimaryactivity(primarycode)
isoneoftheNACEcodesappointedfortheCCIswereapproached.TheNACEcodebased
ontheclassiPicationfromtheKEAstudyin200620wasusedbutwithsomeadjustments
(seeAppendix2.10formoreinformationconcerningthespeciPicmethodologies).
InthePirstphase(duringOctoberandNovember2009),oneonlinequestionnairetargeted
thesectoralassociationsaswellasexpertsfromacademia,culturalorganisationsand
researchinstitutes.Thisonlineexpertquestionnaire(referredtoasexpert
20KEA,(2006),op.cit.,p.56,p.64,p.308.
questionnaire)gatheredresponsesfromapproximately70Expertsfromthedifferent
countriesoftheEU.21
Inthesecondphase,anotheronlinequestionnaire(referredtoasonlinesurvey)was
conductedandwasopenfrommidFebruaryuntilmidApril2010.Thisquestionnaire
targetedCCIsthemselves.670respondentspartiallycompletedthequestionnaireand310
fullycompletedthequestionnaire.
InordertoreceivemoreextensiveopinionsonspeciPicthemes,expertopinionswerealso
gatheredthroughsemistructuredinterviews(referredtoasexpertinterviews)with
respondentscomingmostlyfromMinistriesofCultureandFinance,aswellassectoral
expertsfrommanydifferentcountriesandregions.Theseexpertinterviewstookplace
duringthesecondphase(FebruaryandMarch2010)togainadeeperunderstandingof
theissuesandseveralanonymisedquotesareusedthroughoutthisdocument.These
quotesarereferencedaccordingtothetypeoforganisationoftheintervieweeaswellas
thecountryclusteringinwhichtheorganisationoperates.
Twovalidationworkshopstookplaceduringtheresearchprocess.ThePirstwasheldat
theendofthePirstphaseoftheresearch(January2010),aftergatheringtheCCIstatistical
characteristicsandexaminingtheenvironmentalfactors.Thesecondwasheldafterthe
overallPieldresearchwascompleted(March2010)inordertoreceivefeedbackfromthe
stakeholdersontheinitialrecommendations.Paralleltotheexpertinterviews,throughout
thestudycontextualpolicyscansofnationalandEuropeanreportsandliteraturewere
undertaken.
Intermsofscope,theperformingandvisualartswereincludedaspartoftheCCIsinthis
study.AlthoughinclusionofthesetwosectorswithintheCCIsvariesfromcountryto
countryandtheyareoftenregardedaspartofthecoreartssectorbutnotthecreative
industries,22thisstudyincorporatestheperformingandvisualarts,astheywereincluded
withinthescopeoftherecentGreenPaper.23
1.3.TheCreativeEconomy
Globalisationprocesses,fastercommunicationchannels,rapidlychangingtechnologies
andglobalconnectivityhaveradicallychangedourenvironmentandthewayweproduce
andconsumeculturalproductsandservices.24Thisconvergencebetweentechnological,
social,economicandculturalaspectshasforgedchangesthataffectourdailyenvironment.
Creativityisnowacknowledgedasfosteringcultural,socialaswellaseconomic
gains. 25Inthiscontext,theconceptofthecreativeeconomyisnowbroadlyacceptedand
understood.Theinitialembryonicstageoftranslatingtheunderlyingconceptsintohigh
levelpolicyisnowalmostcomplete.
Differentmodelsexisttoexplainthecreativeeconomy,26butmostarebaseduponthe
recognitionoftheimportanceofservicesandthedynamiceffectsoftheCCIs.Eachmodel
hasaparticularrationale,dependingonunderlyingassumptionsaboutthepurposeand
modeofoperationoftheCCIs.PerhapsthePirstusageofthetermcreativeindustriescan
befoundIntheUKsDepartmentofCulture,MediaandSport(DCMS),whichbegan
developingitsculturalandcreativeindustriesstrategyasfarbackas1997.IntheUK
approach,thecreativeindustriesarethoserequiring...creativityandtalent,with
21Inthisreport,wehaveincludedbothPiguresfromtheonlineexpertquestionnaire(sectoralanddiverseexperts)andthe
onlinesurvey(CCIs).ThePiguresreferringtotheformeraresourcedasEurokleis2009,whilethePiguresfromtheonline
surveyresultsaresourcedasEurokleis2010.
22SomeofthedePinitions,suchastheonefromtheDepartmentofCulture,MediaandSportintheUK,includedperforming
artswithinthecoreartsorculturalorganisation,butnotaspartofthecreativeindustries.
24UNCTAD,(2008),TheCreativeEconomy,UNCTAD/DITC/2008/2,p.iii
25KEA,(2009),op.cit.,p.33.p.44.
26SeetheWIPOmodel,theUKClassiPication,theconcentriccirclesmodelandthedifferentnationalapproachestotackle
theCreativeEconomy,suchas;Santagata,W.,(2009),WhitepaperonCreativity:TowardsanItalianmodelofdevelopment,
Milan:BocconiUniversityEd;DCMS(2008),CreativeBritainNewTalentsfortheNewEconomy,London:DCMS;
NetherlandsMinistryofCultureandMinistryofEconomics(2009),CreativeValueCultureandEconomyPolicyPaper,The
Hague:NetherlandsMinistryofCultureandMinistryofEconomics
potentialforwealthandjobcreationthroughexploitationoftheirintellectual
property.27
ThereportCreativeEconomy,publishedin2008byUNCTAD,UNESCO,theWorld
IntellectualPropertyOrganisation(WIPO),theUnitedNationsDevelopmentProgramme
(UNDP)andtheInternationalTradeCentre(ITC),wasalsoacornerstoneinentrenching
theconcept.28Inthisreport,fourdifferentmodelsforthecreativeeconomywere
considered,highlightingdifferentclassiPicationsystems.
UNCTADmakesadistinctionbetweenupstreamactivities(traditionalculturalactivities
suchasperformingartsorvisualarts)anddownstreamactivities(thoseclosertothe
market,suchasadvertising,publishingormediarelatedactivities)andarguesthatthe
secondgroupderivesitscommercialvaluefromlowreproductioncostsandeasytransfer
toothereconomicdomains.OtherapproacheshavedePinedtheCCIsinmanyways,
includingthecoreartsorevenculinaryarts,aspartofthecreativeorexperience
economy.29
ThestudyTheEconomyofCultureinEurope,commissionedbytheEuropean
Commissionin2006,wasthestartingpointforapoliticalrevaluationoftheCCIsinEurope
anditsmemberstates.30Itmakesadistinctionbetweencultureandeconomyand
arguesthatalthoughtheEUwasformedonthebasisofeconomicandmarketforces,
cultureandEuropeanculturaldiversityisanimportantfactorfortheEUspolitical,
economicandsocialstrength.Itmakesadistinctionbetweentheculturalsector,
subdividedintoanindustrialandnonindustrialsector;andthecreativesector.
Notwithstandingthediversityofthesemodelsofthecreativeeconomy,itisremarkable
thatthevariousdePinitionsleadtobroadlythesamecollectionofindustriesmakingupthe
creativesector.
Inthisstudy,'Culturalindustries'aredePinedasthoseindustriesproducingand
distributinggoodsorserviceswhichatthetimetheyaredevelopedareconsideredasa
speciPicattribute,useorpurpose,whichembodyorconveyculturalexpressions,
irrespectiveofthecommercialvaluetheymayhave.31 Theseincludethecoreartssuchas
performingarts,visualarts,aswellasPilm,DVDandvideo,TVandradio,games,new
media,music,booksandpress.'Creativeindustries'arethoseindustrieswhichuseculture
asaninputbutwhoseoutputsaremainlyfunctional.ThisclassiPicationincludesdesign,
fashion,advertisingandarchitecture.Otherindustriesthatareperipheraltothose
industries,suchastourismorculinaryart,arenottakenintoaccount.
TheCCIshavedevelopedconsiderablyoverthepastyears,contributingtoaround2.6%of
theEUGDPin2008andcreatingsubstantialemployment.Moreover,CCIsmaintainand
developEuropesculturaldiversity,whichisalsoimportantintermsofsocialinclusion.
LookingattheplaceofCCIsinMemberStatesnationalpolicies,theyplayanever
increasingroleintermsofprovidingcontentaswellasservicesandinnovative
spillovers.32
Theuseofthiscreativitytofoster...creative,entrepreneurialandinterculturalskills
thatwillhelpbetterrespondtoneweconomicandsocialchallenges33 requiresusto
reachadeeperunderstandingofthecomplexityofCCIsandthewaytheyareinPluenced
andalteredbytheirenvironment.Forthesereasons,thisstudyseekstoprovideaclear
pictureofthemaincharacteristicsofCCIsandtheprincipalrequirementsforsupporting
entrepreneurship.
27DCMS,(2001),CreativeIndustriesMappingDocument2001(2ed.),London:DepartmentofCulture,MediaandSport
28UNCTAD,(2008),op.cit.,pp.1215.
29Santagata,W.,(2009),op.cit.,p.30.
30KEA,(2006),op.cit.,p.35.
32Bywayofillustration,theroleofCCIsisclearlyrecognisedinnationalpoliciesintheUK,Netherlands,Denmark,Sweden,
Finland,FranceandGermanybutalsoinItaly,Portugal,Lithuania,CzechRepublic,Bulgaria,EstoniaandIreland.
ChapterTwo:CreativeEntrepreneurship
InthischapterthedimensionsofentrepreneurshipintheCCIsareconsidered.Tothisend,
itisnecessarytobriePlydiscusstheconceptofentrepreneurship,itsdeterminantsandthe
necessityforaspeciPictermsuchasculturalandcreativeentrepreneurship.Thisinvolves
examiningthecharacteristicsoftheCCIsingeneralandthereafterthespeciPicfeaturesof
CCIsectors.Inaddition,thewayinwhichenvironmentalfactorsinPluencecreative
entrepreneurshipanddeterminantsofentrepreneurshipisconsidered.Bearinginmind
thechallengingcontextoftheCCIs,thegeneralentrepreneuriallifecycleframeworkused
forthisstudyisdescribedforanalyticalpurposes.
2.1.DeOiningentrepreneurshipintheculturalandcreativeindustries
Entrepreneurshipinthesesectorsmeanstohavecreativeideasandtopursue
theminacommercialway,withthepurposetomakeaproNit.However,the
proNitaloneisnotthedriver;itisthecreativityandthepossibilitytobuild
something,theselffulNilmentorbeingabletopursueyourowncreative
interests.Thereisamixbetweentheentrepreneurialsideandthecreativeside.
(SectoralOrganisation,StructurallyStrongTraditionalEconomy)
AlthoughthereisanogeneralagreementonhowtodePineentrepreneurship,whetheras
riskbearing,enterprisecreationorstimulationofinnovation,thereisevenlessagreement
onhowthiscanbedePinedwithintheculturalandcreativesector.34 35However,giventhe
strongeconomiccontributionmadebytheCCIsectortoGDPinMemberStates,36 dePining
theentrepreneurialdimensionofthissectorisclearlyimportant.Thisisneededinorder
toconsiderhowbesttheseaspectscanbesupportedandtoexaminethevarious
factorsbearingupontheculturalandcreativeentrepreneur.
WiththecomplexchangesthattheEUisexperiencingasaresultoftheongoingeconomic
crisisandthedigitalshiftanditsconsequencesforemerginginnovationpolicies,thereisa
needtoexaminehowculturalandcreativeentrepreneurshipcanbetterbedesignedin
ordertosupportmorecreativeEuropeaninnovationandcontributetoEuropesfuture
growth.37
2.1.1.Creativityandentrepreneurship
Theconceptofculturalentrepreneurshiphasgainedrecognitionduringthelastdecade.38
Differentmodelshavebeenputforwardasameansofprovidingasystematic
understandingofthestructuralcharacteristicsoftheCCIsandinsodoingtryingtoforma
commondePinitionofculturalandcreativeentrepreneurship.ThisisadifPiculttaskasit
combinestermsthatareseeminglydivergentandposesthechallengeofcrossingcultural
andeconomicdiscoursetodePineadistincttermbytakingcomponentsfromboth
worldsandunderstandingthespeciPicsupportthatthisentails.
Eventhoughtheimageofartistscreatingsolelyforartssakeischanging,thereisstilla
strongdividebetweenculturalandcreativeaspectsononesideandtheentrepreneurial
aspectsontheother.Themotivationsoftheculturalandcreativeentrepreneurwilllikely
differaccordingtotheindividualandtotheCCIsectorinwhichtheyareoperating.The
tensionbetweenthecreatorofaculturalworkandtheentrepreneur,typicalofmany
CCIenterprises,isoftenrePlectedinthedesiretoprioritisetheculturalvalueofthe
creationwithlittlemotivationforgeneratingeconomicvalue(creationoriented),while
theentrepreneurwillprioritisetheeconomicexploitationoveritsculturalvalue(growth
oriented).Thesetensionssuggestthatdifferentkindsofsupportneedtobe
34Hagoort,G.,(2007),CulturalEntrepreneurship.OntheFreedomtoCreateArtandtheFreedomofEnterprise,Inaugural
LectureJune6,Utrecht2007
35Kooyman,R.,(ed),(2009),PreliminaryLiteratureReview,HKU
36UKTechnologyStrategyBoard,(2009),op.cit.,p.12.
37 ECCommunication,(March2010b),op.cit.,p.910.
38 Klamer,A.,(2006),CulturalEntrepreneurship,Rotterdam:ErasmusUniversity,AcademiaVitae
elaborateddependingonthenatureoftheorganisationandthesubsectorinwhichthey
operate.
2.1.2.Entrepreneurship
Incommonparlance,beinganentrepreneurisassociatedwithstartingabusiness,butthis
isaverylooseapplicationofatermthathasarichhistoryandamuchmoresigniPicant
meaning.ThetermentrepreneuroriginatedinFrencheconomicsasearlyasthe17th
centurytomeansomeonewhoundertakesasigniPicantprojectoractivity.More
speciPically,itcametobeusedtoidentifytheventuresofsomeindividualswhostimulated
economicprogressbyPindingnewandbetterwaysofdoingthings.TheFrencheconomist
mostcommonlycreditedwithgivingthetermthisparticularmeaningisJeanBaptisteSay.
Writingaroundtheturnofthe19thcentury,Sayputitthisway,Theentrepreneurshifts
economicresourcesoutofanareaoflowerandintoanareaofhigherproductivityand
greateryield.39Inotherwords,entrepreneurscreatevalue.
Inthe20thcentury,theeconomistmostcloselyassociatedwiththetermwasJoseph
Schumpeter.40Hedescribedentrepreneursastheinnovatorswhodrivethecreative
destructiveprocessofeconomicsocieties.Inhiswords,Thefunctionofentrepreneursis
toreformorrevolutionisethepatternofproduction.Theycandothisinmanyways:
...byexploitinganinventionor,moregenerally,anuntriedtechnologicalpossibility
forproducinganewcommodityorproducinganoldoneinanewway,byopeningupa
newsourceofsupplyofmaterialsoranewoutletforproducts,byreorganisingan
industryandsoon.
Schumpetersentrepreneursarethechangeagentsintheeconomy.Byservingnew
marketsorcreatingnewwaysofdoingthingsbycreativelyinnovating,theycreatevalue
andmovetheeconomyforward.Entrepreneurshipisincreasinglyrecognisedasan
importantdriverofeconomicgrowth,productivity,innovationandemployment,anditis
widelyacceptedasakeyaspectofeconomicdynamism:thebirthanddeathofPirmsand
theirgrowthordownsizing.
AccordingtoSchumpeter,anumberoffactorsembodyentrepreneurialbehaviour:
Developingnewandinnovativeproducts
Proposingnewformsoforganisation
Exploringnewmarkets
Introducingnewproductionmethods
Searchingfornewsourcesofsuppliesandmaterials
Seenfromanoccupationalperspective,culturalandcreativeentrepreneursownand
managetheirbusinessenterpriselikeageneralentrepreneur.Theycanbecategorisedas
businessowners;theycreatevalue.Inessence,thecreativeentrepreneurisacreatorof
economicalvalue.41
Theysharewiththegeneralentrepreneurthewillingnesstoassumerisksinthefaceof
uncertainty.Forexample,riskssuchasapossiblelossofbusinesscapitalorpersonal
Pinancialsecurity,orrisksassociatedwiththeuncertainoutcomeofanentrepreneurial
undertaking.42
Theyalsosharethealertnessofopportunity;thefocusonthedetectionof
entrepreneurialopportunitieseitherforPinancialproPit,orforsakeofnewcontent.This
alertnessallowstheentrepreneurtoexploitmarketopportunitiesthathavebeen
39Say,JB.,(1803),Traitd'conomiepolitique,ousimpleexpositiondelamaniredontseforment,sedistribuent,etse
composentlesrichesses,Paris
40 Schumpeter,J.A.(1975).Capitalism,Socialism,andDemocracy,NewYork:Harper
41Sternberg,R.andWennekers,S.,(2005),Determinantsandeffectsofnewbusinesscreationusingglobal
entrepreneurshipmonitordata,SmallBusinessEconomics,Volume24,Number3,pp.193220.
42 Knight,F.H.,(1921),Risk,Uncertainty,andProPit,Boston:Hart,Schaffner&Marx
overlookedorgoneundiscoveredbyothers.43Likeotherentrepreneurstheysharethe
changeperspective.Entrepreneursseechangeasthenormandashealthy.44
Entrepreneursareinvolvedinnetworksofmultipleandchangingclients,competitors,
colleagues,etc.Whatdifferentiatesentrepreneursfromnonentrepreneursisthat
entrepreneurscreateorganisations,whilenonentrepreneursdonot.45
Baseduponanextensiveliteraturereview,theOECDestablishedthefollowingseriesof
dePinitionsonthegeneralentrepreneur:46
Entrepreneursarethosepersons(businessowners)whoseektogenerate
valuethroughthecreationorexpansionofeconomicactivity,byidentifying
andexploitingnewproducts,processesormarkets.
Entrepreneurialactivityisenterprisinghumanactioninpursuitofthe
generationofvaluethroughthecreationorexpansionofeconomicactivity,by
identifyingandexploitingnewproducts,processesormarkets.
Entrepreneurshipisthephenomenonassociatedwithentrepreneurialactivity.
WhenanalysingtheinPluencesthatdeterminetheperformanceofanenterprise,in
additiontothenatureofentrepreneurialactivities,threetopicsarise:
Organisingresources,whichincludesaccessto:(i)physicalcapitalsuchas
propertyorplantandequipment,(ii)PinancialcapitalsuchasdebtPinanceor
equity,and(iii)intangibleresourcessuchasintellectualpropertyor
technology.TheseresourcescantypicallybeboughtandsoldbyPirmsor
individuals.ChangesintheseresourcescanhavedramaticimplicationsforPirm
performance,typicallyresultingfrom(i)creativeinventionsordiscovery,or
(ii)unusualanduniquecombinationsoftheseresources.
Entrepreneurialcapabilities,whichincludesthehumanandsocialexpertise
requiredtoleverageaPirmsresourcesandbringthemtomarket.Inan
entrepreneurialcontext,theseinnovativecapabilitiesincludetheperception
andrecognitionofamatchbetweencreativeresourcesandmarket
opportunities.Thismayincludenovelandskilledcapabilitiesaswellasunique
orunusualsocialnetworksandconnections.
Marketsandmarketconditions,whichincludetheperceptionanddiscovery
ofmarketopportunitiesasoneofthemostimportantabilitiesofsuccessful
entrepreneurs,marketentryandmarketdistortions.47
Thereareanumberofdeterminantsofentrepreneurshipthatcanhelporhinder
entrepreneursintheiroperations,48 anddeterminethelandscapeofentrepreneurship.
49However,thedifferencesbetweenvariousstudiesontheseareoftenlargelysemantic;
mostagreeforexamplethatentrepreneursandentrepreneurshiparecreatedbya
combinationofthreefactors:opportunities,skilledpeopleandresources(capitalbeingthe
mostcritical).50Thesethreefactorsareallaffectedbytwoimportantcontexts:the
surroundingregulatoryframeworkandculture.
43 Kirzner,I.M.,(1973),CompetitionandEntrepreneurship,Chicago,IL:UniversityofChicagoPress
44 Drucker,P.F.,(1985),Innovation&Entrepreneurship,NewYork:HarperandRow
45Gartner,W.B.,(1988),Whoisanentrepreneur?isthewrongquestion,AmericanJournalofSmallBusiness,Volume12,
Number4,pp.1132.
46Ahmad,N.,andSeymour,R.,(2008),DePiningEntrepreneurialActivity:DePiningSupportingFrameworksforData
Collection,Paris:OECDStatisticsWorkingPaper
47Ardichvili,A.,Cardozo,R.&Sourav,R.,(2003),ATheoryofEntrepreneurialOpportunityIdentiPicationandDevelopment,
JournalofBusinessVenturing,Volume18,pp.10523.
48 Kooyman,R.,(ed),(2009),DeterminantsofEntrepreneurshipintheCCIs,HKU
49 Schramm,C.,(2006),TheEntrepreneurialImperative,NewYork:HarperCollinsPublishers
50 EuropeanCommissionGreenPaper,(2003),EntrepreneurshipinEurope,COM(2003)27Pinal,availableat:http://
ec.europa.eu/enterprise/entrepreneurship/green_paper/green_paper_Pinal_en.pdf
TheOECD/EUROSTATEntrepreneurshipIndicatorProjectidentiPiedsixthemes(Fig.1.)
thatdescribethedeterminantsaffectingentrepreneurialperformanceinorderto
encouragecountriestousethesamedePinitions,methodologiesandclassiPicationswhen
discussingentrepreneurialactivities.51
Figure1:TheOECD/EUROSTATFrameworkforDeterminantsofEntrepreneurship
(Source:OECD/EUROSTAT,2008)
Themaincharacteristicsofthesethemescanbedescribedasfollows:
CapitalandAccesstoOinance:Coversallphasesofbusinesslife,fromaccessto
earlyseedfundstoaccesstothestockmarkets.
TechnologyandResearch&Development:R&Dandtechnologycreatesnew
inventionsthattheentrepreneurandentrepreneurialbusinessescanturninto
newproductsorprocesses.TheR&Dinthiscontextshouldbeunderstoodasa
resourcethatcanbecreatedorpurchased,whetherdirectlyorinanembodiedor
diffusedform.
Entrepreneurialcapabilities:Theentrepreneurialcapabilitiesincludethe
humanandsocialcapitaloftheentrepreneurs.
Marketconditions:Opportunitiesarecreatedbythemarketconditionsinthe
country.Thesemarketconditionsincludepublicinvolvementinmarkets,
competitioninthemarkets,accesstoforeignmarkets,procurementregulation,
andstandardisation.
Regulatoryframework:Entrepreneurshiphappenswithinaregulatory
framework,whichaffectsperformance.Acombinationofopportunity,capabilities
andresourcesdoesnotnecessarilyleadtoentrepreneurshipifopportunitycosts
(e.g.forgonesalaryandlossofhealthinsurance)andstartupcostsoutweighthe
potentialbenePits.Inthisframework,theregulatoryframeworkisdePinedvery
broadlyandincludesalltaxes,regulationsandotherpublicrulesandinstitutions
affectingentrepreneurship.
Culture:affectsallpartsofthemodelandisincludedasthePinalfactorinthe
framework.CultureinPluencesanentrepreneursbehaviour,attitudes,andoverall
effectivenessand,moreover,isoftenunnoticedbytheentrepreneursinceitisthe
conduciveenvironment.Inthisframework,culturecompriseseachindividuals
assumptions,adaptations,perceptionsandlearning.52
EachofthesethemesisconsideredinChapter3andadaptedtothespeciPiccontextofthe
CCIs.ReturningtoSchumpetersdePinition,whereasthegeneralentrepreneurcombines
innovationandcreativity,thecreativeaimoftheculturalandcreativeentrepreneurmay
haveadifferentfocus.Howkins(2001)53combinedSay'sdePinitionwiththeCreative
Economy:
EntrepreneursinthecreativeeconomyoperatelikeSaysoriginalmodel
entrepreneurbutwithanimportantdifferencetheyusecreativitytounlockthe
wealththatlieswithinthemselves.Liketruecapitalists,theybelievethatthiscreative
wealth,ifmanagedright,willengendermorewealth".
51OECD/EUROSTAT,(2008),MeasuringEntrepreneurship.Adigestofindicators,Geneva/Paris:Eurostat/OECD
52Ivancevich,J.M.,Konopaske,R.,andMatteson,M.T.,(1996),Organizationalbehaviourandmanagement.Chicago:
UniversityofHouston
53 Howkins,J.,(2001),TheCreativeEconomy:HowPeopleMakeMoneyFromIdeas,NewYork:Penguin,p.129.
ThistypeofcreativityiswhatKEAnamedculturebasedcreativityinitsrecentreport
ontheImpactofCultureonCreativity,54 whichentailsanuancefromgeneral
entrepreneurialcreativity.Withthisbasicunderstandingofentrepreneurship,theterm
culturalandcreativeentrepreneurmaydivergefromthegeneraltermduetothetypeof
creativitybeingusedandhowitrelatestoentrepreneurialdrive.Theuseofculturebased
creativitycanbelinkedtotheculturalandcreativeentrepreneur,allowingforthe
combinationofculturalandcreativedrivesalongsidetheentrepreneurialones.
2.1.3.Culturalandcreativeentrepreneurship
CulturalandcreativeentrepreneurshavespeciPiccharacteristics:theyoperateindifPicult
marketconditions;producegoodsthatare'cultural'bynature;workwithpeoplethatare
oftenmorecontentdriventhancommerciallyoriented;andusuallycreateverysmall
enterprisesthatexistonthebasisofmorepermanentnetworks.
Arisingfromtheartsmanagementarena,theexaminationofculturalentrepreneurshipas
adistinctapproachforderivingeconomicandsocietalvaluehassomeconsiderablemerit.
CulturalentrepreneurshipcanbedePinedas:
...theprocessofintegratingtwofreedoms:artisticfreedomasimmaterial
contentorientedvalue,andentrepreneurialfreedomasmaterialvalue,
supportivetoimmaterial(cultural)values.55
Withthisfoundationinmind,andaccordingtothegeneralsocietalresponsibilityof
entrepreneurs,culturalentrepreneurshipcanbedescribedastheconceptofrunning
aculturalorcreativeorganisation;drivenbyanexplicitstrategicculturalmission;
takingrisksinbalancingcreativeandmanagementvalues;andcontributingtoa
vitalinfrastructureinitsdirectenvironment.
Formostoftheexpertsinterviewedforthisstudy,thecharacteristicsofculturaland
creativeenterprisessuchasproductdifferentiation,thelabourmarket,marketconditions,
theneedforcooperationandnetworking,andthedifferencesinproductionand
distribution,justiPiedtheneedforthisdistinctiveterm.Thereiscertainlyaneedto
acknowledgethedifferentenvironmentinwhichtheCCIsoperate:
Marketsaretotallydifferent.ThisisthewholepurposeofsomespeciNicpolicies,
thatareadaptedtothecreativeindustries,tothecharacteristicsofthe
enterprises,ofthemarket,ofbusinessmodels,andlabs...itcanbeusefultohave
adaptedpolicieslinkedtotheterm.
(InnovationCluster,StructurallyStrongTraditionalEconomy)
MostrespondentsfeltthatsuchadistinctionwasneededtoprovidespeciOic
supportiveschemesadaptedfortheCCIsector,thoughnoteveryoneagreed:
Creativeentrepreneurshipisaredundantdimensioning.Inthetermof
Schumpeter,entrepreneurshipisalwayscreative.IntheCCIs,whenwetalk
aboutcreativity,wespeakaboutthecontent.
(RegionalCCSMESupportcentre,StructurallyStrongTraditionalEconomy)
IntheinterviewsconductedacrossEuropeforthisstudy,twomainopinionsemerged
whenattemptingtodePinetheterm.Themajoritystronglysupportedtheusefulnessof
thedistinctconceptofculturalandcreativeentrepreneurshipwhileontheotherside,
somepreferredtoblendthetermwithinotherexistingdeOinitionsof
entrepreneurship.Therewas,however,generalagreementthatthetermusefully
highlightsthepotencyofthecombinationbetweencreativeandeconomicimpulses:
Creativeentrepreneurisauseful[term],Iwouldaddthetermcultural.Culturaland
creative,becausetheentrepreneursintheculturalsectorarepeoplethatarefocusing
ontheculturalvalueoftheirproductsandtheculturalsectorshavealotof
speciNicitiesthataredifferentwiththeothersectors...becausetherearecultural
products,becauseofwhattheycanspread.Ithinkthetermisimportanttohave.
54 KEA,(June2009),op.cit.,p.31.
55Hagoort,G.,(2007),op.cit.
Creative,alotofpeoplecouldhavethis,butculturalandcreative,...thatisimportant.
(EuropeanSectoralOrganisation)
Disagreementsaboutthetermweremostlyduetothefactthatitwasageneralisationand
didnotdifferentiatethevarioussectorswithinCCIs,implyingalackofdifferentiation
betweenthedivergingmotivesofculturalandcreativeenterprises.Thetermisoftennot
wellacceptedintheculturalsectorsasitisstilloverlyassociatedwithaOinancial
dimensionwhilenotsufPicientlyrecognising,orprioritising,theculturalandsocialvalues
behindthis.Ontheotherhand,theclichoftheartistwhocannotmanageabusiness
andlacksOinancialskillsisstillcommonlyheldamongeconomicpolicymakersand
inPluencestheongoingdistinctionbetweenentrepreneurshippoliciesandculturalpolicies.
Regardlessofthesedifferentperspectives,thereisaneedforaspeciPicdistinction,a
speciPictermtorecognisetheculturalbasisofcreativityandofthistypeof
entrepreneurship.Despitethefactthatitencompassedadiverserangeofsectors,most
respondentsrecognisedtheneed,atthistime,tomakeacaseingeneralforculturaland
creativeentrepreneurshipasthevalueofculturalandcreativeindustrieshasnotyet
beensufOicientlyrecognisedandtranslatedinthepolicyarena,despitenew
initiatives,suchastherecentEurope2020Strategy: 56
That'sabigdiscussion:whetherornotthereshouldbeacommondeNinitionfor
theCCIs.Maybenowitisusefultodistinguish[theCCIsfromtheother
industries].Inthefuture,whenwehaveprobablyevolvedtowardamore
creativeeconomyandcreativesociety,thisdistinctionwontbeusefulanymore.
Nowitisusefultobeabletounderstandthethinking,theprocessandhowto
succeed.Itisalsousefulinordertohaveitonthepoliticalagenda.
(RegionalCultureMinistry,StructurallyStrongTraditionalEconomy)
Inessence,aculturalandcreativeentrepreneurcanbeunderstoodassomeonewho
createsorinnovatesaculturalorcreativeproductorserviceandwhouses
entrepreneurialprinciplestoorganiseandmanagehis/hercreativeactivityina
commercialmanner.However,achievingabalancebetweenculturebasedcreativity
andentrepreneurshipisnotstraightforwardandasnotedentrepreneursdifferaccording
totheirmotivationsandthesectorsinwhichtheyoperate.Thetermthusreferstothefact
thattheseenterpriseshavecertaincharacteristics(seesection2.2below)whichwillaffect
themanagementoftheirentrepreneurialactivity.
Thetermculturalandcreativeentrepreneurshipthusattemptstodrawtheseworlds
together:recognisingthelatententrepreneurialspiritofanartist,thelatentcreative
spiritoftheentrepreneurandtheparticularenvironmentsinwhichculturaland
creativeenterprisesoperate.Havingframedthedistincttermincomparisontothegeneral
term,theentrepreneurialdimensionofCCIscanbebetterunderstoodusingthe
determinantsofentrepreneurshipadaptedtothecharacteristicsofCCIs(seeChapter3
below).
2.1.4.Combiningcreativityandentrepreneurshipforinnovation
Theconceptofculturebasedcreativityrecognisesthatthecombinationofpersonal
abilities,culture,creativity,technicalskillsandsocialenvironmentscanhaveasubstantial
impactonstimulatingresearch,optimisinghumanresourcesandinspiringpeople.57The
economicvalueofthisculturebasedcreativityhasbeenincreasinglyrecognised,58as
seenbelowinTable1.whichillustratesthetotalturnoverofCCIsinseverallarger
countries.AccordingtotheKEAreportof2006,thecreativeeconomygeneratedaround
2.6%oftheEuropeanGDPin2003andemployedover5millionpeople.59Thelatest
researchbyTerraconsultestimatedthatin2008itgenerated4.5%ofthetotalEuropean
GDP.Inthesamestudy,theyestimatedthatinFrance,thecoreactivitiesoftheCCIs(not
56 EuropeanCommissionCommunication,(March2010b),op.cit.
57KEA,(June2009),op.cit.,p.80.
58 Ibid.,p.42.
59 KEA,(2006),op.cit.,p.6,andEuropeanCommissionGreenPaper(2010),op.cit.,p.2.
Given this procedure, these results shall be
Regarding the non-core creative industries, there is considered with caution. However, our assumptions
a technical difficulty in determining the weight of remain valid since the objective is to provide orders
the non-core industries on a country level because of magnitude of the weight of creative industries
of gaps in the Eurostat data, which form the basis in order to portray the economic ecosystem at risk
of the calculation. To overcome this limitation we from widespread piracy.
includingthesupportenterprisessuchaslawyers)generated4.9%oftheGDP,inGermany
4.2%,3.8%inItaly,and3.6%inSpain. 60
Table 5 Weight of the creative industries in UK, France, Germany, Italy and Spain (2008)
UK FRANCE GERMANY ITALY SPAIN

Creative Industries VA Jobs VA Jobs VA Jobs VA Jobs VA Jobs
Core 6.2% 5.4% 4.9% 3.7% 4.2% 4.1% 3.8% 3.6% 3.6% 3.5%
Interdependant & support 3.4% 3.8% 2.6% 2.6% 2.3% 2.8% 2.1% 2.5% 2.0% 2.4%
TOTAL creative industries 9.6% 9.2% 7.5% 6.2% 6.5% 6.9% 5.9% 6.1% 5.6% 5.9%
Creative GDP (billion ) 175 142 162 93 62
Creative employment 2.7 1.7 2.7 1.4 1.2

(million)
Source TERA Consultants analysis
Table1:PercentageofeconomicturnoveroftheCCIpercountry
1.3. !CONCLUSION inseveralEuropeancountries61
(Source:Terraconsult2010)
Our analysis of the weight of the creative industries based on the KEA findings and the WIPO Guidelines provides
Theinterviewsforthisstudyshowedthatculturalandcreativeentrepreneursarean
a more complete assessment of the true scope of these industries in Europe, exceeding previously reported
results. We estimate that the creative industries represent a major European economic force, corresponding to
essentialpartofapostindustrialeconomywhichisincreasinglydemanddriven,user
6.9% of European GDP, and 6.5% of the European workforce. This translates into 860 billion revenues and
centredandwhichismorefocusedontheexperiencetakenoutofproductsandservices.
14 million jobs, reinforcing the importance of these sectors to Europes economy. The creative industries economic
62
Oneofthekeyargumentsistheneedtofocusonincentivesforcultureandculturebased
contribution is comparable to other key traditional industries, like automotive, and with greater weight than
creativityasresourceforcreativity,entrepreneurshipandinnovation,ratherthansolely
utilities or chemical industries. This major European economic area is being challenged by the threat of piracy.
focusingontechnologicalinnovation.
Tappingintothepotentialofculturalandcreativeentrepreneurs,andrecognisingtheir
culturebasedcreativityalongsidetheirentrepreneurialdrive,canallowenterprisesto
unleashinnovativesolutionsthatarenotnecessarilytechnologybased.Entrepreneurship
intheCCIscanthusbelinkedtoadvancesinnontechnologicalinnovation.Recognising
thelinkbetweenculturebasedcreativity,thedeterminantsofentrepreneurship
andnewformsofinnovationisthuscrucialforunlockingCCIspotential.
However,sincemostoftheEUbasedOinancialsupportforinnovationremainslargely
focusedonfunctionalandtechnologicalinnovation,theKEAreportunderlinedthatEU
effortshavenotbeensufPicientlytargetedtocultureandtonontechnologicalandnon
scientiPicinnovation.63Artsandculturearethusseenasessentialindevelopingand
fosteringacreativeenvironmentofferingarichculturaldiversity,aswellasproviding
innovativeprocessesessentialforachangingeconomicandsocialenvironmentby
developingexperience.64 TherecentpolicychangesatEUlevelareacknowledgingthis
needwiththeplanstoreviewinnovationpolicyinachangingeconomythatisincreasingly
dePinedbyexperience,nontechnologicalinnovationandqualityoflifeconcerns.
Inthisrespect,CCIshaveaspeciPicroletoplayininnovationbyfosteringcreativityand
producingoutputsthatcanserveasinputtotheinnovationprocess.65 Thereisaneedfor
greaterfocusontheprocessofinnovationasanexperiencetowhichtheCCIscan
meaningfullycontribute.
However,inpracticalterms,thetensionbetweentheprocessofcreationandthe
necessityofdealingwiththeadministrationandmanagementofanentrepreneurial
activityisparticularlydifPicultfortheCCIentrepreneur.Theartistorcreatormaynothave
60Teraconsultant,(March2010),BuildingaDigitalEconomy:TheImportanceofSavingJobsintheEUsCreativeIndustries,
p.17,seehttp://www.iccwbo.org/uploadedFiles/BASCAP/Pages/BuildingaDigitalEconomyTERA(1).pdf
61Independent&Supportincludeactivitiesrelatedtofacilitatingbroadcast,communication,salesofwork.Theyincludea
fractionofgeneralwholesaleandretailing,generaltransportation,telephonyandtheInternet.
62Ibid.,p.40.
63 Ibid.,p.125.
64EuropeanCouncilConclusions,(May2009),ConclusionsforCultureasaCatalystforCreativity,2941stEducation,Youth
andCultureCouncilmeeting
65Potts,J.,(2009a),CreativeIndustriesandInnovationPolicyinInnovation:Management,PolicyandPractice,Volume11,
No2,pp.138147.
alltheskillsandknowledgetodealwiththecomplexityofabusiness.Certain
organisations,suchasFlandersDistrictofCreativity(seeAppendix1,BestCase1),have
catalysedtheneedtomatchtheculturalandcreativeentrepreneurwitha
professionalmanagertomitigatetheirlimitedentrepreneurialskills.
Creativeindividualswillincreasingly
requireenhancedabilitiesandskillsto FlandersDC
blenddisciplines,methodsand FlandersDCisaFlemishgovernmentalorganisation
instrumentsinordertogenerateand thatpromotesentrepreneurialcreativityinthe
exploitthesehighlydynamicmarkets.The regioninordertoboostFlanderscreativityand
culturalandcreativeentrepreneurhasto innovation.Theyofferpatronageservicesforthe
beabletodrawuponexpertknowledge fashionsectorandmatchingwithbusiness
fromseveralareasanddisciplinesandto managers.
(SeeAppendix1,BestCase1)
moveefPicientlybetweentheminorderto
dealwithboththeartisticcreationandthe
requirementslinkedwithan
entrepreneurialactivity.Forexample,
Arteconomy
Arteconomybringstogethertheartistic
Arteconomyconnectsartandtheeconomythrough
andbusinessworldsbystimulating variousformsofcollaborationsuchaslongterm
collaboration(seeAppendix1,BestCase projectswithartistsincompanies,workshopsfor
2).Supportingculturalandcreative artistsandentrepreneursandatelierswhereartists
entrepreneurshipmeansnotonly andentrepreneurscanmeet.Arteconomywantsto
developingaconduciveenvironment stimulateabroadrangeofpeopletothinkaboutthe
forageneralentrepreneurbutalso convergencebetweenartandtheeconomy.
supportinganenvironmentthat (SeeAppendix1,BestCase2)
recognisesculturebasedcreativity,
encompassingbothaspectsofthecultural
andcreativeentrepreneur.
Amorefavourablecreativeclimatewill,inturn,resultinmoreideas,andgreatercreativity
isassumedtoincreaseR&Dandinnovativeactivities,andcontributetofostering
innovativesolutions.Ultimately,creativitycanbefoundinourcultures,inoursurrounding
territory,inthequalityofoureverydaylifeandourproducts.Itisnotanendinitself,but
aprocess,anextraordinarymeanstoproducingnewideas.66
Inthissense,creativityandculturearethepillarsofsocialquality,seeninthecontext
ofafree,economicallydeveloped,fairandculturallylivelycommunitiesenjoyingahigh
qualityoflife.Creativityandcultureareinextricablybound.Theyareasuccessful
combination,whichcanstrengthenEuropeaninnovationatatimeofstrategictransitionin
theinternationalprocessofglobalisation.
2.2.Characteristicsoftheculturalandcreativeindustries
TheCCIshaveaparticularcharacterthatismarkedlydifferentfromotherindustries.
Whenconsideringthesecharacteristicsseveralissueswereconsidered67including:
SizeofCCIenterprises
CharacteristicsoftheCCIlabourmarket
CharacteristicsofCCIenterpriseprocesses
Marketconditionsandshiftingbusinessmodels
RegardingtheselectionoftheNACEcodes,68severallimitationshavetobeclariPied.Given
theimpossibilityofaccuratelyestimatingthecompaniesrelatedtoCCIswithinthe17
NACEcodes(intermsofthetotalnumberofPirms,employeesandturnover),certain
sectoralbiasesareincludedinthestatisticalanalyses.TheseareexplainedinAppendix
2.10.
66Santagata,W.,(2009),op.cit.,p.17.
67Kooyman,R.,(ed),(2009),EnvironmentalfactorsintheCCIs,HKU
68FromtheFrench'NomenclaturestatistiquedesActiviteseconomiquesdanslaCommunauteEuropeenne'Statistical
classiPicationofeconomicactivitiesintheEuropeanCommunity
2.2.1.ThesizeofCCIenterprises
ThediversityofCCIsisrePlectedinitsrangeofbusinesses.Thisincludeseverytypeof
enterprisefrommultinationalcorporationstosectorscharacterisedbyahighproportion
ofSMEs(forexample,architecture,fashion,crafts);andothersthatincludeabroader
spectrumoflargeandsmallbusinesses(notablysoftware,publishingandtelevision).69
However,themajorityofCCIsareverysmallenterprises.70Around80%ofenterprisesin
theCCIsconsistofSMEswithmanysoletradersormicroSMEsemployingonlya
handfulofpeople.Infact,CCIworkersaremorethantwiceaslikelytobeself
employedasthewholeeconomyaverage.71However,althoughthevastmajorityofCCI
businessesaremicroenterprises(employingfewerthan10people),theyareresponsible
foronlyamodestpercentageofthetotalturnoveroftheCCIs(18%).
AsseeninTable2.below,withinthismajorityof'microenterprises',almost60%are
verysmallbusinesseswithonly1to3employees.72Thestatisticalanalysisundertaken
duringthisstudyconPirmsthattheoverwhelmingmajorityofCCIenterprisesarevery
smallmicroSMEs.Thenumberoflargescaleenterprisesismarginal,atlessthanone
percent,buttheyareresponsibleformorethan40%oftheannualturnover.
Enterprisesize Classofenterprise(#ofemployees)
SMEs
Sector 13 49 1049 50249 250+

