THE ARCHITECTURE BEHIND THE PROVOCATION Challenging Business Design Elements within the Creative Industries.
STUDENT
Anna-Denderah Rickmers
SUBMISSION DATE
18th of August 2015
DEGREE
MSc International Management and Design Innovation
SUPERVISOR
Dr Emma Murphy
WORD COUNT
6592
ABSTRACT TITLE
The Architecture Behind the Provocation. Challenging Business Design Elements within the Creative Industries.
AUTHOR
Anna-Denderah Rickmers
SUPERVISOR
Dr Emma Murphy
DATE
18th of August 2015
PURPOSE
This research aims to challenge the current understanding of business models within the creative industries and their common business design elements. Furthermore, their ability to be assembled in a meaningful model framework is assessed. Based on primary and secondary data analysis, 16 business design elements specific to the creative industries are identified. In order to help companies to conceptualise or re-evaluate their own business models, a guide for how to join up these elements in a model-like structure is developed. Furthermore, additive manufacturing in the furniture industry and commercial crowd design are introduced, in order to showcase the applicability of the model to a business scenario.
RELEVANCE
In recent years academic contributions were made to the creative industries, business models and the change of business models within the creative industries. Based on those works, this research identifies business attributes important for companies active in today‟s creative industries. The relevance of this research lies in a thereupon generated comprehensive overview of the identified elements and a generated model framework. This framework helps companies to identify the business design elements that are of specific importance to them and visualises how to assemble these co-dependent elements in order to design or re-evaluate their own business model.
METHODOLOGY With an underlying interpretivist methodology, this study utilises qualitative primary research methods. Bearing in mind the concept of triangulation, semi-structured expert interviews, participatory observation and participatory design techniques were utilised. Business model analysis, informed by secondary data, was also employed.
FINDINGS
The research indicates that there seems to be a unity of identifiable business design elements in literature and industry examples. This facilitates the creation of a model framework of co-dependent business design elements, relevant to specific businesses within the creative industries. Furthermore, the research points to a subjective uniqueness of the applied model outcome, based on individual perception.
CONTRIBUTION
This research contributes to informing literature and practice by merging business elements specific to the creative industries, as described by Potts (2011), Hartley et. al (2012) and others in a comprehensive and descriptive overview. It thus offers a starting point for further exploration, apart from the generated model framework. As with the transformation of subsidiaries of the creative industries, like design, into generalizable disciplines, general theory development is becoming ever more important (Friedman, 2008).
KEYWORDS
Creative industries, business design elements, co-dependent, additive manufacturing, crowd-design II
TABLE OF CONTENTS ABSTRACT
II
TABLE OF CONTENTS
III
LIST OF FIGURES AND TABLES
V
REFLECTIVE STATEMENT
VI
THESIS TOPIC IN RELATION TO MSC INTERNATIONAL MANAGEMENT AND DESIGN INNOVATION
VII
1 INTRODUCTION 1.1 Research Aim, Objectives and Questions 1.2 Study Outline and Key Findings
1 2 3
2 THEORY 2.1 Literature Review 2.1.1 Creative Industries and Emerging Business Models 2.1.2 Communities and Crowd Sourced Design within the Creative Industries 2.1.3 Technology within the Creative Industries 2.2 Literature Findings Summary
4 4 4 6 9 10
3 METHODOLOGY AND ANALYSIS 3.1 Research Methodology 3.1.1 Empiricism - Inductive Research Approach 3.1.2 Epistemology - Interpretivist Research Approach 3.1.3 Ontology - Constructionist Research Approach 3.2 Research Design 3.3 Research Methods 3.3.1 Semi-Structured Interviews 3.3.2 Document Study / Business Model Analysis 3.3.3 Participatory Research and Participatory Design 3.4 Research Approach and Conceptual Framework 3.4.1 Research Approach 3.4.2 Conceptual Framework 3.5 Data Collection and Analysis 3.5.1 Semi-Structured Interviews 3.5.2 Document Study / Business Model Analysis 3.5.3 Participatory Research and Participatory Design 3.6 Data Interpretation 3.7 Data Reflexivity, Methodology Critique and Ethics
11 11 11 11 12 12 13 13 14 15 16 16 16 17 17 18 18 20 21
4 BUSINESS DESIGN ELEMENT MODEL AND BUSINESS CASE 4.1 16 Business Design Elements 4.2 Case Description and Model Application Workshop 4.2.1 Business Case 4.2.2 Model Application Workshop 4.3 Business Design Model Framework
21 21 22 23 24 25
5 CONCLUSIONS 5.1 Limitations 5.2 Future Exploration
28 28 29
REFERENCES
30
BIBLIOGRAPHY
33
APPENDICES
38
III
LIST OF FIGURES AND TABLES FIGURE 1: CONCENTRIC CIRCLES MODEL OF THE CREATIVE INDUSTRIES (THORSBY, 2008) 5 FIGURE 2: DESIGN RESEARCH INTERDEPENDENCIES (FRANKEL AND MARTIN, 2010)
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FIGURE 3: RESEARCH APPROACH
16
FIGURE 4: CONCEPTUAL RESEARCH FRAMEWORK
16
FIGURE 5: BUSINESS DESIGN ELEMENT MACRO LEVELS
22
FIGURE 7: GRAPHIC ILLUSTRATIONS OF BUSINESS MODEL WORKSHOP
25
TABLE 1: BUSINESS DESIGN ELEMENTS AND KEY DESCRIPTIONS
10
TABLE 2: BUSINESS MODEL TOOL ANALYSIS IN RELATION TO RESEARCH AREA AND AIM
14
TABLE 3: PARTICIPATORY RESEARCH ACTIVITIES LIST
15
TABLE 4: EXPERT INTERVIEW KEY INSIGHTS
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TABLE 5: BUSINESS MODEL ANALYSIS KEY INSIGHTS
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TABLE 6:PARTICIPATORY RESEARCH KEY INSIGHTS
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TABLE 7: BUSINESS MODEL APPLICATION RULES
26
TABLE 8: BUSINESS DESIGN ELEMENTS AND DESCRIPTIVE QUESTIONS
27
V
REFLECTIVE STATEMENT The purpose of this statement is to inform the reader of the reflective process that progressed throughout the research project. “Reflection is the result of careful thinking typically influenced by the recollection of one‟s past experience” (Oxford English Dictionary, 2015). In line with this definition I will briefly outline how my early research findings led to a change of my initial research aim and how my understanding of the research topic has evolved during the project. In hindsight the initial research aim "What could a future furniture manufacturing business model look like, considering advancements in 3D printing and new schools of thinking, such as crowd and open design and local making?” comprised three problems. On a personal, a subject related and a stakeholder-related level, which will be discussed in the following, and ultimately led me to refine my research focus.
On a personal level I was struggling with the aim being formulated as a question. It was difficult for me to find an answer to a question that was simultaneously supposed to represent a desired outcome. I learned that for me, and this is a very personal research approach I understand, aims have to end with a full stop - not a question mark. Particularly as an interpretivist research approach was taken, this, as opposed to e.g. a deductive approach, was at odds with the research conceptualisation. The second personal research implication was that I was not following one specific research method. I had carefully chosen established research methods according to Bryman and Bell (2015), Hanington and Martin (2012) and other Business Model Analysis tools (Osterwalder and Pigneur, 2009). But, as the project is not e.g. one specific case study, I had to make sense of how to align and interlink the approaches I chose. The feedback I received from my supervisor Dr. Emma Murphy throughout the research process was especially helpful here.
On a subject-related level, as my design aligned business case was clearly placed within the creative industries (Thorsby, 2008), I quickly identified the underlying issue of applying business model evaluation techniques to the creative industries. The external market dynamics and business specific actualities significantly differ from other industries (Flew, 2013; Hartley et. al, 2012; Potts, 2011). Hence, the identification and description of underlying business characteristics, or business design elements, clearly emerged as a design opportunity. How these could then be assembled in a less static model framework, in order to help business model design or re-evaluation of exciting business, became the focus as the research progressed.
VI
On a stakeholder related level, it became apparent in my first expert interview with Derek Hodgson (Appendix A – 3: 42), that it would be difficult to generate value for my stakeholders with the proposed research aim. As I was conducting multiple interviews and a short internship, I did not want to compromise on that. Therefore, I altered the research aim to reflect these insights to “Identify and apply a model framework of co-dependent business design elements specific to the creative industries”, using my previous aim as an applied business case scenario. This aligns my personal research approach to the subject and led to an outcome that significantly improved in both, my research understanding and value added to my direct stakeholders.
THESIS TOPIC IN RELATION TO MSC INTERNATIONAL MANAGEMENT AND DESIGN INNOVATION Apart from the research aim reflecting personal academic interests and topicality, this thesis also attempts to incorporate the four aspects that form the core of this degree, namely, internationality, management, design and innovation. In order to utilise a multitude of the academic concepts that were taught throughout the degree and adhere to the programme conceptualisation. As the overriding research topic are the creative industries, internationality is inherent to the area being studied. Furthermore, primary and participatory secondary research was conducted in Scotland and Germany. Business analysis of companies with origins in the U.S., England and Scotland carried out and experts with international backgrounds were interviewed.
