Introducing: The Economics of Innovation for Dance Companies

Welcome to the Economics of Dance.                                                                                                                                                                     7FWMA28DDP85 Public sector cuts: the potential impact on dance This year’s quota of spending cuts in the arts and cultural sector may not be the last. There is no doubt that the effects on current cuts in arts funding will have caused many arts organisations a great deal of concern. The public funding lifeline was at one time an immense source of security but as the economic situation worsened and the evaluation criteria of the funders have been tightened up, the threat of losing further funding has became a real nightmare for arts organisations.This article starts with negative assumptions. While very few dance companies will lose their budgets altogether, it is always better to assume the worst case scenarios when planning new approaches to survival and the continuation of services. No one knows where and when the axe might fall after the current financial year. The dance community has served the country well and mostly, to the best of its abilities.  From now onwards dance companies may have to be more creative and more innovative than ever before. However, it must be noted that starting a programme of innovation should not be seen as an act of desperation! Investment in creativity and innovation offers the best opportunities for gaining competitive advantage in the market and to prepare the company for success regardless of the funding climate. The challenge of creative work Working in the cultural sector has never been easy. The main challenge for many, if not most, arts organisations, especially dance companies, was that of audience development, attracting and training new dancers and maintaining high quality of production outcomes with relatively declining funding. It could be said that artistic ambition and challenge for innovation were always in the forefront of artistic directors’ minds but other demands on their time and their purses may have dominated the pressure for innovation. Also some dance companies were probably experiencing strategic challenges which are not very differently from the experience of drug companies. Once they have invested heavily in research and development to produce a new cure, drug companies do not need much more funding to market their drugs.  Similarly, when a dance company has developed an expensive programme of creative work which may have a reasonably long shelf life, would the arts funders be justified in proposing that they could do with less funding as the cost of the creative process may have been met for the medium term? Research and new programme development must constitute a high proportion of any dance development budget especially when a company may be trying to reinvent itself. Assuming that new programmes have a currency of a few years, would a dance company be justified in maintaining its previous levels of funding? While there is a danger dance companies to pursue ‘more of the same creative agenda’, there is an equal concern about the economics of short run content. Is it possible that many dance companies create more and more output without milking the benefits of existing creative programmes?  Looking for returns on investment Creative directors love to create new product but the persistent search for stimulating content may sometimes work against survival. Many years ago I saw the demise of a theatre company where the artistic director loved producing plays so much that he was always adding new content. This was the case even when some of the existing work had not returned the costs of investment through touring and educational programmes. However, as the arts world anticipates further cuts, the need to innovate for the future will be an essential priority. It is a recipe for survival and it is no longer a luxury. What is the probability that funding cuts will be even harsher in the next funding round? No one knows this. However, macroeconomic analysis (the study of the whole economy) suggests that the worst-case scenarios may turn out to be very serious indeed. It is advisable to plan according to hard assumptions and then be pleasantly surprised if the economy picks up or the Coalition Government decides to balance cuts with economic stimulus. Lessons from the business world Some of the most exciting literature on ‘creativity’ and ‘innovation’ comes from the business world. These two areas of investment have received a great deal of attention with respect to developing new products, running the business successfully and investing in the long term for innovation to work. Successful business leaders would have almost certainly realised fairly early that in order to produce innovative and challenging products and services, they also had to streamline their operations and manage innovatively, whatever that meant for different organisations. In other words, it is unlikely that an old and decaying business structure would have been appropriate for producing innovative products. The two had to change at the same time. Business school professors and academics  continue to provide interesting examples of success but there are also many failures. The meaning of creativity and innovation in dance How does the whole notion of creativity and innovation apply to the modern arts sector? Why is ‘innovation’ an essential investment in today’s funding climate? What do these terms mean? Are arts organisations not creative and innovative anyway at the best of times? What are the special messages for the dance world? In trying to answer these questions and to put forward a proposition for dance companies, I have drawn heavily from the work of David Dubois,[1] but in trying to address the dynamics of dance companies, I have had to regrettably put aside some of his excellent ideas on success of innovation in the business world.  