Archive for July, 2009

Kwende Kefentse
by Kwende Kefentse
Thu Jul 30th 2009 at 4:18am UTC

What’s in a scene?

Thursday, July 30th, 2009

After writing an article about a local catalyst in a beautiful online publication called Dharma Arts, and especially after this past weekend’s successful House of Paint festival, some thoughts on the function of scenes have coalesced a bit more clearly. Both the occasion of writing the piece and participating in the festival were an opportunity to meditate on the words of Lawrence Rothfield, who spoke at the Martin Prosperity Institute earlier in June at the inaugural Placing Creativity conference. In his presentation about the city of Chicago’s cultural scenes he posited a very interesting hypothesis: that cultural scenes might be more powerful attractors/retainers of talent than creative industries. Seems simple, but this recognition can be a game changer.

The employment paradigm has shifted such that jobs follow talent just as much as talent follows jobs. In both cases, place has become more important because in both cases choosing it has become so fluid – there really has to be something particular about a given place for talent or jobs to settle and stay. An over investment in job creation without a balanced cultural investment can create a bubble/vacuum effect wherein creative class types are drawn in by the prospect of being professionally engaged, but aren’t incentivized to put down roots. Ottawa is an interesting place in that it has “creative class stabilizers” – three levels of government employment and 4 post secondary institutions. Still, even if there is a consistent flow of talent, it might not affect the economy that much in a quantitative way but it will inevitably affect the quality of place. In the pre-digital era connectivity and affinity through institutions like sports clubs, churches, or job related groups seemed to be sufficient, but increasingly these days people are more interested in being engaged as individuals. The flexible accumulation that the media environment has afforded us often means that the diversity of individual interests in a given area outpaces the scope of local institutions.

Local scenes are comprised of individuals who are willing to fill that gap by aggregating interest – usually at a place (read: venue) or series of places. I don’t think that the value or role of these people and these places can be understated within the creative economy ecosystem. Without them, the best that any given place can be is what Steven Johnson would term a “swarm without logic” – a group that could be greater than the sum of its parts but lacks the connectivity to realize it. Without active scenes though, talent can only be narrowly engaged along lines of official employment, and the net benefit of that talent can only be narrowly experienced by the region. Considering the fluidity of talent and jobs, creative industries may be the visible tip of the iceberg that signal security to talented people, whereas creative scenes might represent the larger underside that help catalyze that talent, cross-pollinating the emerging creative economy.

Has any particular scene in your city/town affected your quality of life? How is it related to that place? What type of scene activity would support an ideal employment situation for you? Considering that the aggregation of individual interests outpaces institutional reaction time as it does, how can institutions be more supportive of scenes and help to facilitate the emergent culture that is critical to retaining talent?

La musique.

Richard Florida
by Richard Florida
Wed Jul 29th 2009 at 10:00am UTC

Housing and the Crisis, Part IV

Wednesday, July 29th, 2009

Yesterday, we looked at the relationship between housing prices and income. Today, we turn to the relationship between housing prices and wages. Wages are a useful way to gauge regional housing prices because they only count money that is earned by doing work. Income, on the other hand, counts any and all earnings from investments, interest, dividends transfers, and other sources.

The graph below plots housing prices in 2009 against wage levels for 2008 (the most recent data available).

There is a clear, positive, linear, and significant relationship between wages and housing values – the correlation is 0.71 and the R2 0.51. Metros above the fitted line had higher housing prices than wages relative to national levels, while those beneath the line had lower than expected housing prices.

Near the top we see many of the same regions as in yesterday’s analysis. Honolulu is once again the greatest outlier, with housing prices exceeding wage levels with a differential of $384,290. Metros in California once again play a prominent role at the top of the list, including San Diego ($87,365), Los Angeles ($63,340), and San Francisco ($60,148). New York also registers a substantial differential of $76,896; Miami ($46,128) also has a considerable differential.

