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C R E A T I V E F O O T P R I N T
THE
ECONOMIC
IMPACT
OF THE
PHILADELPHIA
REGION ’S
FOR -PROFIT
CREATIVE
ECONOMY
2008
Table of Contents
Welcome 1
Introduction 2
Economic Impact 4
Tax Revenue 6
High-Paying,
High-Value Jobs 8
Exponential Growth 12
Entrepreneurial Activity 14
Competitive Advantage 18
Peer Region Analysis 20
Recommendations 22
Conclusion 25
Appendix 26
Methodology 26
Innovation Philadelphia Mission
Innovation Philadelphia is committed to supporting technology-driven
economic growth in the Philadelphia Region through growing the for-profit
creative industries, attracting and retaining young professionals vital to
economic growth, and fostering entrepreneurism and new ideas.
WELCOME TO CREATIVE FOOTPRINT
Innovation Philadelphia Econsult Corporation
We are pleased to present you with the quantitative findings of a Innovation Philadelphia has retained our firm to
two-phase research study measuring the size, scope and impact of the conduct a first-ever, thorough economic analysis
Philadelphia Region’s for-profit, creative economy. Creative Footprint of the for-profit, creative economy and provide
proves the power of this industry and establishes benchmarks against recommendations that will guide the future
which future growth will be measured. The wealth of information found agenda of the creative industries. Creative
here will help Innovation Philadelphia and regional partners to develop Footprint is the executive summary of the full
programs and initiatives needed to solidify the region’s position as a report, which can be found on Innovation
leader of the for-profit, creative economy. Philadelphia’s website.
The findings of Creative Footprint show that by taking action through a This report is especially unique in that it is the first
proactive approach that includes financial investment and coordinated time the most recent federal data was examined in
regional planning, the for-profit, creative economy has the promise of light of this region’s for-profit, creative economy.
skyrocketing this region’s economic growth and enhancing the region’s Our economists closely examined the different
reputation as a creative and innovative destination. types of data available to ensure all industries and
occupations comprising the for-profit, creative
Creative Footprint illustrates the enormous potential the for-profit, economy were included in the analysis.
creative economy holds in forming a new identity for the Philadelphia
Region. Such potential, made a reality, will offer economic benefits in Creative Footprint presents the findings of the
the form of new jobs and new businesses and will increase the region’s first phase of the analysis, which primarily involves
competitiveness across the nation. This new identity will make the region quantitative information. The second phase, a
a destination for all businesses thirsty for creative talent. qualitative assessment of the for-profit, creative
economy in the Philadelphia Region, is underway.
Innovation Philadelphia is committed to identifying innovative ways Results will be available in early Spring 2008.
to grow the technology industry sectors of the region’s economy. We
recognize the for-profit, creative economy as an emerging industry We believe Creative Footprint serves as a
with significant economic opportunity for the Philadelphia Region. The foundation and guide for a comprehensive
information in Creative Footprint validates the economic benefit and economic development strategy that will attract
provides specific recommendations to further ignite this industry sector. more creative entrepreneurs and businesses to the
Philadelphia Region, as well as grow the for-profit,
Turn the pages and indulge yourself in the quantitative findings of creative businesses and enterprises already here.
Creative Footprint. Join us as we continue to develop a region ripe
with creative opportunity.
Stephen P. Mullin
Econsult Corporation
Kelly R. Lee
Innovation Philadelphia
INNOVATION PHILADELPHIA :: CREATIVE FOOTPRINT 1
2
INTRODUCTION
The creative economy has received considerable minorities, women, entrepreneurs and self-
attention in recent years. In August 2005, Business employed professionals; and the impact of the
Week noted, “The Knowledge Economy as we region’s colleges and universities. The Philadelphia
know it is being eclipsed by something new— Region’s creative industry assets were also
call it the Creative Economy.” A creative economy measured against peer regions pursuing similar
is dedicated to the convergence of creativity, creative industry agendas.
innovation and business. It champions creativity
in all its forms and translates it into valuable assets About Creative Footprint
for economic returns. In this study, Econsult Corporation utilized an
approach that examined the for-profit, creative
Today, entire regions are focused on strengthening economy across two dimensions: creative economy
their creative economy as a means of fortifying industry sectors and occupational employment.
their regional economy. In 2002, Innovation
Philadelphia identified the region’s creative The first dimension, measuring the economic
economy as having the potential for significant activity of the creative economy industry
economic growth. Since then, Innovation sectors, captures all individuals employed by
Philadelphia has adopted a strategic plan that for-profit, creative industry businesses, regardless
targets the growth of for-profit, creative industry of specific occupation. This measurement also
sectors that are driven by technology. Innovation captures self-employed individuals engaged in
Philadelphia has developed resources for creative entrepreneurial activities.
industry entrepreneurs, held creative employment
internship and job fairs, and hosted and participated The second dimension, measuring creative
in regional and national conferences showcasing occupation employment, captures the impact
the Philadelphia Region’s creative economy. of earnings among all individuals employed in
creative occupations throughout the region,
This study of for-profit, creative industry sectors regardless of the industry sector in which they are
focuses on the 11-county* Philadelphia Region. employed. Results of this dimension highlight the
The goals of the study are to provide an accurate extent to which creative occupations cut across
measurement of the size, scope and economic all sectors of the regional economy. It must be
impact of the Philadelphia Region’s for-profit, recognized that virtually all industries contain
creative economy; contributions made by some creative component.