Theodore Levitt said “Creativity is thinking up new things, innovation is doing new things”. Many a dance practitioner or choreographer will have come up with creative ideas and have a singular ‘vision’ for success. However, they may or may not have the skills in innovation – to deliver creative potential within time and budget without stretching the capacity of the dance company. The capacity to deliver innovation may become a constraint. However, mainstream arts funders and sponsors would be the first to identify companies which have implemented creativity and innovation with success. Dubois stresses that ‘innovations do not succeed quite by chance or coincidence of accident’. He goes on say that ‘innovations have to be thought and managers need a real strategy’. The products and services ‘have to be marketed and diffused in coherence with overall strategy’. It is anticipated that further commentaries on dance companies will address this key area of innovation. The best commentaries will be those which are made by dance companies themselves. Learning from Case Studies: Business or Economics? Many years ago I worked with a senior academic  to produce case studies on dance management.. One of our objectives was to develop a number of cases to depict success in the dance world but also to analyse the achievement of notable dance companies by using critical lessons from business planning and strategic management. The two companies which opened their doors to us, knowing that they were going to be scrutinised in detail, were Shobana Jeyasingh Dance Company and Siobhan Davies Dance Company. It goes without saying that by all accounts these companies have done extremely well since the case studies were written just over 12 years ago. The success was entirely due to the persistent efforts made by these companies to innovate. These companies were committed to achieve their strategic priorities; we do not claim to have influenced the outcomes in any way. However, there may be some disagreement with this assertion from the critics of these companies and their creative approach to their work. My response to this is quite simple. Every company has its ups and downs and coping with challenge is just a part of organic growth. But it is the overall success that matters and most importantly the ability of a dance company to retain leadership in its sector would says a great deal about their programmes for implementing strategic innovation. It is hoped that successful dance companies which have secured their success on the basis of strategic innovation will come forward. The Challenge of Innovation How are dance companies suited to innovate in the present funding climate? It is not just the funding that may be at risk; most of their business sponsors may also be coping with the effects of the recent recession or worried about the possibility of an impending double-dip recession. The next question is: how will innovation take root? Does a company not need even more money to innovate? What about the essential knowledge or ‘know how’ and also what Dubois calls ‘ know-why’? Let us also not forget about the spending power of audiences. Which markets are dance companies trying to serve? What is the cost of an evening out for a family of four when everyone may get hungry and thirsty? Dubois says that ‘know-how’ is important, but ‘know-why’ is more important e “as it allows you to be creative – to fall back on principles – to re-invent your know-how”. Also, “creativity is about divergent thinking, innovation is about convergent thinking”. The challenge for dance companies is to put  creativity into action, bringing together challenging and sometimes conflicting proposals but finding a clear pathway for success. Learning from consumer choice Dance companies are not very different from the business analysis offered by Dubois. It is possible that creative dance is probably not the most successful dance from the consumers’ point of view? The audience is the consumer and profiles of the audience may also be changing. Here is what one might call the ‘double whammy’ for dance directors. They have to become more innovative at a time when either their audiences may be falling or the make-up of the audience may be changing quite radically especially when consumers may be using their declining ‘disposable incomes’ on other priorities. Many arts organisations resent being compared with business or even looking at themselves as business organisations. I know this well from my days as an Arts Council assessor for the much hated Incentive Funding Scheme from 1987 onwards.  Many arts leaders revolted when the ‘principles’ of business planning were first applied to assess the viability of their organisations. Not unlike the latter day advent of ‘Service Inspections’ which became the principal bone of contention with the Audit Commission, it was the inspectors who took most of the flak! I had been there but thirsting for more punishment, I also became an assessor for one of the lottery funders. It would not be an exaggeration to say that it was the messenger who brought ideas for better working and more cohesive planning and implementation of innovation that became the first hit in the line of fire of arts companies when they resisted change. Planning for change and gaining competitive advantage is no longer a luxury. Failure to innovate would put dance companies in intensive care and it goes without saying that often the most loved patients have to lose their lifelines…..and sadly, funders may have to lose good arts companies. Am I being rather alarmist and unduly negative? Remember I started by saying that this analysis is biased in that it stems from the worst case assumptions in a planning scenario. It seems that concerns for survival which is based on a high level of public funding are no longer alarmist. There may be trouble ahead and just in case the worst case scenarios fail to materialise, dance companies will be better prepared to face the future through strategic innovation. Further issues of this blog will aim to draw from your feedback and to discuss how innovation may work for dance companies.  Innovation will be examined through the lens of economics. There are plenty of sources of advice on how the process of innovation may be designed and implemented. Reference:  David Dubois, The Role of Innovation in Economics. The 2004 Moffatt Price in Economics. http://economics.about.com/library/weekly/aa060204a.htm

