Points of view

ACEI Biennial Conference – Vienna, Austria – 6-9 July 2006
The Economic Impact of Culture
Michele Trimarchi
University of Catanzaro “Magna Graecia”
Department of Public Organisation
ECCOM - European Centre for Cultural
Organisation and Management - Roma
Summary
1. The Framework: Culture in Transition
2. Impact Studies: Do They Matter?
3. The Measurement of Monetary Impact
4. The Weakness of Impact Studies
5. The Economic Impact of Culture: Scope
6. The Economic Impact of Culture: Features
7. The Cultural Dimensions of Development
8. Prospects: Social Inclusion and Citizenship
9. Prospects: Cultural Capabilities
10. The Economic Impact on Culture
1. The Framework: Culture in Transition
The arts are changing role: their core is shifting from ritual
consumption to demand for information and knowledge
The arts are a multi-dimensional product, generating a
variety of heterogeneous and sometimes contradictory
effects
Direct benefits are not the only effect of the arts, but it may
prove difficult and controversial to identify and measure
indirect benefits
There are still economists who would like the arts to “return
to the market”, while their production has always occurred
between the public and the private sectors
2. Impact Studies: Do They Matter?
Impact studies “try to assess the importance of cultural activities
for the local economy based upon spending effects”
They respond to the need for an objective justification for public
support of the arts, but limit the relevant impact of the arts to
monetary effects upon the local economy
Impact studies are carried out with reference to many sectors of
public expenditure or private activity: this generates skepticism
or indifference
3. The Measurement of Monetary Impact
The economic impact of the arts includes increases in:
a)
Consumption (short run);
b)
Income and employment (short run);
c)
Productivity and growth (long run)
Academic economists are critical towards impact studies: the only
economic impact is limited to the value added in the sector, and
outcomes are generally overstated
Impact studies are generally commissioned by public institutions
supporting the arts, and their results are often simplified by the
press
4. The Weakness of Impact Studies
Causal relationship between visitors’ spending and the arts is
uncertain, choices are influenced by various factors. What if we
eliminate the arts supply? Would the expenditure and employment
be diverted or eliminated? Do displacement effects occur if the Arts
attract new consumers to a town or region?
Gross figures of the economic impact are not sufficient: we need to
evaluate:
a) the amount and proportion of income and employment newly
generated, net of costs newly spent;
b) the differential impact of spending on the arts in comparison with
alternative subsidized activities.
The main objection is that impact studies ignore the main purposes
of arts production: artistic innovation and creativity, and quality
of urban life
5. The Economic Impact of Culture: Scope
The weakness of the traditional impact studies requires a wider
definition of the impact of arts participation:
Monetary vs. immaterial benefits: identity, sense of belonging,
knowledge of one’s own local and national history and culture
Income vs. quality of urban life: consistent framework of urban
services, impact on similar activities, cultural districts
Employment vs. human resource allocation: motivation of
professionals, even distribution of opportunities, satisfaction
Side impact vs. creativity: impact on enterpreneurship, higher
competitiveness, attractive location for industry, creative atmosphere
Dimensions vs. composition of the audience: social relationships,
social inclusion, multi-cultural dialogue
6. The Economic Impact of Culture: Features
The economic impact of arts participation must be analysed and
measured within a long-term time horizon. It necessarily includes
non-monetary benefits for which a shadow value cannot be assigned
Focusing upon the dimensional impact of the arts upon income and
employment may lead to misallocation of public funds, that could
generate more consistent outcomes in other sectors
The analysis should focus upon the strategic choices adopted by the
public sector supporting the arts: rather than asking why and if the
public sector should support the arts, we must ask how it can design
and manage public policies towards the arts
7. The Cultural Dimensions of Development
The arts feel they need to show their economic importance in times
of tighter public budget constraint, but this does not fully capture the
value of culture (aesthetic, spiritual, historic or symbolic importance,
etc.)
A broad definition of economic value may include the cultural value
of the arts, which are traded in a market for ideas, where valuations
are multiple and subjective
Therefore, people’s preferences may opt for patterns of resource
allocation due to cultural values that cannot be captured by
standard economic analysis
8. Prospects: Social Inclusion and Citizenship
In industrialised Countries development often leads to economic
and cultural distorsions: the disappearing of non-urban cultures,
the appearance of urban sub-cultures, ethnic conflicts, youth
problems
This creates an ever wider area of social exclusion, where the
elementary rights of citizenship are actually denied, and
opportunities appear to be unevenly distributed among people
The production and diffusion of the arts is a powerful means for
social inclusion and conflict reduction through cultural exchanges,
inter-racial dialogue, wide representation of different cultural
signs, views and traditions
9. Prospects: Cultural Capabilities
Culture-based development is generally promoted with the goal of
attracting tourists; in such a respect, cultural resources are viewed as
a strategic stock able to generate income and employment
There is an evident trade-off between tourist demand for culture and
residents’ expectations related to the likely increase of their welfare
through the cultural impact of the arts and culture upon their lives
In such a respect the arts and culture represent the specific object of
the most powerful immaterial entitlement. Equality of the starting
points can be pursued through a wide and even cultural endowment
The arts are an “urgent right”: they define what actually individuals are
able to do and to be. In a period of rapid social change both freedom
of expression and personal security depend on cultural development
10. The Economic Impact on Culture
Public action for supporting cultural heritage and the performing
arts are rarely integrated in large-scale development programs
including various other sectors of the economy
The impact of economic development on the arts is not
considered at all, while a partial view of development can
generate negative effects on art production and participation
There are attempts at elaborating an integrated view of
development: these concern cultural heritage in developing
Countries. Their approach should be extended to the arts within
programs of urban development
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