Satellite account for culture and media 2018

This satellite account for culture and media is the second satellite account commissioned by the Ministry of Education, Culture and Science. The first edition covered the year 2015, before the periodic revision of the national accounts. This edition presents the satellite between 2015, after the periodic revision of the national accounts, and 2018. Now that results are available for two years, we can make observations about the economic development of culture and media during this period. The definitions, terms, sources and methods used here are broadly the same as in the first edition.

The share of culture and media in GDP and employment remains stable

The share of culture and media in the gross domestic product (GDP) of the Netherlands in 2018 was 3.4 percent, which is practically the same as the share in 2015: 3.5 percent. In absolute terms, the contribution of culture and media to GDP increased from EUR 23.9 billion to 26.5 billion.
As employment increased from 300,000 labour years in 2015 to 330,000 in 2018, the share of culture and media in total employment remained stable at 4.3 percent.

Of the main macroeconomic figures, areas which increased more than those for the total economy included domestic production, imports and exports and intermediate consumption of culture and media. This is reflected in an increase in the share of culture and media in these macro totals; for example, the share of culture and media in domestic production increased from 3.6 percent in 2015 to 3.9 percent in 2018. However, as the consumption of culture and media lagged slightly behind total consumption, the share of culture and media in total consumption decreased from 3.2 percent in 2015 to 3.1 percent in 2018.

Culture and media slightly smaller after revision

The national accounts are periodically revised, with revisions introducing new sources and methods, and sometimes new national and international definitions, to ensure that they are up to date and use good data. This can lead to differences between the estimates of a range of figures for 2015 before and after revision. The first culture and media satellite account was based on the pre-revision national accounts for 2015. To make sure 2018 is still comparable to 2015, the 2015 satellite account for culture and media has been re-compiled using the post-revision national accounts for 2015. On balance, the share of culture and media in 2015 after revision is slightly smaller than before revision. Whereas the pre-revision share of culture and media in GDP was 3.7 percent, after revision it was shown to be 3.5 percent. The share of total employment in terms of labour years in 2015 also decreased slightly, from 4.5 percent before revision to 4.3 percent after revision.

Advertising is the largest domain

The total supply of culture and media increased from EUR 67.9 billion in 2015 to EUR 85.0 billion in 2018. Within the total supply of cultural and media products, the domains of Advertising (32 percent) and Media (21 percent) were the largest in 2018. Within household consumption, the Media domain was the largest in 2018 with a 41 percent share, followed by the Performing arts domain (15 percent). The share of the various domains therefore differs according to the macroeconomic variable.
For example, in terms of the share of the various domains in the beta indicator of value added, which has been calculated in this satellite for the first time according to domain and subdomain, Advertising remains the largest domain at 29 percent. However, the domains of Architecture and design (11 percent), Performing arts (9 percent), Literature (9 percent), Heritage (3 percent) and Education (8 percent) are gaining in importance in relation to their share of the total supply of cultural and media products. This is partly because the supply of these domains relies more on domestic production, and therefore contributes more to the Dutch economy. These domains also have high value added due to factors such as the greater labour intensity of their economic activities. The importance of the Media and Audiovisual domains in terms of value added and employment is smaller compared with their share in the total supply. This is because these domains involve more imports and re-exports, and also because the incoming and outgoing financial flows in terms of licences and royalties are offset to some extent, with only the value added remaining. The value added for each domain therefore provides an informative indication of how the importance of the various domains is evolving, for example in relation to their share in the total supply of culture and media.

Art is the third most important branch of industry

Within the culture and media sector, the largest branches of industry in 2018 were Advertising and market research (13 percent), Publishing activities (11 percent), Arts (10 percent), Trade and transport (10 percent) and Education (10 percent). Although Trade and transport is not a cultural or media product in itself, it is an indispensable link in bringing together supply and demand in relation to cultural and media products. Trade and transport margins in the domain of Visual arts (including Jewellery), for example, are high.

Literature lagging behind while Architecture and design is growing

As mentioned above, the absolute value of culture and media’s contribution to GDP increased from EUR 23.9 billion in 2015 to EUR 26.5 billion in 2018. Within culture and media, however, there are differences between the domains. For example, the goods and services within the domain of Literature experienced less development in almost all areas than cultural and media products as a whole. The only category within Literature that had an above-average increase was re-exports. However, this largely concerns printing machines and books that are not produced in the Netherlands, from which the only industry to benefit financially is Trade and transport. Literature’s contribution to value added in culture and media therefore decreased from 10 percent in 2015 to 9 percent in 2018.

The domains of Architecture and design and Audiovisual developed by more than the average in relation to total cultural and media products. The contribution of Architecture and design to value added in culture and media increased from 9 percent in 2015 to 11 percent in 2018. This result can largely be attributed to the Architecture subdomain.
The growth of the Audiovisual domain is primarily due to the increase in tax-induced money flows associated with the import and export of licences and royalties. These money flows are by no means always related to cultural expressions produced in the Netherlands; they often involve the import and export of licences and royalties from branches of foreign media companies based in the Netherlands.

Government increases spending on culture and media

The share of culture and media in total spending increased in every layer of government between 2015 and 2018, resulting in an increase in spending on culture and media that was greater than that of government spending as a whole.

The share of culture and media in total government spending increased from 1.3 percent in 2015 to 1.5 percent in 2018. In 2018, this share ranged from 1 percent for the central government to 19 percent for local non-profit institutions (NPIs), which are the local museums, libraries and regional broadcasters that are treated as government organisations.

The focus of spending on culture is more at the local level, while spending on broadcasting and publishing (media) is concentrated more at the central government level.

In 2019, the Ministry of Education, Culture and Science commissioned Statistics Netherlands (CBS) to compile the first-ever satellite account for culture and media.¹⁾  A satellite account is an economic description of a specific phenomenon linked to and distilled from the national accounts. The national accounts provide the quantitative description of the Dutch economy as a whole. A satellite account makes it possible to determine the share of culture and media in the main macroeconomic figures, such as GDP, imports and exports and consumer spending.
In addition, within the culture and media sector itself, a level of detail has been applied to reveal which goods, services and industries within the sector are of greater or lesser economic importance. The goods and services that are counted as culture and media are also categorised into domains, such as Literature, Performing arts and Heritage, facilitating a comparison of the economic size of the various domains. This division into domains is more in line with common practice in the field than the standard divisions of goods, services and branches of industry used in the national accounts. The classification of goods, services and branches of industry used in this publication is set out in Appendices 1 and 2.

What is culture and media?

When compiling a satellite account for culture and media, we must first establish what counts as culture and media. This satellite account defines culture and media in terms of goods and services, according to the Classification of Products by Activity (CPA).²⁾ In the first instance this relates to the primary cultural and media products, roughly in line with the definitions provided by the EU (ESSnet-Culture) and UNESCO. At the core of this definition are the attributes of creation, artistic creation, cultural expression and the management and conservation of heritage. CBS has formulated a set of additional guidelines that identify the extent to which the satellite account should include supporting goods and services further along the cultural and media production and distribution chain. There is less similarity between the approaches of the EU and UNESCO on this point. The guidelines formulated by CBS are worded as follows:

Cultural and media products include not only all primary cultural and media products themselves (based on the values of ‘creation’ and ‘cultural expression’), but also those goods and services which would not exist without these primary cultural and media products.

Some examples of primary cultural and media products are museum and library services, books, architectural services, advertisements, radio and television programmes, theatre productions, online games and photography. Examples of supporting cultural and media products include musical instruments, cameras, radios and television sets and machines for binding and printing books. That being the case, in this satellite account, culture and media include not only traditional culture (museums, libraries, performing arts, etc.) but also the media (radio, TV, newspapers and periodicals, etc.) and large sections of the creative industry (architecture, design, advertising, etc.).

Finally, some goods and services have been included which are not really cultural or media products in themselves but which are inextricably linked to culture and media, such as shops and cafés in museums and investments in museum buildings.
Appendix 1 gives a detailed account of which goods and services are counted as culture and media, including the complete list of these goods and services and the domain and subdomain to which they belong.

Changes from the first edition

In addition to the revised figures for the 2015 national accounts (see the box in Chapter 2), this satellite account for culture and media is slightly different from the first edition. The classification now distinguishes between three branches of industry that are relevant to culture and media: 1) Film and TV production; sound recording; 2) Programming and broadcasting activities; and 3) Design, photography and translation. The first edition combined the first two branches, but they are now identified separately in line with the national accounts. In the first edition, the third branch was still included with other branches of industry, but because of its relevance to culture and media it is now recorded separately.

A domain of Media has also been created, consisting of the subdomains Newspapers and periodicals and Radio and TV. These subdomains already existed, but now they are grouped differently: Newspapers and periodicals have been transferred from Literature to Media, and Radio and TV have been moved from Audiovisual to Media. The underlying classification of which cultural and media products belong to which domain and subdomain remains the same.

Apart from the revision of the national accounts, which, in addition to methodological adjustments, often involves updating earlier estimates of the supply and use of the various goods and services, the sources, definitions and working methods used in this satellite account are similar to those of the first edition.

Reading guide

Chapter 2 describes how culture and media contribute to key macroeconomic figures relating to the Dutch economy.
Chapter 3 explores the culture and media sector itself in greater depth, creating a picture of the most important cultural and media products and the relevant branches of industry. This chapter also describes the main economic figures and characteristics for each domain and subdomain.
Chapter 4 deals with government spending on culture and media, and in Chapter 5 the results of the present satellite account for culture and media are compared with similar work in other countries.

More detailed explanations of what counts as culture and media and how a satellite account is created can be found in Appendix 1 and Appendix 2 respectively.

The detailed tables containing virtually all the underlying figures on which this report is based are also attached.

How do culture and media contribute to key macroeconomic figures regarding the Dutch economy? Table 2.1 shows this contribution for 2015 and 2018, as well as for 2015 before the revision. The national accounts are periodically revised, with revisions introducing new sources and methods, and sometimes new national and international definitions, to ensure that they are up to date and use good data. This can lead to differences between the estimates of a range of figures for 2015 before and after revision. The first culture and media satellite account was based on the pre-revision national accounts for 2015. To make sure 2018 is still comparable to 2015, the 2015 satellite account for culture and media has been re-compiled using the post-revision national accounts for 2015.
The box in this chapter concerns the main consequences of the 2015 revision of the national accounts, especially from the perspective of culture and media.

3.4 percent of GDP

The share of culture and media in Dutch GDP in 2018 was 3.4 percent; the share in 2015 was 3.5 percent. In 2018, this contribution to GDP was associated with employment at 330,000 labour years, or 4.3 percent of total employment in the Netherlands (this percentage was the same in 2015). To put that into perspective: in the 2015 satellite account for sports, the share of sports in GDP was estimated at 1 percent (CBS, 2019), while the share of tourism in 2018 came to 4.4 percent (CBS, StatLine).
The fact that the share of culture and media in employment is higher than in GDP implies that labour productivity in the culture and media sector is somewhat lower than in the economy as a whole. The value added per labour year in the culture and media sector came to EUR 73,000 in 2018, compared with EUR 92,000 for the economy as a whole. In itself, this is not surprising, as industries such as manufacturing are much more capital intensive than the culture and media sector (see Table 5 in the table set).

