The Culture Fix Creative people, places and industries POLICY HIGHLIGHTS
The Culture Fix Creative people, places and industries Contents Cultural and creative sectors (CCS) are big business and drive innovation 2 Digitalisation is changing business models in the sector 4 Cultural and creative employment is significant The impact of the pandemic was dramatic Cultural participation underpins both the supply of, and demand for cultural and creative goods and services
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Financing of cultural and creative sectors should not be considered a cost but rather an investment 10 Strengthening and promoting Cultural and creative sectors can boost local development 11 Better evidence is needed to inform policies and drive investment 12
For further information: www.oecd.org/cfe/leed/culture.htm
What are the types of events, organisations, companies and people that make up the cultural and creative sectors? Cultural and creative sectors are very diverse including inter alia: •
Libraries and cultural centres
•
Film production companies
•
Festivals
•
Museums
•
Global streaming services
•
Theatre companies
•
Visual artists, writers and musicians
•
Design and architectural companies
All these actors belong to the cultural and creative sectors but their cost structures and business models vary significantly, from not-for-profit and public institutions to for-profit and mixed models.
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Cultural and creative sectors are vital to both our economic success, as well as our health, well-being and community cohesion. Lamia Kamal-Chaoui Director
OECD Centre for Entrepreneurship, SMEs, Regions and Cities
INTRODUCTION . 1
The Culture Fix: Creative people, places and industries
Cultural and creative sectors (CCS) are big business and drive innovation, even if most firms are micro-enterprises
However, although the sector includes a number of global players like Netflix or Sony Records, 99% of businesses in the sector are SMEs, and 96% are microenterprises (fewer than 10 employees) compared to 88.9% in the total business economy. Contrary to widespread perception, CCS businesses perform as well as businesses in other sectors. Across the OECD, cultural and creative sectors enterprises have higher birth rates than the rest of the economy (12% vs 10.2%, 2018) and similar survival rates for the first year (82% vs 82.4%).
Cultural and creative sectors make up a large part of
Cultural and creative sectors contribute to innovation
the business landscape and were growing fast prior to
in many different ways, but this innovation is under-
the pandemic crisis. In 2018, an average of 7% of all
represented in official data. CCS produce new products
enterprises in OECD countries were from the cultural
and services; develop new business models and ways of
and creative sectors, directly contributing an average of
working; and create and integrate technologies in novel
2.2% of total business economy gross value added (GVA).
ways. They also feed into innovation in other sectors
In the decade prior to the crisis growth in the number of
of the economy. However, this innovation is not well
CCS sectors enterprises in OECD economies was higher
captured in official statistics, as innovation metrics such
than in the rest of the economy (18% vs 12%).
as R&D expenditure or number of patents often fail to account for the specific characteristics of innovation in cultural and creative sectors .
Figure 1. Value chain and job roles in the music industry
PRODUCTION
CREATION
VALUE CHAIN AND JOB ROLES Song recording Artists Recording engineers Session musicians Record label Manager
Song mixing & mastering producers Cover art creation Graphic designers Photographers
Publisher Legal team Artists & repertoire Copyright administration Mechanicals team Royalties team Licensing/sync team
Song writing Artists Song writers
DESSIMINATION
Song development/ rehearsals Artists Song writers Musicians
Note: These are just some of the processes and job roles involved in producing a new album. There are many more not mentioned here and the exact process and actors involved vary significantly.
2 . THE CULTURE FIX: CREATIVE PEOPLE, PLACES AND INDUSTRIES
Online Streaming Streaming service providers (e.g. Spotify, YouTube etc) Legal team Accounting team Curated play lists (e.g. radio and onlne playlists) Streaming service providers (e.g. Spotify, YouTube etc) DJs Online live performance Live streaming platforms (e.g. Twitch, Instagram, YouTube) Sponsors
Live performance Artists Musicians Sound and lighting technicians Dancers Set designers Booking agents Promoters Venue owners Use in TV, film, advertising Film and TV production companies Advertising executives Legal team Physical records Record shops CD/vinyl manufacturing and pressing companies
MUSEUM FUNDING AND COSTS Mainstream business support at national and local
•
Promote cross-sectoral collaboration between
Jobs procured by an exhibition
Jobs in the museum
levels needs to be adapted to the unique characteristics
cultural and creative sectors and other sectors of
of the sector such as the majority of Jobsmicro-firms supported in the wider economy
the economy for growth and innovation, through
and freelancers, project based work, and reliance on
maker spaces and co-working facilities as well
intangible assets.
