[+57] Creative Colombia (Disseration)

CREATIVE COLOMBIA / The Value Of Making
How can Business Design drive innovation into the countries’ creative and productive force?

Felipe Gómez
Jozeph Forakis

Master in Business Design Academic Year 2010-2011
Milan, October 15 2011

[+57] CREATIVE COLOMBIA

Abstract
Colombia has become a new important economy in the modern world. This South American Country is the
fourth biggest economy amongst the Latin Countries (after Brazil and Mexico and Argentina) and holds the
third biggest market segment in the region. But the business environment in the region is changing, the
population number is rising fast and their buying power is also increasing. In order to keep the pace with its
strategic markets and become more competitive; Colombia will need to understand how to generate value out
of its creative industries, they are becoming a key asset to compete strategically and build the strength for the
developed and developing regions in this modern economy. The different sectors that compose the National
Creative Industries could lead the development process of the country and transform it from its current and
traditional efficiency-driven model to a more innovation-driven one.

The Colombian Creative Industries have a skilled and resourceful workforce; of craftsman’s, designers, small
producers and entrepreneurs that are having great ideas and projects but are not being able to communicate
their value and introduce their products to the markets. The local and creative value is underappreciated within
the global society; therefore, the former needs to be addressed with a solution that equips the creative and
productive community with tools and channels in order to communicate and explore the cultural and
economical value of their creative makings.

Consequently, this project will use the power of a collaborative brand “[+57]”, that will unify the
Colombian creators, producers, and businesses communities through an online Open-sourced Magazine &
Store where the content is generated to draw interest about Local Creative Makings.
This model is conceived as an evolution of what a creative MEDIA-driven business model is (like the One
MONOCLE MAGAZINE follows). It goes even further by being a protagonist in the creative and business
community, that by discovering new talents and driving strategic design research and business modeling with
them to collaboratively conceive new product lines, services and business models.
Finally, the solution model seeks to connect and support the community of creators, makers, and businesses, by
driving innovation through a series of online networking, educational and collaborative strategies, allowing
them to learn, share and participate through out the whole process of creation and innovation.

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TABLE OF CONTENTS

Introduction

Chapter 1: Background. A global and local view of the creative industries.

1.1. The Creative Industries definition and their value for development.
1.1.a. Current business models for creative organizations.
1.2. The challenge for innovation in developing areas, an overview of the present situation.
1.3. Local Context. Colombian creative power and the situation for local innovation.
1.3.a. Colombia; Socio-Economical frame of reference
1.3.b. Innovation competitive outline of the country
1.3.c. The local creative industries definition
1.3.c.1. Being a Colombian Maker. The local crafts sectors case.
1.3.c.2. Being a Colombian Creator. Local design sectors case.

Chapter 2: Problem Definition. The under appreciation of the local creative value.

2.1. Introduction
2.2. Defining the players: Creators, Makers and Consumers
2.3. Problem general Overview: The Under appreciation of the local creative value
2.3.a. Generalized fear to take risks, a problem for innovation.
2.3.b. Low exposure of the “Creators” and their creations.
2.3.c. Scarcity of support and lack of business planning.
2.3.c.1 WAYRA network case study
2.3.d. Absence of collaborative spirit amongst the players.

Chapter 3: A Design-Driven approach to help local creative businesses.

3.1. Business Design as transformation leverage for the local creative and productive forces.
3.1.a. Slow food case study
3.2. What is business design? A new approach for businesses innovation process
3.3. The value of the local creative force and their makings
3.4. Story telling, expressing the value of local creative makings
3.4.a. WALLPAPER case study
3.5. Driving Innovation into the creative and productive sectors through design.
3.5.a. COMMON case study

Chapter 4: Precedent Studies. Existing Models that support creative outcomes.

4.1. Creative-Led Publications; an inspirational source for design
4.1.a. MONOCLE MAGAZINE / Print and online Content; Driving innovation into creative
communities.
4.2. Online Design; Online Design Shops and Project Promotion.
4.2.a. FAB.COM / E-retailing and reselling of creative products
4.2.b. ETSY.COM / Community Sourced Platform for Handmade Products
4.2.c. KICKSTARTER / Crowd-Funding Creative Enterprises
4.3 Creative Networking and Crowd Sourced Innovation
4.3.a NAPKIN LABS / Virtual collaboration tools for creativity.
4.3.b Open IDEO / Challenging the creative community.
4.4 The design Brief what a new business should offer to Colombian creativity.

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Chapter 5: The project. [+57] A Local Resource For Creativity

5.1 Introduction to [+57]
5.1.a Brand Identity and values
5.1.b A link between the Creators and the Consumers
5.1.c [+57] An On-line Magazine and Store for creative content.
5.1.d [+57] A Resource for local innovation
5.2 The strategy; introducing innovation into the local creative process.
5.2.a Phase 1: Gather & inspire the local creative power with education
5.2.b Phase 2: Discover & Communicate the new creative talents
5.2.c Phase 3: Draw attention towards the creative people and their offers
5.2.d Phase 4: Drive innovation amongst the creative players
5.3 The scenario, how does it work?
5.3.a The Inspirational Creative Maker; the one with a developed product
5.3.b The Inspired New Talent; the one that is developing an idea
5.3.c The Industrial Partner Seeking Inspiration; those who need new ideas
5.4 The Business model, how do we make money?
5.4.a Business model Overview and Business Positioning Strategy
5.4.b Key Activities and Key Resources
5.4.c Key Partnerships
5.4.d Revenues & Costs
5.5 Scalability & future developments
5.6 Final Conclusions

Bibliography

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Introduction.

The creative industries, and the different sectors that compose them, have become one of the fastest growing
sectors in today’s international economy. This Industries have teach us their economical importance in
developed countires, like England , where it was proven that in the city of London, this activities generate more
economic value than the one that is being produced by its entire finacial sector. Now is time to understand how
the activities realted to these industries can generate value, and become a trasformation leverage, for developing
countries like Colombia. In order to become more competitive and keep the pace of todays world, this
coountires will need to overcome their traditional economical models based on the efficiency of their industrial
power and move to an innovation driven economy.

Colombia counts with a skilled and talented creative force, this community’s count with a high tradition in
crafts and cultural activities that are being complemented by a resent proliferation of the design disciplines that
has been occurring during the last decade; a rise of creative force is happening together with the economical
growth of the country. This creative force is generating a broad number of products, services and business with
high levels of innovation and quality. Never the less there is a general under-appreciation amongst the global
society of the value of these Colombian creative makings, that are not reaching the local or international goods
market as their creators expect them to. The main reason for this, is that even tough the creative community
count with a high number of well developed product concepts, they are not being able to achieve the same level
of business conceptualization and planning to communicate and distribute this values. This thesis explores the
way in witch business-design, business modeling and design-thinking methodologies can assist this community
to overcome this problem and set long lasting and profitable business around their creative activities.

It is possible to observe how around the world new communication channels and distribution strategies are
being set to manage the value of creative communities. These strategies are facilitating channels that allow
creative products and ideas to reach a large mass of consumers, thanks to the networking power of the Internet,
social media and communications. Now, new business models are supporting the creative communities from
the first stages of conceptualization, where virtual collaboration has enabled people to share knowledge in a
way that was never seen before; to the final stages of implementation where ecommerce platforms have set new
retail and distribution strategies to support and argument the public awareness of creative enterprises. During
this project this companies will be studied in order to understand how their business models and strategic
components could be articulated in a way that suites better the Colombian creative communities.

In the final section of this document, I will explain my solution. A business strategy that uses the power of
story telling and todays WEB 2.0 functionalities; to manage and promote the local creative power and their
communities. Hoping to gather the creative force on a single platform that will be able to support and
empower them with the required tools to communicate and distribute their creations. After this strategy has
achieved to draw attention and rise public awareness towards the local creative and productive communities it
will go farther by facilitating collaboration and innovation dynamics that will allow them to keep generating
new products, services and business ideas and introduce the in the local and international markets.

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Chapter 1: Background.
A global and local view of the creative industries.

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1.1 The Creative Industries definition and their value for development.

