Elsevier

Technovation

Volumes 92–93, April–May 2020, 102042
Technovation

When technology shapes community in the Cultural and Craft Industries: Understanding virtual entrepreneurship in online ecosystems

https://doi.org/10.1016/j.technovation.2018.06.005Get rights and content

Highlights

  • Sense of virtual community in CCIs positively relates to supporting, promoting peers.

  • Promoting other entrepreneurial ventures increases online social capital.

  • CCI firms with increased online social capital have higher performance, satisfaction.

  • Sense of virtual community on cybermediary platforms, leads to positive outcomes.

Abstract

With the aim of providing greater insight into the nature and dynamics of the online entrepreneurial ecosystem in the Cultural and Craft Industries (CCIs), this study investigated the novel interactions taking place among virtual entrepreneurial firms operating in a relatively new technological context i.e. cybermediary platforms. It is argued that the technologically enabled connectivity offered by these platforms helps foster a distinctive sense of virtual community. Connectivity with users and peer-firms allows a greater sense of identity, shared values, and membership that may not exist routinely. This sense of virtual community may give rise to mutually beneficial firm behaviors whereby support of other businesses becomes the norm. The literatures on sense of virtual community, e-word of mouth, online social capital and e-community are integrated to examine the entrepreneurial dynamics in a context epitomizing collaboration, cooperation and creativity. Results from 732 virtual entrepreneurial firms support the hypotheses that (i) a sense of virtual community is positively related to supporting and promoting peers in the CCIs; (ii) promoting other entrepreneurial ventures increases online social capital and (iii) this in turn creates beneficial outcomes for virtual entrepreneurial firms in the CCIs. Future research may delve even deeper into how technologies may influence the community, collaborative or competitive nature of firm behavior.

Introduction

Drawing support from the works of eminent scholars such as Max Weber, Joseph Schumpeter, Georg Simmel, and Emile Durkheim, Swedberg (2006) describes a link between art and entrepreneurship, as both involve the act of combining things creatively. Yet due to the inherent tensions between the economic sphere and the sphere of art, he suggests that creative industries develop a special set of organizational mechanisms to bring them together. In this study, it is proposed that a sense of virtual community serves as this mechanism to bridge creativity, technology and entrepreneurship. The research question the paper seeks to answer is: What are the effects of a sense of virtual community on virtual entrepreneurial firms in the CCIs?

In 1998, UK's Department of Culture, Media and Sport (DCMS) originally introduced the term ‘creative industries’, to denote “those industries that have their origin in individual creativity, skill and talent and that have a potential for wealth and job creation through the generation and exploitation of intellectual property”. Thus, it is an inclusive term that covers a wide spectrum of industries including artistic crafts, an industry that is central to this investigation. Cultural and Creative Industries (CCIs) are generally understood as including “architecture, archives and libraries, artistic crafts, audio-visual (including film, television, video games and multimedia), cultural heritage, design (including fashion design), festivals, music, performing and visual arts, publishing and radio” (European Commission, 2010). It is important to note that this study focuses on the analogue aspect, i.e. arts, crafts and traditional as well as contemporary expressions of heritage and culture, which is as much a part of CCI as the digital aspect i.e. film, television and software. As such, CCIs are defined as "sectors of organized activity whose principal purpose is the production or reproduction, promotion, distribution and/or commercialization of goods, services and activities of a cultural, artistic or heritage-related nature" (UNESCO, 2000).

The growth of information and communication technology (ICT) has helped bring CCIs into the limelight particularly where businesses have a significant technological component. At the crossing of ICT and CCIs new businesses are thriving, prompting research attention on virtual entrepreneurship. Virtual entrepreneurship in CCIs is also an area of practical interest to potential entrepreneurs as well as investors interested in owning the next frontier in innovation (Jakob, 2013).

Besides its growing success, virtual entrepreneurship in the CCIs is unique for a number of reasons. Firstly, there are working practices and specialized knowledge that are very specific to the online nature and artisanal character (Blundel and Smith, 2013). Secondly, the associated low startup costs combined with the opportunity for self-expression make it an attractive avenue for many budding entrepreneurs particularly during the recent recession (Jakob, 2013). Thirdly, a great deal of interaction and sharing of knowledge is enabled through both formal and informal peer-networks (Kuhn and Galloway, 2015). Online platforms offer the opportunity for consumers and firms to interact, collaborate and create value in an atypical fashion (Leitner et al., 2007) and there is a distinct community approach and tendency to value creativity and community over purely economic goals (Kuznetsov and Paulos, 2010).

Thus, the focus of this paper is on entrepreneurial firms in CCIs operating via a technology-based cybermediary platform that promotes crafts. It must be noted that these firms are part of the CCIs as they make one-of-a-kind, unique products that have been designed or created by the entrepreneurs themselves, giving them a unique artisanal touch. Their product range is wide as it includes personalized high-end fine jewelry, made-to-order art, creative and unusual clothing, hand-painted shoes, accessories and other apparel often made of unusual materials, handicrafts and even 3D printed products that are custom designed by the entrepreneurs. Notably, the products are differentiated from automated, mass produced and industrial-scale goods. The descriptions emphasize that products are “creative”, using individual “skills” requiring special “talent” to make, which are the defining elements of CCIs. These shared online platforms have generated profits to the tune of billions of dollars (Statista.com, 2018) with their service fees being minimal, typically averaging less than 10%. Entrepreneurs can thus keep the lion's share of their sales price. Thus, these cybermediaries not only provide avenues for individual talent, but also aid in both job and wealth creation for virtual entrepreneurs in CCIs.

