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Report: Arts, culture add $500B to nation's GDP

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BRETT ZONGKER | December 5, 2013 10:52 AM EST | AP

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WASHINGTON (AP) — Creative industries led by Hollywood account for about $504 billion, or at least 3.2 percent of U.S. goods and services, the government said in its first official measure of how the arts and culture affect the economy.

On Thursday, the U.S. Bureau of Economic Analysis and the National Endowment for the Arts will release the first-ever estimates of the creative sector's contributions to U.S. gross domestic product based on 2011 data, the most recent figures available. GDP measures the nation's production of goods and services.

Sunil Iyengar, the endowment's research director, said the yardstick devised in partnership with the Bureau of Economic Analysis drew on figures from Hollywood, the advertising industry, cable TV production, broadcasting, publishing, performing arts and other areas. Now the nation's creative sector will be measured annually, much as statisticians calculate the contribution of tourism, health care and other sectors to the nation's economy.

"One of the challenges that's always been there for economists and even lay people and certainly policy makers is to understand what is the arts' value," Ilyengar said. "Here's a measurable, legitimate, rigorous way of tracking the contributions of the creative economy in the country."

Analysts said they used preliminary numbers from 2011 and dating back to 1998, including both for-profit and nonprofit industries in the arts and culture sector.

By comparison, the arts and culture sector outpaced the U.S. travel and tourism industry, which was 2.8 percent of GDP in 2011, based on the federal estimate. That finding surprised even the researchers.

"Art and culture is a significant part of the U.S. economy — not just its contributions of ideas and creativity to the innovation economy but also as an important part of the labor force and our country's GDP," NEA Senior Deputy Chairman Joan Shigekawa said in a statement.

Hollywood movies and video services, the advertising industry and cable TV production were leading contributors to GDP in the creative sector, the researchers found, followed by broadcasting, publishing and the performing arts. On their own, the movie and video industries contributed $47 billion in value-added to the economy in 2011.

The total output from arts and cultural production, another measure of economic activity, was $916 billion in 2011, analysts found. That includes $200 billion from creative development in advertising, $104 billion from arts education including college art departments, $100 billion from cable TV and $83 billion from movies and video services.

In the workforce, Hollywood and the video industry employed the most people, totaling 310,000 workers and $25 billion in compensation, according to the data. Museums and performing arts industries each employed about 100,000 people. In total, 2 million people worked in creative industries.

Researchers also analyzed the creative sector's exports and the effect of the recession. Since 2007, the sector's economic impact slumped and had not rebounded by 2011. Between 1998 and 2006, its share of GDP ranged from 3.5 to 3.7 percent, but researchers found the arts suffered more than the overall economy during the Great Recession.

Exports of arts and culture have rebounded, though. A 10-year trend of deficits was reversed beginning in 2008, and by 2011, the U.S. exported $10.4 billion more arts and cultural commodities than it imported. Jewelry, silverware, movies and video services were the biggest exports. The country as a whole, though, has been running a trade deficit.

Analysts defined arts and cultural output based on creative artistic activity and the goods and services produced by it or used to support it. They also included the construction of buildings to house creative industries. Beyond entertainment and advertising, the analysis included independent artists, broadcasting, publishing of books, magazines and newspapers and design and architectural services.

The analysis will be updated each year, next in fall 2014 to include 2012 data.

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National Endowment for the Arts: http://arts.gov/

U.S. Bureau of Economic Analysis: http://bea.gov/

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Follow Brett Zongker on Twitter at https://twitter.com/DCArtBeat .