The research outcome, being oriented towards business design and re-evaluation, implies a managerial substance. As business analysis formed part of the research, different management approaches were part of the analysis likewise.
Based on the identified business design elements, a model was designed. However, aligning with the concept of “research for design” (Friedman, 2008), the more interesting design aspect lies in the facilitated application of the model to business model design and reevaluation by others.
The novelty of this research lies in the synthesised identification and combination of the business design elements, as they were described in literature and utilised in practice. The innovation lies in the application of these to a visual model framework of interdependencies.
VII
1 INTRODUCTION The creative industries are unlike any other economic sector (Hartley et. al, 2012; Potts, 2011; Throsby, 2008). External market conditions, internal organisational actualities and an inherent strive for novelty (Potts, 2011) generate a unique and dynamic commercial environment. This arguably predetermines a different set of business variables, or business design elements, that inform how a business model should be conceptualised or reevaluated, challenging established concepts. Either because these elements are applicable solely within the creative industries, or because their meaning significantly alters within this context, as opposed to other economic sectors. These conditions demand an attitude towards business element definition and business model generation that reflects the agile environment and facilitates a dynamic, tacit and playful approach. But how can businesses be made aware of specific business design elements, and equipped to identify, visualise, contextualise and ultimately address them? One possible way to do so is to utilise models. Even though models have an inherent problem to their simplification and applicability, they can aid an “effectual attitude toward business model experimentation”, which is “vitally important” for any business (Chesbrough, 2009: 362). However, there are two underlying issues when applying business model tools to the creative industries. Firstly, it is difficult to meaningfully apply static, often sequenced, business models to organisations within social network markets1, like the creative industries (Potts et. al, 2008; Potts, 2011). Secondly, the underlying importance of monetary aspects to many business models (Kaplan, and Norton, 1992; Osterwalder and Pigneur, 2009) is especially inadequate for the creative industries. Following Goldhaber‟s reasoning (Wired, 1997) the currency of the economy in general should shift from monetary units as the key driver to human attention as the underlying economic currency. As Hartley et. al (2012: 9) stated “human attention is the scare resource of the creative industries”, this concept is of particular importance within the context of the creative industries. This is contributed to further by the change in the causal chain that underpins current business development in the digital realm, where the customer is so inundated by information (Hartley et. al, 2011) that the generation of attention is arguably value creation in itself, for instance when looking at crowd funding platforms.
1
Social network markets are markets were buying decisions by individuals are not solely based on e.g. product attributes, such as price, but are based on buying decisions by other others e.g. celebrities (Hartley et. al, 2011).
1
Creativity, in addressing that new approach to value definition and generation, can arguably be facilitated by creative business models, generically designed to respond to social network markets.
Hence, based on primary and secondary research, this work attempts to identify a collection of business design elements specific to the creative industries. And, by applying these to a business scenario, develop a guide to help companies make use of these elements in order to e.g. generate emerging business models or alternatives for that business.
1.1 Research Aim, Objectives and Questions Research Aim This research aims to identify and apply a model of co-dependent business design elements specific to the creative industries. This is exemplified by a fictional start-up furniture manufacturer, utilising additive manufacturing2 and crowd-design3 based product design and development. Research Objectives In line with the research aim and according to Gray‟s (2014: 53) notion of research objectives as “clear statements of intended outcomes all of which can be measured in some way” the following objectives were defined: 1. Understand current state of business models and business factors within the social network marketplace of creative industries. 2. Examine literature, expert interviews, relevant business models of selected companies and own experiences to identify common success denominators. 3. Generate a model of business design elements that shows interdependencies. 4. Apply the model to a business scenario, incorporating crowd-design and additive manufacturing.
Research Questions Likewise according to Gray (2014: 52) research questions ought to be “researchable and explicit” and in the context of this study were defined as: 1. How do the creative industries differ from other markets and how does that affect business models? 2. What aspects are most important in terms of a sustainable business model? 2
Additive Manufacturing in the context of this research refers to 3D printing and 3D printed objects Crowd-design in the context of this research refers to objects that are designed by multiple users by means of digital technology 3
2
3. How do these business model elements interdepend on one another in an abstract model? 4. Can such a model be applied meaningfully to a (fictional) company?
1.2 Study Outline and Key Findings Study Outline In order to address the research aim, objectives and questions the research draws on literature review, semi-structured expert interviews (Bryman and Bell, 2015), participatory research and design (Hanington and Martin, 2012) and business model analysis (Osterwalder and Pigneur, 2009).
These methods were specifically selected as they are academically well-founded research concepts appropriate for different stages of the research process (Bryman and Bell, 2015; Hanington and Martin 2012; Merriam, 2002). They meaningfully inform each other and create a varied basis of primary information sources. Furthermore, since no quantitative research methods were utilised, the concept of triangulation 4 was of importance to increase the process reliability (Bryman and Bell, 2015) and thus the validity of the identified business design elements and developed model framework. The specific method selection and the assessed business analysis choices will be discussed further in chapter 3, Methodology and Analysis.
Key Findings Based upon literature review and primary research (Appendix A -C, page 39 – ff.) the key finding of this research is that there seem to be clearly identifiable business design elements specific to the creative industries. The 16 business design elements that were identified in the literature are described in detail in section 2, Theory, and are correlated to the primary research outcomes in chapter 3, Methodology and Analysis. Based upon these elements a model framework was drawn that indicates interdependencies of the individual components. This is discussed and applied in chapter 4, Business Design Element Model and Case. Based upon that, potential future explorations of the area and research restrictions will be discussed in chapter 5, Conclusion.
4
Triangulation describes the utilisation of two or more qualitative and / or quantitative research methods in order to increase data validity, reliability and generalizability (Merriam, 2002)
3
2 THEORY 2.1 LITERATURE REVIEW The literature review focuses on identifying singular business design elements within the creative industries, which form the basis of the developed model framework. The current state of crowd-design and technological advancements will be discussed likewise, in order to fortify the validity of the proposed business scenario. In line with the scenario, the focus of examples will lie on products, as opposed to services. The identified business design elements will be highlighted by individual icons, adjacent to a text paragraph that introduces them for the first time. The theoretically identified elements are matched with primary data in chapter 3 of this paper, icons will be used consistently throughout this process.
2.1.1 Creative Industries and Emerging Business Models The terminology of the „Creative Industries‟ was first widely adapted and acknowledged in a report by the Department for Culture, Media and Sport (DCMS, 1998) in the United Kingdom in 1998. This is notable as it attests to the relative novelty of the concept and indicates that the foundation of the theoretical concept lies within a governmental policy framework (Hartley et. al, 2011).
In terms of the economic contribution of the creative industries to the wider economy Potts (2011) steers the conversation away from the underlying failed-market assumption5 within the creative industries, which debatably still applies to some of its core creative arts sectors (Hartley et. al, 2011; Throsby, 2008), and focuses on their inherent innovate thrive and novelty acceptance and thus their capability to drive a wider economic evolution.
In order for a specific economic sector, like the creative industries, to drive a wider economic evolution, a multitude of singular sector elements are of importance. One key driver are the businesses and organisations that make up a market. Therefore, a process of value creation has to be attributable to their activity, to ensure a lasting wider economic growth and thus impact of the creative industries to the wider economic evolution (Potts, 2011). Therefore, Value Creation can be identified as a business design element.
Figure 1 (Throsby, 2008) indicates the specific industries that make up the economic environment. As is indicated design is classified as a related industry within the cultural industries.
5
The failed-market assumption applies specifically to the core creative industries (Throsby, 2008) and describes an inability of e.g. institutions to work profitable or operate at all without policy or third party assistance (Hartley et. al, 2012)
4
This is notable in terms of the proposed business scenario, which the developed model is applied to in section 4.3, as it ascertains the proposed fictional business model to belong within the creative industries.
Figure 1: Concentric Circles Model of the Creative Industries (Thorsby, 2008)
An aspect inherent to all the above sectors, as part of the creative industries, is that “they form a social network market where choices are determined not directly by price but by the choices of others” (Potts et. al, 2008: 168). This indicates that e.g. a produced good does not only have to gain acceptance by individual customers, but by a group that communicates about and collectively ranks the product. Therefore, whether online or offline, a business design element inherent to all stakeholders of businesses within the creative industries is Community. This is arguably especially interesting to companies in terms of how they encourage, manage and utilise an active e.g. customer community.
