Arts Management

An entrepreneurial approach

Carla Walter

• Publisher: Routledge
• Year: 2015
• ISBN:
  9781317499336
• Edition: 1
• Topic: Art
• Subtopic: Art & Business

Arts Management is designed as an upper division undergraduate and graduate level text that covers the principles of arts management. It is the most comprehensive, up to date, and technologically advanced textbook on arts management on the market. While the book does include the background necessary for understanding the global arts marketplace, it assumes that cultural fine arts come to fruition through entrepreneurial processes, and that cultural fine arts organizations have to be entrepreneurial to thrive. Many cases and examples of successful arts organizations from the Unites States and abroad appear in every chapter. A singular strength of Arts Management is the author's skilful use of in-text tools to facilitate reader interest and engagement. These include learning objectives, chapter summaries, discussion questions and exercises, case studies, and numerous examples and cultural spotlights. Online instructor's materials with PowerPoints are available to adopters.

Part I
Understanding the Cultural Fine Arts

1

The Business of the Arts and Culture

CHAPTER OUTLINE

Learning Objectives

What’s On?

SPOTLIGHT: The Gates, Central Park, New York City, 1979–2005

Impacts of the Creative and Cultural Arts Industry

The Cultural and Creative Industries: Some Definitions and Distinctions

The Culturepreneur Producer of the Arts

A Contextual Relationship: Artists Versus Managers

SPOTLIGHT: The Royal Ballet of England

The Cultural Enterprise Framework

The Firm’s Structure

Cultural Economic Theory

Public Policy and the Cultural Industry

Consumer Behavior

Chapter Summary

Discussion Questions

Notes

LEARNING OBJECTIVES

After reading this chapter, you will be able to do the following:

1. Define creative and cultural arts industry; cultural arts management; cultural clusters; and the culturepreneur.
2. Understand the current scope of the cultural industries.
3. Give an overview of “for-profit/not-for-profit” organizational structures.
4. Recognize the economic context for managing the arts.
5. Situate demand for the arts historically.
6. Explain generally how public policy considerations are related to historical cultural arts economic contexts.
7. Comprehend why understanding consumers and managing the demand for the arts is important.

WHAT’S ON?

David Shirgley

“An important message about the arts”—an animated video by David Shirgley

YouTube, September 9, 2010

www.youtube.com/watch?v=T6rYDaORe3k

SPOTLIGHT: THE GATES, CENTRAL PARK, NEW YORK CITY, 1979–2005

When The Gates arts project was proposed in 1979, Commissioner Gordon Davis rejected the idea, primarily because Central Park was being revitalized and could not support a project as large and popular as a Christo and Jeanne-Claude work of art. Over time, however, the plan evolved, and it finally consisted of 7,500 “gates” made of saffron-colored, lightweight vinyl fabric. The Gates were to stand at about sixteen feet high and be placed throughout the park.

Exhibit 1.1 The Gates, Central Park, New York City, 1979–2005

(Photograph courtesy of Christo and Jeanne-Claude)

Christo and Jeanne-Claude agreed to finance all costs without sponsorship, including planning, design fabrication, delivery, installation, information, security, auxiliary ambulances, insurance, full site restoration, and cleanup. In addition to generating money for the city parks and recreation department, The Gates had an enormous positive impact on the city’s culture and economy. The mayor’s office anticipated and realized benefits to the city in excess of $135 million. The Gates also created more than 1,000 temporary jobs, as the project required workers to construct, install, and monitor the exhibit.

After twenty-five years of resistance and confusion, The Gates was finally installed in Central Park between February 12 and February 27, 2005. The saffron-colored fabric panels were suspended from the top of each gate and hung down to seven feet above the ground, stationed about twelve feet apart. The luminous, billowing material accented the organic and serpentine design of the meandering footpaths, while the rectangular poles were reminiscent of the grid pattern of the city blocks around the park.

Central Park remained open to the public during The Gates installation for the people of New York continued to use the park as usual. For those who walked through The Gates, the saffron-colored fabric became a golden ceiling creating warm shadows. When seen from the buildings surrounding Central Park, however, it seemed like a golden river appearing and disappearing through the bare branches of the trees and highlighting the shape of the meandering footpaths.

IMPACTS OF THE CREATIVE AND CULTURAL ARTS INDUSTRY

It is estimated that the U.S.-based nonprofit arts and culture industry generated $166.2 billion in economic activity in 2005, which was nearly a 25 percent increase over 2000. In real dollars, that translates to an 11 percent increase. That rate is close to the growth of the gross domestic product (GDP), by comparison, which had a growth rate of about 12.5 percent in real dollars.

At the same time, spending by nonprofit arts and culture organizations grew 18.6 percent between 2000 and 2005, from $53.2 billion to $63.1 billion (a 4 percent increase when adjusted for inflation). Event-related demand by audiences increased 28 percent during the same period, from $80.8 billion to $103.1 billion, or 15 percent when adjusted for inflation. Of the billions of dollars the creative and cultural industry generated, it supports 5.7 million full-time jobs that remain local and not off-shored to international locations. Moreover, estimates suggest that the cultural and creative industry generates nearly $30 billion in revenue to local, state, and federal governments every year.

