The Roots of Great Innovation

Entrepreneurial Climate and the Sustainability of Arts and Culture Organizations

Abstract

What is the relationship between a city’s entrepreneurial climate and the sustainability of arts and culture nonprofits?  Business, the arts, and innovation do not exist in isolation.  New York Times writer David Brooks (2011) opined, “The roots of great innovation are never just in the technology itself.”   The significance and value of the arts as community assets has sparked public intervention to leverage the arts to generate a variety of instrumental benefits. The arts were famously positioned as being of significant value for knowledge workers, the creative class, and the entrepreneurs powering the knowledge economy.  This has been portrayed, largely, as a one-way relationship in which the arts benefit cities economic pursuits.  Such depictions fail to consider the influence of open systems and recognize how communities simultaneously influence the population of arts and culture organizations.  This paper asks, “How do entrepreneurship levels affect the population dynamics of arts and culture nonprofits?”  The interactions between the formation and exit of nonprofit arts organizations and entrepreneurial climate of the 50 US states for the period from 1989 to 2012 are analyzed using negative binomial regression.  Higher entrepreneurial climates are associated with lower incidences of nonprofit arts and culture formations and lower exits.  The implications of this and opportunities for additional research are discussed.