In order for any country to keep up with today’s market and trading pace, it is necessary to understand their
creative value and work to make use of them as a main national asset. As it was stated by the OECD
economies, the creative industries are one of the fastest growing sectors in today’s international development.
They “have an expected compound annual growth of over 9%, generate 7% of the global GDP, employing on
average 5% of the workforce and Representing 4% of the world trade” according to the United Nations
Conference on Trade and Development (United Nations , 2009)

These industries are mainly conformed by different subsectors: Performing Arts, Arts, Television &
Radio, Film & Video, Music, Publishing, Advertisement, Antique, Crafts, Design, Fashion and Software.
Besides the definition of these types of industries have been sketched by some governments and
organizations and can change depending on the source.

From the UK Government’s Department for Culture are: ‘Those industries which have
their origin in individual creativity, skill and talent and which have a potential for wealth and
job creation through the generation and exploitation of intellectual property.’ (Parrish,
2008)

And,

Defined by UNESCO as: ‘industries that combine the creation, production
And commercialization of contents which are intangible and cultural in nature; these contents
are typically protected by copyright and they can take the form of a good or a service.’ (Parrish,
2008)

These industries vary in level, and because of their unclear definition it’s hard to understand how they are
conformed and the true value that they could represent. Normally it’s difficult enough to understand the
difference between creative and cultural industries and what characterizes each of these. Therefore, in order to
define the types of categories in thesis industries it was useful to apply the economic model that was developed
by Professor David Throsby to classify and describe the economic inter-dependencies between them. (The
Work Foundation, NESTA, 2007)

His model describes concentric circles with the ‘cultural value of cultural goods’ being passed outside the core
to broader economic categories which further commercialized those cultural goods. In the center we can find
the Core Creative Fields with the expressive value of creation, where pure creative content is the outcome.
This is the domain of the author, painter, filmmaker, dancer, composer, performer and software writer.
Although the creator seeks an audience and market, their activity is the pure expression of personalized value in
which both creator and users have a unique relationship from which both gain. It is the most intensely felt
experiential form of both delivering and consuming expressive value. It can be generated by the artist as sole

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trader, as part of the content generation of a large company or via public support; in whatever structure special
care has to be taken to ensure that that creator has the opportunity to experiment and constantly innovate.
Because of being a personal expression in most cases it is hard to ensure the intellectual writes(rights?) and
properties at this level, but special care has to be taken to this issue at this or any other level where content
creation of any of the creative Industries can be found.

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1.1 Image1: Creative Industries Classification (The Work Foundation, NESTA, 2007)

At the next level we find the Cultural Industries - which focus primarily on the commercialization of pure
expressive value. Here we would find things such as music, television, radio, publishing, computer games and
film in business and organization. These industries normally work according to a vertical integrated model
where everything is done inside the organization, like EMI Music, but lately is starting to give way to more
networked forms of organization. In the UK television production is increasingly organized this way. Channel 4
was founded on the basis that it would solely commission independent production companies to deliver
content. And during the last years with the power of crowd sourced initiatives this collective behavior has gone
even farther. Now the development of a videogame can be completely sourced by the crowd and thanks to the
new web-based technologies and how they have been empowering the use of the crowd, creative people are
getting more involved with the producers. But whatever organizational models it uses to gather the content; the
heart of the business model is generating copyrightable acts of origination of expressive value represented
under an organizational model.

The next circle refers to the focus of the Creative Industries, here activities like architecture, design, fashion
and software based services are located. In this group the market offerings pass both an expressive and
workability value. They are composed of both an expressive and functional content, responding to the study or
forecast on needs and demands based on the consumer. They represent a linking stage between the cultural
industries and the rest of the economy, and are now very closely related to the consumer driven ones such as
manufacturing and service providers.

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It is then that the relation of this rich productive force with this project becomes visible and relevant, where the
applicability of business design and a design-driven holistic approach to generate outcomes of creativity and
cultural relevance that can empower the conventional creative sector to make them market successful. Any
expressive and valuable creative activity should embody the culture but it is useless if the products don’t count
with a sustainable development and support in the industrial fields it cannot succeed. Fashion products have to
be culturally in the vanguard but wearable and in pace with the contemporary and global manufacturing and
retail directions.

The application of creative and cultural values into the industries doesn’t stop at this kind of level. It’s really
obvious how they have also been introduced and are present in The Rest of the Economy, the last sector of
this model. And that's where the term, “creative business” becomes visible. It’s where creativity starts playing
an important role in the innovative creation and organization of new business models that can influence the
rest of the economies. Be it the manufacturing, financial or service sectors that start gaining expressive value
thanks to promoting creative methodologies into their commercial activities. In this way, companies such as
Apple have been able to introduce creativity, not only in terms of technology and product, but also into its
retail and communication model. For example the Apple Stores have taken the company to a higher
commercial level, thanks to creative outcomes and creative strategies its been possible for them to innovate in
the retail experience and now they are able to offer costumers creative value in all their activities, not just in a
fiscal way but each time in a virtual and long distance dimension.

Even though these sectors have been of great benefit to mankind since its first cultural expression, the
industries of this nature where not defined as part of traditional economic models and sectors until lately. The
old models that where followed came from the industrial era, and worked, based on the productive levels, what
could be achieved just by the transformation of work and matter in order to give them an extra value and make
them profitable. Based on those models, the only way for a country to achieve economic development was to
go through an industrialization process to produce and gain enough infrastructure and capital to become a
wealthy country. These models are quite adverse to the realty of some undeveloped economies, such as
Colombia, that would by no chance be able to compete on a market set over those conditions and because of
this reason are becoming more dysfunctional. Where productive monopoles are already established and
distributed amongst a few, the market for ideas and innovation rises as a new path to economic wealth and
progress and are driving the way in which things are happening.

1.1.a Current business models for creative organizations.

We should also understand the classification of the creative business based on their business model; in order to
understand how is possible to generate value. A clear business model classification of the organizations that
have a creative value was made by the Center For The Creative Business (Centre For Creative Business,
University Of the Arts of London). This categorization depends on the value preposition that the different
business dealing with creativity offer make to the market and there are three basic ways to do this. The first
type of model would be the Creative Product Driven Business, that are those firms that create a replicable
product that can be protected by intellectual property. Normally this companies address their creation to final

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consumers (B2C). For this enterprises intellectual property, creation of a brand and a well established instinct
for winning market products is the key. In this area we can find companies such as Zara, Ikea and Nespresso
that drive their innovation strategy toward the development of creative products.

1.1.a Image1: Creative Business Model (The Work Foundation, NESTA, 2007)

Then they are the Creative Process Business. These are mainly professional services enterprises that deliver
creative services to clients. They are mainly business-to-business driven and need to develop strong
relationships and trust with their clients. Design driven consultancy agencies, like IDEO and innovation hubs
are some examples of this nature. They use creativity to drive their clients initiatives into the market and make
them succeed.

Finally there is the Media Based Business that uses recurrent media to deliver creative outcomes to a
community of consumers or businesses that also work to keep them informed or entertain them. Driven by the
new possibilities that are available with new media and the internet this firms are able to distribute a large range
of creative content being develop by their creative community really facts, and that the key for them. New
startups such as KickStarter.com and Eatsy.com are based on this model.

This three business model typologies, all are based on the commercialization of creative value. Be it on a skill,
talent, process or organization of the creative force, its possible to generate value. Today we see a lot how big
companies are directly related to their creative preposition. Mapping this companies allows us see how having a
creative business model and how they manage to create creative products, process and media, hybrids of the
three main models, and how they achieve to complement them to get a better market position, basing
themselves in their creative not only at one level but in a multiple way.

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Creative Product
Business

Creative Process Creative Media
Business Business

1.1.a Image2: Creative Business Models In Todays Companies (positioning map).

1.2 The challenge for innovation in developing areas, an overview of the present situation.

Innovation climates in developing countries are, by nature, problematic, characterized by: poor business and
governance conditions, low educational levels, and mediocre infrastructure. This makes clear how those
enterprise wanting to innovate in this areas are in need of a package of support – technical, financial,
commercial, legal, and so on. There is a need to think about innovative approaches adapted to the needs and
possibilities of developing countries. These economies are in need of technological innovation but also other
kinds of non-technological, such as organization innovation and creative innovation, in order to introduce new
kinds of products and services in the markets that won’t required of big inversions but can produce new job
opportunities and benefit the local Communities.

