Kunst - Economie
Reflecties omtrent
financiering
Prof. Bart Van Looy
(i.s.m. Ward Van de Velde, Peter Vervaecke, OKO, …)
Faculteit Economie en Bedrijfswetenschappen
Background: Management of Technology & Innovation
Research Topics:
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Organizing innovation at the firm level: organizing R&D activities, open
innovation/alliances, venturing,…
Innovation Systems :
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–
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the role of science (universities) within innovation systems – ‘entrepreneurial universities’
the nature/impact of policies (e.g. with respect to Intellectual Property Rights (IPR)), funding of
basic/applied research, restrictive legislation,…
high tech clusters/knowledge dynamics
Technology studies (longitudinal)
Aim of current contribution:
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Explore the similarities between nature/dynamics/governance of Science & Technology
and Culture.
Based on this analysis, arrive at inspiring (?) suggestions on the governance of Culture.
(Increase understanding with respect to the role Art/Culture can play in relation to the
‘Creative Economy’ – creation of wealth).
Faculteit Economie en Bedrijfswetenschappen
Flat?
Faculteit Economie en Bedrijfswetenschappen
Rank
National
Rank
County
Per Capita
Income
Median Household Income
1
1
Marin County
$44,962
$71,306
2
14
San Mateo County
$36,045
$70,819
3
19
San Francisco County
$34,556
$55,221
4
25
Santa Clara County
$32,795
$74,335
5
45
Contra Costa County
$30,615
$63,675
6
49
Ventura County
$29,634
$75,157
7
77
Placer County
$27,963
$57,535
8
96
Alameda County
$26,860
$55,946
9
106
Santa Cruz County
$26,396
$53,998
10
107
Napa County
$26,395
$51,738
4
Faculteit Economie en Bedrijfswetenschappen
5
Faculteit Economie en Bedrijfswetenschappen
Silicon Valley & Stanford University
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1891: Stanford University established…
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D.S. Jordan, made 500 dollars available to Lee de Forrest, who developed the vacuum
tube as a way of intensifying electrical signals (1908).
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In the 1930s, Frederick Terman (dean), encouraged Bill Hewlett and David Packard, to
start their own electronics company.
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In 1951, Stanford University opened the Stanford Industrial Park (234 ha of university
land).
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First company Varian Industries, the second Hewlett-Packard.
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Today, over 150 firms are active in the areas of electronics, software, biotechnology,
–
….
(Sources: Saxenian, Kenny,…)
Faculteit Economie en Bedrijfswetenschappen
Macroeconomic and
regulatory context
Education and
training system
Communication
infrastructure
Global
innovation networks
Product market
conditions
Firms’
capabilities
and networks
Other
research
bodies
Science
system
Clusters
of industries
Regional Innovation
Systems
Knowledge generation, diffusion and use
Supporting
institutions
National innovation system
National Innovation Capacity
COUNTRY PERFORMANCE
Growth, job creation, competitiveness
Faculteit Economie en Bedrijfswetenschappen
Factor market
conditions
Science
•
No immediate economical returns
•
Basic research: valuable but at the same time, uncertain.
•
(Beneficial) Outcomes often characterized by extended time frames.
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Market Failures (K. Arrow)
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Introduction of public funding to address market failures
•
Allocation mechanisms/criteria required for funding
•
Allocation of public sources introduces accountability – governance
evolves towards ‘Entrepreneurial’ Universities (‘Third mission’ – besides
education and research)
Faculteit Economie en Bedrijfswetenschappen
Market Failures
•
The market, as a coordination device to allocate resources, results in a
sub-optimal situation.
•
Basic scientific work: extended time frames before impact unfolds;
results highly uncertain (so often no impact (yet)); creation of
information/knowledge which is difficult to appropriate…
•
For rational actors, driven by profit maximizing objectives (~ firms), the
rational choice with respect to this type of activities: do not invest.
•
If all market actors arrive at the same conclusion, investment levels will
be low/moderate (equaling voluntarism - sponsorship driven by idealism).
