dr stephen connolly jonathan durnin
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Assessing economic value: Economic impacts generated by the independent museum sector and wider considerations about the economic case for culture. Dr Stephen Connolly Jonathan Durnin. Structure of Seminar. Background – Our Experience/Perspective Setting the Scene – The Wider Context - PowerPoint PPT PresentationTRANSCRIPT
Assessing economic value:
Economic impacts generated by the independent museum sector
and wider considerations about theeconomic case for culture
Dr Stephen Connolly Jonathan Durnin
Structure of Seminar
Background – Our Experience/Perspective
Setting the Scene – The Wider Context
Issues around Economic Impact/Economic Value of Culture
Economic Value of Independent Museums
Approach and Method
The survey, sub groups and case studies
Results
Toolkit
Summary and General Considerations
Background – Our Experience/Perspective
DC Research – economists that have assessed the contribution of various aspects of ‘culture’ to other agendas, especially the economic/regeneration contribution
Carried out a range of studies – using economic approaches to assess culture’s impact:
Economic Impact Studies – AIM, LTM, Hawick, Leicester
(Cultural) Impact Frameworks – Knowsley, Living Places
Evaluations – Living Places, LTDP, Empty Shops, Liverpool Thrive!
Policy Research / Evidence Reviews – Culture/LAA links, Local Government Evidence Toolkit, MLA tourism scoping, SAC Lottery Legacy
Setting the Scene – Context
Common thread of culture’s value being assessed in terms of its contribution to other agendas (incl. economic)
Range of factors seem to have influenced this – further reinforced more recently with current economic/public funding climate
A desire to express impact in a way that is convincing to both the cultural sector(s) and stakeholders/funders
Issues for consideration:
Defining the cultural sector (and its sub groups)
Defining what is meant by economic impact/value
Acceptable approaches to assessing economic impact/value
Considering the Issues
(i) Defining the sector
Can be difficult for ‘cultural’ sector impact studies
Relatively straightforward for the AIM research study
(ii) Defining economic impact & (iii) Approaches and methods for assessing economic value/economic impact
Desire to express impact in a way that is convincing to sector and stakeholders/funders - results used for advocacy
Need to satisfy/convince the ‘audience’ and conform to audience expectations about robustness of evidence /method
Range of methods considered – much debate about methods and approaches across the sector (multipliers, input-output, ROI, SROI, contingent valuation (WTP/WTA), GLO/GSO etc.)
Importance of assessing economic value of culture/museums
Increasing need to clearly articulate and demonstrate the contribution of cultural/museums sectors, in a tourism/economic context
Needs to be articulated in such a way that key audiences outside the sector appreciate and are convinced by evidence and related advocacy
Evidence that cultural/museums sectors recognise the importance of tourism and the visitor economy in making the case to support their impact
Heritage/tourism/culture evidence
Eight of the top ten visitor attractions in 2008 were museums and galleries
Major study commissioned by Heritage Lottery Fund: Heritage is a major motivation behind the tourism expenditure
of both overseas and domestic visitors Heritage tourism sector supports an estimated 195,000 full-
time equivalent (FTE) jobs, and is a £12.4bn per year industry (including spending that can be reasonably said is ‘motivated’ by the desire to visit heritage attractions)
£7.3billion based on visits to built heritage attractions and museums, with 60% derived from UK residents on day trips and UK holidays
Purpose of the research
Research objectives: Understand how and to what degree independent museums
contribute value to local, regional and national economies Produce benchmarks to gauge the economic value generated
by different categories of independent museums and draw conclusions from them
To produce data that can provide the basis for further research work
Need for the research to convince both museums within the independent sector and a range of key external stakeholders
Independent sector defined as AIM Membership Museums
Overview of approach
Review of existing research and evidence, and consultations with sample of ‘audience’ stakeholders
Membership survey distributed to AIM membership (over 100 responses, 95 ‘usable’ replies)
Development of AIM ‘sub groups’ for analysis, and selection of case studies
Development of bespoke model to assess impact of responding museums, and application of the model to rest of AIM membership
Development of a economic value ‘toolkit’ for museums to use themselves
The member survey
Collecting key information held by museums:
Information about number of visitors (per annum) to museums, as well as type of visitor (‘type of visitor’ being a critical element in terms of assessing economic value)
Summary information about the employment (including volunteers) and purchasing patterns of the museum
Summary information about the facilities available at the museum (cafe, restaurant, meeting room, etc)
Information about the locality in which the museum is located
Survey evidence used as basis to create model to estimating the value of the whole sector
Findings from responding museums
Turnover of £105 million
Over 8 million visitors
2,164 people employed (equating to 1,646 full time equivalent jobs)
Volunteer numbers totalling 4,724, with 15% of these volunteers volunteering for two or more days per week on average, and 3.5% volunteering for four days a week or more
‘In kind’ contributions of goods and services of £621,000, and ‘in kind’ capital works (such as building work, repairs, development, refurbishment) of £11.5m
Sub groups and case studies
Sub groups developed to categorise the AIM membership based on:
Visitor numbers
The significance of the museum to the local visitor economy
Whether the museum has paid employees
Case studies provided coverage of these sub groups, balancing AIM representativeness, and size of impact
Findings from case studies supported and underpinned approach to developing the economic value model
Also provided vital perspectives on the challenges and opportunities currently facing independent museums
Developing the model Approach rooted in HM Treasury ‘Green Book’
methodology, using mix of relevant technical guidance, and assumptions for key economic factors
Estimates additional economic impacts in terms of jobs and value: Direct, indirect and induced employment effects