140,000 self-employed persons

Expressed in labour years, employment in the culture and media sector increased from 300,000 to 330,000. In both 2015 and 2018, this constituted 4.3 percent of total employment. Self-employed persons (other employed persons) make up approximately one-third of employment in the culture and media sector: twice as high as for the economy as a whole. In 2018, the share of the culture and media sector in the labour volume of self-employed persons was 8.3 percent, as opposed to a share of 3.5 percent in the labour volume of employees. The proportion of self-employed persons in 2018 ranged from more than half in Design, photography and translation (69 percent) and Art (67 percent) to under 10 percent in the Publishing activities (6 percent). For these details, see Tables 1a and 1b in the table set.

31 percent imports

The total supply (basic prices) of culture and media was valued at EUR 85.0 billion in 2018. This total supply consists of goods and services produced in the Netherlands plus imports. In 2018, 31 percent of this culture and media supply was generated by imports, slightly more than for the economy as a whole (27 percent). The main imported cultural and media products in 2018 were advertising services, licences and royalties and audiovisual equipment. The share of culture and media in total imports was 4.7 percent in 2018 (3.9 percent in 2015).
Meaning that almost 70 percent of the supply of culture and media was generated by domestic production. Again, the main product groups are advertising services and licences and royalties, followed by publishing services. The share of culture and media in total domestic production was 3.9 percent in 2018 (3.6 percent in 2015).

Half is intermediate consumption

In 2018, half (51 percent) of culture and media was used as input for the production of other goods and services (intermediate consumption). As the same figure for the economy as a whole was considerably lower (38 percent), the share of culture and media in the total intermediate consumption of the Dutch economy is high, at 5.4 percent (4.7 percent in 2015). The main goods and services within intermediate consumption are advertising services, licences and royalties and publishing services.
The ‘traditional’ art and culture sector also involves an economic division of labour which results in cultural productions being partly categorised as intermediate consumption. A writer, musician or programme maker produces little or nothing directly for the consumer; rather, they produce material for a publisher or producer who will ultimately take the economic risk in actually bringing the cultural expression to the audience.

EUR 1,500 per household

Household consumption of culture and media in 2018 amounted to EUR 12.3 billion, accounting for 3.6 percent of total household consumption (3.8 percent in 2015). This translates to over EUR 1,500 per household. The main goods and services within household consumption were publishing services, telecommunication services and audiovisual equipment.
Culture and media accounted for 2.2 percent of government consumption in 2018, the same percentage as in 2015. Subsidised cultural education made up almost half this government consumption. Subsidised education is largely financed from collective funds and consumed by the government ‘on behalf of’ households. In reality, of course, the recipients of this education are ordinary people.

Investments and stockholding

The share of culture and media in investments was 2.0 percent in 2018 (1.7 percent in 2015). In part, culture and media investments are cultural and media products that are counted as investments, such as audiovisual equipment, printing and book-binding machines and architectural services. ‘Own account’ investments also contributed to this total; this category includes original artworks which are considered to be capital goods and which, in the form of licences and royalties, generate income for the artists concerned. Investments in buildings (including cultural buildings) and similar investments made by the industries of Art and Libraries, museums and nature conservation as well as Public administration are also counted as culture and media investments. Buildings are not generally designated as cultural or media products, but investments in buildings in the culture and media sector are considered to be made largely in the service of culture and media, and are therefore categorised as culture and media sector investments.

The share of culture and media in stock changes was 7.6 percent in 2018 (13.6 percent in 2015). This is partly due to the fact that this item also includes purchases of museum pieces, which range from paintings to dinosaur bones. These goods are not considered to be investments, because they are primarily seen not as a production tool but rather as an object or art object that retains its value over multiple years.

27 percent exports

The share of culture and media in total exports was 3.5 percent in 2018 (3.1 percent in 2015). In 2018, 27 percent of all cultural and media products were exported, compared with 30 percent of all products in the economy as a whole. Three-quarters (74 percent) of all cultural and media products exported came from domestic production. The same figure for the economy as a whole was 63 percent. In comparison with the economy as a whole, exports of cultural and media products rely a little more on exports from domestic production and less on re-exports.
The most important item under exports from domestic production was the yield from licences and royalties. In principle, these serve as remuneration for the use of cultural expressions produced in the Netherlands (a book, music, film or television programme format, etc.). However, licences and royalties are also ‘imported’ by foreign companies based in the Netherlands, which purchase (import) these rights from their parent company and then sell (export) them to foreign customers. This does not include cultural expressions produced in the Netherlands. These money flows arise from the fact that such companies do not have to pay withholding tax on their licences and royalties in the Netherlands.³⁾ Productions by Dutch artists or artistic companies overseas also count as exports.
Almost three-quarters (72 percent) of the re-exports of culture and media in 2018 were accounted for by audiovisual equipment. Re-exports are goods which, although they are exported by companies in the Netherlands, were not produced in the Netherlands. The main branch of industry that gains financially from this practice is the trade and transport sector.

Taxes and subsidies on products

Taxes and subsidies on products are taxes and subsidies that are levied or granted per unit produced. Examples include excise duties on gasoline and alcohol, but the most important example is Value Added Tax (VAT). The government artificially raises the price at which the producer may offer products by levying taxes on products. On the other hand, product-related subsidies are also available and are intended to reduce the sales price. However, because taxes on products are much higher than product subsidies in the Dutch economy as a whole, on balance this has the effect of raising prices.
In 2018, the balance of taxes and subsidies on cultural and media products amounted to EUR 2.5 billion or 3.1 percent of the balance of the economy as a whole (3.4 percent in 2015). This amount consists almost entirely of VAT. When product-related subsidies are transferred to non-product-related subsidies, almost nothing remains of the product-related subsidies (see also the box discussing the revision of the national accounts).
Incidentally, subsidies on products are not the only subsidies the government awards to the culture and media sector. The sum the government extends to the culture and media sector in the form of non-product-related subsidies and income transfers is many times greater (see Chapter 4).

Development of culture and media

As two years of the satellite account for culture and media are now available, it is now possible to discuss the nominal development of the various macroeconomic figures. The nominal value of practically all macroeconomic figures increased between 2015 and 2018. The nominal development of the different figures for culture and media is therefore compared with the nominal development of the same figures for the economy as a whole. For culture and media, the following figures have increased more than the total economy: domestic production, imports, intermediate consumption and exports. Compared with 2015, the consumption of cultural and media products in 2018 came out slightly below total consumption.
All these factors resulted in a slight reduction in the share of culture and media in GDP, from 3.5 percent in 2015 to 3.4 percent in 2018. Although in absolute numbers employment increased in the culture and media sector, its share in total employment remained the same at 4.3 percent.

This chapter gives a broad outline of the development of the culture and media sector from 2015 to 2018. The nature and size of the culture and media sector for 2018 are then described in more detail, using a short fact sheet that presents the characteristics of each subdomain, followed by an estimate of the value added and employment by domain and subdomain. These indicators should be seen as beta indicators: indicators which are not compiled as standard for the national accounts. Whereas the national accounts calculate value added and employment by branch of industry, the domains and subdomains used in this satellite account are a collection of goods and services. However, this approach does add informative nuances to the contribution of the various domains and subdomains to the Dutch economy. The chapter ends with a summary description of the key developments in the various domains and subdomains within culture and media.

3.1 Culture and media – total

How did the various macroeconomic figures within culture and media develop in 2018 compared to 2015? Domestic production of cultural and media products increased from EUR 43.8 billion in 2015 to EUR 53.9 billion in 2018, while imports increased from EUR 19.6 billion to EUR 26.2 billion. This total supply of cultural and media products at basic prices is increased both by the balance of taxes and subsidies on products and by the trade and transport margins to determine the supply of cultural and media products at purchase prices. The supply at purchase prices increased between 2015 and 2018 from EUR 68.8 billion to EUR 85.9 billion.
In addition to cultural and media products, the satellite account also includes the ancillary revenues of cultural institutions and culture-related investments as culture and media. The reasoning behind this is that these items are so intertwined with the cultural and media products themselves that the products would not exist without them. The ancillary revenues of cultural institutions consist of income from any museum shops, associated catering, teaching courses and income from renting out all or part of the buildings for events. Culture-related investments concern items such as museum buildings. Finally, the consumption of cultural and media products by residents of the Netherlands abroad is added to ensure that these figures continue to align with the national totals. This item is not structured by product groups in the national accounts. So the total range of cultural and media products is supplemented by a number of items that are not in themselves cultural or media products, but are nevertheless included for the purposes of this satellite. Trade and transport margins are included in addition to taxes and subsidies on products in order to bridge the ‘accounting gap’ between what producers receive for their products and what users must pay for them. The total supply at purchase prices increased between 2015 and 2018 from EUR 70.2 billion to EUR 87.6 billion.
Please note that, in 2018, 8 percent of the total supply of culture and media at purchase prices – and thus also the total use at purchase prices – consisted of goods and services that are not cultural or media products (9 percent in 2015).⁴⁾ Trade and transport margins are the most striking example of this, followed by product-related taxes minus subsidies.

The increase in the supply of cultural and media products was largely due to the two most significant product groups: licences and royalties and advertising services. These were already the primary product groups in culture and media, and they also saw the largest increase in value (see Tables 1a and 1b).

3.2 Culture and media – by branch of industry

The culture and media sector’s total value added (basic prices) in 2018 was EUR 23.9 billion (EUR 21.6 billion in 2015). Which branches of industry contributed most to this value added in the culture and media sector?

Advertising agencies form the largest branch of industry

In 2018, Advertising and market research made the greatest contribution to the culture and media sector’s value added at 13 percent, followed by Publishing activities (11 percent) and Art (10 percent). The share of the Trade and transport was also 10 percent: a substantial share for an industry whose activities do not naturally place it at the heart of the culture and media sector. However, as mentioned earlier, trade and transport form an indispensable link between the providers of cultural and media products and their users.

Four industries are almost entirely culture and media-based

As well as discussing the importance of a branch of industry to the culture and media sector (Figure 3.2.1), it is also worth asking the question in reverse: how important are culture and media to a given branch of industry (Figure 3.2.2)? There are four industries whose value added is almost entirely the result of cultural and media activities. Two of these industries belong to what used to be known as ‘traditional’ culture, namely Art (performing arts, writers, painters, sculptors, composers, etc.) and Libraries, museums and nature conservation. The two other industries that rely almost entirely on the production of cultural and media products are Programming and broadcasting activities and Film and TV production; sound recording. Despite these four industries’ ‘dedication’ to culture and media, with the exception of Arts their share in the culture and media sector was only modal, indicating that being very active in culture and media does not necessarily go hand in hand with being a significant player in the culture and media sector. Conversely, whereas trade and transport were important to the culture and media sector (10 percent), culture and media were only marginally important to the Trade and transport industry as a whole (2 percent).
It is important to note that the interpretation of the importance of different industries is influenced by the industry classification chosen, and that the picture for 2015 and 2018 is stable.

