Why Is Technological Innovation Emphasized More Than Symbolic Innovation in Art and Cultural Organizations? Analyzing the Sectoral System of Innovation in Museums Chuan Li Óscar Blanco Sierra Pau Rausell Köster ([email protected]) ([email protected]) ([email protected]) PhD. Student at Econcult PhD. Student at Econcult Professor at Econcut 2P05, Department of Applied Economics, University of Valencia Av. Tarongers s/n 46022 Valencia Abstract. Traditional innovation studies concentrate on technological changes whilst innovations in the cultural and creative industries stress content, symbol and other non-technological dimensions. Existing literature shows particular concerns on symbolic innovation in art and cultural organizations. But a contradictory phenomenon was observed that many art and cultural organizations like museums emphasize technological innovations over symbolic innovation. Why is there a gap between theoretical interest and practical cognition? This article attempts to explore the reason resulting in the contradiction between theory and practice. This article begins with the discussion of cultural and technological dimension of innovation in the art and cultural organizations; then analyzing innovative activities involved in the process of production and distribution of museums from the aspects of knowledge creation and innovation in service area, and followed by identifying four subsectors of product and process innovations in museums, including technologydominant production (e.g. restoration), technology-dominant service (e.g. digital museum), symbol-dominant production (storytelling of exhibition) and symboldominant service (e.g. visiting experience); and it continues with a case study of the sectoral system of innovation in museums based on the Valencia Autonomous Community, and comparing the patterns of innovation involved in the four subsectors. At last, a conclusion is arrived to stress innovation features (perception factor) as well as market factor and bureaucratic management system of museums (institutional factor) as contributions to the emphasis on technological innovation over cultural innovation in Spanish museums. Key words: innovation, sectoral system of innovation, technology, symbolic innovation, museum 1 1. Raising the question Great concerns have been paid on innovation in the Cultural and Creative Sectors (CCS) in the recent years. Briefly, innovation refers to something new. Joseph Schumpeter (1939) defined innovation as a new commodity, a new process, a new form of organization, opening up of new markets and new source of supply. More studies regarded innovation more than novelty; they strengthened innovation as the first commercialization of new method and idea (Dosi & Nelson, 2010; Fagerberg, 2006). At this sense, “first reaching market” becomes a key criterion to distinguish innovation from invention and imitation, where innovation is an introduction of a truly novel item while imitation is an adoption of existed items in the market. A technique or product can be new to the world, to the domestic market, and to the firm. Greenhalgh and Rogers (2010) pointed out that being “new to the firm” is not a sufficient test for innovation, but it is “diffusion of innovation”. While Stoneman (2010) argued that innovation is a dynamic process that encompasses all stages of invention, innovation and diffusion, and everything it involves in. Traditional innovation studies and surveys1, no matter whether Schumpeter’s theory or recent studies, place emphasizes on technological production and process innovation in manufacturing, it is always connected with the analysis of process of technological change (Dosi & Nelson 2010); the essence of innovation is something relevant to the creation, application and diffusion of technologies and knowledge. R&D is seen as a vital source of knowledge, the number of R&D activities fundamentally affect the opportunities for technological innovation within a territory (e.g. firm, industry, region, nation or global), which in turn determines the outputs of innovation and its performance (Becheikh et al. 2006). However, the cultural and creative sectors (CCS) are characterized by “creativity” and “symbolic meaning” involving in the mass production of cultural products and services (Bilton & Leary 2002). Symbolic goods and services in the CCS have as “first use” the communication of ideas, rather than functional goods and material manufacture (Galloway & Dunlop 2006). The former usually is reliant on the symbolic (art) base whilst the latter on analytic (science) and synthetic (engineering) 1For example, the Oslo Manuel that is widely adopted as guidance for measuring innovation in enterprises by many countries has been focusing on the technological product and process (TPP) innovation since its first edition. In the present third edition, organization and marketing innovation is added as complements. 2 bases (Asheim & Hansen 2009). Theoretically, innovation in the CCS is characterized by symbolic dimension instead of technological dimension. For example, “aesthetic”, “hidden”, “content” or “soft” innovation are proposed, from the perspectives of input, output, process and measurement of innovation, to capture the unique nature of innovation in art and cultural organizations. Contrary to it, in the practical and empirical level, high priority is given to the technological innovation in many art and cultural organizations. Digital technologies are disrupting established practices and creating new opportunities for innovation across the creative economy (Digital R&D Fund for the Arts 2013), and a majority of organizations treated new technologies as the essential driver in marketing, archiving and preservation, as well as operations. Our interviews about museum innovation also suggested that technological innovation was much emphasized over symbolic innovation among museums. They are not individual cases; actually, many museum and cultural heritage institutions innovate with technologies (Ioannidis et al. 2014). This article aims to tackle the contradiction between theoretically symbolic innovation and practically technological innovation in the art and cultural organizations and to explain the gap between theoretical interest and practical cognition in reality though a case study of the sectoral system of innovation in museums. 