L.A.’s Creative Industries See Economic Growth, Research Finds

The results of the 2019 Otis Report on the Creative Economy were released Friday morning. The 11th year of the report, a research project commissioned in 2007 by the Otis College of Art and Design to understand the size, growth and structure of the creative economy in Los Angeles County and California, found that within the creative industries, the economy has largely returned to pre-recession numbers, adding jobs in virtually every entertainment sector.

The creative industries generate $207.8 billion in annual output in Los Angeles County, out of a 900 billion economy, making it one fifth of the total economic pie. The direct employment and indirect employment generated by the creative industries constitutes 19.7 percent of L.A. County’s total employment, compared to the 15.4 percent that the creative industries constitute within all of California.

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The findings of the report were presented by executive director of economic research at Beacon Economics, Robert Kleinhenz, PhD. “What we found in this report, and the broader research that we have done, is that for all the attention that is given to the tech side of the California economy we actually have a significant presence here in the creative economy, and when you look at it you realize tech and creativity are intermingled in film and digital media as well as elsewhere in the economy,” he told The Hollywood Reporter. “We’ve seen a lot of growth in the California economy, and a lot of it has been attributed to tech, but I think what this points out is that it’s an incomplete description. There is a fair amount of creative economy influence in the growth that we’ve experienced over the last few years.”   

The one sector where jobs have declined is the fashion industry. Kleinhenz noted that while manufacturing jobs have moved away from Los Angeles and California, the fashion industry has not turned its back on Los Angeles. “In L.A. County, and by virtue of L.A. County the state as a whole, has seen declining job counts, but that’s because of the manufacturing component. Otherwise jobs were flat or higher when you compare 2017 against 2010, so this is a good news story in that sense,” he said. “We have for a long time, especially with respect to fashion, been concerned about the vibrancy of that particular sector of the economy. It’s here. It’s just not the manufacturing [hub] that it once was.” 

While the numbers were encouraging across the board, there is still room for improvement. Women in the industry still earn 77 cents to the dollar and make up about 40 percent of the creative economy work force — a statistic that remains unchanged from 2007 to 2017. “That’s a situation we’re looking at all around America’s industries and America’s economy and it’s a slow and long-playing issue that undoubtedly is going to improve over time, with all the discussions we hear about,” said Kleinhenz.

As the average wages of female professionals in the creative industries have risen in L.A. County by 40 percent over the past 11 years, almost double the wage growth of male professionals in the county (23 percent), Kleinhenz is hopeful that the entertainment industry will be at the forefront of parity: “I would like to think that because [the entertainment industry] is so heavily concentrated in L.A. County that we should be seeing more improvement here in the creative economy than would otherwise be the case.”