Art and economics relationship

Why art and culture contribute more to an economy than growth and jobs

art and economics relationship

Art, creativity and the economy1 New opportunities built on a problematic past relationship Paul Rutten The ongoing debate on the social value of art and culture. Culture manifests itself in everything human, including the ordinary business of everyday life. Culture and art have their own value, but economic values are al. Artworks by deceased South African artist Helen Martins. The cultural and creative industries are key for social and economic development.

Conversely, the dominant economic discourse, particularly among policy makers, tends to see the arts as an expenditure, a liability, a leak in the economy cf. Public spending on art and culture is seen as icing on the cake, which can be permitted in times of prosperity but not in times of economic downturn.

This paradigm is increasingly untenable, as there is a growing amount of evidence demonstrating that investments in art, culture and creativity in fact benefit the creation of value in various ways. What is the value of a culturally developed population, whose citizens have acquired a sensibility to artistic expression, compared to a population whose citizens have not acquired these competences?

The main reason why there is a lack of well-founded insight into this issue, has much to do with the methodical complexity such research would entail, in combination with the research tools usually applied by economists for instance. On the other hand, scientists 3 Recent trends in cultural policy: Governments are key players in the world of art and culture in the Netherlands and Europe, and thus influential figures in the context of this debate; not so much as champions of one specific opinion, but rather through the results of their concrete policies.

The continuity of artistic and cultural production is highly dependent on the resources made available by national, regional and local governments. Much of the artistic production which is considered socially valuable, cannot be financed solely through the private sector a combination of funds provided by consumers, sponsors and benefactors.

This is what economists call market failure: In this context, governments in Europe are seen as playing an essential role in the art world, since they are the main source of funding for education programmes, for the creation and production of art and culture, and for organisations which make these available to European citizens, from theatres, museums and public broadcasters to supporting institutions.

Throughout the second half of the 20th century, Dutch art and culture policy has seen a succession of basic principles and philosophies, all justifying this financial state support. Most of these, with the exception of the traditional principle of public edification through art, still play an important role in the contemporary policy paradigm.

The criteria applied by various public art and cultural funds in granting public funding to projects, artists and institutions, are directly based on these principles: In the late s Rick van der Ploeg, then Dutch State Secretary for Culture, Art and Media, was responsible for introducing the concept of cultural entrepreneurship into Dutch national policy. He considered the activities of makers and producers in the art world to be a prime example of entrepreneurship: However, the notion of entrepreneurship, with all its economic implications, was not greeted with immediate and universal enthusiasm in the context of the arts.

Gradually, however, the importance of entrepreneurship as promoted by Van der Ploeg has gained acceptance in the world of art and culture, at least at the institutional level. One indication of this acceptance, in the Netherlands and abroad, is the establishment of education programmes in this field. Art management has become a given fact.

As an economist and an Anglophile, Van der Ploeg was keenly aware of the intensive development of the creative industries in the United Kingdom. The British interest in this sector was based on an awareness of the value for the United Kingdom of the exports of creative economic sectors, such as the music industry. In the mids, the export value of music was equal to that of the British steel industry British Invisibles The government, even more than the sector itself, intensively promoted and showcased the creative industries, based on the insight that British creative industries were developing into an key sector of the economy see also: Rutten and Koops In the Netherlands however, a coherent policy for stimulating the creative industries was from disciplines other than economics are usually less concerned with quantifying the social and economic return value of art and culture.

Such a policy would not be established until a few years later, under State Secretary Medy van der Laan and her successors.

A number of research projects had already been conducted and published by then see: Hofstede and Raes ; in the same period, an Innovation Platform established by the government had declared the creative industries a key sector for the economy Van Tilburg and Bekkers Here too, policy makers recognised the importance of the creative industries, which were defined as one of these top sectors.

