Capital for Creativity
Tuesday, November 14, 2017
Creative industries have tremendous potential for economic and social impact. Experts such as British author John Howkins, who popularized the term “creative economy,” and urban studies theorist Richard Florida, who coined the term “creative class,” have demonstrated the power of creative people and sectors to strengthen communities and unleash growth.
Concurrent with the rise of the creative economy, we have witnessed a substantial growth in impact investing. According to “U.S. Sustainable, Responsible and Impact Investing Trends 2016,” $8.72 trillion in US-domiciled assets apply environmental, social, and governance (ESG) criteria in their investment analysis and portfolio selection. As impact investing has developed, targeted investor interest and substantiated opportunities are finding dedicated investment products catering to a range of values, themes, and social issues.
We have not seen, however, the alignment of impact investing with the creative economy. According to the Global Impact Investing Network, zero percent of impact investment is in the arts and culture sector. This report was validated in 2015, when three impact investment advisory firms—Veris Wealth Partners, Tideline, and Bienville Capital Management—working independently could not identify impact-investment opportunities in arts, culture, and creativity for clients who requested them.
Because creative places (such as cultural institutions, cultural corridors, affordable housing for artists, and shared studio and work space for creatives) and businesses in creative industries exist in rural and urban communities of all sizes and demographics, strengthening this segment of economic activity can have far-reaching benefits. Creative places anchor communities and help foster cohesion and engagement at a time when our nation is divided and its values are tested. Creative businesses can also generate quality jobs.