The economic significance of cultural institutions

News I Image: 2023 Nikolaus Schäffler

At a time when public spending is subject to increasingly stringent scrutiny, cultural institutions are looking for ways to make their economic significance measurable. One commonly used method for assessing the economic contribution of cultural institutions is the so-called "indirect profitability". This calculation method examines the indirect economic effects generated by the operation of cultural institutions and makes it possible to quantify more precisely the monetary added value of these institutions for a municipality or a country. Detour profitability goes beyond traditional metrics such as revenues and attendance figures to include the positive economic impacts that go beyond the immediate activities of cultural institutions.

Thus, the methodology is based on a detailed analysis of the various interactions between cultural institutions and the local economy. These include factors such as tourism, visitor spending, job creation, and the promotion of businesses in the area. By incorporating these indirect effects, detour profitability allows for a more comprehensive assessment of the contribution of cultural institutions to society. In this approach, cultural institutions are viewed not only as institutions in their own right, but as important actors in a broader economic fabric.

The benefits of such calculations lie on several levels. Cultural institutions can use the results to better understand and communicate their own economic importance; to do so, they shift the focus from mere attendance figures to strengthening the local economy. This allows them to better demonstrate their relevance to policymakers and the broader public. In addition, local and state policymakers can use the results of detour profitability to make informed decisions about investment and public spending in the cultural sector. When the added value of cultural institutions becomes more visible and quantifiable, this increases the chances of financial support and sustainable operation.

As an industry expert, actori has developed a precise methodology to calculate the return on investment of cultural institutions. This method has already been successfully applied to various institutions, including the Baden State Theater in Karlsruhe and the Eutin Festival, to determine both primary and secondary economic effects.


An impulse contribution by Jonas Salzer, Consulting.

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