To be successful and sustainable cultural organisations need to create new ideas as well as develop mechanisms how to implement these ideas and transform them into opportunities responding to fast changing environment. Being a core element of successful strategies, driving changes in almost every aspect of organizational perfor- mance, not only in production and technological processes, but also in resource ma- nagement, fundraising strategy, business-modeling, marketing and communication, innovation should be clearly de ned and categorized.
Giving insights on basic definitions of innovation the rest part of the article points on the fact that these de nitions do not reflect cultural sector specifics as they were developed in traditional manufacturing and hi-tech studies. The second part of the article turns to the innovation classification that can be implemented to cultural sector, visualizing it on the scheme, providing selective examples for innovation types and giving special attention to phenomena of ‘soft’ and ‘hidden’ innovations, out- lining a range of innovation opportunities with which cultural sector is presented. Having formed more deep and systematic view on the innovative activities in cultural sector based on the typology developed we conclude by redefining the term ‘innovation’ in a way that allows to catch features of innovations in the arts and culture.
Classical definition of innovation was given by Joseph Schumpeter (1950) who de ned innovation as encompassing new products, processes, raw materials, management methods and markets. Schumpeter also characterized the change process as involving three stages – invention (the generation of new ideas), innovation (the innovation generating process) and diffusion (the process by which global innovations spread across their potential domestic and overseas markets or non-market institutions). Although, for Schumpeter, innovation encompassed a single stage in the overall technological process, this concept is now widely used to de ne ‘innovation process’ involving all three stages mentioned above.
The standard by which statisticians, economists and policy makers in most OECD countries have measured innovation on national and international level is provided in the Oslo Manual. Initially it focused on technological product and process innovation (TPP), later additional types were included giving wider view on innovation phenomenon:
An innovation is the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organisational method in business practices, workplace organization or external relations.
Although this definition includes a range of innovation types and shows that they involve more than purely technological and productive aspects, in cultural matters it should have broader dimensions paying more attention to non-functional types. Consequently, it is needed to extend the term ‘innovation’ in a way that it will complement classical perspective with culture sector specifics. As classification procedure serves as one of the main cognition methods, we should turn to the issue of innovation typologies rest.
From cultural sector perspective innovations can be categorized according to different criteria.
Developing this typology we aimed in particular to answer the following que- stions:
1) Which cultural activities can be involved in innovation process?
2) What kind of changes they may course?
3) Is it easy to identify these changes for measurement and analysis?
To answer the first question we turn to the classification based on the principal.
economic and functional activities of the cultural organizations developing and/or applying innovation. The appropriate international classification for this purpose is European Statistical System Network on Culture (ESSnet-Culture 2012) which proposes statistical framework organized in ten cultural domains and six cultural functions. Cultural domains description and their correspondence to functional areas of creation, production, dissemination & trade and preservation.
The interdisciplinary activities of education and management are the support activities linked to all sectoral domains. Education applied to this framework is understood as formal and non-formal education in the eld of culture facilitating to the development and transfer of skills within cultural activities which can bring together professionals, practicing amateurs and consumers. New types of communications like webinars, for example, have given an impulse for innovative educational technologies. The management relates to activities carried out by institutional organizations whose mission is to offer the means and a favorable environment for cultural activities. Sophisticated project management tools can be deployed in many cultural orga- nizations, especially for administrative and technical support and coordination com- plex projects.
To clarify the second question innovation subject-content structure is examined.
Definitions of product and process innovations (although with emphasis on tech- nological change) are given in Oslo Manual:
A product innovation is the introduction of a good or service that is new or signi cantly improved with respect to its characteristics or intended uses. This includes signi cant improvements in technical specifications, components and materials, incorporated software, user friendliness or other functional characteristics.
Product innovations can utilize new knowledge or technologies, or can be based on new uses or combinations of existing ones. For cultural products more substantial change may be effected here when their content reworked for new media.
A process innovation is the implementation of a new or significantly improved production or delivery method. This includes significant changes in techniques, equipment and/or software.
Process innovations can aim to reduce production or delivery costs, to increase quality or signi cantly improve production and delivery. They include new or significantly improved methods for creating or providing services, and can involve significant changes in the hardware and software or in the procedures or techniques of delivery.
New information technology is pervasively used in cultural sector, even it has not always been a major element of their products and processes. General computerisation of production, stock control, ordering have all enabled cultural products to be more quickly and more cheaply produced, launched and sold.
Although technological product and process innovations are widespread within cultural sector, important part of innovative activities here is based on novelty instead of functionality and involve change which is more aesthetic or intellectual in nature (for example, the writing and publishing of a new book, the development and recording of a new music album, the writing, production and launching of a new film). To cover this kind of changes, a new approach of the ‘soft’ innovation were developed:
Soft innovation is innovation in goods and services that primarily impacts upon sensory perception, aesthetic appeal or intellectual appeal rather than functional performance4.
There are two types of soft innovation in products de ned in the NESTA report:
- Innovations in products that are aesthetic or intellectual in nature (music, books, lm, fashion, art) are spread particularly in cultural sector.
- Aesthetic innovations in goods and services that are primarily functional in nature which can be found in other industries where products may also have many non-functional characteristics (sight and touch of a new car, for example, sound of its engine etc.).
The concept of soft innovation can be spread to another types, first of all to marketing innovation, which means that at least one component of soft innovations is covered by the Oslo Manual:
A marketing innovation is the implementation of a new marketing method involving significant changes in product design or packaging, product placement, product promotion or pricing.
