L.A.'s creativity in action

Study: Showbiz is greatest influence on economy

Creative industries represent the primary driver of the regional economy, and film, TV and music businesses form the biggest segment of that business sector with an estimated 422,300 core and affected jobs and $152.7 billion in economic impact.

Those are among the findings of a new study by the Los Angeles County Economic Development Corp. The report on the regional "creative economy" in 2005 was commissioned by Otis College of Art and Design in Los Angeles.

In Los Angeles County alone, revenue generated by creative industries reached $127.6 billion.

"Overall, the findings show, and tellingly, that in asking what is the basic capital of the region, the correct answer is creativity," LAEDC chief economist Jack Kyser said.

Job totals in the report include all positions affected by the creative segments. For entertainment, the impact total included a core figure of 120,444 people employed directly in film, TV or music, with the higher figure reflecting support jobs providing nonentertainment goods and services to entertainment businesses.

Los Angeles County employment accounted for most of that figure with 105,814 entertainment workers, and another 14,630 were employed in Orange County-based entertainment.

In estimating economic impact, the LAEDC calculated sales, state tax receipts, employment numbers and worker income data from 2005. Data from Los Angeles and Orange counties were considered.

Results of the report show the creative industries represent vital economic contributions to the region and state, officials said.

Kyser pointed to the $1.77 billion in California tax revenue generated by entertainment and other creative industries as evidence that such areas should receive greater care and nurturing by the state government.

"This is serious money that the state is bringing in from these industries," the economist said. "If you had some (film production) incentives, you could grow this revenue number. This is serious business, and it's time we paid some attention to it.

"Local revenue also would have been significant," he added, "but there is more tax revenue that is generated by this industry than people would have expected. So there is reason to pay attention to some of the concerns and the challenges that they face — for instance, piracy, which impacts not just the film industry but also the fashion, computer and (other) industries."

Another implication of the study involves support for arts education in public schools, which has been cut severely in recent years, Kyser said. "There is a lot of talent out there that we aren't cultivating, which is a shame," he said.

The report's calculated impact from other key creative segments included:

Fashion and accessories: 265,200 jobs and $72.3 billion;

Furniture and home furnishings: 108,200 jobs and $25.4 billion;

Visual and performing arts including theater and dance companies: 54,000 jobs and $20.4 billion;

Game design and other digital media: 33,200 jobs and $14.6 million.

Other segments addressed in the study include architecture and interior and landscape design (34,300 jobs, $14 billion), toys (21,400 jobs, $9.9 billion), advertising and other communication arts (58,000 jobs, $8.2 billion), art galleries (2,500 jobs, $463.2 million) and product and industrial design (1,800 jobs, $299 million).

"Now that we know definitively that creativity drives the regional economy, it is imperative that educators, business and cultural leaders and elected officials work together to ensure that the creative fields are recognized as an economic engine and properly supported in the future," Otis College president Samuel Hoi said. "As leaders, we must understand that by inspiring young people through arts-infused learning opportunities, we can help the next generation reach its highest levels of intellectual, civic and economic empowerment."

The LAEDC and Otis were scheduled to detail findings of the report today at a breakfast meeting with regional business, civil and cultural leaders at the Omni Hotel in downtown Los Angeles.