Richard Florida
by Richard Florida
Thu Oct 9th 2008 at 8:43am UTC

Resilience and Recession

About two-thirds of the nation’s 381 metro regions are deemed to be in recession and another 20 percent are at risk, according to these maps from Sunday’s New York Times.

But regions with high scores on my creativity index, a measure of long term economic potential based on the 3 Ts – technology, talent and tolerance – are much more resilient than others on average, according to an analysis by Charlotta Mellander and Patrick Adler of our MPI research team.

Not surprisingly, many, if not most, of the “contracting” metros are older industrial centers, like Buffalo, Detroit, St. Louis, and Cleveland; or service, retirement, or tourist centers like Miami and Phoenix. Their median score on the creativity index score is rather low (.598). The “at-risk” metros include a mix of older industrial metros and some creative performers like San Diego and San Francisco. Their median creativity index score is .698.

Metros with high creativity index scores dominate the list of the “expanding” metros – Seattle, San Jose, Austin, Washington, D.C., Boston, and Raleigh, along with resource-oriented metros in Texas and Oklahoma. The median creativity index score for these metros is .750.

We then conducted a statistical correlation analysis between the Moody’s economic rating and the creativity index. The correlation was positive (0.36) and statistically significant.

4 Responses to “Resilience and Recession”

  1. Kelly Franklin Says:

    I don’t understand why Austin has a high creativity index currently, unless it’s because city government recognizes the music industry crisis and has formed a commission to help.

    When I was in Austin in July, the city sponsored a survey of the local music industry because the “Live Music Capital of the World” music industry is in serious trouble. Musicians can’t make a living there. Only 6 clubs making it. Six – and how big is Austin? 8,000 musicians in Austin. Even nationally-known but still regionally homed musicians said their rent has gone up in 20 years, but the pay has not. Their survey of the creative music industry economy included clubs, studios, managers, publicists, printers, musicians, graphic designers, music publications, all the people involved in making music happen.

    In fact, the Austin Music Foundation is having a “Save Austin Music” event October 17, 2008.
    http://www.austinmusicfoundation.org
    http://www.ci.austin.tx.us/council/livemusictaskforce.htm

    Does your “creative economy” not include the music economy?
    Austin is a microcosm of what’s going on in the music industry as a whole. The recording/licensing/selling side is a mess. Indies used to make money selling merchandise at shows (CDs, t-shirts, etc.), and giving away their recordings as promo, but gas prices almost eliminate their ability to tour, and fans’ ability to purchase.
    How is it going to shake out?

  2. Patrick Adler Says:

    Kelly,

    You make fascinating observations on how the crisis is affecting one of the most “creative” of cities-Austin. How will they respond? Will they move elsewhere?, Will they change their profit structure? Research by others has suggested that artists bring a range of skills to other industries- Will more musicians branch out?

    Just a quick point on the creativity index. It reflects the presence of musicians, artists, scientists, and other creative occupational groups. It makes no judgment on how well creative class members are doing. Also, the index scores are based on census data and the last census was conducted before this crisis really crystallized. Hope this clears things up.

  3. RF Says:

    Kelly – Thanks for your comment. Patrick has responded to your specific comment. We are doing a big new project on the music economy, so your suggestions are especially helpful. Keep them coming. And thank you.

  4. Kelly Franklin Says:

    Thanks for your response. I keep posting those questions hither and yon, and you are the first to respond.

    Not having read the books yet (for shame), just the blog, I assumed that the creative index took into account how successful the creative economy was in any given location. I would also assume that the less successful the creative economy is, the fewer creative class members would remain there, or over time, the less likely they would identify themselves as such. As for musicians branching out, in Austin or in Arkansas the few musicians that don’t have day jobs have a spouse who has one, with health insurance. In the last year, even those are seeking part-time work. Most musicians making decent money per show are playing cover songs at private events, being human jukeboxes, their creative burst coming during the 8-bar lead section of someone else’s song. They feel successful because they are being paid to play any music at all.

    I’m sure if the Austin music industry knew how to change the profit structure they would have done it. I don’t think anyone has that answer, although the recommendations from the survey are going to be made to city government this or next month.

    Tom Pacheco, a great songwriter, once told me a steady diet of cover gigs will kill your soul. Yet, for full-timers, that pays the bills until the big break, if it ever comes. Meanwhile, is their soul dying with a headful of musical cliches and too many “Wonderful Tonights?”

    The population does not value the arts as it seemed to in the past (such as that was). Many think that is directly due to cuts in music and other arts education at all levels. Older style 60s music is becoming more popular, one of the most musically creative times in the U.S. Duffy, Amy Winehouse, are a couple of examples. Say whatever about American Idol cashing in royalties on the song catalog, but the show is also exposing millions to well-crafted songs decades-old that they might never have heard otherwise.

    In some ways I see the music industry as the canary in the coal mine of our financial crisis. Some say the record labels did it to themselves (like the mortgage industry). Music is a commodity to the public. Music is life-soul-giving to the artist.

    When a musical region produces a successful “sound,” everyone wants to go there. Boom! Then over-saturation. Bust! In tough times of limited travel, how will localization affect that? Is it possible to grow a music economy without the roller coaster?

    I greatly anticipate your big new project on the music economy. There’s a lot of ground to cover.