121 Loring Ave. Salem, MA 01970 6 Central St. Salem, MA 01970
February 3, 2005
The Salem Partnership and the Enterprise Center at Salem State College have worked in partnership in the past year to grow the creative economy on Boston’s North Shore. As part of our efforts, last spring we invited Charles Landry, international expert on the creative economy and author of The Creative City to meet with leaders in the business, arts, and governmental sectors of our region. The region includes Beverly, Danvers, Lynn, Marblehead, Peabody, Salem, and Swampscott. During his visit Mr. Landry identified several action items that we should pursue.
First among those items was to drill down to determine exactly what creative businesses want and need. Relying on the demographic research undertaken by the Lawrence Eagle Tribune, we were able to purchase a list of more than 2500 creative economy businesses on the North Shore(identified by SIC code) and to refine that list to 1200 in our geographic area outlined above. We further refined the list and selected 450 companies to invite to a series of focus groups held in the fall of 2004. The Hawthorne Hotel was kind enough to donate evenings of dinners and the Enterprise Center hosted a seventh focus group of creative economy tenants.
The focus groups began on September 24, 2004 and were completed on November 17, 2004. Sixty businesses totaling 72 people attended the sessions. .The facilitators were Christine Sullivan, Executive Director of the SSC Enterprise Center and Patricia Zaido, Executive Director of The Salem Partnership. These are the kinds of businesses who participated: multimedia production, advertising, public relations, art education, art gallery, entertainment, web design, software development, corporate art, business organization, training and development, newsletter authorship and energy consulting, architecture, design, historic preservation consultants, music and musical instruments, photography, business development consulting, IT consulting, math games, international networking, sales training, landscape design, glass design and distribution, corporate presentation skills and much more, puppeteer, independent artists, and more.
The goal of the focus groups was to find out what this sector needs in terms of business development.
Questions were prepared beforehand and were in the following categories:
1. State of their businesses in general—size of company, growth strategies, numbers of employees, types of employees,
2. Adequacy of access to capital and extent of need for capital
3. Customer development—how do they find, maintain, and grow their customer base
4. Region—why are they located in this area. What in their words are the benefits and problems with region
5. Are there skill gaps. What do these entrepreneurs need? How do they like to obtain that knowledge?
6. Are they interested in forming a Creative Economy Association?
Participants were also asked to fill out a questionnaire and these were reviewed after each focus group session.
Six central conclusions emerge from the focus groups
1. Participants were grateful for this first attempt to bring people in the creative economy together as a collective whole and pleased to be recognized as a “legitimate” segment of economic growth in the area. Some, for the first time, saw themselves as part of a “creative economy “. While a group of manufacturers would automatically expect to be recognized as in a specific economic segment, this group was surprised and grateful to be acknowledged as part of the economy and a desirable part of the economy. They had long known that they are economic contributors but assumed that the “creative” label and their small size precluded them from notice.
2. Participants very much want their own organization (a Creative Economy Association for the following reasons:
A. They have a feeling of isolation as many work alone or with only a few employees. They want to network, create relationships with other creative people.
B. They see a creative economy association as significant opportunity to do business. They would particularly like a directory so they could contact each other for collaborative projects or to fill a business need.
C. They want speakers, “experts” and Success Stories on which to model their own businesses.
NOTE: It is our observation that creative economy businesses are likely to do business with each other. Time and time again we saw companies meet at our focus groups with plans to work together going forward—a web designer with a marketing company; a free lance writer with an advertising agency, etc. This means that a trade association could be a major business generator for the individual members simply by enabling them to meet each other and work together. In most trade associations people with like businesses come together to discuss and learn more about their industry and the skills needed to succeed within that general industry. But they do not tend to do business with one another. This group would benefit from a trade association both by finding strategic alliances and other ways to do business with each other and by learning what trends are in creative industries.
3. Participants want educational and training opportunities in specific areas. Those mentioned by many are:
1. Marketing skills
3. Legal assistance
4. Financial/Accounting skills and advice
5. Networking Skills
6. Grant Writing Skills
7. Communication Skills
While this list is similar to the needs of most small businesses, they have a particular significance for the arts focused businesses (artists, musicians, and theater people). In their case they prefer to get this information from others in the “arts”. When the Enterprise Center ran a program in December called “Marketing Your Art and Feeling Good about It” it had the largest single enrollment thus far. There is an obvious need for this kind of programming going forward and the Enterprise Center will create a “creative track” in the coming months.
More than half of participants indicated that they have “minimal business skills”. Their educational background is in Liberal Arts and Technology. Most had no courses in business, marketing, communication etc. The implication of this in terms of college training is substantial since many entrepreneurs are currently enrolled in liberal arts majors.
4. Participants are not growth focused in the traditional sense
In the past, when one asked the question, “how many employees do you intend to have at the end of two years” you would get a specific numerical answer. When that question was asked in our focus groups the answers were all over the place. About a third said they planned to add one or two full time workers. Even in that group however, many said that they intended to supplement with contract or part time workers One participant whose comments mirrored those of many others said that he intends to have a few full time workers, but, he said, “I am not a big fan of employees and enjoy more the model of outsourcing and collaborations with other people.” Close to 20 of the companies said they would grow with contract workers alone, and another third said they anticipated no growth. These tended to be lifestyle businesses, often on the edge of retirement. There was a strong sense, as one participant put it, they “do not see adding of employees as a measure of success”.
Success was defined in a variety of ways. One architect put it in terms of having larger and more lucrative projects that allowed his company to focus more on design issues. Like many others he cited the current economy as a difficult one in which smaller projects were the only ones available till the economy improves. Others defined success as a good income with an ability to keep my style of life.
The issue of contract workers as an alternative to full time employees is one that we feel may be a trend throughout small businesses here in the United States. We are currently researching employment trends to determine if contract work is a permanent option and are talking about hosting a discussion of this issue later in the spring with some of the economists in this area. If it is a long term trend it has major implications for entrepreneurial training and all kinds of other issues from availability of health insurance to retirement planning. The Enterprise Center will also offer sessions specifically targeted to contract workers such as “Setting Yourself up in Business as a Contract Worker”. We would provide sessions in setting up your business finances, retirement plan options, finding health insurance, marketing your services and more.
Contract workers are an important component in creative economy businesses. This presents another conclusion; contract workers are also entrepreneurs, need many business skills and possibly should be associate members of the Creative Economy Association.
5. Financial Assistance The small businesses attending these focus groups showed little or no interest in financial assistance. They are not interested in taking out loans. They do have a high degree of risk tolerance but many were involved in the dot.com crash and want to as one stated, “stay in reality”.
If business not growing, they are not concerned. In most instances, they do not want to grow – interested in what one person termed, “controlled growth”.
6. Other findings:
· Customers are primarily “found” through word of mouth with internet and networking, second and third means. General consensus that these means are, “inefficient”.
· Region: People live here because of beauty, culture, accessibility or because they were born here. Most feel is wonderful place to live and work.
Problems are traffic, growing congestion, high cost of housing in particular and living in general