Creative Economy Packs a Big Punch

Are you the innovative, creative type?  Maybe you teach music or design software.  Perhaps you sketch new fashion ideas.  Maybe your love is architecture or interior design.  If so you are part of the creative economy, Southern California is the right place for you.

Traditionally we think about economic impact in terms of well-defined economic sectors such as manufacturing, healthcare, and financial services.  We count how many jobs and establishments are in each sector.  We compute their economic output in terms of GDP, wages, and tax revenues. 

All this data paints a picture of the economy - what businesses and jobs are increasing or decreasing - data which policy makers, educators and employers use when making public policy, training, and expansion decisions.

But there are other ways to look at the economy which cut across those defined industry sectors and measure some of the same economic output data based on professional attributes rather than by industry.

A recent report prepared for Otis College of Art and Design by the Los Angeles County Economic Development Corporation (LAEDC) did just that.  It asked, “What is the economic output of Southern California’s Creative Economy?”  

The word “creative” immediately brings to mind Hollywood and the entertainment business.   After all, Southern California is the entertainment capital of the world and, as would be expected, the entertainment industry is the largest employer in the creative economy.

But creativity is a critical aspect of many industries.  The Otis Report looked at entertainment and all the other “businesses and individuals involved in producing cultural, artistic and design goods or services.”  In the Los Angeles region those business and professions deliver a hefty economic return. 

The total gross regional impact of the Creative Economy in Los Angeles and Orange Counties is $766 billion. Creative businesses directly employ 406,600 people with a total payroll of $33.5 billion. 

When you add in the indirect jobs (people employed by the sector’s suppliers and vendors) and the induced jobs (jobs supported by employees’ spending) the total impact is 695,100 jobs - five percent of California’s wage and salary employment.

In Los Angeles County alone creative economy businesses have a combined payroll of $30.4 billion of which 45 percent or $13.7 billion is derived from the132, 700 direct employees of the entertainment industry.  Visual & Preforming Arts and Fashion are also significant contributors.

Over $5 billion in property, state and local income and sales taxes are generated by creative businesses in Los Angeles County.

California leads the nation in creative businesses and jobs.  Southern California claims 40 percent of the total creative jobs in California and Los Angeles County is home to 87 percent of the creative jobs in Southern California. 

That’s great news.  But these are the jobs every state and region wants to attract.  Other regions and states are looking to entice the creative, innovative talent who reside here. Our public policy, training and economic decisions must consider how they will impact the Creative Economy so it will continue to grow and thrive here.