 

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[1] David Dubois, winner of The 2004 Moffatt Prize in Economics. This work may be seen at www. Xxxx  

Encouraging feedback confirms our policy

The launch of this new blog has received encouraging support but we want to go further.

The hit rate on the site has been one indicator; many of you have had a look and probably returned again. A few of you have written in and made extremely useful comments. I take all feedback very seriously and am going to work on various aspects of the critical debate.

Also, before I can name people in the feedback I may have to take their permission! Many dance companies are recipients of funds from the Arts Council of England and the regional funding partners. Will a contribution to the debate have an impact on your funding options? I know this is probably a worry when people responded cautiously! Consequently, I am not going to betray confidence until some of you are comfortable about going public.

But do you know what? I know that it is virtually impossible to perceive the possibility that the funders would take your views so badly that they might stop or reduce your funding. We live in an open and democratic society which believes in constructive debate. That is the keyword – constructive, supported by sustainable facts and valid opinions which meet my three ground rules for debate- trust and respect. The third rule is ‘value addition’. Does what we say here add value to the debate and inform future policy and strategies for funding? This site is one of your options to present your views and ‘state your case’ in a positive and constructive manner. It will win you respect and recognition.

Of course you probably belong to one or many networks which best represent your interests. You don’t? Do the network leaders know what you expect from them? Would you not prefer to lead by example? The power of the funding case should not hold you back! Getting your share of funding is your democratic right provided you meet the criteria and generate creative work of high standard to meet the demands of growing competition. This may worry some of the flagship companies in dance. Access to funding may not be treated as a right. With music and dance in constant evolution and when audience tastes and your customers’ expectation may be changing, dance companies must also stay ahead in terms of innovation.

Without trying to raise alarm or unnecessary uncertainty, it is clear that the national economic situation will probably dictate large funding cuts. South Asian dance companies need to be proactive in making their case – what you do, who you serve and why your work is important. If you do not tell the funders, they may assume that a) you have nothing to say and b) your dance company is not in touch with the reality. Defending your budget may need a completely different argument than the one you may have used in the past.

In the end the government’s funding agencies have to make a choice: to fund essential commitments in schools and hospitals or to support dance in general. I am not suggesting that mainstream or South Asian dance will be singled out for more cuts! But dance companies have to innovate and experiment. Will it be the ‘silent’ and  ‘closed’ dance companies which will which make themselves conspicuous through their lack of visibility? Who can tell?

One of the issues that I will return to is: are the arts and cultural funders also going to innovate by redefining the criteria in response to prospective cuts? The only scenario that one can predict is that funding system is not going to do more of the same indefinitely.

Contact Us

Contacts

Kalwant Ajimal can be contacted by email and by mobile phone, the latter in urgent cases only.

The email address is kalwant.ajimal@btinternet.com 

The mobile telephone number is  07973 168331

Email is the preferred method of communication.

