European Union European Regional Development Fund
Business Models and Innovation Policies in the Artistic and Contemporary Crafts Sector
European Union European Regional Development Fund
INNOCRAFTS – INNOvating entrepreneurship policies in the CRAFTS sector has been approved and co-financed in the framework of the Interregional Cooperation Programme INTERREG IVC, financed by the European Union’s Regional Development Fund. The Programme helps European Regions to work together in order to share experiences and good practices in the fields of innovation, knowledge economy, environment and risk prevention.
Municipality of Florence (IT) – Lead Partner www.comune.fi.it National Association of Italian Municipalities Tuscany (IT) www.ancitoscana.it
National Institute of Arts and Crafts (FR) www.institut-metiersdart.org Public Foundation The Legacy of al-Andalus (ES) www.legadoandalusi.es Bistrita Municipality (RO) www.primariabistrita.ro Regional Association of Municipalities “Central Stara Planina” (BG) www.rso-csp.org Burgas Municipality (BG) www.burgas.bg Chamber of Commerce of Barcelona (ES) www.cambrabcn.org Aalto University School of Arts, Design and Architecture (FI) www.muova.fi Riga City Council Department of Education, Culture and Sports (LV) www.iksd.riga.lv Vilnius Old Town Renewal Agency (LT) www.vsaa.lt Reims City Council (FR) www.ville-reims.fr Crafts Council of Ireland (IE) www.ccoi.ie Budapest Enterprise Agency (HU) www.bvk.hu Slovak Chamber of Commerce and Industry (SK) www.sopk.sk
EDITORIAL, Louise Allen
1. BUSINESS MODELS AND SUPPORT SERVICES, Xavier Greffe 1.1. Introduction 1.2. Typical obstacles currently faced by participating initiatives 1.3. Key directions taken by participating initiatives 1.3.1. Handling the specific features of the arts and crafts sector 1.3.2. Taking on board a progressive trajectory for sustainability 1.3.3. Integrating the arts and crafts into territory-based planning 1.3.4. The importance of labelling 1.3.5. Provision of services: inter-company partnerships 1.3.6. Combining cultural heritage and design
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2. BUSINESS MODELS AND BUSINESS SUPPORT SERVICES: GOOD PRACTICES 2.1. Oltrarno Call 2.2. National Exhibition of Arts And Crafts 2.3. Taito Business Services 2.4. Vilnius Ethnographic, Fine Crafts and Fairs Programme 2.5. Support Programme Dedicated to the Business Development of ACC Businesses in the Champagne-Ardenne Region
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3. ACCESS TO INNOVATION DESIGN AND FINANCIAL ASSISTANCE TO SMEs, Xavier Greffe 3.1. Introduction 3.2 Obstacles traditionally faced by the selected Good Practices 3.3. Main trends demonstrated by selected Good Practices 3.3.1. From Incubation to Innovation 3.3.2. Managing the relationship between craft and design 3.3.3. Organising new innovative marketing 3.3.4. Funding for innovation 3.3.5. From economic and social innovation to urban innovation 3.3.6. What role does the government play?
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4. ACCESS TO INNOVATION DESIGN AND FINANCIAL ASSISTANCE TO SMES : GOOD PRACTICES 4.1. Business Incubators 4.2. Ciav Meisenthal France 4.3. Fuse 4.4. Design Sos 4.5. Empremtes De Catalunya and Oficios Singulares 4.6. Cristallo in Contemporanea
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5. CONCLUSIONS, Elisa Guidi
EDITORIAL Louise Allen
EDITORIAL Louise Allen Head of Innovation and Development Programmes Crafts Council of Ireland
The European Crafts sector is a rich and complex interwoven tapestry combining tradition, heritage, culture, skill and design. Craft encompasses a wide range of disciplines including ceramics, glass, textiles, jewellery, metalworking and woodworking that reflect the depth, breadth and diversity of European cultural identity. In economic terms the crafts industry is important as a source of jobs and wealth creation. It is characterized by small entrepreneurial businesses that provide viable, sustainable employment in cities, towns, villages and remote rural regions across the EU. The craft sector is an important part of the creative industries and of Europe’s creative economy. It makes a vital contribution to the wider economy linking to tourism, food, design and enriching our cultural experience. In the words of Schwarz and Yair ‘the value of ‘craft’ in contemporary economy and society is not limited to the value produced by those identifying themselves as makers, or solely held within the objects they produce”. Craft may be better understood as “a distinctive set of knowledges, skills and aptitudes, centred around a process of reflective engagement with the material and digital worlds.’ Making Value: craft and the economic and social contribution of makers’ (Crafts Council UK, 2010). In common with other sectors, the craft sector needs appropriate policies embedded at national and regional levels to sustain and develop it further. The Innocrafts project, funded through INTERREG IVC programme, provides a platform for exchange of best practice in order to inform policy development. The value of Innocrafts is in the provision of a space for agencies involved in policy and programme development to share their knowledge and experience. This report represents a midway point. It highlights the strengths and weaknesses of craft enterprises. It brings visibility to common issues experienced transnationally and provides solutions that have been delivered by partner countries. With the provision of policy supports and additional financial investment there is significant potential for growth of the sector and the development of a stronger crafts industry for future generations to enjoy.
BUSINESS MODELS AND SUPPORT SERVICES Xavier Greffe
BUSINESS MODELS AND SUPPORT SERVICES,
Xavier Greffe, Professor at the University of Paris 1 - Panthéon-Sorbonne Expert for the National Institute of Arts and Crafts (FR)
1.1. Introduction The first project theme is devoted to the analysis of economic and business models and related supporting services, considering the potential impact of public national or local measures and financing, and on their sustainability. The aim of this type of analysis is to underline whether existing systems in Europe enable the arts and crafts sector to develop or whether development perspectives are insufficient despite current initiatives and measures. Given the complex nature of expressions such as business models, services, public interventions and transferability, a number of precautions should be kept in mind from the very beginning:
The terms ‘business model’ and ‘services ’ are more complex than one might imagine and could be interpreted in fairly different ways in different countries. The term ‘economic models’ will be considered here in its widest sense: it is the way in which an enterprise seeks to ensure its sustainability, by organizing its market and obtaining the resources expected for its products and services.
