Research Demonstrates Cultural Industries are Economic Powerhouses

A new report released by the NEA demonstrates once again that cultural industries are economic powerhouses and states have the data to prove it.  Drawing on data from the Bureau of Economic Analysis, Arts and the GDP: Value Added by Selected Cultural Industries is a new NEA research note that examines the value added by three selected cultural industries: (1) performing arts, sports, and museums; (2) motion pictures and sound recording; and (3) publishing (including software).  Combined, these three cultural industries contributed a total of $278.4 billion to the U.S. economy in 2009.  The NEA research also looks at dollars and jobs added to individual state economies by these cultural industries.

Each year, the Bureau of Economic Analysis estimates the value added by major industry groups, including performing arts, sports, and museums.  “Value added” refers to an industry’s contribution to the U.S. economy through its labor and capital, excluding material and energy costs.  More detailed industry breakouts that isolate the performing arts and museums from sports are conducted every five years, most recently for 2002 data.  That year, for example, value added from sports was $16.9 billion, value added from the performing arts was $7.2 billion, and value added from museums was $4.7 billion.

The following are key findings as a result of the research:

• In 2009, the performing arts, sports, and museums added $70.9 billion to the U.S. economy.  That same year, the motion picture and sound recording industries contributed $59.8 billion, while publishing (including software) added $147.7 billion

• Cultural industries have contributed increasingly greater amounts to the U.S. economy.  Between 1987 and 2009, for example, inflation-adjusted value added by the performing arts, sports, and museums nearly doubled.

• The 2007-2009 recession affected cultural production.  Real value added from the performing arts, sports, and museums fell by 1.4 percent in 2008; it dipped 5.5 percent the following year.  Contractions also occurred in the motion picture and sound recording industries and in publishing. 

The note also analyzes how the performing arts and other cultural industries contribute to states in terms of jobs produced and value added by the cultural industry to the Gross State Product (GSP).  Among those findings:

• The performing arts contribute more to states with large, diverse economies, such as California and Texas.  Each new dollar of value added by the performing arts industry in California adds $1.38 to that state’s economy.  The comparable figure in Texas is $1.28.  These findings indicate that these state economies have more of the goods and services (e.g. stage curtains, materials for scenery, sound equipment, printing of programs, advertising services) needed to increase performing arts production without having to import them from other states.

Additional spending on the performing arts generates more new jobs in Utah, North Carolina, Ohio, and Georgia.  In each of these states, more than 45 new jobs are generated for every additional million dollars in performing arts production.