Supply chain linkages (“indirect”) and income multiplier (“induced”) effects on local incomes and employment
In addition, gross visitor impacts are estimated based upon actual visitor numbers and regional tourism spending data
Developing the model Approach driven by survey responses, and creation of ‘sub
groups’ to categorise AIM membership Assumptions based on guidance, survey data and on
judgement based on case study discussions with museums representing sub groups
First stage analysis of the economic value of those museums who responded to the survey: Estimating the direct, indirect and induced employment and
spending effects of responding museums on a case by case basis
Gross day and overnight visitor impacts of responding museums on a case by case basis, using (where possible) regional average spend data
Employment value of responding museums
1,646 full time equivalent staff, with most living near to their museum
These jobs support additional employment through indirect and induced effects Using the model, these jobs are estimated to create 728
indirect and induced jobs in localities
Total of 2,374 estimated direct, indirect and induced jobs
Equivalent value of £15.2 million
Spend value of responding museums
£59.3 million spent by responding museums on good and services
Spending creates additional impacts through indirect and induced effects Using the model, spending by responding museums on
goods and services creates additional indirect and induced additional spend of £11.7 million
Total of £71 million as a result of responding museum spending on goods and services
Visitor impacts of responding museums: Issues
Approach uses similar assumptions to those used in other key studies, but use ‘control’ for local visitors, and for adult child visitor split
Adjustment/judgement needed to account for local visitors in immediate vicinity of a museum in absence of local level tourism data
Adjustment/judgement also needed to account for adult/child split. Assumption that spend is mainly linked to adult visitors
This approach avoids overestimation of visitor impacts
Visitor impacts of responding museums: Issues
Approach uses similar assumptions to those used in other key studies, but use ‘control’ for local visitors, and for adult child visitor split
Adjustment/judgement needed to account for local visitors in immediate vicinity of a museum in absence of local level tourism data
Adjustment/judgement also needed to account for adult/child split. Assumption that spend is mainly linked to adult visitors
This approach avoids overestimation of visitor impacts
Workshops led to adoption of half (50%) of a day visit for local visitors, and a two third/one third adult/child split
Visitor impacts of responding museums
Assumption that two third of visitors are adults, and that local visits have the value of 50% of a day trip 1,110,245 local visitors
2,554,038 day visitors
1,701,980 overnight visitors
This leads to gross visitor impacts of £24.8 million for local visitors, £112.7 million for day visits, and £119.9 million for staying visitors
Total gross visitor impacts of £257 million
Extending analysis to the sector
Extending the analysis to impact on local economies to estimate aggregate value of independent sector as a whole
Factors taken into account:
Range of size of member museums, and survey bias towards medium to large museums
Assumptions adjusted to take account of averages, median and range for employment, spend and visitor numbers
Median and mean values produced to show likely minimum and potential range of impact
Extending analysis to the sector
Comparison of AIM Membership and Survey
Size (visitors) Survey Membership Data
Small (0 to 9,999) 41 51.3% 532 77.6%
Medium (10,000 to 49,000) 24 30.0% 88 12.8%
Large (over 50,000) 15 18.8% 66 9.6%
TOTAL 81 100% 686 100.0%
Source: AIM Membership Data and DC Research Survey, 2010 Note: A further 14 museums completed the survey but did not provide data that could be used to calculate value
Economic value of the independent museum sector
Independent museums sector is likely to account for at least 5,800 direct, indirect and induced jobs in the UK economy (although impact might be as high as 10,500 jobs)
Independent museums sector is likely to account for at least £124 million in direct, indirect and induced impacts from spending on goods and services (although impact might be as high as £349 million)
Economic value of the independent museum sector
Independent museums sector could account for around £363 million in gross visitor impact, taking into account local visitors and a reasonable adult/child split
This is based on a sector wide estimate of visitor numbers of between 9 million and 9.5 million
The AIM Toolkit
Three levels to support a variety of museum types: Tourism Impacts: This stage is for all museums who want to
express the impact of visits to their museum in terms of economic value
Employment Impacts: This stage is for those museums who want to express the impact of their employees (if they have them) in terms of economic value to their local and regional economies
Impacts of Spend on Goods and Services: This stage is for those museums who want to express the impact of their spending on goods and services in terms of economic value to their local and regional economies
Summary and General Considerations
Economic impact of independent museum sector Adopted standard HMT approach to assessing economic impact
Added value of primary research (survey of AIM museums) provided bespoke evidence to inform assumptions and values/ratios used in model
Deliberately cautious approach (‘as a minimum...’)
Some assumptions necessary for model (representativeness of survey respondents, representativeness of AIM for sector)
Advocacy Aided by development of Toolkit
Study well received by sector and ‘audience’ – oft quoted/used
Summary and General Considerations
Importance of evidencing economic impact of culture – especially in current climate: Public spending cuts – national (e.g. MLA, ACE)
Public spending cuts – local (e.g. Somerset)
Ongoing considerations/challenges about the issues Method/approach challenges – potential ‘conflict’ between what
economic/regeneration funders expect/accept and what best captures cultural sector impacts (...happiness may help!)
Costs/resources needed for alternative methods can vary
Better linkages between information collected by sector and information required for robust, well evidenced impact studies
Assessing economic value:
Economic impacts generated by the independent museum sector
and wider considerations about theeconomic case for culture
http://www.aim-museums.co.uk/pages/pg-18-aim-economic-impact-paper/