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A creatively mixed bag for L.A.

The Otis Report shows the creative economy took a hit in '09, but digital media is among bright spots.

November 10, 2010|Jori Finkel

What do you say to parents who are afraid to send their 18-year-old to art school for fear that he or she won't get a job after graduation?

When it began in 2007, the Otis Report on the Creative Economy of the Los Angeles Region gave parents hope (and hopeful students talking points) by documenting the wealth of jobs in creative fields such as fashion, advertising, toy design and digital media, as well as the entertainment industry.

This year, the picture is bleaker, along with so many broader economic indicators.

"Just because these fields are creative, it doesn't mean that they're exempt from the economic down cycle," says Nancy Sidhu, the chief economist of the Los Angeles County Economic Development Corp., the nonprofit agency that generates the Otis reports.

The 2010 Otis Report released Wednesday, which uses 2009 data, shows that the "creative economy" here generated $113 billion in revenue and provided 304,400 jobs last year (compared with $121 billion and 342,300 jobs in 2008). That allowed it to hold onto its rank as the second-largest business sector in Los Angeles County, behind tourism and hospitality. But some creative fields are clearly surviving the recession better than others.

Outsourcing woes

Of the 10 industries analyzed, furniture/home furnishings, toys, and fashion have been hit the hardest. In 2009, the furniture business employed around 28,400 people, down 39% from five years before. Toy manufacturing and wholesaling counted 4,700 employees, down 21% over five years. And fashion had 87,000 employees, down nearly 19% over the same time period.

In all three sectors, the outsourcing of manufacturing overseas is cited as a cause for industry contraction. In the furniture business, the residential and commercial real estate slump has also played a role. The weak housing market has naturally affected the field of architecture and interior design as well: 3,000 jobs have been lost since its peak of 12,800 in 2007.

Otis College of Art and Design President Samuel Hoi says this is a familiar dynamic with architecture firms.

"They're like accordions," he says. "They expand when jobs come in and contract when they diminish. They tend to be quite flexible, flowing and ebbing according to job realities."

On the brighter side, four fields studied posted job gains over this same five-year period: communication arts, digital media, visual and performing arts providers, and product/industrial design. Most of the gains occurred before 2009. But one field, digital media, managed to add 400 jobs last year for a total of 5,800. (The report also gives figures for Orange County, where there was also a net gain in digital media jobs.) Digital media in this report includes developers of video games, mobile phone and Internet applications, as well as movie special effects.

Gathering consistent data for such a report is difficult, and the real numbers of jobs (and job losses) are surely larger than reported. According to Sidhu, digital media jobs are hard to track because the category doesn't exist on government forms, which prefer the rather outdated "software publisher." Also, the Otis Report tracks companies that pay state unemployment insurance, so its core findings exclude thousands of self-employed artists of all kinds.

Still, the report shows that Los Angeles is not the one-industry town some assume it to be. Although by far the largest of the 10 fields studied, entertainment provides less than half of the jobs of the "creative economy."

Diverse sector

Hoi at Otis says debunking the myth of L.A. as a company town was part of the original impetus for commissioning the first report in 2007.

"From the outside looking in, many people think of Los Angeles as being equal to Hollywood, but entertainment is only 40% of the creative economy," he says. "There is true diversity here in terms of our creative professionals."

He confirmed that prospective students and their parents are the report's intended audience. So are, he says, "policy decision makers --our legislators, corporate leaders and even some educators who should be supporting the arts more proactively."

"The report is an advocacy tool," Hoi adds. "It is not meant to provide a rosy picture, but to call to attention and to action efforts to sustain and strengthen the creative economy of the region."

The report also includes an economic forecast, in which Sidhu assumes a "measured recovery" already underway gives way to "moderate growth" through 2014. By her predictions, based in part on 2010 job data that is still trickling in, digital media, the entertainment industry and product/industrial design will experience the highest percentage of job growth within the creative sector.

Hoi and Sidhu are introducing their report at a conference Wednesday morning at the Colburn School in downtown Los Angeles. A panel discussion to follow features economist Ann Markusen; Irvine Foundation President James Canales; and Chairman of the National Endowment for the Arts Rocco Landesman.

A possible sign of economic health: By the start of this week, the 400-seat event, priced at $25 to $50 a ticket, had sold out.


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