Arts and culture organizations influence event-related spending by audiences at restaurants, hotels, retail stores, and other local businesses. When patrons attend a performing arts event, for example, they may park their car in a toll garage, purchase dinner at a restaurant, and eat dessert after the show. The typical attendee spends about $30 per event, after buying an admission ticket. Importantly, cultural tourists spend twice as much as local consumers in buying tickets and related services and goods.

Right now, international cities are competing to attract new businesses as well as the brightest professionals. The winners will be communities that offer a plethora of arts and culture opportunities. As the arts flourish, so will creativity and innovation—the fuel that drives the global economy. Arts and culture also support productivity in the workforce as a whole. Engagement with arts and culture helps to develop critical thinking, creative problem-solving skills, and effective expression and communication ability. These skills improve intellectual ability and well-being, enabling greater success in daily living. As a whole, arts and culture education supports improvements in the effectiveness and flexibility of national workforces, with positive impacts on productivity, long-term health, and reduced crime.

It is estimated that by 2018, the U.S. labor force will increase by 10 percent, or 15.3 million people. Professional and related service occupations are expected to provide more than half of these new jobs. The professional-and-related-occupations category, which includes artists, is projected to increase by nearly 11 percent. At 11 percent, the projected growth rate for artists is similar to the rate projected for overall labor force growth. However, the artist-employment growth rate lags behind the professional-and-related-occupations category by about 6 percent.

Of the artist occupations, museum technicians and conservators are projected to increase the most between 2008 and 2018 (by 26 percent), followed by curators (23 percent). The occupations within the artist categories that are likely to increase at the average rate of the labor force are fine artists, such as painters, sculptors, and illustrators (12 percent); music directors and composers (10 per cent); producers and directors (10 percent); and commercial and industrial designers (9 percent).

Around the globe the growth trend is seen as well. In the United Kingdom, the creative and culture industry is rapidly growing and providing economic impacts as well. There, the arts and cultural sector accounts for approximately 0.4 percent of the nation’s GDP. The industry is estimated to support an aggregate approaching 300,000 full-time jobs or 1.1 percent of total UK employment. The arts and culture industry salaries are nearly 5 percent more than the country’s median salary of £26,095. Furthermore, for every £1 of salary paid by the arts and culture industry, an additional £2.01 is generated in the wider economy through indirect and induced multiplier impacts. The role that arts and culture play in supporting commercial creative industries is estimated at close to 5 percent of UK employment, 10 percent of UK GDP, and 11 percent of the UK’s service exports. Arts and culture play a significant role in supporting these industries.

The phrase “creative and cultural industry” captures a variety of different but related industries, as shown in Exhibit 1.2. It includes not just “cultural” industries but also “creative” industries that encapsulate types of software industry growth, such as publishing software, software consultancy and supply, and new media and computer games. These are industries that are defined by their creative working and by the intellectual property they create. In Europe, it is an aggregate group of industries consisting of a total of 6,576,558 persons or 2.71 percent of the European labor market.

There has been considerable debate over the idea that the industries that constitute the creative and cultural industry can in fact be aggregated. Despite many similarities and interdependencies, the activities of creative and cultural industries need to be understood as separate industries in their own rights. The knowledge requirements, working methods, business and organizational forms, and consumer interfaces that define competitiveness in computer games are, for instance, very different from those that shape competitiveness in the classical fine arts.

THE CULTURAL AND CREATIVE INDUSTRIES: SOME DEFINITIONS AND DISTINCTIONS

Cultural arts management and entrepreneurship resides within an area sometimes referred to as the creative and cultural arts industry, ¹ a thriving and ever-expanding global and local business sector. It is estimated that in the global marketplace, the impact of this industry exceeded US$1.3 trillion as of 2005, ² and in many countries the contribution to GDP is considerable, ranging from about 7 percent in the United Kingdom and the United States to nearly 3 percent in Asian countries. ³ Along with its economic contributions, the creative and cultural arts industry also functions as a measure of social and individual well-being and is considered part of the knowledge economy critical to innovation and technology. ⁴

Recently, partly as a result of its expansion, there has been a debate about exactly what comprises the “creative” and the “cultural” makeup of this industry. Part of this debate arises from a change in the definition of creativity in this milieu, and how that creativity informs and generates innovation, intellectual property, and economic growth through a knowledge economy. The focus of the creative industry is on “those industries which have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property.” ⁵ Given this definition, the cultural arts constitute a subset within the creative and cultural industry as they have been subsumed into it due to overarching creative and cultural policies. ⁶ However, the cultural arts can often be distinctly identified because they are approached and managed quite differently than the creative industry. The creative industry finds most of its enterprises, which can include nearly any company from advertising to physics, seeking profit or investment oriented under a capitalist-informed umbrella.

The cultural i...