The creative sectors lack of innovation is produced by a series of weaknesses that are present at individual,
organizational, social and governmental levels. The low technical and managerial capabilities of these regions
are the most visible obstacles for innovation to take place in these areas. There is also an absence of education
in the different social leaves. In the preindustrial sectors, where craftsmen and a big portion of the locale work
force is, education is in need of basic literacy and better implementation. In the industrial sectors, more
professional and medium-level skills are required. And in the post-industrial phase, where designers that
normally have been educated in a university are, there is a need of entrepreneurship and leadership attitudes
that could lead initiatives to share more knowledge with the part of the population that is not having access to
education, a more collaborative spirit.

A week business environment also characterizes the innovation process in developing countries. The
bureaucratic climate and poor definition of intellectual property and creative markets, makes hard to

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entrepreneurs to self-start their own business. For this the creators that want to start a new endeavor have to
face a lot costs and waste of time.

There is a lack in infrastructure and technological capabilities, and this problem is more visible for new
businesses that don’t count with financial power or business planning. The access to new communication
channels and low development of Internet business connectivity creates barriers to penetrate the market. Its
true that the Internet has created a new era for the commercialization of ideas, goods and services, and if it
could be accessible to more people, they will find easer to promote their product and expand their reachable
markets, this makes part of the lack of exposure that local “makers” and “creator” and their creations have and
that better explained in champed two.

There is a little support in research and development for creators. They don’t have access to studies or
knowledge that could support their work, something that is very important to innovate not only in
technological terms but also to know the market, trends, legal, etc. Also, Innovation systems are really
fragmented, there is a high number of small-enterprises some of them operating in informality with a great
capability to produce but they are completely disconnected from a small number of local and foraging-based
firms that hold the main markets.

In general, these areas are more efficiency driven and their implementation of innovation is in an early stage,
but a maturing process has begun and it’s growing fast. Its amassing how globalization and the sharing of
information is making this areas develop, and to keep this going; it will be necessary to find solutions to the
previous problems in order to accelerate the innovation level of the countries that present this conditions, not
only in Colombia. The general conditions in a lot of these areas are becoming more positive; education is
becoming more accessible in this days, as well as technology. The new creative business models are giving new
possibilities to establish better collaboration and less vertical organizational models. But for developing
economies to generate innovation new models with local identity and that are not just implementation of those
existing in developed countries need to be established. This new models will need to address the specific needs
and the reality of this areas in order to developed their own innovation models, of course it should not be
forgotten the rapid pace in with things are evolving in this areas and how already existing models that have
driven innovation in other countries can be used as inspiration for those that haven’t been able to do so.

1.3 Local Context. Colombian creative power and the situation for local innovation.

How innovation and creative industries are behaving as economic development accelerators in developed areas
could also happen in developing economies if the correct direction is visualized and followed by the creative
talent that is emerging from those areas. But for this, a series of strategies should be developed in order to
overpass as much of the problem explained in the last section, that are characteristic of the creative
development of a region. As a specific case study of how this could be proven, in a scenario of contemporary
economy, this project will be focalized in the South American Country of Colombia. This is a rising economy
with a deep need to organize, develop and make value out its creative industries in order to continue its
economic growth and become a sustainable economy.

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1.3.a Colombian socio-economical frame of refence

Colombia is one of the richest countries is the region, South America. It has a total population of 53 million
inhabitants that makes it the third most populated country in Latin America, with really young population that
represents 62% of the country. This nation has been witnessing and experiencing an economic change and an
industrial development process, that has make possible a series of improvements in: quality of life,
infrastructure, life stile and purchasing power (Departamento Nacional de Planeación, 2010)

The country’s social fragmentation is critical, with an accumulation of richness between a few in a high level
classes, that represent 3,1% of the population, a rising middle class that represents 33,4% and a majoritarian
low income population, 63.5% (Departamento Nacional de Planeación, 2010)

As Raul Almeda Ospina defined in the article “The Socio Economic Pyramid in Colombia” (Ospina, 2007) the
three different classes are marked by a series of unique characteristic and are defined based on the purchasing
power and quality of life that locals have. Those on the top of the pyramid can make salary that goes over
$3.000 USD. They own their own business and have high acquisition power. Normally consume imported
goods and poses a high education level, they studied at national private universities and some of them went
abroad to international institutions mainly in the United States and Europe, they speak English and in most
cases a third language. They are consumers of Internet and are used to buy online from international and local
websites, they also download content from the web and are members of social networks.

Then there is the people from the rising middle class, they are becoming each time more rich and numerous,
whit a meddle salary that goes between the $1,500 USD and $3000 USD, salary that is normally produced by
work or owning a small enterprise. At this level we would find small producers, politicians, executives, teachers
and other positions that require certain type of education, that they received from a national private or public
institutions, they normally have English as a second language. They are starting to have access to second
necessity products such as cars and consumer technologies; in general they count with a relative good quality of
live. They have Internet access from their homes and participate in social networks also.

Finally the majority of the population is considered to have a low-income level. They are the segment of the
population earning a salary below the $1.500USD. They are mainly employed by a company to do different
types of work or are really small producers working in informal markets. A small part of this group has access
to technical level education and a big part of it hasn’t even finished primary level education, they don’t speak a
second language. They just have access to fundamental products and posses a low access level to Internet or
media based services with the exception of television and radio. Most of them are considered to live in extreme
poverty and have acces to governmental subsidy plans.

In terms of national trading on the last year there where estimated exports for $39 billion in 2010 and imports
for $41billion. The trading structure and positive economic growth of the country is very dependent on the big
amount of international investment done in the country that as a percentage of GDP was around 28% in mid-

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2011, higher than the numbers reported by Brazil and Chile during the same year. This has been possible after
the normalization of the local political climate and governmental policies that has been happening during the
last decade, and thanks to a series of campaigns that where launched by the government and industrial sectors
to promote the reestablishment in the national territory of international companies working in the region and
to win the trust of international investors. Its main commercial partner is the United States, representing about
41% of exports and 27% of its imports. Being Colombia the third-largest export market for the United States in
Latin America, behind Mexico and Brazil, there is a high consumption of imported goods. Its major exports are
petroleum, coffee, coal, nickel, cut flowers, and bananas, normally sold to the American and European
countries.
In the last years Colombian government has also set a series of diplomatic endeavors to open new markets. The
local administration has concluded or is pursuing free trade agreements with the U.S., EU, Canada, Switzerland,
Turkey, Panama, South Korea, and Japan in addition to its existing trade agreements with Mexico, Chile,
Central America, the Andean Community of Nations, and Mercosur.

1.3.b Innovation competitive outline of the country

1.2.2 Image1: Colombian Competitive mapping matrix ((World Economic Forum, 2010)

Colombia stands out for a large-scale mismatch between the size of its economy and level of economic
development, on the one hand, and on the other the low performance that it has in what has to do with
innovation, and markets development

In terms of size, Colombia is a relatively important new economy in the world. When ordering the countries of
Latin America, a region who’s market is considered as one of the most import rising markets of the last decade

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and one of the more active during the last years of economic recession. By the size of gross domestic product,
Colombia is in fourth in the region, behind Brazil, Mexico and Argentina. In the classification the Global
Competitiveness Report (GCR) (World Economic Forum, 2010) published that and that classify the trade,
social and technical characteristics of the majority of nations. Colombia is ranked as the country number 32 for
market size, between 139 tested in 2011, and in Latin America is only surpassed by Brazil and Mexico.

However, in the Global Competitiveness Index Colombia ranks 68 and is the seventh country in Latin America
after Brazil, Chile, Mexico, Costa Rica, Panama and Uruguay. As for the efficiency of its goods market, the
country is ranked 103. As for his technological readiness is number 63 and in innovation is in position 65
among the 139 countries surveyed.