as other tools to bring together - for example, artists and technologists; financial instruments
•
Promote better information sharing and capacity
Hotels
Equipment manufacture
building around access to finance, by supporting Visitors shops and attractions
Transportation
Exhibition designers
Marketing & communication
where to look for financing and how to apply for it. This could include national or regional advice centres or online resources targeted towards cultural and creative sectors. •
•
Enhance data collection and reporting of cultural Catering for opening and events
Storage facilities
Art work transportation services (private companies)
and creative sectors innovation. Innovation and
Management
Collection curators
R&D data collection could take into account the Guides & mediators
Exhibitions curators
Cleaning
ways in which innovation in these sectors is likely Conservation experts
Cafeteria staff
Builders, light and sound experts
Restaurants
interdisciplinary projects.
cultural and creative sectors businesses to know Suppliers purchases of goods and services
(e.g. vouchers) to support cross-sectoral and
Learning officers
Offer tailored cultural and creative sectors business
industries.
Programme officers/ mediators
Building maintenance
support, reflecting, in turn, the particularities of Scenography (showcases, built environment)
Shop staff
Security
the business, legal and regulatory landscape for the
•
Researchers
Promote transversality and coherence in policy areas relevant to CCS businesses, including
Administration
Volunteers
also be better targeted towards cultural and creative
Conference coordinators
business, innovation, taxation, IP regulation, urban IT & multimedia solutions (website, film, podcast)
Marketing & communication
sectors businesses and be more open to cultural
planning, employment and skills.
Additional conservation services
and creative sectors firms with differing business
Publishing & distribution (editors, researchers, copywriters, journalists, designers, technical staff…)
and growth models.
Figure 2. Jobs in the museum ecosystem
Extra security in compliance with insurance requirements
Welcome staff
sector. Accelerator and incubator programmes can Additional maintenance services
Content providers (artists, musicians, researchers, lecturers)
to differ from science and engineering-based
JOBS IN THE MUSEUM ECOSYSTEM MUSEUM FUNDING AND COSTS Jobs procured by an exhibition
Jobs in the museum
Jobs supported in the wider economy
Hotels
Equipment manufacture
Visitors shops and attractions
Transportation
Exhibition designers Marketing & communication
Suppliers purchases of goods and services
Catering for opening and events
Storage facilities Collection curators
Art work transportation services (private companies)
Builders, light and sound experts
Restaurants
Management
Conservation experts Cafeteria staff
Content providers (artists, musicians, researchers, lecturers)
Learning officers Programme officers/ mediators
Building maintenance Scenography (showcases, built environment)
Guides & mediators
Exhibitions curators
Cleaning
Shop staff
Security
Researchers
Welcome staff
Extra security in compliance with insurance requirements
Administration Volunteers
Additional maintenance services
Conference coordinators
Marketing & communication
Additional conservation services
IT & multimedia solutions (website, film, podcast)
Publishing & distribution (editors, researchers, copywriters, journalists, designers, technical staff…)
OECD . 3
The Culture Fix: Creative people, places and industries
Digitalisation is changing business models in the sector, the skills needs of its workers, and the ways people engage with culture Cultural sectors have long been at the vanguard of digitalisation, developing new models for production and consumption that are then mainstreamed across other sectors. New technologies have democratised ways to engage with culture and opened up new opportunities for CCS entrepreneurs, and in fact citizens, to disseminate content to larger audiences and reach new markets. The lock-down periods have prompted many CCS businesses, free-lancers and cultural institutions to further embed digital dissemination in their business models to maintain and, in fact, expand their audiences. After the pandemic hybrid models are likely to remain providing opportunities to further reduce barriers to cultural participation.
POLICY ACTION... Going forward, addressing disparities in access to digital tools, infrastructure and skills, as well as ensuring IP rights protection can help capitalise on the full potential of digitalisation in the sector.
