Creative Class

Economists and geographers have looked at the role of scale economies in shaping industries and also in the the clustering or agglomeration of economic activity. Princeton University economist William Baumol identified the role of economies of scope – for example, when large companies leverage shared research and development or marketing capabilities across their product lines or even used the same assembly lines to make different products. The theory of scope economies has been influential in economics and business studies but has not really been applied or discussed in economic geography or regional terms.

A new study with my Martin Prosperity Institute colleagues Charlotta Mellander and Kevin Stolarick explores the role economies of scope in shaping geographic outcomes, advancing a concept we call geographies of scope. Here’s the abstract: (more…)

Check out this chart (via Calculated Risk) based on the newly released Case-Shiller Home Price Index. The Index was up in April. But what I find most interesting is how much cities and regions vary in the way they were hit by the housing bubble and subsequent collapse. The numbers speak for themselves.

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One of the most frequent questions I’m asked is: How can rural areas best cope and thrive in the increasingly spiky creative economy?

New research by economists David McGranahan and Timothy Wojan of the U.S. Department of Agriculture and Dayton Lambert of the University of Tennessee provides some new and important insights. Their study, entitled “The Rural Growth Trifecta: Outdoor Amenities, Creative Class and Entrepreneurial Context,” published in the July 2010 issue of  the Journal of Economic Geography looks closely at the economic forces that are acting on rural areas and the local assets these areas can use to most effectively respond to these forces and spur development and prosperity. Rural areas can no longer depend on manufacturing branch plants as a source of jobs and growth, but rather can work to bolster local amenities, spur entrepreneurship, and enable the creative class to generate jobs and growth.  Their main conclusion is that amenities matter a lot to rural development.  Here’s the abstract for the study: (more…)

That’s the title of my column in the Sunday New York Times Business Section.

When I was growing up, there was a strict line between work and life. Every morning, my dad downed a bowl of cereal and a cup of coffee and drove his Chevy Impala from our home in North Arlington, N.J., to the eyeglass factory in the Ironbound section of Newark, where he worked…

Over the past couple of decades, a new way of working and a new kind of workplace have evolved…

The trend has spread to the point that our lifestyles and our work styles are becoming increasingly blurred. Though my factory-worker father might not have believed it, those people you see hunched over their laptops in coffee shops and thumbing instant messages on their BlackBerrys as they walk through the park are actually working.

The full column is here.

Families are coming back to the city according to this New York Times report. Big apartments – with three to five bedrooms – are all “the rage,” says the Times, as families rediscover New York City living. Money quote:

“The new Bergen County or Westchester County is now the West Village and the Upper West or Upper East Sides,” Darren Sukenik, a managing director at the New York real estate firm Prudential Douglas Elliman, told the Times. “Big families are back, and nobody wants to move to suburbia. It’s the antithesis of what our parents did.”

Long-established trends in the growth and decline of  America’s cities appear to be shifting according to new Census data released Tuesday. The data cover population trends for cities – that is, incorporated areas – from 2000 to 2009, and also for the immediate post-economic crisis period spanning July 2008 to July 2009.

Some major cities, which had long seen population decline, registered population gains. Chicago, for example, saw its population increase by 0.8 percent, its fastest pace of the decade, while New York expanded 0.5 percent, continuing gains in recent years. Other cities, notably many Sunbelt cities that had long seen rapid growth, saw their gains slow considerably for the first time in modern memory.

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The Case-Shiller Home Price Index projects slow growth in house prices for the next four years or so. The chart below (via The Wall Street Journal) tracks the Case-Shiller Index from 2000 through 2014.

After a slight uptick, the index is projected to decline again by about 1.4 percent this year. The cumulative increase for the next five years is projected to be 10.5 percent – or about 2 percent a year. This will make up about a third of the total loss (28 percent) from peak housing values in 2006.

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At the heart of effective economic development is regional cooperation. In 2004, the Department of Labor launched WIRED Initiatives across the U.S. to improve regional efforts for talent development and effective economic development strategies. For over a year, leaders from the Wired65 region, an area spanning 26 counties and two states, have been been working to improve the area’s economic competitiveness and quality of life.

For this feature in our Creative Capstones series, we interviewed Debbie Wesslund, program manager for the Wired65 region, about the area’s efforts to launch Kix.com – The Kentucky Indiana Exchange, an interactive community platform to facilitate networks for employment opportunities and discussions about regional challenges.

Creative Class Group (CCG): Tell us about Wired65. What communities make up the region?

Debbie Wesslund: Wired65 is an initiative that brings together civic leaders in a 26-county, bi-state area around the need to support its human capital – or “talent.” This region is anchored by the Louisville, KY MSA and the Elizabethtown, KY MSA. The Ohio River divides the states of Indiana and Kentucky, but the economy reaches across county and state lines, forming a region with a strong sense of place and sharing talent. (more…)

My interview with the New York Post’s Brian Moore.

To Richard Florida, calling today’s economic woes the “Great Recession” doesn’t begin to describe the tectonic forces at work. This is not simply a time when jobs are hard to find, says the urban theorist and best-selling author, who also runs the Martin Prosperity Institute at the University of Toronto’s management school. Unlike previous downturns, such as the ones that kicked off the previous three decades, he believes today’s recession is a “great reset” that will fundamentally change the work we do and the way we do it.

“Great resets are mechanisms by which technologies change, productivities improve,” says Florida, whose latest book — titled, yes, “The Great Reset” — describes current and past transformations in American society. “But most important, they’re shifts in the way we live and work.”

Read the full piece here.

Is America’s system of homeownership just a mirage?

That’s the question Wall Street Journal economics editor David Wessel asks. The graph below compares the the peak homeownership rate, the current rate, and the percent of homeowners with positive equity for 10 of the largest U.S. metro regions. Less than half of homeowners have positive equity in their homes in eight of 10 of these metros: In Las Vegas, the figure is less than 20 percent.

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