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European Union European Regional Development Fund

THEME 1 Business models and business support servicies

INTERMEDIATE GUIDE

December 2012


Contacts: Municipality of Florence - Lead partner Piazza della Signoria, 50122 Firenze - Italy Contact person: Simone Tani Phone: +39 0552625946 E-mail: simone.tani@comune.fi.it

National Institute of the Arts and Crafts - Coordinator for GP exchange 23 avenue Daumesnil, 75012 Paris - France Contact person : Catherine Virassamy Phone: +33 155788589 E-mail: virassamy@inma-france.org


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.

PROJECT PARTNERSHIP  

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


SUMMARY Preface 1. Innocrafts initiatives “Business models and business support services” by 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 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 2. Business models and business support services: good practices Presentation 2.1. Oltrarno Call - Law 266/97 Art.14, funding for creation of enterprises and development in the traditional and artistic craftsmanship sector in areas of social and urban decay 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 3. Business models and business support services: territorial references 3.1. Vecchio Conventino – Spazio Sam (Arts and Crafts) / Foundation for the Artistic Craftsmanship of Florence 3.2. Association FRANCIADE “LE GOUT DE LA CONNAISSANCE 3.3. Yamakado 3.4. Centro Albayzín. Escuela Andaluza de Restauración (Albayzin Center-Andalusian Restoration School) 3.5. Pirineu Art 3.6. LLC „SENĀ KLĒTS” and LLC „SALONS A” 4. Summary table Innocrafts initiatives by Pedro JARA 5. Policy recommendations / Progress report on public funding by Xavier GREFFE 6. Annexes 6.1. Reims and Barcelona seminars programs 6.2. Barcelona round table 6.3. Business support services presentation by Pedro JARA 6.4. Photos from INNOCRAFTS seminars


PREFACE


The overall objective of the INNOCRAFTS project is to promote entrepreneurship and business creation in the artistic and contemporary crafts sector. The main mean to achieve this objective concerns the improvement of the effectiveness of regional and local development policies of the partner territories through sharing and exchanging experience and good practices. The exchange of experiences focus on a coherent and effective policy mix, highlighting the most successful policy experiences developed in the partners’ territories with a particular regard for those that satisfy specific quality criteria in terms of innovativeness, effectiveness, relevance, transferability, viability, etc. and have already provided tangible and measurable results in reaching their objectives. Starting from the beginning of the project, in April 2012, National Institute of Arts and Crafts - INMA and Reims City Council, coordinators of the project’s component “Exchange of experiences dedicated to the identification and analysis of good practices” organized and leaded the exchange process with support of whole partnership. The first results on the theme concerning the business models and business support services are summarized in following chapters. About one hundred people from 12 different European countries met in Reims (Sept. 2012) and Barcelona (Nov. 2012) to share their good practices on the theme of business models and business support services. More than twenty different projects and initiatives were presented, all characterized by original features and territorial specificity. INTERREG IVC defines best practices as a methodology, a project, process or an instrument. Each project must be potentially transferable to another geographic area and must have been successfully developed by providing tangible and measurable results. Once selected, these will be highlighted in the good practice guide which will conclude the project. INMA that contracted Xavier Greffe, economist, professor of University of Paris 1 Sorbonne, for project expertise and Pedro Jara, consultant in international development for thematic 1 animation, and the City of Reims, are responsible for collecting good practices for the ACC sector through a series of seminars exchanges between partners. Among the twenty initiatives presented in Reims, all are characterized by original features specific to the nature of the territories. Two types of local public policy support emerge, on the one hand incubator type support and on the other innovative technical and financial accompaniment. While the Reims seminar had a first approach of the initiatives developed in Europe, the Barcelona seminar that followed was designed with a view to identifying transferable practices in other territories. The Barcelona debate was enhanced during a roundtable which gathered several european personalities from art, craft and economy, Andrew Hetherington Business to Arts director in Irland, Vuokko Takala, finnish designer, Gemma Amat, Escuola Massana director in Barcelona, Rasa Morkunaite of center for Economic Research in Vilnius and Carles Alcoy of Federation of craft workshops in Catalonia about new types of funding, crowdfunding, cooperation between craftmen, territorial brand, craft, design and internationalization.

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1. INNOCRAFTS INITIATIVES BUSINESS MODELS AND BUSINESS SUPPORT SERVICES BY XAVIER GREFFE


1.1. Introduction The first project theme is devoted to analysing economic (or business) models and services likely to support them. These issues are considered from the point of view of the potential impact of public measures and financing, whether national or local, on their sustainability. The aim of this type of analysis is to find out whether existing systems in Europe enable the arts and crafts sector to develop or whether development perspectives are insufficient despite current initiatives and measures. A number of precautions should be kept in mind from the outset, given the complex nature of expressions such as business models, services, public interventions and transferability:  The terms ‘business model’ and ‘service model’ are more complex than one might imagine and could be interpreted in fairly different ways depending on the individual country. The term ‘economic models’ is mainly applied to activities whose value no longer easily benefits those responsible for them due to digitalization and the internet. Here, it will be considered in its widest sense: it is the manner in which an enterprise seeks to ensure its sustainability, by organizing its markets and obtaining the resources expected for its products and services from said markets.

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 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 measure are therefore included here, whether initiated by central or local government.  Transferability can also be interpreted in a number of different ways. The relationship between an initiative and its context is highlighted in such a way that initiatives are deemed perfectly transferable or totally un transferable depending on whether this relationship is viewed as crucial or not. Identifying the driving principle behind each initiative would no doubt be useful, since their scope is often fairly general, as well as working out whether or not the set of conditions that govern this principle could be replaced by alternative ones and still produce the same effects. Of the initiatives analyzed in this initial phase, five were deemed to be transferable thanks to the general nature and relevance of their objectives and their potential flexibility in terms of actual outcomes in specific institutional environments:

• • • • •

Ethnographic, Fine Crafts and Fairs Programme - Vilnius Old Town Renewal Agency (LT) Taito Business Services - Aalto University School of Art and Design (FI) Oltrarno Call - Municipality of Florence (IT) Accompanying Commercial Program with Business School Students - Reims City Council (FR) National Exhibition of Crafts and Aarts, Village of Oreshak - Regional Association of Municipalities “Central Stara Planina” (BG).

