Curiosities Cabinet: Entrepreneurship

A Critical Review of Contributing Theories in Cirque du Soleil's Innovation Process

19:08

INTRODUCTION

The discourse of innovation is dominated by its implementation in technological landscape which divides the history of innovation into several phases of long waves. Until nowadays, there are 5 types of long waves with their very own characteristics. Eventually, one cycle of the long wave will change to another cycle in a period of 50 years (Schumpeter, 1936; Dosi, 1982; Tylecote, 1992). While this is true, there is less discourse related to non-technological innovation, hence this essay will discuss innovation in terms of creative industries. The purpose is to strengthen understandings about innovation as a versatile concept that covers a wide range of subjects.

This essay will review and analyse how theories of creativity and innovation are applied in the performing arts industry as one of the sectors of creative industries (DCMS, 2001) with a focus on Cirque du Soleil (CDS) as a real-life organisational example. The essay’s structure is based on Smith’s (2006) three stages of innovation theory, which consists of: (1) invention; (2) commercialisation; (3) diffusion and completed with a review of CDS’s diurnal innovation process, corporate culture, and leadership practice.

'Totem' Show by Cirque du Soleil
(Source: www.magchild.com/2015/activities/cirque-du-soleil-totem)

INVENTION

Innovation is ‘an idea, practice, or object that is perceived as new by an individual or another unit of adoption’ (Rogers, 1995, p.11). From the previous statement, it can be inferred that novelty is the most important factor for the invention stage. However, there are several ways to generate novelty. According to Henderson and Clark (1990), there are four types of innovation: (1) incremental innovation; (2) modular innovation; (3) architectural innovation; and (4) radical innovation. The distinctive features of these types are the usage of core concepts (reinforced or overturned) and systems (unchanged or changed) to build something new.

In relation to this theory, CDS can be classified as an architectural innovation. Architectural innovation is defined as ‘the reconfiguration of an established system to link together existing components in a new way’ (Henderson & Clark, 1990, p.10). In architectural innovation, the core concept is reinforced while the system is changed to obtain some degrees of novelty. It is embodied in CDS because it aims to offer a one-of-a-kind alternative to enjoy the old-fashioned concept of the circus for a new market target, specifically for adult and professionals. The invention stage of CDS begun with this notion in mind.

Historically, CDS was first initiated by Guy Laliberte in Quebec, Canada circa 1984. As a street performer himself, he pursued his own dream to set up a more modern circus that will be appealing to wider audiences. He pitched the concept and acquired CDS’s first funding from a governmental body, the Canadian Arts Council. In line with CDS manifesto of ‘we reinvent the circus’ (Cirque du Soleil, n.d.), Laliberte combined several already existing components such as human acrobatic, musical score, and theatre to frame a whole new circus experience. From that on, CDS has transformed the nearly sinking trend of traditional circus industry into a sense-indulging performance that is more likely to be accepted by contemporary audiences.

The innovation of CDS is started by an individual but throughout the years it adopts an employee-based innovation source. Nowadays, it is claimed as the biggest theatrical performance company with more than 5000 international workers and 30 show productions. It succeeded to beat the other previously established circus companies, namely P.T. Barnum and The Ringling Brothers (Grant and Jordan, 2015).

COMMERCIALISATION

In order to make innovation works for CDS, Laliberte’s idea has to be commercialised. To do so, it utilises an innovation model theory. Rothwell (1994) coined five different innovation models: (1) technology push; (2) demand pull; (3) coupling; (4) integrated; and (5) network. In this case, CDS adopted the demand-pull model to prepare its launch to the public.

Demand pull is a market-centred model which prioritises consumers’ needs and expectations. Because of that, the embodiment of the product or service that will be offered depends on prior consumer and market research. The opposite for this model is technology push which puts technology first and then finds a strategy for the product or service to be accepted by the public.

Another contributing theory is blue ocean strategy by Kim and Mauborgne (2005). Blue ocean strategy believes that it is better to be different by cultivating new market or propose distinctive value rather than defeating existing competitors as a follower. In other words, a good business must find a gap between existing product, consumer preference, and future emerging trend which is not created yet. It has to break the boundaries and create a breakthrough as a competitive advantage. The formulation of blue ocean strategy starts with evaluating other competitors’ value proposition to find the gap.

