ENTREPRENEURIAL VENTURES IN THE CREATIVE INDUSTRIES: A CASE STUDY APPROACH

Αιμιλία Πρωτόγερου

Εργαστήριο Ενεργειακής και Βιομηχανικής Οικονομίας, ΕΜΠ

ΟΠΑ, 21/10/2015

Research funded by the EU FP7 under grant agreement CRE8TV.EU–320203

2

WHAT ARE THE CREATIVE AND CULTURAL INDUSTRIES (CCIS)

Creative and Cultural Industries (CCIs) are at the crossroads of arts, culture, business and technology and can be defined as those economic activities that strongly rely on individual creativity, skills and talent and in principal produce intellectual property in contrast to material goods or immediately consumable services (UNCTAD, 2008).

3

TWO MAJOR CHALLENGES

Developing an agreed or harmonized understanding of what these activities or industries are; and

Obtaining statistical data to understand their size, shape, dynamics, and inter-relations with other sectors and activities.

4

CCIS INCLUDE A WIDE RANGE OF ACTIVITIES

Architecture Specialized design Fashion Advertising Publishing Software Video games Film and video

Photography Music Television and Radio Performing arts Libraries and

Museums Visual and graphic

art Crafts

5

THE CONTRIBUTION OF CCIS (I)

CCIs in the EU-27 created a total value of 558 billion €, representing approximately 4.4% of total European GDP and 8.3 million full-time jobs (Terra Consultants, 2014). CCIs firms contribute to industrial innovation in

two ways: They possess strong innovation potentials

themselves They operate as an important catalyst for

innovations and knowledge-based growth in numerous other economic fields. They act as a cross-cutting sector, affecting value added chains both horizontally and vertically as suppliers and customers.

6

THE CONTRIBUTION OF CCIS (IΙ)

Europe’s CCIs are global leaders and competitive exporters in a wide range of fields.

CCIs are significant generators of intellectual property, in particular copyrights.

CCIs are the heart of creating Europe’s culture and identity, and central to promoting Europe’s identity around the world.

Regions with high concentrations of creative and cultural industries have Europe’s highest prosperity levels.(Inner London, Stockholm, Prague, Bratislava, Oxford, Hamburg)

7

CCIS IN GREECE

A recent study based on Eurostat data (in 10 CCIs) (Avdikos, 2014) shows that total employment reaches 110,000 people and accounts for 3% of total employment in Greece (Avdikos, 2014).

Between 2008 and 2013 there is a significant 30% decrease in employment while in the EU-27 total employment in CCIs remained invariant.

8

IN-DEPTH INTERVIEWS WITH CREATIVE ENTREPRENEURS IN GREECE

9

IN-DEPTH INTERVIEWS WITH CREATIVE ENTREPRENEURS IN GREECE

The study was undertaken in the context of the EU-funded FP7 project Cre8tv.eu- Unveiling Creativity for Innovation in Europe (2012-2015)

11 partners all over Europe: University of Manchester, University of

Brighton, Bocconi University, Copenhagen Business School, Eindhoven University, Politechico di Milano, Technical University of Munich, University of Gothenburg, ZEW, National Technical of Athens, Corvinus University of Budapest

10

RESEARCH AIM (1)

Relatively little is known about entrepreneurship in the creative industries (notable exceptions are Henry, 2007; Henry and de Bruin, 2011) because:

the creative sector comprises a large number of heterogeneous sub-sectors and industries;

further definitional and policy coherence needed on what constitutes CIs;

‘creative entrepreneurship’ entails the combination of two different worlds.

11

RESEARCH AIM (2)

This work aims at providing empirical evidence on the characteristics of founders in the creative industries, the challenges they come across and the obstacles they have to face in their entrepreneurial endeavours.

12

INTERVIEWED FIRMS PER SECTOR

Industry code

Specific activities # interviews

74.40 Branding, packaging design, communication design 6

74.10 Fashion & product design 4

71.11 Building design & drafting 5

58.21 Development of video games & relevant frameworks 4

59.11 Video production, motion picture & animation 2

13

IN-DEPTH INTERVIEWS : AN OVERVIEW

Focus on young entrepreneurs Interview with the whole founding team or

at least 1 of the founders 19 face-to-face interviews, 2 Skype-calls

(when personal interviews were not possible due to distance)

Average interview length: 90 minutes

14

IN-DEPTH INTERVIEWS: MAIN PARTS OF THE INTERVIEW PROTOCOL

General information about the firm Creativity and skills of employees Detailed information on all founders

(founding motivations, educational background, experience and knowledge, entrepreneurial skills, personal career)

Information on firm growth, barriers to entry and growth, innovation performance and intellectual property protection methods

15

Selected findings

16

AGE AND SIZE OF FIRMS

Average firm age: 6 years (established between 2004-2012) Approx. 1/3 of the firms (6 out of 19) have been

established during the crisis (2011-2012) Micro firms employing 2-15 people

Approx. 50% of the firms (10 out of 19) do not have employees besides the founders (esp. in architecture and product design)

In their majority collaborate with a network of freelancers, suppliers etc. on a project basis

Some of them use interns on a regular basis (esp. architecture, graphic design, fashion and product design)