*
The 11 counties include Bucks, Chester, Delaware, Montgomery and Philadelphia in Pennsylvania;
Burlington, Camden, Gloucester, Mercer and Salem in New Jersey; and New Castle County in Delaware.
INNOVATION PHILADELPHIA :: CREATIVE FOOTPRINT
Key Findings Creative Economy Definition
The Philadelphia Region’s for-profit, Innovation Philadelphia has adopted the
creative economy... definition of the creative economy as “wealth
and job creation arising from those occupations
Is a significant generator of economic and industries that produce goods and provide
activity The total annual economic impact of business-to-business creative services that generate
the regional for-profit, creative industry equals technical innovation, drive design and cultivate
$60 billion, with 766,000 jobs and $32.5 billion change.” For the purpose of this study, Innovation
in total earnings. Philadelphia has identified the following technology-
driven, for-profit, creative industry sectors:
Is a considerable source of state and local
tax revenue The combined state and local tax Architecture, Engineering and Planning Step into Creative
impact of creative industry sectors amounts to Communications and Marketing
$1.22 billion annually. Digital Media and Programming
Footprint and discover
Fashion Design for yourself how the
Generates high-paying, high-value jobs Graphic and Visual Arts and Multimedia Design
for-profit, creative
Average annual wages equal $61,600. Information Technology
Interior and Industrial Design economy is an
Is experiencing exponential employment Music, Film and Video Production important and
and earnings growth Earnings increased by Photography
19%, and employment growth increased by 12%. Product and Merchandising Design significant economic
Software Development generator in the
Is a major source of entrepreneurial activity
for the region Twelve percent (12%) of
Read the full report of Creative Footprint online Philadelphia Region,
at www.innovationphiladelphia.com.
the creative industry is comprised of the is primed for further
self-employed.
growth, and is a
Is at a competitive advantage compared smart priority for
nationally Creative industry employment is
4% higher than the national average.
economic investment.
Is doing better than or is on pace with peer
regions pursuing similar creative-economy-
related agendas The Philadelphia Region
ranks first in earnings increase and second in
direct creative occupation employment and
average wages.
3
4
The Philadelphia Region’’’s for-profit, creative industry
Key Finding Z is a significant generator of economic activity.
When defining the economic impact of the for-profit, creative economy, two dimensions must be
dimension measures the economic impact of for-profit, creative
measured. The first
industry activity. This captures all employment within creative industry businesses (sectors identified
on page 3), regardless whether that employment is considered “creative” or not.
annual
Creative industry employment within the Philadelphia Region generates an estimated total
economic impact of nearly $60 billion in total output (spending). This includes $32.5 billion
in total annual earnings and supports a total of 766,000 jobs.
ECONOMIC IMPACT OF FOR-PROFIT, CREATIVE INDUSTRY SECTORS IN THE PHILADELPHIA REGION
Direct Indirect and Total
Economic Impact Impact Induced Impact Impact
Total Output (billions) $25.1 $33.8 $58.9
Total Earnings (billions) $17.0 $15.5 $32.5
Total Employment 306,000 460,000 766,000
Source: Econsult Corporation (2007). Notes: Total output (spending) includes total earnings. Total employment includes
full- and part-time jobs. Direct output, or spending, was derived from direct earnings based on Bureau of Economic
Analysis industry averages for proportions of wages to output across the different industry sectors.
The seconddimension measures the economic impact of for-profit, creative
occupations within all industry sectors. Here, the economic activity of all employees who
perform creative functions, regardless of the specific industry in which they are employed, are captured.
Total employment within all creative occupations in the Philadelphia Region totals
187,000 and generates $11.5 billion in total annual direct earnings. These direct
earnings, in turn, produce indirect and induced spending within the regional economy, generating a
total annual economic impact of $23.6 billion.
ECONOMIC IMPACT OF CREATIVE OCCUPATION EMPLOYMENT
Creative Creative Total Economic
Creative Occupation Occupation Impact of
Occupation Earnings Average Earnings
Employment (billions) Annual Wage (billions)
187,000 $11.5 $61,600 $23.6
Source: Bureau of Labor Statistics’ Occupational Employment Statistics (2005)
An analysis of occupations shows the extent to which creative jobs cut across all sectors of the regional
economy. It highlights the fact that virtually all industries contain some creative element. For example, a
graphic designer who works for a hospital fuels the creative economy just as powerfully as a graphic
designer employed by a design boutique.
INNOVATION PHILADELPHIA :: CREATIVE FOOTPRINT 5
6
The Philadelphia Region’’’s for-profit, creative industry
Key Finding Z is a considerable source of state and local tax revenue.
The total annual combined local and state tax impact of for-profit, creative industry
activity amounts to $1.22 billion. Going forward, as the for-profit, creative industry continues to grow,
the local and state tax benefits to the region will also increase.
ANNUAL TAX IMPACT OF CREATIVE INDUSTRY SECTORS IN THE PHILADELPHIA REGION (2005)
Local Taxes (billions) Total State Taxes (billions) Total
Wage Tax: Philadelphia $0.32 Pennsylvania $0.63
Earned Income Tax: All Other Counties $0.04 New Jersey $0.13
Sales and Use Tax $0.01 Delaware $0.09
Subtotal: Local Taxes $0.37 Subtotal: State Taxes $0.85
Source: Econsult Corporation (2007)
INNOVATION PHILADELPHIA :: CREATIVE FOOTPRINT
TOTAL TOTAL TAX IMPACT OF
LOCAL TAXES
$.37 million
+ STATE TAXES
$.85 million
CREATIVE INDUSTRIES
$1.22 billion
million
For-profit, creative industry activity generates considerable state-level tax revenue: $850 State-by-State Breakdown
of State-Level Tax Impacts
in combined state-tax revenue for Pennsylvania, New Jersey and Delaware.
