The Canadian art industry can barely be called dominant in terms of its contribution to the GDP.
This historically has been the case not only in Canada but in most developed countries.
Art is not a necessity and gets moved down the family budget lists with the slightest signs of economic trouble.
Of an estimated 161,000 incorporated nonprofit organizations in Canada, 13,770 are involved in the arts and culture, representing 8.
5% of the total.
The "nonprofitness" of the industry can be likely explained by the nature of the production process.
Art production cannot be industrialized or put on the conveyor belt because value is placed on the uniqueness of an artifact in addition to its artistic characteristics.
Despite seemingly large margins, it can take an individual artist up to several years to produce an artifact and even more time is required for the artifact to gain value due to aging or growing popularity of the artist.
In addition to the production problem, the sector is chronically underfinanced and heavily relies on transient funding sources such as individual donations.
Compared with other incorporated nonprofit organizations, arts and culture organizations receive much lower funding from government (28% for arts and culture vs.
49% for all nonprofits), much higher revenues from earned sources (50% for arts and culture vs.
35% for all nonprofits), slightly higher revenues from gifts and donations (17% for arts and culture vs.
13% for all nonprofits) and roughly similar revenues from other sources (5% for arts and culture organizations vs.
3% for all nonprofits).
Very often, companies in the industry cannot afford to hire staff.
Only 37% of incorporated arts and culture organizations reported having paid staff, much lower than the 46% of all incorporated nonprofit organizations with paid staff.
To compensate for the lack of resources, most organizations in the industry heavily rely on volunteer labor.
Arts and culture organizations reported a volunteer complement of 933,000, with almost 200 million hours volunteered.
The facts paint a rather grim picture for the industry.
However, even despite some negative dynamics, the industry can be profitable given it is able to adjust to the rapidly changing economic reality.
First, the sector should consolidate and syndicate if possible.
I am not talking about unionization per se.
Efficient organization would suffice.
In the medieval Europe, for example, artists organized in professional guilds and marketed their services through a common window.
This approach helped to increase credibility of individual artists and establish industry-wide standards.
Second, there should be a better access to venture capital and business incubators catering specifically to this group.
Many individual artists cannot concentrate on the creative process because they have to take care of their daily needs.
Finally, marketing is the key element of business success.
Producing a great artifact does not necessarily ensure its success.
Increasing visibility of individual artists or organizations does.
Higher visibility of art organizations is likely to increase revenues, leverage technology and increase an overall interest in art and culture.
This historically has been the case not only in Canada but in most developed countries.
Art is not a necessity and gets moved down the family budget lists with the slightest signs of economic trouble.
Of an estimated 161,000 incorporated nonprofit organizations in Canada, 13,770 are involved in the arts and culture, representing 8.
5% of the total.
The "nonprofitness" of the industry can be likely explained by the nature of the production process.
Art production cannot be industrialized or put on the conveyor belt because value is placed on the uniqueness of an artifact in addition to its artistic characteristics.
Despite seemingly large margins, it can take an individual artist up to several years to produce an artifact and even more time is required for the artifact to gain value due to aging or growing popularity of the artist.
In addition to the production problem, the sector is chronically underfinanced and heavily relies on transient funding sources such as individual donations.
Compared with other incorporated nonprofit organizations, arts and culture organizations receive much lower funding from government (28% for arts and culture vs.
49% for all nonprofits), much higher revenues from earned sources (50% for arts and culture vs.
35% for all nonprofits), slightly higher revenues from gifts and donations (17% for arts and culture vs.
13% for all nonprofits) and roughly similar revenues from other sources (5% for arts and culture organizations vs.
3% for all nonprofits).
Very often, companies in the industry cannot afford to hire staff.
Only 37% of incorporated arts and culture organizations reported having paid staff, much lower than the 46% of all incorporated nonprofit organizations with paid staff.
To compensate for the lack of resources, most organizations in the industry heavily rely on volunteer labor.
Arts and culture organizations reported a volunteer complement of 933,000, with almost 200 million hours volunteered.
The facts paint a rather grim picture for the industry.
However, even despite some negative dynamics, the industry can be profitable given it is able to adjust to the rapidly changing economic reality.
First, the sector should consolidate and syndicate if possible.
I am not talking about unionization per se.
Efficient organization would suffice.
In the medieval Europe, for example, artists organized in professional guilds and marketed their services through a common window.
This approach helped to increase credibility of individual artists and establish industry-wide standards.
Second, there should be a better access to venture capital and business incubators catering specifically to this group.
Many individual artists cannot concentrate on the creative process because they have to take care of their daily needs.
Finally, marketing is the key element of business success.
Producing a great artifact does not necessarily ensure its success.
Increasing visibility of individual artists or organizations does.
Higher visibility of art organizations is likely to increase revenues, leverage technology and increase an overall interest in art and culture.