Business can be illuminated brilliantly by the different approaches of the artist, writes Haydn Shaughnessy

IN 2006, Irish business spent €15 million on arts sponsorship, according to the Dublin-based industry body that helps broker arts sponsorship deals, Business2Arts. Nobody knows the annual budget of Italian clothes retailer Benetton's arts and culture project, Fabrica, set in rural Treviso close to Venice, but it funds internships, stipends and production expenses each year for 35 artists, photographers and film-makers to do more or less as they please.

Expenses at Fabrica include the funding of movies, the provision of studios for each artist, a purpose-built accommodation centre, and finance for producing whatever art its "students" are inspired to create.

There is no doubt that Fabrica is an unusual corporate experiment but it is an experiment that has run for the past 14 years and its cost, assuming, conservatively, expenses of €5,000 a month to cover living, stipend and production for each artist, probably exceeds 10 per cent of all business-to-arts funding in Ireland.

The comparison is not a facetious one nor meant to diminish the commitments of Irish business. However, the way that companies relate to the core creative sector is an important issue for anyone who cares about competitiveness.

Ciarán Ó Gaora, who heads up design agency Zero G in Dublin and also serves on the board of the Corn Exchange Theatre Company in Temple Bar, explains a continuing deficit in the way businesses approach the arts.

"People look at sponsorship, say of sport, as an opportunity to improve their social networking. Sponsor a match and get together with fellow business people. They don't engage with art at that same personal level.

"It means the visual arts remain undersubscribed in Ireland. Success in business means buying the Georgian house rather than being reflected in an engagement with contemporary art. In other economies that are enjoying economic success, you see business people align themselves with art, Roman Abramovich for example."

One consequence of that lack of engagement is that Ireland has yet to spawn a significant conceptual art movement, despite conceptual art being a dominant force in art globally. Conceptual art - think Damien Hirst or Jeff Koons - typically bridges the divide between business, art and the broader cultural backdrop to our lives. Almost without exception, success in conceptual art has been driven by the interest of philanthropic and astute businessmen such as Charles Saatchi.

If there is a lack of engagement in Ireland, then it has gone hand in hand with an increased spend on art by business. A millennial survey by Circa magazine estimated that business spent £10.2 million (or €13 million) on arts sponsorship in 1997. Some 10 years later, there is no denying the increase, though the comparison does not suggest significant growth.

"If you look at how well business has been doing," says Emily Mark Fitzgerald, a lecturer in arts management at UCD, "we haven't seen a sizeable shake-up in art sponsorship, not as one might have hoped. But this is true of philanthropy in general in Ireland."

Meanwhile, evidence from abroad shows that enlightened companies are embracing art in a totally different way from sponsorship.

In addition to Fabrica, there is the example of Disonancias in the Basque region of Spain. Disonancias arranges for nine artists a year to spend three- to nine-month periods in leading companies addressing core innovation strategy problems.

The global online social network for business Xing, headquartered in Hamburg, Germany, says art is central to its core mission. "We've always included art in what we do," says Bill Liao, co-founder of the publicly listed company. "Art is central to community and we are building community, many communities. Art is there when we think about design and when we think about how communities operate."

Xing, which consists of about 12 million business profiles and groups, organises its own internal design awards to highlight the design element in businesses' profiles online.

The difference between these initiatives and Irish business sponsorship of the arts is possibly a misunderstanding of what "engagement" means. A willingness to align with the radical and innovatory edge of art, some observers believe, is not only missing in Irish business - its absence is genuinely harmful. "There is an emerging management style," claims Ó Gaora, "that comes from a creative problem-solving tradition. If you look back, we had chief executive officers from accounting and engineering, and more recently from marketing, who create good customer-centric cultures. But those are not creative roles, identifying things people haven't thought of before. In the current crisis, that is what is needed."

He mentions Apple chief executive officer Steve Jobs as a leader with a creative management style and points locally to the appointment of David O'Connor, an architect, as manager of Fingal County Council as evidence of this management style emerging here.

Fitzgerald points to the demographics of wealth attainment in Ireland as a barrier between arts and business. "In the USA, wealth is young. It springs from the dot.com boom and what came after and that's a group that engages with contemporary culture. People who made money in Ireland do not come from that background or experience."

Seen as an opportunity for reinvigorating management - the Dutch electronics company Philips has transformed its whole culture around design - the arts may not be helping their own cause.

"The arts in Ireland often feel very craft-based," says Ó Gaora. "How to use art and creativity in a strategic manner is not quite there. It's incumbent on the arts community to move in a more strategic direction rather than base itself on objects or to be permission-based, like 'please will you buy my painting?' "

Excitement, if not engagement, around art is partly stimulated by a decade of rapidly increasing prices in the contemporary art market. This alone has created an over-emphasis on acquiring art objects as a central purpose of engaging with the arts.

Globally, the use of tax incentives for art donations has driven some of the extraordinary rises in contemporary art valuations that the art world has witnessed at the world's auction houses, reinforcing the sense that value lies in what we can buy.

In the United States, where the momentum behind rising prices began, it is possible for the wealthy to buy art, donate it to the country's leading museums but, at the same time, keep it in the office or home while earning full tax relief on the purchase. A similar scheme for heritage items exists in Ireland.

Though these schemes have been a driver of art prices for some years, the continuation of the boom is now attributed more to the role of the very nouveau riche, commercial barons such as Abramovich, hedge-fund traders and, recently, the beneficiaries of high oil prices in the Middle East.

These cash-rich buyers are driving prices up even as the global economy skirts around recession, a case in point being the recent Damien Hirst auctions in London that broke all records for sales by a living artist.

The source of art-buying wealth and its rationale may be changing in Ireland but not to any great effect as yet. "It is changing," insists Ó Gaora. "Still you can count the number of genuine collectors of contemporary art on one hand."

Genuinely contemporary art in an Irish context is also misunderstood. A Louis Le Brocquy, beloved by auction-goers the past decade, is a safe investment but the edgier, innovative side of Irish art, or conceptual art, the movement that Hirst inspires in Britain, is finding very few patrons here.

By its nature, conceptual art is laden with risk for an investor, given that good conceptual art has yet to take root in any significant way. In fact, "Irish conceptual art" is an oxymoron.

It is conceptual art, though, that connects the world of fine art with that of design and contemporary communications, a reason for which Benetton pays for 35 contemporary practitioners to stay at its Treviso cultural centre each year. There they experiment with their own projects but they also contribute to the business side of Benetton life, speculating on the many ways Benetton can better communicate its vision.

Conceptual artists are, above all, communicators and often are shrewd business people, as attested by the phenomenal financial success of Hirst.

"In the current economic crisis," argues Ó Gaora "and the highly accelerated short-term attitude, what can we learn from how artists work, their relationship to product, to innovation, the way they work with colleagues and their attitude to what they do?"

Answering that question may well accelerate the transition of management from its accounting and marketing legacy into a generation of creative problem-solvers but it may need a different arts community to sell top executives on that mission.