Economic Impact of Popular Culture

in Cali, Colombia
Julio César Alonso C.
Universidad ICESI, Cali, Colombia

Ana Isabel Gallego

Universidad ICESI, Cali, Colombia

Abstract

The term “popular culture” has not yet been clearly defined; however, there
are already efforts to quantify its impact on the economy. Cusic and Faulk
(2009) computed the gross domestic product of popular culture, which is
divided into several economic activities in the information sector and in the
arts, entertainment, and recreation sector. This article follows Cusic and
Faulk’s definition to make explicit the contribution of each activity to Cali’s
economy. Our results imply that the main components of popular culture in
Cali are gambling and sporting activities; however, recreation also plays an
important role. The gambling activities are mainly constituted by the sales
of a small-bets game played on a daily basis by more than half of adults in
Cali. A limitation of our approach to calculating the gross domestic product
of popular culture is that we do not adopt an explicit social sciences defini-
tion. This article presents a detailed description of the industries included in
the calculation of the gross domestic product of popular culture. The data
presented here can be organized to present the economic impact of popu-
lar culture.

L ionel Beehner ranked Cali, Colombia, number 10 on the New York

Times’s “The 41 Places to Go in 2011,” citing that in the city, “cafe cul-
ture is on the rise while salsa fuels the night life. . . . Salsa remains Cali’s
lifeblood.” Certainly, the historical identity of the city evokes salsa (Ochse
2004, 29–30; Ulloa 1992, 388). Ulloa, a sociologist and salsa expert, as-
serted in the local newspaper Diario El País Cali:

Between 1940 and 1980 more than one hundred neighborhoods were
created, built by those same people from the suburbs, on common

Studies in Latin American Popular Culture, Vol. 35, 2017

© 2017 by the University of Texas Press
DOI: 10.7560/SLAPC3506
 Julio César Alonso C. and Ana Isabel Gallego 105

land or over old haciendas divided into lots for housing. Thousands of
men, women and children were part of that construction, and in the
process the music from the Antilles and salsa were present in band-
stands, terraces and community meetings, as a symbol of a collective
achievement. (Our translation)

However, Alonso et al. (2010, 42) assert that, according to the Department
of Taxes and National Customs (DIAN, by its Spanish acronym), between
2005 and 2007, 7.8 percent of Cali’s cultural gross domestic product (GDP)
corresponded to dramatic arts, music, and other arts activities. On the ba-
sis of registered sales from the System of Municipal Accounts (SCM, by its
Spanish acronym), Alonso et al. (2013a) found that these same activities are
part of the less dynamic economic sectors of cultural industry. This group of
activities exhibits low market concentration indexes, which means that there
is strong competition among many small firms with a small market share
(Alonso and Ríos 2011, 115). Alonso and Rios (2013b) found that average
life expectancy for small firms in this group is not more than five years.
Local cultures and traditions are known today as an important trend of
consumption, a priority to individuals (Kasriel-Alexander 2013, 8). Mean-
while, institutions such as the World Bank and UNESCO give particular
attention to the cultural sector as a development vehicle (Aoyama 2007,
104). Cali is no exception. Public and private institutions such as the Inter-­
American Development Bank invested $1.87 million in subsidies for the
cultural industry in unprecedented projects in Latin America (Aldaz et al.
2009, 1).

Defining Popular Culture

The definition of popular culture is an open discussion, according to Storey

(2006, 1): it is “always defined, implicitly or explicitly, in contrast to other
conceptual categories.” Storey presents different approaches to a definition
of popular culture: culture liked by many people, the culture that is not high
culture, mass culture, culture that originates from the people, or the result
of a negotiation between dominate and subordinate groups.
Despite the struggles in defining what popular culture is, there is a con-
sensus on some elements that play an important role in defining pop culture.
The most recognized one is associated with the notion of mass media:

Since the beginning of the twentieth century, the new technologies of

communication have quickly evolved into the major sources of pop-
ular culture, and most of the major forms of popular culture are not
only distributed by but have often emerged in one or more of the mass
media. This confusion and conflation has resulted in a persistent and
106 Studies in Latin American Popular Culture

­common form of criticism of the media: that each new media tech-
nology threatens other, more traditional, forms of popular culture.
(Grossberg et al. 2006, 10)

