The Contribution of the Arts and Culture to the National Economy (Pdf 2.9MB)
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0 The contribution of the arts and culture to the national economy An analysis of the macroeconomic contribution of the arts and culture and of some of their indirect contributions through spillover effects felt in the wider economy Report for Arts Council England and the National Museums Directors’ Council May 2013 Centre for Economics and Business Research Ltd. Unit 1, 4 Bath Street, London EC1V 9DX t: 020 7324 2850 f: 020 7324 2855 w: www.cebr.com 1 Contents Contents .................................................................................................................................................. 1 Executive summary ................................................................................................................................. 1 Scope and methodological overview .................................................................................................................................... 1 ‘Business economy’ highlights .............................................................................................................................................. 2 Macroeconomic impacts of the arts and culture .................................................................................................................. 3 Spillover impacts through tourism ....................................................................................................................................... 3 The role of the arts and culture in supporting commercial creative industries .................................................................... 4 Spillover impacts of the arts and culture that improve national productivity ...................................................................... 5 Investment in the arts and culture as a catalyst for economic regeneration ....................................................................... 6 Suggested areas for further research ................................................................................................................................... 7 1 Introduction ....................................................................................................................................... 8 1.1 Background and aims of the study ....................................................................................................................... 8 1.2 Scope of the study ................................................................................................................................................ 9 1.3 Overview of approach and methodology ........................................................................................................... 12 1.4 Structure of this report ....................................................................................................................................... 14 2 ‘Business economy’ review of the arts and culture ......................................................................... 15 2.1 Turnover ............................................................................................................................................................. 15 2.2 Gross value added .............................................................................................................................................. 17 2.3 Employment ....................................................................................................................................................... 19 2.4 The market structure of the arts and culture industry ....................................................................................... 22 2.5 The structure of incomes from employment in the arts and culture industry ................................................... 25 2.6 Consumer expenditure on the arts and culture .................................................................................................. 27 2.7 Funding of the arts and culture .......................................................................................................................... 29 2.8 Exchequer contributions of the arts and culture industry .................................................................................. 34 3 Macroeconomic impact of the arts and culture .............................................................................. 36 3.1 Embedding the arts and culture within our macroeconomic impacts framework ............................................. 36 3.2 Contribution to GDP of the arts and culture ....................................................................................................... 39 3.3 The ‘industrial’ output multiplier for the arts and culture .................................................................................. 43 3.4 Contribution of the arts and culture to employment ......................................................................................... 46 3.5 The impact on household incomes of the arts and culture ................................................................................ 49 3.6 Regional variation in our multiplier estimates .................................................................................................... 52 4 Spillover impacts of the arts and culture through tourism ............................................................. 55 4.1 The role of the arts and culture in attracting tourists to the UK ......................................................................... 55 4.2 Contribution through tourism when the arts and culture are the main purpose ............................................... 56 4.3 Contribution through tourism when the arts and culture were not the main purpose ..................................... 58 4.4 Selected features of ‘arts and culture’ tourists................................................................................................... 59 5 The arts and culture’s role in developing skills, nurturing innovation and fostering growth in the commercial creative industries ........................................................................................................ 62 5.1 The importance of the commercial creative industries ...................................................................................... 62 5.2 Supply‐chain links with the arts and culture ....................................................................................................... 63 5.3 The boost to wages and productivity in commercial creative industries from proximity to the arts and culture ............................................................................................................................................................................ 65 5.4 How public funding boosts artistic innovation ................................................................................................... 68 5.5 Arts and cultural organisations as incubators for creative talent ....................................................................... 69 5.6 The arts and culture’s role in supporting commercial creative endeavour ........................................................ 73 © Centre for Economics and Business Research Ltd, 2013 2 6 Spillover impacts of the arts and culture that improve national productivity ................................ 76 6.1 Introduction to the spillover benefits of artistic and cultural education ............................................................ 76 6.2 The effects of artistic and cultural education on academic attainment and the development of transferable skills .................................................................................................................................................................... 77 6.3 Higher education in arts and cultural subjects ................................................................................................... 80 6.4 The role of the arts and culture in supporting research activities ...................................................................... 82 6.5 The arts and culture in further education and community learning ................................................................... 83 6.6 The role of the arts and culture in improving wellbeing ..................................................................................... 84 7 Investment in the arts and culture as a catalyst for economic regeneration ................................. 88 7.1 The mechanisms by which investment in the arts and culture drives regeneration .......................................... 88 7.2 The benefits to local business of arts and cultural attractions ........................................................................... 89 7.3 The impact of the arts and culture on house prices ........................................................................................... 89 7.4 The impact of investment in the arts and culture that is related to place .......................................................... 91 8 Suggested areas for further research .............................................................................................. 95 8.1 The ‘business economy’ and macroeconomic impact analysis of museums ...................................................... 95 8.2 Producing more robust estimates of the impacts of the arts and culture industry ............................................ 95 8.3 Potential further research on the spillover impacts of the arts and culture .....................................................