Valuing small to medium arts venues



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The Economic and Cultural Contributions of Small-to-Medium Arts-spaces in the City of Sydney, 2016

Paul Muller and Dr Dave Carter

University of Tasmania


university of tasmania

Introduction


This report considers the cultural and economic value of small-to-medium (S2M) arts spaces within the City of Sydney (CoS) local government area (LGA).

This report utilises a cost-benefit-analysis methodology previously employed to examine the value of live music (Live Music Office, 2015); as well as sports, tourism and the visual arts (Muller et al 2013). The application of this methodology across multiple sectors demonstrates the strength of this approach as a means of generating standardised, rigorous and comparable data to inform policy and decision-making.

Since the 1960s, the visual and performing arts has been recognised by policy-makers and researchers as contributing social, cultural and economic benefits. In the UK, for example, the visual and performing arts were heralded as drivers of both community and economic development and became a feature of urban regeneration programs in the late 1980s and early 1990s (Reeves, 2002). Subsequent research, including mapping projects and economic modelling has established the ‘creative industries’ as a significant driver of economic growth through jobs creation, exports and gross value added (GVA) to the UK economy (Department of Culture, Media and Sport, 2016). The move towards quantifying the economic value of the arts is mirrored in similar research across the European Union. A UNESCO report identifies at least 58 published studies that purport to measure the economic contribution of the creative and cultural industries at a national level between 2002 and 2012 (Micík, 2012).

The application and relevance of these studies to the S2M visual arts sector in Australia is problematic as most economic impact assessments seek to examine the creative industries and / or visual arts as a single entity – or at least a cluster of entities that function in similar ways for the purpose of analysis. This is an issue because, broadly speaking, the data sets and methods many national studies draw on do not allow for sufficient resolution or granularity to identify or address the functions and impacts of discrete sub-sectors such as S2M arts-spaces.

There are also issues with the varying scope and focus of existing mapping and economic impact studies. For example. Bakshi, Freemand and Higgs (2013) highlight fundamental problems with the UK Department of Culture Media and Sport’s classification of the creative industries by pointing to the significant number of creative workers that are employed in ‘non-creative’ sectors. This is particularly relevant to research into S2M arts-spaces, as many workers are volunteers who are employed in other industries. More fundamentally, the methods utilised by the various international studies mentioned above are difficult to divorce from their particular policy or funding context, rarely consistent and so cannot be easily compared (Micík, 2012).

Such research is characteristic of an instrumentalist understanding of the value of the arts, in which they are deployed as an instrument for the purposes of obtaining economic, social and employment benefits (Belfiore, 2002). In the United States and Australia, this instrumental value of the arts is often also expressed in terms of community development particulary at a local government or regional community level (Duxbury and Campbell, 2011; Mulligan and Smith, 2010; Wodsak and Chapple, 2008).

However, the S2M arts-spaces that are the focus of this study include a number of not-for-profit entities whose motivations and impact require a more nuanced approach than those employed by instrumentalist valuations. In the USA, for example, KPMG identified that the non-profit arts sector plays a role analogous to research and development and, as such, its value cannot be measured purely through economic impact, or broader instrumental, outcomes (Marwick, 1994).

In part, this relates to identifying and assessing the intrinsic value of arts activity. Lehman (2013) suggests that this begins with “the basic question of whether the art, in whatever form, made a ‘difference’ to those that viewed it … and how that might be considered a ‘value’” (online). In Australia, several attempts have been made to develop methodologies to measure intrinsic benefit, typically through surveying audience and stakeholder attitudes and experiences (Radbourne and Johanson, 2010). This includes efforts by the Australia Council, who have promoted the concept of ‘artistic vibrancy’ as an appropriate way to assess the impact of visual and performing arts activity (Australia Council, 2010). However Bailey and Richardson (2010) note that there is no one-size-fits-all approach to examining artistic impact in this way, and that attempts to do so will typically devolve into ‘box-ticking’. As noted by Carnworth and Brown (2014), cultural value (as described by Throsby (2001) and Kramer (2004)) may be a more helpful way to think about “value that is created by cultural goods and experiences that is not economic value” (p. 10).

Existing literature makes clear that visual arts activity has both economic and cultural value. A thorough valuation of S2M arts spaces in the CoS requires consideration of both, as well as the unique context in which these spaces exist.

Methodology


This report combines economic analysis with qualitative data on consumer and producer experiences to provide a holistic account of the various ways these spaces and their activities benefit the community as well as how their operations might be enabled and constrained.

For the purposes of this report we define S2M arts-paces as those presenting contemporary visual, media craft and design (visual arts) to the public in a permanent, semi-permanent or recurring space or under a recurring brand, with less than 20 equivalent full time staff. Within the CoS LGA this included a number of artist run initiatives (ARI’s), commercial galleries, university galleries, public galleries and contemporary art organisations (CAOS).

This definition was arrived at in consultation with industry groups and workers and corresponds with the Australian Bureau of Statistics (2001) definition of a small business. Our definition is also inline with the only other known Australian study of the sector commissioned by Arts Victoria, which defined small arts organisations as those with less the 10 FTE employees and annual turnover of less than three million $AUD (Arts Victoria, 2007).

CBA is required to identify real and opportunity costs associated with expenditure, and benefits that flow, including economic impacts, preferences and avoided costs. Cost-benefit analysis (CBA) is the Australian government-preferred approach to evaluating policy choices (Office of Best Practice Regulation, 2005).

Within CBA, avoided cost theory assumes that the positive change in public welfare enabled by galleries and art spaces is a benefit that would otherwise need to be met by the community to maintain the status quo.

The cost-benefit approach demands identification of the recipients of benefits and the bearers of costs. In developing and applying a framework for a complete economic valuation of an activity, it is necessary to quantify the costs and benefits to:



    • government at all levels

    • producers

    • users, and

    • the community, environment and society.

This study estimates the value of galleries and arts spaces in Sydney over a fixed period—in this case, one year. A conservative position is adopted by tending, where necessary, to overestimate costs and underestimate benefits.

Refinement made here to the cost-benefit approach is a more complete illustration of the value creation process. This is because the notion of value is relational, in that the meaning and activity of creating value emerges from a complex set of interconnected social relations (Ollman, 1976). Any study of value should therefore focus on the process by which value is created and ascribed (B. K. Johnson, Mondello, & Whitehead, 2007).





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