The Cultural Economy – Benefits, Challenges, and Plans Lauren Fosnight, undergraduate researcher Center for Business and Economic Research, Ball State University April 2013 Benefits of Enhancing the Cultural Economy Creates job opportunities – In New England, the creative sector provides approximately 83,339 jobs. This number does not include the jobs in other sectors that result from increased businesses from cultural events. For example, a museum might bring business into a restaurant, which causes that restaurant to hire more staff. The arts and cultural industry has a large impact on employment in many sectors. Even people who are not employed in the arts can make themselves more marketable by bolstering their artistic skills (Biennial Report of the Indiana Arts Commission; New England’s Creative Economy). Makes the area more attractive to businesses and consumers – A large factor that affects whether or not people want to live in a community is the appearance of the town. Sprucing up an area with art raises property values and encourages people to remain in or move to that community. People are also drawn to cities with thriving arts scenes because they know there will be a myriad of entertaining activities to do. A study in New York found that people claim the city’s thriving arts and theatre scene as their most important reason for living there (Arts as an Industry: The Economic Impact on New York City and New York State). Revitalizes urban areas – Arts and cultural projects have played a huge role in revitalizing urban areas, not only by refurbishing appearances and attracting new businesses, but by renewing community pride. The technique of transforming an urban area through arts and culture has successfully transpired in cities such as San Jose, Chicago, and Los Angeles (Creative Placemaking). Creates a stronger sense of community identity and unity – When a town is the host of a well-­‐known art or cultural center, the community views the center as a source of pride. Events hosted at these centers bring community members together and give the town a unique identity. This positive identity not only helps promote peace in the community, but also attracts tourists (Small Towns, Big Ideas: Colquitt, Georgia; Creative Placemaking: Portland, Oregon). Raises revenue and helps local businesses – Arts and cultural events raise revenue for more than just themselves. When people attend a cultural event, they are also likely to go to eat at the surrounding restaurants and if they are tourists, sleep in a nearby hotel. The restaurant and hotel owners then have more income, which they can spend at other local businesses, and the cycle continues. This spending as a result of additional income is known as induced spending. A study by the New England Arts Foundation found that the arts sector contributed approximately $8.4 billion to the economy, and $2.2 billion of this revenue was a result of the indirect impact of arts and cultural organizations on other sectors (New England’s Creative Economy: Nonprofit Sector Impact; Indiana Arts Commission: Facts and Figures). Biggest Challenges to Arts and Cultural Organizations Among the biggest challenges to arts and cultural organizations are securing financial resources, networking and advocacy, obtaining marketing and technical assistance, and maintaining qualified personnel (Nonprofit Capacity Assessment: Indiana’s Arts and Cultural Organizations). Measures to Address These Challenges and Bolster the Cultural Economy Strengthen the relationships between development organizations and arts organizations – Funding is the biggest challenge for most arts and cultural organizations, not because there is a lack of desire and support for the arts, but because arts organizations lack contacts to development and economic centers that can help them raise money. Development organizations can help artists raise funds from the private sector and help them find ways to expand their businesses (The Economic Impact of the Creative Sector in Austin; Unveiling the Creative Economy in Arkansas). Maintain arts funding in schools – While most schools consider the arts to be one of the first areas in which to cut funding, The Louisiana Department of Culture, Recreation, and Tourism as well as the Vermont Council on Rural development advocate that arts education is essential to maintaining an economically viable creative sector. Attracting a pool of talented artists is much more difficult and costly than encouraging artists to remain in the area. Therefore, building strong arts programs in schools helps to cultivate young artists and provides the town with a large, stable talent pool (Advancing Vermont’s Creative Economy; Unveiling the Creative Economy in Arkansas). Teaching artists how to market themselves and their town – Finding out where and how to sell their products can be a big challenge for artists, especially