Z
For-profit, creative industry activity produces the greatest statewide revenue in Pennsylvania, where
$630 million in tax revenue from personal income, corporate net income, and sales and use taxes
accounts for 75% of the $850 million total state tax revenues.
For-profit, creative industry sectors in the Philadelphia Region generate approximately $370 million in
annual local tax revenue for the City of Philadelphia and other municipalities in Pennsylvania, with a Pennsylvania
75% $630 million
majority, $320 million, ultimately going towards wage-tax revenue for the City of Philadelphia. New Jersey
15% $130 million
Delaware
10% $90 million
Source: Econsult Corporation (2007)
7
8
The Philadelphia Region’’’s for-profit, creative industry
Key Finding Z generates high-paying, high-value jobs.
Jobs within for-profit, creative industry sectors, as well as creative occupations, pay quite well as a whole.
There are particularly high average annual wages within industry sectors such as:
Creative Creative
Industry Occupation Creative Industry Sector
$77,500 $74,600 Software Development
$59,300 $66,700 Architecture, Engineering
and Planning
$58,200 $70,600 Information Technology
Average annual salaries of those working in creative occupations ($61,600)
are 45% higher than those in non-creative occupations ($43,000).
INNOVATION PHILADELPHIA :: CREATIVE FOOTPRINT
$55,600 Average annual wages across all creative industry sectors
$61,600 Average annual wages across all creative occupations
ECONOMIC IMPACT OF CREATIVE ECONOMIC IMPACT OF CREATIVE
INDUSTRY EMPLOYMENT OCCUPATION EMPLOYMENT
Creative Creative Creative Creative
Industry Industry Average Occupation Occupation Average
Creative Industry Sector Employment Annual Wage Employment Annual Wage
Architecture, Engineering and Planning 41,400 $59,300 42,000 $66,700
Communications and Marketing 67,300 $55,800 30,000 $56,700
Digital Media and Programming 12,800 $54,600 500 $38,900
Fashion Design 6,900 $32,600 3,000 $23,900
Graphic and Visual Arts and Multimedia Design 36,700 $33,400 13,000 $37,900
Information Technology 24,700 $58,200 44,000 $70,600
Interior and Industrial Design 12,300 $36,400 5,000 $37,000
Music, Film and Video Production 7,000 $41,100 3,000 $47,600
Photography 6,600 $23,400 3,000 $23,300
Product and Merchandising Design 25,900 $51,600 13,000 $49,900
Software Development 64,600 $77,500 30,000 $74,600
Total Creative Economy 306,200 $55,600 187,000 $61,600
Source: U.S. Census Bureau County Business Patterns and Non-Employer Statistics (2005) Source: Bureau of Labor Statistics’
Occupational Employment Statistics (2005)
9
10
for-profit, creative economy firms
The Philadelphia Region boasts nearly 56,000
and 766,000 creative industry workers.
In an industry-by-industry breakdown of the Philadelphia Region, Communications and
Marketing comprises nearly 25% of all creative industry employment.
Software Development followed closely behind at 21%.
Engineering and Planning
Other key industry sectors include Architecture,
at 14% and Graphic and Visual Arts and Multimedia Design at 12%.
Communications and Marketing 23%
Software Development 21%
Z
Architecture, Engineering and Planning 14%
Direct
Graphic and Visual Arts and Multimedia Design 12%
Creative
Product and Merchandising Design 8%
Industry
Information Technology 8%
Employment
by Industry Digital Media and Programming 4%
Sector Interior and Industrial Design 4%
Music, Film and Video Production 2%
Photography 2%
Fashion Design 2%
Source: U.S. Census Bureau County Business Patterns
and Non-Employer Statistics (2005)
Number of for-profit, creative industry
56,000 firms in the Philadelphia Region
INNOVATION PHILADELPHIA :: CREATIVE FOOTPRINT
On a county-by-county basis, Montgomery County leads the Philadelphia Region with 62,000
employees in for-profit, creative industry sectors, followed by Philadelphia County
at 52,000 for-profit, creative industry employees. The next highest county, Bucks County, comes in
at 36,000.
The for-profit, creative economy COUNTY COMPARISON OF
CREATIVE INDUSTRY EMPLOYMENT
is truly a regional asset. Creative
industry employment generates
high-paying, high-value jobs
throughout the 11-county Bucks
36,000 Mercer
Philadelphia Region. 22,000
New Jersey
Montgomery
62,000
Philadelphia
52,000 Burlington
24,000
Chester
35,000
Pennsylvania Delaware
21,000
Camden
Gloucester 22,000
9,000
Salem
1,000
New
Castle
County
22,000
Source: U.S. Census Bureau County Business
Delaware
Patterns and Non-Employer Statistics (2005)
11
12
The Philadelphia Region’’’s for-profit, creative industry is
Key Finding Z experiencing exponential employment and earnings growth.
Between 2003 and 2005, the Philadelphia Region’s creative occupation employment and earnings grew
substantially. Employment in the for-profit, creative occupations increased by 12.4% and
earnings among these professionals increased by 19.1%.
