By Doug Noonan
A few weeks ago, the National Endowment for the Arts proclaimed that the arts and cultural industries in the US contributed $1.2 trillion to the economy in 2023. This was based on the latest release of the Arts and Cultural Production Satellite Account (ACPSA) – an ongoing attempt by the Bureau of Economic Analysis to track the ‘arts economy’ and how it fits into overall economy. (Check out NASAA’s excellent profiles using this data to see more.) The ACPSA is the result of efforts to account for the ‘arts economy’ – a more nebulous, cross-cutting system than other traditional industries like agriculture or aerospace engineering. It takes some special effort to try to track down where ‘arts and culture’ manifests as it infuses itself throughout the economy. We can and should learn much from the ACPSA.
At Arts Analytics, we love data. We love numbers. And $1.2 trillion is a real, real big number. What’s not to love?
This trillion-dollar data-point – a holy grail of arts policy tropes – gives us yet another big number to wave about. Decades ago, there was the fashionable excess of flaunting big numbers from economic impact studies. And now, the ACPSA numbers give us enormous numbers (from a far more usable analysis). Will this mean that the arts economy can finally get its flowers? Such big flowers!
The $1.2 Trillion Data Point and Its Discontents
Yet we hear discontent with the trillion-dollar data-point. From two sides, at least. One complaint is that the number is too big, while another is that it’s too small.
- Too big. Incredulous, some see it and dismiss it because it seems an artist’s fantasy – too big to reflect a reality we intuitively sense. The arts economy is quite small, in raw dollars. $1.2 trillion doesn’t pass the ‘eye test’ here, because we’re skeptical that an arts sector – museums, theaters, galleries, and other bastions of fine arts – are really a bigger part of the economy than agriculture (food) or transportation and warehousing (everything else). The skepticism is well-founded. It’s ultimately correct if we limit our conception of the arts economy to a narrower, fine-arts world. And who would ever portray the arts like that? As “the” arts, with elite players and exclusive domains? The ACPSA confirms this intuition. The contribution of the poster-children of the arts economy (i.e., artists, writers, performers, promoters, agents and managers, museums, photography, performing arts companies, fine arts education) is only $124 billion. Not trillion. Even if we take the more expansive definition of arts to include more creatives (e.g., advertising, architecture, graphic design, interior design), the contribution still only reaches $266 billion. The incredulity is apt. We only get to $1.2 trillion by erecting a big tent and counting things that people don’t “feel” or see as part of the arts economy. The ACPSA accounting includes things like construction, transportation, unions, grantmaking, and other support activities necessary to distributing, staging the creatives’ work. The counterargument is that these are inextricably linked. The actors need the stage; the painters need the galleries.
Where we draw the line and how we ‘discount’ the ancillary, support services in thinking about the size of the arts economy can be debated. But that’s where fetishizing a big-number data-point leads us to miss the insight. (It’s not a nuance when the numbers are so big.) These “supporting” industries account for over three-fourths of the sector. Support industries in the arts and culture space include high-profile sectors like movies and broadcasting. Including “jewelry and silverware manufacturing” doesn’t move the needle (at 0.3% of the arts economy). But just 4 support industries (i.e., motion pictures, broadcasting, publishing, government) account for 43% of that $1.2 trillion sector. Is that what we’re talking about when we talk about how big, strong, and valuable the arts economy? Maybe it should be.
But we haven’t yet mentioned the biggest part of the arts economy: “other information services.” Despite its bland label, this subsector has grown by 32x since 2001! (Meanwhile, the arts sector as a whole grew by 2.5x.) This workhorse includes “web publishing and streaming, which includes internet publishing and broadcasting, music and film archives, comic syndicates, and news photo distribution services.” It’s on pace in a few years to overtake the entire set of “core” arts and culture production by creatives. $182 billion for a category labeled as “other” is worth the headlines. Explaining that $1.2 trillion includes streaming, broadcasting, and publishing is a great way to get disbelievers to nod their heads: yes, that arts economy is vast and booming. Time for some self-reflection in the sector, too.
2. Too small. Key parts of the sector are not being seen despite a big tent and headline-grabbing data points. This is because the expansive ACPSA is blind to some fundamental, pervasive aspects of the arts economy. Two big blindspots come to mind.
(a) The ACPSA – like many big datasets – struggle to track self-employment and sole-proprietorships, secondary occupations and gig work, and all the kinds of nonstandard economic arrangements that pervade the arts sector. With extremely high self-employment rates and other creative side hustles abounding in the arts economy, the ACPSA may be overlooking some major economic juice that keeps the arts economy flowing – often some of the most vulnerable or precarious elements.
