Archive for March, 2009

Richard Florida
by Richard Florida
Tue Mar 31st 2009 at 3:48pm UTC

Housing Crisis Goes Global

Tuesday, March 31st, 2009

The housing crisis has spread globally according to data from The Economist.

Source: The Economist.

Housing prices were down the most in the United States (nearly 20 percent), but substantial declines have also occurred in Britain and Hong Kong – two countries with large and dominant financial sectors. Prices were also down significantly in Ireland, New Zeland, the Netherlands, Denmark, and Singapore. Prices have held up in Switzerland, Italy, and France, according to this data.

The second graph charts the trend in commercial real estate.

Source: The Economist.

Commercial office rents fell by 41 percent in London and 25 percent in Mumbai and Sydney. Office rents were off by more than 5 percent in New York, Hong Kong, Frankfurt, and Sao Paolo. Rents were up in Tokyo, Moscow, Beijing, and Dubai.

Sour

Richard Florida
by Richard Florida
Mon Mar 30th 2009 at 1:37pm UTC

Who’s Your (Canadian) City?

Monday, March 30th, 2009

The new Canadian version of Who’s Your City? is now in print. Media starts this week. Here’s the first review – a nice one – by Canadian urbanist Michael Dudley in the Winnipeg Free Press.

[P]lace matters so much to Florida that, upon his arrival in Toronto (to assume his post as professor of business and creativity at the Rotman School of Management at the University of Toronto), he decided to revise for a Canadian audience his most recent book, Who’s Your City?, released a year ago.

This is no quickie “Canadian edition” with token references to Toronto thrown in: it is extensively rewritten, so much so that it almost constitutes a new book.

To be sure, Florida’s principal ideas remain much the same. We are still dealing with a “spiky” world of concentrated talent and economic clustering, not Thomas Friedman’s “flat” world in which location is of little consequence.

Florida describes how the “clustering force” tends to draw people and economic activity into certain key regions rather than to others. As a result, we are becoming segregated according to economic class and chosen urban lifestyles.

To demonstrate how talent, opportunity and quality of life criteria are distributed (and concentrated) north of the 49th parallel, Florida and his team of collaborators generated (or took advantage of) new data, new maps and new analysis. These are augmented by more than 40 life histories by Canadians describing their own place-finding experiences.

Unsurprisingly, Canada’s main mega-regions of Toronto, Vancouver and Victoria, Calgary, Edmonton, Ottawa-Gatineau, and Montreal are most frequently cited as the best places to live. In fact, Florida’s new home of Toronto appears in the index no fewer than 57 times. Montreal follows with 31 page references, and Vancouver with 28.

Winnipeg, alas, is mentioned a mere three times, though two of these references emphasize our city’s creativity (did you know we boast 12 per cent of the country’s musicians with only 2.25 per cent of its population?).

More here.

Wendy Waters
by Wendy Waters
Mon Mar 30th 2009 at 8:31am UTC

Five T’s in the Workplace

Monday, March 30th, 2009

Talent, Tolerance, Technology, Territorial Assets, and Tension

These are the workplace characteristics to seek if you’re wanting a job that will offer exciting challenges and have the best chance to survive the economic downturn and thrive in the next upswing – at least that’s my theory. Challenge it if you like.

Richard Florida has demonstrated how talent, tolerance, and technology can help a city prosper, attracting creative people and the businesses that want to hire them. He has recently added “territorial assets” to the mix (locational amenities) and I’ve long promoted Tension as another T – people need a reason, a challenge – to form community and generate new ideas.

It stands to reason (and Florida may have said this somewhere) that the ideal workplace would also offer:

  • A chance to work with talented, experienced, and wise co-workers.
  • Leadership that is tolerant or open to new ideas, alternative approaches to problem solving, or working generally.
  • Top technology that increases efficiency  (which doesn’t necessarily mean every latest gadget or program).
  • A great location near amenities of interest to me (whether transit, roads, parks, restaurants, cafes, pedestrian malls).
  • The types of challenges or tensions in which bright creative people can make a difference.