•
Society as a whole might be better off if we would allocate more
resources … leading to investing taxpayer’s money….(as well as the
creation of IP arrangements,…)
Faculteit Economie en Bedrijfswetenschappen
Market failures at work
•
Mosaic/Netscape:
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–
–
•
•
•
•
•
•
•
•
•
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Mosaic Communications Corporation (Clarck & Andreesen backed up by Sequoia, VC), 04.04.1994
0.9 Mosaic Netscape Browser: 13.09.1994
IPO of Netscape: August 9, 1995.
1991: World-Wide Web (WWW) released by CERN (Tim Berners-Lee & Robert Cailliau)
1987: UUNET founded
1982: DCA and ARPA establishes the Transmission Control Protocol (TCP) and Internet Protocol
(IP), as the protocol suite, commonly known as TCP/IP, for ARPANET
1976: Queen Elizabeth sends out an e-mail
1973: First international connections to the ARPANET: University College of London (England) and
Royal Radar Establishment (Norway) - Ethernet outlined - File Transfer protocol specified
1971: People communicate over a network - 15 nodes (23 hosts) on ARPANET
1971: E-mail invented - a program to send messages across a distributed network.
1968: ARPANET commissioned by DoD for research into networking- 4 Nodes
1962 - 1968 -- Packet-switching (PS) networks developed
1948: C. E. Shannon, ``A mathematical theory of communication,'' Bell System Technical Journal,
vol. 27, pp. 379-423 and 623-656, July and October, 1948
Faculteit Economie en Bedrijfswetenschappen
Market failures – always, everywhere?
(science, technology, innovation)
• It is clear that market failures are only present in research
and development activities of an uncertain/more basic
nature.
• Currently, both firms and governments support R&D
activities (e.g. 3% Target EU: +/- 2% BERD & 1% HERD).
• Efforts/policies should focus on creating additional rather
than substitutive effects.
• To the extent that public money is being invested in R&D,
actors performing these R&D activities can/should be hold
accountable for results, including efforts geared towards
spillovers (valorizing knowledge)
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Culture
•
R. Caves (2002): Investments in culture imply risk and uncertainty.
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For a number of artistic genres, investments are considerable: theatre,
opera, dance, movies, classic music,…
•
If we rely exclusively on market dynamics, investors will select
productions that appeal to large audiences and/or reflect ‘calculated’
risks only (e.g. classical music: The Three Tenors, A. Rieu,…)
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The occurrence of more risky (novel?) projects will depend on
voluntarism and/or the presence of a Maecenas.
•
Is this a problem?
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Stated otherwise, are we likely to miss ‘spillovers’ when investing less in
culture (when we rely only on market mechanisms and voluntarism)?
Faculteit Economie en Bedrijfswetenschappen
Spill Overs (1)
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Spill Overs (2)
“Why cities without gays and
rock bands are losing the
economic development race”
The Rise of the Creative Class –
R. Florida
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R. Florida – The rise of the creative class
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Spill Overs (3)
“Human creativity is the
ultimate economic resource”
R. Verganti – Design Driven Innovation (Harvard
Business Press)
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R. Verganti: Design Driven Innovation
Recent studies on design management have helped us to better
comprehend how companies can apply design to get closer to users
and better understand their needs; an approach usually referred to
as “user centered design”.
Yet, analysis of design-intensive manufacturers such as Alessi,
Artemide and other leading Italian firms, show that their innovation
process hardly starts from a close observation of user needs and
requirements.
Rather, they follow a different strategy that we call “design driven
innovation”. This strategy aims at radically change the emotional and
symbolic content of products, i.e. their meanings and languages,
through a deep understanding of broader changes in society, culture
and technology.
Rather than being pulled by user requirements, design driven
innovation is pushed by a firm’s vision about possible new product
meanings and languages that could diffuse in society.
