Wednesday, June 19, 2013

Economic impact studies of the Arts - a Timeline

This is something I've been working on for a little while, on and off. 

Following Maria Miller's speech last month about Arts and Culture having to prove its economic worth, I became intrigued about what information was already out there. I had a hunch there was a lot. I was right. So far I have found 32 studies stretching back 25 years to 1988, an average of almost one every 9 months. I am sure there are more. (If I've missed any please, let me know, sending links where possible, and I will add them in).  

I know it's a bit late now for this to be a response to Maria Miller's request, but I've been tied up with In Battalions and trying to make a living. But I am publishing it now, on the day of the first Arts and Culture debate in the Commons for five years, in the hope that it might prove useful to those MPs taking part. If you're in touch with any, please send it to them.

In the meantime, with your help, I will continue to update it. 

Economic impact studies of the arts: a timeline by Fin Kennedy 

The Policy Studies Institute's seminal study, The Economic Importance of the Arts in Britain by John Myerscough established the arts sector as a significant, growing and value-added sector, with a turnover of £10 billion and employing some 500,000 people. Myerscough demonstrated that direct spending on the arts led to spending in other sectors of the economy, which in turn enhanced wealth and job creation, and made cities appear more attractive to citizens and companies. 

Cherry Ann Knott's study of the socio-economic position of craftworkers in the UK, which concluded that there were around 25,000 craftsmakers working in the UK, an increase of 20% since 1981.

O'Brien and Feist's Employment in the arts and cultural industries: an analysis of the 1991 Census identified a total number of 648,900 individuals employed within the cultural sector (2.4% of the totally economically active population), rising to 664,400 if self-employed craftspersons are included in their definition of the sector. The study also showed that there had been a 34% increase in the number of individuals with cultural occupations between 1981 and 1991. 

Also in 1995
The Policy Studies Institute published Culture as Commodity (Casey, Dunlop and Selwood, 1995) which provided an overview of the economics of the arts and built heritage in the UK. £5 billion was estimated to be generated by consumer expenditure on the sector#

Travers et al's study of the arts and cultural industries in the London economy for London Arts Board, which estimated the total numbers of people resident and working in the arts and cultural industries in London at approximately 140,000, and showed that 7% of the capital's economy was generated in the sector. 

The Cultural Industries Sector: its definition and character from secondary sources on employment and trade, Britain 1984-91 argued that the cultural industries have a significant volume of trade, with gross credits from Film and Television alone of £570m (1991 figures). Cultural sector employment was estimated at 972,000 employees, 4.5% of all employees in Britain in 1991. 

The DCMS’s own Creative Industries: 1998 Mapping Document estimated that the creative industries generate £60 billion in revenues and an estimated £7.5 billion exports per year, account for over 1.4 million jobs, and have a growth rate of 5%, faster than any other sector in the economy. The authors suggested that if the sector grew by only 4% a year to 2007, it would generate £81 billion in revenues and account for 1.5 million jobs. 

The Regional Issues Working Group set up by the government’s own  Creative Industries Task Force identified regional employment in the creative industries ranging from 1.8% in the North West to around 5% in the South East and South West and 7% in London. 

Assessing the role of the arts and cultural industries in a local economy by J. Bryan et al. finds that the arts and cultural industries provide employment for 28,600 people, or 2.6% of the working population of Wales. (2,885 people in libraries, museums and heritage); they support an estimated 6,674 FTE jobs in other Welsh industries, accounting for disposable income of £80 million 

The DCMS’s Creative Industries Mapping Document 2001 showed that the revenues generated by UK creative industries has grown to around £112.5 billion and that exports contribute some £10.3 billion to the balance of trade. Creative industries now account for over 5% of the Gross Domestic Product and employ around 1.3 million people. 

Also in 2001
The Policy Studies Institute published the results of its study into the UK Cultural Sector (Selwood, 2001). The research established that ‘main job’ employment in the cultural sector had risen by nearly three times the rate of total employment since 1995. 

