Call for Papers - Special Issue: New Forms of Finance and Funding in the Cultural and Creative Industries
Submission deadline: December 15, 2020
Diana Betzler, ZHAW Zurich University of Applied Sciences, Switzerland
Trine Bille, Copenhagen Business School, Denmark
Karol J. Borowiecki, University of Southern Denmark, Denmark
Boram Lee, University of South Australia, Australia
Ellen Loots, Erasmus University Rotterdam, the Netherlands
This special issue focuses on new forms of finance and funding and their implications for organisations and markets in the Cultural and Creative Industries (CCI). The financial landscape has changed rapidly as a result of the 2008-2009 financial crisis. Because of the globalization of markets and technological developments such as the internet and social media, new players and instruments are now a feature of many markets, including that for the CCI. Low interest rates have steered investors towards innovative ventures, facilitated by venture capital funds, incubators and crowdfunding providers (Block et al., 2018). Novel technologies including reward-based crowdfunding (Tosatto et al., 2019), peer-to-peer lending and virtual currencies can be expected to increase the efficiency of entrepreneurial finance by reducing transaction costs and information asymmetries, also in the CCI.
As a result of those trends, existing participants and new entrants to the creative economy face both fresh opportunities and higher levels of risk. This special issue of the Journal of Cultural Economics seeks to bring together contributions that explore and explain such dynamics in the financing of the CCI, which include sectors as diverse as the performing and visual arts, music, film, TV and radio, gaming, design and fashion, publishing and advertisement, museums, craft, literature and heritage. Individuals and firms operating in the CCI have been found to exhibit aversion towards making use of “other people’s money” (Sigurdardottir & Candi, 2019: 4) while professional funders have been shown to be mistrustful of artistic and creative producers (O’Dair & Owen, 2019; Lee et al., 2017). Identifying how a new funding paradigm, which includes crowdfunding, incubator and accelerator finance, asset finance, online public feeder investment markets, and social funding, affects different aspects of the CCI constitutes a challenge for contemporary researchers in cultural economics. Our hope is that a new examination of innovative, alternative forms of finance for the CCI, embracing both local and global perspectives, as well as the exploration of the determinants and outcomes of novel ways of funding, will engender a varied portfolio of papers which provides new insights on the perennial issue of support for the CCI.
The CCI, or those industries that require creativity as a key production input, have been depicted as social network markets ruled by complex incentive schemes and multifaceted interactions between demand and supply (Potts et al., 2008). Some authors articulate the centrality of intellectual property, and the CCI’s concerns with “the exchange of finance for rights in intellectual property” (e.g., Lash & Urry 1994, p. 117; Handke et al., 2019; Towse, 2017; Loots, 2017). It is commonly acknowledged that the CCI provide not only economic but also cultural and societal value (Hutter & Throsby, 2008; Klamer, 1996).
In recent years, and in many different jurisdictions, the CCI have simultaneously experienced the attenuation of direct government assistance and increased support for creativity-driven and innovative entrepreneurship, motivated by the belief that the CCI are a source of job creation and of economic development. Nevertheless, some segments of the CCI, for example, the publishing and film industries, are primarily oriented towards national markets, with sovereign states seeking to develop subsidized survival strategies in order to ensure cultural originality, traditions and diversity. At the same time, several sectors in the CCI, for example, the gaming and music industries, resemble global winner-take-all markets where a small proportion of superstars or large firms reap astronomically high returns on investment while other creative suppliers barely make ends meet (Elberse, 2013; Lee et al., 2018). While barriers to entry are sometimes low, risks for newcomers as well as existing incumbents are high (Caves, 2000), especially since the production and distribution of many cultural goods has internationalized and the competition has intensified under the new conditions of the platform economy for market share and for new funding opportunities such as crowdfunding and crowd-sourcing (Mendes-Da-Silva et al., 2016).
In terms of public funding, a shift from direct support, as in the form of lump sum subsidies, to the promotion of sustainability, self-employment and entrepreneurship can be observed. Founder loans, trade fairs, innovation and export promotion and the provision of business advice are increasingly being used by governments at different levels. Incubation and start-up funding programs, often initiated by national or regional economic development agencies, are intended to support commercial entities operating within the CCI. Government venture capital funds are intended to yield not only financial gains but societal benefits, often in the form of regional development, job creation, and other positive externalities (Block et al., 2018). Examples of indirect and multi-party funding can be identified at all levels of government (e.g. Dalle Nogare & Bertacchini, 2015). For example, cities such as Amsterdam have started to collaborate with a network of impact driven financiers, private investors, banks, foundations and venture capital firms, with the aim of more effectively equipping its social entrepreneurship ecosystem. Another example is that of The European Union and the European Investment Fund, which have jointly started to support financial institutions by guaranteeing their loan portfolios to the CCI, thereby assuming part of the risk of lending to SMEs and micro-businesses in those industries. Other innovative examples of government support to the CCI can be expected.
