New ideas are the true engine of prosperity in L.A., Otis College study finds
By Gary Walker and Joe Piasecki
In his 2002 book “The Rise of the Creative Class,” economist Richard Florida argued that the United States had transitioned out of its prior manufacturing -and services-based economies to an economy fueled by innovation.
A certain brand of smart phone may be assembled overseas, but it’s the company’s programmers, designers and its leadership and support staffers in California who reap nearly all of the product’s economic benefits and, in turn, stimulate the local economy as they spend.
If this new “creative economy” has a capital city, Los Angeles is a top contender, a study released this month by the Otis College of Art and Design in Westchester concludes.
“The 2013 Otis Report on the Creative Economy,” commissioned by Otis and written by the Los Angeles County Economic Development Corp.’s Kyser Center for Economic Research, measured the economic impacts of creative industries — digital media, entertainment, product and architectural design, fashion, entertainment, publishing and visual and performing arts included — and found them to be a leading driver of economic well-being in the region and statewide.
In Los Angeles and Orange counties:
• Creative industries account for $140 billion in economic activity
• One in seven wage earners are directly or indirectly linked creative industries — some 726,000 workers, representing 44% of all creative workers in California
• Creative industries account for $273 billion in economic activity
The average annual wage of creative workers in 2012 was more than $90,000, some 37% higher than the average for all workers
• Digital media employees, including software designers, had the highest average wage, roughly $162,000
• The digital media industry posted a nearly 20% employment gain between 2007 and 2012
And all of the above isn’t even counting creative workers who are self-employed.
“We went into this already knowing how important the creative economy is, but it was still surprising to see the impressive numbers,” said Otis College of Art and Design President Samuel Hoi. “It was a very pleasant surprise.”
It’s natural for Otis, where nearly all students aspire to jobs within the creative economy, to track such numbers, and the school has done so for the Los Angeles region since 2008.
This year’s report was the first to include statewide data, an expansion funded by a $50,000 grant from the California Arts Council.
For the state’s underfunded arts agency, the Otis report is both a statement of relevance and a call on state officials to take its arts incubation and education more seriously as a contributor to California’s fiscal well-being.
California Arts Council Director Craig Watson said he senses a renewed focus on the importance of arts education and its economic impacts.
“I think there is momentum because of our improving economy,” Watson said. “I also think that hopefulness has given arts leaders and the community more energy to create a groundswell that has gotten the attention of our elected officials.”
Following the release of the Otis Report, state Sen. Ted Lieu (D-Torrance) proposed legislation that would allot $25 million to the arts council’s budget.
The council’s current budget is about $5 million — leaving California in 47th place nationwide in terms of per capita state arts funding, according to the National Assembly of Arts Agencies.
“California is home to one of the highest concentrations of creative individuals in the world. Artistic services and intellectual capital are essential to the 21st-century economy — which is dynamic, knowledge-based and increasingly global,” said Lieu, who is chair of the California Senate Joint Committee on the Arts.
“In my district of more than 1.3 million residents [including Westchester, Playa Vista, Marina del Rey, Venice and Santa Monica], the creative economy supports one in six jobs.”
Watson said Lieu’s proposal would be a welcome infusion to his organization’s budget, which endured major cuts during the recession.
“While it does not put us on par with other states, it would certainly improve our budget dramatically. We would be dead last if [state Assembly Speaker] John Pérez had not given us $2 million [in discretionary spending controlled by the speaker] last year,” Watson said.
By proposing to increase the California Arts Council budget, Lieu is sending “a shout out to the creative community,” Hoi said.
“It helps continue the important dialogue about the importance of funding the arts, and it can also — if the legislation passes — strengthen the pipeline of young people to develop these creative [job]skills.”
Hoi said that while he feels this year’s report is comprehensive, it primarily focuses on existing jobs and does not include some of the innovative elements that can produce new innovation and employment in the 21st century.
“That’s what many of our students are doing: using their skills and talents for jobs that have not been created yet, especially jobs in the technology sector. Also, our digital media department is one of the largest and most successful in the country, and digital media jobs was one of the highlights of the report,” Hoi said.
Lieu said his bill was motivated by a dearth of funding for arts education at the K-12 level after years of cutbacks and the growth of the creative sector.
“There is an insufficient investment in the state’s art programs, and it means art programs and art-related businesses are unable to thrive, or in some cases, to even exist,” Lieu said.
Hoi looks no further than up the coast, along the Westside digital tech corridor known as Silicon Beach.
Silicon Beach, he said, “is drawing other creative people to a place already known for its artistic innovation, a place that can support and nurture that creativity.”
Download the Otis study at otis.edu/creative-economy-report.