The potential of the arts and sciences for economic and social development is under conceptualized. However, the recent development of STEM (science, technology, engineering, and mathematics), justifying increased support for training in the sciences, shows a parallel pathway forward for the arts. The arts are increasingly relevant to the economy, amenable to policy influence as well as an area of human activity in their own right. The authors posit a unified arts framework: PAVAM (performing arts, visual arts, and music), complementing STEM as the basis for a strategy of arts-based interdisciplinary "industrial" policy making. The growing salience of the arts as an industrial sector in the UK and USA is shown. By identifying sources and pathways of value creation from the arts, clear entry points for policy action become identifiable to promote innovation, entrepreneurship, and economic development. Comparative case studies suggest a typology of the arts' potential as sources of creativity, innovation, and regional economic development.