Rather than growth within the sector itself, the creative industries were seen mainly as an agent for innovation in other top sectors Topteam Creatieve Industrie However, and somewhat cynically, two important subsectors of the creative industries were subjected in the same period to sweeping budget cuts. Also, the centre-right government proposed raising the value-added sales tax rate on art products and services, a measure which was eventually reversed by the subsequent and currently incumbent Liberal-Labour coalition.

For several decades, traditional industrial production has no longer been the main economic pillar; other sectors now play an increasingly important role in creating added value and employment, particularly in the field of knowledge-intensive business services. Creativity, and by extension the creative industries, are seen as new and important sources of economic value.

As I previously noted, the United Kingdom first understood the importance of the creative industries in the s. Creative industries are considered an economic field in which Western countries are able to excel on a global level.

Especially in the United Kingdom, but also in the Netherlands, creative industries have shown over the past few years above-average growth rates. These meanings provide end users with experiences which have cultural as well as economic value. This way, creative industries play an important role in developing and maintaining lifestyles and cultural identities within society, but also in generating employment and added value. Based on this study, three subsectors were identified inwhich in turn were defined as 5 produced by the creative industries, including their meaning and symbolism and the lifestyles associated with them, are a relatively new source of economic value.

What is new here is not the sector itself, but rather the identification of this sector as an entity, and the recognition of its economic importance. The main defining characteristic of the creative industries is the dominant role of meaning in their goods and services, which are purchased for their content and symbolism, as these apply and relate to lifestyle value.

There is a clear emphasis on articulation and representation, and often on narrative, conveyed through a language aimed at evoking a specific experience in end users.

Art and Economics | Newington-Cropsey Cultural Studies Center

The language can be one of forms, words, images or sounds. These shared characteristics between the various domains which together constitute the creative industries, apply equally to the artworks of fine artists, the products of the media and entertainment industry, and the services offered by designers and advertising agencies to their business customers.

Still, it is possible to cluster different industries according to certain shared characteristics. We can distinguish three subsectors: This subdivision, and the categorisation of industries among these three subsectors, 9 is designed to enable the quantification of their economic importance. In the domain of arts and cultural heritage, the value is primarily in the aesthetic experience derived from works and artefacts whose creation usually stems from an artistic and cultural need, rather than commercial exploitation.

Public financing plays a key role in this domain. In the case of historical buildings for example, the primary concern at the time of their construction was usually not aesthetic; in our time however, it is the symbolic value of these buildings which determines their status as cultural heritage. Cultural heritage also includes museums, archives and libraries. The arts include mostly practitioners of visual arts and performing arts. For the media and entertainment industry, the role of public financing is less important than for arts and cultural heritage; there is a greater emphasis on profitable exploitation, and on reaching a large audience.

Typical industries in this sector include radio and television, books, cinema, music, and live entertainment. Creative business services do not work directly for the consumer market, but rather for business customers, usually on a commission basis. This subsector of the creative industries includes advertising and communication, design, and architecture including landscape architecture. Despite the commercial context, there is definitely room in creative business services for a personal creative signature, for example in the case of architectural firms or design studios.

The boundaries between the various subsectors are quite open, fluid and unsteady. For example, part of the gaming industry can increasingly be qualified as a form of creative business services, even though the gaming industry as a whole has traditionally been part of the media and entertainment industry.

Serious games are commissioned by businesses in order to teach specific insights and lessons in a more efficient and effective way to their staff, clients or other stakeholders. The boundary between private and public financing within the creative industries is much less clearly defined than is often suggested.

Public funding is by no means the exclusive privilege of the arts sector. For example, the film industry, an important sector within the media and entertainment industries, operates in a market-driven context, but cannot survive without public support in the encompassing various industries.

The definition was updated according to the international redefinition in of the standard classification of economic activities Rutten, Koops and Roso a. Van Andel and Vandenbempt Netherlands Film Fund Public broadcasting is chiefly financed through taxes, but is also an important player with a defining competitive position in the audio-visual market.

