Key Success Factors in Running Animation Business in Thailand

KEY SUCCESS FACTORS IN RUNNING ANIMATION BUSINESS IN THAILAND

SUJEEPORN WONGWAIWANIT

A THEMATIC PAPER SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF MANAGEMENT COLLEGE OF MANAGEMENT MAHIDOL UNIVERSITY 2015

Thematic paper entitled KEY SUCCESS FACTORS IN RUNNING ANIMATION BUSINESS IN THAILAND

was submitted to the College of Management, Mahidol University for the degree of Master of Management on May 2, 2015

……………….………….…..……… Miss. Sujeeporn Wongwaiwanit Candidate

……………………….….…..……… ……………………….….…..……… Dr. Poomporn Thansatitdej, Assoc. Prof. Vichita Ractham, D.B.A. Ph.D. Advisor Chairperson

……………………….….…..……… ……………………….….…..……… Assoc. Prof. Annop Tanlamai, Asst. Prof. Randall Shannon, Ph.D. Ph.D. Dean Committee member College of Management Mahidol University

ACKNOWLEDGEMENTS

I owe a debt of gratitude to Asst Prof. Poomporn Thansatitdej. Advisor of this Thematic Paper for the vision and foresight which inspire me to conceive this project who also offers a great deal of consultative advice and provide the golden opportunity to develop this interesting project. Without him considerable attention, true inspiration and comprehensive instruction, this research could not have been completed. In addition, I would like to thank all eight respondents for their complete cooperation, relevant information publishing in my research and valuable time. Eventually, I would like to extend heartfelt gratitude for my beloved family who always strengthen high motivation and generate a solid support to me actively.

Sujeeporn Wongwaiwanit

KEY SUCCESS FACTORS IN RUNNING ANIMATION BUSINESS IN THAILAND

SUJEEPORN WONGWAIWANIT 5649206

M.M. (ENTREPRENEURSHIP MANAGEMENT)

THEMATIC PAPER ADVISORY COMMITTEE: DR. POOMPORN THAMASATITDEJ, D.B.A., ASST. PROF.RANDALL SHANNON, Ph.D., ASSOC.PROF.VICHITA RACTHAM, Ph.D.

ABSTRACT Due to the creative industry is main focus by many governments around the world including many European countries, United Stated and Thailand as well. Therefore, the purpose of this research paper is to understand the key success factors affecting in running animation business in Thailand and also to investigate Thai animation market trend and opportunity. The research used a qualitative approach. Data was collected with tape recorded. The interview was conducted from 8 respondents who are running animation business or involve in animation business. The study revealed that creativity is the most important key success factors in running animation business. Follow by innovation management, practical skill of entrepreneur and business knowledge; including sale, marketing, and accounting-finance.

KEY WORDS: Animation Business, Creative Industry, Key success factor, Entrepreneur

37 pages

CONTENTS

Page ACKNOWLEDGEMENTS ii ABSTRACT iii LIST OF FIGURES vi CHAPTER I INTRODUCTION 1 1.1 Problem Statement 3 1.2 Research Objective 3 1.3 Expected Benefit 3 1.4 Research Question 4 CHAPTER II LITERATURE REVIEW & HYPOTHESIS DEVELOPMENT 5 2.1 Creative Industry 5 2.2.1 Global Creative Industry 7 2.2.2 Thailand Creative Industry 8 2.2 Animation 9 2.2.1 Global Animation Industry 10 2.2.2 Asia Animation Industry 11 2.2.3 Early Trend in Animation Outsourcing to Asia 12 2.2.4 Thailand Animation Industry 13 2.3 Characteristic of Entrepreneur 14 2.4 Critical Success Characteristic of entrepreneur in Animation Business 16 2.4.1 Entrepreneur knowledge 16 2.4.2 Creativity 17 2.4.3 The principle of creativity 19 2.4.5 Innovation 20

CONTENTS (cont.)

Page 2.5 Conceptual Framework 21 CHAPTER III RESEARCH METHODOLOGY 22 3.1 Research Approach 21 3.2 Data Collection 22 3.3 Interview Question 23 CHAPTER IV RESEARCH FINDING AND RESULTS 24 4.1 Demographic Data 24 4.2 Entrepreneur Knowledge (Practical Skill) 24 4.3 Creativity 27 4.4 Innovation 30 4.5 Business Knowledge 31 CHAPTER V CONCLUSION AND RECOMMENDATION 33 5.1 Conclusion 33 5.2 Recommendation 34 5.3 Limitation 35 5.4 Future Research 35 REFERENCES 36 BIOGRAPHY 38

LIST OF FIGURES

Figure Page 2.1 Classification system for the creative Industries derived from different models 7 2.2 UCTAD Classification of creative Industries. 8 2.3 Size of Global Animation Industry (US $Billions) 11 2.4 Number of Animation studios across the world 11 2.5 Thailand Animation Industry Market Values, year 2011 (US Dollars) 14