Kim and Mauborgne chose CDS as one of the notable examples for their theory. In practice, CDS eliminate the use of animal and reduce the outsourced star performers which both require high cost and mostly offered by their competitors. It exchanges those eliminations and diverts their source to fortify their performers’ ability (human capital) and build enchanting story line while maintains the hallmark of the circus, like the signature red and white tent. Therefore, the artistic-focused show will be more appealing to targeted audiences.

Cirque du Soleil's Blue Ocean Strategy
(Source: www.herald.cauon.net adapted from Blue Ocean Strategy)

In addition, blue ocean strategy is almost similar to first mover strategy. First mover company acts as a pioneer in an unestablished market with the ability to generate revenue and profit because not all pioneer will be accepted by the market (Liebermen and Montgomery, 1988). The main advantage of these three theories is they can begin to build customer base ahead from their followers. At the time of the product launching, there are no other similar products thus the company will predominate the entire market share.

On the contrary, the risk and uncertainty of cultivating uncontested market are high. To such degree, not all companies which implemented these strategies are succeeding. That is why some companies prefer to choose safer follower strategy such as latecomer or side-entrance strategy (Smith, 2006).

DIFFUSION

The diffusion of CDS innovation strategy can be explained by the dominant design theory. This theory explains one particular design that emerged as a favoured product rather than other competitors’ product. Consequently, the dominant design product is often copied by competitors as a benchmark. That is why the appearance of similar mass products as a spreading trend can also indicate the emergence of a dominant design. Nevertheless, the product may not offer the best quality of them all, but it is more acceptable to the public because it offers compatible value (Srinivasan et al., 2016).

Before CDS emerged as the dominant design, there is a ‘period of flux’ (Anderson and Tushman, 1990, p.604) in the circus industry. Circus has been developed since the 1760s but none of the companies can be considered as thriving and as widely recognised throughout the world as CDS. Moreover, by the end of the wars in the 1940s, the circus audiences and revenues kept declining until finally, CDS invigorated the circus industry by the end of 1980s (Grant and Jordan, 2015). The grand production and outstanding quality of CDS may be hard to imitate, but the adaptation can be seen when a circus embeds a story line and resembles the concept of theatrical performance. Before CDS, a circus is merely a series of unrelated acts between the performers with no affiliated theme (Rantisi and Leslie, 2014).

Another theory that can complement it is disruptive innovation theory by Christensen (1997). Disruptive innovation revokes current trend and significantly shift it to follow the offered innovation product. The shifting of the trend can lead other established companies to lose their consumer base and revenue. If those companies do not have a strategy to prevent this, they may go bankrupt. For this reason, disruptive innovation is often seen as an alarming threat to industries. Industries have to prepare and innovate persistently in order to sustain their business and avoid their products being replaced by another industry.

In this case, CDS not only disrupts the circus industry, but also other performance arts industry such as theatre and dance recital. Furthermore, it competes as a strong rival with another entertainment industries as an alternative option (Kim and Mauborgne, 2005). For instance, people who are bored with cinema can go to attend CDS show instead. None the less, CDS must improve their technological aspects of the show consistently (e.g. inventing new performing device, using latest advanced technology such as hologram) to assert itself as the leading performance arts industry.

In relation to this matter, CDS established C:LAB, the creative laboratory of CDS in 2014. C:LAB gathers ideas from all of the workers and tries to make the ideas come to reality (Cirque du Soleil, 2016). One of the most prominent projects is Sparked. It combines the ability of performers and the technology of quadcopters to create a poltergeist-like effect in a show (Cirque du Soleil, 2014).

DIURNAL INNOVATION PROCESS

The term diurnal is used to differentiate between the early stage innovation and the day to day innovation process that occurred afterwards. The innovation process in CDS starts with ‘idea development funnel’ (Smith, 2006, p.227). CDS utilises co-creation design from its workers to develop new ideas and get insights as much as they can. After that, the creative director and production director will curate the ideas and further discuss it to construct future show theme and story line. This process may also include historian to assist them in exploring the traditional culture reference in a theme.