The printed media sector, with products ranging from newspapers to magazines and books, enjoys a low value-added sales tax rate: On the other hand, governments stimulate entrepreneurial thinking and acting in the arts and culture sector, in order to achieve a higher cultural return on public investments.

The influx of private funds in the field of art and culture as a result of cultural entrepreneurship has increased in recent years, which in turn also benefits the government cf. The boundary between culture and economy is thus an increasingly porous one. What is obvious however, is that publicly financed parties as well as private ones, in so far as these could ever be clearly distinguished, both create added value, cultural as well as economic.

As such they are socially relevant, they generate groundbreaking experiences as well as economic value, and they provide citizens with an opportunity to earn their livelihood. Graduates of the wide variety of art education programmes offered in the Netherlands can find employment, not only within a somewhat narrowly defined art sector that is largely dependent on state subsidies, but also in the diverse assortment of creative industries, which include a broad range of economically and socially value-adding activities.

This also applies to the Willem de Kooning Academy: Developments in the creative industries have direct implications for the requirements to students. Alumni of Dutch art education programmes find employment either in the arts sector, where they are expected to function in environments where cultural entrepreneurship is combined with independent artistic practice, or in creative business services such as advertising and fashion design, where the emphasis is rather on applied creativity in a mostly market-driven environment.

In there were more thanjobs in the creative industries in the Netherlands, subdivided across the three subsectors: This amounts to 3. In the most recent years of this period the growth rate was a bit more than one percent lower: Of the three subsectors, growth has been strongest in arts and cultural heritage, with 4.

An important reason for the high growth rate in arts and heritage, is the increase in registered jobs in the performing arts and visual arts, largely as a result of the compulsory registration since of freelance creative workers, many of which were not previously registered with the Chamber of Commerce. This has led to an inflated short-term growth rate.

The bright side is that we are now able to gain a clearer understanding of the true magnitude of these art practices. The lowest growth rate was noted in the media and entertainment industry: The last three years have even shown negative growth. Creative business services have been growing on average 3. Within the creative industries, the gaming sector is showing strong growth.

art and economics relationship

Statistics Netherlands and the Chamber of Commerce have recently added a category for gaming. The registration of businesses and jobs in this category is still under development and therefore incomplete. Still, we have included in table 1 for the sake of completeness the statistics for gaming and other publications. There is, incidentally, no indication that a similar situation might also apply for other categories. From to there was an average annual increase of 8.

This percentage is much higher than the percentage of creative industry jobs within the total number of jobs in the Netherlands 3. This is because the average number of employees in creative industry businesses is much lower than the national average.

This characteristic small scale is due to the high number of freelancers and small operations; there are very few businesses and institutions in the creative industries with more than 50 employees. Of the three subsectors, arts and heritage has the smallest average number of employees per business or institution.

The creative industry's total revenue grew on average 1. The growth of the creative industry's total revenue 1. This is due to a number of factors, such as the fact that much of the growth was realised in the arts sector, which is characterised by a relatively low revenue per job. The productivity in media and entertainment is thus markedly higher than in the other two subsectors Rutten, Koops and Nieuwenhuis a, pp.

However, in more recent years the emphasis has shifted toward the broader economic and social impact of the creative industries: In this economy, the human ability to create value based on new concepts and ideas is seen as the main driving force behind increasing prosperity; most of the added value is realised through goods and services which relate to the experiences of consumers and respond intelligently to broad social needs and requirements cf.

In this context, the creative industries are increasingly perceived as an important motor for competitive strength and innovation; consequently, the contemporary debate sees here the main value of creative activity, a trend described as the turn towards innovation see also: Rutten, Manshanden, den Blanken and Koops ; D.

Creative industries contribute to innovation, by giving concrete shape to the possibilities offered by new systems and technologies, and by linking these to broad social needs, through processes such as visual representation and design.

Creative professionals develop new ideas and create designs focused on current and future needs of representation and experience, but also on practical applicability and useful social value. In principle, this practice applies to a broad range of economic and social domains. Knowledge and understanding of trends, culture and lifestyles are essential requirements for offering attractive and competitive products.

