Archive for March, 2009

Michael Wells
by Michael Wells
Fri Mar 27th 2009 at 8:59am UTC

This Is Stimulating

Friday, March 27th, 2009

In my regular life, one of the things I do is edit Charity Channel’s online Grants & Foundation Review. I wrote this article yesterday for the review and thought it would be of interest and maybe useful to readers of the Creative Class blog.

This is Stimulating
by Michael Wells

The American Recovery and Reinvestment Act of 2009 (ARRA), otherwise known as the Stimulus Package, is setting the grants world on its ear. As a consultant, I’m getting calls from legitimate clients with a good idea of what they want, small nonprofits wanting me to find them grant opportunities, and an up-tick in individuals and small businesses looking for “free government money you don’t have to pay back.”

I’ve been doing some research and while I’m not an expert I can give some hints:

  • The full $797 billion in new spending will be spread over 10 years, although the intention of many programs is to get it out the door this federal fiscal year (September 30).
  • Much of the funding will go directly to states and local governments, which may or may not re-grant it.
  • Stimulus grant funding will go mostly through existing competitive grant programs within agencies and be subject to the regular regulations.
  • Most agencies don’t have new RFPs or NOFAs out yet.
  • There are lots of programs in the Departments of Agriculture, Education and Justice. There are very few in Health & Human Services.

The agencies are racing to get their arms around the Act, but it’s not in place yet. My best advice is to look at some of the opportunities at the end of this article, check out these sites and keep checking back.

  • Grants.gov has a page with links to agency recovery sites and another to grant opportunities.
  • The Catalog of Federal Domestic Assistance website says it’s being updated to better support the ARRA, with the changes supposed to be operational by March 31.
  • There’s a government website, recovery.gov, that’s supposed to make the process transparent, but so far it seems to be just happy talk.
  • At the individual agencies, information is still shaky. HUD has one incomplete announcement page for its $995,000,000 but no details and no full announcements. Hopefully some of its funding will rescue affordable housing projects left stranded by the collapse of the tax credit market.

Given that the Obama Administration has been in office barely two months and the ARRA was signed February 16, it’s too early to expect much detail or for programs to be operating for another month or two. However, there are some good sources of information to begin preparing for the floodgates to open.

The American Association of Grant Professionals has assembled a Stimulus Plan Grant Information feature open to non-members that has overviews and analysis from a number of sources. Go here and scroll down the left side to the 10th button. You have to open each document separately, but they’re worthwhile.

One of Portland’s Congressmen is holding a public meeting this Friday on the stimulus package and I wouldn’t be surprised if many Representatives are doing the same in their hometowns. Check your congressional website or call their local offices.

Michael Wells
by Michael Wells
Wed Mar 25th 2009 at 4:27pm UTC

Food for Thought

Wednesday, March 25th, 2009

The new organic garden at the White House gotten a lot of attention, but a story in last Sunday’s NY Times business section says that the administration’s agricultural policies go much deeper. If the story is right, and if the changes are sustained, Americans may move back to eating the way our grandparents did on the farm.

The long Times piece talks about food’s impact on health and the environment, class issues around healthy eating, and the entrenched agricultural industry.

The most vocal booster so far has been the first lady, Michelle Obama, who has emphasized the need for fresh, unprocessed, locally grown food and, last week, started work on a White House vegetable garden. More surprising, perhaps, are the pronouncements out of the Department of Agriculture, an agency with long and close ties to agribusiness.

In mid-February, Tom Vilsack, the new secretary of agriculture, took a jackhammer to a patch of pavement outside his headquarters to create his own organic “people’s garden.” Two weeks later, the Obama administration named Kathleen Merrigan, an assistant professor at Tufts University and a longtime champion of sustainable agriculture and healthy food, as Mr. Vilsack’s top deputy….

(Vilsack) has said he hopes to devote more resources to child nutrition to improve the quality of school breakfasts and lunches. He also wants to make sure that only healthy choices are available in school vending machines….

Noting that the department’s recently released Census of Agriculture included more than 100,000 new small farmers, he said he wanted his agency to help them develop regional distribution networks. The small farms’ produce could be sold to institutional buyers like schools.