The contribution made by public measures varies between individual countries and regions. It ranges from ensuring that the sector is properly represented, so that it can assert its interests, to organizing specific measures in the sector’s favour, whether regulatory or financial. All these different types of measures are therefore included here, initiated by central or local government.
Transferability can also be interpreted in a number of different ways. Depending on the correlation between an initiative and its context, the initiative can result perfectly transferable or not transferable. Identifying the driving principle behind each initiative would without any doubt be useful, since their scope is often fairly general, as well as understanding in which cases the set of conditions that govern this principle can be replaced by alternative ones and still produce the same effects.
Five of the initiatives analyzed in this initial phase were deemed to be transferable thanks to the general nature relevance of their objectives and their potential flexibility in terms of actual achievements in specific institutional environments environments and reported as Good Practices: ~ Ethnographic, Fine Crafts and Fairs Programme - Vilnius Old Town Renewal Agency (LT) ~ Taito Business Services - Aalto University School of Art and Design (FI)
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Oltrarno Call - Municipality of Florence (IT) Accompanying Commercial Program with Business School Students - Reims City Council (FR) National Exhibition of Crafts and Arts, Village of Oreshak - Regional Association of Municipalities “Central Stara Planina” (BG).
Reference will be made to other Good Practices where necessary in the summary presented here, though their lower degree of transferability will be pointed out.
1.2. Typical obstacles currently faced by participating initiatives Several key obstacles that prevented the successful implementation of the initiatives and the achievement of the planned results were identified during the analysis of the Good practices presented by the partners.
a business plan is the first obstacle. Initiatives supported by potential public funding often require the presentation of business plans. However, the submitted business plans often fall short of requirements, as they do not meet feasibility and evaluation criteria. To a certain extent, these plans are self-fulfilling and often tend to minimize obstacles that they fail to analyze.
• This first obstacle can generally be explained by a far broader issue: the difficulties experienced by very small businesses in bringing together the specific skills required to cover all the different dimensions of a business plan. Although, in general, the technical side is fairly well thought out, since it involves the creative process carried out by the person responsible for the project or structure, the commercial and financial aspects are far less satisfactory.
• Slightly different from the previous two, the third obstacle is related to funding, generally
attributed to existing arts and crafts initiatives that could be described as “insiders” rather than “outsiders”. From a certain point of view, this can be explained by the fact that existing structures have already gained a certain level of experience, on the other hand, public institutions allocating the funding prefer to avoid the risk. While this may not be open to instant criticism, it does prevent renewal in the overall arts and crafts scene. This means that existing structures may be less responsive to the changing population and their long-term sustainability be compromised.
• Rather paradoxically, the fourth obstacle relates to difficulties experienced by a number of
craftsmen in accessing available funding. As a consequence, hiring trainees to reinforce existing human resources is often problematic. Even if needs seem to be recognized, the costbenefit ratio is unfavourable for hiring of trainees. Funding schemes should therefore ensure that support provided does not cause additional costs or spending difficulties.
1.3. Key directions taken by participating initiatives
1.3.1. Handling the specific features of the arts and crafts sector One of the first points revealed by the analysis is the need to take into account the specificity of arts and crafts sector. The analysis of the specific features of the sector is not a new issue; the difficulty arises in deciding whether what separates arts and crafts companies from the mainstream is a difference in scale or a difference in form.
• The difference in scale refers to on the situation of small arts and crafts companies, since
it is difficult to cover all the specific professional skills required to handle the challenges presented by commercialisation, R&D, etc. once the production process in the technical sense has been carried out.
• The difference in form refers to the uncertainty involved in getting “creative” or radically new products recognised by markets or consumers who have not yet experienced them.
1.3.2. Taking on board a progressive trajectory for sustainability A number of funding schemes to assist business start-up or development, struggle with the specific lifecycles of arts and crafts companies. If they fail to make allowances for them, assistance is likely to be inappropriate or ineffective. How can a company’s lifecycle be identified? The sustainability of arts and crafts companies depends on their capacity to overcome the risks inherent to their activity. Two types of risks are identified:
the risk relating to legitimization or recognition, which proves that the product created by the craftsperson is viewed as being of good quality;
~ an organisational risk which coincides with the diversification of the craftsperson’s activities, their capacity to pass from one product to another or produce several goods or services at the same time. Whileit is desirable to see the first risk decreasing over time, the second risk can only increase, and it explains the fragile position of arts and crafts companies. Several of the transferable Good Practices are indeed moving in this direction: Taito Business Services initiative in Finland, Oltrarno Call initiative in Florence, Business Support Services in Champagne-Ardenne.
1.3.3. Integrating the arts and crafts into territory-based planning While much is now expected from arts and crafts in terms of contributing to local development, it should also be pointed out that the sustainability of such arts and crafts also depends on the quality of the territorial environment in which they are situated. There is, therefore, a close
relationship between the development of arts and crafts companies and the local area. Creative arts and crafts companies, which often require skilled workers, contribute to developing added value and employment, while the local area can offer a favourable environment. There may also be beneficial effects on living environments and improvements in the area’s attractiveness to residents and tourists, as well as enhancing property values. Of course, some of these aspects could also have a negative impact beyond a certain threshold, such as gentrification or the departure of artists and craftspeople who can no longer afford rising property costs. We are, therefore, in the presence of ‘virtuous circles’ which could nevertheless turn into vicious circles. Although offering support to enable arts and crafts professionals to enjoy favourable local conditions is therefore appropriate, it is important, nevertheless, to ensure that these conditions do not lead to perverse effects. On examining the different Good Practices, three of these were moreover detected:
A rent-seeking effect, the beneficiaries of these measures were not those who needed them most but already established companies;
A gentrification effect, the beneficiaries of these measures being unable to afford the area’s rising operating costs in the long term;
An abandonment effect, the beneficiaries being unable to afford certain charges that they are expected to pay, particularly in terms of restoration and conservation of built heritage.
These effects are mainly confined to the urban environment, being generally more positive in a rural setting, although identifying them is more difficult or takes longer. Two transferable Good Practices proved very valuable in this respect : Vilnius initiative in Lithuania, Conventino Vecchio in Florence, Italy and Oreshak, the National Exhibition of Crafts and Arts – Village of Oreshak Bulgaria.
