Otis report finds the creative economy outpacing other industries in Los Angeles, but spreading the wealth remains a challenge

By Evan Henerson

Creativity is big business in Greater Los Angeles

Creativity is big business in Greater Los Angeles

Better luck next year, Big Apple.

In terms of total jobs and direct labor income, Los Angeles can boast the title of America’s Most Creative City — easily outdistancing metropolitan competitors like Chicago, New York and the San Francisco Bay Area, according to data compiled by the Otis College of Art and Design and the Los Angeles County Economic Development Corporation.

But while the creative economy may be flourishing locally, the economic news for the country as a whole is somewhat less rosy, said the Nobel Prize-winning economist who coined “Of the 1%, by the 1%, for the 1%.”

“I think we know what to do to make our economy more equal, to have more shared prosperity and to have faster economic growth,” said Dr. Joseph E. Stiglitz, a professor at Columbia University and former chief economist of the World Bank. “Our problem isn’t the economics so much as the politics, and in the United States the intertwining of the influence of the money in our politics makes change all the more difficult.”

Speaking last week at Bob Hope Patriotic Hall, Stiglitz gave the keynote address for the launch of the 2015 Otis Report on the Creative Economy. Since 2007, Otis has commissioned the county’s Economic Development Corporation (LACEDC) to produce a report measuring the economic impacts of the creative industries in Los Angeles.

For the past three years, researchers have expanded the scope of the Otis Report to encompass the entire state of California. Civic leaders and nonprofit arts organizations alike have regularly cited data from the Otis Report to demonstrate the impacts of their programs.

“It’s a powerful advocacy tool,” said Otis President Bruce W. Ferguson. “The report has also inspired countless municipalities, both in the U.S. and abroad, who continue to research and document the economic contributions of arts and businesses in their communities.”

Highlights from the 2015 report — which covers 2009 through 2014 — include 744,100 jobs in the Los Angeles and Orange County region generating nearly $177 billion in revenue, spending and economic activity. The region’s creative industry had a net contribution of $109 billion as well as generating $7.7 billion in tax revenue. One in six jobs in L.A. County is in a creative industry, accounting for 18% of the county’s wage and salary employment.

The data considers both jobs directly related to creative industries (entertainment, fashion, publishing, digital media, architecture, product design and visual art) as well as jobs that are indirectly related or induced by creative industries.

Within the report, LACEDC defines the creative economy to include both “the businesses and individuals  involved in producing cultural, artistic and design goods and services” and “organizations that provide a venue for artists to share their work with the public such as museums, art galleries and theaters.”

Forecasting the next five years, the Otis report predicts employment in the creative industries to outpace overall wage and salary growth in Los Angeles and Orange counties.

Access to arts education will be a major factor in sustaining and strengthening the creative economy.

“Previously there has not been as much focus on K through 12 in the report,” said Kimberly Ritter-Martinez, an economist with the LACEDC’s Kyser Center for Economic Research, which prepared the Otis Report. “Otis and their funding partners are interested in examining that creative pipeline of how we are educating young people as they come up through K-12, and how we prepare them for those kinds of jobs.”

Stiglitz also cited the work of Otis and other institutions as the point of departure for his keynote lecture, noting that around 10% of the nation’s jobs are in manufacturing.

“So when you think about making cars, we’re very much thinking of the world of the 1950s. And the world today is defined by the creative jobs that Otis is trying to prepare students for,” Stiglitz said. “As we move from a knowledge economy to an innovative economy, one of the striking questions is: ‘Will these new economies be able to create jobs for our young people as they get into the labor force?’”

During his speech, titled “The Great Divide: America’s Inequality, Its Causes and Consequences,” Stiglitz said that the growth of the American economy over the past 30 years has largely benefitted “a small fraction of society” and that a substantial number of Americans are awakening to the fact that the economy does not work in their favor.

The rhetoric in the 2016 presidential campaign touching on America’s ability to do things better than other countries has an ironic ring of truth, Stiglitz said, since the country “is better at creating inequality than other countries.”

The speech built on the topics addressed in Stiglitz’s recent books “The Price of Inequality” and “The Great Divide: Unequal Societies and What We Can Do About Them.”

Stiglitz also said that the creative economy can help play a role in illustrating some of the obstacles we are facing.

“Art can send a message far more forcefully than academics can on some of the things I’m talking about,” he said.