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Otis College of Art and Design

Report on The Creative Economy of the Los Angeles Region


The fast facts:
>> One of the largest business sectors in the region >> Nearly 1 million direct and indirect jobsone in every six in the area >> $121 billion in sales/receipts in Los Angeles County and $18 billion in Orange County >> Over $5.1 billion in state and local tax revenues generated

Prepared for Otis College of Art and Design by the Los Angeles County Economic Development Corporation

November 2009
Economic Information & Research Department Los Angeles County Economic Development Corporation 444 S. Flower St., 34th Floor, Los Angeles CA 90071 Tel: (213) 622-4300, (888) 4-LAEDC-1 Fax: (213) 622-7100

UnleashingOurCreativePotential
The2009OtisReportontheCreativeEconomyoftheLosAngelesRegion,thethirdandlatestannualstudy commissioned by Otis College of Art and Design from the Los Angeles County Economic Development Corporation (LAEDC), affirms once again the monumental impact of the arts, design, and entertainment industriesasacombinedeconomicforceinSouthernCalifornia. NearlyonemillionemployeesworkdirectlyorindirectlyinthecreativeeconomyofLosAngelesandOrange counties.Thatsoneineverysixjobsinourregion!Lastyear,evenpartlyinrecessionarytimes,LosAngeles area firms in the creative economy earned an estimated $121 billion in revenues, while those in Orange County accounted for an estimated $18 billion. State and local governments received an estimated $5.1 billion in taxes tied to these activities. The creative sector holds its own with the two broadly recognized regionaleconomicleaderstourism/hospitalityandinternationaltrade. Our current economic challenges mandate longterm solutions. It is gratifying to hear on the federal and statefrontscallsofattentiontotheeconomicimportanceofcreativeendeavors: NewNationalEndowmentfortheArtsChairmanRoccoLandesmanrecentlydeclaredArtWorksas asummativeguidingprincipleofhisworkattheagency.Hewillspendthenextsixmonthslearning andhighlightingthewaysthatartworksacrossAmerica.AdimensionofhisArtWorksconceptis that arts jobs are real jobs that are part of the real economy. Art workers pay taxes, and art contributes to economic growth, neighborhood revitalization, and the livability of American towns andcities. Atthestatelevel,theNationalGovernorsAssociationCenterforBestPracticeshasissuedareport on Arts & the Economy: Using Arts and Culture to Stimulate State Economic Development. This report states that governors can adopt strategies that support and strengthen these industries. These include offering incentives targeted at the arts and culture sectors as well as development initiatives, entrepreneurial training, marketing programs or publicprivate collaborations to encouragegrowthandinvestinspecificcreativeclusters. Locally,wehavethoughtful,excitingandambitiouseffortsthatcouldconvergetoshapeapowerfulaction plan to foster creative endeavors and ensure not only a vital economy but also a better and more vibrant future.Considerthefollowing The LAEDC is developing a consensus strategic plan to betterthe environment for businesses. The planisinformedbyconversationstheLAEDCconductedwithbusiness,community,governmentand educationleaders.Itencouragestheeducationanddevelopmentofhumancapital,businessfriendly policiesandpractices,andqualityoflifetoattractandretainemployersandemployees. TheCityofLosAngelesDepartmentofCulturalAffairs,directedbytheMayor,iscreatingaCultural MasterPlan,aroadmapofstrategiesandtacticstostrengthenLosAngelesfuturethroughcreativity, diversityandsynergy. ArtsforLAhasdevelopedaPolicyPlatformthatarticulatescriticalstrategiesofsystemicchangefor theartsinLosAngelesCounty,withideasrangingfromartseducationtointegrationoftheartsinto civiclifetoculturaltourismtofunding. ArtsforAll:LosAngelesCountyRegionalBlueprintforArtsEducation,astrategicplantorestorearts educationtothe1.7millionstudentsinLosAngelesCountys81schooldistricts,isalreadyinplace.

There is the nascent and compelling argument for an Arts & Business Council for the Greater Los Angeles Area, spearheaded by the Los Angeles Stage Alliance with funding from the California CommunityFoundation.

Thetimehascomeforastrategicinvestmentinanddeploymentofcreativityasaproductivestimulusforour region.Wecanseizethemomenttocombinecreativity,enterprise,technology,andpublicpolicytotackle the complex issues related to our regional growth, education, community development, andsustainability. Proudlyrecognizingandsmartlysupportingthealreadyextraordinarycreativeresourcesandachievements ofourregion,wecanbrandLosAngelesasacreativecapital. AtOtisCollegeofArtandDesign,weprepareourstudentstobroadentheirroleasartistsanddesignersin society.Thelives,workandachievementsofouralumniillustratethepowerofart,designandcreativityin oureconomy,cultureandcommunities.Tous,thedatainthe2009OtisReportontheCreativeEconomyof theLosAngelesRegionaremorethanthefactsofcreativityseconomicimpact;itisthestoryofpossibilities maderealbyacombinationofeducationandtalent.WeatOtislookforwardtojoiningforceswithleaders fromacrosssectorstotakepracticalstepsinunleashingthecreativepotentialoftheLosAngelesregion,and inengaginginacreativeoffensiveforeconomicrecoveryandabetterfuture. SamuelHoi President OtisCollegeofArtandDesign November2009

TableofContents
TheCreativeEconomyoftheLosAngelesRegion.............................................................. 1 L.A.FirstsSomeThingsBorninL.A. ............................................................................ 4 EconomicEnvironment....................................................................................................... 5 Employment........................................................................................................................ 7 Salaries ................................................................................................................................ 8 Revenues............................................................................................................................. 8 TaxImpacts ......................................................................................................................... 9 EmploymentTrends.......................................................................................................... 10 "Nonemployer"CreativeActivity...................................................................................... 11 IndustrySnapshots............................................................................................................ 15 Fashion .............................................................................................................................. 15 Toys ................................................................................................................................... 16 DigitalMedia ..................................................................................................................... 17 ProductandIndustrialDesign........................................................................................... 19 ArchitectureandInteriorDesign ...................................................................................... 20 CommunicationArts ......................................................................................................... 20 ArtGalleries ...................................................................................................................... 21 FineandPerformingArts .................................................................................................. 21 FurnitureandHomeFurnishings ...................................................................................... 22 Entertainment................................................................................................................... 23 WhereDoWeGoFromHere?TheCreativeEconomyin2013....................................... 24 SomeFinalThoughts......................................................................................................... 28 StatisticalAppendix........................................................................................................... 29 SpecialReport:AnalysisofMultimediaArtistandAnimatorEmployment...33

ThisreportwasproducedbytheLAEDCKyserCenterforEconomicResearchteam: JackKyser,FoundingEconomist Dr.NancyD.Sidhu,ChiefEconomist KimberlyRitter,AssociateEconomist FerdinandoGuerra,AssociateEconomist MyasnikPoghosyan,Analyst,EconomicandPolicyConsulting


2009LosAngelesCountyEconomicDevelopmentCorporation 444S.FlowerSt.,34thFloor,LosAngeles,CA90071 Tel:(213)6224300Fax:(213)6227100Web:www.LAEDC.org
Statisticalinformationcontainedhereinhasbeenobtainedfromsourcesbelievedtobereliablebutsuchaccuracycannotbe guaranteed.Theopinionsexpressedhereinaresubjecttochangewithoutnotice.

TheCreativeEconomyoftheLosAngelesRegion
WhatisthecreativeeconomyoftheLosAngelesregion?Asdefinedinthisreport,itisthemarketimpactof businessesandindividualsinvolvedinproducingcultural,artisticanddesigngoodsandservices.Itconsistsof creative professionals and enterprises that parlay original ideas into creative goods and services. It also includes presenting enterprises that bring creative products to the marketplace such as museums, art galleriesandperformingartsvenues.AthirdcomponentofthecreativeeconomyinLosAngelesrevolves aroundactivitiesonedoesnotinstinctivelyassociatewithcreativity,suchasmanufacturing;butapparel, toyandfurnituremanufacturersdependupongooddesignfortheirsuccess.Thefinalpieceofthecreative economy consists of the support system that sustains creative activity: art programs in the schools, post secondary arts institutes to develop talent, and community foundations along with other nonprofits to providefinancialresourcesandincentivesthatallowthecreativeartstothrive. WhenonethinksofLosAngeles,thesignatureindustriesthatmostfrequentlycometomindaretourismand entertainment.Butwhatdrawsnearly25.9millionovernightvisitorstoSouthernCaliforniaeveryyear?How didLosAngelesbecometheentertainmentcapitaloftheworld?Tourismandentertainmentderivetheir competitiveadvantagefromtheL.A.brand,whichinturnowesitsdistinctivenesstothecreativeeconomy. Peopleoftengetconfusedwiththedifferencebetweencultureandcreativity.Cultureisdefinedasasetof values,conventions,orpracticessharedbyasociety.Creativity,ontheotherhand,isdefinedashavingthe abilityandthepowertobringsomethingintobeing;itisimaginative.TheLosAngelesregionhasacreative culture. Althoughtourismandentertainmentarethemostobviousindustriesthatdrawtheircompetitiveadvantage fromthecreativeeconomy,thecreativetalentbaseoftheregionspillsoverintoanumberofothersectors andisamajordriverofeconomicgrowth.Forexample,thereisalinkagebetweenthecreativeeconomyand anotheroneofSouthernCaliforniassignatureindustries:internationaltrade.Theimportcontainershandled attheportsofLongBeachandLosAngelesareoftenfilledwithgoodsdesignedintheregionandproducedin Asia(e.g.toys,clothingandfurniture).Thesortingandfurtherprocessingofthesegoodstakesplaceinlocal warehouses and distribution centers, giving the creative economy a real estate impact. In Los Angeles County, this activity has resulted in the tightest industrial real estate market in the U.S., with an average vacancy rate of just 2.2% at the end of 2008. This need for space has spilled over into adjacent counties, especiallytheRiversideSanBernardinoarea. The creative economy is undeniably important to the regions economic growth. Nearly one million employees work directly or indirectly in the creative economy of Los Angeles and Orange Counties. Los Angeles County based firms in the creative economy earned an estimated $121 billion in revenues during 2008, while Orange County accounted for an estimated $18 billion. California and local governments receivedanestimated$5.1billionintaxestiedtotheseactivities. Thecreativeeconomylinkswithmostotherindustryclustersintheregion.With342,300employeesinLos AngelesCounty,thecreativeindustrieswouldranksecond,behindtourismandhospitality(458,000jobsin 2008), and ahead of direct international trade (281,000 jobs), business and professional services (268,000 jobs, including architecture and engineering), and entertainment (262,000 jobs). The creative industries in Orange County employed 44,500 workers, placing them ninth after tourism (198,000 jobs), business and professionalservices(120,000jobs,includingarchitectureandengineering),wholesaletrade/logistics(85,000 jobs), international trade (83,000 jobs), technology (78,000 jobs, including computer systems design), materials & manufacturing (56,000 jobs), health services (51,000 jobs) and financial services (45,500) jobs. [Note: Although the Orange County creative economy was ranked sixth in LAEDCs previous report, their current status as number nine does not reflect any change in their fortunes relative to other industries. Instead,itisaresultofnewindustryclusterdefinitionsusedinthecurrentreport.]

