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Creative sector brings in $4.35 billion in economic activity

Friday, March 9, 2012 by Michael Kanin

According to city economic consultant Jon Hockenyos, the various parts of Austin’s creative sector account for more than $71 million in city tax revenue and 49,000 area jobs. Those figures are a part of “just over $4.35 billion in economic activity” brought in by the city’s creatives.


Hockenyos presented those figures to Council Thursday as part of a briefing on the subject. In both the briefing and his written report, Hockenyos recommended a set of six general actions that might help the city foster its position in terms of the creative market. Though there were a few spots of concern, Hockenyos painted a generally rosy picture.


“To put these results in context,” reads the report, “the creative sector (as measured by employment) has risen by about twenty-five percent over the past five years, a pace more rapid than the 10 percent growth for the local economy as a whole.”


Hockenyos linked Austin’s ability to weather the recent recession to its creative power. “It’s not a coincidence that the regions of the country that have performed relatively well in the most recent recession also scored very well” on a metric designed to illustrate comparative creative advantage, Hockenyos said.


In compiling their report, Hockenyos’ and his firm, TXP, looked at more than 30 creative occupations. They also made a broader study of music, film and visual media, the gaming and digital media industries, and the “not-for-profit arts.”


TXP found that Austin is among the national leaders “in creativity as a share of its economy”; that creative industries, like their technology cousins, have experienced differing periods and degrees of growth; that, as far as the film industry is concerned, “Texas is suffering from an incentive disadvantage”; that the city should move past thinking of creative subsectors in terms of defined “silos”; that “business models are in flux”; and that “brand identity is extremely important.”


Hockenyos offered the Council six recommendations:

  • That the city should “explore sources of funding to support creative infrastructure”;
  • a call for a focused economic development effort that would bring together sources of funding and the creatives who need them;
  • that the city should think about mobility and the tourists that it transports when thinking about the creative economy;
  • that the city should adjust its regulations “to accommodate the needs of the entertainment industry”;
  • that Austin should expand its promotional efforts to cover the breadth of its creative community; and
  • that the city should look back at some of its previous recommendations with regard to the creative community.

Of these, the shifting of city regulations – such as Austin’s sound ordinance – to better accommodate creative industry, seems as though it might draw the most objection.


“The urbanist approach to central-city development…runs head-on into sound ordinances, parking issues, and the fact that from a real estate perspective, the highest and best use of many venues may no longer be as a place to see music,” according to Hockenyos. “As a reminder the value of live music extends well beyond the activity of any given weekend, as the brand identity in general and the infrastructure to support cultural tourism in particular, are highly valuable economic assets.”


Council Member Laura Morrison, a former Austin Neighborhoods Council chair, took note. “I appreciate your mentioning the issue of sound and applying the compatibility,” she said. Morrison took the matter no further, except to mention that the Council would discuss revisions to the sound ordinance later in the meeting. 


Later on Thursday, Council members unanimously passed an addendum to the city’s sound ordinance that further outlines a path for venue operators to obtain sound permits through agreements with the residents of a neighborhood. To qualify, clubs need to be at least 100 feet from an affected residential area. Clubs that are more than 600 feet away are not subject to residential approval.

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