Creative Class

I’ve long said that the inspiration for my creativity theory of economic development comes from my father’s factory and my early studies of Japanese factories with Martin Kenney. If you want to understand the truly creative corporation of the future, Jon Gertner’s insightful piece on Toyota, a company which epitomizes the creative mode of production,  in today’s New York Times Magazine is a must read. It’s Toyota – more so that Google – that understands that the key source of innovation – or kaizen, continuous process improvement – comes from tapping the full knowledge and intelligence of every worker.  “Creating a new product like an i-Pod or even the Prius is a far more modest achievement than developing a new process.  The former are what we usually think of as inventions, of course. But the latter … presents a novel way of thinking about work and the capabilities of human organizations.”  Amen!  My creativity theory argues that just this kind of creativity is the key to economic growth.  Right now we tap at most the creative talents of 30 percent of the workforce. The key is to harness human creative capabilities across the entire economy – from invention and design to production and the provision of services. Imagine the kind of productivity that can be achieved if we were to fully stoke the creative furnace that lies deep within every human being.

Wendy Waters nails it.

When parents cannot find adequate child care, one parent or
both will often reduce their work hours, or leave the paid workforce
completely, … which drags down economic performance and the region’s ability to attract
investment including hip “creative economy” companies.

To a surprising degree in recent years women with graduate degrees are leaving the paid work force or
at least of being employees …
If good child care — or better put, early childhood education –
programs were available, and if employers were more flexible than most
are, many of these women would stay thereby contributing more to the
tax base and the overall economy.

3.  If young couples and nascent
families could choose between settling in a city with excellent early
childhood education programs and support, and a city without it, guess
which city they would choose, if the job options in each were
reasonable?

Read the whole thing over at All About Cities. I’ll have lots more to say about this in my next book, Who’s Your City? In the meantime, what are your thoughts on this critical issue?

Brookings has just released this report on the impacts of “service outsourcing” on US regions.

Twenty-eight metropolitan areas, with 13.5 percent of the nation’s population, are likely to
lose between 2.6 and 4.3 percent of their jobs to service offshoring, higher than the average
loss among the metropolitan areas studied. Five metropolitan areas—Boulder, CO; Lowell, MA;
San Francisco, CA; San Jose, CA; and Stamford, CT—are likely to lose between 3.1 and 4.3 percent of their jobs to service offshoring between 2004 and 2015, while 23 others are likely to lose between 2.6 and 3 percent of their jobs. However, 158 metropolitan areas are likely to lose no more than 2 percent of their jobs as a result of service offshoring.

Large metropolitan areas and metropolitan areas in the Northeast and West are generally
more vulnerable to service offshoring than small metropolitan areas or metropolitan areas in
the Midwest or South.

Job losses from service offshoring between 2004 and 2015 are projected
at 2.4 percent for metropolitan areas with populations of one million or more but only 1.7 percent
for metropolitan areas with populations below 250,000.

About 2.3 percent of jobs in Northeastern
and Western metropolitan areas are likely to be offshored, compared to 2.2 percent in Midwestern
metropolitan areas and 2.1 percent in Southern ones.

Metropolitan areas with large concentrations of information technology service jobs or backoffice
jobs are generally more vulnerable to service offshoring than other metropolitan areas. Between 2004 and 2015, service offshoring is likely to cause the loss of 2.6 percent of jobs in metropolitan areas that specialize in information technology services and 2.4 percent of jobs in
metropolitan areas that specialize in back-office services but only 1.9 percent of jobs in other metropolitan
areas.

At least 17 percent of computer programming, software engineering, and data entry jobs are
likely to be offshored in particular metropolitan areas. Employment of computer programmers,
data entry keyers, and software engineers (applications) is projected to fall by at least 17 percent
between 2004 and 2015 in Bergen-Passaic, NJ; Boston, MA; Boulder, CO; Danbury, CT; Denver,
CO; Hartford, CT; Minneapolis, MN; Nashua, NH; Newark, NJ; Orange County, CA; San Francisco,
CA; San Jose, CA; Stamford, CT; and Wilmington, DE because of service offshoring. In
Bergen-Passaic, 14 to 17 percent of customer service representatives’ and insurance underwriters’
jobs are projected to move abroad.

Overall, the loss of service jobs to offshoring in the near future will be modest. However, offshoring’s
impact will be greater in metropolitan areas with high shares of information technology or back-office
service jobs and in particular occupations within metropolitan areas. To reduce vulnerability to service
offshoring, federal, state, and local leaders should work in concert to pursue policies that boost
productivity and innovation, assist workers who are harmed by offshoring, and modernize approaches
to economic and workforce development.

The Rockefeller Foundation has launched the Jane Jacobs Medals, which together with cash awards of $200,000, will be given two people annually whose accomplishments reflect Jacob’s ” principles and practices in action in New York City.”

Great piece a few days ago by Troy McMullen in the Wall Street Journal about the number of high value condo’s in NY City that are second or third homes for the super-wealthy.

“Wealthy jet-setters have long maintained cozy
Manhattan pieds-à-terre, but the city’s choicest properties are
increasingly being scooped up by out-of-towners. More than 10% of
Manhattan apartment sales are second-home purchases, up from about 5%
eight years ago, estimates Jonathan Miller of Miller Samuel, one of
Manhattan’s largest real-estate appraisal firms.

Donald Trump says that more than half the condo owners
at his buildings on Central Park West and Park Avenue are part-timers.
These people “may not even know the address” of their New York
holdings, says Mr. Trump, but “they’d still rather own a place in New
York than schlep to a hotel.”