This report uses the Michael Porter’s theory of stages (Porter, 1990), and situates Colombia as a efficiency-
driven economy, meaning that it competes with its unskilled labour and natural resources as main assets. The
companies localized in these countries normally tend to compete on the basis of price and are characterized by
having low productivity and innovation levels; caused by a lack of industrial, technologies advantages and a
numerous but poorly educated working force. Colombia counts with a market that in terms of size is big but
counts with low efficiency levels of its goods and service markets. But by the other hand it has good
sophistication level of its business. The stability in the macro-economical environment also stable and counts
with a healthy and young workforce that need more access to education and knowledge in order to be more
productive and creative. In definition the country looks to be ready to start the transition stage from being
efficiency driven to innovation driven. For this it will need grow in terms of innovation and take advantage of
its big market size by applying new strategies that allows it to raise the not so good efficiency of its goods
market. Its typical to companies that operate in this economic transition to start innovating for the local market
as a reaction to the fact that the general purchasing power of the consumer rises and in this way it results much
more difficult to compete as a producer on terms of price.
Chile is a case of a country that because of the inversion done for research and investigation, and good market
conditions have started to be part of this transitional stage. It ranks 44 in the innovation indicator and 28 in the
efficiency of its goods market.

So innovation and market developing becomes a requirement for any economy to enter in an innovation-driven
stage, where some countries known for their creativity and innovation superiority as the United Kingdom and
Italy are. At this point wages will have risen by so much that the local business will only be able to satisfy
standard of living of the consumers only if their businesses are able to compete with new and unique products.
At this stage, companies and organizations must compete by producing new and different goods using the most
sophisticated production processes, incubating innovation and collaborating with other key players to address
the savage market.

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1.3.c the local creative industries definition

As it was mentioned before, the development of innovation and of the goods and service markets is required.
Parallel to this it was also pointed that the creative industries are a key driver of progress in developing areas.
Reason way its important to understand how these industries operate in the local level and how they compere
and develop amongst the global market for creativity.

1.3.c Image1: Contribution of the creative industries to the economy today.

Creative business represent only the 2% of the countries GDP, a disappointing number if we cross this
information with the number of people being employed in this sector, that represents around 6% of the
countries total workforce (Revista Dinero, 2010). The situation is not positive, considering that some other
countries of the region, with similar development and cultural conditions as Chile and Peru count with more
productive creative industries. The ideal situation would be something similar to what Peru has achieved, this
neighbor country has been able to generate more value out of this industries (4% of GDP) using just a small
part of it work force 2,5%, as it was published by Keith Nurse, in her report about the “Creative sectors in the
Caribbean Community” (Nurse, 2009).

The development of this type of business inside innovation driven countries, such as the United Kingdom,
Korea or Italy shows the relevant contribution done by a well-established creative industries to their economies
and their innovation models are showing a great performance. In the specific case of the United Kingdom, a
country known by its good design and crafts culture, the creative industries had reached a considerable level of
productivity. Thanks to the support that these industries had been counting with for the last decade, they have
become a pillar of the U.K economy, producing 7% of the country’s GDP and employing 5% of the country’s
workforce. These sectors have overpassed some of the most typical and traditional sector of English economy,
as David parish quote form the 2003 Financial Times Newspaper: “the creative industries in London are now
more important than financial services to the economy. Employment in the creative industries (including
fashion, software design, publishing, architecture and antique dealing) has topped 525,000 and is still rising,
compared to a mere 322,000 and falling in financial services” (Parrish, 2008).

This Makes obvious the need for the Colombian development, and transition towards an innovation driven
economy, to take advantage of the high number of workers used by the creative sectors and start producing

18


more value out of it. How these industries sectors are contributing to the economy and how they are able to
produce and operate inside the markets must be understood in order to accelerate the local development of
creative value.

The lack of conscience about the relevance of defining and promoting the local creative industries by the
government and industry is proven by the absence of actualized data and indicators about the performance and
distribution of the creative sectors in the country. Some international institutions have been collecting data
about this topic for the benefit of the inversion coming from private and public enterprises from their nations
been done in Colombia. Based in the studies done by the British Council, in Colombia the subsectors that have
a bigger number of enterprises conforming the creative industries go like this: Crafts (35.5%), Fashion Design
(21,44%), Editorial y Publishing (6,38%), Advertisement (5,79%), Architecture (4.82%). Then the subsectors of
Interface & Software Design, Graphic Design, Industrial Design, Textile Design, Antique, Film & Movies,
Radio & Television, photography and music, are small players with less than a 4%. (Docherty, Shackleto, &
Morales, 2008)

)
4%
.

Cr
(30

Fashion (21%)
aft
rs

s (3
Othe

Interface Design (3,9%)
6%)

Graphic Design (3,8%)
Industrial Design (3,4%)

Textil Design (1,5%)
Others: ,Advertisement (5,79%), Architecture (4.82%).
Editorial y Publishing (6,38%) - Antique, Film & Movies,
Radio & Television, photography music (less than 4%.)
De
sig
n (∑ 3 3,6 %)
1.3.c Image1: The creative industries distribution by number of business per sector
(Docherty, Shackleto, & Morales, 2008)

So the local creative industries are manly composed by the crafts sector, what is a consequence of the high local
cultural tradition in this kind of skilled and talent driven activities. Different kinds of business are seated around
the local artisanal work. It goes from the individual reproduction of a local technic, the reproduction of a
product with cultural DNA or it become more sophisticated as an specialized retail surface for this type of
creations, like the one promoted by the organization “ARTESANIAS DE COLOMBIA” that runs a series of
stores to commercialize the local craftsmen productions.
Then the country’s creative industries are going through an expansion of its design related industries, lead by
fashion. Together all the design disciplines (Fashion Design, Graphic Design, Interface & Software Design,
Industrial Design and Textile design) represent 33.6% of the creative industries, similar to the Crafts sector.
Together they represent a 69.5% o the creative industries.

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1.3.c.1 Being a colombian Maker. The local crafts sectors case.

Making is something that we can all do, but when making becomes part of the local identity like in the case of
traditional crafting, the outcome counts with a great cultural and expressive value that on this days have started
to be more present in the mind of the consumer. The use of natural resources that these types of creators
manage also becomes really attractive for the present markets. The quality of handmade is something that these
communities dominate. During years the local craftsmen force has become of making a critical aspect for
surviving, and they have achieved a developed skill to produce objects that are very rich in esthetics, materials
and meaning. With a high capacity to adept their development process to a surroundings environment and a
limited access to technology and information.

The definition use by the National Government or this discipline is: “Crafts is the creative production of
objects made predominantly manually with the use of simple tools and machines with an individual outcome,
determined by the environment and historical development” (Artesanias De Colombia).

In Colombia the craft sector is the productive force, composed of people and their capacity for knowledge and
technology, in which the craft is generated within a geographical, historical, social and cultural development.
This productive force is not all of the same kind and can be classified based on criteria such as education,
geographical origin, cultural identity and type of trade practiced. Lets start from those coming from the most
rural parts of the country to the more urban ones.
With the implementation of low technology and industrialization processes in the typical sectors and the
establishment of making technics from outsized the country, making has become one of the main resources for
producing wealth and involves a big part of the local workforce, from the majority of the population that are
the poorest; those who live in the jungle and those who live in the big cities. A classification of the different
productive characters that make part of this productive and craft based force; was done in the month of August
(2011), in an observation process and analysis done together with the designer Cecilia Arango (Arango, 2011),
who is an expert in local . The following are the description of them and their main characteristics from the
more rural to the more urban ones:

The Indigenes
This kind of creator is who lives and produces his creations inside an indigenous Community. In Colombia,
these cultural groups are numerous and each of them is really linked to the surrounding context of their
community. The transformation of natural resources into functional objects makes part of the close bond that
these people have with nature, and the domain of certain technic (like basketry) is more than a trade activity but
a cultural and social custom. Because of this, this specific type of makers are really devoted to their hand-made
production process, “they count with the patience that characterises those who live surrounded by nature and
where rise away from the perversions of civilization”. (Arango, 2011)
The problem of working with The Indigenas is that due to their in-land and remote location it is hard to establish
a stabile commerce relationship between them and the main cities where the markets are concentrated. This
groups don’t count with any technical education so all what is expected should be communicated in an oral or

20


graphic way, but of course that the complexity of a technical drawing wouldn’t be understood by them in case
of outsource of collaboration.