Vilsack was generally seen as an agribusiness supporter in Congress and wasn’t a popular choice with the organic and local foods communities, but they’ve been pleasantly surprised. If Vilsack and the local food activists succeed in getting their crops into supermarkets and school lunches, it could be a sea change in American eating habits.

The market is ahead of the government on this. Chains like Whole Foods have brought organic to the big grocery business and now Safeway and Wal-Mart have organic produce sections. Farmer’s markets that sell locally grown food are springing up around American cities, and my guess is that the many of those 100,000 small farmers are selling to them. Portland’s metro area has over 30 farmer’s markets – downtown, in low income working-class neighborhoods, and in the suburbs. Healthy school lunches were pioneered by Bay Area celebrity chef Alice Waters, who got the Berkeley schools to plant gardens for their cafeterias. With Michelle Obama out front, the healthy food movement is poised to make another giant step forward.

Agribusiness is similar to Detroit automakers in many ways. “Big Ag” has subsisted on subsidies and fought reform, while marketing products heavy in corn syrup made cheap by subsidies, and petroleum-based fertilizers are a major oil user. When I was a kid growing up in California’s agricultural Central Valley, my father worked for a poultry feed manufacturer. He brought home calendars from Shell (I think) with cartoon pictures of gigantic tomatoes grown with chemical fertilizers. Now the Valley’s aquifer is poisoned by fertilizers and pesticides and the tap water is unsafe to drink.

Richard Florida
by Richard Florida
Wed Mar 25th 2009 at 8:47am UTC

Crisis Geography

Wednesday, March 25th, 2009

Andrew Sullivan points to Ed Glaeser’s Economix  post on the geography of unemployment and finds a common thread: “Edward Glaeser compares city to city unemployment numbers and affirms Richard Florida’s thesis.” Glaeser writes:

While the disparity in unemployment rates is enormous, it isn’t random. Some areas aren’t just miraculously better able to handle the downturn. Long-standing features of the urban landscape can explain the bulk of the variation in today’s unemployment rates.

Given the enormous gap in unemployment between skilled and unskilled workers, it isn’t surprising that skills best explain today’s metropolitan unemployment rates. The share of adults with college degrees in 2000 can, on its own, explain about one-half of the variation in the unemployment rate.Somewhat remarkably, the educational level of the metropolitan area before World War II can do almost as well.

Here’s his scatter-plot.

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Glaeser also finds that regional unemployment is “strongly linked to manufacturing.” Here’s his plot of the correlation between current unemployment and manufacturing’s share of the labor force in manufacturing in 1970.

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Regional unemployment is also related to density, finding that “unemployment is lowest in those areas that are most centralized.” Sprawling places appear less resilient economically.

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His conclusions: invest in skills and human capital; “beware industrial policies aimed at keeping America tied to heavy industry;” stop trying to breathe life back into declining regions; and encourage mobility.

While the regional diversity within the United States might prompt politicians to pursue policies that target aid to distressed regions, that seems likely to be counterproductive. America has always dealt with regional economic disparities through migration. … Today’s recession will also prompt mobility, probably toward more skilled, more centralized cities with less historical commitment to manufacturing.”

I could not agree more. Our urban policy, such that it is, is decidedly backward looking. It’s high time urban policy focus on leveraging the three key things – mobility, density, and human capital accumulation – that are real engines of prosperity.

Richard Florida
by Richard Florida
Tue Mar 24th 2009 at 4:41pm UTC

Detroit and Pittsburgh

Tuesday, March 24th, 2009

There’s sure been a lot of this in recent weeks. But this op-ed by John Craig in the Wa-Po is on target. Craig is a former editor of the Post-Gazette who I got to know well during my time in Pittsburgh.

So when I think about the lessons the Steel City’s 30-year economic transformation may hold for Detroit, another town built on an industry beaten by competition and confronting bankruptcy, I have to say that the first and hardest lesson for the Motor City is this: Fundamental change will be much longer in coming than you can imagine. You’ll survive. The automakers, bailed out or not, will shrink and adapt to a new future and a new reality. The city will remake itself in whatever ways it can. But there’ll be no “getting over” your past, only moving beyond it.

Organizing and managing contraction is not an activity we Americans know much about. But you’re stuck with the job, Detroit, and it will go better for you if you’re clear-eyed about who you are and where you’ve come from.

