Art and economics relationship

Art and Economics | Newington-Cropsey Cultural Studies Center

art and economics relationship

By Hasan Alpagu; Abstract: Most art products can be classified as intangible goods. They characterize a reasonable connection with passion. The reality of the modern employment market sees talent, ambition and creativity take on a central role. Straight-A-achievers are no longer first. Culture manifests itself in everything human, including the ordinary business of everyday life. Culture and art have their own value, but economic values are also .

Still, it is possible to cluster different industries according to certain shared characteristics. We can distinguish three subsectors: This subdivision, and the categorisation of industries among these three subsectors, 9 is designed to enable the quantification of their economic importance. In the domain of arts and cultural heritage, the value is primarily in the aesthetic experience derived from works and artefacts whose creation usually stems from an artistic and cultural need, rather than commercial exploitation.

Public financing plays a key role in this domain. In the case of historical buildings for example, the primary concern at the time of their construction was usually not aesthetic; in our time however, it is the symbolic value of these buildings which determines their status as cultural heritage.

Cultural heritage also includes museums, archives and libraries. The arts include mostly practitioners of visual arts and performing arts. For the media and entertainment industry, the role of public financing is less important than for arts and cultural heritage; there is a greater emphasis on profitable exploitation, and on reaching a large audience. Typical industries in this sector include radio and television, books, cinema, music, and live entertainment.

Creative business services do not work directly for the consumer market, but rather for business customers, usually on a commission basis. This subsector of the creative industries includes advertising and communication, design, and architecture including landscape architecture.

Despite the commercial context, there is definitely room in creative business services for a personal creative signature, for example in the case of architectural firms or design studios. The boundaries between the various subsectors are quite open, fluid and unsteady.

For example, part of the gaming industry can increasingly be qualified as a form of creative business services, even though the gaming industry as a whole has traditionally been part of the media and entertainment industry.

Serious games are commissioned by businesses in order to teach specific insights and lessons in a more efficient and effective way to their staff, clients or other stakeholders.

Economy and Art: Why are Economy and Art Closely Linked?

The boundary between private and public financing within the creative industries is much less clearly defined than is often suggested. Public funding is by no means the exclusive privilege of the arts sector. For example, the film industry, an important sector within the media and entertainment industries, operates in a market-driven context, but cannot survive without public support in the encompassing various industries.

The definition was updated according to the international redefinition in of the standard classification of economic activities Rutten, Koops and Roso a. Van Andel and Vandenbempt Netherlands Film Fund Public broadcasting is chiefly financed through taxes, but is also an important player with a defining competitive position in the audio-visual market. The printed media sector, with products ranging from newspapers to magazines and books, enjoys a low value-added sales tax rate: On the other hand, governments stimulate entrepreneurial thinking and acting in the arts and culture sector, in order to achieve a higher cultural return on public investments.

The influx of private funds in the field of art and culture as a result of cultural entrepreneurship has increased in recent years, which in turn also benefits the government cf. The boundary between culture and economy is thus an increasingly porous one. What is obvious however, is that publicly financed parties as well as private ones, in so far as these could ever be clearly distinguished, both create added value, cultural as well as economic.

As such they are socially relevant, they generate groundbreaking experiences as well as economic value, and they provide citizens with an opportunity to earn their livelihood. Graduates of the wide variety of art education programmes offered in the Netherlands can find employment, not only within a somewhat narrowly defined art sector that is largely dependent on state subsidies, but also in the diverse assortment of creative industries, which include a broad range of economically and socially value-adding activities.

This also applies to the Willem de Kooning Academy: Developments in the creative industries have direct implications for the requirements to students.

Alumni of Dutch art education programmes find employment either in the arts sector, where they are expected to function in environments where cultural entrepreneurship is combined with independent artistic practice, or in creative business services such as advertising and fashion design, where the emphasis is rather on applied creativity in a mostly market-driven environment.

In there were more thanjobs in the creative industries in the Netherlands, subdivided across the three subsectors: This amounts to 3.