COMPARATIVE ANALYSIS: CREATIVE ECONOMY OCCUPATION EMPLOYMENT AND EARNINGS
% Change in Earnings Earnings % Change
Employment Employment Employment 2003 2005 in Earnings
2003 2005 (2003-2005) (billions) (billions) (2003-2005)
166,600 187,300 12.4% $82.8 $98.6 19.1%
Source: Bureau of Labor Statistics’ Occupational Employment Statistics (2005)
This growth can be fueled by attracting more for-profit, creative workers to the region
and tapping into the wealth of students graduating from regional colleges and universities with degrees
associated with the creative industry sectors.
INNOVATION PHILADELPHIA :: CREATIVE FOOTPRINT
55,700 Total number of degrees awarded from regional colleges and universities
11,700 Total number of degrees related to creative economy occupations
During the 2005-2006 academic year, there were over 55,700degrees awarded from regional
colleges and universities. Of the total degrees awarded, 21%, or 11,700, fell within programs
related to the for-profit, creative economy.
The most popular programs related to the for-profit, creative economy among students included
Communications and Marketing; Architecture, Engineering and Planning;
and Information Technology.
Percentage of
Degrees of Communications and Marketing 36.1%
Z
Creative Architecture, Engineering and Planning 19.4%
Industry Information Technology 16.2%
Sectors Graphic and Visual Arts and Multimedia Design 11.4%
Conferred by Music, Film and Video Production 5.7%
Philadelphia Fashion Design 3.0%
Region Digital Media and Programming 2.7%
Postsecondary Software Development 2.2%
Institutions Interior and Industrial Design 1.7%
Photography 1.5%
Source: National Center for Education Statistics (2006)
13
14
The Philadelphia Region’’’s for-profit, creative industry
Key Finding Z is a major source of entrepreneurial activity for the region.
Self-employed individuals SELF-EMPLOYMENT WITHIN CREATIVE INDUSTRY SECTORS
represent about 12% of all Creative Industry
Industry Sector Self-Employed
direct for-profit, creative
Architecture, Engineering 5,200
industry employment and Planning
within the Philadelphia Region, Communications and Marketing 6,500
at 36,500. Digital Media and Programming 420
Fashion Design 410
Self-Employed Graphic and Visual Arts and 13,800
Individuals Multimedia Design
12% 36,500 Information Technology 210
Interior and Industrial Design 60
Music, Film and Video Production 1,000
Photography 1,800
Product and Merchandising Design 320
Software Development 6,800
Total Creative Economy 36,500
Source: U.S. Census Bureau County Business Patterns
and Non-Employer Statistics (2005)
In looking at the self-employed, entrepreneurial component of creative industry sectors as a subset,
Graphic and Visual Arts and Multimedia Design professionals comprise the greatest
percentage of self-employed professionals, at 37.7%. Following are Software Development and
Communications and Marketing professionals, representing close to 18% each of all
self-employed professionals within the creative industry sectors, as well as Architecture, Engineering
and Planning professionals, at 14.3%.
Graphic and Visual Arts and Multimedia Design 37.7%
Total Self- Software Development 18.7%
Z
Employed Communications and Marketing 17.7%
Creative Architecture, Engineering and Planning 14.3%
Industry Photography 5.0%
Employment Music, Film and Video Production 2.7%
by Industry Digital Media and Programming 1.1%
Sector - Fashion Design 1.1%
Philadelphia Product and Merchandising Design 0.9%
Region Information Technology 0.6%
Interior and Industrial Design 0.2%
Source: U.S. Census County Business Patterns
and Non-Employer Statistics (2005)
A vibrant, successful, entrepreneurial community is essential to regional
economic growth. The significant number of self-employed, entrepreneurial professionals in the
for-profit, creative industry sectors indicates the potential for future growth in the creative industry and
Philadelphia economy as a whole.
INNOVATION PHILADELPHIA :: CREATIVE FOOTPRINT 15
16
Minority- and female-owned firms account for 21.6% of all creative industry firms
in the Philadelphia Region. Six percent (6%) are minority-owned, and about 15.6% are under
female ownership. Increasing the number of firms under minority and female ownership presents
a huge opportunity for growth within the for-profit, creative industry.
INDUSTRY-BY-INDUSTRY BREAKDOWN OF MINORITY AND FEMALE OWNERSHIP
% Minority
% Minority % Female and Female
Industry Sector Ownership) Ownership Ownership
Architecture, Engineering 7.5% 19.0% 26.5%
and Planning
Communications and Marketing 6.1% 16.2% 22.3%
Digital Media and Programming 4.3% 10.1% 14.4%
Fashion Design 4.1% 11.5% 15.6%
Graphic and Visual Arts and 5.1% 13.1% 18.2%
Multimedia Design
Information Technology 4.3% 10.0% 14.3%
Interior and Industrial Design 4.8% 13.3% 18.1%
Music, Film and Video Production 4.2% 10.4% 14.6%
Photography 6.6% 17.6% 24.2%
Product and Merchandising Design 3.9% 11.0% 14.9%
Software Development 6.4% 16.8% 23.2%
Source: U.S. Census Survey of Business Owners (2002)
INNOVATION PHILADELPHIA :: CREATIVE FOOTPRINT
On an industry-by-industry basis, minority and female ownership is the strongest in Architecture, Breakdown of Minority-Owned,
Creative Industry Firms
Engineering and Planning; Photography; Software Development; and
Z
Communications and Marketing.