Socialand Economic Impact of Shetland Music found that 180,000 attended music events on the islands in 2002, and that there were approximately 56 Shetland performers/bands and nearly 400 individual performers. The total income to the venues from hosting music events was £2 million. 

A report for Researching Cultural and Creative Industries in London (RCCIL) by Dominic Shellard found that Theatre is worth £2.6 billion annually to the United Kingdom. This figure does not include impact of individual touring companies or non-building based theatre activity. West End venues are worth £1.5 billion and the UK based theatres excluding the West End venues are worth £1.1 billion.  The 492 theatres outside London have a significant economic impact to the national economy. 

A Study of the Economic and Social Impact ofSubsidised Theatre in Northern Ireland finds that the sector spends in excess of £2 million per annum within NI and provides direct employment opportunities for at least 87 Full Time Equivalents (which translates into over 350 individuals within the sector on a full time, part time and contract basis). While approximately 60% of sectoral income is derived from public subsidy (95% from ACNI and 6% from BCC) this income enables the sector to leverage a further £854K from other sources – that is £0.86 per £1 of subsidy. The level of direct expenditure per £1 of ACNI subsidy equates to £1.97. 

The University of Brighton’s studyof the economic impact of the De La Warr Pavilion finds that DLWP and its visitors have added over £11.7 million to the region’s economy which, in turn, has generated another £4.5 million through further economic activity. From April 2006 to March 2007, DLWP received 576,000 visits, 72% from outside the region. These visitors spent over £4 million in Rother and their spending on hospitality and retail is bringing new business into the local economy. As a cultural business, DLWP spent over £1.6 million between April 2006 and March 2007, £267,000 of this was retained within Rother’s economy.

National Museums in Liverpool commissioned an impact study of the museums for Liverpool. The work, undertaken by ENRS identified NML's venues as producing an economic benefit to the region of £115 million from a turnover of £30 million.

Leading the world - The economic impact of UK arts and humanities research is a study commissioned by the Arts and Humanities Research Council which funds Masters and doctoral degrees in the arts. It estimates that that for every £1 spent on research by the AHRC, the nation may derive as much as £10 of immediate benefit and another £15-£20 of long-term benefit. Thus in 2006-7, the AHRC invested £60.3 million in new research, which implies immediate returns of over £616.9 million and a possible
additional return over 25 years of around £1 billion.

A report for Glasgow City Council, The Economic Impact of Gaelic Arts and Culture within Glasgow finds that the aggregate impacts of Gaelic Arts and Cultural Activities (including the media) on the Glasgow economy are in the region of £3.55 to £4 million supporting almost 200 workers in professional and associated employment.

Liverpool Biennial economic impact review work to measure the impact of the Biennial during the last 3 festivals. Economic impact measurement was undertaken by England’s Northwest Research Services (ENRS) and includes an element of primary research aimed at benchmarking additional visitor spend of arts audiences attending an event. The headline findings from this research place a value of the economic impact on the local economy of the Biennial at between £13 and £15 million.

University of Portsmouth’s economic impact study of Chichester Festival Theatre shows that staff and theatregoers directly spent £7.8million in the local economy between 1st September 2009 and 31st August 2010. Most of this is as a result of spending by theatregoers into the Retail and Hotels and catering sectors of the local economy.  The Theatre provides jobs for over 440 people, 155 of whom live within the District. In addition, more than 180 visiting actors and crew, as well as a substantial number of people supplying artistic services such as directors and designers, spend a proportion of their time working and living in the Chichester District. When the multiplier effect of the direct spending is taken into account, the estimated value of the Festival Theatre to the Chichester local economy for the period from 1st September 2009 to 31st August 2010 was £12.5million. In terms of employment, the Theatre was directly and indirectly responsible for around 356 local full-time equivalent jobs.