EconPapers: Economy and Art: Why are Economy and Art Closely Linked?

In the most recent years of this period the growth rate was a bit more than one percent lower: Of the three subsectors, growth has been strongest in arts and cultural heritage, with 4. An important reason for the high growth rate in arts and heritage, is the increase in registered jobs in the performing arts and visual arts, largely as a result of the compulsory registration since of freelance creative workers, many of which were not previously registered with the Chamber of Commerce.

This has led to an inflated short-term growth rate. The bright side is that we are now able to gain a clearer understanding of the true magnitude of these art practices.

The lowest growth rate was noted in the media and entertainment industry: The last three years have even shown negative growth. Creative business services have been growing on average 3. Within the creative industries, the gaming sector is showing strong growth.

Statistics Netherlands and the Chamber of Commerce have recently added a category for gaming. The registration of businesses and jobs in this category is still under development and therefore incomplete. Still, we have included in table 1 for the sake of completeness the statistics for gaming and other publications.

There is, incidentally, no indication that a similar situation might also apply for other categories. From to there was an average annual increase of 8. This percentage is much higher than the percentage of creative industry jobs within the total number of jobs in the Netherlands 3.

This is because the average number of employees in creative industry businesses is much lower than the national average. This characteristic small scale is due to the high number of freelancers and small operations; there are very few businesses and institutions in the creative industries with more than 50 employees. Of the three subsectors, arts and heritage has the smallest average number of employees per business or institution.

The creative industry's total revenue grew on average 1. The growth of the creative industry's total revenue 1. This is due to a number of factors, such as the fact that much of the growth was realised in the arts sector, which is characterised by a relatively low revenue per job.

The productivity in media and entertainment is thus markedly higher than in the other two subsectors Rutten, Koops and Nieuwenhuis a, pp. However, in more recent years the emphasis has shifted toward the broader economic and social impact of the creative industries: In this economy, the human ability to create value based on new concepts and ideas is seen as the main driving force behind increasing prosperity; most of the added value is realised through goods and services which relate to the experiences of consumers and respond intelligently to broad social needs and requirements cf.

In this context, the creative industries are increasingly perceived as an important motor for competitive strength and innovation; consequently, the contemporary debate sees here the main value of creative activity, a trend described as the turn towards innovation see also: Rutten, Manshanden, den Blanken and Koops ; D.

Creative industries contribute to innovation, by giving concrete shape to the possibilities offered by new systems and technologies, and by linking these to broad social needs, through processes such as visual representation and design. Creative professionals develop new ideas and create designs focused on current and future needs of representation and experience, but also on practical applicability and useful social value.

In principle, this practice applies to a broad range of economic and social domains. Knowledge and understanding of trends, culture and lifestyles are essential requirements for offering attractive and competitive products. This type of creativity is not only important for the development of new products and services, but also for their positioning and marketing.

Since in many cases the functionality of these goods and services has already been optimised, competitive advantage can only be realised by making connections with intangible meaning and cultural value. The combination of both types of activities, the development of new products and services based on the appropriate creative inputs, and the connection of goods and 9 services with experience value, are all essential ingredients for innovation in the creative economy D.

This has led several researchers and theorists to conclude that the creative industries are in fact becoming an integrated component of the innovation systems of contemporary economies, rather than merely an economic sector enjoying above-average growth rates. Therefore the creative industries clearly require specific and focused attention from policy makers. Fortunately, there has been an increasing interest and activity in recent years toward research concentrating specifically on this role of the creative sector in the economy and society at large see for example: The presumed special role of the creative industries can be clearly demonstrated by examining the function of design as a specific branch of creative business services.

Good design, and therefore good designers, are essential for the market success of products and services; not only in providing an aesthetic finishing touch, but also in contributing creative input to design processes, from the earliest phases of the development of goods and services.

art and economics relationship

Of course, the economic value of the fashion sector goes far beyond design; the production, distribution and retailing of clothing all contribute value as well. Still, design remains the key to this value. Also noteworthy is the important role played by designers in connecting the fashion sector with the domain of new materials. Based on their user-oriented perspective and their knowledge of current social trends, designers provide valuable input to businesses developing new materials for use in clothing.