Advertising 60.74% 24.28% 13.60% 1.19% 0.19%
Architecture 62.71% 22.86% 12.59% 1.63% 0.22%
Book&Press 58.74% 23.95% 14.37% 2.38% 0.56%
Design 45.17% 29.49% 21.50% 3.36% 0.47%
Fashion 51.59% 25.30% 18.95% 3.57% 0.58%
Film&Video 59.73% 25.69% 12.75% 1.60% 0.24%
Music 69.18% 18.35% 10.20% 1.83% 0.44%
PerformingArts 63.01% 21.93% 12.52% 2.25% 0.30%
Radio&Television 47.40% 26.86% 20.94% 3.96% 0.84%
SoftwarePub. 62.34% 20.60% 13.91% 2.64% 0.51%
VisualArts 61.62% 21.97% 12.86% 2.96% 0.59%
Average 58.38% 23.75% 14.93% 2.49% 0.45%
Table2:DistributionofEnterpriseamongIndustriespersizeclass
(Source:Eurokleis2009)
ThesestatisticsconPirmanimportantbasiccharacteristicoftheCCIs:namelythatwhile
thevastmajorityofenterprisesareSMEsandmicroenterprises,thelargerenterprises
(withmorethan50employees)contributeasubstantialpartoftheoverallrevenues.Not
surprisingly,thischaracteristichasimportantimplicationsforpolicymakers.Fig.2.below
illustratesthesizeofenterprisesacrosstheCCIsbysector.
69ProportionofemploymentaccountedforbyUKownedSMEs:Designerfashion96%,Architecture92%,Softwareand
computergames57%,TVandradio28%,Publishing28%.DCMS,(Aug2007b),CreativeIndustryPerformance:AStatistical
AnalysisforDCMS,FrontierEconomics,London:DepartmentofCulture,MediaandSport
70ReidlS.,Steyer,F.(2006),ZwischenUnabhngigkeitundZukunftsangstQuantitativeErgebnissezurArbeitindenWiener
CreativeIndustries,Vienna:Forba
71See:DCMS,(Aug2007a),AnAssessmentofProductivityIndicatorsfortheCreativeIndustriesLondon:Departmentof
Culture,MediaandSport;andSondermann,M.(Feb2009),CultureandCreativeIndustriesinGermany,Berlin:BMWI
72EichmannH.andReidl,S.,(2006),ErwerbsttigkeitinderArchitektureinhartesPPlaster,BaukulturReport2006.
Retrieved25August2009:http://www.baukulturreport.at/index.php?idcat=48
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(Source:Eurokleis2009)73
ThischaracteristicofCCIsisoftencalledthe'missingmiddle:mediumsizedenterprises
seemtobealmostabsent.Inviewofthestatisticalobservationsandtheinterviewees
conducted,thereisasubstantialdifPicultyforsmallenterprisestogrowintomediumsized
Pirms.ThegapbetweenthebiggerplayersandthemicroSMEsrendersthegrowthof
microSMEsdifPicultandincreasesthedifPicultyinaccessingmarketsforthesmaller
players.AscanbeseeninFig.3.andFig.4.below,thereareextremedifferencesin
turnoverandassetdistribution.
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73Atthetimeofthestatisticalanalysis,thedePinitionofnewmediawasnotspeciPicandthecategorysoftwarepublishersin
thiscasecombinesbothnewmediaandvideogames.
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Figure4:DistributionoftotalAssetsamongIndustriespersizeofenterprise
Averysmallnumberoflargescale
enterprisesdominatethesectoralmarkets AIE:ItalianPublishersAssociation
andhavelongestablishedinfrastructures AIEisasectoralorganisationsupportingthe
forresearchanddevelopmentactivities publishingindustry.AIEhasactivelyestablisheda
while,ontheotherhand,microSMEsdo numberofcoreactivitieswhichareespecially
nothaveaccesstosimilarpathsto focusedonsupportingSMEsintheItalianpublishing
growthastheydonothavethesame industry.ThebookfairPiliberiisanindependent
infrastructuresandarethereforeforcedto publishersbookfairaimingatincreasingthe
adoptahighlyPlexibleattitudeandPindad visibilityofindependentSMEs.
hocsolutionstospeciPicproblemsinorder (SeeAppendix1,BestCase3)
tosustaintheirexistence.Nonetheless,
therearesomeexamplesofgood
initiatives,suchasthatofAIEinItaly(seeAppendix1,BestCase3)whoactivelyseekto
enhanceandsupportindependentSMEs.
ThestrategiesusedbythesemicroSMEsarenecessarilysmallscale,highlydynamicand
requirerisktakingtocompetewithmoreestablishedenterprisesthatdonotrequiresuch
Plexibility.ThestructuralcharacteristicsofthesemicroSMEsimposearequirement
tomaintainahighlevelofdynamicentrepreneurialskillstoremaincompetitive.
However,theseskillsareusuallylearntonthespotanddonotseemtobesufPicientto
provideclearpathstoenterprisegrowthforCCISMEs.
2.2.2.CharacteristicsoftheCCIlabourmarket
Asmentionedabove,manyCCIenterpriseshavetointegratebothartisticfreedomasan
immaterialvalueandentrepreneurialfreedomasamaterialvalue,supportiveto
immaterial(cultural)values.InmanywaystheyareacombinationofHomoEconomicus
andHomoLudens.74
Someentrepreneurswillbemoregrowthorientedwhileotherswillbemoredrivenby
theculturalandartisticvalueoftheirproductsorservices;thatis,morecreation
oriented.SpeciPicpatternsofemploymentwillbemaintainedbycertainCCIsinorderto
combinethePlexibleapproachofCCISMEs.Thisinherenttensionbetweenthetwo
typesofentrepreneurisoftenreOlectedinorganisationalstructures.
2.2.2.1.SMEsandfreelancers
Culturalandcreativeentrepreneursarefarmorelikelytoholdnonconventional
formsofemployment,suchasparttimework,temporarycontractsandfreelancing,than
74MokreM.,(2006),MyCreativity:ConventiononInternationalCreativeIndustriesResearch,Amsterdam.Retrieved25
August2009http://transform.eipcp.net/correspondence/1166104888
theworkforceingeneral.75InmostCCIsectors,fulltimeworkersreceivingregularpayare
intheminority.76 Multiplejobholdingisacommonformulaastheculturalworkersneed
aminimumincomeforsurvivalandsomedegreeofPinancialsecurity.MostCCIsectors
showthespeciPicdynamicsoffrequentjobchangesandworkingonshortterm
contractsisnormal. 77Duetothelowrecognitionoftheirintangiblecreations,some
culturalandcreativeentrepreneurswillcombineboththeirfreelancingactivitieswith
otherprofessionsthatoffersufPicientPinancialstabilitytosustainthesecreativeactivities.
Thisleadstoasituationinwhichthedistinctionbetweenemployedorunemployed
isobscured,blurredandproblematic:
Theculturalsectorischaracterisedbyahighshareoffreelancersandvery
smallcompanies.Anewtypeofemployerisemergingintheformofthe
entrepreneurialindividualorentrepreneurialculturalworker,whonolonger
Nitsintopreviouslytypicalpatternsoffulltimeprofessions.78
Manyoftheperformingartists,writers,directors,visualartists,craftspeople,composers,
designersandotherscanbeconsideredselfemployedfreelancers.Onaverage,creators
acceptbelowaveragepecuniaryearnings.Thiscanbepartiallyexplainedeitherbyrisk
seekingbehaviour,79orapreferenceforcreativeworkoverothertypesofemployment.80
Itemergedfromtheonlinesurveythat54%oftheCCIenterpriseshadlessthantenfull
timeemployeesintheircompany(seeFig.5.below).Asnotedabove,thisfragmentationof
CCIsintosmallenterpriseshasconsequencesfortheirstructures.Tocompetewithlarger
companieswithstructuraladvantagesintermsofadministrationandresearch,thesmaller
enterprisestendtoadoptamorePlexibleanddynamicattitudewhenrespondingtomarket
opportunities.Thismayinvolveoutsourcing,takingupmultipleprojectsorclustering
withdifferentorganisationsinordertobenePitfromalargercollectivestructure.To
mitigateagainstthislackofguaranteeofsuccess,CCIsoftenworkonmultipleprojectsto
spreadtherisk81andoftenfocusonprojectbasedinvestmentratherthancompany
Pinance.82
Question:Howmanyfulltimeemployeesdidyourenterprisehaveon31stDecember2008?
'#)(#+#
%!#)(#*+#
%#)#&#
$!#)(#&*+#
(#&$!#
!"# $"# %!"# %$"# &!"# &$"# '!"# '$"#
75 Benhamou,F.(2003),LEconomiedelaculture,Paris:LaDcouverte,4thed.
76 Throsby,D.,(2001),op.cit.,pp.12628.
77 Towse,R.,(2004),op.cit.,p.8.
78MKWWirtschaftsforschungGmbH,(2001),Exploitationanddevelopmentofthejobpotentialintheculturalsectorinthe
ageofdigitalization,PapercommissionedforEuropeanCommission,DGEmploymentandSocialAffairs,Munich
79Towse,R.,(2004),Towardsaneconomyofcreativity?inFOKUS,(2004),CreativeIndustries:Ameasureforurban
development?Vienna:FOKUSp.8.
80Throsby,D.,(2001),op.cit.,andCaves,R.,(2000),CreativeIndustries:ContractsBetweenArtandCommerce,Cambridge:
HarvardUniv.Press
82KEA,(May2010),PromotingInvestmentintheCulturalandCreativeSector:FinancingNeeds,TrendsandOpportunities,
ReportpreparedforECCEInnovationNantesMetropole,p.24.
Figure5:PercentageoffulltimeemployeespersizeclassenterpriseinDec.2008
(Source:Eurokleis2009OnlineSurvey)
Moreover,CCIsrequireskilledemployeesandareconsequentlymanuallabourintensive.
Thecreativeproductsandservicesrelatedtotheseindustriesusuallyrequirenotonly
strictlycreativeemployeesbutmanygeneralorcommercialemployeesthatcontributeto
theoverallproductionandsupplychain.Traditionally,culturalandcreativeentrepreneurs
areinterestedmainlyinthedevelopmentoftheirproductsandservicesratherthan
focusedontheirdistribution:inotherwords,R&Disthemainactivity,whileproductionis
secondary.83Thecompanywillgenerallyretainasmallcoreoffulltimeemployees
whilecallingonadditionalemployeesasrequired,accordingtothecompanys
needs.84
2.2.2.2Diversityinskillsacquisition
Duetotheabundanceofpractitionerswithverydiversebackgrounds(certiPicationby
degree,acquiringexperiencethroughinternship,vocationaldegree,etc.),thereareoften
difOicultieswhenrecognisingorcertifyingthequalityandreputationofculturaland
creativeentrepreneurs.ThismakesthepositionofthepotentialemployerintheArts(as
comparedtootherlabourmarkets)especiallydifPicultbecauseofalackofinformationand
qualitycriteria.85
Awardscanactasintermediatestandardsonthequalityoftheculturalandcreative
entrepreneur.86CommissionersintheArtsplacelittlerelianceoncertiPicationbasedon
formalschoolingandoftenusetheirownscreeningdevices(artcompetitions,referees,
peerreviews,etc.).LearningonthePlyiscommonforculturalandcreative
entrepreneurs.Inouronlinequestionnaire,78%oftherespondentsvaluedtheironthe
jobtrainingasmuchastheirprofessionaltraining.
Ononehand,themajorityofenterprisesachieveverylowrewards,signiOicantlybelow
workforcesinotherindustrieswithsimilarhumancapitalattributes.Ontheother
hand,therearearelativelysmallnumberofstarswithveryhighturnover.87
2.2.2.3.CCIemploymentbysectors
Fromtheaggregateddatainthestatisticalanalysis,thelargestindustriespernumberof
workersemployedare:Fashion(31.41%,oftotalemployees),Design(20.12%),
Architecture(10.74%)andBook&Press(9.89%).Theinclusionoftheretailsectorwithin
thefashionsectormayexplaintheunexpectedlyhighnumberofworkersinthissector
(SeeFig.6.).
ThesenumberscoverthetotalnumberofemployeesindifferentsectorsoftheCCIs.As
notedabove,culturalandcreativeentrepreneursarealsoemployedinmanyothersectors
oftheeconomy,contributingtothedevelopmentofthecreativecapacityofnonCCI
companies.Forexample,theUKTechnologyStrategyBoardestimatesthatfromthe1.1
millionpeopledirectlyemployedinthecreativeindustriesintheUK,thereareanother
800,000individualsworkingoutsidetheculturalandcreativesector. 88
83Lash,S.andUrry,J.,(1994),EconomiesofSignsandSpace,London:SagePublications,ascitedin:HandkeC.,(2006),
SurveyinginnovationintheCreativeindustries,Berlin/Rotterdam2006
85 Towse,R.,(ed)(2003)AHandbookofCulturalEconomics,Cheltenham,EdwardElgar.
86SeeWijnberg(2003)foradiscussionoftheroleofawardsinthearts.Wijnberg,N.(2003)Awardsin:Towse,R.(ed)A
HandbookofCulturalEconomics,Cheltenham,EdwardElgar:pp.8184.
87 UNCTADetal(2008),TheCreativeEconomy,UNCTAD/DITC/2008/2,Geneva
Figure6:PercentageofEmployeesperSector
Inanotherexample,therecentECWorkingPaperonDesignasadriverofuserled
innovationconPirmedthistrendinthedesignsector,demonstratingthatmanydesigners
workedinnondesignindustriesasinhousedesigners.90 Thissuggeststhatthecultural
andcreativeentrepreneurandtheCCIshaveagreaterimpactontheeconomyasa
wholethanaccountedforinthestatistics.
2.2.3.CharacteristicsofCCIenterpriseprocessesandoutputs
InadditiontothespeciPiccharacteristicsofCCIsbothintermsofstructureandlabour,the
processesofproductandservicecreationinwhichtheCCIsengagearehighlydistinctive,
especiallyduetotheirsmallsize.CCISMEsoftenengageinnetworkbasedprocesses.Some
ofthesevalueandknowledgecreationprocessesareoftennotrecognisedas
traditionalresearchapproachesandCCISMEsmaythereforebeunabletoaccess
researchfundingresources.
CCIsoftensupplycontentthatrequiresculturebasedcreativityasknowledgebased
andlabourintensiveinputthatishardtomeasureintermsofeconomicvalue.This
complicatestheprovisionofPinancialsupporttoCCIs,astheycannotalwaysdemonstrate
theeconomicviabilityoftheirproductsandservices.Culturalandcreativeproductsand
servicesoftenhavespeciPiceconomiccharacteristics:forexample,theycanbeproduced
onthespotandcannotbeconsumedinanyothercontext(theatreperformances,dance,
liveconcerts).Theseproducts/servicesareanextremeexampleofproduct
differentiation.91
Thefactthatmanyproductsandservicesareintangibleassets,subjectiveinvalueand
oftenprojectbased,92 distinguishesthemfromothermanufacturedproducts.Duetothe
highdegreeofuncertaintysurroundingthesuccessoftheseintangibleassets,the
contentbasedindustriesinparticularwilltendtoworkonseveralprojectsatthe
sametimeinordertobalancetheriskassociatedwithlesssuccessfulproductsor
services.However,thisalsoimpliesthattheculturalandcreativeentrepreneursmay
89ThestatisticalanalysisonPirmcharacteristicswastakenfromtheChambersofCommerceasexplainedinsection1.2
90ECStaffWorkingDocument,(2009a),op.cit.,p.27.
91TheUNESCOconsiderslocalculturalindustriesrelevanttocounterbalancethestandardisationofcultureasaresultofthe
ongoingprocessofglobalisationintheinformationsociety(UNESCO,2001:13;UNESCO,19/11/2001:13;UNESCO,
2122/09/2000;UNESCO,1415/06/1999).
92EspeciallysectorssuchasPilm,TV,music,games.UKTechnologyStrategyBoard(2009),op.cit.,p.18.
receiveonlypartialPinancialadvancesforcertainproductsorservicesthatwillnotbe
successfulandthismayleadtosigniPicantPinanciallimitationsfortheentrepreneurs.
Naturally,intangibleinnovationishardtoquantifyandisnoteasilyrecognisedbythose
outsidetheCCIs.Currently,thesoftinnovatorsarenotlabelledascontributingtoR&D
andcannotreceivefundingorequalrecognitionfromeitherscientiPicorappliedresearch
initiatives.ScientiOicresearchinstitutesstillreceivemostoftheR&Dfundingas
opposedtoappliedresearchinstitutesorotheremergingcommunities.Inarecentstudy
oninnovationinSwedishservicecompanies,itwasshownthat50%oftheinnovation
camedirectlyfromcustomers,35%fromemployeesandonly3%fromexternalR&D. 93
2.2.3.1Productionprocesses
Productiontakesplaceeitherinsmallscaledirectcontactbetweenproducerand
consumer,orwithreproducible,massmediaproducts,innetworksofintermediaries.
Theseintermediariessuchaspublishers,Pilmproductioncompaniesorrecordcompanies,
bringculturalproductsandservicesandanaudiencetogether.Theyexploiteconomiesof
scaleandscopethatapplyinparticulartocapitalintensiveaspectsofproductionand
promotionratherthaninthelabourandknowledgeintensiveprocessofcreation.
However,theincreasingdigitisationofcontentandserviceshasopenednewproduction
anddistributionpossibilities.94
Theimportanceofdigitalcontentforthe
CCIshasledtothedevelopmentofnew CrossoverLabs
applicationsandtheintegrationandre CrossoverLabsintheUKorganisesworkshopswith
aggregationofexistingmedia.Crossover multidisciplinaryparticipantsaimedatexchanging
Labsisanexampleofanorganisationthat informationinordertocreateinnovativeprojects
supportsintegrationintheproduction withtheuseofnewmediatools.
process(seeAppendix1,BestCase4). (SeeAppendix1,BestCase4)
MuchlikeCrossoverLabs,theGATE
projectintegratesdifferentactorstoapply
newtechnologyforthegamesector(see
Appendix1,BestCase5).Thecreative GATE
contentindustryisgrowinginimportance GameResearchforTrainingandEntertainment
(GATE)intheNetherlandsisasectoralprojectfor
andiswelldevelopedthroughoutthevalue gamesaimingatimprovinglearningsystemsand
chain.TheInternetandchanging advancingnewtechnologytoSMEsinorderto
consumerpreferencesareaddingtothe advancethesectoranddevelopingknowledgefrom
complexityofthePlowoffundsbetween appliedresearchwithSMEs.
thedifferentplayersinthesevaluechains. (SeeAppendix1,BestCase5)
Consumerspendingisthesinglemost
importantsourceoffunds.Physicalmedia
stillrepresentasubstantialpartofthemarket,butthisismostexposedtoonline
substitution.95
Thetraditionalideaoftheproductionchainisnowevolving,andinmanycases
intermediariescanbebypassed.96 Takingitsdistancefromthelinearproductionprocess
impliedintheconceptofavaluechain,thetermvaluecreatingecologiesencompasses
theideaofaconstellationofPirmsthataredynamic,withvaluePlowbeingmulti
directionalandworkingthroughclustersofnetworks.97
93ALMEGA(2008),SurveyoninnovationinSwedishservicecompanies,takenfromKoefoedQuinn,M,TheEUperspective
onICTandCreativeIndustry,CReATEInternationalConference,TurinNovember2009,http://www.letscreate.eu/
Pileadmin/_create/downloads/presentation_conference/02_20091104_CReATE__Mette_K_Quinn.pdf
95 AnalysisMason,(May2009),FosteringcreativeambitionintheUKDigitalEconomy,London:AnalysisMason,London
96 Hearn,G.N.andRoodhouse,S.C.andBlackey,J.M.(2007),Fromvaluechaintovaluecreatingecology:Implicationsfor
creativeindustriesdevelopmentpolicy,InternationalJournalofCulturalPolicy,Volume13,Number4,pp.419436.
97 Ibid.,p.6.
ThisideacanbetterrepresenttheshiftexperiencedbymanyCCIs,fromconsumerstoco
creatorsofvalue,fromproducttonetworkvalue98andfromsimplecompetitionto
complexcoompetition.99 Theculturalandcreativeentrepreneuroftenhastocreate
directuserproducerinteraction.Theyhavetointeractcloselywiththeirtarget
audiencesothattheycanmonitortrendsorinitialreactionsbyearlyconsumersoftheir
ownproducts.
Technologicaladvances,suchasmultiplatformcapabilities,makeitpossibletohave
greaterconnectivitywiththeuserandcanprovideafeedbackinthelooptoproduction,
allowingausertointeractdirectlyandallowingtheproducertoadapttochanging
demand.Theincreasinginclusionoftheuser/consumerascoproducercoupledwith
efPicientcommunicationchannels,hasledtoaconvergencebetweentheconsumptionand
theproductionstages.
Theincreaseinthenumberofknowledgesourcesandknowledgeinformationsharingalso
hastheindirectconsequenceofblurring
theboundariesbetweenthesectors100
andleadstoariseinmultidisciplinary b.TWEEN
teams.Forexample,b.TWEENisaplatform b.TWEENisacrossplatformdevelopmentlabinthe
UKthatfosterstheexchangeofideasbetween
thataimstoincreasetheexchangeofideas differentdisciplinesaswellasofferingadviceand
usingdigitalmediamethodsinorderto methodsforblendingdigitalmediamethodswithin
increasethecreationoforiginalideas(see theCCIenterprise.
Appendix1,BestCase6). (SeeAppendix1,BestCase6)
Theactivitiesthatdirectlycontributeto
thecreationofanoriginalcultural
product/serviceareembeddedinalandscapeofadministrative,organisationalor
manufacturingactivities.Thesenetworksoflawyers,businessmanagersor
accountantscontributetothespeciOicationofcontractualarrangementsintheCCIs
andareanintegralpartoftheindustriesstructure.
2.2.3.2Outsourcing
ManyCCIsarecreationorientedandmanyofthemchoosetoremainsmallinorderto
keepthisOlexibilityandadaptabilitythatlargerCCIenterprisesdonotnecessarily
possess.Asnotedabove,largercompanieshaveastructuraladvantageintermsof
research,development,administrativemanagementanddesignactivitiestowhichthe
microSMEshavelittleaccess.Equally,thereproduction,distributionandpromotionof
creativeproductsandtheadministrationofrightsarecomplexprocedureswherelarger
companieshaveanadvantagecomparedtothesmallerones.
However,thelargerenterprisesdonottakethesamerisksasmicroSMEs. 101Micro
SMEsoftenadoptaPlexibleattitudewithnewdynamicandsmallscaletoolsandprocesses
toprovidesolutionstospeciPicproblemsinorderforthemtocompetewithlarger
organisationsthatarenotcapableofbeingasversatile.ThisallowstheCCISME
entrepreneurtomaintainarisktakingattitude.Thisattitudeisnotnecessarilyeasyto
sustaininalargercompany,asexpressedbyoneinterviewee:
Thecreativeindustriescanbeamodelforhowtheknowledgeeconomyin
generalisdeveloping.SosmallercompaniesareNlexible,theyhavemore
collaboration,morefreelancers,andthereforetheycanbeatestbedfortrying
outnewsupportmechanismsthatcaneventuallyberolledouttothewider
economy.
(EuropeanThinkTank)
98Ibid,p.10.Networkvalueisthuscreatedandextractedinanetworkofrelationshipsandvaluecanbestbeunderstood
holisticallyasafunctionoftheentirenetwork.
99 Ibid.,p.7.:Thecombinationofcompetitiveandcooperativeprocessesistermedcoompetition.Inavaluecreating
ecology,theCCIsmodelsfollowtheideasofsimultaneouscooperationandcompetitionbetweenmembersofanecosystem,
Ibid,p.14
101 ECGreenPaper,(2010),op.cit.,p.7.
ThestructureoftheCCISMEenterpriseismoreadaptive,preferringoutsourcing
solutionsforadhocserviceswhilemaintainingasmallcoreteamofemployees.The
solutionfavouredbymanyorganisationsintheCCIsistovarythedegreeofintegration
andcontrolovervariousaspectsofproductionandtooutsourcethistosmaller,
risktaking,dynamicenterprises.
Eventhelargestintermediaryenterprisesregularlyorganisetheproductionofnewmedia
contentinrelativelysmall,semiautonomousteams.Outsourcingalsoresultsintheneed
formicroSMEstobeabletocombineboththecreationaswellastheadministration
linkedtotheirfreelanceactivities.Asnotedbyaregionalinstitute:
ThebigcompaniesintheCCIshavereducedtheiremployeesinthepast50
years...theyoutsource.Thedegreeofoutsourcingisveryhigh.Thisalsomeans
thatpeopledon'tdowhattheyaregoodat(theyneedtoacquirethejob,haveto
maketheirowntaxes,havetodoeverything,marketing)Andinthepastthis
wasdealtwiththroughthedivisionoflabour.Socreativepeoplelosealotof
timedoingthingstheyarenotgoodatandthatshouldn'tbetheirjob!.
(RegionalInstituteforCCI,StructurallyStrongTraditionalEconomy)
ThefactthatCCIshaveconsequentdisparitiesinsizeandgrowthstrengthensthe
tendencytooutsource,especiallyinsectorsinwhichautomationofproduction
enablesoutsourcing,suchastheretailworkinthefashionsectororincertain
computergames.Further,todealwiththemonopolistictendenciesofsomeCCIs,a
highpercentageoffreelancersandmicroSMEsrelyonnetworksandpersonal
contactsinordertoactasagroup.
2.2.3.3.CharacteristicsofCCIoutput
Internationalbodies,suchasUNESCOwithitsConventionontheProtectionofCultural
Diversity,102 notethatculturalgoodshavetobesetapartfromstandardisedmass
consumptionorevenexcludedfrominternationaltradeagreementsandcompetition
regulations.103 Culturalproductsarenotsimplymerchandise,butexpresscultural
uniquenessandfosterculturaldiversity. 104
Theirutilityandqualityforanyindividualcannotoftenbedeterminedwithanycertainty
priortoconsumptionandsometimestastechangesasaresultofrepeatedconsumption.In
general,demandwillincreasewithexposure,inaprocessofrationaleaddiction.105
Culturalandcreativeproductsandservicesarealsoexperiencegoods.106 Culturalproducts
andservicesstageanexperiencethatisdirectlyrelatedtotheuser.Inordertostagethis
experience,theusersdemandswillbetakenintoconsiderationinthedesignofthe
productsandservicescontinuously,throughfeedbackloops.Theseprocessesof
interactionformindirectoutputsoftheproducts/services.
ThesefeedbackloopsimprovethedesignoftheproductortheserviceofferedbytheCCI
enterpriseandusersareactivelytakingpartintheremouldingoftheproduct.Theend
102InOctober2005,148countriessupportedtheUNESCOConventionontheProtectionandPromotionoftheDiversityof
CulturalContentsandArtisticExpressions;expressingtheposition,thatmechanismstomaintainanddevelopdomestic
productionarenecessarybecausethediversegoodsproducedaroundtheworldarenotsimplymerchandise,but
expressionsofrichindividualuniquenessandculturalidentities.
103 UN/UNESCOGattsAgreement,UnescosGlobalAllianceonCulturalDiversity,EUexceptionsoncompetitionlaw,
exemptionsonstateaidandthestateaidprocedure.Stateaidisusuallyconsideredasincompatiblewiththecommon
marketwhenitdistortscompetitionbyfavouringcertainundertakingsortheproductionofcertaingoods.Financialsupport
toSMEsinthesectoroftheculturalandcreativeindustriescanbejustiPiedwhenitis(1)promotingeconomicdevelopment
ofareaswithanabnormallystandardoflivingofseriousunderemployment,(2)itisfacilitatingthedevelopmentofcertain
economicactivitiesofcertaineconomicareas,(3)itispromotingcultureandheritageconservation.Retrievedat14Dec.
2009from:http://www.europa.eu.int.scadplus/leg
104Foradiscussiononthetensionsbetweencommercialisationontheonehandandculturalmeritontheother,see:
StedmanG.,(2006),FromGentlemanlyPublishingtoConglomerates:TheContemporaryLiteraryFieldintheUKIn
Eisenberg,C.,Gerlach,R.andHandke,C.,(eds.),(2006),CulturalIndustries:TheBritishExperienceinInternational
Perspective,Berlin:HumboldtUniversity
105 Throsby,D.,(2001),op.cit.,p.115.
106 KEA(2009),op.cit.,p.39.
resultofthesefeedbackloopsmayprovideinsightintodesignprocessesthatcanbere
usedinthefuture.Assuch,theCCIenterpriseoutputisnotmerelyaproductoraservice
butalsoincludesadesignprocess.ThebenePitsofbeingabletoreplicatethesedesign
processesareobviousinacommercialsense.AnadditionalbenePitisalsoavailableforthe
designer,whocanexamineandrePlectuponhisownworkPlowsandthismayleadtonew
outputsintermsofimprovedproductsorpathsthatappeartoleadinapromising
direction.
However,thedesignprocessofformingaproductoraserviceisnotalwaysexplicit.Those
workinginthecrossmediasectorarefamiliarwiththeartefactsfromparticularcreative
domainsbutarerarelyabletoaccessthedesignprocessesthatcreatedtheseartefacts.By
providinganintuitivelevelofaccesstothesedesignprocesses,SMEsworkinginthe
creativeindustries(suchasadvertising,mashup,curatorsetc.)arefarbetterableto
imagine,explore,analyseandpredictthemostfavourabledirectionsinwhichtheirassets
canthenbedeployed.
Creatinganexperienceis,however,highlysubjectiveandtheeconomicvaluecannotbe
preciselydeterminedinadvanceandthissubjectivecomponentmeansthatthe
culturalandcreativeentrepreneurisconstantlytakingrisks.Inviewofthesize
characteristicsofthemajorityofCCIsandthehighcompetition,theCCIentrepreneuris
constantlylookingforinnovativesolutions,newtrends,productsandservicesthatare
moreinlinewithuserandconsumerdemand.107Asoneintervieweenoted:
Somethingthatpeopleneedistolookatwhattheycandisrupt,theyneedtogo
backtodisruption.Cantheydisruptrealisation?Cantheydisruptdistribution?
Cantheydisruptthewaytheycreateideas?.
(ResearchInstituteforCCI,KnowledgeEconomy)
Culturehasnotexclusivelybeenseenfromthetraditionalpointofviewofconserving
culturalheritagebutmoreasameanstopursuingaqualitativelyhigherlevelof
development.ThisPlexibleconcepthashadthemeritoflinkingtheideaofculturetoa
seriesofactivitiesfromfashion,todesignandtheengineeringofcomputergames
previouslyconsideredoutsidethesphereofculturalpolicies.
2.2.4.Uncertainvalueandchangingbusinessmodels
Asnotedabove,themarketforculturalgoodsisbothvolatileandunpredictable,
promotingbusinessstrategiesthatare'emergent',provisional,highlyresponsivetouser
demandandbasedon'intuitive'and'emotional'knowledgeasmuchasstandardmarket
research.
Consumersareoftennotawareoftheirtastesinculturalmarkets.Rathertheydiscover
themthroughrepeatedexperiencesinasequentialprocessoflargelyunsystematic
learningbyconsuming.AsthereisaninPinitevarietyofcreativeofferings,thisdiscovery
processmaybeneverending.Totheextentthatindividualsareunsureoftheir
preferences,itisnotsurprisingthatproducersofgoodsofexpressivevaluestruggle
toanticipatemarketvalue. 108
Moreover,inadditiontofacinguncertainty,highcompetitionandextremeimbalances
betweenthemicroandlargerenterprises,digitalconvergencehasalsomodiPiedthe
distributionprocessofCCIproductsandservices.Thebroadeningusageoftheinternet
andcontentinterfaceplatformshassigniPicantlychangedthevaluechainanddistribution
process,enablingademocratisationofaccesstodistributionandahigher
participationofproducersandcontentoriginators. 109Consequently,thisshapesnew
marketstrategiesandnewbusinessmodelstowhichCCIsmustadapt.Asnotedabove,the
interactionwiththeuserandconsumerismoredirectthaninthephysicalworldand
muchmoredynamicandselffeeding:
107 ECGreenPaper,(2010),op.cit.,p.7.
108 GarbouaLL.,Montmarquette,C.,(1996),Amicroeconometricstudyoftheatredemand,JournalofCulturalEconomics,
Vol.20,Number1
Thepurelylinearbusinessmodelisgivingwaytoamuchmoreinterwoven
environment,wherecrossfertilisationofstimulusandresponse,datadrivensupply
anddemand,andspeedofcommunicationenableamuchmorerapidevolutionof
productdevelopmentandconsumption.110
Thisshifthasalsotriggeredanexchangeofcontentandservicesandfacilitatedpeerto
peersharing,endangeringlegalprotectionsurroundingthecontent/services.Creative
processesarethereforemuchlesslinearandwiththeincreaseinPilesharingwithin
networks,theabilityofproducersordistributorstocontrolandchargeforcontenthas
becomeamajorconcern.Thattherightsholdersandthecreatorsarenotbeing
rewardedwiththisbroadenedaccesstocontentisarealchallengetocommercial
success.Therearepresentlyimportanttensionsbetweendifferentphilosophiesasa
resultofthedemocratisationofcontentandthisisaddressedinsection3.3below.What
isimportantisthemannerinwhichthishasaffectedthebusinessmodelsofthe
companiesthathavetoadapttothischangingenvironmentandatthesametimebe
sufPicientlyPlexibletoremainupdatedaboutthenewestchangesandopportunities.
ConsideringthespeciPiccharacteristicsoftheCCIswithregardtotheirsizeand
composition;theirproductcreationprocesses;theirintangibleassetsandhidden
innovation;theshiftingoutputconsumption;thechangingvaluechainecologies;the
shiftingdigitalenvironmentandtheimpactithasonbusinessmodelsandinteractionwith
user;itisclearthattheCCIshavemanycomplexchallengestoface.Theyarealso
workinginanenvironmentthatisnotalwayspronetorewardingrisktakingbehaviour
andthisputsfurthercomplicationsontheirpathstosustainabilityandgrowth.
2.3.FeaturesoftheCCIsectors
DespiteallthesimilaritiesbetweenthedifferentsectorsoftheCCIs,itishelpfultolookat
eachspeciPicsectoroftheCCIsinordertohighlightthedifferentprocessesthatmight
inPluencethesupportofentrepreneurship.Oneofthemostcommonissuesobserved
duringthisstudywasthedivisionbetweenthesubsidisedsectorsandthenon
subsidisedones.ThisdivisionisalsoarePlectionofthephilosophiesofeachMember
Statewhenaddressingtheculturalsectorsandopeningupthecreativeeconomy:
Inmyopinionthereisadifferencebetweenthecreativeandtheclassicalpart.The
creativeindustriesaremoreentrepreneurialthanthemoreclassicalpart.Thisalso
hastodowiththewholesubsidysystem,wherethemoreclassicalpartoftheindustry
isbetterabletoreceivefundingfromthegovernment.
(NationalMinistryofCulture,KnowledgeEconomy)
DiscussionabouttheefPiciencyofdifferentsubsidysystemsisbeyondthescopeofthis
study.However,whentalkingaboutsupportingtheentrepreneurialdimensionofCCIs,
therewasagrowingrealisationthatsubsidysystemshaveshapedtheexisting
entrepreneurialdimensionofcertainsectors.Accordingtotheinterviewees,heavily
subsidisedsectorstendtobelessdrivenbythecommercialsideofundertakingan
entrepreneurialactivity.Thesesectorsareprimarilyseenaswillingtocreateand
experience,ratherthancommercialise,theirproductsandservices:
Theartistsmodelrarelyworkswiththeattitudeoropinionthatcommercialisation
strengthensthecreativeoutput.MostNineartistsandchoreographersareengagedin
theprocessratherthantheoutcome.Oncetheopeningnighthasstartedtheyve
almostlostinterestinit.IthinkyouneedtoNindpeoplewhoareinterestedinthe
processandlookbeyondtheopeningnight.
(HigherEducationInstituteforCCI,KnowledgeEconomy)
Moreover,receivingpublicfundingcanalsoimplyacertaindegreeofpoliticalinPluenceon
theproductorservices.Overall,mostrespondentsagreedthatsubsidieswerenecessaryto
enabletheexperimentationandthedevelopmentofcertainsectors.However,thesystem
wasconsideredinefPicientforenablingsustainablegrowth.Paralleltotheblurringof
frontiersbetweenthedifferentsectors,thissectoraldifferentiationmaygradually
disappear.
110Ibid.,p.19.
Movingbeyondthisduality,theUKTechnologyStrategyBoardelaboratedamodelofthe
CCIsbasedonhowcommercialvaluewascreated.111 Themodelisnotintendedto
differentiateinawaythatdiscriminatesinfavourofaparticularsegmentorgroupof
sectors.Insteaditisaimedatshapingpolicytodirectchangesandenhancethe
developmentofCCIsbytargetingadvice,supportandinvestmenttailoredtothepatterns
ofactivityandtheirpotentialforgrowthanddevelopment.Theboundariesbetweenthe
clustersarenotPixedandsomeofthesectorsmaybeinmorethanoneclusterorcross
overbetweenseveralsectors(forexamplemusicandgames).
TheUKTechnologyStrategyBoardmodelstructurestheCCIsalongthreegroups,basedon
thephysicalversusdigitalinput,aswellasmanualversustechnologyaidedoutput(see
Appendix2.9):
Creativeserviceproviderstraditionallynonsubsidised
Creativecontentprovidersmostlynonsubsidised
Creativeexperiences/originalprovidersmostlysubsidised
Forthisstudy,thecreativeexperienceandoriginalprovidershavebeenmergedintoone
clusterastheyrepresentmostlythecorearts(performingartsandvisualarts).
TypeofCluster Sectors MainCharacteristics
Creativeservice Design,architecture,new Directinteractionwithusers

providers media,advertising demand
ExchangeoftimeforIP
products
HighlyinPluencedby
technologyanddigitisation
Mostlyprojectbased
MostlyprivateorselfPinancing
Creativecontent TvandRadio,Fashion,Games, ProducersofIPproduct

providers Music,Film,Books HighlyinPluencedby
digitisation,mostlyfor
creationanduserinteraction
Mostlyprojectbased
MixofselfPinancedand
subsidisedsectors
(audiovisualandgames,
books)
Experiencethreatsofpiracy
fromdigitalmarketandpeer
topeerexchange
Creativeexperience Performingarts,visualarts, Noinitialownershipofwork

providers (music,games) andusuallypayforothers
Creativeoriginal copyright
providers Mostlysubsidisedand
concernedbythecultural
valueoftheirwork
Artsaremostlyoncontract
basis
Digitisationismostlyfor
disseminationandas
communicationtools
Usuallyoneoffproductsand
services
Table3:ClustersintheCCIs
(Source:BasedontheclassiNicationoftheUKTechnologyStrategyBoard)
Theuseofsuchclusteringwaslargelyagreeduponbytheparticipantsoftheworkshops
heldduringthestudytovalidatethemethodologyandtheresults.Thisclusteringenables
ustoseegeneraltrendsintermsofvaluechains,Pinancialschemesandsubsidisation.
Beforedetailingthefeaturesofeachsector,itisinterestingtolookattheoverallturnover
ofeachsectorasillustratedinFig.7.belowwhichshowsthatthesectorsthatgenerated
mostturnoverweremainlytheserviceprovidersandcontentproviders.
Figure7:TotalTurnoverperIndustry
(Source:Eurokleis2009,statisticalanalysis)
Thelargesttotalturnoversperindustryare:Fashion(247.189.494TH),Design
(157.115.932TH)andRadio&Television(155.192.531TH).Theseindustries,mostly
thecontentprovidersandcreativeserviceproviders,havebenePitedfromtheriseofthe
digitisationofsocietyandtheensuingdigitalmarket.
Industriesthatrequiregreatercompetitionandinvestmentintechnologyand/or
economiesofscale(i.e.Radio&Television,SoftwarePub.&Games,Design,Book&Press
andVisualArts)showmoreemployeesinlargecompanies(i.e.morethan250workers)
asseeninTable2.above.
AscanbeseeninFig.6.,theindustriesthatemploymoreworkersare:Fashion
(2.230.534),Design(1.428.645),Architecture(762.714)andBook&Press(702.365).
Clarifyingthedivisionbetweentheentrepreneurandtheenterprise,theindustriesthat
hadthelargestnumberofenterprisesinEuropewereFashion(142.212),Design
(101.255),Architecture(76.236)andAdvertising(37.244).
Figure8:PercentageofEnterprisesperSector
(Source:Eurokleis2009,statisticalanalysis)
Overall,thereisapredominanceofthesectorsthatrequiregreaterinvestmentin
technology,withtheexceptionoffashion(whichisduetotheinclusionoftheretail
industryinthefashionstatistics,seeAppendix2.10).Fromthestudysstatistics,forthe
industriesusingmosttechnology(largelycontentandserviceproviders),thetotal
turnoverisgeneratedpredominantlybythelargecompanieswhileintheotherindustries
theSMEsplayalargerrole.
2.3.1.Creativeserviceproviders
ThisclusterconsistsofDesign,Architecture,AdvertisingandNewMedia.Creativeservice
enterprisesarebasedaroundearningrevenuesinexchangefordevotingtheirtimeand
intellectualproperty(IP)tootherbusinessesandorganisations.Thecreativeactivitiesare
embeddedinalandscapeofadministrative,organisationalormanufacturingactivitiesthat
formanintegralpartoftheindustriesstructure.
ThecreativeserviceprovidersareusuallyselfPinancedandconsistmostlyofmicroSMEs.
Thecreativeprocessisheavilysupportedbytechnologyasthecreativeprocessishighly
involvedinuserinteraction,increasinglysowiththeuseofwebbasedplatforms.
2.3.1.1.Architecture
Architectureismorethananartorarepresentationofaculturalheritagebutformsan
essentialpartofourlivesbyshapingourenvironmentandbyprovidingservicesinvolving
directinteractionwithourdailylives.InEurope,architecturecontributestothethird
highestnumberofemployeespersectorintheCCIs,employing762.714workersin2007,
or10,7%ofthetotalemploymentofCCIsinEurope.112Thetotalturnoverofthesector
amountsto8.19%ofthetotalturnoveroftheCCIs.Thesector'soverallcompositionin
Europeconsistedin2007of62%microSMEs(13employees)and23%ofsmallSMEs
(49employees).Thismeansthat85%ofthearchitectureenterprisesconsistof
companieswithfewerthan10people.
IntermsofOinance,thesectortypicallyoperateswithprivatePinancingwithoutspeciPic
governmentalschemes.Publicprocurementandprizesareoftenseenasmoreappropriate
forthesectorthansubsidies.Thegeneralprofessionisgovernedbythegeneral
regulationsoftheinternalmarketoftheEU(freedomofestablishment,freedomof
movement,publiccontracts).IntheEUCouncilResolutionofJanuary2007,theEU
amendeditsdirectivetosupportthearchitecturalsectortoencouragemobilitythrough
112 Allstatisticaldata,unlessotherwiseindicated,comefromthestatisticalstudyundertakenbyEurokleis.
themutualrecognitionofqualiPicationsinarchitectureacrossEurope.113Inthepast,the
EUhasalsosupportedthesectorbypromotingthecooperationandthenetworking
betweeninstitutionsdedicatedtoculturalheritageandarchitecture.114
Inadditiontosupportingcollaborationand
agreaterfreedomofmovement,theaccess ArchitectuurLokaal
tothemarketisindirectlysupported ArchitectuurLokaalinTheNetherlandsisdirectly
throughlegislativemeans.Indeed,in applyinguser/consumersparticipationwith
countrieswhereitisnotmandatorytohire architecturalpolicyensuringaqualityofservices.
architects,architectureispromotedby ThemainpintheNetherlandsisasectoralproject
pointingtotheculturalsigniPicanceof forgamesthatadvancesnewtechnologytoSMEs
architecturaldesignandprogrammesfor aimingatimprovinglearningsystemsandadvanced
newtechnologytoSMEsinordertoadvancethe
subsidisedconsultationbyarchitects.In
sectoranddevelopknowledgefromapplied
theothercountries,supportisinherent researchwithSMEs.
wherearchitecturaldesignsaremandatory (SeeAppendix1,BestCase7)
fortheconstructionofbuildings.Some
organisations,suchasArchitectuurLokaal,
seektoinvolveuserstoensurequalityofservices(seeAppendix1,BestCase7).
ICTtoolsarewidelyusedinthesectorfordesign,visualisation,informationexchange
aboutprocesses,andICTiswidelyusedtoincreaseefPiciencyinassemblingand
reassembling,aswellasbringingthevariousbranchesofthedisciplinestogether.115With
suchICTtools,theproductionphasehasshortened,butthesectorisstillverylabour
intensive.
2.3.1.2.Advertising
TheEuropeanAssociationofCommunicationAgenciesnames6sectorswhereadvertising
iswidelyused,namely:Television,Newspapers,Magazines,Outdoor,RadioandCinema.116
InthemostrecentPiguresprovided(2007),thehealthcareindustryspent1.3billionon
advertisement,thenonalcoholicdrinksindustries1.5billion,thealcoholicdrinks
industries1.5billion,thefoodindustries6billionandtheautomotiveindustries6
billion.117
Inthestudysstatistics,advertisingisresponsiblefor4.31%ofthetotalrevenueofthe
CCIsin2007,andemploys6.53%ofthetotalCCIemployees.Intermsofitscomposition,
61%ofthesectorconsistsof13peopleenterprises,while24%oftheCCIshave
between49employees.Combined,thecompaniesunder10employeesareresponsible
for28%ofthetotalturnoverforthesector.
TheriseofICThasledEASA(European
AdvertisingStandardAgencysee EuropeanAdvertisingStandard
Appendix1,BestCase8)membersto Alliance
reachaconsensusonincludingdigital EuropeanAdvertisingStandardAllianceisthesingle
marketingcommunicationsintheremitof voiceonadvertisingselfregulationissuesand
advertisingselfregulatoryorganisations. advisesthesectoronsuchissuesandotherssuchas
Onlineadvertisingspendingperuserhas digitalmarketingcommunications.
risendramaticallyinthelastfouryears, (SeeAppendix1,BestCase8)
withUKleadingtheway.Theonline
advertisingmarketintheUKwentfrom
GBP122peruserin2006toGBP217in2010.Francesonlineadvertisingisnowreaching
$135peruser,from$89peruserfouryearsago.AsthestudybytheUKTechnology
StrategyBoardconPirms,70%ofthevalueandgrowthpotentialcomesfromcontentand
113EuropeanParliamentDirective2006/100/EC,RegulationsbytheECNo1137/2008
114SeeforexampleArchitectureNormande,UneAventureEuropennein2000
115Sariyildiz,S.,Ozsariyildiz,S.,(1998)TheFutureofArchitecturalDesignPracticewithinICTDevelopments,unpublished,
http://repository.tudelft.nl
116FortheuseofadvertisingintheCinemaandRadiosector,advertisementsalesPiguresarebeinggivenonlyinapartofthe
EU(Belgium,France,Germany,Italy,Netherlands,Spain,Sweden,andtheUK).
117EuropeanAssociationofCommunicationAgencies,www.eaca.be,viewedMarch2010
advertisingspace.118 TheeMarketerestimatesthatadvertiserswillspend$7.5billionto
reachallWesternEuropeans,anincreaseof25%fromlastyear.119
2.3.1.3.Design
Designisstillaboutinnovatingwithinthesameparametersanddrivenbythe
sameambition,butappliedtoamuchbroaderspectreofchallenges,wherethe
designerispartofavaluechainwhereinnovationthatreachesfarbeyond
materialoutcomesisaddressedbymultidisciplinaryteamsinthewords
mostinclusivesense.Designcanbeappliedtoanartefactoraspecicsolutionto
aspecicchallenge,butitcanalsobeappliedtoacontextbeitaphysical
spaceorenvironmentoraconguration.120
Graduallydistancingitselffromtheearlierassociationwithaesthetics,designincludes,not
exclusively,servicedesign,environmentaldesign,designforall,designforproPit,user
design,andexperiencedesign.Thesectorisnowunderstoodasanimportantdriverof
innovation. 121WithintheworkingdocumentDesignasadriverofusercentred
innovation,theEUhighlightsdesignasapotentialstrategyforinnovativesolutionand
productthatseekstounderstanduserneeds,aspirationsandabilitiesatalowercostthan
traditionalR&Dresearchactivities.122 Designisincreasinglyrecognisedasasectorthat
canhavemanycrossoversanduseswithstrongspinoffeffectsonothersectorsand
companiesoftheeconomy.123Thiswasalsoseeninthenumberofdesignersworking
outsidethedesignsector,124suggestingtheexternaladdedvalueofdesignforother
industries.
However,designprocessesarenotyet
fullyunderstoodasR&Dandare DissenyHub
usuallyconsideredfromasoft DissenyHubBarcelonaprovidesanetworkof
innovationperspective.Organisations designersaswellastargetsanaudiencefrom
suchasDissenyHubseektostimulatethis diversesector,stimulatingcollaborationbetween
understandingwithinnonCCIsectors(see businessesandCCIs.Italsoservesasaresearchand
Appendix1,BestCase9). referencepointandeducationalcentre.
Itemergedfromthestatisticalanalysis
thatdesignrepresents15.49%ofthetotal
revenueoftheCCIs.Itisthesecondmost
importantamongstthesectors.
Intermsofthesectorscomposition,asintheothersectors,thebulkofthecompanies
consistofmicroSMEs:approximately75%ofthedesigncompanieshavefewerthan
10workers(45%havingunder4employees,30%between49employees).Companies
under10employees(75%)aregenerating20%ofthetotalrevenuewhile1049
employeescompanies(20%ofthesector)aregenerating31%ofthetotalrevenueofthe
sector.Clearly,discrepanciesinsizeandturnovercanbeobserved.
Designishighlystructuredincrossdisciplinaryteamsandcrosssectoral
collaborations.125 Itworksheavilyinnetworkswithmultidisciplinaryteamsforgreater
119Seehttp://www.emarketer.com/Reports/All/Em_euro_ad_jan07.aspx
120DanishDesigner,(2010),Theroleofdesigninthe21stCentury:DanishDesignersManifesto,Copenhagen:Danish
Designer,http://www.danishdesigners.com/media/678.pdf,p.5.
121EuropeanCommissionStaffWorkingDocument,(2009a),op.cit.,p.14.
122Ibid.,pp.1516.
123ProInnoGripsGlobalReviewofInnovationIntelligenceandPolicyAudiences,(2005),Designasatoolforinnovation,
MinistudypreparedfortheEuropeanCommission(DGEnterpriseandIndustry)
124EuropeanCommissionStaffWorkingDocument,(2009a),op.cit.,p.27,andalsoinUKDepartmentofIndustryandTrade
(DTI)(2005),Creativity,DesignandBusinessPerformance,EconomicsPaperNo15,London:DTI
125DanishDesigner,(2010),op.cit.,p.4,http://www.danishdesigners.com/media/678.pdf,p.4;ECStaffWorkingDocument
(2009a),op.cit.,p.18.
integrationofmultipleinterests,facilitatingecologiesforopeninnovation.126
ThedesignsectorisusuallyselfOinanced,howevercertaincountries,notablythe
ScandinaviancountriesbutalsoSpain,France,theUKandtheNetherlandshave
establishedgovernmentalsupporttoincreasetheuseofdesignbycompanies.127Design
ishighlyinPluencedbyrecentdevelopmentsinICTforthecreationprocessesbutICTalso
facilitatesthenetworkingandinteractionwithusers.
2.3.1.4.New(Cross)Media
NewMediaisthenewestsubgroupamongthecreativeindustries.Ithasemergedasa
resultofrapidadvancesinICTaimedatdevelopingtheglobalinformationinfrastructure,
givingrisetothesocalledInformationSociety.128
Newmediaisbothaproduct(software,cartoon,gameetc.)aswellasaservice;a
communicationtoolformarketinganddistributingotherproducts.Thesectorcoversa
broadrangeofactivitiesdealingwithdigitaldesign,butmorespeciPicallyservicedesign:it
dealswithprocesseslinkedtoservicesbetweenpeopleandtheirenvironment.This
dePinitionmakestheactivitiesinthissectorinherentlycrosssectoral.Thesupporting
organisationsgivesupportinthisPieldintheformofinnovationandR&Dprojects.In
termsofICTuse,accordingtothestudyssectoralexpertquestionnaires,themost
importantuseofICTtechnologiesforCCISMEsarecommunicationtools(91%)and
knowledge/goodsproductiontools(76%).
Thesectorhas61%ofcompanieswithfewerthan4employees,butitisresponsible
for20.12%oftheemploymentintheCCIs.Theturnoveris,however,mostlygenerated
bythebiggerenterprises(80%ofthetotalrevenueisgeneratedbycompanieswith50+
employeesoutofwhich48%isgeneratedfromenterpriseswith50249employees
consistingof3.14%ofthesector).ICTaccountsforhalfoftheriseinEUproductivity129
andisessentialtobusinesses,publicservicesandtomakingamoderneconomyworkand
acrucialcomponentoftheEUrecoveryplan.Sucheconomiceffectscanbeseeninseveral
MemberStates.130
IntermsofOinancialsupport,thesectorisnotsubsidisedbutexternalsupportexists,
althoughthepathstoobtainitareoftenfartoocomplexforindividualSMEs.Intermsof
growthpotential,thecompanieshavefacilitiestostartupduetotheshorttimespansof
R&DandproductlifecyclesbutthecompanieshavedifPicultyingrowing.Theissueof
marketfragmentationisnotableforthissector.Europeisveryfragmentedintermsof
languageandregulationsaboutIPR,informationaccess,etc.Thissystemdiscouragesthe
companiesfromgrowingacrossnationalbordersasitusuallycreatesonlylocally
operatingSMEs,althoughthemarketisglobal.131 TheNewMediaandICTtechnologies
havealsothepotentialtoaffecttheoverallenvironmentforCCIsduetotheincreasing
importanceofdigitisation.
126OpenInnovationwasdePinedastheuseofpurposiveinPlowsandoutPlowsofknowledgetoaccelerateinternalinnovation,
andexpandthemarketsforexternaluseofinnovation,respectively.Chesbrough,H.W.,(2003),OpenInnovation:Thenew
imperativeforcreatingandproPitingfromtechnology,Boston:HarvardBusinessSchoolPress
127 ECStaffWorkingDocument,(2009a),op.cit.,p.31.
128UNCTAD,(2008),op.cit.,p.132.
129EuropeanDigitalMediaAssociation(EDiMA),(2009),WhitePaperonPolicyStrategyfortheDevelopmentofNewMedia
Services20092014,seehttp://ec.europa.eu/information_society/eeurope/i2010/docs/post_i2010/
additional_contributions/edima.pdf
130InUK,thedigitalmarketanddigitalcontentisresponsibleforapprox.70%oftheturnoverofthecreativeindustriesin
theUK:seeUKTechnologyStrategyBoard,(2009),op.cit.,p.12.
131EuropeanDigitalMediaAssociation(EDiMA),(2009),op.cit.,p.2.
Intermsofinnovationpotential,new
mediaintroducesnewformsofexpression EDIMA
EDIMAistheEUnetworkthataimsatcreatingan
andplatforms,suchasusergenerated
openandlegalframeworkfornewdigitalproducts
content.Itchangesthebackgroundas throughouttheEUsoastoavoidthelegalbarriers
smallercompaniescancompeteaffordably blockingasingleEuropeandigitalmarket.
inbiggermarketsandadvertisetheir (SeeAppendix1,BestCase10)
productsonlinealthoughthecompetition
isPierce.TheEDiMAWhitePaperonICT
standardisationdemonstratesthewillingnesstopayincreasingattentiontonew
technologiesasadriverofinnovation(seeAppendix1,BestCase10).
2.3.2.Creativecontentproducers
ThisclusterincludesPilm,TV,fashion,games,music,booksandpublishing.Creative
contententerprisesproduceIP,usuallymakinguseoftechnicalprotectionmeasures.
Theseenterprisesearnrevenuesthroughavarietyofrelatedbusinessmodelssuchas
onlineandofflinesales,advertisingorsubscription.Theseenterprisesinvestcapital
upfrontinordertodevelopcreativeprojectspriortoanyrevenues.Dependingonthe
sector,thisupfrontinvestmentcanbesubstantial,andasaresulttheinvestmentoften
takesplaceonaprojectbyprojectbasisratherthaninthecontextofanongoingand
sustainablebusiness.Withinthisgroup,aloosebutimportantdistinctioncanbemade
betweenthoseenterprisesthatfocusonthenextindividualcreativeprojectandthosethat
arestructuredtodevelopasustainable'productionline'ofcreativeproductsandan
increasingbodyofIPforrenewedexploitation.
Intermsofthecreativeprocess,theclusterishighlyinPluencedbydigitalconvergence:the
processesareusuallyhighlytechnologicallyaided,havinganimportantuserinteraction
componentwithinthecreativeprocess,andtheproductsandservicesarealsoincreasingly
digital,withtheebookbeinganillustrationofthis.Piracyandpeertopeerexchangeare
threateningthelossofvalueofsomeofthecontentproductandservices.Thecreative
contentproducershavesigniPicantcrossoverswithothersectorsoftheeconomyoutside
theCCIs,suchasmobilephonenetworkoperators,handsetmanufacturersformusic
distribution,whichhaveconsiderableinPluenceonthebusinessmodelsdeployed.132
2.3.2.1.Film
Filmisthesectorthatreceives,generallyspeaking,strongsupportfromthestateacross
Europeancountriesthroughvariousmeasures(taxshelter,subsidiesetc).Taxsheltersof
varyingtypesinHungary,Netherlands,Ireland,theUK,Luxembourg,France,Spainand
Belgiumaremeanttoencourageinvestmentsandconsiderablyenhancethefunding
opportunitiesforPilmproduction.ThesectorisalsohighlysubsidisedinotherEuropean
countries,thoughtherecentPinancialcrisismeansthatthissubsidyislikelytodecrease.
Thespecialprogrammefortheaudiovisual
sectorattheEuropeanlevel,MEDIA,133 MEDIA
alsotacklestheneedsofthesector.MEDIA MEDIAistheEUsupportprogrammeforthe
coPinancestraininginitiativesfor audiovisualsector.ItcoPinancesprojects,promotes,
audiovisualindustryprofessionals,the trainsPilmprofessionalandsupportthesectorto
developmentofproductionprojects, facethedigitalshift.
trainingofprofessionals,andgenerally (SeeAppendix1,BestCase11)
distributesandpromotesPilmsand
audiovisualoutput(seeAppendix1,Best
Cases11).Ontopofthis,theEUMediaprogrammewilllaunchattheendof2010aMedia
ProductionGuaranteeFundthatwillbeaimedatsupportingandfacilitatingtheaccessof
publicaudiovisualcompaniestobankcredits.134
Intermsofthesectorscomposition,thesectorishighlyfragmented.60%ofthe
133 Seehttp://ec.europa.eu/information_society/media/index_en.htm
134Seehttp://ec.europa.eu/culture/media/programme/overview/funding/index_en.htm
companieshaveunder4employees(seeFig.2)butthesecompaniesproduceonly12%
ofthesectoralturnover.Thecompaniesthathave49employeesrepresent26%ofthe
sectorsenterprisesandtheygenerate16%ofthetotalrevenueofthesector(seeFig.3.).
Companiesthathavemorethan50employeesrepresentabitlessthan2%ofthetotalof
enterprisesinthesectorbutgenerate49%ofthetotalrevenue.Thetotalturnoverofthe
sectoris6.10%oftheCCIsturnoveranditholds4.84%oftheemployeesofthetotalCCIs.
ThemarketreachedatotalspendingvalueofUSD39billionin2009.
Thedigitalmarkethasalsobeenchangingtheperspectiveforthissector.Thereisa
growingemergenceofonlinerentalsubscriptionservicesandaconsequentrapiduptake
ofVODandpayperview(PPV).TheVODmarketjuststartedin2004butwasexpectedto
growmorethantenfoldfromUSD165millionin2004toUSD1.7billionin2009.135
2003 2004 2005 2006 2007 2008
Digital 30 55 204 527 897 1529