2. Cultural Dimension of Innovation Creativity and the generation of symbolic meaning are the core features of the CCS (Bilton & Leary 2002). Culture is the expression of its creativity, and it is linked to meaning, knowledge, talents, industries, civilization and values (KEA 2006), whilst cultural products have additional cultural value besides economic value, and this cultural value can be deconstructed into a series of components, including aesthetic, symbolic, spiritual, historical, social and educational value (Throsby, 2001). There is a close connection between the CCS and innovation. The essence of any innovation including scientific and technical innovation - of any sort in any industry is creative (Galloway & Dunlop 2007), and hence, the CCS should be innovative essentially. Furthermore, the main outputs of a cultural and creative institution are symbolic goods and services, whose “first use” is the communication of ideas, rather than a functional value (Bilton & Leary 2002), therefore innovation in the SSC displays special features as opposed to technological and functional dimensions. 3 Prior studies have proposed different types to describe the symbolic component of innovation according to different perspectives, specifically to the cultural and creative industries. From the perspective of inputs of innovation, there are “stylistic innovation” that is the changes in the aesthetic and symbolic elements of goods and services (Cappetta et al. 2006), “aesthetic innovation” that increases the perceived value and satisfy customer demands concerning taste, social image, and performance for novelty (Alcaide-Marzal & Tortajada-Esparza 2007), and “content creativity” where creativity and other innovation may feed into each other in the creative industries (Handke 2004); from the outputs of innovation, there are “formal innovation” that changes product form without any necessary changes in product functions and production methods (Bianchi & Bortolotti 1996), and “soft innovation” that is innovation in products that primarily impacts on aesthetic or intellectual appeal rather than functional performance (Stoneman 2010); from the measurement of innovation, it is “hidden innovation” that is not recorded by traditional innovation indicators and mostly involves in the five aspects: outside product design, organizational forms or business models, novel combinations of existing technologies and processes, and innovative problem-solution (Miles and Green 2008). In the art and culture organizations, Bakhshi and Throsby (2010) identified four dimensions of innovations as extending audience reach, artform development, value creation, and business model, all of which stress non-technological dimensions in the cultural generation and distribution. There is, however, a comment that new technologies are a vital factor that provides new opportunities and demands of innovation in the art, culture and creative organizations (Bakhshi & Throsby 2009; Miles & Green 2008). 3. Innovation Through New Technologies Cultural innovation is stressed theoretically, but innovation through technologies is widespread practically in the CCS. Actually, the advent of the Information and Communication Technologies (ICT) and digitalization constitutes both the context and the means of technological innovation in the art and cultural organizations. Two viewpoints can be summarized in the prior literature. The first one sees the adoption of technology itself as an innovative activity; it is not a simple imitation of the existing business model – “there is not the same commercial imperative to adapt 4 to the technology that exists in business… (and) to be seen as benefits in the public sector” (Fopp 1997), this means that the cultural organizations have to form their own business models in the process of absorbing technologies. For example, the preservation and application of digital heritage (e.g. born-digital contents and virtual museum) greatly change the areas of museum activities from physical site to cyberspace, and allows museums to increase interest and real visit through offering online access to their digital resources (Fopp 1997; Karp 2004). The other one regards technologies as the tool and means of innovation. They emphasize the construction of technological infrastructure to facilitate other process or product innovations rather than technological progress itself. Art and cultural organizations can rely on the ICT to develop innovative management practices in operation (Marchant 1999), heritage preservation (Navarrete 2014), exhibition and storytelling (Pujol-Tost 2011), visiting experience (Kim et al. 2015), and communication and mediation (Kéfi & Pallud 2011). The report How arts and cultural organizations in England use technology (2013) suggested that digital technologies had a positive impact on audience development, creative output and operating efficiency but lower impacts on revenues in arts and cultural organizations; it also pointed out that museums are less engaged with digital technology than other art and cultural organizations. This implies that the extent to which technology is adopted also varies from the type of organization. 4. Museum production and innovative activities 4.1 Museum production and distribution Museums are an important art and cultural organization. According to the International Council of Museums (ICOM), museum is “a non-profit, permanent institution in the service of society and its development, open to the public, which acquires, conserves, researches, communicates and exhibits the tangible and intangible heritage of humanity and its environment for the purposes of education, study and enjoyment”. The essential role of museums is the creation and sharing of knowledge through the generation and distribution of cultural product and service related to cultural heritage (Museum association 2013). Fig.1 depicts the process of the production and distribution in a museum. From the perspective of the value creation, this process begins with the objective setting, through inputs, process, and outputs, and finally ends up with exerting impacts. 5 Fig. 1 The generation and distribution of cultural products and services in the museum • Objectives Four types of the objective can be identified in museums (Asuaga & Rausell Köster 2006). Intrinsic objective is to accomplish the basic activities defined by ICOM, it defines museum’s cultural role in heritage preservation; extrinsic object is to meet the social expectation of a museum, it defines the social role of impacting on community where the museum situates; internal objective is to reach the sustainability of a museum, it determines the legal status of museum; external objective is to optimize the efficiency of museum management, it defines the economic role for development. • Inputs Museums are labor- and knowledge- intensive organizations (Friedman 1994; Järvenpää & Mäki 2002). Museum’s operation requires a large amount of human and knowledge resources besides ordinary physical and financial capitals. Whilst museums are not traditionally technologyintensive institutions, new technology can drive a museum to adopt