THE current downturn has already seen its share of casualties across the creative arts. Fringe Sunday has had to be cancelled. Arts & Business, the arts partnership network, reports that 63 per cent of small and medium-sized arts organisations in the UK are suffering a drop in business funding. And according to the market-leading Mei Moses Annual All Art Index, prices at art auctions fell by 35 per cent in the first quarter of 2009.
But to accept these as natural consequences of a recession and ignore the arts sector opens up the risk of ever truly emerging from the downturn in a position of advantage.
At a time when all the rules have changed, we need creative thinkers to in
novate and inspire us out of our gloom. What starts in an art gallery, fashion show or on the stage often ends up in our homes, on the high street or being recorded and played all over the world. An artistic ability to seek new perspectives serves as a catalyst for new trends.
How we respond to the current business and financial environment should be no different and it is not a huge leap to see how that same open-minded approach in an engineering or technology laboratory gives us a new generation of marketable products. It is a timely reminder that without creativity, many industries will stand still.
What is also revealing is how good design is holding its value and how modern art can still break records in the auction rooms. Modern and contemporary design is one of the fastest-growing and most exciting fields in the international art world. Interest in Art Nouveau, Art Deco and 1970s/1980s avant-garde design is climbing. The appeal of Charles Rennie Mackintosh does not diminish.
Despite the overall decline in the value and number of lots sold at art auction, there have been very notable exceptions.
A David Hockney painting, Beverly Hills Housewife, was sold at auction for more than £5.2 million – a record price for the artist – in May this year. The 12ft by 6ft painting fetched £5,235,328 when it went under the hammer at Christie's in New York. In London, auction house Phillips de Pury & Co sold an aluminium Lockheed Lounge chair by Marc Mewson, once used in a Madonna video, for £1.1m. This was an auction record for a piece of contemporary design art.
A Henry Moore drawing, Shelter, depicting people huddled in their blankets as they slept on a London Underground platform during a bombing raid in 1942, sold for £223,250. This was against an estimate of £40,000 to £60,000.
It seems that collectors, who only a few months ago were reticent, are now returning to the market, with fairs, auctions and dealers alike focusing on exhibiting and selling quality works.
The allure of fine art as an alternative hard asset remains strong for both private and institutional investors, even as the long-term economic prospects remain uncertain. It was the British Rail Pension Fund that provided the empirical evidence. The Fund bought widely between 1974 and 1980 and by the time it had disposed of the collection in the mid-1990s it had achieved an overall rate of return of 11.3 per cent per annum, well in excess of that needed to beat inflation. Certain individual collections yielded significantly better returns – up to 21.3 per cent per annum for impressionist art for instance.
Alongside the fact that art can hold its value, it is its inherent ability to feed the mind and the soul which is also so important in a recession. The partnership between public and private organisations is at the very heart of creative endeavour.
During the 1930s recession, President Roosevelt set up the Works Progress Administration (WPA), which included a range of cultural programmes. These employed hundreds of artists and writers and produced thousands of different works. It supported artists such as Jason Pollock and Mark Rothko; its theatre project encouraged the likes of John Huston and Orson Welles. WPA ultimately produced 234,000 pieces of art, 4,400 musical performances and 1,813 plays, while 5,000 employees produced guidebooks for every state. The theory was that giving someone a job saved both body and spirit and by supporting significant numbers greatness would emerge.
Today, the UK government is looking to develop a "New Deal of the Mind" for the creative industries. The hope is that this will lead to more work in the arts, architecture, publishing, film and television, as well as encouraging the internet developers and inventors who drive innovation in technology and science. To see us through this downturn we should focus on opening up opportunities. A more imaginative approach may reap rewards culturally, socially and financially.
• Joss Mitchell is director of HSBC Private Bank in Scotland. HSBC Private Bank supports Design Miami/Basel