Why Art Works: The value of the contemporary visual arts in Lancashire and Cumbria, a study commissioned by North by North West, a consortium of 12 publicly funded visual arts organisations. It finds that 500,000 attend the venues each year, with a further 1,000,000 viewing online, actively enabling 80,000 a year to participate in projects, employing 195 people, across 80 exhibitions and events. This translates into a collective turnover of £8,3 million with local authority investment of just 35p per head of population per year. These organisations create up to £14 million of economic impact, 80% of which is spent in the local community, and have played a powerful role attracting a further £17 million of investment into their region over 5year.

An economic impact study of the Anvil Arts Trust in Basingstoke, which runs The Anvil, The Haymarket and The Forge, and which gets most of its funding from the council, found that it generated a net economic impact on the borough of £5 million.

Also in 2010
The Value of Jazz in Britain finds that the estimated annual turnover of the jazz sector of the UK music industry is £85.05m per year.

The Cultural Learning Alliance’s report The Case for Cultural Learning finds that learning through arts and culture improves student attainment in all subjects. Furthermore: taking part in drama and library activities improves attainment in literacy; taking part in structured music activities improves attainment in maths, early language acquisition and early literacy; Schools that integrate arts across the curriculum in America have shown consistently higher average reading and mathematics scores compared to similar schools that do not; Participation in structured arts activities increases cognitive abilities; Students from low income families who take part in arts activities at school are three times more likely to get a degree; Employability of students who study arts subjects is higher and they are more likely to stay in employment; Students who engage in the arts at school are twice as likely to volunteer and are 20% more likely to vote as young adults.

Also in 2011
Economic impact of arts activity in the district of Lancaster reports that Lancaster district’s arts sector generates GBP 50m across Lancaster district. 600 businesses and organisations are directly or indirectly involved in the arts and cultural sector, supporting between 1,400 and 2,400 jobs. Direct and indirect activities of the seven member organisations of the Lancaster Arts Partnership generate GBP 7.5m annually, support a total of 200 jobs, produce GBP 800,000 of marketing/promotion value through media coverage outside the district, and provide more than 20,000 separate activities for young people each year. For 85% of visitors attending arts events in the district the event itself was the prime reason for their visit.

Economic impact study of  Milton Keynes Summer of Culture 2012 put the total estimated attendances for the range of Summer of Culture events at 161,000, equating to £4.771m expenditure. For a £197,000 investment by Milton Keynes Council in Summer of Culture the International Festival has levered £978,000 additional funding. The total economic impact is estimated to be £6.4m gross. 58 jobs in the arts and culture sector safeguarded by Summer of Culture 675 new posts and creative opportunities created for Summer of Culture events.

The Society of London Theatre reported that VAT receipts on West End tickets alone grossed the Government £88 million.

Also in 2012
An Independent Economic Assessment, ‘Culture Matters’ - ten of the North East’s leading cultural organisations representing 22 venues – has shown that £4.06 of GVA is generated within the region for every pound of subsidy received. The survey, which was carried out by ERS Ltd and is the fourth of its kind, also highlights that throughout 2011-12, Culture Matters’ members collectivelycontributed £77.6m of GVA, supported up to 2003 full time jobs, procured 60% of goods and services worth £19.8m from North East suppliers, and generated around £8.6m in additional visitor spend.

A report called The Economic, Social and Cultural Impact of the City Arts and Culture Cluster, prepared for the City of London Corporation by BOP Consulting in January 2013 explores the range of benefits that derive from the City’s arts and culture cluster. Drawing on data provided by a range of arts and culture organisations, based in the City, the report highlights the substantial economic contribution made by the City’s world leading arts and culture institutions, showing that the cluster generated a net contribution of £225 million in GVA and supported 6,700 full-time-equivalent jobs in the City. 

