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Art as a Driving Agent of the Foreign Direct Investment (FDI) Confidence Index

By Catalina Restrepo For Forbes México


"[El arte] Es uno de esos extraños casos en los cuales ganan unos y ganamos todos."



The impact of art in the transformation of cities and communities has been widely underestimated. The simplistic view of art as mere beauty and technical skill has led governments, companies and associations to fall into clichés, failing to understand its true potential. Too many times we have witnessed projects, initiatives and campaigns that attempt to beautify urban areas with what they consider "art". They paint brightly colored houses in marginal areas; adorn the streets with series of sculptures of cows, hearts, skulls, butterflies, trees, and everything imaginable intervened; or invite graffiti artists to paint stereotypical portraits of indigenous people, peasants, children or Frida Kahlo's portrait in all its variants (pop, punk, neon, etc.) among other similar initiatives that naively pose as solutions to the profound problems of inequality and social injustice that affect the population.


I feel that the problem lies in the lack of communication between art managers/promoters and entrepreneurs/investors. I think it's a matter of language, since many people in the art world are not good at pulling numbers and giving statistics; and on the other hand, investors are not sensitized to the real art that is inserted in professional circuits and that has nothing to do with the search for beauty and technical mastery, exclusively, as many may think.



"... in the art world are not good at pulling numbers and giving statistics; and on the other hand, investors are not sensitized to the real art"

I remember a project in which the promoter tried to impress the CEO of a company by mentioning a long list of artists and curators involved. This did not captivate the CEO, as he did not know any of them, nor did he understand the relevance of the project. It would have been more effective to present figures, returns on investment, social media reach and other tangible aspects. Sure! Ideally, investors would support artistic projects for their content and depth, but in reality, funding is needed, and it is necessary to present the project in terms that investors understand as a win-win.


This scenario is unfortunately common, although there have been brilliant managers who understood early on how to approach this aspect and managed to establish connections with entrepreneurs to raise funds for high-impact projects. Graciela de la Torre, for example, did so with the MUAC in Mexico City in 2008; a museum that is a reference for the Latin American scene. There are also historical cases of sensitive and sharp entrepreneurs, such as Ciccillo Matarazzo in Brazil, who managed to move forward with the São Paulo Museum of Modern Art and the São Paulo Biennial, thus positioning a world-class cultural event that changed the image of the city, which used to be associated with the favelas, but which for decades has been more recognized for its Biennial.





The Foreign Direct Investment Confidence Index (FDI)


The FDI or "Foreign Direct Investment Confidence Index", analyzes and classifies certain characteristics that encourage the 25 main countries in the world to invest in certain places. In general, the variables taken into account are, among others: interest rate differentials; world stock market return indexes and yield curves; world and country GDP per capita growth rates; inflationary risk and tax burden; real exchange rate; institutional quality; commercial openness and some measures of macroeconomic uncertainty; among many others.


But a city's environment improves to the extent that its people feel safe, free and happy. The real art -not the ornaments and colorful things I mentioned at the beginning- becomes an escape valve for social tensions. I am referring to protest art; sometimes political art; art that is inserted into professional and academic circuits. These projects, which often deal with strong, sordid and heavy themes, as well as being colorful, beautiful and eye-catching, do not focus on formal aspects, but are produced to invite to dialogue, debate, reflection, etc.


In the first instance, investors may fear that this type of art could affect the image of their company or government. However, in a broader perspective, the existence of these spaces for expression becomes, as I said before, an escape valve, creating a fertile ground for business success. It has been proven that the presence of these spaces decreases crime rates, reinforces the feeling of freedom of expression, stimulates creativity and supports dialogues that motivate people to do things; which impacts - indirectly and positively - on people's happiness index. This, in turn, can transform environments and change the image of entire sectors, cities and countries. It may sound romantic and ethereal, but below you will see some concrete examples that demonstrate how the influence of art on the economy is reflected in a quantitative, tangible and evident way.



"The existence of these spaces for expression becomes, as I said before, an escape valve, creating a fertile ground for business success"

We must bear in mind that art is not only painting and sculpture, but there are also proposals categorized as Social Engagement Projects that, far from being approached from a welfare vision, such as charity or social work, are initiatives designed from art to impact communities positively from the root.


For example, in the framework of the UNAM’s curatorial project called Residual, led by curators Paulina Cornejo and Gonzalo Ortega in 2010, German artist Thomas Stricker proposed a piece entitled La tierra nueva de Tlatelolco (The new soil of Tlatelolco). The project consisted of talking to the neighbors of the Tlatelololco residential complex - historically affected by traumatic episodes such as the massacre of 1968 and the earthquake of 1985 - and organizing some families to make a giant compost bin that would nourish the complex's planters. It was so successful that it has been mutating, but it still exists, no longer as a piece of the artist, but as part of the community to which it belongs. This project gave identity and purpose to the neighbors; it changed the urban landscape of the area through planters and fertile urban gardens. It was not a project where the artist came to plant some pretty little plants for the duration of the exhibition. On the contrary, he had the sensitivity to understand the needs of the neighbors, identified the identity crisis caused by historical scars, and gave them tools so that they could build, take care of and assume it as their own.