The city’s second, still-ongoing period of transformation started in the mid-’90s. It has featured less hyperbole and a steady conversion to a high-end service economy with an emphasis on higher education and health care. One reason for the more moderate approach is that we’ve lost and continue to lose too many people. Pittsburgh is a victim of “natural population loss” (deaths outnumbering births) and the only major urban region in the nation to have experienced a small but consistent population decline for three decades, now going on four.

Moreover, for every new technology company coming in, we’ve suffered the loss of such major employers as Gulf Oil, Westinghouse, Koppers Inc. and Dravo Corp. It wasn’t until 2001 that regional employment broke out of two decades of stagnation to reach a record 1.15 million jobs. But this change was short-lived as 9/11, the Bush-era recession and the US Airways bankruptcy — which cost the region 12,000 jobs — took their toll. Despite these realities, Pittsburgh today is a relatively balanced and steady place. Health and higher education are the largest employers, with 232,200 jobs as of January, but there are also more than 150,000 goods-producing jobs. As for steel, well, Chicago, Detroit and Cleveland now produce more of it than Pittsburgh does, but we still retain both basic and specialty steel plants, as well as 329 metals technology service firms providing steel production equipment, engineering services, parts and supplies and raw materials …

Data from the last 10 years clearly suggest that the Motor City’s challenge is bigger than just making better cars. The city is dealing with long-term regional contraction. Since 2000, it has lost manufacturing jobs at a rate of 42 percent, nearly identical to Pittsburgh’s 44 percent loss of a quarter-century ago. And it’s starting to bleed population in the manner of Pittsburgh, though not as acutely yet. But if the automobile industry goes belly-up or even contracts significantly, all bets on that score are off.

Particularly challenging is the state of affairs in the urban core, where population stood at slightly more than 900,000 in 2006, down from a 1950 high of 1.6 million. There’s a critical difference here between the two cities. Even though it has only a third of Detroit’s population, Pittsburgh has more people working in it every day — 298,429 to 241,627. It also has a 1 percent county sales tax that serves as a user fee for regional entertainment and cultural institutions. Thus it’s able to offer area residents more urban amenities and job opportunities than Detroit.

For all its traumas, Pittsburgh retains an urban/suburban/rural coherence. That, coupled with striking architecture and a beautiful natural setting, goes a long way toward explaining why it consistently gets better press than it might deserve, and why, after you examine the region’s economic, demographic, environmental, health and local government measures, you refrain from blurting out, “Why, they’ve been treading water for years!” Which is, in any case, better than sinking.

Craig’s assessment seems more or less on-target to me.

From what I’ve been able to see, the urban turnaround process seems to take about a generation or two. Greater Boston launched its efforts to remake its economy in the wake of the decline of its textile and boot and shoe industries as early as the late 1940s, with the creation of the early venture capital fund American Research and Development and related efforts. When I studied at MIT during the early 1980s, the university was still surrounded by derelict manufacturing buildings. Pittsburgh, as Craig notes, began its own revitalization efforts during the 1980: They were still in take-off stage when I arrived in 1987.

Both were heavy industry towns, but Pittsburgh (where I lived for 17 years) and Detroit  (where my wife’s family is from and where I sit typing this message) are very different places.

Pittsburgh retains a significant downtown business district and a whole series of functioning urban neighborhoods as well as two major research universities and several other universities and colleges in the city. Detroit has seen much more demolition; its core is more isolated; and while Wayne State has a large urban footprint, both Michigan and Michigan State are outside the city.

That said, greater Detroit has a much bigger population than greater Pittsburgh – more than double; and a world-class airport. Michigan, Michigan State, and Wayne State provide research scale that’s quite a bit larger than greater Pittsburgh. Detroit also has a lot more immigration, and an energy and a “coolness factor” that also seems to trump what I experienced in Pittsburgh.

Michael Wells
by Michael Wells
Tue Mar 24th 2009 at 9:18am UTC

Creative Capitalism

Tuesday, March 24th, 2009

At the 2008 Davos billionaire’s prom, Bill Gates gave a speech calling for “creative capitalism.” His message was roughly that corporations are good at solving problems, and the world has enormous problems. If companies would apply some of their researchers, expertise, and money to these problems they might be able to do things that have escaped governments and NGO’s.