In terms of private funding, friends, family and optimistic speculators still play a key role in helping individuals to make their creative dreams come true by the provision of equity finance. Because of the absence of collateral, the uncertainty that comes with the novelty of many creative products, and the lack of available data on the CCI, micro-firms and SMEs in the CCI usually find access to banks difficult and rely on ‘bootstrapping’ (Nesta, 2019). Crowdfunding is on the rise, as a method of altruistic giving by which single funders pool money for a project, often via internet-based platforms. Some initiatives and sectors do appeal to venture capital; corporate venture capital is buoyant, and commonly implies the provision of equity and access to other resources such as the market insight and networks enjoyed by large corporations, which, for their part, seek both financial returns and low-risk access to new markets (Nesta, 2019). Individual ‘angel’ investors provide equity and other forms ofinvestment mostly to early-stage ventures with growth potential; also ‘angel’ networks are gradual turning their attention to the CCI (Block et al., 2018). Other forms of finance and funding include family investment organizations, small business investment companies, IP-based investment funds in which the intellectual assets (property rights) of a company are monetarized, and mini-bonds; the ways by which these relate to the CCI requires investigation.
The distinction between public and private support is attenuating, and many of today’s funders and instruments combine elements of grants, debt and equity financing (Nesta, 2019; Brabham, 2017). For example, government venture capital funds operate either on a stand-alone basis, or by means of hybrid private-public funds (Block et al., 2018). Social venture capital funds provide seed-funding to social entrepreneurs and are intended to provide both financial returns and social payoffs. New public private co-financing initiatives develop measures that involve development banks, ‘angel’ investing and venture capital (OECD, 2018). Combined publicly and privately funded accelerators and incubators offer not only financial resources but space, mentorship, and access to networks and the economies of scale which result from belonging to a micro-cluster of innovation and knowledge (Vanderstraeten et al., 2016). In the CCI, creative start-ups are naturally inclined to combine different financing instruments, while more traditional cultural organizations have also begun to embrace mixed funding.
So far, there is little systematic information on the new forms of financing in the Cultural and Creative Industries, and the academic literature on many developments in entrepreneurial finance generally is still in its infancy (Block et al., 2018). With this special issue, we wish to open up this important topic of research in the CCI.
Objectives and research questions
We welcome theoretical, conceptual, econometric and empirical papers, including case studies, longitudinal analyses and experiments, based on either primary or secondary data, which analyse new forms of cultural finance and funding and their implications for organisations and markets. Papers which reflect on data issues (availability, ethical concerns) are also welcomed. Submitted papers may focus on a specific niche or industry or the CCI in general. The issues that may be investigated include, but are not restricted to:
- Cultural goods/services and funding: How do new forms of finance and funding affect the nature, perception, and supply of and demand for cultural goods and services?
- Innovation in finance and funding: what new methods and forms of financing are evident within the CCI? What are the effects, e.g. in terms of advocacy and justification, and implications, e.g. economic, political, social and cultural, of these new forms of financing? What is the role of cultural policy in these developments (Owen et al., 2019)?
- Hybrid funding: which forms of hybrid funding have come into existence, and how and where are they being applied, and with what aims and expectations? What kind of economic problems, e.g. crowding out, information asymmetries, arise from the involvement of multiple parties and how are they being addressed?
- Organization development: how do specific forms of funding and finance affect organizational development? How do organizations in the CCI make the transition from debt, which is generally easier to obtain at low cost, to equity funding, if at all? Do contemporary trends in finance and funding allow for firm-growth and scaling-up?
- New players: which (new) players (including intermediaries) have become part of funding and finance structures in the CCI? How and why do they affect market structures in the CCI (if at all)?
- Philanthropy and sponsorship: how have different forms of philanthropy and sponsorship in the CCI evolved over time? What are the roles and effects of new fundraising practices (e.g. crowdfunding, peer-to-peer donating, mobile giving, viral fundraising)?
Submitted papers can also consider themes such as the sharing economy, the regulatory environment and technology (e.g. digital platforms, blockchain), so long as the cultural economic angle is clear.
Submissions Open: September 1, 2020
Submissions Deadline: December 15, 2020
Authors will need to submit manuscripts for this special issue on the submission system for the Journal of Cultural Economics (https://www.springer.com/journal/10824). To view the author guidelines for this journal, please visit: https://www.springer.com/journal/10824/submission-guidelines. All submissions will go through the regular JCE review process. For any enquiries about this special issue, please email email@example.com or firstname.lastname@example.org.
