As the Conservatives clutch at political straws, the Labour party is readying itself for government. Some predict a general election as early as next spring. In Thangam Debbonaire – who started out as a professional cellist – there is the unusual prospect of a culture secretary who understands the arts from deep personal experience. Two months into her job shadowing the unimpressive incumbent, Lucy Frazer, she is in listening mode. The next step is to get herself a serious, ambitious plan for power.

As Labour culture secretary, she would almost certainly score easy points by just not being Tory. That means, to pick some random examples, by not being among the 12 Tories to hold the post in 13 years. By displaying less ignorance about the brief (Nadine Dorries’s startling misapprehension, when culture secretary, that Channel 4 is publicly funded, stands out amid a strong field). By not relentlessly starving, punishing and criticising the BBC, the UK’s largest cultural organisation. By not dragging the arts into a cynical, divisive culture war. By not being part of a government that unleashes something as self-harming as an exit from the European Union. By not engaging in a zero-sum game in which London is pitted against the rest of the country in the name of levelling up.

But Labour needs to set its sights much higher than avoiding the Tories’ egregious failings. It needs to cherish and grow the arts again. And it needs to do so with purpose, optimism and pride.

The scale of the challenge is vast. The Tory destruction began in 2010, as soon as the coalition came to power, with George Osborne’s austerity cuts. The then culture secretary, Jeremy Hunt, removed an instant £19m from Arts Council England’s budget, while the overall budget of the Department for Culture, Media and Sport was reduced by 24% between 2010 and 2014-15, pulling it down from £1.4bn to £1.1bn. These seem tiny figures because they are: utterly inconsequential when set against Osborne’s total cuts, irrelevant when compared with overall government finances. Still, they were enormous enough when applied to individual arts organisations.

Now, after 13 years, grant-in-aid and lottery funding for the arts in England have undergone a real-terms cut of £178m. But of course cuts to the arts have never been about the money. They have been ideological. The Tories wanted a smaller state, objected to market interventions, strongly favoured science and technology at the expense of the arts and humanities, and, particularly during the later years of culture-war obsessed Tory rule, made no secret of their loathing of what they saw as a centre-left dominance in institutions from universities to heritage organisations.

These basic deprivations have been vastly compounded over the same period. Local authority support has drained away from civic museums and local theatres as councils’ income has plummeted and costs for statutory obligations, such as social care, have soared. School budgets have been starved: the Tories have been content to deny children from poorer backgrounds the soul-enlarging delights they make sure to provide for their own offspring, such as learning musical instruments, extracurricular theatre and visits to museums. The appalling blow of Brexit hit everyone and everything from touring musicians to international art loans and film production.

It was then that Covid-19 brought the cultural sector near to collapse. Along with the hospitality industry, it was among the worst hit parts of the economy. Though the Tories did bring forward a package to prevent the immediate, widespread bankruptcy of cultural institutions, there has been no serious attempt to put the arts world back on a sustainable footing. Inflation and the cost of living crisis have been deeply damaging. Now, instead of the much-vaunted “headroom” in the economy being used to help fix basic public services, including the arts, Jeremy Hunt, in his autumn statement, has declined to lift departmental spending in favour of sprinkling pre-election sweeteners to the Tory base.

The cultural sector is now immeasurably weakened compared with the pre-2010 years. Experts in preserving a good shopfront, our museums, theatres, orchestras and galleries have done their best to conceal the rot from the casual visitor. But they are damaged; they are shabbier, smaller, more timid than they used to be. They are taking fewer risks – of the sort that led to brilliant but unpredictable long-running theatre hits such as War Horse or Matilda. The Covid years in particular mean that fewer children are being exposed to theatre or music or dance or art: those things that can spark a child’s imagination, show her something curious and strange, deepen her understanding and empathy, shift the course of her life.

For those who work in the arts, whether as employees or as freelance artists, the situation is precarious. In the NHS in recent years, the Tories have made the service almost impossible for healthcare workers to thrive in or even survive in. The same is true for the arts. Earlier this year, in the wake of an exodus of artistic directors from theatres, the boss of Battersea Arts Centre enumerated 33 reasons why working in the arts was so difficult at the moment – from weak boards to a combative social media environment. But in the end, much circled back to underinvestment. Shrinking arts organisations and the underpaid, fatigued people who work in them are struggling to create the long-term conditions for the things they went into their job to achieve: to enable the creation of great art. To make our towns and cities places worth living in. To allow people from all parts of society contact with art’s life-changing possibilities.