If it were anyone but Gates, arguably the world’s best business strategist, this would have been only mildly interesting and a slightly mushy idea. And maybe it would have faded away but Michael Kinsey, founder of Slate among other publications, decided that there was a book here. Rather than write it, or assemble a collection of essays by invitation only, he set up a blog and publicized it among economists. The result was an ongoing conversation among people like Ed Glaeser, Robert Reich, Larry Summers, and lots of people I’ve never heard of but I’ll bet most economists have.

The resulting dialogue was all published as a book (Creative Capitalism) last December that I picked up and read last weekend (some of it anyway). It’s not a fully formed argument and doesn’t reach any conclusions but it’s a great argument and seems appropriate to this blog. You don’t have to buy the book, the blog is live again.

Richard Florida
by Richard Florida
Tue Mar 24th 2009 at 8:51am UTC

Class, Personality, and the 2008 Election

Tuesday, March 24th, 2009

Last week, we looked at the relationship between class and happy states. This week we look at the effects of class on the 2008 Obama-McCain presidential election. Since states are key units in the U.S. electoral college system, we took states as the units of analysis as opposed to individuals. So under the watchful analytical eye of Charlotta Mellander, we looked at how the class composition of states (as opposed to say the class membership of individuals) effected votes for Obama versus McCain. To make this a little bit more interesting and more fun, we also looked at the effects of factors like income, housing prices, and human capital, as well as the gay index and personality on state voting patterns. Basically, we wanted to identify the kinds of states that voted for Obama or McCain.

CLASS AND THE ELECTION: First things first. There was undeniable class pattern to state voting in the 2008 election. States with large concentrations of two classes – the creative class and the service class were strongly associated with Obama, while states with large working class concentrations went for McCain.

The Creative Class: The correlation between creative class states and Obama was positive and significant (.425), while it was negative and significant for McCain (-.442).

The Service Class: The same basic pattern was true of the service class, the largest class and also the class with the lowest average level of wages and salaries.  Service class states were positively associated with Obama (.390) and negative for McCain (-.415).

The Working Class: Now check out the pattern with the working class. Hasn’t the conventional wisdom long been that working class voters tilt heavily toward the Democrats? When it comes to the concentration of working class jobs in a state, not so much. Working class states were even more strongly associated with McCain (.658) than creative class states for Obama; and working class states were quite negatively correlated (-.623) with Obama. This state level pattern contrasts with individual voting. While Obama won lots of working class voters, working class states went strongly for McCain.

Income and Economic Output: We also looked at the association between state voting and income and economic output (measured as GDP per person). Obama states were those with higher levels of GDP per capita (.375 Obama vs. -.388  McCain) and higher incomes (.516 Obama vs. -527 McCain). These are in line with earlier findings of Columbia University political scientist and Rich State, Poor State author, Andrew Gelman.

Housing Prices: States with high housing prices also were in the Obama camp.  Housing prices were strong correlated with Obama states (.672) and negatively associated with McCain states (-.725).

Human Capital: Human capital – that is the percentage of adults with a college degree – was strongly positively associated with Obama states (.458) and negatively associated with McCain states (-.492). These patterns contrast somewhat with more nuanced data for individual voters. Gelman pointed out in an e-mail that: “At the individual level, Obama did best among people without h.s. degrees and people with postgraduate degrees. McCain did best among people with some college and people with college degrees (but no postgrad degrees).”

The Gay Index: Obama states were also those with greater concentrations of gays and lesbians.  The Gay Index was positively associated with Obama states (.532) and negatively associated with McCain states (-.544).

Personality Factors: Psychologists have long been interested in the connection between personality and individual voting and ideology. So, once again using data originally collected by Cambridge University psychologist Jason Rentfrow and his collaborators, we compared state voting patterns to the concentration of the five major personality types – extroversion, agreeableness, conscientiousness, openness-to-experience, and neuroticism. While three of the types had little relation to state voting patterns, two were significantly associated with Obama vs. McCain votes.

Open-to-Experience: Obama states were associated with high concentrations of open-to-experience (.409) – that is highly creative and innovative people; openness was negatively associated with McCain states (-.371).

Conscientiousness: McCain states were associated with high concentrations of conscientious (or dutiful) personalities (.311).