for those who have no experience selling their products online or those who live in rural areas that are far from artisan fairs or large cultural events. Providing classes to teach artists how to best market their products or creating easy-­‐to-­‐use websites on which artists can sell their work can be a very effective way for a town to increase its sales of cultural products and build a positive reputation for its cultural sector (Unveiling the Creative Economy in Arkansas; Advancing Vermont’s Creative Economy). Keep an online inventory of jobs in the local arts/cultural sector – This is an easy way to not only help local artists find jobs, but to attract artists everywhere who are seeking employment. This inventory should be kept on an easily accessible website that artists seeking new employment opportunities are likely to visit. The inventory should also be advertised to businesses or groups that may seek to hire artists now or in the future (Creative Placemaking). Provide tax credits to sources of in-­‐state artistic production – Tax credits can be very helpful in encouraging people to both buy and produce more. When artistic production is subsidized by tax credits, artists can produce their work at a lower cost, allowing them to sell their art at a lower price that more people can afford (Developing Louisiana’s Cultural Economy). Expand markets to sell cultural products outside state borders – Expanding the market of cultural products outside the state is important not only to increase income, but also to brand the state as a hub of cultural activity. Once people become accustomed to thinking of the state as having prime cultural activities and artistic resources, they are more likely to visit the state. Tourism is incredibly important to the cultural economy because a large proportion of patrons are out-­‐of-­‐state visitors (New Orleans Rebirth Louisiana, Advancing Vermont’s Creative Economy). Provide technical support and instruction to artists – This task is closely related with marketing, as the internet can be a primary resource for artists trying to sell their products. Providing low-­‐cost classes to artists that teach them how to make their own websites and make contacts on social media sites can spur a city’s sale of artistic products (Creative Placemaking: San Jose, California). Forming cultural clusters – Clusters are groups of related business and suppliers that are located within close geographic proximity to each other. Cultural clusters contain businesses that are directly involved in the cultural/arts sector. There are two types of cultural clusters – those that form naturally and those that are designed by urban planners. Both types of cultural clusters can assist in the formation of new businesses, the spread of knowledge regarding innovative opportunities, and the enhancement of productivity gains (Toward a Cultural Economic Geography of Creative Industries and Urban Development; Cultivating Natural Cultural Districts). Subsidizing work/living spaces for artists – Most artists have to pay for their work space out of their own pocket if they choose to work outside their home. Many artists also use part this work space as a gallery or an exhibit. Subsidizing work and living spaces for artists not only attracts arts to the area, but also allows them to focus on their career as an artist instead of working additional jobs to earn a living. Subsidies therefore allow artists more time to produce art, which leads to more artwork being produced. Some areas have specifically designed subsidized work/living spaces for artists that are all located within one building. Such spaces help artists network with each other and draw more people to come see their work (Small Towns, Big Ideas: Nelsonville, Ohio; Creative Placemaking: Buffalo, New York and Paducah, Kentucky). Tracking and reporting the economic impact of these measures – A primary component of receiving funding or grants is showing that a project will economically viable. Providing evidence of similar projects that have been successful in the past can help a new proposal gain funding. For this reason, towns should make an effort to make an archive of all major arts projects and cultural events as well as the economic and societal impacts they had on the area (Advancing Vermont’s Creative Economy). A List of Case Studies by Venue Theatres/ Performance Centers •
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Historic Avalon Theatre (Easton, Maryland) Two renovated theatres and one new theatre in the Gordon Square Arts District (Cleveland, Ohio) Globe News Center (Texas) Art/Cultural Centers •