In 2007, the LAEDC, commissioned by Otis College of Art and Design, undertook the first comprehensive analysis of the creative economys impact in the Los Angeles region. This current study is the third in the annual series. The creative economy examined in our reports encompasses the following ten areas: fashion,toys,productandindustrialdesign,architectureandinteriordesign,digitalmedia,communication arts,artgalleries,visualandperformingarts,furnitureandhomefurnishings,andentertainment. The 2009 report is a revision and an update to the research carried out in 2007 and 2008. Data were collectedonemployment,payrolls,andrevenues/shipmentsforallthecomponentsectorsinLosAngelesand Orange counties from the Bureau of the Census, the Bureau of Labor Statistics and the California Employment Development Department. Calculations were made of indirect employment1, the overall economic impact, and the state and local taxes generated by these industries using specific sector inputs fromtheRIMSIImodelcreatedbytheU.S.BureauofEconomicAnalysis.Thenumbersweretrulyimpressive. Theresultsofthe2009reportarenotstrictlycomparablewiththeearlierstudiesforseveralreasons. The 2005 figures cited in the 2007 report for employment and payrolls were partially based on samples.The2008figuresinthisreportcomedirectlyfromtheCaliforniaEmploymentDevelopment Department (EDD) and are based on unemployment tax payments that all firms with employees are requiredtomakeintothestateunemploymentinsurancefund.Thesedataarethebestavailablefor thistypeofinformation. InadditiontousingemploymentdatafromtheEDD,wesurveyedlocaluniversitiesandcollegesand tradeandtechnicalschoolsin2008tolearnhowmanyfacultyandstaffwereinvolvedintheirfineand performingartsprograms.Thesepeoplewerenotcountedinthe2007report.Weplantoupdatethis surveynextyearforthe2010report. The S/S/R (sales/shipments/receipts) estimates are based on data from the 2002 Economic Census. Figuresfor2007willnotbeavailableuntil2010.Forthe2009report,westartedwithestimatesfor 2003andupdatedthemto2008basedontheS/S/Rofthevariousindustriesatthenationallevel.This procedure is equivalent to assuming Los Angeles and Orange County maintained their 2002 industry sharesofU.S.S/S/Rin2003and2008.Wewillrevisetheseestimatesinthe2010studywhenresultsof the2007EconomicCensusshouldbeavailable. Completeinformationisnotpubliclyavailableonthesales,shipments,andreceiptsofallthecreative industriesintheregion.Thereasonforthisnondisclosureistheofficialpolicyofconfidentiality.The governmentdoesnotwanttopublishanydatathatmightallowknowledgeable personstoestimate the sales of any single firm. This policyaffects the smaller creative industries in Orange County and alsothelargemotionpictureindustryinbothcounties.AllofourstatementsaboutreceiptsinOrange Countyshouldbeconsideredalowerbound.Theactualfiguresaresurelyhigherthanshown.

Many creative people are not employed in a traditional way, which complicates our analytical effort. Becausetheyareselfemployed,theyarenotcapturedbytheusualgovernmentinformationsources.We obtainedinformationfromadifferentsource2onthissignificantgroupofpeopleinthetwocountyarea(see thesectiononNonemployerCreativeActivity). The creative economy is among the top employers in the Los Angeles region. Importantly, the talent that drivesthecreativeeconomyisalsoaresourceforcompetitiveadvantagethatreachesacrossalmostevery industryintheLosAngelesOrangeCountyregion.Inaddition,thecreativetalentpoolintheregionisnotas vulnerabletogoingoffshore.Typically,thedevelopmentofadvancedtechnologiestoincreaseproductivity
Directemployeesarethepeopleworkingin theindustry.Indirectemployeesworkforfirmsinthesupplierindustries,and also for suppliers of consumer products who sell goods and services to both the direct workers and the employees of the supplierfirms. 2 BureauoftheCensusNonemployerStatistics:http://www.census.gov/econ/nonemployer/index.html
1

isseenastheroadtobetterjobs.Infact,advancedtechnologiescanbereplicatedacrosstheworldusing cheaper labor. To the contrary, original artistic creation, innovative design thinking and other higherlevel creativeworkcannotbeoutsourcedeasily.Creativityalsoservestobuildbrandawarenessandanattractive environmenttoenticetalentedpeopletotheregion. LosAngelesisuniquebecauseofitscombinationofplace,resourcesandopenattitudestowardsnewideas. Here, ideas are constantly given form and brought to life by creative people. The LAEDC carried out this researchbecauseintheLosAngelesregion,creativityisseriousbusiness.OtisCollegeofArtandDesign,a criticalcomponentofthecreativeeconomy,commissionedthisanalysistoputrealnumberstothebusiness ofcreativity.

L.A.FirstsSomeThingsBorninL.A.
ManyinterestingideashavecomeoutoftheLosAngelesareaovertheyears. Hereisashortlistofsuchthings.
Audioanimatronicfigures Themodernbathingsuit Thefortunecookie SR71(highaltitudesupersonic reconnaissanceplane) TheF117,thefirst"stealth"fighter TheB2"stealth"bomber TheDouglasDC3,thefirst commerciallyviablepassengerplane TheMarsExplorationRoversSpirit& Opportunity TheSpaceShuttle TheInternet Thedomainnameconventionforthe internet CrossinterleavedReedSolomon coding(errorcorrectionmechanism forCDs) BugsBunny NewVWBeetle TheMazdaMiata Talkingmovies "SnowWhite&theSevenDwarfs,"the firstfeaturelengthcartoon Barbie ThefirstcommerciallysuccessfulTV stationnowKTLA,Channel5 Valetparking Toothwhiteningtoothpaste Conceptofmodernmakeup(Max Factor'spancakemakeup) Epogen/neuprogen(biotech blockbusterdrugs) "Dancing"fountains CelebrityPR Theelectricguitar Themultichannelrecordingprocess Arcweldingofnaturalgaspipelines Theskateboard(Venice) TheCobbsalad TheHulaHoop Thestraplessbra Shoulderpads(AdrianforJoanCrawford) Rhinestoneandspangledwesternwear (Nudies) Baremidriffs Neopreneassportswear(evolvedintosurf wear) Thesarong(designedbyEdithHeadfor DorothyLamour) The"stylist" "HotWheels" HeMan,MasteroftheUniverse BratzDolls AllDisneycharactersthathavebecome dolls,figurines,etc. PlasticFrisbee Eamesloungechairandottoman TheAeronchair TheMagic8Ball ThemodernthemeparkDisneyland SeesCandy(therewasaMarySee,who movedtoLosAngelesfromCanada) ThemodernTshirt(forUSCin1932) TheFrenchdipsandwich MySpace VonDutch JuicyCouture Pinkberry HotDogonaStickchain InNOut,firstdrivethroughrestaurant (1948,BaldwinPark,CA) Wigwag,thefirstrailroadgatecrossing Signal(AlbertHunt,1909) THXSoundsSystem(formovietheaters)

EconomicEnvironment
While this is a report about the creative economy of Los Angeles and Orange counties, the impact of the national and global economic downturn during 2008 must be acknowledged. As the year opened, U.S. housing markets were shrinking, home prices were falling, and the subprime mortgage industry was collapsing. Initially, the problems appeared confined to those sectors. However, subprime mortgage problemsturnedupunexpectedlyinmanyothernationsandinfectedtheirfinancialsectorsaswell.Afull fledgedfinancialcrisisbrokeoutinSeptemberOctober2008.Byyearend,muchoftheworldwasengulfed inthedeepestrecessionsinceWorldWarII. ThecreativeindustriesofLosAngelesandOrangecountieshavefeltthestingofthisrecession.Newhome constructionhasplungedfrompeaksearlierinthedecade.Itlookslikepermitsissuedduring2009fornew homesinLosAngelesCountywillbeatmost10,000units,downby63%from2004(at26,935units)andthe lowest level of activity since 1997. The situation is even worse in Orange County. Just 2,000 new home permitsareexpectedin2009,downby83%fromthe2002peakof12,000units.Salesofexistinghomes alsodroppedmarkedlyin2008.Withfewerhometransactionstakingplace,demandfornewfurnitureand homefurnishingshasfallensharply,impactingsalesoftheL.A.OrangeCountyindustry. The financial crisis was well publicized in the media, and generated strong fears among consumers and businesses in Southern California and across the nation. Consumers retrenched and reduced discretionary spending for the holidays, vacations and new vehicles. Business firms reacted by cutting expenses to the boneincludingadvertisingandlayingoffworkers.Bysummer2009,theL.A.Countyunemploymentrate hadsurpassed12%,thehighestinatleast50years(andpossiblysinceWorldWarII).Joblessnessexceeded 9%inOrangeCounty;alsowellabovepreviousdeeprecessionaryperiods.Astheeconomyweakened,global tradeflowsshrankmarkedly.TherearefewercontainersmovingthroughtheLosAngelesLongBeachports andlessheavytrucktrafficonareafreeways.Thatalsomeansfewerdockworkersandlessneedfortruck drivers. Lastfallsfinancialcrisiscreatedproblemsinmanyoftheareascreativeindustries.Forexample, Plunging stock prices hit the endowments of most nonprofit organizations quite hard. Drastic shrinkageofendowmentassetshasforcedanumberofinstitutionstomakeunpalatabledecisions likereducinghoursorthescaleofoperationsandevenlayingoffstaff. The credit crunch means it is more difficult to borrow money or to find new equity investors for major projects. In the entertainment industry, there are fewer people willing to back new film productions or expensive television series. Elsewhere, less venture capital funding is available to promisingnewbutuntriedsoftwarecompanies. Someweakenedfinancialcompanieshavelosttheirownfinancialbackersandhavebeenforcedto reduce or even stop lending to their traditional customer base. The spectacular collapse of the areassubprimemortgageindustryisacaseinpoint.Thissortofproblemalsoimpactstheabilityof small specialty retailers to purchase apparel and other merchandise on credit and of small manufacturersofapparel,toys,giftware,andhomefurnishingstopurchasesupplies.

As of this writing, it appears the economy, which has been falling since December 2007, hitbottom in the summerof2009.Housing,consumerspendingandbusinessinvestmentallareatlowlevelsbutnotgetting appreciably worse. Federal government economic policies have helped to arrest the decline. The Federal Reserves policyfeaturing extremely low interest rates and ample availability of funds to the financial sectoris restoring liquidity to financial markets, though it remains difficult for ordinary (less than prime) peopleandbusinessestoborrowfromtheirbanks.Thefederalstimulusplanhasbeenslowtogetmoving butisbeginningtoreportsomesuccesses,includingtheCashforClunkersprogramandmorefundingfor infrastructure projects. However, in California and other states, the impact of the stimulus plan will be lessenedbyshrinkingbudgetsandincreasesinstateandlocalincomeandsalestaxes.

How has the economic downturn affected the 2008 data in this report? Because of the recession, employmentdeclinedfrom2007to2008inmostoftheareascreativeindustries.Theonlyexceptionswere entertainment, fine and performing arts, and communication arts. Still, the decline was relatively small, about2%overall,astheeconomywasteeteringontheedgeoftheabyssformuchoftheyear.Weexpect employmentlossesintheareascreativeindustriestoincreasemarkedlyduring2009. Inthepagesthatfollow,wedocumentthecreativeindustriesstrugglestowithstandtherecessionaryforces of2008.Someweremoresuccessful,someless,asyouwillsee.However,theeconomyreturnstocenter stageattheendofthisreport.There,wewilldescribewherewethinktheeconomyisheadedoverthenext fourplus years and then present a highlevel projection of employment in the areas creative industries in 2013.

Employment
In2008,about342,300peopleinLosAngelesCountyworkeddirectlyinthecreativeindustries.Whilemany wouldexpecttheentertainmentindustrytodominate,itdidnot.Itaccountedforjust38.5%ofthecreative jobs.Bysectorin2008,thelargestemploymentcountswerefoundin:entertainment:131,800jobs;fashion: 98,000jobs;furniture/homefurnishings:35,600jobs,andfineartsproviders:33,200jobs.(SeeTable21on page31forthesectordetails.) Butdirectemploymentisonlythebeginning.Everyjobinthecreativeindustriessupportsorsustainsother indirect jobs in the area. Direct employees are those who actually work in the creative industries of Los AngelesandOrangecounties.Indirectemploymentiscreatedwhenfirmsintheseindustriesmakepurchases from their suppliers and vendors. Additional indirect (also sometimes referred to as induced) jobs are generatedwhenthedirectandindirectworkersspendtheirwagesonconsumergoodsandservices. DirectandindirectemploymentinthecreativeindustriesbasedinLosAngelesCountytotalednearly860,000 jobs in 2008. This fact points to another aspect of the creative industries they have a highmultiplier impact.Thatis,eachdirectjobsupportsroughly1.5indirectjobs. In Orange County, the creative industries were responsible for 44,500 direct jobs in 2008. The largest employmentsector was fashion with 12,500 jobs, followed by furniture with 10,600 jobs, and architecture andinteriordesignwith6,200jobs. Direct and indirect employment in the creative industries located in Orange County totaled an estimated 92,500jobs.ThemultipliereffectinthiscountyisalittlesmallerthaninLosAngeles,at1.1indirectjobsfor everydirectjob. Some comparisons help put these employment numbers in perspective. There are more direct jobs in the creativeindustriesofLosAngelesandOrangeCountiesthan: All2008nonfarmemploymentintheOxnardVenturametroarea(289,550jobs);and All2008nonfarmemploymentinthestateofNorthDakota(367,000jobs).

