MassINC has argued that the benefits of economic development spending should be quantifiable in order to justify taxpayer investment. But we recognize that this is challenging work.

Measuring impact requires time, and sensitivity to the different channels through which economic development investments contribute to long-term growth. 

At a recent creative economy roundtable, participants made powerful arguments for why arts organizations generate long-term economic renewal in ways that can’t be captured by traditional short-term fiscal impact assessments.

The evidence they gave provides an example of why we need multidimensional approaches when evaluating economic development spending.

Of course, investments in the arts do generate quantifiable economic activity. For instance, New Bedford’s free downtown AHA! cultural nights, supported with a $35,000 grant through the Mass Cultural Council, drew approximately 23,000 visitors in 2009. Half of these participants made purchases, spending $17 on average, according to an evaluation by UMass-Dartmouth’s Center for Policy Analysis. Because this spending bought mostly local products (as opposed to those made elsewhere) these dollars stayed in the region longer and had a sizeable multiplier effect.

While the direct economic benefits of AHA! are certainly considerable relative to the state’s modest investment, the more difficult to quantify contributions may be equally significant. For instance, artists can give communities a powerful new brand, as Michael Taylor, dean of the U-Mass Dartmouth College of Visual and Performing Arts, pointed out at the roundtable. Our regional economies stutter when their older core cities develop a gritty, down and out image that is difficult break. New Bedford’s AHA! night demonstrates how the arts can help rebrand a community, with 84 percent of visitors responding that they view the city more favorably after attending an evening of events.

Arts-based economic development can also build valuable social capital. Economists have long understood the connection between the strength of a community’s social networks and local economic growth. Unfortunately, cities challenged by manufacturing decline loose important business leaders as companies depart. Dramatic job loss also damages community spirit in ways that suppresses civic engagement among those who remain. Rebuilding trust and leadership has been all the more difficult because many of our struggling cities became more diverse just as they began confronting economic change.

Arts organizations are expert in bringing communities together to collaborate. They build momentum through a series of small, attainable victories, and help neighbors develop trust and understanding. At the roundtable, Lee Blake, President of the New Bedford Historical Society, gave a powerful presentation. She described how they have used the city’s rich history to bring people together and create better understanding among the city’s diverse cultural communities. The historical society was a founding partner in AHA!, which now represents 61 participating organizations. From a purely economic development perspective, the effective relationships this event has forged represent tremendous value.

While it will be difficult to quantify the impact AHA! has had on social capital, there are measures that can be useful. The SouthCoast Social Capital Benchmark Survey conducted in 2009 shows New Bedford still has considerable gains to make, but if this valuable survey is repeated, overtime one would expect to see meaningful gains if arts-based economic development strategies are working effectively. 

Participants in New Bedford pointed to other ways in which the arts boost economic growth, such as the contribution artists make to learning through partnerships with local schools. Clearly we need to take a sophisticated look at economic development investments when weighing their effectiveness. There are dangers when straying from cold, quantitative analysis. But if the state moves toward more rational economic development planning and analysis, as proposed in pending legislation, there will be more room to examine logical investments that are consistent with what we know about regional economic growth that don’t necessarily generate easily quantifiable returns.

Posted in: Gateway Cities   Jobs and Economic Security   Creative Placemaking