Introduction
Internationalization of art institutions has been driven by various factors. The advanced technology and shift toward its common use, which allows people from all income classes to travel (low cost airlines, bus lines, train discounts, etc.), the mass digitization and transportability not only of goods and services, but content as well and the Internet, which links people no matter their background, facilitated communication, especially due to the widespread learning of English language. These factors were enabled by trade liberalization, which is more intense especially on a regional level (e.g., the European Single Market). This unprecedented growth of intercultural contacts brought by globalization now allows citizens to “physically, legally, culturally, and psychologically engage with each other in ‘one world’” (Scholte 2002, p. 14).
The chapter explores first-time internationalization strategy of small-and medium-sized enterprises (SMEs) from culture and creative industries (CCI) and discusses the opportunities of using non-nationals in the home country as a starting point for internationalization. This group of potential audiences (that has been ignored in the past), is presented as a new market segment that needs to be explored and tackled within marketing strategy, as it is becoming an increasingly relevant in terms of Single European Market (SEM). Enterprises can save resources and explore their existing international competitive advantages already at the home market. Such internationalization at home (IaH) strategy can be a helpful option for SMEs from transition and emerging markets. The chapter explores two case studies from Central and Eastern Europe, discusses the internationalization potential in the home market environment and analyzes whether internationalization has become an innovative entry mode and strategy for audience development for SMEs in CCI.
To analyze the proposed internationalization strategy, the authors follow the multi-method or mixed methods case study approach (Hurmerinta and Nummela 2011, p. 211) in data collection and analysis, since the topic is complex and combines concepts from different disciplines (international business, marketing, business environment, cultural policies, art management). The explorative research includes in-depth interviews, the enterprise’s social networks profile research, management surveys, customer surveys, in-depth semi-structured interviews, and participant observation.
Internationalization in CCI
Recent empirical evidence confirmed the increased speed and diversification in internationalization strategies, being in entry modes, geographical spread, or product/services portfolio (Dikova et al. 2016). While some successful new internationalizers demonstrate high sophistication and complexity in several internationalization dimensions from the early beginnings, others still follow more experimental/learning by doing approach. Though dominant theoretical frameworks such as the OLI paradigm (Dunning 1993) or the resource base theory or the Uppsala model (Johanson and Vahlne 2009) help to understand internationalization process, recent developments in international entrepreneurship constantly demonstrate new ways and patterns of internationalization. Efforts to understand markets as networks are particularly useful to understand the strategies of newly internationalizing SMEs in CCI (Elg 2000; Ellis 2000). Where the business environment is a “web of relationships, a network, rather than as a neoclassical market with many independent suppliers and customers” and the importance of the so called insidership in “relevant network(s) is necessary for successful internationalization and so by the same token there is a liability of outsidership” (Johanson and Vahlne 2009, p. 1).
EU membership and SEM has allowed many art entrepreneurs from CCI to become part of such networks, facilitating the accumulation of knowledge and leading to their internationalization. The motivation for internationalization ranges from market seeking to resource, efficiency, and strategic asset seeking (Dunning, 1993), but are most commonly summed up as audience and/or assets development.
The two terms: “artistic work” and “entrepreneurial processes” have often remained separate in terms of both academic research and practice (Zander and Scherdin 2011, p. 1). However, the economic crisis affected the cultural sector in Europe severely, as state funding was not able to secure the existence of many artists and art organizations (that rely primarily on public sources). Thus, the “entrepreneurial” approach even if not called by such term, has started to emerge as an alternative way of survival. Entrepreneurship is most commonly associated with the discovery and pursuit of new business opportunities through the creation of business firms (Gartner, 1988; Shane and Venkataraman, 2000 in Zander and Scherdin 2011). It is an activity of “uncertainty inherent in every action” and “in any real and living economy every actor is always an entrepreneur” (Mises 1949, pp. 253–54). However, as the “artists remain fundamentally suspicious of anything that has to do with commerce and business” (Zander and Scherdin 2011, p. 3), the audience development, is the preferred terminology of market seeking actors. Audience development is the core reason why CCIs turn to entrepreneurship, being a special branch of marketing and an expression preferred by cultural managers.