1.3.c.1 Image1: Indigena Maker - Name: Sirahi Paniza /Age: 42 /From: Kuna People, Golfo de Uraba /
Education Level: Primary School / Technics: Molas & Textile based Crafts

The Campesinos
They are not part of an ethnic group but still live in remote and in-land locations. Normally they use crafts as a
parallel activity to their agricultural labours. They live in more modern and big communities, small towns or
villages. They are used to trade with more populated urban areas transporting their products to offer them in
trade and make money out of their production.

1.3.c.1 Image2: Campesino Maker - Name: Ramiro Bautista /Age: 49 / From: Guacamays, Boyaca /
Education Level: No Formal Education / Technics: Fique (Basket Weaving)

Urban Emigrant
These types of makers are from the same origin as the Compassions. The main difference is that because of
local conditions (as violence or lack of opportunities), they where forced to move into mayor urban areas. They
learned their talents where they where born, and now in the city use them to generate an economic income.
They work for formal manufacturers and some times have their own workshops where they work for designers
or final costumers.

21

Gypsies & Hippies
They were born in urban or rural areas, but have no craft tradition in their family or community. Normally, they
are travellers who operate in an informal commerce, going from town to town looking for fairs or local markets
where to sell their production. They are innovators, in the way that they normally use traditional crafts technics
as seed craving (Tagua) or bags knitting, to produce new products that combine those technics with new shapes
and colours in order to make them more appellant to the urban market.

They are not as detailed with their technics, its more about being free and making money out of a personal
expression for them. Contacting them and controlling the production that they do is easer than with rural
craftsmen. Normally their products involve low cost material as natural fibbers, seeds and cheap metals and the
labour cost they charge is also low.

1.3.c.1 Image 4: Gyssies & Hippies - Name: Camila Toro / Age: 23 / From: Tunja, Boyacá. /
/ Education Level: High School Drop Out/ Technics: Leather work, weaving and others.

Urban Creators
Urban creators come from metropolitan areas, and it was there where they were instructed in the labour they
realize. Their knowledge was acquired by one of three different ways: Learning by doing, knowledge transfer
form a more experienced craftsman or from formal technical education institution. There education level, being
the more advanced between craftsmen, allows them to follow a higher degree of specification, and the
processes they use are normally more technology based than those used by the other types of craftsmen. They
also tend to charge more for their work. They work for small, medium and large manufacturers and are willing

22


to work for designers and final costumers if they count with an own workshop and if the clients are capable of
paying what they demand.

`
1.3.c.1 Image 5: Urban Creators - Name: Segundo Morales / Age: 48 / From: Bogota, Cundinamarca. /
Education Level: Technical Degree / Technics: Leather Work, Shoemaking

1.3.c.2 Being a colombian Creartor. Local design sectors case.

Design culture in Colombia is just becoming relevant. This discipline is relatively new and still hasn’t penetrated
in the Colombian cultural DNA. The first design practice done in Colombia were done by a few industrial and
graphic designers that were educated in international schools and then came back to start their own companies
mainly in the furniture, graphic and editorial sectors. A few designers in the sector had become recognized
figures in the local design world, and have been able to reach international markets by developing high quality
products thanks to the good adaptation of productive technics and a descent product development that allows
them to offer a good quality product to the international market. A company such as SERIES, created by the
industrial designer Mauricio Olarte, has been present in the local furniture design business from around two
decades and had been able to introduce their products to international markets, like the United States, Europe
and Middle East.

Fashion is the most advanced design discipline in the country. It represents 21% of the creative companies of
the country and produces around 2% of the country’s GDP. Then there are also other sector with activities that
relate to design such as: Industrial design, web an software design, interior design, graphic design, textile design,
interaction and experience design and branding.

The first characteristic of the companies in the national design industries is that they are normally small and
new companies. They are small enterprises run by a single individual or a small group of people. In the fashion
industry 90% of the business are constitute by single owners, in industrial design business 76% of them are
constituted in the same way and 18% are constituted as a commercial corporations. In the graphic design area
the number of commercial societies is higher, 47% of them follow this characteristic and a single individual
owns 51%. The majority of companies that were studied by the British council (Parrish, 2008), with the

23

exception of the graphic sector that is more established with companies that had been functioning for more
that 5, the companies in the rest of the design sector are mainly early stage startups with no more than 1 year in
the market, In the same way most of this enterprises are characterized by their low value, their assets and
liabilities are not superior to $10.000 US.

In general the design driven business are mainly focused on the product they offer, little consulting is done for
those that are starting projects that count with poor support tools to develop their products for the business or
consumer market. In the same way that we were describing the creative business models based on the value
preposition that they offer to the market we could do the same analysis for the local design driven
organizations of the country:

Creative Product
Business

CECILIA
ARANGO

Creative Media
Creative Process Business
Business
1.3.c.2 Image1: Creative Business Models In Todays Colombian Companies (positioning map).

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Chapter 2: Defining the problem.
The under-appriciation of the local creative value.

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2.1 Introduction to the problem.

First we explored the creative industries and what have made of them an important force for todays economic
growth of developed economies and how they can signify transformation leverage for developing countries.
Their capacity to generate economic and cultural value and their ability to drive innovation and generate a
significant amount of jobs are; just some of the evidences, that more cultural developed economies like the
United States and the United Kingdom have taught us. We explored the subsector of this industries and classify
them, understanding that they are not just cultural industries but because they also deliver an expressive and
functionality value, responding to the study or forecast on needs and demands based on the consumer, they
represent a perfect breach between the market, defined in a cultural context, and the traditional industries that
operate in the middle of this same context .

Subsequently we explored the problem of innovation in developing areas, a series of complications that are
slowing down the maturation process of this type of industries in regions that are not able to link innovation
and industry. What took us to a specific case study, Colombia.
We sketched this Latin American countries’ socio-economical context, and were able to draw a competitiveness
map of it, understanding that innovation should be the solution to overcome a series of problems that are
affecting the countries’ development process. It was patterned a low efficiency of its cultural industries
grounded on the little economic contribution they do to the countries’ productive indicators and the high
amount of workforce that they employ. Going then deeply into their productivity data to understand what are
the key sectors to propose any transformational strategy; getting to the conclusion that there is a big tradition in
the crafts disciplines that are normally composed by a poor but numerous and talented human resource, the
productive force. And a rice of the design related disciplines, which are not well articulated with the traditional
industries.

At this point the problem is to general; it will be needed to understand in a systemic approach how the players
are being defined and how they interact amongst themselves and with the reachable consumers. Why are the
designers not being involved in the productive sectors of the country? Way the traditional industries and
institutions are not reaching the expected innovation levels and why their goods markets efficiency is so bad?
Can the efficiency-driven model that characterizes the country’s economy be transformed into an innovation-
driven model with designers as leaders of this transformation? This are just some of the questions left after the
observation done during chapter ones, here we will try to spot the problem inside the two sectors and the
consumers complex ecosystem, going to lower level to understand possible approaches that could give the
answers to this questions.

2.2 Defining the players: Creators, Makers and Consumers

Three different types of clusters compose the normal system in which new creative outcomes are conceived:
the consumers, the creators and the makers. The three of them are interconnected during different steps of
the creative process: create, produce and commercialize.

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The first group, The Consumers, is composed by the community of people that are interested in buying
artifacts, goods or services with a creative component. They are driven by a necessity or desire that influences
them to acquire creative content with an intangible and emotional value. The market for these creative
outcomes can be found in a local or international frame, each of under specific circumstances. This people are
looking for expressive content, goods and services; to please their necessities of differentiation and self-
fulfillment. With new media, Internet, social networks and new technologies the access to creative content has
become easer for this people. Now they have access too much more information about what they consume,
information that talks to them in a personal way in order to influence its decision making process. Now its
easer for them to find new ideas and have access to them, internet retailing, blogs and a complete new series of
channels being use by this crowd to spot newness .

