This chapter is meant to give an introduction to the economics of arts and culture. We provide a definition of economics and motivate the coverage of the book. This chapter explains when and why the arts and culture have become a subject of economic enquiry. We conclude by giving an overview of the size of the arts sector in the United States and Europe.

For nearly a century, the RCM and the RAM had enjoyed an essentially cooperative relationship. On the everyday level, there had been an element of rivalry for staff and students, but the joint venture of the Associated Examining Board (with its benefits of branding and financial profits), the jointly run GRSM diploma and the need to work together to secure Whitehall funding had all meant that at governance level the two institutions worked together. When David Lumsden became Principal of the Academy, this changed. Lumsden, seeing how much the RCM’s profile had benefitted from its Centenary Appeal, broke the traditional consensus with his ‘Pursuit of Excellence’ strategy for the RAM. Relations between the RCM and the RAM were further strained when their funding body (the Polytechnics and Colleges Funding Council), alarmed at the cost of music college provision compared with how they funded their other client institutions, instituted the Gowrie Review of the London conservatoires. Gowrie recommended their merger – something the RCM was strongly against – and as a compromise, the College and the Academy agreed to operate a joint Vocal faculty.

Under Colin Lawson, the College has embarked upon a major fundraising strategy, ‘More Music: Reimagining the RCM’. Its underlying purpose has been to equip the RCM more completely as an international competitor for musical talent, with world-class facilities and communications, and established academic partnerships in China and the Far East. This has involved an intensive building programme to provide more performance, practice and social space within the East courtyard and to develop and rehouse the RCM’s museum within dedicated facilities. There has also been the purchase of the nearby Markova House, which has greatly expanded the College’s physical resources, and the College Hall site has been redeveloped to provide more secure and better-quality student housing. This chapter also looks at how the College’s museum strategy offering digital, as well as physical, access to its holdings has given a new centrality to its historical collections. It also discusses how the new field of cultural economics has shown that the financial support for music training is now more readily acknowledged to be a financial investment, rather than a luxury.