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The Early Bird Gets the Worm, But the Second Mouse Gets the Cheese: Non-Technological Innovation in Creative Industries


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In the context of economic turmoil, firms in the creative industries (CIs) must make fast decisions as to when to break through with innovations. This paper discusses non-technological, organizational innovation of early-adopters, first movers and early followers in order to overcome persistent economic decline, and the implication of different strategies for innovation success. The strategic principle of the pioneer's advantage rests on pre-emption – the premise that ‘the early bird gets the worm’ and this often applies to business model innovation (BMI). ‘But the second mouse gets the cheese’ points at early followers who may have a more systematic, strategic approach towards innovation. Greater understanding of the advantages of each strategic approach and their significance for innovation performance is critical for CIs where unpredictability and the accelerating pace of change pervade the decisions concerning innovation. Drawing on five exemplary cases of archaeological firms in Spain, this paper explores different innovation process dynamics. The study develops a contingency model where pioneers who challenge their current business model, may be outperformed by early followers who incorporate complementary management innovation (MI) initiatives into the BMI.
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The Early Bird Gets the Worm, But
the Second Mouse Gets the Cheese:
Non-Technological Innovation in
Creative Industries
Carlos Martin-Rios and Eva Parga-Dans
In the context of economic turmoil, firms in the creative industries (CIs) must make fast
decisions as to when to break through with innovations. This paper discusses non-
technological, organizational innovation of early-adopters, first movers and early followers in
order to overcome persistent economic decline, and the implication of different strategies for
innovation success. The strategic principle of the pioneer’s advantage rests on pre-emption –
the premise that ‘the early bird gets the worm’ and this often applies to business model
innovation (BMI). ‘But the second mouse gets the cheese’ points at early followers who may
have a more systematic, strategic approach towards innovation. Greater understanding of the
advantages of each strategic approach and their significance for innovation performance is
critical for CIs where unpredictability and the accelerating pace of change pervade the deci-
sions concerning innovation. Drawing on five exemplary cases of archaeological firms in
Spain, this paper explores different innovation process dynamics. The study develops a
contingency model where pioneers who challenge their current business model, may be
outperformed by early followers who incorporate complementary management innovation
(MI) initiatives into the BMI.
Innovation is essential for entrepreneurial
firms in creative industries (CIs) as a
complex institutional environment and
limited management resources are exacer-
bated by the reliance on highly skilled human
capital, all of which drives increasing commer-
cial competition within the industry. This is
even more critical in turbulent economic
times, where firms are forced to constantly
reposition their strategy and offer new ser-
vices. The international financial crisis of 2007,
further accentuated by an economic down-
turn, has intensified their search for innovative
solutions to diminishing business opportu-
nities. In the context of turbulent economic
conditions, firms’ investment in innovation is
severely reduced (Paunov, 2012). Yet top racers
– pioneers or first-movers and early followers
– are likely to identify innovation opportu-
nities and assume the challenge of committing
resources to new courses of action (Archibugi,
Filippetti & Frenz, 2013). Specific innovation
strategy tends to be uncertain in the creative
industries due to the great uncertainty
involved in what business practices and
models can be rested on. This is the situation
confronting most entrepreneurial firms in CIs
when determining whether to pursue innova-
tive practices to overcome economic downturn
(McKelvie & Wiklund, 2008).
Studies on innovation in CIs highlight their
reliance on non-technological, organizational
sources of innovation, particularly business
model innovation (hereinafter, BMI) and man-
agement innovation (hereinafter, MI) (Franklin
et al., 2013). BMI is a systematic way of defying
conventional ways of doing business by the
core business elements and their interrelation-
ships, including the operational, financial and
marketing model or the value proposition
Volume •• Number •• 2015
© 2015 John Wiley & Sons Ltd
(Markides, 2006; Chesbrough, 2010). Research
has shown that in times of economic crisis,
innovative business model solutions may
provide a competitive advantage (Amit & Zott,
2012). However, as we contend in this work, in
the unsettling competitive landscape of CIs,
the success of BMI might require complemen-
tary innovation solutions in the form of MI
(Birkinshaw, Hamel & Mol, 2008; Damanpour,
Walker & Avellaneda, 2009). In this work we
refer to MI as the generative mechanisms and
actions taken by creative businesses to roll out
managerial reorganization.
This study develops a contingency model
for the selection of innovation strategies, which
examines entry time strategy as it affects the
likelihood of success. The argument made
here is that first movers might be disadvan-
taged by their lack of experience to foresee,
giving an advantage to the early followers,
second movers who may have a more system-
atic approach towards innovation (Robinson,
Fornell & Sullivan, 1992). This does not imply
that some pioneers do not often have a clear
advantage over followers, but as Schnaars
(1994) recognizes, innovation studies need to
acknowledge the huge amount of uncertainty
that innovative action entails. The study of
organizational innovation closely tied to a long
period of economic decline requires system-
atic research into the dynamics associated with
early innovation adoption. The newness of
certain innovations may be detrimental to early
adopters and beneficial to early followers.
Alternatively, for first-movers of strategic inno-
vations, BMI may provide an opportunity to
overcome an adverse macroeconomic environ-
ment and may allow for faster-growing, prof-
itable innovation success. This is a unique
situation for creative firms that the literature
has not yet addressed.
Specifically, in advocating the early adoption
of innovations, we ask how entry time can
affect the success of early movers in overcom-
ing economic downturns. We focus specifically
on the strategic decisions and consequences for
pioneers and early followers attempting inno-
vation. We deliberately exclude late entrants
that merely imitate early-adopters’ successes.
Our objective is to enrich understanding of
innovation in CIs and to think about paradoxes
of managing non-technological innovation
under convoluted economic conditions. We
offer an in-depth case study analysis of five
commercial archaeological firms in Spain to
investigate this. These firms are representative
of a relatively modern cultural business activity
that experienced an extraordinary develop-
ment at the beginning of the twenty-first
century but has been forced into a dramatic
reinvention as a result of the economic crisis
eroding the Spanish economy over the last
seven years.
The paper is organized by first providing
some background regarding archaeological
firms and examining their activities through
the lens of the economic crisis. This is followed
by a discussion of entry time strategy and non-
technological innovation practices in CIs. In
order to provide evidence for the arguments,
this is followed by a qualitative description of
the research methods used and the multiple
case studies. The results section shows differ-
ent methods of BMI and MI introduction in
turbulent times and the consequences of two
different approaches to entry time strategy
(that of first movers and early followers). The
discussion section examines the role of non-
technological innovation and entry time for the
survival of CIs in contexts of crisis before
finally looking at the limitations of this
research and making recommendations for
future studies.
Literature Review
Archaeological Firms as Creative Industries
During the last two decades, CIs have become
an important driver of national economies, cre-
ating value and employment (Flew &
Cunningham, 2010). They embody a hetero-
geneous activity, where all kinds of firms, from
small and entrepreneurial to multi-billion,
multinational firms operate in the cultural and
creative sphere (European Commission, 2010).