The lavish part-time spreads underscore a shift among
the wealthy, who increasingly split their time among three or four
homes. The investment potential of the city’s blue-chip real estate
also appeals to rich people looking to diversify their portfolios.”

Then,

“But the occasional occupants are troubling to some full-time residents,
who say their buildings are left depressingly hollow. And the
popularity of the costly apartments helps boost Manhattan prices for
everyone, draining away developers’ interest in erecting middle-class
buildings on the city’s few available parcels and making one of the
world’s most expensive real-estate markets even more forbidding to
average buyers.”

Is this the decay, that Jacobs wrote about, caused by too much success that leads to lack of diversity as all target this ’successful’ high return use of real estate? Could these ‘part-time’ residents zap the vibrancy of districts, not just buildings?

posted by David

That’s the word over at Crescat (hat tip: Brian Knudsen). Click here to read the whole thing.

Last week, the American Institute of Architects, released the results of a poll of the American public to determine America’s favorite architecture.  The final list of 150 sites includes bridges, cathedrals, retail outlets, memorials, offices, transportation hubs,  homes, and other structures.

Interestingly, it appears that America’s architecture is spiky, with 3 cities (New York, Chicago, and Washington DC) accounting for nearly 1/2 of the list.

View the 150 and comment at the AIA Blog.   The full list after the jump.

posted by David

From the press release,

“Washington’s public buildings and memorials dominated the top
10 list, but New York city easily led the list for the sheer number
of structures in the top 150. Following are the top 10 structures
and their architects and designers:

1. Empire State Building – Shreve, Lamb & Harmon
2. The White House – James Hoban
3. Washington National Cathedral – George Bodley and Henry Vaughan,
FAIA
4. Jefferson Memorial – John Russell Pope, FAIA
5. Golden Gate Bridge – Irving F. Morrow and Gertrude C.
Morrow
6. U.S. Capitol – William Thornton, Benjamin Henry Latrobe, Charles
Bulfinch, Thomas U. Walter, FAIA, Montgomery C. Meigs
7. Lincoln Memorial – Henry Bacon, FAIA
8. Biltmore Estate/Vanderbilt Mansion – Richard Morris Hunt,
FAIA
9. Chrysler Building – William Van Alen, FAIA
10. Vietnam Veterans Memorial – Maya Lin with Cooper-Lecky
Partnership”

Richard’s recent work with Gallup has confirmed the importance of
environment (both built and natural) to happiness and satisfaction so
it is interesting to think on  these structures in the context of
quality of life for users (work, leisure, & residential).

We’re off to Siberia – Krasnoyarsk to be exact, for the big Economic Forum. Flying from DC to London then onto Moscow where we’ lll spend the night, then to Krasnoyarsk. It’s our first time to Russia. Have the trusty laptop so will try to post from the road, time allowing.  Back Saturday.   And if we somehow miss a connection on the way home, there are worse places to be laid over than Moscow and London.

Joel Kotkin is at again with this latest installment in his running tirade against a previous incarnation of himself. But this time NYC’s Mike Bloomberg is the target of his angst, instead of old Kotkin whipping-boys Martin O’Malley or Denver’s John Hickenlooper.  The only mayors he and his Manhattan Institute running-buddies seem to like are Fiorello LaGuardia and Rudy Guiliani. He apparently doesn’t like being a “neocon anti-urbanist.” But what else do you call someone who goes out of their way to trash America’s greatest cities, consistently lashes out against its best mayors, and dismisses a good chunk of urban America as “yuppies, sophistos, trendoids and gays.”

Carrick Mollenkamp of the WSJ (sub required) provided a nice short piece over the weekend highlighting Goldman Sach’s decision to move a top executive from NY to London. The article’s title “Goldman Transfer Adds to Evidence Street is Losing Ground to London,” says it all. Notice that Goldman and its employee (and other firms and talent, as mentioned in the article) can act with speed to take advantage of London’s ascendancy among global financial markets.

From the article,

“As U.S. lawmakers examine ways to keep their financial
markets competitive, some brokerages are dispatching senior New York
executives to London, bolstering claims that the city is gaining at the
expense of Wall Street.

At Goldman Sachs Group
Inc., Chief Executive Lloyd Blankfein is sending a top lieutenant,
Administrative Chief Edward Forst, to London next month. Mr. Forst will
retain his title but will be based in London to oversee Goldman’s
business in the U.S., Europe and Asia, according to a Goldman memo
issued late last month. Mr. Forst has been chief administrative officer
since 2004.

n the Jan. 24 memo, Mr. Blankfein said, “London is a
global financial center and key to many of our clients in both
developed and emerging markets. Today, almost 50% of the firm’s
revenues come from outside the Americas.”

A Goldman spokesman said Mr. Forst wasn’t available
for comment. He added that while Mr. Forst will retain his management
responsibilities in the U.S., he won’t sit on the firm’s London-based
management committee, which is responsible for Europe, the Middle East
and Africa.

In the U.S., blame for New York losing ground has been
directed toward the Sarbanes-Oxley Act, the post-Enron law that
toughened reporting requirements for listed companies.

U.S. firms often don’t break out revenues from Europe, but research firm Sanford C. Bernstein said in a recent report that Morgan Stanley, Lehman Brothers Holdings Inc. and Goldman each generated about 25% of their net revenue from Europe in 2005.

Citigroup
Inc. underscored London’s importance in the past week with a series of
moves at its fixed-income, commodities and currencies division. The
global co-heads of its credit-markets division, Chad Lead and Mark
Watson, will be based in New York and London. The bank also is sending
John Casaudoumecq, who had been in New York and Houston, to London to
work as head of commodities alongside the head of foreign exchange and
the rates business for the world’s leading industrial countries.”

posted by David