This type of creativity is not only important for the development of new products and services, but also for their positioning and marketing. Since in many cases the functionality of these goods and services has already been optimised, competitive advantage can only be realised by making connections with intangible meaning and cultural value. The combination of both types of activities, the development of new products and services based on the appropriate creative inputs, and the connection of goods and 9 services with experience value, are all essential ingredients for innovation in the creative economy D.

This has led several researchers and theorists to conclude that the creative industries are in fact becoming an integrated component of the innovation systems of contemporary economies, rather than merely an economic sector enjoying above-average growth rates.

Therefore the creative industries clearly require specific and focused attention from policy makers. Fortunately, there has been an increasing interest and activity in recent years toward research concentrating specifically on this role of the creative sector in the economy and society at large see for example: The presumed special role of the creative industries can be clearly demonstrated by examining the function of design as a specific branch of creative business services.

Good design, and therefore good designers, are essential for the market success of products and services; not only in providing an aesthetic finishing touch, but also in contributing creative input to design processes, from the earliest phases of the development of goods and services. Of course, the economic value of the fashion sector goes far beyond design; the production, distribution and retailing of clothing all contribute value as well.

Still, design remains the key to this value. Also noteworthy is the important role played by designers in connecting the fashion sector with the domain of new materials. Based on their user-oriented perspective and their knowledge of current social trends, designers provide valuable input to businesses developing new materials for use in clothing.

There are a number of ongoing developments, in traditional fabrics and textiles as well as in the field of new fibres and materials.

One of the roles of designers is to make connections between parts of the chemical sector and the fashion industry. In the automobile industry as well, design is now the determining factor.

art and economics relationship

The technical specifications of the various brands and types are increasingly similar; distinction is created through design, image and identity, which is precisely where the competences of designers and brand specialists come into play. The role of advertising and communication in the economy is thus comparable to that of design.

art and economics relationship

Professionals in these disciplines create value, by defining specific positions for organisations and businesses within the field of public opinion, and by guiding the launch of new products and services and consolidating the position of existing ones.

A recent development in this sector has seen advertising agencies functioning as strategic branding and positioning advisors to businesses, a clear indication of the importance of these competences in the development and success of businesses Bilton The creative industries are moving toward the heart of the creative economy. As a result of this development, products in an increasing number of markets are now chiefly defined by their design and their brand.

Consumer electronics and information hardware are a clear case in point. In the market for media and IT services, the boundaries between technology, design, and even content are becoming increasingly blurred. The best example of this is Apple, the most successful business of the past decade. Apple has demonstrated the crucial importance of design, even more than Sony previously did with a number of groundbreaking concepts in the electronics industry.

Now it seems as though Apple is already losing ground in this respect to Samsung. The almost symbiotic relationship between information and communication technology on one hand, and creative industries on the other, can be explained by the central role of language and information in both domains. The products of the creative industries are basically immaterial: Creative industries almost always make use of newer or more traditional information and communication technology ICT.

The newest forms of ICT include digital networks and various forms of information processing software. Innovation in the creative industries closely follows developments in information and communication technology, and in some cases also vice-versa.

Just as printing technologies once paved the way for book and newspaper publishing, the development of the Internet and new digital technologies is now responsible for an extensive restructuring of the media industry including the emergence of new segments such as the gaming sector as well as profound social transformations.

Creative industries are at the forefront of this development, precisely because the sector in fact thrives on the development and exploitation of information and symbols, of lifestyle and representation. As a consequence, it is often unclear whether some businesses, including global players such as Google, Apple and Amazon, should be classified as ICT or creative industries.

TomTom facilitates and exploits access to information, thus functioning in many respects as a publisher. In the virtual domain, new creative concepts can be very rapidly scaled up to a global level. In the virtual creative industries, the role of local markets plays a much smaller role than in the material creative sector.