Rantisi and Leslie (2014, p.159) undertook this approach as an ‘open-ended nature of creation process’. Another evidence of this process can be seen during the time of the development when the production process is open to additional idea and improvement from all of the workers, not just the head directors. For instance, a dancer can invent his own movements which interpret the show’s theme and perform it in the show as long as it passes the quality control.

Each show in CDS has its own Creative Director who possesses the highest authority in the show. CDS’s shows can run for several years and some of them are performed as tours to different countries. In the period of the long contracts, one circus performer will act as one character only. This obligates the performers to have acting skills and build an emotional connection with the characters in order to make them believable (Dan, 2012).

A show needs at least two years’ preparation stage before the show is ready to be performed. While some divisions develop the script, musical score, and choreography, at the same time the behind the scene divisions work together to design the costumes, properties, and stages. Generally, all of the preparation happens simultaneously with the workload distributed evenly in several divisions (Dan, 2012).

LEADERSHIP & ORGANISATIONAL PRACTICE

Guy Laliberte has the biggest influence in CDS. He is the founder and Chief Executive Officer (CEO) of CDS. Despite the 90% acquisition of the company in 2015, he continues to manage the company. Laliberte’s leadership style can be classified as situational leadership. Situational leadership’s purpose is to understand working conditions and choose the best method to address that situation rather than being an authoritative figure with passive followers. There are two classifications of situational leadership: (1) task-focused and (2) people-focused (McCleskey, 2014). The second approach fits better with Laliberte’s leadership in CDS.

As a former street busker himself, Laliberte acknowledges the joy and hardships of being performers, thus he leads in a more horizontal approach. He encourages participation from all of the workers to pursue CDS’s goals in a communitarian manner. His position in CDS resembles the role of quality control or supervisor and often stated as the father of CDS (Dan, 2014). He emphasises on ‘decision-making at lower levels’ (Rothwell, 1994, p.16) to cut away ineffective bureaucracy. Moreover, situational leadership style corresponds with CDS’s approach to creativity and innovation which fosters ‘collaborative creative process’ (Simon, 2015, p.59) in its corporate culture.

To overcome public perception who often discredits performers’ occupational well-being, all workers in CDS are bounded by at least two years contract with benefits ranging from health insurance to training facility (Rantisi and Leslie, 2014). In regard to organisational practice, the challenge of working within creative industries is to avoid tension between creative and non-creative workers. For instance, the creative director can propose state-of-the-art ideas but production director must evaluate the feasibility of these ideas in terms of technological capacity, financial cost, or audiences’ preference. However, these two components cannot be separated since creativity in the organisation means a collective process between creative & non-creative who complemented each other (Bilton, 2012). Essentially, CDS celebrates the differences among its workers because it demands transdisciplinary knowledge to build a single show.

Furthermore, CDS did corporate venturing and built two independent-venture unit: (1) C:LAB which has been mentioned earlier and (2) Cirque du Monde (CDM). CDM is a social program from CDS. It invites ‘marginalised and disenfranchised youth’ from across the globe to engage in a workshop to improve their circus-related skills and builds community networking. This program was launched in 1995 and it is accomplished with the aid of prominent non-profit organisations such as Oxfam (Branswell, 2003, p.64).

Another challenge is to avoid what Amabile (1997) mentioned as creativity killer and ‘over-familiarisation’ (Bilton, 2012, p.33). They believe that freedom and creativity are interrelated hence managers must provide the supportive working environment. CDS adopted this theory in its PARADE (Programme de Realisation Artistique de Employes) scheme.

This program liberates CDS’s performers, artists, designers, and other creative workers to experiment with their own creative interest and pursue their personal ideas. CDS even supplies them with the incubating process including mentorship and funding for those ideas. Later, CDS will evaluate the ideas and calculate the idea’s viability to be implemented in the upcoming show. However, this is not a mandatory process because the primary intention of this program is to maintain the creative workers’ productivity (Rantisi and Leslie, 2015). Besides that, Amabile (1990) assured that intrinsic motivation is the best practice to sustain innovation in companies.

