Overview

When one mentions "art", the cities that spring to mind are likely to be London, New York and Paris: all traditional centres for the arts and artists. However, Asia's metropolises are fast becoming hubs for the visual arts industry. Thanks to the continent's sustained economic boom, the art world's centre of gravity is moving eastwards.

There are myriad factors that contribute to a flourishing artistic scene, but the bottom line is that art requires the support of affluent customers who can contribute towards the growth of a thriving visual arts industry.

The rise of Asian interest in art is mirrored by Asia's increasing affluence. The continent has weathered the financial crisis better than any other and is experiencing unprecedented economic growth. There are now as many high net-worth individuals (HNWI) - defined as having US$1 million or more in assets - in Asia as in Europe, and by 2013 the number of Asian HNWIs will exceed even the USA¹.

Unlike the consumer behaviour of their Western counterparts, Asia's HNWIs tend to spend their wealth within their home region rather than globally² . The level of disposable income in this region is also higher than the global average: in 2008 and 2009, their cash holdings as a percentage of total wealth was 29% and 22% respectively, versus the global average of 17%³ . This is evidenced by the growth of China and India, as the two Asian giants are expected to outpace some of the more developed economies⁴ in both economic expansion and HNWI growth.

The number of Asia-Pacific millionaires spiked 26% to three million in 2010⁵ . With Asia poised to become the dominant global economic actor, the region is far more than just an exporter of goods: it has a huge potential for consumption. This is why the different players in the arts scene are moving into Asia and providing a new point of growth for the industry.

^[1] The Business Times, 23 Feb 2011
^[2] Global Wealth Report 2010, Boston Consulting Group
^[3] World Wealth Report 2010, Merrill Lynch and Capgemini
^[4] Asia-Pacific Wealth Report 2010, Capgemini
^[5]Asian Wealth Will Now Grow Twice as Fast as the Rest of the World', Business Insider website posting on 23 Jun 2010

Facts on the ground:

With bread-and-butter issues out of the way and extra change in their pockets, Asians are showing greater appreciation for gourmet food, fine wine, fashion and other luxury goods.

Of late, luxury Western labels have been using Asian faces more frequently to sell products⁶, reflecting Asia's rising clout in the world of luxury goods as a response to consumer demand. Asia is also the world's fastest-growing market for luxury goods, where China "is forecast to be the world's top buyer of... cosmetics, handbags, watches, shoes and clothes by 2015," according to professional consultancy firm PriceWaterhouseCoopers.

In addition to luxury goods, HNWIs from Asia are also keen to invest their money on their passions. There is a growing group of sophisticated and globalised Asians who are now learning to appreciate the arts for its inherent merits as well as for its investment value. They seek out items that are perceived to have tangible, long-term value. A report by consultancy firm Capgemini⁷ found that "the two categories most attractive to these investor-collectors are Art and Other Collectibles." This phenomenon is no longer confined to a minority elite. A growing and increasingly affluent middle class also aspire for the finer things in life, and that includes viewing, appreciating and owning art.

In conjunction with Asia's increasing economic clout, there is the growing stature of Asian artists and a global appreciation for Asian art. The players in the visual arts scene are coming up strong with the rapid emergence of Asian artists and high turnover for art auction sales. Out of the top 500 international contemporary artists, nearly half of them are from Asia⁸ . Half of the top 10 countries (in terms of turnover) that conduct contemporary art auctions are from Asia, with China (No.3 at €102,061,445) and Singapore (No.5 at €8,358,083) leading the way. The Asian market for contemporary art has also grown beyond that in the USA. Between July 2008 and June 2009, the contemporary art market was bigger in Asia (€130 million) than the USA (€123 million) for the first time⁹ .

Given China's size and economic wealth, it is unsurprising that the country has a huge role to play in the Asian art scene. However, the Asian giant's focus has been on Chinese art, whereas Singapore has a more cosmopolitan outlook and is stronger when it comes to regional - especially Southeast Asian - art that stems from its geographical location and history as the hub for Asia-Pacific's marine trade. "Singapore is strategically located between the growing art markets of China and East Asia, and India and the Middle East," says Andy Foster, International Managing Director of auction house Christie's.