Status quo is boring; a company just raking in the money without much effort can be a dull place to work after a while (creative people often seek more than a good paycheck).

By contrast, threats, tensions, and new challenges can force all the talented people in an organization to elevate their performance – and the current once-in-a-lifetime economic event is creating many new challenges.

And, I would argue that those companies most open or tolerant to trying new things in the current downturn, to introducing new technologies (such as social media in the workplace), ensuring their location both appeals to workers and helps them be productive – these are the organizations most likely to survive and thrive.

Richard Florida
by Richard Florida
Mon Mar 30th 2009 at 8:26am UTC

New (Government) Boomtowns

Monday, March 30th, 2009

Guess what cities and regions are doing best in the face of the economic crisis? Capitol cities from Washington to Ottawa and beyond. Newsweek dubs them “cities beyond the pain.”

Remember company towns? From Detroit to Wolfsburg, Germany, home to Volkswagen, they used to be places where you could count on a job for life. Now, they are mostly places where you count your unemployment checks. But as the global economy shrinks … and the public sector expands to cope with the fallout, there’s a new kind of boomtown—the government town.

In places like Brasília, Ottawa, Brussels and Washington, not only are new jobs being created, but home sales are rising, incomes are up, car dealerships are full, and new malls, shops, luxury hotels and gyms can’t be built fast enough. …

Last year, home building nose-dived throughout Canada—except in Ottawa, where industry is scant and one in five workers draws a government paycheck. In the Canadian capital the resale price for condos jumped nearly 12 percent in 2008 and 5.7 percent for single-family homes …

Ditto Washington, where 28 percent of the District’s paychecks are cut by the various layers of the federal bureaucracy. While the private sector has shed 4.6 million jobs since December 2007, when the economic contraction began, the federal government has hired 200,000 workers, according to the Bureau of Labor Statistics. The new administration will likely create another 400,000 temporary jobs and 180,000 permanent ones. No wonder D.C., without a factory in sight, was the nation’s second-fastest-growing job market (after Alaska) in 2008.

Perhaps the biggest prosperity bubble of all is in Brasília, where more than 50 percent of jobs depend directly or indirectly on the state. The Brazilian economy will be lucky to grow at all this year, but Brasília is booming. Wages are already four times the national average and are predicted to grow again this year …Home sales rose 25 percent last year and are expected to climb another 20 percent in 2009 compared with a 15 percent drop nationally.

State capitals and university towns are also doing well. These are classic post-industrial cities which never had big factory complexes and large shares of working class jobs which are hardest hit in the crisis.

But many are more than government towns. Washington, D.C. and Ottawa both have large tech sectors, large concentrations of human capital, and among the highest concentrations of the creative class (40+ percent) of North American regions. Both are hubs of large mega-regions which include their country’s economic, financial, and media centers, New York and Toronto respectively. But despite Newsweek’s moniker, there is plenty of pain in the greater Washington, D.C. region: despite having three or four of the country’s wealthiest and most highly educated counties, it also has one of the highest levels of economic inequality with considerable, concentrated poverty, and economic dislocation.

The impacts of the crisis are uneven and continue to reflect the fundamental trajectory of the ongoing economic transformation from an industrial to a creative economy, the big sort, and an increasingly spiky and unequal world.

Richard Florida
by Richard Florida
Sun Mar 29th 2009 at 10:41am UTC

The End of Hollywood?

Sunday, March 29th, 2009

Hollywood is not a place, it’s a business model. The Hollywood model of flexible production, project-based work, and free agents stands as one of the archetypal economic models of the late 20th century – second perhaps only to the Silicon Valley model. Now, according to my good friend, Steve Pearlstein, it’s facing deep and fundamental challenges.