Likewise, in response to the communal effect, aesthetics are no longer judged by individual experts, but are increasingly seen as individual taste and thus a products “value can only be determined in the marketplace” (Hartley et. al, 2011: 6) by a community of individuals. As, this indicates crowd depended judgment, a democratic approach to product innovation and design can, be identified as another business design element. Applicability of this concept might be achieved e.g. by customer ranking options of prototype designs (Haller, 2013). 5
Another factor inherent to all of the sectors identified by Throsby (2008) is that Demand, does not align with conventional supply-demand theory (Potts, 2011). Though Potts focuses on the social network aspect in relation to that, another dimension is the shifted dynamic of the model. Within the creative industries supply does not satisfy demand, supply generates demand (Hartley et. al, 2012). An example here would be that consumers buy a book based on it being available, without having previously known they want to read that specific content. Therefore, in practice, how to generate demand should follow the question of whether to generate initial supply.
It is not only the services and products that are innovative and evolving within e.g. the design industry, but the businesses that make up the economic sector likewise (Murphy and Evans, 2009). As Towse (2010) argues, features of artistic labour markets, especially project-based companies, are becoming more widely utilised within the creative industries. Leavers of larger corporations form creative clusters and temporary business alliances, in order to attract corporate customers. Therefore, a clear, but flexible and agile strategic Mission is identified as a core business design element.
These smaller corporations, with less manpower and likely less financial resources, arguably depend much more on versatile staff than larger corporations do. Therefore, creating a Culture of Creative Confidence, that encourages openness and creative explorations, forms another business design element. As “desginerly attitudes in non-designers” are ever increasing (Murphy and Evans, 2009) this includes leadership and staff within the organisation as well as clients. As Professor McAra-McWilliam put it everyone possesses creativity “the real question is how you harness creativity in such a way that it can be fully expressed and be productive”. This concept is developed further in the following, as crowd sourced design draws upon these creatively confident customers.
2.1.2 Communities and Crowd Sourced Design within the Creative Industries As opposed to digital commons, that “comprise informational resources created and shared within voluntary communities” and where “resources are typically held de facto as communal, rather than private or public property” (Felix, 2010), crowd sourcing “outsources a task to a crowd in the form of an open call” (Sharma, 2010: 3). Hence, there is a clear separation between producers and consumers inherent to the definition. This is important in terms of economic activity by organisations utilising customers in the form of crowd sourced design.
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As previously established, creative industries form part of social network markets (Hartley et. al, 2011; Potts, 2011), and thus have an inherent approximation to customer opinion interdependencies. This allows for a communal exchange beyond closed customer circles that could include businesses likewise, which is not only desired by organisations, but demanded by customers likewise. “At the centre of that is the demand from customers for Transparency, trust, and collaboration” (Cushman and Burke, 2014: xi). Transparency, or openness, generates benefits for companies likewise. For staff transparency facilitates the identification of meaning in their work and increases ambition and joy, for external stakeholders it fosters trust and thus strong relationships (Cushman and Burke, 2014). For customers “being transparent means you have a crowd of interested observers” (Cushman and Burke, 2014: 169) and thus generates an attentive and engaged customer basis within a social network market. However, this transparent exchange has to be facilitated, managed and meaningfully utilised, which is often done in a digital form (Sharma, 2010). Digital Literacy as a business design element, therefore, “is the key capability for social learning that allows for innovation in networked societies” (Hartley et. al, 2011: 84). As opposed to attaining print literacy, where we follow an established process of learning how to read, how to understand what we read and ultimately how to critique what we read, attaining digital literacy follows an individual, less formalised and more interest based approach (Hartley et. al, 2011). This might work in favour of e.g. company-specific software. Customers are used to investing personal time to a process of self-teaching within the digital realm. As human perception has not been altered by digital and high-tech developments (Wang and Tsai, 2011), obtained crowd based results on e.g. prototypes should not be altered by means of their digital form and thus remain meaningful in the, „real‟ world of an organisations production. However, this pre-defines a wider customer segment, as digital literacy is a prerequisite to actively engage in the described activities.
Assuming customers are digitally literate; they also have to be attentive and engaged to invest their time. “Human Attention is the scare resource of the creative industries”, since consumers, especially in the digital sphere, are “confronted by a rapidly growing information and content glut” (Hartley et. al, 2012: 9). Hence, concepts for capturing attention become a very real business design element for companies. Mason and Watts (2010), for instance, found that even though financial incentives increase quantity of work conducted by crowd sourcing participants, they do not improve quality. This aligns with Goldhaber (Wired, 1997) stating that the currency of the economy should shift from the terminology of information economy and fiscal reasoning to time units. 7
On an organisational level the concept of paying attention, incorporating a time aspect into a primarily monetary based economy, by and towards engaged consumers is an operational difficulty that arguably runs deeper that marketing campaigns generally do.
Especially since, once attention was captivated, it has to be sustained. In community based, networked markets “no organisation has any Sustainable future without trust” (Cushman and Burke, 2014: 3). In general “companies are 50% more likely to outperform their rivals and grow sustainable profit” following an approach of openness (Cushman and Burke, 2014: 4). This implies a definition of sustainability that includes development, production and use of products in both, ecological and human terms (Cushman and Burke, 2014: 39) and thus requires a company‟s commitment on multiple levels.
Especially when discussing digital crowds, that have the advantage of easily operating on a global scale, Locality becomes an issue. In terms of marketing as well as sustainability, local company relevance and generated community value (Cushman and Burke, 2014; Potts, 2011). Hence, going home, instead of going big, can lead to equally successful and innovative strategies for companies. And companies can utilise big concepts nonetheless. Initiatives such as e.g. local crowd funding are increasingly successful (Cushman and Burke, 2014). Locality is one level that aids to facilitate general Visibility. It describes how an organisation achieves appropriate offline and online presence, which increases customer attention and leads to engagement and economic activity (Potts, 2011). Another aspect of a company‟s sustainability and sustainable growth, on a local or global scale, is ensured by its unique selling point6. Cushman and Burke (2014) note that due to the internet evolution the cycle for brand reinvention shortened from every five to ten years to every six to twelve months. A key resource for a company that utilise a concept of openness (Cushman and Burke, 2014) to achieve Innovation and a unique Identity can arguably be drawing from their
unique
customers. Considering that digital literacy forms part of social network market prerequisites (Hartley et. al, 2011) customers are more easily reachable.
As outlined, customer accessibility through digital literacy and engaged customer crowds are desirable for companies on multiple levels. On a Product, Prototype and especially Patents level this likewise constitutes operational risks that need to be managed. Open development 6
The Unique Selling Proposition or Point (USP) was initially described as a marketing concept, and is now widely applied to any aspect of a service, product or organisation that differentiates it from competing services, products or organisations.
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and innovation ideally enable the unification of an organisations professional expertise with a representative customer group, in order to form a partnership (Cushman and Burke, 2014). Hence, concepts such as Co-IPs 7 or the differentiation between generic and patented versions of products is increasingly important. Organisations within the creative industries have to acknowledge that openness and customer engagement is a two-way street, in order to facilitate mutually beneficial relationships. Co-IPs, for example, aid in reducing patent breaches at least by customers (Flew, 2013) .
2.1.3 Technology within the Creative Industries The previously described change in company set-ups, design industry business models, and business realities can have various reasons. One of these facilitating powers can be categorised as “technologies” (Potts, 2011: 115). And though technology by itself is no single objective value (Chesbrough, 2010), business design and development can be facilitated by emerging technologies (Potts, 2011) in the “sociotechnological space” (Potts, 2011: 113). Thus Technology, within the creative industries, can be identified as another business design element. This will be built-upon further in the application of the developed model framework to the business scenario in section 4.3, which highlights additive manufacturing as a technological driver. However, as “technologies change, people must change too, along with cultural practices and social institutions” (Potts, 2011: 117), this should include how businesses are run and operated.
Supply Chains, or supply webs (Cushman and Burke, 2014), form the basis for organisational operation. However, a closed supply chain might lead to closed operational and managerial thinking (Van Abel et. al, 2011). As a Cushman and Burke (2014: 192) interviewee put it “what made us brilliantly successful in the past has been our customer innovation and the operationalization of that innovation into supply chains, formats and consistency of offer”. Hence, customer involvement in key supply chain decisions can make a better business. From a technological development perspective, regarding e.g. additive manufacturing, a question arises to a decreased importance of supply chains. As supply is easily accessible, it does not require large storage facilities and little active management (3der.org, 2014). Hence, from an operational standpoint, the question of over-valuing and managing a supply chain arises.
7
Co-IP or Co-Patent ideas come from the Digital Commons movement and describe a co-ownership of patent rights by an economic entity, such as an organisation, and the co-developing crowd users.
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2.2 LITERATURE FINDINGS SUMMARY Table 1 below summaries the outlined business design elements as identified within literature review. These will subsequently be connected with the findings of the primary research.