In order for a visual arts industry to thrive, having well-heeled consumers is not enough: a whole eco-system of different businesses has to flourish. Artists and prospective art buyers require a physical space where the former can display and the latter view and purchase art pieces. The storage and transportation of art represents a logistical challenge, while a favourable tax regime is also important for artists and purchasers alike. Similarly, the emergence of art critics, consultants and technical experts help support and sustain organic growth of the art scene.

The Visual Arts Eco-System:

• galleries and museums offer exhibition space and outreach programmes to educate the public
• teaching institutions groom future talents and administrators
• auction houses value art pieces, set benchmarks and aid in the trading of art
• art fairs act as a market place for all parties to make deals
• specialised storage facilities ensure that valuable art is kept secure in environmentally controlled conditions

Establishing a complete set of system requirements catering to the needs of the various industry players creates the ease of entry into the growing market for them to leverage on the opportunities in Asia. These different components not only make the business side of visual arts seamless, they also perpetuate appreciation and demand for art among the locals, while attracting art enthusiasts from overseas.

^[6] More Asian Models Hit the Runway', The Straits Times, 5 Mar 2011
^[7] Passion Investments and Philanthropy, Capgemini
^[8] 2009/10 Artprice Annual Report
^[9] Art Radar Asia website posting on 11 Nov 2009

The Singapore difference:

To connect buyers and sellers, galleries, museums and art fairs need to be present so that artists can show their flair, and collectors can learn about up-and-coming stars and decide which of their pieces to purchase.

Museums are repositories of local artistic endeavours, and often become tourist attractions in themselves. Think of the Tate Modern in London and the Louvre Museum in Paris. This in turn makes the city a magnet for art lovers. Singapore's museums have made a name for themselves in the region. For example, the Singapore Art Museum has amassed one of the world's largest public collections of modern and contemporary Southeast Asian artworks since it opened in 1996. Galleries are not just exhibition spaces. They discover and nurture deserving artists, and help promote their works. Gallery owners have to actively travel and seek talented artists. "One of the challenges we face is identifying new artists to represent and promote," reveals Aniela Rahardja, director of SBin Art Plus. Her gallery specialises in Indonesian art and Rahardja appreciates Singapore's infrastructure and transport connectivity to the region and the rest of the world.

A further challenge for galleries, says Rahardja, is that "There's not enough exhibition space, especially with high ceilings." To counter this problem, Singapore is targeting to open the National Art Gallery in 2014. It will focus on Southeast Asian art from the 19th century to the present. These works will be housed in two important heritage buildings: City Hall and the former Supreme Court. "The National Art Gallery will have more exhibition space than the National Gallery in London," comments Valentine Willie, founder of Valentine Willie Fine Arts.

"Singapore's active gallery and museum scene, as well as its diverse population, makes it an engaging and dramatic backdrop in which to hold art events," affirms Affordable Art Fair director Camilla Hewitson.

Art fairs not only provide exhibition space, but are also gathering grounds for a whole range of people involved in the visual arts industry. More importantly, they provide opportunities for cross-pollination of ideas between arts communities in different regions. Although top art fairs have been well established in places like Europe, they are rather new in Asia. "Asia is ready for an international event like Art Stage Singapore," says its director, Lorenzo Rudolf, who acknowledges that the focus of the art world is definitely shifting from the West to the East.

A former director of Art Basel, Rudolf turned that trade show into a must-see affair; by the time he left, the fair had an annual wait list of more than 800 galleries¹⁰. When looking for a place to locate his art fair for Asia, Rudolf looked at cities situated at crossroads that had a booming economy, efficient infrastructure and connectivity, and a high quality of life - all of which Singapore offers.

The inaugural Art Stage Singapore was held at the Marina Bay Sands integrated resort in January 2011. More than 120 contemporary and modern art galleries from 26 countries participated¹¹. The event featured a complementary blend of Asia Pacific art and creations from Western art galleries. Gracing the occasion were noted figures from the art world such as American photo artist David LaChapelle and contemporary artist Takashi Murakami from Japan. The landmark event welcomed over 32,000 visitors and generated strong sales¹². "It did not intimidate like some art fairs can," LaChapelle comments. "It reminded me of the early days of the Sundance Film Festival, when there was such optimism."

GOVERNMENT SUPPORT

"I have not seen a place that, when it sets its mind on something, arranges with precision and forethought to get it," says Rudolf, referring to Singapore. "A lot of cities want to be world-class but they only pay lip service. This city is different." He also likes the fact that, after being given the green light, "I have not had anyone trying to veer me in any direction."