3.3 Culture and media – by domain

How did the various domains within culture and media develop in 2018 compared to 2015? Tables 2a and 2b form the basis for the information presented in this section.
Figure 3.3.1 shows the supply of cultural and media products by domain for 2015 and 2018. Domains whose share in the supply of cultural and media products has increased have thus seen an above-average increase, while domains whose share has decreased have increased less rapidly than the total supply of cultural and media products. Again, expressed in nominal values, the supply of practically all domains has increased.

Advertising is the largest domain

Advertising remained the largest domain within culture and media, with a share of 32 percent. The two domains in which the supply increased the most are Media and Audiovisual, with their share increasing by 3 percentage points from 2015 to 2018. The increase in the supply of what might be called ‘traditional’ art and culture was slower than in the domains mentioned above. The share of Literature (-2 percentage points), Performing arts (-1 percentage point), Visual arts (-1 percentage point) and Heritage (-1 percentage point) decreased by 1 or more percentage points.

Households spend most on media

Another interesting macroeconomic figure to disaggregate by domain is household consumption (incl. NPIs), primarily because very different domains dominate in this area: households spend little or no money on things like advertising or architecture and design, for instance. Secondly, this facilitates a much more stable interpretation than a figure such as the total supply of cultural and media products. Households spend the most money on goods and services in the domain of Media (newspapers, periodicals, radio and television), and ‘traditional’ art and culture is reflected in household consumption far more than in the total supply. Performing arts (‘a night out’) made up 15 percent of household spending, and spending on goods and services within the domains of Literature (books), Visual arts (photography, jewellery) and Heritage (museums) were also shown to be much more important in household consumption than in the total supply of cultural and media products.
Tables 2a and 2b show which domains are more or less represented in the other macroeconomic figures. For example, advertising makes up roughly half the intermediate consumption of cultural and media products. In terms of exports, in addition to Advertising, the domains of Media and Audiovisual also emerge as important. The significance of these two domains is partly a result of the aforementioned import and export of licences and royalties from foreign companies that have a branch in the Netherlands.

3.4 Culture and media – by subdomain

This section uses a fixed template – a fact sheet – to briefly describe the most important characteristics of each of the subdomains in 2018. The elements covered are: a list of the most important goods and services in the relevant subdomain; the share in the total of culture and media; a characterisation of the market; and the nominal development compared to 2015.

3.4.1 Visual arts

Visual Arts consists of the subdomains Photography and Other visual arts.

Photography subdomain
Main goods and services
Photochemical products, photography and development itself, equipment, licences and royalties.

Total supply and use (purchase prices)
EUR 3.0 billion.

Share in the total supply and use (purchase prices) of cultural and media products
3 percent.

Supply from domestic production
EUR 1.5 billion, or 59 percent of the total supply (basic prices).

Main use
Intermediate consumption and exports.

Nominal development of supply and use compared to 2015
+EUR 190 million or +7 percent.

Market characterisation
Most of the supply comes from domestic production and thus contributes to employment in the culture and media sector. The total supply is mainly purchased by other companies (intermediate consumption) or exported. Re-exports represent a substantial proportion of exports, in particular the re-export of photochemical products. ‘Re-exports’ refers to goods that are imported, but are then immediately re-exported without significant processing. The main sector that gains financially from this practice is the trade and transport sector. Household consumption is only a limited factor in the market.

Other visual arts subdomain
Main goods and services
Jewellery, licences and royalties, original work by visual artists (painters, graphic designers, sculptors).

Total supply and use (purchase prices)
EUR 1.6 billion.

Share in the total supply and use (purchase prices) of cultural and media products
2 percent.

Supply from domestic production
EUR 0.4 billion, or 47 percent of the total supply (basic prices).

Main use
Household consumption and exports.

Nominal development of supply and use compared to 2015
+EUR 170 million or +12 percent.

Market characterisation
This subdomain is dominated by the Jewellery product group. Supply is shared more or less equally between domestic production and imports. The trade and transport margins in this area are substantial. The total supply is mainly purchased by households. Some of the domestic production in this subdomain is covered by investment, such as original work by visual artists who generate income from their work in the form of licences and royalties. Another part of the supply falls under the Stock changes item, including the balance of the purchase and sale of valuables, primarily jewellery.

3.4.2 Literature

The domain of Literature consists of the Books and Other Literature subdomains.

Books subdomain
Main goods and services
Books, textbooks, library services, original work by authors and licences and royalties.

Total supply and use (purchase prices)
EUR 3.3 billion.

Share in the total supply and use (purchase prices) of cultural and media products
4 percent.

Supply from domestic production
EUR 2.2 billion, or 78 percent of the total supply (basic prices).

Main use
Intermediate consumption, household consumption and exports.

Nominal development of supply and use compared to 2015
-EUR 80 million or -2 percent.

Market characterisation
Three-quarters of the supply comes from domestic production and thus contributes to employment in the culture and media sector. Books are the largest product group in both domestic production and imports. The trade and transport margins in this area are substantial. The majority of the total supply, for example some textbooks, is purchased by other companies (intermediate consumption). The second group of users are households, with household consumption consisting almost entirely of books. Exports are also largely made up of books, as well as licences and royalties to publish the work of Dutch authors abroad. Government consumption consists of library services. Finally, investments relate to original work by writers and academic research within the field of literature; some of the textbooks are also included in investments. This shows that the sale of goods and services within the domain of Literature is quite diverse and not dominated by only one or two categories. The supply and use within the Books subdomain did not increase between 2015 and 2018.

Other Literature subdomain
Main goods and services
Printing machines, printing, typesetting, binding and reproduction, other printed material (reference books, calendars, pictures, etc.)

Total supply and use (purchase prices)
EUR 3.4 billion.

Share in the total supply and use (purchase prices) of cultural and media products
4 percent.

Supply from domestic production
EUR 1.9 billion, or 70 percent of the total supply (basic prices).

Main use
Intermediate consumption and exports.

Nominal development of supply and use compared to 2015
+EUR 180 million or +5 percent.

Market characterisation
Most of the supply consists of domestic production and thus contributes to employment in the culture and media sector. More than half the total supply is purchased by other companies (intermediate consumption). Foreign countries (exports) are the second-most important sales market, with a substantial share of re-exports, with households being the third-largest market in this domain.

3.4.3 Heritage

The Heritage domain has no subdomains.

Main goods and services
Museum services, artefacts and museum pieces.

Total supply and use (purchase prices)
EUR 1.8 billion.

Share in the total supply and use (purchase prices) of cultural and media products
2 percent.

Supply from domestic production
EUR 1.5 billion, or 83 percent of the total supply (basic prices).

Main use
Consumption.

Nominal development of supply and use compared to 2015
+EUR 60 million or +3 percent.

Market characterisation
This mainly concerns the domestic production of museum services that are consumed by households and the government. Government consumption of museum services results from the fact that households do not always have to pay the full cost price for museum visits. The remainder of the cost is ‘contributed’ from collective resources and is consumed by the government on behalf of households. This is comparable to subsidised education. Stock changes relate to the purchase and sale of museum pieces and artefacts. Exports include the consumption of museum services by non-residents.

3.4.4 Performing arts

The Performing arts domain has no subdomains.

Main goods and services
Performing arts (performances, operation of venues, etc.), equipment, musical instruments.

Total supply and use (purchase prices)
EUR 5.4 billion.

Share in the total supply and use (purchase prices) of cultural and media products
6 percent.

Supply from domestic production
EUR 3.9 billion, or 77 percent of the total supply (basic prices).

Main use
Intermediate consumption and consumption by households.

Nominal development of supply and use compared to 2015
+EUR 540 million or +11 percent.

Market characterisation
This subdomain is dominated by the performing arts themselves. In addition to performers, this category also includes the producers of the productions and the operators of the theatres where these productions are ultimately staged. The majority of the supply is purchased by other companies (intermediate consumption), followed by household consumption. Exports of domestic production include overseas performances by performing artists based in the Netherlands. Re-exports consist primarily of equipment and musical instruments that were imported but are not actually used in the Netherlands and are destined for the ‘hinterland’.

3.4.5 Audiovisual

The Audiovisual domain consists of the Film and video and Other audiovisual subdomains.

Film and video
Main goods and services
Licences and royalties, production of films, TV programmes, etc., cinema services.

Total supply and use (purchase prices)
EUR 7.7 billion.

Share in the total supply and use (purchase prices) of cultural and media products
9 percent.

Supply from domestic production
EUR 4.5 billion, or 59 percent of the total supply (basic prices).

Main use
Intermediate consumption, exports and consumption by households.

Nominal development of supply and use compared to 2015
+EUR 4.6 billion or +150 percent.

Market characterisation
This subdomain is dominated by licences and royalties. In principle, licences and royalties are a payment for the right to exploit certain cultural expressions. However, this by no means only concerns cultural expressions produced in the Netherlands. It often involves licences and royalties from Dutch-based divisions of large foreign media companies that have transferred the ownership rights of numerous film and TV productions to the Netherlands for tax reasons, and from there grant others the rights to put on these productions. These are therefore money flows that do not always correspond to real production and are not accompanied by a proportionate contribution to factors such as employment. These financial flows noticeably ‘inflate’ imports and exports and intermediate consumption. The flows are significant and volatile, and they more than doubled between 2015 and 2018. However, because the same companies both buy and sell licences and royalties, the value added and employment give a more realistic picture of the contribution these companies make to the Dutch economy (see Section 3.5). Household consumption consists predominantly of cinema services.

Other audiovisual
Main goods and services
Equipment (including film cameras), licences and royalties, computer games.

Supply from domestic production
EUR 2.8 billion, or 46 percent of the total supply (basic prices).

Total supply and use (purchase prices)
EUR 7 billion.

Share in the total supply and use (purchase prices) of cultural and media products
8 percent.

Supply from domestic production
EUR 2.8 billion, or 46 percent of the total supply (basic prices).

Main use
Exports, intermediate consumption and household consumption.

Nominal development of supply and use compared to 2015
-EUR 200 million or -3 percent.

Market characterisation
As imports account for more than half of the supply, this subdomain makes only a limited contribution to employment in the domestic culture and media sector. The majority of the total supply is exported, predominantly as re-exports consisting largely of equipment. These re-exports therefore depend on cultural and media expressions abroad, rather than in the Netherlands. Exports from domestic production include online content and licences and royalties for computer games and music. Intermediate consumption consists mainly of equipment and licences and royalties for the use of music. Household consumption consists largely of equipment and both physical and online computer games.