Kalwant Ajimal writes several blogs, all in a personal capacity. His references to the arts funding mechanism are based on his extensive experience of working with large and small companies. He has also been appointed by arts and Lottery funders to carry out assessments of diverse and mainstream organisations.

He launched Asian Arts Access in 1989 and both critics and supporters have said that it has an enviable track record. In 2001/01 he started to mainstream his work and Mirador Creative Culture was launched. The work of Mirador can be followed by clicking this link: http://miradorculture.wordpress.com 

Mirador stands for ‘a turret or tower attached to a building providing an expansive view’. Kalwant interprets this to include strategic views of culture of the cultural landscape.

The work of a major client of Mirador can be seen at http://eastendarts.wordpress.com Kalwant welcomes enquiries from arts funders and local authorities for developing local projects based on extensive community engagement and proactive communications.

Further efforts to diversify Kalwant’s main festival, which is the Festival of Ephemeral Arts (www.ephemeralarts.com) may seen within a few weeks at http://traditionalartsexchange.wikispaces.com

Another mainstream blog which is engaged in general aspects of critical debate can be seen at: http://diverseview.wordpress.com  the focus of which is to bring different views to the national scene.

23 years to reckoning

What does the economics of innovation mean for dance companies?

One of the main lessons to be learnt from the much despised Incentive Funding Scheme which was introduced by Margaret Thatcher in the late 1980s was its focus on the arts enterprise as a business; the least it expected was to expect cultural entrepreneurs to visualise their organisations along the lines of a regular business. The scheme was opposed by many grant recipients who saw it as an interference to their entitlement; was not arts funding their right? Others did not resist the scheme but the workload that it generated and the costs it entailed. Suddenly, their contracts for funding had been threatened. They had to adopt formal business working methods. They had to submit those dreaded market forecasts and worse still, the ‘cashflow’ statements. As far as some dance companies were concerned, their subsidy/grant relationships with the old Arts Council of Great Britain came under strain.

This was also a new challenge for ‘assessors’, those agents of the Arts Council of Great Britain who were prepared to walk into the den and work with arts organisations receiving funding. The writer was one of those brave people who were prepared to be mauled by board trustees and senior managements, who were in some cases unified for the first time. Even today, a few arts organisations see their trustees as a necessary evil but thankfully these are the worst case scenarios. However, there are also very positive examples for close and beneficial relationships between charity trustees and managements and staff of dance companies. It is interesting that some of the challenges from 1987 have been revived by the public spending cuts announced by the new coalition government. It has taken 23 years for any government to impose the drastic level of funding cuts that are emerging now. Unfortunately, there could be more if the economy continues to slide towards either a ‘double-dip recession’ or worse still, towards ‘a deflationary spiral’. This post does discuss the merits and demerits of funding cuts. These are discussed elsewhere in the vast number of communications provided by Mirador Creative Economics[1].

The Challenge for Innovation

The introductory post for this blog refers to various challenges facing the cultural sector following the changes in the economic climate but also reminds us about the imperatives to change even if the economy was not in its present state. Taking arts subsidies for granted has never been a good idea! The experience of many dance companies has shown that they have planned meticulously to generate wider funding and income options, created more self-generated income and secured sponsorships. Much as many examples will predictable prove enviable track records, the growth of self-generated income is likely to be diminishing. Income projections need to be constantly challenged.

Dance companies are also challenged by the following factors:

a)      While markets have expanded as a result of the greater and more positive exploitation of broadband and the related ‘facilitators’ of the digital economy,  how many dance companies have actually developed policies and action plans to use the interactive media to create larger markets? We will see that just developing a website and a few email campaigns is not enough.

b)      The sustainability of dance companies can only be ensured by a proactive approach to ‘digital inclusion’.

c)       How successfully have the leaders in the dance economy embraced the basic tenets of ‘innovation economics’? Have they invested resources to understand their role in the ‘knowledge economy’?

d)      The link between culture and economic development has been extensively promoted but the systems and practices of the cultural organisations that are responsible for delivery do not always appear to have changed. This aspect preparing for proactive response to a changing market place will be central part of our enquiry.

e)      The writer is interested in developing a network of national and international focus groups to consider the role of dance companies within the context of innovative cultural economics as a agenda for broader economic growth.

f)        Can the dance ‘sector’ make a convincing case for its role as a job creator and a stimulant for economic impact? What are the critical dimensions of an economic sector? Can dance claim its role as a positive player in the regional economies of the UK?

