THE ARTS AND EMPLOYMENT: THE IMPACT OF THREE CANADIAN THEATRE COMPANIES

Claire Mitchell

Estimating the economic impact of the performing arts has been a fruitful area of research since the seminal work of Baumol and

Bowen (1966). Since that time many case studies of impacts of theatre, dance and music on local, regional and national economies have appeared in both Canada and the United States(l). In these works calculations have been made of the direct expendituresof an organiza- tion or its patrons within a community. Others have taken analyses one step farther and have estimated indirect benefits often using multiplier analysis. In these studies, an attempt is made to assess "the ripple effect through the economy of successive rounds of spending associated with the original organization and its patrons", (Wall and Purdon 1987, 91). In each case, evidence is provided that the performing arts contribute to the economic well-being of a community.

Economic impacts extend beyond the injection of money into an economy. Cultural organizations create jobs: directly, through employment of artists and personnel within the organization; and in~rectly, through employment of individuals within the community who provide services for the organization or its visiting patrons.

In Canada, direct employment in the performing arts is well documented.(2) The Canada Council, for example, estimated that 414,000 workers, or 4 percent of the Canadian labor force in 1981, was employed in arts-related jobs (Research and Evaluation 1984)(3). The role played by cultural activities in stimulating indirect employment in local businesses has been recognized frequently in the literature. This recognition has taken the form of descriptive statements, rather than quantitative evidence. For example, The Special Committee for the Arts (1984, 4) notes that:

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"All kinds of businesses benefit from the arts, ranging from recording studios, set and costume manufacturers, lighting manufacturers and studios, printers, lithographers, pub- fishers, public relations facilities, to restaurants, hotels and other service industries. The argument that these ancillary businesses would exist anyhow is not proven. The fact is that they come into being or unquestionably expand be- cause of the presence of arts institutions, organizations and/or activities."

Indirect employment benefits, therefore, have been recognized in the literature. However, they have not been adequately documented. This paper will attempt to fill this gap by considering impacts of three Canadian theatre companies: the Shakespearean Festival of Stratford, the Shaw Festival of Niagara-on-the-Lake and the Blyth Festival. Analyses is achieved in three steps. First, a brief description of study sites and methodology is presented. Second, an employment multi- plier is derived. Third, some general conclusions and implications of analyses are provided.

Study Sites and Methodology The Stratford, Shaw and Blyth Festivals are three professional

theatre companies located within southwestern Ontario. Each is within a two hour driving distance of metropolitan Toronto and is supported almost exclusively by a "supra-regional" market.(4) Table 1 illustrates that these organizations differ on a number of variables. For example, on the numbers of performances, Blyth is by far the smallest as it is also in expenditures, revenues, the general zone from which the audiences come. Stratford is of course the largest in attendance, revenues and expenditures, but the later developed Niagara festival provides the largest number of performances. Extensiveness of market is greatest for Stratford with the average distance a visitor travels to come to a performance a high 325 kilometers. Expenditures; revenues; age all differ as do repertoire and market size. In addition, the festivals are located in communities of varying sizes and business composition.

Table 2 shows that in each place businesses of the retail and service sector occupy one of three categories: a local group, comprised of firms which receive less than 25 percent of revenue from sales to festival visitors; a tourist group, comprised of businesses which receive between 26 and 50 percent of revenue from festival clientele and a festival group comprised of firms which earn in excess of 75 percent of

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Table 1

Festival Statistics: 1985

Blyth Niagara-on-the-Lake Stratford

Establishment Date 1975 1962 1953 Attendance 33128 256556 487100 Performances 90 558 471 Expenditures 561136 4808537 12581290 Revenues 561773 4576820 11576400 Average Distance Travelled ~km) 106 196 325

Repertoire" Canadian Shavian Shakespearean Community Population 980 12186 26262

1 Basic Repertoire

Source:The Stratford Festival (1985) Blyth Centre for the Arts (1985) The Shaw Festival Theatre Foundation (1985), Mitchell (1987).

Table 2

Business Categories (%)

Local Tourist Festival

Blyth 58 26 16

Niagara-on- the-Lake 24 55 21

Stratford 81 0 19

Source: Mitchell (1987)

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revenue from theatre patrons (Mitchell 1988). The local group is an important component in each place and is particularly significant in Stratford. A general tourist group is absent from Stratford but plays an important role in the economies of Blyth and Niagara-on-the-Lake. The festival group accounts for approximately one-fifth of all busi- nesses in each community. Businesses found in each category are presented in Tables 3, 4 and 5 respectively.

Hence, three sites were chosen to represent a variety of different situations. These differences also should be reflected in the employ- ment generated within the organization and business community.

