The economic value of culture and creativity

Arts and culture add value beyond economics—how do we value those benefits?

With all this talk and excitement around AI, we overlook the role of the arts and creative industries and their positive impact to human health and well-being.

Two decades of research found that the arts and creative activities provide direct and indirect benefits to health and well-being. More than 3000 studies say exposure to the arts prevents diseases, promotes health, and can treat and manage disorders.

Specifically, Daisy Fancourt, Saoirse Finn found that the arts can:

  • help people with mental illness
  • support care for people with acute conditions
  • support people with neurodevelopmental and neurological disorders
  • contribute to the treatment of chronic degenerative diseases
  • participate in end-of-life care.

While in Italy (Emilia-Romagna), I had a long conversation with my cousin (father’s side). A psychologist who works with people who’ve experienced trauma, she uses art and creative activities as part of the healing journey.

Fancourt and Saoirse’s report presents evidence of how arts and culture are effective in disease prevention and health promotion:

  • influence the social determinants of health inequalities
  • support the child’s development (e.g. first 1000 days of life)
  • encourage behaviors that promote health
  • help prevent chronic degenerative diseases
  • support care and the care relationship.

Here’s the complete report.

I took this photo of Piazza Maggiore in Bologna before we watched The Woman Next Door on June 30.
This is what the Piazza looks like during projection of Cinema Ritrovato in partnership with Cineteca di Bologna.

At the tail end of our trip, we spent two days in Bologna. In addition to partaking in the wonderful cultural experience of eating in my native city, we were up late to watch a movie in the open space of the piazza.

It was as if time stopped—complete silence. Even the tourists stopped in mid-step to sit on the steps of San Petronio (the unfinished church) to watch. It was an incredible communal experience of synchronicity that will stay with me for a long time.

Projections are free to citizens and visitors. The people you see in the middle seats buy season tickets to support the initiative. People wait up to two hours to grab good seats on the sides and back. All done with civility and respect.

Museums and curated exhibits are another passion of mine. This time it was Bologna photographed, also in partnership with Cineteca di Bologna. A superb curated narrative that painted a broader context for the history (and stories) of the city.

For example, I got to see the picture of Guglielmo Marconi taken right after his creation of the wireless telegraph. He was probably wearing his only suit, complete with hat, and was standing near a hill outside the city looking directly at the camera. An ordinary man who had just accomplished something extraordinary.

From the 1800 to nearly contemporary times, the exhibit gathered moments in the life of Bologna from private and public collections, comparing before and after phases of the city.

Many artists and politicians (when politics was an art) lived and stopped in Bologna throughout the decades. Their portraits showing the beginnings reminded me that if you’re creative and original, you will face resistance.

Perhaps that resistance is part of the pain of living. Because as humans, we cannot help our desire and inclination to create and imagine a different world. Culture is a path to bring that world to life.

Even when limping, the arts continue to make up large parts of the economy. The reason is our intrinsic understanding of the benefits in both making and enjoying culture.

In 2021, The U.S. Bureau of Economic Analysis reports that arts and cultural production accounts for $1,016,249,142,000 and 4.4% of the U.S. economy, contributing 4,851,046 jobs.

United States Arts and Culture Value Add changed by 14.43% between 2020 and 2021.


Which is impressive, but proportionally low, given estimated resident population of 333,287,557 on July 1, 2022, according to the U.S. Census Bureau. Especially if you compare the data with Italy’s report.

In 2018, Italy’s cultural and creative production system generated €95.8 billion ($104.15) of added value, equal to 6.1% of the total of the Italian economy. At the time, Italy’s population was around 59,433,744.

At the time, culture and creativity employed more than 1.5 million people (also 6.1% of the total), a figure similar to the construction sector and the education system (public and private). There’s a broader impact to other sectors.

The value-add to the Italian economy is nearly 17%. Bologna and Modena rank in the top ten cities both for value add, and occupation.

Creative industries are defined as architecture and design and communication. Cultural industries are cinema, radio, TV, videogames/software, music, publishing. The lion share. [Source]

It’s much easier to be immersed in history and culture when in Italy (and many other European countries) than in America. There, “people consider art a heritage to be protected and enjoyed, a dynamic cultural expression that belongs to the community.”

Art is the creation of value that contributes to social development. The cultural and artistic assets of the past are a historical testimony and possess aesthetic and immaterial qualities. They’re a symbolic and non-reproducible component of society.

Valuing value

In 1976, artist Francis Bacon created an oil and pastels on canvas triptych. This was a fundamental piece within the artist’s body of work, with references to literature. In 2008, the 1976 Triptych sold for $85.5 million. Its buyer’s name Roman Abramovich.

What are the dynamics that prompted the collector to express his interest in the work?

What are the characteristics that make the work attractive on the market?

Francis Bacon, Triptych, 1976

What happens to the relationship between supply and demand for a work of art?

Although we can subject a work of art to a stylistic and economic valuation, the mechanisms of the art market follow different dynamics compared to the market intended for the sale and purchase of other products.

Exchange value is a fraction of the value in use we get from art and culture.

In a late 1965 summer conversation with Nora Ephron and Susan Edmiston, Bob Dylan said that great paintings should be where the people are, so they can enjoy them—in restaurants, gas stations, dime stores, and so on.

But they’re in museums or private collections. He contrasted that with music, which “is the only thing that’s in tune with what’s happening.” How do we get music (and the arts) to people?

In music today, you’re either generating more than $10 million in ticket sales per concert, or starving on the dwindling royalties of opaque companies like Spotify.

For music, as for many of the arts and cultural activities like publishing, supply is plentiful, but discovery is much harder. For example, finding the affordable music scene in LA. Harder discovery means less demand. Which in turn generates lower sales. And so on.

Yet, “we’re paying more for less, for just about everything under the sun.” It’s a value problem for products and services. While we’re undervaluing the benefits of the arts and cultural experiences just about everywhere.

The challenge continues to be how to assign monetary value to things and experiences that add benefits beyond utility.

While I was away, Traces & Dreams published more shorts of previous conversations on value.

Solving humanity’s value crisis, I talked with Peter Tunjic, lawyer and expert in corporate law and value theory. Peter’s challenge is a safer alternative for corporations.

Watch the short here.

For the entire video of our conversation and my thoughts, read they called it the “gentle revolution.”

Researcher Jonathan Cook highlights the adverse effects of automated systems on engagement in business transactions. It’s time to restore value, enrich culture, and reconsider our approach.

Watch the short here.

Seemingly senseless acts do make life worth living, our entire conversation.

Batja Mesquita, a pioneer in cultural psychology, challenges the idea of innate emotions and explores how cultural constructs shape and influence our emotional experiences within interpersonal relationships and broader social networks.

Watch the shot here.