Background and Motivation

In the 21st Century, era of innovation knowledge-based economic which becomes a whole new tendency of global economy. Therefore, the cultural development in every country all effected by the trend of globalization, which also leads the policy of “Think Globally, Act Locally”, spring up like mushrooms (Council for Cultural Affairs, Taiwan, 2004). In other words, when the market concerning about

“globalization”, design tends to concern “localization”, and we must “think globally”

for the market, but “act locally” for design (Ko et al., 2009). Since 1990, the development of urban and regional has paying close attention to the development of cultural industry in the global community (Wynne, 1992; O'Connor, 1998). In the last two to three decades, many western countries such as United States and Western Europe all focused on the development of cultural activities as an economic strategy, since it has become increasingly significant in the economic regeneration. (Kong, 2000). In other words, local cultures could be leveraged to contribute to the variation of economic activities, and economic activities in some particular places are also an essential part of culture-generating and innovation (Kong, 2000).

In addition, lots of metropolitan cities like New York, London, Paris, Tokyo, etc.

all regard their local cultural as unique and important assets and to promote their commercial activities in a vivid way (Feng, 2002). Not only to coordinate with the government policy and economic development but also to make the people widely value their local culture, we should make an effort to develop local cultural industries through the way of combining with some economic activities represented as service innovation for SMBs (i.e., small and medium-size business). For the reason that small

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organizations tend to be more flexible and higher tolerant to adapt and improve and can accept or even implement change more easily (Damanpour, 1992). Furthermore, it could be more easily to attain innovation in small than in large organizations (Nord &

Tucker, 1987) since it requires associating with different parts of an organization to do innovation (Mintzberg, 1979).

We can view the cultural demand as a new blood to present on traditional products or services for innovation and make the industries characterized with local characteristics link up with leisure or tourism industry, in order to inject new vitality to the locality (Zhong et al., 2008). In spite of the fact that innovation is intangible (i.e., it cannot be touched, heard, tasted or seen), it can be felt. It is probably best described as a speculation that enables business to see beyond the present and create the bright future (Ahmed, 1998). When it comes to a business or an organization, innovation not only connects to all parts of the organizations but to all aspects of its operations; for this reason, it comprises all types of innovations. Moreover, to innovate is an adoption to embrace the commencement, development and implementation of the new ideas or actions (Damanpour, 1992).

However, some SMBs know how to use culture as a fresh blood in their service, to convey to the customer. For example, in Taiwan some SMBs foster local cultural development through the cultural festival activities, such as ”Yingge Ceramics” as a service innovation (Zhong et al., 2008), but others don‟t. Many SMBs face the gap between linking their business to the local culture. In this research, we aim to understand the linkage and find a suitable way to do innovation by leveraging the local culture. To leverage local culture by business, there is a need to know the impact of culture to economic activities accordingly.

Over the past few decades, there was a wealth of research into the characteristics

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of culture influence and how they were related to individuals. In the field of psychological anthropology, culture and personality or personality and culture became the classic name (Hofstede and McCrae, 2004). These works have provided us with some useful information, such as Hofstede‟s (2001) five cultural dimensions emphasizing the significance of culture on business communications. That five cultural dimensions enable to understand that nationality differences will contribute the value differences (Hofstede, 1994) The literature that Hofstede provided was full of discussions surrounding the definitions of “culture”, which can be defined as the collective programming of the mind (i.e., culture‟s mental programming) that differentiates the members of one class of people from those of another (Hofstede, 1984) and focusing on the culture‟s mental programming which could form by the determining of the types of thinking, feeling, and acting. Hofstede conceptualized culture as „programming of the mind‟ in the sense that certain cultures will breed certain reaction based on the distinguished between the primary values of the members of different cultures (Smith et al., 2004) The model of Hofstede‟s (2001) five cultural dimensions is the theoretical foundation and implication for us to explore the relationship between culture and its usability.

The majority of literature in the effect of culture has focused on the cross-cultural problem in the multinational workplace. Several studies have examined the relationship between culture and customer‟s service quality evaluation. Nevertheless, few studies have been done on the effect of local cultural on the way of SMBs‟ to provide their service and do innovation.

In the light of the numerous studies were carried out the effectiveness of culture effect, such as (Gray & Imrie, 2008) discussed about the influence of the socio-cultural environment on service quality evaluation, the whole paper is focusing

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on understanding “how” and “what” cultural (i.e., rules, norms, practices) influence on both service quality evaluation and consumers evaluate the service. In the other paper also pointed out that the communication on marketing does reflect specific cultures (Baack, Singh, 2007). It is reasonable for us to assume that local culture have a degree of impact on how SMBs express impression or service idea to the customer.

Since cultural comprise many dimensions such as beliefs, lifestyles, regional, etc. The concept of culture can be derived from anthropology and is in tune with the entire archetype of human behavior, including languages, thoughts, actions and related artifacts. Furthermore, it‟s passed on by the human ability to learn and transfer knowledge from generation to generation (Chiu et al., 2010). Those cultural dimensions may have some impact on each individual to form their values. In consequence, when people found organizations, they will show their cultural values on the characteristics of these foundations (Tayeb, 1988). That is, the owners who run the SMBs will also have their own value delivered to their customer.

In other words, we propose the idea and impression that SMBs want to indicate to their customers and do innovation as an interpretation of local cultural influence.

Here we call these ideas and impression as “Cultural Interpretations”. We aim to diminish the gap of SMBs to link their business to the local culture through the method of adopting “Cultural Interpretation” as the hint to engage innovations.