Then there are the Creators; those eclectic people capable of creating innovative ideas using a design-driven
approach to problem solving are the ones in this group. They are the ones who feed the system with non-
conventional problems, spot opportunities, and find directions and solutions. Being a “Creator” demands a
holistic approach to problem solving and a non-linear way of thinking, in order to find innovative ideas.

In this group we find two different types of subjects: the “Designers and the
Amateurs”. In the designers cluster we find leading designers, people with certain
level of experience in the design industry and who have been able to introduce
their product to local or international consumer driven markets in a successful
way and/or have been able to work for international brands, as the fashion
designer Silvia Tcherassi1(see 2.2 Image:1), who’s name is known in the fashion
world at an international level, being part of the international runways in Milan,
N.Y, and Paris and who’s design has reached international apparel
manufacturers as PAYLESS SHOWSOURCE
2.2 Image1: Colombian Fashion During the development of previous projects they have been able to explore the
Designer , Silvia Tcherassi, for
Payless Shoesource markets and along the way have established different kinds of relations with the
manufacturing and services sectors (the makers).

Next. there is the other kind of designers; the “New Designers”. They are new in
the industry, with a resent degree in a design related discipline, they are seeking
ways to gain exposure amongst the consumers and learn how to deal and create
business relations with providers and manufacturers, but because of the their
lack of experience and contacts they are struggling to launch their professional
carriers and scale their ideas.
The case of the local design studio DosUno, with base in Bogota, leaded by the
29 years old Israeli Assaf Waxter, who moved to Colombia in 2009 after

2.2 Image 2: Industrial Designer
associating with the Colombian designer and industrial engineer Pablo Fog.
Assaf Waxter from DOSUNO Together they have conformed a multidisciplinary tam to develop locally
DESIGN STUDIO

1. See more about the Colombian fashion designer Silvia Tcherassi at: http://www.silviatcherassi.com/enter.html

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produced products with a high content of innovation and awareness about sustainability, one of their main
philosophical drivers. Now they are trying to get in the market by introducing their products in small shops and
finding promotion of local media and magazines. Parallel to this they participate in local and international
design competitions to sustain themselves. They are also interested in promoting their creations in international
markets, but they don’t count with the distributional channels to promote the products outside. Recently the
possibility of going into distributions design networks as KICKSTARTER and ETSY was discussed with them.
This discussion took place during the interview (Fog, 2011) to discuses their strategies; they were really
interested but new little about these support systems and how they work, but after explaining them the
discussion led us to the conclusion that introducing the products in this channels would be possible but it is
complicated since they normally don’t connect their money manage system with Colombian bank accounts,
requiring them to not only solve logistic problems of distributing to international clients but also how to
manage payments from the Country from where this networks operate.

Then the “Amateurs”; are the people that by trade or hobby had become honorary members of the “Creators”
cluster. People who during their work as craftsmen or manufacturers had achieved innovation by applying a
series of design-driven processes to their productive systems. For example the case of a carpenter who has
achieved a high level of innovation by developing a costume made series of tools, or found the way to apply a
new material in order to generate a unique and innovative product. In both cases they are people with a skill to
manage and drive creative process during their work, even though if its on an unconscious way, and are
constantly seeking to come out with new creations and not limit themselves to the reproduction of a talent, skill
or process. This seeking for “new stuff” allows them to identify and solve problems in such way that their
creations can be considered as innovative achievements.

Finally the Makers; composed mainly by small and medium sized enterprises from the commercial,
manufacturers and craftsmen industries. Are those who had established a productive system, based on an old
(thread and needle) or new (3D printing station) technology to transform materials or work into goods and
services? Their value is generated by re reproduction of a certain talent, a skill or technic to produce big or
small series of certain product. Here we would find the local artisans, small and medium size enterprises from
the productive and manufacturing industries. Makers can be innovation-driven manufacturers or efficiency
driven.

2.2 Image 3: Industrial The Players Definition; Consumers, Creators, Makers

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2.3 Problem Overview. The under appreciation of the local creative value.

There is a collective ignorance in the country about what its creative value can offer. The country ignores how
design, creativity and innovation can become transformation drivers for the country’s economy and how can it
signify a leverage of change for local industries. As it was mentioned before, the value of creativity is of great
importance for the development and introduction of innovation amongst creative and productive processes.
Unfortunately in Colombia the innovation performance of these industries is not positive and new strategies
have to be conceived if it wants to stop being behind the main region competitors, such as Peru and Chile, that
in terms of value, achieve to generate much more out of their practice of creativity; reflected by the
contribution that their creative industries do to their GDP and how much jobs they offer amongst the local
workforce (see 1.3.c Image 1).

There is a significant amount of people being employed by the creative industries, but they are not being able to
generate the enough value out of their creations, lacking the opportunity to introduce their creations as winning
products on the market. This problems comes from a series of factors:

a) Generalized fear to take risks, a problem for innovation.
b) Low exposure of the “Creators” and their creations.
c) Scarcity of support and lack of business planning amongst entrepreneurs.
d) Lack of collaborative spirit amongst the players.

2.3.a. Generalized fear to take risks, a problem for innovation.

According to Tim Brown, founder of IDEO and one of the world’s foremost proponents of design thinking,
there exist two main obstacles in the path of every disruptive idea: “Gaining acceptance in one’s own
organization and getting it out into the world… More good ideas die because they fail to navigate the
treacherous waters of the organization where they originate than because the market rejects them. Any complex
organization must balance numerous competing interests, and new ideas… If it is truly innovative, it challenges
the status quo. Considering all of these potential obstacles, it is a wonder that new ideas make through at all”
(Brown, 2009).
And the case amongst the local manufacturers and organizations in the local context is exactly that they resist
to aloud innovation into their productive structures. As it was mentioned in chapter one, the innovation level
of the local manufacturing industries is not good. In general terms producers, most of them small and medium
ones, still believe that their productive systems should be based on the efficiency of their processes and directed
to set their competitive strategies so they can compete in the arena of price, and quantity; a typical behavior in
developing economies. As a result to this; they are resisting to involve designers that at the end are the key for
innovation, into their productive systems.

The relationship between the design and manufacturer sector is fragmented because of this generalized fear.
Characterized by a few amount of opportunities for new designers to get a job at their companies. Not only
there are little chances for designers to get a job, but also for those who find one will have to work under really
bad salaries and working conditions that will kill their creativity. The industrial designer Cesar Augusto

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Zambrano who is a local teacher at Universidad Nacional De Colombia and an important opinion voice fore
the national design industry, during the interview done for this project expressed: “During a series of
investigations I was able to figure out that in average, a Colombian designer gets pay something between 70%
and 80% of what any other average professional, like an engineer or a lawyer is getting paid” (Zambrano,
About work conditions for Colombian designers, 2011). Also by crossing information found on ones of
Zambrano’s economic reports about the national design sectors (Zambrano, How much designers make in
colombia, 2010), that stated an average salary of $12.000 US per year for a new designer, that then compered
with the data published in the Survey of Design Salaries 2011 (AIGA, 2011), saying that the same kind of
designer gets an average of $40.000 US in the United Stated, clearly pictures with numbers how the local
industry underestimates the value of local designers.

There for those who accept this poor salary conditions, comes the other problem. The manufacturing
industries, mainly those of small or medium size, prefer to copy design coming for other countries, mainly the
United States and Europe, than developing new products. The normal behavior in the fashion and furniture
industries is to find nice and trendy American or European design in magazine and internet and adapt it to the
capabilities of their industries, then sell it as their own creation to local markets or what is worst as imitations
branded with the name of the original international brand. This is making designers to get demotivated, they
like to create not to copy, and because of this lack of creative motivation they won’t stay for long working for a
same company , what at the end will affects the innovation process of the company by not allowing them to
establish a lasting design team able to generate a corporate design identity.