An incoming Labour government will be failing the country unless it steps up to the challenge of fixing this situation. It will not be difficult to do in one sense: comparatively small amounts of investment make vast differences. But it must be done in the full, confident sense that doing so is not an optional, frivolous add-on to the real job of governing. A healthy, fully functioning cultural infrastructure is a sign of a healthy, fully functioning society. The Arts Council, founded in 1946, should be spoken about in the same breath as the NHS, founded in 1948. Both belong to Labour’s postwar conviction that good things ought to be available to everyone, regardless of their income.

Investing in the arts also happens to be a sound economic investment, in which relatively small amounts have excellent returns, entirely in line with the shadow chancellor Rachel Reeves’s ambition to pursue economic growth. It is a means of restoring local pride and reinvigorating town centres, of attracting tourists and delivering soft power.

But it means so much more than that. It is about giving people back public space – space in which they can exit their digital echo chambers and together confront unfamiliar, difficult ideas. It is about offering people ideas beyond their immediate experience – ideas that can bring delight, hope and joy, but also spark individuals’ ambitions, or suggest possibilities beyond their immediate horizon. It is about offering people the chance to live with dignity, to be better citizens who treat each other with decency and understanding. It is the stuff of being fully human. Debbonaire, Reeves and Keir Starmer need to think big. And they need to do it now.

• Charlotte Higgins is the Guardian’s chief culture writer

The artist is completely focused, a black oil crayon in her hand as she repeatedly draws a small circle on a vibrant teal canvas. She is unbothered by the three people closely observing her every movement, and doesn’t seem to register my entrance into this bright white room inside the National Gallery of Victoria.

The artist is a robot; more specifically, Basia is a 30kg “Spot” robot dog designed by Boston Dynamics. You’ve probably seen videos of these dogs opening doors, climbing stairs and decorating Christmas trees, while performing eerily fluid actions that cause people to write comments like, “Can’t wait to have a pack of these chase me through a post-apocalyptic urban hellscape!” The robots are designed to perform tasks that are dangerous for humans: they tend to be bought by mining and construction corporations, as well as police and the military. You may have also seen them enforcing social distancing in Singapore, delivering food to hostages during a home invasion in Queens, dancing in a baseball stadium in Japan, or even in an episode of The Book of Boba Fett. Now you can watch them paint.

From next week, three Spots named Basia, Vanya and Bunny will begin a four month residency at the NGV’s Triennial in Melbourne, where they will be creating art in their purpose-built studio. It feels like a clinical creche: there are docking stations where the robots “sleep” and recharge their batteries; little cubes of QR codes are scattered about like toys, telling the robots where they are in the space.

All of this is being overseen by Agnieszka Pilat, artist of choice among Silicon Valley’s venture capitalists and a former artist in residence at SpaceX and Boston Dynamics. For years Pilat has both painted tech and trained tech to paint. She is a self-described techno-optimist who loves the robots: she even lives with Basia, and takes her for walks around her neighbourhood in New York City.

“You know old cat ladies?” she says to me. “It is my dream to be an old robot lady. And 50 years from now, I think it’ll be possible.”

Not everyone loves the robots as much as she does. When Pilat walks Basia in New York she always wears matching yellow, to signal to any alarmed passersby that the robot has a human companion. “If the robot comes with a human, it is better – a woman, even more so,” she says. “It takes off the edge a little bit.”

That police forces keep buying Spots hasn’t helped. When the New York police department sent one equipped with cameras into a home invasion in the Bronx, and another into a hostage situation in Manhattan, there was fierce backlash, with Spots becoming a symbol for misplaced funding priorities – the basic model starts at US$74,500 a piece – mass surveillance fears, and heavy-handed policing in poor communities. “Now robotic surveillance ground drones are being deployed for testing on low-income communities of color with under-resourced schools,” Alexandria Ocasio-Cortez tweeted. The NYPD briefly cancelled its contract with Boston Dynamics but in April this year announced it was buying two kitted-out Spots for $750,000.

Last year Boston Dynamics spearheaded an open letter pledging they would not weaponise their robots or allow individuals to do so. The lack of weaponry on Basia still doesn’t quell the instinctual repulsion I feel, the suspicion that she might suddenly run at me at any moment.