DirectandindirectemploymentinthecreativeindustriesofLosAngelesandOrangecountiesaccountedfor morethan: 17.0%oftotalnonfarmemploymentinthetwocounties; All2008nonfarmemploymentinthestateofNewMexico(848,800jobs) All2008nonfarmemploymentintheSanJosemetroarea(921,200jobs)

Table1:EmploymentImpactofCreativeIndustries,2008
Area LosAngelesCounty OrangeCounty Total DirectJobs 2008 342,300 44,500 386,800 TotalJobs 2008 858,500 92,500 951,000

Sources:CaliforniaEmploymentDevelopmentDept.,ES202data;BLS;overallimpactcalculatedbyLAEDC.

Salaries
When people think of creative, they often think starving artist. But that is not the case with the professionalsworkinginmostoftheLosAngelesregionscreativeindustries.InLosAngelesCountyin2008, thefashionsectorhadthelowestaverageannualsalary,at$36,990.Attheotherendofthespectrumwere fineandperformingartsprovidersat$156,627andtoysat$101,899.(Note:theaveragefashionsalarywas likelyreducedbymanylowerpaidtechnicaljobswhiletheaveragefineandperformingartssalarywaslikely boostedbytheinclusionofentertainmentindustryincomesinthecategory.) InOrangeCounty,personsworkinginthefine&performingartshadthelowestaveragesalaryof$27,027in 2008. Fashion in the County did better at $45,405 thanks to the areas focus on fastchanging active sportswear,specificallythesurfwearsegment.ThehighestaveragesalariesinOrangeCountywereindigital mediaat$139,225,product/industrialdesignat$90,996,followedbyarchitecture/interiordesignat$77,106, andcommunicationartswhichincludesgraphicdesignandadvertisingagenciesat$69,860.
Average Annual Salary of Creative Industries Los Angeles County, 2008
Fine&PerformingArts Toys DigitalMedia CommunicationArts Entertainment Architecture/InteriorDesign Product/IndustrialDesign ArtGalleries Furniture,Home&Garden Fashion $101,899 $100,766 $91,151 $90,762 $76,500 $58,770 $53,291 $39,604 $36,990 $0
Source:Cal.EDD,ES202data

Average Annual Salary of Creative Industries Orange County, 2008


DigitalMedia Product/IndustrialDesign Architecture/InteriorDesign CommunicationArts Toys Entertainment Fashion Furniture,Home&Garden ArtGalleries Fine&PerformingArts
$90,996 $77,106 $69,860 $69,425 $67,085 $45,405 $43,779 $31,313 $27,027 $139,225

$156,627

$40,000 $80,000 $120,000 $160,000


Source:Cal.EDD,ES202data

$0

$40,000

$80,000

$120,000

$160,000

Revenues
Therevenuesgeneratedbytheregionscreativeindustriesarealsoimpressive.InLosAngelesCounty,total revenuesreached$121.1billionin2008.Thelargestsegmentswereentertainmentat$47.9billion,followed byfashionat$36.3billion. In Orange County, revenues for some, but not all, of the creative industries totaled an estimated $18.0 billion.Fashionwasthelargestsegmentat$5.6billion,followedbyfurnitureat$3.1billion. Total(directandindirect)regionaloutputofthecreativeindustrieswasestimatedtobe$276.6billioninLos AngelesCountyand$34.2billioninOrangeCountyin2008.

Revenues of the Creative Industries Los Angeles County, 2008


$121.1Billionin2008
Architecture/ Interior Design 2.2% Digital Media 2.7%

Revenues of the Creative Industries Orange County, 2008


Architecture/ Interior Design 10.7% Digital Media 13.8%

$18.0 Billionin2008

Entertainment 39.5%

Communication Arts 2.4%

Product/ Industrial Design 0.1% Art Galleries 0.2%

Entertainment 16.9%

Product/ Industrial Design 0.4%


Communication Arts 3.5%

Art Galleries 0.3%

Other

Fashion 30.5% Furniture, Home & Garden 10.3%

Toys 4.1%

Furniture, Home & Garden 18.5%

Other

Fashion 27.3% Fine & Performing Arts 2.9%

Toys 4.0%

Fine & Performing Arts 9.0%

Sources:CAEDD,ES202data;estimatesbyLAEDC

Sources:CAEDD,ES202data;estimatesbyLAEDC

TaxImpacts
We also calculated some of the state and local income and sales tax revenues attributable directly and indirectlytothecreativeindustries.Notethatactualtaxrevenuesarehigherthanshownhere,becausewe excludedothertaxes,suchasthestateemploymenttax,corporatetaxesandlocalpropertytaxes. InLosAngelesCounty,state/localpersonalincomeandsalestaxesgenerateddirectlyandindirectlybythe creative industries were nearly $4.7 billion in 2008. By sector, entertainment set the pace at $2.5 billion, followedbyfine&performingartsat$802millionandfashionat$661million. State/local personal income and sales tax revenues associated directly and indirectly with the creative industriesbasedinOrangeCountywereestimatedtobe$383millionin2008(basedonavailabledata).The largest amount, $88 million, was generated by fashion, followed by furniture & home furnishings at $75 million. Table2summarizestheeconomicimpactofourcreativeindustriesin2008.ThecreativeindustriesofLos AngelesandOrangeCountygenerated$310.8billionindirectandindirectoutput.Theyemployednearlyone millionworkers.Thedirectandindirectworkerspaidnearly$5.1billioninpersonalincomeandsalestaxesto theCaliforniastategovernment.

Table2:EconomicImpactofCreativeIndustries,2008
Area LosAngelesCounty OrangeCounty Total DirectImpact Nonemployer Estab. Jobs 342,300 167,600 44,500 18,600 386,800 186,200 OverallEconomicImpact Output Direct& Taxes1 ($millions) IndirectJobs ($millions) $276,600 858,500 $4,700 34,200 92,500 383 $310,800 951,000 $5,083

Notes: 1)Statepersonalincometaxandsalestaxgeneratedbyearningsandspendingofthedirectandindirectworkers. Detailsmightnotaddtototalsduetorounding. Sources:CaliforniaEmploymentDevelopmentDepartment,ES202data;BureauoftheCensus;revenuedataextrapolatedfrom 2002EconomicCensus;overallimpactcalculatedbyLAEDC.

EmploymentTrends
Direct employment in the creative economy of Los Angeles and Orange Counties has moved more or less sidewayssince2003.Somecomponentsectors,suchasfashionandfurniture,havebeensheddingjobsfor quitesometimeduetooffshoringofproductionactivities.Meanwhile,othersectorshavegrownincluding architecture&interiordesign,product/industrialdesign,digitalmediaandthefine&performingarts. By far the largest component ofthe creative economy Job Trends in the Creative Industries in Los Angeles County is the entertainment industry; Los Angeles County, 2003 vs. 2008 particularly motion pictureand video production. The entertainmentindustryhasenjoyedsubstantialgrowth InThousands Entertainment in recent years. Overall, employment has swelled by Furniture,Home 2 Furnishings 0 nearly+10.0%since2003.Thisincreasewasdrivenby Fine&PerformingArts 0 ArtGalleries motion picture and video production which added 3 346.8 CommunicationsArts +11,200workers(+11.3%)andcurrentlycomprises84% DigitalMedia of total employment in the entertainment industry in 2 Architecture/Interior Design 0 LosAngelesCounty. Product/Industrial 0 Design 8 Toys 342.3 Fashion While several sectors within the creative economy 0 50 100 150 200 250 300 350 experienced job losses, the fashion and furniture & Source:Cal.EDD,ES202data home furnishings industries have suffered the most significantdeclinesoverthelastfiveyears.Totalemploymentinfashionfellby11.0%withtheheaviestjob losses concentrated in apparel manufacturing (12,700 jobs) and textile mills manufacturing (1,200 jobs). Thenewswasnotallbad,however.Somefashionsectorsaddedjobs:apparelwholesaling(+2,200jobs)and specializeddesignservices(+800jobs).Unfortunately,therewerenosuchmitigatingoffsetsforthefurniture & home furnishings industry. During the last five years, 12,900 jobs have disappeared in textile products, furnitureandlightfixturemanufacturing,aswellasfurniturewholesalinganindustrywidecontractionof 26.7%. Moving south to Orange County, most sectors of the Job Trends in the Creative Industries creative economy saw declines from 2003 to 2008. Orange County, 2003 vs. 2008 The overall decline of 9.8% was primarily due to job losses in the furniture & home furnishings and Entertainment InThousands communications arts industries. Furniture & home Furniture,HomeFurnishings 2 Fine&PerformingArts furnishings employment fell by 14.8%, with textile 0 0 ArtGalleries mills leading the retreat (24.2%) closely followed by 3 CommunicationsArts 49.3 furniture manufacturing (23.5%) and furniture DigitalMedia wholesaling(13.7%).Theonlybrightspotwaslighting Architectur/InteriorDesign 2 0 Product/IndustrialDesign fixtures,whichadded+700jobs. 0 Toys 8 44.5 Fashion The largest contributor to job losses in Orange 0.00 10.00 20.00 30.00 40.00 50.00 Countys creative economy was communication arts. Source:Cal.EDD,ES202data This sector includes graphic designers and advertising agencies.Since2003,OrangeCountyadvertisingagenciesshed2,900workers(52.8%),while300jobsin graphic design were lost (19.8%). Among the bright spots in Orange County were architecture & interior design(+6.2%)anddigitalmedia(+13.1%). Takingasnapshotviewofthepasteightyears,inLosAngelesCountytherecentemploymenthighpointfor the creative economy was 2002, when there were 358,500 jobs, as compared with 342,300 in 2008. In OrangeCounty,thehighwasreachedin2001,whentheemploymentcountwas59,200jobs.Employmentin thecreativeindustriesfellto49,300jobsin2003and44,500in2008.

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Nonemployer CreativeActivity
Many people in creative activities are selfemployed and work as nonemployer firms, or firms with revenues but no paid direct employees. Thus, they do not show up in the traditional federal and state government employment data, such as the ES202 reports used to develop the job numbers in this report. ThelatestnonemployerdatacomefromtheIRSandcovertaxyear2007.Notethatsomepeoplemayhavea taxIDnumberasanonemployerfirmwhilealsoworkingforatraditionalcompany.Thelatterjobwillbe covered in the traditional statistics. To prevent doublecounting, we treat this data separately from the ES202 based data. (Note also that nonemployer data are not available for digital media and several other industries.) In2007,therewere113,604creativenonemployerfirmsinLosAngelesCountyand18,645inOrangeCounty. Since2000,therehasbeensteadygrowthinbothcounties.Byfarthelargestnumberofthesefirmsisinthe sector called independent artists, writers and performers, which includes many people working in the entertainmentindustry,particularlyinmotionpictureandvideoproductionaswellasonstage. Revenues/receiptsofcreativenonemployerfirmsinLosAngelesCountywereover$5.5billionin2007,with 39.7%generatedbyindependentartists,writersandperformers.InOrangeCounty,revenues/receiptswere almost$845million,withthelargestshare(38.0%)comingfromcommunicationarts. Whileoverallgrowthinnonemployerestablishmentshasbeensteady,thereisagreatdealofvariationinthe relativeimportanceofthesesinglepersonentitiesamongthevarioussectorsofthecreativeeconomy.For example,inthefineandperformingarts,therearenearlytwoselfemployedpersonsinLosAngelesforevery traditional (i.e. salaried) employee. In Orange County, the ratio is 2.3 to one. In the communication arts (advertisingandspecializeddesignservices),thereisalmostonetooneparityinLosAngeles,whileinOrange County,thereare1.3singlepersonfirmsforeachsalariedworker.Incomparison,personsworkingintheLos Angeles furniture industry are more likely to be employed by a regular firm. Nonemployer establishments comprisejustoneoutofevery23individualsworkinginthefurnitureindustry.TheOrangeCountyratiois similar. Growthratesofcreativenonemployerfirmsversusemployeefirmsdifferedmarkedlybyindustrysector.In LosAngelesCounty,nonemployerfirmgrowthoutstrippedregularemploymentgrowthfrom2002to2007in six of the ten major segments included in our analysis: art galleries, communication arts, entertainment, fashion,fine&performingarts,andfurnitureandhomefurnishings.Thedrivingforcebehindthistrendisa growingtendencyforfirmstoconcentrateresourcesontheircorecompetencies(i.e.,whattheydobest)and to outsource other tasks such as design services to independent contractors. Another factor at work, especially during a recession, is for laidoff workers to start their own businesses if they cannot find employmentelsewhere. Inthecaseofartgalleries,fashionandfurniture,traditionalemploymentactuallyshrankastheranksofthe selfemployedgrewoverthisperiod.Onlythetoyindustrydemonstratedgrowthintheoppositedirection. [Wesuspectthismaybeduetoindependentdesignersinmanufacturingindustriesbeingmisclassifiedinthe specializeddesignservicescategory.]InOrangeCounty,thistrendwasmuchlesspronounced,withonly nonemployer firms in entertainment and fine & performing arts growing faster than traditional employer establishments.Heretoothenumberofselfemployedpersonsinthetoyindustriesdiminishedrelativeto regularemployment. We did not try to calculate any indirect impacts from nonemployer firms, as the RIMS II model was not developedtohandlenonemployeractivity.(PleaseseeTables3through6fordetailednonemployerdata).