Screens
Digital 27 45 148 358 550 815

sites
Table4:DigitalCinemasitesandscreeninEurope(20032008)
(Source:MediaSales)136
AninabilitytosustaingrowthisoneofthemainissuesforthePilmsector.Linkedtothe
difPicultytoenterthemarket,thePilmsectorsuffersfromtheinaccessibilityofgrowth
Pinanceaftertheinitialcompanysetup.Indeed,thereportontheevaluationoftheMEDIA
programmeindicatedthatEUaudiovisualsectorsufferedfromstructuralweaknessessuch
asmarketfragmentationandthelowcirculationofEuropeanworksoutsidetheircountry
oforigin.137Intermsofvaluechainprocesses,theproductiontimeisgenerallylong,
althoughtheproductcanbemultipliedanddistributed.
2.3.2.2.BooksandPublishing
Publishingandprintmediaconstitutean
importantsubgroupofthecreative FederationofEuropeanPublishers
industriesfromboththeculturalandthe FEPisEuropeansectoralsupportorganisationfor
economicpointofview.Technologically, bookpublishersassociationintheEU.Itmainly
however,thepublishingandmedia dealswithlegislativesupportattheEUleveland
industriesarefacingnewchallengesdueto advisesoncopyrightissues.
thegrowingtrendtowardselectronic (SeeAppendix1,BestCase12)
publishing.AccordingtotheFederationof
EuropeanPublishers(seeAppendix1,Best
Case12),thetotalannualsalesrevenueofbookpublishersoftheEUandtheEEAin2008
wasapproximately23.75billion.138Thesectorcomprisesmostlyofenterpriseswith13
employees(59%)generating12%ofthetotalturnoverofthesector,whilemost
revenue(72%)isgeneratedbycompanieswith50+employees(2.38%ofthesector).
CompetitioninboththephysicalandthedigitalmarketinPluencesthestructureofthe
sectorbutinitiativessuchasVATreductiongreatlysupportthegrowthofthesector.In25
ofthe27MemberStatesoftheEuropeanUnion,printedbooksbenePitfromreducedrates
ofVAT.Ireland,PolandandtheUnitedKingdomprovideforazeroVATrateforbooks,
whilePivemorecountrieshaveextendedreducedratestobooksonallphysicalsupport:
France,Spain,Slovenia,NorwayandtheNetherlands.SwedenandIcelandallowreduced
135KEA,(2006),op.cit.,p.114.
136EuropeanAudiovisualObservatory,(2009a),PressRelease,EmbargoDigitalScreenBasegrows70%in2008,Strasbourg/
Milan:seehttp://www.obs.coe.int/about/oea/pr/digital_cinema2008.html
137EUREVALMediaConsultinggroup,(November2007),FinalreportofMEDIAprogrammePlusandMediaFormation,
http://ec.europa.eu/culture/media/programme/docs/overview/evaluation/reports/media%20plus/executive_sum_en.pdf
138 Seehttp://www.fepfee.eu
VATforaudiobooks. 139AreducedrateofVATforallkindsofelectronicbookscould
assistthesectortosupportthedevelopmentofadigitalmarket.
Theprincipleofcrosssubsidisationisafundamentalanddistinctivecharacteristicofthe
publishingsector,140andassuchcontributesgreatlytoculturaldiversityinthesector.
Fundsfromonemarketcansupportentrantsinnewmarketsandassuchcansupport
SMEsintheirsector.Thiscanactasasupportfortheaccesstothemarket.
GrowthratesprojectedforthepublishingsectoraresigniPicantlylowerthanforother
culturalindustriesandthisismainlyduetothefactthatpublishingisconsideredasa
maturemarket(especiallybookpublishing)andamarketwheretheimpactofICT
developmentsmaybelesssigniPicantthanforotherindustrysectors.However,the
inPluenceofICTanddigitisationisgreatlyaffectingthesector:spendingonelectronic
bookswasexpectedtogrowexponentiallyfromUSD42millionin2004toUSD1.7billion
in2009(110%CAGR),whenebookswillrepresent3.2%oftotalbookspendingin
Europe.
Asaconsequence,companieshavetocombineboththeprintedpublishingformataswell
asthedigitalone:onepublishingSMEcanbeinanadvancedstateintermsofprinted
publishingbutatanearlystageintermsofepublishing.TheentryoftheiPad,theeBook
andtheincreasingdigitalmarketwithplayerssuchasGoogleorAmazonareonlysignsof
thepotentialofthedigitalmarketaswellasthethreatstothemicroSMEsthatdonot
possesssimilaraccesstothisdigitalmarket.Fig.9.belowdemonstratestheincreaseinthe
wholesaleofelectronicbooksalesinthelasteightyearsintheUnitedStates.TheUS
Pigureswereusedinthisreportasanindicationaswhatthefuturetrendsfordataforthe
EuropeanmarketcouldbeasitistooearlytodrawPigures.
Figure9:USTradeWholesaleElectronicBookSales,20022010(1stquadrimestre)
(Source:www.idpf.org)141
Anotherconsequenceoftheriseofthedigitalmarketandthesubsequentriseofpiracyis
thatofcopyrightregulations.Astheyareoneofthemainrewardstothesector,IPR
regulationsareimportantandtheycontributetothesustainabilityoftheculturaldiversity.
CopyrightiscrucialinallowingthepublishingsectortoPlourish;itisthelegal
frameworkthatenablesbusinessmodelsinthissector.
ManySMEsnotonlylacktechnologicaltraining,butalsosectorspeciPictraining
(managementskills,publishingskills,etc.).Currently,sectoralassociationsprovidebasic
trainingthatpredominantlyfocusesonproduction.Thesectorworksheavilyincross
139 Seehttp://www.fepfee.eu/2.3.html
140 CommentsfromEuropeanSectoralOrganisation
141Seehttp://www.idpf.org
sectoralnetworks,forexamplewithaudiovisualandmusic.142
2.3.2.3.Games
Inadditiontoopendesigngames,interactiveenvironments,smartmoviegamesand
seriousgamesareincreasinglyacknowledgedassuitableforabroaderusewithinsociety
andeconomics.Pedagogicalgamesthatsimulatesurgery;openspaceinteractive
environmentsusedforcityplanning;orgamesdevelopedforpeoplewithdisabilitiesare
allexamplesoftheriseofmultifunctionalityinthissector.
However,onahigherlevel,thesectorisnotsufPicientlyrecognisedandisnotseparated
fromsoftwareinmoststatistics.Thesectorisalsoonlypartiallyrecognisedasan
innovativenewmediainthecreativecontentsector 143.Intermsoftotalrevenue,the
gamesectorisresponsiblefor6.47%ofthetotalrevenuegeneratedbytheCCIs.
Largedisparitiesexistbetweenthefewnumbersoflargecompanies(0.51%ofcompanies
haveover250employees)thatareresponsiblefor31%ofthetotalrevenue,andthe
microSMEs(13employees)consistingin62%oftheenterprisesandthatgenerate
5%ofthetotalturnover.Arisingfromthisimbalanceinthemarketposition,accessing
themarketisdifPicultforsmallbusinessesduetothemonopolisationoflargegame
platformsowners.144 Thesector'saccesstomarketisalsoinPluencedbytheexternal
legislativefactorssuchastheratingsystem.
Thereareimportantdifferencesintheestimationsforthedifferentsegmentsofthevideo
gamesmarket:
Consolegames:theyareheavilydependentonthenextgenerationofconsolesand
thepriceswillfollowthelaunchofnewhardware.Overall,thecompoundannual
growthshouldincreaseatamoderaterateof6.4%.
Onlinegames:theywillboomasaconsequenceoftheincreasingspeedof
broadbandconnections.Theaveragespendingononlinegamesincreasedfrom
USD505millionin2004toUSD4.2billionin2009(53%CAGR).Onlinegameswill
represent30%oftotalvideogamesspendingin2009(upfrom7.6%in2004).
Wirelessgames:theywillalsoexpandfollowingthegrowthof3Gmobile
penetration.Wirelessgamessubscriberswereexpectedtoincreasefrom8.3
millionin2004to96millionin2009(63.2%CAGR).Thespendingonwireless
gamesraiseduptoUSD3.7billionin2009(52%CAGR).
PCgames:theywillcontinuedeclining,asmigrationtootherplatformswill
consolidate.Decreaseisestimatedatacompoundannualrateof3.2%intheyears
leadingupto2009.
AnotherconsequenceoftheriseinICTisthatvaluechainsareshortened,andthisenables
enterprisestoskipmiddlemenandincreasestheinvolvementofusersintheproduction
ofagame.However,thesectorsuffersfrompiracyandgameplayisnotyetprotectedfrom
plagiarismincopyrightlegislation.145
Intermsoffunding,asmostofthecompaniesaremicroSMEs,theirtimeismostlygeared
towardscreatingvalueandmaintainingtheirnetworks,leavingverylittletimeto
concentrateonlookingforfundingopportunities.TheyareusuallyselfPinancedbutthey
mightreceivegovernmentalsupport,asseeninFrancethroughthetaxshelterorthrough
ataxreliefforgamedevelopersintheUK.146
142InterviewwithNationalSectoralOrganisation
143EuropeanGamesDeveloperFederation,(2009),CommentsfromtheEuropeanGamesDeveloperFederationonCreative
ContentinaEuropeanDigitalSingleMarket:ChallengesfortheFutureARePlectionDocumentfromtheDGINFSOandDG
MARKT,Availableonlineat:http://ec.europa.eu/internal_market/consultations/docs/2009/content_online/
rePlection_paper%20web_en.pdf
144 EuropeanGamesDeveloperFederation,(2009),op.cit.,p.2.
145 EuropeanGamesDeveloperFederation,(2009),op.cit.,p.11.
146 Seehttp://biznewz.co.uk/business_news/2010/391/ukbudget2010measuresforsupportingbusinessandgrowth
Networksareanimportantsourceof
supportinordertosharetheknowledge, Imaginov
inparticularabouttherapidchangesinthe ImaginovisthegameclusterinFrancewhichis
speciPicallysupportedbytheregionofRhoneAlpes.
environmentintermsoftechnologies(see Ithasattractedseveralbusinessesandhas
forexampleImaginovinFrance,Appendix stimulatedmultidisciplinaryprojectsaswellto
1,BestCase13).Theincreasingintegration boostcommerceintheregion.
ofmultipleactorssuchasmobile (SeeAppendix1,BestCase13)
operators,internetproviders,social
networks,onlineshops,onlinerights
aggregatorsandbroadbandtechnologycompanies,raisestheriskofoligopolies
developing.
Despitethehighlycollaborativeprocess,thesectorhasdifPicultyorganisingitselfmainly
duetoitssize,novelty,anddiversity.Asaresult,thecapacityforselfrePlectionon
entrepreneurialhabitsislimited,oftenleadingtodifPicultiesinorganisingthesectorin
representativeorganisations.
2.3.2.4.Broadcasting(TVandRadio)
AccordingtotheEuropeanAudiovisualObservatory,theEuropeanaudiovisualmarketwas
evaluatedatapproximately120billionin2009.DuetotheriseoftheInternet,the
changeinthesectorwillfurtherincreasethemarketandoffermanypossibilitiesaswellas
challengesforthesector.Thebiggestcompanieshaveamarketpositionthatallowsthem
tocontrolsomepartsofthemarket,butthesmalleronesalsoneedtohaveaccessto
platformsortodevelopVODplatformsand
accessthem.Insomecountries,suchas
withtheDutchMediaHub,thisneedfor DutchMediaHub
DutchMediaHubgathersmultiplepartnerssuchas
interoperabilityisbeingaddressed(see
localandregionalauthoritiesaswellasCCIsinthe
Appendix1,BestCase14). sectorandprovidessupportforcontentproduction,
AccordingtoStrategyAnalytics,theglobal distributionorservicedevelopment.Italso
riseofVODisexpectedtogofrom$11,5 participatesinlegislativelobbyingfor
147
billionin2010to$17billionin2012. standardisationorinteroperability.
Undersuchcircumstances,Europewill
experiencegrowthinmultichannel
television,spurredbydigitalterrestrialTV(DTT)rollout.DTThasalreadybeenlaunched
inseveralEUcountriesandmigrationtodigitalisexpectedtobecompleteacrossallof
Europeby20102012.148 Satellitesubscriptionshavebeengrowingfastinrecentyears
butinthefuturetheirgrowthratewillslowdown,challengedbytheemergenceofDTT
andnewdigitalplatformssuchasTVoverDSL(IPTV).Lookingatthepotentialevolution
ofthesectorintheelectronicmarket,oneofthepreconditionsisaccesstohighspeed
InternetasthegrowthofVODistypicallydependentonInternetproviders.149
Asinothersectors,thebroadcastingsectorisshapedbyPiercecompetition.Intermsofthe
sectorscontribution,49%ofthecompaniesconsistoflessthan4employees,while
33%ofthecompaniesarebetween49employees.ThemicroandsmallSMEs
togetherformthebulkofthesector.However,similartoothersectors,thislaterbranchis
responsibleforasmallshare(9%)ofthetotalrevenue.Thestudystatisticsshowthatthe
sectorasawholeisresponsiblefor15.30%ofthetotalturnoveroftheCCIinEurope,
cominginthirdafterfashionanddesign.
2.3.2.5.Music
Musicisatalentbasedcreationandoneofthecentralcreativeindustries,with
147StrategyAnalytics,(2008)quotedinEuropeanAudiovisualObservatory,(2009c),VideoondemandandCatchupTVin
Europe,Stockholm:EAO,http://www.obs.coe.int/online_publication/reports/vod_2009.pdf
148EuropeanAudiovisualObservatoryPressrelease,(2010),Growthofthenumberoftelevisionchannelsandmultichannel
platformsinEuropecontinuesdespitethecrisis,http://www.obs.coe.int/about/oea/pr/mavise_end2009.html
149EuropeanAudiovisualObservatory,(2009b),ThePublicServiceremitandtheNewMedia,Stockholm:EAO,seehttp://
www.obs.coe.int/oea_publ/iris/iris_plus/iplus6_2009.pdf.en
greatculturalandeconomicvalueinallsocieties.150
ThemusicsectorisavisibleEuropeanculturalproductandlikeothersectorsitcarries
greatimportanceintermsofsustainingEuropeanculturaldiversity.Manybandsorartists
arestartupsbutcannoteasilyreachaninternationalmarket.
Thesectorhasaverylargebaseofmicroinitiativeswith88%oftheCCIsbeingunder10
people(70%beingmicroSMEswithlessthan4employees)confrontedtoafewmajor
companiescontrollingmostpartofthemarket151.88%ofthecompaniesgenerate30%of
themusictotalrevenue,whilecompaniesof50+employees,forming2.27%ofthesector,
generateapproximately40%.
Intermsofinnovationpotential,theindependentsandsmallcompaniesaretheinnovators
andearlyadopters,discoveringnewtalentandproducingnearly80%ofallnew
releases.152 OrganisationssuchasBandpoolsupporttheseactivities(seeAppendix1,Best
Case15).
Likebroadcasting,Pilm,design,newmediaorarchitecture,digitisationisgreatlyaffecting
themarketofthemusicsector.Europegeneratesoverhalftheworld'smusicpublishing
revenuesandonethirdofglobalrecordingsales,butonly17%oftheworld'sdigital
market.Duetoanexpandingdigitalmarket,opportunitiesariseforSMEstoreachawider
publicbuttheproblemofaccessingthemarketisevenmoreproblematicinthedigital
marketplace.LargecompaniessuchasGoogleandApplecontrolmostofthedigitalmusic
librariesandareconsequentlyhinderingtheentrancetothemarketofsmaller
independentlabels.153 Moreover,barrierstomarketentryarealsocomplementedbythe
fragmentationofthecopyrightandIPRrulesinEurope.154
ThestudyonBuildingaDigitalEconomy:TheImportanceofSavingJobsintheEU's
CreativeIndustriesdeterminedthatin2008someoftheEuropeanUnionscreative
industries(Pilm,TVseries,recordedmusicandsoftware)experiencedretailrevenuelosses
of10billionandlossesofmorethan185,000jobsduetopiracy,largelydigitalpiracy.155
BasedoncurrentprojectionsandassumingnosigniPicantpolicychanges,theEUscreative
industriescouldexpecttoseecumulativeretailrevenuelossesofasmuchas240billion
by2015,resultingin1.2millionjobslostby2015.
Intermsofgrowthpotential,themusic
sectorhassomedifPicultysettingup Bandpool
PinancialPlowmodelsandmechanismsthat BandpoolisoperatedbythePopAcademyin
aidinthesustainabilityandgrowthof Germanyactsasacoachingtoolforbands,giving
activities.SupportforgrowthPinanceis workshopsaswellasnetworkingopportunitiesto
essentialforallowingthedevelopmentof artists.Italsostimulatescrossoverswithbusinesses
themiddlesizedmusiccompanies. aswellaswiththepoliticalscenetoincreasethe
awarenessofthesector.
IntermsofPinance,throughouttheEU, (SeeAppendix1,BestCase15)
classicalmusicisheavilysupportedby
subsidiesfromcentral,regionalandlocal
governmentsandbyprivatesponsorship.Inmostcountries,thereisalsofurtherPinancial
supportgivenbymusicindustryorganisations(suchasauthorssocieties).Undertheir
rules,authorssocietiesarepermittedtospendupto10%oftheirrevenuesfor"socialand
culturalpurposes.156
150UNCTAD,(2008),op.cit.,p.119.
151InterviewwithEuropeanSectoralOrganisation
152 Seehttp://www.impalamusic.org/info_03_indfact.php,retrievedApril2010
153 InterviewwithEuropeanSectoralOrganisation
154Reding,V.,(October2009),SpeechontheDigitalSingleMarket:akeytounlockthepotentialoftheknowledgebase
economy,Availableathttp://www.iccwbo.org/bascap/id35360/index.html
155 Availableathttp://www.iccwbo.org/bascap/id35360/index.html
156Laing,D.,(1999),TheEconomicImportanceofmusicintheEuropeanUnion,Soundscapes,Vol.2,Chap.7,http://
www.icce.rug.nl/~soundscapes/DATABASES/MIE/Part1_chapter07.shtml#Noteref51
2.3.2.6.Fashion
Recognisedthroughouttheworld,Europeanfashiongoesfurtherthanitsglitteringimage.
Accordingtothestudystatistics,fashion,includingfashionretail,isresponsibleforthe
biggestshareonthetotalrevenueofCCIs:247.189.494THor24%ofthetotalrevenue.
ThesectorhasthehighesttotalpercentageofemployeesintheCCI(thefashionsector
employs31%asopposedtothepublishingemploying9.84%ofthetotalemployment
forceintheCCIs.)
AsseeninTable2,Figs.2.and3.,thecompositionofthesectorissimilartootherCC
sector.51%ofthecompaniesconsistoflessthan4employees,andtheyare
responsiblefor9%ofthetotalrevenue.27%ofthecompaniesarebetween410
employees.Companiesover50249employees(3%)areresponsiblefor50%ofthetotal
revenueofthesector.
Largecompaniesoftencontrolaccesstomarket.Howeverthisnumberhastobetreated
carefullyfromthewaythestatisticsandNACEcodeswereusedandwiththeinclusionof
Piguresforfashionretail(seeAppendix2.10).
Generallyspeaking,thefashionsectorisnotperseasubsidisedsector.However,some
countriesmayhavecertainfacilitiesfromthegovernmentandsomeencouragement.
Intermsofinnovation,thereareattempts
tomodernisethesectorinorderto UPTEX
transformitintoademanddriven, UPTEXisaninnovationclusterthataimsat
knowledgebasedandhightech innovatingtextileandfashionsectorbyinvolving
industry.157OneexampleistheUPTEX researchinstitutes,highereducationlabs,fashion
clusterwhichpromotesinnovation(see CCIsandChamberofCommerce.Itprovidesfunding
Appendix1,BestCase16).Theriseof andlegalservicesandinformationexchange.
userorientedstrategiescommontoallCCI (SeeAppendix1,BestCase16)
sectorshashadaneffectontheinnovative
driveofthesector.Advancedtextiles,
perceptionofmaterialsthroughthesensesandtheirwiderapplicationfordifferent
sectorsisbecomingmoreimportantandallowingfordiversecrossoverswithother
sectorssuchastransport(aerospace),health,sport,constructionetc.Thevaluechainis
composedofthefollowingsteps:materialsproductionandprocessing,productdesign,
manufactureofmadeuparticles,tradinginapparel,footwearandtextileitems,servicing
ofapparel,footwearandtextileitems.158
2.3.3.Creativeexperience/originalproviders
ThisclusterincludesPerformingArtsandtheVisualArtsaswellaslivemusicorganisers
andpromoters.Clearlytheremaybearelationshipherebetweenexperienceproviders
andcontentproducers.Forexample,amusicianmaybeinvolvedinproducingarecording,
andthenperformpartsofthisrecordinginfrontofanaudience.Mainissuesforthissector
relatetoparticipationandconsumeraccess,theadaptationtotechnologicaladvances,the
mobilityorterritorialityregulations159foundbothinthephysicalaswellasthedigital
worldandtheprotectionofrightsholders,aswellasthechangeinconsumersandthe
shiftinfundingmechanisms.
Thesecreativeexperienceprovidersaretypicallysubsidisedandtheyhaveimportantnot
forproPitobjectives,includingbroadeningaccesstocultureforsocialpurposeandother
multipleobjectives.160Thevalueofthecreationtakesitsmeaningfromtheaudienceand
theirvalueisrealisedasasocialprocess.161 Fig.10.isNESTAsillustrationofthepresent
valuechainforculturalorganisations.
157 Seehttp://www.aedt.org/projects.html
158 Seehttp://www.skillset.org
159Regulationsbasedontheterritory,suchaslabourregulationsorPiscalregulations,haveadirecteffectforartistsmobility
astheyhavetofacethecomplexitiesofmultipleregulatoryframes.
160Bakhshi,H.Throsby,D.(June2010),CultureofInnovation:Aneconomicanalysisofinnovationinartsandcultural
organisations,London:NESTA,p.12.
161Ibid.,p.13.
Figure10:TheValuechainforculturalinstitutions
(Source:NESTAJune2010)162
Thecreativeexperienceprovidersandtheoriginalproducershaveanumberofaspectsin
common.Manyoftheperformingartists(writers,directors,composersetc)aswellas
visualartists(craftspeople,designersandothers)canbeconsideredselfemployed
freelancers.Intheperformingandvisualartsthereareextremedifferencesinincome
distributionsandcreatorsoftenacceptbelowaveragepecuniaryearnings.Thisis
explainedeitherbyriskseekingorapreferenceforcreativeworkoverothertypesof
work.
2.3.3.1.PerformingArts
AccordingtoaEuropeansectoralorganisation,thissectordealsfarmorewithcreative
personsthanwithenterprises,andtheconceptofentrepreneurshipisfairlynewinthis
Pield.
Thecompositionofthesectorisasfollows:63%oftheperformingartssectors
companiesconsistofcompaniesunder4people,and22%havebetween4and10
people.Intotal,companiesunder10employeesform85%ofthesectorandare
responsiblefor39%oftherevenuegenerationofthesector.Companieswith1049
employeesrepresent12.5%ofthecompaniesinthesectorandisresponsibleforis31%.
Thetotalrevenueofthesectoramountsto1.31%ofthetotalrevenuegeneratedbythe
CCIs.
Typically,thesectorishighlysubsidisedandthereisusuallyminimalprivatefundingdue
tothedifPicultyinvaluingtheintangibleassetsbythePinancialintermediariesaswellas
duetoproblemofaccesstomixedPinance.Thesubsidiessystemhasbeencriticisedby
someashinderingtheaccesstocertainprivatefundingsuchassponsorship,fundsor
otherstimuli.163Howeverthissystemmayensurethediversityofculturalproducts/
servicesthatwouldnototherwisebesupportedbybanksorotherprivateintermediaries.
WiththePinancialcrisis,governmentalfundsareundertightenedbudgetingwhichforces
thecreativeexperienceproviderstolookforprivatefundsandotherrevenuesources.164
ThesectorworksthroughcrosssectoralnetworkinghavingclosecollaborationwithPilm
andthemusicsector.Intermsofmarketaccess,microSMEsinperformingartshave
difPicultiesinreachingagreatermarketandtoturnideasandcreativeinitiativesinto
production.Theproductlifecycleispeculiartothesectorwithlongdevelopmentstages
162Ibid.,p.12.
163EuropeanSectoralOrganisation
164Bakhshi,H.Throsby,D.(June2010),op.cit.,p.13.
(23years)andashortdeliveryoftheproduct(suchasoneoffstageperformances).165
Growthislinkedtosustainabilityandislinkedtolongtermdevelopment.Growthis
perceivedasaslowprocesswheremarketsadaptandrecognisecreativepersons(moreor
lessover10years).Traininginentrepreneurialskillsismostlyabsentintheperforming
arts(businessskillsmanagement,marketsituation)althoughitisseenasessentialfora
sectorthatworkshistoricallythroughpublicsupport.
Thetechnologyofcreativecontentonlineisofgrowingimportanceinthelive
performancesector.Ithelpsdevelopnewformsofperformanceanditfacilitatestheir
dissemination,therebyreachinglargergroupsofaudiencesandconsumersthanever
before.166 Themajoruseoftechnologyforthissectorliesintheadvantageitgivestothe
disseminationofproductions,asnewcommunicationtoolswiththeaudienceandas
possibilitiesforthedevelopmentofnewbusinessmodels.
IntermsofIPR,theliveperformancesectorprimarilypaysforotherscopyrightbuthasno
initialownershiptoarightonitsproductions,whereasotherculturalindustriessuchas
publishing,recordingcompanies,evenbroadcasters,haveaninitialownershipon
copyrightorneighboringrights.167 Therecognitionoftheexistenceofcreativityandtalent
inotherwaysthancopyrightandinusingappropriateculturalandartisticcriteriais
essentialforthesectorsrecognitionofitsculturalandcreativeaddedvalue.168Thisrelates
totheneedforrecognitionoftalentassoftinnovationasinothersectorssuchasmusic.
IPRisalsochallengedwiththeincreaseduseofonlinecontentandexperiencethatthe
sectorprovides.
Anotherimpedingregulatoryfactor,bothintheonlineandofflineworld,isthatthesector
ofperformingartsishighlydependentonlegislationonmobilityandonterritorial
agreementsconcerningthemobilityofartists(withissuessuchasdoubletaxation).This
hampersthemobilityofartistsandproductions,andmakeswebstreamingof
performancesacrossbordersdifPicult,highlylimitingthesectorsabilitytoenternew
marketopportunities.
2.3.3.2.VisualArts
Aswithothersectors,thevisualartsarehighlyfragmented.60%ofthesectorconsistsof
13peopleenterprisesand21%ofthecompanieshavebetween49employees.
81%ofthecompaniesarethusunder10employeesandtheyareresponsiblefor5%ofthe
totalturnover,whilecompaniesof50+employeesareresponsiblefor89%ofthetotal
sectorsrevenueandrepresentapproximately1%ofthesector.Overall,thesector
contributesto9.71%ofthetotalturnoveroftheCCIs.
Themaincharacteristicofthemarketforvisualartsisthefocusontheexclusivityand
originalityofanartwork.169Inthissense,therightstotheartworkareessentialforthe
artiststoberewarded.MorespeciPically,theresalerightordroitdesuiteisthemost
importantcopyrightforauthorsofPineart.VisualandPineartsartistsdependprimarilyon
thesaleoftheiroriginalworkandthus,ontheresaleright.Withoutthelatter,theartist
willnotbenePitfromensuingincreaseofvalueoftheirworks.Unlikewritersand
composerswhohavearegularincomefromroyaltiesthatareduewhenevertheirworks
areperformedorpublished,artistsdependontheoriginalworkandtheensuingvalue
gainedovertime.
165EuropeanSectoralOrganisationInterview
166Pearle,(January2010),CreativeContentinaEuropeanDigitalSingleMarket:rePlectionsdocumentofDGINFSOandDG
MARKT,p.2.
167Pearle,(January2010),op.cit.,p.3.
168Towse,R.,(2004),op.cit.,p.15.
169UNCTAD,(2008),op.cit.,p.122.
Eventhoughvisualartsareusually
representedastheleasttechnologically OnlineArt
OnlineArtistheOnestopshopforworldwide
aidedandrequiringlessdigitalinput,the
licensesonworksofPineartforuseontheWorld
sectorisincreasinglyinPluencedby WideWebbeitcommercialornoncommercial.
technologicaladvancesanddigitisation. OnlineArtensuresthatauthorsarerewardedwhen
Theimportanceofphotography,andmore theirworksareexploitedbyothers.Itisacollecting
speciPicallydigitalphotography,isagood societycreatedbyvisualartistsornonforproPit
example.Privatedigitalcopyingisalso organisations.
threateningtherightsholders.For (SeeAppendix1,BestCase17)
secondaryusesoftheartwork,thereisno
monitoringandtrackingsystematthe
momenttocontrolandrewardtheuseoftheartwork.Remunerationschemesarenot
appliedtothesameextentasDigitalRightsManagement.170 InitiativessuchasOnlineArt
seektoclosethisgap(seeAppendix1,BestCase17).
Havinglookedateachsectorinturn,onecanclearlyseethestrikingsimilaritiesinthe
highfragmentationbetweenthemicroSMEsandthelargerenterprises,aswellas
theincreasingimpactofdigitisation.
2.4.Crosscountryanalysisofregulatoryframeworks
EuropeanMemberStateshaveverydifferentsocioeconomicandculturalbackgrounds
andculturalexpressions.SomewillhavespeciPicprogrammesandmeasuresforcertain
sectorsoftheCCIs,whileotherMemberStateswillconsiderCCIsjustasanyother
economicsector.
Intheexpertquestionnaire,itemergedthatIPRandtaxregulationswerethemost
importantregulatorymeasures(seeTable5.below)forCCIs.
Question:SelectthethreemostimportantregulatorymeasuresthatCCISMEsface:
Item Percent%
IntellectualPropertyRegulation 73.91%
TaxRegulation 60.87%
BusinessStartupRegulation 56.52%
Labourregulations 47.83%
SocialWelfareRegulation 30.43%
AntitrustLaws 8.70%
BankruptcyLaws 4.35%
Other 17.4%
Table5:MostimportantregulatorymeasuresfacedbyCCIs
(Source:Eurokleis2009,PanEuropeanExpertQuestionnaire)
ToexaminetheregulatoryclimatesurroundingCCIsinEurope,aninventoryofthe
environmentalfactorswasprepared,inparticularontheregulatoryissueswhichinPluence
thedevelopmentofSMEs.TheseincludedPiscalmeasures,labourstatus,socialsecurity,
directmeasuressuchasgovernmentalCCIprogrammes,thewaycreativityandCCIare
valuedaswellasinnovationandculturalpolicies.Theanalysisoftheenvironmental
factorsforCCIswasnotexhaustivebutprovidesaframeworktounderstandthedifferent
approachestowardsCCIs.Followingthis,acountrybycountryanalysisonthedifferent
culturalpolicies,SMEandinnovationpolicies,aclusteringofcountrieswasproposed.On
thebasisoftheresearchonenvironmentalfactors,someconsiderationscanbemade.
170EuropeanVisualArtists,seehttp://www.evartists.org
ThePirstsetofconsiderationsrelatestothewaycultureandcreativityisvaluedasadriver
ofinnovation,andhowMemberStatesarerespondingtoEUCouncilsrecommendations
towardsrecognisingthestatusofcreativityandcultureassectorsoftheeconomy,in
particularbyimplementingmeasuresinsupportofCCentrepreneurshipandSMEs.
HavingconsideredtheMemberStatesculturalandinnovationpolicies,itemergedthat
thespeciOiccountrysapproachestoCCIsfollowedthatcountrysinnovation
readinessandeconomicperformance.Inotherwords,thosecountriesthatarealready
performingwellininnovationandhavesolideconomiccapabilitiesshowareadinessto
organiseandinvestinspeciPicpoliciesforCCIsandCCISMEsinparticular.Itisimportant
tounderlinethatthosecountriesthathavesystematicmeasuresforCCIsareonlyasubset
ofthebestinnovationperformers.PositivesignstowardsspeciPicrecognitionofCCIsas
driversofinnovationarealsocomingfromcountriesthatarestilllaggingbehindinterms
ofinnovationperformance,mostlythenewmemberStates.Thisispossiblyduetofactthat
theyarestillengagedinaprocessofpromotinggrowththatissubstantiallybasedon
favourablePiscalpoliciesforenterprises.Culture,economicstructure,innovationreadiness
anddemographicfactorsdePinethelevelandproPileofentrepreneurialactivityforeach
countryandthereforetheproPileofCCindustry.
OnthebasisoftheresearchandbasedontheEuropeInnovationscoreboardof2008,there
isnotahomogeneous,butratherahybridEuropeanmodelofinnovation.Thisisa
modelthatcombinesstewardshipandentrepreneurship;experienceandinnovation;
socialcohesionandrewardsforrisktaking.Thoughallthesetraitsarepresent,theyare
notequallydistributedacrossthecontinent.Eachcountry,ormacroregion,presents
itselfwithspeciPiccharacteristicsthatrespondtothetraditionalgeoeconomicproPile.
Thesecondsetofconsiderationsrelatestothefactthatdifferentinnovationperformances
andCCIsrecognitionarenotonlyduetodifferentinnovationpoliciesframework,butalso
duetodifferentapproachestoenforcinginnovation.Certainapproachesrespondtothe
necessityeithertomaintain(andpossiblytoimprove)competitiveness,whileothersaim
atprovidingthenationaleconomywithcompetitivetechnologicalandorganisational
infrastructures.Therefore,innovationpoliciesincertaincountriesaremoreoriented
towardsaddressinghumanfactorsandengageinrecognisingcreativityasdriverof
innovation(usuallyinthericherandmoreinnovativecountries).Inothercountries
innovationpoliciesandmeasuresarefocusedontechnologyandproduction,anapproach
morecommoninthecatchingupnations.
Thethirdaspectoftheconsiderations,whichderivesdirectlyfromtheaboveobservations,
rePlectshowcountrieshaveorganisedthemselvestorespondtoboththechallengesand
opportunitiesshapedbytheCCIs.Here,thesetofcountriesthatareproposingacombined
approach,thatisaprogrammeshapedthroughacollaborationbetweenseveral
Ministriesacknowledgingthesocial,economicandculturalaspectofCCIs,represent
asmallsubsetofthecountries.
ToestablishanationalclusteringthatissigniPicantwithcrossnationalcommonpatterns
ofpractice,eachindividualnationalproPilewasconsideredandclassiPiedaccordingtothe
levelofevolutionwithregardstoglobaleconomicparadigms.SuchaclassiPicationallows
ustoframeCCIswithinthebroadpictureofnationaleconomicandsocialperformanceand
matchitagainstitsactualcapacitytodiscloseitspotentialwithinthedynamicsofglobal
competition.
Overall,itseemsthatthereareonlyafewcountriesthathavefullyengagedinrecognising
CCIsasdriversofgrowthandinnovationinEurope.Althoughtherecommendationsmade
bytheEUCouncilconclusion171highlighttheneedtochannelnationalandEuropean
Pinancialresourcestowardsnewaimsthataremoreattunedtofosteringartistictalents,
andrecognisetheparticularroleofculturalandcreativeSMEsasdriversofgrowthand
innovationinEurope,thenumberofcountriesfollowingtheserecommendationsisnot
excessive172 .
171EuropeanCouncil,(May2009),ConclusionsforCultureasaCatalystforCreativity,2941stEducation,YouthandCulture,
Councilmeeting
172Austria,Finland,Denmark,Belgium,Estonia,Latvia,France,theNetherlands,SpainandtheUKarecountriesthat
implementspeciPicmeasuresinsupporttoCreativeandCulturalindustries
Overall,themostgeneralapproachtosupportingCreativeandCulturalentrepreneurship
istaxdeductionandfavourablePiscalpolicies.InEurope,CCISMEsarelargelytreatedlike
allotherSMEsandthereforesubjecttotheprioritiesandstrategiessetbyinnovation
policiesasoutlinedabove.
2.4.1.Countryclustering
InTable6below,threebroadclustersofcountriesareidentiPied,whichpresentsome
traitssuggestiveofspeciPiceconomicpatterns.
Cluster Characteristics
KnowledgeEconomy Reliantonknowledgebasedproducts
andservices
SoundenforcementofIPR
Supportentrepreneurshipand
innovation
CCIsspeciPicprogrammes
Innovative
TraditionalEconomy Structurallystrong Soundandstronguseofknowledge
basedproductsandservicesbutno
signiPicantrewardforculturaland
creativeentrepreneurshipandrisk
taking
StateaidstillsigniPicantlypresent
Governmentsupportonstrategicsector
CCIsareappreciated
StructurallyWeak StrengthsintraditionalsectorsandSME
clusters
Belowaverageinnovationmeasuresand
strategies
CCIsacknowledgedbutnocoordinated
strategies
EmergingEconomies Virtuous Goodinnovationperformanceand

