Cities must rethink how they treat artistic entrepreneurs, according to a new paper from the Kauffman Foundation. 

Nationally, the arts generated $135.2 billion in economic activity and $86.68 billion in resident household income, according to the state of Missouri's annual report Arts & Economic Prosperity. In New York City alone, arts and culture groups generate about $6 billion annually for the city's economy.

Creative entrepreneurs also fuel industries such as architecture and media, argues Kauffman. Online journalists create content for start-ups like BuzzFeed and Business Insider, while graphic designers work with ad agencies to help bring their campaigns to life. Here are four ways the Kauffman Foundation says American cities should nurture creative entrepreneurs: 

Encourage collaboration. Most shared workspaces tend to be launched by artists themselves, but inner cities and small towns could do much more to foster collaboration. To start, these cities should build their own performance spaces, which can be used by artistic entrepreneurs for rehearsals, performances, and networking events. Two good examples are Montana's Made in Montana program, which spotlights regional artists works in state parks and other vendor outlets, and Louisiana's Creative Economy Initiative, which turns freeways into art galleries by showcasing locals' work in tourism welcome stations. 

Provide entrepreneurial training. Most artists want to market their skills but don't know how, and that's where nonprofit and for-profit institutions come in. St. Paul, Minnesota-based Springboard for the Arts offers training for creatives, including business seminars.

Embed artists in cities' development. University of Washington geographer William Beyers' studies on Seattle's music industry helped the city's mayor justify his arts initiatives. Meanwhile, San Jose, California, enlivened its downtown with nightclubs and restaurants and launched the ZERO1 initiative to bring its aging technology scene back to life. Both cities made young artists feel welcome and gave them incentives to relocate. 

Rethink city ordinances. Shutting the noise off at 12 a.m. may work for sleepy towns, but artists who want to rock are going to go elsewhere. Some ordinances forbid artists to live in their work spaces, and in expensive cultural hubs like New York and L.A., that can make it difficult to get by affordably. Kauffman suggests cities reconsider such ordinances and get more proactive about creating living spaces by taking advantage of "vacant vintage industrial and warehousing structures."