Now, however, there is a sense that it may all be coming to an end, that the threat this time is real and that the old business models can’t survive. With the rise of legal and illegal downloading, the Internet has already decimated the music business, and it is just beginning to overturn the economic foundations of the movies, television and electronic gaming as well. Financing is drying up, once-sacred expenses are being cut, whole layers of management eliminated and work shifted elsewhere …

Things are looking considerably more precarious for the television business, where there’s been a dizzying drop in network and station advertising revenue, driven as much by the DVR as the souring economy. Syndication revenue has shriveled, and networks have been forced to move away from prime-time drama and comedy series in favor of reality series and talk shows that employ many fewer actors, directors, screenwriters and technicians. The industry’s hopes are now focused on networks like HBO, AMC and Showtime, whose subscribers are still willing to pay for quality programming. But many of those networks’ biggest hits have been produced elsewhere.

The mood in Hollywood, however, is decidedly anxious.   DVD sales, which for years have driven industry profits, have recently fallen by almost half as consumers turn to cable or the Internet to get movies they want, when they want them, for less than what it costs to buy the movie in a store. And piracy is cutting deeply into sales in fast-growing markets overseas.

At the same time, the Wall Street investment houses and hedge funds that have lavished cheap financing on the industry for the past decade are now in retreat. Some have closed their L.A. offices and are reportedly peddling their ownership interests in upcoming movies at discounts of 30 to 70 percent. Viacom gave up in its effort to raise $450 million from outside investors for its slate of movies, and credit ratings have been reduced on debt used to finance past pictures. Even famed director Steven Spielberg is reportedly having trouble raising the $700 million that his DreamWorks Studios needs for its next round of movies.

No surprise, then, that the number of movies produced is expected to decline again this year, or that many of those will be made outside of Southern California as producers respond to incentives from dozens of states and localities offering tax rebates equal to as much as 40 percent of production costs. To lure back what it considers “runaway” production, a strapped state legislature was forced this year to enact a modest tax break of its own.

Meanwhile, studios are under intense pressure to cut costs from corporate parents that over the years have been foiled in their efforts to rein in the industry’s extravagant ways and earn a decent rate of return on their oversized investments. Movie openings have been canceled, weekend jets grounded and marketing budgets slashed, and even top stars are being told they won’t be paid in full until the studios recoup production costs. Nearly every studio has announced layoffs, and a number are closing down subsidiaries and selling off facilities.

The world will always need entertainment, and Southern California is the odds-on favorite to produce it. It has the history, the people, the infrastructure and the creative energy. But as Detroit automakers and New York’s financiers have learned, these natural advantages can disappear when an arrogant and insular industry comes to view its dominance as inevitable and its outsized compensation as an entitlement.

Richard Florida
by Richard Florida
Sat Mar 28th 2009 at 10:14am UTC

College Towns Thrive in the Reset

Saturday, March 28th, 2009

(Graphic from the Wall Street Journal).

College town economies are among the most resilient according to the Wall Street Journal.

Of the six metropolitan areas with unemployment below 4% as of January, three of them are considered college towns. One is Morgantown. The other two are Logan, Utah, home of Utah State University, and Ames, Iowa, home of Iowa State University. Both have just 3.8% unemployment, based on Labor Department figures that are not seasonally adjusted. The pattern holds true for many other big college towns, such as Gainesville, Fla., Ann Arbor, Mich., Manhattan, Kan., and Boulder, Colo. In stark contrast, the unadjusted national unemployment rate is 8.5%

Richard Florida
by Richard Florida
Sat Mar 28th 2009 at 10:14am UTC

America’s Financial Oligarchs

Saturday, March 28th, 2009

The ever-growing financial bailouts have produced a growing sense of outrage in America. Simon Johnson, professor of economics at MIT and former chief economist at MIT, writes in The Atlantic that America’s financial elite are putting their won interests ahead of their country and essentially looting it to enrich themselves and enhance their power.

Johnson compares America’s new financial oligarchs to their Russian counterparts, and says that their considerable political clout amounts to a “silent coup” which paralyzes the country from undertaking much needed sweeping reform of its banks and financial institutions.

The solution is obvious to anyone who has been part of the IMF or understands the financial crises that have affected other countries. Johnson writes, nationalize the banks and limit the power of the financial elite. But he fears this cannot happen because of their unvarnished power.

