The Arts: An Economic Force

You may know that the U.S. Bureau of Economic Analysis (BEA) has four “satellite industry accounts” that are designed to expand the analytical capacity of the bureau’s national income and product statistics. The satellite accounts—transportation, health care, travel and tourism, and arts and cultural production—allow the BEA to focus on specific facets of nationwide economic activity.

It is immensely gratifying to see that the category of U.S. arts and cultural production is being lifted up by the BEA for deeper analysis. Leadership from the National Endowment for the Arts (NEA) and its solid partnership with the BEA have reaped this benefit for our field. As we look at the history and body of work on the economic impact of the arts and the impact that work has had on our field, it’s interesting to see how far that work has come and how much it has matured.

For decades, national arts service organizations, regional arts organizations and state arts agencies (SAAs) have engaged in research to translate some of the value the arts bring to citizens. Many local, state and regional arts agencies, along with the NEA, are celebrating their 50-year anniversaries, and for more than half of that time our industry has worked to articulate the economic impact of what we do. Twenty-five-plus years ago, SAAs began to quantify the economic impact of their work and that of their grantees, demonstrating to state policymakers the return on investment of grant making in the nonprofit arts sector.

By the late 1990s, the New England Foundation on the Arts (NEFA) began ground-breaking, broader research to more fully understand and articulate the economic force of the creative sector. Published in 2000, The Creative Economy Initiative: The Role of the Arts and Culture in New England’s Economic Competitiveness inspired a new day—and the next level of maturation for this kind of work in our field—as the arts were placed in a broader and more holistic economic context. This new framework was soon followed by many more at the national, regional, state and local levels, and the work took our field far beyond case making for public and private funding for the arts.

The research became a beacon for economic development practice in and on behalf of the creative sector. Beyond the research and beyond case making, states birthed and bolstered such creative economy initiatives efforts as:

the Adams Arts Program in Massachusetts, supporting projects that invigorate communities, boost employment and increase public engagement. The program is unique because it requires systemic approaches to cultural economic development;

Space to Create in Colorado, the nation’s first state-led program providing affordable housing for artists. Simultaneously, Colorado has launched its creative district community revolving loan fund, providing access to capital to grow creative sector employment and infrastructure;

15 state-driven creative and cultural district programs (counting new legislation in California) spurring cultural activity, tourism, and economic and community development. Many districts deploy state investments from SAA grants, state sales tax exemptions and tax credits to incentivize their creative place-making work;

sales-tax-exempt art purchases in Rhode Island, incentivizing art sales for artists statewide;

Louisiana cultural districts that cultivate 400-600 new businesses per year;

Texas’s Cultural Tourism toolkit, providing a foundation for arts destinations to develop cultural tourism programs and messaging to better take advantage of tourism opportunities.

These decades of symbiotic research, policies, and creative economy initiatives have resulted in strong outcomes and results in communities across America. Today that good work can be viewed through the newer lens provided by the partnership between the BEA and the NEA with the Arts and Cultural Production Satellite Account. Already launched, the account is now able to demonstrate that the sector is officially 4.23% of America’s gross domestic product and employs 4.7 million workers. This is significant not only in size but through the credibility brought by the Bureau of Economic Analysis.

Where can we go from here? In the short term, our colleagues at the NEA are working with the BEA to drill down to state level data within the satellite account. That next level of data should be immensely beneficial to SAAs as they communicate a deeper story of the role of the arts within the broader economy. I know you join me in thanking our NEA friends Chairman Jane Chu, Director of Research and Analysis Sunil Iyengar, and Director of State and Regional Partnerships Laura Scanlan for their continued work with the BEA.

Just as early creative economy research fueled a host of important policies and initiatives, the BEA’s Arts and Cultural Production Satellite Account data can power some of our work moving forward. As we look ahead at what new policies and initiatives might develop, I’m struck by the fact that current SAA work in cultural economic development benefits the nonprofit and the for-profit sectors, creating momentum and results across entire communities. It’s worth considering how we can be more purposeful around ensuring that the arts generally and the nonprofit arts in particular are adequately sustained, as they’re foundational to so much positive activity at the intersection of cultural, economic and community development.

As the nation continues to recover from our most recent recession, the nonprofit sector, and for that matter state governments, have been slower to bounce back. Can opportunities be created to leverage for-profit creative economy successes for the continued benefit of the creative economy, most especially for the slower-to-recover nonprofit side? As SAAs work to lift up the arts, planning and purposefulness related to the full spectrum of the creative economy will be vital to catalyze success for both traditional SAA stakeholders and newer ones.