Also in 2013
Driving Growth Through Local Government Investment in the Arts, commissioned by the Local Government Association, finds that the arts provide nearly one million jobs and that 67,000 cultural businesses contribute £28 billion every year to the UK economy. It estimates that for every £1 spent by councils on the arts, leverage from grant aid and partnership working brings up to £4 in additional funding. Major beneficiaries are local tourism and hospitality. The visitor economy is this country's fifth biggest industry and one of the few sectors experiencing growth. It grew at over five times the rate of the UK economy as a whole in 2011, contributing about £115 billion. As well as attracting visitors to places, the arts encourage them to stay longer and spend more. The contribution of music, visual arts and performing arts alone exceeds £4 billion per year. Councils invest as much as Arts Council England in our arts and museums infrastructure, spending around £800 million every year. Councils co-fund around 60 per cent of the 695 organisations in ACE’s National Portfolio.

Also in 2013
Analysis by the Centre forEconomics and Business Research (CEBR) shows that the arts budget accounts for less than 0.1% of public spending, yet it makes up 0.4% of the nation's GDP. Further: The turnover of businesses in the arts and culture industry was £12.4bn in 2011. This in turn led to an estimated £5.9bn of gross value added (GVA) to the UK economy in the same year. (GVA is the value of the industry's output minus the value of inputs used to produce it, including state subsidies.) The sector provides more than 110,000 jobs directly, about 0.45% of total employment in the UK. The figure becomes 260,300 jobs once the indirect impacts of arts and culture are added in. Living in an area with twice the average level of cultural density adds an average £26,817 to the value of a property.

Yet again in 2013
Nesta’s A Manifesto for the Creative Economy finds that the ‘creative economy’ accounts for one–tenth of the whole economy. It provides jobs for 2.5 million people, more than in financial services, advanced manufacturing or construction, and that the creative workforce has in recent years grown four times faster than the workforce as a whole.

Have I missed any? I probably have. Let me know if so and I will add them in. There are noticeable gaps between 1988 and 1994, and 2005 to 2007....


Mark Pemberton said...

You may want to include this:

Mark Pemberton said...

And this:

Peter Moore said...

Many of the studies seem to centre on the economic benefit of people who are employed, directly or indirectly, in professional theatre. I wonder how many of the studies included the (presumably) smaller, but significant, impact of the amateur theatre?
Writers and publishers benefit from performance royalties.
Local restaurants, pubs and other businesses receive trade from amateur theatre audiences.
My own local amateur-run theatre, The Plaza in Romsey, contributes rates to the local council; generates work for local printers and designers; purchases drinks and refreshments from local traders to stock the bar and coffee bar; our building refurbishment plans are providing employment for architects and a professional fund-raiser; we also act as an occasional receiving theatre for small-scale shows and concerts, therefore giving a platform to professional groups.
I'm sure there must be other economic benefits to the community from amateur theatre, both tangible and subtle.
In the amateur world, we are, to an extent, self-sustaining and do not tend to suffer as much from the cuts which the pros get hit by. On the other hand, I know of several groups that perform in council-owned (or -run) theatres and who should therefore be wary of cuts becoming deep enough to take away their venues. In that way, all arts, pro and am, are susceptible to cuts, and therefore the economic benefits of both should be considered, separately and together.

PS - keep up the good work, Fin.

Harry Giles said...

Here's the 2010 Edinburgh Festivals Impact Study:

In economic impact, it calculates that each year Edinburgh's Festivals generate £261m in new economic output, £82m in new income, and 4917 FTE jobs in Scotland. It's also a triple-bottom-line report, so includes social, environmental and cultural impact, and there's a whole slew of numbers and idea to pull out there.

Here's the 2012 Economic Contribution Study from Creative Scotland, which calculates £3690m of GVA from arts industries:

Creative Scotland also did a scoping report on previous studies:

And just to spin things in a totally different direction, you might enjoy the Arts Ripple Report, which is a cogent, well-researched and well-argued case for why economic impact is precisely the wrong way to think about the arts, and generally a bad way to make the case for funding the arts to the general public:,%20January%202010.pdf

Ian Shuttleworth said...

Shamelessly - but with all due attribution and gratitude - excerpted for Prompt Corner column of Theatre Record. Hope that's OK.