CONCLUSION

The previous image represents the summary of numerous theories that are implemented in Cirque du Soleil’s innovation, leadership, and organisational management. All of the contributing theories are shaping CDS’s prosperity in the creative industries. Moreover, innovation is not only important in the beginning, but it is a continuous process that evolves alongside with the latest organisational and external environment landscape. The management role is to ensure that the organisation does the process well.

From this review, it can be concluded that one single theory is not enough to explain the innovation process in an organisation since innovation covers a wide dimension. Furthermore, the mentioned theories are able to complement each other. All in all, from the earliest idea to focus on the unique value proposition that satisfies neglected market’s needs up to the reconciliation of creative and non-creative workers, Cirque du Soleil succeeded in managing innovation and creativity as a part of its intrinsic corporate culture.

Cirque du Soleil Performers
(Source: www.tellwut.com)

DISCLAIMER
This is an essay for Managing Creativity and Innovation Assignment for Creative Industries and Cultural Policy Course at the University of Glasgow. Please provide proper citation if you use this as reference.

REFERENCE

AMABILE, T.M. (1997) Motivating Creativity in Organizations: On Doing What You Love and Loving What You Do. California Management Review, 40(1), pp.39-58.

ANDERSON, P. and TUSHMAN, M.L. (1990) Technological Discontinuities and Dominant Designs: A Cyclical Model of Technological Change. Administrative Science Quarterly, 35, pp.604-633.

BILTON, C. (2007) Management and Creativity: From Creative Industries to Creative Management. Oxford: Blackwell Publishing.

BRANSWELL, B. (2003) Cirque du Soleil Thinks Globally. Stanford Social Innovation Review, Spring 2003, pp.64-66.

CHRISTENSEN, C.M. (1997) The Innovator’s Dilemma: When Technologies Cause Great Firms to Fail. Boston: Harvard Business School Press.

CIRQUE DU SOLEIL (2014) SPARKED: A Live Interaction Between Human and Quadcopters. [Online] Available from: https://youtu.be/6C8OJsHfmpI [Accessed 08/12/2016].

CIRQUE DU SOLEIL (2016) What is C:LAB. [Online] Available from: https://youtu.be/p5ie10XwVyI [Accessed 08/12/2016].

DAN, A. (2012) The Secret that Inspires Cirque du Soleil’s Culture of Innovation: Creative Friction. Forbes, 29th May. Available from: http://www.forbes.com [Accessed 06/12/2016].

DCMS (2001) Creative Industries Mapping Document 2001. London: Department of Culture, Media, and Sport.

DOSI, G. (1982) Technological Paradigms and Technological Trajectories. Research Policy, 11, pp.147-162.

GRANT, R.M. and JORDAN, J. (2015) Foundations of Strategy. 2nd ed. Chichester: John Wiley & Sons.

HENDERSON, R. and CLARK, K.B. (1990) Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of Established Firms. Administrative Science Quarterly, 35(1), pp.9-30.

KIM, W.C. and MAUBORGNE, R. (2005) Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant. Boston: Harvard Business School Press.

LIEBERMAN, M.B. and MONTGOMERY, D.B. (1988) First Mover Advantages. Strategic Management Journal, 9, pp.41-58.

MCCLESKEY, J.A. (2014) Situational, Transformational, and Transactional Leadership and Leadership Development. Journal of Business Studies Quarterly, 5(4), pp.117-130.

RANTISI, N.M. and LESLIE, D. (2014) Circus in Action: Exploring the Role of a Translation Zone in the Cirque du Soleil’s Creative Practices. Economic Geography, 91(2), pp.147-164.

ROGERS, E.M. (1995) Diffusion of Innovation. 4th ed. New York: The Free Press.

ROTHWELL, R. (1994) Towards the Fifth-Generation Innovation Process. International Marketing Review, 11(1), pp.7-31.

SCHUMPETER, J. (1936) Capitalism, Socialism and Democracy. Boston: Harvard University Press.