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Table3:RatioBetweenEmployees&NonemployersbySector(2007)
Percentageofnonemployerfirms(selfemployedindividuals)vs.salariedemployees LosAngelesCounty Nonemployers Employees 3,671 12,800 692 1,100 17,884 17,700 n/a 6,800 17,640 131,200 6,653 99,300 64,962 32,800 1,712 39,600 n/a 800 390 6,300 OrangeCounty Nonemployers Employees 1,247 7,300 225 400 5,764 4,300 n/a 3,300 1,267 1,800 1,355 14,000 8,170 3,500 495 10,700 n/a 500 122 600

IndustrySector
Architecture&InteriorDesign ArtGalleries CommunicationArts DigitalMedia Entertainment Fashion Fine&PerformingArts Furniture&HomeFurnishings Product&IndustrialDesign Toys

Ratio 28.7% 62.9% 101.0% 13.4% 6.7% 198.1% 4.3% 6.2%

Ratio 17.1% 56.3% 134.0% 70.4% 9.7% 233.4% 4.6% 20.3%

Source:CaliforniaEDDES202Data;BureauoftheCensusNonemployerStatistics
Note:DataarenotavailableforDigitalMediaandProduct&IndustrialDesign

Table4:ComparativeGrowthRates:Employeesvs.Nonemployers20022007
LosAngelesCounty OrangeCounty Employment Nonemployer Employment Nonemployer Growth Growth Growth Growth 20022007 20022007 20022007 20022007 34.7% 3.2% 30.4% 1.9% 8.3% 2.8% 20.0% 3.2% 16.4% 22.3% 38.6% 20.0% 19.3% n/a 17.5% n/a 5.8% 23.7% 7.0% 20% 16.0% 4.9% 3.4% 0.6% 21.1% 34.9% 7.9% 28.6% 24.5% 1.1% 21.3% 7.1% 60.0% n/a 150.0% n/a 8.6% 16.8% 0.0% 17.6%

IndustrySector
Architecture&InteriorDesign ArtGalleries CommunicationArts DigitalMedia Entertainment Fashion Fine&PerformingArts Furniture&HomeFurnishings Product&IndustrialDesign Toys

Source:CaliforniaEDDES202Data;BureauoftheCensusNonemployerStatistics
Note:DataarenotavailableforDigitalMediaandProduct&IndustrialDesign

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Table5:NonemployerFirmStatisticsfortheCreativeIndustries,20032007
NumberofFirms
Category NAICS 313 315 3162 31699 4243 42394 42392 54131 54132 45392 7111 71141 71151 7121 314 337 4232 5121 5122 515 5414 5418 Industry Description Textile Mills Manufacturing Apparel Manufacturing Footwear Manufacturing Other Leather & Allied Product Manufacturing Apparel Wholesalers Jewelry Merchant Wholesalers Toy and Hobby Goods Wholesalers Architectural Services Landscape Architectural Services Art Dealers Performing Arts Companies Agents & Managers of Artists, etc. Independent Artists, Writers, & Performers Museums Textile Product Mills Furniture & Related Product Manufacturing Furniture/Home Furnishing Wholesalers Motion Picture/TV Production Sound Recording Industries Broadcasting (except Internet) Specialized Design Services Advertising Agencies Total Nonemployer Firms 2003 87 2,408 n/a 99 2,568 1,554 489 2,915 947 646 2,205 3,865 47,132 237 117 737 840 11,867 2,176 914 9,490 5,853 97,146 Los Angeles County 2004 2005 2006 79 79 91 2,381 2,277 2,115 n/a 63 59 99 107 106 2,683 2,662 2,645 1,551 1,615 1,611 487 3,028 995 646 2,376 3,963 49,904 293 131 751 871 12,569 2,305 959 10,091 6,006 102,168 444 2,944 1,000 651 2,516 4,087 53,411 258 116 730 867 12,793 2,329 987 9,937 5,487 105,360 429 2,898 1,006 657 2,787 4,089 54,712 285 114 725 805 13,795 2,510 1,070 10,695 6,001 109,205 2007 103 2,167 56 123 2,645 1,559 390 2,724 947 692 3,331 3,940 57,400 291 153 766 793 14,109 2,512 1,019 11,598 6,286 113,604 2003 19 527 n/a 25 591 273 160 960 349 217 301 434 5,940 17 35 181 332 694 206 149 2,955 2,115 16,480 2004 21 504 n/a 25 595 257 157 934 358 225 336 453 6,320 21 26 178 324 742 223 183 3,084 2,173 17,139 Orange County 2005 2006 19 17 461 430 6 7 22 21 599 564 293 265 143 960 365 220 315 457 6,723 33 33 177 326 769 217 173 3,108 2,089 17,508 134 907 374 220 402 457 6,674 28 33 177 310 832 228 166 3,268 2,041 17,555 2007 24 442 9 20 590 270 122 893 354 225 521 460 7,154 35 29 183 283 855 223 189 3,559 2,205 18,645

Fashion

Toys Architecture & Interior Design Art Galleries Fine & Performing Arts Providers Furniture & Home Furnishings Entertainment Communication Arts

Source:USDept.ofCommerce,BureauoftheCensus,NonemployerStatistics. Note:DataarenotavailableforDigitalMediaandProduct&IndustrialDesign

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Table6:NonemployerFirmStatisticsfortheCreativeIndustries,20032007
ValueofShipment,Sales,orReceipts ($millions)

Category NAICS IndustryDescription 313 TextileMillsManufacturing Fashion 315 3162 31699 4243 42394 42392 54131 54132 45392 7111 71141 71151 7121 314 337 4232 5121 5122 515 5414 5418 ApparelManufacturing FootwearManufacturing OtherLeather&AlliedProduct ApparelWholesalers JewelryMerchantWholesalers ToyandHobbyGoodsWholesalers ArchitecturalServices LandscapeArchitecturalServices ArtDealers PerformingArtsCompanies Agents&ManagersofArtists,etc. IndependentArtists,Writers,& Museums TextileProductMills Furniture&RelatedProduct Furniture/HomeFurnishingWholesalers MotionPicture/TVProduction SoundRecordingIndustries Broadcasting(exceptInternet) SpecializedDesignServices AdvertisingAgencies TotalValue: 2003 $2.6 160.1 n/a 5.3 322.7 242.9 52.1 146.5 33.0 44.8 118.8 192.3 1,589.0 4.7 6.8 45.2 71.1 586.2 104.8 50.3 367.9 310.7 $4,457.8 LosAngelesCounty 2004 2005 $4.1 151.5 n/a 7.3 337.2 250.8 50.7 157.6 41.2 47.9 136.5 205.3 1,735.0 4.9 4.1 55.1 80.8 617.0 110.7 51.4 409.2 354.8 $4,813.2 $4.2 134.6 3.3 6.1 359.6 261.0 44.6 171.6 45.2 60.0 142.7 209.6 1,939.8 6.7 7.9 55.8 81.6 646.2 104.9 56.4 428.6 359.5 $5,129.9 2006 $2.4 122.8 2.7 6.9 356.2 251.8 41.8 179.3 41.3 62.5 160.9 225.7 1,959.5 7.3 7.4 53.7 70.4 668.4 109.7 49.2 464.2 370.6 $5,214.8 2007 $2.6 131.6 2.8 7.4 316.5 234.6 36.8 178.9 44.0 67.3 181.1 236.0 2,185.4 6.5 10.0 55.1 75.5 685.4 112.1 49.9 507.8 371.9 $5,499.3 2003 $1.6 39.5 n/a 1.1 51.6 19.9 14.4 59.6 16.2 16.4 8.1 13.6 122.8 0.4 1.8 12.6 36.8 29.5 7.1 5.4 142.1 144.6 $745.1 OrangeCounty 2004 2005 $1.6 35.0 n/a 1.5 53.8 19.6 12.5 63.7 16.4 26.0 8.8 15.1 132.7 0.5 1.3 12.6 37.7 32.2 7.0 7.0 158.7 153.7 $797.7 $0.3 29.2 0.2 1.5 56.5 21.5 11.4 67.9 19.9 35.2 10.1 19.8 137.6 0.4 1.5 13.4 37.9 33.2 9.5 5.5 166.7 156.4 $836.0 2006 $0.2 23.8 0.1 1.8 56.8 21.6 9.1 67.6 19.6 28.4 14.1 17.1 139.8 0.7 1.6 11.2 38.6 33.2 7.9 6.5 173.2 143.2 $816.2 2007 $0.5 25.4 0.3 1.5 60.2 24.3 9.5 68.0 21.3 17.3 23.6 17.3 153.7 0.7 1.6 13.7 31.8 36.9 9.7 7.1 184.5 136.6 $845.1

Toys Architecture& InteriorDesign ArtGalleries Fine& Performing ArtsProviders Furniture& Home Furnishings Entertainment Communication Arts

Source:USDept.ofCommerce,BureauoftheCensus,NonemployerStatistics. Note:DataarenotavailableforDigitalMediaandProduct&IndustrialDesign

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IndustrySnapshots
Fashion
Thissectorincludesapparelandtextilemanufacturing,thewholesaleapparelandjewelrymarts,jewelry manufacturing, cosmetics, footwear and handbag production. Apparel can be designed in Southern California, produced in Asia, and shipped back to the U.S. through the two local ports. Often, further processingtakesplaceintheregion,suchasqualityinspections,andaffixinglabelsandhangtags.Thereis alsoasubstantiallocalbusinessinquickturnapparelproduction(Ineedityesterday!).Attendanceat thevariousapparelmarketsheldinLosAngelesisgrowing,especiallyamonginternationalbuyers. In2008,therewere6,872fashionbusinessesinLosAngeles County,with98,000directemployees.Direct sales were $36.3 billion, including $16.4 billion from apparel wholesaling and $5.8 billion from apparel manufacturing.Thetotal(directandindirect)economicimpactwaslarge:231,700directandindirectjobs and total output of $70.6 billion. State/local personal income and sales taxes generated directly and indirectlybythissectortotaled$661million. ThefashionindustryinOrangeCountyissmallerbutrunsthegamutfromtherefineddesignsofSt.JohnKnits tohighprofileactionsportswear.In2008,therewere743fashionrelatedbusinesseswith12,500directjobs creating 26,500 total (direct and indirect) jobs in the region. State/local personal income and sales taxes generateddirectlyandindirectlybythissectorwere$88million.

Table7:EconomicImpactoftheFashionIndustry,2008
Area LosAngeles Orange Total Estab. 6,872 743 7,615 Jobs 98,000 12,500 110,500 Payroll ($billions) $3.6 0.6 $4.2 Nonemp. Estab. 6,653 1,355 8,008 2013 Jobs Forecast 88,600 11,100 99,700 Total(Direct+Indirect)Impact Output Taxes1 Jobs ($billions) ($millions) $70.6 231,700 $661.4 10.6 26,500 88.0 $81.2 258,200 $749.4

Notes: 1)Statepersonalincometaxandsalestaxgeneratedbyearningsandspendingofthedirectandindirectworkers. Sources:CaliforniaEDD,ES202data,BureauoftheCensus;indirectimpactsestimatedbyLAEDC.

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Toys
Whilethejobnumbersmaylookmodest,SouthernCaliforniaisamajorforceinthetoyindustry,withsuch marqueenamesasBarbie,HotWheels,andmorerecently,Bratz.ThebusinessnamesincludeMattel,MGA Entertainment,JakksPacific,Funrise,ImperialToys,andMegaToys.Muchoftheactualmanufacturingtakes placeinAsia,butthedesignandmarketingtakeplaceintheLosAngelesregionbecauseofthelocalcreative talentpoolandsupportivetrainingprograms. InLosAngelesCounty,therewere6,000directjobsintoymanufacturingandwholesalingduring2008,while sales totaled $5.0 billion. The total (direct and indirect) economic impact of the toy industry was 16,300 direct & indirect jobs and economic output of $9.5 billion. Taxes associated with this industry were nearly $101million. ToyshadamuchlowerprofileinOrangeCounty,wheretherewere700directjobsin2008,generating1,600 jobsintotal.Statepersonalincomeandsalestaxesgenerateddirectlyandindirectlybythissectortotaled nearly$7million.