(b) These big numbers overlook the heart and soul of the arts economy. Metrics like “value-added” and “compensation paid” derive from government tracking sales and income (for taxation purposes). Yet the taxable arts economy is the ‘Hamilton’ ticket stub, while the full arts economy includes high-school history class rap battles, the TikTok duets of ‘My Shot,’ and the countless hours listening to its songs. It ignores the untaxed benefits of the arts economy, and we have reason to believe those are vast – dwarfing even the $1.2 trillion. Whether it is volunteer work or unpaid artistic creation, enjoyment of art without buying a ticket or paying for a download, or just appreciating that the value of the arts goes far beyond sticker price – transaction-based metrics in the arts fail to see vital elements of the sector.
Both complaints are right. The ACPSA data is no Goldilocks’ porridge: it is both too big and too small.
We do love data. We come not to bury data, nor to praise it, but instead to learn from it. We need to take the data for what they’re worth, and resist taking them farther. The $1.2 trillion number is big because the arts economy is, indeed, big. If it seems to overstate its size, then that’s likely on us. The narratives we build and sell about the arts can be rather exclusive, elitist, etc. They also tend to be (ironically) conventional, dare we say “conservative.” We center the creatives in the narrative, yet the support obviously plays a major role. Storytelling might also catch up to yesterday and realize that the arts sector is increasingly, irreversibly digital.
At the same time, the arts economy is so much greater than this story. It’s more than transactional values. If you want a fuller picture of the arts economy, then you need to study more than transactions.
Art’s Invisible Economy
As economists, we tend to simplify the idea of “value” to “what would someone give up for it.” This is great, because we avoid making judgment calls about value and it’s a flexible concept that can be applied across all manner of contexts. You could argue that it’s too crass (e.g., high-brow culture isn’t advantaged over low-brow) or biased toward those with more to give up (i.e., those with more money dictate more of the value). And you wouldn’t be wrong. But, well, the alternatives aren’t much better. (And we can dig into these debates in future Words postings.) Our point today is that, as a measure of economic value in the arts economy, the ACPSA’s transactional numbers don’t get us what we want. (Nor do ‘economic impact studies’ for that matter.) We need to think bigger, better.
Using transactional measure to capture the arts economy is putting arts and culture’s worst foot forward. When it comes to arts and culture, most of what we give up to enjoy it is not money. It’s our time. And that seems likely to only become truer and truer over time. Sure, there is spending on specific works of art, tickets, downloads, subscriptions, memberships, and so forth. That matters. Those are real sacrifices and tell us a lot of about how people value those things. But when we enjoy the arts, most of what we give up is our time. And our time – like our money – is scarce. (Moreover, paying attention to time is a great way to level the playing field in terms of who is endowed with more resources to spend!) TikTok is free, I’m told, yet millions spend hours every day making creative content (for free) and viewing it (for free). This is real value. Just not taxable. Singing in church choirs, hobbyist creators, listening to the radio, volunteering at the museum, etc. We’re constantly interacting with arts and culture through how we spend our time. Only a (vanishingly) small corner of the arts sector is behind the box office or turnstile.
Take the $1.2T stat at face value, but appreciate that main value added to the economy isn’t captured in transactions. Look harder, and on any given day you’ll find 10 unpaid volunteers and amateur “makers” for every employee in an arts-related industry. You’ll find the value of time we spend on unpaid arts creation to far exceed (2x !) the compensation paid to “core” industry workers. The benefits of enjoying the arts dwarf the value-added via transactions. We looked at just one state last year, and we found that residents’ benefits from arts enjoyment were at least 4.2x the ‘value-added’ from the entire arts economy. Transactions are the tip of the iceberg; the real action in the arts economy is the hard-to-see, submerged parts.
In a pay-per-view world, the job of measuring the arts economy gets easier. And we might see more of that world. But we also spend on arts and culture indirectly. Our cell phones and data plans are spending, very indirectly, on arts and culture. The higher rent paid to live in the ‘hip’ part of town. And so on. We need to pay attention to the value of access to the arts – and how we (and who) pay to access it.
Increasingly, our access to arts and culture is not going to be metered. We expect that it will be based more and more on subscription-style services. We already see that with our streaming platforms for video, audio, and other content. Looking at some monthly or annual payment for access to a bundle of content isn’t going to tell us much about how much the arts and cultural content matters to us. Instead, we have to look at how we spend our time. Once we do that, we will see that $1.2 trillion isn’t just a big data-point. It’s just the tip of a much bigger iceberg. The submerged part of the arts economy touches the lives of so many more, and more profoundly. In future Words posts, we’ll dive deeper to analyze the rest of the iceberg.