This may explain why definitions of what
activities represent the CIs are for the most
part ambiguous. A convenient definition is
provided by UNCTAD (2008), which groups
the industry into blocks: creative arts (e.g.,
visual arts, audiovisual multimedia and com-
puter games), media and entertainment activ-
ities (e.g., video and TV, books and press), or
cultural sites and services (e.g., architecture,
museums, cultural heritage and archaeology).
In the context of economic decline, we give
special attention to entrepreneurial firms in
the periphery of traditional definitions of
CIs, focusing on commercial archaeological
firms. These might be typified as creative ser-
vices: science-based, human-capital intensive
and advanced knowledge service providers
(Miozzo & Soete, 2001; Castellacci, 2008). This
commercial model is firmly established in the
US and UK (Aitchison, 2009), as well as in
Spain, where private initiative has taken place
only recently (in contrast to Anglo-Saxon
countries). To protect national archaeological
heritage, public authorities in these countries
require any individual, firm or institution
wishing to carry out intervention in the field to
Volume •• Number •• 2015 © 2015 John Wiley & Sons Ltd
obtain legal permission and take responsibility
for any subsequent work the administration
may deem necessary (protection, enhance-
ment, diffusion, etc.). Commercial archaeology
started when conservation actions went from
public agencies to private initiatives under the
supervision of government authorities. During
the first six years of the 2000s the construction
boom that took place in these countries led to
an exponential increase in the demand for
archaeological certifications. Whereas con-
struction activity represented, on average, 7.7
per cent of Spain’s GDP in 1980–90, it flour-
ished in the 2000s, reaching its peak in 2006,
when it accounted for more than 12 per cent of
national GDP (Parga, Martin-Rios & Criado,
2013). Likewise, the percentage of GDP in the
UK accounted for by construction activity rose
from 6.0 per cent in 2000 to 7.1 per cent in 2008.
The number of entrepreneurial archaeological
firms entering into that market grew accord-
ingly. This was particularly so in Spain, where
national economic prosperity resulted in an
unprecedented number of new archaeological
In Spain, the driving force for many of these
small, entrepreneurial firms was to provide
service to the construction industry. What
developed was a service consulting business
model anchored in the same business princi-
ples as construction firms: fast service delivery,
mass customization (higher focus on cost than
quality service) and local scope. Due to their
dependence on the construction industry,
firms were seriously affected by the global
financial crisis of 2007 and the resulting reces-
sion, as shown in Figure 1. Around 42 per cent
of archaeological firms were wiped out in the
following four years. Surviving companies
faced a dilemma: to continue in an ever shrink-
ing market or to explore strategic innovation
actions associated with new business initia-
tives, which could enable success in reaching
new markets.
Economic Turndown and Entry Time
Innovation Strategy
A pervasive debate in the current literature
addresses the question of how firms can cope
with ongoing economic turmoil by managing
innovation capacity (Filippetti & Archibugi,
2011; Paunov, 2012). The discussion is, for the
most part, oriented towards general cross-
sectional analyses (Bricongne et al., 2012;
Berchicci, Tucci & Zazzara, 2014) and studies
of innovative policy responses to the economic
crisis (OECD, 2009), not the specific industry-
level factors associated with innovative activ-
ity. One of the few exceptions is Colombo and
colleagues’ (2012) work on how the global
crisis has shaped the product innovation strat-
egy of high-tech entrepreneurial ventures. The
authors conclude that by ‘attempting to navi-
gate the crisis storm, entrepreneurs might be
tempted to entrench in the current strategy
and wait for better conditions’ (2012: 388),
which, given the severe economic recession,
would have adverse effects for firms.
Studies often identify the challenge of time-
liness of innovation as a response to the chang-
ing environment (Klepper, 1997). Common
wisdom suggests a positive relationship
between the pace of innovation and success –
providing the benefits of greater profit poten-
tial through both earlier entry and the ability to
develop disruptive innovations. Montgomery
and Lieberman (1998) suggest that first movers
achieve the best performance gains in eco-
nomic profit or market share. According to
Lawless and Anderson (1996), ‘returns to inno-
vation are traditionally modelled as a function
of entry order, with early adopters outperform-
New Archaeological Firms
New CIs Firms
Figure 1. Number of New Spanish Archaeological Firms and New Spanish CIs Firms for the Period
Volume •• Number •• 2015
© 2015 John Wiley & Sons Ltd
ing later ones’. However, other studies suggest
that late entrants might seize innovation
strategy and results from early-movers. For
example, Bolton (1993) found that early
adopter firms are stimulated to innovate as a
response to environmental uncertainty, but that
later adopters perform more satisfactorily.
Schnaars (1994) shows how late entrants might
exploit the early adopter’s innovation efforts
and overtake them with improved products
and services. In the context of services, the
study of Makadok (1998) shows that pioneers
have a highly sustainable pricing advantage
and a moderately sustainable market share.
The scarce literature on entry time innova-
tion strategy in CIs yields similarly conflicting
results. McKelvie and Wiklund’s (2008) study
of innovation in young media firms shows that
delivering innovation to the market provides
the creative firm with early-mover advantage
and increased responsiveness to customer
demands. In contrast, Markides (2006) high-
lights that, in CIs, small pioneers continuously
develop innovation and bring them to the
market just to be overtaken by second-movers
that further develop their innovations. Ques-
tions arise as to whether the nature and char-
acteristics of innovation in CIs may have a
major impact on the strategic decision of entry
time during turbulent times.
CIs and Non-Technological Innovation
Several works have pointed towards non-
technological, organizational innovation as a
driving force of value and growth for CIs
(Markides, 2006). We draw here on the finer
categorization of non-technological innovation
as that which helps create a new market for CIs
and departs from the narrower principle of
technological innovation to include BMI, a
novel approach to commercializing firm assets
(Gambardella & McGahan, 2010) by delineat-
ing how firms relate to their environment for
value creation (Bucherer, Eisert & Gassman,
2012), and MI, which involves new managerial,
process-related, structural or technical prac-
tices destined to promote the objectives of the
company (Birkinshaw, Hamel & Mol, 2008;
Evangelista & Vezzani, 2010). Both types of
innovation activities are seen as dynamic pro-
cesses subject to both managerial action and
environmental forces. As Damanpour con-
tends, ‘innovation is a means of changing an
organization, whether as a response to changes
in its internal or external environment or as a
pre-emptive action taken to influence an envi-
ronment’ (1991, p. 557). External pressures
foster the need for a deeper understanding of
the problems, which often induces a critical
analysis of the organization, adaptation and,
consequently, renewal within its core business
model and internal processes. This thus estab-
lishes alternative ways of managing employees
and fostering internal and external relation-
ships (Volberda & Lewin, 2003; Armbruster
et al., 2008; Bucherer, Eisert & Gassman, 2012,
Heckscher & Martin-Rios, 2013; Martin-Rios,
2014, 2015; Martin-Rios, Heckscher &
González, 2014).