The primary objective of this study was to calculate employment benefits resulting from the three festivals. Benefits were assessed in three stages. First, direct benefits were calculated from information provided by festival personnel on total number of equivalent full-time staff employed by the festival. Second, indirect employment benefits were estimated. These were defined as the equivalent number of full-time jobs created within the retail and service sectors of the business community. This figure was derived from information provided in a survey of local business proprietors (Mitchell 1987). In Blyth and Niagara-on-the-Lake surveys were administered at all busi- nesses in the retail and service sectors as defined by Dun and Bradstreet (1985). At Stratford, all retail and service firms located in the central business district were surveyed with a random sample selected from the periphery. Numbers of businesses surveyed and response rates are presented in Table 6.

Proprietors provided two pieces of information used to calculate indirect employment: (1) Percentage of revenue derived from sales to theatre patrons and (2) numbers of full and part-time staff at the firm. An estimation was then made of numbers of jobs created in the community to serve festival visitors. For this estimate it was assumed that the number of jobs created was equivalent to the proportion of revenue obtained from sales to festival patrons.(5) Hence, in a firm employing the full-time equivalent of ten people and earning 50 per- cent of its revenue from sales to festival visitors, it was assumed that five additional jobs were created at that firm. An estimate of the number of jobs created indirectly by each festival was provided by totalling the figures for all businesses and for businesses in each economic category (local, tourist and festival).

A third step in the analysis involved computation of an employ- ment multiplier. This was defined as the ratio of direct and indirect

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Table 3

Business in the Local Category

Business Blyth Niagara-on- Stratford the-Lake

Variety store 3 1 13 Restaurant/Tavern 2 1 18 Clothing Store 2 3 18 Butcher/Deli Grocery 2 2 4

Hardware Store 1 1" 2 Service Station 1 1 9 Drugstore 1" 2 Flower Shop 1 2 Bookstore 1 6 Giftstore 2 2 Artstore 1 0 Videos/music store 2 Liquor store 2 Jewellery store 5 Furniture store 4 Sporting Goods store - 1 Ceramics/china store - 3 Shoe store - 4 Fabric store 3 Photography store 3 Music store - 3 Leather store - 1 Toy store - 1

*Business is present in the community but proprietor did not respond to survey.

Source: Mitchell (1987)

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Table 4

Businesses in the Tourist Category

Business Blyth Niagara-on the-Lake

Hotel/motel 1 2 Clothing store 2 2 Antique/Pottery store 2 1 Gift store 9 Restaurant/Tavern 7 Variety store 2 Book store 1 Toy store 1 Fudge shop 3 China store 1 Bakery 1

Source: Mitchell 1987

Table 5

Businesses in the Festival Category

Business

Gift store Restaurant/Tavern Hotel/Motel Antiques/Pottery store Clothing store Art store Bakery China store

Blyth

2 1

Niagara-on the-Lake

Source: Mitchell 1987

Blyth Niagara-on-the-Lake Stratford

Table 6

Result of the Business Survey

Number of businesses Businesses in the retail/service surveyed

sector

20 20 95 68 68 79

219 159 83

Stratford

Stratford

Percent Responding

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employment to direct employment alone (Archer 1976). This is written in the form:

Direct + Indirect

Direct

This figure provides an estimate of the number of jobs created in the community, and within each sector, per job generated at the festival.

Results

Results are presented in Tables 7, 8 and 9. Table 7 shows that the Stratford Festival, the oldest organization, creates the greatest amount of direct employment, with the younger Blyth Festival creating the least. Similar conclusions are drawn for indirect employment (Table 8). In terms of total indirect employment, the Stratford Festival is responsible for the generation of 451jobs in Stratford. In contrast, only 9 jobs in Blyth can be attributed directly to festival clientele. The Shaw Festival holds the intermediary position, responsible for creating 144 jobs.

Table 8 also demonstrates that jobs are created in each business category. In the case of Blyth and Stratford, the greatest number of positions result in the festival group (5.2 and 404.3 respectively). However, in Niagara-on-the-Lake nearly three times as many jobs are created in the general tourist group than in the festival category. Niagara-on-the-Lake is foremost a tourist resort. Many visitors travel to the town to visit Fort George, to enjoy the ambiance supplied by the historic buildings that line its streets or to drive along the picturesque Niagara Parkway. Many retail outlets which have emerged in Niagara- on-the-Lake capitalize to a large extent on the general tourist market. In fact evidence collected in 1985 indicated that many of the in'ms were established prior to the development of the Shaw Festival (Mitchell 1987). Hence, while jobs are created in the Festival category, the greatest benefits accrue to those businesses which serve a general tourist market.

