Museums occupy a unique position in the economic landscape, complicating standard industrial categorization. They function as both cultural institutions, driven by a public-facing mission, and as economic entities that must generate revenue and manage complex budgets.
This combination of public service and financial necessity means they do not fit neatly into purely governmental or commercial classifications. Understanding the industry requires seeing museums as a dynamic part of the broader economy, not just a repository of objects.
Official Industry Classification
The official statistical systems in North America primarily place museums within the Arts, Entertainment, and Recreation sector. This classification, used by the North American Industry Classification System (NAICS), groups museums under the code range beginning with 71. Specifically, the subsector for “Museums, Historical Sites, and Similar Institutions” is designated as NAICS 712.
Museums are often categorized under the six-digit code 712110. This code includes establishments primarily engaged in the preservation and exhibition of objects of historical, cultural, or educational value, such as art museums, science and technology museums, and halls of fame. This placement distinguishes museums from other entities within the broader 71 sector, such as performing arts companies (711) or amusement parks (713).
Defining the Cultural Heritage Sector
Museums are defined by a core mandate that transcends commercial interests, placing them firmly within the cultural heritage sector. Their primary purpose centers on the preservation, education, research, and public access related to their collections. They act as custodians of artifacts, artworks, and historical documents, which they must curate, protect, and conserve for future generations.
The operational focus involves specialized activities, such as conservation and restoration, to ensure the longevity of their holdings. Museums serve as educational hubs, offering programming and exhibitions that foster cultural understanding and provide opportunities for research. Most museums operate as non-profit organizations or government entities, reflecting their mission and affecting their legal requirements and purpose.
Economic Function and Funding Structures
Museums function as complex economic units that rely on a diverse mix of revenue streams to sustain operations. Their financial health depends on balancing earned income with contributed income, separating them from purely commercial businesses. Earned income includes revenue generated directly from visitors and commercial activities, such as admission fees, membership dues, gift shop sales, and facility rentals.
Contributed income provides a substantial portion of the operating budget. This includes funds from sources like government grants, private donations from individuals and corporations, and endowments. Endowments are permanent funds that generate investment returns, offering long-term financial stability, especially for larger institutions. Museums also serve as employers and contribute to local economies through direct spending on staff, supplies, and services, acting as stimulators of economic growth.
Adjacent Industries and Ecosystems
The museum industry is interwoven with a range of adjacent sectors, forming an ecosystem that extends its economic and cultural reach. Tourism is a significant external relationship, as museums act as heritage attractions that draw visitors, supporting the hospitality, travel, and local retail industries. This link positions museums as catalysts for local economic activity.
Museums also rely on specialized technical and creative industries for their core functions. This includes conservation services, specialized construction for exhibit design, and high-level security providers. The educational sector is another close partner, with museums working on curriculum development and providing programming for schools, and collaborating with universities on research and collection management.