Tech, design and the arts lead a new Los Angeles economy

By Gary Walker and Joe Piasecki

Techies really are taking over the world, starting with the local economy.

A study commissioned by Otis College of Art and Design in Westchester concludes that jobs, wages and other economic activity associated with the “creative economy” — a broad term that includes digital media as well as design, entertainment, communication and arts-related fields — are rapidly growing and becoming increasingly concentrated in the Greater Los Angeles area.

Produced in collaboration with the Los Angeles County Economic Development Corp., the 2014 Otis Report on the Creative Economy of the Los Angeles Region analyzed 2013 financial data and was released in March.

According to the report, creative industry activity in the Los Angeles region (including L.A. and Orange counties) generated 695,100 jobs, $48.8 billion in payroll and $139.8 billion in overall economic output.

The Los Angeles region was home to 40% of California’s creative workforce, accounting for 1 in 7 jobs in Los Angeles County and 1 in 18 jobs in Orange County.

The region’s largest creative industries were entertainment, fashion and publishing (both digital and print).

An analysis measuring the geographic concentration of creative industries found that the 10 most heavily concentrated creative occupations were all located in Los Angeles County, with media and communication workers leading the pack.

Kimberly Ritter-Martinez, a development corporation economist who worked on the report, said obtaining estimates for creative technology fields such as coding, gaming and computer animation was difficult to measure, with some industry data not fully accounting for contract workers who are technically self-employed.

It is clear, however, that technology-based firms operating on the Westside — companies like Google, Yahoo, Snapchat and entertainment news website TMZ — are becoming local economic drivers.

“There’s no doubt that, given the influx of all of these companies, it’s a growing part of the region. We know that it’s a lot bigger than what we can count,” she said.

Venice Chamber of Commerce Executive Director Donna Lasman said the types of newer businesses identified in the Otis Report are undoubtedly leaving a deep imprint on the local landscape.

“The creative economy is reshaping and redefining Venice. We’re definitely seeing that it is stimulating the local economy in the restaurant and retail sectors,” Lasman said.

While creative industries bring a welcome influx of talent, energy and spending, there are also those who lose out.

The displacement of long-established businesses along Abbot Kinney Boulevard, for example — Hal’s Bar and Grill, gift boutique Just Tantau, wine store Elvino and the Surfing Cowboys vintage shop — indicates that some traditional small businesses may be struggling to keep up.

“These are the people that have made Abbot Kinney Boulevard what it is today. Many of these more traditional businesses have been forced to look elsewhere because they can’t afford to be on Abbot Kinney,” Lasman said. But others, she acknowledged, have found ways to adapt and “take advantage of the new consumer market.”

The Otis report highlights educational outcomes as a primary factor for sustaining the creative economy and ensuring locals can participate in it.

“Now more than ever, it is critical that leaders from the public, private and nonprofit sectors work together to develop and sustain the talent pipeline that feeds the creative economy of our region. A necessary first step is investment in accessible, high-quality arts education, but championing policies and practices that encourage creative placemaking, entrepreneurship and innovation are also required for growing the talent pipeline, ” the report states.

Read the entire Otis report at otis.edu/otisreport.

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