Creative Class

Lots of media on Toronto and me, here, here, here and here.  We had been trying to wait on the announcement until I visit the city again in late August but the cat’s now very far out of the bag as they say. So here’s the skinny.

First off let me say that our time in Washington DC and at George Mason’s School of Public Policy has been terrific.  The leadership of the school, Kingsley Haynes and Roger Stough are dear old friends and colleagues. What they and their team have done to build a new school of public policy in less than a decade is phenomenal.  My GMU colleagues have been great. Washington is a wonderful city that has been a great place to work.  Also, our remarkable CCG team is mainly here – David, Steven, Amanda, and our interns (with other key folks in Pittsburgh). CCG will stay a DC and Pittsburgh based company. We’ll miss our colleagues, and our friends, our house, neighborhood and neighbors and especially our neighborhood pool. There is no push here, only pull, which brings me to …

Toronto – It’s a city I’ve long admired. My own calculations put the broad Tor-Buff-Chester mega-region as one of the world’s ten largest.  Toronto is at the cutting edge of innovative, dare I say creative, urbanism and economic development. Some of the media say it reflects my principles.  The truth is more the reverse: What Toronto has done has informed my work.

The main reason for the move is Roger Martin, Dean of the Rotman School of Management at the University of Toronto. Its Roger’s vision that has created the major new Centre for Jurisdictional Advantage and Prosperity funded, as has been reported in the press, by some $100 million in funds from the Province of Ontario and private sector sources.  Ontario’s Premier, Dalton McGuinty and his team could not have been more generous.  Joseph Rotman provided part of that funding to get the initial research agenda of the Centre up and running.  The Centre will have amazing quarters in the MaRs Centre, essentially the old Toronto General Hospital, near campus and almost directly across from the Ontario Parliament. The space, which we are working on now, is phenomenal.  For the first time in my career I will have a stable source of research funding to build a team, develop data, support other researchers, and really build capability and knowledge in this area. My title will be Director of the Centre and Professor of Business and Creativity.

My wife Rana and I have found a wonderful house in Toronto’s Rosedale neighborhood overlooking the ravine.  We hope to move in early September.

If there’s more you’d like to know, just give a shout.

While many think that tattoos and piercings are typical of all creative class members, Martha Stewart and her empire embody many elements of the creative class theory — from a focus on design and supporting the creativity of customers to building a career  that allows for one’s passion to play a central role. According to a new WSJ article (sub required) by Michael Corkery, creative class Queen, Martha Stewart has been very effective in using her creativity to sell homes in a weakening housing market. From the piece…

"All across the country, home builders are gasping for air as sales
plunge, inventories rise and profits disappear. But in one small corner
of the housing market, the sales picture is a little brighter: There is
steady demand for houses designed in part by Martha Stewart and built
by Los Angeles-based KB Home.

Here in the Atlanta area, where new-home sales dropped 20% in the first
quarter of 2007, traffic at Martha-KB new-home developments has been
steady. The largest Martha-KB Home development has been outselling the
average Atlanta subdivision 2 to 1, according to SmartNumbers, a
real-estate information and analysis firm, based in Marietta, Ga."

While some core creatives may never be interested in a Martha Stewart home, there are other members of the group who are clearly interested in letting her design a warm, welcoming home for them. (A longer segment of the article is available after the jump).

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David Leonhadt has a fascinating piece in today’s NYT on the "split" housing market:

[T]he high end of the market is surviving the slump much better than any
other segment. Even as foreclosures keep rising and overall sales
continue to plummet, more expensive homes have staged a bit of a
comeback in recent months. They’re spending less time languishing on
the market than others, and their prices appear to be holding up better. … The upper end of the market has also been helped by an influx of
well-off foreign investors whose buying power has grown with the recent
decline of the dollar. Hard as this may be for an American to imagine,
New York, San Francisco or Miami can now seem like a bargain, compared
with London, Moscow or Sydney.

It’s clear that the housing market in key cities and mega-regions has become globalized.  In this sense it bears some parallels with what has happened to elite universities, where foreign students vie for top slots.  The housing market in cities that are atop the world city system -  like London, New York, Toronto, San Francisco, Vancouver, LA, and others in the US and around the world – has been globalized.  This not only drives prices up at the top end, it puts tremendous pressure on the entire market in those areas, making them even more unaffordable for average people and even for the upper-middle class.  My hunch is this problem – and the split nature of the housing market – will continue to worsen for some time.

