Creative Class

Virgin Atlantic unveiled a new multi-media console to give fliers access to pay-per-view movies, live satellite TV,  and more music and audio offerings, as well as enabling them to order meals, send text messages, power-up their computers, and access wireless networks.  According to this Adweek article, Virgin did so to increase its appeal to  the “creative class as a target audience.“

Walter Jones applies the creativity theory to leadership.

“The way to foster creativity … is to encourage everyone to have
a voice, to feel comfortable offering their own quirky opinions, even
the weirdoes, the nerds and those in the minority. They’ll be
encouraged as long as what he calls the “squelchers” are kept in check.
These are the naysayers, the guardians of the status quo. No
one likes to be put down or have his or her ideas minimized. The
natural reaction is to stop offering suggestions when they’re
repeatedly belittled or ignored.”

Read the whole thing here.

Your thoughts?

Just came across this chart on Kenneth Gronbach’s very interesting blog on demography and generational marketing.

Just back from Columbus, Indiana where I addressed the Chamber of Commerce/ Young Professionals annual meeting. Columbus, just outside of Indianapolis, is home to Cummins and is one of the world’s great centers of modernist architecture (that’s Eliel Saarinen 1942 First Christian Church pictured). I  got to spend some time with Mayor Fred Armstrong, Tracy Souza of the Cummins Foundation, and the energetic new president of the Chamber, Jack Hess. I was so impressed with the strategy he outlined during his presentation, based on a combination of Jim Collins, Michael Porter and my own thinking, that I asked Hess for his slides.

Click here for an abridged version.

The Economist summarizes what looks to be an improved economic approach to globalization, outsourcing and off-shoring (hat tip: New Economist).

Globalisation
is a big word but an old idea, most economists will say, with a jaded
air. The phenomenon has kept the profession’s number-crunchers busy,
counting the spoils and how they are divided. But it has left the
blackboard theorists with relatively little to do. They are confident
their traditional models of trade can handle it, even in its latest
manifestations. For example, Greg Mankiw, of Harvard University, has
concluded that “services offshoring fits comfortably within the
intellectual framework of comparative advantage built on the insights
of Adam Smith and David Ricardo.”

Ricardo
illustrated his insights with the example of Portuguese wine trading
for English cloth. But some trade theorists think this metaphor will no
longer do. Indeed, two of them—Gene Grossman and Esteban
Rossi-Hansberg, of Princeton University—published a paper last year subtitled “It’s not wine for cloth anymore.”

Ricardo, it
seems, did only half the job. He described the first of two “great
unbundlings”—as Richard Baldwin, of the Graduate Institute of
International Studies in Geneva, has put it in a recent guide.
Trade in wine, cloth and other goods allows production to be distanced
from consumption. Countries do not need to grow grapes to enjoy the
fruit of the vine; thanks to trade, they can transform cloth into wine
instead.

But in
Ricardo’s world, a country must still take care of all of the separate
tasks required to finish the goods it makes. In a country of pinmakers,
to take Adam Smith’s seminal example, someone must still cut, draw and
straighten the wire; fashion and affix the head; then whiten and sheath
the finished product, if any pins are to be made at all.

In the second
great unbundling, production is spliced and diced into separate
fragments that can be spread around the globe. Pin-whitening is done in
one country; wire-cutting in another. Some theorists call this the
“vertical disintegration of production across borders”. Thankfully,
Messrs Grossman and Rossi-Hansberg have a more felicitous phrase:
“trade in tasks”.

As
globalisation has advanced, it has become easier to move some of these
tasks offshore. For the workers who once carried them out, this has
three possible consequences, two bad, one good. Start with the good
news. Offshoring makes firms more productive. The tasks that are best
kept close to home remain onshore; other tasks can be taken care of in
cheaper places abroad. Everyone benefits from this gain in
productivity, including the workers who have fewer tasks to perform.
For example, Japanese electronics companies continue to flourish in
American markets precisely because they have moved their assembly lines
to China.

The second
potential consequence of offshoring might be called the “Lou Dobbs
effect”, after America’s most prominent television mercantilist. When
some tasks are taken overseas, that leaves less work for patriotic
Americans to do, right? Well, maybe. If a whole industry leaves
America’s shores, demand for labour will ebb, and wages will fall. But
in less extreme cases, relieving workers of some of their tasks
(wire-cutting for example), allows the domestic industry to expand—and
a bigger industry might find room for the displaced wire-cutters, at
the same wage, albeit on different tasks.

