Quick Study: March 16, 2023

Jo Reed:  Welcome to Quick Study, the monthly podcast from the National Endowment for the Arts.  This is where we'll share stats and stories to help us better understand the value of art in everyday life.  Sunil Iyengar is the pilot of Quick Study.  He's the Director of Research and Analysis here at the Arts Endowment.  Hello, Sunil. 

Sunil Iyengar:  Hi, Jo. 

Jo Reed:  So what are we talking about today? 

Sunil Iyengar:  Well, Jo, every year in partnership with the U.S. Bureau of Economic Analysis, or BEA, we release numbers describing the state of the arts economy.  The BEA-- they're the ones who report quarterly and annual GDP numbers showing how well the economy is doing overall.  So several years ago we got with them to produce a series of annual estimates tracking the value added to GDP by a range of arts and cultural industries, everything from museums and performing arts organizations, to design services, movies, publishing, arts retail, and many, many more.

Jo Reed:  Okay, so I have a feeling new numbers were just released.

Sunil Iyengar:  Yes, yes.  That's indeed correct.  The latest estimates are from 2021 but they just came out March 15th.  So the 2021 estimates cover more or less a full year after Covid landed in the U.S.  You may recall, Jo, from last year's estimates which covered the first year of the pandemic, 2020, we saw that many arts and cultural industries, especially those relying on in-person events for revenue, took a disproportionate hit from the pandemic, and that was, of course, no surprise.  The industry is covering performing arts organizations-- performing arts venues, for example, shrank more than did the airline industry and food services and hospitality-- so you might expect more of the same in 2021 but maybe just at a less severe rate.  As it happens, though, the new numbers show that when you look at the overall value added by arts and cultural industries in 2021 you find something counterintuitive.  Despite all the setbacks for the sector in the past few years, the arts value added in 2021 expanded to a record high of one trillion dollars, over one trillion actually, representing 4.4 percent of GDP, and this growth rate more than doubles that of the US economy.  The economy as a whole grew by 5.9 percent versus 13.7 percent for arts and cultural industries.

Jo Reed:  That is extraordinary.  Do they have any idea what accounts for this growth? 

Sunil Iyengar:  Yeah, and so it's quite a sharp rebound for many industries.  But when you scratch the surface you find, for example, that for the first time web streaming and web publishing of arts content has vaulted to the top position among arts industries by size.  Even before the pandemic it was among the most rapidly growing arts industries, but in 2021 it drew nearly 50 billion dollars more than in the pre-pandemic year of 2019 once we adjust for inflation.  As you might suspect, the web streaming and web publishing industry is heavily concentrated in the commercial sector.  We estimate that only 18 percent of nonprofit organizations, such as the kind eligible for NEA support, fall within this industry.  But web streaming and publishing was the only arts industry to experience significant consecutive year-over-year growth from 2019 to 2021.

Jo Reed:  Well, that makes sense, actually.  And how did other parts of the arts industry do? 

Sunil Iyengar:  Well, most did much better in 2021 than in the previous year, and either regained or outstripped 2019 levels of economic activity.  Again, some of these industries are largely commercial such as movies, broadcasting, creative advertising, and arts retail, but also government when considered as an industry held relatively steady since 2019.  It might be hard to remember sometimes, Jo-- but besides federal, state, and local arts and cultural agencies, this category includes public school provided arts education, many government-run museums and libraries and cultural exhibits and parks.  It accounted for roughly 92 billion dollars in 2021.  Other arts industries that grew from the previous year, putting them back on par with pre pandemic levels at least where economic output is concerned, are specialized design services, performing arts venues, and private or non-government-run museums.

Jo Reed:  Okay.  This is usually around the time when you bring out that other shoe, which I think is about to drop. 

Sunil Iyengar:  Yes.  You know me too well, Jo.  So a whole range of other arts industries, while they did see growth compared to 2020 levels, still lag behind their 2019 values.  At the top of that list I'd place a category called independent artists, writers, and performers.  So these are establishments led by artists that have at least one employee on payroll.  This industry gained from 2020, but at 33.5 billion is still under the 41 billion it contributed to GDP in 2019.  Performing arts organizations also have not quite caught up with 2019 levels, though they're nearly there, as is the case with fine arts schools, and custom architectural services such as woodwork and metal.  Then there are a couple of industries that have been in persistent decline since 2020-- arts related construction, and grant making services in the arts.  Again, this is when measured by total economic activity, but those are the two big outliers.  So Jo, not to pile on the bad news, but we see that despite all the economic growth for the sector in aggregate, no single state has recovered to the employment levels of 2019.  Here we're talking about workers on payroll at arts and cultural industries.  That's 4.9 million workers in 2021, up 5 percent from 2020 compared with the 3 percent growth rate for employment in all industries.  So that sounds good, but it's still lower than the 5.1 million arts and cultural workers in 2019 pre-pandemic.  Industries that are employing far fewer than they did in 2019 include performing arts organizations, performing arts venues, the film industry, and others.

Jo Reed:  Okay, so this is a very mixed bag.  Are you saying that, in the final analysis, the arts sector has shown some resilience after that first terrible pandemic year?

Sunil Iyengar:  Yes, I think there's no doubt.  I mean, in the second year after the pandemic, there's definitely been growth as I've shown across the sector and for particular industries, many of which are highly concentrated with commercial establishments.  But I want to sort of make two caveats.  One is, while the economic contributions of self-employed workers are recognized in the value added figures I shared-- you know, when I mentioned total economic activity and growth to GDP, that sort of thing-- that does count self-employed workers, but the data do not permit us to report the number of self-employed workers in each of the industries mentioned.  So what that means is I suspect that we're seeing turbocharged growth for some arts industries even while they've lost workers since 2019, and that's because they're reverting to contractors such as self-employed artists and other workers who are not counted in the total employment figures here.  So that might be why the total employment numbers are lower but we see economic growth still continuing.  Second, the other caveat is that although many of the high growth industries are largely commercial, it's important to mention the role of nonprofit arts organizations in this ecosystem.  They seed innovation, experimentation, and they provide equitable access, of course, to these arts forms and disciplines.  So that's really a credo for the nonprofit arts sector as a whole, that's kind of in their mission, and it really re resounds with the NEA's mission as well, experimentation but also equitable access. 

Jo Reed:  Yes, indeed it does.  Sunil, thank you very much.  These are numbers to chew on for a while. 

Sunil Iyengar:  Yes, at least for a year when we get the new numbers.  Thanks.

Jo Reed:  That was Sunil Iyengar.  He's Director of Research and Analysis here at the National Endowment for the Arts.  You've been listening to Quick Study.  The music is We Are One from Scott Holmes Music.  It's licensed through Creative Commons.  Until next month, I'm Josephine Reed.  Thanks for listening.

In this episode of Quick Study, we look at new statistics from the Bureau of Economic Analysis, showing the pace of recovery for arts and cultural industries from 2020 to 2021.