3.4.6 Media

The domain of Media consists of the subdomains Newspapers and periodicals and Radio and TV.

Newspapers and periodicals
Main goods and services
Newspapers, trade magazines, other periodicals, the printing of these newspapers and periodicals, press agency services.

Total supply and use (purchase prices)
EUR 3.3 billion.

Share in the total supply and use (purchase prices) of cultural and media products
4 percent.

Supply from domestic production
EUR 3 billion, or 95 percent of the total supply (basic prices).

Main use
Intermediate consumption and consumption by households.

Nominal development of supply and use compared to 2015
-EUR 20 million or -1 percent.

Market characterisation
This is a domain with few inputs and outputs: both supply and use take place in the domestic market. Most goods and services are sold to other companies (intermediate consumption), for example the printing of newspapers and periodicals. However, some trade magazines are also bought by companies, and this is counted as intermediate consumption. The remaining supply – primarily newspapers and general periodicals, both in printed form and online – is mainly consumed by households. There was no increase in the supply and use within this domain between 2015 and 2018.

Radio and TV
Main goods and services
Licences and royalties, equipment (including TVs), telecommunications services, public and commercial radio and television services.

Total supply and use (purchase prices)
EUR 14.6 billion.

Share in the total supply and use (purchase prices) of cultural and media products
17 percent.

Supply from domestic production
EUR 8.4 billion, or 62 percent of the total supply (basic prices).

Main use
Intermediate consumption, exports and consumption by households.

Nominal development of supply and use compared to 2015
+EUR 5.4 billion or +59 percent.

Market characterisation
As in the Film and video subdomain, this subdomain is dominated by licences and royalties, especially through the import and export of licences and royalties from subsidiaries of large international media companies based in the Netherlands. As the import of licences and royalties certainly does not always refer to paying for the right to exploit a cultural expression that was produced abroad in the Netherlands, it follows that nowhere near all exports involve the receipt of a fee for the overseas exploitation of a cultural expression produced in the Netherlands. These are partly tax-induced money flows within large international media companies. As mentioned above, these are large amounts that can fluctuate hugely from year to year. The increase in supply and use within the Radio and TV subdomain is almost entirely caused (or overshadowed) by the increase in licences and royalties. Household consumption consists of telecommunication services (transmitting the radio and TV programmes), equipment and radio and television services. Exports from domestic production consist largely of the aforementioned licences and royalties, which are therefore only partly related to cultural expressions actually produced in the Netherlands. Re-exports almost exclusively concern equipment.

3.4.7 Advertising

The Advertising domain has no subdomains.

Main goods and services
Advertising services for print media, radio, TV and online.

Total supply and use (purchase prices)
EUR 25.9 billion.

Share in the total supply and use (purchase prices) of cultural and media products
30 percent.

Supply from domestic production
EUR 15.9 billion, or 63 percent of the total supply (basic prices).

Main use
Intermediate consumption and exports.

Nominal development of supply and use compared to 2015
+EUR 0.5 billion or +25 percent.

Market characterisation
Almost two-thirds of the advertising services on offer are domestic productions. Advertising services are mainly provided to companies (intermediate consumption) and exported. The supply and use of advertising services increased by 25 percent from 2015 to 2018. On the supply side, imports increased by more than domestic production. In terms of use, intermediate consumption increased by more than exports.

3.4.8 Architecture and design

The domain of Architecture and design consists of the Architecture subdomain and the Design subdomain.

Architecture
Main goods and services
Architectural services (building plans and drawings for residential and non-residential buildings, restoration of historical buildings, etc.)

Total supply and use (purchase prices)
EUR 2.5 billion.

Share in the total supply and use (purchase prices) of cultural and media products
3 percent.

Supply from domestic production
EUR 2.2 billion, or 99 percent of the total supply (basic prices).

Main use
Investments and intermediate consumption.

Nominal development of supply and use compared to 2015
+EUR 0.7 billion or +36 percent.

Market characterisation
The supply consists almost entirely of domestic production. Architectural services are mainly provided to other companies which will actually build the structures designed, with a large part of these services being seen as an investment. A limited proportion of the architectural services are exported, and architectural services for private individuals form an even smaller proportion. The supply and use of architectural services increased by 36 percent between 2015 and 2018.

Design
Main goods and services
Design services (industrial, graphic, interior, fashion, etc.), licences and royalties.

Total supply and use (purchase prices)
EUR 2.7 billion.

Share in the total supply and use (purchase prices) of cultural and media products
3 percent.

Supply from domestic production
EUR 2.2 billion, or 82 percent of the total supply (basic prices).

Main use
Intermediate consumption.

Nominal development of supply and use compared to 2015
+EUR 200 million or +8 percent.

Market characterisation
The supply consists largely of domestic production, and most sales also take place on the domestic market. Almost all the design services are purchased by other companies that put the designs into production and ultimately deliver them. A significant proportion of both imports and exports consists of licences and royalties to use these designs.

3.4.9 Education

Main goods and services
Subsidised and private cultural education.

Total supply and use (purchase prices)
EUR 2.4 billion.

Share in the total supply and use (purchase prices) of cultural and media products
3 percent.

Supply from domestic production
EUR 2.4 billion, or 100 percent of the total supply (basic prices).

Main use
Consumption by government and households.

Nominal development of supply and use compared to 2015
+EUR 190 million or +8 percent.

Market characterisation
Cultural education consists entirely of domestic production. Subsidised education is financed from collective resources and consumed by the government ‘on behalf of’ households, while private cultural education is consumed directly by households.

3.4.10 Interdisciplinary and Other

Main goods and services
These goods and services cannot easily be assigned to a particular domain. Examples include: public services in the field of culture, especially public administration; information on and booking of cultural events; and support services for artists (management, etc.).

Total supply and use (purchase prices)
EUR 2.2 billion.

Share in the total supply and use (purchase prices) of cultural and media products
1 percent.

Supply from domestic production
EUR 1.2 billion, or 99 percent of the total supply (basic prices).

Main use
Consumption by government and households.

Nominal development of supply and use compared to 2015
+EUR 110 million or +10 percent.

Market characterisation
Practically all the supply is generated by domestic production. Its use consists largely of government consumption (public services in the field of culture that the government consumes on behalf of households), household consumption (information and bookings) and some intermediate consumption (including management of artists).

3.5 Value added and employment by subdomain: a beta product

In principle, the contribution of the various economic activities to value added and employment in the economy as a whole is calculated in the national accounts at the level of companies and institutions and detailed according to the branches of industry in which these companies and institutions operate. Companies and institutions have a given output (production), which requires a given input (intermediate consumption). The difference between output and input is referred to as the ‘value added’ and is the remuneration for the companies and institutions’ primary means of production: labour and capital. For this reason, the national accounts do not normally calculate value added and employment associated with the production of certain goods and services, for example cultural and media products.

This satellite account for culture and media divides products into subdomains made up of the various cultural and media products that belong to each of those subdomains. However, the production of the products belonging to a subdomain almost never takes place in a single branch of industry, instead being spread over several industries. Conversely, there is no industry that only produces products belonging to one subdomain. In principle, therefore, no figures are available for value added and employment for the production of, say, the products belonging to the Books subdomain.

For this satellite account for culture and media, however, value added and employment have been calculated for the various subdomains; as mentioned earlier, this is in contrast to the regular national accounts, where value added and employment are only calculated by branch of industry. These calculations have been made on the basis of the assumption below, and should be considered a ‘beta indicator’: an indicator which, although it gives a rough indication of value added and employment per subdomain, is not among the economic variables used as standard in the regular national accounts.

The assumption used in calculating the added value by subdomain is that the ratio of output to input of the relevant cultural and media products is equal to the ratio of output to input of the branch of industry within which these cultural and media products are produced.

It is generally the case, in accordance with the Standard Industrial Classification (SIC), that the majority of goods and services are produced in the branch of industry which is considered to produce those goods and services. Conversely, a large proportion of the production of a given industry consists of goods and services which, according to the SIC, are also considered to be produced within that industry.
Example: the vast majority of the products that belong to the Advertising domain are produced in the Advertising and market research industry. These products are also subject to the input-output ratio of the Advertising and market research industry. The vast majority of the total production within Advertising and market research consists of products belonging to the Advertising domain. The input-output ratios of the Advertising and market research industry are thus largely determined by the production of goods and services belonging to the domain of Advertising.

Nevertheless, it is still advisable to regard the results for the variables of value added and employment by domain and subdomain as rough indications of the direction in which the economic importance of a domain is changing, rather than of its absolute size.

Audiovisual and Media domains are declining in importance

Having said that, Figure 3.5.1 shows that the importance of the different domains in value added differs from an earlier measure: the total supply of cultural and media products (see Figure 3.3.1). This is, first, because the total supply also includes imports, meaning that domains with high levels of imports decrease in importance if those imports are excluded. In addition, the relationship between input and output differs between domains, therefore also affecting the final value added.

For example, in 2018 the importance of the Audiovisual domain in value added, and thereby also in the Dutch economy, is significantly smaller than its share in the total supply and use of cultural and media products. This has come about in part because there are a lot of imports and re-exports in this domain, as well as because this domain involves significant flows of money in the area of licences and royalties that do not always relate to cultural expressions produced in the Netherlands. These financial flows are primarily concentrated in intermediate consumption and domestic production. However, when calculating value added, only the balance of these flows remains.
The sharp decline in the importance of the Audiovisual and Media domains automatically produced an increase in the importance of the other domains. The shares of both Architecture and design and Education increased, partly because they have few imports and partly because these are activities with a relatively high value added. All in all, Advertising is the biggest domain in this area, too.
The approach to the various domains from the perspective of value added therefore yields a somewhat different picture from that of factors such as the share in total supply or use. It is important to emphasise again that this is a rough indication; the direction of change is more robust than the absolute size of the calculated value added.

Figure 3.5.2 offsets the share of value added against employment for the various domains. Differences between the share of value added and employment can be roughly attributed to differences in labour productivity and remuneration of labour as a production factor. Labour productivity in the Media domain is above average, partly because this is a somewhat more capital-intensive sector; consider telecom companies, for example. This means that high value added can be achieved with somewhat fewer employees. In the domains of Performing arts, Visual arts and Heritage, the share in employment is higher than the share in value added. This arises from a somewhat lower labour productivity, which may be linked to a lower remuneration of the production factor of labour. Here, too, Advertising remains the largest domain.

The detailed results for the beta indicators of value added and employment by domain and subdomain are presented in Table 3.