Table 1: Business Design Elements and Key Descriptions
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3 METHODOLOGY AND ANALYSIS 3.1 RESEARCH METHODOLOGY Any social research is fundamentally influenced and shaped by its theoretical and methodological framework. As Sapsford (2006: 175) suggests, it reflects “a philosophical stance of worldview that underlines and informs a style of research”. Hence, the underlying methodology determines the methods applied in the research process, thus how data is gathered, analysed and, ultimately, interpreted. In other words, it reflects research commitments and assumptions made by the researcher. Successively the principle research empiricism will be outlined and the epistemological and ontological stance of the researcher described. The correlation of these is addressed and put into relation to the research aim. Subsequently, utilised qualitative research methods will be introduced and described. Lastly, the reliability, generalisability and validity (Bryman and Bell, 2015) of the research will be discussed, potential weaknesses identified and the reflexivity probed.
3.1.1 Empiricism - Inductive Research Approach According to Bryman and Bell (2015: 11) there are two main, opposing, concepts within empiricism, deductive and inductive theory. For this research an inductive research approach was adopted, as “the process of induction involves drawing generalizable inferences out of observations” and thus “theory is the outcome of research” (Bryman and Bell, 2015: 13). An inductive approach, therefore, is directly in line with the research aim. However, Bryman and Bell (2015) also point out that there will often be a deductive element to inductive reasoning and vice versa.
3.1.2 Epistemology - Interpretivist Research Approach This study ascribes to an interpretivist research perspective. Thus supporting the argument that individuals‟ realities are deemed subjective and therefore there is not one fixed, single agreed upon objective truth (Merriam, 2002). Research of this nature is interested in understanding how participants make meaning of a situation (Merriam, 2002). In this case, how business design elements are interpreted and connected. Therefore, data gathering methods should focus on causality and “participants views of the situation being studied” (Creswell, 2003). The researcher‟s values are inherent at all phases of the data collection and analysis, as, from an epistemological standpoint, it is impossible to separate the researcher from the knowledge acquired and analysed. This stipulates an inherent limitation to research.
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3.1.3 Ontology - Constructionist Research Approach The underlying ontological assumption is that reality is subjective and in a constant “state of revision” (Bryman and Bell, 2015: 22).
As a constructionist approach in recent years
increasingly also considers researchers own values and experiences (Bryman and Bell, 2015) this stance is of particular importance to this work, as participatory research methods (Hanington and Martin, 2012) were utilised.
3.2 RESEARCH DESIGN According to Friedman (2008: 154-155) “many of the problems in design research arise from category confusion” and an “ambiguous” definition of “research by, into or for design”, as defined by Frayling (1993). These concepts are also phrased research for, about and through design (Frankel and Martin, 2010). However, as the purpose of this research is to develop a guide to enable business model design, it can be clearly situated within the spectrum of research for design (Frankel and Martin, 2010). Nevertheless, as Figure 2 indicates, all three research approaches will commonly inform each other, reflecting different kinds of design level knowledge. The knowledge level might arguably change during a research process.
Figure 2: Design Research Interdependencies (Frankel and Martin, 2010)
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3.3 RESEARCH METHODS In order to attain data relevant to addressing the project aim of identifying business design elements and developing a network model, in a manner coherent with the previously outlined research methodology, qualitative research methods were employed (Bryman and Bell, 2015; Merriam, 2002).
Even though solely qualitative research methods were utilised, as is often the case in an inductive and interpretivist research framework (Bryman and Bell, 2015), multiple quantitative methods were used in order to increase the validity and reliability of the findings and therefore the generated theory. Semi-structured interviews (Bryman and Bell, 2015), business model assessment tools (Osterwalder and Pigneur, 2009) and participatory research and design methods (Hanington and Martin, 2012) were employed. Thus, triangulation (Merriam, 2002) formed the basis for the research unification. In the following each of these approaches will be described and put into context with each other and the research aim.
3.3.1 Semi-Structured Interviews Interviews as societal happenings and empirical situations are emphasised in literature as a relevant method for research (Alvesson, 2003). Semi-structured interviews specifically were used as they are appropriate to create an open dialogue between the interviewer and the interviewee, which captures the experts‟ professional knowledge as well as his or her subjective understanding of a specific subject matter (Bryman and Bell, 2015).
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3.3.2 Document Study / Business Model Analysis Table 2 indicates the business model analysis tools that were chosen, the ones that were considered and why specific models were rejected. In relation to data availability, the research aim and usefulness in the context of the changed market dynamics of the creative industries.
Table 2: Business Model Tool Analysis in Relation to Research Area and Aim
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3.3.3 Participatory Research and Participatory Design Participatory design started in Scandinavia in the 1970‟s and has since extended in scope and methods, “gaining widespread acceptance as an approach to research in practice” (Hanington and Martin, 2012: 128). Even though workshops are commonly held by designers, this research is based on participation in expert-lead workshops and completing a one week-lasting company internship to enable the researcher to rapidly acquire expert knowledge. Thus, the researcher became the participant, as opposed to utilising nondesigners for the design process.
Table 3 outlines when which research activities that were participated and why these specifically were chosen.
Table 3: Participatory Research Activities List
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3.4 RESEARCH APPROACH AND CONCEPTUAL FRAMEWORK 3.4.1 Research Approach As previously outlined semi-structured interviews were conducted, business model analysis tools utilised and participatory research and design activities undertaken.
Figure 3 indicates at what stages of the research process the methods were utilised, the level of active engagement they required and indicates how the methods interlinked and informed each other throughout the process.
Figure 3: Research Approach
3.4.2 Conceptual Framework Figure 4 indicates how the outlined research approach informed the conceptual research framework and details the specific activities.
Figure 4: Conceptual Research Framework
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3.5 DATA COLLECTION AND ANALYSIS 3.5.1 Semi-Structured Interviews As each interview was designed for experts in different fields, no guide was created, but specific questions formulated and individual timeframes set. Allowing the researcher to gain insights into each interviewees perspective and an individual timeframe. Questions were relating to the experts professional career, current practical understanding, specific literature insight assessment and future expectations.
R. Clifford
N. Ierodiaconou
E. Quigley
O. Schroeter
P.Alderath
No interviewee, upon being asked, requested anonymisation 8. Therefore, from an ethical standpoint, no pseudonyms or name alterations were necessary throughout the process of data collection and analysis. Table 4 lists all interviewees and conversation partners with their real names and relates them to their individual key insights in relation to the identified business design elements.
Table 4: Expert Interview Key Insights 8
Anonymisation refers to the altering data in such a way that it does not reveal e.g. an interviewee‟s identity.
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3.5.2 Document Study / Business Model Analysis Table 5 shows the selected companies that were analysed, why they were selected in relation to the research aim and the key insights in terms of identified business design elements. All the businesses are relatively small, recently established, leading-edge in their respective market and relate to the creative industries and proposed business case. This underlying similarly facilitates a comparable data analysis (Bryman and Bell, 2015).
Table 5: Business Model Analysis Key Insights
3.5.3 Participatory Research and Participatory Design Table 6 describes the key insights from the participatory research in relation to the identified business model design elements.
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Table 6:Participatory Research Key Insights
3D Print Show
Copynet Innovation Entrance Maklab Workshop
Opendesk Workshop
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3.6 DATA INTERPRETATION The gathered data was inductively analysed to identify recurring patterns or common themes (Merriam, 2002). The gathered material let to the drastic change of the entire research aim during the research process, see page VI, Reflective Statement. Upon completion of the data collection process an „open‟ reading of interview responses, business model analysis outcomes and participatory research notes was conducted to identify themes and repetition across the results of the different qualitative research methods (Ryan and Bernard, 2003; Merriam 2002). Hence, the data was compared and analysed in generic groups. There was a conscious decision to take time before a second iteration, to have a distant stance towards the results (Alvesson and Sköldberg, 2009), especially since the research aim changed during the research process.
The second iteration aimed to define the initially loosely grouped topics into business design elements. Detailed descriptions of identified themes, such as demand and digital literacy, were created.
After a third iteration, the relative importance of each theme was assessed. The most salient themes were selected(Ryan and Bernard (2003). Furthermore, the third read would have been likely to reveal missing data (Ryan and Bernard, 2003).
Upon completing this iterative process a theoretical model was developed. Nevertheless, limitations have to be drawn, which will be discussed further in the following.
The research process can be seen on the images below.
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3.7 DATA REFLEXIVITY, METHODOLOGY CRITIQUE AND ETHICS Reflexivity as a framework can be achieved when (1) Contact with the empirical material, (2) awareness of the interpretive act, (3) clarification of political-ideological context and (4) the handling of the question of representation and authority are actively managed during the research process (Alvesson and Sköldberg, 2009), which has been attempted.. Though this work generates specific theory, it further agrees with Alvesson and Sköldberg (2009: 248) that “crucial ingredients are the researcher‟s judgment, intuition, ability to see and point something out”. Hence, it is important to be aware of the fact that the researcher is the primary instrument of research, and human device, who could influence the research, analysis and results (Merriam, 2002). Even though triangulation has been employed to increase data and result reliability, validity and generalisability (Merriam, 2002), this research is still based purely on qualitative research methods. Since the research aim is defined clearly and narrowly, this hinders especially the generalisability of the research outcome. As outlined, data availability for the analysis of exiting business models was a constraint. This circumstance highly influenced the choice of business model analysis tools and hence the results. Furthermore, the inappropriateness of a multitude of initially selected business analysis tools likewise hindered a more refined analysis outcome. Nonetheless, it also informed the identified design opportunity. From an ethical standpoint, though the subject area might seem less prone for ethical implications, the major concern was data confidentiality. The provided data was given under the condition of strict academic use only. Moreover, during the internship, no photographs were allowed that depicted CopyNet employees or office and work spaces.