sometimesinceptivephasefor
coordinatedactionforCCIs
LackofrobustinvestmentinR&Dand
infrastructure
LaggingBehind Startedcatchingupprocesstobe
competitive
RecognitionofCCIsbutnostrategies
implemented
Table6:Clusteringbycountrycharacteristics
(Source:K2M2010)
2.4.1.1.Knowledgeeconomies
Theseareeconomies,whichcanalreadybeconsideredstructurallyrelianton
knowledgebasedproductsandservices.Allaspectsofthesystem(education,
productionandregulations)havealreadymadethetransitionfromtraditionaleconomyto
knowledgebasedeconomy.AllthesecountriesrelyonsoundenforcementofIPR,agood
balancebetweenPlexibilityandsocialprotection,goodinfrastructuresandsupportfor
entrepreneurshipandinnovation.Governmentshavealreadyputinplacecoordinated
andsynergisticmeasurestosupporttheeconomyingeneralandCCIsinparticular.These
economiesarealsopredisposedtoacceptacertainlevelofuncertaintyandnewmodelsof
productionandconsumption.
Thosecountriesthatalreadyhaveaconsolidatedinnovationpotentialtendtoinvestin
thosesectorsandprocessesthatwillenablethemtomaintaincompetitiveedgeand
furthershifttowardsafullrealisationofaknowledgeeconomy.Inparticulartheytendto
investineducationandhumanresources,butalsotopromoteknowledgetransfer
betweenacademicinstitutionsandcommercialorganisations,especiallySMEs.A
relevantroleinthisregardisplayedbyincubatorsanduniversityspinoffs,whichare
supportedbypoliciesaimedatnetworkingandsynergisticcollaborationsaswellas
administrativesimpliPication.
Bywayofillustration,Finlandadoptedacombinedgovernmentalstrategybetweenthe
MinistryofEducationandtheMinistryofEconomics.Themeasuresdevelopedinthe
StrategyforentrepreneurshipintheCreativeIndustriessectorfor2015173are
summarisedin15measuresin4areas174andiscoordinatedbytheAcademyforCreative
Industries.TheMinistryofEducationproducedtheStrategyforCulturalPolicy2020with
theactionplanof20072013(publicationofMinistryofEducation2009:12).175 This
documenthighlightstheimportanceofcultureandcreativityintheFinnishsocietyaswell
asunderlinesthecontributionintheeconomy.Thefollowingitemswillbeontheagenda
for2010:
SectorspeciPicdocumentssuchasnewprogrammesincludeamuseumpolicy
programme,acopyrightpolicydocument,andanarchitectureandcultural
environmentprogrammetobepreparedincooperationwiththeMinistryofthe
Environment
Reframetheframeworkactonthedevelopmentofculturetoclarifythelegislation
ConsolidatethefundingandPinancingsystembyalsointegratingwaysinwhich
theprivatefundingandsponsorshipcouldbeencouraged
Consolidatetheknowledgeeconomy,bymonitoringandimplementingintegrated
policies,sectorspeciPiccallingforabetterinteractionbetweenMinistriesandlocal
actors
Moreover,apartfromcertainPiscalleveragesandreductionsonCCIsfeesandincomeand
taxdeductionsforcompaniesinvestinginCCIs,theFinnishgovernmentintroduced
speciPicsectoralprogramme(forsectorssuchasTheatre,Music,VisualArts,Audiovisual
andTourism)providingadviceformarketing,servicedevelopmentaswellasitoffers
mentoringsupport.TheGovernmentalsoemphasisededucationandtrainingforCCIsas
oneoftheprioritythroughtheprogrammeCreativeFinland.
SimilarcombinedapproachescanbefoundinDenmark.Since2007,thecountry
establishedtheCentreforCultureandExperienceEconomythatisfundedbothbythe
MinistryofCultureandtheMinistryofTradeandBusinessAffairs.Thecentreactsasalink
betweentheculturalandthebusinesssectorsinordertobuildamorecompetitive
economy.ThecentredoesnotaimatdirectlysupportingCCIsbutratheratmakingthe
connectionsbetweentheCCIsectorandtheothersectorsoftheeconomy,andinsodoing
supportingthegrowthofthecreativeeconomy.
2.4.1.2.Traditionaleconomies
Theseareeconomiesthatarestillheavilyreliantontraditionalproductive,economic
andsocialparadigms.Theyeitherhavenotcompletedthetransitiontotheknowledge
economy,orarestillintheprocessofcompletingsuchatransition.TraditionalEconomies
canbefurtherclassiPiedas:
173FinlandMinistryofTradeandIndustry,(2007),DevelopmentStrategyforentrepreneurshipintheCreativeindustries
sectorfor2015,http://ec.europa.eu/culture/ourpolicydevelopment/doc/
Pi_devpmt_strategy_entrepr_crea_industries2015.pdf
174Developmentofoperatingenvironment,;Growthandinternationalization;Productdevelopment(includingthefundfor
demosandprototypes);andReinforcementofexpertise(includingadegreeinentrepreneurship).
175 Seehttp://www.minedu.Pi/export/sites/default/OPM/Julkaisut/2009/liitteet/opm45.pdf?lang=en
StructurallyStrong:Thesenationsrelyonsolidstructuralfundamentalsacross
allobservedfactors,butcannotbeconsideredknowledgeeconomiesastheyfailto
rewardculturalandcreativeentrepreneurshipandrisktakingattitudes.
Educationalsystemsarefeltasinadequatetopreparetoembrace
entrepreneurshipandfaceglobalcompetition.Inthesecountries,thePinancial
supporttoCCIsappearstobemostlystateaidsandgrantsratherthanprivate
investments.ThesocialsecuritysystemprivilegessecurityoverPlexibilityandthis
isalsorePlectedonproductionandconsumptionpatterns.Governmentstendto
supporttheestablishedstrategicsectorssuchasautomobile,asawaytomaintain
traditionalcompetitiveadvantage.CCIsareappreciatedandculturalandcreative
entrepreneurscanbenePitfromsomespeciPicmeasures,butthesearenot
necessarilyseeninacombinedapproachbetweenMinistries.
Forexample,inAustriathereisawide
arrayofpolicyinstrumentssupporting Departure
startupsatbothnationalandregional Departureisamunicipalorganisationthataimsat
levels,rangingfromfundingto PinanciallysupportingCCIsinterestedingrowingby
consultancy,withafocusthathasshifted emphasisingknowledgeexchangeandcooperation
fromsupportingsingleenterprisesto betweenCCIsandbusinessesandprovidingan
establishingnetworksandusingsynergies extensivenetworkaswellasresearchresources.
betweenpublicinstitutions,enterprises (SeeAppendix1,BestCase18)
andeducation.Noteworthyarethe
initiativesaimedatproviding
comprehensivesupporttoentrepreneurship.OneexampleisDeparturewhichpromotes
knowledgeexchange(seeAppendix1,BestCase18)Theimpulseprogramme'Creative
economy'isaninitiativethatofferstraining,education,Pinancialsupportandawareness
programmes.Thematically,theprogrammeissplitupintodesign,multimediaandmusic.
IntellectualpropertyrightsarestronglyenforcedinAustria.ComparingAustriasEISscore
totheEUaverage,showsthatthecountryperformswellatknowledgecreationand
intellectualproperty,whichrePlectstheratherhighR&Dexpendituresaswellastheuseof
thelegalsystemtoprotectinnovation.
InFrance,thegovernmenthaslong
recognisedtheimportanceofCCIsandthe IFCIC
roleofCCISMEs.Ontopofthesubsidies IFCICisastatesupportedinstitutionaimedat
providedbyregionalandlocalauthorities facilitatingbankPinancingfortheCCIs.Itguarantees
forthedevelopmentofCCIs,theMinistry thebankloaninvestedinCCIsaswellasactingasa
ofCultureandtheMinistryofEconomy marketanalystandCCconsultanttothebanks.
andFinancecreatedtheIFCIC(See (SeeAppendix1,BestCase19)
Appendix1,bestcase19),aPinancial
instrumenttofacilitateaccesstoPinance
forCCIs.Intermsofsocialsecurity,CC
entrepreneurshavetherighttopension ICO
ICOisapubliccreditinstitutionthatPinancesCCIs
supportbutnottounemploymentbenePit
servingPinancialneedsthattheprivatesectordoes
inthePirstyear.Thismeansthatthestart notcover.Italsosupportstheinternationalisationof
upconditionsarelow.However,after Spanishcompanies.
havingdoneacertainamountofwork,CC (SeeAppendix1,BestCase20)
entrepreneurshavetherighttosocial
securitybenePits.Forfreelancers,the
unemploymentbenePitsareavailablefromthesecondyear.TherearespeciPicpension
schemesfortheartistsaswell.Francesubsidisesculturalorganisationsandoffersgrants
andscholarshipsforculturalprojectsanddirectsupporttotheartists.InSpain,ICO
providesagoodexampleofhowsupportcanbegivenforSMEstointernationalise(see
Appendix1,BestCase20).
AnothersuccessfulexampleofsupporttoCCIsinthestructurallystrongtraditional
economiescanbefoundinBelgiumssectorspeciPictaxshelterforthePilmsector 176.The
mechanismallowsacompanyprovidingPinancialbackingforaudiovisualproductionsto
benePitfromexemptionofanyretainedtaxableproPitsworthupto150%ofthesums
176Seehttp://www.locationPlanders.be
actuallypaid.Theupperlimitoninvestmentis50%ofacompanysretainedproPits,upto
aceilingof500,000.Thisway,thelegislatorensureslimitedPinancialrisksforthe
investorswhilesupportingaspeciPicsectoroftheCCIs.TheBelgiumMinistryofFinance
estimatesthatfrom2003to2008thesystemchannelledover220millionintoPilmsand
otheraudiovisualworks,providingmorethan60millionin2008alone.
StructurallyWeak:Thesecountriespresentsomestrengthintraditionalsectors
andSMEclusters,butshowaverageorbelowaverageperformanceinenforcing
structuralinnovationmeasuresandstrategies.CCIs,evenwhenacknowledged,
appearnottobeaddressedcoherentlyandsystematicallywithoutspeciPicco
ordinatedactionsbetweennational,localandacademicauthorities.CC
entrepreneurscanrelyonthealreadyestablishedmeasurestargetingSMEs,but
canalsosufferfromtheinefPicienciesofeconomicandsocialsystems.
Forexample,in Spain,CCIsarenowgettingrecognition inthe national statisticsand are
incorporated in the plan for the Government (20082012) through the creation of a
DirectorateGeneralforCulturalIndustriesandPolicieswhichintroducesseveralmeasures
suchas:
Thelaunchofanewlineofcreditfortheculturalindustries,incollaborationwith
theOfPicialCreditInstitute(ICOSeeAppendix1,BestCase20),withsubsidised
ratestosupportthecreationofnewbusinesses
AcombinedapproachtobedesignedbytheMinistryofCulture,MinistryofForeign
AffairsandMinistryofEconomyandFinance
AidstosubsidisethecostofguaranteesthatCCIsneedinordertoaccessexternal
funding
Capitalgrantstopromotethemodernisation,innovationandtechnological
adaptationofCCISand
ReimbursableaidstoPinancetheimprovementofmanagerialcapacitiesthrough
trainingandinternationalisationofculturalcompanies
Aspartofthesocialsecuritysystem,theCCIandfreelancersdonothavespeciPic
provisionsandhavethesamerightsandobligationsofSMEsingeneral,althoughthereare
speciPicbenePitsforlowincomeartists.Intermsofpensionschemes,thereisaspeciPic
earlyretirementfordancers.Inadditiontothis,copyrightsocietieshavetosetupa
welfareandsupportservicesystemforauthors,performingartistsandculturalworkers.
Thissystemhastobefundedby20%fromtheIPRrevenues.
2.4.1.3.Emergingeconomies
Theseeconomieshaveundertakensubstantialeffortstobecomeknowledgebased
economies.TheyarealmostentirelyfocusedonprovidingthemselveswithefPicient
infrastructuresandcatchingupintermsofinnovationandR&D.Byandlarge,theyall
performwellintermsofeducation,Plexibilityandfavourabletaxationregimesfor
entrepreneurs.EmergingEconomiescanalsobefurtherclassiPiedas:
Virtuous:Someofthesecountriesperformaswell,ifnotbetterthansomeofthe
traditionaleconomiesintermsofinnovationperformancesandmeasures.The
mostvirtuoushavealreadyspeciPicmeasuresforCCIsandcoordinatedactions
betweeninstitutions,buttheseeffortsremainmoretheoreticalthanpractical,as
thelackofrobustR&Dexploitationandinfrastructureforinnovationishindering
development.
Bywayofexample,Estoniaisthecountrywiththehighestrateofimprovementin
innovationofanycountryinEuropeasaresultofstrongimprovementsinbusinessR&D
expendituresandNonR&Dinnovationexpenditures177.InEstonia,thewordculturaland
creativeindustriescametotheforefrontin2004,andin2006,theMinistryofCultureset
upanewDepartmentofDevelopment.TheStateofferssomeSocialSecurityprovisionsfor
CCIs:theEstonianGovernmentintroducedunemploymentforartistswithdifPicultiesin
177EuropeanInnovationScoreboard,(Jan2009),EuropeanInnovationScoreboard2008:Comparativeanalysisofinnovation
performance,ProInnoMetrics
earningtheirincome,althoughtherearenospeciPicpensionsupplementforartistsinthe
culturalandcreativesector.
LaggingBehind:Thesecountrieshavejuststartedthecatchingupprocessof
generatingtheconditionswherebytheycanbecompetitive.
Thesenationalclustersmustnotbeseenaswalledgardens.Therearecontinentaltraits
thatarepresentinallcountriesandeachcountrypresentsacombinationofallthese
characteristics.PointsofexcellencecanbeidentiPiedineachcountry,andtheoutlined
proPilescannotunequivocallyidentifyeachcountryofthecluster,butshouldratherbe
intendedasasumofthetraitsandtrendsexpressedbyeachindividualcountry.The
presentedclusteringshouldallowforconsiderationstoemergeandopennew
perspectivesforfurtherresearch.Moreover,theseclustersdonotintegratethedifferent
regionalandmunicipalinitiativesthatsometimesdonotcorrespondtothebiggernational
programmes.Table7.belowgivesanoverviewonthemostimportantregionsforcultural
andcreativeemploymentclusterswhichdonotnecessarilymatchtheclustering.
Table7:EuropestopregionsforCCIemploymentclusters.178
(Source:EuropeanClusterObservatory)179
Moreover,therangeofemploymentdoesnotequalanevengrowthrateontheregional
basis,assomeoftheregionsexperiencingthehighestgrowthintheCCIsdonotequateto
bigregionsbutmoresmallandmiddlesizedregions.AregionalperspectiveonCCIsand
178LQisanindicatorofCCIemploymentrelativetothetotalemploymentoftheregion,whereLQ>1indicatesanover
representationofCCIemployment
179EuropeanClusterObservatory,(March2010),PrioritySectorReport:CulturalandCreativeIndustries,Stockholm:
EuropeanClusterObservatory,p.5.
CCIpolicyisthusneeded,asregionalisedpatternsofgrowthandchangeseemtobea
strongfeatureoftheculturalandcreativeindustries.180ThisisalsorePlectedinthe
differentregionalconcentrationofCCIbysector(seeAppendix2.11).
2.5.Supportingculturalandcreativeentrepreneurship
2.5.1.Entrepreneuriallifecycleframework
InordertobestsupporttheCCIs,asimplelifecycleframework(Fig.11.)wasdevelopedfor
thisstudyaimingatprovidingpointersforblendingnewmodelsofcollaborativeand
competitiveadvantageforCCISMEs.
InviewofthecharacteristicsnotedearlierandthedifPicultyinPindingpathstogrowth,the
frameworksoughttodeterminethepointswheredifferenttypesofsupportmightbemost
effectivelyemployedatthedifferentlevelsandphasesoftheentrepreneurialactivity,and
inthisway,toexaminehowthemosteffectivepathstogrowthforCCISMEscanbe
embeddedwithinInnovation,SME,EntrepreneurshipandCulturalPolicies.
Theframeworkintroducedaseparationbetweensupportingtheentrepreneurand
supportingtheenterprise.Often,bothentitiesareconfusedinpolicyandliteratureand
thisleadstoanunderestimationofthecomplexdifferentinteractionsentailedineachone.
Theentrepreneurisapersonwithcertainmotivationsandneeds,whileanenterpriseis
not.Adistinctionbetweenthetwomeansthatsupportforboththeindividualandthe
enterprisecanbedesignedandimplementedwithappropriatepolicyinitiatives.Howcan
webestsupportthepersonsothattheycandeveloptheircreativetalentthatcaninturn
beadriverfortheirentrepreneurialdevelopmentandforthedevelopmentoftheir
economicactivity?
Suppor&ngtheEntrepreneurialLifecycle
Phase1 Phase2 Phase3 Phase4 Phase5

Preparingthe StartUp BuildUp BuildOut Connec&ng
ground
Entrepreneursupport
Enterprisesupport
Municipalsupport
Regionalsupport
Na&onalsupport
Sectoralsupport
Europeansupport
Figure11:SimplelifecycleframeworkforsupportingtheCCentrepreneurandenterprise
Thisseparationbetweentheenterpriseandtheentrepreneurwasconsideredusefulfor
mostoftherespondentsasthepathtobecominganentrepreneurisblendedwiththe
growthoftheenterprise,whiletheyaretwodistinctunitsthatbothneedsupport.This
separationwasalsousefulforpolicymakersasitmadeexplicitthepossiblewaystobridge
betweenthecreativepersonsandthebusinessandenterprise,andclariPiedbetweenthe
advantagesanddisadvantagesinthetypesofsupport.
Inviewofsupportingentrepreneurshipintheculturalandcreativesectors,mostofthe
respondentsagreedthatthesupporttotheentrepreneurwasmostlyneededintheOirst
180EuropeanClusterObservatory,(March2010),op.cit.,p.12.
phasesofthelifecycle;whilefromphase3ontophase5,theenterprisewasthemain
targetforthesupport.Therespondentsagreedthattherecouldbesomeoverlapand
intercombinationofsupportinsomeofthelifecyclefortheentrepreneurandthe
enterprise.
2.5.2.Phases
OnecanidentifyPivephaseswithintheentrepreneuriallifecycle:
PhaseOne:Preparingtheground
Inthisphase,theinitialunderstandingoflearningandpreparingforthe
entrepreneurialpracticetakesplace.Oftenthisisdoneduringtheprofessionaland
educationtraining,whencreativepeopleprepareforaprofessionalexistenceafter
graduation.
PhaseTwo:StartUp
Inthisphase,thePirstintegrationofpracticalexperienceandintegrationoflearning
andentrepreneurialpracticetakesplace.Thereisacombinationofnovel
experiencesandadaptablebehaviourneededinordertogettheenterprisestarted.
PhaseThree:BuildUp
Inthebuildupphase,theinitialenterprisemovestoitsPirstlevelofstable,
sustainableexistence.Thenoveltyofthebeginningischangedintoadaptable
behaviour,basedonpracticalcriteriaandusability.Extrastrengtheningof
competenciestotransformdiscoveryintoexploitationiscrucialinthisphase.
PhaseFour:BuildOut
Inthisphase,theenterpriseismaturingintoamorestable,structuralexistence.Itis
deepeningitsstructuralsustainabilityandimprovingitsmarketposition.
PhaseFive:Connectingnetworks
ThelastphaseidentiPiedisdealingwithmaturegrowthwithinastronglynetworked
environment.Sustainablepathstoacontinuousenterprisegrowthhavebeen
identiPiedandimplemented.
Thissimpleframeworkwasintendedtoprovideindications,ratherthanstatic
recommendations,forsupportinggrowthofCCIsthroughanincreasedunderstandingof
themultiplecomponentsatstakebydividingtheprocessesandthelayersofexistinglevels
ofsupport,andmakingadifferencebetweenthepersonandtheorganisation.The
apprenticeentrepreneurswillmostlyneedsupportasindividualsinordertobeabletotry
outtheirentrepreneurialactivityinanorganisedway.Thedistinctionalsoimplicitly
allowsonetointegratethedifferentmotivationsoftheentrepreneur:whattypeof
entrepreneurorenterprisetheywanttodevelop,asthesupportisnotsolelyoriented
towardsgrowingtheorganisation.
2.5.2.1.Linearity,motivationandgrowth
Thelinearityandthetopdownapproachadoptedinthisframework,althoughindicative
ofaprocess,doesnotofcoursecorrespondtothedynamismandrealityofthecultural
andcreativesector.Beinghighlyheterogeneous,severalpathsforsuccessfulCCIgrowth
orsustainableexistencecanbeimagined,representingforexampleaconcentric
framework.However,forthepurposeofclarity,thedifferentcomponentswereplacedina
linearframework,althoughtheidealshapewouldbeathreedimensionalformwith
overlappinglayerswhichmightalsoincludedesignphases(novelty,adaptability,usability,
replicabilityandscalability)andtechnologyimplementationphases(create,catalyse,
connect).Indeed,thetermentrepreneuriallifecyclecanonlypartiallyrePlectthewaysin
whichCCISMEsareconstantlyadaptingtotheirenvironmentandemergingdemands:
Inthecreativeindustriesyouhavedevelopmentstypicallyrunninginparallel.
Whileacompanyisstartingupandgrowing,itnotonlylearnsinternallyor
expandsitshorizonorseesnewthingsbyexperienceinternally,butalso
externally.Atthesametimetheyreonasteeplearningcurveasfarastheir
professionalentrepreneuriallifeisconcernedandtheygrowinsizeandbusiness
typically.Youhaveanumberofthingsgoingparallel.
(CCNationalSupport,Structurallystrongtraditionaleconomies)
Lookingatthelinearityofthisapproach,onecriticismoftheframeworkwasthe
underlyingassumptionoftheCCIentrepreneursdesiretogrow.However,asexplained
earlier,aCCIentrepreneuroftencombinesboththeculturalcreativedriveandthe
economicentrepreneurialdrive.AccordingtoHubertetal,bycombiningbothacultural/
creativeandanentrepreneurialpositioning,onecanPindfourdifferentapproachesinthe
personalorientationoftheCCentrepreneur 181asillustratedinTable8.below.
Culturalandcreativeentrepreneurspositionthemselvesinfourdifferentsetsofideals:
entrepreneurialsuccess,professionalachievement,artcreationandpursuinga
professionalcareer.ThesefourpersonalpreferentialmotivationscanbeidentiPied,based
uponPivedimensions:personalaspirations,identiPicationfocus,thedivisionbetween
workandpersonallife,typeofoccupation(employer,manager,freelancer),thedifferent
industries,andadditionaltypicalcharacteristics.
Mainmo&va&on: Entrepreneurial Professional Artcrea&on Professionalcareer
success achievement
Domina&ng Successrst,than
Balancebetween Autonomyand Security.Reciprocity.
occupa&onal autonomy success,autonomy Ar8s8cRecogni8on, Alia8onof
aspira&on andsecurity Aesthe8cCriteria autonomyand
success
Domina&ng Personalenterprise ProfessionalStatus ArtCommuni8es,the Employee
iden&ca&onfocus moreimportantthan ArtScene
occupa8onstatus
Workandlive Professionalac8vi8es Professionalac8vi8es Professionalac8vi8es Professionalac8vi8es

inthecentre;private moreimportantthan aspartofpersonal andprivatelife
ac8vi8esmarginal privatelife,but choices.Refusalto equallyimportant.
dependingonactual makedis8nc8on Separa8onof
topics betweenprofessional Professionaland
andprivatelife Privateac8vi8es
Typeofoccupa&on Employer,manager Freelancer, Freelancer.Rarely Employeeor