CHAPTER I INTRODUCTION

Creative industries are becoming increasingly important components of modern post-industrial knowledge- based economies. They are thought to account for higher than average growth and job creation, they are also vehicles of cultural identity that play an important role in fostering cultural diversity. During the last decade, the creative economy has been growing at a faster pace than the rest of other industries. According to UNCTAD, world trade in creative industries products continues to increase, even during the financial crisis in 2008. In many advanced economies, the creative economy is now recognized as a leading sector in generating economic growth, employment and trade. In Europe, the creative economy generated a turnover of € 654 billion in 2003, increasing 12 per cent faster than the overall economy (KEA, 2006). World exports of creative goods and services continued to grow, reaching $592 billion in 2008 more than double their 2002 level, indicating an annual growth rate of 14 per cent over six consecutive years. This is a confirmation that the creative industries hold great potential for developing countries that seek to diversify their economies and leapfrog into one of the most dynamic sectors of the world economy. There are many models classifying creative industry into many categories and one of them is animation industry. The demand for animated entertainment has expanded with the increase in broadcasting hours by cable and satellite TV along with the growing popularity of the Internet. The rapid advancement of technology has made computer animation available to the masses and the animation industry is one of the fastest growing industries. The size of the global animation industry was about USD 222 billion in 2013. And most of the segments in the animation industry are growing at the rate of 7%. (Digital Vector, Marketresearch.com, 2014) Consequently, this new software genre has become one of the fastest growing industries in the current decade. Owing to the increase in computing power and the reduction in computing costs, we are seeing more and more of the global computer animation production output taking place. The multinational studios leverage various forms of partnership, coproduction and joint ventures with global partners. Several countries subsidize their national film industries, including animation and therefore, strategies such as coproduction have been adopted to explore global market opportunities and production subsidies. Co-production has emerged as a popular strategy for studios in many countries. Funding flows for coproduction, from Hollywood to other countries and vice versa is very common. The interesting thing is the animation outsourcing is spread widely to Asia, including Thailand. According to the report on Thai Digital Content Industry (2009), it is found that there is a potential growth in the animation industry at the rate of 7.07% between 2008 -2013. The report also predicted that the growth in value would reach THB 14,900 million in 2013. Thai animation industry is considered as one of the industries with high potential to generate foreign revenue. With all above information, it can be said that animation industry is one of the most interesting industry in Thailand. Currently, there are more institutes and universities in Thailand providing the animation study program for both non-degree and Bachelor degree than the past. The example of universities that have animation study as their majority in studying are Chulaolongkorn University, Mahidol University (MUIC), Rangsit University and Sripathum University. The increasing of institute and university offering the course, combining with the spread of technology, there will be more graduate student and newcomer who will be an entrepreneur or one of the workforces in Thailand creative industry. The growing trend of animation industry, the increasing of new graduation student under animation field in Thailand plus the spreading of technology and its cheaper cost are reasons why animation industry is interesting to study. Therefore, it is important to know the key criteria or component, which these entrepreneurs should have in order to run the animation business in Thailand.

1.1 Problem Statement The growth of animation industry and the increasing in the number of the student studying animation field in Thailand are two factors that make this industry interesting. However, there few researches on this industry and almost of them are the study in terms of economy analysis, not an analysis on an entrepreneur aspect.

1.2 Research objective To identify the key success factors in running animation business.

1.3 Expected Benefit This research will benefit directly to both of the entrepreneur who would like to stat running animation business and the animation organization who already operate or having an experience in the industry already. The result of this research can be use to be a guidance of both start up business and experience operated animation business to what are the key important factors they have to considered to run a business.

1.4 Research Question • Identify Thai Animation Industry in term of opportunity, growth and market size • Identify entrepreneur’s skill and mindset needed in order to run animation business

CHAPTER II LITERATURE REVIEW & HYPOTHESIS DEVELOPMENT

This chapter includes a review of literature of the creative industry, which will divide into the global creative industry, the classification of creative industry models and the creative industry in Thai perspective. Second, there will be a literature of animation, which is the interesting industry under the creative industry. The literature will combine the meaning and statistic of animation toward the global, Asian and Thai market. Third, the literature of Thai government support on animation industry, the information will include their support and policy toward animation studio in Thailand. Lastly, the literature will be the critical success characteristics which entrepreneurship in animation industry who have in order to run this business.

2.1 Creative Industry Creative industry is the industries that include the cultural industries plus all cultural or artistic production, whether live or produced as an individual unit. The creative industries are those in which the product or service contains a substantial element of artistic or creative endeavor. Creative industries comprise activities related to the creation, production and/or distribution of creative goods and services as well as with the integration of creative elements into wider processes and other sectors. Creative industries are sometimes referred to as the cultural industries, but the two terms are neither synonymous nor interchangeable.

2.1.1 Global Creative Industry The global market for traded goods and services of the creative industries has enjoyed an unprecedented dynamism in recent years. The value of world exports of creative-industry goods and services reached $592 billion in 2008, up from $267 billion in 2002, according to UNCTAD. During this same period, the creative industries gained shares in global markets, growing at an annual rate of 14 per cent. This upward trend is likely to continue, given the positive prospects for global demand even in turbulent times. Plus the information from the Organization of American States (OAS), the value of the world’s exports of creative goods and services in 2011 was $640 billion. This value and growth rate is showing the growth trend of creative industry. According to the United Nations Conference on Trade and Development or UNCTAD’s Creative Economy Report 2008 – the first report resulting from the United Nations’ concern of the emerging creative economy issues, a new development paradigm regards creativity, knowledge and access to information as influential engines of economic growth and development in a globalizing world. (UNCTAD, Creative Economy Report 2008) The UK’s Department of Culture, Media and Sport (UK DCMS) defines creative industries as “those activities which have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property”

The World Intellectual Property Organization (WIPO), on the other hand, states, “creative industries has a wider meaning and includes, besides the cultural. Industries, all cultural or artistic production, whether live or produced as an individual unit and is traditionally used in relation to live performances, cultural heritage and similar “high-art” activities”

Figure 2.1 Classification system for the creative Industries derived from different models. Source: UNCTAD, Creative Economy Report, 2008

In addition to the definitions offered by international and national organizations as mentioned above, one of the gurus in this field also provides an interesting explanation on creativity and creative economy. He states that people with capability to create something new can be defined as creative people. Nevertheless, creativity is not necessarily related to economic activities unless it is transformed to tradable products. Creative products are composed of two major features: developed from creative activities and creating economic value. (John Howkins) Importantly, according to Howkins, these creative products are recognized as intellectual property, which is classified into several types such as copyrights, patents, trademarks, and designs. However, for the creative industry, volume of creative products firms can produce is not as significant as exploitation, distribution, and trade of their products.