1.3.4. The importance of labelling One popular form of support for developing arts and crafts activities is the use of labels or certifications. Defining labels and supervising compliance is no doubt one of the first conditions of sustainability:
• Faced with markets for new products or experience goods, i.e. markets for products whose
veritable value remains unknown until consumers have experienced them, labels play a role in reducing uncertainty.
regards services rendered, such as obtaining qualifications, labels act not only as a guarantee but also indicate that a skill exists, which enables craftspeople to operate in a variety of markets, conditions that are now fundamental to their sustainability.
Few initiatives going in this precise direction were proposed, however, the majority of initiatives underlined their interest in this method of intervention which belongs in the regulatory rather than financial domain as the Albayzín training centre in Granada and Pireneu Art, a “territorial brand”, in the Val d’Aran area in Spain.
1.3.5. Provision of services: inter-company partnerships The traditional view of business service provision is filtered by the intermediation of public or private non-profit institutions (including professional arts and crafts institutes or organisations). Funding remains public and in the vast majority of cases, services are supplied by traditional economic operators. This explains the majority of incubation formulae: guidance remains generally non-profit although the management of different services offered features important commercial elements. This balance therefore ensures that:
• A general interest mission is indeed organized at the level of the territory, which cannot fail to be collectively beneficial to all members;
• The services are as professional as possible, i.e. provided by stakeholders with solid economic and management experience.
However, similar situations may also arise when businesses themselves organize analogue services, taking advantage of the experience gained from the relationships developed with subcontractors, These experiences could almost be described as private incubators, except for the fact that the need for private funding will always be an issue. We are not saying that this balance between a purely private initiative and the requirement of public-sector funding to cover the resulting additional costs for this private company would be sustainable but as Yamakado enterprise initiative in France testifies it is certainly an interesting perspective.
1.3.6. Combining cultural heritage and design Another lesson learnt from the Good Practices studied bring an important contribution to effective new public funding mechanisms combining different forms of cultural heritage and design. Bottlenecks in arts and crafts activities often occur when companies remain specialized in a single area of activity, since company development relies on using different references and meeting different requirements. Two growth levers have been identified:
intangible heritage or know-how in other domains than those in which they emerged, for example mobilizing textile know-how by moving it from traditional sectors into far more modern sectors.
• Taking references inspired by the past and mobilizing them for new products. Although it may be difficult to consider initiatives as transferable here, two are nevertheless worth highlighting. Riga initiative in Latvia and Franciade in Saint-Denis, France are a testimonial of this direction.
2. BUSINESS MODELS AND BUSINESS SUPPORT SERVICES: GOOD PRACTICES
2.1. Oltrarno Call Law 266/97 Art.14, Funding for creation of enterprises and development of projects in the traditional and artistic craftsmanship sector in areas of social and urban decay. Good Practice Promoter: Municipality of Florence
Presentation Nowadays the phase of sharp economic slowdown have strong effects on enterprises operating in the traditional and artistic craftsmanship sector. Aim of the Oltrarno Call is to provide entrepreneurial support to innovative and traditional enterprises operating in Florence, promoting at the same time the conversion, development and revitalization of specific urban areas characterized by situations of social and urban decay.
The area selected to benefit from the Call was the Oltrarno district, characterized by the presence of numerous artisan workshops regarded as necessary in order to preserve the historical and artistic value of the area. Thanks to the contribution of the Chamber of Commerce of Florence, which offered its financial and operative support, the Municipality of Florence issued a call for application for incentives to small and micro enterprises located in the selected areas or interested to settle their headquarters therein, focusing on the aspects of production and process innovation, internationalization and shop aesthetics. The Call identified as eligible for funding all expenditures related to the purchasing of long-term goods, used to realize brand new products. Operating costs eligible for incentives were reserved to those enterprises constituted no more than 24 months prior to the date of application and to new enterprises located in the Oltrarno district for a maximum funding of 20.000,00 â‚Ź per business.
Evaluation and perspective 24 out of 26 submitted applications were ruled as eligible. The total amount of incentives granted for selected projects was over 248.000,00 â‚Ź. The business sectors eligible under this call were: restoration (38%), clothing and tailoring (21%), jewelry and goldsmith (21%), bronze processing (8%), glassware production (8%) and silver processing (4%). After two years in operation, it can be noted that 36% of funding has been allocated to purchasing of new equipment, 27% for improvement of product labeling and 27% for financing of the websites. The whole process combines different forms of funding, offering varying levels of benefits that can last throughout the lifetime of an arts or crafts company, provided that new products are produced. It is precisely this condition that ensures funding contributes to local development.
Contact Municipality of Florence Department of Economic Promotion and Innovation Policies Simone Tani, Director firstname.lastname@example.org www.comune.fi.it
2.2. National Exhibition of Arts and Crafts Good Practice Promoter: Troyan Municipality
Since Exhibition was established in 1971, traditions and modern arts have been closely working together. Every hall has a demonstration area where the visitors can see how craft objects are realized and try to create pieces of pottery, wood-carving, poker-work and weaving with their own hands. Visitors have the opportunity to touch and feel the essence of crafts, as they realize with their own hands something original and distinctive to bring home as a memory of an unique experience. This scheme also aims to make traditional crafts from the town of Troyan a special form of art therapy. Every year, the National Exhibition of Crafts and Arts organizes an Easter Fair dedicated to one of the biggest Christian festivals and holy days. The festival lasts for 3 days and is held near the third biggest monastery in Bulgaria - the Troyan Monastery. The "Crafts Alive" Initiative is an occasion to introduce to the public specific original local products, in particular artistic crafts, through demonstrations in open workshops, exhibitions, concerts and performances. It is realized by a partnership established between the National Exhibition, the Municipality of Troyan, tour operators, hotels, guest houses and restaurant owners. “Craft Alive” represents an unique tourist product and a precondition for the development of local tourist industry. In 2012 the Municipality of Troyan, in collaboration with the Ministry of Regional Development and Public Works set up the "Development of Tourist Attractions in the Municipality of Troyan" project, that has turned the National Exhibition into the biggest tourist attraction of the region. The total amount of the project is 752.756,00 €. The grant amount requested from the Regional Operational Programme, funded by the European Regional Development Fund, was 640.000,00 €, while the Municipality of Troyan invested 112.756,00 €.
Evaluation and perspective The economic impact of the project is relevant. Many tourists from Bulgaria and abroad visit the site several times every year, stimulating the development of local businesses, such as craftsmen, food and drink industry, hotels and family guest houses, raising the interest of the economic sector towards artistic and contemporary crafts. As a result more and more people have started practicing crafts, while craftsmen have now the opportunity to place their traditional and contemporary productions in a permanent market.