innovative technological solutions in museological works so as to keep pace with the changing social demands on museums (Bakhshi & Throsby 2009). • Process It reflects the detail methods and process of creating and sharing knowledge flow, through executing essential activities defined by the ICOM. • Outputs Museums output both cultural products and services at the same time. Museum products refer to tangible outcomes of their activities, e.g. digitized 6 image, exhibition, publication and conference are the outcomes of digitalization, curation, and storytelling, investigation and communication respectively. Whilst museum services refer to the visiting experience (e.g. guided visit) and consumption (e.g. catering and shopping) online and on site. • Impacts Museums’ impacts can be classified into four values: i.e. public, private, personnel and institutional values, which are created by museums and transmitted to the audience and local community (Jacobsen 2016). Clear and motivating organizational objectives can facilitate innovation in art and cultural organizations, which is a key mediating step in achieving superior organizational performance (McDonald 2007). But most innovative activities occur in the production step covering from inputs to outputs. For example, the new source of technologies and other capitals, the new cultural products and services, the new process and expanding new market like audience reach. At last, well-identified impacts can be good indicators to measure and evaluate the efficiency of innovation and organization performance. 4.2 Knowledge, technology and innovation Knowledge and technology are both the essential inputs of museum production and the important drivers of innovation (Jensen et al. 2007; Karlsson et al. 2011). Innovation traditionally concentrates on technological progress, where R&D activity determines the intensity of technology and further fuels innovation. Technology in museums has two resources: in-house R&D and imported technology. It is not widespread to own R&D departments or be engaged in the R&D activities in the museum sector, except for some large museums that own facilities for conservation and scientific research, such as the British Museum. Whilst most of the technologies adopted by museums are imported from external sources. At this sense, each technique update or the introduction of new technology is an innovation in technological dimensions. For example, the “automation” in the 1960s; museum information management in the 1970s; local networks, multimedia and microcomputing in the 1980s; the Web, interoperability and mass digitization in the 1990s; and the mobile and social media at the start of the new century (Parry 2010). In the digital era, many museums innovate by employing digital heritage solutions to protect the natural and cultural heritage, reach potential audience to a great extent, and 7 attract tourists who may simply not have been aware of the opportunity to visit (Kokalj et al. 2013) Museums are knowledge-intensive; many innovative activities rely on knowledge flow and exchanges. Asheim and Hansen (2009) classified knowledge in the CCS into three bases: analytical, synthetic and symbolic bases. Analytical knowledge refers to developing new knowledge about natural system and the knowledge is scientific; synthetic knowledge refers to applying or combining existing knowledge in new ways and it is problem-solving; symbolic knowledge refers to creating meaning, desire, aesthetic, qualities, affect, intangibles, symbols. Take an example of the restoration and conservation: analytical knowledge includes chemistry, physics and biology etc.; synthetic knowledge include engineering etc.; and symbolic knowledge includes fine arts, art history, history and photography etc. (De-Miguelmolina et al. 2013). Synthetic and analytical knowledge relate to the scientific and technological component of innovation whilst symbolic knowledge relates to creative process. Innovation is a learning process (Lichtenthaler 2013), and the learning relies on the exchange and acceleration of knowledge flow. Similar to investing R&D, investing in knowledge (learning) occurs to two types of activities: “to improve the quality of intermediate goods… then produce actually their intermediate goods serving as inputs of in the production of the final good” (Esso 2010). In the case of museum, many academic achievements through research activities, based on symbolic knowledge like art history and museology etc., firstly improve the understanding of museum staff on museum collection and management, and then the staff make the use of these achievements as new theory or method in the production process like storytelling, educating and communicating to product related final products like exhibitions, popular publications and guide service for the public. Therefore, symbolic innovation or symbolic component of innovation deals with the changes in symbolic meanings and contents of cultural generation and distribution of museums; it includes extending the understanding of museology, art history or other disciplines; designing the storytelling for exhibitions and visiting; preparing educational programs for study and communication and so forth. All of these works are based on creativity and symbolic knowledge and focus on “collection”, “educational”, “connecting” and “communication” values rather than economic value (DSP-groep 2011). Their contribution to society usually is cumulative 8 and the improvement in aesthetic and symbolic dimension is not as easily judged as in function dimensions. In another word, symbolic innovation is a “hidden innovation” (Miles & Green 2008). Opposite to hidden innovation, technological innovation or technological component of innovation is more “explicit” because it is output-based (e.g. new technology and devices) and may lead to great social-economic outcomes. 