CULTURAL RETURN: TOWARD A PRELIMINARY FRAMEWORK

Javier J. Hernández Acosta, MBA

International Conference on Cultural Economics

Kyoto, Japan June 21-24, 2012

INTRODUCTION

There is a need to understand the impact of arts and culture at the micro level.

There is a need of a better balance between economic and cultural indicators.

It is important to “describe, understand and establish”, not only to measure.

“Cultural return” could be a parallel analysis to “financial return”.

RESEARCH OBJECTIVES

To develop a preliminary framework for the concept of “cultural return” as an analysis

that describes the effects of cultural organizations into the cultural sector. The

concept is expressed as the net benefits of cultural organizations that are not included

in the financial statements.

METHODOLOGY

Literature review on social analysis for businesses, performance of cultural organizations and spillovers in the cultural and creative industries.

Development of an analysis model based on the experiences of three cultural organizations in Puerto Rico.

Surveys and interviews with employees, collaborators and customers of these three organizations regarding the positive effects of the organizations (47 questionnaires).

LITERATURE REVIEW

Cultural Value – (Throsby, 2001, Holden, 2004, King, 2003, Klamer, 2002)

Accountability and Social Analysis – (May, 2011, Shedler, 1999, Gallego, 1999)

Performance evaluation in cultural organizations – (Peacock, 2003, FEMP, 2009, AECD, 2009, López, 2002, Porter, 1990, Chiaravalloti &Piber, 2011, Sawhill & Williamson, 2001)

Externalities (spillovers) – (DCMS, 2007, Benegas, 1998, Throsby, 2001, Hagoort, 2003)

Effect Impact Description

Entrepreneurial Effect

Supply

Effects of cultural organizations on the development of other cultural projects. The effect is expressed in terms of projects developed by members, collaborators, sponsors or competitors. This includes developing job skills and experience, and interaction with other industries.

Policy Effect Supply

Effect of a cultural organization on issues traditionally associated with cultural policy, such as subsidies and access to the arts. This net benefit does not result from the main cultural activity but from management practices that allows an efficient allocation of resources.

Diversity EffectSupply, Demand

Effect of cultural organizations on the content and context of artistic activity. It can be expressed in terms of aesthetical, historical and artistic terms, and as cross-generational, folkloric and traditional expressions and openness to innovation. Similarly, diversity arises as a demand effect when audiences have access to a diverse offer or through a diverse audience composition.

Cultural Clustering and Cultural Life

Supply, Demand

Phenomenon by which a project influences the development of cultural spaces and a climate of “cultural life”. It describes the agglomeration of cultural activity and its relation to the participation of citizens.

Participation Effect Demand

This effect describes the impact of cultural organizations in promoting citizens’ participation in the arts. It refers mainly to the extent that promotes access for segments of the population that traditionally do not attend for different reasons. Overall, it describes the scope and diversity in the audience’s composition.

Educational Effect DemandDirect impact of the project in terms of educational activities related to the arts. This type of events, despite not being the main activity of the company, has direct effects on participation and enjoyment of the arts.

CULTURAL RETURN ANALYSIS MODEL (SUMMARY TABLE)

EffectPolicy approach(FEMP, 2009)

Competitiveness(Porter, 1990)

Value Chain(López, 2003)

Cultural Track(Hagoort, 2003)

Entrepreneurial Effect

Social, economic and territorial developmentInnovation and Memoir

Firm Strategy, Structure and “Cooperation”

Related and Supporting Industries

CreationProduction Distribution

Cultural innovation, Artistic Leadership, Artistic and creative

processes

Policy EffectAccess,

ParticipationLocal Culture

Factor conditionsCreation

ProductionConservation

Historic analysis, Cultural credit,

Diversity Effect

Innovation and Memoir Access

ParticipationLocal Culture

Firm Strategy, Structure and “Cooperation”Demand conditions

CreationProduction

Consumption

Multicultural contextCultural innovation, Artistic and creative

processes

Cultural Clustering / Cultural Life

Social, economic and territorial development

Innovation and Memoir Local Culture

Related and Supporting Industries

Factor conditions

Creation Production Distribution

Consumption

Cultural Innovation, Common Interest, Artistic

and creative process

Participation Effect Participation Demand conditions Consumption Common Interest

Educational EffectAccess

ParticipationFactor conditions

Demand conditionsTraining

ConsumptionCommon Interest

CULTURAL RETURN – LINKS WITH THEORETICAL APPROACHES

CULTURAL ORGANIZATIONS – CASE STUDY Taller Cé – Cultural cooperative that operate from

2001 to 20010. Members were singer-songwriters who invest and receive dividends according to their work. Operated a Theater that produced over 1,000 events from independent artists. The Cooperative produced seven compilations.

Teatro Breve – A theater company that produces a new comedy event two times a week. The company employs aprox. 8 actors and a production crew of 10 people.

Cambio en Clave – A project that offer Salsa dance lessons to general population. It has impact over 10,000 people, coordinate Salsa events, a promote performances with local artists.

ANALYSIS – TALLER CÉ (SUPPLY)Summary Table 3. Taller Cé “Cultural Return” Analysis – Supply Side

Supply Effect Impact Indicators

Policy Effect

Transferring of labor subsidies to artists through the reduction of production costs.

1. Analysis of production costs for artists and theater policies.

2. Admission rights income generated by artists.

Entrepreneurial Effect

Facilitating the creation of cultural projects through their services.

1. Musical recordings and performances.2. Arts projects developed during the

period.3. Other venues opened during the period.

Cultural Clustering / Cultural Life

Contribution in the revitalization of Río Piedras and its “cultural life”.

1. Business developed in the area after the Cooperative.

2. Collaborative events produced.3. Interdisciplinary cultural events

produced.

Diversity Effect (Supply)

Openness to diversity in the cultural offering through exhibition and performance policies.

1. Qualitative events analysis by genre, sector, etc.

2. Qualitative analysis of special events. 3. Analysis of events with international

artists.

ANALYSIS – TALLER CÉ (DEMAND)Summary Table 4. Taller Cé “Cultural Return” Analysis – Demand Side

Demand Effect Impact Indicators

Diversity Effect(Demand)

Audience segmentation, strengthen niche markets and developing new segments.

1. Analysis of the cultural offering. 2. Artists and producers opinion on

events and audiences.3. Demographic profile of the

audience.

EducationalEffect

Impact on youth segments through music lessons. Professional education to artists through workshops on management and performance.

1. Attendance data of students and workshops

2. Analysis of educational events produced by other entities.

Participation Effect

Access and active participation for different audience segments in the cultural activity.

1. Analysis of audiences’ opinion2. Analysis of the artistic offer.

TALLER CÉ – SUMMARY GRAPH

TEATRO BREVE– SUMMARY GRAPH

CAMBIO EN CLAVE – SUMMARY GRAPH

CONCLUSIONS

Performance analysis model should be able to adapt to the realities and differences between sectors and activities.

Governments should develop models to balance the analysis between economic and cultural value.

Artists-entrepreneurs and cultural organizations should use models to understand the net benefits of their cultural activity.

It is easier for organizations to understand their impact on the cultural sector with cultural indicators.

“Cultural Return” should be an integral part of strategic planning in cultural organizations.