Research shows that internal or external
threats or, indeed, opportunities trigger BMI.
For example, Zott and Amit (2010) show how
in times of economic change product and
process innovation investments are reduced or
eliminated, while BMI becomes a way to gain
efficiency by satisfying market needs.
Chesbrough (2010) analyses how IBM suc-
ceeded in reinventing its business model after
a period of loss. Sosna, Trevinyo-Rodríguez
and Velamuri (2010) reach similar conclusions
regarding Naturhouse.
Successful organizational innovation is
therefore challenging as it questions existing
practices and processes, as well as ingrained
assumptions on the way things are. At the same
time, as these innovations are generally more
systemic and difficult to imitate than techno-
logical innovations, it is assumed that they may
be an important source of competitive advan-
tage for firms (Evangelista & Vezzani, 2010). It is
argued that during times of environmental and
market turbulence such as during an economic
crisis, non-technological innovation may play
an important role in a firm’s turnaround
(Archibugi, Filippetti & Frenz, 2013). This par-
ticularly holds for creative firms with lower
technological components and less hierarchical
structures, which are more interactive and
spontaneous; although this does not make
them any less intentional and planned
(Castañer & Campos, 2002).
For small, entrepreneurial firms in CIs, non-
technological, organizational innovation is a
unique source of potential value (Potts, 2009;
Miles & Green, 2011; Abecassis-Moedas et al.,
2012; Stierand, Dörfler & MacBryde, 2014). For
example, Franklin and colleagues (2013)
contend that innovation through internally
developed projects (as opposed to externally
driven R&D initiatives) helps creative firms to
reduce demand uncertainty and respond to
market disruption. Also, Castañer and
Campos (2002) stressed the relationship
between organizational innovation dynamics
and artistic innovation. Moreover, Hotho and
Champion (2011) offered findings on how MI
(i.e., changing people management practices)
is amenable to exploratory innovation in ICs.
Foss and Stieglitz (2014) theorize that due to
the inherently systemic character of BMI, it
may entail integration with MI. However,
further development is needed and the
Volume •• Number •• 2015 © 2015 John Wiley & Sons Ltd
interrelation between BMI and MI in the
context of massive economic upheaval has yet
to be systematically explored.
For this research a multiple case study
approach was chosen in order to provide a rich
and comprehensive view of the innovation
strategies pursued by successful archaeologi-
cal firms to overcome economic uncertainty. To
provide insight into the critical role of non-
technological innovation in the convoluted
industry of commercial archaeology, the five
case studies selected were deliberately chosen
to provide a diverse and representative sample
of strategic and organizational situations.
Based on the authors’ experience with the
industry, a list of potential firms was gener-
ated. The list was then submitted to academics
and industry experts. From the responses
received, five cases were selected (see Table 1).
These firms were defined as market champi-
ons and the most innovative firms in the indus-
try and were selected as case studies to give a
theoretically representative rather than statisti-
cally representative sample (Eisenhardt, 1989).
By virtue of their position, pioneers and early
followers tend to have a stronger grasp of the
economic landscape and the need for innova-
tion in the business model in which they
Selected firms were contacted and all
accepted to participate. Interviews with key
members of the targeted organizations further
validated the appropriateness of each case for
this study. Fine-grained qualitative data for this
study involved multiple levels and units of
analysis (Corbin & Strauss, 1994). Information
was obtained by interviewing seven CEOs, five
managers, and 21 employees from selected
firms. Interview procedures ensured anonym-
ity and confidentiality, were digitally recorded,
conducted through a semi-structured inter-
view template, and lasted 50–100 minutes.
Additionally, numerous informal conversa-
tions took place over the two-year period of
fieldwork. We specifically asked questions
regarding the long-term economic crisis and its
implications for the future of archaeological
activity and of their own firm. Also, questions
were posed to managers and employees about
their past and current business models, the
benefits and obstacles of implementing new
business strategies and new methods in the
firm’s business practices and workplace
organization. A number of questions were
asked about innovation dynamics and strat-
egies developed by the company and their
impact on service output and improvements.
Finally, we registered firm profile information
(turnover, scope and size) and its evolution in
the market.
Coding and Analytic Strategy
Our study adopted the strategy of building
pre-defined constructs and propositions
based on the existing innovation literature, as
Table 1. Case Companies
Case Main activity Employees Interviews Position of the
A. Pioneer
(early bird)
management project
10 7 CEO
Project manager
Employees (5)
B. Pioneer
(early bird)
Publishing, editorial
services and
18 6 CEO
Employees (5)
C. Pioneer
(early bird)
Cultural promotion 40 6 CEO (2)
Employees (4)
D. Early follower
(second mouse)
Graphical heritage
33 7 CEO (2)
Manager director
Employees (4)
E. Early follower
(second mouse)
Cultural activities 58 7 CEO
Management team (2)
Head of department
Employees (3)
Volume •• Number •• 2015
© 2015 John Wiley & Sons Ltd
recommended by Yin (2014) and Eisenhardt
(1989). Such an approach provided a well-
defined focus, facilitating the systematic collec-
tion of data and serving as a guide for data
analysis. For our analysis we took the steps
recommended by Yin (2014) and Eisenhardt
(1989) to conduct both within-case analysis
and cross-case pattern searching. The second
author conducted content analysis and initial
open coding of all interviews. Each interview
was translated from Spanish into English so
that the entire research team could conduct
content validation of the initial codes. The tran-
script from each single firm was analysed,
noting all the contingencies related to the use
of non-technological innovation initiatives.
Repeat occurrences of any emergent themes,
as in the case of BMI and MI, were also noted
and categorized. Coupled with within-case
analysis, we searched for repeated patterns
among the selected firms. Our analysis sur-
faced two groups of firms: top racers and early
followers. Based on the dimensions we estab-
lished from the existing innovation literature,
we documented similarities and/or differ-
ences across entry-time groups. Themes were
considered established only if there were
multiple occurrences within and across cases.
This coding process was highly iterative
(Pettigrew, 1997) and focused on reducing the
initial codes by merging similar or overlap-
ping ones into more meaningful analytical cat-
egories. In this way, we were able to identify
key themes within the innovation initiative. A
comprehensive list of codes from the tran-
scribed interviews was generated, aimed at
capturing the different types of innovation ini-
tiatives undertaken by firms and how
organizational actors at all levels (board, man-
agement team, employees) anticipate the
success of disruptive innovations aimed at
recovering from economic turbulence and
uncertainty. Thanks to extensive study and
interpretation of analytical categories, the case
data was compared, contrasted and reduced to
two innovation trajectories that have been
unfolding in the archaeological industry. The
final step involved integrating and refining
themes and patterns into broader analytical
categories, representing the overall theoretical
foundation for understanding entry timing
and non-technological innovation actions
(Strauss & Corbin, 1998). Each entry time strat-
egy was supported by examples from the data,
to add voice to the text (Wolcott, 1990). Table 2
outlines six sub-dimensions of entry time and
innovation strategy to overcome crisis along
with associated actions.