Reference will be made to the other initiatives 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 were identified during the analysis of partners’ working practices, because they either prevented the successful implementation of initiatives from the outset, or subsequently prevented them from achieving the expected results.  Serious difficulties in compiling business plans constitute an initial obstacle. Understandably, initiatives supported by potential public funding often require the presentation of business plans. However, the plans submitted often fall short of requirements. Though formal business plans, they do not include feasibility and evaluation criteria which are generally advisable. To a certain extent, these plans are self-fulfilling and therefore often 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 structures 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. Moreover, provisions for maintenance and servicing are either underestimated or absent, which could lead to lengthy or permanent delays when the first problems arrive.  Slightly different to the previous two, the third obstacle involves funds being attributed mainly to existing arts and crafts initiatives, to what might be described as “insiders” rather than “outsiders”. On the one hand, this can be explained by the fact that existing structures have already gained a certain level of experience. However, it is also due to deliberate risk avoidance by those allocating funding. The trend is clearly visible when the age structures of the craftspeople or companies receiving this type of funding are analyzed. While this may not be open to instant criticism it does prevent renewal in the overall arts and crafts scene and means that existing structures may be less responsive to the changing population, which compromises their long-term sustainability.  Rather paradoxically, the fourth obstacle relates to difficulties experienced by a number of project developers in accessing available funding. Thus, it has been noted that hiring trainees to reinforce existing human resources is often problematic. Requirements seem to be recognized on the one hand but the cost-benefit ratio is sufficiently unfavourable for the initiative to be dropped. Funding schemes should therefore ensure that support provided does not cause additional expense or costs that would be difficult to meet. The expression “barriers to entry” could be used in this context. In general, barriers to entry can be explained in three ways.  The first involves “insiders” working together to prevent access to “outsiders”. No examples of this type were found, although insiders’ experience and resources give them a clear advantage in overcoming obstacles due to obscure or overly bureaucratic eligibility procedures.

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 A second explanation for barriers to entry comes from the fact that investment costs may be excessive and non-recoverable and would have to be written off if existing activities ceased. In view of good practice, we do not believe that this is the case here either, since fairly low levels of capital are generally invested in comparison to other activities; many cases actually rely on the intellectual capital or embedded skills of the person in charge of the project.  It would seem then, that a third explanation must be more relevant here; When dealing with activities involving a high level of risk, it is always tempting to offer funding to those who are already established because they are easily recognized by potential users or consumers. The following conclusion should therefore be borne in mind: activities can be expected to make fairly slow progress and it is important not to impose excessively shortterm recovery deadlines that only established structures would be capable of meeting; any provision of financial or physical resources should be accompanied by assistance and advice to support structures through the initial stages, which are often the most difficult.

1.3. Key directions taken by participating initiatives

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1.3.1. Handling the specific features of the arts and crafts One of the first points revealed by the analysis is the need to make allowances for the specific features of arts and crafts. This problem is not a new one; 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.  Talking about difference in scale focuses on their situation being complicated by their small size, 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.  On the other hand, talking about difference in form focuses on the uncertainty involved in getting “creative” or radically new products recognised by markets or consumers who have not yet experienced them. Each of the initiatives has provided some form of response to these challenges and we will now take a closer look at two of them:  The analysis by the Vilnius initiative (identified as transferable), instantly 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 Vilnius initiative allows craftspeople to work in direct contact with the public, users and consumers of their products and services. This direct contact is essential here, since when arts and crafts are made available through intermediaries, craftspeople no longer receive the direct


information which enables them to express their creativity, i.e. the expression of a new requirement or the reaction to a product they designed. By contrast, distancing craftspeople from their consumers often leads to the standardization of production and varying degrees of appropriateness in responses provided to problems encountered by those using their products. This point is therefore a central one. On the other hand, we have noticed that the effectiveness of such initiatives depends on whether participants are established and recognized craftspeople or newcomers wishing to join the profession.  An initiative involving the creation of a design-specific incubator by Reims City Council exemplifies this need to give the originality of arts and crafts due consideration. When activities being launched on the market are relatively conventional and easily recognisable, building up and establishing projects may be quite quick. However, when creative activities which are less easily recognised and absorbed by the market are involved, the project may take longer to reach maturity. Exploring these different ways of working is the most interesting point here, which is precisely what is underlined in the Reims case. The range of services scarcely seems exceptional, and the list of participants does not support the initial theory presented, according to which graduates of the Ecole des Beaux-arts would be the primary users of this new structure. However, creating a specific incubator for arts, crafts and design at the same time as a mainstream incubator does demonstrate willingness to take on board the originality of projects from the arts and crafts domain. The approach is two-fold: spaces are occupied for much longer periods and projects therefore take far longer to reach maturity and obtain recognition than in the mainstream incubator; advice is given by both managers and product design technicians to ensure that the specific technical features of the domain are not lost in a legitimate but overly generalized management message.

1.3.2. Taking on board a progressive trajectory for sustainability A number of 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. There are two types of risk: 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. While we can hope to see the first risk decreasing over time, the second risk can only increase, which explains the fragile position of arts and crafts companies. Several of the transferable initiatives are indeed moving in this direction : Taito Business Services initiative in Finland, Oltrarno call initiative in Italy, business support services initiative in Champagne-Ardenne, France.

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1.3.3. Integrating the arts and crafts into territory-based planning

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While much is now expected of 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. On the one hand, creative arts and crafts companies, which often require skilled workers, contribute to developing added value and employment. On the other, 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 alike, 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 initiatives, 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. It goes without saying that these effects are mainly confined to the urban environment, the effects being generally more positive in a rural setting, although identifying them is more difficult or takes longer. Two transferable initiatives 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 in 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.  As 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 via the intermediary of public or private nonprofit 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: it is the guidance and a significant share of the funding that are public here. This moreover explains the majority of incubation formulae: guidance remains generally not-for-profit although the management of different services offered features ever more commercial elements. This balance therefore ensures that:  On the one hand, a general interest mission is indeed organized at the level of the territory, which cannot fail to be collectively beneficial to all members;  On the other hand, the services are as professional as possible, i.e. provided by stakeholders with solid economic and management experience. However, situations may also arise where it is the companies themselves that are now in a position to organize comparable services, taking advantage of experience gained and especially the fact that they work with a number of subcontractors. These could almost be described as private incubators except 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 workable but it is certainly an interesting perspective as Yamakado enterprise initiative in France.

