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California Creative Economy Shows Resilience, but Fashion Sector Declines, Research Finds


California’s creative economy is showing signs of resilience in the entertainment and media sectors, which were best able to pivot during the COVID-19 recession, while the fashion industry continues to decline, according to Otis College of Art and Design’s annual report released Wednesday.

Encompassing five sectors — entertainment and digital media; fine and performing arts; architecture and related services; creative goods and products, and fashion — the creative economy was responsible for an outsize impact on the state’s fiscal well-being, with total value added impact of $687.6 billion in 2020, the equivalent of roughly 23 percent of California’s nearly $3 trillion gross regional product, even though its 1.4 million workers only make up 7.8 percent of employment.

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California’s creative industry employment overall increased by 15 percent in 2020, which is down from 22 percent in 2019 but still a positive trend line over the last 13-year period the Otis study has tracked.

(This year’s report studied 2020 is in depth since labor statistics are only fully available from that year, but also looked at macroeconomic conditions speaking to the recovery that occurred in 2021.)

No surprise, entertainment and digital media continued to be the most robust sector, employing nearly 1 million workers statewide, mostly in L.A. County and the Bay Area.

Driven largely by the rise in streaming video, California added 320,000 entertainment and digital media jobs from 2007 to 2020, but employment dipped 3.3 percent in 2020. Still, for scale, the total added GRP of the sector, $599.4 billion, would rank above that of the cities of Dallas and Seattle in economic impact.

By comparison, total added GRP for California’s fashion sector, with 3.8 percent of creative economy workers, was $17.4 billion. Still, if it were a city, its economic impact would rank above Gainesville, Fla., and Eugene, Ore.

Creative industry employment in L.A. County saw the sharpest declines, because of the higher concentration of workers (64 percent of the state total) in the lagging fashion sector — a victim of the steady, long-term decline of manufacturing in the U.S.

“SoCal was historically the blue jean capital, but labor costs have moved a lot of that activity to other areas,” said Adam Fowler, a partner of CVL Economics, the economic research firm that authored the report. “As fashion technology is becoming more accessible, we’re starting to see it come back a little but housed under retail where design prototyping and supply chain is being done in-house under a small, more entrepreneurial umbrella.”

As of 2020, the total number of fashion jobs in the state was 108,250, representing an annual decrease of 14.4 percent, the majority salaried workers.

One bright spot? The cosmetics subsector grew by more than 35 percent. That L.A. County cosmetics employment contracted by nearly 13 percent shows the center of gravity of this subsector is shifting to other regions.

Supply chain issues, inflation, labor shortages and global disruptions due to the pandemic and Russian invasion of Ukraine are expected to have continued impact on the creative economy.

Looking ahead, to promote growth, the report recommends the state focus on increasing affordable housing and affordable commercial real estate; adapting film and TV tax incentives to also include post-production, VFX, animation and the burgeoning gaming industries, and cultivate talent by partnering with the educational and commercial sectors.

In fashion specifically, Fowler noted potential in fashion technology, from Snapchat filters of a Levi’s T-shirt, as well as for lighting technicians and costume designers working in the virtual world.

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