Archive for December, 2008

Richard Florida
by Richard Florida
Wed Dec 31st 2008 at 11:16am UTC

The Fracturing of America?

Wednesday, December 31st, 2008

In 2010 exactly – according to a Russian professor and former high ranking KGB intelligence expert who forecast the collapse of the Soviet Union – in 1976. Here’s a map and summary from the Wall Street Journal.

[M]ass immigration, economic decline, and moral degradation will trigger a civil war next fall and the collapse of the dollar. Around the end of June 2010, or early July, he says, the U.S. will break into six pieces …  He predicts that economic, financial and demographic trends will provoke a political and social crisis in the U.S. When the going gets tough, he says, wealthier states will withhold funds from the federal government and effectively secede from the union. Social unrest up to and including a civil war will follow. The U.S. will then split along ethnic lines, and foreign powers will move in.

California will form the nucleus of what he calls “The Californian Republic,” and will be part of China or under Chinese influence. Texas will be the heart of “The Texas Republic,” a cluster of states that will go to Mexico or fall under Mexican influence. Washington, D.C., and New York will be part of an “Atlantic America” that may join the European Union. Canada will grab a group of Northern states Prof. Panarin calls “The Central North American Republic.” Hawaii, he suggests, will be a protectorate of Japan or China, and Alaska will be subsumed into Russia.

Richard Florida
by Richard Florida
Wed Dec 31st 2008 at 11:14am UTC

Creative Europe

Wednesday, December 31st, 2008

In this newly published article, two Dutch researchers, Roel Rutten and John Gelissen, test the creative class theory for Europe and find it holds. I especially like the last line.

[W]e test the creativity and diversity hypothesis of Richard Florida for European regions. Florida argues that the level of regional economic development depends on the levels of technology, talent, and tolerance that regions harbour. Tolerance, in this case, is a measure for diversity of lifestyles, the creativity that results from it and population’s openness towards non-traditional lifestyles. Using data for 94 European regions we investigate whether differences in creativity and diversity are a good predictor of differences in regional wealth in additive and multiplicative regression models. The results indicate that regional differences in diversity are directly related to differences in regional wealth. Moreover, we find that the synergetic effect of technology and talent on the level of regional wealth depends on the degree of diversity that resides within regions. Our findings support the idea that creativity and diversity deserve a more prominent place in economic geography.

Bert Sperling
by Bert Sperling
Tue Dec 30th 2008 at 1:01pm UTC

The Secret of New York’s Success

Tuesday, December 30th, 2008

There’s a great post by Edward Glaeser (in the Economix blog of the New York Times), titled “New York, New York: America’s Resilient City.”

In it, he describes how New York has managed to avoid the decay that has afflicted many large older cities, and, after a brief downturn in the 1970’s, came roaring back as arguably the most influential single city in the world.

His explanation? In a word – “smart people.”

“New York still has an amazing concentration of talent. That talent is more effective because all those smart people are connected because of the city’s extreme population density levels. Historically, human capital — the education and skills of a work force — predicts which cities are able to reinvent themselves and which ones are not. Those people who are continuing to pay high prices for Manhattan real estate are implicitly betting that New York’s human capital will continue to come up with new ways of reinventing the city. “

Glaeser continues, describing why dense cities succeed…

“They thrive by enabling us to connect with each other, which then promotes learning and innovation. The current downturn will only increase the returns to being smart, and you get smart by hanging around smart people. As long as New York continues to attract and connect those people, the city will continue to thrive.”

Now here’s what every city planner wants to know. Is this replicable? Can this success be engineered or encouraged, and are the effects measurable in 10 years, 20 years, a lifetime?

Does anyone have successful examples of campaigns and projects to replicate this resilient infrastructure? Or perhaps, examples of some cautionary unsuccessful attempts?

Best wishes to everyone for a creative and fruitful New Year!

