California’s ‘creative economy’ faces economic challenges – San Bernardino Sun

California’s creative industries faced a host of economic challenges over the past two years, with architecture and related services faring the best and fine art and performing arts taking the heaviest hit.

That’s the upshot of the 2022 Otis College Report on the Creative Economy. The report is compiled annually to provide an economic snapshot of employment, wages and other factors for each industry.

So what exactly is the “creative economy?”

The study groups that into five major categories: Architecture and related services, fine and performing arts, entertainment and digital media, creative goods and services, and fashion.

Combined, they’re a major economic force. The business-to-business transactions and spending of employees in those industries generated an economic impact of $687.6 billion in 2020, directly employing nearly 1.4 million people and supporting 3.9 million workers statewide.

The challenges

But like virtually every other facet of the economy, they been impacted over the past two years by everything from inflation and supply chain disruptions, to pandemic-related shutdowns, labor shortages — and more recently, fallout from the Ukraine war.

Architecture and related services has remained the most stable creative industry, with statewide employment falling just 2.2% between 2019 and 2020, leaving 225,867 jobs throughout California. The industry accounts for 12.2% of L.A. County’s creative workforce and 16.5% of the state’s employment base.

Conversely, the fine art and performing arts industry went from being one of the fastest growing pre-pandemic sectors to the one with the steepest drop in employment. Its workforce shrank by 19.4%, primarily due to COVID-19 related shutdowns, leaving just 76,442 jobs statewide in 2020.

A shifting narrative

“The arts tend to be first on the chopping block,” said Adam Fowler, a partner with CVL Economics, which compiled the report. “The old thinking was ‘It’s nice to have, but it’s really not part of the overall economy.’”

That narrative has shifted over time. Fowler said people who have been cooped up during the COVID-19 pandemic are anxious to get out and return to live performances, art exhibits and other art-related activities.

Fine arts and performing arts account for nearly 7% of Los Angeles County’s creative workforce (29,861 jobs) and 5.6% of the state’s creative base (76,442 jobs).

Entertainment and digital media saw a 3.3% employment decline in 2020, largely due to production disruptions and cinema closures. But it remains California’s robust sector, employing 980,986 workers statewide, mostly in L.A. County and the Bay Area.

It accounts for 70.4% of L.A. County’s creative employment base and 71.6% of the state’s creative workforce.

Digital technology spreads

Fowler acknowledged that movie theater attendance has declined in California as more and more consumers access movies via Netflix, Hulu and other streaming services. But digital technology is working its way into other areas.

“We’re seeing gaming technology infiltrating into other sectors,” he said. “Those platforms are being used in places like the Weather Channel. High-speed internet and mobile devices used by small startups suddenly give these companies a global market.”

The fashion industry accounts for 7.7% of L.A. County’s creative economy and 3.8% of the state’s. Creative goods and services makes up 2.8% in L.A. County and 2.6% statewide.

The report also shows that people employed in creative endeavours are earning more than ever before.

The average annual wage for a worker in California’s creative economy more than doubled from $75,824 in 2007 to $158,477 in 2020, the study said. That outpaced the average annual wage gain in the state’s overall economy, which jumped from $49,817 in 2007 to $76,590 in 2020.

And there’s a ripple effect: For every 100 jobs in the creative industry sectors, an additional 180 jobs are supported in other sectors of the California economy, the report said.

The study offers recommendations to help grow the creative economy:

– Increased availability of affordable housing and commercial real estate for growing small businesses and housing workers in creative fields

– Expanding film tax incentives in California to also include the growing pool of post-production, animation and gaming industries

– Cultivate talent for the creative sectors through better coordination between publicly-funded schools/community colleges and the commercial sector

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