There are a number of ongoing developments, in traditional fabrics and textiles as well as in the field of new fibres and materials.

One of the roles of designers is to make connections between parts of the chemical sector and the fashion industry. In the automobile industry as well, design is now the determining factor. The technical specifications of the various brands and types are increasingly similar; distinction is created through design, image and identity, which is precisely where the competences of designers and brand specialists come into play. The role of advertising and communication in the economy is thus comparable to that of design.

Professionals in these disciplines create value, by defining specific positions for organisations and businesses within the field of public opinion, and by guiding the launch of new products and services and consolidating the position of existing ones.

A recent development in this sector has seen advertising agencies functioning as strategic branding and positioning advisors to businesses, a clear indication of the importance of these competences in the development and success of businesses Bilton The creative industries are moving toward the heart of the creative economy.

As a result of this development, products in an increasing number of markets are now chiefly defined by their design and their brand. Consumer electronics and information hardware are a clear case in point. In the market for media and IT services, the boundaries between technology, design, and even content are becoming increasingly blurred.

The best example of this is Apple, the most successful business of the past decade. Apple has demonstrated the crucial importance of design, even more than Sony previously did with a number of groundbreaking concepts in the electronics industry. Now it seems as though Apple is already losing ground in this respect to Samsung. The almost symbiotic relationship between information and communication technology on one hand, and creative industries on the other, can be explained by the central role of language and information in both domains.

The products of the creative industries are basically immaterial: Creative industries almost always make use of newer or more traditional information and communication technology ICT. The newest forms of ICT include digital networks and various forms of information processing software. Innovation in the creative industries closely follows developments in information and communication technology, and in some cases also vice-versa.

Why art and culture contribute more to an economy than growth and jobs

Just as printing technologies once paved the way for book and newspaper publishing, the development of the Internet and new digital technologies is now responsible for an extensive restructuring of the media industry including the emergence of new segments such as the gaming sector as well as profound social transformations.

Creative industries are at the forefront of this development, precisely because the sector in fact thrives on the development and exploitation of information and symbols, of lifestyle and representation. As a consequence, it is often unclear whether some businesses, including global players such as Google, Apple and Amazon, should be classified as ICT or creative industries.

TomTom facilitates and exploits access to information, thus functioning in many respects as a publisher. In the virtual domain, new creative concepts can be very rapidly scaled up to a global level.

In the virtual creative industries, the role of local markets plays a much smaller role than in the material creative sector. The catalysing effect of creative industries on the rest of the economy is not limited to creative business services, which include design, advertising and communication. In the media and entertainment industry as well, products, services and competences are being developed which can be applied within the economy at large, and which add lifestyle value to more generic products and services, by providing them with symbolic qualities based on the gravitational attraction of products and personalities from the world of popular culture Wolf Serious gaming is another example of how new applications developed within one subsector add value to another sector.

Games, which first originated as entertainment products, are increasingly being applied in communication and information strategies, as well as in health care, where the use of specialised games in medical rehabilitation processes has met with some very interesting results indeed.

Also the domain of the arts, particularly artistic research, is providing contributions to broader social and even economic developments. In the current practice of art and technology labs, artists ask questions such as: How are we living? How do we wish to live? These questions are then the subject of a creative and research process, in which technology is deconstructed and reconstructed: Creative works resulting from this practice call into question existing practices, and provoke new discussions and debates.

Media labs thus aim to deconstruct technology from a social or aesthetic perspective, showcasing technological development processes which otherwise might have remained undetected from the dominant design perspective.

This in turn allows for the development of possible alternative processes, for the benefit of social values, targets and applications which otherwise may not have been explored.