Or so writes Robert Samuelson: 

The psychology of prosperity –
striving, taking risks — feeds on ambition and insecurity. Our system
often seems an insane rat race. But over time, it has created huge
gains in material well-being. Air conditioning may not have made people
in the South and elsewhere happier. But it surely has made them more
comfortable.

The Washington Post writes:

The birthplace of the roller coaster and the American hot dog is set to fall into the same powerful grip of New York City gentrification that cleaned up Times Square
and brought luxury lofts to Hell’s Kitchen. Thor Equities, a mall and
commercial real estate developer, has amassed much of Coney Island’s
six-block-long amusement area, with public hearings expected later this
summer on a $1.5 billion redesign of the area into an upscale techno
theme park with retail space, high-rise timeshare towers and hotels. Click here for the full story.

This picture and accompanying story in the New York Times struck a deep chord.

I vividly recall the day the Newark riots erupted. I was with my parents and brother at the beach in Long Branch, New Jersey. It was a classic working class beach resort, something you might see on a flashback scene in the Soprano’s. I was 9 or 10 at the time. People kept rushing up to the adults saying: “Newark is on fire.”

We returned home later that week and my father took me to my Saturday guitar lesson in Bloomfield, right outside of Newark. On the drive through, we saw the National Guard troops and their heavy equipment essentially occupying the city.  Police pulled our car over and told my father to take an alternate route: “There are snipers on top of those buildings.”  Later it was found that many of the so-called snipers were actually police.

The “riots” left a deep impression on me. From then on, I found myself wandering through the stacks of the Newark Library, trading in my “Hardy Boys” novels for books on urban affairs. I needed to understand what was happening in the city of my birth – its once vibrant downtown and neighborhoods reduced to empty store-fronts, burned-out shells, and rubble. I continued to revisit those streets for some time after. Not just on car rides with my father. In our early teens, my brother and I would ride our bicycles – conducting our own version of amateur two-wheeled urban ethnography – on those same streets. More than anything else, I recall how even at that very young age how repulsed I was by the blatant racism lurking behind all of it.

There’s a marvelous essay in the Book Review by the novelist Haruki Murakami on the impact of music on his writing.  Music was an enormous part of my youth, but I’d never before so clearly seen the connection between it and what I do now. My guitar playing in bands with my brother Rob were much more important to me than just about anything else. We quickly got bored with playing cover hits, so we we would spend endless hours of riffing and improvising around songs. For years, I’ve thought I traded in my guitar for a career as a thinker, writer and speaker.  Not really, Murakami helped me understand.  Sure, I’ve always liked to read, but I’ve never been a studied writer. Other than first semester composition, I never took a writing class. And I’ve never had any coaching with public speaking, nor even watched a tape of myself.  People recommend books to me on writing and speaking all the time: I never, ever look at them.

Music, Murkami helped me understand, was a critical component of my training. Music, he explains, helps impart an indelible sense of rhythm, melody, and harmony on writing which he likens to “performance.” I essentially “listen” to what I write, trying to feel the rhythm and melody in the combinations of words. The best part, he adds: “Free improvisation. Through some special channel, the story comes welling out freely from inside. All I have to do is get into the flow.” I improvise a lot in my writing, drawing out riffs of examples, or stories or even trying to bring together new connections between subjects. And improvisation is the core of my speaking.  I don’t use any notes at all. I remember the day I put them down: It was the day I realized they were impeding the flow of thoughts and the process of story-telling and communicating which is critical in making a connection to your audience.

There’s an excerpt from Brink Lindsey’s terrific new book, The Age of Affluence, over at Reason Magazine. I read the book in galleys and must say I strongly recommend it. The piece, titled “The Aquarians and the Evangelicals,” deals with the breakdown of post-war culture in the late 1950s and simultaneous rise of the counterculture and the religious right in response. On balance, I think he is right. This explains the dualistic pattern found by Ron Ingelhart in his work and our own cultural divide and political polarization. The U.S. is really two separate nations – one shaped by the values of the counterculture, the other by the socially conservative response to it.

He goes on to say:

The resulting cultural synthesis that prevails today, this accidental
by-product of ideological stalemate, remains nameless. It could be
called liberal, in the larger sense of the tradition of individualism
and moral egalitarianism that America has always embodied. It could
also be called conservative, if that same liberal tradition is
understood to be the object of conservation. But the ideologies that
pass for liberalism and conservatism today are too weighed down with
authoritarian elements for either to lay claim to the real American
center.

