I hasten to add that enlightened self-interest is not the only motivation. We actually enjoy the arts we support. But there is far more to it than just having good seats on opening nights or somewhere to entertain customers. We believe we have an obligation to do it. For our business, for the business culture in which we operate, for the communities within which we operate our factories, and for the wider society of all Australians. But before I go too much further let me try to put the arts into some sort of context for you. Because little of what I want to say will make sense unless I summarise a few basic facts about the arts in Australia and business funding for them. I’ll also summarise a few basic comparative facts, in this case from the United States.

So what are we talking about?

The total arts and entertainment industry in Australia employs more than 200,000 people. That excludes a further 200,000 volunteer workers in what might loosely be termed the cultural industry, which is of course closely linked to the arts. The industry generates more than $14 billion in goods and services. It contributes nearly $8 billion a year in value added to the economy.

In fact, the contribution by arts and entertainment to our GNP is greater than that of many other sectors of the economy. It’s far greater than most manufacturing industries. And it’s certainly greater than the sport and recreation business. Hold on to those basic statistics, and consider some more.

In 1996 the value of corporate support for the arts in Australia was $65 million, up in real terms by six percent since 1993. And 11 percent of businesses now support the arts. While that’s a very low figure, it’s at least a reversal of the downward trend of recent years.

But if that sounds like the good news, the bad news is that the arts are losing out to sport, welfare and educational giving by the corporate sector. Just ten years ago the arts drew 13 percent of the corporate public benefit outlays; today it’s down to just five percent. Compare that to 39 percent on community welfare, 33 percent on sport, and 23 percent on education. Let’s put community welfare and education to one side. There are cogent reasons why they need our assistance and I’m not going to detract from them.

Now you all know that I’m a dedicated sports fan and a corporate sponsor of sport. But there’s something seriously amiss in Australia when corporate Australia is spending nearly seven times the amount on sport as we do on the arts . . . seven times. The irony is that even if the only criteria were direct economic benefits, I believe that the arts can give business at least equal, if not better, value for money. And when we come to the less immediate, more long-term benefits to business and the nation as a whole, there’s simply no comparison. The arts have it.

Consider the United States figures. While only 11 percent of Australian business gives to the arts, 47 percent of American businesses do, up from 37 percent in 1991. We’ve never been higher than 11 percent. Where Australian corporates give just five percent of our public outlay budgets to the arts, the Americans give 19 percent – four times as much. The most important point to make here is that it wasn’t always so. Just 30 years ago the total outlays by American business on the arts was only about $30 million ($Aus). Today it’s around $1.3 billion ($Aus).

Even allowing for inflation, it’s been a quantum leap. Now I’ve been doing business in the United States for a decade. So no one knows better than me how strongly the Americans believe in the free market. Yet clearly the Americans have learned that involvement in the arts makes good bottom line business sense.

Why is that so?

There are a few ways to answer that question. The first way is descriptive. I can tell you what the research shows about the reasons why Australian companies in fact support the arts. The main reasons, in order, are:

1. As a community service
2. To improve the company’s image in the public’s eyes
3. To provide the opportunity to entertain clients and staff
4. To participate in regional or local arts activities
5. As part of specific marketing or public relations activities

These are understandable reasons. And they are beneficial to companies.

There’s another reason why I believe arts sponsorship can deliver value for money. It has to do with demographics. Few people would argue that a key difference between a sports audience and an arts audience is that the sports audience will be 60 percent male and 40 percent female. However an arts audience will be 60 percent female and 40 percent male. Yet when it comes to purchasing decisions, up to 80 percent are probably made by women. In other words, exposure to arts audiences is exposure to a higher percentage of actual purchasing decision makers. But all these reasons for stinging the arts undersell the actual and potential value of arts sponsorship and philanthropy. So instead of sticking to the descriptive answers of why companies say they give to the arts, let me offer you a prescriptive answer. Let me tell you why those companies already investing in the arts should be investing more and why those companies not currently investing should begin to do so.

The arts are a positive force for business because if the investing is planned, targeted, monitored and reviewed, it can yield three broad dividends of value to business. First, the arts can directly stimulate economic growth.

Second, the arts increasingly are vital to the development of an appealing community that will attract business leaders to live, work, and visit.

Thirdly, a positive approach by business to the arts helps to encourage new ways of thinking across the whole society.

It helps us to reflect on our deepest concerns and aspirations and hold them up for examination.

Let’s begin with economic development and that, of course, means jobs. Business is not yet sufficiently aware in Australia that the arts spark economic growth, revitalise cities and improve the business climate. But the evidence is there, locally and internationally. For every dollar spent on the arts, an additional three or more dollars is generated in hotels, restaurants, retail transportation and parking revenues within most local economies.

