Creative Class

Marc Andreessen (via Borjas) argues persuasively that the writers’ strike will essentially kill Hollywood as we know it. Hollywood he argues is based on an industrial model where big companies have controlled distribution and talent. New technology is fundamentally disrupting that pattern, allowing more efficient and decentralized production and distribution of content. As a result, he contends that a new entertainment business model will emerge – along the lines of Silicon Valley – where talent owns and controls the means of production.

The classic Hollywood economic model is built around the existence of a few very large companies — studios — that dominate production, marketing, and distribution. … As a consequence, talent gets paid like hired guns, not owners. As a consequence of that, talent bands together to form unions. …

In Silicon Valley, there are many companies, large and small, that create, market, and distribute products — and more such companies all the time. … In Silicon Valley, the creators of the product — the talent — are owners: owners of their product, and owners of their company. …  in a world where there can be many companies, the best creative talent will be drawn to the situations in which they will be owners, and will be compensated as owners. Because of that, in technology, creators get paid like owners.

Entertainment is a huge industry, and it’s business model is now shifting to one that is more fully in sync with the creative economy.

According to an article in yesterday’s New York Times, transfers from emigrants to their home countries is an enormous economic phenomenon.

Posted by Kevin Stolarick for Alison Kemper

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We are wrapping up an incredible week in Noosa, Australia.  I’ll be posting more on this later, but here’s a press report on what we’re doing.

Noosa is a community that reflects all the core values and could become a model of the creative age. Just recognized as a UN biosphere community, Noosa is at the cutting-edge of sustainable, inclusive and creative development. We’re excited to be partnered with the stewards and people of this great community.

We’ll be foregoing turkey and football for baramundi and surfing this thanksgiving.

Irving Wladawsky Berger writes:

Rather than attempting to fashion the initiative after Silicon Valley,
Design-London is taking the seemingly radical step of building on the strengths of London – its history, culture, tradition, infrastructure, diversity and talent base – and come up with its own model.  They emphasize creativity and design, in addition to innovation, because of their belief that these are qualities at which London has particularly excelled through the ages.

While you’re at it have a look at this take on “Sweatshop Silicon Valley.”

Tony Judt writes on “The Wrecking Ball of Innovation” identifying the fundamental contradiction of our time.

In which case who, today, will take responsibility for what Jan Patocka called the “Soul of the City”? There are two overriding reasons to worry about the soul of the
city, and to fear that it cannot be satisfactorily substituted with a
story of indefinite economic growth, or even the creative destruction
of the wrecking ball of capitalist innovation. The first reason is that
this story is not very appealing. It leaves a lot of people out, both
at home and abroad; it wreaks havoc with the natural environment; and
its consequences are unattractive and uninspiring. Abundance (as Daniel
Bell once observed) may be the American substitute for socialism; but
as shared social objectives go, shopping remains something of an
underachievement. …

The second source of anxiety is that the never-ending story may not
last. Even economies have histories. The last time the capitalist world
passed through a period of unprecedented expansion and great wealth
creation, during the “globalization” avant le mot of the world
economy in the imperial decades preceding World War I, there was a
widespread assumption in Brit-ain—much as there is in the US and
Western Europe today—that this was the threshold of an unprecedented
age of indefinite peace and prosperity. …

But we have good reason to believe that this may be
about to change. Fear is reemerging as an active ingredient of
political life in Western democracies. Fear of terrorism, of course;
but also, and perhaps more insidiously, fear of the uncontrollable
speed of change, fear of the loss of employment, fear of losing ground
to others in an increasingly unequal distribution of resources, fear of
losing control of the circumstances and routines of one’s daily life.
And, perhaps above all, fear that it is not just we who can no longer
shape our lives but that those in authority have lost control as well,
to forces beyond their reach.

Half a century of security and prosperity has largely erased the
memory of the last time an “economic age” collapsed into an era of
fear. We have become stridently insistent—in our economic calculations,
our political practices, our international strategies, even our
educational priorities—that the past has little of relevance to teach
us. Ours, we insist, is a new world; its risks and opportunities are
without precedent. Our parents and grandparents, however, who lived the
consequences of the unraveling of an earlier economic age, had a far
sharper sense of what can happen to a society when private and
sectional interests trump public goals and obscure the common good.

In its review of innovation in Europe, The Economist concludes that the EU is lagging in the spiky world and that clusters may be losing their luster (h/t: Kevin).

We’re in Australia where nearly everyone we meet, including expats and Canadians, asks why America has seemingly lost the plot on internationalism in a global world. People don’t even mention the Bush administration, but politely ask: “Do you think the American empire is starting to decline?” Ouch. Now Felix Salamon reports that:

I cannot even imagine the experience of being finger-printed while traveling. It’s outside the pale of my imagination and I would certainly think twice about traveling to a country where they put me, my family and colleagues through it.

Since as it has no real effect on security and will only damage the US economy, what could be motivating such patently bizarre behavior?

Her 1979 Lost Massey Lecture, here (h/t: Betsy Donald).

This new study from the Philadelphia Fed finds that human capital is the most important factor in innovation. It’s talent that’s the real driving force behind innovative clusters of business.

This study of the “ethical economy” says that talent is no longer the source of economic growth. Instead real value comes from creative industries which package, brand and sell content.  Aren’t those creative industries based on talent to begin with?

In the future, it argues value-creation economic growth will come from ethical economic communities. Huh?