Content analysis of interview data shows that
the five case studies followed two distinct
innovation pathways (Table 3). Three pioneer-
ing firms, defined as early birds, first intro-
duced BMI and, eventually, as they were facing
difficulties related with the new business
model, introduced non-planned MI. The other
two cases, labelled as second mouse,
attempted to overcome the economic crisis a
little later than the early birds. These firms also
did so through BMI, but in their case com-
bined it with MI actions. They designed and
Table 2. Coding Examples of Non-Technological Innovation: Pioneers and Early Followers (N=175)
Persistent economic crisis and non-technological innovation
Pioneers (First-mover in offering innovative
Early followers (Informed innovative
Successful BMI (33) (e.g., We need a radically
new service offering)
Complementarities (36) (e.g., Making sure
BMI and MI are in agreement)
Turnaround (27) (e.g., We need to generate
breakthrough innovations for tackling the
challenges of the crisis)
Innovation decisions (27) (e.g., We have
decided one formal, comprehensive
innovation strategy)
BMI-MI loosely-tied (22) (e.g., Innovation
synergies were far from planned)
Acknowledging (19) (e.g., We learnt from the
decisions our competitors made)
Detecting problems (16) (e.g., Feedback on
innovation deployment strategy)
Deliberate (14) (e.g., Our new business model
goes hand by hand with the adoption of
improved planning and management)
Volume •• Number •• 2015 © 2015 John Wiley & Sons Ltd
implemented both BMI and MI actions
together based on what they learned from
their competitors’ struggle with changing
their organization’s system and practices once
BMI was in place. Next, we examine these two
innovation pathways, giving a short introduc-
tion to their context, examining BMI strategies
implemented, and addressing barriers to suc-
cessful exploitation of this innovation in rela-
tion to MI.
Early Birds. . .
From the start of the economic crisis in 2007,
the Spanish archaeological firms under study
were wary of the industry’s excessive focus on
partnerships with construction firms. For
these pioneering firms, however, economic
instability also offered opportunities for the
implementation of recovery initiatives through
innovation. Three case studies attempted turn-
around by breaking through existing markets
and undertaking new service offerings. Inno-
vation in their business model offered them a
way to offer new services. One top manager
summarized, ‘I couldn’t disagree more that
[this firm] should be thought of as an archaeo-
logical service to construction firms and leave
it at that. Should we let the opportunities for
professional services wither and die? We can
and should have a thriving heritage firm here.’
Case A is remarkable as it represents a
radical transformation of the dominant
construction-service business model. The
company started operating in 1990 and experi-
enced steady and significant growth until
2006, with annual revenues of more than 1
million. According to interviews with manage-
ment, this company responded differently to
most archaeological firms with respect to the
financial crisis: they shifted course by radically
transforming their business offering to mini-
mize the impact of demand uncertainty. Firstly,
they outsourced their successful services (i.e.,
traditional impact assessment work) so as to
focus on high-end project design services with
a scope to expand beyond the national market.
These innovations incorporated practices new
to the industry, such as delocalizing their busi-
ness and investing in digital marketing and
online platforms. Moreover, they sought inter-
national partners and funding institutions. The
major advantages of these initiatives were
their low cost (relative to the required invest-
ment) and their potential for expansion into
innovative services. However, soon after the
firm implemented its new business model,
management stumbled upon organizational
challenges. The new service offering required
skills and organization that were unfamiliar to
both their managers and employees, including
in-depth knowledge of transnational contexts,
a project-driven organizational design, and
agility to forge strategic alliances with com-
petitors, suppliers, universities and other
public bodies. In the midst of these difficulties,
the company had to maintain its fragile com-
petitive position and deal with the difficulties
of managing work across organizational
boundaries. Costs had to be controlled, pro-
cesses analysed and adapted, and the new
business model reinforced. Not without strain
the firm managed to survive and entered the
international market. In 2012, the CEO stated
‘by means of changing organizationally, we
hoped to create a stable infrastructure that
allowed us to bid for public funds and indus-
trial projects. Being so focused on redefining
our service offering, we didn’t plan for it and it
was difficult to undergo this type of transfor-
mation. Still, we were convinced that we
needed to seek out alternatives to the previous
Case B is exemplary of the type of
organizational innovation taking place after
the crisis erupted. The firm soon identified the
changing conditions of the market and reori-
ented its activity through aggressive BMI.
Table 3. BMI and MI Innovation in Archaeological Firms
Non-technological innovation
Pioneers Radical Spontaneous
Purposely designed Reactive
Opportunity-driven Loosely-designed
Early followers Systematic Complementary
Planned Deliberate
Integral Interplays with BMI
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Aimed towards provision of higher value
activities, this company became a provider of
heritage and cultural content through publish-
ing, editorial activities and documentary film-
making. The CEO’s background and expertise
was in archives and libraries. Despite the
absence of prior experience in cultural ser-
vices, the firm entered into the market. Experi-
mentation was critical to this process and their
approach. Management adjusted the business
model through an iterative process involving
market feedback, intuitive sense making and
collective involvement in changing decision
making. Nonetheless, the firm’s initial
attempts to promote the new business model
were unsuccessful; customers distrusted their
lack of experience. Thus, the company
invested its scarce resources in building a
trusted, knowledgeable business with a quali-
fied team. This involved new organizational
challenges. Management was forced to allocate
resources to knowledge acquisition in mana-
gerial skills, to marketing and design, as well
as to setting up formal collaboration networks
with suppliers and customers. Although the
new BMI strategy did not guarantee overnight
financial success, it nonetheless contributed to
the attainment of Case B’s non-technological
innovation when MIs were later implemented.
Case C completely refurbished its business
model during the first few years of the crisis.
The firm exited the traditional archaeological
service market and introduced new business
practices aimed at the general public. These
included enhancement and museum projects
(services associated with the commercializa-
tion of heritage, its access, and opening for
visitors), consultancy (specialized technical
knowledge) and diffusion (presentation of
heritage knowledge and resources to the
general public). This allowed them to enter the
high-value cultural market in which the firm
had some previous exposure. Initially, these
projects were unsuccessful with unproductive
financial results, mostly due to an over-
dependence on public funding. Soon it
changed approach to target the general public
with new cultural services the owner had
learnt from counterpart firms in the UK. They
entered the new market successfully, but, due
to a lack of planning, they faced significant
challenges in providing managerial and
organizational solutions to maintain their
competitive position. After some delay the
firm introduced a new plan for adopting an
organic structure and establishing multidisci-
plinary teams, introducing a new business
culture, and developing formal communica-
tion and marketing plans. As the manager
summarized ‘It was all chaos when we first
attempted to offer new services. With so little
business experience (all of us had back-
grounds in humanities), we planned little,
everything was very intuitive and the amount
of work we had was overflowing. Competitors
were catching up fast. That was when we
jumped through the organizational transfor-
mation’. After two years of economic strain,
the firm was finally expanding against the
backdrop of the crisis, with some 40,000 users
per year, and continued to develop new strat-
egies to innovate its service offering.