Contact National Exhibition of Crafts and Arts e-mail: email@example.com www.fairoreshakbg.com
2.3. Taito Business Services Good Practice Promoter: Taito Group
Presentation Developing Taito Business services first started with the Ministry of Employment and Economy under the development programme of the handicraft sector. Taito Group is a private organization and its Business Services are the core of a modular and versatile structure dedicated to working and starting-up craft entrepreneurs, formed of various packages addressed to different needs identified in the area. Consultants and Taito business advisors, guide the entrepreneurs through the process according to their needs.
• Taito Start: is addressed for who is planning to set up a craft enterprise. It consists of a business idea and feasibility analysis. • Taito product analysis: assists in the analysis of the commercial potential and areas of improvement of the products. • Taito Product Information: assists to finetune the products for markets, including legal aspects of product information and packaging. • Taito Marketing 1: includes marketing plan, customer segmentation and other marketing elements. • Taito Start Online: advices in e-commerce, e.g. e-mail, own website, and online shop. • Taito Test Marketing • Taito Pricing: assists the craftsman to calculate the price for products and services. • Taito IPR: assist in defining immaterial property- copy rights for immaterial products. • Taito Network and classified advertisement is a marketing place for handicraft, arts and craft products and services. Information about entrepreneurs, associations, stores and experts of the sector is available here as part of the Finnish handicraft know-how.
Evaluation and perspective Taito Business Services offer a system of assistance and advice which starts with the very first projects and continues over the entire potential lifetime of arts and crafts companies, offering them specific services designed to accompany the different procedures that they are likely to encounter. The access cost is low but does exist. After each working session, the consultant
provides a written report which can be used as an initial checklist and a way of ensuring that recommendations have been followed, even from the beneficiaryâ€™s point of view. A number of specific measures are also available: product analysis, analysis of information communicated about the new product; marketing programme accompanying any new product launches; use of new information technologies to coincide with launches; tests and feedback from marketing activities.
Contact Aalto University School of Art and Design firstname.lastname@example.org www.aalto.fi
Taito Group Marketta Luutonen, Managing Director* email@example.com www.taito.fi
2.4. Vilnius Ethnographic, Fine Crafts and Fairs Programme Good Practice Promoter: Vilnius City Municipality and Vilnius Old Town Renewal Agency
Presentation The programme "Ethnographic, Fine Crafts and Fairs Programme" was approved by the City Council of Vilnius in 2001. The final objective was a real challenge: to restore the local know-how and revitalize the Old Town preventing the deterioration of traditions of fine crafts by revitalizing some empty and neglected buildings.
The second priority of the programme was the revitalization of the Tymo Quarter, which was destroyed after the World War II. The Crafts Town was decided to be established there and starting from the year 2002 the establishment of the infrastructure was financed. Now, there are 17 galleries-workshops participating in the programme, representing crafts of potters, blacksmiths, goldsmiths, textile, amber processing, stained-glass, paper cutting and other traditional folk arts. In the workshop-galleries a lot of attention is paid to children and students while organizing educative circles. The participants of the program actively take part in city festivals, fairs and international events. The initiative took on board one of the specific features of arts and crafts: the need to provide solutions thanks to direct contact with consumers. By combining a system for supporting arts and crafts with the opportunity to work in the area's most frequented sites, the programme allows craftspeople to work in direct contact with the public, users and consumers of their products and services. The Good Practice implemented in Vilnius remains a model: the City Council undertakes to provide arts and crafts professionals with some forty workspaces in the tourist frequented Old Town, where they can work, exhibit, carry out demonstrations and obtain direct feedback on the relevance of their work with regard to consumers' changing requirements.
Evaluation and perspective The project has been very well-received by all parties involved, including the local population, even though the main beneficiaries seem to be tourists and children living in the city. A certain number of significant outcomes have been observed: 17 installations; 63 specific temporary exhibitions; 14 training seminars open to the general public; 192 workshops for school children; 11 trade fairs since 2001. Nearly 200 jobs have been created (full-time equivalent over the year), as well as an association for the artists and craftspeople involved in the scheme (Fine Crafts Association of Vilnius) which is highly significant in a domain where people tend to seek individual solutions automatically rather than joining forces with others.
Contact Vilnius City Municipality, Vilnius Old Town Renewal Agency Jurate Raugaliene, Director firstname.lastname@example.org www.vdaa.lt
2.5. Support Programme Dedicated to the Business Development of ACC Businesses in the Champagne-Ardenne Region Good Practice Promoter: Confédération Nationale de l’Artisanat des Métiers et des Services (National Confederation for Artisans, Professions and Services)
Presentation The CNAMS (Confederation of Crafts and Service Professions) Champagne-Ardenne implemented this project in the framework of the Regional Programme for the development of artistic crafts in Champagne-Ardenne with the objective of sustaining enterprises to improve the structure of their commercial strategy anticipating evolution in business techniques in order to achieve a good position and be competitive in their sector of interest. The initiative is built around 3 strands:
1. Individual and personalized accompaniment by a consultant specialized and experienced in accompanying businesses in the artistic crafts sector. An audit of the business and a project by a consultant takes place in the first instance. This is followed by the drafting of a business strategy tailored for each business individually. The consultant is available throughout the year in order to provide additional support to each of the participating businesses.. 2. Placement of an internship. The business director is assisted in the implementation of his/her strategy by a student from the higher education sector undertaking a 2 year diploma in business: one day per week and/or continuous internships. The student benefits from the permanent advice and support of the consultant during their placement in the business. 3. Participation in collective training sessions. The business director participates in a collective training programme adapted to project development.
Evaluation and perspective The project was launched in July 2007. Since then, 5 groups of businesses have benefited from this programme, representing a total of 35 businesses in Champagne-Ardenne, including the Reims area. The business support initiative in Champagne-Ardenne offers to participants a personalized support system, from the project definition stage to the final creation of the product. Grants are used to fund advisory and support measures rather than covering costs: provided that a project is original, the project developer motivated and the technological dimension accepted, the structure offers a multi-phase support service with no additional costs for the project developer.