This way, media labs offer alternative and often superior uses of the social possibilities offered by technology; art provides the fundamental research for the creative industries, in much the same way as scientific laboratory research does for industrial innovation. In the United Kingdom, the connection between 12 A challenging new development in this respect is 3D printing, discussed by Peter Troxler elsewhere in this volume.

Rinnooy Kan, Rutten and Stikker In the Netherlands, such a connection has yet to be established. The potential demonstrated in all the above examples manifests itself in the role currently attributed to the creative industries in providing solutions to broad social challenges, for example in the fields of sustainability, mobility and health care. The European Union refers to these as grand societal challenges which are crucial to the future of societies on our continent.

Such challenges require integrated responses, rather than purely technological solutions; there are cultural values at stake, requiring an approach in which the creative industries will be called upon to play an important role see also: Amerika ; Topteam Creatieve Industrie Talent for the creative economy The developments I have described above, all have direct implications for government policy on art and culture, particularly policy regarding creative industries, but also for the curriculum of educational institutions, and for research focused on the creative economy.

The perspective is shifting, from the magnitude and growth of the sector itself, toward the broader catalysing effect of the creative industries on social and economic innovation. The crucial question is now: This question directly addresses the promise of the creative economy, in which creativity is the motor of innovation and development.

This implies a greater emphasis on creative talent, rather than creative businesses, since it is the individuals working in creative professions who play a crucial role in realising the intended catalysing effect. Therefore, research and policy should concentrate increasingly on the connections relations and interactions, networks and interfaces, and of course their effectiveness between these creative professionals and the fields of application in which they function.

This is also a crucial development for education programmes focused on the development of talent for the creative industries. Many designers work in specialised agencies which take on commissions from third-party clients; in this respect they clearly work within the creative industries. However, an even greater number of designers work in organisations which do not fall under the creative industries: For these organisations, fulfilling design needs using in-house personnel proves to be a better strategic option than purchasing these designs on the market, from design agencies.

It is estimated that two thirds of all designers in the Netherlands work for businesses outside the creative industries see: Therefore these professionals are not counted in the statistics of researchers investigating the creative industries, even though they are an important factor in the creative economy, and their activities are crucial in determining the value of creative competences as a driving force for innovation.

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As long as the research was still focused on determining the magnitude and scope of the creative industries, there was no urgent need to gain a clear understanding of the presence, range and significance of creative talent operating outside the creative industries. However, the focus is now clearly shifting towards the catalysing social effects of creativity, as a motor for innovation, competitive strength and quality of life; conversely, there is now a decreased interest from this perspective on the numbers of individuals working in a non-creative capacity within the creative industries, but who are currently still included in statistics on the creative sector.

These include financial managers as well as office and catering personnel. Employment 12 statistics in businesses with a large number of facilitary jobs relative to the number of creative jobs, are now indiscriminately counted along with businesses employing a relatively high percentage of creative professionals. An example of a sector belonging to the first category is amusement parks, which are part of the leisure industry. Most employees in this sector are facilitary staff, ranging from ice-cream vendors to attraction attendants; all these workers are counted as part of the creative industries, alongside employees of businesses with a high number of creative professionals.

These include various creative business services, architects, designers and advertising and communication services, where forty to fifty percent of employees are creative professionals.

Statistics Netherlands has compiled a provisory list of creative professions a selection from the more than creative professions officially recognised in the Netherlandsin an effort to measure the extent of the creative sector industries from this perspective as well see: Urlings and Braams According to this list, there were more thancreative professionals in the period from toboth within and outside the creative industries.

By comparison, there were aboutjobs both creative and facilitary in the creative industries in the Netherlands in Rutten, Koops and Roso b.

In the United Kingdom, by comparison, Higgs, Cunningham and Bakhshi determined that inthere werecreative jobs outside the creative industries, in addition to the 1. In other words, creative skills and competences specific to the creative industries are firmly embedded in the British economy as a whole.

Recent research by Rutten, Marlet and van Oort on creative talent in the greater economic region of Amsterdam, has shown how various creative sectors are deeply integrated in the regional economy. An important indicator is the migration of talent between businesses from various sectors within and outside the creative industries: This is only possible in a situation which stimulates the spillover of knowledge, through mobility of creative talent, from the creative industries towards the rest of the economy.

