A Resurgence of Economic Impact Studies

Perhaps unsurprisingly, most things are cyclical in nature so it should come as no surprise to see a resurgence of economic impact studies touting the economic benefits the arts bring to a metropolitan area. The 10/29/2013 edition of Philly.com published an article by Joseph N. DiStefano how the Avenue of the Arts is turning around a dying financial district. An AP article by Brett Zongker on 12/5/2013 reports that the U.S. Bureau of Economic Analysis and the National Endowment for the Arts estimate the creative industries account for just over $500 billion in goods and services.

150x150_ITA_Guy176If you can remember far enough back, the last cycle of positive impact studies came in the wake of the post 9/11 recession. After a few years, it wasn’t uncommon to hear voices playing down the studies or accusing them of artificially inflating the arts’ economic contribution.

Consequently, it is interesting that more and more of my colleagues have been in touch with similar complaints about the latest round of studies but when it comes down to it, it is important to keep in mind a few critical points when considering an arts economic impact study:

  • Don’t try to compare them. A good economic impact study should be unique to the respective metropolitan area; so there should be next to no connection between one report and another, unless there are some undeniable common threads such as the same firm was used to create the reports.
  • Consider the source. It should come as no surprise that some consultants will produce reports that say more or less whatever a client wants but that doesn’t mean all reports are biased.

But I’m curious to know what you think. Have you encountered an economic impact study that was particularly good or bad?

About Drew McManus

"I hear that every time you show up to work with an orchestra, people get fired." Those were the first words out of an executive's mouth after her board chair introduced us. That executive is now a dear colleague and friend but the day that consulting contract began with her orchestra, she was convinced I was a hatchet-man brought in by the board to clean house.

I understand where the trepidation comes from as a great deal of my consulting and technology provider work for arts organizations involves due diligence, separating fact from fiction, interpreting spin, as well as performance review and oversight. So yes, sometimes that work results in one or two individuals "aggressively embracing career change" but far more often than not, it reinforces and clarifies exactly what works and why.

In short, it doesn't matter if you know where all the bodies are buried if you can't keep your own clients out of the ground, and I'm fortunate enough to say that for more than 15 years, I've done exactly that for groups of all budget size from Qatar to Kathmandu.

For fun, I write a daily blog about the orchestra business, provide a platform for arts insiders to speak their mind, keep track of what people in this business get paid, help write a satirical cartoon about orchestra life, hack the arts, and love a good coffee drink.

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3 thoughts on “A Resurgence of Economic Impact Studies”

  1. As an economist (although not very traditional one) I agree. I think its a dangerous path to evaluate the arts in purely utilitarian terms. Most often these studies are done in terms of revenues to businesses and dollars spent than to the value added to the lives of the participants, and they rarely consider other factors affecting revenues (or costs). That said, I think if they contribute to an understanding of arts’ impacts on local economic development it’s not so bad… just to be viewed with caution and in isolation as you suggest.

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