4.3 Innovation in service areas Service is an important output of museums; museums also innovate to improve audience engagement and visiting experience (Bakhshi & Throsby 2009). Service is the transformations of people, things and information (Tether & Metcalfe 2004). Different from a tangible product, service is characterized by intangible, ephemerality, co-terminality of production and consumption, and intensive user/producer interaction (Hauknes 1998). Firstly, intangibility suggests that service usually is problem-solving; it reflects “customization of specific technologies, pieces of equipment, organizational models and strategies, to answer to a wide range of users' needs” (Evangelista 2000), and the customization can be seen as a process innovation. Secondly, the nature of ephemerality and co-terminality of production and consumption means that production and consumption of service are closely connected and occur at the same time, and therefore, it is hard to distinguish between process innovation and product innovation, and some scholars introduced “delivery innovation” to represent service innovation (Miles 1993). Thirdly, user/producer interaction suggests that the process of innovation is not one way but a loop of try and feedback for learning by doing and by interaction, and therefore, cooperation between producers and users is an important source of innovation. Fig. 1 identifies different activities in the service area in the museum, and these activities can be categorized in accordance with different criteria. According to service objects, they can be classified into backstage service that mainly offers administrative and informative supports to production process, and service objects are internal personnel within a museum, and front stage service that mainly creates an experience business from guided visits to creativity-oriented museum shopping and the service object is the public. According to inputs of service, they can be classified into technology user and symbol user. “Technology user” resembles the similar concept by Evangelista (2000) or the supplier dominated concept by Pavitt (1984), and mostly refers to the service that relies on technologies developed outside. 9 Computerization of administrative system, digitization of the interactive manner, and the usage of self-help devices like kiosks and audio tour has been an innovative tendency in the museum service, and they are heavily reliant on the investment and the acquisition of new machinery, equipment and the setting up of several kind of technological infrastructures” (Evangelista 2000). On the contrary, symbol user reflects the traditional service that relies on symbolic knowledge. For example, reception desk, guided visit, catering service and museum shop etc. Most of these services are labour-intensive, and require not only basic knowledge of art, history and museology etc. but also necessary demands, preference and taste of the public. Therefore, employee training is an important investment than technology acquisition in this catalogry. Traditional opionion thinks that an important characteristic of innovation in service is non-technological or “soft”, meanwhile technology also plays a significant role in shaping service in some service areas like “technology user” catogory. 4.4 Subsectors of product and process innovations in museums The realm of museums spans across the creative economy, cultural institutions and service sector; and the complexity of museum production determines the variety of innovation patterns in the museums. As discussed above, innovation relies on many factors, like technology, knowledge base and sector. As a consequence, it is useless to adopt a single pattern from manufacturing or service sector to summarize a panorama of innovative activities in museums; on the contrary, the “heterogeneous” production and distribution of museums requires analysis on different patterns of innovation, and hence, identifying homogeneous components from the heterogeneity is of significance. Based on section 4.2 and 4.3, four sub-sectors of museum production can be categorized according to the value creation and innovation inputs (see tab. 1). • Technology-dominated production refers to the process and output stages where the production process relies heavily on technology and analytical and synthetic knowledge, and the final products are function-oriented. A representative of the technology-dominated process is the restoration that involves precision instruments and intensive knowledge like color, pigment, spectral and geology etc. • Symbol-dominated production refers to the process and output stages where 10 production process is based on the symbolic knowledge, and “first use” of the final products is the communication of ideas instead of functional value. Many collection-centered activities and outputs, e.g. research, exhibition, and educational courses, fall into this sub-sector. • Technology-dominated service refers to both backstage and front stage services that mainly rely on the adoption of new technologies. A representative of backstage service is office automation and the usage of Intranet; whilst the utilization of digital museum, virtual visit, and social media communication belong to the technology-dominated front stage services. • Symbol-dominated service mostly refers to the traditional front stage services in museums such as information desk, guided visit, catering and shopping services that mainly rely on symbolic knowledge. Service, theoretically, is a part of production in a museum, but here we differentiate service from production, which is restricted to two stages of process and output in the categories, for emphasizing the “co-terminality” and interaction characteristics of service, and this will help us to identify certain patterns of innovation. At this sense, this classification is more tactical than theoretical. Two differences should be emphasized here. Firstly, it should differentiate “technology” from “symbol”. In most cases, production activities and their final products (or services) contain both technological and symbolic components at the same time, so the criterion of classification is to see which component plays a dominant role in the production process or value composition. Secondly, it should differentiate “product” from “service”. Many creative products also serve users, some educational programs like course and conference are accomplished by the interaction between educators and audience. The criterion lies in if the production process and delivery can be separated. Most educational programs require a good plan and design, and many innovations in educational programs are embodied in the new and creative design and contents that are determined prior to their delivery to the final users. Because of the curriculumization of the educational programs like courses and workshops, museum education becomes a cultural product that can be delivered to different users at the different time and places. On the other hand, some educational 11 Tab. 1 sub-sector of museum production for innovation pattern analysis Service Value creation Production Innovation inputs Technology Technology-dominated production − Preservation − Conservation − Digitization − Restoration − New forms of born-digital and digital surrogates Symbol Symbol-dominated production − Research & investigation − Curating & storytelling − New storytelling of exhibition − New design of catalogue − Original publication − New guidance for educational programs/courses − New contents of born-digital objects Technology-dominated service − Office automation / intranet − Instant communication − Virtual exhibition/visit − Social media connection − Online ticket/shopping − Digital interactive technologies and devices application Symbolic-dominated service − Front desk service − Guided visit − Catering service − Museum shopping − Conference & concert programs like conferences and concerts are one-time performance and concentrate on “live” and interaction between producers and users. Therefore, they are regarded as service. On this basis, it supposed that technological innovation involve in the technology-dominated production and service whilst symbolic innovation involves in symbol-dominated production and service subsectors 5. Sectoral system of innovation in museums: a case of Valencia Region 5.1 Sectoral system of innovation approach as methodology The sectoral system of innovation (SSI) approach is an effective conceptual framework to analyze innovation and production process as well as policy implications (Edquist 2005), and it is the application of the system of innovation theory in the boundary of a product or product group (Coenen & Díaz López 2010). The sectoral system of innovation can be regarded as a set of new and established products for specific uses and the set of agents carrying out a market and non-market interactions for the creation of one or a number of innovation within a framework of instructions (Malerba 2002). The products here are stressed to delimit the sectoral boundary distinguished from the national and regional boundaries delimited by geographical criterion. Agents include individual, firms and non-firm organizations 12 like universities, research centers, government bodies, and even firms’ sub-units like R&D and production departments. The institution is defined by its broad sense as law, social conventions, contracts, and traditions. The SSI approach is adopted to analyze such questions as the structure and boundary of the sector, agents and their activities, and learning and innovation process. This analysis can be achieved through the following three building blocks. • Knowledge base and learning process Knowledge is relevant for explaining innovative activities in a sector; learning process is an important resource of knowledge, different combinations of degrees of accessibility, cumulativeness and appropriability of knowledge lead to different patterns of innovation (Malerba 2002). Considering that knowledge and technology domains of innovation process vary across the sectors, they are significant factors to affect the boundary of the innovation system. • Actors and networks Actors are heterogeneous because of their types, competencies, organizations, beliefs, and behaviors. The types and structures of networks (i.e. links among artifacts or relationship among agents) differ from sector systems, so they also affect the boundary of the sector. Knowledge involves the network and interaction of these different actors, and new or existing knowledge can be acquired through “monitoring”, “mobility” and “collaboration” by the process of learning by doing, by using, by interacting and by cooperation (Tether & Metcalfe 2001). • Institutions Institution may be both national and specific to the sector; it shapes the network and interaction of actors, and then further influence the process of innovation. The basic logic is that the SSI is composed of actors and their networks shaped by national and sectorial institutions; the boundary of the sectoral system are determined by the knowledge and technology domain as well as the link and complementary among artifacts (e.g. a product or a technology) and activities; the heterogeneity of actors within a sector results not only from different cognitive degrees but also from different demands of users, therefore the process of systematic innovation is the interplay of the process of variety creation and the process of selection; at last, changes in the knowledge base change the type of actors and the structure of networks, and further affects the boundaries of the sectoral system 13 (Malerba 2003). Because “often the most appropriate units of analysis in specific sectoral systems are not necessarily firms, but individuals or firms’ sub-units” (Malerba 2002), an attractiveness of the SSI approach is to describe and compare the similarities and differences of operation, dynamics and transformation of sub-sectors within a sector. In order to apply the SSI approach in the museum sector, the following process will be followed. Firstly, sorting out the agents and networks in museum sector and defining its boundary of sectoral system of innovation; secondly, identifying the types of knowledge, the sources of knowledge (monitoring, mobility, collaboration) (Martin & Moodysson 2011), and learning processes (learning by doing, by using, by interacting, and by cooperating) (Arrow 1962; Rosenberg 1982; Lundvall 1988; Bureth et al. 1997) of four sub-sector of museum production, and summarizing patterns of innovation of each sub-sectors; thirdly, analyzing the state of arts of the infrastructure and structure of the sectoral system of innovation and discussing how they affect the innovative activities of different sub-sectors within the museum sector. 5.2 The boundary of the sectoral system Regional boundary may be more appropriate than national boundary to be regarded in the analysis of the sectoral system because a sectoral system usually is highly localized (Malerba 2002), and empirical studies also suggested that knowledge flows and exchanges mostly happen within the same region in the “symbolic” industries (Martin & Moodysson 2011). In Spain, there is no influential national organization or alliance for museums, the operation, and networks among museums are highly conformed to the territorial of autonomous communities. This article basically focuses on the sectoral system of innovation in the Valencia Autonomous Community, semistructure interviews were conducted with museum directors, professionals and independent curators from seven museums (see appendix), and the questions principally focused on the four working field: restoration, digital heritage, exhibition, and investigation, and visit service and quality evaluation system. According to the Ministry of Education, Culture and Sports of Spain2, Valencia Community owns 190 museums, only second to Castilla y Leon (195) in the number 2See Ministry of Education, Culture and Sport, Museum and Museological collection Statistics 2014: http://www.mcu.es/culturabase/cgi/um?M=/t11/p11&O=culturabase&N=&L=0 14 whilst they attracted the forth largest amount of visitors in 2014, only inferior to Madrid, Cataluña, and Andalucía. In Valencia, 78% museums are public museums, among which there are 4 national museums, 9 autonomous regional museums and 