In an e-mail, Rentfrow says these findings are in line with his own: “The links with class, openness and voting is consistent with what we found in the 1996, 2000, and 2004 presidential elections. Although we didn’t look at the class groupings you looked at, each is related to openness, and we found that openness was strongly related to voting patterns after controlling for income, education, race, and sex. I ran the same analyses for the 2008 election and the results are very similar…”

Richard Florida
by Richard Florida
Mon Mar 23rd 2009 at 5:24pm UTC

“Companies That Treat Humans as Machines Are Doomed…”

Monday, March 23rd, 2009

Greg Hart of Calgary responds to Saturday’s Globe and Mail piece on Ontario’s economic future:

CAW economist Jim Stanford disputes Richard Florida’s assertion that creativity by front-line workers is at least partly responsible for Toyota’s success (Ontariowe – Focus, March 21). He says that Mr. Florida’s line of thinking “reveals a complete ignorance of how the auto industry actually works.” Perhaps Mr. Stanford, in his humans-as-robots description of how things “actually” work on the shop floor, has unwittingly revealed a key reason for the decline of his industry while giving little hope for a turnaround.  Companies that treat humans as machines are doomed, and it’s not so much fun for the humans who work there either.

Wendy Waters
by Wendy Waters
Mon Mar 23rd 2009 at 9:00am UTC

Contradictions in Corporate Creativity Recruiting

Monday, March 23rd, 2009

As creativity becomes increasingly important to all jobs, existing corporate recruiting and management processes face challenges. Some of these were documented recently by the Conference Board in “Changing Attitudes to Work – What Should HR Do.“  (Subscription may be required to view.)

First, some numbers about employer attitudes and approaches to hiring for creativity:

  • 97 percent of American employers agree that “creativity is increasingly important in U.S. workplaces.”
  • 72 percent say that hiring creative people is a primary concern.
  • 85 percent of employers who seek creative employees state they struggle to find them.
  • 25 percent assess creativity from interviewees appearances.
  • Less than 20 percent use profile tests to identify creativity.

From the above, it seems that many companies appear lost when it comes to an approach to finding the types of employees they want.

The ways that creative people often want or need to work sometimes challenge traditional HR practices.

  • 75 percent of junior to mid-level staff use social networking tools while most senior leaders have never done so and are concerned about privacy.
  • Younger people appear to be more entrepreneurial, interested in starting their own ventures at some point. This leaves some HR professionals concerned about hiring them, wanting “lifers,” but in making this preference they may be rejecting some incredibly driven and talented people from contributing to their company.
  • Many talented younger people are not interested in the traditional hierarchy of career paths within a company. Creative people often want flexibility, whether to balance work-home life or shift laterally within the company to learn new skills.

What do you think of these stats? Do you feel like you fit in at your workplace as a creative?

David Miller
by David Miller
Thu Mar 19th 2009 at 8:12am UTC

WSJ: U.S. Migration Drops Sharply

Thursday, March 19th, 2009

Conor Dougherty over at the WSJ highlights the slowdown in movement of people in the U.S. The article makes use of data being released today and covers the one-year period up until July 2008 – so the most severe/recent parts of this recession are not included. There are some interesting migration numbers from areas as diverse as Cleveland and Phoenix. From the piece:

Older metro areas such as New York and San Francisco, which have seen residents move to faster-growing areas, are now losing fewer people. Cities in the formerly hot housing markets such as Nevada and Florida are seeing fewer arrivals and, in some cases, more people moving out than in.

At the local level, more people are staying in the city and postponing their move to the suburbs. In 2005-06, metropolitan areas with one million or more people saw a net 688,000 people leave their core counties. In 2007-08, a net 336,000 left, according to an analysis of Census data by Kenneth Johnson, senior demographer at the University of New Hampshire’s Carsey Institute.

“Fewer people are leaving the urban cores to go to the suburbs,” said Mr. Johnson.

Decisions like his help explain why a net 15,000 people left the Cleveland area for somewhere else in the U.S. in 2007-2008, compared with a net of 21,000 between 2005 and 2006. Sarasota, meanwhile, saw a net increase of 2,500 residents from inside the U.S., compared with as many as 20,000 during the boom years.