Employee,Rarely employeeor Freelancer
Employer employer
Industriesand Allsectors,inthe Technical Artprofessions. IT,Adver8sing,Sales
profession Crea8veEconomy professions, Design,Film, Professions
absent Architecture,Sound Architecture,Visual
technician,Camera Arts
man,etc
Addi&onaltypical Predominantlymen Mostlypersonswith Separa8onofbread Majorityofyoung
characteris&cs longprofessional earningac8vi8esand people
experience ar8s8cdrive
Table8:Personalmotivationinentrepreneurship
(Source:Eichmann,Hetal,2007)182
DependingontheCCIentrepreneurspersonalmotivations,anysupportwillhavetobe
adaptedsothat,forexample,localsupportwillbeavailableforaCCentrepreneurwhois
moredrivenbythecultural/creativecontentofitsproducts/services,whiletheEUand
regionallevelscouldbemoresupportiveofCCIswishingtointernationalisetheirmarket.
181Ibid.
182
EichmannH.,Flecker,J.Reidl,S.,(2007),EsistjaeinefreiesGewerbe.ArbeiteninderWienerKreativwirtschaft,Vienna:
FORBAForschungsundBeratungsstelleArbeitswelt
Manyrespondentshighlightedtheneedtodifferentiatebetweenthesubsidisedand
nonsubsidisedsectorsoftheCCIs.Thedifferentsectorcharacteristicshavebeen
elaboratedaboveinsection2.3.TheframeworkdealswithCCIsingeneral,thoughthe
characteristicspreviouslystatedshouldbetakenintoaccountaccordingtothegeneral
structureofthesector.
2.5.3.ApproachestosupportingentrepreneurshipinCCI
Thehorizontallayersoftheframeworkrepresentthedifferentlevelsofsupportasthe
multiplepoliciesforeachlevelmaynotnecessarilybeknownorvisibletooneanother.
Thereisindeedoftenalackofclaritybetweenthedifferentlayersofsupport,making
thesupportmorecomplexforeachtargetgroup.Thetypeofsupportprovidedmay,for
example,beacombinationofmunicipaltaxbreaksandfundsaswellaslargerECfunded
projectsornationalsectoralfunds.ThisisoftenverydifPicultfortheCCIentrepreneurto
understand.
Moreover,thereisamisunderstandingonbothsides:Pinancialintermediariesandfunding
agenciesusuallyhaverigidandriskfreeproceduresthatarealmostincompatiblewith
CCIsthatare,asnoted,basedontherewardoftheirintangibleassets.Ontheotherhand,
CCIsmayhaveacertainmistrusttowardsthoseprogrammesforfearofbeingovertakenby
commercialinterestsandtheymaynotnecessarilylookforthefundingandsupport,
eitheroutofstubbornnessorlackofinformationorcompetenciestodealwiththe
procedures.Duetothecombinedrequirementofentrepreneurialactivityandthecultural/
creativeone,theCCIentrepreneurmaylackthetime,andmaybeunwillingtolook
forinformationamongstthemultitudeofsupportprovided.Thereisthusamismatch
betweentherealneedsoftheCCentrepreneurandthesupportprovided.
Thenecessitytobringbothsidescloserbymakingthesupportmoretargetedtothe
needsoftheCCentrepreneurisessential.Thereisadebatebetweentheneedto
targetthesupporttoCCIsortomainstreamCCIswithinexistingschemes.The
questionofincludingthespeciPicitiesofCCIs(intangibleassets,size,production
processes)withinexistingdePinitionsmayhelptobroadenthetypeofsupportthatthe
CCIscanget.Forexample,openingthedePinitionofinnovationtosoftinnovation,to
intangibleassets,bringingtalentscoutingaspartofR&D,mayincreasethepossibilitiesof
supportandfundingintheseareas.
However,lookingattheexistingsupportintheChamberofCommerceorinsimilar
unit,theCCIsdonottakeadvantageofthesupportavailable,comparedtowhenthere
isaspeciPictargetedsupport.ForexampleinBelgium,CultuurInvestisainvestmentfund
forCCIsandtheyaremorewellknownthantheotherprogrammesreachingallSMEs.The
CCIsdonotknowordonotdealwiththeseoverallstructuressuchasBusinessSMEs
Centresforlackofknowledge,stubbornness,distrustandlackoftime.
WehavelargearrayofsupportprogrammefortheSMEsingeneral,butmany
oftheCCIsdontapplyfortheseprogrammes,ordonthaveaccesstoordont
NindtheaccesstothoseprogrammesthatareforallSMEs.Thesesupportsare
forthemomenttheleasteffective.Andyoucanseeadifferencebetweentheuse
byCCIsofthegeneralSMEssupportandtheonesthataretailormadetothe
needsoftheCCIs.
(RegionalCulturalMinistry,StructurallyStrongTraditionalEconomy)
ThispushesfortheelaborationoftargetedpoliciesfortheCCIs,inordertoovercome
suchdisparityinsupportprovision.Moredemandledprogrammesandprogrammes
thatOitthespeciOicitiesoftheCCIsneedtobeelaborated.Thedifferentlayersof
supportprovisionwillbefurtherelaboratedinthefollowingchaptersaccordingtothe
variedissuesfacedbyCCIenterprises.
2.6.Concludingremarks
HavingconsideredthecharacteristicsoftheCCIs,thesectoralcharacteristicsandthe
factorsthatshapethecontextsurroundingtheCCIs(determinantsandenvironmental
factors),thischapterhasdescribedthegeneralframeworkusedinordertobetter
understandthetargetedissuesthatneedfurtherattentionforpolicymakerstodevelop
supportingschemesforentrepreneurshipthatPittheneedsofCCIs.Inadditiontothe
factorsalreadyoutlinedinthischapter,itisworthreiteratingthecorecompetencies
neededwithintheentrepreneuriallifecycle:
1.Visiondevelopment
Tooperateinacomplex,highturbulenceenvironmentinthecreativeeconomy,and
torealiseastrategicpositionforthelongrun,itisnecessarythatculturaland
creativeentrepreneursareabletodevelopavisionontheirowncreativeOirm.
Mostoftheentrepreneurshaveaoneyearscopeontheirculturalandcreative
business.Forasustainablegrowthanddevelopmentreasonsitwouldbeadvisable
tocreateamorelongitudinalperspective.
2.Marketpositioning
Withineachphase,marketpositionsarecrucialfortheexistenceofculturaland
creativeOirms.Inthebeginningonecanstartoffbyapositioningbasedonone
productorservice,andintheperiodafterthepioneeringphasetherewillcomea
differentiationwithavarietyofproductmarketcombinationsinthematuringstage.
Thiscorecompetencescanningone'smarketpositionisneededinallphasesof
theentrepreneurialdevelopment.
3.Returnoncreativitycompetencies
AccesstoPinanceandtheskillstodealwiththePinancialsideofCCISMEsisa
genericproblem.183FromsimpletocomplexPinancialsupport,theculturaland
creativeentrepreneurisresponsibleforhisorherownbusinessmodelandthe
Pinancialsources:bankloans,guaranteedloansbygovernmentalornonproPit
agencies,crowdsourcing,grantsandsubsidies.Businessmodelsarefocusedmainly
oncomponentsofvaluepropositions,relationshipswithvisitorsandclients,thecost
structureandincome/proPit.184 Duetotheinvolvementofculturalvalues,business
modellingbasedonCCIsisanessentialpartofthecompetencies.
4.Communicationskills
Culturalandcreativeentrepreneurscommunicatewithcolleagues,visitors,clients,
experts,Pinanciers,governmentalrepresentatives,grantofPicersandtrainers.To
optimisethequalityoftheircommunicationwithinastrongnormativePieldof
crucialimportancewithintheCCIstheseentrepreneurshavetohavegood
communicationskills,bothoralandwritten,applicablewithinacontextof
diversity.
5.Networkingandteamwork
NetworkingisalmostasecondnaturewithintheCCIs.Formanycreative
peoplenetworkingbeginsduringtheireducationandtakesonamoreprofessional
structureintheworkplace.Networking(onapersonal,functionalandmultilayered
interactionlevels)isaqualitythatformstheraisond'etreofacreativePirm.
TeamworkisaqualitythatisstronglyconnectedwiththeCCIs.Coreissuesin
theculturalexistencearetheroleoftheleadershipPigure,teamdevelopmentwithin
projectsandprojectresponsibilities.185
Thenextchapterlooksatthedeterminantsofculturalandcreativeentrepreneurship,
basedonthesixthemesofdeterminantsofentrepreneurshipelaboratedabovebut
adaptedtoencompasstheneedsoftheCCIs.ThesethemesareaccesstoPinance,accessto
market,regulatorymeasuresfocusingonIPR,entrepreneurshiptrainingandeducation,
accesstoinnovation(R&D)andcollaborationandclusters.
183Hagoort,G&KuiperG:ReturnonCreativity:insearchforaformula.In:HagoortG&Kooyman,R(Ed):Creative
Industries;ColourfulFabricinmultipledimensions.Utrecht2009
184 Osterwalder,Alexander:OnBusinessModelInnovation.Asretrieved12April2010fromhttp://alexosterwalder.com
185Maarse,D.,(2009),ProjectBasedLearning:thetemperatureofourbathwaterinHagoortG.andKooyman,R.,(Ed.),
(2009),CreativeIndustries,ColourfulFabricinMultipleDimensions,Utrecht:HogeschoolvoordeKunstenUtrecht
Chapter3:MainThematicOutcomes
ItisclearthatCCIshavespeciPiccharacteristicsthatneedtobetakenintoaccountwhen
lookingatculturalandcreativeentrepreneurship.Moreover,CCIsdonotworkinclosed
environments;rathertheyarestronglyinPluencedbytheirregionalandnational
environments,aswellasthechangesduetodigitalconvergence.Havinglookedatthe
determinantsofentrepreneurship,thissectionexaminesthekeythemesthatdirectly
inPluencethedevelopmentofentrepreneurshipinCCIsinEurope.Thesekeythematic
outcomesfromthestudyprovideananalysisandoverviewoftheareaandformthebasis
fortherecommendationsinChapter4.
FromtheinterviewsconductedforthisstudyacrossEurope,oneofthegeneralPindings
thatquicklyemergedwastheoverridingneedtogathermoreconsistentdataregarding
CCIsonaEuropeanlevel.Nationalstatisticsarenothomogenisedandthismeansthatany
comparisonisPlawed.AtEuropeanlevel,Eurostat,thestatisticalofPiceoftheEuropean
Union,iscurrentlyworkingwithagroupofMemberStatesonanupdateoftheframework
forculturalstatisticssetupin2000aswellasondePiningthescopeofCCIs.Atamore
modestlevel,theCreativeGrowthprojectisagoodexampleofanefforttorebalancethis
butitremainslimitedtocertaincities.186
Thischapterwilllookatthemainthemesthatemergedfromtheresearchundertaken
correspondingtothedeterminantsofentrepreneurship,namely:accesstoPinance,access
tomarket,IPR,educationandtraining,innovationandconnectivecollaborationand
clustering.
3.1AccesstoOinance
ThekeyissueisnottheavailabilityofNinanceorbusinessdevelopmentservices;
ratheritistheaccessandusemadeofthisfundingandsupportbycreative
businesses.SpeciNically,itisthelowpropensityandabilityofmanycreative
businessestomakefulluseoftheavailableNinance,adviceandexpertisethat
inhibitsincreasedproductivityandgrowthinthecreativeindustries.187
PerhapsthegreatestobstaclefacedbyentrepreneursandenterprisesintheCCIsishowto
locatethefundstoPinancetheirendeavours.Inthestudysonlinesurvey,accessto
Oinancewasdeemedby33.8%oftherespondentstobethemostimportant
businessrelatedchallengewhenstartingacompany.ThisobservationwasconPirmed
bythesectoralexpertswho,whenaskedaboutthemostimportanttransversalissues
facedintheirownsectors,prioritisedaccesstoPinance(37.9%).Indeed,manystudieson
entrepreneurshiphighlightcapitalasoneofthemostcriticalfactorsforsuccess.188The
perceivedlackofPinancefortheCCIswasfurtherexacerbatedbytheeffectoftherecent
Pinancialcrisis,fromwhich39%oftheCCIsexpectedadecreasefrom5to10%in
theirturnover,asopposedto18%believinginastableturnover(or+2.5%)ascanbe
seeninFig.12.below.
ArecentsurveybySICAconOirmedthistrendasalsoaffectingpublicfundsfor
culturalactivities.Forexample,Portugalsculturalsectorisheavilyunderpressureasthe
MinistryofCultureisevenconsideringcuttingfundsoninternationalrepresentationand
themanyprojectsfundedfrombankloansarenolongeravailable.Latviaisthecountry
thathasexperiencedthemostcutsinitsnationalgovernmentbudgetwithadecreaseof
67%inthePilmsectorsbudgetand40%intheartsandliteraturesector.Precursorsin
thecreativeeconomyarenotsparedeither,withSwedenshiftingitsfundingtoregional
government,leadingtoadisparitybetweensmallerandbiggercities.TheUKhas
witnessedseverecutsfortheArtsCouncil(20millionEuros)thatwillbemaintainedsince
186Seehttp://www.creativegrowth.eu
187DCMS/CreativeEconomyProgramme(2006),BusinessSupportandAccesstoFinanceGroup,London:Departmentof
Culture,MediaandSport
188ECGreenPaper,(2003),op.cit.,p.18.
fundsforculturearemostlyreservedfortheOlympicsin2012.189
Question:Whatwastheeffectoftherecentcrisisonyourturnoverfor2009?
:1,3*;#C-+,-./-#0*#12,*34-,#5@%!"#28#13#@$"9#
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Figure12:EffectoftherecentOinancialcrisison2009turnover
(Source:Eurokleis2010,onlinesurvey)
CapitalandaccesstoPinanceplayanimportantroleduringallphasesofthe
entrepreneuriallifecycleandcandirectlyaffecthowwellabusinessperforms.Indeed,in
thestudysonlinesurvey,52.2%oftheCCIshighlightedthestartingupphaseasthemost
importantphaseforPinancialsupport.Fromtheonlinesurvey(Fig.13.),56%oftheCCIs
(78%ofwhichconsistedofproOitorganisations)reliedonselfOinanceastheirmain
Oinancialsource,asopposedto20%whichweremainlysupportedthroughpublicgrants.
Question:InthelastNinancialyear(2008),whichwas
themostimportantNinancingsource?
*:?2=#N19=+:;#
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Figure13:MostimportantOinancesource20072008
(Source:Eurokleis2010onlinesurvey)
ItisalsoclearthatCCISMEshaveashorttermspanforOinancialplanning.Theonline
questionnairerevealedthat22%oftheCCIshadnoPinancialandeconomicplanningwhile
53%hadaoneyearforecast,ascanbeseeninFig.14.Only4%hadaOinancialforecast
ofupto5years.
Moreover,comingbacktothecharacteristicsofoutsourcingmechanismsandthenecessity
tocombinetheadministrativetaskswiththecreativeprocess,theonlinesurveyshowed
189SICA,DutchCenterforInternationalCulturalActivities,(June2010),TheEconomicCrisisandtheProspectsforArtsand
CultureinEurope,p.4.
that75%ofthesecompanieselaboratedtheforecastthemselvesasopposedto20%
thatusedaprofessionalconsultancyservice.
Question:DoesyourorganisationmakeanyNinancialandeconomicplanning(budgetandupdated
businessplan)?
*+,-#$#5+30#6/0+73,1#
:/#
*+,-#89#1/#&#5+30,#6/0+73,1#
*+,-#89#1/#(#5+30,#6/0+73,1#
*+,-#./0+#1234#(#5+30,#6/0+73,1#
!"# $!"# %!"# &!"# '!"# (!"# )!"#
Figure14:FinancialandEconomicplanning(Budgetandbusinessplan)forCCIs
3.1.1.SizerelatedconstraintsforOinance
InviewoftheEUSmallBusinessActof2008,smallandmedium sizedenterprisesand
freelancersplayacentralroleintheEuropeaneconomy,especiallyintheirroleas
innovators.190However,theexistenceofanequitygaptheinabilityofsmallPirmsto
accessthePinancetheyneedtogrowhasbeenalongtermchallengeforgovernments
andisamajorconsiderationinEuropesstrategyforitsinnovativefuture.191 Successive
administrationshaveacknowledgedtheimportanceoftheventurecapitalindustryand
implementedvariousinitiativesinsupportofearlystageventurecapitalinvestment,
includingseedandstartupfunding,tosupportSMEs,andespeciallyCCISMEs.192
OnecharacteristicthatsetsaparttheCCIsand,inmanywaysimpedestheiraccessto
Pinance,isthedependencyonintangibleassets.Thecreativeentrepreneurtraditionally
combinestangibleinformationandcommunicationtechnologywithintangible
informationproducts:culturalqualitiesandmediacontent.However,intangibleassets
suchasnovelty,softinnovation,copyrightandcreativityareoftennotreOlectedin
accounts,althoughthisisslowlychanging.193Financialinstitutionssuchasbanksoften
failtosufOicientlyrecognisetheireconomicvalue. 194Fig.15.belowillustratesthemain
obstaclesforCCIstoaccessPinance,wheretheshareofriskaversionfromPinancial
institutionsandthedifPicultyingettinggrantsaccountsforapproximately30%ofthe
responses.
Forthisreason,aloansupportingCCIactivitiesisconsideredriskyandisnotalways
endorsed.WhileguaranteefundssuchasthoseelaboratedintheNetherlands(Kunsten
Zaken)orinFlanders(CultuurInvest),facilitatetheattractionofsuchfunds,there
remainsastrongneedforgreaterknowledgeexchangebetweentheOinancialsector
andstakeholdersintheCCIs,assectoralexpertshaveindicated.
190EuropeanCouncilConclusions,(December2008),ThinkSmallFirstASmallBusinessActforEurope,doc16788/08
191EuropeanCouncilConclusions,(May2010),ConclusionsonCreatinganInnovativeEurope,3016thCompetitiveness
CouncilMeeting,26thMay2010
192Higgs,P.andCunningham,S.,(2007)AustraliasCreativeEconomy:MappingMethodologies.TechnicalReport.Brisbane:
CentreofExcellenceinCreativeIndustriesandInnovation.
193OECDisdevelopinganinnovationstrategytoprovidepolicymakerswithtoolstoimprovetheirowninnovationstrategies
basedonnewinnovationmeasurementswhichwouldtakeintoconsiderationsoftinnovationandisalsoexpectedto
integratethevalueofuserinnovation.SeeNationalEndowmentforScience,TechnologyandtheArts,(April2010a),
MeasuringuserinnovationintheUKTheimportanceofproductcreationbyusers,London:NESTA
194EuropeanCommissionGreenPaper,(2003),op.cit.,p.12.
Question:WhatisthemainobstacleforyourorganisationtoaccessNinance?
J97E#/;-479*6#34*,#=6/6:9/1#967+.>+*67#
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)*#+,-#.*#/0012#3*4#54/6.7896:-6+;-7#
!"# $"# %"# &"# '"# (!"# ($"# (%"# (&"# ('"#
Figure15:MainobstaclesforCCIstoaccessOinance
3.1.2.Subsidyversusmarketcompanies
Asseenalready,theCCIscanbebroadlydividedintotwocategories:thosethataremore
commerciallyorientedandthosethatarepubliclyfunded.Whilethisdistinctionis
identiPied,therealityisoftennotasexplicitbecauseThepublicandtheprivatesectors
areintegratedviatheCCIthroughsponsorshipanddonations,aswellaseffectivecross
subsidies.195Inanycase,themaindifferencesillustratethewaysinwhichbusinessesare
Pinanciallysupported.WhilecommercialbusinesseswithintheCCIsaresubjectto
variationsinconsumerdemand,SMEsthatarepubliclyfunded,conversely,willoftenbe
steeredbytheconstantlyshiftingprioritiesofpublicresources.
ThetypesofPinancialsupportmadeavailabletoCCISMEscorrespondtothedivisionmade
betweentheculturalandthecreativesectors.Manyculturalservices,aspartoftheCCIs,
arealsopublicservicesandaresupportedassuch.Taxationmeasures,inparticular,play
animportantrolefortheseactivities.Thoughpolicymakersincreasinglyturntheir
attentiontonewmethodsoffunding,suchaspublicprivatepartnerships,cultural
servicescontinuetobeprimarilyfundedbytheState.196Theseservices,suchas
activitiesintheperformingartsandtheaudiovisualsectorsaremorereadilygranted
fundingfromnationalgovernmentswhilethecreativeindustries,suchasdesignand
gaming,areexpectedtobemorecommercialinnature,receivingfundingthrough
entrepreneurialactivitiesandprivateequityPinanceratherthansubsidies.Thiscontrast
wasstronglyconPirmedbyrespondentsfromtheMinistriesofCultureinstructurally
strongandtraditionaleconomiesinthestudyresearch.
AnadditionaldistinctionshouldbemadebetweendifferentEuropeancountries.Inmost
traditionalandknowledgeeconomies,theperformingartsbenePitfromgovernmentgrants
orsubsidies.Inemergingorstructurallyweakeconomies,however,thefundsavailableare,
bycomparison,verylimitedastheyarehamperedbyaproductdevelopmentfocusas
expertshaveindicated.Whilesubsidiesfromthepublicsectormayassistinthestartup
andfundingofSMEs,theyareoftenmoreaccessibletotheculturalsectors(e.g.the
performingarts)thantotheCCIsasawhole.Inaddition,responsesfromexperts
suggestthatpublicinitiativesseemunabletomeettheexpectationsandneedsofCC
entrepreneursbecausetheyarecomplicatedtounderstandandoftendetachedfromthe
territoryinwhichthecompanyoperates.
Expertsfrequentlyexpressedcautionatrelyingonsubsidiessystemsandbroughtup
195 Pratt,A.C.,(2009),Thecreativeandculturaleconomyandtherecession,Geoforum,Volume40,pp.495496.
196KEA,(2009),op.cit.,p.6.
issuessuchasSMEsustainability,PinancialselfsufPiciencyaswellaspoliticalinPluenceon
culturalproductsandservices.Nonetheless,mostmembersoftheCCIshaveinsomeway
beenhelpedtodeveloptheirfranchisethroughpublicsupportandinvestment.
Amongrespondents,supportfrompublicgrantsisstronglyexpected.Bearinginmindthe
shortterm,projectbasedcharacteristicsofmanyCCIs,grantscanbestrategically
organisedtomaximisetheircreativeandculturalimpact,andencouragestrong
spillovereffectsandconnectivitybetweenthecore,thecreativeindustriesandthe
widereconomy.Indeed,thoughmanyentrepreneursrelyonprivatefunds,themajority
ofrespondentsconsideredpublicgrantstobethebesttooltoincreaseOinancial
opportunities.
TheneedformorepublicfundingfromEUfundingprogrammesornationalMinistriesof
Financewashighlighted(e.g.forworkspaces).Alternatively,anewEuropeanfund
speciOictoCCISMEswassuggestedasanothertypeofOinancialsupport.
3.1.3.TypesofOinancialsupport
WhilemanysimilartypesofsupportareofferedthroughoutEurope,thelevelatwhich
theyareofferedandthesectorstowhichtheyaremadeavailablemaydifferconsiderably.
Asdiscussedabove,themostimportantOinancingsourceisundoubtedlyself
Oinancing.Publicgrants,bankloansandprivategrantshavearesidualrole,whilethe
otherssourcesaremarginal.
3.1.3.1.AccesstodebtOinancing
Thesupplyofdebtcapitalviamoretraditionalcreditmarketsisvitaltoallentrepreneurial
activity.WithoutalargeandefPicientcreditmarkettosupplyPirmswithefPicientdebt
capital,someentrepreneurswillfaceaPinancialbarriermakingitimpossibletoseize
opportunities.Ingeneral,debtPinancingcoversbankloanschemesandinsurance
schemes.Theyare,inprinciple,easiertosecurebecausethesePinancialsourcesare
availabletoallentrepreneurs.
However,theregularOinancialinstitutionsofferlittledevelopmentassistanceor
expertisewithregardstotheCCIs. 197Inaddition,thenatureofCCIsmakesitharderto
accessPinance:businessesassetsareoftenintangiblewithcopyrightdifPiculttoprotectfor
newproductsanddesigns;returnsareuncertain;andproductinnovationdoesnot
easilytranslateintoformalbusinessstructures.Inordertodeveloptheircompany,a
midtolongtermloancanprovidesecuredinvestmentwhichismoreadaptedtothe
usuallonginvestmentcyclethatcharacterisestheCCIs.198
Furthermore,duetothePinancialrecession,manybankshavebecomemoreriskaverse
and,asaresult,areincreasinglylesslikelytosupportbusinessesintheCCIsdueto
theirhighriskqualities.InFig.16.,thethreemostimportantinstrumentstoincrease
Pinancialopportunitieswereseenaspublicgrants,anincreaseinselfPinancingandbank
loans.
Thereturnoninvestmentisconsidered
lowandriskyforinvestors.Accordingly, CultuurInvest
Pindingsfromtheonlinesurveyindicate CultuurInvestisanindependentinvestmentfund
thatthegreatestobstaclefororganisations coPinancedbytheregionofFlandersalongwith
toaccessPinancewasriskaversionfrom sevenstrategicpartners.Thefundisaimedat
Pinancialinstitutions,followedbydifPiculty entrepreneursintheculturalindustries,whohave
inobtaininggrants(seeFig.15.above). productsorserviceswithaculturalcontent,
Thus,abankloanguaranteefor creationandmarketing.Itisprimarilyshortterm
loans.
innovativeSMEsandCCIscouldhelpin
providingmoretargetedsupport.As
bankguaranteesdonotsufPicientlytarget
CCIs,specialisedPinancialintermediariesforCCIscouldmediatebetweenthemandthe
banks.TheexamplesofCultuurInvest,KunstenZakenandIFCIC(seeAppendix1)are
197 Karra,N.,(2008),TheUKDesignerFashionEconomy,London:NESTA
198KEA,(May2010),op.cit.,p.30.
highlyregardedinthiscase.
Question:WhatisthemostadequatetooltoincreaseNinancialopportunities
foryourcompany?
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H+,.:#,.4C+1#5(0C#
F:0/=:0#G#3@:02:.+0-#
AB;#.4C(,=:0#5:.#1D4#EE#@.:C(,12#/0C#24.>+,42#
?+29#,/@+1/*#
;/<#+0,40=>4#
8/09#*:/0#
34*5670/0,+0-#
'()*+,#-./012#
!"# $"# %!"# %$"# &!"# &$"#
Figure16:MostadequatetooltoincreaseOinancialopportunitiesforCCIs
3.1.3.2.AccesstoVentureCapital
Venturecapitalisanimportantsourceoffundingforpotentialhighgrowthventuresthat
requiresigniPicantcapitalfordevelopment,growthandexpansion.TheEurope2020
StrategyrecognisestheirbenePitforstartupcompaniesandinnovativecompanies.199
InarecentstudybyKEAonthePinancialopportunitiestofundCCIs,itwasfoundthateven
thoughtherearefewventurecapitalfundscomparedtotheUS,therearestill62speciPic
equityPinanceschemesacrossEuropewhicharepartlydedicatedtoCCIs,mostofthem
(approximatelyhalf)arededicatedtoaudiovisualbusinessessectorslinkedtotheICT
sector.200
InvestmentintheCCIoftenneedstobelongertermthanotherventurecapital
investments.Typicallyinvestorswantareturnontheirinvestmentinaslittleasthree
years.DespiteitshighproPile,investmentintheCCIscantakemuchlongertobecome
proPitable.Forthemicro,smallandevenmediumsizedbusinessesitisexceptionally
difOiculttoattractstrategicinvestment.However,thereareexamplesofsuccessful
equityfundssuchasWallimage,aBelgianinvestmentfundtotheaudiovisualsectorthat
coPinancedPilmprojectsfor30millionandgeneratedabout100millionrevenuein
WallonianandBrusselsregions.201
Ontheotherhand,manycreativeentrepreneursaregenerallynervousaboutpartnerships
withinvestors,fearinglossofcontroloftheircompany,andarereluctanttoshare
proOitsinreturn.
Inordertoenlargethedomesticsupplyofventurecapital,governmentscaneithertake
initiativestodevelopnationalventurefundsorimproveventuremarketregulation
togrowexistingventuremarkets.Theformerincludesdirectinvestmentsandthelatter
includesrelaxinglegislation,makingitmoreattractive(orsimplypossible)forentities,
suchaspensionandinsurancefunds,tomakeventureinvestments.
199EuropeanCommissionCommunication,(March2010b),op.cit.,p.20.
200KEA,(May2010b),PromotingInvestmentintheCulturalandCreativeSector:FinancingNeeds,TrendsandOpportunities,
ReportpreparedforECCEInnovationNantesMetropole,p.37.
201TapisRougeCannoispourlessystemesbelgesdaidesaucinma,LEcho,11May2010
3.1.3.3.Intermediarybodies
Intermediarybodies(suchasKunstenZakenintheNetherlands,orCultuurInvest
(Appendix1,BestCases27and21)),providealternativesourcesofPinancialsupport
throughventurecapital,microcreditschemesforstartupSMEsandculturaland
creativeentrepreneurs,andbyfacilitatingloanguaranteesthatminimiserisk.The
IFCIC(Appendix1,BestCase19)isacreditinstituteinFrancethatmakesiteasierfor
companieswithintheCCIstoobtainbankPinancing.TheIFCICprovidesloanguarantees
toSMEsthatcovermostoftheirneedsatallstagesoftheirdevelopment.
3.1.3.4.BusinessAngels
Businessangelsaretypicallywealthyindividualswhomakedirectequityinvestmentsin
theseedstageofcompanies,andtheytendtoprovidemoremanagerialandbusiness
advicethroughtheirgreaterpersonalinvolvementthaninstitutionalinvestors.The
motivesforbusinessangelstoinvestinnew,riskyideasandprojectsarevaried:from
expectationsofbigproPits,asenseofsocialresponsibility,helpingyoungentrepreneursto
setuptheircompanies,toinvestmentsimplyforthereasonsoffunandpleasure.202
Governmentsinmanycountriestrytocultivatebusinessangelsbyorganisingnetworks
andgivingspecialinvestmenttaxincentives.Severalcountrieshavealsotriedto
improveinformationOlowsbetweenangelsandpotentialentrepreneursthat
otherwisetendtobeinformal.203Forexample,theDutchgovernmentplannedinits
recentpolicyprogrammetoextendtheBusinessAngelsProgrammetoincludeCCIs,204 as
CCIsstillmakerelativelylittleuseofsuchBusinessAngelsystems.
3.1.3.5.Taxationincentives
ApartfromAustria,Finland,theNetherlands,SpainandtheUK,whichimplementspeciPic
measurestosupportCCIs(althoughdePinitionsarenotalwayshomogeneousfordifferent
policyframeworks),themostgeneralapproachestosupportingculturalandcreative
entrepreneurshiparetaxdeductionandfavourableOiscalpolicies.
Taxincentivescaneitherenhanceorimpaircompetitivenessandthecreationofa
prosperousentrepreneurialenvironment,dependingonthelevelandtypeofincentive.
Theoveralltaxburden,whichconsistsofalltaxes,directandindirect,andcompulsory
socialcontributions,canbeusedasaninstrumentfortheCCIs.205Expertsatdifferent
levelsfrequentlybroughtuptheissueoftaxcreditsandPiscalexemptions.Togetherwith
bankloanguarantees,taxexemptionswereconsideredbyEuropeanexpertstobethebest
waytoprovidePinancialsupport.
WhenaskedaboutthemostrelevantwaytoaccessPinanceforCCISMEs,taxexemptions
forCCIswereselectedasthemostimportantinitiativesbysectoralexperts(38%),
followedbyaCCISMEfriendlygrowthloan(27%),asillustratedinFig.17.Mostofthe
otheralternatives(7.4%)suggestedtheimplementationofamultilayeredapproach
encompassingfriendlygrowthloans,taxexemption,guaranteefacilities,riskcapital,and
VATreduction.Someonlyunderlinedtheneedtohavealoanorbankguarantee.Onthe
otherhand,forgeneralEuropeanexperts,seedOinancingwasconsideredthemost
relevantwaytosupportCCISMEs(22%)aswellasanincreaseinpublicgrants.
OneofthemostfrequentlyusedinstrumentstostimulatetheCCIsisthecreationof
speciPictaxregimesforculturalandcreativeentrepreneurs.TheECrecentlyconsidered
theimplementationofalowVATratetolabourintensivecreativeservicesand
products,includingartheritage,music,pressonline,worksofart,admissiontoshows,
202Ramadani,V.,(2008),BusinessAngels;whotheyreallyare,SouthEastEuropeanUniversityofTetovo,Macedonia
203KEA,(May2010b),op.cit.,p.43.
204NetherlandsMinistryofCultureandMinistryofEconomics(2009),CreativeValueCultureandEconomypolicyPaper,
TheHague:MinistryofCultureandMinistryEconomics,p.46.
205TheEChasconsideredtheimplementationofalowVatRatetocreativeservicesandproducts,includingallartistsand
theroyaltiesduetothem.EuropeanCommission,(2008),ConsultationPaperofReviewofExistinglegislationonVAT
Reducedrates,http://ec.europa.eu/taxation_customs/resources/documents/common/consultations/tax/
vat_rates_public_consultation_document_en.pdf
theatres,circuses,concerts,museums,etc.206Theargumentissimple:demandcanbe
boostedforanyproductbyloweringVATrates.Themotivationcanbetomakecultural
goodsmorewidelyavailableforlowincomehouseholdsortostimulatetheconsumption
ofgoodswithpositiveincentives.Examplesoftheformerwouldbebooks,musicand
culturalevents.
Question:SelectthemostrelevantinitiativetoaccessNinanceforCCISMEs
G1H#,H,I:<90#C9-#;;=#
;;=#AB7#C-/,053D#E-9F*+#3910#
78-9:,10#;83*8-13#105#;-,1<6,#
=058>*-/,>#?10@#
./0102/13#456/2,#
)*+,-#
!"# $"# %!"# %$"# &!"# &$"# '!"# '$"# (!"# ($"#
Figure17:MostrelevantinitiativetoaccessOinanceforCCISMEs
(Source:Eurokleis2010,Sectoralexpertquestionnaire)
Fig.18.belowshowsthemostimportantkindsofPinancialinitiativesthatcouldbestbe
usedforassistingCCISMEs.
Question:Selectthethreemostimportantsourcesofexternalcapitalinyoursector
L6E(5#
05+H-6(#45-,67#
B15=;(-,#??@#J-,K#
I(,615(#?-;+6-3#
*+,-,.+-3#G)H+.(7#
??@#'AB#>5+(,)3C#/5=D6E#F=-,#
8-9#(9(:;<=,#>=5#??@#'AB7#
0123+.#45-,67#
'(()#*+,-,.+,/#
!"# $"# %!"# %$"# &!"# &$"#
Figure18:MostimportantkindofOinancialinitiativesbestassistingCCISMEs
(Source:Eurokleis2009,SectoralExpertquestionnaire)
3.1.3.6.PublicPrivatePartnerships
ThediverseanddynamicnatureofCCISMEsmeansthatthequestionofaccesstoPinance
206ECConsultationPaperofReviewofExistinglegislationonVATReducedrates,(2008),seehttp://ec.europa.eu/
taxation_customs/resources/documents/common/consultations/tax/vat_rates_public_consultation_document_en.pdf
dependsonnumerousfactors.MultipleandblendedformsofPinancialsupportareneeded
dependingonthegivensectorandphaseofaspeciPicprojectatwhichanSMEPindsitself.
TheCouncilConclusionsofMay2010onCreatinganInnovativeEuropestressedtheneed
toincludepublicprivatepartnershipstoPinancemoreeffectivebankinglinesforResearch,
DevelopmentandInnovationinvolvingactorssuchastheEuropeanInvestmentBank.207
Theexpertintervieweesofthisstudysimilarlystressedthepotentialoftheseactorsto
tapintotheCCIs.
3.1.2.Phases
TheimportanceofaccesstoPinancevariesgreatlybetweenSMEsandmaybeofgreater
needduringthebeginningorlaterstagesofgrowth.Accordingtorespondents(Fig.19.)an
overwhelmingmajority,bothfromthesurveyandqualitativeinterviews,indicatethe
signiPicanceofPinancialsupportparticularlyinphasestwoandthreeofthelifecyclemodel.
Theamountandtypeoffunding,however,differsbetweenphases.Forinstance,startup
costs(e.g.registrationscosts)willbegreatestinphasetwo.Therefore,loweringthestart
upandregistrationcosts,therebydiminishingthePinancialthresholdstostart,will
positivelyinPluencethenumberofstartersinthesector.Similarly,providinginnovation
fundsduringphasethree,whentheyareofgreateruseandvalue,canbettertarget
innovation.
Thedivisionbetweensupportingtheentrepreneurandtheenterprisebecomes
apparentwhenregardingPinancialsupport.Thetransitionfromaonepersonenterpriseto
amultipersonenterprisegreatlyaffectsthetypeandamountofPinancesrequired,
particularlyifadditionalworkersareemployed.Similarly,theefPiciencyofpublicfunds
changesbetweenthesetwolevels,withdirectsubsidiesbeingveryefPicientatthe
beginningtosupporttheentrepreneur,butlesssoattheenterpriselevel.
Question:AtwhatstageoftheentrepreneuriallifecycleisNinancialsupportmostneeded?
*+,-.#%/#?9,69>:7#
*+,-.#&/#<:8=;>:7#
*+,-.#'/#<:8=;#1:9#
*+,-.#$/#*6.7,6825#9+.#
561:2;#
*+,-.#(/#0122.3425#
!"# $!"# %!"# &!"# '!"# (!"# )!"#
Figure19:MostimportantphaseforOinancialsupport
SinceaccesstoPinanceisimportantduringtheearlyphasesoftheentrepreneurial
lifecycle,knowledgeandinformationonthetypesofOinancialsupportavailableisof
correspondingsigniPicance.TherearemanytypesofexistingPinancialsupportavailable,
suchasmultisectoralsupportschemes.However,CCIsgenerallydonotaccessthemdueto
theirlackofknowledgeaboutfundsthatarenotspeciPicallytargetedatCCIs.208Cultural
andcreativeentrepreneursneedtobeawareof,andcomfortablewith,Pinancialoptions.
Ontheotherhand,toomuchfundingduringtheearlyphasescanalsoinhibitgrowth.
Asseveralexpertsexpressed,toomuchfundingcanmakeentrepreneursriskaverseand
stopthembringingtheirideastothemarket.
207EuropeanCouncilConclusions,(May2010),op.cit.,p.3.
208 KEA,(2010),op.cit.,p.26.
Duringthelaterstagesofthecycle,namelyduringphasefourandPive,thereareadditional
obstaclestoovercome.ForgrowthorientedSMEsparticularly,speciOicstructural
Oinanceandworkingcapitalareneededinordertoexpandgrowthandaccesstothe
market(buildout).Financialsupportmustbeaccessibleduringallphasesofthe
entrepreneuriallifecycle,butthetypesofsupportmustconcurwiththeevolvingneedsof
eachphase.
3.1.3.Levels
Financialsupportprovidedatlocal,regionalandnationallevelswereclearlyemphasised
bythesurveysrespondentsasmostadequateforsupportingCCIs.AsseeninFig.20.
below,32%ofrespondentsconsideredtheregionallevelofauthorityasmostsuitable
forsupportingaccesstoOinance,followedbythenationallevel(29%)andthelocal/city
level(22%).TheEUlevelwasdeemedtobelessadequatefordirectsupporttotheCCIs
mainlyduetothebureaucracyandcomplexityinvolvedintheprocedures.
Question:Whatlevelofauthorityismostsuitableforsupporting
accesstoNinanceforyourorganisation?
=-7);-.3,-./#/)1)/##
9:;,<).-#0)1)/#
0,4./56+78#/)1)/#
2.3,-./#0)1)/#
()*+,-./#0)1)/#
!"# $"# %!"# %$"# &!"# &$"# '!"# '$"#
Figure20:MostSuitableAuthoritytosupportaccesstoOinance
APirmunderstandingoftheparticularcharacteristicsandneedsoftheCCIswas
consideredcrucialtoprovidingthecorrectfundingmechanisms.Forthisreason,the
region,asanintermediarylevelproviderofOinancialsupport,isoftenpreferred,
accordingtorespondents.Regionalinstrumentswerereportedlyabetteroptionto
adequatelyimplementfunding.Assuch,theyactasaOiltertofocussupport.Hence,the
regionallevelispreferredduetoitspotentialtobridgethegapbetweenthelocaland
nationallevel.Additionally,Oinancesofferedandinvestedattheregionallevelallow
forthedevelopmentofaculturalidentitywithintheregion.
Atregionalandlocallevels,andoftenin
collaborationwiththenational AdvantageCreativeFund
government,capitalinjectionisattainable AdvantageCreativeFundisanexampleofaventure
throughinvestmentfunds.Onesuchfund capitaldedicatedtoCCIsaimedatPinancingCCIs
isAdvantageCreativeFund(seeAppendix throughouttheWestMidlandsregionintheUK.
1,BestCase22)intheUnitedKingdom,
dedicatedtoinvestingintheCCIs. (SeeAppendix1,BestCase22)
StudyPindingsindicatethatthenational
levelisconsideredmostadequateregardingthecreationofaconduciveOiscal
environment.AlsoimportantatthislevelistheapproveddeOinitionofCCIs,whichwill
directlyaffectwhichPinancialinstrumentsaremadeavailableandtowhom.
AtEUandnationallevels,initiativesaremainlytargetedatinnovationandpromoting
investmentininnovation.AttheEUlevel,theSeventhFrameworkProgramme(FP7)209
wasputinplacetostrengthenthescientiPicandtechnologicalcompetenceofEuropean
209Seehttp://cordis.europa.eu/fp7/
industryandthusincreasecompetitiveness.Itaimstoincreasecooperation,notably
through15%ofthebudgettargetedatthereinforcementofSMEsparticipationinresearch
projects,aswellassupportingthedevelopmentofaknowledgeeconomy.Despitethis
focusonSMEs,theprojectsstilllargelyaddresstechnologicalandscientiOic
performance,notputtingforwardmorespacefortheinnovativerolesoftheCCIs
throughnontechnologicalinnovationandserviceinnovation.Theneedforfundsfor
innovationandresearchforCCIswereclearlyexpressedintheonlinesurvey,with84.6%
ofrespondentsagreeingthattherewasaneedforstrongersupportinresearchand
innovationfortheCCIs.
AdditionalinitiativestargetingtheearlystagePinancingofSMEsincludetheCohesion
FundandJEREMIE(structuralfundsallocatedforSMEs,20072013).Whilethe
importanceofSMEsfortheEuropeaneconomyhasbeenrecognisedintheSmallBusiness
Act,CCIsremainunderrepresentedinEUinitiatives.
AlthoughattheEUlevelfundshavebeendevelopedthrough,forexample,theEU
InvestmentBank,suchinvestmentsarecommissionedtospeciPicintermediariesatthe
nationallevel,suchasbanksandinvestmentcompaniesthatmaynothaveexpertiseinthe
CCIsandthereforemaynotprovidethemwithloans.Additionally,thebureaucracy
involvedinobtainingEUfundingwasconsideredabarrier,bothintermsoftimeand
money:manyCCISMEssimplydonothavetheresourcestoapplyforthistypeoffunding.
Inanycase,accesstoPinancecanbestimulatedattheEUlevel.AsCCISMEsareoften
consideredtooriskyforbankloans,theEuropeanCommissionandtheEuropean
InvestmentBankhavejoinedforcestosetuptheRiskSharingFinanceFacilitytoprovide
riskcapitalandventurecapitalforinnovativerisktakers.210
EUCohesionandStructuralFundscouldfunctionaspartoftheresourcesallocatedto
CCIsataEuropeanlevelifindividualMemberStatescreatespeciPicsupportprogrammes
withintheStructuralFunds,ascanalreadybeobservedincertaincountries.
Itisimportanttorememberthatfundingmechanismsarenotalwayslimitedtoonelevel,
butmayoverlapbetweenlevels.Forinstance,fundsthatareofferedlocallymayinfactbe
managedatthenationallevelorcomefromEUStructuralFunds.Thesourceandextentof
fundingdependsgreatlyonthetargetsandscaleofaproject,idea,orbusiness.
Whilethefundsthemselvesarerequired,expertsalsoraisedtheissueofondemand
supportthroughmentorshipandcoachingintheareaofPinances.Entrepreneursmay
oftenbeunawareoftheirOinancialoptionsandthesourcesofOinancialsupportthat
theycouldapproach,whetherthroughpublicfunds,venturecapitalorbankloans.211The
lackofinformationonavailablePinancialsources,andthetimeandeffortneededto
acquiretheinformation,isanadditionalcostrequiredofSMEsintheCCIsinorderto
succeed.
AstheneedforPinancescannotalwaysbe
anticipated,Oinancialsupportavailable CREATEBerlin
ondemandcanbestimulatedthrough CREATEBERLINbringstogetherenergiesandideas
regionalandlocallevels.Culturaland andprovidescreativetalentswithopportunitiesto
creativeentrepreneurswillthenhavethe realisetheirvisionsbystronglybelievinginthe
possibilityofprocuringfundsfromviable importanceofthecreativeindustriesinthecitys
andapproachablesourceswithintheir economicdevelopment.
network.Agoodillustrationistheworkof (SeeAppendix1,BestCase23)
CreateBerlin(seeAppendix1,bestCase
23).
3.2.Accesstomarket
Accordingtosectoralexperts,themostimportantknowledgefactorsinPluencingan
organisationsgrowthwerelinkedtoinformationaboutmarketopportunities.The
respondentsnotedthatdifPicultyinidentifyingnewmarkets(19%)andthelackof
210Seehttp://www.eib.org/products/loans/special/rsff/index.htm
211 Expertinterviewsandbestcases
knowledgeofexternalmarkets(15%)212 weretwoofthemostimportantknowledge
factorsobstructinganorganisationsgrowth(Fig.21.).
Question:selectthethreemostimportantknowledgefactors
obstructinganorganisationsgrowth
B6-1;,4>13#1-5#D(9*-/.#
B6-1;,4>13#-C/-91(2#D(9*-/.#
'()*#+,#1-/5+9*#
'()*#+,#@8.>1-..#(6A>)-#
'()*#+,#=8(2>?-6#:-9.+11-2#
</0-9#
789+:-(1#1(;+1(2#9-382(;+1#
'()*#+,#())-..#/+#*1+52-63-#
'()*#+,#())-..#/+#/-)01+2+34#
!"# $"# %!"# %$"# &!"#
Figure21:MostimportantknowledgefactorimpedingCCIs
(Source:Eurokleis2009,Sectoralexperts)
Themarketsforculturalandcreativeproductsandservicesareoftencharacterisedby
unpredictabledemandconditions.Entrepreneurshavetotakeheterogeneous,changing
tastesintoaccount.Inaddition,creativeproductsservefunctionsthatoftenescape
objective,quantitativemeasurement.Asnotedabove,theuncertaintyofdemandis
furtherstrengthenedbytheintangiblenatureoftheproductsandservicesaswellasthe
factthattheyareoftenprojectbased.Thispropertymeansthatatvirtuallynostageinthe
productionsequencecantheprojectsoutcomebepredictedwithanydegreeofassurance:
sleepersinexplicablyturnintosmashhits,andsurePiresuccessesPlop.
ThepositionoftheCCentrepreneurhastobetakenintoaccountinthisgeneralcontext.
FormicroSMEs,thequestionnairerevealedthatthemainbarrierstoenterthemarketare
ingreatpartduetotheexclusiveagreementswithkeydistributors(37%)andaccess
toknowledgeonmarketopportunities.Thepresenceoflargeandmultiplecompetitors
wasalsoacomplementaryimpedingfactor.
LinkingthisobservationwiththefactthatmanycountriesandtheEUarepromoting
microSMEsascontributorsfortherevitalisationoftheeconomy,213 onecanonlystress
theimportanceofaccesstomarketandknowledgeaskeytoenablingmicro
enterprisestoOlourishandencourageinnovation.
ThelackofknowledgeaboutmarketopportunitiescanimpedetheCCIstobenePitfrom
theseopportunities.AccordingtoNESTA,knowledgesourcing,especiallyinternational
sourcesaswellashavinganetwork,isessentialtounderstandtheglobalmarket. 214
GovernmentscouldencourageandprovideSMEswithappropriatesupporttoenablethem
toaccessknowledgeinorderforthemtobetteraccessopportunitiesonthemarket.With
existingsupportinincubatorsandothersupportsuchasseedPinance,startingupaCCI
SMEsisnotthehardestpart:buildingupandgainingamarketpositionismoredifPicult.
212 ExpertQuestionnaire
213Seeforexample,EuropeanCouncilConclusions,(December2008),ThinkSmallFirstASmallBusinessActforEurope,
doc16788/08;Raffoetal.(2000),Teachingandlearningentrepreneurshipformicroandsmallbusinessesinthecultural
industriessector,EducationandTraining,Vol.42,No6,p.356.
214NESTA,(May2010c),SourcingKnowledgeforinnovation:theinternationaldimension,London:NESTA,p.6.
Thedecreaseoftradebarriersandtheintegrationofworldmarketshavemadeitpossible
foralltypesofcompanies,includingnewones,toexploitglobalopportunities.The
globalisationprocessesencourageanexternalisationstrategyinthesamewayasit
confrontstwooppositeextremes:themicroSMEsandthelargecorporation.Thehigh
competition,theholdonthemarketbyafewlargecorporationsandthelimited
knowledgeaboutexternalopportunitiesformtheenvironmentthatconfrontsthe
CCentrepreneuratthestartoftheiractivityandthroughouttheentrepreneurial
lifecycle.
3.2.1.TheMissingMiddle:AsymmetryandSizeRelatedConstraintsinthe
Market
Asnotedearlier(2.2.4),themaincharacteristicofthecreativeeconomyis,in
organisationalterms,itsmissingmiddle.Thisreferstothefactthatthereisa
predominanceofasmallnumberofverylargePirmsworkinginternationally,
counterbalancedbyaverylargenumberofessentiallylocal,microenterprises.Thereis
verylittleclassicalverticalintegrationofthekindmostcommonlyassociatedwith
transnationalPirmsinothersectors.Instead,thereisastronghorizontalandvertical
integrationofpartsofthecreativeeconomy.Thisdoesnotextendtothemicroenterprises
andindividualcreativeentrepreneurs.215
TheprevalenceofSMEsinthecreativesectorhighlightstheneedforpolicymakersto
addresssizerelatedconstraintsinthemarket. 216Theabsenceofmediumsized
enterprisesincreasestheimpactofthemarketgapbetweenthemicroSMEsandthebig
majorsincertainsectors.Generallyspeaking,thebiggerenterprisesownthe
organisationalandknowledgeskillsneededtodealwithregulatoryfactors;theymakea
strongeruseofthesupportforIPR;andtheyhavelongestablishedinfrastructuresfor
undertakingresearch,designanddevelopmentactivitieswhicheasetheirentryand
positiononthemarket.Ontheotherhand,microSMEstendnottohaveaccesstothese
advantagesandhavelimitedknowledgeaboutmarketopportunities.
Theasymmetryinthemarketpositionbetweenthetwoextremesisstriking.Enabling
accesstothemarketforstartingCCIsand,atthesametime,workingonpotential
pathstogrowthandsustainabilityforCCIsisapreconditionforculturaldiversityin
Europe.ThiscanenablegreatercompetitionbetweenfastgrowingCCIs,althoughnotall
oftheCCIswanttogrowandextendtheirmarket.
AlternativesupportmechanismssuchasasolidarityschemewereadvancedbyIMPALA,
which,usingtheanalogyoftransferfeesfromfootball,aimedatreducingtheimbalances
betweentheshareofthemarketbetweenbigandsmallercompanies.Thisscheme
proposedthatsmallcompanies,suchassmallmusicproductionsthathadsignedartists
wholateronmadeabreakthroughandcontractedoutwithlargerproductioncompanies,