SIMON, L. (2015) Setting the Stage for the Collaborative Creative Leadership at Cirque du Soleil. Technology Innovation Management Review, 5(7), pp.59-65.

SMITH, D. (2006). Exploring Innovation. Berkshire: McGraw-Hill Education.

SRINIVASAN, R., LILIEN, G.L., and RANGASWAMY, A. (2006) The Emergence of Dominant Designs. Journal of Marketing, 70(2), pp.1-17.

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Entrepreneurship

The Role of Business Incubators as Creative Policy Intermediaries in Indonesia

03:27

Creative industries and cultural policy discourses have spread around the world, not only to first world countries but also to some developing countries, including Indonesia. Since the term creative industries is more prominent in Indonesia than cultural industries to distinguish contemporary and popular culture from traditional arts and culture, I will use the term creative policy rather than cultural policy for this essay to avoid confusion.

Unfortunately, contemporary culture audiences in Indonesia is not as plenty and appreciated as traditional culture audiences. Doing contemporary culture is often seen as an act of neglecting local cultures and a movement to uphold Western culture more than Indonesian culture which is not entirely true. For that reason, the dissemination of this idea must be supported by intermediaries. This essay will highlight two types of business incubators as creative policy intermediaries in Indonesia.

This essay is structured as following. Firstly, I will describe the creative industries discourse and model in Indonesia and how intermediaries are able to aid the development of the creative industries. Secondly, the term creative intermediaries will be explained thoroughly. To make this essay more specific, I narrowed down the many types of intermediaries and chose to address Business Incubators (BI) and further explain the roles of BI. Then thirdly, I will undertake a critical review of the implementation of BI in my home country, Indonesia, endowed with real world examples, two particular types of BI, how it is interrelated to promote the model and discourse, and suggestion for improvement.

Indonesia recovered from the severe Asian economic crisis in 1998 which marked the transition between New Order economic period to Reform economic period (Jones, 2007). At this rough time, numerous big corporations went bankrupt. On the contrary, Small Medium Enterprises (SME) stood still and saved Indonesian economic system. Therefore, since that period Indonesian government has been striving to intensify the growth of entrepreneurs. Within just 17 years’ period until 2003, there were 64 new institutions, ranging from governmental bodies, banking services, and private companies, initiated 594 diverse programs related to SME empowerment. These programs include coaching, funding, and award granting (Tambunan, 2007).

Moreover, with the abundance of Indonesian citizen as well as a limited job opportunity, the notion of self-employment is highly compatible to be implemented. The widespread of the creative economy term also influences the number of SME which operates within creative economy categories such as fashion, craft, design, and interactive leisure software. In line with Reform’s vision of ‘greater freedom of expression in the press and cultural practices’ (Jones, 2007, p.449), the overall circumstances of Indonesia in this economic period is indeed far more conducive for creative workers than the oppressive New Order period. We can see the determination of Indonesian government to nourish creative entrepreneurs in its long-term development plan to

embody competitive and dynamic creative entrepreneurship: (1) increase quantity and quality of creative entrepreneur (amount, even distribution, enhancement of skill-knowledge-attitude) and (2) increase collaboration, networking, and partnership at local, national, and global stage (Indonesia Ministry of Tourism and Creative Economy, 2014, p.292).

In other words, the delivery of creative economy discourse in Indonesia is emphasised on creative entrepreneurship or SME development. My undergraduate research also shows that the alumni from art and design faculty have a hard time finding suitable jobs related to their degree because the creative economy ecosystem in Indonesia is not supportive enough. The implication is some alumni chose to work in non-creative industries (Wiradarmo, 2014). This is why entrepreneurial spirit must be implanted for them so they can invent new job opportunities independently.

This leads the government to apply cultural occupation theory by Grodach (2013) as a creative economy model. The focus of this model is to maximise the power of human capital in the sense that government must prepare all needs of creative workers to help them thrive. Intermediaries are needed as a bridge to ensure that all of their necessities are affordable whether in terms of cost or access. This theory is backed by Markusen and Schrock (2005) who popularised the artistic dividend theory, an approach to highlight how precious it is to foster artists and creative workers as an investment that can improve the extensive economic landscape.

