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Economic development seeks to create economic well-being for a community. Positive economic development results in economic growth and improved quality of life. The economic health of our communities – which means the economic health of each individual within that community – is crucial to our collective and individual success, happiness, and progress.
Economic arguments have long been a significant rationale that influence the policy and funding for the arts and culture sector, including festivals and events. While just one slice of the total community pie, the economic health and vitality of a community is something that basically everyone can agree on, and tying the arts and culture to that health has been, and will remain, crucial to the success of the sector.
Economic development falls across numerous portfolios of government, including (but not limited to):
South Australian festivals and events generate significant positive economic impact each year. This is not only from tourism expenditure by those visiting from interstate or overseas, but also from local expenditure and activity by South Australian businesses and consumers. For example, festivals often have extensive infrastructure requirements, from tents and catering, sanitation, traffic control, and lights. Hiring other South Australian businesses to help organise the festivals therefore results in the employment of staff, the creation and sale of products and services, and the purchase of intermediate inputs. Similarly, festival patrons often pay for food and beverages, goods and transport, and admission for ticketed events. A study of cultural festivals taking place in non-metropolitan Australia finds there is evidence that even festivals of a small scale can cumulatively generate a significant impact on local employment, although often on an impermanent basis. Adelaide’s festivals might also help to retain some additional expenditure in the state, by encouraging South Australians to remain at home for leisure activities or holidays instead of going interstate.
Adelaide’s festivals positively contribute to employment and production in South Australia. In 2018, it is estimated that Adelaide’s festivals had a contribution of $109.1 million, and 1,025 full-time equivalent (FTE) jobs. Gross expenditure totalled $345.9 million in the same year, an increase of 29.2 per cent compared to 2017.
Growing just five of Adelaide’s festivals could provide a $59 million boost to the South Australian economy – Deloitte Access Economics considered the potential economic impact if five of Adelaide’s festivals achieved their attendance growth targets over ten years, with an associated increase in tourism visitation and expenditure. Overall, those festivals with growth targets could attract an additional 24,900 tourists on average annually, who would spend an extra $182 million over ten years in net present value (NPV) terms. Deloitte Access Economics estimated that if the festivals achieved their growth targets, gross state product (GSP) would be $59 million higher over a ten-year period in NPV terms. Employment would also be higher overall, with an additional 44 full time equivalent (FTE) jobs on average annually, peaking at 63 FTEs in 2029-30 as visitation increases year-on-year. Of course, the total economic contribution in 2029-30 — the equivalent of figures published today — would be significantly greater, as this figure would capture all festival-related expenditures in the state, not only the additional and induced visitation.
The Deloitte study also identified that the broader economic effects associated with growing Adelaide’s festivals are less easily measured but are nevertheless important. For example, larger festivals with greater links to international markets may produce better outcomes for artists selling their work, therefore increasing South Australian exports. The Deloitte analysis also did not consider the broader economic benefits of larger festivals (beyond visitation), such as creating a favourable environment for skills development and training, or marketing Adelaide as a compelling visitor destination and an attractive place to live. These are benefits which tend to emerge over time, often without a clear driving change, but are nevertheless important to consider in the context of growing Adelaide’s festivals.