Table8:EconomicImpactoftheToyIndustry,2008
Area LosAngelesCounty OrangeCounty Total Estab. 258 47 305 Jobs 6,000 700 6,700 Payroll ($billions) $0.61 0.05 $0.66 Nonemp. Estab. 390 122 512 2013 Jobs Forecast 5,800 700 6,500 Total(Direct+Indirect)Impact Taxes Output Jobs ($millions) ($billions) $9.5 16,300 $100.8 1.3 1,600 6.8 $10.8 17,900 $107.6

Sources:CaliforniaEDD,ES202data,BureauoftheCensus;indirectimpactsestimatedbyLAEDC.

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DigitalMedia
Dataforemploymentinthedigitalmediaindustryareincomplete.Alargenumberofprogrammersare independentcontractorswhoarenotcapturedbythetraditionaldatasources.Manyalsoworkforfirmsin otherindustries.Withthegrowthofdigitalmediaintheentertainmentindustry,forexample,moreand moreoftheseindividualsaremovingontothepayrollsofthefilmstudios. Weselectedsoftwarepublishersastheindustrythatbestfitsthisactivityandidentified53majorvideogame producersintheLosAngelesandOrangecounties.InLosAngelesCounty,therewere5,400personsdirectly engaged in software publishing during 2008, and sector revenues were $3.3 billion. The total economic impactprovedtobeimpressive:16,000totaljobsandtotaleconomicoutputof$6.3billion. Orange County had 4,200 people working in this sector in 2008, and sales of $2.5 billion. Again, the total economicimpactwaslarge;9,100totaljobsandeconomicoutputof$5.0billion. Kathleen Milnes, CEO of the Entertainment Economy Institute, researched occupations requiring digital mediaskills.Selectingmultimediaartistsandanimators,shefound10,510peopleemployedinCaliforniain a variety of industries. The top five were motion picture & video, advertising, computer systems design, software publishers and specialized design services. All but computer systems design are included in our creativeeconomyemploymenttotals.Ofequalinterest(andfrustrationtothedatawatchers),nearly70%of digitalartists(nationwide)areselfemployed.(SeetheendofthisreportforKathleenMilnes,Opportunities intheArtsAreLargerThanTheyAppear:AnAnalysisofMultimediaArtistandAnimatorEmploymentAcross CaliforniasIndustries.)

Table9:EconomicImpactoftheDigitalMediaIndustry,2008
Area LosAngelesCounty OrangeCounty Total

Estab. 176 112 288

Jobs 5,400 4,200 9,600

Payroll ($billions) $0.5 0.6 $1.1

2013 Jobs Forecast 5,900 4,600 10,500

Total(Direct+Indirect)Impact Output Taxes ($billions) Jobs ($millions) $6.3 16,000 $71.7 5.0 9,100 66.7 $11.3 25,100 $138.4

Sources:CaliforniaEDD,ES202data,BureauoftheCensus;indirectimpactsestimatedbyLAEDC.

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MajorVideoGameFirmswithOperationsinSouthernCalifornia
Videogamefirmsaredifficulttofind,butweputtogetheralistofsuchfirmsinLosAngelesandOrangecounties,usingsources deemedreliable.Ifthereareanyomissions,weapologize(callandtellus). Oneoftheproblemsisthatthesefirmscanbe classified under software publishing or under toy manufacturing (there is no government industry code NAICS for video gamepublishers).Therearealso"serious"videogamepublishersinthearea.OneisAlelo,whichpublishesagamethathelps U.S.soldierslearneverydayconversationalArabic.

LosAngelesareagamepublisherswithlocaldevelopmentbranches:
ActivisionBlizzard,Irvine&SantaMonica HeavyIronStudios,CulverCity InfinityWard,Encino Luxoflux,SantaMonica Neversoft,WoodlandHills NovaLogic,Calabasas

RiotGames,LosAngeles TheWaltDisneyCo.,Burbank eDisneyStudios,NorthHollywood THQ,Calabasas Treyarch,SantaMonica

SouthernCaliforniaareaindependentlyownedgamedevelopers:
EmergentGameTechnologies,Calabasas GenuineGames,WoodlandHills HighImpactGames,NorthHollywood InsomniacGames,Burbank JailedGamesInc.,SantaMonica LeftField,WestlakeVillage LegacyInteractive,Hollywood LiquidEntertainment,Pasadena NakedSkyEntertainment,LosAngeles PandemicStudios,Westwood(ownedin partnershipwithBioWare,Canada) RealtimeAssociates,ElSegundo SevenStudios,LosAngeles SparkUnlimited,ShermanOaks TrilogyStudios,SantaMonica WayForward,SantaClarita Coresoft,LakeForest inXileEntertainment,NewportBeach ObsidianEntertainment,SantaAna PointofView,Tustin QuicksilverSoftware,Irvine ReadyatDawnStudios,Tustin Red5Studios,AlisoViejo SupervillainStudios,SantaAna

Companiesheadquarteredoutsidetheregion,butwithlocaldevelopmentbranches:
AbandonEntertainment,NewYork LuckyChickenGames,Malibu ClimaxGroup,UK Climax,SantaMonica ElectronicArts,RedwoodShores,CA EALosAngeles,PlayaVista EAMobile(formerlyJAMDATMobile),Playa Vista MidwayGames,Illinois MidwayStudios,LosAngeles Sony,Japan NaughtyDog,SantaMonica SonyComputerEntertainmentAmerica, SantaMonica Turbine,Massachusetts TurbineLA,SantaMonica NCsoft,SouthKorea NCsoftLosAngeles,SantaMonica NCsoftOrangeCounty,AlisoViejo TheCollective,NewportBeach ShinyEntertainment Foundation9 MumboJumbo,Texas ZonoInc.,CostaMesa ValveCorporation,Washington TurtleRockStudios,Irvine

SouthernCaliforniagamepublisherswithnolocaldevelopmentoffices:
AcclaimGames,BeverlyHills BuenaVistaGames,Glendale(ownedbyDisney) ConspiracyEntertainment,SantaMonica FoxInteractive,CenturyCity(ownedbyNewsCorp.) KonamiDigitalEntertainment,LosAngeles (ownedbyKonamiJapan) TecmoInc.,Torrance(ownedbyTecmoJapan) WarnerBros.InteractiveEntertainment,Burbank (TimeWarner,NewYork) AtlusUSA,Irvine(ownedbyAtlus,Japan) CraveGames,NewportBeach(ownedby Handleman,Illinois) SquareEnixNorthAmerica,ElSegundo(owned bySquareEnix,Japan)

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ProductandIndustrialDesign
Many product and industrial designers are direct employees of companies that produce and sell a wide varietyofproducts.Thedatainthisreportalreadycapturethoseworkingincreativeindustrieslikeapparel orfurniturebutdonotincludethoseworkinginotherindustries(e.g.,aerospaceorcustomfabricatedmetal products). The figures shown in Table 10 below reflect only specialized design firms that serve as outside contractorsorconsultantstomanufacturersandconstructionfirms. Thoughitisdifficulttoquantify,therealdesignbaseintheareaismuch,muchlargerthanshown.Alarge numberofdesignersworkatthe22automotivedesignshopslocatedinSouthernCaliforniaandareclassified asautomotiveindustryemployees.AnotherexampleisWETDesign,locatedinSunValley.WETdesigns and manufactures unique water fountains featuring music and decorative visual displays. This firm is classifiedasamanufacturerofotherfabricatedmetalproducts! In Los Angeles County during 2008, there were 700 direct workers in the outside product and industrial designindustry,andrevenuesforthisactivitywere$99.3million.Thetotaleconomicimpactyielded1,100 totaljobsandeconomicoutputof$202million.OrangeCountyhassomeheftinthissector,with500direct jobsin2008,andrevenuesforthisactivitywere$74.4million.Thetotaleconomicimpactwas800jobs.

Table10:EconomicImpactoftheProductandIndustrialDesignIndustry,2008
Area LosAngelesCounty OrangeCounty Total Estab. 131 67 198 Jobs 700 500 1,200 Payroll ($millions) $41.1 45.5 $86.6 2013 Jobs Forecast 800 600 1,400 Total(Direct+Indirect)Impact Output Taxes ($millions) Jobs ($millions) $202.0 1,100 $5.4 146.3 800 5.7 $348.3 1,900 $11.1

Sources:CaliforniaEDD,ES202data,BureauoftheCensus;indirectimpactsestimatedbyLAEDC.

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ArchitectureandInteriorDesign
Thissectorincludesfirmsthatspecializeinarchitecturalservices,landscapearchitectureandinteriordesign. InLosAngelesCounty,theindustryreported12,600directjobsin2008.Revenueswereestimatedtobe$2.7 billion (with $1.9 billion from architecture). Los Angeles is the home of several highprofile architects, including Frank Gehry, Thom Mayne, Fred Fisher, Steven Ehrlich, and longtime local stalwart A.C. Martin Partners (designers of the iconic Los Angeles City Hall and many other prominent buildings). This sector generatedatotaleconomicimpactof24,800jobsand$5.4billionineconomicoutput. Orange County has a lot of activity in this sector as well, with 6,200 direct jobs in 2008 and estimated revenuesof$1.9billion.Thetotaleconomicimpactincluded12,100directandindirectjobsandoutputof $3.8billion.

Table11:EconomicImpactoftheArchitectureandInteriorDesignIndustry,2008
2013 Total(Direct+Indirect)Impact

Area LosAngelesCounty OrangeCounty Total

Estab. 1,727 796 2,523

Jobs 12,600 6,200 18,800

Payroll ($billions $1.0 0.5 $1.5

Nonemp. Estab. 3,671 1,247 4,918

Jobs Forecast 13,400 6,600 20,000

Output ($billions $5.4 3.8 $9.2

Taxes Jobs ($millions) 24,800 $123.7 12,100 59.4 36,900 $183.1

Sources:CaliforniaEDD,ES202data,BureauoftheCensus;indirectimpactsestimatedbyLAEDC.

CommunicationArts
This sector includes firms specializing in graphic design services, advertising agencies, package design, and displayanddirectmailadvertising.During2008,therewere18,000peopleworkingdirectlyinthissectorin Los Angeles County (with 12,600 employed in advertising agencies), and revenues were more than $2.8 billion.Thetotaleconomicimpactwassizable:38,800directandindirectjobsandoutputof$5.9billion. In Orange County, there were 3,900 people working directly in these activities, with business revenues of $6.0million.Thetotaleconomicimpactincluded7,900jobsandoutputof$1.1billion.

Table12:EconomicImpactoftheCommunicationArtsIndustry,2008
Area LosAngeles OrangeCounty Total Estab. 1,644 579 2,223 Jobs 18,000 3,900 21,900 Payroll ($billions) $1.6 0.3 $1.9 Nonemp. Estab. 17,884 5,764 23,648 2013 Jobs Forecast 18,000 4,000 22,000 Total(Direct+Indirect)Impact Output Taxes ($billions) Jobs ($millions) $5.9 38,800 $225.8 1.1 7,900 34.7 $7.0 46,700 $260.5

Sources:CaliforniaEDD,ES202data,BureauoftheCensus;indirectimpactsestimatedbyLAEDC.

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ArtGalleries
There were 255 art galleries in Los Angeles County during 2008. Direct sales volume was estimated to be $215million.Thetotaleconomicimpactwas1,600jobsandoutputof$444.5million.Inaddition,wefound 692artdealersinthenonemployerdataforL.A.County,withsalesof$67.3millionduring2007(latestdata available).Someofthesecouldbeoperatingoutoftheirhomes. In Orange County, there were 71 galleries in 2008 with estimated direct sales of $49.3 million. The total impactofthissegmentofthecreativeindustrieswas510totaljobsandoutputof$97.3million.Also,there were225nonemployerartdealersin2007,whoreportedsalesof$17.3million.

Table13:EconomicImpactofArtGalleries,2008
Area LosAngelesCounty OrangeCounty Total Estab. 255 71 326 Jobs 1,000 300 1,300 Payroll ($millions) $53.3 9.4 $62.7 Nonemp. Estab. 692 225 917 2013 Jobs Forecast 1,100 400 1,500 Total(Direct+Indirect)Impact Output Taxes ($millions) Jobs ($millions) $444.5 1,600 $7.8 97.3 510 1.3 $541.8 2,110 $9.1

Sources:CaliforniaEDD,ES202data,BureauoftheCensus;indirectimpactsestimatedbyLAEDC.