Contact CNAMS CĂ¨cile Debart, Manager of the PRDMA (Development programme for artistic crafts in the Champagne-Ardenne region) email@example.com www.metiersdart.info
Maryse Maillard Felix Maitre-verrier
3. ACCESS TO INNOVATION DESIGN AND FINANCIAL ASSISTANCE TO SMEs Xavier Greffe
ACCESS TO INNOVATION DESIGN AND FINANCIAL ASSISTANCE TO SMEs
Professor at the University of Paris 1 - PanthĂŠon-Sorbonne Expert for the National Institute of Arts and Crafts (FR)
3.1. Introduction Innovation is commonly defined by the implementation of new products or services. It lies therefore between pure creation that has no economic resonance and remains at the stage of an idea and the day-to-day running of an existing activity. When we deal with innovation, we highlight an ability to discover new opportunities and to implement new activities. This implementation of new products or new services depends on the ability to access to new markets and to organise new efficient productive combinations. This explains the most celebrated definitions of innovation, as new products, new markets, new productive combinations, and new modes of financing. In the field of Arts and Crafts, innovation can take different forms from those it takes in the industrial field: ~ The appearance of new products is obviously an important criterion; and one can even consider that in many cases the art craftsmen is innovative because he is at the core of this function, both as a designer and implementer. ~ The research of new inputs and new productive combinations, even on a small scale, is also something very important for craftsmen since it appears determinant for controlling their costs of production. ~ In both cases, the realisation of innovation passes through commercial, legal, technical, financial and organisational innovations. But whether we consider crafts, industry or services, the emphasis on innovation must focus also on its social dimensions. Even if the end remains the creation of added value and jobs, we must always consider innovation results from social transformations too, such as empowerment, consolidation of social and cultural capital, new forms of social organisations, new forms of urban and rural life, etc. The two workshops held in Budapest and Turku helped us to analyse these challenges, elements of responses that have been made to them and the role of public support in this area. More than twenty potential Good Practices were presented by the partners, and six of them were the subject of in-depth attention because they offered, beyond the specific context in which they have been implemented, references disseminated in order to organise an innovative atmosphere for craft enterprises. They come mainly from: Design SOS (Finland), Footprints (Spain), Fuse (Ireland), Meisenthal (France), Colle Val dâ€™Elsa (Italy) and Riga (Lithuania). The criterion of selection is based mostly on their capacity to be transferred to other contexts. Moreover some example will be re-examined in the two next steps.
3.2 Obstacles traditionally faced by the selected Good Practices To understand the barriers and obstacles traditionally faced by artisanal activities in innovative practices, it is important to eliminate first two traditional misconceptions. ~ There is no curse of non-innovation that weighs on crafts. In a traditional vision, craftsmen are not innovative because their products remain generally the same and create value because they do not change. But the respect of resources, traditions and values does not mean that artisans do not innovate. On the contrary, they mobilise all possible resources and new knowledge to improve their production. ~ Another error is to believe that craftsman can live without changing his or her production. Very often a craftsman starts with a project of a new product, which is both useful and original. But this product will have a specific life-cycle and it is absolutely necessary to anticipate new uses and new values. This is difficult because a craftsman is often alone and he does not benefit from the kind or resources and information that a company can have.
What are in effect the main obstacles that hinder or inhibit the desire of craftsmen for innovation? A first obstacle lies in the absence of relevant information on markets, technologies, training and so on. Innovation requires an open access to very precise information. Moreover, the fact that markets are increasingly globalised, even for craft products, implies specific knowledge about more external opportunities and competitors. The need of external networks is here evident, and isolated artisans are often impoverished in terms of time and resources to enter such networks. Even though the theme of networks will be at the core of the third phase of the INNOCRAFTS project , it is already at the heart of innovations. A second obstacle lies in the frequent lack of mastery of the technologies available. If some innovations are related to the identification of the utility to provide, many others are related to the process of producing and therefore to the need to bypass traditional technologies using new ones. A third obstacle may result from an (artificial) opposition between craftsmanship and designing. Traditionally craftsmanship integrated design as a core activity, but the evolution of contemporary and globalised markets has created design as a more and more independent activity. Thus one barrier is the access of craftsman to this new field of knowledge created by the development of design. A fourth obstacle lies in the need to design new price and financing strategies. Of course crafts are not in the situation of â€œintangible contentâ€? activities for which financial innovation is crucial. Here the materiality of the product allows the craft product to remain in a fairly traditional domain, but the danger of copying is still present, which means a need to attract a first batch of consumers that will act as outsourcers for other consumers, and a need for a call price strategy that will be followed by higher prices.
3.3. Main trends demonstrated by selected Good Practices 3.3.1. From Incubation to Innovation The first thematic area of the project was focused on incubation and a common idea would be that the same structure can support the emergence of new craft enterprises and their innovative potential. But, in our opinion, a structure of incubation is not enough on its own to spark innovation. One thing is to allow a creator to benefit from a favourable environment for launching a first activity, another thing is to adapt his or her production to the new market conditions. The incubator must then benefit from a platform of skilled services or at least of network giving access to qualified and customised services. This passage is difficult and it shows that an innovation policy cannot be limited to create an incubator: it must also support access to professional networks.
3.3.2. Managing the relationship between craft and design A second lesson resulting from the workshops deals with the need to correctly connect crafts and design together. This dialogue is not very easy because there are differences of culture, training and age between these two worlds. Yet, this relationship is essential if its results are to be equally shared. Moreover, it is not a one way street since craftsman start with a deep knowledge of the needs of their consumers.
3.3.3. Organising new innovative marketing Two linked programs presented by Cataluña combine to make crafts enterprises achieving and referencing new products, in order to meet the demand from more than 27 million foreign visitors who visit Catalonia annually, plus national tourists from outside Catalonia. Besides being produced and designed in certain areas where handicraft production is a historical tradition, it helps in the geographical decentralisation of the handicraft sector and in territorial development. These two programmes are organised and implemented by the Consorcio de Comercio, Artesanía y Moda de Cataluña (Trade, Crafts and Fashion Consortium of Catalonia), which reports to the Directorate General for Trade of the Generalitat de Cataluña (Government of Catalonia), through the Artesanía de Cataluña centre.