Faculteit Economie en Bedrijfswetenschappen
Bookworm Shelving – Kartell – Castelli/Ron
Anrad/Luti
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Innovating Through Design – Roberto Verganti
Harvard Business Review - Dec 2006
•
Alessi, the lighting manufacturers Flos and Artemide, the furniture maker Kartell,
and many other northern Italian firms make up the Lombardy design discourse, a
loose collection of home-furnishings companies that create highly marketable
products with distinctive design profiles.
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These companies do not follow either of the design industry's norms: "tech push,"
whereby an improvement in performance and functionality dictates a modification
in design, or "market pull," whereby the design accommodates consumers'
demand for new features or an up-to-date look.
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Nor do they resort to the open-innovation techniques for which IBM, Procter &
Gamble, and Eli Lilly, for example, have become known.
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That is, they don't rely on an anonymous horde of code writers or the equivalent
to perfect an existing product; they don't in-license the patented discoveries of
unaffiliated businesses or inventors; and they don't out-license their own
discoveries to generate revenues with minimal effort, or to elicit a third party's
better-informed reading of the discoveries' marketability so as to spur their own
development efforts.
Faculteit Economie en Bedrijfswetenschappen
Ingredients
• In a study conducted for the government of Lombardy, 26
international design experts agreed that the components of the
design system – schools, studios, manufacturers, and so forth –
were not significantly better in Lombardy than elsewhere.
• What did distinguish the region was the number and strength of
the links between these components and the quality of the
interactions among them.
• According to the Israeli designer Ron Arad, "Northern Italy is the
center of the design world, above all because of its manufacturing
culture. There is no other place in the world where you can find
such a vast array of manufacturers who know the value of
design."
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Financial Performance of Leading Companies in the Lombardy Design Cluster
Ten-Year Growth – Revenue (2003,
U.S. $)
81%-104 million
59%-$110 million
54%-$165 million
117%-$29 million
60%-$163 million
106%-$75 million
211%-$70 million
Alessi
Artemide
B&B Italia
Cappellini
Cassina
Flos
Kartell
TOTAL
76%-$716 million
Furniture Industry Performance Italy
Furniture Industry Performance EU
28%-$21 billion
11%-$78 billion
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Home furnishings
Lighting
Furniture
Furniture
Furniture
Lighting
Furniture
Ingredients
•
Earlier kettles came in various shapes and sizes, but their purpose was,
almost without exception, utilitarian. Consequently, their form followed
their function (to boil water)–the first precept of modern design.
•
Sensing from his interactions with the Lombardy research community a
new spirit of playfulness that reflected a growing disillusionment with
modernism's severity, Alessi's CEO and managing director, Alberto
Alessi, contacted Graves, a professor of architecture at Princeton, who at
that point had never worked on a consumer product but had designed a
few notoriously postmodern buildings in the United States (their surfaces
were decorative and referred to earlier architectural idioms– modernist
taboos).
•
Although undeniably clever in its synthesis of pop art and art deco
references, model 9093 showed its greatest originality in broadening
people's expectations of what a kettle was and did and, indeed, the
nature of the breakfast experience.
Faculteit Economie en Bedrijfswetenschappen
Ingredients
• This broadening reflected years of discussion and generations of
design concepts preceding Graves's realization of model 9093.
• Far from being an annoyance or merely a signal, the birdlike
whistle the kettle emits draws its owners to the breakfast table as
powerfully as the aroma of freshly brewed coffee. The little plastic
bird visually confirms that beckoning sound, and the
delightfulness of the kettle's shape is its own reward.
• According to an interview he gave BusinessWeek.com, Graves
once received a postcard from a French poet, who wrote, "I'm
always very grumpy when I get up in the morning. But when I get
up now, I put the teakettle on, and when it starts to sing it makes
me smile – goddamn you!"
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Phase 1 - Absorb
Move – as an entrepreneur - at the frontiers of art/avant garde/fashion.
E.g. Alessi being involved in the Memphis collective (founded by E.
