To Scale: Mapping Financial Inflows in Australian Arts, Culture and Creativity
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Investment in cultural and creative activity is high on international public agendas as nations seek to harness its economic, social and cultural benefits. The non-governmental finance market for arts, culture and creativity in Australia – and industry’s knowledge of these diverse financial options – remains under-researched. This report addresses these gaps in research and awareness by painting a fuller picture of the scope and scale of financial inflows to the cultural and creative industries. It also explores new ways to assess and articulate return on investment (ROI) across short, medium and long-term time horizons.
Please note ANA’s minor revision to this report since first released. The revision was in the report’s Figure 7 and Exhibit 2 in the Executive Summary. The reference to ‘Employee share schemes’ has replaced ‘Equity share scheme’.
Summary of Findings
Australian cultural and creative industries attracted $160 billion in 2020–21. In the comparison year, 2017–18, these industries attracted an estimated $141 billion, indicating 13% growth.
For context, not-for-profit organisations in these industries attracted $1.2 billion in 2019–20.
The vast majority of income in the cultural and creative industries is from sales and services. In 2020–21, these industries earned 87% of income from sales and services, and in 2017–18, they earned 92%. ‘Computer system design and related services’ earned the most sales and services income in these industries, whereas ‘libraries and other services’ earned the least.
For context, not-for-profit organisations in these industries earned 27% of their incomes from sales and services in 2019–20.
Australian consumers are significant contributors to financial inflows to arts, culture and creativity, with more than $45.6 billion in annual household expenditure being spent within the entertainment and recreation industry.
Non-residents – for example foreign markets and international travellers to Australia – are also contributors, with total exports at $1.7 billion in the 2021 calendar year for all creative goods.
Distinct from most other investing entities, governments typically invest in Australian arts, culture and creativity without the need for financial reimbursement.
In 2020–21, governments distributed an estimated $16.4 billion to the cultural and creative industries (including targeted and wider-economy COVID-19 expenditure). A total of $393 million of this was indirect, including a range of tax concessions (revenue forgone) and exemptions accessed by the film industry, not-for-profit organisations ‘advancing culture’ and individuals.
For 2017–18, governments invested $7.9 billion in these industries, including $362 million of indirect expenditure.
Other financial inflows include licence fees collected by copyright collecting societies ($849 million, 2021–22/$732 million, 2017–18) and philanthropic income ($282 million, 2021–22/$150 million, 2017–18). These estimates showed growth of 16% in copyright revenue and 88% in philanthropic support from 2017–18 to 2021–22.
Examples of financial inflows through other models include successful crowdfunding campaigns in Australian arts, culture and creativity; venture capital investment into Australian start-ups; and foreign media groups and financial groups in Australian media companies holding company interests.
Despite global interest, no single framework or methodology for returns on investments in the cultural and creative industries currently allows for consistent or systematic comparison, over time and across countries.
Investors aim to achieve returns over a range of different time frames. The language used to consider and describe these returns varies across the investment environment, from consideration of risks, costs and benefits; to business growth; to language grounded in social impacts, values and economic spillovers.
Summary of Opportunities
To leverage new and existing finance opportunities for arts, culture and creativity, governments and industry stakeholders should
- Establish a clearer line of sight on the interdependencies and risks of the investment environment, for example, through environmental scanning
- Facilitate cross-industry learning and collaboration, such as through increased information, advice, coaching and mentoring schemes
- Draw on information about underused and emerging sources of finance held by financial brokers and investment specialists
In implementing the current National Cultural Policy, the federal government should assess the impacts and ongoing policy implications of artificial intelligence including those relating to
- Rights management through copyright collecting societies
- Overseas approaches to artificial intelligence’s inputs (data and text)
- The role of ‘human creativity as a major input’ in definitions and measurements of cultural and creative activity
Governments and industries can use this research’s estimates and descriptions of financial inflows to work through the practical implications of ‘preserving’ and ‘strengthening’ the financing of culture, which UNESCO and its membership have declared a global ‘public good’.
At the next regulatory opportunity, or in developing the next National Cultural Policy, the federal government should weigh the evidence of the benefits of local content rules (e.g. economic spillovers) with the evidence of the benefits of foreign stakeholders’ investment in Australia’s arts, culture and creativity.
Regulators, businesses, and policymakers should together assess the impacts of these rules alongside the intersecting issues of:
- Global trade barriers
- International competition in sector-specific tax incentives
- Australia’s requirements from foreign investors
To improve the measurement of returns on investment over time and across countries, researchers and policymakers should address known weaknesses in ROI methodologies and data sources, including in valuations of intellectual property and artistic merit and of ‘non-use value’ in economic modelling.
To form new partnerships and to communicate individual and cumulative effects of investments, investors, industries and policymakers should trial the ROI conceptual framework outlined in this research. This includes using the framework’s language of short-term outputs, medium-term outcomes and long-term impacts.
Fielding, Kate; Vivian, Angela; Rossi, Sari, August 2023. “To Scale: Mapping Financial Inflows in Australian Arts, Culture and Creativity”. Insight report no. 2023-02. Produced by A New Approach (ANA). Canberra, Australia.
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A New Approach (ANA) is Australia’s leading think tank focused on arts and culture. We believe Australia can become a cultural powerhouse whose compelling creativity is locally loved, nationally valued and globally influential.
Through credible and independent public leadership, ANA helps build an ambitious and innovative policy and investment environment for arts, culture and creativity.
We work to ensure Australia can be a great place for creators and audiences, whoever they are and wherever they live.
ANA acknowledges the cultures of Aboriginal and Torres Strait Islander peoples in Australia and their continuing cultural and creative practices in this land.
A New Approach (ANA) produced this report. CEO Kate Fielding provided the overall direction; Director of Research Dr Angela Vivian led authorship; and Researcher Dr Sari Rossi led data analysis.
Grace McQuilten, RMIT, Associate Professor; Jayne Lovelock; and Ben Au provided expert advice on early drafts of this report. However, any errors are our own. If you notice any, please get in touch using the contact details provided below.
ANA thanks all the people who generously reviewed this paper for their time and feedback, including members of ANA’s Board and Reference Group.
The opinions in this Insight Report do not necessarily represent the views of ANA’s funding partners, the individual members involved in governance or advisory groups or others who have provided input.
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