As Storey (2003, 9) states, television is the popular culture industry of the

twenty-first century; however, television itself is not popular culture. For a
product of the cultural industries to become popular culture, it needs to
have popular productivity (Storey 2003, 91).
To talk about popular culture and its impact on the economy, the main
purpose of this article, it is necessary to have a workable definition of popu-
lar culture. For Grossberg et al. (2006, 54), popular culture is “that culture
which, regardless of where or by whom it is produced, speaks to a large pub-
lic audience that cannot be simply described by a single social variable, such
as class or gender or age.” This conception is interesting and neutral enough
to serve as a guide to classify an economic activity as part of the popular cul-
ture sector.
However, there is an even more practical definition for constructing na-
tional economic accounts. Cusic and Faulk (2009) studied the impact of
popular culture on the US economy. They used a definition (for statisti-
cal purposes) provided by the Bureau of Economic Analysis. In their work,
popular culture is composed of two main economic activities: the informa-
tion sector and the arts, entertainment, and recreation sector. The infor-
mation sector includes newspaper, book, and periodical publishers, motion
picture and video industries, sound-recording industries, radio and televi-
sion broadcasting, and cable networks and program distribution. The arts,
entertainment, and recreation sector includes performing arts companies;
promoters of performing arts and sports, as well as agents for public figures;
independent artists, writers, and performers; museums, historical sites, zoos,
and parks; fitness and recreational sports centers; bowling centers; and other
amusement, gambling, and recreation industries.
The definition used by Cusic and Faulk (2009) does not fit some of the
most popular definitions of popular culture cited by Storey (2006), espe-
cially because of their inclusion of the arts, entertainment, and recreation
sector. The performing arts companies and museums could better fit a def-
inition of high culture (or arts) more than one of popular culture, in the
sense that maybe they are not popular enough in Storey’s (2003) sense.
In contrast, sports and gambling are clearly popular but they can easily be
taken as different from culture.
The limitations of Cusic and Faulk’s definition should not be an imped-
iment for its use in measuring the impact of popular culture on the econ-
omy. They include artistic activities and leave to critics the task of defining
whether art is high or popular culture; what is sure is that art has the poten-
tial to become popular. In the case of sports, Boyle and Haynes would agree
that through television, sports have gained an important role in popular cul-
ture. For gambling and recreational activities, Mato (2009) would ­argue
 Julio César Alonso C. and Ana Isabel Gallego 107

that those activities are engrained in the cultural aspects of the society, and
so they are cultural.
We follow the definition of Cusic and Faulk (2009), which makes ex-
plicit the contribution of each activity to the economy, so that the size of
the economic impact can be adjusted according to the definition of popu-
lar culture.

The Case of Cali

Methodology
The definition of popular culture in this article has been adapted to the
availability of information on Cali, Colombia, and economic activities are
classified according to the International Standard Industrial Classification.
The source for most of the sectors included in our measurement comes from
the results from the Culture Satellite Account calculated for Cali (Alonso et
al. 2010). An independent methodology was created for the measurement of
additional sectors.
Table 1 shows that, according to Cusic and Faulk’s definition, those cul-
tural industries with an identifiable public can be considered popular culture.
However, cultural industries such as design, cultural education, heritage, re-
search on cultural aspects, and toys do not have a clear definition of pub-
lic, and consequently are not part of popular culture. The sports activities,
gambling, and some recreational activities whose intention is not to trans-
mit symbolic meaning are not considered cultural industries according to
the guide to calculating the GDP of the culture industries in Latin America
(Convenio Andrés Bello 2009), and so are not included in the culture indus-
tries’ GDP of Cali (Alonso et al. 2010).
The music sector is not clearly identified in Cali’s official accounts, and
it was not possible to include it in the computation of the economic impact
of the information sector on popular culture. In a similar fashion, newspa-
per and periodical publishers are grouped in the same category as radio, tele-
vision broadcasting, and cable networks. In the arts sector, the performing
arts companies and independent artists were unified in a single category that
also included musical production.
The main sources of information used to compute the gross domestic
product of popular industries in Cali were the annual income tax declara-
tions (available from DIAN), the financial statements of large companies re-
ported in the database Benchmark, and the Colombian Annual Industry
Survey (EAM, by its initials in Spanish).