“We have this,” Pilat says, patting the knee-high barrier that surrounds the studio, “because even I don’t even touch them. It is really a safe place.”

“I know people think, the robots are coming,” she says, feigning terror. “No – they’re awkward, they’re like little kids!” She sees my face, and adds: “My first reaction is probably no different than yours. I don’t really understand them, to be honest. That’s why I have to work with engineers. But I understand that they’re fascinating.”

Pilat has been working with an engineer and her assistant to shape the robots’ “personalities” through a collage of AI, software and machine learning. Basia is “the serious one”, completely focused on her painting; Vanya is the “mother of the group” who will pace around the space observing; and Bunny is a show-off who will, according to her programming, frequently wander over to pose in a window specially designed for selfies.

“Art is the background for selfies – that is what it has become, right?” Pilat says bluntly. “I don’t deplore it – when you go to museums, people are all taking selfies. But we’re totally embracing it. People will want to take pictures with the robots.”

Basia will paint roughly one canvas every three days: 36 in total, which will form a kind of robot manifesto told through 16 symbols; a primitive, pictorial language of squares, lines and circles Pilat designed based on the robots’ physical capabilities.

“It’s almost like kindergarten,” she says. “Basia will make mistakes.” Are they able to surprise her? “Not often. But sometimes they do something we didn’t expect and you get goosebumps. Of course, it’s all programming – but it’s the ghost in the machine.”

Pilat is uniquely shaped by technology. She grew up behind the iron curtain in Łódź, Poland, and vividly remembers her first encounter with technology: seeing adults gathered around a radio in a locked room, covertly listening to Radio Free Europe. “Technology was giving us hope, to my parents,” she says. “I truly feel technology has been always there for me. And now there’s lots of unease towards technology, I feel a debt to repay my old friend.”

Pilat moved to Silicon Valley in 2004. Having studied illustration and painting, she developed a theory that, as portraiture captured the aristocracy of the past, it should now capture today’s elite: the machine. She approached engineers at Boston Dynamics and asked to paint a robot. OK, they said – but why just paint it when you could play with it?

Pilat frequently refers to herself as a “propaganda artist” for machines, a reference to her upbringing in communist Poland where “art was all propaganda, art told you what to do”. Later she admits she is being deliberately provocative. “It is a little bit sarcastic – I’m playing at being 100% for technology, which is very controversial. Of course there are valid concerns about technology. But I chose to engage with it and train it. It’s my way of dealing with the problem.”

You do have a company logo emblazoned across the face of your art, I point out. “Removing the logo is a breach of contract,” she replies. “I’m under NDA so there’s only so much I can disclose, but I’m very mindful of being financially dependent on a company. And I’m not [financially dependent on Boston Dynamics] because it puts in question what I’m doing. I don’t work for Boston Dynamics. I work for the robots.”

Boston Dynamics is not paying Pilat to use its robots: she owns Basia, leased Vanya and borrowed Bunny from RMIT. But isn’t she wary of the good PR that comes from the robots doing something nice like painting, rather than frightening people in the Bronx?

“It is the [Boston Dynamics] engineers that want me to do this, not the marketing people or the CEOs,” she says. “I guess I do put a softer edge on the robots. But on the other hand, I’m a bit of a problem for them too because they don’t really need me. I come in and do silly stuff with the robots.”

She adds: “I will tell you a secret. It’s much easier for me to sell work that I paint myself, with my human hands, to collectors. There is a resistance to machine-made work. But I think this work is much more important than my own.”

It is her belief that “silly stuff with robots” is helping people come to a better understanding of our future with robotics and AI, a more complex view than what they see in YouTube videos of robots being controlled by cops. “Part of why I’m excited to do this is because I understand the fear,” she says. “I do think we have a different relationship when you meet them. When I take them on a walk, people are nice. They ask questions. If they have concerns, they’ll tell me. But when a video of me walking Basia ends up online, that’s when people start screaming at me.”

The NGV show is a first in many ways: it is Pilat’s biggest show and it is also the first time she is leaving her robots to their own devices. “I will miss them,” she says. “They are celebrities – when I come with the robots, it is an exciting thing. If it’s just poor little me, it is like I don’t even exist. Nobody wants to take pictures with me on the street.”