1.3.6. Combining cultural heritage and design Another lesson to take away from the initiatives studied, that is likely to contribute to effective new public funding mechanisms, lies in 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:  Mobilizing intangible heritage or know-how in domains other 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.

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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 Territory concerned: City of Florence – Oltrarno district (IT) Partner: Municipality of Florence Theme: Business and financial innovations Public assistance provided (funding/support): Yes

Presentation

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This call for projects is intended to provide entrepreneurial support to innovative and traditional enterprises operating in the traditional and artistic craftsmanship sector in Florence, as a distinctive and qualifying element of the town’s culture and image, as well as to support such enterprises in a period of sharp economic slowdown, promoting at the same time the conversion, development and revitalization of specific urban areas within the municipality characterized by situations of social and urban decay. The Municipality of Florence, in collaboration with the Chamber of Commerce of Florence, which offered its financial and operative support, issued a call for application for incentives to small and micro enterprises located in the above areas or that chose to settle their headquarters therein, according to art. 14 Law No. 266/97 as specified later, with a focus on:


1. Product and process innovation 2. Internationalization 3. Urban aesthetics (shop aesthetics, signs, conversion of spaces and rooms, shop windows etc.). The Oltrarno district was chosen because the presence of artisan workshops in this neighborhood is regarded as necessary in order to preserve its historical and artistic value. This is therefore a measure in between aids for enterprises and a form of urban redevelopment of an entire neighborhood. Eligible for aid are all capital expenditures and operating costs (operating costs reserved only to enterprises that have been constituted no more than 24 months prior to the date of application and to new enterprises) under art. 5 Ministerial Decree No. 267/2004, net of VAT, related to projects of enterprises whose headquarters are located in the areas indicated by the Call and whose business is amongst those eligible for funding. Eligible for aid are all expenditures, net of VAT, connected to the purchase of long-term tangible and intangible goods (investments) directly connected with the company’s productive cycle, provided that they are new products and did not enjoy previous public aid. Operating costs eligible for incentives are reserved to those enterprises that have been constituted no more than 24 months prior to the date of application and to new enterprises, provided that their headquarters are located in areas indicated by this call and for a period not exceeding two years. The maximum aid allocated per business was 20.000,00 €.

Evaluation and perspective In total, 26 applications were received by May 31, 2012 (deadline), of which 24 were ruled eligible. The total amount of incentives granted to the 24 projects selected is over 248.000,00 €. The business sectors eligible for such incentives are: restoration (38%), clothing and tailoring (21%), jewelry and goldsmith (21%), bronze smithing (8%), glassware production (8%) and silver smithing (4%). Funds included in the call which were not used in the first round will remain available for a second round of funding and amount almost to 152.000,00 €. The Oltrarno call initiative in Italy operates specifically in the financial domain. Established by the Tuscan regional Law no. 53/2008, it mainly targets companies which are based or setting up in the historic Oltrarno district of Florence, the allocation of funding varies depending on whether the company’s head office is within the district or not. The principle involves analyzing the different costs that the art or craft activity is required to cover, whether investment or operating costs and offering assistance through various forms of financing. Operating costs are eligible if the art or craft company was established within the previous two years and if the head office is located within Oltrarno. Irrespective of the age of the company, capital costs are eligible if they relate to the development of new products and do not already benefit from other public funding.

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Subject to these conditions, 80% of costs are eligible for financial assistance, which is provided in three different forms:

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 over one third (37.50%) in the form of Chamber of Commerce grants, paid in advance, subject to the existence of a bank guarantee;  nearly one third (31.25%) in the form of a grant, paid after a one-year period;  the same percentage (31.25%) in the form of a subsidized loan at a rate of 0.50%, i.e. a negative rate when inflation is taken into account. In any event, funding shall not exceed 20.000,00 €. After two years in operation, it can be noted that 36% of funding has been allocated to purchasing new equipment, 27% to improving product labelling and 27% to financing websites. As regards the beneficiaries of this funding, 38% is allocated to restoration-conservation activities, in line with the brand image of Florence, 21% to fashion and textile-related activities and the rest to jewellery. It can therefore be noted that this mechanism promotes responsibility since it is graded, combines different forms of funding, offering varying levels of benefit and can last throughout the lifetime of an arts or crafts company, provided that new products are produced, in which case grants apply to investment expenditure alone. In fact, 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 Via Ghibellina, 30 – 50122 Firenze Tel. +39 055 2625946 simone.tani@comune.fi.it www.comune.fi.it


2.2. National Exhibition of Arts and Crafts Good practice promoter: Troyan Municipality Territory concerned: Village of Oreshak, Central Stara Planina Region (BG) Partner: Regional Association of Municipalities - Central Stara Planina Theme: Business and Financial Innovations Public assistance provided (funding/support): Yes

The National Exhibition of Crafts and Arts - Village of Oreshak is unique in Bulgaria with exhibition halls exposing rare masterpieces from all ethnographic regions of the country. The whole exhibition complex is located in a magnificent park of 50 000 sq.m. It has 9 exhibitions halls that reveal Bulgarian traditions of crafts and arts for more than 40 years. Today the Exhibition is a modern facility exposing the national, European and world cultural heritage and aiming at becoming an European Crafts Centre. Crafts Alive is an initiative for promotion of artistic crafts through demonstrations in open workshops, exhibitions, concerts and performances. Visitors could see how all crafts’ works are produced and try his/her hand on pieces of pottery, wood-carving, poker-work and weaving. Their unskilled hands produce something original and distinctive so they could touch and feel the essence of craft. Crafts Alive Initiative is a partnership between the National Exhibition, the Municipality of Troyan, tour operators, hotels, guest houses and restaurant owners. It is a unique tourist product and a precondition for development of the local tourism. Ivan Chakarov Manager of National Exhibition of Crafts and Arts Village of Oreshak

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Presentation The National Exhibition of Crafts and Arts – village of Oreshak, Bulgaria, exposes to its visitors unique masterpieces from all ethnographic regions of the country. The whole exhibition complex is located in a park consisting of 9 exhibition halls that have been promoting the Bulgarian traditions of crafts and arts for more than 40 years. Today, the National Exhibition is a modern facility exposing national and European art with the aim of becoming a European Crafts Centre. The Exhibition was established in 1971 and since then, traditions and modern arts have been closely working together. Every hall has a demonstration spot where the visitor can not only see how craft objects are made but to can also try their hand at make pieces of pottery, woodcarving, poker-work and weaving. Making something original and distinctive with their bare hands, visitors can touch and feel the essence of crafts. On leaving the site, they take home not only the physical souvenir, but a memory of a unique experience.