Second Mouse. . .
Early followers lacked their competitors’
organizational capabilities to pioneer radical
innovations in their business model. In their
own view, firms with superior firm-specific
organizational skills and resources naturally
chose to pioneer new markets, whereas early
followers or ‘second mice’ followed archaeo-
logical pioneers in attempting BMI with
greater emphasis placed on innovation in their
management practices. This enabled them to
improve their competitiveness and to realize
innovations in their business model, as one
employee we interviewed summarized, ‘There
is no shortage of smart folks working on this
[organizational innovations]. How to make
any of these business ideas reality is up to the
firm, and it moves slowly. It’s all about
resources, and the lack thereof.’
Case D started operations in 2000 during the
construction boom and was financially suc-
cessful until its market share plummeted in
2007. In 2008 its revenues were reduced by 40
per cent and the management team was forced
to lay off half the staff (12 people). Layoffs
allowed the firm to temporarily cope with
declining workload. After informally bench-
marking other companies, the firm launched a
new service related to graphical heritage docu-
mentation in 2009. Prior to entering into the
new market, managers set up a series of initia-
tives to adapt their former way of working to
the new business requirements. They hired
five highly skilled employees familiar with the
new service and technology in place and
implemented a new R&D strategy. The goal
was to set up a pipeline of new projects, pro-
posals and ideas and to subsequently exploit
them. As a result, work design and the chain of
command were adjusted to meet the new
work demands. In late 2010, the firm’s market
share and profits began to increase again. It
successfully implemented IT archaeological
services (such as satellite-based surveying,
geographical information technology, remote
sensing archaeology, 3D technologies applied
to archaeology, etc.) and stepped up the
digitization content. As the CEO stated,
Volume •• Number •• 2015 © 2015 John Wiley & Sons Ltd
It was all or nothing. And we needed to
build a strong organization over which we
could grow. We found an opportunity in
digital documentation and had a plan to
exploit it. We were all excited about setting
up an R&D lab. But to try and get the best
out it, a new management model was on
demand. We needed the will to co-operate,
to trust those new ideas, and to transfer
authority to where knowledge is. This is
where we are ever since.
Case E is another exemplary case of an estab-
lished firm that renewed its business model
through the development of a new line of ser-
vices. Initially a small enterprise in 1996, it
began to grow exponentially from 2008
onwards because of incorporating a line of ser-
vices aimed at heritage-based activities for edu-
cational purposes. This business offer was a
keystone of the firm’s strategy since the start of
the economic downturn. It had to deal simulta-
neously with the introduction of a competing
new business model and the organizational
inertia resulting from an established company.
The owner took the decision to compete in a
new niche, capturing vital market share for
long-term survival. Uncertainty regarding the
BMI viability called for a comprehensive strat-
egy. Several MIs contributed decisively to
reducing the uncertainty of the new business
model and to guaranteeing firm success. The
firm was reorganized into multi-disciplinary
teams and a communication plan and related
collaborative mechanisms were developed.
Management also promoted the establishment
of an open, largely horizontal culture that
would foster activities related to sharing
knowledge and creativity and to detecting
problems and deficiencies in service processes.
Finally, a network was established with both
internal and external agents. In 2012, the
company employed 128 people on a permanent
basis, making it one of the most important
archaeology firms, with its displays and exhib-
its receiving more than 15,000 visitors per year.
In this case, management innovation was seen
as a channel or facilitator of the BMI. Through
this innovative business model the company
entered a new business area.
In summary, these cases show that archaeo-
logical firms drew on non-technological inno-
vation to overcome longstanding economic
strain. Cases A, B and C were exclusively con-
cerned with BMI until they realized that MI
actions were required for the new business
model to succeed. Cases D and E represent
early followers, who learnt from the pioneers
and introduced BMI and MI together. For both
groups, changes in the business model also
entailed MI actions. Pioneers became aware of
organizational challenges as they emerged.
Soon after they offered ground-breaking ser-
vices and pursued new markets, they were
prompted to redesign their work structures, to
reappraise their workforce needs, to establish
work rules for expanding inter-organizational
relationships, and to attempt new talent man-
agement systems. These companies had to rec-
oncile their new business model with new
organizational challenges, developing an
innovative process based on experimentation
and improvisation. In these cases disruptive
BMI initiatives were associated with high
levels of risk and uncertainty. Conversely,
early followers soon realized that without
complementary MI actions, the chances of
implementing BMI were low. They learnt from
first-movers that MI initiatives gave support
for BMI, fostering higher guarantees of success
if they combine both non-technological inno-
vative initiatives.
An enduring economic turmoil is likely to
undermine the traditional sources of competi-
tive advantage and this is particularly hazard-
ous for small firms in CIs. The goal of this
work was to explore innovation initiatives to
handle the crisis taken by small firms in an
activity severely affected by economic down-
turn. The contingency model of innovation
strategy hypothesizes that entry-time-related
decisions moderate the impact of innovation
strategy on a creative firm’s turnaround. Our
study offers evidence on the various innova-
tion strategies pursued by early adopters
and the different risks and opportunities
they face as they attempt non-technological,
organizational innovation initiatives. Our case
companies were early movers, pioneers and
early followers that exhibited two different
entry strategies: these firms posited market-
wide economic crisis and uncertainty as
the primary stimulus for strategic renewal
through non-technological, organizational
innovation. Our case analysis shows that pio-
neers’ response to crisis stemmed from BMI
and only attempted MI when they faced
organizational challenges, whereas early fol-
lowers combined BMI with complementary
MI activities in a more planned, less sponta-
neous manner.
While largely informed by technological
innovation, the literature has failed to offer evi-
dence on what type of innovation strategy
takes place in firms in the CIs experiencing a
hostile environmental jolt. Also, it has not
explored in detail whether BMI and MI may be
linked together and what the advantages and
Volume •• Number •• 2015
© 2015 John Wiley & Sons Ltd
disadvantages are of planning and implement-
ing them together. Our study offers prelimi-
nary evidence about the relationship between
different organizational innovation initiatives
by focusing on the adopter’s perspective. Our
case studies show the difference in first- and
second-mover innovation strategy. First-mover
advantage comes from BMI, whereas second-
mover advantage is related to interrelated BMI
and MI. BMI is appropriate for pioneers
willing to take risks and allows for faster-
growing, profitable innovation practices. Alter-
natively, early followers may have a more
systematic strategic approach towards innova-
tion, bringing together BMI and MI. MI is com-
plementary to the adoption of other
innovation, it is linked to a comprehensive
innovation strategy, and is often regarded as
less disruptive than BMI.