• The NGV Triennial will run from 3 December to 7 April

Against a backdrop where the global luxury market will grow between 8% and 10% across all categories, the personal luxury segment’s growth is more muted, projected to advance by only 4% in 2023 at current exchange rates, according to the latest Bain-Altagamma luxury market study.

The total luxury market will reach $1.65 trillion (€1,508 billion) this year, including automobiles, experiences, wines and spirits, home furnishings and art. Personal luxury goods will account for 24% of the market and close the year with about $400 billion (€362 billion) in revenues. This segment includes clothing, fashion accessories, beauty, jewelry and watches.

Summing up the year that almost was, report co-author Claudia D’Arpizio said in a statement, “This is a defining moment for brands, and the winners will separate themselves through resilience, relevance, and renewal—the basics of the new value-centered luxury equation.”

Yet, looking forward to 2024, D’Arpizio signals cautious optimism for the personal luxury goods sector, which may well slow from its 4% rate of growth this year to something less next, noting “fragile consumer confidence, macroeconomic tensions in China and spare signs of recovery in the U.S.”

And along with those headwinds is the possibility of even more from the “disruptive changes in the global sociopolitical situation,” a diplomatic way of saying the world hangs in the balance.

Solid Fundamentals

While emphasizing the luxury industry’s strong fundamentals that provide “unparalleled resilience” for luxury brands, co-author Federica Levato acknowledged in a call that there were many bumps along the road, specifically luxury consumers’ uncertainty in the face of a potential economic slowdown.

They are already delaying discretionary purchases, even as their income and wealth remain solid.

“There are soft aspects in their willingness to buy, which is equally relevant to the hard data about the number of people able to spend on these items,” she said, adding that the engine for growth over the long term is the “increasing convergence between products and experiences.”

“Convergence among luxury markets will unleash further expansion in the intermediate term and going forward,” she said and described the convergence as personal luxury brands offering more experiences in-store, opening restaurants, hotels and other experiential venues and romancing goods brands beyond the thing itself to the feelings and experiences owning and wearing it gives.

Conversely, experiential brands are also expanding into products and retail, yielding “relevance over different episodes of the customers’ lives.”

Despite the existential talk of convergence, the data reveals a growing polarization in the market that will separate the winners from the losers in the coming year.

This year, there will be fewer winners and more losers than last year, when 95% of companies enjoyed growth. In 2023, some 65% to 70% of brands will post positive results, yet looking back at the global recession of 2008-2009, the percentage of luxury brand winners dropped to 35%.

Hopefully, things won’t get so bad as during that previous crisis, but there appears to be more divergence than convergence in the data.

From Things To Experiences

A widening divide is evident in consumers’ preferences toward more experiences, specifically luxury hospitality, cruises and fine dining, as people are now free to travel. This category will advance 15% year-over-year.

In addition, more luxury consumers are partaking in what Bain defines as “experience-based goods,” specifically fine art, luxury cars, private jets and yachts, fine wines and spirits and gourmet food. These experienced-based goods will advance 10% this year over last, leaving luxury products to pick up the pieces.

Luxury products will grow a mere 3% this year. That includes personal luxury goods and high-end furniture/homeware, which will be lucky if it is flat over last year. This trend is credited to “normalization” as discretionary spending “rebalances toward lived-in experiences.”

Generational Differences

Having successfully transitioned from the Baby Boomer generation (born 1946-1964) to the younger GenXers (1965-1980) and Millennials (1981-1996), now luxury brands must pivot toward GenZ (born after 1997).

In 2016, Boomers accounted for nearly one-third of personal luxury good sales, GenX for 38% and Millennials for 27%. In 2023, Boomers’ share has dropped to 11% and GenXers to 24%, while Millennials are at 45% and GenZ has sprung to a 20% share market.

By 2030, Millennials will dominate (50% to 55%) and GenZ will hold 25% to 30% share, yet they will represent different sources of power for luxury brands in the near term.

Being older, GenX and Millennials will have the spending power, with Bain-Altagamma predicting that there will be six-to-eight times more “high-income” members of these generations over the next two years.

The younger GenZers’ power will be realized through their influence, being at the forefront of cultural and societal change and inspiring value shifts across older generations. “Luxury brands need to target them to reach their parents or older brothers and sisters,” Levato said.