3.3.4. Funding for innovation A third statement deals with innovative funding for innovation. Many case studies have shown that local and global government interventions marginalise the role of subsidies in favour of fiscal expenditures and any other tax credit systems. For all these governments, the second formula is much more interesting than the first because it prevents the formation of large files and simplifies the process of control by substituting a priori control with a posteriori control. Moreover some case studies have demonstrated that these tax credit systems may be very efficient. But it shows also that this formula mainly benefit crafts enterprise that are already sustainable. Only well organised
craftsmen are able to take advantage of information and to benefit from a formula that implies generally a minimal size level of activity as well as to debate with officials who may be opposed to some deductions. More precisely, it seems that financing innovation is always an issue whatever the proposed devices. It actually appeared that we faced two phases during the innovative process: ~ A creative phase where it exists a mobilisation of new knowledge without knowing the expected economic result, which is dominated by uncertainty; ~ A phase of innovation where this knowledge is invested considering more and more precise marketing data when the uncertainty is transformed in terms of risk to create monetary values: risks remain, though they are reduced. Therefore a solution may be to design non-refundable funding during the first period but refundable during the second one. But naturally this would first mean that we can clearly identify these two phases, which is not an easy task. This problem could be simplified by identifying different types of expenditures, as those facilitating the acquisition of new information and other required expenditures.
3.3.5. From economic and social innovation to urban innovation The case studies examined during the workshops have shown that the frontiers of innovation are very flexible. More precisely, there are exchanges between different forms of innovation. Considering crafts, this connection is quite well recognised when we scrutinise economic and social innovation. The connection between economic and social innovation, on one hand, and urban design innovation on the other, is much more unusual. If the proposed case study deals with urban design, other situations have shown how the development of an innovative milieu can benefit a rural atmosphere.
3.3.6. What role does the government play? This second phase of our project has demonstrated that public support for innovation can be useful, but must address many specific conditions: What is the economic size of a craft enterprise? How long has it been in business? Are its markets geographically diversified or not? The main issue created by an innovative process is related to the solitude and the lack of financial support of an enterprise. Public support is useful when it creates opportunities not only for funding but also for networking. All reported good practices stressed this role, especially at local level. For preventing a duplication of instruments, source of confusion and complexity, a certain division of tasks appears desirable: ~ Local governments should support the diagnosis, mobilisation of resources and marketing. Their action could be especially efficient in creating real estate resources or in supporting
new tailored training projects. They should also organise salons and fairs, or support the participation of local craftsmen with internationally known ones. The efficiency of these actions is supported by their proximity with local professional organisations, and the possibility to build and support efficient partnerships. ~ Central governments should assume two main tasks: creating relevant funding systems and ensuring a better protection of the craftsmenâ€™s intellectual property. Moreover, a more seamless connection of crafts culture with the culture of design appears as an issue that could be better solved at a national level as it must overcome many internal barriers. Specific forums or educational programmes could contribute to mutually hybridise these cultures. Workshops have also shown that in Europe, systems of applied arts have been eroded everywhere. Nobody would like to return to the traditional systems, but many participants consider that better bridging between creative design and traditional craftsmanship is a way to address and mitigate the challenges of a global economy. Debates on globalisation however, often marginalise the potential which artisans have.
4. ACCESS TO INNOVATION DESIGN AND FINANCIAL ASSISTANCE TO SMEs: GOOD PRACTICES
4.1. Business Incubators Good Practice Promoters: Latvian Folk Art Union and Investment and Development Agency of Latvia (IDAL)
Presentation SMEs can take part actively in business start-up programmes. For example, they can use business incubators or take part in several banks start up programme contests, as “Ideju kauss” (“Idea Cup” – organised by the Investment and Development Agency of Latvia), or grant programmes, as “Atspēriens” (“Take off” – organised by the Riga City Council and Swedbank Latvia).
To allow and promote the development of new, viable and competitive SMEs, as well as to ensure a good business environment and consultancy services to support business activities, the Investment and Development Agency of Latvia (IDAL) is implementing the project “Development of Business Incubators in Latvia”, co-financed by the European Regional Development Fund (ERDF). A business incubator supports the successful start-up and development of SMEs, providing infrastructures, advisory and basic business development services, in order to create new job opportunities and to promote socio-economic development at local and regional level. Currently 10 business incubators are active in Latvia. One of them, the Creative Industry Incubator “Creative Andrejsala” (LLC “HUB Riga”), is located in Riga.
Evaluation and outlook Since October 2012, 535 SMEs (providing 1,251 jobs) have been taking advantage from services provided by Latvian business incubators. Among them, only “Creative Andrejsala” is supporting companies in the artistic and contemporary crafts as part of the cultural and creative industries together with other sectors, such as : architecture, design, cinema, performing arts, visual arts, music, publishing, television, radio, interactive media, advertisement, computer games and interactive software, cultural heritage, cultural education, recreation, entertainment, etc. The Business incubator “Creative Andrejsala” has already concluded more than 50 business support agreements. By 2014 it foresees to support at least 100 companies .
Contacts Society “Latvian Folk Art Union” Gita Prīberga, Coordinator for International relations firstname.lastname@example.org www.tautasmaksla.lv Investment and Development Agency of Latvia (IDAL) Evija Vintere, Project manager Evija.Vintere@liaa.gov.lv www.liaa.gov.lv Creative Industry Incubator “Creative Andrejsala” (LLC “HUB Riga”) www.creativeandrejsala.lv
4.2. Ciav Meisenthal France Good Practice Promoter: Centre International dâ€™Art Verrier
42 Presentation The Centre International dâ€™Art Verrier (CIAV) was created in 1992 in Meisenthal, a small French village situated in the heart of the famous glass-producing Region, Lorraine, to celebrate the Art of Glassmaking and to promote and share knowledge and innovation. Within this abandoned factory, three complementary structures are located: 1. The CIAV, a research, education and production laboratory, composed by artist and designer studios, glassmaking facilities for resident glassmakers, a gallery, several viewing galleries and a commercial market. 2. An exhibition venue for contemporary art, music, theatre and performing arts. 3. The Museum of Glass, created to celebrate the link between Art of Glassmaking and local community. Visitors are also invited to experience the rich variety of cultural and social heritage in Meisenthal, enhanced by the vision of a contemporary creative community. To preserve and safeguard traditional skills and methods, high-skilled glassmakers work every day in the centre, contributing to build up a significant glass mould archive. Since its creation, in fact, the CIAV holds a collection of 1500 moulds.