Minority Female
Ownership Ownership Creative Industry Sector
7.5% 19.0% Architecture, Engineering
and Planning
6.6% 17.6% Photography
6.4% 16.8% Software Development
6.1% 16.2% Communications
and Marketing
Sixty percent (60%) of minority-owned, creative industry firms are owned by Asians,
26% by African-Americans, and 12% by Latinos.
Asian-Owned Firms 60%
African-American- 26%
Owned Firms
Latino-Owned Firms 12%
American Indian- and 2%
Alaska Native-Owned Firms
Source: U.S. Census Survey
of Business Owners (2002)
17
18
The Philadelphia Region’’’s for-profit, creative industry
Key Finding Z is at a competitive advantage compared nationally.
The Philadelphia Region exhibits a competitive advantage over the nation as a whole for
combined activity across all for-profit, creative industry sectors. This is evidenced by a location quotient of
Region’s proportion of for-profit, creative
1.04, which means the Philadelphia
industry employment is 4% higher than that of the nation.
Certain industry sectors display strong competitive advantages. Compared to the rest of the nation,
Philadelphia’s Digital Media and Programming industry displays a particularly strong
presence, with a location quotient of 1.68, indicating 68% higher employment in this sector
than the national average. Other areas of strength include Photography at 50% and Software
Development at 40%.
What is a location quotient?
A location quotient measures the relative competitive advantage of a particular industry within a region’s economy
and helps to identify an unusually large regional presence of a particular industry, which may ultimately lead to a
competitive advantage in that industry for the local economy. A location quotient greater than “1” indicates a region
holds a degree of industry specialization and has proportionately more workers than the national average. A location
quotient less than “1” indicates a region holds a degree of industry specialization below the national average.
INNOVATION PHILADELPHIA :: CREATIVE FOOTPRINT
In total, more than half of all for-profit, creative industry sectors display a
competitive advantage in the Philadelphia Region over the nation as a whole.
With ongoing investment, the region can become a national leader in the for-profit, creative industry.
LOCATION QUOTIENT ANALYSIS OF CREATIVE
INDUSTRY EMPLOYMENT: COMPETITIVE ADVANTAGE
OF PHILADELPHIA OVER U.S.
Location
Industry Sector Quotient
Architecture, Engineering
and Planning
1.09 68%
Digital Media and Programming
Communications and Marketing 1.18 Percent higher of
Digital Media and Programming 1.68
employment in this
Fashion Design 0.58
Graphic and Visual Arts and 1.17
sector than the
Multimedia Design national average
Information Technology 0.93
Interior and Industrial Design
Music, Film and Video Production
0.56
0.66 50%
Photography
Photography 1.50
Product and Merchandising Design 0.66
Software Development
Average Creative Economy
1.40
1.04
40%
Software Development
Source: U.S. Census Bureau County Business Patterns
and Non-Employer Statistics (2005)
The Philadelphia Region’s proportion of for-profit, creative
industry employment is 4% higher than that of the nation.
19
20
The Philadelphia Region’’’s for-profit, creative industry is doing
Key Finding Z better than or is on pace with peer regions pursuing similar
creative-economy-related agendas.
Nationally and internationally, regions are exploring their creative economy as a means of attracting
businesses and workers. Having established the current state of the Philadelphia Region’s for-profit, creative
industry, it is essential to provide context by comparing this region to peer regions. The following regions in
19.1% the U.S. have been engaged in sustained efforts to expand their own creative industry sectors:
Percent by which
Philadelphia Seattle, WA
experiences
greatest wage Boston, MA
growth
Philadelphia, PA
between
2003-2005 Denver, CO
Phoenix, AZ
Tampa, FL
Austin, TX
INNOVATION PHILADELPHIA :: CREATIVE FOOTPRINT
creative economy occupation employment experienced the
The Philadelphia Region’s
greatest wage growth between 2003 and 2005 among peer regions at 19%. The Philadelphia
Region’s 12% increase in creative occupation employment was the second largest growth
among peer regions.
The Philadelphia Region has
already experienced significant
COMPARATIVE ANALYSIS: CREATIVE ECONOMY OCCUPATION EMPLOYMENT AND EARNINGS
growth within the for-profit,
% Change in Earnings Earnings % Change creative industry sectors, with
Employment Employment Employment 2003 2005 in Earnings minimal attention to date.
Peer Regions 2003 2005 (2003-2005) (billions) (billions) (2003-2005) The region’s large percentage
Austin, TX 67,000 72,100 7.6% $32.5 $36.3 11.7% of earnings and employment
Boston, MA 205,100 226,600 10.5% $115.3 $135.3 17.3% growth make Philadelphia an
attractive place for creative
Denver, CO 105,700 112,800 6.7% $56.4 $59.2 4.9%
businesses and creative jobs
Philadelphia, PA 166,600 187,300 12.4% $82.8 $98.6 19.1% to locate. Imagine what the for-
Phoenix, AZ 109,000 123,400 13.2% $48.7 $57.6 18.4% profit, creative industry will be
Seattle, WA 135,100 132,100 -2.3% $76.1 $73.1 -3.9% when more attention is granted
Tampa, FL 66,900 66,500 -0.7% $28.9 $29.6 2.4% to this growing economic sector.
Source: Bureau of Labor Statistics’ Occupational Employment Statistics (2005). Note: 2005 data is based on MSA for all cities;
2003 data is based on MSA for Austin and Tampa and PMSA for Boston, Denver, Philadelphia and Seattle.