In addition, Indonesia also highlighted the importance of ‘design-led innovation’ from Potts and Cunningham’s (2008, p.237) growth model as a competitive value for creative industries which is able to boost not only creative industries revenue, but also has wider implication to catalyse the prosperity of other non-creative fields like tourism, technology, or service industries that will evoke higher Gross Domestic Product (GDP). In this model, creative industries is classified as a specialised subject. It is positioned above other industries and overarched them. For Indonesian case, this may explain the transformation of Ministry of Tourism and Creative Economy (KEMENPAREKRAF) to a more independent Creative Economy Council (BEKRAF) in 2015 because its programs require inter-ministry collaboration (Creative Economy Council, 2015).

The term ‘cultural intermediaries’ was coined by Bourdieu (1984, p.356) in reference to critics about how cultural products were chosen to be consumed by the masses. However, currently, the term is slightly shifted. Intermediaries are defined by Perry et al. (2015) as institutions which connect creative goods from producer to consumer and vice versa, then frame it in order to gain a greater monetary advantage. Another definition by Jakob and Heur (2014, p.357) add another significant policy-related role of intermediaries to ‘shape, regulate, organise, and govern’. For them, some intermediaries have contributed to informing stakeholders about what kind of policy is needed by the masses, while at the same time other kinds of intermediaries invoke policy to the masses.

There are several types of intermediaries ranging from ‘creative hubs, business support services, […] national agencies with specific policy framings, to […] policy think tanks’ (Selfe, 2016). Nevertheless, the most interesting one for me is business support services or in this case, business incubators (BI) because it intersects with Indonesian’s creative economy agenda to cultivate the people. BI is defined as

a […] combination of business development processes, infrastructure and people, designed to nurture and grow new and small business by supporting them through the early stages of development and change (UKBI, 2007 cited in Bruneel et al., 2012, p.111).

In my perspectives, BI as intermediaries will fortify the application of the two theories which are implemented in Indonesia, the occupational and growth model.

More or less creative economy development in Indonesia is based on the UK model which was first socialised by British Council. It even invited Charles Landry, a prominent creative economy consultant from the UK to Bandung, a pilot project for the creative city in Indonesia (Temenos and McCann, 2012) so the citizen can learn directly from the source. Until nowadays Indonesia still does policy benchmarking to other developed countries and then adapted it in Indonesia with some adjustment. Consequently, it is better to learn how BI concept is executed in developed countries.

Sheffield Cultural Industries Quarter
(Source: www..integreatplus.com)

There are many BI across the UK itself, namely Sheffield’s Cultural Industries Quarter, Birmingham’s The Custard Factory, London’s The Chocolate Factory, Cardiff’s Chapter Workshops, and Glasgow’s Creative Clyde. Physically it almost looks like conventional office space, but there are other additional facilities like front office, meeting room, print and photocopy, cafeteria or studio workshop for a more advanced type which can be utilised by all tenants. Basically, the tenants will save operational cost because they are grouped with other renters to get common facilities with cheaper shared price. The environment also provokes collaboration or inter-trade with other businesses.

Apart from cheaper total rent cost than typical office space, consultancy service is incubators core value proposition. Since most of the prospective tenants are new in entrepreneurship field, they are eager to learn practical things. There are workshop coaching and private mentoring with hope to help these start-ups overcome critical early phase of business until they are mature and ready to leverage their business to the next phase. Tenants do not have to pay the supplementary cost for this service since it is included in their rents (Bergek and Norrman, 2008).

Most BI are owned by private corporations thus their revenue relies upon rent payment. In order to gain additional payment, they often rent common rooms for events such as seminars, gathering, or craft workshops. There are also ancillary activities like a coffee shop, library, or gift shop which can also act as a showcase for the tenants’ products. BI with bigger spaces tend to include gallery or performance stage thus they can attract general visitors beside the existing tenants (Montgomery, 2007). In principle, they always find a way to make the space lively and attractive for prospective tenants.