Perhaps I should emphasise something at this point. By ‘the arts’ I’m using the term in its widest sense. I’m not just talking about the condescendingly so-called elite or highbrow arts – arts such as opera, ballet, symphony orchestras, museums, theatre, and the visual arts. I’m also talking about entertainment. By which I mean everything from musical comedy, rock concerts, street theatre, pipe bands, the film industry, and line dancing. Now when any of the arts are done well they generate growth; they increase employment tax revenues, encourage commercial and residential real estate projects, foster tourism and attract new industry and business. The last point leads on to the second main reason for investment in the arts.

A couple of years ago Fortune magazine took a poll of 500 CEOs of transnational companies in America, Asia and Europe. The magazine asked them to list the top ten, and then the top 50 cities around the world in which they would prefer to do business. A striking feature of nine of the top ten cities was the very high rating given to the accessibility of varied arts and cultural activities. This was a key factor in attracting executives and their families in a mobile global economy. Sydney was the only Australian city to win a guernsey. And it came in at around 40th. Melbourne did not rate at all.

That was 1995. Let’s hope that’s changing. But supporting the arts as a way of making communities more attractive to outside investment is only a secondary reason. The primary reason is that it’s good for internal investment, for those of us already here. A community which is arts-rich has a multiplier effect – not only on revenues and jobs, but on the quality of living standards and the social fabric.

This is because the arts, both for practitioners and for audiences, contributes to the fund of ‘social capital’, a key element in wealth generation.

The concept of ‘social capital’ has increasingly figured in the work of social scientists and economists trying to understand a paradox. That paradox is how some countries, which seem to have much the same economic features and policies, are nevertheless so dramatically different when it comes to growth and development.

The answer can be found in the social and cultural networks which bind people together in their non-working lives.

This matters just as much, if not more, than what they do – or even how they do it – on the factory floor or in the office. In those ‘social capital’ networks the arts, especially when extended to involve people at the grass roots, play a significant role. Which brings me to the third reason for investment in the arts.

Long before we heard the terms globalisation and world best practice the late John F Kennedy had something insightful to say about the arts and civilisation. JFK said: “the life of the arts, far from being an interruption, a distraction in the life of the nation, is very close to the centre of the nation’s purpose and is a test of a nation’s civilisation.”

Our nation’s civilisation is being tested. In an era of rapid global change educated, analytical and creative thinkers are at a premium. They are the human resources who will make the difference to business and to the growth of this country. We all know that a comprehensive and continuing education for aspiring leaders in business must include management and technical training in many specific fields. But unless it also includes an awareness of, and sensitivity to, the creative process, it will produce leaders who will not reach their true potential.

Why do I believe this? Because if you’re merely aware of the arts and creativity you are aware of the past and who came before you. You are aware of the great masters who have set the standards of excellence, and the importance of the attention to detail. But if you’re sensitive to the arts, you’re also alive to the promise of the future. To the excitement of innovation, risk-taking and experimentation, and to the need to look for unfamiliar solutions to, familiar problems. Balance, harmony, timing, inspiration, method, improvisation, boldness, infinite care, chancing your arm, a sense of possibility, patience, daring, empathy, dissent, illumination, communication, transformation. Each of these, and all of these, are qualities we would like to associate with our best decision makers in business. Yet they’re all definitive qualities we also associate with the creative arts. Indeed, we derive our sense and understanding of those qualities from the arts. How often have we heard the expression “we have a fine general manager (or marketing director or financial controller), but if only he or she could think outside the square . . . “

Thinking outside the square. That is precisely what creative thinking involves. And it’s what a community where the arts are nurtured, fostered and supported will encourage. Not just in business, of course, but in every area where problem-solving and imagining the future hold the key. That’s so whether it be at the level of national or local government or in the classrooms and playgrounds of our schools.

This is a time when we in Australia are grappling with what we mean when we talk of the impact of globalisation. We read daily of the importance of finding ways to compete in the Asia-pacific region. We debate incessantly on who we are and how to define our national identity. Surely one inescapable fact in all this clamour must be clear by now.

No company or government can consider doing business in the Asia-pacific region without factoring in language, culture and the arts – ours and theirs –as a essential elements. But an awareness of culture and the arts, our own and those of others, has not been seen as all that relevant to profits, dividends, takeovers and balance sheets. Let’s acknowledge it.

Most of us have not recognised a relationship between involving ourselves in the arts and the bottom line. At best we’ve viewed contributing to the arts as helping our image as socially responsible corporate citizens. There’s nothing wrong with that, of course. But it has narrowed our vision.

I’m asking Australian business to broaden its vision, to lift its cultural sights, and to form a new alliance with the arts. In making that call I believe that such an alliance will benefit more than business and the arts alone. The wider impact will be felt in many ways.

Such an alliance would enhance the quality of life in our communities. It would provide an impetus to creativity and innovation in many areas of Australian society. And it would add to our confidence in dealing with the revolutionary era of change in which we now find ourselves.