The Manual explains that marketing innovations are aimed to increase arm’s sales by better addressing customer needs, opening up new markets or newly positioning a rm’s product on the market. But what is more important for cultural organizations, new marketing tools can improve their external visibility, facilitate to more effective communications with stakeholders and audience engagement.
A common way to look at marketing innovations is Kotler’s ‘marketing 4p’ view- point.
Innovations in “product concept” (What is the customer receiving?) can involve significant changes in the core element of cultural products ‒ the content ‒ which is consumed to produce the desired experience (text, imagery etc.) To attract new customers, provide them with new cultural experience and generate pro t to support main activity they can also involve changes in additional and peripheral products and services. For example, new exhibition concept can be accompanied by educational programmes and workshops, catalogues, books and souvenirs design.
Changes in “product placement” (Where can customer get product from?) primarily involve new ways of distribution through both of ine and online cannels. Using alternative venues like restaurants, coffee shops, hotels which people visit not directly for cultural experience, on one hand, and E-commerce and systems for online bookings and reservations, digital music sales, on the other, are innovations in this area which are considerably changing the market turning it into cyberspace.
Innovations in “product promotion” (What communications inform customers and stakeholders?) are based on new ways of interacting with customers and can in- volve the implementation of new of ine (broadcast, press, posters, catalogues), on- line (website, podcasts, video, social networking) and mobile advertising tools, new concepts for publicizing a organisation’s goods and services (television and radio presentations, open educational programmes, celebrity endorsements, special public events), new brand identity. They can be not only the living extension of organisation’s vision and objectives but also tools which form positive climate for exchanging knowledge and increase audience involvement in co-production of cultural goods.
Innovations in “pricing” (How much does the customer pay?) assume the usage of new pricing strategies to motivate and develop audience. Cultural organizations can offer new price packages and deals in collaboration with other organizations, promotional prices to regular audience and special offers for members of projects.
It should be noted that soft innovation and TPP innovation are not independent of each other. Many improvements in aesthetics are enabled or made cheaper and more effective by advances in technological products and processes. There may also be de- mand-side interactions between soft and functional innovation, for example, the de- mand for DVD players is in part dependent on the quality of lms available, as is the demand for MP3 players on the quality of music.
An organisational innovation is the implementation of a new organizational method in the arm’s business practices, workplace organisation or external relations.
Innovations in business practices involve the implementation of new methods for organizing them, for example, nancial innovations (credit monitoring software, streamline expense reports, linking payment systems to social networks), administra- tive activities improvement to minimize duplication, learning and knowledge sharing within the organization using organisational website options for internal users (stan- dardized documentation forms, online advisement and training tools).
Innovations in workplace organisation lies at the intersection of human resources management, knowledge management systems and technology. Nowadays they are mostly determined by willingness of organizations to adapt mobile workstyle using online marketplace for short-term rental of office space and meeting, conference, training and workshop rooms, as well as cloud labour and virtual teams brought to- gether by information technologies. At the level of employee workplace innovation solutions that result in more mobility might lead to greater exibility and better work- life balance.
New organisational methods in a firm’s external relations involve the implemen- tation of new ways of organizing relations with other rms or public institutions, such as the establishment of new types of collaborations with research organisations or customers, new methods of integration with suppliers, and the outsourcing or sub-contracting for the rst time of business activities in production, procuring, distribution, recruiting and auxiliary services and they greatly correlate with promotion tools mentioned above.
The nal aspect of innovation classi cation for cultural sector that we think deserves attention is that many of them cannot be recorded using traditional innovation indicators. Four categories of ‘hidden innovation’ which deserve special attention can be identified:
- Innovation that is the same or similar to R&D activities that are measured by traditional indicators, but excluded from measurement because the activity is usually built into product or project development as dedicated R&D depart- ments in cultural organizations are uncommon.
- Innovation without a major scientific/technological basis, such as innovation in organisational forms or business models.
- Innovation created from the novel combination of existing technologies and processes. The delivery of creative content via the Internet or mobile phones is a good example.
- Locally-developed, small-scale innovations that take place ‘under the radar’ and being ‘working place based’, for example innovative problem-solving solutions and management tools in a format ‘I can fix it’ performed in unfamiliar ways of seeing things. Practitioners in cultural sector accept that many of their innovative solutions are not formally recognized, ‘captured’ or reproduced.
Innovations in cultural sector could also be categorized according to the level they take place on and at which they can be researched, the degree of novelty, purpose and innovation potential, production function stage.
Based on the specific features of innovations in cultural sector described above we can conclude that for innovation studies in cultural organisations, it is better to extend the de nition of innovation in the following way:
An innovation is the introduction to an existing or new market or non-market institutions of a new or significantly improved product (good or service), or process, or a novel combination of existing products or processes, having impact upon aesthetic or intellectual appeal or/and functional performance, a new marketing method, or a new organisational method in business practices, business modeling, workplace organization or external relations measured both by traditional and alternative innovation indicators.
We hope our ndings will help to bring innovations in cultural sector to the surface for better understanding their nature and accompanying the development of innovation management practice. The improvements introduced in innovation concept can facilitate to better evaluation of innovation within cultural organizations and to research work examining the specific types of innovations in cultural sphere.
Natalia Subbotina (2017): Innovation in Cultural Sector ‒ definition and typology. Zarządzanie w Kulturze 379 2015, 16, z. 4, s. 379–388 doi:10.4467/20843976ZK.15.025.3782 http://www.ejournals.eu/Zarzadzanie-w-Kulturze