The Philadelphia Region’s average CREATIVE INDUSTRY EMPLOYMENT AND EARNINGS
for-profit, creative industry Creative Industry Creative Industry
Peer Regions Employment Average Wages
annual wage of $55,600 is
Austin, TX 107,000 $54,300
the second highest among peer
Boston, MA 360,000 $39,000
regions, with Seattle having the
Denver, CO 153,000 $50,500
highest, due to its higher cost of Philadelphia, PA 306,000 $55,600
living. The Philadelphia Region Phoenix, AZ 164,000 $40,700
also has the second highest Seattle, WA 213,000 $65,500
number of industry workers Tampa, FL 124,000 $40,400
of all peer regions at 306,000. Source: U.S. Census Bureau County Business Patterns
and Non-Employer Statistics (2005)
21
22
RECOMMENDATIONS
Creative Footprint’s quantitative findings demonstrate that the Philadelphia Region’s for-profit, creative
economy is an important economic generator that powerfully fuels our regional economy with hundreds of
thousands of high-wage, high-value jobs. The recommendations below translate our findings into actionable
steps to be taken by public and private stakeholders. Innovation Philadelphia—the premier organization
responsible for promoting the region’s for-profit, creative economy—will play a vital role in successfully
implementing these recommendations.
1. Continue to Promote the For-Profit, Creative Economy through a Designated Institutional Driver
The for-profit, creative economy contributes significantly to Philadelphia’s regional economy—producing a
total annual economic impact of almost $60 billion and generating $1.22 billion in annual tax revenue. Given
that local governments are key institutional drivers in promoting the growth of targeted industry sectors, a
designated public institution focused on the for-profit, creative economy would help to ensure that the
growth of the for-profit, creative economy holds a priority position within the local economic agenda. A
designated institutional driver would ensure that the for-profit, creative economy receives the attention that
is on par with levels given to the non-profit, creative sector and other sectors targeted for growth.
2. Develop Innovative Financing Programs and Resources Targeting Creative Entrepreneurs
Creative Footprint demonstrates that self-employed and entrepreneurial professionals within for-profit,
creative industry sectors amount to 36,500, or 11.6%, of all for-profit, creative industry employment. In
some for-profit, creative industry sectors, these individuals account for more than 25% of all employment.
Recognizing the tremendous economic value these entrepreneurs bring to the for-profit, creative economy,
the development of specific financial programs and business resources targeted towards the long-term
survival and growth of these enterprises is recommended. Financial programs may include the development
of special loans and/or opportunities for private investors or venture capitalists to fund “creative” start-ups.
Business resources may include technical assistance, access to information on existing business development
resources, and/or networking opportunities.
3. Work with Local and State Government to Establish
Financial-Incentive Packages to Attract Creative Economy Businesses to the Region
The for-profit, creative economy is a major economic generator for the region as compared to select peer
regions. However, the Philadelphia Region holds just a slight competitive advantage over the nation as a
whole in terms of creative industry employment, with a location quotient of 1.04 (4% above the national
average). Through strong advocacy and targeted lobbying efforts, Innovation Philadelphia and other regional
stakeholder organizations can work to influence decision-making at the state level in order to develop
financial-incentive packages that stimulate entrepreneurial activity and attract new creative
businesses to the region. Potential programming could include industry-specific financing and tax
incentives, the formation of creative “districts,” the development and funding of for-profit, creative
industry “incubators,” and increased micro-loan programs to support entrepreneurial enterprises and
self-employed, creative professionals.
4. Expand Recruitment and Retention Efforts
to Attract In-Demand, Creative Economy Employees to the Region
Colleges and universities within the Philadelphia Region confer approximately 60,000 degrees annually,
with nearly 20% (about 12,000) falling under programs and majors directly related to creative occupations.
To attract and sustain for-profit, creative businesses in the region, it is critical to retain a significant portion
of “creative” graduates in the region. These individuals provide fresh talent as well as meet human-capital
needs. While there are regional institutions that target the retention of college graduates, there is also a
separate, distinct need to recruit and retain early- to mid-career professionals (25-34 years old) in order
to meet the human-capital needs of the creative economy occupations, which a experiencing annual
growth of 12%.
5. Brand the Philadelphia Region as a Hub of Creative Enterprise
Research on select peer regions shows significant competition in the market in terms of regional
for-profit, creative economy growth. In order for Philadelphia to emerge as the leader of the for-profit,
creative economy, it must proactively market itself as such throughout the nation. Through an aggressive,
national branding campaign, regional economic development organizations, as well as creative academic
institutions, can collaborate to market the Philadelphia Region as a hub for creative enterprises.
6. Work with Regional Organizations to Expand
Minority- and Female- Owned Businesses within the For-Profit, Creative Economy
Results within Creative Footprint show that just 6% of all creative economy firms in the Philadelphia
Region are minority-owned, and female-owned businesses fare slightly better at 15%. Given the
Philadelphia Region’s sizeable minority population, these figures reveal a considerable gap in creative
industry firm ownership by race and gender and, ultimately, fall short of national averages of roughly
9% minority ownership and 17% female ownership among for-profit, creative industry firms.
Organizations that focus on economic development and minority- and female-owned business
development within the region are well positioned to collaborate in order to help expand minority
and female participation in business ownership in the for-profit, creative industry sectors.
