“At National Security Level”: Culture as a State-Level Business Case

Volodymyr Vorobey, director of Lviv-based PPV Knowledge Networks, an economic development agency, held a seminar in Kyiv aimed at cultural managers and talked with Platfor.ma about strengthening the creative sector, “political entrepreneurs”, and the formation of cultural development strategies.

Volodymyr, what exactly does your agency do?

We are engaged in two spheres that bring added value: the green economy and the creative economy. We advise cultural and creative organisations on strategy, business modelling, interaction with stakeholders, and social responsibility. We manage projects, write project proposals, conduct analysis, develop scope statements, “roadmaps”.

Another component is investments: we accompany investment projects or invest in them. For example, Lislis toys, toys made from Ukrainian wood, are created together with the Lis design agency. A niche British online store, which sells environmentally friendly wooden toys, found us on Instagram, and we are already seeing the first sales in the UK. What is also important is that this is an expensive product, that is, we are entering the premium segment. This is precisely the added value that the creative economy can create.

Do people come to you with ideas or finished products?

It varies. Sometimes people come with ideas, and we understand that it is necessary to direct them to institutions that will help them realise their ideas. Or they come with a finished product, and we see that our interests intersect. We are interested in commercialisation, market entry, business development. And sometimes people who have created a product don’t know where to take their product next. Then we help them find their way.

This year, we started working with Hochu rayu, a Lviv-based design bureau engaged in space and building design. But a key area of interest for them is product design. Now we’re working together on commercialising a product. It’s a coat hanger, an object for the interior and exterior in the form of transmission lines. We already have a prototype, and we’re now thinking about the format for presentation.

We also work with a unique fortress/museum in Tustan. We advise it, and together with the team, we are trying to decide a strategy, how to build the business processes and the museum’s business model. In general, we invest only in projects that have a future. That is, they must be potentially profitable and have the potential for development.

What is your assessment of the state of Ukraine’s creative sector?

Some of its strengths are the ability to produce ideas and their quality. But implementation suffers. This is in terms of newly-established institutions. In terms of traditional ones, such as museums, if we want to produce an opera or an exhibition, we can do it. However, what is topical now is the transformation of old cultural institutions and supporting new, creative ones.

There is also a lack of knowledge. First, it has to do with systems management, business modelling skills, the ability to plan the sustainability of organisations. Second, development of products and services. Third, internationalisation, entry to international markets. This is also the promotion of the creative sector: how can we attract a foreign audience to our cultural products? This is also inclusion in the international value chain [all the processes that create the value of the product in the eyes of the consumer –Platfor.ma]. This is what helps us understand our competitiveness or lack of it.

There is also a lack of skills for formulating ideas, how to create a project out of them, how to find funding, or draw up a business model independently; who, what and in what order should things be done, how to interact with stakeholders. There is a lack of understanding of the processes at the policy level. Yet there are positive changes. We may not feel them, but I’m convinced that with the reforms that are being introduced now, fundamental and radical changes are taking place. There is already talk of it.

Who exactly is talking about this?

Directors of institutions, cultural managers. These conversations are held in lobbies, on Facebook, and are periodically raised at the political level: for example, does Ukraine need a humanitarian or a cultural fund? What is the role of the Ministry of Culture? We are already seeing talks coming up here and there about policy: To finance or not to finance? Should the state interfere in this sphere or keep out of it? What should the format of state involvement look like?

That is, we are beginning to talk about the development policy for the creative sector, about the necessary conditions and the rules of the game.

I would say that we are beginning to realise the need for this debate. We have yet to understand the policy for culture as such. There is Culture 2025, but there is a lack of understanding of how to put it into practice. We should first learn how to develop policies for certain issues, then we can move on, otherwise, it would be difficult to talk about such complex issues such as the development strategy for the industry as a whole.

The keyword is “creative economy”, the economy. Here, it is necessary to involve first not the Ministry of Culture, but rather the Ministry of Economic Development and Trade and the Ministry of Regional Development. How can we help the regions use the creative economy to develop their territories? One way would be creating new markets, new jobs, new cultural products. This is also a tool for the development of post-industrial areas. There are already examples emerging in Ukraine: the Izolyatsiya foundation and the Platforma co-working space in Kyiv, REMA factory in Lviv, and Promprilad in Ivano-Frankivsk. But where are the systematic discussions about whether to provide assistance to regions and how to do it? Perhaps, it is better not to give direct financing, but create market conditions? Or provide information or create forums where developers, creative professions and hub organisers can meet?