The catalysing effect of creative industries on the rest of the economy is not limited to creative business services, which include design, advertising and communication. In the media and entertainment industry as well, products, services and competences are being developed which can be applied within the economy at large, and which add lifestyle value to more generic products and services, by providing them with symbolic qualities based on the gravitational attraction of products and personalities from the world of popular culture Wolf Serious gaming is another example of how new applications developed within one subsector add value to another sector.

Games, which first originated as entertainment products, are increasingly being applied in communication and information strategies, as well as in health care, where the use of specialised games in medical rehabilitation processes has met with some very interesting results indeed. Also the domain of the arts, particularly artistic research, is providing contributions to broader social and even economic developments. In the current practice of art and technology labs, artists ask questions such as: How are we living?

How do we wish to live? These questions are then the subject of a creative and research process, in which technology is deconstructed and reconstructed: Creative works resulting from this practice call into question existing practices, and provoke new discussions and debates.

Media labs thus aim to deconstruct technology from a social or aesthetic perspective, showcasing technological development processes which otherwise might have remained undetected from the dominant design perspective. This in turn allows for the development of possible alternative processes, for the benefit of social values, targets and applications which otherwise may not have been explored.

This way, media labs offer alternative and often superior uses of the social possibilities offered by technology; art provides the fundamental research for the creative industries, in much the same way as scientific laboratory research does for industrial innovation. In the United Kingdom, the connection between 12 A challenging new development in this respect is 3D printing, discussed by Peter Troxler elsewhere in this volume. Rinnooy Kan, Rutten and Stikker In the Netherlands, such a connection has yet to be established.

Economy and Art: Why are Economy and Art Closely Linked?

The potential demonstrated in all the above examples manifests itself in the role currently attributed to the creative industries in providing solutions to broad social challenges, for example in the fields of sustainability, mobility and health care.

The European Union refers to these as grand societal challenges which are crucial to the future of societies on our continent. Such challenges require integrated responses, rather than purely technological solutions; there are cultural values at stake, requiring an approach in which the creative industries will be called upon to play an important role see also: Amerika ; Topteam Creatieve Industrie Talent for the creative economy The developments I have described above, all have direct implications for government policy on art and culture, particularly policy regarding creative industries, but also for the curriculum of educational institutions, and for research focused on the creative economy.

The perspective is shifting, from the magnitude and growth of the sector itself, toward the broader catalysing effect of the creative industries on social and economic innovation. The crucial question is now: This question directly addresses the promise of the creative economy, in which creativity is the motor of innovation and development.

This implies a greater emphasis on creative talent, rather than creative businesses, since it is the individuals working in creative professions who play a crucial role in realising the intended catalysing effect. Therefore, research and policy should concentrate increasingly on the connections relations and interactions, networks and interfaces, and of course their effectiveness between these creative professionals and the fields of application in which they function.

art and economics relationship

This is also a crucial development for education programmes focused on the development of talent for the creative industries. Many designers work in specialised agencies which take on commissions from third-party clients; in this respect they clearly work within the creative industries. However, an even greater number of designers work in organisations which do not fall under the creative industries: When it comes to interpreting what is acceptable error and what is flawed theory may come down to more art than science, because at some point, standard errors and t-test statistics can only go so far.

Is economics an art or science? Economics Is About SCience. Because Science is how you make stuff. But Art Is What you draw It really has nothing to do with art. Major universities allow undergraduate students majoring in Economics to select whether they pursue a "Bachelor of Arts" or a "Bachelor of Science" degree in the field. What is art and relationship between art and society?

Art is the way in which people choose to express themselves, theirfeelings, for example, or how they see things around them. Artforms include writing, music, drawing, painting…, dance, etc. The relationship between art and society is a two way process.

Artworks often show what the society is going through at thatmoment in time, whether things are peaceful or not, for example, aswell as how individual artists are feeling at the time.

art and economics relationship

If you were to look at visual art from older eras in time you wouldbe able to see that people in a painting, for instance, aren'tdressed as we are now.