Demystifying business models (shifts) among Ghanaian creative entrepreneurs in a COVID-19 era

Introduction

The current work is situated within the wider discourse on COVID-19 and the creative industry in the Global South perspectives. More specifically, the paper provides insights into business models and business model shifts in response to the COVID-19 pandemic among creative entrepreneurs in Ghana. The COVID-19 pandemic has turned out to be the most significant global disruptive event as witnessed in the 21st century. The crisis spanned from the enormous loss of human lives to mainstream remote working, cutting global physical activities down to a virtual world. Indeed, the outbreak of the pandemic has also changed the way businesses are executed. While the scientific and health community of practice work towards research to ensure prevention and recovery, the business and management community have to deal with the economic impact of the crisis. Though on one hand, the COVID-19 crisis has imposed enormous challenges on business organizations, on the other hand, it necessitated innovations, presenting organizations with opportunities to identify new business models that will allow them to survive through the crisis (Seetharaman, 2020).

Business model as a concept is a recent addition to developmental management research. A common argument in the literature states that business model refers to the logic of the company, including how it operates and how it creates value for stakeholders (Reim, 2018). Over the last few years, more and more agreement has arisen for a common definition, as used by Teece (2010) and Osterwalder and Pigneur (2010), which basically states that business models describe the design or architecture of the value creation, value delivery and value capturing mechanisms that a company employs. Business models decide how value is created, delivered and captured, the tactical sets decide how much value in the end is created and captured. Literature, however, lacks clarity surrounding the contents of the business model components (value creation, delivery and capture), and they seem open for interpretation as to exactly what activities they entail. Creative entrepreneurship is the practice of setting up a business or setting oneself up as self-employed in one of the creative systems (Howkins, 2001). Essentially, creative entrepreneurs are investors who use their creative or intellectual talent and skills to earn a living (Kilu et al., 2022).

The cultural and creative sectors account for 3.1% of the world's GDP and 6.2% of global employment, making them critical investments for economic development (UNESCO, 2022). It is no secret that COVID-19 and national lockdowns had a dramatic effect on employment for many. However, they hit the cultural and creative industries particularly hard, with a total of 10 million jobs lost in these sectors worldwide in 2020 (UNESCO, 2022). This had an impact not only on individuals, but also on the wider economy, wiping 750 billion off the value of the global cultural and creative industries, The crisis will not only leave many creative organizations struggling for survival, but it will also force some to look for alternative strategic paths (Seetharaman, 2020). People's global access to, and reliance on, cultural content has increased during the pandemic, however, at the same time, those who produce arts and culture find it increasingly difficult to work, and all over the world, museums, cinemas, theaters and concert halls – all strategic places of creation and sharing, have closed their doors (UNESCO, 2022). Indeed, what was already a precarious situation for many artists has become unsustainable and a threat to the creative space.

The paper generally seeks insight into the ongoing conversation relative to COVID-19 pandemic and creative business models in the Ghanaian context. In order to achieve this aim of the paper, the following questions were asked: what are the unique business models among the Ghanaian creative entrepreneurs? What are the business model shifts in response to the COVID-19 pandemic among the creative entrepreneurs in Ghana? The paper is structured as follows: section one presents the introduction, dovetailing the concepts and constructs of the study. Section two reviewed extant literature on the subject matter, guided by the aim of the paper. The third section centered on the methodological remarks. Section four presents the results, specifically, creating understanding of creative entrepreneurial business models according to the nine building blocks of business models (Osterwalder et al., 2005; Bock and George, 2018; Wirtz, 2011), and their business model shifts. The section five and six presents the conclusion and practical implications of the study.

Literature review

This section contained a useful body of knowledge emanating from extant literature to create understanding and state-of-the-art on business models in creative entrepreneurship. Magretta (2002) argued that business models are reflections on how businesses operate and create value for their stakeholders. Teece (2010) and Osterwalder and Pigneur (2010) posited that business models are all about the design and architecture of the value creation, value delivery and value capturing means that entrepreneurs deploy. Wirtz (2011) reviewed the business model concept and proposed an integrated business model consisting of nine sub-models divided into three main components: strategy, customer and market, and then value creation. The strategy component comprises three models regarding the strategy (mission, strategic positions and development paths, value proposition), resources (core competencies and assets) and network (business model networks and partners). The customer and market components consist of customer model (customer relationships/target group, channel configuration, customer touchpoint), market offer model (competitors, market structure, value offering/products and services) and revenue model (revenue streams and revenue differentiation).

