The Scottish System Lesson: the invisible hand gets distracted
In innovation right now everyone talks about ecosystems. Its a favourite word of policy and corporate strategy.
The analogy of a natural ecosystem suggests that if you can make it rain, it’s good for everyone.
That does not seem to the case for the Edinburgh festivals.
SCOTLAND AT THE CENTRE OF SOMETHING
Scotland’s role in what you might term very broadly the performing arts seems integral in the world.
People are willing to travel from Australia and Korea to be a part of it. So too people head away from the entertainment capitals of LA and New York to see if they can cut it in Scotland for these few weeks in a wet summer.
As Alexandra Silber said in our podcast Scotland occupies a key role in the performing arts in the 21s century.
ITS HAPPENING HERE, BUT WHO IS IT HAPPENING TO AND FOR?
The company behind Mary Queen of Scots had to go to London to get programmed in their home city. That is a natural consequence of the fact that the fringe festival is programmed by venue operators based elsewhere.
90 per cent of submission viewers for the film festivals do not live in Scotland. The ticketing app for the Fringe used to be made in Glasgow, now it’s licensed in from Australia with barely a thought (we ran through much of this story when the festival started in the Scotsman).
There is no Scotland House like there is a House of Oz.
THE CONTEXT
None of this is surprising to those who have been following the economic dialogue around the geography of innovation.
In Innovation in Real Places by Dan Breznitz he laid out the 5 stages of innovation, each of which a region or country can thrive in (but they need to know where they want to play).
To summarise at a very high level, Dan outlines:
Stage One: Novelty - new-to-the-world inventions.
Stage Two: Design, Prototype Development and Production Engineering - largely dominated by service providers (think luxury manufacturers in Italy)
Stage Three: Second-Generation Product and Component Innovation - improving, expanding and redefining a product or its critical components with the unique capabilities of an area (think the german mittelstand)
Stage Four: Production and Assembly - producing goods designed elsewhere (think the pearl river delta in china)
Scotland imagines that simply by hosting the biggest arts festivals in the world it will reap the economic rewards of a stage one economy. Almost as if Adam Smith’s guiding hand will look after the rest.
All over the world though we find that unless the local ingredients are right, stage one innovation rarely leads to innovation-led prosperity. The two classic examples of it working are Silicon Valley and Israel and both have highly unusual ingredients in the soil that are not easily simulated.
The reality is that the Edinburgh festivals in effect make Scotland a stage 4 creative ecosystem. Work is assembled here - international shows, international promoters, international bookers. It isn’t invented here though.
So too big movies are filmed here, rather than being from here.
That’s not a problem of itself. It simply states where we are at.
It does mean though that policy is based on a bad case of mistaken identity.
WHAT IT MEANS FOR PEOPLE WHO
MAKE NEW THINGS
Scotland’s creative scene is a kind of case study of what happens when we mistake innovation activity for wealth generation, or ecosystem development.
From a policy perspective we need to be very clear about what kind of innovation ecosystem we are actually looking to produce - and take active steps to produce it.
By the way, it is hardly as if Scotland does not have the levers to shift the way its festival economy works. For instance, while we talk about an array of venue managers how many of them are managing venues on behalf of the university. How is the public value of that assessed? How does that connect with the university’s role in developing the innovation economy of the country?
For innovation leaders inside companies we need to think about what role we want to play in the different ecosystems we are a part of, and gain clarity on what we mean by that.
Everyone wants to be an innovation ecosystem. Only now do some of us realise we should have been more specific.