3.6 Developments by domain and subdomain

Chart 3.6.1 summarises the developments of the main macroeconomic figures from 2015 to 2018 by domain and subdomain. The development of the relevant variable for total cultural and media products is used as the reference development. If a variable lags behind by more than 10 percent for a particular domain or subdomain, the corresponding field is shaded red. If a variable is ahead by more than 10 percent, the corresponding field is shaded green. If the development of the variable for a given domain or subdomain deviates by less than 10 percent from the development of that variable for total cultural and media products, the corresponding field is shaded grey.

Example: Total domestic production of cultural and media products increased by 23 percent between 2015 and 2018. The domestic production of goods and services in the domain of Performing arts increased by 9 percent over the same period. As this development lags behind the development of the total of cultural and media products by more than 10 percent (threshold: 23 - 0.1x 23 = 20.7), the field is shaded red.

This development is therefore relative to the reference development. In the example, the domestic production of Performing arts did increase, but that increase was smaller than that of the domestic production of total cultural and media products.

Literature domain is falling behind

The goods and services within the domain of Literature experienced less development in almost all areas than did cultural and media products as a whole. The only category within Literature that had an above-average increase was re-exports. However, this largely concerns printing machines and books that are not produced in the Netherlands, from which the only industry to benefit financially is Trade and transport. Literature’s contribution to value added and employment in culture and media therefore saw a relative decline.

Audiovisual and Architecture and design domains see above-average increase

The domains of Architecture and design and Audiovisual developed by more than the average in relation to total cultural and media products. The relative contribution of Architecture and design to value added in culture and media also increased. This can largely be attributed to the Architecture subdomain, although both value added and employment also saw an above-average increase in the Design subdomain.
The growth of the Audiovisual domain is primarily due to the increase in tax-induced money flows associated with the import and export of licences and royalties. These money flows are by no means always related to cultural expressions produced in the Netherlands; they often involve the import and export of licences and royalties from branches of foreign media companies based in the Netherlands. The relative increase in the Audiovisual domain can largely be attributed to the Film and video subdomain.
There is also a division within the domain of Media. Within the Radio and TV subdomain, a large number of variables increased by more than the average, resulting in a similarly above-average increase in employment. The other subdomain within Media, Newspapers and periodicals, increased more slowly across the board, which led to a similarly slow increase in value added and employment.

Within the framework of the national accounts, the government sector encompasses the classic government functions that are mainly concerned with public administration. In particular, this concerns the central government, local authorities, provinces, water boards and compulsory social security organisations. The Public administration sector, as set out in the supply and use table, consists of named government sectors, supplemented with services on which the government more or less has a monopoly, such as policing, the justice system and defence.
However, in addition to these government sectors which mainly concern themselves with public administration, a large group of organisations and institutes that are also counted under government carry out tasks delegated to them by central government, the provinces and local authorities. These institutes are mainly included as non-profit institutions (NPIs) at a local or central government level, depending on the layer of government under which these organisations fall. In a general sense, these include a large number of publicly financed educational establishments, sheltered employment, regional transport organisations, waste processing firms and institutions concerned with health and welfare. Examples of institutions in the culture and media sector that are counted as government institutions include many libraries and museums, the Rijksmuseum Foundation, the National Library of the Netherlands, regional broadcasters and the Netherlands Broadcasting Corporation (NOS).
As has already been mentioned, the government organisations that concern themselves with public administration are grouped within Public administration. Government organisations such as libraries, museums and broadcasters are divided into either Libraries, museums and nature conservation or Programming and broadcasting activities; these are also services that fall within culture and media rather than public administration.
The box in this chapter briefly explains which decision-making rules underpin the choice of whether or not to include an organisation in the government sector.

1.5 percent government spending on culture and media

Total government spending in 2018 was EUR 327.3 billion; EUR 4.8 billion (1.5 percent) of this was spent on culture and media.⁵⁾ As this share was 1.3 percent in 2015, spending on culture and media increased by slightly more than total government spending between 2015 and 2018.
In 2018, two-thirds (67 percent) of government spending on culture and media related to the production of cultural and media products, with one-third (33 percent) consisting of other expenditure. This ratio is slightly different for total government spending, of which 41 percent was production-related and 59 percent was other expenditure (see Figures 4.2a and 4.2b). ‘Other expenditure’ is largely made up of redistributive expenditure: money from public funds that is redistributed in the form of subsidies, capital transfers, income transfers and – especially across government as a whole – social benefits.⁶⁾ 
Production-related government spending refers to the government’s expenditure that is derived from the provision of public services. This includes public administration by the central government and the municipalities and provinces, as well as public services provided by organisations that are classified as government organisations. In terms of culture and media, these organisations include the Rijksmuseum, the National Library of the Netherlands, the Netherlands Broadcasting Corporation, the Dutch Media Authority and many regional museums, libraries and broadcasters. These types of organisations are included among the NPIs for the layer of government to which they belong.

Central government

In 2018, the central government spent EUR 2.7 billion on culture and media.⁷⁾ This represents an increase in the share of culture and media in total spending by central government, from 1.2 percent in 2015 to 1.4 percent in 2018. Central government spending is distributed roughly equally between production-related expenditure and other expenditure. Within central government other expenditure dominates the national government’s spending on culture and media. When it comes to other central government, including non-profit cultural and media institutions, spending is more evenly distributed between the two categories. For both layers of central government, as well as for the central government itself, the share of culture and media in the total expenditure of the respective layer of government increased between 2015 and 2018.

Local government

In 2018, local government spent EUR 2.3 billion on culture and media, representing 2.3 percent of total local government spending in that year (2.2 percent in 2015).  At the local government level, spending on culture and media is dominated by production-related expenditure. Local cultural institutions make a strong contribution in this area. While this group’s spending on culture and media consists almost entirely of expenditure related to production – ‘delivering’ cultural and media products – other expenses are still prevalent in the municipalities themselves. Moreover, some of this money goes to local cultural institutions, which can be seen as the final destination of these redistribution operations.
Provinces do not spend a great deal of money on culture and media.

Local NPIs account for the largest share of culture and media

Other central government (7.7 percent in 2018) and local NPIs (19 percent in 2018) had the largest share of culture and media in total expenditure among all the various layers of government. This refers to the local museums, libraries and regional broadcasters that are treated as government organisations.

Share of culture and media increased

The share of culture and media in total spending increased in every layer of government between 2015 and 2018, This does not necessarily say anything concrete about the level of spending, as other expenditure may have decreased. However, even in nominal terms, spending on culture and media increased across the board.

The government’s total consolidated expenditure on culture and media in 2018 amounted to EUR 3.5 billion, while spending on publishers and broadcasters (media) amounted to EUR 1.3 billion in that year. It is important to note that spending on culture is concentrated more at the local level, while spending on publishing and broadcasting is concentrated more within central government.

Detailed findings on government spending on culture and media are provided in Table 4.

Partly thanks to the work of UNESCO and the EU⁹⁾ to define culture in terms of internationally harmonised classifications used to collect statistics, the number of countries which have compiled a satellite account for culture is slowly rising. Countries with a recent satellite account for culture include Finland, Spain, the United Kingdom, Germany, the United States and Australia. Some Latin American countries have also already produced their own satellite accounts, partly because a harmonised Spanish-language manual is available in the region.¹⁰⁾ In Asia, only Japan seems to be producing such a satellite account.

In many ways the creation of a satellite account for culture is still at the pioneer stage, but some countries have been producing accounts periodically for some time. This is the second such account produced by the Netherlands. Although UNESCO is trying to align the concepts and methods of setting up these accounts,¹¹⁾ countries can still differ considerably from each other. For example, the national and international discussion about what should and should not count as the phenomenon of culture shows no sign of stopping. While the core definition of ‘culture’ is generally the same, countries often differ on more peripheral aspects of that definition. These include whether or not to count goods and services that support products of a cultural nature; the entire IT infrastructure; software development; the sale of jewellery; the sale of toys; the production of clothing; and the value of volunteers’ contribution. Depending on their needs, some countries even expand their satellite account for culture to include the entire creative industry and/or sports, which makes quite a difference to the account’s findings. Another factor is that there is no one uniform approach to methodology. Some countries only look at culture-related industries (based on the SIC), while others, such as the Netherlands, ground their account in culture-related goods and services (based on the CPA). Although the latter approach produces a better description of the macroeconomic significance of culture, the first approach is easier, and therefore cheaper. This situation makes it difficult to compare the findings of different countries’ satellite accounts for culture and highlights the need for a more harmonised methodology and delineation that would allow for more internationally comparable accounts.

If, leaving aside the sub-optimal comparability, we were to compare the results of different countries’ satellite accounts globally, the Netherlands would appear in the top half in terms of the contribution of culture and media to GDP. Most countries arrive at a figure of around 3 percent of GDP, with a contribution to total employment slightly higher than this percentage.
At the upper end of the spectrum are the United Kingdom and the United States, both of whose figures include the entire creative industry. However, to a large extent this is also relevant to the Dutch satellite account for culture. When discussing employment, it should be borne in mind that it is not always clear which unit is being referred to: individuals, jobs or labour years (FTEs).

CBS (2019) De Nederlandse sporteconomie. De bijdrage van sport aan de Nederlandse economie in 2006-2015. (‘The Dutch sports economy. The contribution of sports to the Dutch economy in 2006-2015.’) The Hague/Heerlen/Bonaire. De Nederlandse sporteconomie (cbs.nl).

CBS (2014). Vooronderzoek satellietrekening cultuur en creatieve industrie (‘Preliminary research for the satellite account for culture and the creative industry’), The Hague/Heerlen/Bonaire.

CBS (2019). Nationale rekeningen 2018 (‘National Accounts 2018’), The Hague/Heerlen/Bonaire. National Accounts 2018 (cbs.nl)

ESSnet-Culture (2012). European Statistical System Network on Culture, final report, Eurostat, Luxembourg.

Media Perspectives (2019). Monitor Creatieve Industrie 2019 (‘Creative Industry Monitor 2019’). Monitor Creatieve Industrie 2019 (‘Creative Industry Monitor 2019’) - Media Perspectives

OECD (2007). International measurement of the Economic and Social importance of culture, Paris.

OECD (2018). Culture and local development, Paris.

SCP (2018). Het culturele leven (‘The cultural life’), The Hague.

UNESCO (2009). Framework for cultural statistics, Montreal, Canada.

UNESCO (2012). Measuring the economic contribution of cultural industries, Montreal, Canada.

Explanation of the delineation of culture and media as used in the satellite account for culture and media 2018

The first question that has to be answered when compiling a satellite account is how to define the phenomenon that is to be described, in this case ‘culture and media’. The decision about what does and does not constitute culture and media will influence the extent of the culture and media sector, and thereby also the contribution made by culture and media to the Dutch economy. This appendix therefore further explores the delineation of culture and media and the associated choices made. Before going on to discuss the definition ultimately used in this satellite account for culture and media, the appendix provides some definitions of the concept of culture both from within the Netherlands and internationally, together with some considerations relating to that concept. The perspectives that gave rise to these definitions, together with the classifications that give them functional meaning, were a key guideline for the final definition of culture and media used in the satellite account.

