Culture Is Not a Cost Centre: Three Studies That Show Its Economic Impact

Culture is often discussed as a public expense. But the best economic impact studies tell a more complete story: festivals, museums, theatres and heritage organisations are also local economic infrastructure. They attract visitors, support jobs, extend tourism seasons, strengthen hospitality and retail, and give cities a reason to be noticed.

This does not mean every cultural project should be judged only by money. Cultural value, social cohesion, education and identity matter in their own right. But when cultural organisations speak to public funders, sponsors or city leaders, economic evidence helps make the value visible.

Below are three strong case studies that show how cultural activity turns into measurable economic impact.

1. Edinburgh Festivals: a cultural brand with national economic weight

Edinburgh is one of the clearest examples of culture operating as an economic engine. The city’s annual festivals — including the Fringe, International Festival, Book Festival, Science Festival, Jazz & Blues Festival, Hogmanay and the Royal Edinburgh Military Tattoo — create a concentrated cultural season with global visibility.

In 2022, Festivals Edinburgh commissioned BOP Consulting to update the impact study for 11 major events. The research used festival management data and a large audience survey of around 22,000 people.

The reported results were substantial:

• £367 million net economic impact to Scotland
• 3.237 million total attendances
• 5,850 full-time equivalent jobs supported in Edinburgh
• 5,000 full-time equivalent jobs supported across Scotland
• 4.6 nights average stay by visitors to Edinburgh
• £33 return for every £1 of public investment

The important point is not only the headline number. It is the mechanism behind it. Festivals bring people into the city, extend their stay and connect cultural programming with accommodation, restaurants, transport and local services. For destination cities, this is why cultural events are not just “nice to have” — they are part of the visitor economy.

2. Museums in the United States: national scale, local jobs

Museums are sometimes seen primarily as educational or heritage institutions. The American Alliance of Museums report Museums as Economic Engines, prepared with Oxford Economics, shows that their economic role is much broader.

The study estimated that US museums generated:

• more than $50 billion in GDP contribution in 2016
• 726,200 jobs supported
• $12 billion in tax revenue for local, state and federal governments
• more than 850 million museum visits each year

The study also separates the channels of impact: direct museum operations, indirect supply-chain effects and induced spending from employees and suppliers. This is useful because it shows that impact is not limited to ticket sales. A museum buys services, employs staff, attracts visitors and stimulates spending across many parts of the economy.

For local decision-makers, this is a critical argument. A museum’s value is not captured only inside the building. It also appears in nearby restaurants, hotels, transport, suppliers, creative workers and public revenue.

3. UK theatre: ticket sales are only the beginning

Theatre offers a strong example of how audience spending multiplies beyond the venue. Sound Diplomacy’s economic assessment for UK Theatre and the Society of London Theatre mapped the UK theatre ecosystem and measured its wider contribution.

The study found that the UK theatre sector:

• delivers £2.39 billion in Gross Value Added to the UK economy
• supports 204,993 jobs, including freelancers
• generates £4.44 billion in annual turnover
• attracted 41.6 million attendances in 2019
• generated an estimated £3.67 billion in attendee spend
• produced £1.40 in additional local-economy spend for every £1 spent on a theatre ticket

This last figure is especially powerful. It translates cultural attendance into language that local economies understand. A theatre ticket is not only revenue for the venue. It can also trigger dinner before the performance, a hotel stay, local transport, childcare, retail spending or return visits.

For theatres under pressure, evidence like this helps reposition cultural investment as a driver of town-centre vitality and local employment.

What these studies have in common

The strongest cultural impact studies do not rely on vague claims. They make three things visible:

1. Audience movement — who comes, where from and how long they stay.
2. Spending patterns — what visitors, organisations and supply chains spend locally.
3. Economic translation — how direct activity becomes jobs, GVA/GDP, tax revenue or return on public investment.

This is why robust methodology matters. Without a clear method, cultural organisations may know they create value, but struggle to prove it. With a credible model, they can speak the language of municipalities, regions, sponsors and funders without reducing culture to a purely financial product.

The lesson for cultural organisations

Culture has economic impact because it creates reasons for people to gather, travel, stay, spend and return. Festivals can shape a destination. Museums can anchor local economies. Theatres can bring life back into city centres.

The opportunity now is to make those effects measurable.

For cultural organisations, the question is no longer whether culture creates value. The question is whether that value is documented clearly enough to be understood by the people who decide budgets, grants and partnerships.

That is exactly where economic impact measurement becomes strategic. It gives culture the evidence it needs to defend its role — not as a cost centre, but as a source of public, social and economic value.

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Sources

• Festivals Edinburgh / BOP Consulting: Economic Impact of the Edinburgh Festivals 2023 and Event Impacts summary of Edinburgh Festivals 2022.
• American Alliance of Museums and Oxford Economics: Museums as Economic Engines.
• Sound Diplomacy for UK Theatre and Society of London Theatre: Economic Assessment of the UK Theatre Sector.
• The Broadway League: Broadway’s Economic Contribution to New York City 2018–2019; included as additional reference context for theatre-sector economic impact.