receiveaOinancialcompensationrewardfromthesebiggercompanies.217
Mostrespondentsduringtheexpertinterviews,aswellasbytheEuropeanPlatformand
theOMCExpertWorkingGrouponCCIs,highlightedthegeneralimportanceofmapping
outthelandscapeofeachCCIsectorineachcountry.218 CertaincountriessuchasSweden,
Austria,theUnitedKingdom,Germany,FinlandandtheNetherlands,havestarted
examiningandmappingthesectorstoobtainrawdatatoestablishareaswherethe
industryisinneedofsupporttoquantifythecurrentandfutureeconomicbeneOits
oftheCCIs.
3.2.2.TheDigitalMarket
Themovetowardsdigitalconvergencehasdrasticallyexpandedthemeansofproducing,
circulating,distributingandexchangingculturalexpressioninalldomains.Inturn,the
rangeofhuman,materialandtechnicalresourcesineachoftheartisticPieldsisincreasing,
215UNCTAD,(2008),op.cit.,p.62.
216EuropeanCommissionGreenPaper,(April2010),op.cit.,p.7.
217Impala(www.impala.be)andinterviewwithsectoralorganisation
218PlatformonthePotentialofCreativeandCulturalIndustries,(2009),FinalRecommendationsofthePlatformonthe
PotentialofCreativeandCulturalIndustries
contributingsigniPicantlytoincomeandemployment 219.Thetransitionfromtraditional
meanstonewmediaisnottheonlychallengeforCCIs,asthestructureofthemarket
hasalteredsigniOicantly.Newdevelopmentsrepresentnewmarketopportunitiesfor
producersofcontent,andgenerateimportantgrowthprospectsfortheculturaland
creativesector.Noticinganincreaseintheparticipationofpeopleintheartsthrough
electronicanddigitalmediademonstratesthepotentialthatdigitalmediacanofferin
termsofnewmarketopportunities 220.
NewtechnologymultipliesanddiversiOiesthechannelsthroughwhichcultural
worksreachthepublic.AtPirstthereisanincrementaleffect,followedbyepisodesof
cannibalisationbetweenoldandnewchannels.Yetattheend,thereisagreaterchoicefor
theconsumeramongstthedifferentwaysofaccessingculture,whichresultsinincreased
culturalconsumption.
Inthisradicallychangingenvironment,akeychallengeistoPindappropriatenewbusiness
models.TheoverallconsequencesofICToncultureareindeedambivalent.Ontheone
hand,andashighlightedabove,technologyopensupnewopportunitiesforcreatorsto
produceanddistributetheirworkstoawiderpublic,independentlyofphysicaland
geographicalconstraints,potentiallyincreasingchoiceandaccessibilityforall.Onthe
otherhandICTdisruptstraditionalcontent.Whilenewmodelsstruggletoemerge,the
riskisthatculturalcontentmaybeconsideredasanyothercommoditytradedinthe
virtualworldandmaybedevalued.
DigitalmediacanpotentiallyenableSMEstoaffordablycompeteinbiggermarketsby
allowingforexample,smallercompaniestoadvertisetheirproductsonline,byincreasing
theircompetitivenessthroughagreaterusageofusergeneratedcontentorbyaccessing
internationalnetworks.Theseemingdemocratisationofmarketopportunitiesonthe
Internetandtheenhancedroleoftheuserinshapingtheproductsandserviceshas
fundamentallyalteredbusinessmodelsincertainsectors,suchasinthemediaindustry.
However,Europeiscurrentlyfailingtotakefulladvantageofthedigitalmarketandnew
technologies.Thedigitalmarketremainsfragmentedandregulationshinderthefull
developmentofaSingleDigitalMarketinEurope.Recentinitiativesareimportantsignsof
changingopportunities.221 TheAgendaforaDigitalEurope,aPlagshipinitiativeinthe
Europe2020strategy,aimsatcorrectingtheseimbalancesandistryingtoadapttothese
changesinordertodevelopaSingleDigitalMarket 222,increasingtheinteroperabilityand
theconvergenceofstandards,aswellasincreasingthesupportfornetworks.
TheEUfundedEDiMAproject(EuropeanDigitalMediaAssociation)isanallianceofnew
mediacompaniesthataimsatcreatinganopenandlegalframeworkforPanEuropeanE
commerceandenablinggreaterconsumerchoiceindiversityandenhanced
competitivenessthroughouttheEU.ItaddresseslegalbarriersblockingasingleEuropean
DigitalMarket.Forexample,EDiMAaimsatincreasingthecoordinationofpolicy
formationbyestablishinganewEuropeanParliamentgrouponthenewmediasectorto
ensureabetterPitwithregardstothecopyrightlicensingregimeforthedigitalage.223
Moreover,itprovidesnewmediaplatformsinordertoimproveconsumerconPidenceand
providesonlineservicestoimprovetheuseofmediaandEcommerceinEurope.Theex
CommissionerforInformationSocietyandMedia,VivianeReding,acknowledgedsimilar
needsincompletingaSingleDigitalMarket 224,seeingthepotentialthatthedigitalworld
hastooffer.
220USNationalEndowmentfortheArts,(2010),Audience20:HowTechnologyInPluencesArtsParticipation,Washington:US
NationalEndowmentfortheArts,p.10.Thisreportfoundthat53%USadultsparticipateintheartsthroughelectronicand
digitalmediathroughTV,radio,cv/dvd,computerandinternettoviewartperformance,artworks,museums.Athirdofthe
USadultsparticipateinbenchmarkartsactivitiessuchasjazz,classicalmusic,operaandallformsofdance,through
electronicmedia.Foreverytypeofartsperformance,adultsweremorelikelytovieworlistenthroughelectronicmediathan
attendliveperformances.
221ECCommunication,(2010b),op.cit.,p.3.
222ECCommunication,(May2010a),DigitalAgendaforEurope,COM(2010)245
223EuropeanDigitalMediaAssociation(EDiMA),(2009),op.cit.
224Reding,V.,(October2009),SpeechontheDigitalSingleMarket:akeytounlockthepotentialoftheknowledgebase
economy,Availableathttp://www.iccwbo.org/bascap/id35360/index.html
3.2.3.Typesofsupporttomarketaccess
ConsciousoftheinnovativepotentialofCCISMEs,theEUCouncilconclusionsofMay2010
acknowledgetheneedtosupportculturebasedcreativitySMEsintheiraccesstomarket
asawaytoencourageinnovation.225 Publicprocurement,LeadMarketInitiative,
standardisation,althoughhighlypromising,remainuntappedresourcesforinnovation
andfortheencouragementtoaccessthemarket.226
TheEuropeanplatformonthepotentialofculturalandcreativeindustrieshasemphasised
theimportanceofcreatinganenvironmentthatfostersthecreationand
developmentofculturalSMEs.TheystatethattheseshouldbegrantedspeciPicsupport
andbenePitfrompositivediscriminationmeasures.ThePlatformnotedthat:
Marketaccessmustbeensuredforallculturalandcreativeactorsregardlessoftheir
sizetoguaranteepluralismandarealeconomyofdiversityandtheinternational
promotionandexchangeshouldbedeveloped(...)thepresenceofartistsandcultural
professionalsinkeyinternationalmarketsmustbemaintainedthroughthe
establishmentofspeciNicschemesandthefacilitationofexchangewiththird
countries.227
IntermsofsupportforCCISMEstobenePitfromtheEuropeandigitalsinglemarket,most
respondentspointedattheneedforOinancialsupporttofacethedigitalshift(34%)
andsecondly,theneedfortheharmonisationofaccessconditions(31%)(Table9.
below).The'other'typesofSMEsupporttoentertheEuropeansingledigitalmarketwere
targetingthecapacitybuildingonaccesspossibilitiesandknowledgesupport.
Question:HowdoyouthinkCCISMEsshouldbesupportedtobeneNit
fromtheEuropeanDigitalSingleMarket?
Item Percent%
NospeciPicsupport 3.45%
Harmonizationofaccess 31.03%
conditions
LegalSupport 20.69%
FinancialSupport 34.48%
Other 10.35%
Capacitybuildingonaccess 3.45%
possibilities
Don'tknow 3.45%
Knowledgesupport 3.45%
Table9:CCISMEssupportforthedigitalmarket
(Source:Eurokleis2009,Sectoralexperts)
AlthoughdirectmeasuresforsupportingaccesstomarketforCCIsarenotyetinplaceat
theEUlevel,theEUhascertainexistingprojectsthatshowsignsofpossibleextensionof
supporttoCCIs.Forexample,theLeadMarketInitiativelaunchedbytheEUin2008was
settoidentifythenewneedsandnewmarketforinnovativeproductsorservices.Fornow,
thisinitiativeistargetedtowards6LMIs,228whichareneitherservicenornon
technologicalinnovationoriented.However,extendingaLMItoCCproductandservices
andtargetingCCISMEs,couldbeawaytosupportaccesstomarketforCCIs.Similarly,in
225EuropeanCouncil,(May2010),op.cit.,p.2.
226EuropeanCouncil,(May2010),op.cit.,p.2.
PotentialofCreativeandCulturalIndustries,op.cit.,p.4.;andOMCExpertWorkingGrouponmaximisingthepotentialof
culturalandcreativeindustries,inparticularthatofSMEs,(2010),FinalReport,op.cit.,pp.611.
228ECWorkingDocument,(September2009c),LeadMarketInitiativesforEurope:MidTermprogressreport,SEC(2009)
1198:biobasedproducts,eHealth,sustainableconstruction,protectivetextiles,recyclingandrenewableenergy
thecommunicationAssessingCommunityInnovationPoliciesintheperiod20052009,
theEUsuggestedthatpublicprocurementbepartofinnovationpolicyasitcanhelp
fosterthemarketuptakeofinnovativeproducts.229PublicProcurementprocedurescould
beusedtoincreasethedemandforspeciPicinnovativeproductsandservicescomingfrom
CCIsandinsodoingcanencouragetheaccesstomarketforinnovativeCCISMEs.TheEU
CouncilrecommendedinitsConclusionsinMay2010thatthepublicprocurementbudget
isincreasedanddevotedtoinnovativeproducts,processesandservices230.Thisshowsthe
potentialtoextendexistinginitiativestosupportCCIsintheiraccesstomarket.
Standardisationalsostimulatesthemarketforinnovativeproductsbysettingupa
playingPieldforinnovators,accompanyingtheemergenceofnewmarketsandfacilitating
thespreadoftechnology.However,initscommunicationin2008,theEUacknowledged
thelimitednumberofstandardsforservices(mainlyduetotheheterogeneousnatureof
services).
TheexampleofQuebecspositivemeasurestoensuremarketaccesstoCCIsis
illustrativeofthesuccessthatspeciPicmeasuresforCCISMEscanhavetoaccessthe
marketandpromotetheCCIs.231
3.2.3.1.Phasesofmarketaccess
Withregardstotheentrepreneuriallifecycle,amajorityofexpertsinterviewedstatedthat
accesstomarketisparamountinphase2and3ofthelifecycle,asFig.22.
demonstrates.Indeed,45%oftherespondentsfoundthatsupporttoaccessthemarket
wasmostneededinthestartupphaseofthelifecycle.
Inthebuildupandbuildoutphasesoftheentrepreneuriallifecycle,entrepreneurs
needtodoseveralthingssimultaneously:createstructuralsustainabilitybybuilding
strongnetworks;developamethodologicalwayofstayingcreativetosucceed;havea
futureorientedgrowthplantoexportintonewmarketsandbrandingforgrowth;be
scalableandreplicable.
Question:Inwhichphaseofthelifecycledoyouseethemostneed
tosupportaccesstomarket?
)*+,-#%.#>:+;:=6<#
)*+,-#&.#56789=6<#
)*+,-#$.#);-<+;714#:*-#4;0619#
)*+,-#'.#56789#06:#
)*+,-#(.#/011-2314#
!"# $!"# %!"# &!"# '!"# (!"#
Figure22:Preferredphaseinthelifecycleforsupporttoaccessthemarket
Somerespondentshighlightedtheneedtofocusonthelatterstagesofthelifecyclefor
marketsupportinparalleltoaccessinginternationalmarkets.However,withthe
globalisationofmarkets,suchstrategiesarenowmorefocusedontheearlierstages.CCI
229USNationalEndowmentfortheArts,(2010),AssessingCommunityInnovationPoliciesintheperiod20052009,SEC
(2009)1194
230EuropeanCouncilConclusions,(26thMay2010),op.cit.,p.4.
PotentialofCreativeandCulturalIndustries
Pirmsareconfrontedfromphaseonewithstronginternationalcompetition.Europes
regulatoryenvironmentisinthiscasenothelpful.
Withregardtoforeignmarkets,
respondentsfoundthatthesupportto FINPRO
accesscrossbordermarketswasmost FinprodealswithFinnishcompaniesatdifferent
neededinthebuildupandbuildout stagesofinternationalisationandaimsat
phasesofthelifecycle,oncetheCCIshave guaranteeingthatFinnishcompaniesandespecially
acquiredsomeregularclientsandcanlook CCISMEsaccessaninternationalmarket.Italso
atotheropportunities.(seeFig.23.).The givesopportunitiestonetwork.
bestcaseexampleofFinproisauseful (SeeAppendix1,BestCase24)
illustrationofthis(SeeAppendix1,Best
Case24).
Question:Inwhichphaseofthelifecycledoyouseethemostneedtosupportforcrossbordergrowth
andcrossbordermarkets?
)*+,-#(.#=61>7#564#
)*+,-#'.#=61>7960#
)*+,-#$.#:522-;<23#
)*+,-#&.#84+/4960#
)*+,-#%.#)/-0+/123#4*-#3/5627#
!"# $"# %!"#%$"#&!"#&$"#'!"#'$"#(!"#
Figure23:Mostappropriatephaseforcrossbordermarketsupport
3.2.3.2.Levelsofsupport
Nationalandregionallevelswereclearlyemphasisedintheonlinesurveyforsupporting
accesstothemarket(seeFig.24.below).31.5%oftherespondentsindicatedthatthe
nationallevelwasmostsuitedtorespondtotheneedsoftheCCISMEsintermsofthe
marketwhile26%foundthattheregionallevelwasmostappropriate.
ResultsfromqualitativeinterviewssuggestedthatspeciOicandtailormadeinformation
onaregionallevelisessentialforenhancingthemobilityofartists.
TheroleofthenationalgovernmentcanbetoprovidesigniPicantencouragementforthe
CCIstoexporttheirproductandservices,asseenintheQuebecexample,orbyagreeingon
doubletaxationschemes.
TheEuropeanlevelwasalsoemphasisedbytheintervieweesforfacilitatingaccessto
bothphysicalanddigitalmarketsandensuringpanEuropeanaccess.Expertsemphasised
thataholisticapproachforthecreationofpolicywasnecessary.
Question:Atwhatlevelshouldthissupportfornewmarketopportunities
foryourorganisationbeprovided?
E06/301#@+8+1#
D+24/301#@+8+1#
=;,/C+03#@+8+1#
@/.017A4)B#1+8+1#
93)+,306/301#1+8+1#:/;)54<+#)*+#=>?#
-+.)/,01#/,2034506/37055/.406/3#
1+8+1#
()*+,#
!"# $"# %!"# %$"# &!"# &$"# '!"# '$"#
Figure24:Mostappropriatelevelforsupportingaccesstomarket
3.3.IPRinstrumentsandCCISMEs
CCISMEsoftenhavelimitedknowledgeoftheuseofintellectualproperty(IP)andrights
management.232 However,theseformalandinformalrightsconstituteanimportantsource
forcreativecompanies,andareafairrewardingforcreativity.
Fromouronlinesurvey,52%ofSMEsdidnotreceiveIPRadvicebeforethestart
oftheirentrepreneurialactivity,asopposedto40%whodid.Ofthosethatdid
receiveadvice,thiswasmostlyatanationallevel(38.5%)orfromtheirsectoral
organisation(20.5%)and11%attheEuropeanlevel.
Intheexpertquestionnaire,theimportanceofIPRregulationswasseenasthesecond
mostimportantregulatoryissue(21%)aftertaxregulation(29%)ascanbeseeninthe
Fig.25.below.
Question:SelectthethreemostimportantregulatoryissuesfacedbySMEsinyoursector
D0E#748-90*:)#
A)+4994=+-09#B,:64,+C#748-90*:)#
/0@:-,#748-90*:).#
5:=309#>49?0,4#748-90*:)#
;+<4,#
2-.3)4..#5+0,+#-6#748-90*:)#
()*+,-.+#/01.#
!"# $"# %!"# %$"# &!"# &$"# '!"# '$"#
Figure25:MostimportantregulatoryissuesfacedbyCCISMEs
(Source:Eurokleis2009,Sectoralexpertquestionnaire)
SomeoftheCCIshaveplacedcertainhopesontechnologiestoregulateandprotect
contentwithtechnologicalprotectionmeasuressuchasdigitalrightsmanagement
(DRMs).However,suchtechnologieshavesofarnotpreventedpeertopeerpiracyand
232KEA,(February2010a),BusinessInnovationSupportServicesforCreativeIndustries,Shortstudypreparedforthe
EuropeanCommission(DGEntrepriseandIndustry),http://www.keanet.eu/report/BISScreativeindustries.pdf.March5,
2010,p.7.
remaincontroversialforconsumerfriendliness.233 Thereremainsatensionbetween
accessandexploitation.
3.3.1.AccessversusExploitation
Existingtensionsovercontentprotectionandopenaccessphilosophiesareoftenseenin
termsofaccessversusexploitation.WhilethePirstapproachwillhighlighttheimportance
ofIntellectualPropertyRightsasatoolthatcanrewardintangibleassetsandensure
controlofcontentandhowIPisused,theotherapproachwillfavourfreeaccesstocontent
touseforthedevelopmentofnewservicesorproducts.
Withthedigitalmarket,theexploitationofcontenthasbecomehardertocontroland
piracyandpeertopeerexchangehavefedthedevelopmentofagetitforfreeculture
whichmaypreventcreatorsfromexploitingtheircreation.234 Theillegaldistributionof
copieserodesthepossibilityofproducerstobenePitandthusreducestheincentiveto
investinthecreationofnewworks.Rightsholdershighlighttheneedtolegallycircumvent
thisdevelopmentthroughlawsandservicesinordertocurbtheillegitimatereuseof
somebodyelseswork.DRMsrepresentatechnologythatcanpreventthefreeaccessof
someofthecontentonlineandenableCCISMEstoberewardedfortheircreation.
However,suchtechnologyhasnotreducedpiracyasillegalPilesharingmayberesponsible
forapproximately96%ofaudiovisualdownloadsavailableonstreamingorbittorrent
networks.235
Ontheotherside,somehavehighlightedtheneedtoeasetheprotectionofcreative
contentandarepushingtoallowgreateraccessibilitytocopyrightedcontentinordertobe
abletoshareandaccessfreelyexistingcontentasawaytounlockthepotentialadvantages
thatthiscanoffer.Therightsoftheconsumerstoshareonlinecontentarethuspromoted
bythisstrandofthought.However,thetwostrandsofthoughtarenotsoclearlydistinct
anddichotomous.Copyrightprotectsinvestmentintheartistsworkandallowsnew
creation,andthereforeallowsaccesstothework,althoughitdoesnotallowfreeand
illegitimatereuseofthework.
Thisdebaterevolvesaroundhowtocombinelegalexceptionsandexclusiverights,the
rightsandinterestsofconsumers,aswellastherewardofcreators.Moreover,asseenin
Chapter2,increasingdigitisationmodiPiestheshapeofthecreativevaluechaintothatof
acycleofcreationthatbypassesmiddlemen.Thelinkbetweenrightsholdersandthe
consumersshortens,increasingthecontactbetweenconsumersandcreators,increasing
thepotentialofplatformsforfreeexchange.TheexampleofYouTubeisanillustrationof
theincreasingaccessibilityofonlinecontentandtheevolvingissueofIPindigital
environments.
ThediscussionandfuturepoliciestosupportthedevelopmentofCCIswillhavetotake
intoaccountthechangingIPenvironmentandchangingbusinessmodels,whilekeepingin
mindtheimportanceofIPRasanincentiveforCCentrepreneursandasarewardfortheir
output.Moreover,asmanyCCISMEsdonotpresentlymakeuseofIPR,thequestionarises
ofhowbesttoencourageCCentrepreneurstorealiseandmakeuseofIPRastoolsin
theirentrepreneurialactivity.Indeed,theissueofIPmanagementfortheCCIsisa
centraldeterminanttotheirentrepreneurialdriveasitgivestheCCIentrepreneurthe
opportunitytoberewardedandcanactasanenablerfortheiractivity.
3.3.2.FormsofIPRanddifferentuse
Inlinewiththedebateonaccessandexploitation,thetypesofIPRmustbedifferentiated
tounderstandtheirusebyCCISMES.FormalIPRmechanismsincludethefollowing:
designprotection,236 trademarks,patents,utilitymodelsandcopyright.
233CabreraBlazquez,F.J,(2007),DigitalRightsManagementssystems(DRMs):RecentdevelopmentsinEurope,European
AudiovisualObservatory,seehttp://www.obs.coe.int/oea_publ/iris/iris_plus/iplus1_2007.pdf.en
234Ibid.,p.2
236AnewregisteredCommunityDesignRighthasbeenrecentlyintroduced.
InformalIPRvariesinitsnatureandpurposebutarealsoimportantforSMEs.237Themost
importantinformalprotectionmethods
are:secrecy,restrictedaccessto
information,databaseandnetwork CreativeDepot
CreativeDepotisanelectronicservicethatprovides
protection,conPidentiality,technical
secureregistrationofauthorshipofcreative
protection,divisionofdutiesand workings.Theconceptscaneitherberevealedor
subcontracting,circulationofstaff hidden.Itisatooltosecureandproveones
betweentasks,loyaltybuildingamong propertyinanareainaninformalway.
personnel,clientrelationship (SeeAppendix1,BestCase25)
management,membershipofprofessional
organisations,andpublishing.238 The
CreativeDepotisagoodexampleoftacklingissuesrelatedtoinformalIPR(seeAppendix
1,BestCase25).
Intheonlinequestionnaire,ahighpercentageofrespondents(33%)didnotuseany
speciOicinstrumentofprotection.AsshowninFig.26.below,forthoserespondents
protectingtheircreativeinput,copyrightisbyfar(89.66%)themostcommonlyused
instrument.InformalIPRintheformofconPidentialityagreementswereusedby62%of
respondentsresortingtoprotectingmeasures,asagainst21%forpatenting.Creative
commonsandopenaccesssystemscountedfor38%oftheinstrumentstoprotectcreative
outputswhiletrademarkswereusedby35%.
ThesePindingscoincidewiththeresultsofaNESTAsurveyontheuserinnovationinthe
UK.Inthestudyonsoftinnovationandontheroleofuserinnovation,239 theyobserved
thatintheUK,59%oftheuserinnovatorCCIsdidnotprotecttheirinnovationandshared
themfreelywithothercompanieswithonly20%receivingroyaltiesascompensation.
Question:Whatisthemostcommonlyusedinstrumentfortheprotectionofcreativeoutputs(IPR)for
yourorganisation?
Items Percentage
Patent 20.69%
RegistrationofDesign 34.48%
Trademarks 34.48%
Copyright 89.66%
ConPidentiality 62.07%
OpenAccessLicensing(eg:CreativeCommon) 37.93%
Other 20.7%
Figure26:Mostcommonlyusedinstrumentsforthe
protectionofcreativeoutputsinCCIs
(Source:Eurokleis2009,SectoralQuestionnaire)
Therelativelylowuseofprotectionmeasuresdemonstratestheneedtoincrease
awarenessontheuseofIPRregimesandfacilitatesaccesstoIPRforCCISMEs.
Knowledgeintensivebusinesseshaveadoptedavarietyofformalandinformalmethodsto
decreasethemisuseorlossofIP.Bothmethodscanbeseenascomplementaryinsteadof
237ProINNOEurope,(2007),AMemorandumonRemovingBarriersforabetteruseofIPRbySMEs,ReportfortheEuropean
Commission,(DGforEnterprisesandIndustry)andIPRExpertGroup
238Ibid.,pp.1723.
239NationalEndowmentforScience,TechnologyandtheArts,(April2010a),MeasuringuserinnovationintheUKThe
importanceofproductcreationbyusers,London:NESTA
competitivewaystomanageandprotectIP.Thisreiteratestheneedtounderstandthe
systematicuseofbothinformalandformalmethods. 240
3.3.3.ExistingEuropeanInitiatives
IntheEuropeancontext,nationalterritoriallawstendtopredominate.Intermsof
protection,mostattentionhasbeenpaidtopatentsfortechnologicaladvancementwhile
manycompaniesarebasedonnontechnologicalinnovationthatisperceivedas
increasinglyimportantforEurope241.Theneedtoreducethecostofpatentsandtomove
towardsasingleEUpatentsystemwasmadeclearbyindustryitselftoencourage
innovation.242
InviewoftheCommunicationonAssessingCommunityInnovationPoliciesinthePeriod
20052009,243theEUalsoacknowledgedthemisOitincurrentIPRregulationsforsoft
innovation.ThedecreaseinthecostoftheEUwidetrademark(40%lower),whichisone
ofthemostusedformaltoolstoprotectCCIscreativeoutputsaftercopyright,244was
intendedtoprovideincentivesfornontechnologicalinnovation.245
ApartfromtryingtohaveaCommunitypatent,otherinitiativesweresuggestedattheEU
levelasawaytohelpprotectcontent.AProtectedDesignationofOrigin,similartothe
onesseenincollectivepropertyrights,wassuggestedasawaytohelpreducethenumber
ofunauthorisedcopies.
TherecentEUDigitalAgenda246alsohighlightstheneedtohomogenisetherights
managementsystemsthatSMEshavetoimplementinordertoprotecttheircreationsin
differentcountries.247 ThisdocumentnotedConsumerscanbuyCDsineveryshopbutare
oftenunabletobuymusicfromonlineplatformsacrosstheEUbecauserightsarelicensedon
anationalbasis.TheexCommissionerforInformationSocietyandMedia,Vivianne
Reding,suggestedaEuropeanwide,consumerfriendlylicensingsystemtoovercomethe
fragmentationofthesystemandtocomeupwithnewIPRmodelsandsomeofthisworkis
currentlyundertakenbytheOfPicefortheHarmonisationoftheInternalMarketandthe
EuropeanPatentOrganisation.
Initslatestcommunication,theECsuggestedtheneedforimprovedprocessesof
governanceandtransparencyofcollectiverightsmanagementinordertoenablea
fairaccesstocontent,balancingbetweentheinterestsofrightsholdersandthegeneral
accesstocontentandknowledge.248
3.3.4.LevelsandPhasesofsupportforIPR
ThewayinwhichIPservicesareprovidedtotheCCIscanhaveahugeimpactonthe
outcomeandtheuseofsuchservicesbytheCCIs249.InaProInnoStudyonIPR,thekey
successfactorsforIPusagewereissuessuchastheavailabilityofsufPicientlyqualiPied
staffinthecompany,thelevelofintegrationofIPservices,andthelevelofnetworking
withotherservices.250ReceivingwrongorinappropriateadviceonIPRforSMEs,for
examplepatentingwhenitisnotadvisablecouldalsobedetrimentaltothem.Inthis
regard,theavailabilityofIPRadvicetoculturalandcreativeentrepreneursiscritical
240ProINNOEurope,(2007),op.cit.,p.24.
241ArgeCreativwirtschaftAustria,(2010),ExecutiveSummaryoftheThirdAustrianReportonCreativeIndustriesin
Innovation,Vienna:ArgeCreativwirtschaft,Austria,http://www.creativwirtschaft.at/document/
KWB_Kurzfassung_EN_web.pdf
242IPREG,(2007),MemorandumonRemovingBarriersforabetteruseofIPRbySMEs,ReportfortheDGforenterprises
andindustryandIPRExpertGroup
243ECCommunication,(April2009a),op.cit.,p.11.
244ECCommunication,(September2009c),ReviewingCommunityInnovationPolicyinaChangingWorld,COM(2009)442
245 Ibid.,p.11.
246ECCommunication,(May2010a),op.cit.,p.8.
247Ibid.,p.15.
248Ibid.,p.8.
249Ibid.,p.34.
250 Ibid.,p.3033.
andthemomentwhenitisgivenisimportant.AbusinessmodelthatintegratesIPas
partoftheenterpriselifecyclewasseenasimportant.251
Inthisregard,thenumberofoverlappinginnovationsupportschemesatbothnationaland
EuropeanlevelscomplicatethepictureaspresentedtoSMEs.Asrecentlynoted,Notonly
doMemberStatesoftenhaveseveralfundingschemesandavarietyofcompetingsources
ofadvice,theEUprovidesitsownschemesandsources(RelayCentres,IPRHelpdesk)and
severalfundingregimes.252
Theresultsfromtheonlinequestionnaireshowedthatinmostcases,theOirstphasesof
thelifecycleweremostcrucialforadviceonIPRforCCISMEs(seeFig.27.).
Question:InwhichphaseofthelifecycledoyouseeaneedforIPRadvice?
)*+,-#%.#)>-<+>714#:*-#4>0619#
)*+,-#&.#=:+>:;6<#
)*+,-#'.#56789;6<#
)*+,-#(.#56789#06:#
)*+,-#$.#/011-2314#
!"# $"#%!"#%$"#&!"#&$"#'!"#'$"#(!"#($"#
Figure27:BestphasefortheprovisionofIPRadvice
Thenational(39%)andthesectoral(20.5%)levelswereconsideredmostsuitablefor
providingIPRadvicefortherespondents.Only20%intotalusedlocalandregional
institutionsforsimilaradvice.Despitethefactthatmostoftheexpertinterviewees
highlightedthevitalrolethatEuropecouldplayinshapingaharmonisedlegalcontextfor
IPR,veryfewrespondents(7%)receiveddirectadviceataEuropeanlevel.
Inordertoincreasethenumberofinnovativeplatforms,andtobeabletocompetewith
countrieswithmuchlowercostofpatentssuchasJapanandtheUS,253theDigital
Agenda254highlightedtheavailabilityofawideandattractiveonlinelegalofferforshaping
theregulatoryenvironment.255
Overall,theintervieweesnotedthatclearadviceandqualiPiedstaffbeavailabletocaterfor
theneedsofCCIstoeffectivelyuseIPRas
anenablerfortheirentrepreneurial
activity.Boththeregulatoryandthe OWNIT
humanresourceenvironmentshould OwnitisaUKfreeintellectualpropertyadvicefor
creativebusinesses.Itaimstoprovidecreative
beimprovedtomakeIPRadvicemore
entrepreneurswithaccessible,specialised
transparentandlesstimeconsuming. knowledgeIPsystemsaswellasitoffersworkshop,
OwnItintheUKisanexampleofafree networkingandcoachingandonetooneadvises.
IPRadvicecentreforSMEsspecialisedin (SeeAppendix1,BestCase26)
theCCIs(seeAppendix1,BestCase26).
SupportondemandforIPRadvicein
ordertobetterrespondtothechangingneedsoftheCCIsthroughouttheirlifecyclewas
citedasaessentialtopromotetheiruseasanenablerforentrepreneurialand
creativeactivities.
251Ibid.,p.14.
252Foord,J.(2008),Strategiesforcreativeindustries:aninternationalreview,CreativeIndustriesJournal,Volume1,
Number2.,p.96.
253ProINNOEurope,(2007),op.cit.,p.33
254ECCommunication,(May2010a),DigitalAgendaforEurope,COM(2010)245
255Ibid.,p.8
3.4.Entrepreneurshipeducation,skillsandtraining
Itisclearfromthestudythatthereisagenerallackofentrepreneurialskillswithinall
sectorsoftheCCIs.Limitedbusinessskillswerecitedasthesecondmostimportant
businessrelatedchallengeafterlackofPinancewhenstartingacompany(seeFig.28.
below).
Question:Whichwasthemostimportantbusinessrelatedchallenge
whenstartingyourcompany?
:42;#*-#F/4/20#
:.=.,0A#;/*C10A80#*/#9*C#,*#63/#4#@3+./0++#
D.89#2*=50EE*/#./#,90#=46;0,#
:42;#*-#;/*C10A80#4@*3,#,90#=46;0,#
B,906#
>4?#@36A0/+#
:42;#*-#))<##+*2.41#+0236.,7#+290=0#
)*+,#*-#./,01102,341#56*506,7#6.89,+#
!"# $"# %!"# %$"# &!"# &$"# '!"# '$"# (!"#
Figure28:Mostimportantbusinessrelatedchallengewhenstartingacompany
IntheOECDsentrepreneurshipframework,thecultureofentrepreneurshipisincluded
asadeterminantofentrepreneurship,beinginPluentialindevelopingaconducive
environmentforfosteringentrepreneurialactivity.256Despiteitsimportance,thereisstill
insufOicientintegrationofentrepreneurshipeducationingeneralcurriculaandin
artseducation. 257
Thereisstillrelativelylittledataontheoutcomesandimpactoftherecentincreasein
generalentrepreneurshipandeducationprogrammes.258Fosteringthetakeupof
entrepreneurialskillsbyculturalandcreativeentrepreneursmayalsorequirenon
traditionaleducationalprogrammes.Thenarrowmodelofentrepreneurshipfocusing
solelyoncommercialsuccessdoesnotseemtocorrespondtotheCCIs,forwhom
criticalcreativeandculturalachievementsareoftenmoreimportant.259 However,
stimulatingthedevelopmentandimplementationofentrepreneurialskillsisneededin
termsofentrepreneurialdevelopment,marketorientation,returnoncreativity,
communicationskills,networkdevelopment,andteambuildingwithinthe
entrepreneuriallifecycle.
AspeciOicskillsetrangingfrombasicbusinessplanningskillstopresentation(e.g.
pitchinganidea)andmanagementskillsarecrucialfortheculturalandcreative
entrepreneurstoadvertisetheirproductsandservices.Fromtheexpertquestionnaires,
marketentryisdirectlyinhibitedbyknowledgeobstructingfactorssuchasthelack
ofbusinessskills(asdiscussedaboveinsection3.2.).Expertsalsohighlightedthelackof
businessskillsasthemostimportantentrybarrier.Indeed,forfreelancers,theexpert
respondentscited,Pirst,thelackofentrepreneurialskills(41%)andthenthelackof
knowledge(22.7%).Ontheotherhand,forpanEuropeanexperts,lackofbusinessadvice
256OECD(2009),EvaluationofProgrammesConcerningEducationforEntrepreneurship,reportbytheOECDWorkingParty
onSMEsandEntrepreneurship,Paris:OECDp.9.
257DCMS(2006),DevelopingEntrepreneurshipfortheCreativeIndustriesTheRoleofHigherandFurtherEducation
London:DepartmentofCulture,MediaandSport
258OECD(2009),op.cit.,p.9.
259 TheHigherEducationAcademyArtDesignMediaSubjectCentreandNESTA,(2007),op.cit.,pp.1314.
andofnetworks(60%)accountforthemostimportantknowledgefactorsobstructingCCI
SMEsgrowth.260
Regardingtheintegrationofentrepreneurshipwithintheeducationalsystem(seeFig.29.
below),69%oftherespondentsintheonlinequestionnairedisagreedwiththe
statementthatentrepreneurshipwassufOicientlyaddressedintheeducational
system,while26%agreed.261
Question:Educationandtrainingisoftenthepreferredinstrumenttofosteracultureof
entrepreneurship.DoyouagreethatentrepreneurshipissufNicientlyaddressedintheeducational
system?
3781.+22#
9.+22#
)*+,-./0#3781.+22#
3,-4*#5-,6#
)*+,-./0#1.+22#
!"# $!"# %!"# &!"# '!"# (!"#
Figure29:AgreementonsufOicientintegrationofentrepreneurship
ineducationalsystem
ThissuggestsalackofentrepreneurialeducationalprogrammesPittingtheneedsofthe
CCIsector.Paralleltothepossibletensionsbetweentheentrepreneurialandthecreative
sideofaCCentrepreneur,thecombinationofentrepreneurialskillswithartisticand
creativeeducationisnotyetwellintegrated.Severaltypesofeducationalschemesare
tryingtobringthetwoaspectstogethertofosterentrepreneurialskills.
3.4.1.Problemsincurrenteducationalandtrainingsystems
ThemanagementofculturalandcreativeenterprisesrequiresspeciPicskillsfromboththe
entrepreneurialandtheartisticorculturalperspectives.TheCCentrepreneursare
responsiblefortheirownbusinessmodelsandPinancialresources.TheCCentrepreneur
hastounderstandbusinessmodelsthatarefocusedmainlyoncomponentsofvalue
propositions,relationshipswithvisitorsandclients,coststructuresandvaluechains.
Professionalinstitutesofhighereducation,artschools,theatreschools,conservatories,
culturalandmediastudiesoftendonotaddresstheentrepreneurialaspectsofthe
CCIs.
Ontheotherhand,professionalandintermediateentrepreneurialsupportinstitutions
oftenlacktheculturalafPinityandprofessionalknowledgethatisneededtosupportCC
entrepreneurs,althoughgoodexamplessuchasKunstenZakendoexist(seeAppendix1,
BestCase27).Despiterecentinitiativesaimedatenhancingentrepreneurshipeducation
forart,designandmediastudents,includingprojectsthatpromotecollaborationwiththe
culturalandcreativeindustries,thereislittleindicationonwhetherthesehavebeen
effective.262
261 Onlinesurvey
262 TheHigherEducationAcademyArtDesignMediaSubjectCentreandNESTA,(2007),op.cit.,p.56.
Additionally,receivingaprofessional
degreeintheArtsdoesnotprovide KunstenZaken
KunstenZakenprovidessupportinordertomake
automaticaccesstoemployment.Fineart,
thetransitionfromartstudenttocreativeworker
music,dramaanddesigncoursesare moreeffective.Theyalsoaimtoenhancethepalette
heavilyoversubscribed,standardsare ofpossibilitiesforthecreativeworkersbytryingto
demandingand,withmostcourses Pinddifferentmodelsinwhichtheycantradetheir
requiringahugeamountoftimein intellectualvaluetoregularbusinesses.
rehearsalorstudio,theworkloadishuge. (SeeAppendix1,BestCase27)
Itisunsurprisingthatentrepreneurial
skillsarenotacquiredduringthis
periodofeducationasthemajorityoftimeisdevotedtodevelopingother,more
speciOic,professionalskills.
Nonetheless,resultsfromtheonlinequestionnaireindicatethatmostentrepreneurs
considerthemselvessufOicientlyskilledatthemomentofbusinessstartup.
However,theseskillsarenotnecessarilyderivedfromtheformaleducationsystem.As
seeninTable10below,36%ofCCentrepreneursgaintheirentrepreneurialandbusiness
skillsatthegraduate/postgraduatelevelwhile61%gaintheseskillsthroughonsite
experienceandinternships.
Inotherwords,formaleducationsystemsdonotnecessarilyprovidetheproper
entrepreneurialandbusinesstoolsforindividualsintheCCIs.Integratingcreativityand
entrepreneurshipwithinexistingeducationalcurriculaisanimportantwayto
supportCCISMEs263andnotsufPicientlyrecognisedatthemoment.
3.4.2.Informalversusformaleducationandtraining
Thedifferencebetweenformalandinformalentrepreneurshipeducationisarecurring
discussionforCCIs.Accordingtosomeoftherespondents,supporttodevelop
entrepreneurialskillsshouldcomeasearlyaspossible,inphaseoneofthe
entrepreneuriallifecycle,andevenearlierintheeducationsysteminordertoaddress
thedesirabilityofbeinganentrepreneur.
FollowingthestartupofanSME,itisinterestingtonotethat76%ofOinancialand
economicplanningisdonebytheCCIentrepreneurthemselves.Whilesomemayhave
theexperiencetodealwithPinancialbudgetingandplanning,manymaysimplybe
avoidingadditionalcosts.Itis,therefore,importantthatattheindividuallevel,CC
entrepreneursarecomfortableandcapableofmanagingtheirPinances,asthiswilldirectly
affecttheirbusinessgrowthandpotential.
Question:Howdo/didyougainentrepreneurshipskills?
Item %
Throughpersonalnetworks 62.1
Throughinternshipsorhandsonlearningorlearningbydoing 61.2
Throughgraduateandpostgraduateeduca8oninentrepreneurialandbusinessskills 36.6
Throughlifelonglearningini8a8veandtrainingcourses 30.2
Throughbasictraininginprojectcoordina8on,teambuildingandpeertopeer 15.9
networking
Throughvoca8onaltraininginproductandservicedevelopment 15.1
Throughadvancetraininginmanagement 12.5
Item %
Throughprivatebusinesscourses 12.1
Throughbasictraininginnancialandbusinessmodeling 9.5
ThroughcentersthatsupportSMEsandentrepreneurship 7.8
Throughentrepreneurshiptrainingprogramsattheregionallevel 4.7
Throughentrepreneurshiptrainingprogramsatthena8onallevel 3.9
Thoughentrepreneurshiptrainingprogramsatthelocal/municipallevel 2.6
Table10:Waysofacquiringentrepreneurialskills
(Eurokleis2010,onlinesurvey)
Infact,thetwomostrelevantdeterminantstoacquireentrepreneurialskillsarepractical
experiencesandtheCCentrepreneurspersonalrelationships.Graduateand
postgraduateeducationtakesthirdplace(36.6%)whilepublictrainingcourseswere
almostirrelevant(atnational(4,7%),regional(3.9%)andlocallevels(2.6%)).
ForCCISMEs,businessskillsareneededtosuccessfullymakealiving,attractinvestorsand
potentiallyexpandtheirbusiness.Many
SMEs,simplyput,...lacktheskillsneeded
todevelopabusinessproposaltoastage DEMOLA
DemolaprojectispartofaprojectinCreative
whereitisreadytoattractexternal
Tampere,theCityofTampere'sbusiness
investors.264 Creativegraduatesneedto developmentpolicyprogramme,(20062011),which
gainawarenessofthetransferabilityof aimstofacilitatenewbusiness,services,
theirskills(i.e.toothersectors)ifthey innovativenessandcreativitybylinkingeducation
haveaninterestinbusiness andbusiness.Itmakesthecooperationbetween
entrepreneurship,265possiblythrough companiesanduniversitiescloser.Itteamsup
initiativessuchasDemolainFinland(see studentofdifferentbackgrounds:technical,
Appendix1,BestCase28).TherecentEC economical,artordesigntomakethemwork
GreenPaperonthepotentialofCCIs together.
stressestheneedtobettermatchthe (SeeAppendix1,BestCase28)
skillsneedsofCCIsbyallowingfor
continuoustraininginitiativesaswell
promotingthemobilityofartists. 266LifeLongLearningmechanismscanbeprovided
forsuchcontinuouslearningschemesandcouldbedeployedondemandbythe
entrepreneur.
Astheacquisitionofsuchskillsoccurs
throughbothformalandinformalmeans, HelsinkiSCE
theneedtoincreasethenetworksand HelsinkiSchoolofCreativeEntrepreneurshipisa
interconnectionbetweenbusinesses, collaborativeinitiativethatstimulatesthe
SMEs,educationandvocational entrepreneurshipofitsstudentsbyintegratingthree
institutionsisrecognisedasparticularly schools(artdesign,businessandtechnology)toone
relevant.267Asawayofexample,theUKs programme,stimulatingcrossdisciplinaryprojects
HigherEducationInnovationFund(HEIF) toenhancetheiractivelearningfromeachother.
hasbeenusedasatooltoguidehigher
educationinstitutionstowardsforming
greaterlinkswithindustryandthewider
community.TheHelsinkiSchoolofCreativeEntrepreneurshipinFinlandisacollaborative
264 Hutton,W.(2007),Stayingahead:theeconomicperformanceoftheUKscreativeindustries,London:DCMS,p.157.
265 KEA,(2009),op.cit.,p.112.
266EuropeanCommissionGreenPaper,(April2010),op.cit.,p.10.
267TheHigherEducationAcademyArtDesignMediaSubjectCentreandNESTA,(2007),op.cit.,p.102;European
CommissionGreenPaper,(2010),op.cit.,p.11.
initiativethataimsatstimulatingentrepreneurialeducationthroughitsnetworkof
stakeholders(seeAppendix1,BestCase29).
However,whilesuchprogrammeswouldappeartobeapositivestepinencouraging
greaternumbersofentrepreneurs,therealityisthattheyonlyattractandbenePitthosefor
whomentrepreneurshipisalreadyaninterest.268 Conversely,someexpertsclaimthat
competencebuildingandskillsinentrepreneurshipareirrelevant.Againstthelackof
evaluationofeducationalentrepreneurshipprogrammes,269somesuggestredirectingthe
presenteducationalmicroeffortssuchasascoursesinbusinessskills 270aimedat
stimulatingentrepreneurship,toprioritisereformsinregulatorymeasures,suchas
competitionpolicy,taxandbenePitsregimes.271 Insteadoffocusingontrainingfuture
entrepreneursorgivingthemcoursesinbusinessmanagement,theadvocatesofthis
approacharguethatitismoreeffectiveinthelongruntosupportentrepreneurshipfor
SMEsthroughmacroeconomicmeasures.
Thistensionbetweenthemicroandthemacrointerventionistinitiativesispresently
rePlectedinCCIsupportprogrammeswhichtiltthebalancetowardsintermediaryand
complementarysolutionsthatcombinelearningbydoingandpeertopeer
coaching.Indeed,ratherthanfocusingoneducationcurricula,acomplementary
alternativetosupportsustainabilityandgrowth(whichcouldalsodissipatethetension
betweenthegrowthorientedCCentrepreneurandthecreationorientedCC
entrepreneur),couldbetobolstertheconnectionsbetweentheCCentrepreneursand
individualsexperiencedinbusiness.272
3.4.3.Entrepreneurshipeducationinachangingdigitalenvironment
IncreasingdigitisationhasledtonewchallengesforCCIssuchasdealingwithshifting
waysoflearningandworkingandunderstandingthedifferencesinhowCCIsand
educationalinstitutionsreacttothisfastchangingclimate.Withtherapidgrowthin
informationconsumptioncomplexity,thereexistsaneedtobridgethegapbetween
generationsofconsumersofdigitalinformation.Youngergenerationsaregrowingup
withfargreaterunderstandingofinformationcomplexitywithoutalwaysrequiringalink
fromthesedigitalobjectstoexisting,realworldcounterparts.Fortheyoungergeneration,
thedigitalobjectsthemselvesaretherealworldcounterparts.Fortheoldergeneration,
however,theexplicitlinkbetweenphysicalobjectsandthedigitalrepositoriesofobjects
remainsvital.Fortheoldergenerations,thephysicalobjectsremainthemetaphors
appliedtobuildanunderstandingofthemeaningofthatparticularobject.Thisisnot
necessarilythecaseforthosewhoareborndigital.
Manyeducationalinstitutionsarealreadyunabletorespondadequatelytothese
changingstudentproPiles.Youngpeoplearedevelopingnewformsofliteracy.They
frequentlycooperate,functionwellinnetworks,quicklypickupsocialcodes,participate
ingaming(andlearnandadheretotheaccompanyingrules)andarevery(socially)
involved.TheyareextremelycapableofdigestingdiscontinuousinformationOlows
andhaveaproactivewayoflearning.Problemsthereforeoccurwiththemorelinear
transferofknowledgefoundinmanyexistinglearningandtrainingenvironments.
OneusefulapproachtoovercomingsuchtensionscanbefoundintheideaofTshaped
persons.273 Thesearepeoplewho,bynature,enduptakingapositionbetweendifferent
disciplinesandwhoseethemergerofthesetwoormoredisciplinesasawholeandnotas
individual,separateandunrelatedentities.TheseTshapedpersonsautomatically
cometofulOiltheroleofmediatorbetweenthevariousdisciplines.Theyexperience
268TheHigherEducationAcademyArtDesignMediaSubjectCentreandNESTA,(2007),op.cit.,p.42.
269OECD(2009),op.cit.,p.9.
270Inthiscontext,micropoliciesconsistofprogrammessuchasworkshopsinbusinessskillsorcoursesinbusinessfor
creativeentrepreneurs.MacropoliciesinthiscontextareunderstoodasmeasuresonPiscalregulations(e.g.startup
registrationcostsandsocialsecurity).
271Storey,D.J.,(2008),EntrepreneurshipandSMEPolicy,WorldEntrepreneurshipForum2008
272 ExpertinterviewsandBestCases
273Kelley,T.andLittman,J.,(2005),Thetenfacesofinnovation:IDEOsStrategiesforDefeatingtheDevilsAdvocateand
DrivingCreativityThroughoutyourOrganisation,NewYork:DoubleDay
theassignmentfromthevariousdisciplinesbuttheyarepeoplewhoengagewiththe
disciplinesasanacademicallyschooledmediatormight.ThereforetheTshapedperson
willbeabletoenterintoa(working)relationshipwiththesedisciplineswithadegreeof
intimacyand,basedonthis,theycanintuitivelycomeupwithresearchanddesign
solutions.
Tshapedpersonsspecifysystemsonthebasisofconnections(bridges)betweenentities
insteadofbasedonseparateentities.Theythereforehaveamuchbroaderperceptionand
amuchmorePluidwayofthinking.Theyenablecompaniesandinstitutionsto
establishconnectionsbasedonnaturalcommonalities.Becauseoftheintimatebond
theycanforgewithbothindividualdisciplinesandthebiggerwhole,theycancouplethe
innerworldofthesedisciplinestotheirouterworldtransparently.Throughthis
transparentconnectionthevariousdisciplinescancommunicatemoreinformallyandan
understandingemergesofhowthisconnectionisworkingandcankeeponworking.
Inthisway,creativitycannotonlybeexaminedbyobservinghowpeopledealwith
limitations.Creativitycanalsobeexaminedbyobservinghowpeopledealwith
informalopenness.Tshapedpersonsareabletooperateindifferentsettingsandthey
willbeabletotransformtheirworkenvironmentfromonetypeintotheother:from
limitationto(controllable)openness.Thesearelikelytobetheculturalandcreative
entrepreneursofthefuture.InviewofprovidingsupporttoCCIsentrepreneurialskills
acquisition,itisimportanttohaveinmindtheconsiderationsofthischangingclimateand
thechangingneedsofborndigitalpeople.
3.4.4.Matchingversustraining
Matchingthesupplyofskillsandthedemandsofthelabourmarketisavaluable
complement,orevenalternative,toeducationandskillsacquisitionfortheCCIs.Support
canbegivenbymatchingindividualswithabusinessbackgroundwithcreative
individuals,thusachievingmultidisciplinarycrossovers.Theemphasis,then,ison
bridgingthegapbetweenthecreativeandbusinesssectorbyraisingawareness,
communicationandsettingupmatchmakingprogrammes.Cooperationbetweenformal
educationinstitutionsintheartsandexistingbusinessesiscriticalinordertoachievethis.
Innovationcentreswithinauniversityorcreativebusinessincubators,oftenlinked
toartschoolsoruniversities,haveprovedsuccessfulinclosingthegapbyenabling
studentsinasupportiveenvironment.274
FacilitatingtheexchangeofknowledgewithintheCCIsbetweenexperiencedand
inexperiencedCCIsisanothertypeofmatchingworthconsideration.Peertopeer
exchangewithinanetworkmayprovidecrucialinformationontheresourcesavailableand
necessarytotransitionfromonephasetoanother.Whilepeertopeerexchangeorpeer
coaching275appliesparticularlytotheearlystagesoftheSMElifecycle,itisalsoapplicable
throughoutthegrowthofabusinessasinformationandtechnologyconstantlyundergoes
change.
3.4.5.Supportondemand:mentorshipprogrammers,advicecentresand
learningloops
Regardingtheacquisitionofentrepreneurialeducationandskills,itisclearthatonesize
clearlydoesnotOitall.Ratherthantryingtoproduceaformulaforafairlycomplicated
anddynamicprocess,supportshouldbeofferedondemand,speciOictothephaseof
developmentandtheexpressedneedsoftheCCISMEinquestion.