But the fact is that with the development process that the country has been going through, the opportunities
for those who won’t take the risk and innovate are becoming rare. The economic development in the country is
characterized by a general rise of wages, there is now access for the masses to acquire better and less basic
products that the ones they could afford before, but most of what they are consuming at the moment are
imported goods brought to overfill the local demand and lack of “Colombian Made” products to consume.
This situation has brought out the need for producers to develop new strategies that will allow them to come
out with new and better products to satisfy and address this new demand being able to compete with
international brands established in the local market. A dark future waits for those who won’t accept to take this
innovation challenge.

Some few examples of good practice of innovation and how this can make the local design industries more
sustainable in the actual markets are present in some of the leading design-driven companies of the country,
that demonstrate the benefits of overpassing this fear to change. One of them is the case of
MANUFACTURAS MUÑOZ2 (MUMA), a local furniture producer with more than 40 year in the market.
They are the only company in the country that has ever been awarded with the REDDOT DESIGN AWARD
- with their Menta chair (MUMA, 2011). The company has been a pioneer in innovation and has always been
in the hart of the local design industry, since it developed the first chair in polypropylene - the Mariposa chair,
until now. Thanks to its philosophy that establishes design as a key wining strategy for their commercial
activities, they are always working in how to apply last generation materials and 100% Colombian creativity,

2. See more about MANUFACTURAS MUÑOS at: http://www.muma.co/

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coming out of its designers team, merging them together to generate an innovative product that is connected to
global and local trends and will allow them to reach the top of the local market and be known for its quality and
fair price amongst international buyers.
Cases as the one of MANUFACTURAS MUÑOS are strange amongst local manufacturers, innovation has
started to show its advantages in some of the leading and big companies but is not the case amongst the small
and medium size ones, those who don’t count with this creative conciseness and are not willing to take the risk
and innovate because they think that creating new thing is expensive and that those creative people don’t know
enough about the market to assure the success, and that doing it would take a lot of resources that are already
assigned. And in fact it is expensive if we understand the limited economic capacity of this companies, in most
cases they don’t count with the available money to hire good designers, something that is evident in the lack
offers available for designers, that are supposed to be innovation drivers, to work in national industries.

2.3.b. Low exposure of the “Creators” and their creations.

The “creators” and small “makers” are lacking access to potential markets. The majority of them will say that
this is because they don’t count with the means to run expensive communication campaigns or set themselves
in stores in the main commercial spots of the city, but the problem is more complex than that.

The main problem is that the small enterprises started by “creators” and “makers” normally don’t have the
access to physical or virtual channels to reach clients. This narrows the offer amongst the market that in settled
around the geographic location of the company. Most of this business are unique placed, the majority counting
only with a workshop or home business as their unique commercial establishment, some few with a store that
represents big part of their overhear expenses and that in most case are not able to support due to high price of
commercial establishment in the country. As the studies done by the British Council to define the typology of
location in which the creative companies in the city of Bogota operate revels; In the crafts sectors, 93.9% count
only with one commercial establishment and just 6,1% have multiple selling points, 9% of them work and do
business from their place of residence. In the industrial design sector, almost all of the business 98% counts
with one single commercial establishment and just 2% have multiple selling points and 11% of them work and
do business from their place of residence. In the fashion business a total of 100% are unique locations and 30%
of them wok in their residence place. And similar with graphic design business were 92% of them count with
jus one commercial point, from which 22,6% are established in the same place were the owner lives (Parrish,
2008).

This looks like a strong explanation of why the creations are not reaching the markets, they have centralized
positions with low ace to potential buyers. Obviously this not the only reason found along this investigation,
and maybe if would have been during a market analysis done before the Internet boom that characterized our
contemporary lifestyles. Its obvious that the only way that a producers can set distribution channels is not by
having a store, they could establish commercial relationships with retails or apply new media based channels as
Internet and Social Networks, those that have been changing the ways consumers use to purchase new
products and have been making things easer for the producer not only to promote themselves but also to
giving them that chance to complete a commercial transaction in a virtual way.

31

This web-solution looks really convenient for small producers, the Internet has become an ideal channel to
reach clients located far from the location of the businesses. But in the local context the situation is far away of
being like this, a restricted access of business to these technologies is reducing their possibilities to access this
web market. On average of 100 companies dedicated to the craft production and commercialization only 6 of
them have a computer in their working place and just two of them count with access to internet. Of course is
because a lot of them are located in rural areas of the country that don’t count with the communication
infrastructure and the money to afford acceptable level of connectivity. In the design related sectors the
situation is less dramatic but stills bad, on average every company has three computers and one of each two has
computers is alto 6 for each 100 and just 4 of them are connected to Internet.

To generate new organizational models and communication strategies to scale the size of their ideas in the
market, with limited economical resources, is the challenge. The ideas are good but need more than Facebook
Front Pages and fans lists to make themselves popular. The creative forces of the country are in need of
figuring out better ways to communicate the story of their creations to the public and set the proper channels
that could aloud them to deliver this message to a wider group of people. The technological barrier has to be
overpass and new field need to be explore.

2.3.c Scarcity of support and lack of business planning amongst entrepreneurs.

The slight job opportunities available in the market for designers and the bad conditions, under which those
that found one have to work, is creating a big entrepreneur wave to rice amongst the young creators. A series
of multidisciplinary design studios like DOSUNO DESIGN3 and IONN GROUP4 are beginning to be
founded by young designer that because of the lack of opportunities in the job market decided to go solo,
create a multidisciplinary work team and start looking for new clients, inspired by the design-thinking
philosophy, something that is not easy to introduce to the market more if the possible clients in the industry are
not open to introduce innovation to their companies as it was mentioned before. For this reason the young
studios are struggling to find adequate revenue streams. The independent designers and design studios are
being forced to lead and develop their own ideas, something that requires money and time they don’t count
with. Since the financial and legal support available in local backs, companies, private and public institutions are
not normally available they are drifting.

The support networks available for these start-ups or early stage-business are rare. There is a lot of international
investment going on in the country as well as local investment done by the private sectors of the industry but
none of them is getting to the designers, it goes to the industry, an industry that is not welling to involve design.
This kind of funding is also distributed by a series of venture capitalist and business angels in the region, but
they normally assign these funds strictly to some specific industries such as telecommunications, software and
pharmaceutics and more advanced ventures. Like the Spanish telecom company TELEFONICA, that just
launched WAYRA5, a private initiative that promotes local technological development in the areas of mobile or
web communications that could represent them a benefit for their own establishment in the local market.

3. To see more about DOSUNO DESIGN go to: http://www.dosunodesign.com
4. To see more about IONN GRUPO CREATIVO go to: (http://www.ionngroup.com)
5. See (2.3.c.1) WAYRA case study.

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A weak establishment of copyright laws and the lack of incentives and governmental funds directed to the
creation of this kind of start-ups, shows that the problem is not only at a industrial or organizational level but
also in a more macro way, national support for this creative initiatives is also needed. The government has
expressed the necessity to promote innovation and entrepreneurship and is working to define the game rules
for this challenge. There has been some initiatives like the one achieved by creating the law 1014 on 2006
(Universidad Autonoma De Occidente, 2007), for the establishment of a entrepreneur culture as they call it, and the
creation of Ley Lleras (Reyes, 2011) (being studied by congress at this moment for its approval) that seeks to
defend the copyrights of content, creators and creative works. These initiatives are creating the legal bases for a
new beginning. But the truth is that the applications of these laws that seek to promote and protect the creation
of new business and the introduction of creative minds in the traditional ones is far away of the country’s reality,
now there has to be a creative boom able to build over this the new national reality.

But limited financial, strategic and legal support are just the external problems making more difficult to new
“Creators” and “Makers” with innovative ideas to prosper. There is an internal reason inside their own way of
planning and executing their ventures that needs to be solved before any external intervention can generate a
positive and disruptive impact.
They are lacking a winning strategy to fulfill their purposes, or as Alexander Osterwalder defined in his book
Business Model Generation, they are lacking a business model: “ the rationale of how an organization creates,
delivers, and captures value” (Oswalder). Since the first problem that was mentioned in this section, the lack of
generalized fear amongst the industries and productive sectors to take risks can be explained in the reduced
capacity of “creators” to define a clear value preposition and use it to build strong customer relations. And the
second problem spotted shows this as well, the lack of exposure that new “Creators” and small “Makers” are
going through, can be reduced to the lack of having defined the proper communication channels to address a
poorly defined customer segments.