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This scheme also aims at making traditional crafts from the neighbouring 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 also a tool used on site for an introduction to the public of specific products of cultural heritage, and in particular artistic crafts, through demonstrations in open workshops, exhibitions, concerts and performances. The Crafts Alive Initiative is a partnership between the National Exhibition, the Municipality of Troyan (a neighbouring town), tour operators,


hotels, guest houses and restaurant owners. It is an unique tourist product and a precondition for development of the 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 in the region. The total amount of the project is 752.756,00 €. The grant amount requested from the Operational Programme for Regional Development (ERDF funding) was 640.000,00 €. The Municipality of Troyan invested 112.756,00 €.

Evaluation and perspective Various economic impacts of the project can be noted: Many tourists from Bulgaria and abroad are drawn to the site several times every year, which stimulates the development of local businesses – craftsmen, food and drink industry, hotels and family guest houses. The increasing number of visitors stimulates the interest in the economic sector of artistic and contemporary crafts and thus, more and more people have started practicing different crafts; finally local craftsman can target a permanent market for their products both traditional and contemporary. On the other hand, an important challenge can be observed: the absence of a labeling process. More the only direct beneficiary of this labeling is the Troyan monastery, which is likely to impede local craftsmen from aspiring to a greater level of excellence.

Contact National Exhibition of Crafts and Arts 256 Stara Planina Str. 5630 Oreshak, BULGARIA e-mail: fairoreshak@abv.bg www.fairoreshakbg.com

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2.3. Taito Business Services Good practice promoter: Taito Group Territory concerned: Finland Partner: Aalto University School of Art and Design Theme: Business and financial innovations Public assistance provided (funding/support): Yes

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All rights Linida Oy

Being professional of own field is not enough for a craftsman. A craftsman needs additional assistance especially in the areas of entreprising, business and marketing areas. Taito-Group was familiar to me. I found information about the Taito Business Services on their website. The price of the services was good. This is vital as a starting-up entrepreneur struggles with lots of expenses with very little income. I had previous experiences of similar services with others, thus I was a bit critical. (For me) The strength of the TBS was consultants’ expertise of the handicraft sector. This is vital as the sector differentiates a lot for other sectors. Using TBS an entrepreneur gets a professional and objective opinion of own products and their opportunities on markets. Furthermore, the TBS consultants have knowledge of other craftsmen’s experiences, a vast network and cooperation with Taito Shop (Taito Group). Pirjo Pajusalo Linida Design Maker of hand woven wool carpets

Presentation Taito Business Services is a modular and versatile business service for working and starting-up craft entrepreneurs. The service set is formed of various packages addressed to different needs identified in the area. The expert consultants, Taito business advisors, guide the entrepreneurs through the process. Packages:  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: assist in analysing 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. Bases for the prices: materials, work time, lucrative business and contribution margin  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. In addition to traditional face to face consultation, the services of the Taito Group are available also via online meetings – web conferencing. Currently Taito Group starting up updates in its work of promoting entrepreneurship and employment in the handicraft sector. Taito Group is a private organisation. Developing Taito Business services first started with the Ministry of Employment and Economy under the development programme of the handicraft sector. The following development has been executed under various programmes and independently by the organisation itself. For example developing the educational material for pricing has been supported by the Finnish Ministry of Education and the regional government of the Southern Finland via ESF programme “Programme to increase the entrepreneurial activity and internationalisation of creative sectors” Socio-political justification: Increasing competitiveness of the creative sector and its enterprises in Europe according to the Lisbon strategy. According to the Finnish government programme, the creative economy and creative sector, industries and entrepreneurship is strengthened and their importance in the national economy is increased by promoting cultural exportation and entrepreneurship.

Evaluation and perspective Taking on board a progressive trajectory for sustainability In this respect, the Taito Business Services initiative in Finland stands out from the crowd since it offers 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. Two measures remain fairly conventional: - personalized advice and opinion at the project design stage; - consultation session aiming to check that the various aspects of the project launch have been given due consideration. A further two elements are worth underlining here: - 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

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recommendations have been followed, even from the beneficiary’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. This list of options which can be selected on a bespoke basis successfully highlights the specific lifecycles of arts and crafts companies: renewing production on a continual basis, which leads to the need for a specific strategy for each one, as well as an overall strategy, tailored to suit their coexistence and shifting activities.

Contact Aalto University School of Art and Design Tanja Oraviita, Project manager tanja.oraviita@aalto.fi www.aalto.fi

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Taito Group Marketta Luutonen, Managing Director* marketta.luutonen@taito.fi www.taito.fi All rights Linida Oy


2.4. Vilnius Ethnographic, Fine Crafts and Fairs Programme Good practice promoter: Vilnius City Municipality and Vilnius Old Town Renewal Agency Territory concerned: Vilnius (LT) Partner: Vilnius Old Town Renewal Agency Theme: Incubators and local networks Public assistance provided (funding/support): Yes

Aims of the “Ethnographic, Fine Crafts and Fairs Programme” are to strengthen Vilnius cultural identity, promote small business, and develop cultural tourism; also to promote Vilnius city which takes care about revitalisation of traditional crafts and continuation of European urban traditions. These aims are implemented. Parts of neglected and unused buildings in the Old Town are adapted to the new use of workshops-galleries; the community is involved into the Programme, especially the youth and students. Vilnius becomes a living city of culture. Lost traditions are revitalised, festivals, fairs and international events are organised. The cultural, educational and social impact of the Programme is very positive and visible. Daina Urbanaviciene Vilnius City Councillor Member of the Committee of Culture, Education and Sport

