Music, a primary cultural cornerstone, plays a transformative role in fostering creativity, collaboration, and risk-taking — traits essential for entrepreneurship and innovation. A 2019 study by the World Economic Forum underscored the symbiotic relationship between the arts and innovation, emphasizing that creativity spurred by artistic engagement improves problem-solving and decision-making. Similarly, the National Endowment for the Arts has highlighted how arts participation correlates with entrepreneurial ventures, noting higher rates of patent filings and business creation among individuals with artistic backgrounds.
“People’s arts participation, as they self-define it, is constantly changing. Through our arts participation strategies, we all become entrepreneurs—conceptualizing new worlds of artistic possibility, defined by the people and for the people.” – Johanna K. Taylor, Associate Professor, The Design School, Arizona State University, with National Endowment for the Arts
Music’s unique ability to cultivate mental agility has been noted by luminaries in both the arts and business. Steve Jobs famously credited Bob Dylan and The Beatles as major influences on his philosophy, stating in a 1995 interview, “Creativity is just connecting things. When you ask creative people how they did something, they feel a little guilty because they didn’t really do it, they just saw something.” This insight reflects music’s power to inspire lateral thinking—finding connections between seemingly unrelated concepts, an essential element of innovation.
‘The world is not static, but constantly changing; indeed, there is always the potential for a variety of future worlds to spring from the ideas and actions of today,’ leading entrepreneurship scholar Saras Sarasvathy (2012). Worldmaking. In A. Corbett and J.A. Katz (Eds.), Entrepreneurial Action (Advances in Entrepreneurship, Firm Emergence and Growth, Vol. 14, pp. 1-24) Bingley: Emerald Group Publishing Limited. ‘The arts are central to this notion of worldmaking. They invite us to consider new realities and test many possible futures through how we choose to participate, experience, create, and perform.’
Music in Shaping Industry and Innovation
Detroit and the Auto Industry
Detroit’s influence on the music industry, particularly through Motown Records, is inseparable from its role as the birthplace of modern automotive manufacturing. Motown, founded by Berry Gordy in 1959, was a trailblazer in both music and business. Gordy’s assembly-line approach to producing music mirrored the innovations pioneered by Henry Ford. Gordy’s philosophy, “Don’t look at where you are, look at where you want to be,” encapsulated the city’s industrious spirit and the boldness required to transform ideas into global success stories.
Motown artists like Stevie Wonder and The Supremes not only revolutionized music but also demonstrated the scalability of creative enterprises, providing a blueprint for industries far beyond entertainment. The synergy between music and the auto industry shaped Detroit’s global identity as a city of both creative and industrial ingenuity.
New York and the Financial Industry
In New York City, the frenetic energy of jazz mirrored the high-octane pace of Wall Street. Jazz legends like Duke Ellington and Charlie Parker cultivated an ethos of improvisation and adaptability, qualities that resonate with financial innovation. George Wein, founder of the Newport Jazz Festival, once remarked, “Jazz is the sound of surprise.” This sense of surprise parallels the calculated risks and quick decision-making that characterize the financial sector.
New York’s financial industry thrived on the dynamism of the city’s cultural fabric. Jazz clubs became networking hubs, drawing professionals who found inspiration in the art form’s complexity and unpredictability. The interplay between New York’s cultural and economic sectors has been instrumental in solidifying its reputation as a global capital of innovation.
Silicon Valley and Haight-Ashbury
The countercultural revolution of Haight-Ashbury in San Francisco during the 1960s laid the ideological groundwork for Silicon Valley’s tech boom. Bands like Jefferson Airplane and The Grateful Dead championed an ethos of experimentation and defiance of norms. Steve Wozniak, co-founder of Apple, drew parallels between this cultural moment and the spirit of technological innovation, echoing Sarasvathy, “Everything we did we were setting the tone for the world.”
The countercultural movement’s embrace of communal living and open collaboration foreshadowed the Valley’s startup ecosystem, where knowledge sharing and partnerships are key. The rebellious energy of Haight-Ashbury echoed in the willingness of tech pioneers to take risks and disrupt industries. By the way, the origin of the iPod? Wozniak, “My first transistor radio was the heart of my gadget love today. It fit in my hand and brought me a world of music 24 / 7.”