Next to core motivation is assets seeking and assets development. Here, the use of English language is a key asset and main tool for European SMEs, as it increased the opportunities on the market. The knowledge of English has become a comparative advantage over those who cannot speak English or have not adopted it in their communication (Neeley 2012, Van Parijs 2004).
However, the connection between the internationalization and the English language, specifically in the CCI is not without risks. Research in multilingual education can be applied to the CCIs claims that performance in English lacks the dimension of diversity and therefore does not adequately reflect the rhetoric of plurality and interculturality which accompanies proposals for internationalization (Liddicoat 2003). Cultural exception (when it comes to content travelling beyond borders) is therefore seen as important measure, especially in small countries. Slovenia, the country of the selected case studies, has two million inhabitants, yet the majority of the population or 59 percent speaks excellent English (European Commission 2012, p. 21). The market for Slovenian language is small and cultural industry suffers, as consumers can easily access the content they are interested in English and sectors such as the book industry are seriously threatened.1 Though this can be a threat for some SMEs from CCI, it is also a turning point for the CCI to adjust and turn this phenomenon into an asset in order to promote the accessibility of their own content. The diversity of cultures can stay invisible if communication is not adopted. It does not mean only to create content in English, but first of all to stimulate local production which then is communicated also in English (official translations, subtitles). As the global expansion of English has led to the pluralization of its users, the audience has also become global (Crystal 2003). It can come from unexpected places and can be included in the audience development strategies. English offers the connection with bigger and established institutions and art groups (and their creation of value), which is often a matter of survival and represents essential framework for internationalization for art communities from small transition economies.
The increasing number of networks and associations in the EU facilitates communication and performance, accumulation of knowledge, and entrepreneurship models development. It opens new markets and better platforms for expression. Introducing films, music, theater performances in SEM means a test of international potential and competitiveness and can enhance the demand for cultural content inside and outside the EU. While the strength of the U.S. cultural content is a production oriented toward international markets, taking advantage of the English language world domination, private investment, professional business models, and sophisticated marketing has proven a successful strategy (Crystal 2003, p. 99). The application of this approach in Europe however seems controversial, as culture is often funded with public money, treated as “national treasure” (i.e., public good) and closely connected to national identity.
Case Studies
The case studies were chosen in the Central and Eastern European region, recognized for dynamic liberalization, rapid transformation, and intensive integration into European and global business networks (Kaminski and Ng, 2005), which offers an excellent context for exploring early internationalization. Ljubljana, the capital of Slovenia, is an example of a destination, where the movement of people flourished in the past years, thanks to the four freedoms established in the EU.2 Foreign visitors to Ljubljana amount to more than double its own population.3
As a whole, foreigners in Slovenia represent 4.95 percent (Statistical Office of the Republic of Slovenia 2016) of the population (excluding foreign students and expatriates or people in international assignment) and this has been identified as enough for demand driven IaH. Cultural institutions have recognized the demand for cultural production in English language, which has been primarily limited only to concerts and films from the United Kingdom and the United States (in Slovenia, films are not dubbed). The case studies presented here show two small art organizations that have recognized this potential and have shared their experience in implementing the IaH model for audience development.
The authors analyze two alternative theaters observed from July 2016 to March 2017 and their early internationalization efforts to use English, as part of their audience development strategy.4 They are both supported by public funds, but recognized the opportunity and the need to internationalize at the same time in spite of different age, experience, and approaches in their work. In both cases, international networks have been of crucial importance for their entrance in foreign markets.
Case Study 1: IGLU—Improvisational Theatre of Ljubljana
IGLU is a crew of three performers with a professional approach to the improvisational arts. Inspired by the international movement OHANA, where the three are members, IGLU’s interest in international exchange and the wish to establish a improv culture in Ljubljana led to the establishment of the theater. The first show in English was in 2011, where the potential of Ljubljana as an international hub was recognized. On the first show in English there was only one foreigner, however the domestic audience accepted the experiment well, which helped the recognize the need for more comprehensive strategy. To exploit this potential they included foreign guests, which was also provoked due to the need for know-how exchange. Knowledge transfer speeded up learning, alongside skills and network development. In a conversation with one of IGLU’s founders, it was noted that he views this strategy as a “very amateur internationalisation to do every month,” and finds the exchange or artists a very cost-efficient and innovative foreign market entry mode.