4 BUSINESS DESIGN ELEMENT MODEL AND BUSINESS CASE 4.1 16 BUSINESS DESIGN ELEMENTS As described, 16 business design elements were identified based on literature review and then matched with the results of the primary research data. Based on the data interpretation process (Ryan and Bernard, 2003), they were clustered into the four overarching macrothemes Core, Culture, Marketing and Production. To add a second, more easily understandable and familiar level to the model (Bryman and Bell, 2015) and ease potential users into the process of the model application. Figure 5 highlights the business design elements again and indicates their respective grouping. 21
Figure 5: Business Design Element Macro Levels
4.2 CASE DESCRIPTION AND MODEL APPLCIATION WORKSHOP As outlined, solely qualitative research methods were employed during the research process. Hence, there was no option to assemble the elements on a numerical or quantifiable basis (Bryman and Bell, 2015). Nonetheless, an attempt was made by the researcher to group the items, specific to the business scenario, as visible on the exemplary images below.
22
To test the pictured hypothesis outcome, five business students were given a model prototype tool kid, the business scenario description and a list of the business design elements and their respective descriptions. The results of which will be discussed further in section 4.2.2.
4.2.1 Business Case The proposed business case was to create a business model for a start-up company that utilises crowd-based design and additive manufacturing in order to design and produce furniture pieces. The case was constructed because of its current context in the multiple industries it touches upon.
Additive manufacturing has been talked about much, though it is often widely misunderstood, e.g. in terms of current technological capabilities (Quigley, Appendix A – 5). However, global additive manufacturing revenues are expected to rise from $3.07 billion in 2013 to exceed $21 billion by 2020 (Wohler‟s Report, 2014), which includes products sold that are 3D printed.
Thus, in terms of additive manufacturing within the design industry, as Jane Kyttanen (Financial Times, 2013) put it “we‟ll make the transition from having the very few designing for the masses, to the millions customising designer pieces to their personal taste”. The furniture industry is just one example where this already starts to apply (3der.org., 2014). Due to a lack of individual expertise, e.g. of ergonomics (Hodgson, Appendix A – 3), these problems could be solved by digital crowds (Surowiecki, 2005), which might even lead to competitive advantages (Lane, 2010).
Figure 6 depicts the increase of US Millennials expenditure on furniture by 142.1% within two years. As they, due to their high level of digital literacy, would likely form a substantial part of a potential customer base. This further testifies to a potential market and demand, in correlation to additive manufacturing.
Figure 6: U.S. Furniture Industry Spending
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4.2.2 Model Application Workshop Each participant modelled an individual network of interdependencies during the workshop session for the proposed business case. As visible on the images the prototype was based on the icon images and allowed for a raking of elements being of low, medium or high importance, whilst the colours reflect the identified macro levels.
Business model prototype
Participants studying the element description
Business model arrangement
Business model construction outcome 1
As visible in Figure 7, the graphic illustrations of the results show that each joined up business model looked very different.
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Participant 1
Participant 2
Participant 4
Participant 3
Participant 5 Figure 7: Graphic Illustrations of Business Model Workshop
These findings highlighted how individual co-dependencies were perceived and their subjective importance rated, even though similar information was available to each participant. Therefore, facilitating others to assemble the elements, instead of networking them on an arbitrary basis, was the conclusion the workshop as well as lack of quantitative primary research data pointed to.
The second main insight was that the participants found it easier to understand the described business design elements and how to assess them when the descriptive statements, as stated in section 2.2, were re-defined as questions. Both these findings were addressed when constructing the finale business design element model framework.
4.3 BUSINESS DESIGN MODEL FRAMEWORK As previously outlined the 16 identified business design elements and the four overarching themes interrelate with one another in theory and practice, yet are interpreted and connected very individually. Therefore, the focus of the model is to generate a framework, which facilitates the individual application to a business model conception or re-evaluation.
Four aspects were identified in order to facilitate the application of the model: A business case, the physical model tool, a set of guidelines or application rules and a description of the business design elements phrased as questions.
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The business case can either be relating to a company conceptualisation or business model re-evaluation. As the model is not based on market or competitor analysis (Mauborgne and Kim, 2005; Porter, 1979) internal information suffices to meaningfully apply the model framework.
The physical model in its current form facilitates the visualisation of a network of business design elements. However, it can be iterated further, which will be discussed in section 5.2. Table 7 indicates the application rules that were developed based on the primary research evidence gathered in the workshop and relevant literature review.
Table 7: Business Model Application Rules
26
As previously outlined the workshop participants found it easier to understand the business design elements description when phrased as questions. Hence, Table 8 indicates how the descriptions were redefined as questions.
Table 8: Business Design Elements and Descriptive Questions
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5 CONCLUSIONS The transformation of subsidiaries of the creative industries into generalizable disciplines, like design, and the increasing importance of general theory development (Friedman, 2008) to this relatively novel field of research (Hartley et. al, 2012) nudged gathering the identified business design elements and the developed model framework.
The conducted research outcomes are by no means generalisable, nor are they intended to be. However, they open up the question of how meaningful business model tools are to certain industries or, in turn, how business elements should be redefined in order to facilitate the development of flexible, visual and playful business design models.
In line with the initial research questions it was established, (1) how the creative industries differ from other economic sectors and (2) what business aspects are important when conceptualising or re-evaluating a business model. Based on the qualitative research approach that was taken, it was not possible to (3) describe clear interdependencies of these elements in general. However, a framework was established that helps companies to (4) assemble the 16 identified business design elements meaningfully. It can therefore be concluded that the majority of the research questions were answered. Hence, the research aim to identify and apply a model of co-dependent business design elements specific to the creative industries has been partially achieved.
As the creative industries often facilitate wider economic paradigm shifts (Potts, 2011), concepts such as this might stimulate how business design elements are perceived in general. Moving away from a monetary, relatively static reasoning (Kaplan, and Norton, 1992; Goldhaber, 1997), to a more “experimental” attitude (Chesbrough, 2009: 362) toward business model design. As Potts (2011: 115) challenges his readers to come up with an example of an “innovation that has affected economic evolution that has not been facilitated and / or shaped by the creative industries”, business model innovation might just become a part of that.
5.1 Limitations As outlined in section 3.6, limitations inherent to all models have to be drawn. In terms of the overall research process there are outcome-inhibiting factors that have to be accounted for. Foremost, that the designed model framework has been tested by solely five individuals during the iteration stage. Further, that they were business students might have influenced how they perceived the model.
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5.2 Future Exploration Business Design Elements Further research into the identified business design elements, their generalisability and applicability in other economic sectors might be interesting. Since the focus of this research lay on product-oriented companies, in line with the proposed business scenario, a similar research towards companies that generate services seems appropriate.
Prototype Iteration During the workshop it became apparent that the difficulty in applying the model lay in understanding the business design elements, not in assembling the actual model. Thus, the participants spend a lot of time reading the list of the 16 elements, viewing it separately to the icons visualised on the prototype components. Hence, incorporating the descriptive information on the model elements might ease the application of the model and encourage immediate visual thinking and application with fewer constraints.
Digital Tool A potentially interesting concept might be a digital version of the prototype that combines the individual user responses and thus e.g. visualises how the majority of employees of one specific company regard and assess their business model overall. Visually this could be represented, for instance, by increasing the size of the items that were used multiple times and thickening line weight if multiple users connected similar business design elements.
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Zeratsky, J., 2015. Google Ventures: Not Every Product Needs to Be Beautiful. Wired Magazine, [online] 27 May. Available at: http://www.wired.com/2015/05/google-ventures-notevery-product-needs-beautiful/ [Last accessed: 16 July 2015]
37
APPENDICES
APPENDIX A - EXPERT INTERVIEWS AND CONVERSATION INSIGHTS
39
Appendix A - 1 Peter Alderath, Sales Manager Germany, 3D Systems Appendix A - 2 Richard Clifford, Executive Director, Maklab Appendix A - 3 Derek Hodgson, Furniture Designer and Maker Appendix A - 4 Nick Ierodiaconou, Co-Founder, Opendesk.cc Appendix A - 5 Euan Quigley, Co-Founder, Step3D Appendix A - 6 Olaf Schröter, Head of Innovation Centre, CopyNet Innovation
39 41 42 46 47 49
APPENDIX B- BUSINESS MODEL ANALYSIS
50
Appendix B - 1 Behance Appendix B - 2 Maklab Appendix B - 3 Onshape Appendix B - 4 Opendesk Appendix B - 5 Shapeways
50 51 52 53 54
Business Model Analysis Business Model Analysis Business Model Analysis Business Model Analysis Business Model Analysis
APPENDIX C- PARTICIPATORY RESEARCH ACTIVITY NOTES AND IMAGES
55
Appendix C – 1 Opendesk Workshop Appendix C – 2 3D Print Show Berlin Appendix C – 3 Maklab Workshop Appendix C - 4 CopyNet Internship
55 57 59 64
12.2.2015 24.3.2015 03.7.2015 13.- 17.7.2015
38
APPENDIX A – EXPERT INVERVIEWS AND CONVERSATION INSIGHTS Appendix A - 1 Peter Alderath, Sales Manager Germany, 3D Systems 14.7.2015 Points made by Mr Alderath (including own adaptations):
-
3 D Systems manufactures and sells 3 D printers, printer materials and offers end-to-end solutions and add-on services on a B2B basis since 1989.
