Venice is a management challenge

24/02/2009

Venice is a management challenge


John Kay, winner of the new Istituto Veneto Prize for outstanding journalism, has a critical but helpful view of how the city can be saved.

Venice is threatened by crumbling infrastructure and rising sea levels, and by inexorable growth in the number of visitors. With effective planning, one problem solves the other. Gates that let the tourists in pay for gates that keep the water out.

Left unmanaged, the sea of tourists may be more threatening than the Adriatic. Currently, more than 15 million people visit Venice each year. Literacy and cultural awareness are growing, as is US population growth; and incomes in India, China and Eastern Europe are increasing rapidly. The number of people who want to see Venice and can afford to do so might expand by a factor of three or more in the next few decades.

There is little we can do to stop this growth of tourism: and we ought not to want to stop it. Venice is a crown jewel of Western European civilisation. If we take pride in that civilisation, if we intend to promote its values, we want as many people as possible to come to Venice.

But the most widely circulated image of Venice today is probably not a reproduction of a Canaletto, or even a postcard of the Doges' Palace. It is a picture of a young Japanese visitor standing in St Mark's Square surrounded by pigeons, snapped by an equally bewildered compatriot. We should burn with shame, because the fault is with the host not the visitor. These people have travelled across the world to be exposed to a culture they know is profoundly influential, but know nothing of. What help do we give them?

When I talked of this once before, the English writer A N Wilson commented that the phrase cultural tourism was an oxymoron. It was a remark of quite exceptional stupidity. There is little exaggeration in saying that the mutual understanding which cultural tourism promotes is the most important contribution we can make to world peace: no exaggeration at all in saying that modern Europe can do more than any other continent to promote that understanding. The issue for Europeans is how not only to accommodate, but to promote, such cultural tourism without letting the visitors destroy what people go to visit. Nobody goes there any more, it's too crowded; anyone who has been in Venice in August knows what sage and baseball player Yogi Berra meant. Imagine central Venice in August with three times as many people.

A somewhat different argument is that the promotion and preservation of culture is incompatible with the practice of management - or the pursuit of profit.  Those who say that have forgotten how the Venice we treasure came into being in the first place.  In its heyday, this city was the poster child of globalisation, and the centre of the international financial system.  Its successful merchants displayed their logos - somewhat discreetly, it should be said - on the artistic treasures they funded from their profits.

Profit is, in itself, neither good or bad:  what is done with profit may be good or bad.  When I observe that Disney would run Venice better than it is run today,  I seek to provoke rather than to make a serious proposal.  But a sense that the primary motive of those you meet is to relieve you of your cash is, if anything, more omnipresent for the visitor to Venice than the visitor to Disneyland.  Disney tries to offer value for money:  the company wants you to have a good time because it wants you to come back.  In Venice the postcard sellers and the tourist cafes do not expect you to come back and the residents mostly wish you wouldn't come back.  And while the Disney Corporation reinvests most of its revenues in the maintenance and development of its activities, the sellers of tatty merchandise take their money home in the evening train.

Venice needs management and Venice should generate profits:  our concern should not be to turn up our noses at management and profits but to direct management and profits to the order and preservation of the city.  Managing the tourist flow is the beginning.  This involves segregating, in time and space,  people who want only to be photographed in front of the Campanile from those who would dearly love to wander the streets as Ruskin did.  Managing the flow of tourists gives day trippers a proper opportunity to learn about the history and culture of what they see, with well designed exhibits and qualified guides.  Managing the flow of tourists takes t-shirt sellers and vendors of fake antiques off the streets and squares and diverts revenue from rip-off merchants to the protection and sustainable development of the city.