Due to the differences in classification as discussed above, UNCTAD categorizes the creative industries into four major groups in order to make them easy to understand and to create a platform for the analysis. The four major groups of creative industries are heritage, arts, media and functional creations as illustrated in Figure 2.1.2

Figure 2.2 UNCTAD Classification of creative Industries. Source: UNCTAD, Creative Economy Report, 2008

2.1.2 Thailand’s Creative Industry The Thai government has promoted the concept of the “Creative Economy” as critical to Thailand’s development. This is seen in the draft of the 11th National Development Plan and in the nine government programs for developing creative industries that are included in the second stimulus package (Thai Kem Kang: Strong Thai). The objective of this focus on the creative economy is to establish Thailand as the creative industrial hub of ASEAN and to increase the share of GDP contributed by creativity from 12% to 20% by the end of 2012. Thailand’s emphasis on the creative economy is not unique. Countries such as the United Kingdom, Singapore, China and India have launched policies to support creativity and intellectual capital. Thailand’s creative industries contributed THB 1,067,987 million (about USD 32 billion) in sales and more than THB 325,274 million (about USD 9.7 billion) in value added (not including the value added from the IT industry as this value-added data is not available). These industries accounted for 9.53% of total Gross Domestic Product (GDP) with the value added amounting to 2.86% of GDP in 2008 In 2008, 875,500 workers (or 2.42% of Thailand’s workforce) were employed in the selected creative industries. The IT industry had the highest employment, accounting for 1.23% of total employment In terms of international trade, exports of the selected creative industries totaled THB 429,653 million (USD12.9 billion) in 2008, 7.34 % of total exports, and, according to UNTAD statistics, has been growing steadily (5.1% per year from 2000 to 20005). The main exporting sectors were the IT sector, with exports worth about THB 192,079.32 million (USD 5.77 billion)

2.2 Animation UNCTAD Classification of creative Industries Model has classified animation industry as one of the industries under Creative Industry. Animation industry is the interesting industry as it is the combination of technology and creativity of art. Animation, the art of movement, is a way of making inanimate objects move. This may be materialized by sets of drawings, which are photographed in sequence on successive motion picture frames. These photographed drawings when run in film produce smooth flowing and continuous actions. Throughout the years, animators together with producers have thought of several ways to be able to improve its quality and substance. Animation ended into a highly sophisticated art form and motion picture technique, as well as an effective way for communications, as certain techniques and equipment were developed.

2.2.1 Global Animation Industry Animation plays one of the major parts in the creative industries (Chen, Wei, & Huang, 2010). Animation is Animation is increasingly used in entertainment, games and education as well as in scientific and medical works (Thomas & Rayadurgam, 2005). The animation market is divided into 3 segments, which are e- education, web designing and entertainment (MarketsandMarkets, 2011). The huge demand of 3D animation has encouraged more Asian countries to develop their animation industry (MarketsandMarkets, 2011). China, India, Singapore and the Philippines are top choices for outsourcing works for western animation companies (Thomas & Rayadurgam, 2005), while Malaysia, Thailand, Indonesia and Vietnam are also linked to animation production (Rall, 2011). India’s animation sector is expected to grow to US$20 billion by the year 2020, making the country one of the key players in the animation industry (Tejaswi, 2013). The animation industry in the Philippines too is becoming one of the most promising sectors of the local IT-BPO industry, earning $142 million worth of revenues in 2011 (Fernando, 2012). Although these countries are key players in carrying out outsourcing works, the real income generator lies in content creation, which the countries can capitalize through IPs. The animation industry can have an increased added value by developing local content (Tschang & Goldstein, 2010). Thus countries like China, India, the Philippines and Indonesia are concentrating on developing their own original contents (Chen, Wei, & Huang, 2010; Wu, 2010; Tejaswi, 2013; Fernando, 2012; Nur, 2011). The total value of global animation production was US $ 177 billion in 2009 and is projected to reach US $ 249 billion by 2012. The industry is growing at an average growth of 10% YoY. Refer Figure 5 for the market forecast of the industry. North America is the largest geographical segment of the industry followed by Europe and Asia. The geographical break-up of the global animation industry is given in Figure below. Figure 2.3 Represent Size of Global Animation Industry (US $Billions) Source: UNCTAD, Creative Economy Report 2010

Figure 2.4 Number of Animation studios across the world Source: UNCTAD, Creative Economy Report 2010

2.2.2 Asia Animation Industry Asia has emerged as a major player in the animation industry in part for cultural reasons, but mainly because of its relatively low labor costs. China and Korea in particular, have a number of animation service studios. These tend to concentrate on volume production for projects subcontracted by studios in Europe and America. Animation studios can make substantial savings by subcontracting work to Asia, with Korea offering productions costs per half hour of between US$85,000 –185,000, compared to the USA where costs usually exceed US$400,000. Among the services they offer are preparing layouts, drawn animation, inking, painting and compositing. Korea, with over 450 animation studios is also moving into originating animation projects with the active support of the Government, which now operates a grant system to support such production. The mature animation production countries in Asia include Japan, South Korea, the Philippines and Taiwan. As animation production is a very lucrative and labor-intensive (70 percent to 80 percent of costs go to labor) business, other Asian countries such as India, China, Vietnam, Malaysia and Singapore have started their own industries. The early animation in Asia was predominantly influenced by Walt Disney.