Presentation The Council of Vilnius City Municipality approved the programme of “Ethnographic, Fine Crafts and Fairs Programme” in 2001. Objective of the activity was to promote the installation of conventional workshops and traditional businesses in the historic centre of Vilnius, promote arts and crafts, restore the local know-how and revitalize the Old Town. The problem was the deterioration of traditions of fine crafts and ethnographic businesses in historic city centre. The other objective was to revitalize some empty and neglected buildings in the Old Town. Some of them belonged to the City Municipality, and it was possible to rent the space on easy terms for the artists and craftsmen. Second direction of the programme was the revitalisation of a Tymo Quarter, which was destroyed after the World War II. It was decided to establish the Crafts Town here. In 2002-2006 the City financed the establishment of the infrastructure. There are 17 galleries-workshops participating in the programme. They represent 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 programme actively take part in city festivals, fairs and international events.

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Evaluation and perspective

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Handling the specific features of the arts and crafts The analysis by the Vilnius initiative (identified as transferable), instantly 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 Vilnius initiative allows craftspeople to work in direct contact with the public, users and consumers of their products and services. This direct contact is essential here, since when arts and crafts are made available through intermediaries, craftspeople no longer receive the direct information which enables them to express their creativity, i.e. the expression of a new requirement or the reaction to a product they designed. By contrast, distancing craftspeople from their consumers often leads to the standardization of production and varying degrees of appropriateness in responses provided to problems encountered by those using their products. This point is therefore a central one. On the other hand, we have noticed that the effectiveness of such initiatives depends on whether participants are established and recognized craftspeople or newcomers wishing to join the profession. Integrating the arts and crafts into territory-based planning The Vilnius initiative remains a model of this type in view of the measures and outcomes, as well as the questions asked. Via an intermediary agency, 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. Contracts are drawn up between the organisation which manages the network - Vilnius Old Town Renewal Agency - and the various arts and crafts professionals, however the contract is officially signed with the city council. The contract drafted is fairly balanced although it makes the new occupants responsible for building


maintenance, which seems appropriate since leases are granted for a minimum of ten years. This is probably because the rent charged is extremely low: two hundred times lower than standard rents in the same area! This is the main difficulty encountered, besides the inadequacy of certain business plans which do not offer a precise overview of future charges and the amounts involved. 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. Other effects seem very positive, such as innovations in jewellery-making and the use of 3D technologies, as well as efforts to organize distribution on an international basis, using the Internet, for example. However, four reservations can also be noted: the fact that it is the Ministry for Agriculture that has ended up responsible for arts and crafts in Lithuania, which does not facilitate matters; the previously mentioned inadequacy of many Business Plans; the fact that many craftspeople’s resources are totally insufficient for covering required maintenance expenditure, which leads to the deterioration of buildings in the long-term, i.e. exactly the opposite of what was expected; the fact that the system seems more favourable to insiders than outsiders.

Contact Vilnius City Municipality, Vilnius Old Town Renewal Agency Jurate Raugaliene, Director raugaliene@gmail.com www.vdaa.lt

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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) Territory concerned: Champagne-Ardenne Region, including Reims (FR) Associated Innocrafts partner: Reims City Council Theme: Business and financial innovations Public assistance provided (funding/support): Yes

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The artistic and contemporary crafts sector benefits from a reputation based on an image of quality, know-how and tradition. This reputation is a precious asset which influences the business strategy of businesses. However, this is not enough in itself to allow them to establish themselves in a competitive environment. Despite the real potential which exists in almost all businesses in the sector, the majority of which possess high level technical skills and know-how, the formalisation of a business strategy is rare. The partners of the regional programme for the development of artistic and contemporary crafts of Champagne-Ardenne (Regional authority of Champagne-Ardenne, European Regional Development Funds, the State and the CNAMS) therefore wished to help professionals from this sector in our region to develop. The intervention of this programme of action allows them to acquire, upon completion of an individual and collective process, the knowledge necessary to improve the structure of their business strategy, harness the latest developments in commercial techniques and improve their market competitiveness. The support programme dedicated to business development for artistic crafts businesses has shown itself to be an instrument well adapted to the needs of very small businesses, both by its methodology and the stakeholders involved. Christian Blanckaert President of the CNAMS Champagne-Ardenne

Maryse Maillard Felix Maitre-verrier


Presentation This is a measure which allows businesses participating to aquire, at the end of a collective and individual course, the necessary knowledge to improve the structure of their commercial strategy, anticipate evolution in business techniques and therefore be better positioned to remain competitive in their market sectors. This programme is implemented by the CNAMS (Confederation of Crafts and Service Professions) Champagne-Ardenne in the framework of the Regional programme for development of artistic crafts in Champagne-Ardenne. Each action has lasts for 10 months from September of year N to July of the year N+1. This support programme is built around 3 strands: 1. Individual and personalised accompagnement by a consultant specialised and experienced in accompanying businesses in the artistic crafts sector. An audit of the business and the project by the 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 intern: 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 (excluding school holidays) and/or continuous internships (2 months). 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 development project. The partners of the regional programme for development of artistic crafts finance the support provided by the consultants, as well as the implementation of the programme (i.e. the communication tools and the time spent by the staff members of the CNAMS) No financial participation is required from the participating businesses. As a consequence, each participating business commits itself to financing the placement of the intern (travel expenses, meals, end of internship stipend‌) and the costs of the implementation of its commercial strategy.

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Evaluation and perspective The action was launched in July 2007, since when 5 groups of businesses have benefited from this programme, representing a grand total of 35 businesses in Champagne-Ardenne, including the Reims area. The business support initiative in Champagne-Ardenne is also presented as a personalized support system, from the project definition stage all the way through to supervising creation. In contrast to the previous initiative, grants are used to fund advisory and support measures rather than covering costs. Provided that a project is viewed as original, the project developer as motivated and the technological dimension as understood and accepted, the structure is offered a multiphase support service, which can go as far as providing a trainee. Here, the underlying idea is that it is important to ensure that the assistance provided does not generate additional costs for the project developer, since taking on a trainee and the costs involved could create this situation. That said, the rich and meaningful experience which has already been gained from this initiative shows that ensuring this measure is understood does not seem to be as easy as it should be.