FineandPerformingArts
Thisgroupingincludesfineandperformingartschools,theateranddancecompanies,musicalgroups,other performingartscompanies,museums,aswellasindependentartists,writers,entertainersandtheiragents and managers. Many of these firms are nonprofit organizations. In addition to the official employment numbers,weconductedasurveyofuniversities,colleges,andtechnicalandtradeschoolsprovidingdegree programsinthefineandperformingarts.Weincludedtheminthe2008employmentfiguresinTable14. Therewere33,200directjobsinthissectorinLosAngelesCountyduring2008(3,700jobsfromtheLAEDC survey), and revenues totaled $11.0 billion (with $6.6 billion from the independent artists). The total economicimpactincluded56,500jobsandoutputof$26.7billion.Thestatetaxrevenuesgenerateddirectly andindirectlybythissectorcameto$802.2millionin2008. In Orange County, the fine and performing arts industry had 3,700 direct jobs (200 jobs from the LAEDC survey) with total revenue of $527 million. The total economic impact of this industry was 6,300 jobs and outputof$1.2billion.Thetaxrevenuesgenerateddirectlyandindirectlybythissectorcameto$20.1million in2008.

Table14:EconomicImpactoftheFineandPerformingArtsIndustry,2008
Area LosAngeles Orange Total Estab. 8,295 405 8,700 Jobs* 33,200 3,700 36,900 Payroll ($billions) $5.2 0.1 $5.3 Nonemp. Estab. 64,962 8,170 73,132 2013 Jobs Forecast 35,300 3,900 39,200 Total(Direct+Indirect)Impact Output Taxes ($billions) Jobs ($millions) $26.7 1.2 27.9 56,500 6,300 62,800 $802.2 20.1 $822.3

*IncludesLAEDCssurveyofdegreeprogramsofferedbyFineandPerformingArtsdepartments/schoolsinlocal universities/collegesandtrade/technicalschools. Sources:CaliforniaEDD,ES202data,BureauoftheCensus;indirectimpactsestimatedbyLAEDC.

21

FurnitureandHomeFurnishings
This grouping includes firms that manufacture, warehouse, import and export furniture, the furniture marts, textile product mills (e.g., sheets, toweling, and curtains) and china and pottery producers. Like apparel,theseitemsarefrequentlydesignedintheregion,producedinAsiaandshippedbackthroughthe localports.Thefurnituremartshaveannualshowsthatattractbuyersfromaroundthenation. In Los Angeles County, this segment accounted for 35,600 direct jobs during 2008 and estimated sales of more than $12.2 billion. Furniture wholesaling (which includes import/export and warehousing as well as wholesale distribution) accounted for $7.1 billion and furniture manufacturing for $3.3 billion. The total economic impact was over 77,800 direct and indirect jobs and output of $23.7 billion. State and local tax revenuesgenerateddirectlyandindirectlybythesectorwere$230.6million. OrangeCountyhad10,600peopleworkinginthisindustryduring2008withestimatedrevenuestotaling$3.1 billion. The total economic impact was 22,700 jobs. State/local tax revenues generated directly and indirectlybythesectorwere$74.7million.

Table15:EconomicImpactoftheFurnitureandHomeFurnishingsIndustry,2008
Area Estab. Jobs LosAngelesCounty 1,872 35,600 OrangeCounty 547 10,600 Total 2,419 46,200 2013 Total(Direct+Indirect)Impact Jobs Payroll Nonemp. Output Taxes Forecast ($billions) ($billions) Estab. Jobs ($millions) $1.4 1,712 33,300 $23.7 77,800 $230.6 0.5 495 9,800 5.8 22,700 74.7 $1.9 2,207 43,100 29.5 100,500 $305.3

Sources:CaliforniaEDD,ES202data,BureauoftheCensus;indirectimpactsestimatedbyLAEDC.

22

Entertainment
When people think of creativity and Los Angeles, this sector is often the focus of their thoughts. Several activities are included here: sound recording (including records), motion picture and TV production, and cable broadcasting (cable firms are producing more of their own contentthese days). Musicians might be includedhereforrecordingfilmscores,butmanyperformonthestageaswellasinthestudio;sowehave alreadycountedthemasemployeesornonemployerfirmsinthefineandperformingartssector. In Los Angeles County, there were 131,800 people working directly in the entertainment industry during 2008.Theestimateddirectsalesnumberswerehuge,$47.9billionin2008,ofwhich$37.7billioncamefrom thefilmproductionindustry.Thetotaleconomicimpactwasalmost394,000directandindirectjobs(ahigh multiplier) and estimated total output of nearly $128 billion. State and local taxes generated directly and indirectly by this sector totaled $2.5 billion in 2008 (a reminder of why other states are trying to lure film productionaway). TheentertainmentsectorinOrangeCountyissmaller,withjust1,800directjobsin2008andestimatedtotal revenueof$2.9billion.Thetotaleconomicimpactwasnearly4,800totaljobs.State/localtaxesgenerated directlyandindirectlybythissectortotaled$20.0millionin2008.

Table16:EconomicImpactoftheEntertainmentIndustry,2008

Area Estab. Jobs LosAngelesCounty 5,488 131,800 OrangeCounty 157 1,800 Total 5,645 133,600

Payroll ($billions) $12.0 0.1 $12.1

Nonemp. Estab. 17,640 1,267 18,907

2013 Jobs Forecast 132,200 1,800 134,000

Total(Direct+Indirect)Impact Output Taxes ($billions) Jobs ($billions) $127.8 393,700 $2.5 0.5 4,800 0.02 $128.3 398,500 $2.52

Sources:CaliforniaEDD,ES202data,BureauoftheCensus;indirectimpactsestimatedbyLAEDC.

23

WhereDoWeGofromHere?TheCreativeEconomyin2013
Intheprecedingpagesofthisreport,wehavereviewedtheperformanceofthecreativeeconomyofLos AngelesandOrangeCountyin2008,includingtheimpactsofthecurrenteconomicdownturn.Inthis section,wemakeapreliminaryprojectionof2013creativeindustryemploymentlevelsinLosAngeles and Orange County. We chose 2013 because it should be far removed from the current distressed situation.Whatwillthecreativeeconomylooklikebythen? Makingsuchaprojectionprovedsurprisinglydifficult.Theemploymentprojectionsfor2013musttake intoaccountboththedepthofthedownturnin2009(andpossibly2010)andthespeedoftheupturn expected in 2011 through 2013. As to the former, we recognize that 2009 will compare unfavorably with2008.Beyond2009,theoutlookforthenextfewyearsisquiteuncertain.Thebestcasewouldbe severalyearsofsteadyeconomicgrowthandexpansiononcethelowpointhaspassedlaterin2009.A morenegativeresultisalsopossible,however:afterafitfulupturninlate2009,theeconomyrelapses againin2010andgrowsonlysluggishlythereafter. As of this writing, the LAEDC economic forecast anticipates the economy will travel a path between thesetwoalternatives.Therecessionhitsbottombeforetheendof2009,andrecoverygetsunderway during2010. Theeconomyisgrowing nicelyby2011,and moderategrowth continues through2013. Labor markets will take somewhat longer to turn around. The unemployment rate is expected to increaseandemploymenttodeclineuntilspringorsummer2010.Bytheendof2010,bothshouldbe movingintherightdirection(joblessnessdownwardandjobcountsupward)andshouldcontinuetodo sothrough2013.
Los Angeles County Creative Economy Service vs. Manufacturing Sector Employment
Service Industries 250 200 150 100 50 Manufacturing Industries

What does this economic outlook imply for the areas creative industries? The LAEDC projects that,giventhetrendsvisibletoday,totalcreative industry employment in Los Angeles County will be 334,400 jobs during 2013, down by 2.3%, or 7,900 jobs, from 2008 levels. Note that total creative employment in LA County declined somewhatlessthanthisbetween2003and2008, by4,500jobsor1.3%.

Why is total creative employment in the area expected to decline when the economy will be 2003 2008 2013 growing?Theansweristhemanufacturingsector, Employment, thousands Source: California EDD, QCEW Data whichisexpectedtolose11,800creativeindustry jobs by 2013, for a decline of 11.7% over the next five years. Fundamental trends in the creative manufacturing sectorsespecially apparel and textiles, footwear, furniture, and toysare pushing downfactoryproductionintheU.S.infavorofproductioninregionswithlowerlaborcosts,likeChina, other nations of Southeast Asia and Latin America. Excluding manufacturing, employment in L.A.s creativeindustriesshouldgrowby+4,000jobs,or+1.6%by2013.
0

24

Total creative industry employment in Orange Countyduring2013willbe43,300jobs,down by 2.6% or 1,200 jobs, from 2008. This will be a better performance than the previous fiveyear period, when total creative industry employment fell by 4,800 jobs or 9.8%. Again, the projected decline in total creative industry employment is explained by losses in thecreativemanufacturingsectors.Excluding manufacturing, employment in Orange Countys creative industries is projected to growby+900jobs,or+3.5%,by2013.
Orange County Creative Economy Service vs. Manufacturing Sector Employment
Service Industries 30 25 20 15 10 5 0 2003 2008 2013
Employment, thousands

Manufacturing Industries

Table 17 on page 27 presents the 2013 projection for each sector of the creative economy in Los Angeles County. The digital media sector is expected to grow the fastest between 2008and2013,withemploymentrisingbyatleast+10%.Thissectorsgoodrecordduringthecurrent recessionistheprimaryreasontoexpecta highrateofgrowth to2013.Morethanvideogamesare involvedinthisprojection.Demandisquitestrongforalltypesofconsumerhandhelddevicesdespite therecession,andinterestinnewapplicationsforthemisveryhigh. Employment in two smaller creative sectors, industrial design and art galleries, is expected to post growth in the 7% to 8% range between 2008 and 2013. In the industrial design sector, the LAEDC believes there is always a healthy appetite for good design in all kinds of economic weather. Employment in most designrelated creative industries is expected to increase. Art galleries also are projectedtogrowinnumbersandstaffingasaresultoftheeconomicrecoveryandexpansion. Moderately good employment growth, in the 5% to 6% range, is projected for the architecture and interiordesignsectorandforfineandperformingarts.Employmentinthefirsthasfallenduringthe recession a casualty of the collapse in residential and commercial construction activity. However, demandfordesignservicesisexpectedtogrowwhenconstructionactivityresumes.Amongthefineand performing arts industries, employment is expected to grow rapidlyby 10% or moreamong independent artists, writers and actors. Employment is also likely to increase at the areas education and training institutions. Stable employment, at best, is expected at nonprofit institutions like museums,theateranddancecompaniesastheystruggletoovercomethefinancialchallengestheywill befacingoverthenextfewyears. Littleifanyemploymentgrowthisprojectedforthecommunicationartsandentertainmentsectors overall. However, job counts will increase in certain segments of both sectors. The nogrowth projectionforcommunicationartsmasksadeclineinemploymentatadvertisingagencies thatwill be matchedbyjobgrowthinthegraphicdesignindustry.Graphicdesignersareemployedbyalargecross sectionofindustries,someofwhichwillbegrowingoverthenextseveralyearsasothersdecline.Jobs for graphic designers are projected to increase especially rapidly in computer systems design and in management, scientific & technical consulting services. Among the entertainment related industries, postproductionservicesactivityisseenas growingrapidly,whilejobcounts in thetraditionalsectors remainstable.

