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A comprehensive study on creation of a market for Indian art
An insightful study of genuine value construction as detailed and meticulously laid-out processes in a new dynamic market category has just been released by a Harvard Business School analyst. The research paper terms the Indian art market a unique case to understand how entrepreneurs may well take advantage of fast-changing contexts and build on the actions of other players in the ecosystem to benefit from new market domains.

Mukti Khaire, an assistant professor at Harvard Business School and R. Daniel Wadhwani, an assistant professor at University of the Pacific, have looked at the emergence of modern Indian art as a category in the international fine art market between 1995 and 2007. The former, an Assistant Professor at HBS, has done her PhD (Management) from Columbia Business School after completing her Masters in Management from IIT, Mumbai. In appreciation of her academic excellence, she has received a special award from the Eugene Lang Center for Entrepreneurship.

The analyst duo has undertaken an in-depth study of the role of entrepreneurs and incumbent firms to construct a market for products comprised of subjective attributes as well as intangible value. Their project deals with the creation and consolidation of a market for modern and contemporary Indian art. Elaborating on its purpose, an accompanying note states: “Before 1995, fine art was produced in India sans little demand largely because it was considered provincial or decorative (in nature). To create a market for art, it was redefined as a new product category, i.e. modern Indian art, by a variety of participants including academics, artists, critics, and commercial auction houses. As Western museums and individual collectors started to take notice, prices rose, from a few thousand dollars to as high as millions of dollars, in some cases.”

These developments form the background against which the two have contextualized their research document, entitled ‘Changing Landscapes: ‘The Construction of Meaning and Value in a New Market Category - Modern Indian Art’. It defines the core premises of market creation for modern Indian art in three broad steps as follows:

1.Redefinition of the category: Art academics and historians started the process of redefining as well as reinterpreting 20th-century art from India in modernist terms, underling its originality and bringing out its aesthetic value. This essentially implied that the art had a much higher economic value than ascribed before.

2.Creation of valuation metrics: This particular part of the process occurred among the commercial role-players in the entire ecosystem. Auction houses opted to translate the academic discourse into straightforward constructs that not only simplified the new category to key stakeholders, but also enabled comparison and consequently proper valuation of the works. The idea was to generate meaningful trade in the art arena.

3.Broad acceptance and precise understanding of the category: These constructs employed in auction texts helped define the precise value of modern Indian art. Western galleries and museums started taking notice of the new genre. They began to hold special exhibitions and retrospectives, to further establish it as a legitimate fine art category.

Until the early 1990s, Indian art was largely characterized as ‘decorative’ in international art circles. Since it was identified with that category, its value remained low. It was after 1995 that Indian art was classified as modernist and therefore ‘fine art’. It was then accepted as having more aesthetic and economic value than ascribed earlier. Several prominent auction houses translated the changing academic discourse into fathomable constructs, enabling a larger group of participants and lay consumers to follow its finer points. As the understanding of modern Indian art spread, its value automatically increased. This resulted in a greater media coverage, which naturally expanded the circle of interested stakeholders.

When the researchers first wrote a case study on an Indian start-up for online auctions of modern Indian art, they realized an interesting story of market creation was at play. Mukti Khaire elaborates in an interview to the HBS Working Knowledge editor-in-Chief, Sean Silverthorne, “The case was particularly relevant to the study of market creation owing to three reasons. First, the art itself (the ‘product’ so to speak) was produced since the late 1940s in India although it had not been systematically traded in a sustained manner in international art markets until the early 1990s, which indicated that a market for the art had had to be actively created. Supply alone did not generate demand.

“Second, this was a case in which actors other than the producers (i.e., the artists) interpreted the product to explain and construct its value to consumers, allowing us to examine the entire ecosystem of players important in creating expectations about a new market category. Third, the processes of reinterpretation and value construction are particularly explicit and overt in the art world, where critics and reviewers etc engage in public discourse that compares works and discusses the attributes underlying their relative value.”

The in-depth study underlines the importance of co-opting changes in the broader context as timely opportunities to create new markets. While the ability to create valuation metrics for new market categories holds the key, entrepreneurs should also realize that no single actor can generate the broad, inter-subjective agreement in order to the establish a new market. They must take cognizance of the role played by other commercial and non-commercial actors in the ecosystem. For instance, while non-commercial actors like academics build the foundation for modern and contemporary Indian art market, the media and auction houses enhance its dissemination, for a widespread understanding and ultimately, the infusion of meaning and value in it.