Osterwalder et al. (2005), are of the view that a typical business model consists of nine building blocks namely: Customer segments that an organization serves; Value propositions that seek to solve customers' problems and satisfy their needs; channels which an organization uses to deliver, communicate and sell value; customer relationships which an organization builds and maintains with each customer segment; revenue streams resulting from value propositions successfully offered to customers; key resources as the assets required to offer and deliver the aforementioned elements; key activities which are performed to offered and deliver the aforementioned elements; key partnerships being a network of suppliers and partners that support the business model execution by providing some resources and performing some activities. Creative partnership leads to supply routes, reduce inherent business risks, support in product design, marketing, financing, facilitate production processes and management. Thus, creative key partnerships enhance attainment of key resources and performance of key activities Scott (2015). Roos (2014) and Bechtel et al. (2013) argued that, without key partnerships, achieving art-based results in a creative entrepreneurial context is hardly possible.

Cost structure is usually mentioned when the implications and potential benefits of a business are described. It may pertain to cost savings related issues or reverse material flow (Subramanian and Gunasekaran, 2015) production costs (Sivertsson and Tell, 2015), costs of product development (Berning and Venter, 2015) or investments (Barquet et al., 2013). Cost structure comprising all the costs incurred when operating a business model. Also, Bock and George (2018) are of the view that business models are designs used to exploit business opportunities and propose value. According to Bock and George (2018), value could be profit, education, an economic growth, entertainment, social justice or any amount of possible business and entrepreneurial outcomes. In business models, organizations use all forms of capital (i.e. human, financial and technology) to create and capture value. In this work, value-creation through creative entrepreneurship is often referred to as an essential function of the creative entrepreneurial business model, because it forms the basis for satisfying customer needs (Zhuang et al., 2017). For Agrawal et al. (2019), value-creation as a function explains how resources and capabilities are disbursed in order to sustain the value desired within the value creation network. Value-creation processes can be divided into different categories - namely (1) activities related to increased efficiency and cost reduction (Agrawal et al., 2019), and (2) activities related to revenue and growth (Cockburn et al., 2018). Activities related to increased efficiency and cost reduction aim to improve and refine already existing operations, such as maintenance and daily production processes (Agrawal et al., 2019). Strategic key activities according to Lewandowski (2016) include operations, marketing, production, problem-solving and administration.

Value proposition is a function of product and product-related services, which provide users value for money (Osterwalder and Pigneur, 2010). Distribution channels include wholesalers, retailers, distributors and even the Internet (Osterwalder et al., 2005). Another distribution possibility for the creatives centered on virtual communication with customers through web advertisements, e-mails, websites, social media handles and video conferences (Scott, 2015). Also, maintaining good relationship with customers can lead to the attainment of creative entrepreneurial goals. Good relationships with customers may enhance social-marketing strategies and leverage relationships with community partners (Lacy et al., 2015). Revenue streams are basically ways that a company makes money. There are several ways, mainly associated with the product-service systems (Joustra et al., 2013). Key resources are the building blocks pertaining to the most important assets required to make a business model work (Sivertsson and Tell, 2015). According to Joffe (2021) culture and the arts help human beings negotiate their conditions in times of crisis, grief and mourning. Although the severe impact of the COVID-19 pandemic was acknowledged with anxiety, creative entrepreneurs vehemently refused to give up, hence remain resilient to the socio-economic difficulties that characterized the health emergency. Instead of the creatives being pulled or pushed out of operations or performances by the challenges presented, they swiftly metamorphosized themselves to take advantage of new opportunities with new future visions.

Indeed, the pandemic has presented new opportunities for creative entrepreneurs to digitalize businesses or identify alternative business models of value, in looking to expand their horizons (Seetharaman, 2020).Langevang et al. (2022) identified three practices of hustling in creative work during the pandemic in Ghana: digitalization, diversification and social engagement.

