Cultural Centers in the Knowledge Age The Impact of Digital Presence on the Success of Cultural Centers in Germany Master’s thesis within Economics and Management of Arts and Entertainment. Author: Agata Rukat, Rasah Böhm Tutor: Åke Andersson, Pia Nilsson Jönköping June, 2010 Master’s Thesis in Economics and Management of Entertainment & Arts Title: Cultural Centers in the Knowledge Age. The impact of Digital Pres- ence on the Success of Cultural Centers in Germany. Author: Agata Rukat, Rasah Böhm Tutor: Åke Andersson, Pia Nilsson Date: 2010-06-11 Subject terms: Cultural centers, technological innovations, knowledge age, synergy, cultural infrastructure, web 2,0 Abstract This study investigates the digital presence of cultural centers in three regions of Ger- many taking into account the theoretical framework of the knowledge age. In order to find out if the adaption of online tools has a positive influence on visitor reach, i.e. on the success of the centers, the thesis attempts to gather information on online tool us- age of individual institutions via questionnaires. Taking into consideration the overall context three factors referring to traditional economic concepts namely industry size, institution size and program diversity are proposed as additional success factors. The research results indicate that digital presence, together with the other measured factors, have a positive impact on the success of the centers. Moreover, the cultural infrastruc- ture appears to have a direct positive impact on industry size and, consequently, an in- direct impact on the success of cultural centers. Table of Contents 1 Introduction ........................................................................... iii 1.1 Purpose ........................................................................................... iii 1.2 Disposition ...................................................................................... iv 2 Background on Cultural Centers ............................................... 5 2.1 The role and function of cultural centers .............................................. 5 2.2 The financial and organizational structure ............................................. 6 2.3 Visitors to the cultural centers ............................................................ 7 2.4 Major problems of the centers ............................................................ 7 2.5 Usage possibilities of web applications for cultural centers ...................... 8 3 Theoretical Framework ........................................................... 11 3.1 Knowledge Age .............................................................................. 11 3.2 Globalization ................................................................................. 11 3.3 Location: place matters more ............................................................ 12 3.4 Accessibility ................................................................................... 12 3.5 Economies of scale and scope .......................................................... 13 3.6 Cultural infrastructure ..................................................................... 14 3.7 The role of creativity ....................................................................... 14 3.8 Synergetics ..................................................................................... 15 3.9 Technology .................................................................................... 16 3.10 The contemporary web and the concept of web 2.0 tools...................... 16 3.11 Web 2.0 tools: changing demand and supply in cultural sector ............... 18 3.12 Conclusion to the Theoretical Framework ................................... 19 4 Method ................................................................................... 21 4.1 Research philosophy ....................................................................... 21 4.2 Research Approach ......................................................................... 22 4.3 Research Strategies .......................................................................... 22 5 Empirical Study ...................................................................... 23 5.1 Survey design and procedure ............................................................ 23 5.2 Sample selection ............................................................................. 23 5.3 Non-response ................................................................................ 23 5.4 Hypotheses .................................................................................... 24 5.5 Research Questions ......................................................................... 24 5.6 Model and variables ........................................................................ 24 5.7 Descriptive statistics ........................................................................ 26 5.7.1 Findings of the survey ........................................................... 26 5.7.2 Data collected or categorized by the researchers ....................... 29 5.8 Deductive Statistics ......................................................................... 31 6 Conclusion ............................................................................. 35 6.1 Limitations and recommendations for further study ............................. 35 6.2 Recommendations for Further Study ................................................. 36 List of references .......................................................................... 40 i Appendix ..................................................................................... 45 Figures Figure 1-1 Networks of connected ideas (Source:Andersson and Andersson, 2006………………………………………………….. 11 Figure 3-1 Methodology approach of the study (Source: Saunders et. al. 2007)………………………………………………………………………… 17 Figure 6-1 Modeling the causes of success within the knowledge age(Source: the authors of this thesis)………………………………...... 20 Figure 6-2 Number of visitors (Source: survey on cultural cen- ters)…………………………………………………………………………. 22 Figure 6-2 Number of visitors (Source: survey on cultural cen- ters)…………………………………………………………………………. 22 Figure 6-3 Budget for 2009 ( Source:survey on cultural centers)... 23 Figure 6-4 Online Tools Usage(Source: survey on cultural centers) 24 Figure 6-5 Total Number of Online Tools(Source: survey on cultural cen- ters)………………………………………………………………………… 25 Figure 6-6 Number of Stars for the Cultural Infrastructure (Source: Michelin Guide 2010)………………………………………………………………. 26 Tables Chart 1-1 Descriptive statistics table. ………………………………… 22 Chart 6-2 Correlation matrix (Source: SPSS)……………………….. 27 Chart 6-3 Regression analyses for ‘Success’……………………… 28 Chart 6-4 Regression analysis for the impact of cultural infrastructure on the industry size…………………………………………………………… 29 ii 1 Introduction “A digital footprint for cultural organizations is as important as its physical footprint and is vital for its continued presence and growth” (Ailsa Barry, Natural History Museum in Ar, p.12) The statement that internet has revolutionized the world is so well known that it became a cliché. Web services opened a spectrum of possibilities for virtually every industry, in- cluding arts and entertainment. The Net, by enabling information flow without con- straints, has brought new rules to the business world. Vogel (2007) writes that “The inter- net is not only a major new medium for the transmission of information and entertainment-a network of all networks, …, but also by now an integral part of every modern business operation.”(146) There is an existing body of literature concerning the impact of internet on arts and en- tertainment institutions (Byrnes, 2004 ;Anderson, 2007). However, the literature is mostly on media companies, museums and the performing arts. Little research has been done on cultural centers which are an important part of the cultural infrastructure. Therefore, this thesis attempts to investigate how cultural centers are affected by inter- net and, by doing so, it aims to provide background for further research. According to the Enquet commission on cultural infrastructure in Germany, cultural centers offer di- verse cultural programs in order to enhance the regional creative activity. The centers are often nonprofit organizations which, as many other institutions in the cultural sec- tor, struggle with budgetary constraints and insufficient demand. In the Knowledge Age the consumer behavior and expectations have changed. Such factors as location, creativ- ity and knowledge dissemination and technology are crucial to mention while discussing the cultural centers in the context of the „new era‟. Taking into consideration the con- cepts referring to knowledge age and cultural centers, two hypotheses were posed and a model was constructed by the researchers. In order to test the model the data was col- lected from e-mail generated questionnaires sent to 230 cultural centers in Germany. In addition, the stars from Michelin Guide 2010 were gathered for the cities that cultural centers are located in order to measure the attractiveness and density of the cultural in- frastructure. The main focus of this thesis, however, is on the adaption of online tools by the cultural centers and how it impacts their success. 1.1 Purpose The purpose of this study Provide the base for research on cultural centers in the knowledge age Examine the impact of online tools on the success of the cultural ters This study was conducted in order