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The Economic Contribution of Culture

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Yves Jauneau

The Economic Contribution of Culture

The cultural branches : a total output of 85 billion euros in 2011

Testo integrale

1In 2011, the various cultural branches (audiovisual, performing arts, press and book publishing, advertising agencies, architecture, visual arts, cultural heritage, cultural education) generated a total output of € 85bn (see Table 1 & Box 1). This total output can be broken down into three sections (see Box 2). Firstly, cultural market output (€ 65bn) covers the production of cultural goods and services destined for sale on the market at an economically significant price, i.e. a price which covers more than 50 % of the production costs. Secondly, output produced for own final use (€ 4bn) covers, in the case of culture, capitalised production constituting an asset generating income which is realised at a later date : for example films or television programmes made in that year for broadcast at a later date. Thirdly, there is cultural non-market output (€ 16bn) which covers cultural goods and services for domestic consumption offered at a price which is not economically significant as it has benefited from public contributions (from local or national government budgets, subsidies paid to associations, community contributions etc.). Non-market output is, in accordance with current norms, valued at its production cost (Box 2) which mostly covers three types of expenditure : compensation of employees, intermediate consumption and investment expenses.

2Cultural market output is almost exclusively produced by businesses ; cultural non-market output, on the other hand, is the product of government bodies, public services or even associations (Box 2).

A cultural gross value added of € 40 billion

3The gross value added (GVA) of the cultural branches was put at € 40bn in 2011 (see Table 1). This cultural GVA covers total cultural output minus intermediate consumption, i.e. all goods or services which are modified or consumed during the production process (commodities such as electricity for example). Intermediate consumption represents 53 % of output within the cultural sector, a slightly higher proportion than for the economy as a whole (51 %). Indeed, certain cultural activities, due to their specific activity, account for a significant proportion of goods and services consumed through intermediate consumption and these are not taken into account in the final GVA calculations.

4This is particularly the case for the press and book publishing (use of paper), and for video, electronic games and film distribution.

Economic contribution of culture put at 2.2 % in 2011 ; in decline since 2004

5Expressed as the percentage of the cultural GVA of the cultural branches within all branches combined, the economic contribution of culture was 2.2 % in 2011 (see Table 1). This economic contribution relates to the standardised defined field of "cultural branches" within Europe (Box 1). Any extension of this field by adding further activities to the fringes of cultural activity (industries enabling the manufacturing of cultural goods, businesses enabling their sale, etc) would lead to an increase in direct economic impact.

Graph 1 – The contribution of the cultural branches on the gross value added of the economy as a whole, 1995-2011

Graph 1 – The contribution of the cultural branches on the gross value added of the economy as a whole, 1995-2011

Source : INSEE, National Accounts 2005/DEPS data, French Ministry of Culture and Communication, 2013

6Moreover, this economic impact does not take account here of the indirect influence which culture can have on other economic activities, as the calculation of these indirect economic knock-on effects is highly predicated upon hypothetical propositions. For example, culture-oriented tourism accounts for a not inconsiderable proportion of tourism. However, to take into account the total gross value added of the hotel, cafe and restaurant sector (€ 44bn) would immediately double the cultural GVA of culture. Moreover, there are currently not enough data or concepts to adequately determine the proportion of tourism which could be strictly defined as cultural.

7Between 1959 and 2003, the economic contribution of culture in monetary value increased, reaching 2.4 % in 2003 (Graph 1). After this long, almost uninterrupted period of growth, the economic contribution of culture started to decline. It is primarily its market element which caused this fall-off. For at the same time, the contribution of culture in terms of non-market production continued to increase, going from 2.7 % in 1995 to 3.8 % in 2001, albeit that the majority of this growth occurred between 1995 and 2003 (Graph 2).

