Where Are We Now?

From Arts Subsidy to Creative Strategy
Cultural economics began as a branch of welfare economics. The question was simple: should governments subsidise the arts? Early research focused on the performing arts and their economic limits—why an orchestra, for instance, can’t just play faster to reduce costs.

Everything changed around 2000, when digital technologies reframed culture as commerce. Attention shifted to the broader “creative industries”: media, design, gaming, advertising, as well as the arts. Culture became marketable. “People started talking about GDP, exports, and employment,” Towse notes, “rather than meaning or beauty.” Policy followed suit. Copyright and intellectual property moved to the centre of cultural strategy.

Towse doesn’t dismiss this shift—but she urges caution. Measuring impact is useful, she says, but “there’s a risk of focusing too much on what can be measured, and too little on what gives culture its deeper value.” The challenge for cultural economists is to stay grounded in both. As she wryly adds: “Shakespeare didn’t need a subsidy. In fact, the government was against him, censoring what he did — which probably made him more popular.”

Rethinking Economics, Rethinking Culture
To understand this new world, Towse argues, cultural economists must think like industrial economists. That may sound dry—but it’s anything but. Industrial economics looks at how markets work. Who has power? Where does money flow? And when should the state step in? “We need to know what consumers are doing,” Towse emphasises, “and we need people who are willing to advise based on real knowledge.” That’s where cultural economists and universities can still make a difference.

Take music streaming. A handful of platforms dominate the market, and most artists see little of the revenue. This is a textbook case of a “natural monopoly”, Towse explains, where big players benefit from network effects and economies of scale. To understand this, economists must go beyond arts funding and ask the tough structural questions: How do platforms make money? Who gets paid? Who doesn’t? And we must learn from the past. “Artists had no case to bring against Napster. The labels had signed away the rights. And the labels didn’t understand what was coming. ”The result? Creators left without leverage, and a system still failing to pay them fairly.

What Makes Culture Different?
But culture isn’t just another industry. A song, a film, a painting—these aren’t just products. They carry stories, identities, values. That’s why cultural economics matters: it combines the logic of markets with the messiness of meaning.

And that complexity matters. “We need to understand how creative markets function,” Towse says, “but also what makes creative work worth protecting.” Not everything that can be sold should be. And not everything that matters can be measured.

A Call for Vision
Towse ends with a clear message: cultural economics must reclaim its intellectual depth. Not just by gathering more data, but by building stronger frameworks to make sense of it. That means borrowing from industrial economics—but without losing sight of what makes culture different.

It also means facing the realities of power. “You can’t rely on regulation if the companies are too powerful and the states too small,” she warns. Cultural policy must evolve—not only smarter, but also more aligned, across sectors and borders. The task ahead is to reconnect analysis with meaning. Or, as Towse puts it: “Let’s try to see the wood for the trees.”