Sottsas) realized that a sharply new design language was needed for
his company’s kitchenware
He believed that foreign architects who had never designed consumer
goods were the ones to invent its vocabulary and grammar. He called
his project the ‘Tea and Coffee Piazza’ and invited Mendini (architect) to
select 10 other architects (including Hollein (AT), Venturi (US) and
Graves).
Architects were asked to concentrate on communicativeness and
evocativeness and to neglect issues of cost and functionality (the four
dimensional framework used by Alessi to assess designs).
“It is easy to make a list of the top ten designers of the past ten years. But I’m virtually
certain that fewer than half of them will be among the top ten designers of the next
10 years.”
A. Alessi
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Phase 2: Interpret
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Before ground-breaking products could be presented to the public, the ground had
to be prepared:
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The 11 coffee and tea service prototypes the architects produced were exhibited at the
San Francisco Museum of Modern Art and the Smithsonian and in other cultural settings.
They were produced in limited editions of 99 pieces and sold to museums and influential
collectors for $25,000 each.
Alessi prepared a book about the prototypes and distributed it to the extended design
community.
A traveling exhibit of the prototypes was shown in high-end department stores around
the world.
The press in Italy and abroad was invited to write about the exhibits and the project.
Alessi closely followed the reactions of design aficionados to the prototypes. An
incidental benefit of publicizing them and the concepts behind them before an
actual product existed was to ensure that the public would forever associate them
with the Alessi brand and would view any related development by others as an
imitation.
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Phase 2: Interpret
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Among the 11 architects, Graves was one of only two who were invited
to turn their concepts into cost-effective and functional commercial
products.
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Model 9093 was then rated on Alessi's four dimensions. Its broad base,
which facilitated rapid heating; its visible rivets, which recalled a kind of
vintage artisanship; its superimposed plastic handle in cool blue, which
was decorative as well as heat-resistant; and its little bird, which flew in
the face of modernism's insistence on abstract form, earned it the
highest rating in Alessi's history.
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Because of the company's success with Sapper's model 9091 kettle,
which emits two low, harmonizing whistles evoking ships passing in the
night, a whistle was one specification imposed on Graves.
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Alessi also wanted the bird to be removable, so that the kettle could
feature a spout instead of a hole, and he wanted a lower cost of
fabrication and a faster boil.
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Alessi 9091 Kettle From Richard Sapper
Faculteit Economie en Bedrijfswetenschappen
Phase 3: Address
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Shortly before and then after model 9093 was launched, Alessi organized another
round of exhibitions and publicity.
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Because advertising is not the ideal explanatory medium, little of it was done.
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The members of the design discourse, by continuing to talk and write about the
kettle's role and meaning, disseminated knowledge of the product to a wider
audience. In the end, they acted as amplifiers of a message they had helped to
construct.
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Nowadays, many of the Lombardy companies maintain their own retail outlets as
a way of controlling presentation and underlining the traits their products have in
common.
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When third-party retailers carry them, often items of the same brand will be found
grouped together in their own showcase, for the same reasons. And, unlike an
Armani jacket or a Gucci handbag, these products come with literature elaborating
on how they came into existence and the qualities that make them special.
Faculteit Economie en Bedrijfswetenschappen
Alessi 9093
67oz Kettle with Bird Whistle by Michael Graves, 1985
Faculteit Economie en Bedrijfswetenschappen
Greg Lynn, Production prototypes for
Alessi Coffee and Tea Towers (2001).
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Reversing the logic – looking for (innovation) systems where culture
flourishes without ‘public’ support.
•
Comparative analysis – US vs. Flanders (UK, D, NL) – performed by P. Vervaecke, W. Van de Velde
& B. Van Looy (K.U.Leuven) - Support/assistance in terms of data: OKO & J. Janssens/VTI)
•
Focus on classical music (as a first case)
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In Flanders, considerable part of the revenue stems from support of the Flemish Community
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In the US significant contributions stem from the NEA (National Endowment of the Arts) and SEA,
albeit to a lesser extent.
