International Entrepreneurship in the Arts: Scope, Models and Examples

This report summarizes the results of the online survey on International Entrepreneurship n the Arts, disseminated among the members of IFACCA (International Federation of Arts Councils and Culture Agencies) in May-June 2015. IFACCA Secretariat assisted my research on this topic. The results are included in Chapter 6 of my new book International Entrepreneurship in the Arts, to be published by Routledge in 2016.

Why is International Entrepreneurship an Important Issue in the Arts?

International entrepreneurship is a dynamic, evolving and motivating field for scholars, researchers, educators, artists and managers in the arts. In the current global context of scarcity of financial resources for the arts, artists and art managers require more than ever innovative methods and tools to expand their creative ideas and projects internationally in order to find a sustainable ways to increase audiences for the arts and attract diverse stakeholders. Artistic creativity nowadays is not simply a personal expression, but a means to influence society, foster economic growth, and create new jobs by transforming an artistic idea into a business model. Therefore, it is inevitably connected with the development of creative industries and cultural entrepreneurship. Governments and diverse stakeholders at local, national and international level have an important role to play in creating a support system for entrepreneurial climate in the arts.

What Were the Aims of This Research?

The online survey aimed at answering the following key questions:

How do the national governments, local authorities and diverse stakeholders support arts entrepreneurs, organizations and artists that go beyond national borders with a creative idea that has the potential to earn revenue?
What are the opportunities, barriers and trends in international entrepreneurship in the arts in different countries? What are effective ways by which arts entrepreneurs expand internationally?
What are the leading examples in support of international entrepreneurship in the arts in different countries?
What are some of the success stories of arts entrepreneurs and organizations in different countries and regions of the world?
What are the “lessons learned” about how to expand a creative idea internationally?

The survey consisted of 12 open and closed questions. Twenty six people from 19 countries responded to the questionnaire – 18 in English, 4 in French and 2 in Spanish. Below is the summary of the survey’s results.

Scope of International Entrepreneurship in the Arts

Respondents of the online survey answered that there are four main aspects related to the term international entrepreneurship in the arts, ranking them in priority order as follows:

Gradual expansion of an arts organization globally after positioning itself on the domestic market (16%).
Attracting international sources of financing and funding in the development of an emerging arts organization (16%).
Starting an entrepreneurial arts organization or project in another country and conducting business activities based on a creative idea across national boundaries (4%)
Presenting of artistic projects, or events in front of audiences beyond the national boundaries.
All of the above (60%)
Other (4%). Here respondents outline the following two aspects of IEA: simultaneous presence in several countries and starting up an arts venture that is run by a multinational team

Sectors Most Suitable for Entrepreneurial Development

The online survey aimed at identifying the sectors of arts and creative industries that are most suitable for starting up entrepreneurial ventures. Respondents in the survey ranked them in the following way (please, note that the question had multiple choice answers):

Music and sound recording (73%)
Visual and applied arts (72%)
Performing arts (62%)
Crafts (62%)
Design (61%)
Cultural heritage (60%)
Fashion (50%)
Film (45%)
Video (34%)
Publishing (33%)
Multimedia art (33%)
Animation (28%)
Computer games (27%)
Architecture (22%)
Others (11%)

Several respondents expressed opinions that all sectors could be suitable for elaboration of entrepreneurial models. In some sectors this depends to a great extent on public funding (like cultural heritage), while in other branches entrepreneurs could generate more revenues from audiences and buyers (e.g. video games, film business or music business). The important aspect of an entrepreneurial model in the arts is to keep a balance between self-generated incomes and public funding, especially in the cases of social entrepreneurship.

Models of International Expansion

International entrepreneurs in the arts have different choices to expand their creative business abroad. They have an option to start internationally from the early inception of an innovative idea, or to grow the venture beyond borders after the initial domestic positioning and local success. The process of considering expansion beyond borders usually starts with evaluation of the main reasons for international growth and a thorough research of all influencing external and internal factors in order to find out the driving and restraining forces that might influence the expansion process. The research results shows that the choice of a model for international expansion is influencing by diverse factors, such as: the aspiration of the arts entrepreneur, the motivation to expand internationally, the “exportability” of cultural goods and services, the art venture’s capacity and potential for growth, options for partnership and collaboration in the targeted country, the overall situation in the targeted country, the level of risk which arts entrepreneur need to undertake, as well as practical and logistical matters.