Evaluation and outlook From the quantitative point of view, a significant number of companies are involved. Since 1992, 342 artists and designers have been participating in residencies. 21 years after its creation, the CIAV has grown from 2 to 16 full time employees, 6 seasonal employees, and 50 different work experience opportunities. Local economy (restaurants, accommodations and tourist services) are taking advantage from CIAV. In 2012, 15,000 visitors visited the Centre during the Christmas time, and at least 3,000 of them purchased goods. From the qualitative point of view, establishing the CIAV within the abandoned glassworks site has undoubtedly enhanced the local economy and the whole area. The factory carcass was seen as a symbol of Regionâ€™s failure to industrially compete with market trends and changes. The restored industrial site is currently considered a symbol of optimism and a viable key for the future of the Region. The mix of heritage, skills and innovation encourages social identity and pride in Meisenthalâ€™s history, traditions and culture. Last but not least, visitors and general public are engaged on a local and artistic level with familiarity, also thanks to the hospitality of the local communities. This bears well for the future of glassmaking in the area, and leads to furthering social cohesion.
Contacts Centre International dâ€™Art Verrier Yann GRIENENBERGER, Director email@example.com www.ciav-meisenthal.com
4.3. Fuse Good Practice Promoter: Crafts Council of Ireland
Presentation FUSE â€“ is a series of experimental projects developed by the Crafts Council of Ireland to develop the design and innovation capabilities of the crafts sector. The project has a number of elements that address product innovation and process innovation and explores the potential to access new markets.
FUSE - Innovation and Design Event, Design Week 2012 The concept was to pair craftspeople and the products they make with designers. Craftspeople were asked to provide images of their work to be re-imagined, re-invented and re-hacked by a team of designers. Each designer was paired with a craftsperson and received images of their product. Using their design skills, they re-imagined and re-invented products. A workshop was held at the National College of Art and Design for designers and craftspeople to work in pairs, discuss design approaches and how industrial processes and traditional methods could be used to re-imagine the final product. The event was delivered in partnership with the National College of Art and Design and Design Week 2012. The objective of this teamwork and workshop was to provide a forum to exchange ideas and network, to give new perspectives, to lay the ground for future events combining craft, design and new technologies. FUSE - Design Challenge The objective of the workshop was to enable small groups of Designers and Craftspeople to work together in response to commercial briefs. During the two day course, teams presented their products, branding, costs and recommended retail prices to a retail and design team for input. Four teams developed products which were displayed at the 37th edition of the Showcase Irelands Creative Expo 2013. FUSE Facilities Support Funding The FUSE Facilities Support Funding is a fund and mentoring programme to support existing craft facilities to develop strategic plans, establish financial independence and work toward future growth. The rationale is to support clusters providing services, equipment, advice and studio/incubation space to craft enterprises. The long-term goal is to create a healthy and vigorous crafts industry in Ireland through supporting ambitious and competitive clusters. A regular access to mentors over the year and â‚Ź 20.000,00 of funds awarded to one or two groups ensure success to develop new business opportunities.
Evaluation and perspective All of the three experimental FUSE projects achieved interesting results from their lunching. In the framework of the Innovation and Design Event and Design Week 2012, a total of 26 crafts people and 13 designers engaged in collaboration. Following the workshops, 2 teams have continued their collaboration with designers and are currently developing a lighting range for production. The Design Challenge involved 6 inter-disciplinary teams and 4 teams went on to fully develop products. 1 team secured significant orders at Showcase Irelands Creative Expo 2013. Finally, 6 organisations received funding through the Facilities Support Funding. These organisations support over 42 craft enterprises. Facilities provided in the studio support access to equipment which is critical to the on-going development of the sector.
Contacts The Crafts Council of Ireland Louise Allen, Head of Innovation & Development Programmes firstname.lastname@example.org www.ccoi.ie
4.4. Design Sos Good Practice Promoter: Aalto University School of Arts, Design and Architecture
Presentation Design SOS, a continuously renewable innovation platform, is a process model developed during the project â€œDesign SOSâ€?, financed by the European Regional Development Fund (ERDF).
The objectives are to increase the competitiveness on different societal levels, including enterprises, and to create basic structures for this work via the continuously renewable innovation platform. It combines inputs from policies, research, development practices and skills and know-how of people working on it into market-oriented design innovation based development and research projects, and services for companies. The aim is to increase competitiveness and innovation potential of companies and other organisations (e.g. handicraft developers). The innovation themes are a) increasing the level and quality of services by the means of service design, b) strengthening the use of sustainability by the means of market-oriented design, c) strengthening innovation activities by the means of future oriented design methods The target groups are enterprises, especially SMEs, from different sectors, and public and private organisations mainly in the region of the Ostrobothnia, as well as in Finland and Europe.
Evaluation and outlook Started in 2011, it is expected to end by December, 2013. Project results have been positive so far and the number of participants and partners has been very significant, considering the size of the region. Realisation indicators: 60 Companies participating in the project (38 realised by December 2012), 48 Other organisations participating in the project, 5 Jobs created, of which 3 women (1 realised by December 2012), 4 Jobs created in Research&Development, of which 2 women (1 realised by December 2012),
Contacts Aalto University School of Arts, Design and Architecture - University of Vaasa Ms Annika Hissa, Director email@example.com www.arts.aalto.fi/en
4.5. Empremtes de Catalunya and Oficios Singulares Good Practice Promoter: Consorcio de Comercio, Artesanía y Moda de Catalunya
Presentation “Empremtes de Catalunya” and “Oficios Singulares” aim to achieve modern products and their certification to meet the demand from more than 27 million foreign visitors who visit Catalonia annually. Besides being produced and designed in certain areas where handicraft production is a historical tradition, they support the geographical decentralisation of the handicraft sector and territorial development.
The programmes are organised and implemented by the Consorcio de Comercio, Artesanía y Moda de Catalunya (Trade, Crafts and Fashion Consortium of Catalonia). The basic outline of the programmes is as follows: - Empremtes de Catalunya: creation of a brand and preparation of a dynamic catalogue (featuring over 1,000 products) thank to the involvement of 125 handicraft companies. This makes a strong impact on the handicraft products marketing, an activity relatively weak in the sector. - Oficios Singulars (Unique Trades): contact and collaboration between one or more renowned designers, and one or more well-known producers or artisans in a territory very well-known for its handicrafts. The end result, in addition to economic, territorial and social development impacting 11 different municipalities, is obtaining more than 200 specific items.
