Needless to say, London art drives the economy of London in its own way. Not only are millions of funds generated in art sales every year, the art market also creates scope for new jobs, media spend and regeneration. Approximately 10,000 people are employed in the over 120 art galleries of London alone. Finally various other industries also benefit in the process. Underlined are more details on the London art market and how it drives the economy of the nation.
UK is the world market leader when it comes to auction sales by volume, and demonstrates an approximate 30% in the world market share. With London holding an important position in the UK art market, it is needless to add that its various auctions form the art market of UK. The London art market is strongly driven by its Frieze art fair, collector Charles Saatchi and finally the approximately fifty new galleries that have opened up at East End. Three main auction houses mainly operate the art markets of London. Statistics reveal that put together, $353 million worth of art changes hands in these markets, that too in the off season. Christie's conducted their biggest ever sales in the year 2006 and reported sales of approximately 78%. Sotheby profits heavily too. It indicates that the art market of London functions through many micro markets, which revolve around specific artists or genres. Among these micro markets, those of old Masters, Impressionist and Modern Art have seen the greatest rise. The post war and contemporary market have also shown a rise of over 45% over 2006. As the financial markets represent the economy of the nation, the art market reflects the willingness of the rich to spend disposable amounts of money on works of art. However along with this market, there are also some pieces of art that have not sold at all. One glaring example is the sale of Basquiats which were reported to sell at the $5 million range in the 1988 time period. As people expected the prices to go up several notches to touch the $10 million mark, many were surprised when the pieces did not sell over the last few years. While some say that this indicates a fall of economy in the London art market, many others state that this issue is just a matter of quality, which was presented through signature elements in the earlier Basquiats, but absent now. So discerning customers are not overspending but are choosing to spend their money on certain micro markets, which are present and growing and taking the economy to a new high.
Tourism is an important economy generator in London accounting for one tenth of the city's economy. The various art galleries of London serve as a major attraction to tourists and international visitors who come from diverse parts of the world for the various art fairs. These tourists not only enhance the economy by spending on pieces of art in London, they do much more. They provide the much needed boost to local economies through their spending during their stay, which is approximately 2.3 million locally. A study conducted in 2005 by MEW Research at the National Gallery, on their 2004-2005 exhibition on Raphael: From Ubrino to Rome, indicated similar results. The exhibition attracted 47% people from UK and 17% tourists from abroad. Studies also revealed that 47% tourists came specifically for the exhibition.