One of the questions in the online survey was about the most common and preferred methods which entrepreneur in the arts use to expand their ventures abroad. The list below represents respondents’ answers, in a priority order (please, note that the question had multiple-choice answers):

Networking (88%)
Co-productions (75%)
Touring (66%)
Artistic cooperatives (53%)
Representatives (40%)
Online expansion (40%)
Agents (33%)
Consortium (33%)
Creative clusters (33%)
Licensing (27%)
Strategic alliances (non-equity) (27%)
Distributors (22%)
Strategic alliances (equity based) (20%)
Indirect export (through trade houses) (14%)
Merging (13%)
Acquisition (7%)
Horizontal integration (6%)
Vertical integration (0%)
Others (please specify):

Collaborative models of international expansion, such as networking and co-productions are ranked with priority. They aim at combining efforts, competences, resources and expertise of arts organisations in order to achieve mutually beneficiary results by working together. Touring is an especially effective model for performing arts organisations that aim at reaching international audiences and increase their visibility abroad. Foreign agents and other types of representatives also receive high ranking in the list, especially related to arts ventures that sell abroad creative and cultural goods in the field of fine arts and crafts. Establishing of international consortium is useful for attracting international funding for a specific project, for building up a new cultural venue, or for promoting the value of cultural resources to local communities. This type of partnership is often used by nonprofit organisations and social enterprises. Licensing is a popular international expansion model especially in some branches of creative industries such as visual arts, music, design and photography.

Business models focused on online distribution and sales are also very popular in the arts, especially considering the rapid development of Web 2.0 tools and other online and mobile technologies in the 21^st century.

Development of strategic alliances, horizontal and vertical integration methods, indirect exporting, as well as mergers and acquisitions are not very popular international expansion models in the arts sector. One of the reasons is that they are usually effective for big corporations and arts sector worldwide is fragmented, consisting of small and medium-scale businesses that do not have the capacity and resources to use these methods of expansion.

Examples of Arts Enterprises

Part of the online survey was related to finding examples of arts enterprises that start small and local, but then rapidly develop internationally, that have innovative characteristics, efficient business mode and aim at global leadership. Survey respondents provided the following examples coming from eight countries:

CGS Visual Effects, Tunis: http://www.cgs3d.com/site/en/index.php
Druid theatre company, Galway, Ireland: http://www.druid.ie
Mother’s Tankstation , Dublin, Ireland: http://www.motherstankstation.com
Joseph Walsh Studio, Dubln, Ireland: http://www.josephwalshstudio.com/
Chris Judge, illustrator, artist and children’s picture book author, Dublin, Ireland: http://www.chrisjudge.com/
ROADS lifestyle brand, Dublin, Ireland: http://www.roads.co
Landmark Productions, Dublin, Ireland: http://www.landmarkproductions.ie/
Riverdance, Ireland: http://riverdance.com/
Thisispopbaby, Ireland: http://www.thisispopbaby.com/
VISUAL Centre for Contemporary Art & The George Bernard Shaw Theatre, Carlow, Ireland: http://www.visualcarlow.ie
Teamwork Productions, New Delhi, India: http://www.teamworkproductions.in
Arts Printing House, Vilnius, Lithuania: http://www.menuspaustuve.lt/en/
OMBA, Nambia: http://www.omba.org.na/
David Goldrake, Luxembourg: http://www.davidgoldrake.com/
Ina Expert, France: http://www.ina-expert.com/
Agence de promotion des enterprises et industries culturelles (APEIC), NIger: http://apeic-niger.net/
Su-Mei Tse, Luxembourg: https://fr.wikipedia.org/wiki/Su-Mei_Tse

There are several key success factors in the process of international expansion of an arts venture, as follows:

Ongoing innovation and high creative capacity;
Choice of the right partner in the targeted country;
Maintaining a strong international network of partners, audiences and supporters;
Understanding and applying online technologies;
Creative and devoted international team, and
Constant observation of trends and external factors.