Nowadays, IGLU targets local and international audience with shows in Slovenian and in English. After five years, the number of foreign visitors are steadily growing and non-nationals in the audience have increased. On their English show in January 2017, almost half of the people were foreigners (each show has 60 to 100 visitors). In total, IGLU has three to four shows per month of which one is English, usually with a guest from abroad. About a third of the audience of the English shows are foreigners.
IaH not only helped them change the structure of audience, but also changed the need for public funds5 and pricing policy. The main reason for internationalization was not lack of finance, but primarily from content and staff development. From conversations with IGLU, the authors found out that they see this as a long-term investment:
without an enormous input we receive an immense output: we grow and develop our skills and way of working. There is no improv school in Slovenia, so if we want to be good in what we do and be professional, we have to go abroad.
This strategy helped them to explore the market and increase demand. Improved content, the improv school and rising demand also helped them set new pricing policy. Free tickets (that were used at the beginning, also due to availability of public funds) were substituted with market prices, followed by the increased prices for their improv school. Social networks have proven to be their best tool for advertising, with paid ads and double language posts for events. Their website is in English and Slovenian. They have also recognized the country’s main event website as very good promotional tool. For them, mail list has proven to be very effective, and activated the most important marketing form: the word of mouth. The social media also stimulated marketing research and survey that helped them introduce changes (e.g., identifying the leaflets are ineffective way of advertisement).
The introduction to English language shows has proved as important decision for the IGLU development; foreign audience became significant part of the audience, however not at the expense of the domestic one. High level of English language knowledge in home country however influences this success. In addition, IGLU also recognized the potential of improv theater to extract the best from physical experiences and transcended language barriers.6
IaH strategy with foreign guests also increased their resources and capacities for direct export of their performances. With the help of Ohana—European Improv Project and ITI—International Theatresports Institute, IGLU Theatre has built a close connection with theaters in Germany, Switzerland, Canada and they have also performed in the Netherlands, Germany, Switzerland, Croatia, France, Italy, Belgium, Czech Republic, Austria, Poland, and different cities in Canada and the United States. This “internationalization” was self-financed and provoked by the need to learn, leading to their professional improv skills, defined in theory as strategic asset seeking (Dunning 1993).
Case Study 2: Glej Theatre
The Glej Theatre (founded in 1970) is one of Slovenia’s oldest independent theaters. As an experimental venue and production house, renowned for unconventional theater performances it constantly undertakes new artistic approaches. Glej emerged as a response to the need for an alternative space for independent theatrical productions in Ljubljana7 and was founded by a group of directors, inspired by the evolving experimental theater approaches abroad.
Business models and financing alternatives for Glej have proven very unstable. The most important source is public funding; however this has been declining constantly in the last decade. At the same time new opportunities opened up with Slovenia’s accession to the EU.
Glej collaborates with numerous local theaters, but in terms of innovation, it is pioneering the introduction of English language performances. Every first Saturday of the month “Glej in English” is held, a program established in 2013. This special program is presented as “performances that are performed in English or have English subtitles, aimed at foreign citizens living in Slovenia,” as stated on Glej’s official website. Going “international” therefore meant the translation of original Glej’s content and it had three purposes: (1) to enlarge the theater’s audience, including the international community in Ljubljana, (2) to allow the theater to travel and present their shows abroad (exports), and (3) to become an international theater hub for professionals (assets seeking and innovation cooperation).
Thus, they expose Slovenian productions to non-nationals and guest productions to locals. By this exchange, the process of Glej travelling abroad (exports of production) has also been facilitated. Foreign audience represents between 20 and 40 percent of Glej performances (Čater 2016). Another very important target audience for Glej are theater professionals, as it has become a meeting point for foreign theater professionals, who recognize Glej as an innovative regional experimental theater hub. Glej is using several options; they present a show in English when they are guest performances or have it both ways when they present a Slovenian show with English subtitles. Such inclusive performances diversify and develop the audience and improve the access to the Slovenian cultural scene for foreigners.