After analyzing Indonesian BI models and compare it with literature, generally I find 2 main roles of BI in Indonesia: the first one is (1) business-based output to increase nascent creative entrepreneurs, especially for youth, with new business or start-up as output; and the second one is (2) product-based output to help extant SME to develop new creative product or re-branding process in order to fit better into creative industries criteria such as novelty and well-designed products.

As for the way BI choose tenant, Bergek and Norrman (2008, p.23) divided into two approaches, namely (1) ‘idea-focused’ where innovative ideas and business models are the primary consideration and (2) ‘entrepreneur focused’ which put aside ideas but emphasizes on character and quality of the person or the team. The first approach believes that entrepreneurial spirit can be nurtured upon training or coaching, while the second approach argues that realistically not everyone can be entrepreneur so they must select the right individual from the beginning of the program. The differences in these two approaches are in parallel with the two types that I previously mention.

Clearly, these two types can be seen in real world practice. For this essay, I chose four BI programs from three different governmental bodies as an example. Most of the programs are recently launched thus there is still much room for evaluation and improvement. The reason to choose state-owned bodies is to understand how the key stakeholders interpret and lead creative industries development. Besides, these programs may become a significant precedent for other private BI.

The first category includes BEKRAF for Pre-Start-up (BEKUP) program from Creative Economy Council and Bali Creative industries Center Business Incubators (BCIC-BI) from Ministry of Industry. In 2016 BEKUP aspire to select 100 teams which consist of 1200 participants from all over Indonesia to join 8 coaching clinics in Jakarta, the capital city of Indonesia, for several weeks. The mentors are experts from diverse backgrounds who teach everything participants need to know to build a start-up. The mentors are selectively approached by the government and they even had their own pre-training. This program divided the coaching material into 4 stages, namely talent development, founder preparation, program preparation, and mapping (Palupi, 2016).

Competition in Bali Creative Industry Center
(Source: www.bcic-ikm.net)

BCIC-BI is pretty much the same, but it has longer incubation period for 6 months. It is held in Bali Creative industries Center building in Bali which is occupied with workshop. It takes time because the participants are organised to fabricate product prototypes for their business by themselves and later collaborate with local craftsmen for the actual products. BCIC also organises design competitions and the tenants are allowed to join (Bali Creative industries Center, 2015).

The second category comprises of Nusantara Innovative and Creative Collaboration (IKKON) from Creative Economy Council and Designer Dispatch Service (DDS) from Ministry of Trade. IKKON offers a combination of creative entrepreneurship and cultural empowerment program. For the first year, it selects 5 teams which consist of designers, photographers, and anthropologists to live in selected rural areas, with minimum exposure potential, to develop new product or system for several weeks. The aim of this program is to empower local talents outside big cities of Indonesia to be involved more in creative industries discourse. The teams will reconstruct traditional crafts and designed them in a more sophisticated way. The first program was held in Sawahlunto, Lampung, Brebes, Rembang, and Flores, all areas with the eminent culture of batik and weaving (Zulaikha, 2016).

Product from Designer Dispatch Service Program
(Source: www.facebook.com/indonesia-design-development-center)

The other program, DDS, also facilitate designers to work together with local SME from 11 export-intensive cities, such as Yogyakarta, Kupang, Medan, Palangkaraya, and Solo. Two businesses from each city are curated and then assigned with one designer to help them design a new product which best fit current global market trend. Later the designs will be mass-produced by the SME. DDS is the eldest program of all the BI cases in this essay. It was first initiated in 2011 and since then has contributed to improving export product diversification (Indonesia Design Development Center, 2016).

The most apparent distinction from UK BI model is Indonesian BI are free of charge. The BI and all programs related to them are fully sponsored by the government. As far as I comprehend, the uttermost objective is to promote that creative economy is not exclusive, but inclusive, hence they have to reach audiences as broad as possible, even the less fortunate one. Payment may overcast the audiences’ excitement for this program, especially because these programs mainly target youth. The bottom line is Indonesian BI must encourage that everyone is invited to participate in this promising industry, learn, and grow together.

