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L.A. region's 'creative economy' produced 457,400 jobs in 2016, driven by Hollywood rebound

L.A. region's 'creative economy' produced 457,400 jobs in 2016, driven by Hollywood rebound
An aerial view of the Hollywood sign atop Mount Lee in Griffith Park. (Wally Skalij / Los Angeles Times)

The creative economy of the Los Angeles region saw significant job growth between 2011 and 2016, with statewide creative employment now exceeding the pre-recession highs observed more than 10 years ago, according to a new study.

The annual Otis Report on the Creative Economy, which was released Tuesday, noted that direct employment in the Los Angeles region rose by 21,800 jobs to 457,400 during the five-year period.

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In addition to individuals employed directly by a company, there were 179,200 freelance persons working in the creative industries of the region earning $8.5 billion in 2015, the latest year for which freelance information was available.

The L.A. region's creative economy includes the entertainment industry as well as other artistic sectors such as fashion, digital media, architecture and the visual and performing arts. The Otis report, authored by the Los Angeles County Economic Development Corp., covers Los Angeles and Orange counties.

Overall employment in the creative industries for the region totaled 792,600 jobs in 2016, up from 759,000 in 2015. The figures include direct employment as well as jobs indirectly generated through vendors, suppliers and other business partners.

For all of California, creative employment stood at 789,900 jobs in 2016, surpassing the pre-recession peak recorded in 2007 of 767,000 jobs, according to the report.

The research showed that in 2016, the creative industries in L.A. County alone generated 399,500 jobs, an increase of 13%, or 48,700 jobs, compared with 2011. The entertainment industry — which includes those who work in film, TV and post-production — accounted for more than 40% of those jobs, or 162,600 jobs in 2016.

Direct labor income in the creative industries in L.A. County totaled $37.4 billion that year. Hollywood contributed by far the largest share, at just over 45%, or $16.8 billion.

"We have an existing infrastructure and ecosystem that has allowed entertainment to thrive here and has drawn companies to the region that weren't originally here," said Somjita Mitra, director of the LAEDC's Institute for Applied Economics, in an interview.

Companies like Netflix, Amazon and Apple have set up their entertainment studios in L.A., recruiting local industry talent as they seek to expand or kick-start their original content production.

California's expanded film and TV tax incentives have also contributed to job growth, said Mitra. "We were able to bring back some of the jobs that were lost, especially in the television area."

The L.A. region has also benefited from the proliferation of digital media entertainment companies like BuzzFeed and AwesomenessTV, which specialize in short-form online content.

Gaming companies like Activision Blizzard, which is based in Santa Monica, have also contributed to job growth in the area.

"Video games are like full-scale movie productions now," said Chris Rico, who heads digital media and entertainment development at LAEDC. "They are also pulling from that same talent pool."

The report noted, however, that the L.A. region's creative sector faces ongoing external threats.

"Countries such as China and India have invested heavily in their domestic entertainment industries, increasing global competition for products produced in the Los Angeles region," the report stated. "Moreover, the continued race to the bottom for state film tax credits might siphon some film studios from the Los Angeles basin, especially as the film support industries mature in other localities."

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Nonetheless, the statewide employment outlook for the creative industries continues to appear bright.

The Economic Development Corp. — the nonprofit organization that promotes economic development in the region — projects that the statewide creative economy will grow by 5.6% between 2016 and 2021. That translates into a 44,200-job increase over five years, from 789,600 creative economy jobs in the state in 2016 to 833,800 jobs by 2021.

UPDATES:

2:09 p.m.: This article was updated with comments from LAEDC officials.

This article was originally published at 1:35 p.m.

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