This week I went to the library of the Danish language center. I went to return some books (for learners) and had a little conversation with the librarian in Danish. Then we switched to English, as many Danes do when they see you’re struggling. Then he asked me: “So, you study economy, when do you think the crisis is going to finish?” I thought a second and said: “5 years to really recover”. He replied back: “5 years!, that’s long time, uh?!. Is that what you really think?”. I said something like. “Some say now is the lowest point of the economy. Others say in three months things will start recovering. Other 2 years and others… more. So let’s say 2014 to really see the improvement.

While I was saying it that a mix of articles at nyt, financialtimes, intereconomia, the coming of Obama, commercials or American realtors, the economic crisis/consumer confidence graph, and few other things, quickly run over my head.

I followed, “You know, the economy comes in cycles, so things will improve. When? Nobody knows. But perhaps we will not see in a very long time the kind of live many people had before”. Then I remembered the Cities of Jane Jacobs, and her worst economic dream: “Having all the main cities stagnate at the same time, and little by little all loosing their skills”.

A few months ago in the birthday party of Bram, many recent graduates (economists, mastered in businesses, etc.) and young academics were talking about the upcoming of the financial crisis, and how the cousins from Iceland just got quite screwed. Some pointed out the housing market, but I showed my skepticism towards the importance of the housing, after all if you add the price of all foreclosure and related in the US, that was only around 200 billion. Which is peanuts compared with the amounts of trillions that were being lost.

I have always been more inclined to suspect about the artificial low interest rate in the U.S., the debt, the high military expenses (the 3 are strongly connected). In the party, I even said that this could be the death of the theories of the National Innovation System, something that made all the IKE guys around quite shocked. Not that I don’t love those theories, but I doubted of the extreme relevance of the “National System” term, when the Global seemed to be the dominant. To ease the feelings and the high probabilities for me to be wrong, I said I was exaggerating.

But going back where I wanted to go, now I think that I underestimated the role of the housing. Of course this is connected with the ability of money by the artificial low interest rate. But here it came my moment of light.

I was talking with my wise grandma in Christmas. She’s 75 and she’s very intelligent, however because of the poor situation in Spain when she grew up, she did not even finish primary education. I asked her: Why do we have this crisis?. She replied without any doubt: “Because everyone wanted to get a bigger house, or a second or a third one. Have you seen how many houses they have built? And the prices kept increasing to a ridiculous level! If people would have stayed where they lived, the economy would have been ok. Look at your cousin*, she sold her old apartment, for 30 million (of pesetas) when she bought it for 12. She bought her new house for 40 and wanted to sell it for 75. Cash the money and get another house for 50. Her neighbor was lucky and sold a similar house for 75, but that was just crazy! But in the first place, why did she need a bigger house? You sleep in one room, you cook in another, you don’t need anything else! She should have stated in the first apartment and everything would have been just fine. Because they already have good salaries, and they would have been happy, now they are just worried. This is her case, because I know it, but thousands are like that.”

I replied. “Grandma, I have been thinking about it a lot, and I think you are right”.

Then I saw it was confirmed the death of the experience economy. Ok, I’m exaggerating.

* the identity of my family member has been changed.

Yesterday I added in wikipedia the section: History of the concept of the experience economy. I think that interested people, learn about the term through wikipedia as its first source. Unfortunately is not a very good wiki article, but this is what we have for now. I consider myself quite a regular editor at wikipedia during the last years, and this is the time that I’m most excited to see how a paragraph can evolve. I believe it was necessary to clarify ideas about the experience economy. The term is quite confusing for everyone. I have got a few comments of people asking me about it, so just in case the check google and the wiki, I hope I can help to answer it.

I personally call Pine and Gilmore the Christopher Columbus of the experience economy. It’s clear, that they were not the first one to find about it. This is quite clear by wiki section I mentioned above. Nevertheless I have to say, that I respect these guys, and I wish someone left a comment on their blog. I guess the proud comments on Rush Limbaugh and the pictures with George Bush father is a turn off for the audience! :) j/K

Ok, let’s see the evolution of the paragraph.

Today has bankrupt. On Friday, Martin Profesional lights, in Frederikhavn, laid off 140 employees (of 500), etc. These are the consequences of the financial crisis of 2008. In mid 2007, business analyst, started feeling it, although it was not until late 2007 that media started to report about it heavely. So some people now are getting surprised, but I, and many business/economics students are not getting surprised at all. This affect us all, but I have to say that the sky is not falling. It’s part of the creative destruction. Of course, now it’s WAY easier to say it, now that I’m working for the public sector, instead of private consulting, but it’s the truth.

For example, I’m involved in the experience economy. Many are worried about the current financial situation. Ok, here I would like to share something I wrote in April 2008. In a nutshell: We need to see the big picture.

The issue of how recession can affect experience activities is not trivial. Many consultants and entrepreneurs specialized in the experience economy have started to worry. For example, in February, Stephanie Weaver ( 2008 ) in her blog “Experienceology” dedicated the whole month to explore the question, “What happens when the experience economy meets the recession economy?” Specialists and bloggers were invited to share their views. The public took the question seriously. Even Joe Pine (co-author of “The Experience Economy”), who was invited to participate was actively involved in sharing his opinion. They all probably have some bias and tended towards easing people’s fears. This is understandable since these people have allocated years of learning this subject. In Weaver’s blog, all answers defending the importance of the experience economy were quite reasonable (I also participated); however it seems that at the moment participants have forgotten to take into account the importance of the big picture. Andersson and Andersson (2006), give clear examples to explain the demand for the arts and entertainment products through time. Although it is quite hard to make economic comparisons over time, when looking at the economic trends during the last century, it seems clear that “the impact of economic growth on the consumption of recreational goods and services has been substantial” (ibid).