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The only competitor 3D Systems currently has is Stratasys, a fellow U.S. company, also NYSE listed and with roughly similar size, turnover, annual growth and share price developments.
-
Law suits between these two competitors are daily business, e.g. with regards to licensed materials - which are intentionally composed complexly, to reduce copy risks
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As the Wohler‟s Report predicted about 30% year-on-year growth within the 3D sector and both, 3D Systems and Stratasys currently „only‟ grown at 20-25%, both face difficulties with their share price developments.
-
According to Wohler‟s Report about 100 - 120 3D printer manufacturers enter the market each year, of which 80 - 90% go bankrupt within the first 3 years. Most of those focus on smaller printers, as opposed to Stratasys and 3D Systems.
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3 D Systems has less interest in the B2C market, as profit margins are (relatively speaking) lower and customer service and retention is extremely cost and time intensive in relation to the profits.
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1 out of 30 - 40 sales leads ends with a sold printer.
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Every licensed 3D Systems dealer our of the 7 operating in Germany has a different focus. Copycat focuses very much on generating ideas, entire concepts and thus wins clients.
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3D Systems currently sells printers with 7 different printing technologies and utilises up to 100 different materials.
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The 7 techniques are: 1. (FTI) 2. Colour Jet Printing (CJP) 3. Multi Jet Printing (MJP) 4. Multi Jet Modelling (MJM) - Plastic / Wax 5. Stereolithography (SLA) - (Micro -SLA) 6. Selective Laser Sintering (SLS) 7. Direct Metal Printing (DMP)
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“Most of this technique is 30 years old, but somehow now there is a hype. People can finally imagine what it can do for them and their companies”.
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Printer prices range from below $1.000 for desktop „Cube‟ products to industrial Direct Metal Printing (DMP) ProX printers at $1.500.000. 39
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Revenue Streams are 50% the actual printers and 50% the various materials, most of which are licensed.
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The only justification to clients on why to buy a 3D printer is where the added-value in two dimensions lies: 1. How does it eliminate time wasted? or 2. How does it eliminate money wasted? or - ideally- How does it eliminate both?
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Money wasted often exceeds, e.g. cost of conventional prototyping to simulation software as a result of insufficient prototypes.
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Which printer should be sold really depends on the most suitable material for whichever purpose the printer needs to serve. The hierarchy really should be: Purpose - Material – Printer
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“As a sales person you can only do so much, we need creative engineers and innovative business man on the other side.”
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“The key, at the moment - regardless of the industry - is customisation and individualisation.”
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Out of the 100 materials offered (or accepted) by 3D Systems, 8 - 10 are the vital ones, utilised by the majority of the client base.
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Depending on the printer up to 7 different materials can be used on one printer, however, not really more than two at a time.
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Material changes should be conscious choices, as the cleaning process in-between has to be extremely thorough and may take quite some time.
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Important material characteristics are: head resistance, durability, flexibility, opacity, robustness, melting point temperature and characteristics, casting characteristics and many many more.
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The next big thing are the developments in the Direct Metal Printing (DMP) segment and the maximum sizes of printable objects.
40
Appendix A - 2 Richard Clifford, Executive Director, Maklab 03.07.2015 Points mentioned / Ideas that came up:
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“We spent most of our initial funding on rent, when we were in the Lighthouse. This location is expensive as well. But it is just so important that people see us, come in, ask questions and perceive us as part of the community.”
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As Maklab is currently expanding into other cities the focus lies on understanding local communities, as opposed to bringing the Glasgow business model to other environments.
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“Before today‟s workshop I never used a model to understand our own business model. It‟s really great to see it visually on paper. We will definitely refine that outline for our own understanding of what it is that we are doing here.”
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Though the background of Maklab lies in education, many other activities and sources of income have been developed since.
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There seems to be little interaction between Maklab and higher education institutions. This is something Richard would like to encourage more.
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Though students tend to come to Maklab as clients to get e.g. products 3D printed.
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The main source of funds still comes from public funding and donations.
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Though the focus of a makerspace lies in its community, least revenue is generated via membership fees by Maklab.
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Maklab is currently reworking its website, as online traffic has increased immensely and new digital tools and information sources will be enabled as a reaction.
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There are various machines available to members of the Maklab community, including jewellery design and making, a textile workshop, CNC machines, 3D printers, engineering and electronics workspaces and digital tools.
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One afternoon a week the studio closes and members of Maklab staff teach each other one new skill, e.g. textile dying, to strengthen their internal community as well.
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Staff is, apart from rent, the most capital intensive expenditure lump
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Richard will focus on his work with the Scottish government in the future, which addresses the gap between formal education and informal learning and how the later can be adequately certified
41
Appendix A - 3 Derek Hodgson, Furniture Designer and Maker, Self-employed, Edinburgh 19.06.2015 - First Meeting
Mail - Add:
[email protected]
Points mentioned / Ideas that came up:
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Why do you look at this particular project? What‟s in it? For who?
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A great part of designers job is to use / experiment with materials - that‟s how they evolve new materials. How could that be facilitates?
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Designers balance out a design process and project and weighs: design, material, sustainability,
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Modularity of Furniture Pieces
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Prototypes are extremely important for designers to get attention / customer traction for their designs
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Difficulty of weight of design vs. weight of brand in terms of pricing / willingness to buy / customer awareness etc.
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“Designers are like actors, they want to be seen”. In other words: they need a stage.
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The Italian system of companies promoting a few big names left many designers, who did large parts of the work, unmentioned and not adequately financially rewarded.
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A sustainable financial model is a necessity for long term operations / success.
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Very transparent billing and cost / compensation necessary.
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Trust is absolutely necessary for a community of designers in any shape or form: plagiarism and idea stealing is a problem online and offline.
-
There are many technology / software oriented „design‟ crowds online that develop projects together over time. How can the entrance barriers be lowered so that less digitally literate people can partake?
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How much time are non-designers willing to spent on designing a furniture piece?
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How can designer communities be created within that business frame?
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How can the ownership of the business model / possible website / products / be maintained and administered meaningfully within an open design context?
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How can scale / sub-groups be created ?
42
Research aim specific to-dos: 1. Research mass customisations concepts vs. complete furniture design development by individuals. 2. Look at statistics: Home ownership rates; Expenditure on furniture in countries; Personal spend on furniture etc. 3. Look at growth structures / development of furniture companies in SME segment. 4. Evaluate other current business models (Opendesk, made.com, etc…) Companies to look at: 1. United Kingdom: Modus 2. Sweden: Mass Productions 3. Denmark: Fredericia
07.07.2015 - Second Meeting Points of discussion:
-
A focus on micro companies (1-10) might be a good idea for the project (also in terms if the stakeholders that were contacted / spoken to)
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„People make companies‟
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many designers started with lighting design and then moved to other categories, as the required machinery / material was relatively cheap
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Furniture companies used to locate in geographic ares were people (workers) with a certain skill-set were to be found, so geographic clusters formed (UK: Buckinghamshire; Italy: Milano; Spain: Barcelona; Sweden: Småland; Denmark: Jutland)
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Other geographic aspects were e.g. forestry (local and sustainable sourcing)
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In the 1980‟s / 1990‟s a trend to more globalised production emerged, this led to problematic situations for smaller manufacturers
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This has shifted back in recent years, to a more local focus, also due to specific customer demand
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The design process of a furniture piece never has a specific time-frame
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Rough process outline: identify design opportunity; sketches; speak to relevant people (who‟s opinion is valued) and get further input; models; (maybe prototype); approach manufacturers that might be interested in that specific object;
-
Risk / Commitment: depends on the willingness to spent time on a specific project - and therefore the (financial) risk e.g. to produce a full scale prototype
-
Questions is: Do you sell a concept, a process or a finished product? 43
-
more often than not, when a prototype is produced the design will end up being bought though
-
Often B2B customers don't understand a design until they see a full scale prototype
-
Manufacturers are approached by many designers, so capturing their attention is key
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Some designers use PR agencies or agents to market themselves and their designs
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Exhibitions and design competitions are often key as a place to showcase work (though ideas might be stolen)
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Either way, 1st steps of a designer are key after graduating to market themselves and get attention, especially by larger manufacturers
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Many micro companies of individual (or small groups of designers) don't make it - a guess would be upward of 90%
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„You had to find the design‟ (Derek on Salon de Mobile in 1973) where there was supposed to be a lot of „new‟ design
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You need to be „looking for people who are looking for new ways of design‟
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Key is to find the right kind of linkages / mix between designers, business people and marketers
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Relationships are either build either on trust or tight contracts - both can work
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Remuneration varies for independent designers - commission / royalties / other forms
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Small companies can‟t really engage in the process of developing products, as they often lack the resources / time / machinery; larger manufacturers are more likely able to
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Smaller manufacturers therefore utilise machinery at universities and / or makerspaces
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Companies that are led by engineers / business people often lack the willingness / business culture / ability to take on the risk of co-developing / committing to specific projects
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Companies often shy away from business savvy designers
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Larger manufacturers who work with a team of designers for a number of years, like Vitra, reach a level of „intellectual sophistication‟ that is immense
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„Spending time with people makes a difference‟ (In terms of designers Derek admires)
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„The individual is difficult to find.‟ (In linear design process of many product designers.)