Background: national and international definitions

It is not easy to define, quantify and put into practice a phenomenon like culture. There is a lot of debate at both the national and international level about the question of what should and should not be seen as culture, and about how these elements can then be combined to form meaningful domains.

UNESCO

In principle, a national or international definition should provide the starting point for delineating the concept of culture. UNESCO defines culture as:

‘A set of distinctive spiritual, material, intellectual, and emotional features of society or a social group, that encompasses, not only art and literature, but lifestyles, ways of living together, value systems, traditions and beliefs.’ (UNESCO, 2009, p. 9).

UNESCO decided to take a practical approach in order to make this somewhat abstract definition more functional, since things like lifestyles, traditions and personal convictions are hard to quantify.
The following domains are included in culture:

1. Heritage (including landscape and nature);
2. Performing arts, including festivities;
3. Visual arts, including crafts;
4. Books and press;
5. Audiovisual and interactive media;
6. Design and creative services.

These six core domains of culture are supplemented by the domains of:

7. Education and training;
8. Archiving and conservation;
9. Instruments, materials and support services.

For example, UNESCO considers that the latter group includes various services relating to printing books and reproducing media and interactive media, as well as the production of computer parts and the telecommunications infrastructure. The production of musical instruments, on the other hand, is simply seen as part of the core domain of Performing arts. In addition to tangible heritage, intangible and natural¹⁾ heritage is also identified as a separate core domain.

To link this structure to statistical data, UNESCO uses internationally harmonised classifications to translate all these domains into culture-related branches of industry on the one hand, and culture-related goods and services on the other. The ISIC²⁾ system is used internationally to classify businesses by economic activity; the Dutch version of this system is the Standard Industrial Classification (SIC 2008, in Dutch: SBI). The CPA 2008³⁾ is the international classification system for goods and services. The end result is a summary of a large number of branches of industry and goods and services, which can then be used to put the concept of culture into practice by linking it to classifications used to compile statistics (for an overview, see also UNESCO, 2009, p. 52 et seq.).

The EU

Another international delineation of the concept of culture is that used in the European Statistical System Network on Culture (ESSnet-Culture, 2012). Although ESSnet does not adopt a specific definition of culture as a starting point, there are certain criteria that culture-related branches of industry and goods and services⁴⁾ must satisfy, the most important of which are creativity and cultural expression. These criteria are associated with creation according to the ‘nobody knows’ principle,⁵⁾ values (including mainly intrinsic values and traditions), communication using symbols and a relationship with intellectual property.⁶⁾ These criteria are also mentioned by UNESCO. However, when using these criteria to put the definition into practice, ESSnet largely restricts itself to UNESCO’s six core domains of culture; intangible heritage is not a separate domain within this structure, but rather part of the domain of heritage. In contrast to UNESCO, ESSnet uses not six but ten core domains:

1. Heritage (including museums, archaeological attractions and intangible heritage);
2. Archives;
3. Libraries;
4. Books and press;
5. Visual arts (including photography and design);
6. Performing arts (including music, dance, drama and other live shows);
7. Audio/audiovisual and multimedia (including film, radio, television, video and multimedia);
8. Architecture (design only, not including construction and production);
9. Advertising (creation only, not including the production);
10. Artisanal and domestic art (‘art crafts’).

ESSnet’s cultural cycle is also slightly different from that of UNESCO. ESSnet’s cycle uses the phases: creation, production (to convert a conceptual good or service into an available good or service), dissemination and trade, preservation, education and management and regulation (businesses and organisations that finance and regulate culture). It should be noted here that ESSnet does not focus explicitly on the economic distribution process of cultural and media products. This means that trade and transport margins are counted as culture and media, not because they are cultural and media products themselves, but because they are indispensable links in the economic distribution chain of cultural and media products; trade brings supply and demand together.

ESSnet also translates the above domains into a summary of culture-related branches of industry based on the NACE classification on the one hand, and, on the other, culture-related goods and services based on the CPA classification (for an overview, see also ESSnet, 2012, p. 62 et seq.). The most important difference between ESSnet and UNESCO is that ESSnet does not include the entire domain of equipment, materials and supporting services in the concept of culture. ESSnet views these activities not as intrinsic parts of culture (creation) but more as part of the production process. However, ESSnet is not consistent in this regard; for instance, the production of musical instruments, printing of books and reproduction of recorded media are included in the list of culture-related branches of industry and goods and services. This raises the question of why other culture-related equipment, materials and supporting services, such as microphones, cameras, etc., are not included.

WIPO and OECD

Other, ultimately less suitable ways to delineate the concept of culture can be found in the standards of the World Intellectual Property Organization (WIPO)⁷⁾ and the Organisation for Economic Co-operation and Development (OECD; see e.g. (OECD, 2007)). As far as the OECD is concerned, it is possible to point to a publication about culture as it relates to local development (OECD, 2018), which in large part follows the ESSnet definition of culture. This OECD publication focuses primarily on the role of culture, and in a broader sense the creative industry, in regional development.

The Netherlands

The delineation of the concept of culture is also a subject of discussion in the Netherlands when drafting the satellite account for culture and media (CBS, 2014). This preliminary research mainly aligns with the ESSnet definition and, in addition to delineating the concept of culture, it also focuses on doing the same for the concept of the creative industry. The branches of industry served as the starting point for the statistical operationalisation of these concepts. No delineation was made based on goods and services. Nevertheless, it is a useful description of basic principles and criteria with the aim of delineating the concepts of culture and the creative industry and identifying similarities and differences between these concepts.
There are other discussions surrounding the concept of culture, for example in the Ministry of Education, Culture and Science’s Cultuur in beeld (‘Culture in the picture’) series of publications, the Monitor Creatieve Industrie (Media Perspectives, 2019) and the Netherlands Institute for Social Research (SCP, 2018).

The conclusion is that UNESCO and ESSnet’s delineations of the concept of culture offer the best way to further describe the concept of culture in this satellite account. Particularly as regards statistics, these delineations will also help to apply the established definition in practice. First of all, both organisations largely agree about the goods and services that belong to the core domain of culture. This has also been given practical implementation by actually naming these goods and services in the international classification of goods and services (CPA). The only point on which there is a difference of opinion or implementation between the organisations is regarding precisely which supporting goods and services should be included in the domain of culture; CBS has formulated its own guidelines for this. Finally, it should be noted that both the EU (Eurostat), following up on ESSnet, and UNESCO are currently revising their delineations of the concept of culture. The international discussion about what should and should not be included in the phenomenon of culture shows no sign of stopping.

The final delineation of culture and media

In compiling the satellite account for culture and media for the Netherlands, the decision was made to remain as close as possible to an existing, authoritative international definition and operationalisation of the phenomenon of culture. The aim was to avoid reopening the discussion of precisely what is understood to be culture. It was also considered an unachievable goal to find a new definition that ‘everyone’ would agree on in a short time; as mentioned above, that debate is still ongoing at both a national and an international level.

For this reason, the ESSnet definition and framework were chosen to form the basis for the definition and operationalisation of culture and media. One reason for this choice was that it largely aligns with UNESCO’s core domains; the operationalisation is also restricted to the core business of culture, starting with the creation of a good or service. Moreover, it makes future comparisons with other countries more likely. Like UNESCO, ESSnet uses delineations based on both branches of industry (NACE) and goods and services (CPA).

Choice 1: Within the framework of the satellite account for culture and media, the choice was made to define culture and media using the goods and services recorded in the CPA 2008.

Culture and media are therefore not defined in terms of branches of industry; it is the good or service that determines whether something counts as culture or media, and not the branch of industry that produces certain goods and services. The approach from the point of view of goods and services is methodologically more sound because it only includes goods and services that are considered to be culture and media. After all, not all goods and services produced by a particular branch of industry which is included within the culture and media sector are themselves cultural and media products. And the reverse is also true: branches of industry which are not generally included in the culture and media sector also produce cultural and media products. An approach from the point of view of goods and services also offers the opportunity to identify the demand side of culture and media (consumption, investments, exports, etc.) in relation to the various cultural and media products and the domains of which they form the basis. In a general sense, a goods-and-services approach is most in keeping with the structure of the national accounts which ultimately underpin this satellite account; this approach will also yield more detailed and informative data.

A necessary follow-up question is whether the delineation of culture and media should be restricted to the core domains of culture mentioned above (creation and cultural expression), or whether it should be expanded to include supporting goods and services that occur further up the production and distribution chain. Neither ESSnet nor UNESCO offer a consistent answer to this question. ESSnet appears to restrict itself to the stated core domains, but still ultimately includes some supporting goods and services in the delineation. UNESCO, on the other hand, includes a great many supporting goods and services in its delineation, such as the production of computers, software and telecommunications services. Neither organisation offers explicit regulations to govern this choice.

In delineating culture and media for the satellite account, the following guideline was used to govern the inclusion of support goods and services in the production and distribution chain:

Choice 2: The only culture-related supporting goods and services in the production and distribution chain that are included in the satellite are those which would cease to exist if the cultural good or service in question, viewed from the perspective of creation, did not exist. These supporting goods and services therefore only exist because they form part of the value chain of a cultural good or service.

This means that printing machines, cameras and musical instruments are included, but that for example the ICT infrastructure (hardware, software, telecommunications services) is not. Product groups such as ICT infrastructure would still exist if they were not functioning as carriers of culture.

There will always be grey areas, and in all honesty it must be noted that the choices also depended to a certain extent on the level of detail of the classifications – such as NACE and CPA – and whether there are enough data available at a low level of detail. The more detailed these classifications are in the domain of culture and media, and the more data are available at a low level of detail, the more culture can be observed. In other words: a certain level of pragmatism is necessary when making choices and compiling the satellite account for culture and media.

Final list of cultural and media products

The attached table includes all the goods and services that were ultimately considered to be culture and media. As already stated, this selection was made on the basis of the CPA 2008, a European classification of products that relates to the section of the branch of industry within which these products were produced. In this regard, the first four figures of the CPA product codes are the same as the first four figures of the classification of economic activities that forms the basis of the classification of businesses by branch of industry (NACE).

Within the system of national accounts, these CPA codes are linked to the product groups used when compiling the national accounts. A product group in the national accounts almost always consists of multiple CPA codes. If all of a product group’s CPA codes are considered to be related to culture and media, this means that the entire product group falls under culture and media. If only some of the CPA codes count as culture and media, an estimate is made as to which part of the product group this concerns. In addition, where necessary, supplementary estimates are made in order to classify the various cultural and media products as accurately as possible in the various domains and subdomains.

The attached table shows exactly which CPA codes belong to which product groups, as well as how they are further subdivided according to the product groups, domains and subdomains published in the satellite account. In the interest of readability, the product groups have been sorted by domain and subdomain.