INNOVATION PHILADELPHIA :: CREATIVE FOOTPRINT 23
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7. Target Key Creative Economy Industry Sectors Already Exhibiting Strength in the Region
The quantitative findings in Creative Footprint have uncovered particular strengths within these industry
sectors: Communications and Marketing; Software Development; Architecture, Engineering and Planning;
Graphic and Visual Arts and Multimedia Design; Product and Merchandising Design; and Information
Technology. Each of these sectors individually employs 25,000 or more workers. As a group, they account
for 85% of for-profit, creative industry employment; 89% of for-profit, creative industry earnings; and
90% of for-profit, creative industry direct output. Almost all of these sectors feature average wages of
$50,000 or more. Shifts in occupational employment among these sectors from 2003-2005 showed
that all occupational sectors except Graphic and Visual Arts and Multimedia Design and Information
Technology experienced growth of roughly 20% or more. By building on the strengths of the for-profit,
creative economy through focused investment in the six strongest industry sectors and occupations,
economic development resources can be targeted efficiently and effectively.
8. Incorporate a Collaborative Regional Approach to Growing the For-Profit, Creative Economy
Just as Creative Footprint shows that the assets of the for-profit, creative economy are dispersed
throughout the region, the economic development strategy to develop and grow the creative industry
sectors must be a collaborative regional effort. Though the data clearly demonstrates that the highest
levels of for-profit, creative industry employment are found within Bucks, Chester, Montgomery and
Philadelphia counties, it is also true that concentrations of creative industry employment are found in all
counties throughout the Philadelphia Region. Collaboration among economic development organizations
across geographic boundaries is essential to grow the for-profit, creative economy and to establish the
Philadelphia Region as a regional and national destination for creative businesses and employment.
9. Track and Measure Future For-Profit, Creative Economy Activity
Having established a baseline measure of the creative economy’s regional impact, ongoing updates of
this analysis are recommended in order to track future growth and to gauge progress. From a quantitative
perspective, this will enable the measurement for growth of specific industries to determine the impact of
current and future policies and initiatives. Note, however, that as technology continues to advance, it is
likely that new and emerging industries that fall within the scope of the creative economy will need to
be accounted for in order to accurately represent the full growth of the region’s creative economy.
CONCLUSION
Innovation Philadelphia is excited to share the findings of Creative Footprint. They validate that the for-profit,
creative industry is a tremendous economic asset to the Philadelphia Region. Creative Footprint demonstrates
the significant role this industry plays in our entire regional economy, which generates a total annual
economic impact of nearly $60 billion, 766,000 jobs and $1.22 billion in state and local taxes. In fact,
the for-profit, creative industry is one of our largest economic generators. Add proactive investment and
planning, and the for-profit, creative industry will become a chief anchor in the Philadelphia Region’s future
economic landscape.
Focusing on the for-profit, creative industry as part of a regional economic development strategy is essential,
as this industry generates high-wage jobs and boasts a strong entrepreneurial community. Resources such as
Innovation Philadelphia’s Creative Economy Investment Fund, Greater Philadelphia Entrepreneurs’ Resource
Guide, and workshops and events that provide technical assistance and business development skills for
creative industry entrepreneurs help existing for-profit, creative industry businesses to grow and new
businesses to sprout. Expanding these resources will lead to further economic growth in the creative industry.
Creative industry jobs are driven by traits like innovation and skills resistant to commoditization. They are
withstandable against outsourcing to foreign markets. Because most creative industry jobs cannot become a
“commodity” easily mined out to the lowest bidder, attracting for-profit, creative industry businesses and
their high-value jobs is critical to the ongoing economic health of the Philadelphia Region.
Recent history confirms that collaboration affords remarkable results. The Philadelphia Region’s life sciences
and hospitality industries have experienced substantial growth through joint efforts and partnerships among
private, public and government sectors. With comparable collaboration among key stakeholders to
implement existing regional, creative economy initiatives—along with recommendations in Creative
Footprint—the region will witness the same kind of sustainable economic expansion.
So ends the quantitative phase of our research. Our next step is to provide a comprehensive qualitative review
of the Philadelphia Region’s for-profit, creative economy, along with an in-depth peer region comparison.
Econsult Corporation has already begun conducting interviews, surveys, literature reviews and comparative
best-practices research. We look forward to sharing the qualitative findings, along with an enhanced strategy,
to strengthen and grow the for-profit, creative industry.
INNOVATION PHILADELPHIA :: CREATIVE FOOTPRINT 25
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APPENDIX
METHODOLOGY
It is important to understand how we have defined the for-profit, creative economy and how the results have
been quantified. Great attention has been given to both the data and methodology employed in this study.
Creative Economy Definition Innovation Philadelphia has adopted the definition of the creative economy
as “wealth and job creation arising from those occupations and industries that produce goods and provide
business-to-business creative services that generate technical innovation, drive design and cultivate change.”
For the purpose of this study, Innovation Philadelphia has identified the following technology-driven, for-
profit, creative industry sectors:
Architecture, Engineering and Planning Interior and Industrial Design
Communications and Marketing Music, Film and Video Production
Digital Media and Programming Photography
Fashion Design Product and Merchandising Design
Graphic and Visual Arts and Multimedia Design Software Development
Information Technology
Peer Regions Similar regions are pursuing creative economy agendas. Innovation Philadelphia has
selected the following six peer regions in order to draw comparisons and gauge the Philadelphia Region’s
relative performance:
Austin, Texas Phoenix, Arizona
Boston, Massachusetts Seattle, Washington
Denver, Colorado Tampa, Florida
Data Sources This study has employed data from the U.S. Census County Business Patterns, U.S. Census
Non-Employer Statistics, Bureau of Labor Statistics’ Occupation Employment Statistics, U.S. Census Survey
of Business Owners and National Center for Education Statistics Integrated Postsecondary Education Data
System. These sources have served as the foundation for measuring the breadth, depth and overall economic
impact of the for-profit, creative economy. They have provided data inputs needed to quantify the total size
of the for-profit, creative economy in terms of number of firms, total revenue generated, purchasing impact,
employment and earnings in the Philadelphia Region and select peer regions.