Richard Florida
by Richard Florida
Tue Dec 30th 2008 at 9:27am UTC

Spiky World

Tuesday, December 30th, 2008

More than 95 percent of the world’s population lives in less than 10 percent of the earth’s land area, according to a new study and map by the European Commission’s Joint Research Centre and published in the World Bank’s World Development Report 2009. The research conceptualizes the world and its cities in terms of accessibility and connectivity measured as proximity and travel time to 8,500 major cities worldwide. Here’s the map.

And here’s a summary of the study in Science Daily:

[H]uman population is more concentrated than ever before. Europe’s urban sprawl gradually fades as we move eastwards into the steppes of central Asia, soon to re-emerge into the dense networks of people and places in India, China and Japan. The attraction of Australia’s coasts is dramatically revealed, while North America appears to adopt a grid system not just for its streets and road networks, but for distribution of the cities themselves.

Cities exercise enormous control over national economies – even the global economy. They provide jobs, access to the best cultural, educational and health facilities and they act as hubs for communication and transport. Of course, they also cluster massive demands for energy, generate large quantities of waste, and concentrate pollution as well as social hardship.

By using travel-time as a unit of measurement … the map represents accessibility through the … concept of “how long will it take to get there?” Accessibility links people with places, goods with markets and communities to vital services. Accessibility – whether it is to markets, schools, hospitals or water – is a precondition for the satisfaction of almost any economic need. Furthermore, accessibility is relevant at all levels, from local development to global trade.

More here.

Richard Florida
by Richard Florida
Mon Dec 29th 2008 at 4:01pm UTC

What Would Jane Jacobs Think of Dubai & Shanghai?

Monday, December 29th, 2008

That’s the question Karrie Jacobs asks after visiting the two cities (via Planetizen):

The question was harder to answer than it might seem. Clearly, she would hate much of the heedless tower mania. But the real answer would hinge on whether she regarded Dubai’s increasingly sophisticated approach to mixed-use place-making as an improvement over the sterile environments churned out by the urban planners of the 1960 …

After my return to New York, I received an e-mail about a new development called Jumeirah Gardens, a huge, upscale, master-planned community. Most of what I’d seen in Dubai had been built on open desert or land reclaimed from the sea, but this was a classic urban-renewal scheme, one calling for the demolition of Satwa. A number of accounts, none of them official, estimated that between 100,000 to 150,000 people would be displaced.

Time Out Dubai reported on the development in May: “‘These low-quality villas and the ­illegal inhabitants they house simply can not continue to exist so close to Trade Center, Sheikh Zayed Road and the heart of the city,’ our source confirms. ‘Not in such prime real estate.’” A more recent article in the Gulf News was accompanied by the kind of spectacular architectural renderings that are pro forma in Dubai, and it noted, “The development will redefine living in one of the most popular neighborhoods of Dubai, currently undergoing demolition to pave the way for the new project.” Redefine living in one of the most popular neighborhoods of Dubai? The plan for Jumeirah Gardens made me wish a Jane Jacobs could rise from Satwa.

And then there was Shanghai. In October I spent a few days in a hotel in Pudong, the district of jumbo office towers that began construction in the 1990s. I was taken on a whirlwind tour of the city’s architecture. One of the supposed highlights was Xintiandi, an enclave of preserved tenements converted to a shopping mall with the help of an American architect who drew his inspiration from Faneuil Hall. It struck me as strange that this was regarded as a premier example of preservation: it would be like taking a first-time visitor to New York to the South Street Seaport. But preservation of any sort, even the kind that turns authentic neighborhoods into malls, was the exception rather than the rule. Everywhere I went, new towers were rising and old low-rise neighborhoods were coming down. No sign of Jane here, either.