Interesting stuff. What is clear is that, like everything else in our modern economy, changes can be sharp; from major capital positions (Madoff’s billions) to human capital movement.

Btw, part of me wonders if less people are leaving the cities because they are trapped under high priced urban real estate? That concept has been discussed here. Any thoughts on any of the new data?

Richard Florida
by Richard Florida
Wed Mar 18th 2009 at 3:46pm UTC

The Creative Economy, Bailouts, and Good Jobs

Wednesday, March 18th, 2009
Matt Yglesias has a nuanced and reasoned response to my earlier post.

I think we need to distinguish between the bailouts and the stimulus here. And then within bailouts, we need to distinguish between the auto bailout and the financial sector bailouts.  So, starting with bailouts. The problem comparing the two bailouts is that social justice considerations and economic considerations point in different directions here …

On stimulus, I think that how well this turns out will ultimately hinge to some extent on the success of the programs. In principle, the stimulus spending—which largely goes to infrastructure, to education, and to health care—ought to greatly facilitate economic transition to the kind of “creative” economy Florida’s envisioning. To the extent that that money winds up wasted on programs that are ineffective we will have bought short-term demand at the price of stalling on long-term adjustments. I’d still say that’s a price worth paying, all things considered, but obviously it’s a good deal worse than a scenario in which these investments turn out to pay off in the long-run in the form of a healthier, better educated population able to move on better transportation and take advantage of faster broadband.

Little to take issue with here. His commenters raise the larger and critically important question of how to fill the gap in high-paying, stable, high-quality jobs for folks without, say, college degrees or who are not members of the creative class.

Max writes:

People like Florida have been arguing for trashing the industrial base so long, they don’t seem to notice that, absent finance, we got nothin’… and certainly no employment for the Richard Florida’s of the world.

First things first: I’m not now nor have I ever been anti-manufacturing, anti-industrial base, or anti-working class. My first book with Martin Kenney was entitled The Breakthrough Illusion: Corporate America’s Failure to Move from Innovation to Mass Production (Basic Books, 1990); my second also with Kenney, Beyond Mass Production (Oxford, 1993) summarized the findings from our large-scale study of leading-edge Japanese manufacturing techniques and how Japanese transplants factories like those of Toyota, Honda, and their suppliers were able to successfully build cars in America with American workers. John Krafcik’s study of the GM-Toyota joint venture, NUMMI, showed how GM’s hubris prevented it from learning much about Toyota’s revolutionary production system. Toyota took great advantage – NUMMI became a “laboratory” for how it could produce cars in the States using unionized UAW workers. Then there’s the story of the fit Lee Iacocca threw after recieving a commissoned study of the Japanese transplants – flinging the document against the wall, stomping his feet, and screaming more or less: “They want us to give up our private lunch room and eat with the workers and our own parking spots, the hell with that.” Nuff said.

I have long said that the inspiration for my theory of the creative economy isn’t hip cities, or gay neighborhoods, or even Apple or Google. It comes from my early, ground-level studies of Toyota where top management essentially told me more than 25 years ago: “We will win and the Big Three will lose. The problem is in your heads and the way you manage. You think the key to success is having a big-shot CEO,  lots of engineers, and scads of high-priced MBAs. We know better. The key to our success lies in mobilizing the collective knowledge, intelligence, and creativity of our factory workers.” Time sure seems to have proved them out. And as I have recounted many times, these are more or less the same words my own father – a factory worker of more than 50 years - told me about the plant he worked in.

Josh G. gets to the nub of the matter:

The problem with a “creative economy” is that it doesn’t have any answer about what to do with the large segment of the population that are non-college graduates. Only about 25% of the adult working population has a Bachelor’s degree or higher. Let’s say that we could double that without watering down standards if we put a lot more money and effort into elementary education, reducing child poverty, cheaper college, removing all the lead paint from the slums, and so forth. Great. That still leaves half the population without a degree. What do they do in the “knowledge economy”? The unspoken answer is that they become low-paid servants. In the long run, I don’t see this as being sustainable.

Some people, for various reasons, are simply not intellectually and/or temperamentally suited to a college education. We as a society need to provide these individuals with employment opportunities that allow them to live in dignity and raise families. The old manufacturing economy did this very well. The new “knowledge economy” – not so much.

