Culture & The Economy :: David Throsby :: valuation and the cultural sector

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Culture & The Economy :: David Throsby :: valuation and the cultural sector

  1. 1. Valuation and the cultural sector:current issues and future directions David Throsby Professor of Economics Macquarie University Sydney Lecture delivered at conference on Culture and Innovation: New Ways of CapturingValue, organised by the Temple Bar Cultural Trust and held in Dublin on 9 May 2012.
  2. 2. The valuation issue: • macro level: how to value the contribution of the cultural sector to the economy? • micro level: how to value the local, regional and national impacts of cultural organisations? • how to value the work of individual artists?
  3. 3. Creative or cultural industries? • creative industries are those industries in which creativity is an identifiable and significant input • cultural industries are those industries providing specifically cultural goods and services
  4. 4. Cultural goods and services • they require creativity in their manufacture • they convey some form of symbolic meaning or message through their cultural content • they embody at least potentially some element of intellectual property
  5. 5. Where do the creative arts fit in the economyof culture? • imagine the creative industries as a series of concentric circles • artists and arts organisations at the centre • the circles represent increasingly commercial industries • creative ideas, skills and talents originate in the core
  6. 6. The concentric circles model of the cultural industries Core creative arts Other core cultural industries Literature Film Music Museums, galleries, libraries Performing arts Photography Visual arts Related industries Advertising Architecture Wider cultural industries Design Heritage services Fashion Publishing and print media Television and radio Sound recording Video and computer games
  7. 7. Public value• The value that society as a whole derives from public expenditure• It poses a challenge to conventional cost-benefit analysis which considers only those impacts measurable in financial terms• It suggests a broadening of value measures, e.g. towards indicators of social well-being, etc.
  8. 8. Public value of the arts and cultureEconomic value Cultural Value
  9. 9. The cultural industries create economic value via: • market value of output of cultural goods and services • non-market value of public goods produced reflecting:  existence demand for arts and culture  option demand for arts and culture  bequest demand for arts and culture • flow-through effects to innovation processes in other industries via:  diffusion of creative ideas  skills transfers  movement of creative labour from the core
  10. 10. Cultural value • aesthetic value • spiritual value • social value • historical value • symbolic value • authenticity value
  11. 11. Measurement of value: economic value can be measured in money terms cultural value is multi-faceted and has no single unit of account
  12. 12. Measurement of economic value • market value measured as observable financial flows (gross value of output, value added, etc.) • non-market value measured by revealed or stated preference methods (e.g. hedonic methods, contingent valuation, choice modelling)
  13. 13. Measurement of cultural value • cultural indicators • expert appraisal • attitudinal analysis of public preferences
  14. 14. Impacts of new technologies • understanding the effects on demand for cultural products arising from the adoption of new consumption technologies • potential for the application of new technologies in cultural organisations (e.g. museums, theatres, etc.)
  15. 15. New business models for arts and culturalenterprises • anticipation of demand shifts • diversification of revenue streams • online market development • clearer articulation of value creation to funding sources • more flexible governance structures
  16. 16. Future directions for cultural policyEffective cultural policy in the future will need to • comprehend the economic benefits (market and non- market) of the arts and culture; • recognise the fundamental importance of cultural value as a component of the public value created by the cultural sector; • foster a positive climate for private sector engagement with the arts; • promote cultural policy as a core government function involving a wide range of ministries including culture, heritage, education, social welfare, trade, urban and regional development, etc.

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