4 . THE CULTURE FIX: CREATIVE PEOPLE, PLACES AND INDUSTRIES
Cultural and creative (CC) employment is significant both within and outside of cultural and creative sectors
(13.4% vs 9.1% on average between 2011 and 2019). These are conservative estimates as official data often do not capture secondary employment which can represent notable shares of CC employment (e.g. creative workers whose main job is in a non-creative sector). Cultural and creative jobs tend to concentrate in large cities, this implies that more can be done in smaller urban and rural areas to promote CC employment as a driver of regional development. Cultural and creative jobs are, on average, more precarious
Cultural and creative employment accounts for up
than jobs in other sectors. That precarity reflects contract
to 1 in 20 jobs in some OECD countries and up to 1
instability, fluctuations in income, and challenges in
in 10 jobs in some cities and capital regions. Growth
access to social protection. Across OECD countries, 29% of
in CC employment has outpaced growth in overall
cultural and creative employees are self-employed, more
employment in most countries in pre-pandemic years
than twice the average rate for all workers.
Figure 3. Cultural and creative employment accounts for more than 1 in 20 jobs in some countries Lowest Germany Czech Republic United Kingdom Hungary Belgium Netherlands Sweden Austria Switzerland Finland Denmark Slovak Republic France United States Norway Iceland Poland Malta Slovenia Luxembourg Estonia Spain Lithuania Italy Australia Serbia Greece Turkey Ireland Croatia Canada Korea Bulgaria Portugal Latvia Montenegro North Macedonia Mexico Romania
-2 %
National Average
Highest Berlin
Saxony-Anhalt Prague
Moravia-Silesia
London
West Midlands
Budapest
Southern Transdanubia
Brussels Capital Region
Flemish Region
North Holland
Drenthe
Stockholm
Upper Norrland
Vienna
Upper Austria
Zürich
Eastern Switzerland
Helsinki-Uusimaa
Eastern and Northern Finland
Capital
Zealand
Bratislava Region
East Slovakia
Île-de-France
Hauts-de-France
District of Columbia
Mississippi
Oslo and Akershus
Northern Norway
Masovian Macroregion
East Macroregion
Madrid
Centre
Sostines regionas
Vidurio ir vakaru Lietuvos regionas
Lazio
Calabria
New South Wales
Northern Territory
Serbia - north
Serbia - south
Attica
Kentriki Ellada
Istanbul Region
East Black Sea Region
Eastern and Midland
Southern
Continential Croatia
Adriatic Croatia
British Columbia
Newfoundland and Labrador
Note: Data for Canada, Mexico, the United Kingdom, and the United States are from 2019. Data for Australia is from 2016. Regions for Serbia, Croatia, Bulgaria, Poland, Romania, and Spain are based on Nomenclature of Territorial Units for Statistics 1 (NUTS 1) while the remaining regional classifications are based on Territorial Level (TL). The minimum and maximum regional employment shares are only reported for countries with sufficient data for at least two regions.
South-Western and South-Central Bulgaria
Northern and Eastern Bulgaria
Source: Eurostat (2021) Cultural employment by NUTS 2 regions, https://ec.europa.eu/eurostat/web/culture/data/database; OECD calculations on American Community Survey, 2019, Canadian Labour Force Survey, March 2019, Mexican National Survey of Occupation and Employment, 2019 quarter 4, Australian Census, 2016, and Statistics Korea, 2020.
Quintana Roo
Coahuila de Zaragoza
Macroregion Three
Macroregion Two
0
Cultural and creative employment as a share of total employment, selected OECD and EU countries, Territorial Level 2 regions, 2020 or latest year available
2
4
6
8
10
12 %
OECD . 5
The Culture Fix: Creative people, places and industries
Figure 4. Cultural and creative employees are more likely to be in non-standard forms of employment and hold multiple jobs Share of workers who are self-employed, work part-time, have non-permanent contracts, or have multiple jobs, OECD average, 2020
Cultural employment
% 30
Total
25 20 15 10 5 0
Self-employed
Part-time
Non-permanent contract
Has multiple jobs
Note: OECD average includes Austria, Belgium, Canada, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Norway, Poland, Portugal, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, the United Kingdom, and the United States. Data for Canada, the United Kingdom, and the United States are from 2019. Source: OECD calculations on Eurostat (2021), Cultural Employment Statistics, https://ec.europa.eu/eurostat/web/culture/data/database, American Community Survey, 2019, and Canadian Labour Force Survey, March 2019.