Similarly, Langevang et al. (2022), further argued in affirmation that hustling and the associated worker resourcefulness, improvisation, savviness, hopefulness and caring are not merely individualized survival strategy, but rather as an agentic and ethical effort to turn the vicissitudes of life into situated advantages and opportunities, and even social change in the COVID era. According to Chulek (2020) the COVID-19 pandemic compelled creatives to either initiate or enhance their presence in the digital space. Digitalizing was an attempt to create and capture value and to explore new revenue streams for their creative wares and services. For the creatives in Ghana during the COVID-19, it was either you join the digital community or you go hungry (Hinson et al., 2020). A researcher attests to how globally both creators and audiences made rapid pivotal shifts to digital means of creation, distribution and consumption (Jeannotte, 2021). Across the world, the digital capabilities of firms and their ability to adapt were crucial components of resilience strategies during the COVID-19 pandemic (Khlystova et al., 2022). Similarly, during the pandemic crisis, the creatives acknowledged absence of state and institutional support, they then turned to new activities as additions to their work portfolio to manage risk, make the most of scarce resources and develop safety nets (Muthoni Mwaura, 2017; Thieme, 2013). A common practice among the creatives in Ghana was to diversify their business portfolios and income streams (Alacovska et al., 2021). This involves both “related diversification” whereby the creatives hold multiple jobs or businesses within the creative industries or closely related industry as well as “unrelated diversification” through which creatives venture into completely different industries such as trade and farming. While relying on a portfolio of different incomes were pervasive prior to COVID-19, the pandemic seems to have pushed the creatives into relying more on unrelated diversification. Relative to the shifting business models of the creatives, some critics argue that the shift models are just knee-jerk reactions to the pandemic and once normalcy returns, they will revert to their earlier business models or find a new equilibrium (Seetharaman, 2020). Just as Sanda (2017) argued that African organizations facing the momentous challenges emanating from changes in the global spaces, might need future visions, which when made attractive, inspiring and compelling will shift mindsets of managers from not only focusing on managing crises, but also future predictors.

Methods and materials

The fieldwork span over 7 months – May to December 2020. The participants operate within 3 regions in Ghana (Savannah, Northern and Ashanti regions). The study also centered on four towns in the regions (Daboya, Kumasi, Bonwire and Tamale). The three regions and four weaving towns understudied are noted for wealth of craft and artistic trade in Ghana. Their choice for the study was scientifically guided by the subjective information oriented context selection strategy, justified on grounds of maximizing the utilization of abundant art and creative information in the area (Flyvbjerg, 2006; Kilu, 2017). The study participants include smocks designers, yarn merchants, smocks weaving trainers, graphic and digital designers, painters, textile technology: Batik-tie and dye, leather works, art entrepreneurs, indigo pit dye operators, smocks weavers, fashion designers, musicians and performing artists. Working interviews were deployed to the participants at their respective weaving centers, galleries and studios. The interviews lasted between 45 and 60 min.

Identification of study participants was mainly done through snowballing with the assistance of key gatekeepers. A semi-structured interview guide was used. Structured around key themes: understanding creative entrepreneurial business models as well as their business model shifts in the COVID-19 era. The study participants ranged in age from 17 to 60 years, and included 6 women and 14 men. Justification for interviewing the twenty (20) participants was on grounds of reaching theoretical saturation. The participants also ranged from no formal education to those well-educated with the highest educated person being a PhD student in Textiles Design Technology in a Ghanaian technology university. The participants also spent between 3 months and 38 years in artistic practice. In all, 23 data collection engagements were carried out, made up of 20 interviews and 3 focus group discussions. The socio-demographic characteristics of the participants are captured in Table 1.

By way of data management and analysis, voice recordings of both the interviews and focus group discussions were done using a tape recorder. Recordings were further transcribed and organized into themes, reflecting the research questions. The data were then organized thematically, including both the recurrent themes and issues that were not recurrent but were of interest in relation to the aim of the paper. All quotes were verbatim and approved by the interviewees. Also, handwritten notes were taken in the course of both the interviews and the focus group discussions to augment comprehension of the process.

Analysis of data was guided by both literature and aim of the study. More specifically, the analysis was developed in a three-stage process rather than follow a precise sequence. The analysis began with an open coding (Yin, 2014), breaking the data into pieces by associating words and sentences with codes such as “creative entrepreneurship”, “creative business models” and “creative model shifts”. Further axial coding was conducted where codes that were conceptually similar were grouped into more abstract concepts. Finally, from these abstracts, concepts were aggregated, themes were then developed to describe the studied phenomenon. The aggregate dimensions that emerged from the analysis are: “public institutions, traditional authorities, foreigners and the diaspora community as key creative partners.” Creative value proposition via “quality deliveries, attractive pattern mix, pure handy crafts, mart finishing, imbibing culture into productions and symbolic meanings.” Key activities include “cutting and gluing, sewing and colouring, sketching and prototyping, annual Kente festivals, film shooting and editing.” Creatives stream revenue through “sales, advances, profit margins, contracts, gate proceeds, loans, friends and family supports.” The results also point at a regime of business model shifts in terms of “digitalization” and “diversification” in response to the COVID-19 pandemic.

