Tradition-minded economists may not have much respect for the arts as an agent of growth, but creative industries-music, books, painting, and galleries-do earn a lot of money, especially for cities.
A recent report from the U.K. based Future Laboratory showed that some 625,000 Londoners worked in a creative organization such as record companies, dance companies, museums, and orchestras, and that these arts industries contributed some £21 billion (about $41 billion) to the London economy. And a 2007 report from Americans for the Arts (findings announced May 2007) showed that the nonprofit arts and culture industries generate a yearly average of $166 billion in economic activity for the United States. “Most Americans understand that the arts improve our quality of life,” says the organization’s president and CEO, Robert L. Lynch. “This study demonstrates that the arts are an industry that stimulates the economy in cities and towns across the country. A vibrant arts and culture industry helps local businesses thrive.”
The Future Lab report (which includes both nonprofit and for-profit arts) reveals that the arts are the fastest? growing segment of the U.K. economy. But some economists contend that the arts aren’t a monetary driver so much as a beneficiary of economic growth that occurs elsewhere.
“There has to be some prosperity in order for the arts to flourish,” says Dutch economist and artist Hans ?Abbing, author of Why Are Artists Poor? (University of Amsterdam Press, 2002). Abbing concedes that the arts can bring in a great deal of money and help already high-earning businesses earn more, but he insists that creative industries don’t serve as a catalyst for economic growth so much as they reflect growth taking place nearby. “Somewhere where everyone is poor, there’s no money to support the arts. But as soon as you get the poor people next to the rich people, there’s something happening.”
London, in many ways, provides a case in point. In addition to hosting a large number of artists, London is also experiencing an explosion of wealth, suggesting that the two trends might be linked. The financial services provider Barclay’s Group forecasts that approximately 8 million U.K. households (one in four) will be dollar millionaires by the year 2016.
Abbing is skeptical about any report that claims to measure the economic value of something as intan?gible as the arts. He insists that some such reports overlook or downplay the relationship between private wealth and the arts in order to advocate arts subsidies that aren’t as effective in producing either wealth or art. However, he does admit that mainstream economists are increasingly recognizing the value of the arts, particularly for cities.
“The economists I know, cultural economists, are beginning to understand how important arts can be, particularly for municipal governments, and also how important it is that governments be competitive in attracting the arts,” says Abbing. “If all the artists go to Amsterdam, the rest of Europe will suffer, yes?”
Originally published in THE FUTURIST, May-June 2008.