Culture and Economics
June 20, 2006Various writers, researchers and consultants have put forward challenging arguments to outline the role of culture in the economies of cities, regions and countries where culture is seen as a major economic driver. For us here at Mirador, the issue is not whether culture has a positive role in economic development. We take that for granted although the case needs to be made!
I will be sharing various insights into this subject, which is attracting interest from a wide range of groups, to continually reaffirm our view that strategic investment in culture produces major benefits for the economy.
There are also some concerns. The first is about definition, ‘measurement’and validation of cultural concepts, their impact or outputs, contribution to wealth creation and the relationships between inputs and outputs, all aspects loosely described as the ‘evidence-base’ for culture. There are different views on what should be included and what should be excluded in the quantification or aggregation of cultural output. However, as long as the definitions are clearly stated and appropriate qualifications are provided, there is ample scope for developing the debate.
One of the most urgent concerns is how investment in culture can be secured to provide the greatest possible returns to the economy in terms of employment, value added, the creation of multiplier effects and the benefits that culture can deliver for the development of markets, the creation of economies of scale and through the forging of positive linkages in economies where culture is recognised as a major contributor to the gross domestic product (GDP).
There is a further challenge for agencies involved in the development and promotion of culture as a driver for economic development. Using the example of input-output analysis, there is perhaps scope for developing a model to project various levels of economic growth and to ascertain how different levels of investment in culture can be optimised to produce a given rate of return. Is the art or science of economic modelling able to provide such an analysis? If this was at all possible, perhaps people who campaign for investment in culture would be able to quantify the real benefits to the economy and society.
Many years ago the National Health Service used to say that they were investing £Xmillion in improving their service. Today, they report that an investment of £xmillion has yielded a specific number of hospital beds, operating theatres and a known increase of trained staff. In other words, the focus of reports has shifted from inputs to outputs. In the UK, where the developmental activities connected with increasing the capacity of cultural providers is mostly grant funded and the entertainment and leisure industries receive a combination of public and private sector investment, it should be possible to project the outputs that a given investment in culture should realise.
Critics of this argument may even justifiably say that you can only assess outcomes and outputs if you can measure them. A study of the economic impact of the Brighton Festival provides interesting conclusions. I hope to return to this later.
Posted by Kalwant Ajimal