Evaluation and outlook Up to day 160 companies involved in both programmes with approximately 325 jobs affected. The store sales were over 25% higher in 2012 compared with 2011 and 27 exhibitions and fairs were organized in Catalonia. Thank to these programmes, craft trades in Catalonia have greater relevance, artisans participate through private associations, trade associations and unions in the management of the centre and thus feel supported in their social and business development. Bringing more than 2,000 new products to the market have led to a greater knowledge of Catalan craft products and, as a consequence, more differentiation, appraisal, demand, and in general a change of culture in the modus operandi in the sector.
Contacts Centre dâ€™ArtesanĂa de Catalunya Xavi Villas, Manager firstname.lastname@example.org www.artesania-catalunya.com
4.6. Cristallo in Contemporanea Good Practice Promoter: Municipality of Colle Val d’Elsa
Presentation From the first edition (1996), the town of Colle Val d’Elsa has taken part in the Arte all’Arte event, (www.arteallarte.org), promoted by Associazione Arte Continua of San Gimignano in order to install several works of well-known contemporary artists.
Particular attention has been given to the combination of crystal and contemporary art. The latest example of this process has been the work of the American artist, Kiki Smith, under the San Francisco Bridge in the upper part of the city, close to UMoCA (the Under Museum of Contemporary Art) created in 2001 by Cai Guo-Qiang, one of the most famous Chinese artist who curated the firework performance that closed the Beijing Olympic Games in 2008. This has given rise to a desire to strengthen the connection between urban space and the language of contemporary art, between crystal and an international outlook, supporting projects to re-evaluate products on the international market, including new applications in the technical and artistic sectors. The programme of revaluation and restoration of the urban heritage is an important moment for the revitalisation of the town’s public spaces and for re-launching the entire commercial and service sectors. The interventions of urban revitalisation in the town aim to upgrade its image and its historical, social and urban heritage. In this context, it is important to underline the qualities which make the territory of Colle unique, paying special attention to water and crystal. These two elements, albeit in different periods of history, determined the economy and social development of the town and today are part of the urban heritage to be restored. Nowadays Colle Val d’Elsa is considered the capital of Italian crystal. The programme of exploiting and restoring Colle’s urban heritage is a commitment for the municipal authorities. But it will also involve the active participation of commercial operators, businessmen/women, local authorities, social partners and citizens. This process is governed by principles of participation, information and transparency.
Evaluation and outlook The programme of revaluation and restoration of the urban heritage is an important moment for the revitalisation of the townâ€™s public spaces and for re-launching the entire commercial and service sectors. The aim is to promote the economic and social development of the city though innovation and social cohesion means able to involve inhabitants in choices that concern the transformation of their town. The interventions of urban revitalisation in the town have the aim of upgrading its image and its historical, social and urban heritage.
Contacts Municipality of Colle di Val dâ€™Elsa Sandra Busini, Responsable DG Culture email@example.com www.comune.colle-di-val-d-elsa.si.it
5. CONCLUSIONS Elisa Guidi
Elisa Guidi General Coordinator ARTEX Centre for the Artistic and Traditional Craft of Tuscany (IT)
The Good Practices presented in the context of the first two Policy Working Groups of the INNOCRAFTS project highlight a number of guidelines. Some key aspects of the problems and potential of artistic handicrafts, already highlighted in the International Charter of Artistic Craftsmanship, are resumed and strengthened in recent European documents1. What emerges strongly from the various proposals is primarily the substantial interdisciplinary nature of artistic and traditional handicraft. This sector is mutually beneficial to economic, cultural and social resources in the immediate locality. The diverse character is definitely a point of strength and a main strategic line for the enhancement and development of the sector in the years to come. Alongside considering the obvious benefits of the various Good Practices, the following proposals are in response to the different recurring problems expressed by the sector:
events and / or projects aimed at cutting out intermediaries; facilitate direct relationships between local consumers and the traditional handicraft sector. Target city quarters/ listed buildings suffering a low profile / footfall in order to rejuvenate by raising awareness amongst the local population and visiting tourists. (Etnographic, Fine Crafts and Fairs Programme - Vilnius Municipality; Oltrarno Call – Florence Municipality).
• Create centres with staff offering specialised assistance to companies in the sector, taking into
account the peculiarities of the sector, its diversity, strengths and weaknesses. This support is important in terms of services such as marketing and research, but most significantly in terms of encouraging and nurturing innovative approaches. (Taito Business Services – Finland; Business incubators - Latvian Folk Art Union and IDAL Investment and Development Agency of Latvia).
a network of specialised consultants; young people and/or professionals with specialised skillsets would mentor artisans whose strengths and focus are pre-dominantly creating. The skillsets in question would be in relation to concerns such as business organisation, management and development alongside design issues including product innovation, marketing and distribution. (Accompanying Commercial Program – CNAMS Champagne Ardenne; Fuse – The Crafts Council of Ireland). Create and develop partnership relationships between the artistic handicraft and other
1 Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, “Valuing cultural and creative sectors to promote growth and employment in the EU”, Brussels, 26.09.2012.
cultural and creative industries; including heritage, modern art, architecture and design. This innovative approach would be mutually beneficial to all of the industries as well as the city, inhabitants and tourists. (National Exhibition of Arts and Crafts - Troyan Municipality; Emprentes de Catalunya and Oficios Singulares - Consorcio de Comercio, Artesania y Moda de Catalunya; Centre International dâ€™Art Verrier - Meisenthal; Cristallo in Contemporanea - Colle Val dâ€™Elsa Municipality; Design SOS â€“ Finland). These proposals covered so far, in addition to the experiences already presented, provides crucial information for local development policies and enhancement of artistic handicraft. They are specifically in response to companies locally based; who maintain a close relationship with their location and the end consumer. The success of which necessitates technical support at some stages of their development. These local policies in order to be more incisive, need a regional/ national policy; depending on the organisation of the various partner countries as well as a support of European policies and programs. In this sense, the results of INNOCRAFTS project will become an influential tool for the European Commission to focus future systems for the support, promotion, and development of artistic handicraft. These future systems will ensure the continued growth of the sector and recognise the role that artistic handicrafts has as a driver of economic, cultural and social development across the whole of Europe.
CREDITS This publication is a result of collaborative work of INNOCRAFTS project staff Edited by ANCI Tuscany Visual design Marcello Bucci November 2013