The objective of managed tourism would be to allow as many visitors as possible to experience their own personal Venice.  Imagine that in the peak season, admission to Venice were only be available as part of a guided tour.  Imagine day tourists arriving by train in a modernised station, from which they would enter a visitor centre - major commercial and educational development - which would offer audio visual presentations of the culture and history of Venice.  The visitor centre might have lecture rooms and libraries, a shopping mall focussed on Venice related material, and restaurants of all kinds and price brackets.  Merchandising in the city itself would be controlled, traditional but not kitsch.  Imagine Ruskin weeks, in which no guided tours would be permitted, and numbers of visitors would be strictly limited.

There are many successful examples of such managed tourism.  Yosemite succeeds in remaining a place of astounding natural beauty even though it is on the doorstep of California's densely populated coastal strip.  People who want to stand in front of the waterfall are bussed in and out: hikers and campers can find unspoiled territory.  Yosemite is managed to allow large numbers of people to visit and while sustaining the environmental attractions that make them want to come in the first place.

Yosemite is preserved successfully because Yosemite is managed as a National Park.  When Ulysses S Grant, an unlikely hero,  created the first national park in America - or anywhere - he emphasised that America's natural wonders belonged, not just to the people who lived nearby, but to the nation as a whole.  The implication was that the nation as a whole had both rights of access and responsibilities of management.  Europe's man-made wonders belong, not just to the people who live near them, but to the inheritors of European civilisation. Europe as a whole has both rights of access and responsibilities of management.

I hear the cry: 'we don't want to turn Venice into a park'.  But Venice is already a park.  As a business centre, as a political force, as a pioneer of new cultural ideas rather than a showcase for older ones, the city died centuries ago, and only the flow of visitors brought Venice back to life.  Today, most people in the city are tourists, and most people who work there have come for the day to service the needs of tourists.  No-one goes to Venice to have their hair cut or buy their groceries.  An inescapable economic logic means that many normal activities of city life will be unviable at the prices of property, goods and labour in Venice.

That doesn't mean that the only economic activities in Venice will be changing the sheets of tourists and serving them bowls of pasta.  It means that the activities likely to be economically sustainable in Venice are ones associated in one way or another with the distinctive character of the City - those associated with education, history art and architecture.  Looking forward, we should see not just Venice and its educational institutions but the Veneto region as a whole as a centre of European culture not just for Europe but for the world. 

As a business economist, I have learnt that shortage of money is generally the manifestation of a problem rather than the problem itself.  Lehman failed, as Alitalia failed, because it ran out of money:  but running out of money was only the proximate cause of its failure.  Lehman failed because an organisation composed only of competitive, greedy people lacked the internal resources or external support to survive a crisis.  Alitalia became a company run for the benefit of its employees rather than its passengers, and so acquired too many of the former and not enough of the latter.  For Venice, there are parallels, and lessons, in both the rapacity and short-time horizons of its private sector and the indolence and disdain of its public sector.

The proposition that shortage of money is the measure of the problem not the problem itself is equally true of non-profit organisations.  At Oxford I would frequently hear 'if only we had as much money as Harvard we wouldn't be in such a mess' which got it just the wrong way round.  To have the best educational brand in the world and not enough money is a management problem, not a financial problem.  The most beautiful city in Europe is visited each year by fifteen million people with open wallets.  To find it in danger of physical and economic collapse is a management problem, not a financial problem.  A problem we have a collective responsibility, as Europeans, to solve.
 
John Kay is a visiting professor of economics at the London School of Economics and a Fellow of St John's College, Oxford. He has been Professor of Management at Oxford University and Professor of Economics at the London Business School, Director of a think tank, the Institute for Fiscal Studies, and founder and executive chairman of the consultancy London Economics. He has been non-executive director of several public companies.

His principal activity today is writing, and he commutes between London, Oxfordshire and the south of France. He contributes a weekly column to the Financial Times. His most recent books are The Truth About Markets (2003), Everlasting Light Bulbs (2004) and The Hare & The Tortoise (2006). His next book, The Long and Short of It; finance and investment for normally intelligent people who are not in the industry, will be published in January 2009.

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