On the way to Shanghai, I stopped in Hong Kong, a city where real estate development is one of the main industries, and where the government derives much of its revenue from leasing property and selling development rights. There I caught up on the latest: another harbor scheme with more reclamation and a new waterfront highway, and still more massive luxury high-rises eating away at some of the city’s best-loved streetscapes …

Of course, what Dubai, Shanghai, and Hong Kong have in common is a top-down approach to development. Dubai has a hereditary ruler, Sheikh Mohammed bin Rashid al-Maktoum. The United Arab Emirates held its first ever elections in 2006, but they’re only open to a tiny fraction of the population. …In the West, we envy China’s ability to build on a monumental scale—the Bei­jing airport! The Bird’s Nest! A subway system quadrupled in size in five years!—and completely change the face of its cities, but residents don’t seem to have a role to play in how their cities are remade, aside from getting out of the way. In Hong Kong, public participation is carefully rationed, and recent protests over the demolition of beloved landmarks—such as the Central Star Ferry Pier and the Queen’s Pier—are a subset of a larger movement advocating open government.

[I]t’s revealing to see what happens in cities where there is no Jane. Because what these people are really talking about when they complain about the Jane Jacobs mentality is democracy, the inconvenient fact that we live in a society where ordinary people can have an impact on the political process.

CCE Editor
by CCE Editor
Mon Dec 29th 2008 at 10:18am UTC


Monday, December 29th, 2008

The Authors@Google program welcomed Richard Florida in March 2008 at their Google New York City office where he discussed the methodology behind, and evolution of, his latest book Who’s Your City?: How the Creative Economy is Making Where to Live the Most Important Decision of Your Life.


Richard Florida
by Richard Florida
Sat Dec 27th 2008 at 7:14pm UTC

A Post Super-Power World

Saturday, December 27th, 2008

My Globe and Mail column is out.


Russia’s youth ready to embrace the dawn of a new era

Hard to believe, as we enter a thoroughly globalized world in 2009, that as an elementary-school student, I crouched under my desk every time an air-raid siren pierced the unsteady calm. I was born in 1957, the year of Sputnik, and my first political memory is of John F. Kennedy announcing that he would “stand up” to Russia during the Cuban missile crisis. Back then, in the United States, we grew up believing that we were engaged in a titanic struggle against a mortal enemy whose very existence threatened our creed of individualism, freedom and liberty.

But when I visited Russia this month, I was struck at how similar it has become to the United States. Certainly, the country is pushing to develop more of a market-based economy, having abandoned its state-run economy to the historical dustbin. But it’s more than that.

In Russia, as in the U.S., everything is big. People are loud and aggressive. Many are overweight. The roads are clogged with gas-guzzling SUVs. Billboards advertising luxury products dot the sky, and women walk around covered in designer labels – most of which, as in the U.S., are knock-offs. In a Moscow airport café, two young women are transfixed by the Russian version of InStyle magazine, poring over pictures of Sarah Jessica Parker, Paris Hilton and Scarlett Johansson.

And, just like the U.S. then and now, Russia is security-crazed – from the contortions required to obtain visas to airport checkpoints, from the suspicion of anyone taking a photo in a restaurant or hotel to the metal detectors at the entrances of official buildings, even the security gate at my hotel’s front door. Police sirens blare into the night, reminding me of city life in the U.S.

But it’s among the youth that the similarities between Russia and the U.S. become eye-popping.

While older Russians still appear to smoke and drink too much – evoking a U.S. culture more typical of the 1950s Mad Men era than the present – young Russians, with their jeans, T-shirts, BlackBerrys and iPhones, are virtually indistinguishable from their Western counterparts.

I had been invited to Moscow along with Megatrends visionary John Naisbett, Garage Technology Ventures start-up guru Guy Kawasaki and billionaire entrepreneur Richard Branson to take part in a conference on innovation and entrepreneurship, meant to encourage a new generation of techies to launch start-up companies in Russia.

Even as someone who has written about the growth of a new global creative class worldwide, I was struck by how much entrepreneurial zeal there was among Russia’s young generation.

I asked our interpreter and guide – a twentysomething foreign affairs staffer – what could account for it. Three things, he said.

One is globalization. Young Russians are well aware that they are part of a global economy, a global lifestyle and growing global class.

The second cause is communication. With international distribution of television and movies (including the Russian version of the recent Hollyood comedy Baby Mama), the boom in Internet and social media, the country’s young people are participating in cutting-edge trends.