Examples of Government Support for International Entrepreneurship in the Arts

Government support mechanisms for international entrepreneurship in the arts vary from country to country. Some strategies and tools are specialized for the creative industries while others are part of the general country support for international trade and business. There are several main methods of government support, as follows:

Legislative mechanisms for import-export of arts-related products
Export and trade support services, including export finance measures and fiscal initiatives
Promotional activities for arts events and organisations that expand abroad
Cultural diplomacy

Governments’ support on organizational level includes the following mechanisms:

Support for international co-productions;
Establishment of incubators and accelerators for startup companies in the arts and creative industries;
Offering low-cost spaces for artistic innovation and entrepreneurial activities in the arts;
Support of networks of startup companies, and
Assistance of artists-run centers and cooperatives.

On individual level, governments in different countries support artists and entrepreneurs in the arts in their efforts to expand abroad in the following main ways:

Individual travel grants;
Individual travel loans;
Information sessions for possibility to expand abroad;
Support for attending international events, such as trade shows and festivals;
Mentorship and coaching for arts entrepreneurs; and
Awards and prizes for the most successful arts entrepreneurs and inventors.

Respondents in the survey provided a few concrete country examples of government support for international entrepreneurship in the arts, as follows:

Austria: Go-international: www.go-international.at
Finland: Export Finland: http://www.exportfinland.fi;
Luovimo: http://www.exportfinland.fi/web/eng/luovimo/luovimo-in-brief
Ireland: Arts Council Ireland, Travel and Training Grants: http://www.artscouncil.ie/Funds/Travel-and-Training-award/ ; Culture Ireland: http://www.cultureireland.ie; Crowdfunding Ireland: http://fundit.ie/browse ; Microfinance, Ireland: http://microfinanceireland.ie/
Lithuania: Lithuanian Business Support Agency: http://lvpa.lt/
NOMEX Nordic Music Export Program: http://nordicmusicexport.com/

Arts entrepreneurs need to explore what are the support system elements that exist in their country in all the three sectors-government, business and nonprofit, and how to use these opportunities. It is important that they are aware of the direct and indirect cultural policy methods for support of arts entrepreneurship, as well as the city strategy for investing in innovations, creativity and the arts as vectors for further economic and social development.

What’s next?

The forthcoming book International Entrepreneurship in the Arts (Routledge, 2016) will provide further understanding and analysis of elements of the support system for entrepreneurship in the arts that exist on international, national and local level. It aims to help entrepreneurs in the arts to apply successfully theoretical strategies and tools into their practice to cross borders and expand their artistic ventures internationally.

Read more on the research results at IFACCA D’Art research reports soon!

The Entrepreneurial Strategy in the Real World: Davender Gupta’s Advises and Lessons Learned

22Feb

Davender Gupta is a coach and mentor to many entrepreneurs through his company, Startup-Académie, and programs such as Startup-Académie 101, FastTrac TechVenture Québec, Startup Weekend (Québec, Sherbrooke and Montreal) and Lean Startup Machine. His passion is to guide high-performance entrepreneurs to develop the clarity, the confidence and the discipline to successfully execute on their ideas. His first 15-year career as a military aerospace research and development engineer led to a second career, experiencing first-hand the startup boom of the late 1990s. He then pivoted into a third career as a Venture Catalyst and Entrepreneurial Leadership Coach, helping hundreds of startups and scaleups across Canada and overseas to transform their ideas into impact. His fourth act is building an “Entrepreneurial Amplifier” and seed fund to support tech scaleups earn their first $1M-$10M of revenue. Davender is also very active in developing the regional and national startup ecosystems. In 2013, Davender was named as one of “Canada’s Top Ten Rockstar Mentors” by Startup Canada and Futurpreneur Canada. Most recently, he completed the MIT-Sloan School of Management “Entrepreneur Development Program”, an elite-level international intensive in innovation-driven business strategy and growth.

Davender was so kind to join my classes on Strategic Management at Desautels Faculty of Management at McGill University last week and share his viewpoint on strategy, related to startup companies and entrepreneurs. His guest lecture was very much appreciated by the students. Below are some of the highlights:

The importance of every strategy is how you create, deliver and harvest value.
Strategy is a guide, but not the answer. It is about exploring choices and it has to be adaptable to the reality. The moment you execute a strategy, it becomes invalid.
Strategy is to look at problems and find solutions, not to justify ideas.
It is important to ask yourself the question: is your idea a strong foundation for growth? How does it measure up to the four Ps:

* People: Who are the stakeholders of your idea and how many of them you could get to contribute to your growth?
*Purpose: How does your idea resonate with the stakeholders and does it have a strong, responsible and compelling purpose?
*Passion: How does your idea tap into the passion of your stakeholders? Would they contribute to your growth?
*Profit: What is the result that you will create with your idea? How will your stakeholders benefit? How can you be rewarded for the impact and results you make?