Source: California EDD, QCEW Data

25

The three remaining sectors, all of which are heavily dependent on manufacturing activities, will experience declines in employment over the coming years. The trend toward retaining local design andqualitycontrolwhileoutsourcingproductionoverseasiswellentrenchedandwillcertainlycontinue in the next five years. This trend has been especially visible in the apparel and textiles industry. Job counts in the textiles, apparel, footwear, handbag and jewelry manufacturing are projected to fall by 11%to15%.Wholesaleemploymentineachofthesesegmentswillremainflatordeclineslightly.The one activity that will enjoy employment growth is other specialized design services. This group includes fashion designers and is expected to expand rapidly. The furniture and home furnishings sectoralsowillcontinuetoloseworkersasproductioncontinuestoshiftoffshore.Textileproductmills are expected to suffer the largest declines, but furniture and electric light manufacturers will shed workersaswell.Thestoryismuchthesameforthetoyindustry,asmosttoysarenowdesignedlocally andproducedinChina. Employment projections for Orange County follow an arc similar to that of Los Angeles over the forecast period. Table 18 on page 27 presents the 2013 projection for each sector of the creative economy in Orange County. The digital media sector is expected to exhibit the largest growth rate between 2008 and 2013, rising by over 10% and adding +400 jobs. Orange County is home to a numberofdigitalmediafirmswithasignificantpresenceinvideogaming.Theeconomicdownturnhas not impaired future development of this sector and may even have helped, as consumers shift to at homeentertainmentoptionsinlieuofmorecostlyactivities. Growingatamoderatebutstillhealthypace(between+6%and+8%)between2008and2013areart galleries,product&industrialdesign,andarchitecture&interiordesign.Asisexpectedtobethecase in Los Angeles County, a recovery in the economy and the labor market will enable consumers to redirectagreatershareofdiscretionaryincometotheartsandbusinessfirmstoincreasedemandfor welldesignedproducts.Improvinglabormarketswillalsogohandinhandwithrecoveryinthehousing andconstructionindustries,thusincreasingthedemandforarchitectsandinterior/landscapedesigners. Overallgrowthinthecommunicationartswillbeflat,butthisistheresultofdivergentresultswithin thesectorgraphicdesignersareexpectedtoexpandtheirrankssignificantly.However,theeffect willbeoffsetbyadeclineinadvertisingjobs.Similarly,thefine&performingartssectorwillseelittle gainoverall,thoughtheranksofindependentartists,writers,etc.,willincrease.Performingartsschools anduniversitieswithfineartsprogramsshouldalsodowelloverthenextfiveyears.Entertainment,a relativelysmallportionofthecreativeartsindustryinOrangeCounty,willremainflat. ThetwolargestcreativesectorsinOrangeCountyintermsofemployment,fashionandfurniture,are projected to contract between 2008 and 2013. The declines in textile and apparel manufacturing parallelthedropoffseeninLosAngeles.Employmentinthefurnitureandhomefurnishingsindustry willalsofallacrosstheboard.Toymanufacturing,oneofthesmallestsectorsintheCounty,willlose workersaswell.

26

Table17:LosAngelesCountyEmploymentForecast2008 2013
CreativeIndustry
ArtGalleries CommunicationArts Architecture &InteriorDesign DigitalMedia Fashion Entertainment Fine&PerformingArtsProviders Furniture&HomeFurnishings Toys ProductDesign IndustrialDesign NumberofJobs(000)
2008 2013

20082013Change
Number Percent

1.0 18.0 12.6 5.4 98.0 131.8 33.2 35.6 6.0 0.7 342.3

1.1 18.0 13.4 5.9 88.6 132.2 35.3 33.3 5.8 0.8 334.4

0.1 0.0 0.8 0.6 9.5 0.5 2.1 2.3 0.1 0.1 7.9

7.7% 0.0% 6.1% 10.4% 9.7% 0.4% 6.2% 6.4% 2.2% 7.7% 2.3%

Total

Source: California EDD LMID, ES202 Series; forecasts by LAEDC

Table18:OrangeCountyEmploymentForecast2008 2013
CreativeIndustry
ArtGalleries CommunicationArts Architecture &InteriorDesign DigitalMedia Fashion Entertainment Fine&PerformingArtsProviders Furniture&HomeFurnishings Toys ProductDesign IndustrialDesign
NumberofJobs(000) 2008 2013 20082013Change Number Percent

0.3 3.9 6.2 4.2 12.5 1.8 3.7 10.6 0.7 0.5 44.5

0.4 4.0 6.6 4.6 11.1 1.8 3.9 9.8 0.7 0.6 43.3

0.0 0.0 0.4 0.4 1.4 0.0 0.1 0.8 0.0 1.1 1.2

7.7% 0.2% 6.2% 10.4% 11.4% 0.0% 3.8% 7.3% 0.9% 7.7% 2.6%

Total

Source: California EDD LMID, ES202 Series; forecasts by LAEDC

27

SomeF inalThoughts
SomesegmentsofthecreativeeconomyofLosAngelesandOrangeCountyhavesignificantpotentialfor further growth. The declining employment trends of the past five years and the coming half decade reflectmanufacturingspecificissues,asfoundinapparel,furnitureandtoys.Between2003and2008, employment inthevariousmanufacturingsectorsdeclinedby 21.5%inLos Angelesand by11.0%in Orange County because more production runs now take place in Asia. Excluding the manufacturing segments, employment in the serviceoriented creative industries of Los Angeles grew by +21,500 jobs,orby+9.9%,between2003and2008,andbyanestimated2%inOrangeCounty. However,thecreativeindustriesdofacesomeissues.Theseinclude: A lack of recognition in the region of just how important these activities are. A key driver of the regions economy, the creative sector is a serious business generating good quality jobs and significanttaxrevenuestreams. One result of this attitude is that many of the creative industries are ignored by government agenciesinplanningandsupport. Inparticular,theK12curriculumlackssufficientartsanddesignrelatededucation.Statereductions inschooldistrictbudgetswillmakethisproblemworseinthenearterm.Thereisahugeironyhere becauseatthecollegeanduniversitylevel,thecreativeeducationalassetsoftheLosAngelesarea areunparalleled.Inaddition,graduatesofartsprogramscanmovetoandthriveinotherfieldsof endeavor. The regions creative talent pool, which is unique, is not fully used in the areas economic development efforts. Business and government leaders should consider how to partner with collegesanduniversityprogramstopromoteinnovationandutilizetheregionscreativeassetsmore effectively.

Resolvingalltheissueswillbetimeconsumingandrequireacollectivewillamongvarioussectors.But theeffortswillbeworthwhile,ascreativityinLosAngelesalreadygeneratesahugenumberofjobsand taxflowswithlittleornoencouragement. With the data in this report, it is clear that the creative industries can be used to more effectively brand Southern California. Already local media identify the region as the Creative Capital of the World.Moreofusneedtodoso.

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StatisticalAppendix
Table19:EconomicImpactofCreativeIndustries,2008
LosAngelesCounty Industry Fashion Toys DigitalMedia Product/IndustrialDesign Architecture/InteriorDesign CommunicationArts ArtGalleries FineandPerformingArts Furniture/HomeFurnishings Entertainment Total OrangeCounty Industry Fashion Toys DigitalMedia Product/IndustrialDesign Architecture/InteriorDesign CommunicationArts ArtGalleries FineandPerformingArts Furniture/HomeFurnishings Entertainment Total Notes: 1)Statepersonalincometaxandsalestaxgeneratedbyearningsandspendingofthedirectandindirectworkers. Detailsmightnotaddtototalsduetorounding. Sources:CaliforniaEDD,ES202data;BureauoftheCensus;indirectimpactsestimatedbyLAEDC. No.of Estab. 6,872 258 176 131 1,727 1,644 255 8,295 1,872 5,488 26,718 No.of Estab. 743 47 112 67 796 579 71 405 547 157 3,525 Jobs 12,500 700 4,200 500 6,200 3,900 300 3,700 10,600 1,800 44,500 Jobs 98,000 6,000 5,400 700 12,600 18,000 1,000 33,200 35,600 131,800 342,300 Payroll ($billions) $3.6 0.6 0.5 0.04 1.0 1.6 0.05 5.2 1.4 12.0 $26.0 Payroll ($billions) $0.6 0.05 0.6 0.05 0.5 0.3 0.01 0.1 0.5 0.1 $2.8 Nonemployer Estab. 6,653 390 3,671 17,884 692 64,962 1,712 71,640 167,604 Nonemployer Estab. 1,355 122 1,247 5,764 225 8,170 495 1,267 18,645 Total(Direct+Indirect)Impact Output Taxes1 ($billions) ($millions) Jobs 231,700 $70.6 $661.4 9.5 16,300 100.8 6.3 16,000 71.7 0.2 1,100 5.4 5.4 24,800 123.7 5.9 38,800 225.8 0.4 1,600 7.8 26.7 56,500 802.2 23.7 77,800 230.6 127.8 393,700 2,470.4 $276.6 858,300 $4,700.4 Total(Direct+Indirect)Impact Output Taxes1 ($billions) Jobs ($millions) $10.6 26,500 $88.0 1.3 1,600 6.8 5.0 9,100 66.7 0.1 800 5.7 3.8 12,100 59.4 1.1 7,900 34.7 0.1 510 1.3 1.2 6,400 20.1 5.8 22,700 74.7 5.2 4,800 20.0 $34.2 92,500 $383.2

29

Table20:LocalUniversities,Colleges,TradeandTechnicalSchoolsOfferingDegreePrograms intheCreativeIndustries,2008

LosAngelesCounty
ArtCenterCollegeofDesign CaliforniaInstituteoftheArts ColburnSchoolofMusic FashionInstituteofDesign&Merchandising CaliforniaPolytechnicUniversity,Pomona
CollegeofEnvironmentalDesign Music,TheaterandDance ApparelMerchandising&Management

LoyolaMarymountUniversity
SchoolofFilm&Television

OccidentalCollege
SchoolofArts

OtisCollegeofArtandDesign PomonaCollege
Music Theater&Dance

CaliforniaStateUniversity,LongBeach CollegeoftheArts CaliforniaStateUniversity,LosAngeles


Art Music TheaterArts&Drams

SouthernCaliforniaInstituteofArchitecture ScrippsCollege
Art Artconservation Dance Music

CaliforniaStateUniversity,Northridge CollegeofArts,Media,Communication ClaremontGraduateUniversity


SchoolofArts&Humanities

UniversityofCalifornia,LosAngeles
SchoolofArts&Architecture SchoolofTheater,Film,Television

UniversityofSouthernCalifornia
SchoolofArchitecture(incl.GambleHouse) SchoolofCinematicArts SchoolofFineArts SchoolofTheater ThorntonSchoolofMusic FisherGallery

LosAngelesTradeTechnicalCollege
Architecture&EnvironmentalDesign CabinetMaking&Millwork CulinaryArts FashionDesign&Merchandising

VisualCommunications&SignGraphics

OrangeCounty
CaliforniaStateUniversity,Fullerton
Theater Music VisualArts

ChapmanUniversity
CollegeofPerformingArts DodgeCollegeofFilm&Media

UniversityofCalifornia,Irvine ClaireTrevorSchooloftheArts

30

Table21:NumberofJobsintheCreativeIndustriesofLosAngelesCounty,2003vs.2008
Graphic Design 54143 4.9 5.4 0.5 10.1% Advertising Agencies 54181 10.2 12.6 2.4 23.9% Architecture and Interior Design: 9.4 12.6 3.2 34.0% Architectural Sevices 54131 6.7 9.0 2.3 34.7% Landscape Design 54132 1.0 1.1 0.1 12.5% Interior Design 54141 1.7 2.4 0.7 43.8% Digital Media: 5.3 5.4 0.0 0.4% Software Pub lishers 5112 5.3 5.4 0.0 0.4% Fashion: 110.1 98.0 -12.1 -11.0% Textile Mills Manufacturing 313 10.3 9.1 -1.2 -11.5% Apparel Manufacturing 315 67.8 55.1 -12.7 -18.8% Apparel Wholesaling 4243 15.5 17.7 2.2 14.3% Footwear Manufacturing 3162 0.9 0.7 -0.2 -25.7% Footwear Wholesaling 42434 2.8 3.0 0.2 5.5% Women's Handb ag Manufacturing 316992 0.1 0.0 -0.1 -96.6% Cosmetics Manufacturing 32562 4.4 4.9 0.5 12.3% Jewelry Manufacturing 33991 3.1 1.7 -1.4 -46.6% Jewelry Wholesaling 42394 4.4 4.3 -0.1 -3.3% Other Specialized Design Svc 54149 0.8 1.6 0.8 104.6% Entertainment: 119.9 131.8 11.9 9.9% Sound Recording 5122 4.9 3.3 -1.6 -32.2% Cab le Broadcasting 5152 5.5 6.7 1.2 21.9% Motion Picture/Video Production 51211 99.2 110.4 11.2 11.3% Motion Picture Distrib ution 51212 1.9 2.2 0.3 13.3% Post Production Services 51219 8.4 9.2 0.8 9.5% Fine and Performing Arts Providers: 30.9 33.2 2.3 7.4% Fine and Performing Arts Schools 61161 2.6 3.2 0.6 23.4% Programs at colleges and universities* 6113 na 3.0 Programs at technical and trade schools* 6115 na 0.7 Theater Companies 71111 1.4 2.2 0.8 59.3% Dance Companies 71112 0.2 0.1 -0.1 -32.5% Musical Groups 71113 4.1 3.3 -0.8 -19.9% Other Performing Arts Cos. 71119 0.3 0.2 -0.1 -45.0% Agents & Managers of Artists, etc. 71141 4.3 6.3 1.9 44.5% Independent Artists, Writers, etc. 71151 14.0 10.1 -3.9 -27.9% Museums 71211 3.5 3.8 0.3 7.9% Musical Instrument Manufacturing 339992 0.5 0.4 -0.1 -28.7% Furniture and Home Furnishings: 48.5 35.6 -12.9 -26.7% Textile Product Mills 314 8.1 5.8 -2.3 -28.3% Furniture Manufacturing 337 26.7 18.0 -8.7 -32.8% Furniture Wholesaling 4232 9.5 8.7 -0.8 -8.0% Electric Lighting Fixtures 33512 4.2 3.1 -1.1 -27.0% Toys: 6.0 6.0 0.0 -0.4% Toy Manufacturing 33993 2.4 2.2 -0.2 -7.8% Toy Wholesaling 42392 3.6 3.8 0.2 4.4% 54142 Product Design-Industrial Design 0.5 0.7 0.2 41.4% 346.8 342.3 -4.5 -1.3% TOTAL *LAEDC'ssurveyofdegreeprogramsofferedbyfineandperformingartsschools/departmentincolleges/universities, tradeandtechnicalschoolsinLosAngelesCounty. Source:CaliforniaEmploymentDevelopmentDepartment,LaborMarketInformationDivision,ES202data.
Creative Industry Art Galleries Communication Arts: NAICS Avg. Number of Jobs (000) 2003-2008 Change Code 2003 2008 Number Percent 45392 1.0 1.0 0.0 3.5% 15.1 18.0 2.9 19.4%