On the other hand, there are metros where housing prices were less than their incomes would predict based on the national trend. In Decatur, IL, for example, housing prices were $131,344 less than what its wage level could support based on the national trend. In Michigan, both Saginaw ($123,140) and Lansing ($119,334) had differentials over $100,000, as did two Ohio cities, Akron ($105,447) and Cleveland ($105,386). Atlanta ($86,079), Washington, D.C. ($65,446), and Dallas ($51,896) all had differentials of greater than $50,000, while Houston ($48,874), Chicago ($48,794), and Boston ($42,834) all had differentials of greater than $40,000. The difference was more modest in Philadelphia ($20,520). We’ve again omitted Detroit because it failed to report housing price data for 2009.

Richard Florida
by Richard Florida
Wed Jul 29th 2009 at 9:49am UTC

Quote of the Day

Wednesday, July 29th, 2009

“Make no mistake, Jacobs is the hero of this yarn. But in the epilogue, Flint addresses our ever-changing urban dynamics, where Jacobs’ quest for “thoughtful citizen involvement” has morphed into “all-powerful neighborhood residents, who seek conditions to stay exactly as they are and reward politicians who agree with them.”

From John King’s review of Anthony Flint’s, Wrestling With Moses: How Jane Jacobs Took On New York’s Master Builder and Transformed the American City.” (via Planetizen)

Richard Florida
by Richard Florida
Tue Jul 28th 2009 at 10:30am UTC

Housing and the Crisis, Part III

Tuesday, July 28th, 2009

The past couple of days, we’ve looked at the relationship between past and current housing prices. We saw that there are some regions where housing prices have fallen more than what might be expected based on national trends, while prices have declined considerably less than expected in others.

Today, we shift gears looking at the relationship between housing price and incomes. The graph below compares median housing prices in 2009 to income per capita levels in 2007 (the most recent figures available).

Housing prices and incomes are closely associated with one another: The correlation coefficient is 0.68 and the R2, 0.46. Metros above the fitted line have housing prices that are higher than their incomes relative to the national trend, while those below the line have housing values that are less than what their incomes would predict relative to the national trend.

In Honolulu, for example, the differential was a whopping $371,777. Almost half of the top 10 regions are in California. In San Jose the differential is $120,134, San Diego ($106,625), Los Angeles ($103,278), and San Francisco ($59,633). The differential was also in the Pacific Northwest – Portland ($74,490) and Seattle ($60,848), as well as Salt Lake City ($77,526) and New York ($93,900).

On the other hand, there are metros where housing prices were significantly less than their incomes would predict based on the national trend. In Bridgeport, CT, for example, housing prices were $151,460 less than what its income level could support based on the national trend. In Cape Coral, FL, the figure was $110,460. This was also true in Rustbelt regions like Akron ($106,692) and Cleveland ($105,130) which had differentials greater than $100,000. There were also considerable differentials in two Texas cities, Houston ($93,586) and Dallas ($58,602). In addition to this, Atlanta ($50,166), Chicago ($30,337), Philadelphia ($18,699), and Washington, D.C. ($17,280) all had housing prices that are less than their incomes would predict based on the national trend. We’ve omitted Detroit because it failed to report housing value data for 2009.

Richard Florida
by Richard Florida
Sat Jul 25th 2009 at 10:30am UTC

Failed States and Development

Saturday, July 25th, 2009

Earlier this week, Foreign Policy released the latest edition of its Failed States Index (via Daily Dish’s Patrick Appel). It’s based on a database of 12 indicators of state cohesion and performance for 177 nations. So my colleague Charlotta Mellander decided to compare it to our Prosperity Institute economic development database which has a wide range of indicators for output, productivity, human capital innovation, life satisfaction, human development, and economic structure. The findings, while not particularly surprising, are nonetheless interesting. FP asks:

“[W]ho (or what) is to blame when things go bad—corrupt leaders, dysfunctional societies, bad neighbors, a global recession, unfortunate history, or simply geography itself? ”

The simple answer that comes from our analysis is development – or lack of it. Failed states not only fail on state cohesion and performance, they also fail on measures of economic development from output or GNP per capita and total factor productivity to human capital, life satisfaction, and more. And failed states apparently lag badly on the transition to knowledge-driven, creative economies.