132 local museums, whilst private museums only sum up to 21% and the two residues are public-and-private-mixed museums. Besides museums, the sectoral system of innovation also consists of diverse agents including public-funded institutions for heritage conservation and restoration, e.g. Instituto Valenciano de Conservación y Restauración and Instituto de Restauración de Patrimonio de UPV, Fine Arts School and art history departments of local universities, associations for museums and museum professionals, high-tech enterprises as technology and service suppliers as well as cultural and heritage authorities of regional and municipal governments. There are two types of interactions among agents according to the links between products. On the one hand, museums as cultural producers interact with the suppliers that provide inputs to production. Suppliers may be research centers and universities that provide human and symbol capitals, museum service firms and (high-) technology firms that offer technology and physical capital, and government bodies that offer financial capital. On the other hand, museums also interact with visitors as users of cultural products and services, many museums attach importance to the feedback from visitors in order to improve the service quality through the widely adopted quality evaluation system. In the technology and knowledge regime, in-house R&D activities are not common and most technologies and equipment are imported from other sectors, and hence museums can be seen as Pavitt called “supplier-dominated sectors” (Pavitt 1984). Analytical, synthetic and symbolic knowledge are scattered among different production segments owing to different natures of works. Analytical base (e.g. chemistry, physic and biology) and synthetic base (e.g. engineering) constitute scientific knowledge that mostly involve in some technology-oriented works for examination, analysis, conservation, restoration and digitalization (De-Miguel-molina et al. 2013) while symbolic base mainly involve in the creative process, including symbolic meaning production area that refers to the contents of fine arts, history, photography and museology, and visit service areas that are reliant on the understanding of demand, preference and habit of visitors. These knowledge flows and exchanges are the outcome of the interaction and learning process. According to Martin and Moodysson (2011), the sources of knowledge are diverse in terms of: 15 (1) Monitoring: searching for knowledge outside the organizational boundaries of the museum, but without direct interaction with these external sources, e.g. fairs, magazines, surveys, and journals. This knowledge may be technological, and symbolic as well. A good example is that such research activities as art history studies and art critics require solid review of literature that mainly from journeys and surveys. (2) Mobility: retrieving knowledge input thought the recruitment of key employees from other organizations. In the curatorship of an exhibition and educational program, it is a widespread practice for museums to recruit independent curators, university professors or experts in specific sectors temporarily; museums also recruit volunteers and memberships of museum friends club from different careers. (3) Collaboration: exchanging knowledge though direct interaction with other individuals and organizations. Innovation as a learning process is implicit in the interaction and interdependence of agents, and thus gives importance to the patterns of learning processes. Although cultural production of museums is similar to a certain extent to in-house R&D in symbolic dimension and stresses the importance of learning by doing and by using; the close linkages between museums and suppliers and users also implies the existence of learning by interaction and by cooperation. 5.3 Patterns of innovation in four subsectors Tab.2 describes the basic elements of the sectoral system of innovation and innovation patterns of four subsectors of museum production. In the technology-dominated production subsector, we focus on the restoration. Many museums set up restoration departments or employ restoration professionals, who are in charge of daily maintenance of collections. In the case of a complex restoration, they tend to search external service from professional institutions such as Instituto Valenciano de Conservacion y Restauración de Bienes Cultural (M1, M2, M5), or self-employed specialists (M6, M7). Therefore, “outsourcing” is a common feature in the field of restoration, which suggests an intensive producer-supplier interactions based on commercial contracts and market mechanism. Additionally, there also exist some informal exchanges and diffusion of tacit knowledge about certain small-scale and new restoration technique and skills among employees from 16 different museums (M2, M5, M7). So knowledge may come from two sources: cooperation with suppliers and monitoring by seeking and imitating among employees. Innovation in restoration is the outcome from learning by interaction and by cooperation. In the symbolic-dominated production subsector, we focus on the storytelling of exhibition 3 . Museum exhibition is of academic and educational significance, involving a new method of story-telling, or a new idea on nature, history, humanity, and artform etc., and hence, it faces small-scale, accumulated, and content dominated innovation. An exhibition usually is a project-oriented collaboration, involving internal collaboration among conservators, curators, and educators, as well as external cooperation with independent curators, university professors, collectors and artists etc. Internal collaboration is of institutional division of labor, whilst a large amount of external cooperation is based either on contract with independent curators, artists and collectors or on informal network and trust with scholars or art critics. Therefore, in the symbolic-dominated production, monitoring and mobility are two principal sources of the knowledge; the relationship among agents still belongs to producersupplier interaction, and innovation is the outcome of learning by doing and learning by interaction. In the technology-dominated service subsector, we focus on the digital museums. Digital museum is an information network service system constructed for collecting, preserving, managing and utilizing information resources of human heritage (Chen & Zhu 2013). It may improve the museum experience particularly by ICT, such as wireless communication, VR, 3D and intelligent terminals so as to reach a wide and deep audience by means of the creation, dissemination and (re-) usage of digital heritage resource. Therefore, the driver of innovation mainly comes from the lifestyle and demand from visitors. But museums belong to the supplier dominated sector, and technological innovation in museum are restricted by the R&D and commercialization of new technology from other sectors, so service innovation in technological dimension also relies on the cooperation of other agents like (high-) technology firms (M4, M5, M7), or universities (M1, M5, M6). This particularity forms a special loop of user-producer-supplier interaction, i.e. the advent of new 3Exhibition usually is a systematic project, which embraces both symbolic meaning component (e.g. storytelling) and technological component (design, installation and conservation of exhibits). 