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The Torpedo Factory Arts Center (Alexandria, Virginia) Northern Warehouse Artists’ Cooperative (St. Paul, Minnesota) New York Mills Regional Cultural Center (New York Mills, Minnesota) Bosque Arts Center (Clifton, Texas) Parker Arts, Culture and Events Center (Denver, Colorado) Clyfford Still Museum (Denver, Colorado) Lonetree Arts Center (Denver, Colorado) Cultural Economy Literature Bibliography Alliance for the Arts. 2006. Arts as an Industry: The Economic Impact on New York City and New York State. December. http://www.nyc-­‐arts.org/page/arts-­‐research Alliance for the Arts. 2007. Culture Builds New York: The Economic Impact of Capital Construction at New York City's Cultural Institutions. November. http://www.nyc-­‐arts.org/page/arts-­‐research Alliance for the Arts. 2010. Who Pays for the Arts? Income for the Nonprofit Cultural Industry in New York City. http://www.nyc-­‐arts.org/page/arts-­‐research Americans for the Arts. 2010. Arts & Economic Prosperity in Indianapolis. http://www.americansforthearts.org/information_services/research/reports/default.asp Americans for the Arts. 2007. Indiana Arts Commission: Facts and Figures. http://www.in.gov/arts/2361.htm Arizona Humanities Council. 2005. Cultural Heritage Tourism Study. http://www.culturalheritagetourism.org/resources/StudiesonEconomicImpacts.htm Arkansas Arts Council. 2009. Unveiling the Creative Economy in Arkansas. Regional Technology Strategies. March. http://www.arkansasarts.org/news/highlights.aspx Broun, Dan. 2008. Ducks, Documentaries & Design: Tales from Arkansas' Creative Economy. Regional Technology Strategies. March. http://rtsinc.org/publications/index.html Colgan, Charles. 2011. New England’s Creative Economy: Nonprofit Sector Impact. New England Foundation for the Arts. September. http://www.nefa.org/creative_economy/research_data Colorado Business Committee for the Arts. 2012. A Decade of Growth: Arts, Culture, and the Economy. http://cbca.org/index.php Delaney, Neeta. 2004. Cultural Economic Development: A Practical Guide for Communities. Office of Governor Jennifer Granholm. June. http://ruralarts.museum.msu.edu/resources/cultural_economic_resources.php Flew, Terry. 2010. Toward a Cultural Economic Geography of Creative Industries and Urban Development: Introduction to the special issue on Creative Industries and Urban Development. http://eprints.qut.edu.au/39361/ Gadwa, Ann and Ann Markusen. 2010. Creative Placemaking. National Endowment for the Arts. http://www.nea.gov/pub/pubAll.php?s=alpha Indiana Arts Commission. 2011. 2009-­‐2010 Biennial Report. January. http://www.in.gov/arts/2361.htm Indiana Arts Commission. 2012. Nonprofit Capacity Assessment: Indiana's Arts and Cultural Organizations. http://www.in.gov/arts/2361.htm Johnson, Angela L., Diane L. Mataraza, and Eric Thompson. 2004. The Arts: A competitive Advantage for California II. California Arts Council. http://www.cac.ca.gov/artsinfo/economicimpact.php Levine, Michael. 2008. The Creative Communities Program Final Report. Vermont Council on Rural Development. January. http://vtrural.org/ Louisiana Department of Culture, Recreation, and Tourism. 2009. Developing Louisiana's Cultural Economy. http://www.crt.state.la.us/culture/ National Assembly of State Arts Agencies. 2010. Why Should Government Support the Arts? http://www.nasaa-­‐arts.org/Research/index.php National Governors Association. 2012. New Engines of Growth: Five Roles for Arts, Culture, and Design. May. http://www.nga.org/cms/home/nga-­‐center-­‐for-­‐best-­‐practices/center-­‐publications/page-­‐ehsw-­‐
publications/col2-­‐content/main-­‐content-­‐list/new-­‐engines-­‐of-­‐growth-­‐five-­‐roles.html Minnesota Citizens for the Arts. 2006. The Arts: A Driving Force in Minnesota's Economy. http://www.mncitizensforthearts.org/learn/artsresearch/driving-­‐force/ Oregon Arts Commision. 2007. Creative Vitality in Oregon. http://www.oregonartscommission.org/creative-­‐oregon/creative-­‐vitality-­‐index San Jose Arts and Culture Roundtable. 2003. White Paper on the Economic Impact of the Arts and Culture Industry in San Jose. AMH Consultants. February. http://analysis3.com/White-­‐Paper-­‐on-­‐the-­‐
Economic-­‐Impact-­‐of-­‐the-­‐Arts-­‐and-­‐Culture-­‐download-­‐w71225.pdf Seifert, Susan C. and Mark J. Stern. 2007. Cultivating "Natural" Cultural Districts. The Reinvestment Fund. September. http://www.trfund.com/resource/creativity.html Sneed, Emily. 2005. Louisiana Rebirth: Restoring the Soul of America. Louisiana Department of Culture Recreation and Tourism. September 20. Accessed April 26, 2013. http://www.crt.state.la.us/ltgovernor/media_view.aspx?id=58 Texas Cultural Trust. 2010. The Art of Economic Development. Fall. https://www.txculturaltrust.org/programs/economic-­‐development/ TXP. 2012. The Economic Impact of the Creative Sector in Austin. http://www.txp.com/ UNC School of Government. 2007. Small Towns Big Ideas. http://www.iog.unc.edu/programs/cednc/stbi/ Vermont Council on Culture and Innovation. 2004. Advancing Vermont's Creative Economy. September. http://vtrural.org/programs/community-­‐programs/creative-­‐communities