Non-cultural and media products

Finally, in addition to the cultural and media products, some other products were also included in the satellite account for culture and media because these products are inextricably linked to the cultural and media products identified. This means that investments in assets such as buildings by the Art (SIC 90), Libraries, museums and nature Conservation (SIC 91) and Public administration (SIC 84) sectors – insofar as they fall under culture – are also included. These investments are considered to be used for the purposes of culture and media to such an extent that they are inextricably linked with culture and media; one example of this is the construction and renovation of museums. The same is true for the ancillary revenues of the businesses and organisations in the art and culture branch of industry. These are not in themselves cultural and media products, but these ancillary revenues would not exist without the associated cultural and media products, such as museum shops, cafés and restaurants, educational courses, etc.

References

CBS (2014). Vooronderzoek satellietrekening cultuur en creatieve industrie (‘Preliminary research for the satellite account for culture and the creative industry’), The Hague/Heerlen/Bonaire.

ESSnet-Culture (2012). European Statistical System Network on Culture, final report, Eurostat, Luxembourg.

Media Perspectives (2019). Monitor Creatieve Industrie 2019 (‘Creative Industry Monitor 2019’). Monitor Creatieve Industrie 2019 - Media Perspectives

OECD (2007). International measurement of the Economic and Social importance of culture, Paris.

OECD (2018). Culture and local development, Paris.

SCP (2018). Het culturele leven (‘The cultural life’), The Hague.

UNESCO (2009). Framework for cultural statistics, Montreal, Canada.

Appendix 1 What is culture and media (link)

The creation of the satellite account for culture and media 2018

Once it has been established which goods and services are considered to fall under culture and media, the next step is to distil from the national accounts the economic transactions that are most significant for these goods and services. What is the production value of cultural and media products? And how much do households spend on these products (consumption)? The starting point for these estimates is the ‘supply and use tables’ as compiled within the framework of the national accounts. Diagram 2.1 illustrates the form of a supply and use table. This diagram is also useful for explaining how a satellite account for culture and media is actually compiled and how the findings should be interpreted.

Supply of cultural and media products

The domestic production is established for all cultural and media products (rows 1-n), together with the branches of industry (columns 1-n) that carry out this production. Cell (1.1) contains information on the production of culture and media product 1 by branch of industry 1. When the production of the various cultural and media products is added across the branches of industry, this yields the total domestic production of cultural and media products (column n+1). In addition to domestic production, cultural and media products can also be imported (column n+2). The domestically produced and imported cultural and media products together form the total supply of cultural and media products at basic prices (column n+3). The basic price is the price the producer actually receives on delivery of the product. This price is not the same as the price the buyer of this product has to pay (purchase price). The difference is determined by the trade and transport margins that must be paid in order to get the product from the producer to the buyer. Any taxes and subsidies on products can also raise or lower the purchase price. Increasing the supply at basic prices by the balance of the taxes and subsidies on products (column n+4) and the trade and transport margins (column n+5) gives the supply at basic prices of each culture and media product (column n+6). This establishes the total supply of cultural and media products, together with the branches of industry that produced these products and the extent to which these cultural and media products were also imported.

Value added

Value added is created through domestic production of cultural and media products. This value added (row n+8) is calculated by reducing the production value (row n+6) of the branches of industry by the necessary goods and services (intermediate consumption (row n+7)). The sum of the value added in all branches of industry adds up to the culture and media sector’s value added at basic prices. Increasing this value added by the balance of taxes and subsidies on products then generates the culture and media sector’s contribution to the gross domestic product (GDP).

Appendix 2.1 Outline of a supply and use table (link)

Use of cultural and media products

Once cultural and media products have been supplied, they are then used. Cultural and media products can serve as input for the production of other products (intermediate consumptione (column n+7)), they can be directly consumed by households (column n+8) or by the government (column n+9), they can be investment goods (column n+10) or cause a change in the stock of cultural and media products (column n+11), or they can be exported (columns n+12 and n+13). Ultimately, the total use of cultural and media products at purchase prices (column n+14) is equal to the total supply at purchase prices (column n+6).
At the level of the work charts, the method outlined above has been used for 103 goods groups from the national accounts that fall either entirely or in part under cultural and media products. To make the results more robust, the number of cultural and media products in the publication was reduced to 24 goods groups, 10 domains and 15 subdomains. At a work chart level, the number of branches of industry was 142; by no means all these branches produced cultural and media products. Also for the sake of robustness, this number of branches of industry has been narrowed down to 26.

Non-cultural and media products

In addition to the cultural and media products, some other activities were also included in the satellite account for culture and media because these activities are inextricably linked to the associated cultural and media products. This means that investments in assets such as buildings in the art and culture branch of industry (SIC 90 and 91) and the government (SIC 84) – insofar as they come under culture and media – are also included (row n+2). These investments are considered to be used for the purposes of culture and media to such an extent that they are inextricably linked with culture and media; one example of this is the construction and renovation of museums. The same is true for the ancillary revenues (row n+3) of the businesses and organisations in the art and culture branch of industry. These are not in themselves cultural and media products – otherwise they would have been included in rows 1 to n – but they relate to ancillary revenues that would not exist without the associated cultural and media products, such as museum shops, cafés and restaurants, educational courses, etc. Row n+4 contains the trade and transport margins which are not themselves cultural and media products, but which form an indispensable link in the production and distribution process of cultural and media products. Cultural and media products only acquire economic relevance in the system used for the national accounts once they are actually sold.

Alignment with macro-economic totals

To align with the macroeconomic totals, consumer spending by Dutch residents in other countries has also been included on row n+5. This amount is added to the consumer spending by residents, with the resulting sum being ‘reverted’ to imports. This item is offset with these macro totals because the item is not available by commodity group.

Structure of branches of industry used in the satellite account for culture and media

Table 2.2, below, presents the branches of industry used in this publication. The intention was to identify the branches relevant to culture and media separately wherever possible. This had to be reconciled with the desire to publish fairly robust figures – not going down to the level of too-small sums. Finally, the nature of the basic material meant that it was not always possible to publish at the desired level of detail. Looking at the goods groups, it becomes clear which cultural and media products are generated by a branch of industry that may at first glance seem to be large and heterogeneous.

Appendix 2.2 Classification of branches of industry (link)

This appendix describes the terms used, to the extent that they are relevant to this satellite account for culture and media. The relevant transactions in the national accounts are then explained, together with the supply and use table, terms relating to labour and the various distinct sectors (CBS, 2019).

A. Transactions in the national accounts

Domestic production (basic prices)

The total of goods and services produced, also known as the output. There are three different kinds of output:

• market output: goods and services which are available on the market or which are intended to be marketed in future;
• output for own final use: goods and services for personal consumption or for investments by the same business entity which produced those goods and services;
• non-market output: goods and services which are made available to other entities either free of charge or at economically non-significant prices.

The output is valued at basic prices. These are the prices experienced by producers themselves: for each branch of industry, the taxes on products are deducted and the subsidies on products are added. Transport costs charged separately by the producer are not included; neither are the value adjustments of financial and non-financial assets (production assets) during the reporting period.

The production of all business entities operating in the Netherlands – including those with foreign owners – is included, as are government bodies and other non-commercial organisations.

Intermediate consumption (purchase prices)

Goods and services used as input in a production process, excluding fixed assets (investment goods). These are goods which are incorporated into other products or entirely consumed during the production process (this is by definition the case for hired-in services). In line with international agreements, goods purchased or services hired are considered to be fixed assets rather than input for intermediate consumption (investment) if they can be used in the production process for at least one year. Goods and services that are considered to be intermediate consumption are valued at the purchase price level that is applicable to similar goods or services at the time of use.

Value added (basic prices)

The value of all goods and services produced (production value or output) minus the value of goods and services that were used up during this production (intermediate consumption).

Gross domestic product (GDP)

The gross domestic product (GDP) is a way to measure the size of the economy. GDP at market prices is the end result of the productive activities of domestic production entities.
In the satellite account for culture and media, the GDP from production is the sum of the gross value added of all branches of industry and the balance of taxes and subsidies on products.

Taxes on products

Taxes that must be paid per unit of a certain good or service that is produced or imported. The tax may be a certain amount per quantitative unit of a good or service; alternatively, it can be calculated as a certain percentage of the price per unit or of the value of the goods and services produced or traded.

Subsidies on products

Subsidies granted per unit of a good or a service that is produced or imported. The subsidies are linked to the value or the quantity of the product.

Import of goods and services

The flows of goods and services (sale, exchange and donations) provided by non-residents (of the Netherlands) to residents. Goods imports take place when the economic ownership of goods is transferred by a non-resident to a resident, regardless of whether a physical cross-border movement of goods takes place. A company or organisation is considered to be resident for this purpose if it has been active in the Netherlands for at least one year, regardless of whether this organisation is owned by an entity based outside the Netherlands.

Export of goods and services

The flows of goods and services (sale, exchange and donations) provided by residents (of the Netherlands) to non-residents. Goods exports take place when the economic ownership of goods is transferred by a resident to a non-resident, regardless of whether a physical cross-border movement of goods takes place. A company or organisation is considered to be resident for this purpose if it has been active in the Netherlands for at least one year, regardless of whether this organisation is owned by an entity based outside the Netherlands.

Re-exports

Goods which are imported and subsequently exported again, after having undergone no or only minor industrial processing.

Consumer spending by households

The following borderline cases fall under consumer spending by households:

• income in kind, such as housing, nutrition and clothing and a company car;
• services for homes in which the owner him- or herself lives (the ‘enjoyment of residence’) and for which there is thus no actual paid rent. The value of these services is determined using the rental prices of comparable homes;
• products produced for personal use, for instance in agriculture. The value of these products is equivalent to the market price for these or comparable products;
• durable consumer goods, such as passenger cars, domestic appliances, furniture and clothing. However, purchases of homes by private individuals are considered to be investments in fixed assets by households.

Consumer spending by NPIs for households

By convention, consumer spending by non-profit institutions (NPIs) for households includes the non-market production in this sector, with the exception of own account investments.

Consumer spending by the government

Consumer spending by the government faces a problem relating to the nature of government production. Only some government services are actually sold (market production). The majority of government production is paid for out of the generic funds and made generally available at no cost (non-market production). Because this raises some serious hurdles when allocating it to users, no such allocation is made. By convention, the government is treated as the consumer of the services it produces itself. Due to the lack of market prices, the value of the government’s consumer spending is calculated using the costs:

Gross fixed capital formation

Expenditure on production assets which are used for more than one year during a production process. These include company buildings, houses, company vehicles or machinery and contrast with goods or services which are used up during the production process, such as iron ore (intermediate consumption). Purchases of cars, furniture, etc. by households are not counted as investments. Fixed assets may decline in value over the years, whether through wear and tear or because, for example, the technology becomes outdated (economic obsolescence). This is referred to as consumption of fixed assets (or depreciation). In the case of gross investments, this is not deducted from the value of the investments; however, it is deducted from net investments.