2.2.3 Early trends in Animation Outsourcing to Asia Much of Asia's animation production since the 1960s has been tied to foreign interests attracted by stable and inexpensive labor supplies. For nearly forty years, western studios have established and maintained production facilities, first in Japan, then in South Korea and Taiwan, and now also in the Philippines, Malaysia, Singapore, Vietnam, Thailand, India, Indonesia, and China. The economics of the industry made it feasible for Asia to feed the cartoon world, to the extent that today, about 90% of all "American" television animation is produced in Asia. The usual procedure is for pre-production (preparing the script, storyboard, and exposure sheets) to be done in the United States or other headquarters countries, after which, the package is sent to Asia for production (drawing cells, coloring by hand, inking, painting, and camera work). The work is sent back to the U.S. or other headquarters country for post-production (film editing, color timing, and sound). Asian animation companies bid fiercely for part of the global business, insisting that it provides employment and skills for young people, brings in needed foreign capital, and adds to the creation or enhancement of domestic animation. Most animation workstations in Asia are staffed by young people, many of whom are women. They are enticed by wages low by western scales but competitive locally, splashy perks, ceremonies, and celebrations, or opportunities to be trained. Even in situations where wages have been low and working conditions poor, Asian animation officials rationalize away labor exploitation. Nevertheless, animators in offshore companies face a precarious existence because of the seasonal nature of animation work and knowing they can be easily replaced by freelancers, computers, or cheaper labor elsewhere.

2.2.4 Thailand Animation Industry Thailand's first animator, Payut Ngaokrachang, had done an animated short in the mid-1950s that caught the attention of the U.S. Embassy in Bangkok, which was looking for cartoonists to draw anti- communism themes. Payut drew for the embassy a Thai child sitting in the palm of a hairy hand carrying a sickle and was quickly signed to a contract. In 1955, he started nearly thirty-four years of work with the United States Information Service, where he produced Hanuman pachoenpai krangmai (The new adventures of Hanuman, 1958) and Dek kub mee (A child and a bear, 1960). Like the Wans in China, Payut was influenced both by the Fleischers and by local shadow theatre (nan talung). Thailand's animation industry continues to grow at a steady rate with more animated feature films and TV series produced than ever before. Between 2004 and 2006, the total market value increased from 62 to 75.43 million US dollars. Since the success of Khan Kluay in 2006, more and more animated films and TV series have been created to cater to the rising domestic demand for Thai animation. Long form TV series still represent the bulk of the animation industry, although new feature films such as "The Life of Buddha" released in December of 2007, and "Nak" released in April 2008, have also been distributed to theatres. These movies have been in production for a few years each and showcase the increasing variety and scope of stories that Thai animation can tell. Advertising is another area, which has expanded its use of animation. Most recently, Thailand has created animated commercials for international use, such as the public service announcement produced by Kantana for UNICEF and the BBC. These spots have been shown across Asia and confirm that Thais can produce animation up to international standards. (KOMPIN KEMGUMNIRD, 2008) The animation market in Thailand is divided into seven subsectors namely animated film, animated TV series, animation on VCD/DVD, animation on mobile devices, VFX for TVC, VFX and post production, and character license fees. The animation industry has experienced significant growth rate of 11% per annum. In 2011, the total of animation market in Thailand valued at USD 170,393,941

Figure 2.5 Thailand Animation Industry Market Values, year 2011 (US Dollars) Source: Fiscal Policy Research Institute Foundation, 2012

2.3 Characteristic of Entrepreneur Critical success factors (CSF) can be regarded as key factors that “an organization must pay particular attention to in order to achieve the level of performance essential to achieve desired goals” (Hackney & Dunn, 2000 as quoted by Sebora, Lee, & Sukasame, 2009). According to Bullen & Rockart (1981), businesses will grow and thrive when CSFs are met. Aksoy (2010) carried out a research into the success factors of entrepreneurship in the creative industries in Rotterdam. The results showed the success factors in the order of importance, which are entrepreneurial skills, having a large network, the availability of physical infrastructure in the city, entrepreneurs having relevant education, flexibility of the local government, business location, visiting trade fairs, having access to external finance and proximity of other creative businesses. Chen, Wei, & Huang (2010) carried out a study of animation companies in China, but focuses on innovation. They found that companies can be successful if they focus on the planning of work by having a multi-disciplinary planning team and the planner’s expertise; focus on the pre-production stage by having a good talent pool and market development; production stage with good technical support and productivity; having good cooperation with distributors and copyright protection; and having good relation with investors and government. Sulaiman (2006), In the study into the development of technopreneurship. Sulaiman found that there are four factors that contribute to the success of an entrepreneurship, which are marketing, technology, entrepreneurship and management. Success factors identified in Aksoy (2010) and other studies into entrepreneurship and creative industries are categorised according to the four main factors as identified in Sulaiman (2006). Today, on the most demanding markets, those entrepreneurs lead the ways that most successfully use the knowledge for connecting existing and new technologies. Successful entrepreneurs constantly develop their competences, skills and techniques and acquire specific knowledge in order to survive and innovate new entrepreneurial opportunities in their industries. (Doris Gomezelh 2008) According to a number of studies, entrepreneurs in their early developmental stage lack specific skills and knowledge, but despite this they can succeed. Enterprise growth is guaranteed during this stage because of their vision, persistence, networking, positive attitude towards their entrepreneurial idea and their problem solving ability. Entrepreneurs do not get such skills during their formal education. During their work, entrepreneurs develop various practical skills, aimed at understanding of business situations and problems, e.g. understanding the market, developing their vision, shaping and structuring the organization of the enterprise and introducing the factors for the promotion of company culture. Their wish to succeed is the most important motive, which determines how the entrepreneur will acquire knowledge. A successful entrepreneur constantly supplements the system of acquiring knowledge with his or her vision. Therefore, entrepreneurs combine their knowledge, broaden it and create new innovative ideas (Berginc in Mozina and Kovac, 2006; Lassen, 2007)