Rudolf's experience shows that investors in the visual arts appreciate supportive governments that can cut red tape and put them in touch with all relevant regulatory authorities quickly and efficiently. A pro-business environment, coupled with clear laws governing business practices and intellectual property, is also crucial. In Singapore's case, the government has also walked the talk. In his Budget speech on 18 February 2011, Finance Minister Tharman Shanmugaratnam announced that the government will set aside $365 million annually for arts practitioners up to 2015, an increase of more than 50% over current figures¹³. In a separate investment, it is also turning the laid back enclave of Gillman Barracks into an arts and creative hub¹⁴.

Governmental support is also instrumental in Singapore's Freeport, a massive state-of-the-art facility for storing art and other collectibles located near Terminal 3 of its famed Changi Airport. The first facility of its kind in Asia, Freeport is an example of the ability of Singapore's logistics sector. The size of six football fields, it contains secure vaults, private viewing rooms and exhibition space, all with temperature and humidity controls. "This is the perfect partner of international fine art collectors, dealers, auction houses as well as for sovereign state collections looking for a safe, stable and secure location to store their valuable collections and treasures," says Alain Vandenborre, its president and co-founder¹⁵. "Singapore is a stable location, and the government is committed to promoting and supporting the arts," he continues. "These factors are a huge draw for collectors." Another big draw is that collectors who store works there will be allowed to exhibit them in the city's museums without having to pay taxes or fill custom forms.

ATTRACTING PATRONS OF THE ARTS

Asia has a deep pool of HNWIs who are increasingly acquiring art, especially Asian art, for enjoyment or investment. In order to draw these HNWIs, a city looking to grow its visual arts industry must also offer other conditions to entice them. A safe and stable environment with a high standard of living, required infrastructure, facilities and transport links, and supporting business framework are prerequisites of the successful art hub

Although Singapore's HNWI population surged by 32.7% to 81,600¹⁶ in 2010, it has also been proactive in attracting enthusiasts from around the region to expand the market for the visual arts. "Singapore has a highly attractive environment for business, with a stable government, low tax rates, a growing economy and excellent telecommunications and infrastructure," says Jazz Chong, director of Ode To Art galleries. "As a result, Singapore attracts individuals and organisations to engage in business. This translates to a steady flow of well-travelled and affluent individuals who visit or reside on the island, offering boundless opportunities to showcase artworks in their corporate spaces or private homes."

In addition, Singapore's strategic location between China and India makes it easier to attract HNWIs from both these two fast-growing economies.

NEW BLOOD

Another important component in the visual arts eco-system is the education institutions that continuously produce graduates to fill positions in the industry. Even if they eventually end up working in other sectors, their training and exposure mean they can influence the local community to be more appreciative of art. But there is a wider implication: an Australian study¹⁷ suggests that art education has a positive impact on economic growth, communication skills and knowledge acquisition, among other things.

Singapore offers a comprehensive array of institutions that provide myriad courses, from pre-tertiary (School of the Arts) to diploma and degree levels (Nanyang Academy of Fine Arts, LASALLE College of the Arts) for young people interested in the arts.

As the art world's centre of gravity shifts inexorably towards Asia, thanks to its affluence and growing appreciation of art, Singapore is well poised to become a hub of activities for this industry. Says Sotheby's Deputy Chairman for Asia, Quek Chin Yeow, "A forward thinking and thriving arts community, aided by the ease of movement, all go towards encouraging more artists, auction houses and collectors to flock to Singapore." Confirming that Singapore is on the right path, Fumio Nanjo, Artistic Director of Singapore Biennale 2006 and 2008, adds, "Singapore is increasing depth not only by building the arts, but also the galleries, museums, colleges and businesses that support the industry."

^[10] The Peak, Oct 2010
^[11] 'Art Stage Singapore Opens at MBS', The Straits Times, 12 Jan 2011
^[12] http://www.artinfo.com/news/story/36768/art-stage-singapore-trumpets-a-successful-debut/
^[13]'$365 million a Year for the Arts', The Straits Times, 19 Feb 2011
^[14]'Grow Live-Work-Play Zones', My Paper, 5 Feb 2010
^[15]The Straits Times, 20 May 2010
^[16]Channel NewsAsia website posting on 28 Sep 2010
^[17]'Art Education and Contemporary Culture', www.arteducation.org.au/resources/art_education_and_contemporary_culture.pdf