Table 1 – Output and gross value added in the cultural branches, 2011

Table 1 – Output and gross value added in the cultural branches, 2011

Source : INSEE, National Accounts 2005/DEPS data, French Ministry of Culture and Communication, 2013

Graph 2 – The contribution of the cultural branches on output from the economy in monetary value, 1995-2011

Graph 2 – The contribution of the cultural branches on output from the economy in monetary value, 1995-2011

Source : INSEE, National Accounts 2005/DEPS data, French Ministry of Culture and Communication, 2013

Graph 3 – Breakdown of the cultural gross value added (GVA) for the cultural branches in monetary value, 1995-2011

Graph 3 – Breakdown of the cultural gross value added (GVA) for the cultural branches in monetary value, 1995-2011

Source : INSEE, National Accounts 2005/DEPS data, French Ministry of Culture and Communication, 2013

Declining relative proportion of press and book publishing, with that for architecture and heritage increasing

  • 1 This constitutes all expenses necessary to production, e.g. compensation of employees, purchasing, (...)

8In 2011, audiovisual activities (radio, television, cinema, video and music publishing) constituted the biggest branch of cultural activity in terms of economic impact, accounting for almost one third of total output (and almost 40 % of market output) and a quarter of cultural GVA (Table 2). The performing arts (for which 60 % of output is non-market and valued on its production costs1) represents 18 % of cultural GVA, 15 % of its output and 7 % of its commercial output. Book publishing and press activities accounted for 15 % of cultural GVA in 2011 and 19 % of its output. Advertising agencies, included here for their overall creative contribution, even though it might not be seen as an entirely cultural activity (Box 1), accounted for 11 % of cultural GVA, whilst architectural activities accounted for 10 % in 2011.

9Finally, heritage accounted for 11 % of cultural valueadded, the visual arts 6 % (fine arts, design and photography, including photographic laboratories and development stores), and cultural education 4 %.

10In the space of fifteen years, the proportional contribution of the various branches to cultural GVA has changed enormously. In 1995, press and book publishing were the largest contributors to cultural activity in terms of GVA, representing 26 % of the cultural total (Graph 3). This proportion has since gradually fallen, reaching 15 % in 2011. At the same time, architecture, heritage and the performing arts have seen their proportional contribution to overall GVA increase. For the remaining cultural branches (audiovisual, advertising, cultural education, visual arts) their proportion of GVA has remained stable overall.

Table 2 – Breakdown of cultural output and gross value added (GVA), 2011 in €bn at the current rate

Table 2 – Breakdown of cultural output and gross value added (GVA), 2011 in €bn at the current rate

Source : INSEE, National Accounts 2005/DEPS data, French Ministry of Culture and Communication, 2013

Architecture and advertising : the two cultural activities most affected by the 2008–2009 crisis

11In 2011 the architecture sector accounted for 10 % of cultural GVA, having gradually risen overall over the last fifteen years from 7 % in 1995. Architecture’s contribution to cultural GVA amounted to 11 % in 2008, before falling in 2009 and 2010 and rising again slightly in 2011 (Graph 3). Indeed, architectural activities, more so than any other cultural activities, were widely affected by the economic crisis of 2008 and 2009. This branch is directly linked to the construction industry, which was hit hard by the crisis. The drop-off in the number of new construction projects, both residential and non-residential, lead in 2009 to a significant fall in the number of architectural projects. In 2010, the branch felt the benefits of the overall economic upturn, but failed to return to its pre-crisis levels.

12Advertising agency activity has been affected by falling advertising revenue within the mainstream media, going from € 9.4bn in 2008 to € 8.1bn in 2009, rising slightly thereafter to € 8.5bn in 2011 In fact, advertising agencies’contribution to cultural GVA remained stable between 2008 and 2011, with a steadily rising trend from start of the 2000s.

Falling contribution of culture on the economy in monetary terms for 2004 and by volume from 2006

13Between 1995 and 2003, prices in the cultural branches rose by 19 %, as compared with 13 % for all branches of the economy (Table 3). This higher price rise in the cultural branches is especially noticeable in the audiovisual branch and has thus contributed to an increase in the economic impact of culture in monetary value.