In general it could be said that the creative and productive main forces of the country lack education in how to
set their business going and the tools that exists for this matter. An important figure reveled inside the study
done by the British Council amongst the Colombian creative industries (Docherty, Shackleto, & Morales,
2008) shows for example that in the crafts sector only 36,2% of the business count with a updated and proper
balance sheet of their activities and 26% of them don’t have any financial record of their businesses. In the
design related industries the situation is slightly better; in the fashion sector only 27.5% have a balance sheet, in
the graphic design and industrial design sectors, they area a little more aware about this issue, maybe because of
its personal counts with a better level of education, but still only 58% and 51% respectively have balance sheets.
What gives us a picture of the poor business planning that is going on here.

Related to this business planning lack it becomes interesting that fact that in The Global Competitiveness
Report 2010–2011 (World Economic Forum, 2010), Colombia business sophistications is mentioned to be
one of the competitive advantages of the country but this is not the case of the creative industries. Why is this?
The only reason that comes to my mind is the same that is being argued here and its that in general the creative
sectors of the country are badly supported and poorly educated in business terms, it would be much more easer
if the creative and productive new enterprises counted with the same level of strategic and business support

33

that telecommunications start-ups are counting with. They are in need of business planning and if they can’t
afford to outsource this job they will need to be instructed and supported by those who know how, and are
creating “sophisticated business” as the world economy forum said, in order to do it by themselves.

2.3.c.1 WAYRA case study

Wayra is a private initiative made by Telefonica, a Spanish telecom company that
operates in Colombia. Its objective is to promote technological startups in the Latin
American Region.
Thanks to the high entrepreneurship environment that they were able to spot during their previous activities in
Colombia, the Spanish company decided to start this model in Colombia, and after finishing the first
convocation, they decided to move into other countries as Peru, Chile, Mexico and Argentina.

For those that have a new idea in the technological area, developing a new website or a mobile based
application, this campaign offers financing, management consultancy, technical support and physical space to
work. As a benefit in return, Wayra is entitled to a share of up to 15% of the capital of the new company.

In the first edition of this initiative, that took place on the month of July 2011, a total of 487 ideas were
presented and a total of 10 were selected to develop. The selected project will count with six months at the
Wayra Academy, a physical space of 400 square meters, were they will be assisted to develop their ideas and will
count with the support of strategic partners that Wayra has found in the region, like: Endeavor Colombia,
HubBog, and some other private and public institutions. The winners will also count with a capital that could
go from $30.000 USD to $70.000 USD depending of the maturation and necessity of the initiative. After the
seeding period is completed, a new convocation will be available and hopefully the number of ten selected
projects will be raised. The projects that are successfully developed during this period will still be promoted and
will receive support to find business angels for the future stages.

Some of the winning proposals during the 2011 convocation were:
-Yimup, a marketing, distribution and diffusion system for the national musical industry. With this platform
artist will be able not only to distribute and promote the ideas but also develop their creation by themselves
without the help of any 3rd party producer.
- Cubby.Co, a cloud based platform for the administration and management of customer relationships for the
small and medium size local enterprises that is really easy to use.

As Telefonica’s president to the Latin area, Jose Maria Alvarez (Academia Wayra inicia operaciones con sus
10 seleccionados , 2011) Wayra initiative shows how the creative talent in technological development is
present in the country, and what is more interesting is that it protects the development and acceleration of
projects, motivating the creators to stay in the country, and promoting the sustainable development of local
technologies.

34


2.3.d. Lack of collaborative spirit amongst the players.

As we keep exploring the problems amongst the players and start studying the systemic relationships that
interconnect the parts of the system we are able to find a generalized individualism and disarticulation of each
part. The business people and some local industries count with business sophistication and by the other hand
the designers and small producers are lacking business knowledge. The designers count with access to new
media and are experienced in innovation processes but lack the workforce and financial support to start, and
the same time the small and medium size producers are lacking the access to this new communications
channels, need to apply more innovation-driven strategies and have what designers are missing that is the
productive force. So it seems as each player is lacking something that the other player haves.

As Tim Brown “Challenge your organization to think about how it can spend more time doing collaborative,
generative work that will produce a tangible outcome at the end of the day—not having more meetings…
Make it as productive and creative as possible. Building on the ideas of others is a whole lot easier when the
building is happening in real time and among people who know and trust one another. And it is usually a whole
lot more fun”

There is a need for those who have a higher education level to share the knowledge that they have with those
lacking it. There is little or none involvement of the design community with the crafts community, and they
could really help them to give momentum to their technics and business by proposing new formal expressions
and how to empower their productive capacities to develop new solution produced in a more efficient way, this
way the artisans could stop being known only for their technical capacities and really explore new business
scenarios. Universities and industries need to involve more design to create new business prepositions and
share more of their previous collected knowledge and capital with the new entrepreneurs and creative minds, as
TELEFONICA did with WAYRA6. In this way they could open new markets for themselves, be it a big or
small idea or a small or large business, putting together the creative and productive classes will only drive
innovation in each of the involved parts.
These collaboration strategies should promote multidisciplinary relations that can find new opportunities and
develop truly innovations, there is a high necessity to connect the players in a creative atmosphere were new
ideas can come to life and what is more important that recognizes to each player its part. If the resistance
preventing the “Creators” of being hired by the industries internal organizations persists, maybe they don’t
need to incorporate them permanently maybe they just need create cooperation policies together with designers
and design studios to assist them during their innovation process, like happens in tally between the designers,
entrepreneurs and the manufacturing industries, and that has always been one of the biggest innovation drivers
for this European country.

6. See (2.3.c.1) WAYRA case study.

35

Chapter 3:
A Desing-Drived Aproacch to support the local creative business

36


3.1 Business Design as a trasformation leverage for the local creative and productive
forces.

In the last section we were able to identify a series of problems that were persistent at a systemic level, in which
the interaction between the parts (Creators, Makers and Consumers) were presenting a series of barriers that
were spotted as the main reason for the regions low innovation level. But being the problems so complex a
systemic solution of the same complexity needs to be developed. A solution capable of accelerating innovation
levels amongst the productive force of the country; a solution that holds designers as main innovation sources;
them, as design thinkers have a non-linear way of thinking and do problem solving in a way that could allowed
to tap all capacities that each part of the Maker-Creator-Consumer system have, but that are being misused by
their more traditional and conventional solving-problem practices. Business design gives us the possibility to
approach the problem in a non-conventional way, to generate innovative solutions for the problems.

It’s multidisciplinary and non lineal approach to generate new business, based on design driven methodologies
with a high capacity to run research, spot new opportunities and understand the players and the markets will
give us the possibility to find new ways of helping the local creative forces. They need to find a way to innovate
in their offer, communicate this value to the market, and collaborate; in order to make their business
sustainable, not only in a “green” way but also sustainable as a fissile and self-sufficient businesses.

This solution should involve all the players of the system, leading them to a more collaborative way of working,
where new interdisciplinary and disruptive outcomes can change the course of how things are being done in the
local productive and creative sectors and give their businesses better ideas to offer to the local and international
markets.

The methodology of setting business through design has shown to be able to generate sustainable business of
those who traditional economics that where impossible to make profitable. An example of that is what the
Italian Organization, SLOW FOOD , has been able to achieve by redefining a complete business that sees the
alimentary industry from the point of few of local producers and has manage to create for them new channels
to expand their business and position themselves in todays markets.

3.1.a SLOW FOOD Case Study

This Italian non-profit member-supported association, was founded in 1989, in Italy,
to counter the rise of fast food and fast life, the disappearance of local food traditions
and people’s dwindling interest in the food they eat, where it comes from and how it
tastes. It is a global, non-profit organization with supporters in 150 countries around
the world with a commitment to their community and the environment It opposes the standardization of
food and culture, and the unrestrained power of the food industry multinationals and industrial agriculture.

37

[+57] Creative Colombia (Disseration)

[+57] Creative Colombia (Disseration)

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