Because tenants do not have to pay, there are some limitations for Indonesian BI. For instance, there is a short time limit for them to be engaged in the program. This is not happened in developed countries’ BI because they can stay as long as they pay the rent or at least for a long period of 3 years (Bruneel et al., 2012). When the program is over, tenants are released without any formal bond or contract. To illustrate, a BI could have been set a strict target for all tenants to launched their business a month after incubation process ends or to hit breakeven point one year after the business is launched. Quite the contrary, there is still no data regarding how the BI evaluate these tenants afterwards, hence there is no solid evidence to prove that this system or tenants’ businesses to be succeeded or failed. Possibly the evaluation will be accomplished for upcoming years’ program. I recommend cost-benefit analysis to assure that the governments’ huge investment for this programs is right on target and gap analysis to compare and contrast with best practices programs as suitable policy evaluation methods.

Another distinctive feature from Indonesian BI is the shape of the BI. In developed countries, BI is a tangible place or real brick and mortar buildings, while in Indonesia BI is adapted as an event or incidental program which can be held in several places based on the sponsors. Here, incubators are perceived as a system. There is also an adaptation for BI as actual places, which often called co-working space in Indonesia, but this space is open for any kind of businesses, certainly without special training or mentoring services as offered by conventional BI.

Despite these different adaptations, pointedly for business-based output BI, they should acknowledge that initiating a business is not as hard as sustaining it. Regardless of how brilliant the product, branding, and marketing strategy which are the core coaching material for most BI (Mustafa, 2016), business needs a stable operational system and constant profit to keep on going forward. These non-creative management tasks may sound less appealing to learn and can be delegated to outsourced workers, but it is essential for business owners to understand the basic knowledge. Based on my observation, I suggest BI to invite professional accountant to teach tenants in composing major financial statements such as income and expenditure report, balance sheet, and cash flow. Above all, these start-ups need access to capital. A sponsorship guidance related to business model presentation, pitching, and how to approach angel investor is of the utmost importance.

On the other hand, my suggestion for product-based output BI type is to include training related to intellectual property rights. As an Indonesian product design student, from my experience, there are many SME, which mostly produce furniture and craft, with exquisite craftsmanship skills but the products’ designs are copied from existing products or even from the internet without proper acknowledgements. This is caused by their poor understanding of design and copyright. They do not know that this simple act can be considered as an illegal practice, especially if they want to expand their market overseas because it is better to showcase goods with true Indonesian identity. Furthermore, it will attract bad publication for Indonesia to be known as a copycat country. Therefore, the presence of BI is necessary to educate the value of design and inspire them to hire designers for the upcoming production process. Bridging talented designers and emerging SME through intermediaries is a good step to overcoming this perennial problem.

Considering this fact, in my opinion, the product-based output approach is more viable for Indonesia because the output is directly visible and more measurable. There is no worry regarding the mechanism of production because it is professionally handled by experienced industries, thus the BI can go straight to manage the export system. For instance, what international exhibition should the products be displayed at so the industries can acquire more international customers? By the same token, the risk of program failure is smaller since in assumption, working with nascent entrepreneurs in idea-based output BI model without precise talent assessment is open to the possibility of irresponsible tenants who do not reap the intention of the coaching.

All in all, the role of governmental business incubators is paramount to achieve Indonesian vision for 2025 to accelerate creative entrepreneurship growth. Even though there are three disparate governmental bodies with their own flagship creative industries support programs, we should see them as complementing rather than overlapping one another. Eventually, they are all playing active roles to achieve the long-term development plan.

Most of these programs are recently established in the past two years. In such circumstance, it is pleasant to notice that Indonesian government’s put such determination to flourish creative industries. I believe in the upcoming years more creative entrepreneurship-related programs will be established and in the end, I am optimistic that Indonesia will reach its creative economy long term development plan in 2025.

DISCLAIMER

This is an essay for CICP Assignment for Creative Industries and Cultural Policy Course at the University of Glasgow. Please provide proper citation if you use this as reference.

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*Translated by me from Indonesian language.

A Critical Review of Contributing Theories in Cirque du Soleil's Innovation Process

The Role of Business Incubators as Creative Policy Intermediaries in Indonesia

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