Women are better represented in cultural and creative
Around 40% of cultural and creative employment can
jobs than in employment overall (50% vs 46%) but
be found outside of cultural and creative sectors, e.g.
significant disparities exist related to seniority, pay and
designers working in the automotive industry. In this
market access. In addition, more can be done to increase
way, cultural and creative skills are directly feeding
the representation of other disadvantaged groups and to
into innovation across the whole economy, highlighting
make the sector more diverse.
the importance of arts and cultural education as an economic driver.
A lower share of cultural and creative jobs is at high risk of automation - 10% of cultural and creative jobs are at high risk of automation compared to 14% in the labour market more generally – and cultural and creative workers tend to be more highly educated and highly skilled than the average worker. However, there are persistent skills gaps across the subsectors, particularly in regard to digital and entrepreneurship skills.
6 . THE CULTURE FIX: CREATIVE PEOPLE, PLACES AND INDUSTRIES
Figure 5. Around 40% of cultural and creative jobs can be found outside cultural and creative sectors Cultural and creative employment as a share of total employment within and outside cultural and creative sectors, 2020 Cultural and creative sectors
Other sectors
% 6 5 4 3 2 1 0
Note: Data for Canada, Mexico, the United Kingdom, and the United States are from 2019. Please refer to Eurostat (2018) for the list of cultural and creative sectors included in the calculation. Source: OECD calculations on Eurostat (2021) Cultural Statistics, https://ec.europa.eu/eurostat/web/culture/data/database; American Community Survey, 2019; Canadian Labour Force Survey, March 2019; Mexican National Survey of Occupation and Employment, 2019 quarter 4; and Australian Census, 2016.
Policies to make the most of cultural and creative
•
Promote integration of cultural and creative skills
employment and skills at national and regional levels
within other subject areas. Maximising the full
include:
potential of the synergies between CCS and other sectors such as education, health and technology
•
Address gaps in social protection coverage, and
entails education programmes which integrate
leverage other tools to improve job quality in the
learning from these different disciplines. It also
sector, such as developing sector skills strategies,
implies a need for new professional training that
nationally and locally, that consider both supply and
combines cultural skills with, for example, those of
demand factors, as well as the structure of public
education, nursing, medical or social services.
contracts and grants to CCS workers and firms. •
Close skills gaps, particularly related to entrepreneurial and digital skills and for specific sub-sectors. Strategies include enhancing access to entrepreneurial training, coaching and mentoring programmes, as well as better integration of entrepreneurship and digital skills in higher education training.
OECD . 7
The Culture Fix: Creative people, places and industries
The impact of the pandemic on cultural and creative sectors was dramatic but uneven across sectors
global GVA of CCS fell by 20% between 2019 and 2020. The impact of the crisis was uneven across CCS, for example, businesses with a strong digital content, such as gaming and music streaming services, fared much better. The lingering effects of the pandemic could put longerterm strains on the sector and creative professionals, who frequently transition to non-creative careers during times of economic crisis, resulting in a significant loss of human capital essential to drive the recovery of CCS.
Venue and site-based activities (e.g. theatre, cinema,
While public support measures helped to cushion some
festivals, museums) have been heavily affected by
of this blow, they were not always well adapted to the
successive lockdowns and travel restrictions. Estimates
specificities of this sector, e.g. for workers who combine
by UNESCO indicate that the overall contribution to the
standard and freelance work.