In the context of a convoluted market slow-
down, which forces firms to act fast, non-
technological innovation has the potential to
offer creative firms ways to cope with eco-
nomic dangers and shift course (Archibugi,
Filippetti & Frenz, 2013). But there is a ques-
tion over how early an adapter of innovations
may want to engage in innovative business
models. When it comes to innovation in small,
entrepreneurial firms in CIs, early adopters of
organizational innovations are the early birds
who get the worm, and close early followers
relying on multiple non-technological initia-
tives may also benefit from being the second
mouse and get the cheese. Engagement in BMI
can pay off for earlier adopters. An innovative
business model is a valuable corporate asset.
However, our study suggests that this is per-
ceived to be a risky decision. Only firms with
superior organizational capabilities and
resources should engage in pioneer BMI. Early
followers may be better suited to managing
sustained non-technological innovations.
Allegedly, by combining BMI and MI, small,
entrepreneurial firms in CIs may cope with
changes in activity without some of the risks
that newcomers face.
This discussion brings to light the dilemma
or paradox of attempting organizational inno-
vation in the context of global economic slow-
down. Times of economic crisis are an
interesting scenario to explore innovative strat-
egies and its consequences for firms in CIs.
Innovation is deemed the key to progress
during those times and innovative firms are less
vulnerable to crisis than non-innovative firms.
Innovators identify and offer new services and
realize benefits from them, whereas non-
innovative firms tend to experience substantial
difficulties in dealing with the crisis. This is
what in ecology is referred to as the ecological
edge effect. When two different ecosystems
meet, there will be the least density of life forms
but also the most variety of new life forms. The
risk factor is higher in those types of ecological
systems, and so are the chances of finding new
living forms. In our study, these new living
forms were represented by market pioneers
and early followers. Although they displayed
differences in certain capabilities and
resources, these firms achieved and maintained
superior performance in such dynamic and
hostile market conditions. The time dynamics
in our study were greatly determined by the
fact that a considerable number of firms engag-
ing in archaeological activity were forced to
close, with little to any new firm creation.
This study also adds to the current innova-
tion debate as it pertains to the innovative
potential of non-technological, organizational
initiatives in CIs. Under the current zeitgeist,
CIs face a context in which globalization and
ICTs have transformed the rules of market
competition, reducing the cost of innovation
and imitation and, thus, setting the heart of
discussion around the black box of non-
technological innovation practices. In such a
market, the cost of innovation goes down as
the number of similar (product and process)
innovations goes up. In that sense, for creative
firms, the current challenge is to differentiate
from competitors by adding value to products
and services through other innovation paths,
and it is then that BMI and MI become particu-
larly relevant for success.
Limitations and Future Research
The main limitation of this study lies in its
nonrandomized and retrospective nature. By
offering evidence on the various non-
technological innovation success strategies for
CIs in a convoluted context, the analysis drew
on a sample that is not fully representative of
the entire population of archaeological firms
and, hence, does not allow statistical generali-
zations. From this perspective, future research
should continue gathering both quantitative
and qualitative data and extending the study
to other CI businesses. Also, future research on
non-technological innovation should pay
greater attention to the issues around the risks
and consequences of entry time choice, adap-
tation and corporate turnaround. Moreover, it
would be interesting to analyse to what extent
BMI and MI initiatives may be a route to dis-
ruptive innovation for small and entrepreneur-
ial firms in CIs. Christensen and Raynor (2003)
classified disruptive innovations as those at the
low end of the original value network
and those creating a new value network.
Govindarajan and Kopalle’s (2006) offer an
innovation measure ranging from low-end to
high-end disruptions. Hence, disruptive
Volume •• Number •• 2015 © 2015 John Wiley & Sons Ltd
innovation does not always imply that the
entrants or emerging businesses will replace
the incumbents or traditional businesses (Yu &
Hang, 2010). Other authors, however, advo-
cate for more radical views of the innovation/
competition practice, where disruptive
innovations are not merely answers to market
needs but also new meanings through which
firms create and shape new markets (Verganti,
2009). This approach seems amenable to entre-
preneurial firms in the CIs and therefore may
be explored in future research.
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Carlos Martin-Rios (carlos.martin-rios@ is assistant professor of manage-
ment at the Ecole Hôtelière de Lausanne,
HES-SO University of Applied Sciences
Western Switzerland. He received his PhD
from Rutgers University. His current
research interests are concerned with
organizational innovation and renewal with
an emphasis on services and knowledge-
intensive work settings. In addition, he is
also working on collaborative network rela-
tionships and inter-firm transfer of knowl-
edge. His recent work has been published
in Journal of Management Inquiry,Journal of
Business Research,Human Resource Manage-
ment, and Research in Personnel and Human
Resource Management.
Eva Parga-Dans (eva.parga-dans@incipit, PhD in Economics, is a collabora-
tor researcher at the Instituto de Ciencias
del Patrimonio (INCIPIT-CSIC), Spain, and
researcher-professor in the Universidad de
Ambato, Ecuador. With a background in
sociology, she specializes in investigating
non-technological innovation in service
firms, with a focus on innovation practices
among archaeological firms.
Volume •• Number •• 2015 © 2015 John Wiley & Sons Ltd
... El rápido crecimiento del turismo en SPH a principios del siglo XXI es resultado de una compleja relación entre la oferta turística patrimonial y la interpretación de estos destinos por parte de la demanda (Poria, Reichel, y Cohen, 2013). Múltiples investigaciones han conectado esta relación con la cuestión de la gestión patrimonial (Bourdeau, Gravari -Barbas, y Robinson, 2018; Martín Ríos y Parga Dans, 2016a). La declaración de qué es patrimonio y qué no lo es representa la visión de ciertas élites y profesionales que poco tiene que ver con la visión de la mayoría de la población (González -Ruibal, Alonso González, y Criado -Boado, 2018; Parga Dans et al., 2016), esto es, una serie de criterios científicos, históricos o culturales establecidos por un grupo de especialistas dominantes en la toma de decisiones patrimoniales. ...
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Purpose This paper aims to develop a conceptual framework for understanding the role of servitization in the creative and cultural industries (CCI). Design/methodology/approach A conceptual model is proposed based on five elements: servitization drivers (digitalization in particular), agents, modes (based on the standardization/customization dynamics), servitization mechanisms (the authors provide a new classification) and service experiences. Findings CCI is not considered a natural part of the service sector. They drive economic and social development and are part of the innovation ecosystem. They are confronting a set of emerging dynamics in which servitization plays a leading role. Servitization is a way to move toward value co-creation by transforming existing business models. Servitization – with digitalization facilitates the co-creation of CCI-based experiences for customers, users and other stakeholders. Research limitations/implications In terms of further research implications, these theoretical and managerial considerations call for empirical research of the servitization of CCI to investigate how and how much it develops. Practical implications CCI companies need new business models that combine servitization, digitalization and value co-creation in the right mix. “One size fits all” does not work. Business models have to consider the right mix. Originality/value The proposed conceptual model provides a novel understanding of servitization and CCI and changes the focus from the “production” or push side (e.g. artistic creativity and messages) that has characterized much CCI theory toward the demand or pull side and buyers’ (users) increased power.