Inordertoprovidesupportondemand,respondentshighlightedacombinationof
strategies.WhilewelldePinedandneedsspeciPictrainingandlifelonglearning
274KEA,(February2010a),BusinessInnovationSupportServicesforCreativeIndustries,Shortstudypreparedforthe
EuropeanCommission,(DGEnterpriseandIndustry),http://www.keanet.eu/report/BISScreativeindustries.pdf.March5,
2010.
275ECGreenPaper,(2010),op.cit.:Inthedocument,peercoachingistheupgradingofskillsandprocessesthroughthe
exchangebetweenpeersfacingthesamechallenges,asawaytolearnfromothers'mistakesorsuccesses,Ninetuneone's
projectsthankstoexperiencedtutors,explorenewtechnologiesorexpandone'scontactbase.
programmesareextremelyvaluable,theycanbecombinedwithmentoring,tailormadeto
theCCISMEs.
AdvicecentreswerealsoidentiPiedasessentialassetstoadevelopingbusinessintheCCIs.
TheCompetitivenessandInnovationProgramme,anEUPinancialframeworkputinplace
toincreaseaccesstoPinanceandbusinessadviceforinnovativeSMEs,isonesuch
initiative.276However,despitebeingtargetedatSMEsandtryingtoputthefocuson
entrepreneurship,thelackofspeciOictailoredadvicecentresforCCISMEsisgenerally
lackinginEUinitiatives.Mostoftherespondentsagreedontheneedforacentralpoint
wheretheycouldgetspeciOicadviceforCCIs,alongsidetailoredadviceonsector
speciOicpolicies.
DifferentbestpracticesinCCISMEentrepreneurshipsupportweresuggested,especially
involvinginitiativesfocusingoncustomisedinteraction:onetoonecoachingand
consulting,microcredit,bottomupmethodsfordevelopinglocationsusedsolelyby
endusers, 277peertopeerconsultationsandOlexiblebusinessincubators.
Inordertoimproveprofessionaltraining,
respondentsmentionedPirstlythe FIRSTPORT
developmentofregionalcentresforCCI Firstportservesnewandemergingsocial
SMEsforappliedresearchand entrepreneursthroughfacetofacesupportand
exchangeofpractices(82.5%)andthen adviceaswellassetstheculturalandcreative
thesettingupofmentoringschemesand entrepreneurwithastrongnetworkandtraining
Europeanmobilitygrants(both61%).One sessions.
bestcasepracticeimplementingmanyof (SeeAppendix1,BestCase30)
theabovelistedcharacteristicsisFirstport,
anorganisationservingCCISMEsand
otherentrepreneurs(seeAppendix1,BestCase30).
3.4.6.Phases
Astheacquisitionofentrepreneurialandbusinessskillsissaidtobebestintroducedin
theeducationalsystem,beforetheCCIentrepreneurcreatesabusinessandasearly
assecondaryschool,someoftheintervieweessuggestedthattherewasaneedto
introduceanotherphaseintheentrepreneuriallifecycle:phasezero.Severalrespondents
expressedtheimportanceofthisperiod,whichoccurspriortothecreationandpursuitof
anidea.Naturallythetransitionfromprofessionaltrainingintoprofessionalpracticealso
provestobeachallengingstage.278
ThedevelopmentofapprenticeshipsinCCI
SMEsiscurrentlyusedinsomecountries CreativeApprenticeship
butapprenticeshipiseasierintraditional CreativeApprenticeshipisaUKprogrammethat
industriesashiringsomeonecanalsobea aimsatbridgingthelackofskillsfromstudentsin
considerablyheavyloadformicroSMEs theCCIsectorsbyofferingtheopportunitytolearn
alreadyundertimeandresources onthejobandgivingyoungpeopleastartintheCCI
constraints.Toaddressthisproblem, sectors.
programmessuchastheNordicCreative (SeeAppendix1,BestCase31)
KnowledgeExchangeProgrammeorthe
UKCreativeApprenticeship
Programme(seeAppendix1,BestCase31),linkindustries,educationandbusiness
clusterstogetherbyprovidingavitalnetworkofinformationandopportunities.279
IntheOirstphase,themostadequatesupportforacquiringentrepreneurialpracticeswas
deemedtobeonsiteexperienceorinternshipfor33%oftherespondents(seeFig.30.
below).
276 Seehttp://ec.europa.eu/cip/
277Lookingattheimportanceoffeedbackloopsinthedesignprocessandproductionofaproductandservice,different
securedlocations,suchasrestrictedonlineplatforms,canbedevelopedtoenablegreaterinteraction
278 ECGreenPaper,(2010),op.cit.
279Seehttp://www.ccskills.org.uk/Apprenticeships/CreativeApprenticeships/tabid/82/Default.aspx
Question:Whattypeofsupportinacquiringentrepreneurialpractices
ismostusefulduringtheNirstphase?
J.<,3*6?#.*-1.01.*.;1+4,0#-16,*,*<##
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5167893+-5167#:;+,*.++#-16,*,*<#
)*#+,-.#./0.1,.*2.#31#,*-.1*+4,0+#
!"# $"# %!"# %$"# &!"# &$"# '!"# '$"# (!"#
Figure30:Mostusefulsupportforacquiringentrepreneurialpracticesinthestartupphase
Itisinthisphasethatacademiaandentrepreneurshiparebestcombined.Atthelocal
level,ChambersofCommercetackleaspectsofeducationalsupportandprovidecourses
forstartingbusinessesandcapacitybuildingforyoungentrepreneurswhoareinphases
oneandtwo.Atanationallevelthefocusliesmainlyonhowtoprepareeducational
institutionstomeettheneedsofculturalandcreativeentrepreneursandfutureSMEs.
Duringphasetwo,supportneedstobeveryPlexibleandeasilyaccessible.CC
entrepreneurshavetobecomefamiliarwithtermsandregulationsthatmayhelpthemin
theirbusiness.TheyhavetofeelcomfortablewithdebtPinanceandwithIPRmanagement.
TheymustdevelopcompetenciesandredePinetheirbusinesstowardsgrowthwiththeaim
ofeasingthetransitionintothenextphase.
Additionally,elementsrelatedtotrainingwerealsomentionedduringthisphaseofthe
entrepreneuriallifecycle.Thenascententrepreneurexperiencesaverysteep
learningcurve,especiallyifphaseonehasbeentooshortorbypassed.Phasetwoisa
periodoftrialanderror,duringwhichculturalandcreativeentrepreneursmustrelyon
mentorsandadditionaltrainingorcoachingthatmightbeavailable.Accordingto
respondentsofthequestionnaire,aspeciOicprogrammeforimprovingOinancialand
technologicalskillsisneeded(49%oftherespondentsagreedthatitwasneededand
37%agreedthatitwasverymuchneeded).Thistypeofprogrammewasparticularly
neededduringphases1and2(seeFig.31.).
Question:.Inwhichphasesofthelifecyclewouldthisprogrammebemostuseful?
(youcanchoosemorethanonephase)
*+,-."#/"0*@.>,@936"=+."6@283;0"
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Figure31:MostappropriatephaseforspeciOictrainingintechnologyandOinancialskills
Similarly,Lifelonglearning(LLL)programmes,thatsupportstartingandgrowing
companiesbyprovidingpersonalandmanagementskills,aswellasriskmanagement,also
occurattheentrepreneurorenterpriselevelandareusuallypreferredinthestartupor
thebuildupphase.(seeFig.32.)
Question:LifeLongLearning(LLL)programmesprovidingpersonalandmanagementskills,aswellas
riskmanagement,cansupportstartingandgrowingcompanies.Inwhichphaseofthelifecycleare
theseprogrammesmostuseful?
()*+,#%.#/@=*>=#7?/#
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5>172:/#
()*+,#'.#/6789:;<7=/#
()*+,#-.#/0122,3425/#
!"# $!"# %!"# &!"# '!"#
Figure32:PreferredphaseforLLLinlifecycle
(Source:(Eurokleis2010,onlinesurvey)
Fromphasethree,issuessuchasthescalabilityandgrowthofabusinesscomeintoplay.
ItisduringthisphasethatSMEsmustconsiderwhetherornottheywanttobescalable,
whichmayleadtodifferingpathstogrowth.ThesustainabilityoftheSMEthusbecomes
animportantcomponentinthisphaseandthephasestofollow.Morefocusedsupportin
businessskillsarecitedasimportantskillsatthisstage.Ondemandsupportsuchas
coachingisexplicitlymentionedfromthispoint.
InphasesfourandOive,Pinancingandmarketrelatedissuesbecomemoreimportantand
thesupportshouldfocusonorganisingthecreativeprocess,andmanagingpeople
andresources.
Additionalemphasisisgiventotheimportanceofnetworksandpeertopeer
knowledgeexchange.Inthesetwolastphases,Plexibilitygiveswaytoanecessaryrigidity
(e.g.distinctorganisationalroles,manyprojects,projectmanagement,resource
management)andthiscanbedifOicultforCCIsiftheshiftinscaleandchangeoffocus
andstructurescoincideswithalackofsupportandguidance.Fromthispointon,
SMEscontinuetorequiresupport;however,thetypeandamountofsupportneeded
differsandondemandadviceandcoachingneedstobespeciPicandadvanced.
3.4.7.Levels
Skills,educationandtrainingcanbeprovidedatdifferentlevels.Duetothefastchanging
environmentinwhichtheywork,regulartrainingindevelopingsectorspeciOicskills
isimportant.84%oftherespondentsthoughtthatthedevelopmentofadviceandsupport
centresspeciPicallyforCCIsisneededorverymuchneeded,asillustratedinFig.33.below.
RegionalcentresforCCISMEswerealsosuggestedforimprovingprofessional
training(seeFig.34).
Question:DoyouseeaneedforthedevelopmentofadviceandsupportcentresspeciNicallyforthe
creativeandculturalindustries?
*5#59:4:54#
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-+./#0123#4++,+,#
*++,+,#
!"# $!"# %!"# &!"# '!"# (!"# )!"#
Figure33:NeedfordevelopmentofadviceandsupportcentresforCCIs
Question:Atwhichlevelwouldthesesupportcentresbebestplaced?
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9:,/;+03#1+8+1#
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()*+,#
!"# $"# %!"# %$"# &!"# &$"# '!"# '$"#
Figure34:PreferredlevelfordevelopingadviceandsupportcentresforCCIs
Attheentrepreneurlevel,skillsandknowledgearegainedinvariousways,asseenin
Table11.above.Evenduringtheeducationalphases,personalinitiativesand
participationinextracurricularactivitiesandexperiencesbeyondthoseacquired
throughformalprogrammeshaveproventoplayamajorroleinthedevelopmentof
studentsandgraduatesentrepreneurialcapacity. 280
Duringthisphase,thecompetenciesoftheindividualmustcontinuetodevelop,such
asintheareasofinnovationandR&D,butalsointheorganisationandmanagement
ofanenterprise.Theprocessremainsverymuchatanindividuallevel,inpartdueto
thelargenumbersofmicroSMEs.Atthislevel,thetraining,skillsandadvicethat
weredescribedfortheentrepreneurlevelwillalsoapply.
Thecontinuityinlearningandskillsdevelopment,orlifelonglearning(LLL),is
deemedessentialtosustainEuropesinnovationasresearchshowstheinPluence
LLLhasonthecreativeandinnovativepotentialofindividuals,groups,organisations
andcountries.281 Therefore,LLLhasbecomeacornerstoneoftheEUslearning
280 TheHigherEducationAcademyArtDesignMediaSubjectCentreandNESTA,(2007),op.cit.,pp.94101.
281Dohmen,M.(2009),ThefutureofcontinuingeducationinEurope,Bonn:GermanFederalMinistryofEducationand
Research,Bonn,Germany
strategy,althoughthepotentialofLLLhasyettobefullyembraced.282The
European,regionalandnationallevelsmayeachplayanimportantroleinexecuting
LLLprogrammes,thoughthemajorityofrespondentsbelievethattheresponsibility
shouldlieattheEuropeanlevel(29%),283asinFig.35.below.
Question:AtwhatleveldoyouseethistypeofLLLprogramme
mostusefulforyourcompany?
?@,.A+09#-+6+1#
>0;.901#-+6+1#
=+84.901#-+6+1#
7+/).,01#.,8094:0;.92
0<<./40;.9#1+6+1#
-./01234)5#1+6+1#
()*+,#
!"# $"# %!"# %$"# &!"# &$"# '!"#
Figure35:PreferredlevelforLLLstrategies
Atthelocallevel,themunicipalitymayprovideentrepreneurialtrainingto
entrepreneurs.However,accordingtorespondents,trainingandadviceisoftennot
tailoredtotheCCIsandisthereforenotsuitable.Localpolicymayhaveanarrow
viewofentrepreneurship,tendingtofocusoncommercialentrepreneurshipmeasured
throughlevelsofbusinessstartup.284ThisisduetoalackofunderstandingoftheCCIs
bylocalgovernmentsorbylocalgeneralSMEssupportcentresthatmaynotpossess
informationontheCCIsector.However,trainingatthislevelisbenePicialinthattheCC
entrepreneursthatparticipatecandirectlycontributetotheirlocalenvironment.Thus,
theremaybegreaterimpactinlesstimethroughlocaltrainingandadvicecentres.
Theroleoftheregionallevelwas
stronglyhighlightedbythe ArgeCreativWirtschaft
intervieweesregardingthe ArgeCreativWirtschaftisacompetencecentrefor
competenciesofentrepreneursinthe creativeentrepreneursandindividuals.Itactsin
CCIs,onegoodexamplebeingArge entrepreneurialskills(trainingandsupportin
CreativWirtschaft(SeeAppendix1,Best networking),representationofinterestsand
Case32).Regionsareoftencloseto informationandawarenessraising.Itactsasa
developmentsintheCCIs,andoffer knowledgehubfortheinterestsofthecreative
training,coaching,LLLprogrammes,and industries.
theorganisationoflearningloopsand
thiscanbeefPicientlysupportedatthe
regionallevelalongsideotherservicessuchasconsulting,advisingandbusiness
modelling.32%ofrespondentsbelievethatadvicesupportcentresshouldbeplaced
attheregionallevel,while22%chosethenationallevel(seeFig.35.above).Inaddition
totheserviceslistedabove,theregionplaysanimportantintermediarysupportrole,
linkingthelocallevelwiththenationallevel.Overall,asystemforadviceandsupport
orientedtotheCCIsisstronglyrequiredinparticularatregionalandlocallevels.
Accordingtorespondents,thenationallevelalsohasanimportantroletoplayintermsof
educationandskillsfortheCCIs.Itisseenasusefultoestablishcollaborativeplatforms,
282 KEA,(2009),op.cit.,p.119.
283 Onlinesurvey
284TheHigherEducationAcademyArtDesignMediaSubjectCentreandNESTA,(2007)op.cit.,p.25.
advicecentresandtofosterlinksbetweenCCIsandresearchanddevelopment.
Additionally,supportcaninterveneinformaleducationcurriculadevelopmentasitis
usuallyanationalcompetenceandnotregionalone.Forinstance,intheNetherlands,the
requirementstobecomeaprofessionalarchitectareestablishedatanationallevel.Onthe
otherhand,atthenationallevel,thelocalcontextmaybeoverlookedandtheneedsofCC
entrepreneursandmicroSMEsarenotalwaysproperlyidentiPiedoraddressed.Therefore,
thenationalandregionallevelsneedtobelinkedsothattheregionallevelcanbean
ambassadorforpoliciesmadeatthenationallevel,andthenationallevelinturncan
benePitfromtheunderstandingthattheregionshaveontheneedsofindividualsinthe
CCIs.
TheEUlevelisprimarilyresponsibleforthestructuralmeasuresrequiredbytheCCIs
regardingtheregulatoryenvironment.Theseincludeenforcingandcorrectlyevaluating
IPR,andproactivelyofferingdirectsupportinthePieldoftrainingandformalnetworking.
Facilitatingincreasedexchangebetweengroupsofprofessionals,suchaspolicymakers,
innovationsupportexperts,andcreativeclustermanagerswouldimprovethewealthof
expertiseonworkingpracticesandprogrammesintheCCIs.285TheEUlevelisnotthelevel
ofauthoritybestsuitedfordeliveringservices.Rather,atthislevel,culturalexchangeand
thePlowofideasbetweenMemberStatesonentrepreneurialeducationalprogrammescan
bemoreeffective.
ThedifOicultiesofCCentrepreneursandmicroSMEsmayalsovarygreatly
dependingonthesectorwithintheCCIs.Forinstance,contrarytothegamingsector,
wherethedifPicultieswithinthesectorlieintheareaofknowledgesharing,
entrepreneurialskillsandcommunicationwithsupportingorganisations;themusicsector
PindsitsdifPicultiessettingupPinancialPlowmodelsandmechanismsthataidinthe
sustainabilityandgrowthoftheactivitiescarriedoutbySMEs.
However,whiletheneedsmayvarygreatlybetweensectorsoftheCCIs,essentialgeneral
trainingonentrepreneurialskills,alongsidesectorspeciOictraining,iscrucial.
Essentialtraining,fromwritingbusinessplanstorelatingproductideastoamarket
situation,isrequiredtoremaininformedandtorePlectonnewdevelopments.Thisis
particularlytrueforthoseSMEsthatnotonlylacktechnologicaltraining,butalsosector
speciPictraining.Currently,thesectoralassociationsmayonlyprovidesomebasic
trainingthoughmorespecialisedknowledgeisnecessary.SectoralsupportforCCIs
entrepreneurialskillswasmostlyperceivedtobethroughexchangeofbestpractices
(97%)andconsultations(76%)togatherforexample,informationonCCIpoliciesand
effectiveness.
3.5.Accesstoinnovation
TheEurope2020Strategyhighlightstheneedtostrengthentheroleofknowledgeand
innovationasdriversofgrowthforEuropesfuturechallenges.286 TheInnovationUnion,
oneofthePlagshipinitiativesannouncedinEurope2020,recognisestheroleofcreativity
intheinnovationprocess,andunderlinesthat"thecreativityanddiversityofourpeople
andthestrengthofEuropeancreativeindustriesofferhugepotentialfornewgrowthand
jobsthroughinnovation,especiallyforSMEs".287Theseprioritiesplacedthespotlighton
CCIs,acknowledgingtheroleofthecreativetalentworkforceandentrepreneurship
asessentialfortacklingthesechallenges. 288Innovationnowalsoencompassesnotonly
scientiPicinnovationbutalsohiddeninnovation,suchasinnovativeprocesseshidden
fromclassicalinnovationmeasures; 289softinnovation; 290ordesignprocessesas
driversofusercentredinnovation.291Thisisanindicationofthewillingnesstounlock
thepotentialrolethattheCCIscouldhaveinfurtherenablinginnovationinEurope.
285 KEA,(2010a),op.cit.
286ECCommunication,(March2010b),op.cit.,p.9.
287ECCommunication,(October2010),op.cit.,p.7.
288Ibid.,p.9.
289Miles,I.andGreen,L.(2008),HiddenInnovationintheCreativeIndustries,London:NESTA
290Stoneman,P.(2009),SoftInnovation:Towardsamorecompletepictureofinnovativechange,London:NESTA.
291ECStaffWorkingdocument,(2009a),op.cit.,
TheThirdAustrianReportonCulturalandCreativeIndustriessuggestedthattheCCIsare
moreinnovativethantheaveragesectorintheeconomy.In2008,asurveyundertaken
withmorethantwothousandAustrianCCIenterprisesshowedthat46%of
organisationsintheculturalandcreativeindustriessupportedcustomersoutside
oftheirsectoringeneratinginnovation.292
However,inordertofullytapintotheinnovativepotentialoftheCCIsandincreasetheir
(indirect)impactonothersectorsoftheeconomy,itisessentialtofacilitatetheiraccess
toinnovativeprocessesandtools.Strengtheningthelinksbetweenacademia,
knowledgeinstitutes,CCIsandbusinessesinothersectorscanbeonepromptingfactor
thatsupportCCIsaccesstoinnovativetrajectories.Iftheyaretoprosperfromthis,the
CCIsmusthavethestrategicabilitytounderstandtheimpactofnewtechnologyand
thepracticalabilitytoexploitit. 293
Atthesametime,rapidcommunicationanddigitalconvergencerepresentafundamental
opportunityforinnovationforCCIs.Theopportunitiesforresortingtouserdriven
creationthroughinteractivenetworks,includingfeedbackloopsintheproduction
processesaswellasusingtheinternetforinnovativemethodstoapproachaudiences,are
keystoenablinggreaterinnovationwithintheCCIs.Innovationpoliciesmusttherefore
addressthesekeydrivers,bothtechnologicalandnontechnological,andallowfor
OlexibleapproachesthatcorrespondtotheneedsofCCIs.
Thus,thepositioningoftheCCIsistwofold.CCIscanthemselvesbedriversofcreativity
andinnovationandrecognisedasanessentialpartofcreativityinsocialandtechnological
innovationprocesses,294whilesupportforinnovationisneededtofurtherthecreative
potentialoftheCCIsandisessentialinmaintainingtheircompetitiveness.
Theimportanceofinnovationwasalsorecognisedintheonlinequestionnaireas74%of
therespondentshighlightedtheneedforinvestmentininnovationforCCISMEs
whiletheneedforstrongersupportinR&Dwasalsoperceivedasnecessaryby85%
oftherespondents.
3.5.1.Dynamicinnovationlandscape
InnovationistraditionallyviewedandmeasuredfromthetechnologicalandscientiPic
perspective.ThismakesitdifPiculttoincludethemoreintangibleandcreativenatureof
innovationtheCCIshavetooffer.Eventhoughinnovationisnowacceptedas
encompassingmorethanjusttechnology,295itisstillhardtopredictwhetherthese
innovativeprocesseswillsucceedinthemarket.
Theconceptofsoftinnovation,rePlectingchangesofalargelyaestheticnature,296 canbe
bothnonfunctional(aesthetics)aswellasfunctional.AccordingtoNESTA,softinnovation
islargelyfoundinthecreativesector,eventhoughthenoncreativesectorholdsalsosome
softinnovationpotential.297 Theactuallackofmeasuringindicesthattakeinto
accountsoftinnovationalongsidetechnicalandscientiOicinnovationaccountsfor
oneofthemajordifOicultiesintermsofrecognitionfortheCCIs.298
Newmeasures,suchasthosebeingresearchedbyNESTA299orbytheEuropeanInnovation
Scoreboard,300attempttobridgethisgap.TheNetherlandsandCanadahavealsostarted
todosobyincorporatinguserinnovationwithininnovationmeasurement.301 Apartfrom
292ArgeCreativwirtschaftAustria,(2010),op.cit.,p.11.
293DCMS(DepartmentforCulture,MediaandSport),(2008),CreativeBritainNewTalentsfortheNewEconomy,London:
DepartmentofCulture,MediaandSport
294OpenMethodofCoordinationfortheCulturalandCreativeIndustriesinEurope,(2009)Preliminaryreport,p.18.
295ECCommunication,(September2009c),op.cit.,p.8.
296Stoneham,P,(2008),op.cit.,p.18.
297Stoneham,P,(2008),op.cit.,p.18.
298InterviewEuropeanSectoralOrganisation
299Seehttp://www.nesta.org.uk/innovation_index
300Seehttp://www.proinnoeurope.eu/index.cfm?fuseaction=page.display&topicID=275&parentID=51#
301NESTA,(April2010a),op.cit.,p.11.
aestheticchanges,innovativeprocesses,neworganisationalmodelsornewbusiness
modelshavealsobeguntoberecognisedasinnovationunderthenamehidden
innovation.302 ThelatterisdifPiculttodisentanglefromroutineworkofproblemsolving
byanorganisationandisnotnecessarilyrecordedintheorganisationsinnovation
practicesandthusisnotPlaggedasinnovation.Thismakesithardtobackupwith
appropriatepolicy.Softinnovationandthesubsequentprocessesofhiddeninnovationare,
however,essentialwhendealingwithserviceinnovation.
TheinPluencethatsuchinnovativeprocessescanhaveonanorganisationsefPiciency,
managementproceduresortheinteractionwiththecustomerscanbeconsiderable.The
EUEPISISINNONet303andtheEUKnowledgeIntensiveServiceInnovationPlatformare
policiesandinstrumentstosupportserviceinnovationandareillustrativeofthe
recognitionofsuchinnovativeprocessesatthedecisionmakinglevel.
Moreover,theconceptofopeninnovation,dePinedastheuseofpurposiveinPlowsand
outPlowsofknowledgetoaccelerateinternalinnovation,andexpandthemarketsfor
externaluseofinnovation,304 blendsthemultipleinnovationprocessesoforganisationsto
advancenewmethodstoachieveacommongoal.Thiscanbeillustrativeoftheimpactthat
CCIscanoffertootherorganisationsasanindirectspinoffeffectofcreativityasadriverof
innovationinotherorganisations.OneexampleamongmanyisTheWalk.Thiswasa
collaborationbetweenavisualartistproducingahumansculpturewithatextile
enterpriseandwasaimedatstimulatingthePlexibilityoftheenterpriseemployees.It
aimedtoteachthemtothinkinamorefutureorientedwayinordertoanticipatetheever
changingmarketwithaviewtomodifyingorganisationalprocesses.305
However,theappreciationofsoftinnovationorothertypesofnontechnological
innovationisnotfullyhomogenisedacrossgovernmentorisnotyettranslatedintopolicy
actions.Countrieshavedifferentwaysoftacklinginnovationthataffectsthegeneral
contextforCCIs.AcountryintheknowledgeeconomiesclusterrecognisesthebenePitof
softinnovationforbusinessandwillhavespeciPicprogrammesaimedatsupportingCCIs.
TheUKforexampleencouragestheuptakeofinnovationvouchersthatcouldnudgePirms
towardsanincreasinguseofinnovationservices.306Otherinitiativessuchasthe
KnowledgeTransferNetwork(seeAppendix1,BestCase33)fromtheUKTechnology
StrategyBoardarealsoillustrativeofthesupporttheygivetoenhanceinnovationinthe
CCIs.
However,notonlydoCCIsneedtoberecognisedasdriversofinnovation,inallthe
sensesmentionedabove,buttheyalsoneedtobeappropriatelysupportedin
innovativeprocessestotapintotheirfullinnovativepotential.TheEUhasinvested147
billionEuros(20072013)tostimulateR&DandICT,butsuchinnovationpolicylargely
ignoresthevalueofculturebasedcreativity.ItisestimatedthattheEUwillspendless
than3billionEuros(20072013)onculturebasedcreativity.307
Opensourceandcollaborativeplatformdevelopmentsthathavearisenfromdigitaland
technologicaldevelopmentopenupopportunitiesfortheCCIstorespondtonew
demands.Thisallowsforlowcostcreativeexperimentationthatcanbetestedand
reshapedbytheprosumer,allowingforamorelevelplayingPieldforinnovationtry
outs.308 Allowingsuchcreativetryoutsisessentialintriggeringinnovation.Astudyby
NESTAfoundthat25%ofuserinnovatorPirmshavesharedtheirprocesswithequipment
suppliers(20%didreceiveroyaltiesascompensationfortheirsharing).309
302Green,L,(Dec2008),HiddenInnovationinCreativeIndustries,NESTAVideogameinnovationworkshop,Manchester
BusinessSchool
303Seehttp://www.proinnoeurope.eu/episis
304Chesbrough,H.W,((2003),op.cit.
305Seehttp://www.arteconomy.be/htm/getpageEN.asp?i=3
306Potts,J.,Morrison,K.,(April2009b),NudgingInnovation,London:NESTA
307KEA,(2006),op.cit.,p.139.
importanceofproductcreationbyusers,London:NESTA,p.8.
CCIs,andespeciallythedesignsector,useuserorientedstrategies.310Designcanactas
apotentialinstrumentforinnovativesolutionsandproductsthatseektounderstand
userneeds,aspirationsandabilitiesatalowercostthantraditionalR&Dactivities.311The
roleofCCISMEsinmaintainingcloserinteractionwiththeuserandconsumeris
inPluentialintheircapacitytoinnovatenewprocessesandservices.Thischanging
dynamicbetweenaudienceandcontentcreator,especiallywiththeriseofdigitalcontent,
allowsforthepersonalisationandcocreationofservicesandproducts.Thisalsoallows
forgreaterknowledgeexchangeandcanhaveaconsiderableeffectonthebusinessmodels
ofculturalandcreativeindustries.UserinnovatorsarePirmsorindividualconsumersthat
expecttobenePitfromusinganovelproductoraservicetheydevelop.312Culturaland
creativeentrepreneursarewellawareofthispotential.
Enablingsuchexploratoryenvironmentstoemergeisthereforevitalforunlocking
thepotentialofCCIstoinnovateandfosteraspinoffeffectontheothersectors.In
thiscontext,interoperabilityisimportantasitcanalsoensuregreateraccesstonew
platformsforCCISMEsandassuchcanincreasethelevelofcrosssectoralandmulti
disciplinarycollaborationthatcanenhanceopeninnovationatalowercostacross
borders.
CCIsareconstantlyinnovatingintheirproductsorservicesandinthestudysonline
questionnaire,itemergedthatthemostimportantreasonstoinnovateareusually
improvementoriented(35%)oruseroriented(29%)(seeFig.36.below).
Question:Whatistheaimofyourorganisationwheninnovating?
A0628#
@+#*+0#1**+,-02#520#
)**+,-.*/#;+8#<+41->#1=78+,2=2*0<#
)**+,-.*/#;+8#-2<062.4->?#-8.<.4#82-<+*<#
)**+,-.*/#0+#=-046#:<28<#92=-*9<#
)**+,-.*/#0+#/-1*#23412*45#1*#062#78+9:4.+*#
+;#-#<28,142#
!"# $"# %!"# %$"# &!"# &$"# '!"# '$"# (!"#
Figure36:AimofCCIswheninnovating
Inthisregard,designisincreasinglyseenasaparticularstrengthforEuropeandasource
ofcompetitiveadvantage.TheEUCommunicationonDesignasadriverofusercentred
innovationshowedthatnontechnologyR&DwasascompetitiveastechnologyR&Dand
couldbeseenasasolutionforlowtechnologySMEstoincreasetheircompetitiveness.313
ThiswasconPirmedintheresultsoftheopenconsultationondesignasusercentred
innovationtobeintegratedinthefutureinnovationpolicy.314 However,oneofthe
greatestbarriersisthelackofawarenessofpolicymakersandSMEsthemselvesof
theeconomicandinnovativepotentialofdesign. 315
310ECWorkingdocument,(April2009a),op.cit.,p.17.
311 Ibid.,p.12.
importanceofproductcreationbyusers,London:NESTA,p.9.
313 ECStaffWorkingPaper,(April2009),op.cit.,p.12.
314ECStaffWorkingPaper,(April2009),op.cit.,Cunningham,P.N,(2008),NationalandRegionalPoliciesforDesign,
CreativityandUserdrivenInnovation,Thematicreport,EuropeanTrendChartonInnovationPolicy
315 EC,(October2009),Resultsoftheopenconsultationondesignasadriverofusercenteredinnovation,http://
ec.europa.eu/enterprise/policies/innovation/Piles/results_design_consultation_en.pdf
Ontopoflackingawarenessoftheinnovativepotentialofdesign,CCIsalsofaceinnovation
constraintsandchallengesinunderstandingnewemerginglifestylesandmanaging
theroleoftheuser/consumer(seeFig.37.below).Greaterinteractionwiththe
customerthrough,forexample,digitalinteractiveplatformscouldsupportCC
entrepreneurs.AccordingtotheresearchinstituteCreatiwirtschaft,certainother
constraints,suchaslackoftime(20%),lackoffundingsources(18%)andmissing
customerapproval(14%)arealsoinnovationconstraints.316
Question:Please,selectthethreemostimportantchallengesininnovation
thatyoursectorfaces
C):+-4*.):3),#+@+-,3),#231+4*62+4#
A02+#01#5>4*0@+-B>4+-#
()*+,-./0)#01#+<=+-/4+#3)#=-0:>5*#:+?+20=@+)*#
()*+,-./0)#01#9*62+#.):#;+58)020,6#
7*8+-#
()*+,-./0)#01#20,34/5#.).26434#
!"# $"# %!"# %$"# &!"# &$"# '!"#
Figure37:Mostimportantchallengesintermsofinnovation
(Source:(Eurokleis2009,sectoralexpertquestionnaire)
3.5.2.PromotinginnovationforCCIs:targetedorblendedsupportfor
innovation
ThereisarecognisedneedtosupportinnovationandaccesstoinnovationfortheCCIsin
ordertoenhancetheirexistinginnovativeprocessesandincreasetheirefPiciencyaswell
asspilloverstoothersectorsoftheeconomy.
3.5.2.1.BroadeninginnovationdeOinitions
InordertosupportinnovationtakeupbyCCIs,Pirstofall,theinnovativepotentialofCCIs
havetoberecognised.OpeningupthedePinitionofinnovationtoincludeCCIoutputsand
processescontributestosupportingCCIinnovativepractices.Recognising,forexample,
talentbasedresearch(suchastalentscouting)oruserinnovationaspartofCCIs
innovationcanalsoenableaccesstofundingfromexistinginnovationfunds.
Twomainideasemergedfromtheexpertinterviews.Firstly,thereisaneedtorecognise
creativityandsoftinnovationaspartofinnovation.Insodoing,theopportunityfor
CCIstoapplyforinnovationfundingcanbeopened,althoughspeciPictargetedsupportfor
innovationmightbenecessaryandcomplementaryinordertoincreasetheuseofthese
programmesbyCCIs.Therespondentsfromtheexpertquestionnaireagreedorfully
agreed(70%)onthefactthatinnovationpolicyneededasectorspeciOicapproach,
perhapsasaPirststep.Secondly,innovationfundsusuallygotothemost
institutionalisedsectorandinnovationpoliciesaremostlydirectedatR&Dand
scientiOicsectors.RecognisingthepotentialofCCIsasproducersofknowledgeandsoft
innovatorscanunlocksomeofthesefunds.
3.5.2.2.Accesstoknowledge
Knowledge,competenceandrelatedintangibleshaveemergedaskeydriversof
competitiveadvantageindevelopedcountries.OneoftheprioritiesnotedbytheUK
TechnologyStrategyBoardsreportonCreativeIndustriestofosterinnovation,is
developingtheskills,knowledgesharingandthecrossexchangeofexperienceand
knowledgebetweenthedifferentsectorsoftheCCIs.317 CCIsrelyonknowledgetobreak
316Seehttp://www.creativwirtschaft.at
317UKTechnologyStrategyBoard,(2009),op.cit.
throughinnovativeservicesorproductsortokeepupdatedaboutnewpractices,markets
andtechnologies.KnowledgeexchangecanactasacatalyserfortheCCIstoreachbigger
opportunitiesandcloserinteractionwithusers.InastudybyNESTA,itwasshownthat
innovationwascloselyassociatedwithaccessingknowledge(53%),especially
internationalsourcesofknowledge.318
AccessingexternalknowledgeisakeyfactorforaPirmscompetitiveness.319 Lookingatthe
importantuseofmultiplatformsforinnovation,theUKStrategyTechnologicalBoard
underlinedtheneedtopromoteknowledgesharingandstimulatenewskillsandcross
mediacollaborationinordertopromoteopeninnovationprocessesanddevelopnew
brands,products,services.320Asthedifferencesbetweensectorsbecomemoreblurred,
thismeansthatcrossmediaknowledgetransfercantakeplaceinaneasiermanner.
TheexistinginitiativefundedbytheUK
TechnologyBoardCreativeIndustries, KnowledgeTransferNetwork
KnowledgeTransferNetworkBeacons, KnowledgeTransferNetworkforCCIistheUK
demonstratestheimportanceaccordedto nationalnetworksinCCIwhichbringstogether
transferofknowledgeandillustratesthe peoplefrombusinesses,universities,research,
typeofsupporttoinnovationbyincreasing Pinanceandtechnologyorganisationstostimulate
knowledgePlowandexchange(see innovationthroughknowledgetransfer.
321
Appendix1,BestCase33). Inthiscase, (SeeAppendix1,BestCase33)
knowledgesharingacrossbordersand
differentusesofIPinordertoenable
SMEstotakeadvantageoftheOlowofinformationwerestrongsuggestionsfromthe
expertquestionnaire.
Fig.38.belowdemonstratesthatCCISMEsfoundinformationandknowledgethrough
peertopeerexchangeofknowledge(24%),cooperationwithothersectoralorganisation
(19%)oropeninformationsources(18%)mostrelevant.Programmesthatfosterthe
exchangeofpracticesbetweenCCIsandpeertopeerlearninghavebeenseenas
havinggreatpotentialtofosterknowledgeexchangeandinnovativepractices.
Question:SelectthethreemostrelevantsourcesofknowledgeforCCISMEs
A1=0>0=724#D1.;4+=E+#8*2,01E#
-,./#5.9.:+,23.1#;0)*#8+5).,#288.5023.18#
(:+1#A1B.,/23.1#C.7,5+8#
-,./#)*+#5.9.:+,23.1#;0)*#710>+,80)?@,+8+2,5*#0183)7)+#
-,./##5.9.:+,23.1#;0)*#:,0>2)+#25).,8#
-,./#5.9.:+,23.1#;0)*#)*+#:7<405#2=/0108),23.1#
-,./#01)+,123.124#5.44.6707/8#
()*+,#
!"# $"# %!"# %$"# &!"# &$"# '!"#
Figure38:MostrelevantsourcesofknowledgeforCCISMES
(Source:Eurokleis2009,SectoralExpertquestionnaire)
318NESTA,(2010c),op.cit.,p.3.
319NESTA,(May2010),op.cit.,p.7.
321ProspectforCIKTN,UnlockingKnowledgeTransfer:Report1/3Baselines,CIKTNBeaconProject,seehttp://
creativeindustriesktn.org/beacons
Althoughmostknowledgeaboutresearch
andinnovationinitiativesmostlycomes SEE
SEESharingExperienceEuropePolicy,
fromtheinternet,theimportanceof
Innovation&Designisanetworkofeleven
networks,bothprofessionalandpersonal, organizationssharingknowledgeandexperiencein
isfarfrominsigniPicant(seeFig.39. ordertodevelopnewthinking,disseminategood
below).Theinternetcanalsobethe practicesandinPluencelocal,regionalandnational
mediumforonlineplatformsofexchange policiesfordesignandinnovationintheircountries.
andaccountsforanimportantsourceof (SeeAppendix1,BestCase34)
knowledge.Socialmediatoolsandopen
sourcesoftwareareallelementsthat
encourageinnovativepracticesthrough
theexchangeofinformationorthrough
collaborativecontentcreation IBBT
processes. Theneedtoincreasedigital IBBTisanindependentresearchinstitutecreatedby
322
theFlemishgovernmenttomotivateICTinnovation
literacytomakeuseofdigital byintegratingdemanddrivenapproaches.Itplaces
opportunitiesisessentialtopromote greatemphasisonengaginginmultidisciplinary
innovation,throughmethodssuchasuser researchstudiesandisspeciallyfocusedonnew
participation.DifferentStateinitiatives media.
havebeenestablishedwiththeaimof (SeeAppendix1,BestCase35)
increasingthetakeupofinnovationwith
theuseofthedigitalmedia.Theexamples
ofSEEintheUKandIBBTinFlanders,Belgium,areillustrative(seeAppendix1,BestCases
34and35).
Theplaceofcustomersandemployeesasasourceofknowledgeforresearchand
innovationinitiativesisnotyetfullyexploitedascanbeseenfromFig.39.Increasing
digitalliteracycanimprovethetakeupofthepotentialthatthedigitalworldhastooffer.
Question:Howdoyouacquireknowledgeaboutresearchandinnovationinitiativesandprogrammes
relatedtoyourbusiness?
E-0",1F.2,1="
*+,-./+"CB48-D116"
*+,-./+"A.60-B1,6"
*+,-./+";1617,<+"73=">33-?7@-3"
*+,-./+"41,6-378"3109-,:"
*+,-./+"4,-51662-378"3109-,:"
*+,-./+"0+1"2301,310"
!" #!$!!!" %!$!!!" &!$!!!" '!$!!!" (!$!!!" )!$!!!"
Figure39:Waystoacquireknowledgeaboutresearchandinnovationinitiatives
3.5.2.3.Accesstonetworks
Asnotedearlier,networkscanserveasasourceofinnovationthroughtheexchangeof
bestpractices.Thecrossexchangeofknowledge,ideas,practicesbetweenvariousactors
suchasacademia,businessandCCIscanenhanceinnovationpotential.323
Moreover,networkscanserveasreliablesourceofinformation.Theneedtoaccess
knowledgeiscloselylinkedtoaccessingspeciPicinformationoutofthevastamountof
informationavailable.However,theamountofinformationavailableis
disproportionatetothetimeCCISMEshavetoacquirethisknowledge.Filteringthe
informationthroughnetworks,andespeciallythroughinformaleventssuchaspeersand
beersisessentialforCCISMEstoexchangevaluableknowledgeandinformation,324as
canbeseeninFig.39.above.(Networkingandcollaborationareexploredingreaterdetail
insection3.6below).
3.5.2.4.RecognisingCCISMEsasproducersofknowledge
CCISMEsarenotsufPicientlyappreciatedinproducingnewknowledgeandadapting
speciOicknowledgetransferprocesses.Ontheotherhand,giventheirinherentstability,
largercompaniesanduniversitiestendtohavewellestablishedlinkswithresearch
supportandfundingopportunitiesandarerecognisedasproducersofknowledge.Given
theirlargerpremises,professionalstaff,technicalresourcesandbreadthofskills
(includingdedicatedlegal,HRandPinancialexperts),theytendtosettheresearchagenda
whileCCISMEshavelittlesayandreceivelittlerecognitionoftheresearchoutcomesof
theirownprocesses.
However,formostCCISMEs,theroleof
universitiesissomewhatlimitedin TULI
providingknowledge,thoughgood TuliisFinnishnationwideprogramthatturns
exampleslikeTuliinFinlanddoexist(see researchresultsintobusinessinnovations.They
Appendix1,BestCase36).Ontheother fundriskyideasintoproductorservicesaswellas
hand,communitiesofpractice providesinformationonpatent,legalaspectsand
professionalassociationsandmore marketanalysesforCCIs.
informalgroupsareconsideredan (SeeAppendix1,BestCase36)
extremelyimportantsourceofnewideas.
Fosteringacultureofinnovation
throughnontechnologicaldriverssuchasentrepreneurshipdevelopmentrequiresmore
attentionbeingpaidtotheskillsgappresentbetweenlargeorganisationsandCCI
SMEs.MorerecognitionfortheroleoftheAppliedResearchsectorinhelpingtoassessCCI
SMEsoutputintermsofknowledgeproductionshouldbeconsidered.
ToenableSMEstolocatesustainablepathstogrowth,theymustbeabletotapintospeciPic
skillsmoreorlessastheyarerequired,orondemand.WhileseveralECprogrammeshave
soughttobetteraddresstheneedsofSMEsandincludeSMEsinresearchprogrammes,
theseSMEsarethemselvesoftenunawareoftheirappliedresearchneedsandare
unablecoherentlytoexpressthem.Amediatingintermediarylevelisclearlyrequired
tonegotiatebetweentheeducationalandtrainingperspectiveandtheeconomic
perspective.
Suchalayercouldbeprovidedonaregionalbasistosupportsmallscale,practice
orientedbusinessinnovation.Inthisrespect,theRegionalAttentionandActionfor
KnowledgeCirculation(RAAK)programmeintheNetherlandsofferssomepointers.RAAK
bringstogetherUniversitiesofAppliedScienceandSMEsonaregionalbasisandarecent
evaluationhasshownthatalargenumberofSMEsparticipateinRAAKarenot
automaticallyinvolvedininnovationprocesses.325ForSMEsintheCCIs,suchanapproach
wouldhavetheaddedadvantageofstrengtheningtheappliedresearchbackboneof
creativeclustersandinsodoingincreaseknowledgeexchange.
WithintheCCIs,innovativefunding
approaches,whichengagemoredirectly DigiDemo
withinnovative,bottomup,smallscale DigiDemoisaFinnishgovernmentalprojectthat
creativenetworks,arelikelytobecritical hasasthemaingoaltosupportthedevelopmentof
tofosteringfuturetransformational culturallyrelevantdigitalcreativecontent,which
researchintheCCIs.Combinedwith enablescompaniestoallocateresourcesto
trendsindigitalconvergence,these developmentwork.DigiDemosubsidieshavebeen
innovativefundingapproacheslooklikely importantforpreproductionphasedevelopment
projects,forwhichverylittleotherfundingis
tosupersedetraditionalapproaches(see
available.
3.6belowandDigiDemo,Appendix1,Best (SeeAppendix1,BestCase37)
Case37)).Producingknowledgeisnotthe
solecompetenceofacademiaorresearch
324CIKTN,(2010)ProspectforCIKTN,UnlockingKnowledgeTransfer:report1/3baselines,CIKTNBeaconProject#9,see
http://creativeindustriesktn.org/beacons,p.9.
325StichtingInnovatieAlliantie,(2008),RAAKBeleidsevaluatie20052008.Seehttp://www.innovatiealliantie.nl/?id=579
institutesbutcanalsobefoundwithinCCISMEsprocessesandnetworks.Recognisingthis
enablespolicymakerstoopenupbroadercollaborativeschemesfortheexchangeof
innovativepractices.
3.5.2.5.Investingininnovation
Fromtheexpertquestionnaire,publicprivatepartnershipwasthemostrelevantmeasures
tofosterinnovationprojects.Indeed,26%oftherespondentsagreedwiththisstatement
(seeFig.40.below).
PrivateinvestmentsininnovativeCCIs,suchasaventurecapitalorbusinessangel
frameworks,areregardedasbenePicialforfosteringCCIinnovation.Privateinvestments
canprovideacertainPlexibilityandallowforexperimentationthatisvitalforCCI
innovativeprocesses.
Question:Selectthethreemostimportantmeasuresforthepromotionofinnovation
?263/#
I15,3/#1--355#2<#5214G1/G,J1A<4#<B#,44<01A<4#
()*+,-#7/<-)/3@342#<B#/3531/-6#14G#,44<01A<4#
(/<@<A4D#@1/F32.+3G#,4,A1A035#8)53/.G3@14G#
7+1H</@5>#
(/<@<A<4#<B#573-,C-#23-64<+<DE#,4B/152/)-2)/3#
?734#-<@73AA<4#
()*+,-#.#(/,0123#(1/243/56,7#839:#;<,42#/3531/-6=>#
!"# $"# %!"# %$"# &!"# &$"# '!"#
Figure40:Mostimportantmeasuresforthepromotionofinnovation
(Source:Eurokleis2009,PanEuropeanexpertquestionnaire)
Intermsofpublicinitiatives,publicprocurementisregardedasanuntapped
mechanismstofosterinnovation326andmarketaccesstoCCIs,asdescribedinsection3.1
above
Innovationvouchersarealsoseenasanotherpublicorsemipublicfundingschemethat
couldfosterinnovation.NESTAandKEAarecurrentlyundertakinglongitudinalresearchto
quantifythesuccessofthiscurrentapproachusedintheirpilotprojectinManchester.327
Thesevouchersareusedtoencouragebusinessestohirecreativestotriggerinnovative
mechanismsintheirbusinessassoftinnovationmaynotyetbeavailableintheirvalue
chain.Thiscanhelpincreasetheinnovationcapacityofthenoncreativebusinessesand
thecrosssectoraldimension.328InnovationvoucherscanalsobeprovidedforCCIsasa
waytoincreasetheirinvestmentoninnovation.
3.5.3.Phasesofsupport
CCIsareconstantlyinnovatingandadaptingtheirproductsandservices,increasingthe
diversityoftheproductsandservicesavailable,aswellasadaptingtotheenvironment
andtodemandsoftheuser/consumers.However,intermsofbusinessstrategy,itemerged
fromtheonlinesurvey(seeFig.41.below)thatinnovationsupportisconsideredmost
326NationalEndowmentforScience,TechnologyandtheArts,(May2010b),ResearchReport:Opportunitiesforinnovation
throughlocalgovernmentprocurementAcasestudyofGreaterManchester,London:NESTA,p.16.
327InterviewNESTA
328InterviewwithEuropeanThinkTank
importantduringthebuildupphaseoftheCCIs.HavingacquiredaninitialPirstlevelof
stable,sustainableexistence,thenoveltyofthebeginningischangedintoadaptable
behaviour,basedonpracticalcriteriaandusability.Innovationsupportcanstrengthenthe
CCIstotransformdiscoveryintoexploitation.
Question:Inwhichphaseofthelifecycleisinnovationsupport
mostimportantforyourcompany?
)*+,-#'.#;97<:>96#
)*+,-#&.#=8+58>96#
)*+,-#(.#;97<:#098#
)*+,-#%.#)5-6+5714#8*-#45091:#
)*+,-#$.#/011-2314#
!"# $"# %!"# %$"# &!"# &$"# '!"# '$"# (!"#
Figure41:MostimportantphaseforinnovationsupportforCCISMEs
Accordingtosomerespondents,thisphasecorrespondstothemomentwhenCCISMEsare
facedwiththechoiceofgrowingand/orsustainingthemselvesatthesamelevel.
Innovatinginservices,productsorstrategicdevelopmentatthisstagecanenabletheCCI
toremaincompetitiveandnovel,aswellasenablingittodiscovernewopportunitiesfor
growthpotential.
3.5.4.Levelsofsupport
Intermsoflevelsofsupport,respondentsfromtheonlinesurveyindicatedaslight
preferenceforinnovationsupportcomingfromthenationallevel,withregionaland
Europeanlevelfollowingcloselybehind(seeFig.42.below).
Question:AtwhatlevelsdoyouseeaneedforfurtherstimulationininnovationforCCISMEs?
>9?.2#
<+8)-;869=#-./.-#
7.89+2)-#+25),6:)*+,;)::+86)*+,#-./.-#
4.56+,)-#-./.-#
012+3.),#-./.-#
()*+,)-#-./.-#
!"# $"# %!"# %$"# &!"# &$"# '!"# '$"#
Figure42:PreferredLevelsforinnovationinvestmentsforCCISMEs
Nationalservicesforinnovationsuchasinnovationvouchersoradvicecentresand
knowledgenetworks,canprovideimportantopportunitiesforothersectorstoengage
withCCIsorcanfosterCCIstoengageininnovation,increasingtheinnovativepotential
outputsofCCIs.
Regionalsupportcanrepresenttheintermediatelevel,linkingknowledgenetworks,CCI
SMEs,appliedresearchcentresandotherbusinesses.AsCCISMEsarenotnecessarily
awareoftheirownneedsintermsofappliedresearchorinnovation,theregionallevelcan
offersmallscaleandpracticeorientedclustersthatofferagreatopportunitytoexchange
knowledgeandatthesametimeincreaselearningprocessesforSMEs.CCISMEsmustbe
abletorequireinnovationsupportmoreorlessondemand.Asfarastheregionsare
concerned,structuralfundscanbeusedtofundinnovative,smallscalecreativenetworks
thatwillhavesigniPicantimpactoninnovativeoutputsfromCCIsandonothersectors.
Triangulationandincreasingthelevelofexchangebetweenresearchinstitutesacademic
andCCISMEsisthuscrucialforenablinggreatercollaborationandfosteringnewideas
andinnovativeprocesses.Intheonlinesurvey,itemergedthatnationalandregionallevels
wereseenasmostadequatelevelstostimulatepartnerships.(seeFig.43.below).
Question:Atwhichleveldoyouseeaneedinstimulatingpartnershipbetweenprivatebusiness,public
institutionsandCCISMEs?
?+24/301#
<=,/>+03#
;06/301#
9/.017.4):#1+8+1#
-+.)/,01#/,2034506/37
055/.406/3#1+8+1#
()*+,#
!"# $"# %!"# %$"# &!"# &$"# '!"#
Figure43:Preferredleveltostimulatepartnershipbetweenprivatebusiness,public
institutionsandCCISMEs
DespitethenumberofcurrentinnovationprogrammesattheEuropeanlevel,the
complexityoftheproceduresinvolvedmeanstheyarenotnecessarilyadequateforsmall
enterprisessuchasCCISMESthatmayhavelimitedresourcesintime,moneyand
knowledge.However,asnotedearlier,openingupthedePinitionofinnovationcanopenup