Jean Maurice Célérier – bronzier d’art

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Contact Cécile DEBART Manager of the PRDMA (Development programme for artistic crafts in the Champagne-Ardenne region) CNAMS 37 rue des Capucins 51100 REIMS, France Tel. : +33 03 26 47 22 55 cecile.debart@metiersdart-champagne-ardenne.org www.metiersdart.info


3. BUSINESS MODELS AND BUSINESS SUPPORT SERVICES: TERRITORIAL REFERENCES


3.1. Vecchio Conventino – Spazio Sam (Arts and Crafts) / Foundation for the Artistic Craftsmanship of Florence Good practice promoter: Municipality of Florence Partner: Municipality of Florence (IT)

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“Vecchio Conventino” (Old Convent) is a real estate property owned by the Municipality of Florence that was used for a variety of purposes over the centuries and became a site for artisans and art workshops in the 1920’s. Today the Municipality of Florence has decided to reconfirm the historical function of this complex as an incubator for arts and crafts intended to host artisanal enterprises and artistic activities which, in line with the best Florentine tradition, are characterized by elements of process or product innovation, with the objective of creating a promotional center on a national and international scale. The management of the Vecchio Coventino / SAM (Arts and Crafts Space) was assigned to the Foundation for the Artistic Craftsmanship of Florence (FFAA), which has been active since 2001 in the field of promotion, support and development of the sector in the areas of Oltrarno and Florence, in collaboration with the Municipality of Florence and other local founding institutions (Provincial Administration of Florence, Chamber of Commerce of Florence, Trade Associations - CNA and Confartigianato). This measure aims to achieve the following objectives:  identification of new markets and business opportunities for artisanal enterprises  development of artisanal products for sale  training new generations of artisans  incentives to product / process innovation systems  activation of a new model of incubator for artisanal enterprises

Web site: www.fondazioneartigianato.it

“The initiative of the city of Florence is aiming to resolve problems encountered by craftspeople by allocating them workspace as well as enhancing their visibility, since the spaces provided are situated in a prestigious venue Conventino Vecchio, where professionals are likely to come into contact with a great number of tourists, as well as Florence residents and even other artists.”


3.2. Association FRANCIADE "LE GOUT DE LA CONNAISSANCE" Good practice promoter: Municipality of Saint-Denis - Ile-de-France Partner: National Institute of Arts and Crafts (FR)

Franciade is an association that develops an economic activity since 2002, bringing together researchers, craftman, professionals of art, teachers, and residents on a process crossing the scientific, cultural, social and economic solidarity. Franciade publishes and sells objects derived from archaeological heritage, accompanies training activities and integration, organizing festive events and entertainment to cultural and tourist center. Franciade is an actor of local life that aims to promote the cultural heritage of Saint-Denis. The association relies on the resources of the territory, including the craftsmanship of its residents, to encourage a local development approach. All products and services of Franciade, meets the quality and authenticity of a plural heritage through a quality charter. A network of professionals specializing in traditional skills and copy of archaeological objects, engaged in this partnership approach to promote local employment and maintaining the craft in France and abroad. This approach is supported by a European project Equal "Territory and heritage for a shared economy" in connection with many local partnerships.

Web site: www.franciade.fr

“The scope of the Franciade shows how arts and crafts can be given a renewed sense when playing an active role in a local development project, which should inspire incubators to adopt this type of logic. In theory, what could be further from the future and creativity than archaeology? The Franciade association has nevertheless demonstrated, in a so-called disadvantaged area, home to a number of different communities, how archaeological activities were both a source of development and confirmation of important heritage, creating a link between those who lived there before and those who will live there in the future.�

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3.3. Yamakado Good practice promoter: Private initiative Partner: National Institute of Arts and Crafts (FR)

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Yamakado society, founded in 1986 by Hiroyuki and Agnes Yamakado aims to design, manufacture and distribute high quality furniture. Yamakado design is oriented towards a new concept of modularity, flexibility and nomadism. With the outstanding success of the chair Cinderella in 1986, Yamakado became the specialist folding chair high bill. Control of all steps between the creation and distribution of a product is a guarantee of excellence. "We are artisans with an industrial approach, able to create unique pieces and large series. We work with all materials, wood, metal, glass, slate, ceramic cloth, leather, paper... We can also advise customers to create new concepts. Yamakado is open to individuals, businesses, governments and architects. Yamakado plans a much wider scheme: inviting these subcontractors or partners to come to settle in his own premises to work in cooperation not only on Yamakado projects but on their own independent project. It is therefore something of an incubator of a second generation. The initiative is that of a private company (it employs 10 people) who intends to create synergies between enterprises who mutually need each other.

Web site: www.yamakado.com

“We view the project as crucial and, in many respects, revolutionary. Instead of reducing the role of the incubator to barely concealed assistance from public authorities to private companies and craftspeople, it becomes a partnership established between individual companies to take them to a new dimension.�


3.4. Centro Albayzín. Escuela Andaluza de Restauración (Albayzin Center-Andalusian Restoration School) Good practice promoter: Regional Ministry for Economy, Innovation, Science and Employment of the Regional Government of Andalusia and Granada City Council Partner: Public Foundation The Legacy of al-Andalus (ES) Albayzín Center is a consortium belonging to the Regional Ministry for Economy, Innovation, Science and Employment of the Regional Government of Andalusia and participated by Granada City Council. Starting its activities in March 2001, it is a specialized vocational training centre in the fields of brickwork and stone, ceramics and wood. Albayzín Center belongs to the network of Consortiums for specialized vocational training of the Junta de Andalucía (Andalusian Regional Government). This center is aimed to boost the craftwork and restoration sectors by bringing together all professionals, enterprises and institutions involved, taking into account their interests and suggestions, and trying to give efficient response to specific needs. The aims of Albayzin Center:  To train qualified professionals in the field of craftwork, restoration and conservation of cultural heritage, fostering its access to the labour market in a promising sector.  To contribute to the specialization and updating of skills of professionals working in this sector, fostering its development and meeting the needs of companies for qualified workers.  To create and put into practice innovative methods related to training in this field.  To investigate new intervention methods, as well as to recover and maintain the traditional regional knowhow in craftwork, restoration and conservation of cultural heritage.  To keep constant contact with other training centers in the same field in Europe, America and the Mediterranean Basin.  To participate in initiatives related to evaluation, employment management and entrepreneurship.