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The digital era is reshaping the competitive landscape, creating a more turbulent environment where digital technologies play a significant role in enabling innovative business models. Companies need to promote business model innovations, readapting their business models, and create new digital business models to thrive in this scenario. The literature emphasizes that dynamic capabilities are the main antecedent to business model innovation. However, the dynamic capabilities construct is poorly operationalized, lacking proper measurements that effectively translate them to practice, remaining a black box. This paper aims to further understand, operationalize and measure the distinctive dimensions of dynamic capabilities for business model innovation. To this end, we follow the design science research methodology, building a tool for dynamic capabilities evaluation through a systematic literature review. We then evaluate the tool based on a three-year, in-depth case study of a software company. Our findings show that the current business model has a central role in shaping dynamic capabilities for business model innovation. The proposed measures encompass activities and practices and business model structure, highlighting the relevance of the co-evolution between business model and dynamic capabilities. Thus, we propose creating what we call a “business model innovation engine” as a function that reshapes the business model to incorporate dynamic capabilities as part of the value creation architecture. We contribute to theory by better translating dynamic capabilities for business model innovation to observable (and measurable) organizational phenomena, linking it to the extant strategic management literature, and elucidating how to measure and guide the build-up of such capabilities. We also add to practice by developing a practical tool for management to use as a means to evaluate their current dynamic capabilities state, therefore guiding for informed strategic action.
... Adopting technological SOI via collaborations with third-party tech companies can be a suitable, cost-effective way to supplement a foodservice company's standard operating activities, as the in-depth case study of a European startup providing innovative waste quantification technology suggests. The role of innovative solutions to lower costs and increase business sustainable development are of utmost importance in navigating through economic downturn and social uncertainty [66][67][68][69]. This is particularly the case in the current market conditions of extreme volatility by the COVID-19 virus pandemic [70]. ...
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Food is essential to our survival, yet the Food and Agriculture Organization of the United Nations (FAO) estimates that about 820 million people were undernourished in 2018. In this context, food waste generation is a particularly salient issue. Wasting food means missing opportunities to feed the growing world population and consuming scarce resources, such as land, water and energy used in the production, processing, distribution and consumption of food. Firms in HORECA (hospitality, restaurant and catering) represent a considerable share of total food waste and, more importantly, are characterized by an overall low sense of awareness about the sustainability-oriented innovation opportunities and challenges of minimizing food waste. This article draws on an in-depth case study to explore the use of technological advancements in downstream value chain. This case study draws on a tech startup providing services for HORECA companies to address a new way for companies to solve the food waste challenge. Adopting technological innovations to quantify and minimize wastage via collaborations with third-party companies can be a strategic and cost-effective way to supplement a company’s open innovation activities.
... The generative space, physical layout and material objects of the studio also contribute to the innovation process, as do producers establishing and combining spatial and material relations to regulate tasks, manage roles and make decisions (Gaim et al. 2018;Gander 2015). Innovative models and distribution channels expand the innovation focus for cultural entrepreneurs (Franklin et al. 2013;Martin-Rios and Parga-Dans 2016). ...
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An essential condition for talented cultural entrepreneurs to make a living in the creative industries is novel ideas that lead to new projects and productions. The growth and expansion of cultural entrepreneurships depend on the inherent tensions of continuous innovation. This article contributes to the literature by con-ducting a systematic literature review of the tensions that cultural entrepreneurs face when managing con-tinuous innovation. The authors present a conceptual framework that classifies managerial, entrepreneurial, innovation-related and network-related tensions. This serves to increase our understanding of the complexity of tensions within and between disciplines for cultural entrepreneurs needing to innovate continually. The article also discusses the implications for further research, practice and policy.
... A DI does not always imply that entrants or emerging business will replace incumbents or traditional businesses, for example small vs large satellites (Martin-Rios and Parga-Dans, 2016;P erez et al., 2017;Yu and Hang, 2010). Not all firms succumb to disruption, however; some are able to regain their dominance (Yeh and Walter, 2016). ...
Purpose Disruptive innovation theory has attracted the interest of researchers and practitioners across many areas, resulting in the development of new business models and strategies. Despite the increasing scholarly attention, its definition has not yet been understood, the understanding of the term “disruptive” and the complex nature of this innovation has provoked some misinterpretations, and the meaning remains ambiguous. To address this confusion, this article undertakes a critical review of disruptive innovation in an attempt at providing a solid theoretical grounding. Design/methodology/approach The review examines the key issues of published articles, identified after conducting a search in the Web of Science scholarly database. The analysis highlights the basic definitions of disruptive innovation, showing its evolution, types and its characteristics. This article also examines the behaviours adopted by the actors associated with disruptive innovation (i.e. incumbents, entrants and customers). Findings Overall, this article finds that disruptive innovation has its own elements to be identified, requiring an in-depth analysis to avoid confusing with other innovation approaches. The findings suggest that disruptive innovation affects businesses and sectors in varied and complex ways because customers from low-end market and mainstream market appreciate this innovation. Further, its impact on practice is huge and incites further efforts in establishing a stronger theoretical grounding. Originality/value Our research contributes on the evolution of this theory, helping to better understand the phenomenon of disruption and can be used for different types of research settings.
The research aims to explore and compare the framing of the disruptive innovation phenomenon by the business media and the academic literature. For this purpose, 1160 news articles available on the Factiva database and 228 academic papers published in the Web of Science in the last 20 years were content analysed through an automated text-mining method. The results revealed that the representation of the disruptive innovation phenomenon in the news media diverges with the academic discourse despite the common vocabulary. While researchers describe disruptive innovation as a process/business model involving an improved performance, the media has not yet evolved from the technology-based perspective. Also, the media tends to focus on the features of the disruptive products and services but fails to discuss their value to the market. The framing of the social side of disruptive innovation also differs. The study offers three contributions: (i) it reveals the main concepts representing the term ‘disruptive innovation’ in the media and scholar discourse, (ii) it suggests future academic research avenues based on media interest and (iii) it emphasises media coverage gaps stemming from its failure to communicate the advances in the academic research on disruptive innovation.
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Research on business model innovation (BMI) processes is blossoming and expanding in many directions. Hence, the time is ripe to summarize and systematize this body of knowledge for the benefit of current and future BMI scholars. In this article, we take stock of the current literature to clarify the concept of a BMI process, develop a categorization scheme (a “BMI process framework”), and discuss future research possibilities. Building on a systematic literature review of 114 papers, our categorization delineates different types of BMI processes and corresponding sub-processes. Moreover, we develop a framework that illustrates how BMI processes are interrelated and interconnected. Finally, we identify the main process-related research gaps in BMI research and provide directions for future research that emerge from our categorization and discussion.