Table 9 presents employment multipliers for each business category (local, tourist and festival) and for each community as a whole. The multipfiers are calculated from information provided in Tables 7 and 8 and represent the number of jobs created per job generated at the festivals. The multiplier varies from 1.2 in Blyth, 1.5 in Niagara-on-

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Blyth

Niagara -on-the -Lake

Stratford

Blyth

Table 7

Direct Employment: 1985 (Number of equivalent full-time jobs)

Community Direct Employment

Blyth 47 Niagara-on-the-Lake 260 Stratford 700

Table 8

Indirect Employment: 1985 (Number of equivalent full-time jobs)

Business Categories

Local Tourist Festival Total

.06 3.7 5.2 9.0

10,0 100.5 33,5 144.0

46.5 0.0 404.3 451.0

Table 9

Employment Multipliers

Business Categories

Local Tourist Festival Total

1.001 1.08 1.10 1.19

Niagara -on-the 1.04 -Lake

1.38 1.13 1.55

Stratford 1.06 0.00 1.15 1.64

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the-Lake to 1.6 in Stratford. These results are not surprising as one would expect the multiplier value to increase with festival size.

Table 9 also reveals that the multiplier value varies within each business category. Multiplier values are greatest in the festival group in Blyth and Stratford, but are highest in the general tourist cluster in Niagara-on-the-Lake.

Conclusions

Two general conclusions are drawn from this analysis. First, professional theatre companies create jobs, both directly and indirect- ly, which contribute to the economic well-being of a community. These employment benefits extend to all business types: firms which cater to a tourist and festival market, and firms which serve a predominantly local clientele.

Second, employment benefits increase with festival size. The Stratford Festival creates significantly more jobs than do the other organizations. This occurs because large, well-established companies have a large market area. Visitors who travel to attend a performance at the festival demand services to sustain them while in the community. On the other hand, smaller organizations, such as the Blyth Festival, have not gained the recognition of distant audiences. Hence, a large tourist infrastructure is not required. In conclusion, evidence presented here suggests that as a festival matures indirect employment will be generated within the community. This conclusion has implica- tions for both festival administrators and town planners. The former is provided with ammunition to argue the need for continued support of the arts. The latter is provided with evidence that cultural organiza- tions, which attract a non-local clientele, can be used as a catalyst for economic growth. This knowledge may prove particularly valuable to small town planners who are looking for ways to revitalize local economies. In both cases, the argument is clear: professional theatre contributes positively to the economic climate of a community.

University of Waterloo

Acknowledgements Thanks are extended to the Ontario Ministry of Citizenship and

Culture for their support of this work and Dr. Geoffrey Wall for his involvement in the collection and analysis of data.

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Footnotes

1. Reviews of these studies may be found in G. Wall and C.J.A. Brown (1983) and Wall G. and Purdon M. (1987).

2. See, for example: Research and Evaluation (1982, 1984, 1986 abc); Cheney (1986) Beckerman (1983) and Anne (1985).

3. This conclusion is based on results of a 1985 visitor survey. Mail- back questionnaires were distributed to 500 visitors at two per- formances of each festival. Response rates were as follows: Stratford 33 percent; Niagara-on-the-Lake 32 percent and Blyth 46 percent (Mitchell 1987). Results indicated that in all case in excess of 97 percent of visitors reside in a supra-regional market: one which extends beyond the community's regional trading area as defined by the extent of daily newspaper circulation.

4. Conversion of sales to employment is a fairly common practice in employment analysis. See, for example, Mulligan (1984).

5. Employment figures for Stratford are adjusted to include jobs created at all retail and service establishments.

References

Anne, S., "The Economic Impact of the Arts on Sudbury and Region," Sudbury Arts Festival Association, Sudbury, 1985.

Archer, B.H., "Uses and Abuses of Multipliers", in Gearing, G.E. Swart, W.W., and Vat T. (eds.), Planning for Tourism Develop- ment: Quantitative Approaches. New York: Praeger, pp. 115-32.

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Cheney, T., Report of the Steering Committee: Economic Dimensions of the Culture Sector, Policy Planning Secretariat, Ottawa, 1986.

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Mitchell, C.J.A., Relationships Between Urban Systems Evolution and Cultural Aspects of Community Support, Unpublished Ph.D. dis- sertation, Department of Geography, University of Waterloo, Waterloo, Ontario, 1987.

, "Recreation and Culture in the Toronto Urban Field", P. Coppack, L. H. Russwurm, C. Bryant (eds.), Essays on Canadian Urban Process and Form III, Department of Geography Publica- tion Series, University of Waterloo, 1988, pp. 193-207.

Mulligan, G.F., "Regression estimates of economic base multipliers for small communities", Economic Geography, 60:225-238, 1984.

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