Figure 6. Impacts of COVID-19: change in hours worked by sector OECD average, percentage change, year on year
Net job destruction/creation
Hours per at work employees
0 hours employment
Arts
Accomodation and food service activities 0
0
-10
-10
-20
-20
-30
-30
-40
-40
-50
-50
-60
Q1 2020
Q2 2020
Q3 2020
Q4 2020
Total change in hours
-60
Q1 2020
Q2 2020
Q3 2020
Q4 2020
Note: The figure reports the contribution of each category to the change in total hours. Average of EU countries (excluding Germany), Chile, Japan, Mexico, Norway, Switzerland, Turkey, the United Kingdom and the United States. Source: OECD (2021), OECD Employment Outlook 2021: Navigating the COVID 19 Crisis and Recovery, https://dx.doi.org/10.1787/5a700c4b-en
8 . THE CULTURE FIX: CREATIVE PEOPLE, PLACES AND INDUSTRIES
Cultural participation underpins both the supply of, and demand for cultural and creative goods and services, and generates important social benefits
spending. In 2020, however, per capita spending on recreational and cultural services dropped by 30% on average across OECD countries. Cultural participation in its myriad forms can have positive social benefits, but they remain under-exploited. These benefits range from social inclusion to boosting health and well-being, as well as cultivation of skills and entrepreneurship. Cultural participation can also promote behavioural changes that can address social challenges, including the environment. Cultural participation rates vary between and within countries and between people with different socioeconomic characteristics. Cultural participation is higher in countries with higher public expenditure on culture, with likely mutually reinforcing effects between the two.
Prior to the pandemic, demand for culture was high and growing but COVID-19 has clearly caused a dent.
Within countries, participation is higher among people
Across the OECD, households spend on recreation
with greater levels of education and income, raising
and culture more than on restaurants and hotels, or
challenges for social inclusion. Access to, and proximity
clothing and footwear, and this spending category grew
of cultural amenities varies across places with urban
by 18% between 2011 and 2019, twice as fast as overall
areas typically benefitting from better provisions.
OECD . 9
The Culture Fix: Creative people, places and industries
Policies to capitalise on the potential of cultural participation at national and regional levels include: •
Broaden the scope of cultural participation policies by, for example, integrating cultural participation into wider policy agendas around health, societal changes, research and innovation, environment and education, while also promoting research on the causal effects of cultural participation on areas of social impact.
•
Create new collaborations between cultural and non-cultural institutions - e.g. between museums or theatres and hospitals, between independent art spaces and urban planners - in the experimentation and implementation of crossover projects.
Financing of cultural and creative sectors should not be considered a cost but rather an investment, with the role of public, private and philanthropic financing continuing to evolve Investing in CCS is important due to the direct and indirect benefits they generate for the economy and society. Traditionally, cultural policies and public expenditure have promoted culture as a “merit good”, similar to education and healthcare. Greater focus on the economic impact of CCS has shifted the scope of spending beyond cultural policy to industrial policy approaches. Given the generalised reduction of public spending, governments are transforming their participation in the financial ecosystem of CCS from that of direct support, although it remains important for parts of CCS, towards more intermediation with the private sector and philanthropy. Partnerships and alliances (public-private, public-public and public-civic partnerships) are at the core of the emergence of new financial ecosystems for CCS. Government spending on cultural services has been decreasing, and represents, on average, 1.2% of total government spending across the OECD. The bulk of government spending on cultural services comes from subnational governments, accounting for almost 60% of total public expenditure in 2019. They also spend a far higher proportion of their budgets - 3% on average - on this category.
10 . THE CULTURE FIX: CREATIVE PEOPLE, PLACES AND INDUSTRIES
Figure 7. Cultural services as a share of subnational and national government spending, 2019 Subnational %
National
7 6 5 4 3 2 1 0
Note: Subnational refers to the combination of state and local government spending. Data for Costa Rica in 2011 refers to 2012, and data for Costa Rica in 2019 refers to 2017. Source: OECD (2022), National Accounts Statistics - Government expenditure by function (COFOG), http://dx.doi.org/10.1787/na-data-en.
CCS generate largely intangible capital that is often
•
Recognise the diversity of funding needs within the
viewed as high risk by investors. This incapacity to
sector. Since CCS are largely composed of micro
provide (tangible) collateral to guarantee the risk of
and small companies, freelancers, and non-for-
loans, as well as the project-based nature of work,
profits, adequate support tools should recognise the
has important implications for CCS firms’ ability to
importance and the specific needs of these creative
successfully apply for finance through formal channels.
communities.