Graph 4 – The proportion of household consumer expenditure and public expenditure on culture in monetary terms, 1995-2011

Graph 4 – The proportion of household consumer expenditure and public expenditure on culture in monetary terms, 1995-2011

Source : INSEE, National Accounts 2005/DEPS data, French Ministry of Culture and Communication, 2013

14Therefore, between 1995 and 2003, the cultural GVA of the cultural branches increased by 50 % in monetary value but only 26 % in volume, i.e. at constant prices. After 2003, the reverse applied : on average, price increases in the cultural branches (9 %) were lower than those across the rest of the economy (14 %). This is primarily linked to the dramatic drop in prices in the audiovisual sector, records and videos in particular. The falling impact of culture upon the economy from 2004 onwards is therefore first and foremost due to the falling prices of certain cultural goods. Looking at volume, i.e. having offset the effect of price variation, the impact of the cultural branches within the economy still shows a downward trend, but only from 2006 onwards (Graph 1). This fall in volume is particularly pronounced in the press and book publishing, performing arts and visual arts branches.

Declining proportion of household expenditure on culture since 1995

15Changes to the economic impact of culture since 1995 (an upturn followed by a downturn) can be linked to two results. On the one hand, households are spending a smaller and smaller proportion of their budget on cultural goods. Between 1995 and 2011, household cultural expenditure (books, press, audiovisual, live entertainment, etc.) have only shown an average annual increase of 1.8 % by value, as compared with a 3.3 % increase in other areas of expenditure. Thus, the proportion of household consumer expenditure on culture fell from 2.6 % to 2.1 % between 1995 and 2011 (Graph 4). The diminishing impact of culture on household consumer expenditure has had a direct impact on the market output of those cultural businesses most hit by this decline in consumption (press, books, records). On the other hand, the growth of public expenditure on culture (Box 2), which constitutes the majority of non-market cultural output, has slowed down (Graph 4). Between 1995 and 2006, culture as a proportion of overall general public expenditure went from 1.0 % to 1.5 % and has remained stable ever since, with national government commitment to culture falling slightly (as a proportion of total expenditure), and that of local authorities remaining stable.

Increasing household expenditure on cinema and television

16The proportion of household cultural expenditure in monetary value on audiovisual (excluding sound recordings) has been steadily increasing, from 25 % in 1995 to 30 % in 2011 (Graph 5). Cinema box office takings have shown an average annual increase of 4 % between 1995 and 2011, with box office takings for 2013 totalling € 1.4bn. TV and radio advertising revenue, a good indicator of the health of these branches, has also continued moving in the right direction, with average annual increases of 2.3 %, despite slowing slightly since 2003.

Net fall in consumer expenditure on records & cds since 2003

17In 1995, 10 % of household cultural expenditure went on records & CDs, as opposed to just 3 % in 2011 (Graph 5). With the emergence of downloadable music on the internet, the record and CD market has collapsed.

Table 3 – Gross value added (GVA) by volume and GVA price index within the cultural branches

Table 3 – Gross value added (GVA) by volume and GVA price index within the cultural branches

Source : INSEE, National Accounts – 2005/DEPS data, French Ministry of Culture and Communication, 2013

Graph 5 – Breakdown of household consumer expenditure on culture, 1995-2011

Graph 5 – Breakdown of household consumer expenditure on culture, 1995-2011

Source : INSEE, National Accounts – 2005/DEPS data, French Ministry of Culture and Communication, 2013

Graph 6 – Turnover from sales of recorded music by publishers, 1995-2011

Graph 6 – Turnover from sales of recorded music by publishers, 1995-2011

Source : INSEE, National Accounts – 2005/DEPS data, French Ministry of Culture and Communication, 2013

18Since 2003, the contribution of sound recording and music publishing activities to cultural wealth produced has fallen by almost half, going from 1.4 % to 0 9 % in terms of GVA and from 2.3 % to 1.5 % in terms of total output. Thus, in 2002 turnover from sales of recorded music by publishers was € 1.3bn ; and by 2001 this figure had fallen to a mere 25 % of that figure to € 400m, according to the industry’s professional body, SNEP (Graph 6). Recent improvements in legal music download platforms seems however to have put the brakes on the sector’s decline : in 2011, 21 % of sales turnover for sound recordings came from digital recordings as compared with 13 % in 2010 and just 3 % in 2005.