2.4 Critical Success Characteristic of Entrepreneur in Animation Industry Beside of those entrepreneur characteristics, there are some critical successes Characteristic for entrepreneur in Animation Industry needs to have in order to run and make it success under this industry.

2.4.1 Entrepreneur knowledge There is a study of Doris Gomezelh, 2008 talking about entrepreneur knowledge model that combine of 4 key elements, which will effect to entrepreneur knowledge level, which are;

• Education level; • Work experience; • Knowledge about functional disciplines; and • Self-confidence.

The owner/manager knowledge is derived mostly from their education and past experience. It is their formal education, exposure to and experience in other organisations that determines the unique set of skills or knowledge base that they bring to the organization (Boeker, 1997; Bennett and Robson, 1999; Honig, 2001). A consistent finding in research is a positive relationship between the level of education of owners/managers and the firm performance (Bates, 1990; Lussier and Pfeifer, 2001; Roper, 1999). Regarding experiences, industry experiences, findings are less consistent. Prior experience may play a prominent role in successful opportunity recognition processes (Hills and Shrader, 1998). On the other hand, experienced owners/managers are vulnerable since they may unwittingly stick on manners of working which are commonly accepted in the industry and are less able to grasp new ideas (Hambrick and Mason, 1984). It can be said that entrepreneur knowledge influences company performance (Hambrick and Mason, 1984; Barker and Mueller, 2002; Hadjimanolis, 2000).Boeker (1997) found that formal education, experience and set of skills are important for the firm performance. Highly educated owners/managers seem to be more receptive to new ideas (Hambrick and Mason, 1984). Knowledge, as a part of human capital is considered to be the most important factor for selecting and managing crucial. Entrepreneur knowledge significantly contributes to the performance of SME. Different dimensions of entrepreneur knowledge play pivotal role. Education level of the entrepreneur (owner/manager), skills and knowledge about functional disciplines are important elements for firm performance The results of our study are in accordance with similar studies. Boeker (1997) found that formal education, experience and set of skills are important for the firm performance. Highly educated owners/managers seem to be more receptive to new ideas (Hambrick and Mason, 1984). Knowledge, as a part of human capital is considered to be the most important factor for selecting and managing crucial resources to implement the desired strategy to achieve the performance (Baird and Meshoulam, 1988; Bergmann Lichtenstein and Brush, 2001).

2.4.2 Creativity Creativity is the ability to make or otherwise bring into existence something new, whether a new solution to a problem, a new method or device, or a new artistic object or form. Innovation is defined as adding something new to an existing product or process. All innovation begins with creative ideas. Creativity is the starting point for innovation. Innovation is the implantation of creative inspiration. (Dr. R. Rangarajan, 2013) Creativity is marked by the ability to create, bring into existence, to invent into a new form, to produce through imaginative skill, to make to bring into existence something new. Creativity is not ability to create out of nothing (only God can do that), but the ability to generate new ideas by combining, changing, or reapplying existing ideas. Some creative ideas are astonishing and brilliant, while others are just simple, good practical ideas that no one seems to have thought, of yet. (Harris, 1998). Creativity is also an attitude, the ability to accept change and newness, a willingness to play with ideas and possibilities, a flexibility of outlook, the habit of enjoying the good, while looking for ways to improve it, we are socialized into accepting only a small number of permissible or normal things, like chocolate-covered strawberries, for example. The creative person realizes that there are other possibilities like peanut butter and banana sandwiches, or chocolate-covered prunes. Harris (1998). Creativity is also a process. Creative person work hard and continually to improve ideas and solutions, by making gradual alterations and refinements to their works. Contrary to the mythology surrounding creativity, very few of creative excellence are produced with a single stroke of brilliance or in a frenzy of rapid activity. Much closer to the real truth are the stories of companies which had to take the invention away from the inventor in order to market it because the inventor would have kept on tweaking it and fiddling with it,, always trying to make it a little better, (Harris, 1998). Entrepreneurs have been described as people who have the ability to see and evaluate business opportunities, gather the necessary resources to take advantage of them and initiate appropriate action to ensure success. When the entrepreneurs are creative in their ideas and making innovation, they are doing their business successfully. In the global scenario, Innovation and creativity acts as platform for the organization to complete and sustain in the market. Entrepreneurship is therefore a key priority area with potential to stimulate job and wealth creation in an innovative and independent way.