Johnson seems convinced that if the financial roots of the the current crisis are not dealt with it will end up worse then the Great Depression.

Sobering stuff. Read it closely.

Richard Florida
by Richard Florida
Fri Mar 27th 2009 at 1:10pm UTC

The Economic Case for Diversity is Winning Over Some Conservatives

Friday, March 27th, 2009

West Virginia politics blogger, Clem Guttata reports that, “The notorious Russell S. Sobel, author of the West Virginia Republicans’ (failed) blueprint for electoral success last cycle, Unleashing Capitalism,” has strong words of support for state legislation that would provide equal treatment for gays and lesbians.

So why should a conservative state pass legislation that p the notorious Russell S. Sobel, author of the West Virginia Republicans (failed) blueprint for electoral success last cycle, “Unleashing Capitalism”, saying: provides protected status for gays and lesbians?The answer is because diversity and acceptance — not just tolerance — are among the missing pieces of the state’s economic puzzle, according to Russell S. Sobel, an economics professor and the James Clark Coffman Distinguished Chair in Entrepreneurial Studies at West Virginia University.

It may be a small building block to success, but it’s still important, several interviewed said. That’s because entrepreneurship often starts with people who don’t always fit in with what is considered “mainstream” society and think about things in a different way than others might. Those different thoughts and approaches often lead to entrepreneurial ideas.

“The idea is real entrepreneurs are different people, strange, quirky. They think differently,” Sobel said.

He said Richard Florida’s studies on creative class theory, while more sociological than economical, has some credibility. Florida, who wrote the international bestseller “The Rise of the Creative Class,” teaches at the University of Toronto and has taught as a visiting professor at Harvard University and MIT.

Florida’s study said there is a link between the areas that creative people — such as architects, engineers, musicians and writers — live and work and the areas where gays and lesbians live and work.

Entrepreneurship tends to flourish in such areas, Sobel said.

“It makes 100 percent sense. More entrepreneurial climates are in more accepting, diverse areas,” he said.

Economists who study entrepreneurship also suggest there is a correlation between areas accepting gays and lesbians and business success, Sobel said.

“If we want the state to be entrepreneurial, we want a place that is accepting and diverse,” he said.

AMEN.

Richard Florida
by Richard Florida
Fri Mar 27th 2009 at 10:39am UTC

China’s Subway Boom

Friday, March 27th, 2009

Fifteen Chinese cities are building subway lines according to the New York Times.

Money quote: “Nobody is building like they are,” said Shomik Mehndiratta, a World Bank specialist in urban transport. “The center of construction is really China.”

How many U.S. cities are doing the same? And, by the way, how much of the U.S. “stimulus” is going to subways?

Kwende Kefentse
by Kwende Kefentse
Fri Mar 27th 2009 at 9:00am UTC

Toronto’s Graffiti History

Friday, March 27th, 2009

My computer died earlier last week so I’ve been in serious catch up mode over the past couple of days! While catching up on my blog reading, I came across a cool little documentary featuring some of Toronto’s more enduring street artists talking about the scene in the city (thanks to Mary Fogarty over at Organic Mechanic):


Writing Toronto’s (Hi)Story from Well and Good on Vimeo

I thought that it was interesting how much of the Toronto scene seemed to be defined by New York – either a reaction away from or toward it, with the exception of the photographer who picked up things by experiencing the diversity of the London (UK) scene. That geography is interesting – I’ve been putting together a bit of data here and there, and it seems like that triangle between Toronto, New York, and London has been one of the most interesting and vibrant geographical relationships of the last century. The push and pull of these cultural poles created a strong artistic dynamism in Toronto and a great visual legacy for young artists to interact with and be inspired by. It seems to be predicated by the Caribbean diaspora of people in the post-war era, under girding the movement of people and ideas as families visited each other, exchanging love, culture, media products like photographs and cassettes. Add a bit of emergence to the mix and voila.

Also interesting is that the doc is tied to Toronto’s 175th anniversary healthy city initiative. It’s nice to see a city acknowledging the things on the ground that make it great.

And now to continue catching up. But not before some music.