Agglomeration and the Success of Arts Majors Working in Entrepreneurship and Innovation

Although most DataBriefs focus on studies using the SNAAP data itself, we periodically feature summaries of other research relevant to the SNAAP mission. This DataBrief highlights the work of Richard Paulsen and colleagues, who used American Community Survey data to explore career patterns for arts majors working in entrepreneurship and innovation.

A recent study published in Economics of Innovation and New Technology, authored by Richard J. Paulsen, Gregory Wassall, and Neil Alper, explores the role that agglomeration, or proximity to other creatives, entrepreneurs, and innovators, plays in leading arts graduates toward entrepreneurial or innovative roles. They also measured their degree of success in these roles. This research was the follow up to another study from the same authors, which found that arts graduates were overrepresented in entrepreneurial occupations (such as photographers and woodworkers) and innovative industries (such as software publishing and specialized design services) in the United States.

Economic theories of agglomeration argue that productivity can improve when workers and firms are geographically proximate to similar workers and firms, likely through the spread of information and personal contact (Carlino et al., 2007). Historically in the arts there has been clustering of creatives in cities like Paris, London, and New York. Similar clustering has been observed in other industries, like automakers in Detroit and technology firms and startups in Silicon Valley.

In this study, the authors tested for how agglomeration impacts arts graduates engaged in entrepreneurship and innovation. They hypothesized that living or working in creative and entrepreneurship or innovation hubs, with hubs defined as locations that exceed national averages of creatives, entrepreneurs, or innovators by more than 50 percent, would increase the likelihood that arts graduates work in entrepreneurial occupations or innovative industries. They also hypothesized that living or working in these hubs would increase the productivity of arts graduates working in these areas, with earnings being used to measure productivity. The study utilized American Community Survey data from 2013 to 2017, with responses from over 100,000 arts majors. The American Community Survey is administered by the U.S. Census Bureau to a one percent random cross-section of the U.S. population each year, asking questions pertaining to topics such as demographics, educations, and employment, among others.

Figure 1 shows shares of arts graduates working in entrepreneurial occupations by hub status. Majors classified within ​“core arts” follow a narrow definition of arts major, while those classified as ​“extended arts” follow a looser definition. As seen in the figure, arts graduates are far more likely to work in entrepreneurial occupations when they live or work in a creative hub, an entrepreneurship hub, or both. This was true for both core and extended definitions of arts majors. Figure 2 shows shares of arts graduates working in innovative industries by hub status. Here too the findings indicate that both types of arts graduates are far more likely to work in innovative industries when they live or work in hubs. Regression analyses show similar patterns of results.

The authors also examined how living or working in hubs impacts the productivity of arts graduates working in entrepreneurial occupations and innovative industries. Regression analyses show increased earnings in entrepreneurial occupations and innovative industries when working in creative hubs. Proximity to other creatives improves the productivity of arts graduates working in entrepreneurship and innovation. However, these findings are less conclusive and more research in this area is needed.

The findings of this work have important implications for those who have pursued or plan to pursue higher education in the arts. First, this provides further evidence that arts graduates may be well positioned to pursue careers in entrepreneurial occupations and innovative industries. Second, arts graduates seeking employment in entrepreneurial occupations and innovative industries should consider pursuing such work in geographic areas where other creatives, entrepreneurs, and innovators are present, as proximity to other creatives, entrepreneurs, and innovators has the potential to spur entrepreneurial and innovative activity.

The findings can also serve to spur action among institution of higher education, policy makers, and supporters of the arts seeking to ensure the success of arts graduates. Institutions of higher education in the arts can include more coursework in entrepreneurship and innovation and encourage internships and service-learning experiences to develop these skills. Career services staff can also ensure arts graduates are aware of opportunities in entrepreneurship and innovation. Formal alumni networks can be developed in entrepreneurship and innovation hubs. With regards to policy, relocation assistance to allow workers to move to where jobs may be available could assist arts graduates seeking to relocate to creative, entrepreneurship, and innovative hubs.

Full Article Citation:

Paulsen, R. J., Wassal, G., & Alper, N. (2025). Agglomeration and the success of arts majors working in entrepreneurship and innovation. Economics of Innovation and New Technology, 34(5), 769 – 781. https://doi.org/10.1080/10438599.2024.2368142

References:

Carlino, G. A., Chatterjee, S., & Hunt, R. M. (2007). Urban density and the rate of invention. Journal of Urban Economics, 61, 389 – 419. https://doi.org/10.1016/j.jue.2006.08.003