opportunitiesforinnovationfundingfortheCCIs.
3.6.Clustersandcollaboration
Inordertoincreasethecapacitytoexperiment,toinnovate,togrowassuccessfulCC
entrepreneurswiththerightskillsandsourcesofPinance,thereisaneedtofoster
conduciveenvironmentswhereCCIswillprosperwithacertainsecurity,freedomto
experimentandwithaccesstotherightinformationandknowledge.Inthisregard,
collaborationandnetworkingisakeyenablertostrengthenCCIs.
3.6.1.Collaborationandnetworks
Asseenintheprevioussection,networkingwasseenasanessentialaspectforCCIsto
accessandexchangebestpractices,exchangeknowledgeortohaveasupportingscheme
forcollectiveinitiatives:networksarethusseenasenablersofinnovation.Intheexpert
questionnaire,52%oftherespondentsnotedthatnetworkingopportunitiesweremost
relevantforsupportingthegrowthofCCISMEs.
Asnoted,CCISMEshavetocombinemultipletaskssuchasproducingcreativeoutput,
administrativetasksandgatheringimportantinformationinordertokeepupdatedandso
tostaycompetitive.Thisrequiresaconsiderableamountoftime.AsaNESTAstudy
demonstrated,smallPirmstendtobedisadvantagedintermsofsourcingknowledgeand
theyusenetworkstoovercomeimperfectionsinthemarketofknowledgeasthe
conOigurationofanetworkinaOirmatanearlystagewillinOluencethecompanys
performance. 329AccordingtoNESTA,47%oftheirstudysrespondentsfoundthatthis
329NESTA,(May2010c),op.cit.,p.8.
wassigniPicantlyhelpfulfortheirinnovationpotential.330
CollaborationandnetworksarethusessentialforCCISMEstosurvive.Inthestudys
onlinequestionnaire,itwasseenthathalfoftherespondentssometimescollaboratedwith
otherenterprisesinthesamesector,andsimilarresultswerefoundforcollaborationwith
othersectors(seeFig.44.andFig.45.below).
Question:Doesyourenterprisecooperatewithotherenterprisesinthesamesector?
;*1<8#=1*4#
7,9,:#
7*8#6,8#
23456.#
/0,1#
)*+,-+,.#
!"# $!"# %!"# &!"# '!"# (!"#
Figure44:Cooperationwithotherenterprisesinthesamesector
Question:Doesyourenterprisecooperatewithotherenterprisesindifferentsectors?
<+=2>=29#
:;2,#
670859#
1+.#52.#
12324#
*+,-.#/,+0#
!"# $!"# %!"# &!"# '!"# (!"# )!"#
Figure45:Cooperationwithenterprisesinadifferentsector
Thesenetworksaremostlyinformal(53%)althoughformalcollaborationisalso
important(40%)accordingtotheonlinesurvey.
3.6.1.1.Networktypes
ResearchhasindicatedthatclustersaresupportivetoCCIs.Forexample,theThird
AustrianReportonCreativeIndustrieshas,amongotherthings,examinedresearchon
networkformationsintheCCIs(Fig.46.).Theyfoundthatcreativeindustriesare
dynamic,yetnotenoughembeddedinnetworks.InAustria,60%ofthecreative
entrepreneurseitherhadnonetworks(singles),orhadshortrelationshipsthatwere
projectdriven,hierarchical,andhighlyinnovativewithahighriskofburnout(spot
markets).331
330NESTA,(May2010c),op.cit.,p.10.
331ArgeCreativwirtschaftAustria,(2010),op.cit.,p.33
Figure46:Typeofnetwork
(Source:NetworksintheCreativeIndustriesFAS2010retrievedfromCreativwirtschaft332
TheAustrianstudyrecommendsfourdifferentareaswhereonecouldbuildnetworksin
theCCIsinordertointegrateresourcesbest.Theseare:
withincreativeindustriesthemselvesbutalsoinothersubsectors
withinthevaluechainbutoutsidecreativeindustries
outsidethevaluechainandoutsidethecreativeindustries
internationallyviaexport
CollaborationandnetworkscanenableCCI
SMEstoenterapoolofinformationPlows Inserralves
thatallowthecompanytotakeadvantage InserralvesIncubatorisaregionalPortuguese
ofsuchinteraction.Notonlycan projectsupportingentrepreneurialinitiativesinthe
networkingallowagreaterexchangeof creativeindustries.Thisincubatoraimsatbridging
informationandiskeyinenabling thewellknowngapsbetweencreativepeopleand
innovativeprocesses,butworkingina artists,andthebusinessworld,byproviding
collaborativemanneralsoimplies adequateenvironmentandconditions.
exchangingpracticalinformationthat (SeeAppendix1,BestCase38)
mightservethecompany,especiallythe
startupthatneedsguidancein
administrative,Oinancialandinnovationmeasures.PlacingCCISMEstogethercan
enablethemtonotonlybenePitfromeachothersresources,butalsopooltheireffortsfor
workingspace,foraccountingservicesandotherrequiredsupportfor
entrepreneurship.333
Crosssectoralnetworks(betweenCCIsandoutsidetheCCIsector)canalsoenable
innovativepractices,aswasdiscussedearlierintheframeworkofopeninnovation
(section3.5.1),aswellprovidingvisibilityoftheCCIsectortoothersectors,asillustrated
intheexampleofInserralves(seeAppendix1,BestCase38).
3.6.1.2.Recreatinggrowththroughcollaborativeprocessesandusing
socialmedia
SocialmediacanbeusedeffectivelytoincreasecollaborationbetweenCCIs,nationallyand
internationally,withinsimilarsectorsandacrosssectorsasseenintheprevioussection.
TheuseoftheInternethasbeenincreasinglybenePicialintermsofconnectingpeopleand
engagingentrepreneurstoshowcasetheirproductsandPindaplacewhereinformationis
accurate,uptodateandreadilyavailable.Thedigitalshiftisresponsibleforemergent
innovativeprocessesintheCCIsandassuchhasfosteredtheemergenceofculturaland
creativeentrepreneursbygivingtheopportunitytoaccessvaluableinformationand
networkingopportunities.TheexampleofthesiteMashable334intheUKgivesconcrete
informationforCCIstocollectandexchangeinformationonsocialanddigitalmedia,giving
aboosttotheirentrepreneurialactivitiesatthesametime.
ThereisnowaconPlationofproducerandconsumer.Asseenintheprevioussection,the
sectorsareadaptingtheirprocessestointegratethesechanges.However,CCIs'concerns
arenotnecessarilyunderstoodbyacademiaandotherdisciplinesastheirprocesses,such
ascreativedesignprocesses,aresometimesnotexplicitandarebasedonapplied
methods.TherehasbeenablendingoftraditionalconcernsbetweenacademiaandCCIs
wherethelatterarenowalsoproducingknowledgeandexperience.Knowledgecanlead
toexperiencebutinthecaseofcreativeprocesses,experiencealsoleadstonew
knowledge.
CCIsarehighlydynamicinadaptingtothechangesduetothemultiplicityofknowledge
resources.Throughtheiradaptationtothischangingenvironment,CCIsmergethe
creationofexperiencewiththeactofproducingknowledge.Byadaptingtheirworking
processes,designingnewservicesandproductsinadaptationtotheenvironment,CCIs
developandproduceinstruments,suchascreativedesigntools,thatcanbeintuitively
usedbydesignerswhileatthesametimecanprovideforwellstructureddatafor
observers.Theuseofcollaborativeprocessesfoundinmultidisciplinaryenvironments
whereCCIs,academiaandprivatesectorsworkwithinadynamicframeworkwhere
productsandprocessescanbeconstantlyevaluatedandcanbenePitfromsupport
(researchaswellasPinancial)fromtheentitiespartoftheframework,isclearlytobe
encouraged.ThiscanenabletheCCIentrepreneurtobenePitfromtrainingandlearning
processesaspartoftheinteractionwiththeotherstakeholders,aswellasfromexternal
knowledgethatiscrucialforinnovation.335
Associatingventurecapitalstrategieswith
suchcollaborativeprocessescansecurea DutchGameGarden
returnoninvestmentforthefundersas DutchGameGardenhasthevisionofinspiring,
wellassecuringfundsfortheCCISMEs innovating,stimulatingandconnectingtheDutch
andentrepreneurs.Theideaofclusters gameIndustryintheNetherlandsand,ifpossible,
andincubatorsistoprovideemergent internationally.Theirapproachtonetworkingaims
locationstoallowforsuchconvergence atmaintainingformalrelationshipsininformalway
betweendifferentstakeholdersallowing andtheirmethodsarehighlycrosssectoral.
thecreativeprocessesaswellas
strengtheningentrepreneurial
opportunities.Agoodillustrationisthe
DutchgameGarden(seeAppendix1,BestCase39).
3.6.1.3.ClusteringStrategies
Incubatorsandclustersarewaystofacilitatethenetworkingandcollaborationofseveral
businesses.AsstatedintheGreenPaper,theinteractionbetweenprivatesector,CCI
SMEsandhighereducationalinstitutionsmustbeencouragedtoallowforcross
overlearningprocessesandexperimentation.336
Mostoftheintervieweesagreedthatcollaborativeclustersneedtobeencouragedasthey
enablepeoplewithdifferentsetsofskillstoworktogetherandcreatenewideas.
Regardinggrowth,CCISMEsneedtoexpandtheirnetworkswithintheirsectorandacross
sectors;especiallyifsuchnetworkscanbemorehelpfulthantrainingprogrammes.The
importanceoflearningprocessesinsuchcollaborativeenvironmentsisespecially
appealingforCCISMEs.
IntheECCommunicationTowardsWorldClassClustersintheEuropeanUnion:
ImplementingaBroadBasedinnovationStrategy,theplaceofSMEsinclusterswas
encouragedforthePlexibleandinnovativepotentialaswellasbeingbenePicialforthe
334Seehttp://mashable.com
335NESTA,(May2010),op.cit.,p.8.
internationalisationoftheSMEsandencouragingentrepreneurshipbyprovidingbetter
frameworkconditions.337
TheEUhasbeenplacingseriouseffortsinpromotingclustersinEuropeasawayto
supportinnovationandentrepreneurship.ThenewStateaidFrameworkforResearch,
DevelopmentandInnovationshouldhelpMemberStatestotargettheirexistingsupport
budgettopromoteinnovativeclusters,highlightingtheneedtoformafunctioninginternal
marketforenhancingcooperation.338 TheEuropeanINNOVAinitiativeundertheCIP
(CompetitionandInnovationProgramme)focusesontheuseofjointdevelopment
programmesthatlinkclustersbygivingthembusinesssupportservices.339
Europecouldalsostimulateclusterstoworktogetherandtoplaceconsiderablevisibility
ontheEuropeanClusterssothattheycangainaninternationalreputation.
TheforthcominginitiativeoftheEuropeanCreativeIndustriesAlliance(ECIA)promoted
bytheEuropeanCommissionandwhichwasannouncedintheAmsterdamDeclarationin
February2010,340goesalongthesamelineoffocusingontakingbetteradvantageof
theinnovativepotentialofthecreativeindustrieswithotherindustrieswithaview
tofacilitatingbroadercreativityandinnovation.
However,therewasanoverallagreementthatnetworksshouldoccurorganicallyand
fromthebottomupratherthanbeingimposedonthedifferentCCIsectors.Thisis
alsoinlinewiththeconceptof"smartspecialisation"asdevelopedintherecentEC
Communication"RegionalPolicycontributingtosmartgrowthinEurope2020".341 One
canartiPiciallycreateclustersviainvestingininfrastructureandtargetingaregion
geographically.Theproliferationofdesignatedcreativeplacesinrecentyearsistestimony
topolicypractitionersbeliefthatregardlessoflocalconditionstheycanalsomobilise
creativityandtransformtheireconomiesandcommunities(suchasCreativeToronto,
CreativeShefPield,CreativeNewYorkandCreateBerlin).342
AgoodexampleistheCITIESnetwork(see
Appendix1,BestCase40).ThisisanEU CITIES
ledinitiativeencouragingmunicipal CitiesisaPanEuropeannetworkthataimsto
networkstofosterpoliciesinsupportof improveregionalandlocalpoliciesthrough
CCIs.However,themodelinonecitymay interregionalcooperation,addressingthe
notworkelsewhere,andtheregional promotionandsupportofcreativeandcultural
effortstoreviveacitymaybe industries.ItprovidesnetworkthroughoutEurope
counteracted. andstimulatestheexchangeofpractice
Theadoptionofaclusterapproachaimsat
easingtheinteractionbetweenexisting
andpotentialenterprises,possibleculturalconsumptionandincreasesthepotentialof
triangulationasstatedintheGreenPaper.Anexampleofwheretheseelementshavebeen
successfulcanbeseeninplaceswherehighereducationispresentincreativebusiness
incubators.Highereducationcanbeseenintheformofuniversity,vocationaland
technicaltraininghubs,educationandtrainingfacilities,R&D,incubation/startup
companies,andconsumereducationintastesandtrends.Innovationwascloselyrelatedto
337EuropeanCommissionCommunication,(November2008),op.cit.,p.4.
338Ibid.,p.3.
339Seehttp://www.europeinnova.eu/web/guest;jsessionid=776648982F47989589C95603D715A0DF
340AmsterdamDeclaration,(March2010),seehttp://85.92.129.90/~workshop/
341ECCommunication"RegionalPolicycontributingtosmartgrowthinEurope2020",(October2010),COM(2010)553
342Foord,J.,(2008),op.cit.
R&Dhighereducationindustryhubs.The
caseoftheBadenWrttembergFilm CAPDIGITAL
CapDigitalisaFrenchbusinessclusterfordigital
AcademyinGermanyistellingofhowthe
contentandservicesintheParisianregion.Cap
locationofahigherinstitutioncanattract Digitalprovidesmemberswithessential
business(suchasmediabusiness,visual information,networks,andresources.Theseinclude
effects,digitalpostproductionbusinesses) ongoingcompetitiveintelligence,training,
aroundasectoralclusterandattractworld partnerships,fundingsolutions,andprojectreviews.
visibility.343Thestudentsthentakethe (SeeAppendix1,BestCase41)
opportunitytotakePirststepsin
supportiveenvironment.344 InFrance,Cap
DigitalprovidessuchanotherapproachforParis(seeAppendix1,BestCase41).
ThisapproachisnotyetvisibleinallofEurope.Althoughsomevirtuousemerging
economycountrieshavebeenabletosuccessfullyestablishcreativeincubators,
someothercountries'systemisstillbasedonhighlycentralisedsystemswhichmay
impedetheestablishmentofregionalclusters345.Theexpertquestionnairecitedthe
weakpublicOinancialsupport(85%)asthemainbarriersfortheemergenceofa
worldclassclusterinEurope,aswellasadifPicultaccesstoprivatefunding(77.8%).
SomecitedanexcessofofPicialregulationsandthelackofaninternationalshowcaseas
beingbarriersfortheemergenceofaglobalclusterinEurope.
Asasolutiontothis,mostrespondentscitedtheneedtocreateconditionsfor
growthofSMEsandfreelancers(70%)inordertopromotetheemergenceofworld
renownclustersinEuropeaswellascreateconditionsforselforganisinginnovation
(60%)andincreasethecohesionbetweenthedifferentlevelofauthoritiesintheEU
(47%).Collaborativeclustersoperatewellataprojectlevel,buttheyneedtobeableto
representthemselvesatapoliticallevelaswell,inthelongterm,inordertobeableto
voicetheirconcerns.
3.6.2.Phasesforsupportingnetworksandclusterstowardsentrepreneurship
Theuseofnetworksisoneoftheprerequisiteswhenstartingaculturalandcreative
entrepreneurialactivity.Creativeclustershavesocialaswellasenterpriseobjectives
goalsofinclusion,culturaldevelopment,aswellasenterprisegrowth.
Question:Wheredidyougetadviceandsupportwhenstartingyourcompanyintheculturaland
creativesector?
Item %
Throughpersonalnetworks 68.1
Throughmysectoralorganisa8on/associa8on 17.7
Attheregionallevel 17.2
Atthemunicipallevel 14.7
Atthena8onallevel 11.2
AttheEuropeanlevel 4.7
Table11:WaystogetadviceandsupportwhenstartingaCCIcompany
Theentrepreneurneedstobewellsurroundedandtheideaofanincubator,offering
accesstoknowledge,Oinanceandresearchaswellastothemarketfromthe
343InterviewwithEuropeanSectoralExpert,http://www.Pilmakademie.de
344KEA,(Feb2010a),op.cit.,p.11.
345InterviewwithNationalMinistryofCultureandEducationinlaggingbehindemergingeconomy
network,canbesupportivefromtheverybeginning.Targetingnetworkingactivities
inthebeginningoftheactivitycancontributetotheentrepreneurslearningprocess.As
mostoftheinformationandsupportaregivenwithinpersonalnetworks,promoting
speciPicadviceforculturalandcreativeentrepreneursandmatchingthemwithother
businessescancontributetostrengtheningtheirposition.Intheonlinequestionnaire,
suchtypesofadvicecentresspeciPictoCCIswereregardedashighlyneeded(85%)(see
Fig.47.below).
Question:DoyouseeaneedforthedevelopmentofadviceandsupportcentresspeciNicallyforthe
creativeandculturalindustries?
*5#59:4:54#
*56#4++,+,#76#788#
*56#0123#4++,+,#
-+./#0123#4++,+,#
*++,+,#
!"# $!"# %!"# &!"# '!"# (!"# )!"#
Figure47:NeedfordevelopmentofadviceandsupportcentrespeciOicforCCI(Source:
Eurokleis2010,onlinesurvey)
Intermsofclusters,onestrikingresultwasthattheyremainlargelyunknowntotheCCIs.
Indeed,20%donotknowoftheseinitiativeswhileaquarteroftheonlinesurvey
respondentsworkinacreativeclusterinitiative/incubator.47%oftherespondentssaw
aneedtodevelopsuchcollaborativebusinessenvironmentinitiatives(seeFig.48.).
Question:Doesyourenterpriseworkwithinacollaborativebusinessenvironmentsuchasacreative
clusterinitiativeoranincubator?
3)4#
(/#
(/1#2)1#
()*)+#,)-+.#/0#
!"# $"# %!"# %$"# &!"# &$"# '!"#
Figure48:Useofcollaborativebusinessenvironment(clusterorincubator)withinCCIs
AlthoughCCIentrepreneursneedanexistingnetworkofrelationtostartuptheir
company,itemergedfromthestudythatCCIssawcollaborativebusinessenvironment
suchasaclusterasmostusefulinthelaterstageofthelifecycle(seeFig.49).Fromthe
interviews,thephasesoftheentrepreneurialcyclethatneededmostattentionwereboth
thestartingupaswellasinthebuildupandbuildoutphaseswheretheCCIenterpriseis
startingtopickupclientsandwheretheclustercanserveasafacilitationtoaccessa
broadermarket.
Question:Inwhichphaseofthelifecycleisthiscollaborative
businessenvironmentmostuseful?
)*+,-#'.#=61>7<60#
)*+,-#(.#=61>7#564#
)*+,-#&.#;4+/4<60#
)*+,-#$.#8522-9:23#
)*+,-#%.#)/-0+/123#4*-#3/5627#
!"# $"# %!"#%$"#&!"#&$"#'!"#'$"#(!"#
Figure49:Preferredphaseforcollaborativebusinessenvironment
Asnoted,clustersandnetworkscanfosterpoolingofresourcesofthedifferentcompanies
andcanalsosupportsmallsizedCCISMEstobenePitfromtheseresourcesthatcouldnot
necessarilyhavebeenavailableinanoncollaborativeenvironment.Inthiscase,
clusteringCCISMEswithotherlargerorganisationscanserveasawinwinsolution,
forCCISMEScanactasrisktakerswhilealsobenePitingfromthesupportoflarger
organisationstoenterthemarket.TheECCommunicationTowardsWorldClassClusters
intheEuropeanUnion:ImplementingaBroadBasedinnovationStrategydescribedthe
recentprogressmadeinthisareaastheEUrecognisedtheimportanceofSMEsand
encouragedthefacilitationofSMEsincrosssectoralclusters.346 Theuseofcrosssectoral
platformsbetweenCCIsandothersectorsoftheeconomywaslargelysupportedbythe
onlinesurveysrespondents(seeFig.50.below).
Question:Doyouseetheneedforincreasedopportunitiesfor
crosssectoralSMEcooperation?
:./0-1#
9/45#-./0-1#
*+#+6787+8#
*+,#3/45#-./0-1#
*+,#-./0-1#2,#211#
!"# $!"# %!"# &!"# '!"# (!"# )!"#
Figure50:NeedforcrosssectoralSMEcooperation
3.6.3.Levelsofsupport
Differentlevelsofsupportexistintermsofdevelopingaconduciveenvironmentaswellas
advancingpersonalandprofessionalnetworksthatcanboosttheentrepreneurialactivity.
346ECCommunication,(November2008),TowardsWorldClassClustersintheEuropeanUnion:ImplementingaBroad
BasedinnovationStrategy,SEC(2008)2637
SeveralcitieshaveadvertisedthemselvesascreativeinordertoattractmoreCCIs.They
maketheenvironmentmoreattractivetootheremployersandcanattractsubstantial
tourismaswellasnewculturalinitiatives.347
However,intermsofprovidingthemostappropriatetypeofsupportforcollaborative
processes,mostoftherespondentsintheonlinesurveyhighlightedtheregional
levelaswellastheEuropeanandnationalonesasmostappropriate(seeFig.51.
below).
Question:Atwhatlevelwouldyouseethedevelopmentof
collaborativebusinessenvironmentinitiativehappening?
?+24/301#
<=,/>+03#
;06/301#
9/.017.4):#1+8+1#
-+.)/,01#/,2034506/37
055/.406/3#1+8+1#
()*+,#
!"# $"# %!"# %$"# &!"# &$"# '!"#
Figure51:Preferredlevelfordevelopingcollaborativebusinessenvironmentinitiatives
Theregionallevelcanactasanintermediarybetweenthenationalandthe
EuropeanlevelfosteringmatchingCCIswithotherbusinessesaswellasfacilitating
clusteringataregionallevel.
CertainrespondentshighlightedtheroleofclusterswithintheregionasasufPicientwayto
supportCCIs.Thisemphasisontheroleoftheregionswasalsosupportedbythe
Amsterdamdeclarationthatinvitedtheregionstopromoteafavourableecosystemfor
theCCISMEs.348
Similarly,theregionisalsoseenasatooltoreachouttootherregionsinordertoincrease
crossregionalinitiativesoflinkingupnetworks.84%oftheonlinesurveysrespondents
agreedforanincreaseincrossregionalcooperationasawaytosupportthegrowthofCCI
SMEs(seeFig.52).
Question:Doyouseetheneedforincreasedopportunitiesforcrossregionalcooperationtohelpthe
growthofCCISMEs?
348#.+,-./#:8#://#
348#9,12#.+,-./#
34#4567647#
0,12#.+,-./#
*+,-./#
!"# $!"# %!"# &!"# '!"# (!"# )!"#
347InterviewconductedwithaMinistryofCulturefromaKnowledgeEconomy
348AmsterdamDeclaration,(2010),seehttp://85.92.129.90/~workshop/
Figure52:Needforanincreaseincrossregionalcooperation
toimprovegrowthofCCISMEs
TheStructuralFundsareinthiswayasourceoffundingthatcanbespeciPicallyusedto
supportCCIsthroughthesettingupofnetworksorcollaborativeplatforms.However,the
generalframeworkcanbeinitiatedbythenationalgovernmentorattheEuropeanlevel.
ThenationalsupportcantakeadvantageofitsmoredistantpositioningfromCCIsto
steerandcoordinatedifferentbusinessclusters.Theexpertquestionnairesrevealedthat
70%oftherespondentscitedtheneedtocreateconditionsforthegrowthofSMEs
andfreelancersinordertopromotetheemergenceofworldclassclustersandinso
doing,toincreasetheconditionsforselforganisinginnovationandtopromote
entrepreneurship.Asthenationallevelisusuallycompetentintermsofregulatory
measures,thenationallevelcanactastheindirectsupporttoclusterdevelopment.
SupportingnetworksandclustersattheEUlevelwasalsounderlined.Theimportanceof
aEUcollaborativelevelhasalreadybeenmentioned(seesection3.6.1importanceof
clustersandcollaboration).Thewishoftherespondentsintheinterviewswasclearly
statingthattheEuropeanlevelcouldhelpasageneralfacilitatorandasanoveralllinkto
allregionalclusters/networks,enablingaEuropeanintegrationoftheCCsupportalsoin
viewofstrengtheningtheEuropeancreativeeconomy.
Theimportanceofbottomupapproaches,basedonamorelocallevel,isnotundermined
whenunderliningtheaddedusefulnessofaEuropeanvisionbutrathercomplementsit.
TheEuropeanlevelcanfacilitatedialogueandopennetworkstobiggermarketsoflocal
initiatives.Inthisregard,theEuropeanvisionactsasafacilitatorforCCIandCCclusterto
grow.
Intermsofsectoralsupport,therearemanywhoPindasectoralapproachusefulinterms
oftailormadesupportsystemsandinformationwhichcanbedifferentforthoseworking
forexampleintheartsversusmorecommercialsectorssuchasPilmordesign.
3.7.Concludingremarks
InthischapterthesixdeterminantsofentrepreneurshipspeciPictoCCIsandwhich
encompasstheoverallsurroundingenvironmentfortheentrepreneurialactivityofthe
culturalandcreativeindustrieswereconsidered.Theseissueswereexaminedfromthe
perspectiveoftheentrepreneuriallifecycletoassessthebestwaystoenablemore
conduciveenvironmentsthatcanprovideasustainableexistenceorrealisticpathto
growthforCCIenterprises,especiallySMEs.
Morethanjustseparateissues,thesesixdeterminantsaretobeseeninsystemsthatare
inherenttonationalcontextsandwhichalreadyhavespeciPicculturaltraditionsthatwill
shapethedirectionofthesupport,acknowledgingthevalueofCCIsandsupportingtheir
needs.
Moreover,theissueshavetobeconsideredintheirtotality;actiononasinglepointwill
advancetheneedsofCCIsbuttheoverallconduciveenvironmentwillonlybecreated
throughtheintegrationofamultilayeredapproach.Thefollowingchapterofferssome
recommendationsonhowthismightbeachieved.
ChapterFour:Recommendations
4.1.Transversalrecommendations
TherecentEurope2020StrategyreportfromtheEuropeanCommissionlaiddownthe
prioritiesforenablingacompetitiveandinnovativeEuropeandplacedconsiderable
importanceontheneedtouseEuropescreativityandinnovationtotackletomorrows
challenges.Thecontributionofculturalandcreativeindustries(CCIs)tothisStrategyhas
beenreiteratedbytheGreenPaper"UnlockingthepotentialofCCIs"andbynumerous
studies.349ThePlagshipinitiativesannouncedinthisStrategy,especiallythoseconcerning
theInnovationUnion,aDigitalAgendaandanIndustrialPolicyfortheGlobalisationEra
andSMEs,areofparticularrelevanceforCCIs.TherecentCommunication"RegionalPolicy
contributingtosmartgrowth"highlightsthepotentialofCCIsforregionalandlocal
development.TheeffortsthathavebeenunderwayinindividualMemberStatesalso
illustratetheseattemptstocatalysesupportforCCIs.
CulturalandcreativeentrepreneursarecentraltoEuropescreativepotentialfordriving
innovativeprocessesintoreality.Culturebasedcreativityhasthepotentialtohave
positivecrossovereffectsinthewidereconomyandsocietyingeneral.Thiscreativitycan
actasadriverofnontechnologicalinnovationiftherightenablersareputinplaceto
developaconduciveenvironmentfortheentrepreneurialactivityoftheCCIs.Creating
suitableenvironmentsinwhichindividualscanmakeuseoftheircreativepotentialby
supportingtheirentrepreneurialskillscanfosternontechnologicalinnovation,aswellas
enrichEuropeanculturaldiversity.RecognisingtheentrepreneurialdimensionofCCIsasa
driverofnontechnologicalinnovationandrecognisingthevalueoftheirintangibleassets
arePirststepstoshapethisenvironment.
Severalgeneralrecommendationscanbedrawn:
1.InorderbettertotargettherequirementsofCCIs,moredataandstatisticsare
neededfortheculturalandcreativeindustries,andespeciallyforeach
individualsector.Basedonthecurrentmultipledatagatheringprocessesonthe
CCIs,thiscouldbecoordinatedattheEuropeanlevelanddataconcerningCCIs
centralisedanddisseminatedatdifferentpolicylevelstohelpconstructa
matrixofpolicyoptionsthatcanbeconsideredinlinewiththeprioritiesof
policymakersinMemberStates.
2.AsseenfromcountriesthathaveadvancedsupportmechanismsforCCIsand
deliverstronginnovationresults,thecoordinationofseveralMinistriesforthe
policyformulationofCCIsupportmechanismscanservetotargettheefforts
andenablegreatercoherence.AstheCCIsarecrossdisciplinaryandaddressboth
culturalandeconomicfactors,thecollaborationbetweenMinistries,especially
theMinistryofCultureandtheMinistryofEconomicAffairs,shouldbe
encouragedandcoordinationandcoherenceofmultilayeredpoliciesshould
bereinforcedtoachieveefOicientsupportingschemes.Similarly,support
providedbyPinancial(andnonPinancial)intermediariesshouldbebetterco
ordinatedforanincreasedefPiciencyinsupportprovision.
CCISMEshavedifferentneedsatdifferenttimesandoperateinacontextthatrequires
severallevelsofdecisionmaking.Supportingtheseenterprisesrequiresamultilayered
approachwhereinnovationsupportcaninturnbecomplementedwithPinancialand
marketsupport.GreaterrecognitionofthecharacteristicsofCCIsindifferentpoliciesand
atdifferentlevelscansupportsuchmultilayeredapproaches.Thisrequirespolicymakers
toconsiderthedifferentstagesoftheentrepreneuriallifecycleandtheassociatedneedsof
theCCIs,particularlymicroSMEs.AsthesemicroSMEshavefewresourcestolook
throughmultiplesourcesofinformation,theyneedtobeabletohavespeciPicsupport
349Seeinparticular,KEA(2006),TheEconomyofCultureinEurope,KEAEuropeanAffairs,BrusselsandKEA(2009),KEA,
(2009),TheImpactofCultureonCreativity,KEAEuropeanAffairs,Brussels;UKTechnologyStrategyBoard,(2009),Driving
Innovation:CreativeIndustriesTechnologyStrategy20092012,London:UKTechnologyStrategy
whenrequired.Supportondemandshouldthereforebepreferredtogeneral
approaches.
3.Stimulationpoliciesareneeded,atregional,nationalandEuropeanlevels,inorder
fullytoaddressthespeciPicrequirementsoftheCCIs.Alllevelsofpolicy
governanceshouldplayaroleinacknowledgingthecontributionofCCIstothe
neweconomyandinensuringalevelplayingPieldfortheCCIs.Ingeneral:
3a)NationalbodiesshapetheregulatoryframeworkinwhichCCIswork.
TaxationremainsoneofthemostimportantregulatoryfactorsforCCIs
especiallymicroSMEstoencouragetheirentryintothemarket.Tax
exemptionsforCCIproductsorservicescouldencouragetheproduction
anddistributionofCCIproductsandservicesandstimulategrowthacross
manysectors.Similarly,themobilityofartistscouldbeencouragedby
facilitatingtheregulatoryproceduresforcrossborderinitiatives.
Agreementonissuessuchasdoubletaxationbetweencountriescanhelp
culturalandcreativeentrepreneursandpromotetheirmobility.
3b)RegionsareclosertoCCIneedsandcanrespondtotheirneedsrather
quickly.AsCCIsprefertohavecloseinteractionandsupportondemand,
regionscouldactasintermediariesbetweentheCCIsandotherpolicy
levelssuchasthenationalortheEuropean.Regionscanencourage
regionalclustersandsectoralnetworkstobeplatformsofinnovation,
encouragingCCISMEstobeintegratedwithinclusters.Regionscanuse
existingStructuralFundstotargetCCIsfunding.
3c)TheEUshouldencourageexistingandfutureframeworkprogrammesfor
ResearchandTechnologicalDevelopment(FP7,FP8)ortheCompetitiveness
andInnovationProgramme(CIP),aswellastheCohesionPolicy,tobemore
targetedtowardsCCIsinteraliabyincludingnontechnological
innovationprojectsandincorporatingCCISMES(andnotonlythosein
theICTsector).Itshouldalsoincreasethevisibilityofongoingactivitiesat
regionalandnationallevelsandencouragegreaternetworking.
InordertosupporttheCCIsmoreconcretely,severalrecommendationscanbemadein
viewofthethematicoutcomesfromthestudy,suchassupportingCCIsbylocatingPinance,
accessingthemarket,supportingentrepreneurshiptrainingintheCCIs,supportingthe
innovativepotentialofCCIsandenablingaconduciveenvironmentforCCIstoPlourish.
4.2.AccessingOinance
LackofPinanceisarecurrentissueforCCIsandespeciallyformicroSMEs.Provisionof
Pinanceshouldrespondtothedifferentphasesoftheentrepreneuriallifecycle
accordingtotheneedsoftheCCISMEs,providingforPinancialpossibilitiesinthestart
upphase;providingrisk(debt)Pinancinginordertotriggerexperimentationand
innovation;offeringgrowthPinancethroughbankloanguaranteesinordertopromote
corporatefundingratherthanfundingonaprojectbasis;andprovidingventurecapital
fundstoenablegrowth.Inthisrespect,existingprogrammescanbetargetedatCCIs.The
useofregionstochannelthefundsandtheuseofPinancialintermediariesthatareaware
ofthecharacteristicsofCCISMEsareessentialissuesintargetingsupportfortheCCIs.
AttheEuropeanlevel:
4.Thelargefundingschemesforsupportinginnovationaretoocomplex(too
bureaucratic,toocostlyandtimeconsuming)forCCIs.AttheEUlevel,thefunding
schemesshouldbemadelesscomplexsoastoallowCCISMEstoapplymoreeasily.
Existingprogrammes(FP7,CIP)shouldbestronglytargetedatCCISMEs.
5.TheMEDIAprogrammegivesspeciPicsupporttoaparticularsectorinthe
differentstagesofthevaluechain.Similarsupportopportunitiesshouldbe
developedforothersectorsoftheCCIsatcrucialpointsintheirrespective
valuechains.
6.AttheEUlevel,theEIBandEIFfunds,thatalsopromoteinnovation,couldbe
usedtofundCCIsdebtOinancingorventurecapitalfordevelopmentofnon
technologicalinnovation.Theycouldalsobacknationalorregionalinitiatives
aimedatdevelopingguaranteesschemes.Inthisregard,dueattentionshouldbe
paidtotheexampleoftheguaranteefundfortheaudiovisualsectorsoontobe
introducedintheMEDIAprogrammefordigitalisationofcinema.
7.IncoordinationwiththeMemberStates,itisrecommendedthattheEU
considerthecreationorstrengtheningoflowerVATrateandothertaxincentives
forbothonlineandofflinelabourintensivecreativeservicesandproducts.
Atthenationallevel:
8.Theregulatoryframeworkisimportantinboostingtheentrepreneurialactivityof
CCIs.GrantingOiscalreductionsorincentivestoinvestorsintheCCIscan
enablegreaterinvestment.Taxshelterssuchastheonesfoundintheaudiovisual
sectorinsomecountriesorinthevideogameindustryinothers,cansubstantially
helpunlockfundsandinvestmentforthesector.
9.NationalStatesareencouragedtoconsidertaxsheltermeasuresforother
sectorsandsupportthedevelopmentofVentureCapitalFunds(suchaspublic
venturecapitalfunds),theinvestmentofBusinessAngelsinCCIsandmicro
creditstofundCCIs.Similarly,speciPicmeasuressuchasguaranteedbankloans
couldstimulatePinancialsupportstructures.
Attheregionallevel:
10.TheinvestmentoftheEuropeanStructuralFundsinCCIsshouldbe
encouraged,withspecialsupporttoregionalnetworkinginitiativesandplatforms
forCCIs.
4.3.Accessingthemarket
Themarketsforculturalandcreativeproductsandservicesareoftencharacterisedby
unpredictabledemandconditions.Entrepreneurshavetotakeheterogeneous,changing
tastesintoaccount.Inaddition,creativeproductsservefunctionsthatoftenescape
objective,quantitativemeasurement.
AttheEuropeanlevel:
11.TheEUshouldpromotetheopportunitiesforCCIstoaccessthemarketbyusing
publicprocurementmeasuresthatholduntappedpotentialtosupport
innovation.Publicprocurementrequestscouldbetargetedatinnovativenon
technologicalprocesses,productsandservicesforwhichCCIs,andespecially
microSMES,couldapply.
12.TheLeadMarketInitiative(LMI)launchedbytheEUin2008wassetto
identifynewneedsandnewmarketsforinnovativeproductsorservices.Thiscan
helptargetfuturedemandandthusofferanexperimentalplayingPieldfor
innovators.Inordertotargetsocietalneeds,theEUshouldconsideropeningup
LMItonontechnologicalinnovationandinnovationinservicestotapinto
CCIsinnovativepotential.
13.AccessingthemarketremainsdifPicultforCCISMEs,especiallywhereafew
largecompaniesdominatethemarket.TheEUshouldconsideradapting
competitionpolicytoCCIscharacteristicsinordertoavoidexcessivemarket
concentration.Thiscouldensurethatallculturalplayershaveaminimumaccess
toalldistributionchannels,includingontheonlinemarket,inordertooffer
realculturaldiversityandchoiceforconsumers.
Atthenationallevel:
14.NationalpolicymakersandOinancialintermediariesshouldbetrainedto
understandtheinnovativeentrepreneurialpotentialoftheCCIsandshouldbe
encouragedtousepublicprocurementforCCIstopromotenontechnological
innovation.
15.TheNationalandRegionallevelsshouldpromoteCCIsvisibilityatanational
andinternationallevelinordertoencouragetheiraccesstonewgeographical
markets.
Attheregionallevel:
16.CCIsandespeciallymicroSMEsoftendonothavesufOicientinformationon
marketopportunitiesintheirregionandmorespeciPicallyacrossregionsandin
crossbordermarkets.Regionsshouldpromotethedisseminationof
informationaboutcrosssectoralandcrossbordermarketopportunitiesto
CCIsthrougharegionalnetwork.Regionscanactasplatformfortheexchangeof
bestpracticesonbothtechnologicalandnontechnologicalissues.
17.Regionscouldencourageaminimumaccesstothemarketbysettingup
platformswhereCCISMEscouldshowcasetheirproducts/servicesandassuch
promotethevisibilityoftheCCIsintheirregion.
4.4.Bridgingtheentrepreneurialskillsgap
ThereisagenerallackofentrepreneurialskillswithinallsectorsoftheCCIs.Despitethe
importanceofthetopic,thereisstillalackofintegrationofentrepreneurshipeducationin
curriculaineducation,andparticularlyinartseducation.
AttheEuropeanlevel:
18.Withabudgetof7billionfor20072013,theLifeLongLearning
ProgrammeistheEUsmainfundingprogrammeforeducationandtraining
projectsandactivities.Itissuggestedthattheprogrammeprioritisethe
developmentofcreativityandsupportforentrepreneurshiptraining
includinginthecreativesector.Specialfocusonincreasingtrainingindigital
skillscouldenableCCIstokeepupdatedaboutthelatestchangesin
technology,therebyimprovingthepotentialforinnovation.Thereshouldalsobean
increasedefforttopromotesoftskillssuchascreativeorinterculturalskills
throughstrongerpartnershipsbetweeneducationinstitutionsandCCIs.
19.TheEUcouldhelptobetterunderstandandmapthecurrentandfuture
skillsneedsofCCIsthroughthevariousinitiativescarriedoutinthisregardat
nationallevel.
Atthenationallevel:
20.Students'skillsandqualiPicationsoftendonotmatchtheneedsoftheCCIs.In
ordertomatchtheeducationalsystemwiththedemandsofindustry,programmesof
apprenticeshipforCCIsshouldbepromotedatthenationallevel.EuropeanSocial
FundscouldbeusedtohelpstrengthenemploymentinCCIsby,forexample,
channellingthefundsintocreativeapprenticeshipsinordertoeasethetransition
fromeducationtoemploymentbypromotingonthejoblearning.ICTskills
trainingshouldbeincludedorstrengthenedinthecurriculumofarts
institutionsinordertofostertheinnovativepotentialofCCIsandhelpthemfurther
exploittheopportunitiesofferedbythedigitalshift.
21.Thelinkbetweeneducation,publicinstitutionsandprivatebusinessis
neededtobridgethegapsbetweenthethreesoastosupportarealtriangulation
andcommunicationbetweentheneedsandtheopportunitiesfortheCCIs.Findings
showedthatmostoftheCCISMEsacquireentrepreneurialskillsthroughnetworks
andinformal'onthego'experiences.Itisrecommendedthatthenationallevel
encouragecrossoversandmultidisciplinaryprojectsbetweenbusiness
peopleandcreativepeoplethrougheducationinstitutionsandcross
disciplinaryclusters.
Attheregionallevel:
22.UniversitiesofAppliedScience(UAS)couldplayavaluableroleinlinking
regionalactivitiestootherEuropeanregionsandnetworksofCCIs.CCIsare
alsoproducersofknowledgethroughappliedresearchprocesses.Linking
collaborativeworkbetweenknowledgeinstitutionsandlocalSMEscouldactasa
complementarycatalysttoinnovativecapacitiesintheregion.FurtherlinkingCCI
entitiesandappliedresearchinstitutionswouldalsocontributetotheprofessional
skillsupgradingofSMEsintheregionregardingprofessionallyoriented
innovation,entrepreneurship,creativityandresearchcompetencies.
23.Matchingcreativeentrepreneursandbusinessindividualscanfacilitate
entrepreneurshipandtheprofessionalupgradingofskillsthroughmutual
learning.Thesecoachingsystemscanenablebetterintegrationofentrepreneurial
skillswithinCCIs.Itisrecommendedthatpeertopeernetworksbeencouraged
attheregionalleveltoincreasepeerlearningandcrossdisciplinarysupport
networks.
4.5.Developingentrepreneurshipasnontechnologicaldriverofinnovation
InordertostimulatetheinnovationpotentialofCCIs,anddevelopentrepreneurshipasa
nontechnologicaldriverofinnovation,thefollowingspeciPicrecommendationsaremade.
AttheEuropeanlevel:
24.ConsiderationshouldbegiventothewideningofthedeOinitionof
innovationintheupcomingreviewofinnovationandresearchpolicyto
encompassallformsofinnovation,bothfromthepublicandprivatesector,including
processesofsoftandhiddeninnovationandrecogniseR&Dinsomeofthe
processestypicaloftheCCIs,suchasdesignprocessesortalentscouting.This
shouldfostermoremultidisciplinaryandmultisectoralinitiativesforCCIs.
25.TheEUshouldimproveSMEsaccesstocopyrightinstrumentsandfacilitate
easieruseofIPinstrumentsforSMEs.Thedigitalenvironmenthasbroughtsome
challengesintermsofIPRinthedigitalworld.Creativesolutionsthatrewardthe
rightsholdersbutensureOlexibilityandeasierapplicabilityshouldbesought
attheEuropeanlevel.
Atthenationallevel:
26.Theuseofalternativeoptionssuchasinnovationvoucherscouldbepromoted
byregionalandnationalgovernments.Innovationvouchersshouldencourage
otherbusinesstocollaboratewithculturalandcreativeentrepreneurs.Theycould
alsobeaimedatfosteringinnovationwithinCCIs.
Attheregionallevel:
27.Toencourageregionstoincreasecrosscollaborationandknowledge
transferbetweentheCCIs,researchinstitutesandprivatesectorinorderto
researchsolutionsthatincreaseinnovationinCCIsbutalsotopositivelyinPluence
thewidereconomyandsociety.
28.ToencourageregionstoworkwithintermediariesinordertolinkCCIs,in
particularCCISMEs,withotherbusinessessoastofosterinnovativeplatformsand
processestoemerge.SupportingclusterslinkingbothCCIsandotherbusinesses
couldsupportinnovativepracticesaswellastheintegrationofCCISME.
4.6.Supportinguseofdigitalisation
CCIsfacenewopportunitiesaswellaschallengeswiththedigitalshiftandtheyneedto
beadequatelysupportedtotakeadvantageofthem.InordertoenabletheCCIstotakefull
advantage,thefollowingrecommendationsaremade:
AttheEuropeanlevel:
29.Unlockingspecialfundstopromotetheuseofdigitaltechnologiesinthe
CCIs,suchasundertakenthroughtheMEDIAprogrammefortheaudiovisualsector.
Atthenationallevel:
30.SpecialfundsshouldbeallocatedtoCCIs,especiallySMEs,toensuregreater
medialiteracyandtakeupofdigitaltoolswithintheirenterprises.Member
Statesindividualfundinginitiativesaimedatpromotingtheuseofdigital
technologiesshouldbepromoted.
31.SupportingCCIsandinparticularSMEstoadapttothedigitalshiftbyproposing
newonlineservicespromotingauthorsrightsandneighbouringrights.
Oneofthekeyoutcomesofthisstudyistherealisationthatculturalandcreative
entrepreneursrelyheavilyontheuseofnetworkswithinhighlyinnovativeandrisk
orientedenvironments.However,thelackofaccesstoPinance,tomarketandthelackof
knowledgeofspeciPicskillscanhindertheirdevelopment,makingitdifPicultforcultural
andcreativeentrepreneurstofullyembracetheopportunitiesofferedbythedigitalshift
andforcingthemintocomplexprocedureswhentheyarealreadyunderpressuredueto
theirsmallsize.
ThisshapestheneedforCCISMEstolookforcollaborativesolutionsintermsof
organisation,businesssupportorproduction.Developinganentrepreneurialactivityin
thiscontextrequiresacertaindegreeofPlexibility,riskorientedsolutionsandcross
disciplinaryskillsthatcanalsoprovideanontechnologicalinnovationdriverfortherest
oftheeconomy.InordertosupporttheCCIs,collaborationandnetworksneedtobe
supported.
Theserecommendationsshouldbetakenintoconsiderationinthecontextofthefollowup
oftheGreenPaperUnlockingthepotentialofCCIsinordertoimplementsomeofthese
recommendationswhendevelopingthefuturepolicyinsupportoftheculturaland
creativesectorinEurope.
Appendix
Thefollowingappendixareavailableintwoseparatedocuments:
Appendix1
BestCases
Appendix2
1. Prepilotinterviewschedule
2. OnlineExpertQuestionnaire
3. ExpertInterview:Listofinterviewees
4. ExpertInterviewquestionschedule
5. OnlineSurveyquestionnaire
6. WorkshopIListofParticipants
7. WorkshopIIListofParticipants
8. ProcurementTypeandInnovationEffect
9. GraphofSectorClusters
10. NACEcodes
11. RegionalConcentrationofCCIbysector
Aboutus
UtrechtSchooloftheArts
UtrechtSchooloftheArts(HKU)wasestablishedin1987,followingamergerbetweenthe
AcademievoorFinearten,theUtrechtConservatory,theAcademievoorExpressiedoor
WoordenGebaar,theNederlandsKerkinstituutandtheNederlandseBeiaardschool.In
1989,anewfacultywasaddedtotheHKU,theFacultyofArt,Media&Technology.In2009,
HKUhadaround3500studentsandoffersahighlyvariedprogrammeofpretraining,
BachelorandMastersprogrammesandpostacademicprogrammesandcoursesatoneof
thelargesttraininginstitutesforcultureandtheartsintheNetherlandsandEurope.HKU
offerseducationalprogrammesintheareaofautonomousnearts,design,music,theatre,
artandtechnology,artandeconomics,andartandeducation.Forthisstudy,twofaculties
collaboratedintheresearch:
FacultyofArtandEconomics:preparesstudentsformanagementpositionsin
thecreativeindustry
FacultyofArt,Media&Technology:trainsstudentstodesignanddevelop
virtualproducts
TheHKUhasastrongpositionwithinEuropewhenitcomestotrainingyoung
professionalsinthecreativeindustry,asseeninthehighrankinginBusinessWeekly(Feb
2007)inalistoftheworldsmostinuentialdesignschools.
Contact:PierreMersch:pierre.mersch@kmt.hku.nl
K2MLtd:fromknowledgetomarket
K2Misaprivateconsultingrmwithhighmarketandbusinessresearchorientationthat
focusesondevelopingandusingmethodsofknowledgeintegrationandknowledge
transfer.Itsinterdisciplinaryteamofhighlyspecialisedresearchersandbusinessanalysts
supportsorganisationstodevelopinnovationstrategies,validatemarketsandassestheir
economicfeasibility,performbenchmarkingandderivebestpracticeswiththeaimto
increasethelevelofeffectivenessofclientsvaluecreatingprocesses.Theprimaryeldsof
activityareintheareasofinnovationmanagementanddigitalcontentexploitation.
Contact:GeorgeIoannidis:gi@k2mark.com
EurokleisS.r.l.
EurokleisisaSMEspecializedineconomic,nancialandstrategicconsultancyandstudies
withthemainfocusonInformation&CommunicationTechnologies.Eurokleispartners
combinetheiracademicbackgroundwithnumerousyearsofexperienceinvarioussectors
andofferintegratedserviceswhichcoverallthedifferentaspectsinvolved.Moreover,
Eurokleispartnershaveworkedforanumberofinternationalcompanies,localauthorities
andprivateorganisationsaswellaswiththeEuropeanCommission.
ContactFrancescoBellini:Francesco.Bellini@eurokleis.com
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The Entrepreneurial Dimension of The Cultural and Creative Industries

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The Entrepreneurial Dimension of The Cultural and Creative Industries

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TheEntrepreneurialDimension

UK FRANCE GERMANY ITALY SPAIN

Creative GDP (billion ) 175 142 162 93 62

Creative employment 2.7 1.7 2.7 1.4 1.2

Source TERA Consultants analysis

Sector 13 49 1049 50249 250+

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TypeofCluster Sectors MainCharacteristics

Creativeservice Design,architecture,new Directinteractionwithusers

Creativecontent TvandRadio,Fashion,Games, ProducersofIPproduct

Creativeexperience Performingarts,visualarts, Noinitialownershipofwork

2003 2004 2005 2006 2007 2008

Digital 30 55 204 527 897 1529

Digital 27 45 148 358 550 815

EmergingEconomies Virtuous Goodinnovationperformanceand

Phase1 Phase2 Phase3 Phase4 Phase5

Workandlive Professionalac8vi8es Professionalac8vi8es Professionalac8vi8es Professionalac8vi8es

Typeofoccupa&on Employer,manager Freelancer, Freelancer.Rarely Employeeor

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