Two things here. First, the creative class is a broader category than college-educated people. The creative class accounts for 40 million jobs, roughly a third of our workforce – that’s in-and-of-itself bigger than the share of college-educated people in the adult population. And, as my colleague Charlotta Mellander has found (albeit for Sweden), while nine in 10 people with college degrees work in creative class jobs, half the jobs in the creative class are done by workers without such degrees. In fact, it’s why I came up with the concept of  creative class in the first place – I wanted to examine economic growth not just by looking at education level or “what people learn,” but by zeroing in on the actual jobs they do.

Second, the creative economy is made up of three great classes – not two. In addition to the creative class (roughly a third of the workforce and half of all earnings) and the working class (between a fifth and a quarter of the workforce) is the biggest class of all – the service class, with more than 40 percent of all jobs. These are jobs in food prep, retail trade, and the like. They are mainly low-skill and low paying – the lowest paying of all. Creative class workers make twice what working class people make, but three times what members of the service class make. While working class work is relatively stable, and is made up of a lot of  family-supporting “men’s work,” much of the service class work is unstable and concentrated among less-advantaged groups, women, and single-headed households.

So, we can keep wishing and hoping for manufacturing and working class jobs to come back – and trying to breathe life back into them or protect them. Or we can try another route.

We can work to make service jobs better, more stable, more innovative, and higher-paying jobs. Roger Martin and I outline such a strategy in our recent report to the McGuinty government, Ontario in the Creative Age.

It’s doable, actually. We did it once before – by turning a huge number of manufacturing jobs from ”bad” jobs (the kind Marx liked to impugn capitalism for, or what William Blake dubbed “satanic mills”) into the “good jobs” we bemoan losing. This was a big part of the New Deal – the Wagner Act specifically - which made it easier for workers to form and join unions and to bargain collectively. This ultimately helped to accelerate the transformation of factory jobs from low-paying, unstable, subsistence-level work into much higher-paying, stable, family-supporting work. As scholars of post-war “fordism” have shown, it was this mass increase in working class wages which was a key structural force behind mass prosperity.

My factory-worker father told me as much as a young boy: When he started working in the factory at 13 years of age, it took all nine members of his immediate family - my grandfather, my grandmother who worked in a Newark bakery, my dad, and his six brothers and sisters to make a single living wage. But upon returning from infantry service in World War II, all that had changed. Somehow, as if by magic, his bad job had turned into a good one – complete with high wages, good benefits, and stability. It paid enough so my mother could quit her job, they could buy a house, put us through Catholic school, and ultimately through college.

Manufacturing jobs are not pre-ordained as good jobs. We made them good jobs – through worker struggle, public policy change, and massive institutional innovation.

The same kind of thing can – and must – be done with today’s largest class of service jobs. These are the low-skill, port-of-entry analog to the factory jobs of the past. Service jobs come with an added bonus. Many of them are strongly rooted in place and virtually impervious to off-shoring. Whether it’s preparing food, waitering, or cutting hair a huge number of service jobs must be done in-person. That’s why they call them “personal services.”

We can use the same basic principles of the best manufacturing work distilled from quality manufacturing and the Toyota Production system - work teams, worker engagement and involvement, and continuous improvement - to upgrade service work, make it more innovative and productive, and ultimately higher-paying, more stable, and better. Heck, given the massive and geographically uneven hit to manufacturing employment, men are losing their jobs at a much faster pace than women, and many women in service and care-giving occupations have become their family’s main bread-winners.

So Josh G. is right to a point: Left to its own devices without policy change and institutional innovation, our economy will become more and more divided between a creative class elite and “low-paid servants.” But that’s not our only choice. We have a huge opportunity to transform the growing mass of service jobs  into better, more innnovative, more engaged, more dignified, and higher paying forms of work. We did it 70 years ago for manufacturing work. We can surely do it again.

For the life of me, I cannot understand how and why, across the entire the entire United States, there is near-complete silence on the need to upgrade service work. Tomorrow, President Obama should call for a national summit on improving service work bringing together leading companies in the U.S. and across the world from Whole Foods to Starbucks and Ikea who are already doing this. The opportunity, as my mother was wont to say, is “as clear as the nose on your face.”

I’ll have much more to say on how in the future, but for now I’d love to hear what you think.