Therefore, the conditions necessary for the creative industries to function as a catalyser for innovation in the creative economy are clearly present. Further research will be needed in order to gain deeper insight into such processes. There is a parallel between the shift of direction in research, which is required in order to gain a clearer understanding of the workings of the creative economy, and a similar necessary change in policy.

Creative industry policy currently focuses mainly on businesses, which are still perceived as the most important actors in the creative and innovative economy. However, there is a clear need, in the context of creative sector policy, for a shift of emphasis toward the role and significance of creative talent, and the embedding of this talent within the economy at large, particularly when one considers the promise of the creative economy.

Education clearly plays a key role here. This can take place in the context of a freelance practice, a creative industry business, or other businesses and organisations which have chosen to employ creative professionals. This is the broad framework in which the creative economy is gaining its momentum, and in which institutions such as the Willem de Kooning Academy will continue to play a crucial role.

According to Florida, the development of the high-tech knowledge economy requires talent 13 which can proactively give shape to innovation. This talent is what he refers to as the creative class: Members of the creative class share a common ethos in which creativity, individuality, quality and a keen sense of judgment are highly valued.

The creative class can be found in a variety of professions: This core plays a key role in generating new ideas, techniques or content, in science and technology, architecture and design, education, art, music and entertainment. These creative professionals are able to solve complex problems, which requires independent judgment. They are often, though not necessarily, highly educated.

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A region with a high concentration of such talent becomes a magnet for innovative businesses. Florida accurately observes that jobs i. In the industrial age, workers flocked towards factories; in the creative economy however, high-end service and technology businesses choose locations close to pools of talent, which are generally concentrated in metropolitan areas cf.

art and economics relationship

Conversely, professionals from the creative class choose an attractive, usually urban living environment, and then look for a job in that area. In other words, the talent that shapes the creative economy thrives in a liberal, artistically rich and tolerant environment. In order to attract and hold on to the creative class, a city must offer its residents a rich cultural life. This is usually provided by the creative industries, particularly in the case of cultural activities which are consumed on location: Art in public spaces is also an important factor in this equation.

Art, culture and creative industries thus indirectly stimulate innovation in addition to the previously described catalysing effect of creativity by fostering environments in which creative talent, which is in a position to contribute to urban economic development and innovation, feels at home.

Additionally, Florida recognises the direct value of creative talent for innovation; this is why he considers artists, designers and creative professionals from the media and entertainment industry as an integral part of the creative core. The often conspicuous presence of creative talent in the city is also an important factor in this respect. Creative individuals often work in the city centre, where they frequent coffee and lunch bars; here they meet, cultivate their professional networks, and keep in touch with the pulse of the city, always an important source of inspiration.

Even sculpture and architecture can be recast in bronze or recreated from plans and blueprints. Art is always already dematerialized; it resembles commercial advertising in that it creates unnecessary desires, it represents the transcendent human spirit in surviving its fleshly makers and its local social homeplace. So great art is entirely consistent with economic abstraction and financial derivatives.

Corporate business, funded by banks, is part of the meaning-making that drew us up from an animal existence into a world of higher significance and set the populations of the developed world free to pursue the making of their souls. If that progress contains booms and busts, that only shows that the process of creative destruction is working as it should, testing the parameters of the phase-space within which it can healthily operate, a part of the discovery process.

art and economics relationship

Mass production simply makes available to ordinary people what was once set aside for the rich and powerful alone, and there is no reason to suppose that it necessarily leads to a decline in the quality of goods.

Competition will refine the excellence of manufactures until it surpasses that of handmade craft goods. But it is time to hear another side of the debate. Benjamin might well agree with the fictional market apologist of the last few paragraphs. Marxists such as he actually approve of the achievements of capitalism, as long as they are seen as a prologue and enabling technology for the proletarian revolution that will be next phase in human history. Benjamin goes on to say, though, that the mechanical reproduction of a work of art necessarily destroys its authenticity: Even the most perfect reproduction of a work of art is lacking in one element: This unique existence of the work of art determined the history to which it was subject throughout the time of its existence.