Moreover, while CCS do not necessarily underperform in terms of profit or financial soundness when compared
•
Consider assuming the risk of financing uncertain
to other sectors, they are often viewed as high risk by
phases in the value chain, mainly associated with
equity financers. Given the difficulties that many CCS
the creation phase. This could either be through
businesses face in accessing equity and debt finance,
direct financing or through de-risking strategies
governments are increasingly stepping in to provide debt
such as loan guarantees.
and equity finance or finance guarantees. • Policies to reinforce financing of CCS at national and
Use public funding to leverage private involvement in areas of social impact.
regional levels include: • •
•
Ease access to crowdfunding by providing a suitable,
Consider culture as an investment, not a cost in
fully functional technological and regulatory
recognition of the numerous economic and social
environment as well as by increasing the financial
benefits CCS bring.
literacy of entrepreneurs and citizens.
Ensure a stable regulatory framework to facilitate the increasing participation of new actors in the support and finance of CCS. OECD. 11
The Culture Fix: Creative people, places and industries
Strengthening and promoting cultural and creative sectors can boost local development
At the local level, cities and regions are being innovative in their approach to CCS policy. They use different funding mechanisms, such as tax incentives, match funding, loan guarantees and local government-backed crowdfunding initiatives to support CCS financing. There are also examples of cultural credits to encourage cross-sector collaboration, alongside a whole range of different types of creative hubs and co-working spaces. Many cities and regions are also using CCS to address social and environmental issues, such as using museums, libraries and other cultural spaces to engage with
Culture-led regeneration and development strategies
marginalised communities, using cultural participation
can transform places. CCS not only provide economic
to support health and wellbeing objectives through
benefits (through local taxation, job creation, innovation
cultural prescriptions, and harnessing artists and cultural
and supply chains), and social benefits (e.g. improved
organisations to encourage behavioural change around
wellbeing and community cohesion) but also contribute
climate and sustainability issues.
to “place making” by making cities and regions more attractive to work and live, encouraging inward
In addition to the opportunities mentioned above, policies
investment, inward labour flows, and increased tourism.
at the local level include:
Culture financing is increasingly used as a tool for regional development and regeneration. Local
•
Target cultural participation initiatives to
and regional governments have been shifting their
marginalised communities, including through
policies from the direct support of artists and artistic
projects developed with local community groups
organisations to policies that target the development
(such as museum exhibitions, or small festivals),
of “cultural districts” or support the “creative milieu” of
reduced pricing or vouchers for certain groups,
cities and neighbourhoods. This includes the support
such as youth or those on a low income, or efforts
in renovating disused properties (such as warehouses
to improve cultural access in remote areas and
and factories) and repurposing them for use by CCS, and
disadvantaged neighbourhoods.
the creation of specific planning zones to attract CCS businesses.
12 . THE CULTURE FIX: CREATIVE PEOPLE, PLACES AND INDUSTRIES
•
Strengthen connections between actors in the
definition and methodology. Moreover, some of the more
local CCS ecosystem, such as universities, schools,
granular level data which are available at the national
businesses, freelancers, not-for-profit and voluntary
level, are not typically available at the regional level.
organisations, for example, through networking
Recommendations to improve evidence and data on CCS
events, virtual community platforms or physical
and allow for international comparisons:
creative hubs. • •
More granularity in reporting of employment,
Consider supporting the reallocation of unused
business, government spending and innovation
spaces for cultural and creative purposes. For
statistics including at sub-national level would
example, urban planning schemes could promote
enable more meaningful comparisons across and
reallocating former industrial districts and unused
within countries.
warehouse spaces for CCS use. •
Better evidence is needed to inform policies and drive investment
Better data around second jobs, voluntary work and non-standard forms of employment would greatly improve our understanding of work dynamics in the sector.
•
More regular cultural participation surveys are required, including revisiting current definitions of cultural participation to be more inclusive of contemporary forms of cultural practice (e.g. participation through digital social media).
Increased policy attention to the needs and contribution of the sector in light of the pandemic provides an
•
Explore the integration of complementary data
opportunity to close data gaps to better inform policies
sources, such as online vacancy data, geolocation
and channel investment to where it is most needed.
data, and websites to complement official data
There remain significant data gaps for CCS which make
sources.
it difficult to fully assess the impact of these sectors. While many OECD countries produce their own data on CCS, these are not easily comparable due to differences in
OECD . 13
For more information: www.oecd.org/cfe/leed/culture @OECD_Local
© OECD, June 2022 All images: Getty Images