One issue is to look at arts and entertainment consumption, as percentage shares of the total consumption expenditures in developed market economies. From 1975 to 2002 there has been a considerable increase in arts and entertainment consumption in all countries* surveyed (OECD, 2004). Another main factor chosen by Andersson & Andersson (2006), are the annual hours of work from 1870 to 1979. Western Europe and North America have a strong increase in leisure hours, “the most pronounced case being Sweden where the number of working hours decreased from 2.945 hours to 1.461 hours after a century of industrialization.” (ibid.) An increased life expectancy must also be taken into consideration. In 1900 it was 49,2 and in the year 2000 it is up to 77,3. By 2050 it is calculated that the average life expectancy will be 81,9 years (ibid).

These and other factors, such as the progressive increment of years people spend on education before working, show that in the earliest phase of industrialization 30% of a person’s lifetime was spent working, and 40% of one’s time was spent sleeping and eating. Therefore “little free time remained for entertainment, the arts and other recreational activities for members of the working class. A young person can today expect, after education, to work less than 9% of the total expected lifetime.” (ibid)

Yesterday I had the opportunity to present to the Team Project at Frederikshavn. My supervisor and my colleague Isaac were with me. I’m really excited with the project, meet the people and specially getting an outstanding feedback. I have to say that this is a raw presentation that will be improved after the discussion we had.

Three scholars

August 8, 2008

During these week for different reasons I have found articles and books written by Zoltan J. Acs. I have to admit, that I have not read his work too much (until these last days), but I’m currently overwhelmed with his work. Right now, I’m reading his latest book “Entrepreneurship, Growth and Public Policy” (2008) in which he compiles various articles. 

I know I have read things from him, but I guess I’m now in the process that any research goes through, rediscovering authors. 

Another book, that I have in my desk and it’s an interesting reading, (less academic than the previous), is another 2008 book. “The Illusions of Entrepreneurship: The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live By”. This book is written by Scott A. Shane. Many things he writes I have already studied and know, but is a nice way how he puts it. He writes very well too.

I’m also deeply grateful to all the material than my former professor and the secondary supervisor of my master thesis, has on his website. I need to write him, I don’t think he knows I started a phd. He’s Dr. Philip Shapira. One of the smartest teachers I’ve ever had. His notes are coming at handy when I start teaching soon.   

p.s. Today is 8-8-8, and it was the opening ceremony of the Beijing Olympics.

An important area of my research is to look at cultural and engaging activities for the city of Frederikshavn. The activities that the city has carried during the last years have been pretty cool and innovative. One of them has been the Festival of Tordenskiold.  I will quote supervisor who explains about it:

The Festival of Tordenskiold started in Frederikshavn in 1998 and has been organised as an annual summer festival in the city since that year. From a humble start in 1998 in 2007 more than 25,000 people visited the festival which had 1000 local participants and activists. The historical core of the festival is a sea battle in the year 1717 in which Tordenskiold participated as a twelve year old boy. The festival is constructed as scenery at the harbour, with the water as an important element. A theatre play involving sailing ships, rowing boats, guns and canons and the wharf, as well as people dressed up in XVIII century clothes as king and nobles, soldiers and mariners, represents the culmination of the festival. Many people dress up as XVIII century peasants, vendors and street performers and serve food, sell arts and crafts and give little performances of different kinds during the two days of the festival. Sailing ships from different countries visit the harbour during the festival. The visiting ships are actors in as well as part of the scenery of the festival and the theatre play. Some of the ships are also attractions, inviting people to experience their beautiful interior. Only since 2004 the city council has put the festival on the budget with a salary for a coordinator. Until then it was run by volunteers and based on private donations. (Lorentzen, January 2008)

Well this last weekend the 2008 Festival received more than 30.000 people. Which is a great sign that the Festival is doing better every year. Unfortunately I didn’t go, as it coincide with my moving to my new place. I feel bad about it, next year I will go 100% sure. Anyways, it seems people did not miss me to have great fun…

Oh, I forgot to tell you. Torden, in Danish means Thunder, and Skiold, Shield. From what I understand is the title that it was given to this brave guy (Peter Tordenskiold) who defended the city. That was in 1717.

In a way reminds me the ideas shared by Gilmore and Pine, in their last book Authenticity (2007), about celebrating key dates for a place.

The other day I met Google Trends, a powerful tool. I think still some unprecise, but it can bring useful info. I started looking at some of the keywords of my research interest, like “innovation” & “entrepreneurship”,  

Comparing searches of \

We can comment a few things. First, people are more interested in “innovation” than “entrepreneurship”. Even if some of us, keep saying that “Entrepreneurs or Intrapreneurs, We Couldn’t Innovate Without Them” (Mary Key, today). Second thing is that Copenhague and Singapore, are the  most interested city/regions in the world about innovation (Google dixit). Third thing, is that entrepreneurship is much more googled in developing countries. Which makes sense as they have the highest entrepreneurial rates in the world, and are the ones kicking Europe and US. Last thing to point out, that always in Christmas, people don’t care about these things, that’s funny to see in the graph. I always like to see things from a multilevel perspective.  

The experience economy

Aalborg learns about Experience Economy

Aalborg learns about Experience Economy

I looked at other words, but probably the most interesting is “experience economy“. Notice, that Aalborg (or Ålborg), it’s ranked as the number one place in the world more interested in this concept. In fact Denmark its by far number one country googling about it. My supervisor got quite excited when yesterday I saw her that. Of course that is not only my Department that has been interested in this subject, other in Aalborg also do.

So if you are interested in this issue, stay tuned. In fact, the word in the street says we will soon open a website about it.