This includes the changes which it may have suffered in physical condition over the years as well as the various changes in its ownership. The traces of the first can be revealed only by chemical or physical analyses which it is impossible to perform on a reproduction; changes of ownership are subject to a tradition which must be traced from the situation of the original. The presence of the original is the prerequisite to the concept of authenticity. But far from bemoaning this loss of artistic authenticity, aura and authority, Benjamin celebrates it as liberating the masses from the tyranny of tradition.

The religious roots of the arts are severed, and for the first time in world history, mechanical reproduction emancipates the work of art from its parasitical dependence on ritual. To an ever greater degree the work of art reproduced becomes the work of art designed for reproducibility.

But the instant the criterion of authenticity ceases to be applicable to artistic production, the total function of art is reversed. Instead of being based on ritual, it begins to be based on another practice—politics. As a Marxist, Benjamin is delighted with this. The masses are no longer to be drawn hypnotically into contemplation of the work of art and idolization of its author or subject, but instead galvanized into action.

Because the artwork is cut off from any particular and unique physical reality, it can now be put to use in the continuing class struggle. Even the appeal of the human face cannot seduce us: The cult of remembrance of loved ones, absent or dead, offers a last refuge for the cult value of the picture. For the last time the aura emanates from the early photographs in the fleeting expression of a human face.

This is what constitutes their melancholy, incomparable beauty. But as man withdraws from the photographic image, the exhibition value for the first time shows its superiority to the ritual value. It is, I believe, very important to show how deeply and terribly wrong Benjamin was, and by implication how evil his large influence may now be.

As a German Jew, Benjamin was writing these words in Auschwitz, with its mechanical reproduction of death, its efficient elimination of all human aura and authenticity, its rejection of all sentimental bourgeois cult, was only seven years away.

And the records of those atrocities have no less genuine ritual value if they are in the form of reproducible photographic images or irreproducible human skulls and fragments of clothing.

Where does his logic go wrong? Perhaps the first false turn was to identify the actual physical presence, the objectness of the art object, with its aura and authenticity.

Such an argument sounds plausible for paintings and patinas, perhaps, but becomes absurd when we turn to poetry, whose aura is often specifically identifiable with the pathos of its being preserved by being copied on paper and not graven in physical stone. As Shakespeare says in Sonnet Or what strong hand can hold his swift foot back? Or who his spoil of beauty can forbid? O, none, unless this miracle have might, That in black ink my love may still shine bright.

art and economics relationship

But as a dialectical materialist, with what else could he identify the real authenticity of an object, except its material physicality? The deep mistake, which is endemic to the Marxist view, is to reduce content to physical matter. And here we may be on the trail of a real answer to the conundrum we began with.

Perhaps the really essential bond is not between idea and matter as such, but between idea and content—content that may indeed be very much embodied in matter but is not the same thing as it. A century of formalism, structuralism and post-structuralism cannot dispense with the fundamental need for true content.

As the Encyclopedia Britannica usefully paraphrases Greenberg: What counted in a Morris Louis painting, for example, was the way the colours stained the canvas, confirming its flatness while seeming to levitate above it. The painting had presumably no other meaning than the sheer matter-of-factness of its colours and their movement on the canvas.

Again, content is reduced to matter. The way forward, then, after the false starts of the last century, may be to break our fetishization of matter itself, or rather to recognize matter—material—as a relative, not an absolute term.

Matter reduces to content, not content to matter.

art and economics relationship

Our fleshly neurons are indeed the material of our thoughts and decisions. But organic molecules are the material of our neurons, and atoms are the material of molecules, and elementary particles the material of atoms.

We now know that even elementary particles are not the fundamental matter of the universe; photons—light waves—are more fundamental still. What is light but the pure medium of information, a set of information states?