More Recently, Let’s Take a Look at Why Austin Emerged
Austin’s richer musical history dates back to the early 20th century, but its transformation into a creative hub began in earnest in the 1960s and 70s. During this period, country and blues artists such as Willie Nelson, Waylon Jennings, and Stevie Ray Vaughan emerged as icons of Austin’s music scene. Willie Nelson’s decision to return to Texas in the early 1970s after leaving Nashville signaled a shift in Austin’s identity as a haven for artists seeking authenticity over commercialization. As Nelson put it, “In Austin, I could just be Willie, and the music could be what it needed to be.”
The Armadillo World Headquarters, opened in 1970, became a cultural landmark and a melting pot for genres ranging from rock to progressive country. It was here that Austin’s unique blend of musical influences—rooted in Texas traditions yet open to innovation—gained national attention. As Eddie Wilson, founder of the venue, alluded, ‘The Armadillo was about letting the music be itself. No pretenses.’
By the 1980s, Austin’s reputation as a music city was firmly established, bolstered by venues like Antone’s, which hosted legends such as B.B. King and Muddy Waters. At the same time, Austin was becoming a hub for technological innovation. The founding of Dell in 1984 marked the beginning of the city’s ascent as a tech powerhouse, showing a unique parallel between Austin’s creative and entrepreneurial energies and notice, the approach these artists had toward music reflect the personality and entrepreneurial spirit of Austin today
From 1995 onward, and I want to pause there to make sure your attention is keyed into the fact that 1995 is about the time that the internet reached broad, consumer appeal, from then on Austin cemented its status as the “Live Music Capital of the World.” Festivals like South by Southwest (SXSW), which began in 1987, became global stages for both artists and innovators, “Austin’s magic lies in its ability to bring people together from different disciplines to create something bigger than themselves,” noted Hugh Forrest, SXSW’s Chief Programming Officer.
The period also saw the rise of artists like Spoon and Shakey Graves, alongside challenges for the industry thanks to that pivot of our economy to the internet. The shift to streaming revenue models put immense pressure on musicians, as did Austin’s escalating cost of living. The convergence of these issues spurred the creation of organizations like Black Fret, now Sonic Guild, dedicated to sustaining the city’s musical ecosystem.
Cities Leveraging Music for Growth: Lessons from Manchester and Beyond
Cities like Manchester, England, have successfully tied music to economic development. Manchester’s storied history, from Joy Division to The Stone Roses, has become a cornerstone of its urban branding. The city actively integrates music into its economic strategy, hosting events like Manchester International Festival and Beyond the Music, recently founded by Oli Wilson with Sarah Pearson, to attract global attention. Other cities, including Nashville, Berlin, and Melbourne, follow similar models, using music to foster tourism and community, or course, but more so, to inspire entrepreneurship and local innovation.
“It is more than a city, it’s kind of a way of thinking, it represents a way of life, a philosophy. It’s about economic progress and social progress going together hand-in-hand. Manchester has always been fighting for a better world. Hundreds of years ago it was home of the Suffragettes who fought and won votes for women not just in our country but all over the world.” Manchester Mayor, Andy Burnham at SXSW 2023. “Go back to the American Civil War when Manchester was the cotton capital of the world, it’s the place where ordinary people, workers in those cotton mills, voted that they would not handle slave picked cotton. Think about that, 160 years ago, the working people of Manchester said Black Lives Matter.”
So, I brought up Sonic Guild for reasons that will become apparent. I’ve covered innovation in music by way of Austin before, but we’re nearing 10 years since and much has changed. Exemplifying the entrepreneurial adaptability needed to navigate today’s economic landscape, the patrons of local music initially founded as Black Fret, rebranded to reflect a broader, more inclusive mission of supporting extraordinary new music.