Characterization
In Cali, according to the last available economic census, from August 2005,
there were 1,395 commercial establishments of popular culture. However,
Table 1: Comparison of cultural industries and popular culture sectors of the economy
Popular Industry
Cultural Industry (Alonso, (Cusic and Faulk,
Gallego, and Ríos, 2010) 2009) Comments
Publishing of books, Book publishers
brochures, musical books,
and other publications
Publishing of newspapers, Newspaper publishers
journals, and periodicals Periodical publishers
Publishing of recorded media Sound recording Absent in Cali as
(absent) industries main activity
Other publishing
Printing and service activities
related to printing
Manufacture of games
and toys
Retail of books, newspapers,
and office supplies in special-
ized stores
Research and experimental
development on social sciences
and humanities (SSH)
Architectural and engineering
activities and related technical
consultancy (partial)
Advertisement
Photographic activities
Other business activities Promoters of Partial—promoters
(partial) performing arts of performing arts
and sports and agents and sports absent in
for public figures Cali as main activity
Motion picture and video Motion picture and
production and distribution video industries
Motion picture projection Motion picture and
video industries
Radio and television activi­ Radio and televi-
ties/broadcasting or radio, sion broadcasting
TV, and cable programs Cable networks and
program distribution
Dramatic arts, music, and Performing arts
other arts activities companies
Independent
artists, writers, and
performers
 Julio César Alonso C. and Ana Isabel Gallego 109

Table 1: (continued)
Popular Industry
Cultural Industry (Alonso, (Cusic and Faulk,
Gallego, and Ríos, 2010) 2009) Comments
Other entertainment activities Other amusement,
n.e.c. gambling, and
recreation industries
News agency activities
Library and archives activities Other amusement,
gambling, and
recreation industries
Museum activities and Museums, historical
preservation of historical sites sites, zoos, and parks
and buildings
Botanical and zoological Museums, historical
gardens and nature reserves sites, zoos, and parks
activities
Higher education (partial)
Other recreational activities Other amusement, Cultural content
(absent) gambling, and absent in Cali as
recreation industries main activity. New
methodology.
New methodology:
gambling activities
Fitness and recre- New methodology:
ational sports centers, sporting activities
bowling centers,
spectator sports

54.8 percent of those establishments are dedicated to gambling activities,

and 19.5 percent to recreational activities. Of the establishments, 53.5 per-
cent correspond to an office or factory, compared to 33.6 percent for gam-
bling activities, where 36.9 percent of the sellers are mobile (without a store,
they sell on the streets and move around).
The proportion of informal establishments is 49.8 percent for the pop-
ular culture sector and 64.0 percent for gambling activities. In this con-
text, informality refers to the enterprises that had not registered or renewed
a registry with the Chamber of Commerce. The popular culture economic
activities with less informality are book publishing and TV and radio ac-
tivities. However, the rate of informal employment in this sector is much
higher; it is 72.4 percent for the entire sector, and rises to 82.1 percent and
80.8 percent for movie projection and gambling activities, respectively.1 The
 Table 2: The economic impact of popular culture in Cali 2005, 2008p (thousands of COP)
2005 2006 2007 2008
Information
Book publishers 402,558 2,153,655 2,883,200 3,395,583
Periodical and newspaper publishers 5,746,046 10,366,514 10,760,381 12,672,641
Motion picture and video industries 470,267 455,776 1,791,081 2,402,728
Radio and TV broadcasting and cable networks 18,362,203 31,599,035 19,868,144 23,334,360
Subtotal 24,981,074 44,574,980 35,302,807 41,805,312
Arts, entertainment, and recreation
Performing art companies, independent artists, writers, 3,872,876 6,105,160 9,013,487 9,823,062
musicians, and performers
Museums, historical sites, zoos, and parks 5,303,167 5,387,155 6,392,943 6,648,741
Spectator sports, fitness and recreational sport centers, and 51,063,116 45,987,447 196,166,896 69,372,123
bowling centers
Gambling industries 149,203,837 153,505,874 171,355,544 179,878,070
Other amusement and recreation industries 41,782,286 43,240,646 51,525,113 57,090,702
Subtotal 251,225,282 254,226,282 434,453,983 322,812,698
Popular culture 276,206,356 298,801,262 469,756,789 364,618,010
Information/popular culture (%)  9.04% 14.92%  7.52% 11.47%
Arts, entertainment, recreation/popular culture (%) 90.96% 85.08% 92.48% 88.53%
Gambling/popular culture (%) 54.02% 51.37% 36.48% 49.33%
Sports/popular culture (%) 18.49% 15.39% 41.76% 19.03%
Pop culture/GDP (%)   1.42%   1.37%   1.88%   1.47%
 Julio César Alonso C. and Ana Isabel Gallego 111

Figure 1: Pop culture gross domestic product in Cali, 2005–2008.

industries with more formal employment are book publishing and publish-
ing periodicals and newspapers.
Of the establishments in the sector, 93 percent have fewer than ten em-
ployees (microenterprises), but 40 percent of establishments in book pub-
lishing, newspapers, and periodicals have between eleven and two hundred
employees. The economic activities with the largest proportion of big (more
than two hundred employees) establishments are TV and radio activities
(7.7 percent), followed by entertainment activities (2.2 percent) and sporting
activities (2.2 percent).
On average, in 2005 there were 6,354 employees in the popular culture
sector, 58.9 percent of whom were men. The economic activities that em-
ployed mostly women were libraries, zoos and parks, and movie projection.

