Business Models in Cultural Entrepreneurship: From Cost Disease to the Fractionalized Future
By Amy Whitaker, New York University, USA, acw224@nyu.edu
Abstract
This work introduces the core logic of economics and of finance along with a number of business-model patterns in the creative industries. The core logic of economics is that price equals value, and that revenue must cover expense. The core logic of finance is that risk and return move in lockstep. The arts present interesting challenges to both: cultural entrepreneurs are often investors and producers. They must cover ongoing expenses while also taking risk to create things of value—before that value is known. While Baumol and Bowen coined the term “cost disease” in 1966 to describe the difficulties of cost-intensive models in the arts, newer entrepreneurial forms are embracing shared resources, fractionalization, and cooperative ventures that point to new organizational models in the arts and cultural sector. With cases ranging from emerging galleries to auction houses, this work focuses on visual arts, though connects those models to performing arts and other creative industries.
Cultural Entrepreneurship
This volume explores the concept of Cultural Entrepreneurship, illustrating how creativity, culture, and business come together in innovative ways. Starting with a working definition -- “entrepreneurship in or of culture, including entrepreneurship in the cultural industries and entrepreneurship in the cultural arena of artistic and cultural values” – the volume examines key themes in current research. These include balancing artistic creativity with economic viability, navigating individual agency versus structural constraints in creative careers, and adapting to new business models from traditional arts organizations to emerging digital platforms. Highlighting an interdisciplinary perspective, the volume considers the economic, sociological, and cultural forces shaping entrepreneurial activities in creative realms. It provides both theoretical frameworks and practical insights, presenting cultural entrepreneurship as a dynamic field that combines artistic innovation with economic strategies.
Companion
Foundations and Trends® in Entrepreneurship, Volume 21, Issue 4-5 Special Issue: Cultural Entrepreneurship
See the other articles that are also part of this special issue.