Nurturing the Creative Economy Through Investment

The creative economy is about more than music and theater, it also includes the work of artisans.

impact investors looking for ways to transform

ailing communities are increasingly channeling capital into the creative economy, relying on a growing body of research that indicates thriving culture is key to driving economic revitalization.

Indeed, there are clear links between culture and well-being. A concentration of assets in a low- or moderate-income community’s culture has a statistically significant impact on the health, education and security of its residents, according to a 2017 study by Mark Stern, a professor of social policy and history at the University of Pennsylvania.

Yet it is only recently that the creative economy has been clearly defined and identified as an important facet of impact investing, said Laura Callanan, founder of Upstart Co-Lab, a nonprofit launched in 2016 to help bridge capital between investors and creative entrepreneurs.

Ms. Callanan launched Upstart after identifying a gaping disparity between the creative economy’s contribution of some 5% to the U.S. economy and the capital it was attracting from impact investors: almost nil.

Part of the problem has been that the creative economy hasn’t been clearly defined, so Upstart took on the task, including not just the traditional arts such as music and theater, but any facet that supports the unique culture of a community. Consider nail art, furniture-making, local cuisine, toy and game designers, jewelry makers and real estate that houses artists—all are part of the creative economy definition that’s being mainstreamed by Upstart Co-Lab. In all, some 145 industries are included in the creative economy.

“What the creative economy can contribute includes a positive change in quality of life, economic development, jobs and community resiliency,” Ms. Callanan said, adding that

35% AND 38%

In the U.S., around 35% of women-owned businesses and 38% of businesses owned by Black, indigenous and people of color align with the creative economy.