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Table22:NumberofJobsintheCreativeIndustriesofOrangeCounty,2003vs.2008
Creative Industry Art Galleries Communication Arts:
Graphic Design Advertising Agencies

NAICS Avg. Number of Jobs (000) 2003-2008 Change Code 2003 2008 Number Percent 45392 0.4 0.3 -0.1 -24.0% 7.2 3.9 -3.3 -45.3%
54143 54181 54131 54132 54141 5112 313 315 4243 42434 32562 33991 42394 54149 5122 5152 51211 61161 6113 71111 71113 71119 71141 71151 71211 339992 314 337 4232 33512 33993 42392 54142 1.6 5.6 1.3 2.6 -0.3 -2.9 -19.8% -52.8%

Architecture and Interior Design:


Architectural Sevices Landscape Design Interior Design

5.9
3.5 1.5 0.9

6.2
4.1 1.4 0.8

0.4
0.6 -0.1 -0.1

6.2%
16.3% -5.8% -13.6%

Digital Media:
Software Pub lishers

3.7
3.7

4.2
4.2

0.5
0.5

13.1%
13.1%

Fashion:
Textile Mills Manufacturing Apparel Manufacturing Apparel Wholesaling Footwear Wholesaling Cosmetics Manufacturing Jewelry Manufacturing Jewelry Wholesaling Other Specialized Design Svc

13.3
1.3 8.2 1.9 0.7 0.3 0.3 0.4 0.3

12.5
0.8 8.0 2.0 0.6 0.3 0.2 0.3 0.3

-0.8
-0.5 -0.2 0.1 -0.1 0.0 -0.1 -0.1 0.0

-6.2%
-36.3% -2.5% 4.6% -13.6% 3.5% -35.3% -18.4% -3.6%

Entertainment:
Sound Recording Cab le Broadcasting Motion Picture/Video Production

1.9
0.2 1.2 0.6

1.8
0.1 1.0 0.7

-0.1
-0.1 -0.2 0.1

-7.0%
-36.4% -14.4% 17.7%

Fine and Performing Arts Providers:


Fine and Performing Arts Schools Programs at colleges and universities* Theater Companies Musical Groups Other Performing Arts Companies Agents & Managers of Artists, etc. Independent Artists, Writers, etc. Museums Musical Instrument Manufacturing

3.5
0.8 0.9 0.2 0.2 0.1 0.7 0.3 0.2

3.7
0.8 0.2 0.8 0.3 0.1 0.1 0.8 0.4 0.2

0.2
0.1 -0.1 0.1 -0.1 0.0 0.1 0.1 0.0

6.2%
9.3% -15.5% 41.6% -49.6% -34.0% 15.5% 15.4% -1.4%

Furniture and Home Furnishings:


Textile Product Mills Furniture Manufacturing Furniture Wholesaling Electric Lighting Fixtures

12.4
2.8 6.9 1.9 0.9

10.6
2.1 5.2 1.6 1.6

-1.8
-0.7 -1.6 -0.3 0.7

-14.8%
-24.2% -23.5% -13.7% 77.9%

Toys:
Toy Manufacturing Toy Wholesaling

0.6
0.1 0.5

0.7
0.1 0.6

0.0
0.0 0.1

6.7%
-14.9% 11.7%

Product Design-Industrial Design TOTAL

0.3 49.3

0.5 44.5

0.2 -4.8

80.8% -9.8%

*LAEDC'ssurveyofdegreeprogramsofferedbyfineandperformingartsschools/departmentincolleges/universities, tradeandtechnicalschoolsinLosAngelesCounty. Source:CaliforniaEmploymentDevelopmentDepartment,LaborMarketInformationDivision,ES202data.

32

OpportunitiesintheArtsAreLargerThanTheyAppear: AnAnalysisofMultimediaArtistandAnimatorEmployment AcrossCaliforniasIndustries


KathleenA.Milnes PresidentandCEO TheEntertainmentEconomyInstitute AdjunctAssistantProfessorDigitalMedia OtisCollegeofArtandDesign October1,2009

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WelcometoanyFriday.YouturnontheTVnewsinthemorning.Theresareportaboutthelatestastronauts joiningthespacestationcrewthatincludesasimulationofthedockingmaneuverviewedfromoutsidethe aircraft. You head out for a doctors appointment because you are scheduled for an artificial heart valve replacement.YourdoctorplaysaDVDshowinghowthenewvalvewillbeinsertedandhowitwillfunction. Onthewayhome,youstopatyourkitchendesignstoretoseeavirtualflythroughofyournewkitchen.You decideyouprefercherrycabinetstowhiteandthedesignerchangesitbeforeyoureyes.Finally,youcome homeandpulloutyourWiiremoteforaquicktennismatchwithyourteenagerbeforeheadingouttosee thelatestsciencefictionmovie. Whatdoalltheseexperienceshaveincommon?Manyoftheimagesyouareseeingwerecreatedbyworkers that the U. S. Bureau of Labor Statistics calls MultiMedia Artists and Animators. This relatively new occupational classification (added in the late 1990s) covers 3D animators, video game designers, special effectswizards,characteranimators,andotherspecialties. Animation once involved scores of workers who painstakingly drew and colored cells. Today, lowcost computersandenhanced3Dsoftwareenableananimationstudiotofitonadesktop,fuelingaboominthe genrethathasextendedwellbeyondthemajorHollywoodstudios. Thepurposeofthispaperistolookathowartistsareemployedacrossindustrysectors.Themostcommon waytolookateconomicandworkforcedevelopmentisbyanalyzingtotalindustryemploymentbyspecific industrysector.ThisisthemethodologyusedbytheLosAngelesEconomicDevelopmentCorporationinthe 2009OtisReportontheCreativeEconomyoftheLosAngelesRegion.However,ifyouarefocusedprimarily onspecifickindsofworkersinthiscase,artistsitisvaluabletolookatdatathatcoversoccupations. While there are many occupations that include creative and design elements, we are using MultiMedia Artists and Animators (hereafter Digital Artists) to illustrate the breadth of artistic employment across industrysectors. Althoughoverallunemploymentishigh,thejobprospectsforDigitalArtistscontinuetobeexcellent.Total payroll employment nationally stands at 31,500 in 2008, slightly down from the 2003 peak of 32,910. The California Labor Market Information Division reports that these artists are among the fastestgrowing occupations in California, with a 32 percent growth rate expected over the next ten years and over 1,500 annualjobopenings.TwothirdsofthenewjobsforthiscategoryareexpectedtooccurintheLosAngeles region. BelowisatableshowingCaliforniaEmploymentofMultiMediaArtistsandAnimatorsforallindustriesfrom 20012009.Thisonlycoversemployeesofbusinessespayingpayrolltaxesontheseworkers. MultiMediaArtistsandAnimatorEmployment,California

2001 5,410

2002 6,020

2003 8,110

2004 7,880

2005 9,370

2006 6,530

2007 8,470

2008 9,460

2009 10,510

Source:EDD,LaborMarketInformationDivision

Thenumbersaresignificantlylowerthanonemightexpect,asauniqueaspectofthiscareeristhatnearly 70% of Digital Artists are selfemployed (Current Population Statistics, BLS, 2007). Therefore, the total numberofpeopleworkingasDigitalArtistsismuchlarger.Forcomparison,only25%ofGraphicDesigners (SOC271024)areselfemployed.

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CaliforniaProjectionsofEmployment,EarningsandSelfEmployment

DigitalArtist Employment, AllIndustries 2006 27,900

Projected Percent Growth 20062016 31.9

Projected AnnualJob Openings 20062016 1,540

Statewide Median Annual Wage $72,901

SelfEmployed 69.7%

In addition, Digital Artists earn much more than the average Californian, with a statewide Median Annual Wageofjustunder$73,000doublethemedianwageof$36,500.And,DigitalArtistsworkinginCalifornia earn more than their counterparts in the rest of country, where the median wage for these artists is approximately$55,000. Nationally, Digital Artists are employed in 14 different broad industry sectors and 78 different industry categories.ThetopfiveindustriesemployingDigitalArtistsareMotionPictureandVideo;Advertising,Public RelationsandRelatedIndustries;ComputerSystemsDesignandRelatedServices;SoftwarePublishers;and Specialized Design Services. Included in the highest paying industries are Aerospace Product and Parts ManufacturersandEmploymentServices.OthersectorsincludePrinting,Publishing,HealthCareandSocial Assistance, Manufacturing, Finance and Insurance, and, not surprisingly Performing Arts, Spectator Sports andRelatedIndustries. A number of these industries are covered in the 2009 Report on the Creative Economy, but the Digital MediasectorislimitedtoSoftwarePublishers.Anotherexampleofanindustrythatslipsthroughthecracks istheVideoGameIndustry.AsnotedintheReport,thereissignificantemploymentinthesecompaniesin LosAngelesandOrangecounties.However,itisnearlyimpossibletotrack,ascompaniesareclassifiedas specialized computer design firms, software publishers or toy manufacturers, or are found in industry classifications where one would not naturally look. For example, one of the largest game companies in Orange County, Blizzard Entertainment (now Activision Blizzard) is classified as Musical Groups and Artists (NAICS code: 711130) by Info USA, the company that provides employer information to the California Employment Development Departments Labor Market website. Obsidian Entertainment, another Orange Countygamecompany,islistedunderMarketingConsultingServices(NAICScode:541613). Afurthercomplicationisthatdigitalmediaskillsarenowembeddedinmanyotheroccupationswithinother industries.Sincetheemployerdeterminestheoccupationalclassificationoftheirownemployees,manyof these workers will not be reported as multimedia artists and animators but as architects or aerospace engineers. Is California supplying enough workers to fill the expected demand? The answer appears to be not yet. AccordingtotheNationalCenterforEducationalStatistics,thetotalnumberoftrainingprogramcompleters forthe200607yearamountedtoabout75%oftheprojectedannualdemand. As with themotion picture industry, California has established a strong presence in this area. However, as withallmaturingindustries,companiesbegintosearchforlowercostlabortofillthegrowingdemands.An importantfactintheReportisthatwhilemanufacturingisexperiencingcontinueddecreasesinemployment, thetrendtowardretaininglocaldesigniswellentrenchedandwillcontinuetogrow.SouthernCalifornia isinauniquepositiontomaintainitsholdonthesecreativeworkers,aswehaveaspecializedinfrastructure of institutions that provide training as well as challenging opportunities for artists to work across industry sectors. Finally, these industries all rely on a continuous supply of innovation, inspiration and new ideas. Withthepropercareandfeeding,SouthernCaliforniashouldbeabletocontinueitsprominenceinthisfield.

Source:CaliforniaLaborMarketInformationDivision,BLSCurrentPopulationSurvey

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