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How the Arts Add to Urban Economies

Performing arts organizations like opera or ballet help to attract knowledge workers.

Grigory Dukor / REUTERS

I’ve long argued that the arts can help cities attract talent, spur innovation, and grow their economies. But there’s no shortage of naysayers out there who will counter that the only connection between the arts and urban economies is the fact that wealthier places can afford more art and artists.

A new study published in Economic Development Quarterly finds that the arts do in fact add to urban economies overall. To get at this, the authors—the noted urban real estate specialist Arthur Nelson and several colleagues—employ a unique data set on professional performing arts organizations (which I have lightheartedly referred to as the “SOBs” of the symphony, opera, and ballet) with annual budgets of over $2 million.

Using this data, the study looks at the change in knowledge-class workers (defined similarly to the creative class) between 2000 and 2010 for some 350 U.S. metro areas. Its statistical analysis controls for a wide variety of other factors that might be thought to affect the growth in knowledge or creative class employment, including overall employment change, population, density, housing values, the share of college grads, race, the share of the population that is foreign-born, and natural amenities like climate and terrain, among others.

The study finds substantial evidence that performing arts organizations add to both the growth of the knowledge class and to urban economies broadly. Those with just one type of performing arts center saw a 1.1 percent increase in knowledge-class employment between 2000 and 2010; those with two types of performing arts centers saw a 1.5 percent increase; and those with all three types saw a 2.2 percent increase. The study notes that, while this may seem like modest growth, the numbers add up. Over this ten-year period, the 118 metros with at least one performing arts organization generated a whopping $60 billion in annual income and more than half a million additional knowledge-class jobs, or over 12 percent of all knowledge-class jobs created over that time frame.

The two maps below, from my MPI colleague Isabel Ritchie, show the change in knowledge-class jobs and income for all 118 metros with one or more performing arts organization. Metros in California, the East Coast, and the Rustbelt saw some of the biggest gains.

Now let’s take a look at the 28 metros with three or more performing arts organizations, as show on the table below (from the study).

New York attracted by far the highest shares of knowledge-class jobs (64,100) and income ($5.7 billion). Behind New York was Los Angeles, with 41,700 new knowledge-class jobs and over $3 billion in income. Both Chicago and Washington, D.C., generated over $2 billion in knowledge-class income, while cities like Atlanta, Dallas, Houston, Miami, Philadelphia, and San Francisco each generated over $1 billion.

Even smaller metros with one or two performing arts organizations racked up considerable gains: Austin, Nashville, Cincinnati, Providence, San Antonio, and Sacramento each generated more than $200 million in knowledge-class income from 2000-2010.

The study also takes a closer look at the economic impact of performing arts organizations on three medium-sized metros: San Antonio, Texas; Oklahoma City, Oklahoma; and Salt Lake City, Utah. In San Antonio, the presence of the San Antonio Symphony has proven to be a vital economic asset. Of the 245,000 knowledge-class jobs that San Antonio gained between 2000 and 2010, around 2,700 of them can largely be attributed to the symphony. The study also finds that the symphony helped to generate $222 million in annual employment income during this time, as well as nearly a third of a billion dollars in annual economic impact.

The Oklahoma Philharmonic and the Oklahoma City Ballet contributed around 2,500 of the metro’s 165,000 knowledge-class jobs. The study also estimates that the ballet and philharmonic helped to generate around $150 million in annual employment income and $225 million in annual economic impact.

And the Utah Symphony, Utah Opera, and Ballet West in Salt Lake City together added around 3,600 knowledge-class jobs (out of 170,000) between 2000 and 2010. The annual employment income stemming from these centers was an estimated $230 million, while the annual economic impact was the same as in San Antonio—about a third of a billion dollars.

The study points out that these figures may not be a direct effect of performing arts organizations per se, but rather how such organizations proxy for the broader creative and cultural climate of a city or metro area. It adds that the connection between arts, talent, and economic growth is a complex one, and that it will take additional research over longer time frames to ferret out causality. That said, the study provides clear evidence that arts and culture really do add to the ability of all metros, whether large or small, to attract talent and grow their economies.

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