Declining proportion of newspaper and book purchases in household cultural expenditure

19The net fall in the proportion of cultural GVA represented by books and press can be related to declining practices during this period. Between 1997 and 2008, the proportion of French people aged 15 or over claiming to have read a daily newspaper within the last year has fallen from 73 % to 69 % and those claiming to read one every day fell from 36 % to 29 %. In the same period, the proportion of French people aged 15 or over claiming to have read a book within the last year fell from 74 % to 70 % and those claiming have read at least 10 books fell from 37 % to 31 %. Finally, those households which in 1995 devoted more than half of household cultural expenditure to books and newspapers (56 %) only devoted 45 % of their budget to them in 2011 (Graph 5).

Household expenditure on performing arts shows a marked increase since 1995

20Household cultural expenditure on performing arts or heritage steadily increased between 1995 and 2001, and at a higher rate than any other area of household expenditure. Thus, in 2011, 20 % of household cultural expenditure went on creative, artistic or performing arts activities, or libraries, archives, and museums, as compared with 8 % in 1995. This sustained upward trend, boosted by the rise in live entertainment prices, contributed to increased market output value within these branches. At the same time, despite a fall towards the end of the period, the overall increase in public cultural expenditure contributed to the relative increase to the impact of non-market performing arts and heritage activities on cultural GVA.

Note

1 This constitutes all expenses necessary to production, e.g. compensation of employees, purchasing, gross fixed capital formation, etc.

Indice delle illustrazioni

Titolo Graph 1 – The contribution of the cultural branches on the gross value added of the economy as a whole, 1995-2011
Credits Source : INSEE, National Accounts 2005/DEPS data, French Ministry of Culture and Communication, 2013
URL http://books.openedition.org/deps/docannexe/image/507/img-1.png
File image/png, 36k
Titolo Table 1 – Output and gross value added in the cultural branches, 2011
Credits Source : INSEE, National Accounts 2005/DEPS data, French Ministry of Culture and Communication, 2013
URL http://books.openedition.org/deps/docannexe/image/507/img-2.png
File image/png, 76k
Titolo Graph 2 – The contribution of the cultural branches on output from the economy in monetary value, 1995-2011
Credits Source : INSEE, National Accounts 2005/DEPS data, French Ministry of Culture and Communication, 2013
URL http://books.openedition.org/deps/docannexe/image/507/img-3.png
File image/png, 32k
Titolo Graph 3 – Breakdown of the cultural gross value added (GVA) for the cultural branches in monetary value, 1995-2011
Credits Source : INSEE, National Accounts 2005/DEPS data, French Ministry of Culture and Communication, 2013
URL http://books.openedition.org/deps/docannexe/image/507/img-4.png
File image/png, 45k
Titolo Table 2 – Breakdown of cultural output and gross value added (GVA), 2011 in €bn at the current rate
Credits Source : INSEE, National Accounts 2005/DEPS data, French Ministry of Culture and Communication, 2013
URL http://books.openedition.org/deps/docannexe/image/507/img-5.png
File image/png, 108k
Titolo Graph 4 – The proportion of household consumer expenditure and public expenditure on culture in monetary terms, 1995-2011
Credits Source : INSEE, National Accounts 2005/DEPS data, French Ministry of Culture and Communication, 2013
URL http://books.openedition.org/deps/docannexe/image/507/img-6.png
File image/png, 42k
Titolo Table 3 – Gross value added (GVA) by volume and GVA price index within the cultural branches
Credits Source : INSEE, National Accounts – 2005/DEPS data, French Ministry of Culture and Communication, 2013
URL http://books.openedition.org/deps/docannexe/image/507/img-7.png
File image/png, 100k
Titolo Graph 5 – Breakdown of household consumer expenditure on culture, 1995-2011
Credits Source : INSEE, National Accounts – 2005/DEPS data, French Ministry of Culture and Communication, 2013
URL http://books.openedition.org/deps/docannexe/image/507/img-8.png
File image/png, 44k
Titolo Graph 6 – Turnover from sales of recorded music by publishers, 1995-2011
Credits Source : INSEE, National Accounts – 2005/DEPS data, French Ministry of Culture and Communication, 2013
URL http://books.openedition.org/deps/docannexe/image/507/img-9.png
File image/png, 37k

© Département des études, de la prospective et des statistiques, 2013

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