Richard Florida
by Richard Florida
Fri Jul 24th 2009 at 10:00am UTC

Chart of the Day

Friday, July 24th, 2009

The U.S. economy has shed 7.2 million jobs since the onset of the recession. But the economic pain of unemployment has not been spread equally, according to a new analysis by my colleagues at the Martin Prosperity Institute.

The graph below, compiled by Ulrich Atz, tracks the unemployment rate for three broad groups or classes of employment – the working class, the service class, and the creative class from 1971 to May 2009.

The report finds that:

Unemployment for all three groups has spiked since the onset of the recession.  But the downturn has hit hardest on working class. . . The working class has been hard hit by every downturn since 1971. Working class unemployment spiked from 6.2 percent in 1973 to 14.5 percent in the 1975 downturn.  It spiked again from 7.7 percent in 1979 to 16.8 percent in 1983.  It reached 12.0 percent in 1992.

In contrast, the unemployment rate for the creative class has hardly ever reached the 4 percent mark.  Unemployment rates among the working and service class are typically about 3-4 and 2-3 times respectively the rate of those in the creative class.

A closer look at monthly data (available starting in 2000) reveals that unemployment rates among the working and service classes typically move together while creative class unemployment lags the other two by several months.

The full analysis is here.

Zoltan Acs
by Zoltan Acs
Thu Jul 23rd 2009 at 4:45pm UTC

The “Creativity Crisis” in Industrial Cities

Thursday, July 23rd, 2009

Creativity is changing the way in which cities approach economic development and formulate policy. Creative metropolises base their economic development strategies, at least partly, on building communities attractive to the creative class worker. While there are countless examples of high-tech regions transforming into creative economies, traditionally industrial cities have received much less attention in this regard.

In a recent article with Monica Megyesi, we study Baltimore to assess the potential of transforming a traditionally industrial region into a creative economy. It analyzes Baltimore’s performance on dimensions of talent, tolerance, technology, and territory both as a stand-alone metropolitan area and in comparison to similar industrial metropolises.

This case study concludes that Baltimore has the opportunity to capitalize on the creative economy because of its openness to diversity, established technology base, appealing territorial amenities, and access to the largest reservoir of creative talent in the USA: Washington, D.C.

While a decade ago it seemed that you can transform an industrial city, today it looks bleaker than ever. Baltimore is a case in point. The rise of the creative class and the international creative class has driven a wedge between the members and nonmembers of the creative class. The evidence is to be found in the rise in inequality in income and wealth.

Without resetting the goal posts to create opportunity, America faces an uncertain future. It appears that without investing in the education and training of the non-creative class, the U.S. is on a long-run decline. How we reform, invest, and deliver educational services remains one of the most daunting challenges for the U.S. in the 21st century.

Richard Florida
by Richard Florida
Thu Jul 23rd 2009 at 10:00am UTC

Housing and the Crisis, Part II

Thursday, July 23rd, 2009

Yesterday, I compared 2009 housing prices to their 2006 baseline. Today, I turn to the change in housing prices. The graph below plots the percentage units change in housing prices between 2006 and 2009 against the 2006 baseline price.

There is a significant relationship between the two. The slope is steep, with a correlation of  -0.42 and the R2 of 0.19. Metros above the line have seen drops which are less than would be expected based on national trends, while those below the line have seen drops in excess of the national trend. The numbers in parentheses are the percentage difference between the actual and predicted values.

Under-performers: These are regions where the decline in housing prices has been greater than predicted based on the national trend. The biggest losers are metros in the Sunbelt and Rustbelt. In Cape Coral-Fort Myers, FL, for example, housing prices have declined 47.3 percent more than expected based on the national trend. For Akron, OH, the figure is 44.9 percent; Lansing, MI (-39.6 percent); Cleveland, OH (-35.4 percent); Grand Rapids, MI (-33.9 percent); Phoenix, AZ (-31.7 percent); Sarasota, FL (-29.7 percent); Riverside, CA (-29.3 percent); Toledo, OH (-29.3 percent); Palm Bay-Melbourne, FL (-29.1 percent); Sacramento, CA (-28.8 percent); Canton, OH (-28.3 percent); and Las Vegas, NV (-28.2 percent). Miami (-18.56 percent), Atlanta (-18.05 percent), Chicago (-11.72 percent), Los Angeles (-10.07 percent), and Washington, D.C. also performed worse than expected.

