Economics of the Arts

The Arts in England: Size, Earnings & Unreliable Data

he Hewlett-Packard versus Autonomy court case has flared up again in the news. The litigation in both directions has being going on so long that the roots of it are rarely reported. Autonomy was a British tech success- and there are not many- whose domain was data mining. Its product was meaning-based technology intended to draw sense from unstructured human information.

Claims for the arts swirl around in profusion, assertions made without the bedrock of evidence. A smell of lobbying pervades. Claims on health and the arts range from the muddled to the plain false. Would that data mining had a powerful player to shine a spotlight on culture. Happily Arts Council England has commissioned a report from a dispassionate participant, the Centre for Economics and Business Research. Few will read it but it is worth it- link below.

Its first virtue is that it throws a lasso around the arts. The blurring of arts with broader industry sectors is useful for economic development policy; its value for cultural policy is less so. The consultancy restricts itself to the relevant SIC codes 58/59 and 90.

These codes comprise 58.11 book publishing, 59.2 sound recording and music publishing, 90.01 performing arts, 90.02 support activities to performing arts, 90.03 artistic creation, 90.04 operation of arts facilities including the operation of concert and theatre halls. So revenue in England is £21.2.bn with a GVA of £10.8 bn. This is made by 137,250 people earning £6.1bn in pay.

The GVA per employee is £62,000 with a GVA multiplier effect of 1.14. This feels more realistic than the claims that are thrown around. Interestingly the report highlights the Pareto effect, the big recipients generating the big benefits. The economists have old data- the year is 2016- and it is an estimate that the National Portfolio Organisations, (although not museums), delivered £2.4bn in output, £1.2bn in GVA and 22,300 jobs.

Taking in indirect effects, supply chains, and induced effects, wider spending, the estimates are that the NPOs supported £5.3bn in output, £2.6bn in GVA and 59,095 jobs in the wider economy. Growth in arts and culture employment in the UK as a whole increased by 11 per cent over the years 2009-2016 from an estimated 123,300 to 137,200.

CEBR’s models conclude that the arts and culture industry’s gross domestic output multiplier is 2.24. This means that for every £1 in output, directly produced by NPOs, an additional £1.24 in output is supported in the wider economy, through indirect and induced multiplier impacts. Combining this multiplier effect with the output contribution of NPOs, an aggregate contribution of £5.3bn worth of output in 2016 is estimated.

Median salary was £32,556 in 2016. This will be surprising, but data-out is as good as data-in. The figure is based on official earnings data taken from the Annual Survey of Hours and Earnings (ASHE). This was a 5% rise on £30,789 in 2015. The same multiplier applies: £1 of income from employment generated in arts and culture gives an additional £1.21 of income from employment is generated in the wider economy through indirect and induced multiplier impacts. But a caveat. Employment in the arts is not the same as participation in the arts. In terms of participation there is under-utilised capacity on a massive scale. But that data is not available.

This is an enjoyable document, no doubt of use to the arts policy-makers who were its commissioners. Its equivalent in Wales, made available to the public domain, would be welcome.

CEBR report at

https://www.artscouncil.org.uk/sites/default/files/download-file/Economic%20impact%20of%20arts%20and%20culture%20on%20the%20national%20economy%20FINAL_0_0.PDF

author:Adam Somerset

original source:
10 June 2019