Offshoring,
it is clear, enables companies to make more stuff. But this can be a
mixed blessing. If the home industry makes too much, it will depress
the price of its exports on world markets, damaging the country’s terms
of trade, and hurting workers. This result is sometimes called the
“terms of trade effect”.

Messrs
Grossman and Rossi-Hansberg describe this as a “new paradigm”, a phrase
guaranteed to raise the hackles of more cautious scholars. Their model
may not be quite that, but nor does it sit altogether comfortably
within trade economists’ established way of thinking. That tradition
painted in bold strokes, and identified clear winners and losers from
globalisation. Economists felt sure they could predict what would be
traded and who would get hurt. As Mr Baldwin points out, they made
pronouncements about entire “sectors” of the economy (heralding the
dawn of some industries; the twilight of others) and whole classes of
workers (the college-educated versus the rest) whose fortunes were tied
to them.

A bundle of results

The new breed
of models paint globalisation with a much finer brush. (It is
high-resolution globalisation, Mr Baldwin says.) International
competition plays out not just at the level of the industry, or even
the firm, but right down at the level of individual tasks—assembly,
packaging, data entry—that cut across whole sectors of the economy.
Moreover, in a break with most traditional models, the new theories do
not take the tradability of things as a given. For Messrs Grossman and
Rossi-Hansberg, the ease of trading a particular task is a matter of
degree not kind; and it is a variable, not a constant. Hence tasks that
seem safe from foreign competition today may not be so tomorrow.
Finally, the tradability of a task might bear no relation to the amount
of skill it requires. As a result, the victims of globalisation are
harder to identify and the salves harder to apply.

So is
globalisation to blame for the rich world’s recent anxieties or not?
Unfortunately, the new theories of offshoring can deliver opposite
verdicts depending on precisely how they are set up. As James Markusen,
of the University of Colorado, mischievously puts it, “I am confident
that I can concoct a model to generate any result desired by a reader
with a deep pocketbook.” If only every worker were as versatile.

Grossman and Rossi-Hansberg’s paper is here.

A nice report by Richard Baldwin on globalization and the great unbundling is here.

Very interesting piece by Chris Hedges, Pulitzer prize winning journalist and former Middle East Bureau Chief for the New York Times:

“The engine that drives the radical Christian Right in the United
States, the most dangerous mass movement in American history, is not religiosity, but despair. It is a movement built on the growing
personal and economic despair of tens of millions of Americans, who
watched helplessly as their communities were plunged into poverty by
the flight of manufacturing jobs, their families and neighborhoods torn
apart by neglect and indifference, and who eventually lost hope that
America was a place where they had a future. This
despair crosses economic boundaries, of course, enveloping many in the
middle class who live trapped in huge, soulless exurbs where, lacking
any form of community rituals or centers, they also feel deeply
isolated, vulnerable and lonely. Those in despair are the most easily
manipulated by demagogues, who promise a fantastic utopia, whether it
is a worker’s paradise, fraternite-egalite-liberte, or the second
coming of Jesus Christ. Those in despair search desperately for a
solution, the warm embrace of a community to replace the one they lost,
a sense of purpose and meaning in life, the assurance they are
protected, loved and worthwhile.”

Read the whole thing here.

U.S. News and World Report pundit Michael Barone has a blog entry on migration between cities and counties where he writes:  “… so much for Richard Florida’s theory that “creative cities” are growth magnets. …net internal migration is out of rather than into such creative cities as Manhattan,
San Francisco, Seattle, and Denver.”   Read the whole thing here.