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Collaborative places nurture creativity and efficiency of cultural and creative industries. Research in collaborative places revealed they are essential for networking and cooperation in the creative ecosystem. The results of studies focusing on competitiveness of coworking spaces and their effect on boosting entrepreneurship are rather vague. Furthermore, an awareness of how coworking spaces stimulate coworkers to engage in urban regeneration through local community initiatives is limited. Hence, this study seeks to provide an insight into coworking spaces from the organizational perspective devoted to entrepreneurship and competitiveness. Simultaneously, the paper aims to reveal synergies between creative communities and local development. The method of data gathering consists of semi-structured in-depth interviews with managers and entrepreneurs from selected countries of the EU applying the grounded theory for their analysis. The results suggest that coworking spaces indicate a boosting of the entrepreneurship of the creative class through collective projects. These activities tend to stimulate knowledge creation and open innovation in the creative ecosystem that benefit local development. Coworking spaces also represent a driving force to initiate and maintain a dialogue between the creative ecosystem and local authorities for culture-led urban development.
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Many nations, companies and individuals were still reeling from the negative effects of the financial crash that began in 2007, when Covid-19 struck affecting many economies, especially those related to the service industries.
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This work is a systematic pilot study conducted in Lagos between 20011 and 2013 to establish reliable data on the character, size and contribution of the creative/cultural industries (Music, FIlm and Fashion) to the Nigerian economy.
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Organisational control systems are a central phenomenon, yet despite their significance, top-down command-and-control approaches often dominate research. This surmise creates no problem in hierarchical organisations where everyone knows their work duties and what is expected of them. However, it becomes troublesome in knowledge work, where the sets of tasks carried out by any two members of the organisation differ significantly. The article offers conceptual insights elucidating control systems based on the notion of accountability; which help to raise awareness and mobilise efforts beyond the boundaries of long-established hierarchical control. Implications for the theory and practice of organisational control are discussed.
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This article sheds light on how industry fluctuations affect firms' propensity to innovate. We test two seemingly conflicting arguments that suggest how firms are more or less inclined to engage in innovation activities during industry fluctuations. By studying a panel of 622 Italian manufacturing firms during the period 1995-2003, we show how differentiating between product and process innovation may help reconcile the theory of opportunity cost of innovation with the cash-flow effect argument. We find that industry downturns are related to product and process innovation in different ways: firms tend to invest in product innovation rather than process innovation in downturns. The findings have implications for both theory (showing when the opportunity cost of innovation dominates) and research design (showing the importance of both the input and output measures in innovation studies and how they might influence the results). © The Author 2013. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved.
- This paper describes the process of inducting theory using case studies from specifying the research questions to reaching closure. Some features of the process, such as problem definition and construct validation, are similar to hypothesis-testing research. Others, such as within-case analysis and replication logic, are unique to the inductive, case-oriented process. Overall, the process described here is highly iterative and tightly linked to data. This research approach is especially appropriate in new topic areas. The resultant theory is often novel, testable, and empirically valid. Finally, framebreaking insights, the tests of good theory (e.g., parsimony, logical coherence), and convincing grounding in the evidence are the key criteria for evaluating this type of research.
Companies, the authors argue, are increasingly turning toward business model innovation as an alternative or complement to product or process innovation. Drawing on extensive research they conducted over the course of the last decade, the authors define a company's business model as a system of interconnected and interdependent activities that determines the way the company "does business" with its customers, partners and vendors. In other words, a business model is a bundle of specific activities - an activity system - conducted to satisfy the perceived needs of the market, along with the specification of which parties (a company or its partners) conduct which activities, and how these activities are linked to each other. Business model innovation can occur in a number of ways: (1) by adding novel activities, for example, through forward or backward integration, (2) by linking activities in novel ways, or (3) by changing one or more parties that perform any of the activities. Changes to business model design can be subtle, the authors note; even when they might not have the potential to disrupt an industry, they can still yield important benefits to the innovator. The authors offer a number of examples of business model innovation and pose six questions for executives to consider when thinking about business model innovation: 1. What perceived needs can be satisfied through the new model design? 2. What novel activities are needed to satisfy these perceived needs? 3. How could the required activities be linked to each other in novel ways? 4. Who should perform each of the activities that are part of the business model? 5. How is value created through the novel business model for each of the participants? 6. What revenue model fits with the company's business model to appropriate part of the total value it helps create?
Pioneers-- those innovative "first movers" who enter markets before competitors are often defined as engines of economic growth while imitators are generally scorned as copycats and shameful followers. But who most often wins? Drawing on seven years of research, Steven Schnaars documents that, in sharp contrast to conventional beliefs, imitators commonly surpass pioneers as market leaders and attain the greatest financial rewards. How do they do it? In this ground-breaking book-- the first to formulate imitation strategies for managers-- Schnaars systematically examines 28 detailed case histories, from light beer to commercial jet liners, in which imitators such as Anheuser-Busch and Boeing prevailed over pioneers. He describes the marketing wars, court battles, and even personal vendettas that often resulted, and shows that imitators have several clear advantages. Pioneers are forced to spend heavily on both product and market development. They also risk making costly mistakes. Pioneers often aid in their own destruction, thrown into confusion by rapid growth, internal bickering, and the neverending search for expansion capital. Moreover, imitators do not have to risk expensive start-up costs or pursuing a market that does not exist, enabling them to quickly outmaneuver pioneers once the market is finally shaped. By patiently waiting on the sidelines while the innovator makes the mistakes, imitators can also usurp benefits from the test of time-- major defects in the product having been removed by the pioneer at an earlier stage in the game. Schnaars discusses the three basic strategies that successful imitators such as Microsoft, American Express, and Pepsi have used to dominate markets pioneered by others. First, some imitators sell lower-priced, generic versions of the pioneer's product once it becomes popular, as Bic did with ballpoint pens. Second, some firms imitate and improve upon the pioneer's product; for example, WordPerfect in the case of word processing software. Third, building on their capital, distribution, and marketing advantages that smaller pioneers cannot hope to match, imitators use the most prevalent strategy of all-- bullying their way into a pioneer's market on sheer power. In several cases a one-two-punch, or combination of strategies, is often utilized by the imitator to remove any doubt regarding their dominance in the market and in the eyes of the public. Schnaars concludes that the benefits of pioneering have been oversold, and that imitation compels recognition as a legitimate marketing strategy. It should be as much a part of a company's strategic arsenal as strategies for innovation.
We tested the effects of innovation and market complexity on firm performance. Generational technological change - a major advance within a technology regime - fosters the emergence of niches and local rivalry. Findings from the U.S. microcomputer industry between 1982 and 1991 suggest accelerated markets reward innovativeness that differentiates firms within a niche but not across niches. Changing niches confers a short-term penalty. Strong performers adopt new technology quickly, without changing niches.