A sense of ethical behavior was exercised in line with the demands of ethical legislations and requirements. Schutt (1996) noted that informed consent and voluntary research participation is an ethical requirement. This, when done properly, will ensure that individuals voluntarily will participate in the research with full knowledge of relevant risks and benefits. This then drew the researcher's attention to negotiate access. We went further to explain the notion of informed consent to the respondents and further explained that they were free to participate or not, or may start and withdraw when sensing discomfort.

Results

Results from the study created understanding of business models among the Ghanaian creative entrepreneurs. The results further showed a regime of business model shifts among the creatives in response to the COVID-19 pandemic. Several indications from the analysis showed the Ghanaian creative entrepreneurs have in place business models as strategy to guide, shape and propel their businesses. Also, reason for the creative business model shifts was due to a collective frustration, occasioned by the ravaging COVID-19 pandemic.

Demystifying the Ghanaian creative entrepreneurial business models

The nine elements of a typical business model have been assessed among the Ghanaian creative enterprises. These include key partners, key activities, value proposition, customer relationship, customer segment, key resources, channels of distribution, cost structure and revenue streams. These elements seek to address operational and growth issues among the creative enterprises as captured in Table 2.

Creative model shifts/in the COVID 19 era

The COVID-19 happened to be the most significant disruptive pandemic witnessed by the Ghanaian creative industry and what has already been a difficult situation for many artists has become unsustainable and threatening survival of the industry. The constraints caused by the pandemic were severe and the responses to it occasioned some changes regarding business models. The changes were situated in two most dominant forms captured in the data, thus diversification and digitalization, to be discussed in turns.

Conclusion

The study identified business models of the Ghanaian creative entrepreneurs – who their key partners are, what their key resources are, how they create and capture value for their wares, key activities they carry out, how their wares are being distributed, whom their customers are and how they relate with customers. The nature and structure of their cost and how they stream revenue were empirically captured in this paper, as a way of demystifying the myth surrounding business models of the creative entrepreneurs in Ghana. In that regards, foreigners and the diaspora community constitute key creative partners. Imbibing culture into productions and symbolic meanings attached to their creative wares is how they propose value. Their key activities hinge on annual creative festivals. Sales, advances and profits are their revenue streaming avenues.

Demystifying the creative business models centered on three elements: first relating to money, made up of the revenue streams and cost structure, essentially money in and money out. Next, relating to supply, so their key resources, suppliers and activities. Lastly, elements of the business model related to demand (i.e. customers). This section includes things such as value proposition, customer segments, channels and customer relationships. All of these must work together as a whole. This section provides answers to the first research issue: demystifying creative business models among Ghanaian creative entrepreneurs. The results further showed how the creative entrepreneurs responded to the pandemic by diversifying into alternative businesses and changing their business models from being predominantly retail led, to completely online, witnessing physical stores being closed and increased their spending on digital marketing, utilizing social media and their own websites. This part also provides answers to the second research issue: providing insights into creative business model shifts among Ghanaian creative entrepreneurs.

The current research by design is limited to the qualitative tradition; despite knowing well about the quantitative approach that could have provided a wider scope and coverage for effective generalizability. Certainly, it would be of future research interest to design a comparative mix-method study to achieve a wider coverage feat. Indeed, the paper does achieve the goal of providing an original empirical account, hence making a valid contribution to knowledge in the area of study.

Implications

The research provides insights into creative business models and business model shifts in response to the COVID-19 pandemic among creative entrepreneurs in Ghana. The results demystified business models of the Ghanaian creative entrepreneurs, as a way of providing insights. Unique business models were found that identified government agencies and departments; chiefs and traditional authorities, foreigners and the diaspora community as key creative partners. The creatives' value proposition hinged on quality, attraction, good pattern mix, pure handy crafts, smart finishing, imbibing culture into productions and symbolic meanings. Their key activities include cutting and gluing, sewing and coloring, sketching and prototyping, annual Kente festivals, film shooting and editing. The creatives stream revenue through sales, advances, profits making, contracts, gate proceeds, loans, government, friends and family supports. The knowledge on demystified business models relative to the Ghanaian creative entrepreneurs has practical implications for practice: first, it generates a ground-up knowledge as to what creative entrepreneurial business models are, why they exist and exactly how to create one in a Global South perspective.

The results also point at a regime of business model shifts among the creative entrepreneurs, who are deploying digitalization and diversification in response to the COVID-19 pandemic. This implies the Ghanaian creative entrepreneurs are delivering value, distributing their cultural wares and streaming revenue with a more digital flavor in a diversified manner. It further means that, the pandemic required organizations to look for alternatives and digital replacements of their products and services and to identify ways of delivering them with minimal physical contacts and increased safety.