The third is language. Young Russians (of whom he is a perfect example, he said) are speaking more and better English. When I addressed a class in Siberia last year, many of the students (a self-selected group for sure) engaged me in perfect English, asking questions that mixed academic insights with of-the-moment slang. I couldn’t help but feel that these young Russians had developed capacities that even exceeded so many of their North American peers. They seemed perfectly poised to navigate our global economic terrain.

As I sat in the fashionable Pushkin Café near the Kremlin and Red Square one evening, musing that the bustling nightlife around me could just as easily been that of Toronto, New York or London, it occurred me: I was witnessing the dawn of a new era. The age of the great superpower conflict – of a generation and a world defined by the Cold War – is over. While both countries remain powerful in their own ways, they are now subsumed in a global economy that is bigger than either of them.

At the conference, John Naisbett spoke of the rise of Asia, and especially of China as not just the world’s factory but as a growing centre of research and innovation. He described new universities, new research institutions (including one that he runs), high-speed trains and the striking, architecturally significant new airport terminals being built there. The contrast between an emergent society in the throes of rapid expansion and older societies that are living off the past and failing in many ways to embrace the 21st century could not have been clearer.

While Fareed Zakaria, editor of Newsweek International, describes a post-American world defined by the rise of the rest, I now think of our era as that of a post-superpower world. The energy has shifted, and been unleashed, and it’s not just a wide range of countries that matter, but mega-regions such as the Beijing-Shanghai corridor, the Mumbai-Bangalore axis, greater Toronto and its environs, Cascadia in the Pacific Northwest, and all throughout Asia, Europe and across the world – everywhere the Internet and global airwaves now reach.

Language, communication and openness to new ideas – these are now the drivers, whether you find yourself in New York or Toronto, Amsterdam or Moscow.

It will be interesting to see how the first post-superpower generation in the U.S. and Russia handles the looming economic crisis. Judging from the ubiquitous Louis Vuitton purses and InStyle readers in the Moscow airport, populations in both countries appear to be in denial about the prospect of a full-fledged depression. Americans still pacing the malls fervently wish that some combination of government bailouts, Federal Reserve action and the incoming Obama administration will save them. Russians cannot bear to think back to the late 1990s, when they last faced an economic fallout, and have stockpiled savings and foreign reserves in the hopes of avoiding it, even in the event of a stock-market collapse.

But it’s also clear that we share more connective tissue. A truly global creative class has emerged and is growing. We are all much more connected and similar than ever before – much more so than when we cowered under our desks at the threat of mutually assured destruction when I was in grade school.

Call me an optimist, but that fact bodes well for our shared future.

Richard Florida
by Richard Florida
Sat Dec 27th 2008 at 7:11pm UTC

Talent, Creativity, and the Crisis

Saturday, December 27th, 2008

The New York Times’ Hannah Seligson reports on how the crisis is causing some financial types to switch to more creative careers.

With Wall Street hemorrhaging jobs, bonuses disappearing and the financial sector going through a seismic shift, some bankers and lawyers are switching lanes to more creative career paths. They are putting down their Wall Street Journals and picking up Variety as they try their hands at comedy, filmmaking and writing.

Harry B. Weiner, a partner at On-Ramps, a recruiting and consulting firm that works with financial professionals, says the economic downturn is creating a new psychology of career transition. “People feel there’s nothing to lose in terms of taking a risk and pursuing a new direction, especially when you have a résumé that says ‘banking’ and no banks are hiring,” Mr. Weiner said.

That was certainly the calculus for Benjamin Cox, 33. After leaving his job as a vice president at Goldman Sachs in August, he immediately began incubating his plans to work on his screenplay — he calls it a cross between “Swingers” and “Annie Hall” — and start a production company. Mr. Cox said that with the upheaval on Wall Street, he feels relieved to have a backup plan. “I’m seeing a lot of people who never thought of an alternative to banking.”