There is another dimension to this discussion and exploration. Can the managements of both large and small national and regional dance companies with predominantly diverse cultural content also be engaged in this debate?  The most predictable likelihood is that South Asian, African and Afro-Caribbean dance companies may not always perceive a role in this wide ranging debate. One possible reason is that they may consider themselves to be insignificant in terms of their capacity to stimulate change. However, as they cannot be considered to be insignificant as receivers of public subsidy, they must have an important role in the debate. Mirador aims to offer a separate platform for South Asian dance companies much as their motivation as key providers cannot justify a separate role in the critical debate. The reason for providing a separate platform which will be linked to this site is that it is conceivable that many South Asian dance companies may consider themselves to be distinctly different in an economic sense when they are not. However, their markets and content is culturally diverse. Does this factor justify a special programme of communications? Only time will tell. The writer believes that the best way to engage them is to treat them as equal performers in the political and economic arena in the dance industry. However, the reason for identifying differences between the South Asian dance providers and the mainstream is partly due to the cultural affinity of the writer but mainly because South Asian dance companies may argue that their markets are different. It remains to be seen how, why and when their cultural difference may be a factor for specialist treatment.

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Calling Graduates and Senior Students of Dance and Journalism

This blog and a number of ancillary blogs are all aimed at bringing new thinking and generating critical debate in the dance ‘industry’.  The recent success of modern ‘dance forms’ and the emergence of street and community participation provide very important justification for engaging young people and new choreographers and producers.

Recent graduates and students of dance and arts journalism should also be encouraged to bring vibrancy, energy and potentially fresh thinking about how they wish to see their work reflected, planned and understood in the future. Graduates and students of dance who wish to develop skills in criticism and management are invited to contact me to discuss ways of working with us as volunteers. We hope that they will be able to gain valuable experience and visibility which will help them to forge ahead in their careers and develop their own enterprises or find jobs.

If you are interested, please send an email with ‘Dance Economics’ in the subject area.

Please write to me, Kalwant Ajimal at kalwant.ajimal@btinternet.com

Thank you.

The Economics of South Asian Dance

This is the title of a new blog, currently under development.

The scope of the new blog is based on one of the key articles provided above. Here is the excerpt:

There is another dimension to this discussion and exploration. Can the managements of both large and small national and regional dance companies with predominantly diverse cultural content also be engaged in this debate?  The most predictable likelihood is that South Asian, African and Afro-Caribbean dance companies may not always perceive a role in this wide-ranging debate. One possible reason is that they may consider themselves to be insignificant in terms of their capacity to stimulate change. However, as they cannot be considered to be insignificant as receivers of public subsidy, they must have an important role in the debate. Mirador aims to offer a separate platform for South Asian dance companies much as their motivation as key providers cannot justify a separate role in the critical debate. The reason for providing a separate platform which will be linked to this site is that it is conceivable that many South Asian dance companies may consider themselves to be distinctly different in an economic sense when they are not. However, their markets and content is culturally diverse. Does this factor justify a special programme of communications? Only time will tell. The writer believes that the best way to engage them is to treat them as equal performers in the political and economic arena in the dance industry. However, the reason for identifying differences between the South Asian dance providers and the mainstream is partly due to the cultural affinity of the writer but mainly because South Asian dance companies may argue that their markets are different. It remains to be seen how, why and when their cultural difference may be a factor for specialist treatment.

Only time will tell. We will be contacting South Asian dance companies shortly.