Another example: We have castles on the right bank of Ukraine: almost all of them are under the control of the Ministry of Culture and almost all of them are in poor condition. What is our policy? Do we transfer them to local communities and give them additional financing? Or do we create a separate state programme and finance these castles, one a year? Or do we distribute them as concessions [transfer for temporary use for a fee –Platfor.ma]? There are various policies. What the creative sector lacks are platforms where we would be able to hold discussions about policy options.

What are the necessary skills for the analysis and implementation of strategies?

Policymaking skills. Unfortunately, when we use politika in Ukrainian, we primarily refer to politicians. Whereas in English, we would have used policy, in the sense of policy-making. In the absence of an equivalent in Ukrainian, we often use “strategic approach” for the English word policy. To develop a policy, it is necessary to understand the institutional landscape, the problem, to be able to formulate the scope statements for studies, alternative policies and scenarios. When you have selected your policy, you can move to tools. What do we do: Do we regulate or transfer cultural management to the local level, and give money through regional development funds? Or do we create a cultural fund to finance the creative sector? Or do we use a combination of different tools? This is precisely what choosing a policy is.

Have we already made it through the first stage, and now all stakeholders understand the role of the creative sector?

I don’t think so. If we carry out an opinion poll of what ordinary people understand when they hear “creative industries”, it will probably be television and concert shows. Most people do not have access to innovative cultural products and don’t have experience of consuming them. This is also a question of awareness at the political level. Do people who have the ability to influence increasing the number of innovative cultural products, understand what we’re talking about? To what extent are cultural operators conveying this to them? It is important to advocate, instil in people the true meaning of the creative economy.

And what is its true meaning?

One that allows the creation of new formats and generation of meanings. In reality, it is when people use products that have a creative component in them. The very definition of the creative sector and the creative economy is difficult to understand. It is much simpler to say “there’s a museum”, than “that’s culture”.

What should the next step be for the effective development of the sector?

This is a difficult question. On the one hand, I would like to say that, yes, we need dialogue between all parties. It is necessary to establish rules, determine the role of the state, business, civil society. But you can look at it from a different angle and ask, but should a rather weak state interfere in this process in the first place, if it cannot cope with its basic duties, law and order, and security? Perhaps one of the scenarios is acknowledging that the state is, at the moment, unable to manage the cultural and creative economy. And that in this case, it should not interfere with it. I’m saying unpopular things, but maybe these are precisely the decisions we need. Perhaps, it is worth giving business the space it needs, allow civil society to create the products that it is willing to pay for.

For topical issues, entrepreneurs need to be informed about the possibilities of the creative economy. It is necessary to engage in promoting existing cultural products and boosting the creative economy to increase the number of entrepreneurs. This can be a state, a civil society or a media function. And maybe, we don’t even need the state in this process. I’m, of course, speculating. But there is the so-called public good that forms the basis of national identity and shapes our understanding of ourselves. This is something that the state assigns to citizens. We need to define what constitutes the minimum public good in culture, for which the state should be responsible: it is cultural heritage, the protection of historical monuments, tangible and non-tangible culture. Perhaps the state should finance culture not through government bodies, but rather through cultural products? Like in the medical sphere, when money comes not for a bed, but for the patient.

What would be the result?

Cultural operators will develop a need to look for innovations. Knowledge will be in demand, there will be a need to reform the management system. With such a policy, we could create a business case for the modernisation of culture. Of course, these are just assumptions. But we know that when the state knows and cares about cultural heritage, it then guarantees citizens access to a minimal set of cultural products. While the rest is the business of the local authority. Maybe, this should be within the framework of a state fund for regional development.

We understand which industries and how to support them. You can involve the Ministry of Culture, Ministry of the Economy, and the Ministry of Regional Development, and other stakeholders. For example, in Odessa and the region it is worth developing winemaking, in Lviv Region, this relates to fashion, art, light industry, local designers. In the east, it is about transforming post-industrial areas.