Shaun Gatter, 38, left his position as a vice president and counsel at a large investment bank last year to work on his novel about a Jewish South African family, a story set against the backdrop of apartheid. Mr. Gatter says that the decision has meant a huge financial adjustment, but that the payback — having more mental energy for his book — has been worth it.  “It’s been euphoric to be able to think mainly about the book and less about equity derivatives and client risk.”

Greg Collett, 37, left his job as a director in the commodity exchange-traded fund business at Deutsche Bank in June to explore a career in stand-up comedy.  “I had this gnawing feeling that things were only going to get worse and that Wall Street was not the place to be,” Mr. Collett said, adding that it was easier to leave knowing that compensation packages were going to be a fraction of what they were a few years ago.

Richard Florida, author of “Who’s Your City?” and director of the Martin Prosperity Institute at the University of Toronto, sees the gravitational pull away from Wall Street and toward more creative industries as part of a necessary economic recalibration.  “The economy couldn’t survive on speculation and what really amounted to advanced financial alchemy,” he said. “We are now realizing it is our human creativity that is our real capital.  “The economic downturn is going to free up top talent to do other things that are going to change the metabolism of cities like New York in a very good way.”

While most bankers and lawyers who pursue careers in comedy, writing and filmmaking say they are somewhat anomalous, the situation could change quickly.  “Things look so bad in finance that if you think the difference in salary multiple isn’t as big as it used to be between doing what you are viscerally interested in versus a job that’s just about money, it puts a whole different spin on it,” Mr. Terry said.

Mr. Gatter said that many of his colleagues at the bank commended his choice to leave, telling him that they also nursed ambitions to be chefs, photographers, writers and artists. “Everyone seems to have something else they would rather be doing than their 9-to-5,” he said. “I think that people who are losing their jobs are being forced to pursue their dreams and, in a way, are being liberated from the golden handcuffs of Wall Street and venturing into something that might fulfill them.”

Martin Kenney
by Martin Kenney
Fri Dec 26th 2008 at 9:53am UTC

Crackpotism, Delusions, and Obama Stimulus

Friday, December 26th, 2008

Rich has already written about how 1930s New Deal stimuli projects will not help this country prepare for the 21st century global economy. Bloomberg has an incredibly insightful article on the Obama stimulus package. In effect, all the funds that will be appropriated for infrastructure will go for fixing old roads and building new ones to open new open spaces to crackpot development. Whatever one believes about global warming, this is certainly environmentally irresponsible and a step in the wrong direction. Moreover, it will cost cities, which, as Rich, Ed Glaeser, and many others have shown, have subsidized suburban development in the past. Now, U.S. “leaders” want to give us another dollop of past solutions. Optimistically applying old solutions (like ever greater indebtedness) for a debt and insolvency crisis is definitionally “crackpot.”

Can Obama translate his vague promises of change into a real change of direction for this country? To those that responded to my posting about taxation decisions, thanks.

I hope you all have great holidays. Rest, have fun, and prepare to put your thinking caps on because next year will be the most important for the global economy since 1933. We need to be there with alternative solutions and open the space for debate. Otherwise, the economists with old failed theories, some of whom claim to understand the Great Depression, will continue to provide crackpot solutions… to be discussed in the next posting.

David Miller
by David Miller
Wed Dec 24th 2008 at 3:34pm UTC

2009: SUVs and Real Estate?

Wednesday, December 24th, 2008

If you own a home, chances are you are racing to refinance and mortgage brokers are calling you. Lots of folks are taking advantage of record low rates on vanilla-flavored 30-year loans. Cash in your pocket! Some are wondering, is it time to pick up a second home? Invest in a downtown condo?

Moreover, oil has crashed and there is little that OPEC or traders on global and virtual exchanges can do about demand reality. Is it time to pull that SUV back out and drive it around town? Maybe take a weekend trip with the kids? (There are lots of hotel deals!)

Is this how its gonna play out? Are we gonna stumble out of this recession and back into our old habits?  Remember in about two months the Fed will be writing out a lot of checks. Record spending + cheap money + cheap commodities = ?  What do you think? Happy Holidays to all!