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An Underutilized Economic Development Engine: Hip-Hop

It's the world’s most popular music genre, and some of its stars are making big investments in their communities. People who work on building local economies should pay attention and nurture this opportunity.

Sankofa Park
A rendering of Sankofa Park in the Crenshaw neighborhood of South Los Angeles. The park, scheduled to open in fall 2023, is a centerpiece of Destination Crenshaw, a Black arts and culture development inspired by the off-stage work of the late rapper and entrepreneur Nipsey Hussle. (Destination Crenshaw)
Over the past few years, a high-net-worth individual has been investing across Atlanta to create jobs and boost local economic development. He created a local bank and a venture capital fund. One of his first investments was a barber shop franchise. Next was an equitable lender prioritizing Black and Latino entrepreneurs, followed by a co-working hub called The Gathering Spot. And all of these investments, large or small, were created through income generated from revenues earned by one business: hip-hop.

This is the other side of Killer Mike, the rapper and actor who has used his success as half of the multiplatinum group Run the Jewels to direct investment back into his hometown in a way that prioritizes local jobs, skills and opportunities. He is, in essence, a one-man economic development agency.

Killer Mike is far from an exception. Miami’s Rick Ross has invested heavily in real estate in Tanzania and is a part-owner of the Wingstop restaurant franchise business. The community hip-hop collaboration Fire in Little Africa supports opportunities across Tulsa, Okla.’s Greenwood District, site of the 1921 race massacre. Nipsey Hussle, who was tragically murdered in 2019, was a significant local economic developer in Los Angeles through his social enterprise, The Marathon Clothing. His work offstage has since inspired the development of a new Black arts and culture destination plan, Destination Crenshaw. Chance the Rapper has invested in nonprofit and social enterprises in Chicago. There are many more examples.

Taken collectively, these artists demonstrate the power of hip-hop not only to generate revenue streams, accumulate fans and sell records, but also to be a direct, intentional and powerful tool to foster local economic development. However, the business of hip-hop and the business of creating local economic policy tend to operate in different worlds. There is little investment across economic development agencies, chambers of commerce and workforce development programs to foster hip-hop in communities. Yet, hip-hop — if taken as a job-creation engine — is a powerful tool that can improve many communities. Those who work in local economic development just need to see it as that and embrace it.

Hip-hop is the world’s most popular music genre and a business that, in its simplest form, is accessible to everyone. Yet, far from being seen as a strategic economic sector, it is more often ignored or, in some places, even discriminated against. Lyrics can still be used as a character reference in court in most states and some countries, and the music is wrongly associated, more than other genres, with crime and anti-social behavior. It is blamed as a cause of crime rather than a symptom of wider social disparities. But if we deconstruct the art form to its component parts, what is revealed is one of the most powerful paths to develop skills, create jobs and equitably develop local economies.

There are multiple skills on show when hip-hop is made and disseminated. Alongside the production of the music — which in essence is created by those with engineering, literacy, math and digital production skills — there are graphic designers, videographers, editors, social media experts, business managers, agents and promoters working in unison to market and sell the music to the community and beyond. The fashion of hip-hop is the fashion of popular culture. Moreover, the more success an artist achieves, the larger the community around them often becomes, buttressed by the often hyperlocal subject matter many artists rhyme and write about. Furthermore, hip-hop, like all other music genres, is not a singular point of business sale models. Music earns revenue in a variety of ways, be it primary (going to a gig or buying a record), secondary (soundtracking an ad or a movie) or ancillary (being on a PA at a supermarket or licensed to a karaoke bar). And these are additive. One can earn in all three circumstances at once. Many artists do.

Yet many tasked with implementing local economic development policies and seeing them through lack the framework to engage with, understand and develop hip-hop as a local business sector. Take the tools that economic developers use to attract business: Local economic development policy often disseminates the false equivalence that for something to be deemed investable — meaning incentives are drawn up to attract it and time and money are put into luring it to town — the asset or company requires land, a shovel and physical construction. Intellectual property is not considered as investable as property unless it can be patented, despite the creative economy representing upward of 4 percent of global GDP. Add the aforementioned challenges on top of this, and seeing hip-hop for what it is becomes even more challenging in terms of writing economic policy to attract it.

Yet there is a significant potential benefit for everyone involved if policies were drawn up to attract, support and incubate hip-hop in communities. Hip-hop has the power to create jobs at the very grass-roots level. It also fosters literacy skills and business acumen, and can address social issues as well as anything else because of its popularity and accessibility. But this requires a change in perspective that asserts hip-hop as an engine of local economic development. As we celebrate the 50th year of hip-hop, this would be a fitting way to honor this incredible art form, no matter where we live.

Shain Shapiro is the founder and executive director of the Center for Music Ecosystems, a global nonprofit dedicated to enhancing the economic role of music in communities. He is the author of This Must Be The Place: How Music Can Make Your City Better, published in September 2023.
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