Results

The popular culture sector’s share of Cali’s GDP has oscillated between
1.37 percent and 1.88 percent from 2005 to 2008. Unlike the United States,
in Cali, the most important sector of popular culture is the arts, entertain-
ment, and recreation sector (fig. 1; table 2).
In its best year (2006), the information sector accounted for less than
15 percent of per capita GDP. The most important economic activity in the
information sector is radio, television, and cable broadcasting. The second is
newspaper and periodical publishing, composed mainly of two enterprises:
112 Studies in Latin American Popular Culture

Figure 2: Distribution of the pop culture GDP

in the information sector, Cali, 2007.

Figure 3: Distribution of the pop culture GDP in the arts,

entertainment, and recreation sector, Cali, 2007.

El País SA and Nuevo Diario Occidente SA—both companies publish daily

journals, but the second has free distribution (see fig. 2).
The arts, entertainment, and recreation sector has the most impact on
popular culture GDP. The main economic activity in this sector is gambling
(except for in 2007), more specifically a game called chance, which is ex-
plained in the next section. The second main contributor to GDP is sporting
activities (e.g., spectator sports, bowling, fitness centers). Finally, entertain-
ment and recreational activities are the third largest contributor to popular
culture GDP (fig. 3).
 Julio César Alonso C. and Ana Isabel Gallego 113

The “Small Bets” Sector

Chance is the name of a small-bets game that plays against lotteries; the
player chooses four numbers, the amount to bet, and a lottery or regional
draw. If a person asserts the numbers of that particular lottery or regional
draw, he or she receives five hundred times the bet. A notable characteristic
of the game is that the amount a gambler can bet is very low, approximately
US$0.25. In fact, Alonso asserts in the local Diario El País Cali that chance
sells sixteen times more than the lotteries do.
According to a 2006 study by the Centro de Investigación en Economía
y Finanzas (Universidad Icesi), 57.3 percent of adults in Cali play chance;
the main reasons they bet are to solve an immediate necessity with the prize
money (25.5 percent) and because it is a habit (19 percent). The players are
mostly women (54.1 percent), housewives (30.1 percent), and people in low
(44.4 percent) and medium-low income (36.9 percent) neighborhoods.
Most players (76.4 percent) have only primary or secondary education;
the average chance player is forty-four years old and started playing when
he or she was twenty-three. Of the players, 65.1 percent play at least once a
week and 22.5 percent every day.
Chance is very important throughout Colombia, not only because its sales
account for approximately 0.5 percent of GDP, but also because for every
hundred pesos sold in chance (or any other gaming), the health sector of the
department (like a state) receives twelve pesos.

Conclusions

The term “popular culture” has not yet been clearly defined; however, there
are efforts to quantify its impact in the economy. Cusic and Faulk (2009)
computed the gross domestic product of popular culture, which included
several economic activities grouped into the information sector and into the
arts, entertainment, and recreation sector.
This study is similar to Cusic and Faulk’s; however, it was adapted accord-
ing to the availability of information in Cali. Most of the economic activities
considered popular culture have also been included in previous work on cul-
tural industries in Cali. The economic impact of popular culture in Cali is
greater than the impact of cultural industries.
The main components of popular culture in Cali are gambling and sport-
ing activities, but recreation activities also play an important role. The gam-
bling activities mostly involve chance. Unlike in the United States, the
information sector plays a secondary role in the creation of the added value
of popular culture in Cali. However, on the national level, the results could
be different, since most film and television activities are located in Bogotá.
114 Studies in Latin American Popular Culture

Measuring popular culture without the existence of a clear, agreed-upon

definition is a limitation. To counteract this, this article has presented a de-
tailed description of the industries included in our computations. Once a
definition for popular culture is agreed on, the data presented here can be
organized, in several cases, to present the economic impact of popular cul-
ture accordingly.

Note
1. ​Percentage of enterprises that in the previous month did not pay the parafis-
cal taxes.

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