17 technologies leads to new usage habit and demand (e.g. smart mobile devices) of visitors, which encourages technological innovation (e.g. seeking wireless communication solution for enriching visiting experience) to meet new needs of users, and this in turn forces museums to cooperate and interact with high-tech suppliers for importing and adopting new technologies. The knowledge sourcing is based on collaboration, and innovation is the outcome of learning by interaction and by cooperation. In the symbolic-dominated service subsector, we focus on visitor service and quality evaluation system. Visitor service is the front house job about meeting and greeting visitors to provide them favorable visiting experience, it often involves the guided tours, information desk, answer general enquiries, shop and coffee etc. Innovation in visitor service is small scale and problem-solving. The innovation process is usually associated with the effective operation of the quality evaluation system adopted by many museums (M3, M7). The system embraces a typical producer-users interaction, which requires a museum to response to visitors’ feedback for tackling the deficiencies and problems in order to improve the quality of visitors’ experience. In this subsector, the knowledge sourcing is collaboration, and innovation is the outcome of learning by interaction. Based on the above description, it is summarized that innovation in the cultural production of museums consists of both technological component and symbolic component. In the technological component, most innovative activities are radical and outcome-oriented because technological innovation in museums relies heavily on the importation and integration of technologies supplied by other sectors, which requires intensive interaction and cooperation between museums and technology suppliers. During the direct interaction with outside agents, innovators acquire essential knowledge and technology resources though the necessary processes of learning by interaction and cooperation. In the symbolic component, innovation appears as a process-oriented and problem-solving activity. Symbolic innovation also emphasizes the interaction of agents and exchange of knowledge, but linkage types and knowledge sourcing are various from areas of value creation. In the production area, many symbolic innovations are initiated from key employees such as researchers and curators. This implies the importance of mobility as a knowledge sourcing, and the interaction and learning process are somehow of individualism and rely on informal relationships among the academic community or peer groups, whilst organizational 18 Tab. 2 basic elements of the sectoral system of innovation and innovation patterns according to four subsectors of museum production Technology-dominated production Symbol-dominated production Technology-dominated service Symbol-dominated service Example Restoration Storytelling of exhibition Digital museum Visitor service / quality evaluation system Actors Museums, research centers, universities, technology suppliers Museum, university, independent curator, artists, collectors Museums; high-tech firms; universities; museum visitors. Museum, visitors, consulting company Knowledge type Synthetic and analytical base (3D print, X-Ray examination, lon-exchange chromatography…) Symbolic base (fine arts, art, art history, design) Synthetic base (informatics, engineering) Symbolic base (demand, preference and habit) Knowledge source Monitoring (search and imitation) & collaboration. Monitoring & mobility Collaboration Collaboration Learning process Learning by interaction, by cooperation Learning by doing, by interaction Learning by interaction, by cooperation Learning by interaction Network Supplier-producer interaction Suppliers-producers interaction Informal network Users-producer-supplier interaction Producer-user interaction Institution Contract Many museums set up restoration departments or employ restoration professionals, who are in charge of daily maintenance of collections. In case of a complex restoration, they tend to search external service from professional institution or companies, or self-employed specialists. Therefore, outsource becomes a common feature in the field of restoration. Besides, the informal exchanges of information between museums also exist in the diffusion of small-scale and new restoration technique and skills. Contract The advent of ICT helps museums to reach a wide and deep audience by means of the creation, dissemination and (re)usage of digital heritage resource. The object is to improve the museum experience particularly by ICT, such as VR, 3D, intelligent terminals etc., and hence the drive of innovation comes from the lifestyle and demand from visitors, especially young generation who deeply involve in the social media, mobile phone etc. But museums are supplier dominated sector, and hence technological innovation are restricted by the R&D and commercialization of new technology from other sectors. E.g. mobile operators and university. Therefore, innovation requires intensive interaction between users-producerssuppliers. Regulation Visitor service is the front house job about meeting and greeting visitors to provide them favorable visiting experience, it often involves the guided tours, information desk, answer general enquires, shop and coffee etc. Innovation in visitor service is small scale and problem solving. The innovation process is usually associated with museum quality and evaluation system, which is based on the feedback from visitors, and museums proceed the feedback and end up with improvement of service quality. Innovation pattern Trust Museum exhibition is of academic and educational significance, involving new method of story-telling, or new idea on nature, history, humanity, and artform etc., and hence it faces small-scale, accumulated, and content dominated innovation. An exhibition is usually project-oriented collaboration, involving internal collaboration with research and education department, as well as external cooperation with independent curators, university professors, collectors etc. Internal collaboration is of institutional division of labor, whilst a large amount of external cooperation is based on informal and individual networks or contract between museum and independent curators and scholars. 