Over-performers: There were again a series of regions that performed better than the national trend. These are places where housing prices have held up better than expected based on the national pattern. In Honolulu, HI, for example, housing prices remain 31.1 percent above what could be expected based on the national pattern. Cumberland, MD, a suburb of Washington, D.C., has held up 30.4 percent better than expected. In Salt Lake City, UT, the figure is 29.8 percent; Bismarck, ND (26.2 percent); Beaumont-Port Arthur, TX (25.9percent); Farmington, NM (25.7 percent); Binghamton, NY (24.2 percent); Columbia, MO (22.4 percent); Raleigh, NC (21.3 percent); and Austin, TX (19.7 percent). New York (11.3 percent), Philadelphia (7.4 percent), Houston (6.37 percent), and Dallas (+4.2 percent) also performed better than expected.

Zoltan Acs
by Zoltan Acs
Thu Jul 23rd 2009 at 9:57am UTC

Immigration, What’s the Big Deal?

Thursday, July 23rd, 2009

It’s my pleasure to announce the release of a new study of immigrant entrepreneurs in the U.S. high-tech sector, which I co-authored with David Hart and Spencer Tracy. The central finding of the study is that about 16 percent of the nationally representative sample of high-impact, high-tech businesses that we surveyed count at least one foreign-born person among their founding team.

Only about three percent of the founders of high-impact, high-tech companies are foreigners (60 out of 2034). 97 percent are U.S. citizens, and specifically 87 percent are U.S.-born, while the other 10 percent are naturalized U.S. citizens. Furthermore, most foreign-born founders lived in the US for decades.  These founders are statistically very similar to the average U.S. population in terms of birth and immigration status.

An interesting but unanswered aspect of the study is how these high-tech immigrants (many not new), part of the international creative class, help integrate U.S. business in a post-American world? Do they as some have claimed strengthen America in a post-American world, or is it a non-issue? If they strengthen our connection to the rest of the world through “brain circulation” is the flight of the creative class not a major public policy issue?

A second issue has to do with closing the borders. If America closed the borders to high impact entrepreneurs, would its own citizens fill the breach? Would more students become better high school students and go on to college and graduate school in engineering and the sciences? This is a much more difficult question to answer, but is again at the heart of public policy today.

David Eaves
by David Eaves
Thu Jul 23rd 2009 at 7:55am UTC

Creating the Open Data Bargain

Thursday, July 23rd, 2009

Embedded below is the talk I’ve given to both community hackers (at Open Web Vancouver) as well as City of Vancouver Staff regarding the opportunities and challenges around open data and the open motion. (Here’s an update on where Vancouver is at.)

For those willing to brave through the presentation (or simply fast forward to the end), one piece I felt is most important is the talk’s last section which outlines what I term “The Bargain” in a reference to the informal contract Clay Shirky says exists between every Web 2.0 site and their users.

The bargain comes last, because it matters only if there is a promise (open and shared data) and a set of tools (applications languages) that are already working together. The bargain is also the most complex aspect of a functioning group, in part because it is the least explicit aspect and in part because it is the one the users have the biggest hand in creating, which means it can’t be completely determined in advance… A bargain helps clarify what you can expect of others and what they can expect of you.

- Clay Shirky in Here Comes Everybody (my italics, page 270)

I believe that in an open city, a similar bargain exists between a government and its citizens. To make open data a success and to engage the community a city must listen, engage, ask for help, and of course, fulfill its promise to open data as quickly as possible. But this bargain runs both ways. The city must do its part, but so, on the flip side, must the local tech community. They must participate, be patient (cities move slower than tech companies), offer help and, most importantly, make the data come alive for each other, policy makers, and citizens through applications and shared analysis.