He uses  Census data on net internal migration, the change in population excluding natural increase or international migration, to identify winning and losing places.  His five biggest winners: Riverside, California (gaining 292,038 residents), Maricopa/Phoenix, Arizona (259,869), Clark/Las Vegas, Nevada (219,112), San Bernardino, California (120,496), and Collins/Plano, Texas (110,837).  He adds:  “Note that most of these counties are exurban in character, at the edge of large metropolitan areas. …The internal migration flow out from the central-city counties to exurban counties is immense. Politically, 21 of these 24 counties voted for George W. Bush in 2004. ”

His biggest five losers: Los Angeles (loss of 562,351 residents), Cook County/Chicago, Illinois (500,099), Kings County/Brookyn, New York (291,748), Queens County, New York (283,573), and Dallas, Texas (207,389).  San Francisco, Boston, Seattle, Denver, Washington DC, Fairfax County, VA, and many other places make this list.  “You won’t be surprised to learn,” he writes, “that most are big central-city counties; the five counties that make up New York City had a net internal outmigration of
808,562.”  Politically, he adds, “31 of these 33 counties (and county equivalents) voted
for John Kerry in 2004….”

Not so fast.  What Barone fails to consider is that these overall trends mask a deeper demographic shift…

…As Harvard economist Edward Glaeser has shown, the human capital levels of U.S. regions are diverging, and highly-educated, highly-skilled people are becoming more concentrated. New York City attracted more than 250,000 college graduates between 2000-2005, according to a recent New York Times report.  Another indicator of this trend is the rise of what Wharton real estate expert Joseph Gyourko has dubbed “super-star” cities, places  like San Francisco, Los Angeles, San Diego, Seattle, Boston, Austin, Raleigh-Durham, and Nassau-Suffolk, NY,  which have had 40-plus years of housing appreciation  that far outdistances the national average. Even though Brooklyn and Queens have lost total population, the New York Times recently reported that housing values have gone up another 25 percent in 2006, at a time when most economists say the U.S. housing market is cooling and the overall bubble has burst.

To provide a first cut at this, I asked my colleague Steven Pedigo of the Greater Washington Initiative to put together the numbers on key factors like human capital, income, creative occupations, and housing prices.

Let’s take income first. The top five counties in terms of per capita income are:  New York; Marin County, California; Arlington, Virginia; Alexandria, Virgina; and Westchester, New York.  Fourteen of the top 15  counties are in the NYC, DC, and San Francisco metros.

How about the classic measure of economic growth, highly educated people (those who hold a bachelor’s degree and above)? Arlington, Virgina; Marin, California; Alexandria, Virginia; Fairfax County, Virgina;  and Howard County,  Maryland, top the list. Boulder, New York, and Denver each make the top 15.

There’s also my own creative class measure:  the percent of  workforce in science, technology, culture and entertainment, management, health-care and finance. This group earns, on average, 3 times as much as service or manufacturing workers, and accounts for half of all U.S. wages even as only one-third of the workforce. On this score the leading metros are: Boulder, Ann Arbor, Washington DC, Charlottesville, San Jose, and the North Carolina Research Triangle area.

On virtually all of these measures, Barone’s net internal migration winners fall far behind.

But why? Well, consider what Pedigo wrote to me about the places that top Barone’s list. “What his list tells me about is the mass net immigration of unskilled, low-income residents. Take the Phoenix and Las Vegas areas for example. Phoenix ranks near the bottom in terms of educational attainment, 35th of the 50 largest metro-regions. Phoenix has a median household income of $48,124 and and a per capita income of $24,866, 33rd out of the 50. Las Vegas is 49th,  with 18.9 perecent of its people having a BA or higher, nearly 10 points below the national average.” Not coincidentally, housing values in both places, which appreciated over the boom phase of the cycle, are now in free-fall.

What accounts for this seeming contradiction in numbers, where population growth – in this case net internal migration – is no longer associated with income, housing price, talent, or overall economic development? As I’ve argued elsewhere, the age-old connection between population growth and  economic growth no longer holds. This fact continues to confound a lot of smart people, like Barone. The resulting demographic shift is what I call the “means migration” – the mass relocation of highly skilled, highly educated, and high-income Americans to a relatively small number of metropolitan regions, and a corresponding exodus of the traditional middle-class from these same places. Let me be clear: I’m not saying that this is a good thing or a bad thing. It just is; yet it still seems to be leading a lot of smart commentators down dead-end alleys of economic growth theory.

The political trends Barone mentions are of course tied to this shift.  As  traditional middle class families are pushed from dynamic urban centers — which are increasingly home to wealthier, more highly educated, more cosmopolitan people, as well as more single, gay and immigrant households — to far-off suburbs, ex-urbs, or less-expensive regions like Las Vegas and Phoenix, it’s not surprising that they take on more conservative positions with regard to immigration or gay rights.  Underlying the oft-observed political polarization in our country is this very basic economic and demographic reality.