17

THE CREATIVE TALENT AND HUMAN CAPITAL OF EMPLOYEES

Interaction of founders with employees is an inspiring process leading to the realization of their ideas

In general, full-time employees are encouraged to pursue their own projects and develop their own ideas

Core activities are mainly undertaken in house e.g. design activities are internal to fashion design

and 80% of software development and engineering are internal to video games development

Significant contribution of freelancers/external collaborators to the companies’ creative potential and final outcome

18

THE FOUNDERS: MOTIVATIONS FOR SETTING UP A BUSINESS Founding teams of mainly 2 members (in 13

out of 21 firms), while the rest are composed of 3 and only one of 4 people

Male dominated, aged between 35-45 Founding motivations were fuelled primarily

by the need to realize their own ideas to express and use their own creative and artistic

skills even reinforce the artistic and creative culture

within their community or region and, not to make money

19

FOUNDERS: IMPACT OF EDUCATION, EXPERIENCE AND SKILLS ON FIRM SURVIVAL AND GROWTH (I)

Well-educated founders with major field of studies directly related to their firm’s activities it appears that artistic, creative and technical skills

acquired through formal education have been decisive in the creation and survival of their firms

In their majority have acquired significant professional experience in their sector and some of them also have entrepreneurial experience professional experience has helped founders to gain

significant knowledge and expertise on their sectors, markets, clients and the organization and management of their companies

20

FOUNDERS: IMPACT OF EDUCATION, EXPERIENCE AND SKILLS ON FIRM SURVIVAL AND GROWTH (II)

Founding teams combining artistic with market and managerial expertise achieve better firm performance outcomes

The export vision of certain founding teams appears to be crucial for ensuring their firms’ growth prospects (some firms are born global)

All founders pursue firm growth in a controlled and manageable way since they primarily wish to retain their creative/company identity and the quality of their work

21

THE FOUNDERS: ENTREPRENEURIAL SKILLS

Entrepreneurial skills –communication, problem solving, leadership, networking, creative thinking international export vision, administrative/financial skills – are highly important to their firms’ success and growth

Such skills have not been gained through formal education or training but mainly through learning-by-doing and informal personal networks

22

SELECTED FINDINGS: THE MARKET

Firms related to video games and fashion design have a strong export orientation

The firms constantly look for new markets Some of them pursue the expansion of their

activities to international markets, while others are trying to serve new market niches

The firms have a diverse client base from different industries e.g. media, publishing and advertising companies, the tourism industry, museums, galleries, education institutions, the agricultural industry, governmental organizations etc.

23

SELECTED FINDINGS: INNOVATION

Most of the firms implement new or significantly transformed business strategies.

Some of the firms have changed the way they manage their

company have launched new or significantly improved

services have improved the way they produce and supply

products. In general, they cannot easily patent their

products and only some of them have applied for patents, registered designs and trademarks

24

FIRM GROWTH PROSPECTS

Financial crisis had an impact on some of the firms resulting on decrease in the number of employees or sales volume.

In their majority, firms exhibit a certain resilience to economic crisis esp. those with a strong market orientation (video games, fashion design)

The firms constantly look for new markets: Some pursue the expansion of their activities to

international markets, while others are trying to serve new market niches

25

BARRIERS TO FIRM GROWTH

Some important barriers across sectors Government regulation i.e. heavy taxation,

bureaucracy, limited support to newcomers) Current economic climate Limited access to external finance Increased competition in their markets The market is not ready for their ideas Gaps in the skills of workforce (esp. in video

games)

26

CONCLUSIONS The creative economy can be a lever of

development also for Greece. Greece, however, is yet to take full

advantage of the CCIs significant opportunities

An active and continuous dialogue on these issues could assist in realizing a) the actual creative capital available in the

country b) policy action (both at the local and national

level), to establish an appropriate business environment to support and empower Creativity as an essential factor for development.

27

SOME MORE DETAILS ON THREE SELECTED FIRMS

28

ANCIENT GREEK SANDALS Ancient Greek Sandals, was founded in 2011. Founders: very well educated in the US and UK,

complementary skills Their idea was to make and launch a collections of

leather sandals (in ancient Greek style) with original designs and many colours

They debuted in 2011 with 13 designs. Now, more than 150 different designs are available

4 million euros turnover in 2014 They now sell more than 80,000 sandals a year

through 500 outlets around the world The sandals are manufactured by Greek craftsmen

in a factory in Athens. AGS is now planning to expanding production to two more factories in Athens.

29

ZEUS+DIONE

The company was founded in 2012 Founders: very well educated in UK and the US They wanted to create a Greek brand name,

by reviving Greek tradition and the long forgotten Greek fashion industry

They have decided to target the international market right from the beginning

They now sell their clothes in 50 outlets all over the world and in internationally renowned e-shops such as net-a-porter and matchesfashion

30

ABZORBA GAMES

AbZorba Games was founded in 2011 by a talented international team determined to create the best mobile multiplayer casino titles

The name, AbZorba, was chosen to reflect both their Greek origin and their gaming intent

They started with 6-7 people and they now employ 15, they are profitable and they are rapidly growing

It has been recently acquired by Greentube, a leading developer and supplier of Gaming solutions for the Internet and mobile devices

31

Thank you for your attention! www.liee.ntua.gr