19 institutions and culture may favor or hamper this interaction and network. In the service area, innovative activities involve in organization process that determines how a museum and visitors interact. 5.4 Cultural institutions as a key of shaping sectoral system Specific culture institutions (Hasitschka et al. 2005) play an important role in shaping the existing interaction and relationships among museums, individuals and other organizations, and further influences innovation in the sectoral system. In Spain, there is a common understanding that cultural resources are publically owned and shared by the whole society. This cognition leads to at least two outputs of local cultural institutions. On the one hand, the state rather than market dominates the production, distribution, and reception/consumption of cultural heritage products and services in Valencia region. It is generally regarded that market is an effective mechanism of resources allocation but the market mechanism is a failure in such a public sector like cultural heritage, and hence government intervention is necessary for the production, allocation and consumption of cultural production and services. Government intervention incurs two outcomes. Firstly, the sustainability of museums relies heavily on public support. Public funding accounts to near 90% revenue of museums in Valencia Community 4 . Secondly, the operation of museums leans towards institutional interaction instead of market interaction. Take an example of exhibit loan policy, many western museums have market-oriented exhibit loan policies that allow museums to charge loan fees for lending their collections to other cultural institutions whilst exhibit loan activities in Spanish public museums are restricted to nonprofitable bilateral agreements between governments or museums and the existing policy doesn't allow public museums to charge loan fees for lending exhibits. Whilst in the technology-dominated areas, museums rely on market exchange mechanism because the essential techniques or machines need to be imported from other agents or even other sectors. In the digital era, museums have increasing demands on such digital technology as 3D, VR, and AR etc. Under the existing producer-supplier interactions, the extra demands of museums will lead to the 4 Considering that the data source includes both public and private museums, the real proportion of public funding to total revenue will be higher than 90% in the public museums. 20 increase in supply by attracting more specialized supplier firms (mostly are high-tech SME dedicating to museum sector) to enter this emerging market, which forms the process of variety creation. At this sense, market mechanism helps to expand the boundaries of a sectoral system by introducing emerging actors of the museum sector. On the other hand, museums are categorized by the administrative management system. At the organizational level, each museum belongs to a certain bureaucrat classification corresponding to its governing body if it is central government, autonomous community government, municipal government or private entities. In the Valencia region, museums are heavily dependent on their governing bodies not only for fundraising but also for organizational decision-making. The bureaucracy of the museum sector incurs two outcomes. Firstly, most museums interact with other museums from the same category, so the interaction among museums usually is horizontal. Secondly, the vertical interaction of museums across different categories is limited, partly because of the lack of powerful national museum associations like Museum Association of UK or the American Alliance of Museums to unite and cohere museums at national or regional territorial. At the individual level, most museum professionals are civil servants. It is not easy for a museum to hire key employees for knowledge seeking as firms do under the existing system. Therefore, the mobility as a knowledge sourcing is temporary, informal and unstable. 6. Conclusions Why is technological innovation emphasized more than symbolic innovation in the art and cultural organization? This is not a perception issue, but a matter of choice, that is, which innovation is easier to implement. In the existing sectoral system, different innovative activities are reliant on different knowledge bases, learning process, actors’ network and institutional restriction; and different combinations of these elements, in turn, shape various path dependences for innovation. Yet the similar institutional environment may encourage some kinds of innovative activities and hamper the others. Based on the above analysis, the conclusion of this question that this article aims to answer may be arrived at by the perception and choice aspects. From the perception aspect, technological innovation usually is output-oriented and radical whilst symbolic innovation is process-oriented and problem-solving, therefore it is easier to identify and concentrate on the technological innovation than symbolic innovation. 21 From the choice aspect, as Schumpeter’s innovation theory suggested, “creative destruction” is realized by effective resource allocation through market (Schumpeter 1939). This may also work in the art and cultural organizations, because the market may facilitate the interaction and network of the sectoral system of innovation effectively, and further attracts cultural actors to innovate with the help of market. This is proved in the case study of the sectoral system of innovation in museums, where technology absorption depends on collaboration through market mechanism, which plays a significant role in attracting new technology supplier firms to enter the emerging technology market for museums through adjusting the demand and supply relationship. This process of variety creation actually is similar to the Mark I pattern of Schumpeter innovation and contributes to the expansion of the boundaries of the sectoral system of innovation in museums. The analysis of the sectoral system of innovation in museums shows that government intervention is widespread in the production, distribution and consumption of cultural products and services; but this intervention may limit the autonomy and self-determination of museums and their innovation, for example, the administrative management system of museums actually weakens the mobility as knowledge sourcing and vertical interaction and cooperation. 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