Arts and cultural activity accounted for over $804 billion in U.S. gross domestic product (GDP) in 2016 according to data recently released by the Bureau of Economic Analysis (BEA) in the US Department of Commerce.

That’s about 4.3 percent of total Gross GDP, and growth continues.

The BEA definition includes “creative artistic activity, the goods and services produced by it, the goods and services produced in the support of it, and the construction of buildings in which it is taking place.” A spectrum of activities is included – museums, design services, fine arts education, information services, agents/managers, writers and performers, broadcasting, and motion pictures, among others.

The importance of arts and culture varies significantly by state. While most fall into the 2-5 percent range, for the District of Columbia (where there are a number of arts-related agencies and associated governmental entities), a full 8.5 percent of gross product is linked to the arts. About 8.3 percent of Washington and 7.0 percent of California gross product involves arts or culture, but for Delaware, the percentage is only 1.5 percent. Texas comes in at 2.9 percent, due to some extent to the state’s diverse economy but also to relatively low public funding.

National arts and cultural employment totaled over 5.0 million persons with compensation of $386.2 billion in 2016. In Texas, nearly 367,000 people were working in such jobs, with almost $23.0 billion in compensation. Growth in employment and compensation was significant over the prior year for both the U.S. and the state.

While these are impressive contributions, there are other layers of benefits of the arts to the economy which go much deeper. The arts and other cultural amenities are essential to establishing a desirable quality of life (or quality of place, as it is sometimes called). Not only is this community asset beneficial to current and future residents, it is also important in economic development. Having arts and entertainment options available can be a significant advantage in recruiting new businesses and retaining existing ones.

In addition, such cultural options can aid in attracting knowledge workers and other professionals. Arts and culture are an important aspect of the location decision process for many individuals, families, and companies. At a more fundamental level, studies (including ones by our firm) have linked exposure to the arts to innovation and creativity of many types, including advances in seemingly unrelated fields. Moreover, many goods from automobiles to fashion to smartphones have an artistic component that differentiates them from competitors.

Arts, culture, and creativity contribute to every facet of economic vitality. They involve a substantial economic stimulus, generate tourism, and enhance competitiveness. With the potential to spark creativity and assure product success, arts and culture contribute to prosperity and well-being in countless ways.