According to a report released this week by the Otis College of Art and Design in Los Angeles, the “creative economy” accounted for 23% of California’s gross regional product, or $687.6 billion, in 2020. Defined by its authors as five distinct sectors—architecture, “creative goods and products,” entertainment, fashion, and visual and performing arts—the industry is essential to California’s economy and employs 3.9 million people. If the state were a country, it would have the fifth largest economy in the world, and the creative industries are a big reason for that.
The report not only confirms the importance of the creative workforce during the pandemic, but also examines the economic health of the industry two years after the virus broke out. The visual and performing arts sectors – which had been expanding the fastest before the pandemic – took the biggest hit as their workforce shrank by 4% following the economic downturn.
Canceled music and performing arts seasons and the closure of galleries, museums and cultural centers, led to a 20% drop in employment from 2019 to 2020. Direct employment in the entertainment and digital media segment, by far the largest of the five segments, also fell by 3.3% in 2020, reflecting delays and cancellations in production and the Closing of cinemas.
The authors of the report assume that supply chain problems, inflation and geopolitical crises will continue to negatively impact the creative industries.
Wages for creative professionals increased between 2007 and 2020, but unevenly across sectors.
Nevertheless, the industry is beginning to recover. New businesses grew 8% from 2019 to April 2021. And in 2021, the architecture sector — which was least affected by the pandemic — added 670,000 jobs, the largest annual increase since the 2008 financial crisis. The performance of the architecture industry is often seen as a reliable indicator of the overall economic recovery.
Employment in the visual and performing arts fell dramatically between 2019 and 2020.
Many of the report’s findings confirm previous studies and economists’ intuitions: the creative industries have been disproportionately affected by the pandemic, but remain vital.
Its authors highlight several policy recommendations to ensure the future resilience of the creative industries. Compared to other democracies, the funding landscape for individuals and projects in the US is anemic. A chart accompanying the report shows the United States behind 31 countries, including Norway, Korea, Colombia and the United Kingdom, in public spending on the cultural sector as a percentage of national GDP.
To bolster the creative industries, the report’s authors also encourage greater investment in community college and public education, support for digitally literate nonprofits, and better affordable housing policies that could provide housing for workers employed in creative fields.
“The creative industries mirrored the broader economy when it came to disproportionate impacts from COVID-19,” the report said. “Through December 2021, socially disadvantaged populations continued to experience elevated unemployment rates — 8.6% for black workers and 6.8% for Hispanic or Hispanic workers, compared to 5.3% for all workers across the economy.”
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