La Tierra Nueva de Tlatelolco, 2010. Thomas Stricker

Fotografía cortesía del artista


There are many projects and artists like this one that have managed to do significant things for different communities, addressing different problems, and I refer to projects of this type when I say real art. That art that the promoters have perhaps failed to communicate to businessmen and governments in order to have more resources and be able to multiply them.



Cultural tourism


The Bilbao effect is a term coined by economists to describe the social and economic impact that the Guggenheim Museum has brought to this city. Bilbao was a post-industrial wasteland. The city was built on moribund shipbuilding and steel industries, impossible to revitalize for the 21st century. The museum completely transformed the city's landscape, attracting millions of tourists and investors every year. It is the quintessential example of art as a driver of The Foreign Direct Investment Confidence Index.



According to a study published by the market consulting firm FMI (Future Market Insights), global cultural tourism revenues are set to total $5,931.2 billion by 2023; and global demand is likely to increase at a compound annual rate of 14.4% over the next ten years. In addition, the WTTC (World Travel and Tourism Council) states that the entire tourism sector generates 300 to 350 million jobs and that cultural tourism accounts for 40% of worldwide revenue.


These figures are revealing and although this study encompasses many categories that are not particularly linked to the visual arts and new media - such as gastronomy, cultural heritage, languages, music, crafts, dance, etc. - its exponential growth can be seen in the number of visitors to museums, biennials, exhibitions and art fairs around the world. Art Basel alone receives more than 90,000 visitors annually; in 2022 the Venice Biennale broke the record with 800,000 and the Louvre Museum in Paris received 7,726,321, which in its case means an increase of 173% compared to the previous year.


Before Art Basel had its first international venue in Miami in 2002, the state of Florida was known for Mickey Mouse and its beaches. Today it ranks eighth in the rankings of cultural tourism destinations. Today it is a point of reference in the international art scene and the rise of the Miami Design District, coupled with the number of museums that have opened since then in this city is impressive.






"Before Art Basel had its first international venue in Miami in 2002, the state of Florida was known for Mickey Mouse and its beaches. Today it ranks eighth in the rankings of cultural tourism destinations."

Transformation in sectors - Gentrification


The economic growth thanks to art is also perceived in neighborhoods and districts. Here I have to make use of a word that brings with it both positive and negative connotations: Gentrification.


In Mexico City there is no one who has not noticed the transformation of the Roma neighborhood. However, this was not even a pale shadow of what it is today, before the Roma-Condesa Cultural Corridor, inaugurated in 2009, initially promoted by the UNAM museum, MUCA Roma and curator Ana Elena Mallet, who continued it until 2019, which revived an exercise carried out by some galleries in the nineties to reactivate the area.



Fotografías por Gabriela Prado cortesía

Corredor Cultural Roma Condesa


Colonia Roma was a part of the city that was still recovering from the devastating earthquake of 1985. There lived those who wanted to be close to La Colonia Condesa, but could not afford it, since rents in that area were relatively cheap. This initiative sought to map the galleries and alternative spaces in the neighborhood and get everyone to agree to open at the same time. It was impressive to see the thousands of people walking through the streets, going from gallery to gallery and of course this motivated many entrepreneurs to open bars, cafes, restaurants, galleries, etc.


Something similar also happened in Bogota in the Barrio San Felipe neighborhood, when architect and collector Alejandro Castaño and industrial engineer Juan Carlos Paris, bought properties in the sector and invited some nearby galleries to move their headquarters there. In 2013 FLORA ars+natura -a space managed by José Roca (one of the most recognized Colombian curators in the world)- opened its doors, and in the surrounding area they added workshops and artists' studios; alternative spaces; initiatives that transformed an old and neglected neighborhood into one of the most visited cultural districts in Latin America.


Now, for this to happen in an area, many aspects have to be aligned: infrastructure; development policies; etc; but undoubtedly, the presence of spaces dedicated to art is a constant in all cases.


On the other hand, it should not be ignored that gentrification entails a problem. Specifically: it raises the price of rents in the area and that is something that definitely needs to be addressed. However, it is undeniable that its effect translates into consumers with high purchasing power, which spills an important flow of capital on local businesses. We see it today with the digital nomads who choose Mexico as one of their favorite cities to live in. While they work, they earn in dollars and spend in pesos.


"... [ Art] It is one of those rare cases in which some win and we all win."

A few years ago on Regina Street in downtown Mexico City, an interesting exercise took place. The government (in a previous administration) hired designers and artists to improve the image of stores and mini markets in the area. With this initiative, local businesses dignified their spaces, created a pedestrian corridor, improved the appearance of the area, and substantially reduced the levels of violence (which were particularly serious there). Casa Vecina, an alternative art space that served as a meeting and dialogue point, also became operational. The exercise improved the quality of life of local residents, attracted people from other sectors and clearly showed the enormous benefits of keeping their environments clean, cared for and beautiful.


In conclusion, these examples of neighborhoods, cities and countries that have managed to captivate foreign investment have a common denominator: the realization of highly relevant artistic projects. Whether viewed from a humanitarian perspective, or through the lens of investment, art has always been and will always be a big business that positively impacts all parties and whose wave of expansion is enormous. It is one of those rare cases in which some win and we all win.





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