Furthermore, this industry niche allows virtual entrepreneurs new to the CCIs the opportunity to use the same technological interface to connect with their customers as well as peer-firms. This technologically enabled connectivity helps foster a distinctive sense of virtual community. Their peers in the same industry who are likely to have specific resources, pertinent knowledge and experience with the cybermediary platforms may frequently aid new entrants in setting-up and operating their business (Kuhn and Galloway, 2015). These networks of relationships are important in virtual CCI communities as “…the production and distribution of both fine arts and popular culture entail relationships among a complex network of organizations…” (Hirsch, 1972: pg. 640). As explained later on, cybermediaries help facilitate these relationships in a very effective way.

Web 2.0 (which is the current version of the World Wide Web), provides the ability to connect with multiple actors online -peer businesses, co-seller networks and community members. This facilitates community interaction, ease of communication and constant contact, thereby making online exchanges much more interactive and e-community focused than before (Kollman and Krell, 2011; Cormode and Krishnamurthy, 2008). In particular, it is a boon for the smooth functioning of cybermediaries. Cybermediaries are entities offering virtual platforms that not only replicate and adapt traditional intermediaries’ roles to virtual settings, but also offer new kinds of intermediation functions (Del Aguila-Obra and Padilla-Melendez, 2006). A few notable examples of cybermediaries are Etsy, Kickstarter and StoreEnvy in the United States, DaWanda in Germany and InOnIt in India, among several others.

Though some prior literature on community-based Web 2.0 tools exists, it remains predominantly centered on online social networking sites such as Facebook (Kayri and Cakir, 2010), or Twitter (Gruzd, Wellman, and Takhteyev, 2011), collaborative information sharing portals like Wikipedia (Pentzold, 2010, Baytiyeh and Pfaffman, 2010a), crowdfunding (Bi, Liu and Usman, 2017) or open source software development (Kayri and Cakir, 2010). Thus, a gap exists in the understanding of online entrepreneurial firms in CCIs – i.e. firms that combine the community aspects of Web 2.0 with e-commerce. This gap is surprising given the rapid rise of online ventures in the CCIs. The co-mingling of the virtual community with online retail has socio-cultural and technological implications that could guide empirical and theoretical scholarly inquiry, and merits special attention.

Simply put, the philosophy and artistic values embedded in the creation of aesthetically driven products coupled with the interactivity of online platforms, has created a paradigm shift by profoundly transforming how entrepreneurial dynamics operate in this context (Todorovic and Bakir, 2016). The strong sense of belonging to a community and its inherent values of helping fellow peers, have possibly transferred to the virtual context of CCIs (because of the community features of Web 2.0). It has significant repercussions as it affects both entrepreneur's interactions with competitive peers in the same industry and their own outcomes. This paper is the first known step towards understanding the entrepreneurial dynamics of a technologically enabled sense of community among the CCIs in the current Web 2.0 world.

To develop the theoretical model, the extant literature and theory on psychological sense of community (Sarason, 1974) as well as more recent work on sense of virtual community (Blanchard, 2007), virtual/ e-word of mouth (Kozinets, 1999), online social capital and e-community support (Williams, 2006) are drawn upon. In the following section, hypotheses that a sense of virtual community among virtual entrepreneurial firms in CCIs will have positive effects, such that helping others eventually benefits oneself, are presented. Thus, contrary to the traditional competitive mindset, this study builds the case that promoting and supporting competitors in the same industry is not detrimental but rather instrumental in building social capital. This in turn has positive spillover effects on performance and satisfaction.

The rest of the paper is organized in four main sections. The first section presents the literature review and hypotheses. The second section, methods, contains details about the research design, sample, constructs and data collection. The third section presents the results and the last section, discussion and conclusion, elaborates on theoretical contributions, practical implications, limitations and future directions.

Section snippets

Cultural and Creative Industries (CCIs) today

Interest in the CCIs from the business domain is not new as art (Albrecht, 1968), publishing (Miller, 1949), cultural consumers (Toffler, 1965) and even entrepreneurship (Peterson and Berger, 1971) in CCIs has been explored. However, it has seen a marked resurgence since the 1990s because of its economic significance, its importance for public policy and its relevance to innovation (Moore, 2014, Cunningham, 2002). The CCIs are growing quite rapidly and are now recognized as driving important

Research design

Of the different modes of delivering surveys, online surveys tend to have quicker response times as well higher response rates while reaching out to geographically spread respondents that are only reachable in the online domain (Cobanoglu et al., 2001, Trochim et al., 2015, Sheehan, 2001, Klassen and Jacobs, 2001, Wright, 2005, Wyatt, 2000). Thus, online surveys were optimal for reaching out to the group of interest here i.e. virtual entrepreneurial firms in CCIs.

In order to collect data from

Results

The descriptive information about the businesses as well as the demographic data of the business owners is summarized in Table 3. Demographic data, which were optional, were nonetheless supplied by almost all participants.

Before testing the model, the correlations between objective and subjective measures of performance were checked to ensure that the subjective measures were representative of objective financial performance (Chandler and Hanks, 1993, Chandler and Hanks, 1994). The correlation

Discussion

It is well established in prior literature that firms exist in competitive arenas and seek to beat out the competition to gain advantages and above average returns. At the same time, the idea of co-opetition also exists- it is not a new strategy either and is encouraged as a strategic move with far reaching benefits (Brandenburger and Nalebuff, 1996); but it is notable that firms engaging in co-opetition, do so only with one or a handful of competitors and for a limited term. Hence, the idea

Conclusion

The paper explores a hitherto unexplored avenue (that of virtual entrepreneurial firms operating in the CCIs), and brings to light the salience of technology-enabled connectivity and community and its implications for entrepreneurial dynamics in online ecosystems. A sense of virtual community has the potential to generate interesting spillover outcomes for multiple virtual entrepreneurial firms in the CCIs. Helping peers that are competing in the same industry may have positive rebound effects

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