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Many bought designs never actually hit the market or only at later stages / in combination with new concepts
-
„Design is not one of those things you stop doing.‟ 44
-
Concept of design profession vs. designer
Comments on Concept: 1. Interesting approach / especially network idea 2. In terms of master thesis probably rather a brought concept - time constraint
Companies to look at: 1. openideo.com (Tim Hulme) 2. 100% Design Exhibition / London
45
Appendix A - 4 Nick Ierodiaconou, Co-Founder, Opendesk.cc 12.2.2015 Points mentioned / Ideas that came up: 3. “Our idea is based on open commons principles, which some of us were very actively engaged in prior to co-starting open desk”. 4. The goal is to facilitate designers and makers to connect and in the process to offer customers, who can become part of the process, great office furniture pieces. 5. Though Opendesk is a digital platform foremost, its product focus really lies on connecting designers, makers and clients on a global and local scale. 6. Shortening logistical chains to a minimum and increasing work for local producers are Opendesk‟s main focuses in terms of sustainable production. 7. Every design is digitally made and CNC produced, so all products should be exactly the same regardless of where they are produced and who produces them. 8. There often were minor problems in the beginning of working with a new producer. As all furniture pieces are made entirely out of wood, even the links and couplers. Hence, precisions during production and use of exactly the right kind of wood are key. The marginal tolerance is relatively low. 9. The cost structure of a furniture piece is very transparent for the client. Designer fee, maker fee and Opendesk‟s commission are all openly written down in an invoice. 10. Generally, the company is very open about everything. With designers, makers and clients as well internal and product struggles, which are then e.g. addressed at an open hackatho
46
Appendix A - 5 Euan Quigley, Co-Founder, Step3D 25.07.2015 Points mentioned / Ideas that came up:
-
Motivated to start Step3D because of background in product and industrial design engineering; Affinity to CAD / software; An interest in additive manufacturing.
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In terms of company development the initial idea was to rent a mall stand / space and 3D print personalised gadgets, like cell phone covers, while customers watch / shop.
-
Quickly realised that it was economically and technically not viable, majorly due to: high cost of mal spaces in malls and often (multiple) misprints when printing an output. Plus no real use of design / software skills.
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From then on the company developed with the demands of customers.
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Step 3D produces objects and prototypes for private customers, like creative students, designers and any other private person with a viable project.
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Business customers come from multiple industries, demanding 3D scanning, design and printing services, especially for prototypes.
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“At this stage we don't really do any marketing, apart from our website and contacts within the industry. Word-of-mouth has proven to be the most important so far. But it is something we want to improve on.”
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The main business partners develop naturally. Euan especially mentioned the natural development of contacts in a very close-knight industry.
-
The stock was initially kept in an Excel-list, which is no longer happening. If new standard filament is needed, it is ordered from the main supplier, which is a UK based company, who delivers in 24 - 48 hours. Prints can even be started with stock remainders and then filled-up while the machine is printing.
-
If a specific filament is needed, the best supplier is researched. Any supplier that is ordered from is test in-house though.
-
As none of the 3D printers owned / used by Step 3D are subject to proprietary filaments / printer manufacturers it is relatively easy. Other companies might encounter difficulties with U.S. suppliers, customs and logistics and delivery times otherwise.
-
Which customer segment is more profitable is difficult to say. Design jobs are not priced by the hour, so a direct measurement is disregard. However, we just increased our price for 3D printing objects from GBP 10 to GBP 12 per hour printed.
-
The filament, if standard, is so cheap, we disregard it entirely.
-
Obviously there are overhead costs and the initial purchase costs for the machines. Apart from that design work is probably the most „expensive‟. Whether it is to rework 3D scans, which can take a long time, create files or rework files. 47
-
The public seems widely misinformed about the current state of 3D printing. There are constantly enquiries for completely unfeasible projects. The hype in the media seems to not reflect the current economic-value-added and trade-off of one-off objects and time needed accurately. In terms of design work and skill necessary also.
-
The B2B clients are more well informed and actually often point out that Step 3D offers their services too cheap, which is something that is deliberated at the moment.
-
In terms of the future of 3D printing “there is so much going on every day!”
-
Carbon printing, online communities that design via Facebook groups, BioMedical filaments and products and time and skill wise decreasing learning curves in terms of software and hardware components are happening already. Filament varieties and per-unit costs will be interesting to watch as well.
48
Appendix A - 6 Olaf Schröter, Head of Innovation Centre, CopyNet Innovation 15.07.2015 Points mentioned / Ideas that came up:
-
“In terms of hardware I would say in both, the 2D and 3D segment, 60% of revenue generated come from selling or - more often - leasing agreements and 40% from material sales afterwards.“
-
“Within the 2D segment our USP is the add-on service and especially software solutions we offer, e.g. data banks, secure systems, workflows or archive generation.
-
I think it might be heading there with the 3D segment in the long run, as data compilation and reworking are such vital parts of the process.”
-
In the 2D segment service agreements often include printing consumption items (e.g. ink), because clients know how much they will use per month and we can install reliable meters. Both are not given in the 3D segment.
-
CopyNet also offers 2D and 3D training courses and other services.
-
A general problem is that the licensed materials by 3D Systems may take quite some time until they are licensed in Germany and Europe; this is for instance a drawback in the medical field.
-
Delivery times from the U.S. and custom clearance may take weeks as well.
-
“It is extremely difficult to find comprehensive FAQ‟s in terms of the actual printing process online.”
-
The statics behind the models need thorough consideration, which is something, for instance new architecture graduates, will learn how to do in the future.
-
We are not at liberty to say how many 3D printing machines are currently leased / sold by us, as we often sign confidentiality agreements.
49
APPENDIX B – BUSINESS MODEL ANALYSIS Appendix B - 1 Behance Business Model Analysis Business Model Canvas
50
Appendix B - 2 MakLab Business Model Analysis Business Model Canvas
51
Appendix B - 3 Onshape Business Model Analysis Business Model Canvas
52
Appendix B - 4 Opendesk Business Model Analysis Business Model Canvas
53
Appendix B - 5 Shapeways Business Model Analysis Business Model Canvas
54
APPENDIX C – PARTICIPATORY RESEARCH ACTIVITY NOTES AND IMAGES Appendix C – 1
Opendesk Workshop
12.2.2015
Opendesk workshop space at The Proud Alchemist in Hackney, London.
Opendesk Furniture unassembeld in backgroung and Smart Desk porject in front.
Group ntroduction with Joni and Nick from Opendesk, other participants and myself.
55
Discussion within my group about the future of digital artefacts and smart furniture.
More unassembled Opendesk furniture, as produced on CNC machinery.
Wooden idea board during workshop.
Detail of CNC laser cut wood.
56
Appendix C – 2
3D Print Show Berlin
24.3.2015
Entrance to the Exhibition.
Big Rep 3D printer, printing a furniture pieces with Polylactic acid / polylactide (PLA).
PLA furniture printed by Big Rep.
57
Atlas Stool by Daniel Buening and Joerg Petri, also printed in PLA, standing on a mirror to showcase the intricate lower surface.
Exemplary 3D printed objects, showcasing the variety of filaments and additives that can be utilised during the printing process.
