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Support to SME Development in Armenia (SMEDA) Co-Funded by EU and BMZ, Implemented by GIZ’S Private Sector Development SC Programme

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Support to SME Development in Armenia (SMEDA) Co-Funded by EU and BMZ, Implemented by GIZ’S Private Sector Development SC Programme Support to SME Development in Armenia (SMEDA) co-funded by EU and BMZ, implemented by GIZ’s Private Sector Development SC Programme Published by: Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Registered Offices: Bonn and Eschborn, Germany Private Sector Development South Caucasus EU Support to SME Development in Armenia (SMEDA) Address: 12 Proshyan Street 0019 Yerevan Armenia Phone: +374 010 269986 Email: [email protected] Internet: www.giz.de, www.smeda.am Responsible: Katja Kammerer, Programme Director Private Sector Development South Caucasus Mariam Babayan, Acting Team Leader SMEDA Author: Nina Iskandaryan, Caucasus Institute Photo credits: © GIZ / PSD SC EU SMEDA Project Design & Layout: © GIZ / PSDSC Programme Yerevan, November 2018 The “Support to SME Development in Armenia” (SMEDA) Project is co-funded by the European Union and the German Federal Ministry for Economic Cooperation and Development (BMZ) and implemented by GIZ’s PSD SC Regional Programme. SMEDA is part of the EU4Business and EU4Innovation Initiatives. The content in this publication does not necessarily reflect the views of the European Commission. 2 Contents Executive Summary ............................................................................................................................... 4 Stakeholder maps .................................................................................................................................. 5 Film .............................................................................................................................................6 Fashion design .............................................................................................................................. 7 Music .............................................................................................................................................8 Marketing and advertising ............................................................................................................. 9 Software and games development .............................................................................................. 10 Value Chain Analysis .......................................................................................................................... 11 General overview ......................................................................................................................... 11 Film ...........................................................................................................................................13 Fashion design ............................................................................................................................ 15 Music ...........................................................................................................................................16 Marketing and advertising ........................................................................................................... 17 Software and games development .............................................................................................. 18 Economic assessment ................................................................................................................ 20 SWOT Analysis .................................................................................................................................... 22 Film ...........................................................................................................................................23 Fashion design ............................................................................................................................ 24 Music ...........................................................................................................................................25 Marketing and advertising ........................................................................................................... 26 Software and games development .............................................................................................. 27 Recommendations for the development of CCI in Armenia ............................................................ 28 Film ...........................................................................................................................................29 Fashion design ............................................................................................................................ 30 Music ...........................................................................................................................................31 Marketing and Advertising ........................................................................................................... 33 Software and games development .............................................................................................. 34 3 CCI of Armenia 2018 Stakeholder Maps Executive Summary This report presents the results of a comprehensive study of the Cultural and Creative Industries (CCI) of Armenia conducted in May-September 2018 with focus on Armenia’s main cities – Yerevan, Gyumri and Vanadzor – and five sub-sectors: 1. Film 2. Fashion design 3. Music 4. Marketing and advertising 5. Software and games development The study was cross-disciplinary, based on a combination of economics and social science. It included the following steps: • Stakeholder mapping that served to identify the main stakeholders of the industry and the ties between them; • Value Chain Analysis that was used to describe the legal and economic environment of each sector, its potential, prevailing trends, and the main challenges facing the sector • Recommendations on ways to tap into the potentials and address the challenges The methods used to collect the data included desk research, participatory workshops in each of the three cities, and 46 semi-structured interviews with creative and business actors from all five sub-sectors, regulatory bodies, donors, support structures and educational organizations. A Sounding Board meeting was held by the SMEDA project in August 2018 to present the results of the study and discuss recommendations. 4 CCI of Armenia 2018 Stakeholder Maps Stakeholder maps The stakeholder maps are graphic representations of the main stakeholders active in the sub-sectors of Armenia’s CCI and the links between them. The stakeholders are broken down into three main types: Private Actors, State Actors, and Civil Society Actors. In the maps, they are represented by sectors (top – Civil Society, bottom left – Private Actors, bottom right – State Actors). Some actors are of a mixed type, e.g. professional unions are both civil society and private actors; they are located on the borders between sectors. The three circles in the maps represent the role of stakeholders with respect to the Cultural and Creative Industries, as follows: Inner circle Key actors Middle circle Primary actors Outer circle Secondary actors Actors that play mixed roles are placed on the borders between circles. Symbols on the maps have the following meaning: Solid lines symbolize relationships/connections Arrows symbolize the dominance of one actor over another Double lines symbolize partnerships and alliances V Veto players 5 CCI of Armenia 2018 Stakeholder Maps Film In the subsector of film, a significant role is played by state actors, due to the dependence of the subsector on state subsidies. Key veto players are the Ministry of Culture and the Cinema Centre, with some overlap in decision-making capacity; the role of the Film Commission remains undefined. Non-transparent ties between the Cinema Centre and the leading rental company also render the latter a veto player, with negative consequences for the industry. The situation calls for urgent changes in legislation and regulation. 6 CCI of Armenia 2018 Stakeholder Maps Fashion design In the subsector of fashion design, state bodies have little engagement or impact. The primary actors in this subsector are chiefly small private companies and individual designers. The civil society segment is at early development stages. 7 CCI of Armenia 2018 Stakeholder Maps Music Primary players in the music industry of Armenia include bands, music clubs and production companies surviving almost entirely on their own: civil society bodies are weak and have negligible influence, involvement of state bodies mostly concerns educational institutions with few ties to the industry. 8 CCI of Armenia 2018 Stakeholder Maps Marketing and advertising Leading players in this subsector are TV stations and municipalities which own outdoor advertising. Private players are still at development stages; civil society is all but nonexistent. 9 CCI of Armenia 2018 Stakeholder Maps Software and games In some ways, the map of this subsector can be seen as a model for the other subsectors: it has the most and the strongest primary actors, including private companies and vocational/in house training and educational institutions, and a strong and modern development actor, the Enterprise Incubator Foundation with joint engagement of the state, civil society and private sector. 10 CCI of Armenia 2018 Value Chain Analysis Value Chain Analysis General overview The value chains of the selected CCI in Armenia share a number of parameters. Understandably for a situation of transition to market economy, the weakest link in the chain is dissemination/trade, with the partial exception of computer games and
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