Stock changes

Changes in raw materials, semi-finished goods, work in progress (unfinished products such as ships or machinery) and finished products at the producers’ locations and changes in commercial stock levels. Work in progress in the construction industry is not counted as stockholding. Positive stock changes come about when goods have been produced in the reporting year but have not yet been sold. Additions are also made to stocks when goods have been purchased in the reporting year but have not yet been used in the production process or, in the case of trade, not yet been sold. Negative stock changes come about when goods are removed from existing stocks to be sold or used in the production process.

Changes in stock are valued in such a way as not to create any profit or loss on stocks through price changes. For these purposes, the initial stock and the closing stock of each good is valued at the same price; raw materials are valued at the applicable average purchase price during the period, finished products at the average sale price and work in progress at the average cost price.

Balance of the purchase and sale of valuables

This concerns the balance of purchases and sales of valuables, such as precious stones, gold, antiquities, art objects and jewellery, which are purchased primarily as investment objects. In the national accounts, this transaction is generally combined with the stock changes.

Net investments

Investments in fixed assets (gross) plus the stock changes, including the balance of the purchase and sale of valuables, minus the sale of fixed assets used, less the depreciation.

Balance of the purchase and sale of non-produced non-financial assets

Primarily land transactions. The majority is made up of the sale by local authority land development companies to investors in buildings and homes of land that has been made ready for construction. Purchases and sales of land are valued excluding VAT and transfer costs; these costs form part of the investments in fixed assets.

Income from capital

The income that the owner of a receivable or of tangible non-produced assets receives in exchange for providing financial resources or making tangible non-produced assets available to another institutional entity. Income from capital consists of: interest, profit distributions (dividends and income extracted from quasi-corporations), retained profits from direct overseas investments, income from capital allocated to policy holders and income from land and mineral reserves.

Benefit payments

Benefit payments, either in money or in kind, that are allocated to households to relieve the financial burden for households arising from certain risks and needs (such as illness, disability, incapacity to work, old age, surviving relatives and unemployment). These benefits are distributed as social payments in money and social payments in kind.

Subsidies

Payments made by the government and the European Union (EU) to producers with the aim of reducing the prices of products, maintaining employment or providing reasonable remuneration for the factors of production.

Income transfers

All payments for which no direct reciprocation is expected and which neither affect the payer’s capital nor serve as financing for the recipient’s long-term expenditure.

Capital transfers

Payments for which no reciprocation is expected and which  affect the payer’s capital or serve as financing for the recipient’s investments in fixed assets or other long-term expenditure. A distinction is made between two partial transactions: investment contributions and other capital transfers.

Other expenditure

Other expenditure includes:

• Taxes paid on production and imports;
• Taxes on income and wealth;
• Social insurance payments made directly by employers.

B. Supply and use table

The supply table

The supply table shows the supply of the various goods and services, differentiated according to product group. The supply equals what is produced in the Netherlands plus what is imported. The table shows domestic production by industries and the imports for the various product groups.

Each row of the supply table provides a description of the supply of a specific product group. Each column of the supply table describes the total production of an industry.

The use table

The use table describes the use of goods and services, differentiated according to product groups. A distinction is made between intermediate consumption by industries and final expenditure. The final expenditure is divided into exports of goods and of services, consumer spending by households and by the government, gross investments in fixed assets and stock changes.

Each row of the use table provides a description of the destinations of a specific product group. The total of each row of the use table is by definition equal to the total of the corresponding row in the supply table. However, some additional columns must be included as a result of the different valuations used in the supply and use tables.
Each column in the intermediate section of the use table describes which products an industry uses in the production process, together with the value added that is generated in the production process. The total gross value added (at basic prices) of the industry and the intermediate consumption is by definition equal to the production value at basic prices for that industry.

B.I Aligning the use table and macro-totals

Some extra rows and columns have been included in the use table to achieve alignment with the macro-totals, as explained below.

Consumption by residents outside the Netherlands

The consumer spending has been corrected for this. This amount has been reverted to imports in a separate column: ‘consumption by residents outside the Netherlands’.

C. Labour

Employed persons

Employed persons are all persons who have one or more jobs as an employee and/or self-employed person with an economic entity located in the Netherlands (a company, institution or private household).

The category of working persons includes all persons who carry out paid work, even if only for one or a few hours a week, even if they:

• work legally as such, but without registration for income tax and social security (‘undeclared work’);
• are temporarily not at work, but have continued receipt of wages or salary (for instance owing to illness or hold-ups due to frost);
• have taken temporary unpaid leave.

Working persons can be divided into the categories of employees and self-employed persons. They may live in the Netherlands or in another country.

Employees / self-employed persons

Employees are persons carrying out paid work under an employment contract for an economic entity and whose payment (in money and/or in kind) is recorded as employee remuneration. Self-employed persons are persons carrying out work on their own account or at their own risk in their own business or practice, or in the business or practice of a family member, or in a profession conducted independently. This category includes domestic workers, childminders, babysitters, newspaper delivery workers and people who distribute flyers. Family members working for a family business are considered to be self-employed, unless they have entered into an employment contract.

Labour year

The labour volume in labour years is a measure of labour volume, calculated by converting all full-time and part-time jobs to full-time jobs; this is also known as the full-time equivalent (FTE). The full-time equivalent of a job is determined by dividing the agreed annual working hours for that job by the agreed annual working hours for a full-time job with the company in question. In this way, when taken together, the volume of work of two half jobs totals one FTE. The full-time equivalent of a self-employed person’s job is determined by dividing the usual weekly working hours associated with that job by the average working hours of self-employed persons’ jobs working 37 hours or more per week (in the same branch of industry).

D. Sectors

The accounting system provides an overview of all economic partial processes, such as production, income distribution and financing, in the form of successive accounts. These accounts are not only drawn up for the economy as a whole, but also for five different domestic sectors. In this way, the accounting system describes:

• for each economic partial process, the role played by each sector, such as the government’s role in income redistribution and financial institutions’ role in financing;
• for each sector, the extent and cohesion of the various economic activities and how they relate to the rest of the economy and to other countries.

The sectors are divided, according to internationally established criteria, into non-financial corporations, financial institutions, government, households and non-profit institutions for households.

In the supply and use tables, the producers are grouped by industry rather than by sector.

Government

The government sector includes, firstly, all statutory entities concerned with the redistribution of income and capital. In the Netherlands, these entities are ministries, local authorities, provinces, water boards, etc. Secondly, it includes institutions which are controlled and primarily financed by the aforementioned entities and which do not also produce goods for the market.

Non-market production is relevant if the sales returns are consistently less than 50 percent of the production costs. In this way, organisations such as ProRail and the Open University fall under government.

Government bodies which are active outside the Netherlands, such as embassies, are also part of the government sector. Conversely, foreign embassies and international institutions, such as Europol and the International Court of Justice, are not allocated to government. In principle, government corporations (such as Nederlandse Spoorwegen (Dutch railways), Schiphol, BNG Bank) and quasi-corporations are not part of the government sector. Neither is De Nederlandsche Bank (the Dutch central bank).

The government sector consists of three subsectors: central government, local government and statutory social insurance institutions.

Central government includes:

• the national government (ministries and budget funds such as the Municipal Fund, Provincial Fund and Infrastructure Fund);
• universities;
• product and business associations;
• a group of nationwide foundations and organisations.

Examples of nationwide foundations and organisations include:

• research institutions (including NWO, KNAW and institutes linked to the universities);
• idealistic organisations (including Oxfam Novib);
• organisationally independent government services such as ProRail and Statistics Netherlands (CBS).

Local government includes:

• provinces and water boards;
• local authorities, excluding their quasi-corporations which are grouped with the non-financial or the financial corporations (including local authority transport companies);
• joint schemes (collaborations between local authorities in the areas of waste processing, water purification, fire services, sheltered employment, etc.);
• organisationally independent local government services, such as job placement offices and regional police forces;
• private local institutions in the areas of labour, social work, culture and education such as jobs pools, the Jeugd Werk Garantieplan (young people’s work guarantee scheme), asylum seekers’ centres, museums, libraries, organisationally independent institutes of education and tutoring services.

For a more detailed explanation, as well as the complete list of institutions CBS considers to be part of the government sector, see Wat rekent CBS tot de sector overheid? (‘What does CBS include in the government sector?’) (CBS, 2018).

Households

The households sector includes all natural persons who have remained in the Netherlands for longer than one year, regardless of their nationality. Conversely, Dutch people who have remained outside the Netherlands for longer than one year are not included in Dutch households. The category of households includes not only people who are living alone or with family, but also people in care facilities, retirement homes for elderly people, prisons and boarding institutions. In the event that the people included in households own their own business, these businesses are also counted towards the households. This is the case for self-employed persons (sole proprietorships). Large, unincorporated, independently operating enterprises (quasi-corporations) are allocated to (non-financial or financial) corporations.

Non-profit institutions for households

The non-profit institutions for households (NPIs for households) sector includes foundations and associations whose resources are sourced primarily from voluntary donations by households and from income from capital. Examples of these organisations include religious institutions, philanthropic organisations, political parties, labour unions and associations in the area of culture, sports and recreation.

D.I The relationship between sectors and industries

In the supply and use tables, the business entities are grouped by industry; that is to say, by economic activity. Because the main systems are in alignment, there is an exact relationship between the sectors and the industries. The industries with which the various sectors correspond are indicated below.

Government

The majority of the government sector consists of the industries of public administration and public services and subsidised education. There are also entities in some other industries which belong to the government sector, for example:

• specific activities by local authorities, such as cleaning services (waste management industry), sheltered workplaces (other industry), municipal health services (healthcare industry) and exceptional local authority schemes for these activities;
• job placement offices, job pools and the Jeugd Werk Garantieplan (employment agencies and job placement services industry);
• institutes linked to universities (research industry);
• ProRail (storage, transport services industry);
• shelters and asylum seeker centres (care and welfare industry);
• idealistic organisations, such as Oxfam Novib and SNV Netherlands Development Organisation.

Households

The households sector includes all natural persons and their businesses. Self-employed persons and homeowners fall within this category. Home ownership forms part of the industry of renting, buying and selling real estate. In principle, there can be self-employed persons in any industry, with the exception of industries that involve specific government activities.

Non-profit institutions for households

The foundations and associations included in the sector of NPIs for households are particularly common in the industries of healthcare, care and welfare, culture, sports and recreation and other services.

References

CBS (2019). Nationale rekeningen 2018 (‘National Accounts 2018’), The Hague/Heerlen/Bonaire. National Accounts 2018 (cbs.nl)

CBS (2018). Wat rekent CBS tot de sector overheid? (‘What does CBS include in the government sector?’), The Hague/Heerlen/Bonaire. Wat rekent het CBS tot de sector overheid? (page in Dutch)