Web site: www.andaluzaderestauracion.com

“One of the initiatives, the Albayzín training centre in Granada, underlines the extent to which staterecognition of the quality of its training courses was crucial, since it enables craftspeople who have received this training to work freely throughout Spain.”

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3.5. Pirineu Art Good practice promoter: Pirineu Art Association Partner: Barcelona Chamber of Commerce (ES)

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“Pirineu Art" is the Arts and Crafts Association of the High Pyrenees and Aran. This non-profit organisation was established on 19th April 2009, with the aim of representing the professional arts and crafts industry in the territory of the High Pyrenees and Aran. The cornerstones of this new association are: - representation of the sector of professional artisans from the High Pyrenees and Aran. - the dissemination, promotion and marketing of handmade arts and crafts products. - its role as an interlocutor with government agencies. One of the important points to highlight is the quality of the manufacturing. Pirineu Art carries out joint actions to raise awareness of Pyrenean handicrafts and increase the opportunities for the sector. The Association is open to Web site who  : - live and work in the territory of the High Pyrenees and Aran - work on their own products, with limited and stable production runs - hold the art and craft license issued by Artesania de Catalunya, which is a form of guaranteeing professional quality. The Association also offers support and advice to those artisans who still do not have this accreditation and who wish to have it.

Web site: www.pirineuart.cat

“By creating an association whose members all share the same label, the idea is to offer members a structure which represents their interests as well as their potential, defending their interests, carrying out marketing activities that are beneficial to all, and (in theory) improving the quality of their products.”


3.6. LLC „SENĀ KLĒTS” and LLC ���SALONS A” Good practice promoter: Riga City Council Partner: Riga City Council (LV)

Latvia’s specific - (artistic and contemporary crafts) ACC direction – folk applied art. After World War II, many years Latvia has been occupied. For each Latvian one of the options to keep cultural identity was to work in the direction of folk applied arts. There are folk applied art studios in Latvia – collectives, voluntary groups of people, with members who have devoted their free time to actively participate in the learning and innovation process of cultural and artistic heritage (members participate in competitions, exhibitions, events without remuneration). Riga City Council supports the folk applied art studios providing with spaces and paying salaries to the managers of studios. The objective of the studios is to contribute to the strengthening of the values of a traditional craftwork successions and development. It is important that studios are not commercial. Due to the fact that the Latvian situation is so specific, Riga City Council has chosen two Limited Liability companies (LLC) – which are engaged in the ACC sector businesses and promoting Latvian folk applied art in Latvia and other countries: LLC National Cultural Center “SENĀ KLĒTS” LLC Fashion House “SALONS A”

Web sites: www.senaklets.lv - www.salonsa.lv

“The objective of SALONS A was to stay and work in the fashion industry, create new products, to keep the quality and good, highly qualified masters (not losing their jobs), to keep the ability to process natural fabrics and keep the Latvian identity. This high quality has given the company the opportunity to differentiate costumes for different target audiences, as well as provide advice to the fashion industry on novelties, and design costumes and collections for the Latvian higher officials (authorities.)”

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4. SUMMARY TABLE INNOCRAFTS INITIATIVES BY PEDRO JARA


5. POLICY RECOMMENDATIONS  PROGRESS REPORT ON PUBLIC FUNDING BY XAVIER GREFFE


Policy recommendations  Progress report on public funding by Xavier GREFFE As we reach the end of this analysis, what lessons can be drawn about the effectiveness of public funding?  An initial general comment should be made: irrespective of the various situations, the relevance of public funding has never been called into question. There is a structural reason for this: we are dealing with creative activities, with an inevitable element of risk, and, at best, a certain number of goods and services will eventually receive recognition from the market. The slow speed of achieving economic sustainability means that growth levers are required, one of them being public funding. It goes without saying that public funding does not mean a lack of accountability, hence public authorities often request that applications are prepared by specialized organizations, such as financial institutions, and that the dayto-day running of initiatives should be accompanied by professional structures which are already active in these markets.  This point leads to a second comment. Funding and services provided to initiatives will only be effective if said initiatives demonstrate a high level of professionalization. The situation where a single operator provides a full range of different services simultaneously is becoming a thing of the past, since it is difficult to offer comprehensive professionalization in every domain and the requirements of those creating new activities also change very quickly. General service providers can only offer guidance, redirecting stakeholders towards highly professionalized service offers.  The third point relates to the form of this public assistance. For the fundamental reason outlined above, this is naturally offered in the form of funding; However, other forms of public assistance can prove extremely useful, such as the recognition and protection offered by collective brand labels, certifications, etc. In a domain where intellectual property plays a key role and where new technologies increase the potential for copying in certain cases, this type of intervention is crucial. The conclusion that can be drawn from the above analysis is that new forms of incubation or business service structures need to combine the provision of public funds and existing professional skills to define the eligibility of projects, their accompaniment and the moment at which assistance should cease, so that it can be redeployed to new projects elsewhere.

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6. ANNEXES


6.1 Reims and Barcelona seminars programs

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58


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6.2 Barcelona round table

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6.3 Business support services presentation by Pedro JARA

63 NEW TYPES OF COMMERCIALISATION (FUNDING & PAYMENT) 26 – 27 SEPTEMBRE REIMS Pedro Jara

European Union European Regional Development Fund


COMMERCIALISATION THE HANDICRAFT SECTOR CHANGES

IN THE SAME WAY WE CHANGE …

64 TRADITIONAL CONSUMER


PROSUMER – PROACTIVE CONSUMER

65 NEW MARKETS – NEW CHALLENGES  THE EMERGENCE OF NEW COMPETITORS

(SUCH AS CHINA, INDIA, TURKEY, BRAZIL AND MEXICO)