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In the US, orchestras obtain 43% of their revenue from the public. In Flanders, this number equals
42% (Notice: UK: 44%, D: 37%; NL: 21/5%)
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Major difference: Government support versus Donations.
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Donations have a public character as they imply (considerable) tax exemptions.
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The major difference pertains to the allocation logic/decision making unit: governance by
(democratic) installed committees versus (wealthy) individuals/foundations.
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No sign whatsoever that direct market mechanisms are able to support the classical music industry
in the US (notice also, differences in scale, variety – quality/novelty?)
Faculteit Economie en Bedrijfswetenschappen
Some additional reflections on ‘Subsidiering van
podiumkunsten: beschaving of verslaving?’ (van Klink, van
den Born, van Witteloostuijn)
•
•
Chapter 2: Utility functions for Artists
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Are artists the only ‘species’ that are intrinsically motivated?
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Do all artists/artistic productions display the same characteristics (risk, investments,…):
poetry/song writing versus theater/opera/classical music/dance…
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Taking into account the nature of artistic productions seems a prerequisite to arrive at
relevant/valuable policy recommendations (for evidence in Flanders, see analysis P. Jocqué,
master thesis FEB, K.U.Leuven).
Chapter 3 onwards:
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Governance models will ‘determine’ entrepreneurial/income dynamics (e.g. share of income
obtained from the public attending performances)
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A distinction can be made between ‘Anglo-Saxon’ models and ‘Continental governance’ (D, NL,
FL), whereby the superiority of the ‘Anglo-Saxon’ model is being advanced.
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Previous figures clearly indicate that this conclusion is not warranted (facts & figures suggest
otherwise). E.g. Dance – Flanders; 64% own Income <> 43% Uk (NL: 19%).
Faculteit Economie en Bedrijfswetenschappen
To conclude (intermediate…)
•
Exploring the similarities between science (creation of knowledge) and arts (creation of meaning)
seems valuable.
•
Arriving at policy recommendations benefits from analyzing facts and figures (towards evidence
based policies).
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Such analysis should take into account and reflect the nature of artistic production.
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Market failures are a ‘real’ phenomenon – in science/technology/R&D as well as Arts.
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If public resources are being allocated to arts, accountability seems legitimate : hence, the
introduction of sound (quantifiable?) and debatable criteria.
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In terms of science, fears have been uttered that an orientation towards ‘valorizing’ would jeopardize
academic freedom/quality.
•
Empirical evidence demonstrates the opposite: ‘entrepreneurial’ effectiveness implies ‘scientific
eminence’ (e.g. Van Looy et al., 2004, 2006, 2011…)
•
If this logic holds for artistic production, one should incorporate criteria which reflect
impact/importance/quality (including international recognition).
Faculteit Economie en Bedrijfswetenschappen
Example – IMEC
Faculteit Economie en Bedrijfswetenschappen
Leuvense IMEC helpt Samsung met slimme gsm's
Het Leuvense onderzoekscentrum IMEC gaat de Zuid-Koreaanse technologiereus Samsung helpen
met de bouw van een nieuwe generatie slimme en groene mobiele telefoons. IMEC behoort tot de
absolute wereldtop in onderzoek naar nanotechnologie en verwierf wereldfaam in het onderzoek
naar chips. De Leuvenaars werken dan ook samen met de grootste chipmakers ter wereld, zoals
Intel (in omzet de nummer 1) en Samsung.
Samsung
In Zuid-Korea werkt IMEC al samen met Samsung en Hynix, deel van de Hyundai-groep. IMEC gaat
nu een nieuw contract met Samsung aan. Woensdag wordt daartoe een principe-akkoord
ondertekend. IMEC gaat Samsung helpen in de bouw van een nieuwe generatie mobiele en groene
mobiele telefoons. Het gaat om toestellen die bijvoorbeeld zelf automatisch van bandbreedte
verspringen en minder energie verbruiken. Het contract loopt over een periode van 2 à 3 jaar.