Pedigo’s full tables are here.

Your thoughts?

Mark Cuban can’t understand why people wear suits.

“Exactly what purpose does a suit serve ? Why in the world are so many people required to wear a suit to work ? Do the clothes make the man or woman in the western world today ? Does
wearing a tie make us work harder or smarter ? Is this a conspiracy by
the clothing, fabric or dry cleaning industry to take our money?  Or are we all just lemmings following a standard we all know makes zero sense, but we follow  because we are afraid not to ? “

Read the whole thing here.

‘Place Branding’ or slogans are used by a lot of communities to attract people.

TaglineGuru named these the top 10 city slogans in the US:

    What Happens Here, Stays Here. – Las Vegas, NV
    So Very Virginia. – Charlottesville, VA
    Always Turned On. – Atlantic City, NJ
    Cleveland Rocks! – Cleveland, OH
    The Sweetest Place on Earth. – Hershey, PA
    Rare. Well Done. – Omaha, NE
    The City Different. – Santa Fe, NM
    Where Yee-Ha Meets Olé. – Eagle Pass, TX
    City with Sol. – San Diego, CA
    Where the Odds Are With You. – Peculiar, MO
Click here for the full list and methodology.

Image is definitely important - check out Place Branding’s Anholt-GMI City Brands Index, which analyzes how people see different cities.

The question is, can cities effectively craft their image with words?  And if they can, will it lead to more people moving and/or visiting the city?

Here are a few articles/studies for your consideration:

A recent op-ed by Corey Johnson, a doctoral candidate at the University of Oregon, on Eugene’s new slogan.

A study of European City Branding: An Effective Assertion Of Identity Or a Transitory Marketing Trick?

And this study on community slogans in Wisconsin by Professor David Muench. He points out that slogans may in fact be more important for current residents, giving them a connect to local history and each other.

And one more, on branding countries.

What do you think? Has a community’s slogan ever affected your decision to move or visit? Is your community’s slogan helping people connect to each other and/or the soul of their city? What makes a slogan work?

Posted by Amanda. Have thoughts, questions or examples on/of community development strategies? Post them here or write  Amanda@CreativeClass.org. 

Blogger John Manoogian pens a very interesting post here. I for one understand what it’s like to be inside what he calls his “amniotic bubble.”

A friend asked me why i left {my old job, town} and moved to SF. This is what i wrote in response. I took a wild new job. and i felt like it was time.   felt that by living in detroit,
i had to work harder than i would have to work in other cities to
connect w/people who understood the sorts of projects i love to build,
and that it was really hard to find audiences and collaborators for,
well, most things i cared about. i love detroit, but i could see that
meeting collaborators and mentors would be easier in a more creative
city [1]. i also started felt that the attitude i had adopted was
defensively masochistic, i.e. “yeah it’s way harder to make yourself
understood here, but because it’s tough makes it worth struggling for”.
and that attitude was kinda childish. yes, hard things are worth doing,
but just BECAUSE something is hard, doesn’t make it worth doing. you
might just be doing it in the wrong way, or in the wrong place.

When i quit my job of seven years at Organic, i had nothing
definite lined up — i just had some approximate opportunities and open
promises from friends for interviews and freelance work and so on. but
before i left, i realized something: Organic was an amniotic bubble that protected me from Detroit. what i mean by that is: work provided me with a complete,
self-sustaining ecosystem that assuaged my needs and wants, while
muffling the roaring vacuum of the Detroit environment. it provided
constant travel to SF, NY, Toronto, and Europe. it provided access to a
network of information, and people in those cities. by remaining inside
that protective bubble, i could continue to live a semi-normal creative
life inside detroit, because new culture and people and technology were
being drip-fed into my amniotic bubble by my employer.But an artificial
equilibrium doesn’t hold, and one day i realized i was a Matrix-baby
spoon fed by the system, and i had to escape. so i left. and upon
cutting that life-line, i needed to go somewhere where the oxygen was
rich and plentiful, if i wanted to breathe. so i picked SF. So that’s my story. i hadn’t planned on writing quite so much, but it just sort of expressed itself.

Anyone else feel like that – your thoughts, comments?