2.4.3 The Principles of Creativity Base on the research on the value of creativity and innovation in entrepreneurship, Dr. Friday O. Okapara : Within every individual, creativity is a function of three components:

• Expertise • Creative thinking skills • Motivation. Expertise encompasses everything that a person knows and can do in the broad domain of his or her work- knowledge and technical ability. Creative thinking refers to how you approach problems and solutions- the capacity to put existing ideas together in new combinations. The skill itself depends quite a bit on personality as well as on how a person thinks and works. Expertise and creative thinking are the entrepreneur’s raw materials or natural resources. Motivation is the drive and desires to do something, an inner passion and interest. When people are intrinsically motivated, they engage in their work for the challenge and enjoyment of it. The work itself is motivating. People will be most creative when they feel motivated primarily by the interest, satisfaction and the challenge of the work itself-“the labour of love”, love of the work- “the enjoyment of seeing and searching for an outstanding solution – a break through. Creativity, according to Robert Gahim, consists of anticipation and commitment. Anticipation involves having a vision of something that will become important in the future before anybody else has it. Commitment is the belief that keeps one working to realize the vision despite doubt and discouragement. Entrepreneurs take bold creative steps but situations encourage creativity. Creativity is, however, enhanced when people have some freedom, but not too much; high internal commitment to the task; but not too high a commitment; high proportion of intense rewards, but some extrinsic rewards as well; some competition but not winner- take-all competition. Thompson (2001). Entrepreneurial activity depends on the process of innovation following creativity, not on creativity alone.

2.4.5 Innovation Innovation is the process of bringing the best ideas into reality, which triggers a creative idea, which generates a series of innovative events. Innovation is the creation of new value. Innovation is the process that transforms new ideas into new value- turning an idea into value. You cannot innovate without creativity. Innovation is the process that combines ideas and knowledge into new value. Without innovation an enterprise and what it provides quickly become obsolete. The dictionary defines innovation as the introduction of something new or different. Innovation is the implementation of creative inspiration. The National Innovation Initiative (NII) defines innovation as “the inter-section of invention and insight, leading to the creative of social and economic value” Innovation is “value” – the creation of value adding value to customer’s satisfaction- “delighting the customers”. Innovation is the basis of all competition advantages, the means of anticipating and meeting customer’s needs and the method of utilization of technology. Innovation is fostered by information gathered from new connections; from insights gained by journeys into other disciplines or places; from active, collegial networks and fluid open boundaries. Innovation arises from organizing circles of exchange, where information is not just accumulated or stored, but created. Knowledge is generated a new from connections that were not there before. Wheatley (1994). Innovation calls for special entrepreneurial and management skills, the cooperation of a committed workforce, finance and a climate, which will create the optimum overall conditions to encourage success. Joseph Schumpeter (1934) believes that the concept of innovation, described as the use of an invention to create a new commercial product or service, is the key force in creating new demand and thus new wealth. Innovation creates new demand and entrepreneurs bring the innovations to the market. This destroys the existing markets and creates new ones, which will in turn be destroyed by even newer products or services. Schumpeter calls this process “creative destructions.”

2.5 Conceptual Framework

CHAPTER III RESEARCH METHODOLOGY

In this chapter, the methodology is outlined. The research approach and data collection of this study are described.

3.1 Research Approach There are 2 types of research approach, which are qualitative research and quantitative research. Qualitative research is research whose findings are not subject to quantification or quantitative analysis. This research approach is typically characterized by small sample size. Quantitative research is a research that uses mathematical analysis and it has various amount of information from each respondent (Carl Mcdaniel, JR. Roger Gates, Marketing Research, 2013). Researcher choose the qualitative approach to conduct the data in this case because the methodological approach is oriented to understand entrepreneur in animation industry clearly in order to identify key components in opening and running animation studio in Thailand. Moreover, qualitative methodology is suitable to get the detailed information from all perspectives of animation studio owner in Thailand. Plus, it is also easy for researcher to control the conversation in its scope area and timing. Researcher will use the open-end questions, which allow interview to explore the answer in details from their own perspectives. Combining with the limited number of animation studio operating in Thailand, qualitative methodology is selected to use in this research.

3.2 Data Collection The data for this study will be collected from eight animation-studio owners and people who are involved with animation in Thailand. Four of them are local companies. One is Foreigner Company whom does outsourcing work and send back to Western countries. The rest are animators. Data collection was conducted in March 2015. Researcher used the open-end questions, which allow interviewee to explore the answer in details from their own perspectives.

3.3 Interview Question The questions to be used for interview are developed from several previous researches with different topic such as study of industry trend of animation in global and its effect on Asia market, the market size with its growth, Thai government support on animation industry and the critical success factors of the entrepreneur who run their business in the animation industry.

Questions are:

• General Background of interviewee: Name, Education field, Work experience • What is your perspective towards an animation industry in Thailand? • What are the challenge factors of doing this business in Thailand? • Animation seems to require several aspects of skills. If so, what would be the necessary skill for those who would like to run animation business? • What would be the successful innovation management in your perspective in animation business? • Beside the knowledge about functional disciplines, what do you think about management skill, is it required for the owner who wants to run this business? • Do you receive any support from government while running this business? • What would you recommend to start up entrepreneur to prepare for their future challenges?

CHAPTER IV RESEARCH FINDING AND RESULTS

This research is a study of “key success factors of the entrepreneurs who run animation business in Thailand” This section analyzes the research outcome in term of key factors that cause success in running animation business in Thailand. The data analysis is based on in-depth interviews from 6 respondents who are in animation company owner in Thailand. The main factors from the result are accordingly;

4.1 Demographic Data According to the framework on social influence consist of culture, social and family. These three factors have influence to customer buying decision as the finding below. There are 4 respondents who are animation company owners. Three of them are local companies and one is Foreigner Company. Another Three respondents are animator.