Authors are encouraged to submit their abstracts for the 21st conference on Cultural Economics,
(https://acei-2020.univ-lille.fr/; submission deadline January 31, 2020), where the opportunity will be created to discuss your work in progress with the guest editors. Conference participation is not a necessary condition for paper submission.
The coronavirus disease (COVID-19) outbreak across the world is expected to affect finance and funding in the Cultural and Creative industries. It may accelerate the implementation of new forms of finance and funding, as well as lead to unseen financial instruments and support mechanisms. The special issue opens up to contributions that relate to new forms of finance and funding in this crisis and/or post-crisis situation. Short Communication Papers will be considered as well (word count between 3000-5000, abstract of 100 words). All other regular author guidelines and key deadlines apply.
Block, J. H., Colombo, M. G., Cumming, D. J., & Vismara, S. (2018). New players in entrepreneurial finance and why they are there. Small Business Economics, 50(2), 239-250.
Brabham, D. C. (2017). How crowdfunding discourse threatens public arts. New Media & Society, 19(7), 983–999.
Dalle Nogare, C., & Bertacchini, E. (2015). Emerging modes of public cultural spending: Direct support through production delegation. Poetics, 49, 5-19.
Elberse, A. (2013). Blockbusters: why big hits–and big risks–are the future of the entertainment business. Faber & Faber.
Franco, M., Haase, H. & Correia, S. (2018). Exploring Factors in the Success of Creative Incubators: a Cultural Entrepreneurship Perspective. Journal of the Knowledge Economy, 9, 239–262.
Handke, C.W., Quintais, J.P. & Bodo, B. (2019). Truce in the Copyright War? The Economics of Copyright Compensation Systems for Digital Use. Review of Economic Research on Copyright Issues, 15(2), 23-56.
Hutter, M., & Throsby, D. (Eds.). (2008). Beyond price: Value in culture, economics, and the arts. Cambridge University Press.
Klamer, A. (1996). The value of culture: On the relationship between economics and arts. Amsterdam: Amsterdam University Press.
Lash, S., & Urry, J. (1994). Economies of signs and space. London: Sage.
Lee, B., Fraser, I., & Fillis, I. (2017). Nudging art lovers to donate. Nonprofit and Voluntary Sector Quarterly, 46(4), 837-858.
Lee, B., Fraser, I., & Fillis, I. (2018). Creative futures for new contemporary artists: opportunities and barriers. International Journal of Arts Management, 20(2), 9-19.
Loots, E. (2017). Authors' rights in the creative economy. Perpetually a work in progress. Forum+, 24(3), 4-13.
Mendes-Da-Silva, W., Rossoni, L., Conte, B.S. et al. (2016). The impacts of fundraising periods and geographic distance on financing music production via crowdfunding in Brazil. Journal of Cultural Economics, 40: 75. https://doi.org/10.1007/s10824-015-9248-3
Nesta (2019). Paths to scale. Finance lessons from European Entrepreneurs. Report. Resource document. https://www.nesta.org.uk/report/paths-to-scale/
O’Dair, M., & Owen, R. (2019). Monetizing new music ventures through blockchain: Four possible futures?. The International Journal of Entrepreneurship and Innovation, 20(4), 263-276.
Owen, R., Mac an Bhaird, C., Hussain, J., & Botelho, T. (2019). Contemporary innovations in entrepreneurial finance: Implications for future policy. Strategic Change, 28(1), 5-8.
Potts, J., Cunningham, S., Hartley, J., & Ormerod, P. (2008). Social network markets: a new definition of the creative industries. Journal of Cultural Economics, 32(3), 167-185.
Sigurdardottir, M. S., & Candi, M. (2019). Growth strategies in creative industries. Creativity and Innovation Management. https://doi.org/10.1111/caim.12334
Tosatto, J., Cox, J. & Nguyen, T. (2019). An overview of crowdfunding in the creative and cultural industries, In: Landström, H., Parhankangs, A. & Mason, C. (eds.). Handbook of Research on Crowdfunding, Research Handbooks in Business and Management series, Edgar Elgar Publishing: Cheltenham.
Towse, R. (2017). Economics of music publishing: copyright and the market. Journal of Cultural Economics, 41(4), 403-420.
Vanderstraeten, J., van Witteloostuijn, A., Matthyssens, P., & Andreassi, T. (2016). Being flexible through customization− The impact of incubator focus and customization strategies on incubatee survival and growth. Journal of Engineering and Technology Management, 41, 45-64.
Wilkerson, M. (2012). Using the Arts to Pay for the Arts: A Proposed New Public Funding Model, The Journal of Arts Management, Law, and Society, 42(3), 103-115.