INNOVATION PHILADELPHIA :: CREATIVE FOOTPRINT
Industry Activity Analysis Using the U.S. Census Bureau’s County Business Pattern and Non-Employer
Statistics data, industry employment and wages were measured within the Philadelphia Region and peer
cities. By applying wage to output ratios established by the U.S. Census Bureau to each of the creative
industries, total industry expenditures were estimated.
Economic Impact Model The total economic impact of activities within the for-profit, creative economy
industries was estimated using the U.S. Department of Commerce’s Regional Input-Output Modeling System
(RIMS II).
Tax Impact Model This model took the output from the RIMS II model and generated detailed estimates of
the increases in state and local tax collections that have arisen from regional activity. It combined the RIMS II
output with U.S. Census Bureau County Business Patterns data to produce estimates of the distribution of
additional employment and earnings by county.
Location Quotient Competitive Analysis A location quotient was used to establish the Philadelphia
Region’s competitive advantage in a given industry as compared to nationwide averages. Using total
industry employment, the location quotient revealed if a region had an above-average share of an industry.
A higher-than-average presence in a specific industry indicates a competitive advantage in that industry.
Minority and Female Participation Analysis Minority and female participation in the for-profit, creative
economy was evaluated using data from the U.S. Census Bureau’s Survey of Business Owners (SBO). SBO data
provides minority and female firm ownership, not total employment.
Occupational Employment Analysis Occupational employment and wage data was gathered using
Bureau of Labor Statistics Occupation Employment Statistics. The direct economic impact of earnings among
all creative occupations within the identified for-profit, creative economy sectors was measured.
University Contribution Contributions of regional colleges and universities to the for-profit, creative
economy were established using the National Center for Education Statistics’ Integrated Postsecondary
Education Data System (IPEDS). All degrees conferred within majors and programs aligned with selected
for-profit, creative economy occupation sectors were identified.
For specific details on methodology, visit www.innovationphiladelphia.com.
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ADJUSTED CREATIVE ECONOMY INDUSTRY CATEGORIES AND DESCRIPTIONS
Adjusted Industry Category Industry/Occupation Description
Architecture, Engineering All industries/occupations falling within the fields of architecture,
and Planning engineering and planning
Communications and Marketing All industries/occupations relating to fields such as journalism, advertising,
public relations, broadcasting, publishing, promotion, marketing
and consulting
Digital Media and Programming All industries/occupations involving the technical production and
distribution/delivery of digital media products and services
Fashion Design All industries/occupations directly related to the design, development,
and production of clothing, as well as models and other professionals
supporting and/or dependent upon the fashion industry
Graphic and Visual Arts and All industries/occupations relating to the creation, production and
Multimedia Design distribution/sale of visual and graphic arts and multimedia products,
including artists, printers, illustrators and designers
Information Technology All industries/occupations involving the servicing, producing and
distributing computer, network and telecom equipment and services
Interior and Industrial Design All industries/occupations related to commercial, industrial, and interior
design services, as well as production of materials used in these
industries/occupations
Music, Film and Video Production All industries/occupations surrounding the artistic creation, production,
delivery and distribution of music, film and video products
Photography All industries/occupations involving photographic services, production
and delivery/distribution
Product and Merchandising Design All industries/occupations relating to the design, production and display
of products, packaging materials and exhibits
Software Development All industries/occupations impacting computer system and software
production and service
Source: Econsult Corporation (2007)
INNOVATION PHILADELPHIA :: CREATIVE FOOTPRINT
A creative economy is the fuel of magnificence. RALPH WALDO EMERSON
BOARD OF DIRECTORS
MEL BAIADA
Partner, Basecamp Ventures
RICHARD A . BENDIS
President and CEO, Bendis Investment Group, LLC
ERNEST J . DIANASTASIS
Managing Director, CAI
BRENDA D . GAVIN
Partner, Quaker BioVentures, Inc.
STEPHEN M . GOODMAN
Partner, Morgan, Lewis & Bockius, LLP
JOHANNA HAMBROSE
President, Electronic Ink
INNOVATION PHILADELPHIA WILLIAM P. HANKOWSKY
1500 MARKET STREET President and CEO, Liberty Property Trust
2600 CENTRE SQUARE WEST HUGH LONG
CEO, Northern Banking Group, Wachovia Bank
PHILADELPHIA , P E N N S Y LVA N I A 19102
RALPH MULLER
CEO, University of Pennsylvania Health System
(215) 496-8110 :: WWW.INNOVATIONPHILADELPHIA .COM DR . CONSTANTINE N . PAPADAKIS
President, Drexel University
SAMUEL J . PATTERSON
President and CEO, Veridyne, Inc.
GLENN T. RIEGER
Partner, New Spring Capital
DR . JUDITH RODIN
President, Rockefeller Foundation
INNOVATION PHILADELPHIA STAFF
ELEANOR BALL
LAUREN BELEY
HASSAN CHARLES
ANDREW DAVIS
TYSHA DIXON
NICOLE KENNEY
K E L LY LEE
JESSICA PULLANO
MARC SELKOW
C R E A T I V E F O O T P R I N T
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