Introduction
The crisis induced by the COVID-19 pandemic created challenges for creative enterprises in Australia, including the dance industry. Sydney Dance Company (n.d.), an enterprise that organizes performances and offers contemporary dance classes for clients with different proficiency levels, ranging from beginners to advanced dancers, had to alter its offer due to the pandemic.
The business needed to account for the clientele’s changing attitudes to self-care and infection prevention, as well as the national guidelines to limit public events and gatherings. Started in the late 1960s by Susan Musitz, Sydney Dance Company (n.d., para. 4) has launched multiple innovations, including interdisciplinary collaborations and becoming the first non-Asian company performing in the People’s Republic of China.
In 2020, after closing its Ultimo studios to comply with public health advice, Sydney Dance Company (2020, p. 1) launched the Virtual Studio platform. It offers different subscription modes and pre-recorded and live-streamed lessons for various audiences. This replacement of the service delivery mode in response to the changing public health landscape exemplifies creative destruction in the dance education market required to adapt to audiences’ new expectations and prevent revenue loss.
The Virtual Studio as the Example of Creative Destruction in Australian Entrepreneurship
The notion of creative destruction is inseparable from the concepts of innovativeness and innovative activity. Basically, innovation is what creates the circumstances for creative destruction. Schumpeter, the author of the creative destruction theory, applies biological processes, such as mutation, to the realia and evolution of industrial companies (Borrup, 2018). From his perspective, industrial mutations occur in the form of the revolutionization of economic structures, the destruction of older ways of doing things, and the emergence of the replacing practices or products (Borrup, 2018).
In biology, mutation results from exposure to mutagens or agents of change. This could be compared to new external business and regulatory environments that limit the enterprise’s ability to physically interact with the consumer, thus urging the need for innovative change. Innovation, whether imitative or radical, presents the implementation of new ideas, products, or methods with the purpose of generating greater inputs or increasing competitiveness (Nuruzzaman, Singh and Pattnaik, 2019).
According to Schumpeter’s understanding of innovation, the latter should refer specifically to changes in the production function that lead to decreases in costs and increases in outputs (Günar and Doğan, 2020). Therefore, to cause actual creative destruction by revolutionizing business processes, entrepreneurs need ideas that are innovative in terms of both contents and the ability to promote wiser approaches to resource utilization. Based on the connections between destruction and innovation and the terms’ definitions, it is possible to demonstrate that the Virtual Studio exemplifies creative destruction.
The opening of the Virtual Studio by Sydney Dance Company meets the definition of a true innovation capable of causing creative disruption in the industry. The reasons for this include the transformation’s intentional nature and the ability to produce a greater efficiency by replacing the old way of providing services. Importantly, Schumpeter’s reliance on the perspective that innovation is a new idea that is operationally feasible and beneficial fully applies to the company’s Virtual Studio (Günar and Doğan, 2020).
Firstly, aside from assisting the company in meeting public health recommendations, the decision to broadcast group dance lessons instead of conducting them in person can decrease production costs. It is achieved by eliminating dance studio maintenance expenses since teachers typically broadcast lessons from their apartments (Sydney Dance Company, 2020). Secondly, lesson broadcasting can produce greater financial outputs by removing geographical and capacity-related barriers to selling more subscriptions.
With lessons available online, Sydney Dance Company (2020) can attract foreign audiences and increase its customer outreach without establishing physical studios outside of Dawes Point and New South Wales. At the same time, the maximum possible number of clients to attend the broadcasted lessons is not specified, implying that no particular limitations are actually applicable (Sydney Dance Company, 2020).
With this approach, when selling subscriptions, the organization can exceed its dance studios’ average capacity without threats to users’ safety, which has positive implications for revenue generation. The discussed example of destruction is part of a larger trend in the Australian arts sector focused on the digitalization of service.
Creative destruction finds reflection in the ubiquitous “onlinification” of products in the creative sector, including Sydney Dance Company’s dance class offers. The recent pandemic has accelerated the global shift towards entrepreneurship in the online space, thus harming traditional offline businesses that rely on face-to-face service provision (Wojnicka-Sycz et al., 2022). Based on surveys, the Australia Council for the Arts (2020, p. 3) concludes that new restrictive bans on gatherings announced in March 2020 caused income losses exceeding $5 million for those in the Ausdance Network. Many studios have closed with no alternatives for income generation, but the preference for online solutions has also increased (Australia Council for the Arts, 2020).
Wojnicka-Sycz et al. (2022) recognize the global digitalization scenario as an instance of Schumpeterian creative destruction as the product delivered online seeks to replace its traditional analog. The case of Sydney Dance Company’s (2020) transformation effectively exemplifies this need to deconstruct the traditional way of conducting dance classes by changing the service delivery channel to the company’s own online video streaming platform.
Another aspect of the deconstruction refers to keeping lessons scheduled, as opposed to the industry’s long-term practice of using pre-recorded courses as a replacement for traditional classes (Sydney Dance Company, 2020). This can create the effect of real-time communication with the instructor, which is innovative and takes service delivery to the next level (Sydney Dance Company, 2020). Thus, the organization instrumentalized creative destruction by launching the Virtual Studio and offering an innovative replacement for traditional classes, which has enabled it to continue operations despite closing the Ultimo physical studios.
Conclusion
In summary, Sydney Dance Company has adapted to Australia’s COVID-19-related bans on gatherings to offer an innovative, technology-mediated way of conducting dance classes, which exemplifies creative destruction. The company’s Virtual Studio offers scheduled broadcasted dance lessons for dancers with various proficiency levels and subscription options that involve unlimited access to lessons. It emphasizes flexibility and convenience for both long-standing and new customers, thus making the innovation operationally feasible and preventing the nullification of demand. Moreover, this innovative way of conducting contemporary dance classes enables the company to incorporate larger trends affecting the country’s creative industry, such as digitalization, into its offer.
By initiating transformation and offering a new product type, at least as a temporary replacement, Sydney Dance Company has effectively responded to the changing circumstances of the performing arts industry. Particularly, the transformation addresses limited access to face-to-face interaction with the target audience. In this manner, it has managed to avoid the total suspension of operations and retain its competitive advantage as much as possible.
Reference List
Australia Council for the Arts (2020) Summary of data: measuring the impacts of COVID-19 on the Australian arts sector.
Borrup, T. (2018) ‘Creative disruption in the arts—special issue introduction’, The Journal of Arts Management, Law, and Society, 48(4), pp. 223-226. doi: 10.1080/10632921.2018.1497392
Günar, A. and Doğan, S. (2020) ‘Innovation in the European Union within the framework of the theory of creative destruction: an overview after the global financial crisis 2008’, Ekonomi Politika ve Finans Araştırmaları Dergisi, 5(3), pp. 682-705. doi: 10.30784/epfad.822774
Nuruzzaman, N., Singh, D. and Pattnaik, C. (2019) ‘Competing to be innovative: foreign competition and imitative innovation of emerging economy firms’, International Business Review, 28(5), pp. 1-10. doi: 10.1016/j.ibusrev.2018.03.005
Sydney Dance Company (2020) Sydney Dance Company launches virtual dance studio.
Sydney Dance Company (n.d.) About us: the company.
Wojnicka-Sycz, E. et al. (2022) ‘From adjustment to structural changes–innovation activity of enterprises in the time of COVID-19 pandemic’, Innovation: The European Journal of Social Science Research, pp. 1-46. doi: 10.1080/13511610.2022.203695