4.2. Entrepreneur Knowledge (Practical Skill) Entrepreneur knowledge is one of the important factors, which lead to success in running animation business. Based on the interview, none of the animation owner graduated directly in animation field in their Bachelor’s degree. Respondent #1, 3, 4, 5 and 6: These 5 respondents are the Thai owners of small animation studio and none of them graduated directly from animation field in their Bachelor’s degree due to there was no animation major teaching in university. These 5 Thai owners learned how to use the animation program by themselves and adapted it with their special talent in art field. They continued to develop their skill by working as freelance and they gained experience by working.

“I did not graduate directly from animation as there was no such course in university in last 10-20 years. I have learned all animation programs by myself. No matter what degree you have; the master degree from USA, UK or wherever, you cannot just start up the animation company after you graduate without any work experience”

Respondent 1

“I had a Bachelor’s degree, majoring in Industrial Design. I had studied animation by myself. After that I found animation is what I like. So I decided to do animation job as my freelance”

Respondent 2

“I graduated in Graphic Design, and I have learned animation program outside university by myself”

Respondent 3

“I did not have any degree and currently I have run this business in Thailand for 9 years already. Passion, talent, practice, hardworking and experience are the important things for entrepreneur”

Respondent 7

“I have been working as freelance when I studied Bachelor’s degree in Thailand and after graduated Master degree in USA. I also had worked as an intern for a year before I ran my own company”

Respondent 5

Beside self-study and work experience, respondent#1, 3 and 5 have become an entrepreneur from their freelance working in animation first. They did not immediately decide to start up the company.

“I had worked as a freelance with my friends for many years, later after we had experience; we decided to run our own company”

Respondent 1

On the other hand, Respondent#2 became an entrepreneur after he had been working for international animation company in USA for many years.

“I brought all knowledge I have learned while working there back to Thailand, to run my own company”

Respondent 2

4.3 Creativity All respondents mentioned that creativity is the most important thing for running this business for themselves and also for their employee. Since their work is to create new idea, new thing for their customer.

“You need to have a creativity skill in order to think something creative. Creativity is not a major focus in university that has animation program in Thailand. They only focus to teach how to use the program”

Respondent 1

“You have to make sure that you have good in creative management when you run an animation business. As this is the most important thing you have to manage”

Respondent 7

“Environment in organization should be an environment which support or lead to idea creativity for employee”

Respondent 8

Talking about creativity processed, each interviewee has given the different answers on how their companies generate the idea or called creativity processed.

“Since our company is small, we will brainstorm ideas from all employee, we will sit together and talk, discuss to help each other in generating the idea. If there is something we really cannot figure it out, we will talk with customers to clarify what they think or what they want to see from the message concept they provided us. Then we will develop it as an image”

Respondent 3

“To create the idea, we have to draw everything in our mind first, there is no right or wrong, just draw it. Later we will select some of them, which we think it suits to the work concept to develop. This is how the creativity process of generating idea we did here”

Respondent 4

On the other hand, Respondent 7 mention that for this company, this creativity idea will came up from creative team. This team will generate the idea and pass it to animator to continue working on it.

“At our office, marketing team will be a team who generate the idea and later talk with animator about what customer wants as marketing team is the team who deals with customer directly so they know what customer wants”

Respondent 8

Beside of the Thai owner small animation company, Respondent 6 whose own medium size of animation company which all of work is outsourcing work for the western mention that

“The work concept will be provided by customer clearly. Then they will give us 100% freedom in generate the idea and clear time schedule. In our company, there will be a team meeting for every project/work to brainstorm from the beginning step to last step before we start any work to make sure all people who work in different part of the project understand the same”

Respondent 6

Respondent 8, Thai animator whose use to work in international company stated that

“Freedom in creative work or idea in USA is higher than freedom of work in Thailand and customers do care and understand the important of art so they provide more time to team in generate idea of work”

Respondent 8

Respondent 7, the foreign CEO of international animation studio, mentioned on cultural context which effect to creativity. He mentioned that,

“Since there is a different gesture, posture, culture of each country we have produced work for, the cultural context is one of limitation of creativity of animation making process, and for instance; the way people talk, body language of each country. USA people normally roll their eyes as it is very normal, but when doing Thai work, rolling the eyes may means boring. So before start working on any project, we need to be clear on work idea, concept, the target audience and the country/cultural of the audience”

Respondent 7

4.4 Innovation Innovation is the process of bringing the best ideas into reality, which triggers a creative idea. Innovation is the process that combines ideas and knowledge into new value and make sure this creative idea can be done and sold to customer. Thai animation company owners, Respondent 1, 3 and 5 mentioned the same that in Thailand, customer does not care much about art or the perfection of work. So what company focus is selling process, as they need to make sure that their work can be sold to customer.

“While create the idea/concept for customer, we have to think whether this idea will answer to what customer wants or not. We have to make sure that our work can send correct message in terms of motion picture to audience”

Respondent 3

Respondent 1 mentioned that there is no problem in creative process. The problem they have faced is unclear idea/concept from their customer, which will lead them to create wrong work to customer.