When elaborating a strategy, it is important to choose the right market and industry segment. Business ventures are complex entities and it is often difficult to define the exact industry branch where the company will compete. In what business are we in, and how to compete are the two important angles of strategic choices.
Strategy is a hypothesis. You need to dig down to what you don’t know about what you don’t know – and what the market doesn’t know about what the market doesn’t know.
The strategy needs to be agile and to be able to adapt to the changes and the real world in real time. Strategic plans are dynamic-in order to be useful, they should contain a room for changes.
Strategy is about choosing between equally viable alternative strategic commitments. This requires knowledge that can only be gained through experimentation and learning.
When elaborating a strategy, there is no “right answer” other than that which honours what you stand for.
Smart entrepreneurs are not “risk-takers, but “risk managers”. The goal of the entrepreneurs when elaborating and executing a strategy is to change the game in their own favour. This is actually the only strategy that counts.

Davender’s talk provoked students to ask over 30 questions at the end of the class.He took time after the classes to answer to all of them-a big Thank You for that on behalf of the students! Below are only a small portion of questions and answers:

1. What are the biggest errors an entrepreneur can do that would lead to a business failure?

– Focusing on “building the thing” rather than focusing on solving a real problem for a real person.

– Not choosing the right people: most business failures are team and people failures, not financial or technical

– Starting a business “to get rich”: there are easier, faster and cheaper ways to make money. Start a business for the right reasons, primarily because you are “in love” with what you’re doing.

2. What is the most challenging risk that you have observed in startups?

– Shifting from development mode to sales mode and entering the first market. It requires a whole different mindset. Sometimes you need to let people go and bring new people on board.

3. What advices would you give to someone that wants to work in consulting?

– Build a network of smart people around you early on.

– Share your knowledge early and often (blog, podcast, social media).

– Build a personal brand, be known as a passionate.

4. How to find passion? When you find out that someone’s idea is really your passion? How to differentiate from just other things you like?

– Passion about an idea is like falling in love: you can’t think of anything else other than that idea and it keeps you up at night.

5. How do you think a company’s growth strategy should change as revenue grows from $10 000 to 100 000 to 10 000 000 to 50 000 000?

– The first ten customers need to become your best friends. They will buy because they know and love you.

– The first hundred customers then become your best spokespeople. They will buy because they know you and want to help you.

– The first thousand customers need to be your true fans. They buy because they are meeting you and love what you’re doing.

– At that point, your customer base loyalty shifts from you to your offer.

– So at first, don’t be shy about putting a personal face on your company and your offer. Then as the company grows, put the offer first.

6. It appears that the hope of 2015+ is around tech-apps, sites, platforms…and product ideas are discouraged. Is it getting too crowded?

– Disagree. The movement up until recently was more apps and software because the tools were developed to make it cheap to build software. Now with 3d-printing, Arduino, etc, I believe the next wave is more hardware. I am specifically looking to invest in tangible things rather than just software.

7. How to you coach to deal with uncertainty?

– Visualize the future as if everything will go right and act in the moment as if everything will go wrong.

8. What are specific tools entrepreneurs use to identify what they don’t know?

– Validation of hypothesis around what people need and what they want

– https://www.leanstartupmachine.com/validationboard/; http://www.businessmodelgeneration.com/canvas/vpc

9. Do you believe an undergraduate diploma in entrepreneurship is worth anything to actually start a company?

– The popular belief today is that the only way to learn entrepreneurship is “on the job”, that you learn by doing. However what I see is that this leads to too many blind spots that end up sinking great ideas. I think that you need to learn the basics of aerodynamics before taking the controls of a jet fighter. I like the trends at McGill and Concordia to integrate learning about entrepreneurship and doing it at the same time.

Davender is convinced that “in the future we need a new generation of citizen-leaders who are crystal-clear about their purpose, who are powered by the passion of a big vision and who transform the status-quo by mobilizing communities of people to build systems that create profit and prosperity for all“. Hopefully McGill students will be exactly this types of leaders in the 21st century….Especially supported in such a generous way by business leadership mentors and coaches like Davender Gupta.

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26Jan