Lindsey is right: Both right and left are infused with authoritarianism.  And
if that is so, is there really any way out of the ideological and
policy “box” we’ve dug ourselves into? My hunch is no, even given the
fact the US is the best turnaround artist around. Our political
institutions have become near completely sclerotic, out-of-touch, and
disconnected – not just from the wants and desires of “the people” but
from much-needed economic alternatives. As I wrote yesterday, the
so-called “war on terror” makes it highly unlikely that a real dialogue
over how best to adapt to the creative, knowledge-based economy can
even take place. I, for one, have been unable to locate even one
national politician willing to engage it. And of course, perhaps the
greatest failure of our time is the failure of so-called “progressives”
in the United States and around the world to articulate a hopeful,
indeed a sustainable and inclusive, vision of the future creative
society

Maybe some fantastic new candidate will emerge on the scene who can
put this all together.  Do you really think that will happen?
Especially, when the real action today is at the local level. One
longer run possibility is some rejiggering the “federalist system” in
favor of greater state and local autonomy, as is occurring. The shift
to mega-regions as the centers of economic action also suggests this
possibility. But how long will it take for such a shift in power to
states and city-regions to occur? Much of regional political
infrastructure remains to be built.  The other and more likely
alternative is a long stalemate, providing just enough time for other
nations and regions to get traction around the creative age, and a
gradual erosion of the long-run US lead in talent, innovation and
competitiveness.

In this kind of environment, it would seem, a key factor will be how
to begin to build not just more robust regional institutions – setting
in motion regional experiments in the U.S. and around the world – but to
begin to connect them in a set of truly global networks and
institutions.

Your thoughts?

Roger Martin. Dean of the University of Toronto’s Rotman School of Management, and Gord Nixon, President and CEO of the Royal Bank of Canada, outline a detailed strategy for Canadian competitiveness in our era of “transformational globalization.”

In a 2005 Atlantic Monthly article titled ‘The World is Spiky’, Richard
Florida countered Mr. Friedman’s flat world hypothesis by showing that
economic activity in the world is incredibly spiky as is innovation
activity, measured by patents. Mr. Florida showed convincingly that
talented people agglomerate in a limited number of regions in the world
where they work for innovative organizations that dominate their
industries. …As these industries get intensely spiky, a country is either
a player or not; there is not an in-between. … We think that Canadian policy is largely
indifferent to, if not ignores, the transformation that is going on
today. While things may turn out fine with a policy of indifference, we
think that the likelihood of that is sufficiently low and the downsides
so devastating for Canada that we will argue that Canada needs to take
positive action now.

The full story in the Globe and Mail is here.

While this debate is taking place in Canada and elsewhere around the world, America’s attention is drained away by Iraq and the so-called “war on terror”. Major global transformations come together in rapid tipping points. The opportunity costs of lapsed attention can be great.  We’re not there yet, but the clock of history continues to tick away. Or as Paul Romer likes to say, “A crisis is a terrible thing to waste.”

As we posted yesterday, I’ll be a guest on the Colbert Report on Monday, July 16th (11:30PM EST, Comedy Central).

I’d love your help getting ready. Please send along suggested subjects, one-liners, and repartee I might use to engage Stephen.

Microsoft is setting up a new software development center in Vancouver, Canada.  Talent and especially US visa restrictions are the reason.

"For the time being, it’s a centre for great talent. We’re using it
as a place to locate talent rather than to get a specific piece of work
done," Sharif Khan, vice president of human resources of Microsoft
Canada, told CBCNews.ca … "It’s such an amazing place to attract great talent to," he said.
"Talk about a hub, a great place to live for people, a sort of diverse
and inclusive location with great infrastructure…."There’s a restriction on the number of visas the company can get for foreign employees in the U.S.," he said. "Canada’s slightly more
inclusive in that respect."

It’s pretty clear from the story this is a real research facility, not a back office, geared to attract top talent from Canada, Asia-Pacific and the world. Vancouver is close to Microsoft’s Redmond, Washington headquarters just outside Seattle. So the development work, the salaries and tax revenues go to Canada not the US. And of course those all important technology spillovers and clustering get built in Vancouver strengthening its already significant research base and university infrastructure.

The full story is here (hat tips: Wendy Waters, Ken Firestone)