“Thai customers usually give us unclear or insufficient information on what they really want it to be after we have done our work. There are many times they ask just to change in some points and it is always time consuming as it cannot be finished on time”

Respondent 1

“We have experience in receiving unclear concept from our customer as they tell us they only want us to create animation on how to use some stuffs without any other details. Until we have finished our work, customer complaint that what they want is totally different from what we did. Combining with unclear agreement at beginning whether how many times they can ask us to edit/change work, so this project it is really time consuming for us and also one of our big lesson learn”

Respondent 2

“With Thai customer, there is no exactly time schedule and agreement on how many times customer can ask company to change/edit work from them which is different from foreigner customer who will have everything clear in agreement at the beginning”

Respondent 4

“The good thing when working with foreigner is they have clear system, structure and procedure which also mean agreement. They will give you freedom in creative their work but they will tell you clear at beginning of what they want with their time frame. So there will not be the delay of work or project “

Respondent 8

4.5 Business Knowledge Most Thai studio owners who run small company claim that business knowledge is really important and needed. All of them graduate from art field. They don’t even have any knowledge in business fundamental field.

“I have graduated from art major and the company started after I had worked as freelance so I don’t have much knowledge on management or business related. At beginning, it is quite difficult to me to calculate the price of our work. We price the work based on our experience. Also how to calculate the cost or expense”

Respondent 1

“If you are freelance, that’s okay if you don’t have much business knowledge like marketing, finance. However, once you decide to run your own company. Business knowledge is really needed. We need sale, marketing and finance skill at least. Also how to deal with people, how to manage people are important. Since this is a company not a work from individual as I previously did as freelance. If the owner does not have this skill, he or she may need to find someone to help or hire someone, especially in financial part”

Respondent 3

“I do not have any business background but I have learned it along the way since my first company was still small. After the company expanded, we have hired employee who have knowledge in business to help working on our administration work.

Respondent 6

CHAPTER V CONCLUSION AND RECOMMENDATION

5.1 Conclusion From the interview, there are 4 critiria which are key important success factors for the entreprenuer who run animation business in thailand which are entreprenuer knowledge, the creativity, innovation and business knowledge. Entreprenuer knowledge for this business means the specific knowledge in animation processed. From the interview, all of the entreprenuers have studied these specific skill and knowledge by themselves outside the classroom or school. Moreover, the experience and practicing is more important than learning in class as none of the owner graduate in animation field. The creativity is the key success factor of running this business. However, how to merger them is depend on the organization characteristic, the complexity of organization, size of organziation. For instance; some companies there will be creative team who response in idea creatation. On the other hand, some companies may have all people sit together to brain strom. The different in creative processed is depend on the organization characteristic, the complexity of organization, size of organziation as mentioned previously. Moreover, base on interview, the creativity is not a freedom in individual level. Individual may be the person who start the initial concept but later these idea will be montitor or discuss by team or creative directors. It would say that creativity processed in each company are influence by social environment and the company’s structure too. In tern of innovation, there is an issue with the creativity innovation processed. The issue usually come up since the lakc of co-opeation between customer and animation company in providing the idea, concept, criteria and requirement of works and projects. This unclear of the project requirement usually happened when working with Thai customer rather than Foreigner customer. Thai customer tend to provide an unclear of what they want which lead the company to create the incorrect work to customer. Beside of the specific art and techinical skill, Management skill is claim to be one of the key important success factors for the animation business. All of the ntreprenuer claim that animator may not need this knowledge if they work as a freelance. However, when they start up the company, thisknowledge cannot missed. Even all of the entreprenuers did not graduate in business field, they mention that the business knowledge can gain from outside of class/school as well by reading, talking with knowledgable people or learning by experience. Big company may hire the knowlegable employee to take care of this. On the other hand, for small company, the owner need to take care of this part by themselves. No matter they will do it by themselves or hiring someone, they claim that this knowledge is important for them.

5.2 Recommendation

5.2.1 For start up company After the interview, I would like to recommend for the interested investor who would like to run animation , it is very important from them to consideration of their knowledge, in both specific skills in animation and management skill. They need to make sure that they have social environment which is the creative environment within organisation as it helps to support the creativity in an organisation. They anslo need to ensure they have good management in innovation process. Entreprenuer also need to understand the whole process of animation making and the business value chain. Lastly, the business knowledge which require in the being stage of start up business is marketing and sale since company still small so entrepreneur may need to take response in both marketing and sale in term of contact and discuss with customers.

5.2.2 For the company which already operated in business For those of business owners who are already operating in animation business, it is very essential for them to stress the important of creativity processed and innovation management in their company. Make sure every work project have clear concept, requirement, and storyboard in order to not create the wrong work to customer. They need to focus on the effectiveness of the innovation process in the organization. Also make sure that they have continuing in develop and update their animation skills as technology changes fast. Lastly, for the business knowledge, after the company become bigger, Human Resource knowledge is required to apply in the company to keep the talent employee continue working in the company.

5.3 Limitation

There is a limitation in sampling frame in term of time constraint which lead to the respondent may not cover all of the stake holder in the animation fields. Research methodologies use in this research is qualitative which may not cover much of respondent. It would be better if we do the quantitative survey too.

5.4 Future Research The research should have more number of the interviewee. Moreover, the case study should applied for animation company to do a deep analysis of each company. Critical issue should be futher investigated for instance; the term of innovation in animation context.

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BIOGRAPHY

NAME Ms. Sujeeporn Wongwaiwanit DATE OF BIRTH 3 March 1989 PLACE OF BIRTH Nakhonsrithammarat, Thailand INSTITUTIONS ATTENDED Bachelor of Business Administration, Assumption University, 2009 Master of Management, Mahidol University, 2015 RESEARCH GRANTS - HOME ADDRESS 20/212 Masterpiece Rama9 Village Bangkok 10250, Thailand EMPLOYMENT ADDRESS Account Payables, ExxonMobil 3195/17-25 Viboontani Building, Rama 4 Rd., Klong Ton, Klong Toei, Bangkok, Thailand PUBLICATION/PRESENTATION -