The Arts, Sport and Culture (ASC) sector had a hell of a 2020. Safe to say, no one in living memory that works in the sector has ever experienced anything like the level of disruption caused by COVID-19. From big to small, COVID-19 was like a cannonball ripping through an already fragile ecosystem.

At Blenheim, we anticipate a much different year as confidence is slowly restored and the Federal Government’s Restart Investment to Sustain and Expand (RISE) Fund program just got an extra $125m kick. According to Paul Fletcher’s office, this will support more than 230 projects and create 90,000 jobs in the creative sector. At the very least, the RISE Fund provides a bridge for the organisations successful in accessing it even as many in the sector will consider it far below the amount required to make up for what was lost.

As that inevitable debate rages, in 2021, the sector will pick itself up, dust itself off and look to the return of the new normal as people head out of home again in search of the fun, connection, and culture our Arts, Sport and Culture sector reliably delivers. As the public mourning that swept across Australia for legendary musical promoter Michael Gudinski illustrated after he unexpectedly left us on March 2, leading to a state funeral at Melbourne’s Rod Laver Arena, this is a sector that sits close to the hearts of Australians.

Signs of recovery are encouraging. In Melbourne, a refreshed Australian Centre for the Moving Image has swung open its doors to the public and in Sydney, audiences are flocking to see Frozen and Hamilton on stage. Meanwhile, the market for the early part of the calendar year is already busy with a number of organisations, such as Opera Australia, the Brisbane International Film Festival, Screenwest and the New Zealand Film Commission undertaking senior executive searches.

To their credit, the sporting codes have weathered the storm, showing remarkable resistance, and are now beginning to see the fruits of their labour and bold decisions made over the recent time. To the world, Australian sport arguably has been the beacon of hope and the example of what can be achieved with strong leadership and open dialogue.

Overall, a few trends are emerging. The promotion of home-grown, on-the-ground talent for one. The opportunity to introduce offshore talent simply remains limited due to the threats of ongoing COVID-19 relapses. Consequently, we see a tight senior executive market.

Whilst we conduct global searches and identify the appropriate international candidates for each assignment, we anticipate it will be highly unlikely that those based offshore will leave their country, family, friends and networks. It will certainly be less than usual. This, therefore, places the emphasis on the domestic market and will stimulate appointments of those coming through the ranks.

One exception to the localisation trend, as has been widely reported, what seems like half of Hollywood’s A-list acting talent has moved to Byron Bay to make movies and hang out with the Hemsworth family. The country’s film crews are experiencing a boom in employment as overseas production has flocked here to shoot in “safe” Australia. Yet there is widespread concern that as soon as the vaccine is globally distributed, our relatively high dollar and cost of doing business in Australia will make this a temporary blip rather than a sustainable trend. Will Marvel Studios really stay 5 years based in Sydney? Now is the opportunity to lock in measures to keep Hollywood here. But even that is not without controversy. Local screen producers face pressure on finding crews for local production as better paying big-budget tentpoles hoover up local talent. Finding balance will be another ongoing debate as the year rolls on.

More broadly, whilst global confidence is still shaky depending on regions, Australia and New Zealand have been global standouts in containment leading to cautious confidence. Underscoring this, the long-awaited Trans-Tasman travel bubble has been announced for mid-April with Air New Zealand flying 3-5 flights out of Sydney to Auckland daily from 19 April.

Data illustrates that contrary to expectations of consumer spending exploding, most people are not yet filled with enormous confidence and as such are remaining disciplined and financially prudent given elements of uncertainty. Australia, however, is arguably better placed than most and positivity is returning with low unemployment numbers and a belief that the impact of the end of JobKeeper will be short and markets will step up. This should be a positive trend for any ASC organisation reliant on ticket sales for support.

When it comes to the greater economy for the country and the ASC sector in particular, there is an enormous opportunity that is being lost due to lack of forward-thinking policy. With no significant reform in tax and industrial relations policies being undertaken, there is a growing sentiment of concern toward what is perceived as indifferent or, at best, unfocused leadership across the business and political landscapes when it comes to future growth.

The Morrison government has seen more than a 10% decline in support since last year which is in danger of increasing as the vaccine rollout continues at a slower pace than had originally been forecast.

The State Premiers remain difficult to predict and whilst arguing for the good of their state, many have argued they have lost sight of the bigger picture for the nation. According to many business heads, the Federal Government has also failed to influence the Premiers to act in a more coherent manner leaving investment on the sideline despite the appeals, particularly in tourism and hospitality, but having a flow impact on the ASC sector for some clarity that would lead to booking interstate travel with confidence.

Whilst other countries position themselves as “open for business”, we arrive at well-meaning but short-term band-aid solutions of cheap flights around the country. No doubt, this is a great move for a number of industries, but it isn’t enough to sustain meaningful future growth.

JobKeeper and JobSeeker have been terrific life support mechanisms. Now that JobKeeper has run its course, we have the opportunity to really get moving and seize the initiative. Instead, it seems we limit ourselves to the same old, frustrating, red-taped, bureaucratic methodology of doing business.

Recently we saw the American Chamber of Commerce, PwC Australia and representatives of American companies with a combined market value of c. $4.5 trillion put forth the report “Attracting US Investors to Australia: The Opportunity Is Now”, highlighting this very point and bringing home the short-termism and lack of vision for the Australian economy. We rely on our natural resources industry and dig more holes as opposed to taking this moment in time to apply the necessary pressure and deliver some needed reform to business regulation in an effort to achieve international competitiveness and stimulate entrepreneurship.

Business leadership has a role to play in turning this perception around, particularly ASC executives in a position to promote Australian culture internationally.

Another trend, digital transformation, continues at an accelerated pace. For the ASC market, the emphasis has been on the domestic market and in many cases, the local state customers. Organisations have taken the opportunity to accelerate their digital strategy in parallel with the focus on efficiencies. For many, digital has been the lifeline, prominent in the creation of the ecosystem. The question companies continue to grapple with is how this can be extended to deliver value and capture a broader customer base.

Yet, behind the chatter, there is disappointment and exhaustion. Truly successful digital transformations are surprisingly rare. Research shows that 70% of them fail and this has not been lost in the ASC sector. Recent research suggests cross-industry partnerships will be a significant driver for further growth in 2021, but such strategies remain largely untested.

Much of this change has shone the light on the composition of both the executive and Board in terms of the necessary future skills which has highlighted gaps in technology and a general need for accelerated decision making. Just take the recent events at Channel 9, which suffered one of the worst cyber attacks in the nation’s history. As highlighted, COVID-19 has fast-tracked much of the planned digital strategy to a period of rapid implementation, a streamlining of roles, and an examination of outsourcing. In the Boardroom, there has been further questioning around technology capability and understanding as well as experienced leadership.

Blenheim Partners’ dedicated Arts, Sport and Culture Practice has built and will continue to gather intelligence on a pool of current and future senior executives. We have also invested heavily in our Technology and Digital Transformation Practice and continue to occupy a lead position promoting diversity in the Executive and Board as an essential characteristic of the most effective and successful teams. We believe diversity is a multivariate attribute that includes gender, ethnicity, experience, culture, language and other factors.

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