 THE INCREASINGLY ACCELERATED

CHARACTERISTICS OF TECHNOLOGICAL CHANGE

 THE GROWING INTERNATIONAL DEMAND


GLOBAL MARKET vs INDIVIDUAL CUSTOMERS

66 WHAT MUST I PRODUCE TO GET INTO THE INDIVIDUAL MARKET? BEFORE

NOW


QUOTE “As well as providing pleasure and satisfaction to the maker and designer, a practice also has to be a sustainable, viable reality and find its marketplace successfully.” Grace Cochrane

67 TRADITIONAL CHANNELS LARGE RETAILER

BUYING AGENT ARTISAN

WHOLESALER

MEDIUM RETAILER

EXPORTER SMALL RETAILER

CONSUMER


A NEW DISTRIBUTION CONCEPT BUYING AGENT EXPORTER

WHOLESALE IMPORTER

Discount/ Mass Retailer Department Store

ARTISAN´S WORKSHOP

Specialty Store

ARTISAN´S SHOP

Catalogue Retailer

FAIRS AND EXHIBITIONS

Internet Retailer

ARTISAN

INTERNET

ENTERPRISES

INSTITUTIONS

CONSUMER

PERSONS

Independent Retailer

68 PURCHASER AND DEALER PROFILE o

PURCHASERS o o o

o

o

o

o o o o

MORE SPECIALISED MORE ORGANISED BIGGER LESS AND LESS IN EVERY COUNTRY.

DEALERS

NOT SO SPECIALISED LESS ORGANISED SMALLER MORE AND MORE QUANTITY OF THEM. MORE AND MORE CONCURRENCE


WHAT SHOULD WE DO?

INNOVATION

COMMERCIALISATION

COOPERATION PRODUCTION

FUNDING

WHY COOPERATE?  TO OPEN TO NEW MARKETS, ALSO IN FOREIGN      

COUNTRIES. TO KEEP THE FIDELITY OF MY CUSTOMERS TOSAVE COSTS TO IMPROVE OUR PRODUCTIVITY TO LEARN FROM OTHERS AND BE INFORMED. TO INNOVATE JOINTLY TO COMMUNICATE

TO BE MORE COMPETITIVE

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WHERE TO FIND FUNDS? INSTITUTIONAL FUNDS

PRIVATE FUNDS

70 PRIVATE FUNDS. 

LEASING - Loan agreement for the purchase of a capital asset on installments. There´s an option of purchase at the end of the contract period.

RENTING – Direct renting of equipments. No option of purchase at the end of the contract period.

FACTORING - Short-term, non-bank financing of accounts-receivable

MICROCREDITS - Small loans that are made to individuals and entities that would otherwise not be able to obtain any type of credit.

VENTURE CAPITAL COMPANIES - Government, semi-government, or private firm that provides startup or growth equity capital and/or loan capital to promising ventures for returns that are higher than market interest rates.

BUSINESS ANGELS Usually, a former entrepreneur or professional who provides starting or growth capital in promising ventures, and helps also with advice and contacts.

AND OF COURSE, BANK LOANS.


SO MANY… BUT WHY SO DIFFICULT o FINANCIAL CRISIS o HARD BANK CONDITIONS o o

o o o

HIGH MANAGING COSTS TOO HIGH GUARANTEES ADDITIONAL COMPLEXITIES FOR UPRAISING RISKS ADDITIONAL COSTS FOR CUSTOMERS WORST INTEREST RATES.

71 E.U. SUPPORT FOR SMEs Thematic funding opportunities Environment, energy and transport

Structural funds ERDF

Financial instruments CIP

Support for the internationalisation of SMEs

CANDIDATE AND NEIGHBOURHOOD COUNTRIES

JEREMIE Innovation and Research

European Social Fund

EIF

Education and training Rural Development Fund

Culture and media

LATIN AMERICA JASMINE

EPMF

ASIA


FINANCIAL INSTRUMENTS  The 2007-13 Competitiveness and Innovation framework Programme

(CIP)  The SME guarantee facility (SMEG) More debt finance available to SMEs, including microcredit, mezzanine reducing the banks' exposure to risk.

 JEREMIE & JASMINE- It aims to improve access to finance for

micro to medium-sized enterprises and in particular the supply of micro-credit, venture capital finance or guarantees and other forms of innovative financing.

 European Investment Fund (EIF) own investments

The EIF’s activity is based on two instruments such as venture capital and guarantee instruments

 European Investment Bank (EIB) loans

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They are targeted at tangible or intangible investments by SMEs. EIB loans may also help to provide a stable working capital base to SMEs

STRUCTURAL FUNDS.  European Regional Development Fund (ERDF) .- Its aim is to

reduce disparities in the development of regions and to support social and economic cohesion within the European Union

 European Social Fund provides support for anticipating and

managing economic and social change, with a number of opportunities for supporting SMEs. The key areas for action are under the “Regional competitiveness and employment”

 Rural Development Fund. – It focuses on three thematic axes;

improving competitiveness for farming and forestry; environment and countryside; improving quality of life and diversification of the rural economy


NEW PAYMENT METHODS Extensions of traditional retail electronic

New non-traditional retail electronic

payment systems

payment systems

• Prepaid payment cards • Internet payments based on bank accounts • Mobile payments based on bank accounts

• Electronic Purse • Internet payments not based directly on a bank account • Mobile payments not based directly on a bank account

73 NEW PAYMENT METHODS Mobile payments  Based on bank accounts - simply use the phone as an access device to initiate and authenticate transactions from existing bank accounts or payment cards  Based on non-banks accounts - The telecom operator typically acts as a payment intermediary. The payment comes with the phone bill. Internet payments  Not based directly on a bank account (such as PayPal) – It works as an intermediary and customer. Customers don´t have to share financial information, as sellers do not see the numbers of your credit card or bank account.


WE ARE IMPORTANT  Micro, small and medium-sized enterprises (SMEs)

play a central role in the European economy.

 We are a major source of entrepreneurial skills,

innovation and employment.

 In the enlarged European Union of 25 countries, some

23 million SMEs provide around 75 million jobs and represent 99% of all enterprises.

74 LET´S GO WITH GOOD PRACTICES. 26 – 27 SEPTEMBRE REIMS

European Union European Regional Development Fund


6.4. Photos from INNOCRAFTS seminars

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Innocrafts Intermediate Guide