58
Appendix C – 3
Maklab Workshop 03.07.2015
Blog Entry available at: http://dendirickmers.wix.com/stage3#!MAKLAB-OPENUNIVERSTYWORKSHOP/ c1vtp/ 559834720cf2c7ea473ea247 So yesterday I partook in an event hosted by Maklab, a Glasgow based makerspace founded in 2012, and the Open University. In their own words the event was about: EVENT: RE:FORM - Industry Needs and Redistributed Manufacturing Event Details What does the manufacturing industry need from future employees to stay competitive in the future of redistributed manufacturing? What role can makerspaces play? What skills do young entrepreneurs need to help their ideas grow and businesses flourish? We would like your help to answer these questions. This summer, the Open University and MAKLab Glasgow are working together as part of RE:FORM, an FMsRdM research project* to understand future models of Redistributed Manufacturing. RE:FORM is particularly interested in the ways makerspaces can work alongside industry and universities to support trainee designers and fabricators in learning skills that can help with their future employment. Over the summer MAKLab and the Open University, as part of RE:FORM, will be running some one day workshops with interested industry partners to open up the conversation around their current training requirements and whether these are being met by current education models as well as potential future training needs that may arise through the adoption of a new Redistributed Manufacturing model. We will also be conducting a 12 week trial exploring how makerspaces can be used to give design students insight into the manufacturing process. This will involve design students across the UK working collaboratively with trainee fabricators based in Glasgow, to design and build full-size prototypes of chair designs, and understand the challenges involved in distributed, networked manufacturing. We are keen to meet with industry, education, entrepreneurs and learners to understand what you think the crucial challenges are, and would like to invite you to our workshops. Please come along to our workshop and help us answer the following questions: - What are the current needs of industry and where are the current gaps in skills when recruiting a new workforce? - What employment skills are needed to be competitive in the future of redistributed manufacturing? - Can collaborative working with local Makerspaces enhance the current industry practice? - What skills do new graduates need to meet the challenges of starting their own enterprise? We will have a day of discussions, guest speakers and feedback. Catering will be provided throughout the day.
So, here are my Notes (including some pictures) in the order of events:
1. Introduction of Open University (OU) and Maklab (ML) teams. 2. Introduction of each of the workshop participants 59
3. Recap of the research questions:
-
What are the current needs of industry and where are the current gaps in skills when recruiting a new workforce?
-
What employment skills are needed to be competitive in the future of redistributed manufacturing?
-
Can collaborative working with local Makerspaces enhance the current industry practice?
-
What skills do new graduates need to meet the challenges of starting their own enterprise?
4. Introduction of current case study collaboration by OU / ML:
-
OU and ML trainees currently work on designing and producing a chair via digital communication.
-
(Interesting point: It was described as „replicating a real-world manufacturing and distribution system‟ even though that does not seems like a widely applied concept (especially in the furniture industry) yet.)
5. First Activity Comments that campe up during the first activity of answering broad questions with in the research context:
-
Delivery times from the U.S. and custom clearance may take weeks as well.
-
„People consume making.‟ (Liz)
-
Definition and mission of makerspaces often unclear, not defined - try to address multiple issues at once Vs. What purpose exactly do they serve? (Industries involved / focus / etc.)
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Should makerspaces teach more than making? E.g. design theory; critical design thinking; sustainability issues (wastage); problem solving; societal design
6. Second Activity Comments that came up during the second activity of answering the following three questions (These three questions were formulated by OU / ML members during the lunch break as a reaction to the outcomes of the first activity) :
-
How can makerspaces benefit from universities, as opposed to just the other way around?
The question should be:
-
How can informal learning add value to formal and academic education programmes? Or: How can formal and academic education programmes add value to informal learning?
60
One of the key insights from the second activity: Learning vs. Education.
-
Delivery times from the U.S. and custom clearance may take weeks as well.
-
How can the respective expertise be utilised in order to create meaning?
-
„From the zoo to the jungle‟
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How can we tackle the structural and cultural differences between makerspaces and traditional education providers?
The questions should be:
-
How can we utilise the structural and cultural differences between makerspaces and traditional education in order the benefit stakeholders of both parties? Learning and education are two very different concepts (participatory/informal vs. formal)
-
Disconnect of future makerspaces and what makerspaces currently are
61
Dawing of the Maklab Business Model
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Who makes makerspaces and for what purpose?
-
How can makerspaces benefit from universities, as opposed to just the other way around?
-
How do makerspaces identify and respond to different local industry needs?
-
Can the question be: How does /can a „local‟ environment shape a makerspace? Vs. noncontextual makerspaces
External Factors that influence the Maklab business model and environment.
62
-
You have to understand the concept / set-up of a makerspace in order to respond meaningfully to a local / communal / contextual opportunity for a makerspace.
-
Where is the value added for both points of view in this question?
In short, these are the questions I formulated based on today‟s fantastic workshop: (You will notice, they are questions - not answers. I don' have those - yet.)
-
Is there just action or also reflection in makerspaces?
-
Is the sole mission to make?
-
How can formal education and informal learning organisations support and complement each other?
-
How do you legitimise makerspace learning and highlight its advantages as opposed to formal education?
Images from the workshop.
63
Appendix C - 4 CopyNet Innovation Internship, 13. - 17.07.2015 Blog entries available at: http://dendirickmers.wix.com/stage3#!blog/crb2
Day 1 Start 9:30 Short Company Introduction by Ralf Siebert, who bought the company in 2011 and has since started a process of repositioning, innovating and developing the existing CopyNet Innovation business model Introduction to Jan Uecker, Head of Sales at CopyNet Innovation and my Contact Partner during the week. Interesting Insights: CopyNet Innovation focuses on renting out 2D printers to medium and large sized companies and offers additional client specific (secure) software and add-on services, exclusivley sells 3D Systems printers and 3D printing solutions and, under the Ideen-Sprechstunde.de umbrella, creative 3D prinitng consulting and individual idea and solution co-development with clients. Innovations, and the in-house InnovationCentre, drive the company and will increasingly do so in the coming years Add-on solutions and software services set CopyNet apart, espescailly from American printer manufacturers - who generally focus on sales, rather than after-sales client relations - and revenue streams. The word 'solution' is a no-go, CopyNet Innovation trades in ideas. Generally speaking, German entrepreneurs seem much more cautious than, e.g. Amercian business man, which is difficult in an idustry that sells ideas and possibilities just as much as actuall hardware. (Contious) Professional Training, initially for weeks on end, is a MUST for employees within the 3D priniting industry. This requires substantial investements by the company to widen individual employees skill-sets and, in a small company like CopyNet, necessitates the entire team to work around those schedules and take on additional responsibilities. Data protection is very important to CopyNet clients, as they often make substantial financial commitments and (partly) define their future business strategy via 3D printing.
Evening: 17:00 - 21:30 Meeting at Meyle headquarters, a CopyNet Innovation client, with about 50 entrepreneurs and companies from Hamburg to discuss the future of 3D printing in the manufacturing industries. The event was hosted by: Meyle, CopyNet Innovation and the Hamburg Trade Association. The future of SME‟s in terms of 3D Printing and the current usability of 3D printing were the main points of discussion. Day 2 64
Start 8:00 Laptop set-up 3D Systems company research Question preparation 10:00 - 17:30 Expert interview with Peter Alderath, one of three Sales Managers for 3D Systems in Germany. For further information on the interview please see Appendix A – 1.
Day 3 9:00 - 10:15 Expert Interview with Mr Olaf Schröter, Head of the Innovation Centre at CopyNet Innovation For further information on the interview please see Appendix A – 6. The statics behind the models need thorough consideration, that is something, for instance new architecture graduates, will learn to do. We are not at liberty to say how many 3D printing machines are currently leased / sold by us, as we often sign confidentiality agreements. 10:15 - 10:45 Introduction to 3D printing software and the physical printers in the showroom at CopyNet 10:45 - 17:30 Started working on CopyNet Innovation organisational Chart / Network as part of a presentation on Friday.
Day 4 Mr. Siebert asked me compile a small presentation as to how I understood the company, where I thought they could improve / extend their services and tips regadring their digital strategy / appearance. 8:00 - 17:30 CopyNet Innovation presentation Sub-tasks included: • Building of a mock-up CopyNet Innovation landing page website via wix.com • Identifying and describing potential digital media outlets and potential digital strategy • Presentation layout and design
• kununu.com familiarisation and CopyNet Innovation rating xing.com familiarisation and research for company sites in terms go employee engagement and visibility 65
Day 5
8:00 - 8:45 CopyNet Innovation presentation finalisation 9:30 - 11:00 Meeting at TRENDONE GmbH, trend report and innovation services provider 11:00 - 14:00 TRENDONE rework and presentation preparation 14:00 - 15:00 CopyNet Innovation Presentation. Accessible on the blog via the following http://media.wix.com/ugd/25afa7_cb5e14330b15 4bb0b32f080c05d90513.pdf
link:
Positive feedback was given towards the conceptual idea of the presentation and especially the social media aspects A follow-up appointment for end of August was agreed upon. 15:15 - 16:00 Wrap up, photographing the workplace and hand-over of written notes for approval 16:00 Goodbye until August and farewell to colleagues.
CopyNet Innovation GmbH Showroom and back office entry space.
66
3D Systems: Projet 1200 micro- SLA printer
Poject 3500 HD Max Multijet printer
Inside of a 3D Systems Project 360 3D printer, utilising plaster powder as printing material.
67
3D printed object that is printed in one piece, though it is made up out of multiple synthetic materials.
Multi Jet printed (MJP) shoe models, which were coloured post-printing.
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