California’s creative industries pack a powerful economic punch and Los Angeles County is leading the way, according to a report from Otis College of Art & Design.

The 2019 report, prepared by Beacon Economics, shows that creative industries throughout the state support 2.6 million jobs, $227.8 billion in labor income and $604.9 billion in annual economic output. One million of those jobs represent workers directly employed in creative industries and the other 1.6 million are jobs indirectly generated by those sectors.

When added up, they account for 15.4 percent of California’s total employment.

“This report really shows that there is a creative ecosystem here in Los Angeles County and in California as a whole,” said economist Robert Kleinhenz, Beacon’s executive director of economic research. “The thing to recognize is the key contribution this segment makes to the state and local economy. It’s much bigger than the motion picture and sound recording industry.”

What is it?

So what exactly is the creative economy?

The report breaks it into five key sectors: architecture and related services, entertainment and digital media, creative goods and products, fashion, and fine arts and performing arts. Each of those sectors contains several sub-categories, some of which are probably not top of mind when envisioning creative work.

Architecture and related services, for example, includes everything from interior design services to ornamental and architectural metalwork manufacturing. Entertainment and digital media include such industries as advertising, graphic design, newspaper publishers and greeting card publishers.

LA County’s role

Los Angeles County plays a major role, producing roughly 40 percent of all direct creative industry employment in California. The region is also home to about a third of the jobs indirectly generated from creative industries.

Indirect jobs typically include vendors and suppliers. In the case of a film production company, that could include the business that supplies lumber to build sets, the security personnel who are on site during filming and the catering trucks that provide food for film crews.

A deeper dive shows L.A. County’s creative industries support 864,958 jobs, nearly $78 billion in labor income and $207.8 billion in annual output. Nearly 415,000 of the jobs are workers directly employed in the creative industries and 450,013 are positions indirectly generated by creative work.

When multiplier effects are factored in, that accounts for nearly 20 percent of the county’s total employment.

Wage disparity

The report notes a wage disparity between men and women who work in creative industries. In L.A. County, a woman earns 77 cents for every dollar her male counterpart earns. So a man who earns $70,000 a year would make $16,100 more than a woman doing the same job.

In New York City, women earn 72 cents for every dollar their male counterparts earn.

The report attributes L.A. County’s smaller gender wage gap to rapidly rising pay for female professionals. From 2007 to 2017 their average wage rose 40 percent, nearly double the pay hikes seen by males working in the same industries.

Wages vary widely throughout the creative industries.

Women made up 51 percent of L.A. County’s fine arts and performing arts industry in 2017 and earned an average of $30,000 a year, the report said, while men averaged $42,000.

Wages in entertainment and digital media were considerably higher. Women accounted for 37 percent of the workforce in 2017, averaging $68,000 a year, while men averaged $82,000 annually.

Fashion – an entrepreneurial industry

Else Metchek, president of the California Fashion Association, said her industry is thriving. Most employees in the fashion field, she said, work for small businesses that are hyper-attuned to rapid changes and trends in the industry.

“The industry is very healthy but very entrepreneurial,” Metchek said. “Usually, these businesses are 20, 30 or maybe 40 people. It can’t be much bigger because you have to be able to move very quickly if you are going to change every five weeks.”

Creativity can take many forms. Another recent report from Business.org showed California far outpaces others U.S. states in research and development spending. National Science Foundation data on research and development spending in 2016 — the most recent year for which numbers are available — found that California accounted for 31 percent of the nation’s overall R&D spending.