Internationalization outside home market is (still) regionally concentrated. Most of Glej’s travels is in the culturally, linguistically and geographically close countries of ex-Yugoslavia, which is aiding the success of such collaborations. Extensions beyond the region are facilitated by the International Network for Contemporary Performing Arts (IETM). Glej is part of the network and for the past five years they performed in Spain, Netherlands, France, Tunisia, Litva, Austria, Hungary, and the United States. International network helped them to recognize new market segments and opportunities for both: audience and assets development. The importance of EU for Glej is significant as EU funds are perceived as a great way for the internationalization of small European theaters and almost the only way. In this light, they see the success rate of EU funds absorption for the cultural sector in Slovenia as very low.8
The theater uses different channels (e.g., Embassies, Erasmus networks, professional associations, etc.) and relies on social networks communication. It is also listed in Ljubljana’s tourist web page, which is available in nine languages.
Conclusions
The examined case studies showed IaH as useful strategy for audience development, access to resources development, creation of value and market extension. However, the success of this strategy is vitally related to the presence of international network; membership in an international organization allows access to resources, channels to communicate own content, fast implementation of “best practices” and innovation cooperation, which are all important for small countries. Both theaters have improved the access to original Slovenian theater productions for foreigners by the use of English language.
The proposition that art institutions should go international in order to enlarge and stabilize domestic production has been demonstrated in the presented case studies. Audience and assets development are essential for the survival of art organizations, in financial terms, but also in terms of following new trends and being part of the global art movements. Summing up, internationalization at home does not endanger the national art and culture, but may on the contrary bring synergies if IaH strategy is designed systematically. The studied cases demonstrated that the speed and scope of internationalization without IaH would have been substantially lower.
In one way or another, internationalization at home, with globalized product (performances in English), is a trend present all over Europe, as cities are becoming more and more multicultural. The accessibility of cultural activities is crucial for integration, so the adoption of such internationalization models may support the integration process and become effective strategy of art and cultural institutions to (re)position themselves in the European and global art scene.
References
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1 Subtitles in native language are not needed, they can consume English-speaking content or content with English subtitles and they do not need local providers to find it. According to Eurobarometer younger people, particularly between 15 and 24 year old when compared with those aged 55+, are more likely to mention English (79 percent vs. 56 percent respectively), German (20 percent vs. 14 percent), Spanish (18 percent vs. 11 percent), and Chinese (8 percent vs. 4 percent) as most useful languages for personal development (European Commission 2012). This data show a trend for the future: the vast majority of the global population will most certainly speak English and will have access to the Internet.
2 Ljubljana’s population is 287,218 people. In 2011 the visits amounted to 423,163 of which 404,969 were foreigners in 2016 this number was 726.082 (of which 690,585 were foreigners) (Municipality of Ljubljana 2017).
3 It is also important to note that this number is higher in real terms, as data is not possible to be collected for travellers who stay with friends or use online hosting platforms.
4 The variables observed during from July 2016 to March 2017 were: number of international visitors for the performances; amount of financial public support; social network efficiency and responsiveness; management style and time dedicated to marketing strategies.
5 IGLU has stopped applying for public funds, as they have calculated the inefficiency of spending a significant amount of time of submitting documentation for small amount of public support, but rather dedicate an additional time to marketing and audience development, strategy, which has brought positive results.
6 An example being a show where there are six people on the stage who perform in their native language, which turned out to be a great successful experiment. The format of such performance is called Babylon: everyone speaks their own language and the second step of the performance consists of everyone speaking a language, which they know badly. The key here is to act with your body.
7 The theater and its experimental nature were highly influenced by the Polish innovative theater director Jerzy Grotowski the American Professor of Performance Studies Richard Schechner (Arhar 2010).
8 One of the most influential international projects for Glej is Generation to Generation (G2G), cofunded by the European Union. Different theaters have realized that there is a trend of decline of young audiences in most European countries. Slovenia is no exception, as young people between 12 and 19 do not have content to be shown, while children and adults have many programs to choose from. G2G therefore became an European project, coordinated by Glej trying to deal with this challenge together with partners from 11 EU countries.