“There are two opposing forces turning the Austin music scene into a crucible with the potential to produce some of the top acts in the country, but only the strongest will survive it. On one hand, Austin’s reputation as a Music city continues to grow and that is attracting more and more of the best artists in the country. So the quality of music in Austin gets better every year, producing bands like the Shakey Graves, the Black Pumas, Dayglo, Rob Baird, and many others. But at the same time, the financial pressures on these artists also continue to grow and may be getting close to a breaking point,” referring to that that affordability challenge I mentioned, Greg Carter, the Operations Director of Sonic Guild Austin, shared some perspective. “For years, streaming has been the primary delivery route for music, so the only way bands can make money is to play live. And with thousands of musicians competing for limited performance slots, the competition is fierce and the pay is low. But Austin’s cost of living continues to climb. What was once seen as one of the most affordable cities for Artists is now rivaling the cost of Cities on the East and West coasts.”
Clearly, a need for innovation thanks to the inspiration of the art. Not surprisingly, Sonic Guild and all non-profits are largely impacted by broader economic forces. During the pandemic when people had lots of time on their hands and few options to spend their money, Sonic Guild had our largest membership base in history and distributed record dollar amounts to music economies throughout the United States. But as the “real” economy has contracted (or struggled with the emergence of AI or the booming expenses) over the past few years, support from members, donors, and sponsors has contracted. While such challenges stifle many philanthropies, it’s in the convergence of music with entrepreneurship that such organizations evolve; hard times make you evaluate your organization, cut the fat, and determine how to maximize your value proposition to all your stakeholders – if I were to call it a startup, I might say pivot. Sonic Guild is going through an evolution based on those learnings and is now in a position to better serve our artists and music businesses, deliver better experiences and value to a broader set of members in different segments, and to enable sponsors to better justify their support based on returns in branding, customer acquisition, and employee attraction & retention.
A glimpse behind their curtain?
- More public engagement to build community and provide broader visibility to Sonic Guild artists. For example, the Love Your Music fest at SXSW is open to the public and has been attended by thousands of people over the past few years. This year the Sonic Guild Ball (coming up) opens to the public as well.
- Introducing three membership tiers to expand the membership base and better tailor the experience and cost.
- Expanding their artist programs to better provide the resources they need to treat their band as a small business and take best advantage of the financial grant to expand their audience and advance their careers.
Sonic Guild’s expansion to cities like Seattle, Colorado, and Northwest Arkansas demonstrates its broader ambition. “The ultimate goal of expanding to cities across the country is to provide meaningful touring support for Sonic Guild bands. It can be very difficult for even very successful local bands to build audiences and create financially successful tours in other cities. Imagine being able to plan a tour that includes opening for popular Sonic Guild bands in all the cities going to and from your anchor gig thousands of miles away,” added Carter. By establishing chapters nationwide, the organization creates opportunities for local musicians to connect with broader audiences, enhancing their ability to build sustainable careers. These chapters also serve as catalysts for innovation, showcasing how music can drive economic and cultural growth.
Imagine, founders and venture capitalists, if lessons are to be learned, we should be looking to Arkansas, Colorado, and Washington for the next big hub of innovation, thanks to the music that leads the way.
If you happen to be in Central Texas, this year the Sonic Guild Ball will be held in just a few days, on Jan 18th at the Long Center. And for the first time ever, it’s open to the public. An amazing night of music and celebration giving away $150,000 in grants to musicians while 10 artists perform. I want you to get involved more in Austin Music as it’s the fuel behind Austin Startups, so here’s a 20% discount on tickets.
Cities that embrace the arts, especially music, are uniquely positioned to foster entrepreneurship, innovation, and sustainable economic growth. Music is more than entertainment; it’s a driver of mental agility, collaboration, and creative problem-solving—traits that propel industries and define entrepreneurial success. From Detroit’s Motown to Austin’s “Live Music Capital of the World” ethos, history shows us how cultural investment seeds transformative economic identities. Today, the work of organizations like Sonic Guild highlights how aligning music with entrepreneurship can overcome challenges like affordability and shifting revenue models, ensuring both artists and local economies thrive. City leaders, economic developers, and innovators must recognize the value of weaving the arts into their growth strategies. Doing so isn’t just a nod to culture; it’s an investment in a future where creativity, community, and innovation coalesce into boundless opportunity. Let us commit to building cities that, like the music we champion, inspire bold visions and enduring legacies.
