Methodology

This section outlines the general methodology used to calculate the economic impact. A brief discussion of the models employed is followed by a description of the pertinent data used in the economic calculations. The primary data, which includes industry employment levels and local demographic characteristics, is taken from state and national data sources. For all of the details on methodology download the full report here.

General Economic Forecasting

This study employed an Input/Output model to make the primary economic forecasts. Input/Output methodology allows the examination of forward and backward linkages that are present in any regional economy. The model measures the total annual economic activity that results from inter- and intra-industry transactions. The model breaks the economy into approximately 500 separate sectors with each sector representing an individual industry. It then uses a sectoring scheme developed by the IMPLAN Group and is closely related to the Bureau of Economic Analysis (BEA) REIS model.

Primary Data

Once the primary (direct) impact is identified, it is necessary to estimate the ultimate impact on the economy. This study’s forecasting model utilizes variables from a variety of national data sets. To reduce potential confusion, a specific definition of the major variables may be of use. The primary data in this study is 2017 data that has been adjusted to 2018 price levels.

Industry Output

Industry output represents the value of the industry’s total production. Industry output can be thought of as the value of industry sales plus or minus inventory changes. It should be emphasized that industry output is not a measure of an industry’s income and therefore, cannot be directly compared to the Gross State Product (GSP) numbers reported by the BEA. The value of industry output is typically higher than GSP. It is a more comprehensive measure and therefore, us a better measure of true economic impacts. The IMPLAN model estimates the industry output data, which is derived from the U.S. Census Bureau’s Economic Census, the Annual Survey of Manufacturers, and the Bureau of Labor Statistics growth model.

Employment

Employment is the total number of full-time wage and salary employees, plus the number of self-employed workers within a particular industry. Part-time workers’ hours are aggregated into full-time equivalents (2,080 hours) and reported with the full-time workers.

Industries Selected

The region’s creative economy is comprised of everyone who works for creative firms and enterprises – e.g., advertising agencies, museums, music studios – whether or not they are directly engaged in the process of developing creative content or products, as well as those who perform creative work on a contractual basis for firms in other industries. For example, the region’s creative economy includes a graphic designer employed full-time at the large advertising firm and a principal dancer for a ballet theater. Further, it also includes a videographer who is working freelance on the weekend, completing a corporate training video for Nationwide Insurance. Prior work by Americans for the Arts, a national research and advocacy

group, the New England Foundation for the Arts, and data from the Bureau of Labor Statistics, the U.S. Census, and the Bureau of

Economic Analysis were used to help model which industries are in Ohio’s creative economy. To simplify the analysis and give the study a sense of continuity, the industries selected are those identified by the Americans for The Arts. (See Table 1 for Industry Detail)

This study uses the IMPLAN model to calculate the economic impacts. IMPLAN breaks the economy into 536 sectors each representing a group of industrial classifications. Most of the IMPLAN sectors contain a number of sub categories. All of the Americans for the Arts industries listed in Table 1 are contained in the IMPLAN sectors shown in Table 2.

Understanding Multipliers

Once the analytical framework is established and the scale and scope of the creative economy quantified in terms of the workforce by industrial sector, it is possible to estimate its economic impacts on the region by using IMPLAN input-output economic modeling software.

IMPLAN is an industry standard tool used to calculate the directindirect, and induced impacts of spending and employment. To better understand this process, a brief look at how impacts for a creative firm’s operations are calculated is helpful. When an advertising agency spends money to pay employee salaries, buy supplies, and cover other operating expenses, it is creating the direct effect. When the businesses that supply the advertising agency with goods or services (e.g., accounting firm) pay their employees or purchase supplies, they create the indirect effect. When employees of the advertising agency and its supporting businesses spend their income, this causes the induced effect. When combined, the activity from the direct, indirect, and induced impacts is referred to as the “multiplier effect.”

Americans for the Arts Creative Industry Categories