Topspeler
Voor het onderzoekscentrum gaat het om een strategisch erg belangrijk contract, vertelt professor
Declerck. "Samsung is een topspeler en de technologie die wordt ontwikkeld is heel belangrijk." Ook
met het NNFC, het National Nanotechnology Fabrication Center, zal een principe-overeenkomst
worden ondertekend. Het NNFC is de Koreaanse tegenhanger van IMEC. Beide onderzoekscentra
gaan studenten en professoren uitwisselen en wetenschappelijk overleg aangaan.
IMEC is 25 jaar geleden ontstaan als een interuniversitaire spinoff. Het is nog steeds een vzw, maar
met een budget van 260 miljoen euro is het wellicht de grootste vzw van het land. (belga/gb)
Grant Flemish government: +/- 40 Mio Euro.
Faculteit Economie en Bedrijfswetenschappen
IMEC
Bedrijfsop brengsten
•
Externe inkomsten voor onderzoek :
•
Diverse inkomsten (doorbelasting kosten, inbreng in natura, congressen, …):
•
Toelage Vlaamse Gewest
•
Subsidie Nederlandse overheid
274.750.181
212.129.712
9.914.323
44.730.000
7.976.146
Bedrijfs kosten
262.416.954
•
•
•
•
•
Handelsgoederen, grond- en hulpstoffen
Diensten en diverse goederen
Bezoldigingen, sociale lasten en pensioenen
Afschrijvingen, waardeverminderingen en provisies
Andere bedrijfskosten
44.324.470
53.384.736
98.795.816
64.891.161
1.020.772
Bedrijfsresultat 12.333.227
•
•
•
•
Kosten van schulden
Andere financiële kosten en opbrengsten
Uitzonderlijke kosten en opbrengsten
Belastingen
-1.820.182
1.588.927
726.717
-121.868
Winst van het boekjaar
12.706.821
Investeringen
38.123.527
Faculteit Economie en Bedrijfswetenschappen
University Research Scorecard 2002
MIT Technology Review
Copyright (C) 2002 by Technology Review and CHI Research, Inc.
Institution
University of California
MIT
Caltech
Stanford University
Princeton University
University of Texas
Cornell University
Columbia University
University of Wisconsin
University of Washington
Johns Hopkins University
University of North Carolina
University of Pennsylvania
Duke University
University of Michigan
Pennsylvania State University
University of Southern California
University of Minnesota
University of Utah
University of Florida
(* annual average)
Technological Strength
2001 rank 1996-2000* rank
460
1
383
1
227
2
186
2
178
3
101
5
137
4
102
4
105
5
37
20
89
6
120
3
88
7
65
9
79
8
63
11
75
9
80
6
71
10
74
7
68
11
63
11
58
12
42
14
57
13
69
8
56
14
41
16
55
15
64
10
46
16
31
25
44
17
17
48
41
18
42
14
41
18
33
24
40
20
40
18
Number of Patents
2001 1996-2000*
434
387
140
130
127
76
90
82
47
24
100
104
71
61
62
50
75
73
51
49
88
75
48
42
55
57
59
39
59
55
60
32
33
18
42
44
46
35
59
55
Current Impact Index
2001
1996-2000*
1,06
0,99
1,62
1,43
1,40
1,33
1,52
1,25
2,23
1,56
0,89
1,16
1,24
1,07
1,27
1,26
1,00
1,09
1,39
1,50
0,78
0,84
1,20
0,99
1,03
1,20
0,95
1,05
0,93
1,17
0,77
0,97
1,33
0,91
0,99
0,95
0,89
0,95
0,67
0,72
Faculteit Economie en Bedrijfswetenschappen
Science Linkage
2001 1996-2000*
15,13
13,01
14,76
14,23
16,17
11,96
13,98
12,44
10,87
12,61
37,87
33,21
18,66
14,37
18,02
11,09
16,29
10,87
11,53
15,51
16,07
15,12
15,98
20,04
30,11
27,29
13,34
20,05
19,00
24,62
14,95
12,76
24,64
15,12
26,64
24,00
13,43
12,08
17,20
9,44