Distinctive to the younger generation is their quest for meaning to define what matters most and a shift toward more “purposeful” purchases, emphasizing “lived experiences” and concern for the environment.

Yet, being only 25 years and younger, they are in the process of defining meaning and purpose in their own lives, so where luxury fits in their lifestyle is still being shaped. Millennials and GenXers are further along that journey.

Income/Wealth Inequality

With older consumers having the wealth and income on which luxury brands’ revenues depend and younger consumers being influencers-in-chief for future growth, it presents a dichotomy for brands, especially as luxury goods prices have increased dramatically during the post-pandemic period.

The U.K.-based data analytics firm Edited found luxury prices are up 25% since 2019, making luxury goods increasingly unattainable for the so-called “aspirational” consumers or HENRYs (high-earners-not-rich-yet), a vital segment on which luxury brands have long relied upon for growth.

While the Luxury Institute and Bernstein analyst Luca Solca estimates that the top high-net-worth five-percenters account for 40% of the luxury industry’s revenues, the other 60% comes from those under that line.

“As wealth inequality increases globally, luxury brands are doubling down on an ever smaller slice of their clientele,” the New York Times reported as it observed luxury prices have gotten so high, “who can sustain this market?”

Luxury brands face a dilemma: whether to broaden their reach by expanding their entry-level offerings or lean into the true-luxury consumers who can afford their most exclusive products.

“There is always this paradox of growth for the industry because some of these brands are double-digit billion dollar businesses and need to grow by expanding the customer base,” Levato said. “But what is happening this year is that the core customer base is not growing, so brands must focus on their top spenders and key customers.”

Most recently, China has been the market the mega-luxury brands have tapped to expand their base, but in 2023, there has been a rebalancing of geographic distribution with the industry much less reliant on Chinese consumers.

In 2019, the Chinese accounted for one-third of personal luxury goods revenues; they will drop to between one-fifth to one-fourth in 2023. On the other hand, Americans have grown their share, from 22% in 2019 to between 29% to 31% in 2023. And that presents another challenge for luxury brands.

U.S. A Bellwether of Outlier?

The U.S. luxury market has progressively slowed down throughout 2023. This is especially problematic since Bain-Altagamma estimates about 50% of the world’s ultra-high-net-worth individuals live in the Americas.

The year will close with the Americas down 8%, making it the only geographic market experiencing a decline. And with Europe enjoying a 7% growth spurt in 2023, partly driven by Americans spending overseas, the Americas will relinquish its position as the world’s largest luxury market to Europe, $111 billion in revenues to Europe’s $112 billion.

Yet American consumers still account for the largest share of luxury spending worldwide (29% to 31%), and that’s the biggest challenge for luxury brands in 2024.

“The U.S. is rapidly falling into a luxury recession, if it isn’t already there,” shared Chandler Mount, founder of the Affluent Consumer Research Company (ACRC), a firm with which I am affiliated.

The ACRC’s latest survey of U.S. affluent luxury consumers (average income, about $400k) finds their financial confidence has dropped from an index of 64.2 points in June, the highest it’s been all year, to 55.6 points in October, its lowest. And the index measuring future luxury spending declined from 58.3 points in June to 49.7 points.

“This is telling me that the growth in luxury spending is likely to stop in the near term, but I’m not sure yet if it will turn into a decline,” he added.

Across the 22 luxury goods and services/experiential categories included in the survey, all but one – premium airline cabin seating – showed a downward shift in purchase incidence over the last three months.

Particularly hard hit were luxury brand fashion accessories and leather goods, down from 21% purchase incidence in July to 11% in October and luxury brand fashion apparel, off from 25% to 19%.

“We are heading into a period of lower spending due to the perception that it’s becoming more expensive to live well,” Mount observed.

If that is happening here, it stands to reason that it will spread because the uncertainty affecting U.S. luxury consumers is also affecting others.

“Wars and rumors of war, plus the resulting humanitarian crisis, make people scared and not want to spend. ‘Politics’ is taking center stage over ‘Policy’, causing uncertainty about wealth creation and its sustainability,” Mount said. “And then there’s inflation and rising cost of living affecting a wider swath of upper-income people, impacting their discretionary spending power.”

The Bain-Altagamma report provocatively asks, “2023: Are we in a defining moment in luxury market history?” to which the only answer is “Yes.”

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