Do stakeholders need guidance in policymaking?

We lack political entrepreneurs, that is, a politician who would take the initiative to set policies and launch a political debate. This should be a person from a decision-making body: Verkhovna Rada, Cabinet of Ministers, ministry, or Presidential Administration. Someone who has enough authority to get this issue rolling. A person who will work on this subject and is willing to spend their time on it. It may not be a political leader, but a leader in the policymaking process. And, undoubtedly, there are people who are willing to get into this and formulate certain policies. Even the situation with the Ukrainian Cultural Fund goes to show that we have quite strong concepts.

What other key problems would you identify?

Today, we have quite a few issues that don’t have a clear-cut policy: from the castles mentioned above to state houses of culture, the issue of harmonising various policies, for example, economic and regional development. There are also problems that need to be addressed in a broader context: an inefficient, poor state cannot afford to maintain a huge number of cultural sites, in addition to lacking management skills. Perhaps it is worth phrasing the issue squarely? For the sake of society, we have to ask ourselves why we are keeping all this? If it is about providing cultural products, has anyone even researched this, what exactly is being provided and how is it provided?

Next: what is the public good and how do we guarantee its provision? If we investigate what people understand when they hear the word culture, then television and commercial cinema will come out on top. On the other hand, if we do not finance all these houses of culture, wouldn’t we become a consumer nation without the least national cultural product? Or wouldn’t that lead to catastrophic consequences? Then we must admit that we have to fund culture, but we should reform the way in which it is done. This is what policymaking is about.

We have now raised a number of policy-related issues in very broad brushstrokes. Who is doing that? I doubt that anyone is discussing this at the Ministry of Culture. At the Ministry of Economic Development and Trade, they don’t even know about the creative economy sector. There is no systematic dialogue between the real creative sector and these ministries. We are living in a scenario when we have 250 options for doing things. And what about the approach to the things we don’t do? What is our policy there?

At the international level, what are the main trends in cultural policymaking and reforms?

They relate to general global trends. Firstly, as a result of the economic crisis, culture budgets have seen cuts. Even in developed countries, where people are used to a wide range of cultural institutions and high-quality cultural products, budgets have been reduced. The cultural sphere is so developed there that nobody can afford it there. This forces the creative sector to look for innovative approaches. But politicians in Europe understand the need to help the creative industries.

There is also the issue of digitisation, the conversion of information into a digital format. The leap “into digital” leads to the dominance of big business platforms, as a result, local creative products have difficulty reaching consumers. We are all constantly on our phones, social networks. The method and rate of consuming cultural products are changing, the consumer is choosing digital channels, attention is lost on a device. The local cultural product has to adapt too. Perhaps the state’s function today is precisely to assist this transformation.

Another trend is collective financing or crowdfunding. For example, you have EUR 1,000 that you can invest in a company’s authorised capital. Creating such platforms allows the monetisation of ideas and bringing new products to the market. Without subsidies, but with the help of other people’s money. This money doesn’t have just to sit there but can work for you. But in our country, we still don’t have a legal mechanism for collective investments in the authorised capitals of companies.

Can you give a European example where these problems were successfully resolved?

For example, this happens when museums create interactive exhibitions together with IT companies. Such projects receive additional funding, IT companies for that. This establishes relations between developers who work with multimedia formats and cultural institutions that prepare new, interesting products. What is key here is the ability of institutions to interact with skilled people. Here’s another policymaking example: to say that 20% of funding will go to finance the projects of these very institutions relating to digitisation.  This is one of the possible options to stimulate sluggish institutions that are slow to take on modern work methods.

What about relations with the audience?

The audience is going to international online platforms. On the one hand, this has democratised the digital reality and, on the other, monopolised it. Google, Facebook, Amazon control mass information and are practically beginning to control cultural policy. And we know from the history of Donbass to what extent radio and television can influence people. As we see, culture is directly relevant to national security. And this issue is relevant for all states, Ukraine is no exception. To win this fight, you have to have your own strategic innovations. The creative economy is innovation in itself, but there are also technological, managerial, creative and political innovations. And we should seek policies that work and are effective in our conditions.

The article was drawn up in cooperation with the EU-Eastern Partnership Culture and Creativity


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