BEA’s Arts in the GDP Study: What Next?

In January 2015, the U.S. Bureau of Economic Analysis (BEA) and National Endowment for the Arts (NEA) released its revised Arts and Cultural Production Satellite Account (ACPSA)—a set of measures of arts and culture in the economy, including its share of Gross Domestic Product (GDP). Much has been written about the truly mind-bending sum of $698.7 billion in industry expenditures—a substantial contributor to the economy that supported 4.7 million jobs in 2012 and represented 4.32 percent of GDP.

How big is $698.7 billion and 4.3 percent of GDP?

• If the arts and culture in the U.S. was a state, its $698.7 billion would be larger than the Gross State Product for 45 out of 50 states.
• Arts and culture’s 4.3 percent of GDP in 2012 represented a larger share of the economy than Travel and Tourism (2.6 percent), Agriculture (1.2 percent), and Transportation (2.9 percent). Worth remembering is that transportation and agriculture have major federal agencies to ensure their stability and effectiveness, and are represented in the President’s Cabinet.

Sectors Making the Biggest Splash

Six industries account for the bulk of arts and culture production, led by Broadcasting and followed by Motion Pictures and Publishing.

Tracking the Trends: Some Good, Some Troubling

The BEA provides a14-year trend of data (1998-2012) that enables us to see how the arts dollars and jobs have changed over time. Since the Great Recession the arts dollars piled on literally by the tens of billions: $619 billion in 2009 way up to $699 billion in 2012. If one looked solely at production, all would seem rosy. But, how does the arts and culture sector stack-up against the nation’s overall economic performance? To that question, the results are mixed.

Arts & Culture Production Tracks Well with Nation’s Economy

Looking at changes in production, arts and culture has largely tracked the nation’s economy. In 2008, for example, Arts & Culture production increased 3 percent, while GDP grew just 1.7 percent. The arts have shown more volatility than the general economy. Over time, however, these variations iron themselves out, with arts growing an average of 2.4 percent annually while the nation’s GDP grew about the same (+2.3 percent).

The labyrinth of BEA data tables provides a feast of possibilities for the analyst, including a look at specific industry sub-sectors. Here, again, some sectors are up while others are down.

• While the nation’s economy averaged 2.3 percent growth between 2007 and 2012, Independent Artists Writers and Performers’ contribution to the economy grew nearly twice as fast, at an annual rate of 4.4 percent.
• The Performing Arts grew at an average annual rate of 10.4 percent.
• Motion Pictures production was not only among the largest contributors to the sector, but among the fastest growing (up an average rate of 11.1 percent a year).
• The news wasn’t as good as good for Architectural Services—with production decreasing at an average rate of -4.1 percent.

Arts Employment is Lagging All Employment

While production was similar, arts employment as measured in the ACPSA lagged—dropping from 5.2 million in 2007 down to 4.7 million in 2012, with decreases measured every year. In short, arts employment under-performed compared to the nation’s total employment (an average annual change of -2.1 percent vs. -0.6 percent).

• In total, 523,100 Arts and Culture jobs were lost between 2007 and 2012, of which 74,000 were in the Publishing industry (rate of -3.5 percent per year), 64,700 in the Government (-1.1 percent per year), and 46,800 in Construction (-6.7 percent per year).
• Between 2007 and 2012, Museum employment grew at a rate of 0.8 percent per year, adding 4,900 jobs to the nation’s economy, while Fine Arts Education added 6,900 jobs in the same period, an increase of 3.8 percent per year.

Let’s Get Local and Statewide!

Now that BEA has its methodology in place, we can expect annual measures of arts and culture activity in the GDP updates. For that, a huge Thank You to the NEA and BEA for delivering this Herculean research effort, one that was years in the making. While national numbers are impressive, since the outset we’ve pushed NEA and BEA to develop state and local versions of this report—making the research even more useful to advocates, researchers, and policy makers. Can it be done? I put the question directly to the ACPSA project architect, NEA Research Director, Sunil Iyengar. He says,

"In 2015 and 2016 the NEA and BEA will pilot an effort to collect and report data on arts/cultural production for as many states as possible, and to understand distinctive regional patterns shaping the arts' contribution to U.S. economic growth. Ultimately, we want to know not only what the numbers and trends are, but how the data can be used by state and regional policy-makers and arts practitioners to spur their local creative economies. It's doubtful that we'll get to such detail at the MSA level, but our exploration of the state data is a promising start."

Sunil’s response is a promising one. In addition to the obvious advocacy benefits that come with demonstrating that the arts are big business in this country, there are also some great data and policy questions to be considered:

• There are 300,000 arts manufacturing jobs in the U.S. In which states will those be found?
• Most states have tax incentives to attract movie makers to their states. Who is winning the Motion Pictures jobs and dollars?
• Which states are experiencing growth and decline in arts employment?

The Arts: Providing Both Economic AND Quality-of-Life Benefits

That the top economics shop on the planet—the U.S. Bureau of Economic Analysis—is measuring arts and culture production makes clear the important role of the arts in building a healthy economy and ensuring our global competitiveness. So, yes, what’s measured, matters—and at $698.7 billion industry and 4.3 percent of GDP, the arts matter a lot. But when we tout those powerful economic benefits, let’s also remember to tout the virtuous qualities that the arts bring to us as individuals, to our communities, and to our nation. How the arts are fundamental to our humanity. How they ennoble and inspire us—fostering creativity, goodness, and beauty. That the arts help us express our values, build bridges between cultures, and bring us together regardless of ethnicity, religion, or age. Life is more than economic measures, as Senator Robert Kennedy reminded us so beautifully back in 1968:

“The Gross National Product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile.”