Creative Class

Class is a word that elicits strong, and sometimes strange, reactions from many Americans. Once a powerful construct understanding economies and societies, class has been all but banished from the lexicon of social scientists and from the public conversation.

It’s time we put class back in the center of our vocabulary, especially so during this ongoing economic crisis and reset. The impacts of the crisis have been extremely uneven by class – hitting hardest at the industrial working class and their communities.

Over the coming week, I’ll be posting on that, and also on the powerful effects of class on the wealth, innovativeness, and happiness of nations, drawing on a variety of statistical analyses conducted with Charlotta Mellander and my Martin Prosperity Institute colleagues.

We define class simply by peoples’ position in the economy - not by perceived status, level of income, or what we consume, but by the kind of work we do. Conveniently, the U.S. Bureau of Labor Statistics keeps detailed statistics on the myriad occupations that make up the U.S. economy.

We identify three core classes:

The working class who work in production, transportation, construction, and related jobs.

The service class who work in jobs like food prep, grounds cleaning, building maintenance, personal care, administrative offices, and community, social, and protective services.

The creative class of scientists, engineers, and entrepreneurs; artists, designers, media types, and entertainers; and knowledge-based professionals in management, health care, education, and related fields.

I’ll report on the relationship between class and various social and economic outcomes over the next several days, starting with the relationship between class and economic output tomorrow. On Wednesday we turn to class and technological innovation; class and entrepreneurship on Thursday; and class and the happiness of various nations on Friday. Along the way, I’ll also post on the uneven ways that recessions impact different classes, and relationship between class and unemployment, among other things.

Stay tuned.

Wednesday morning I went to visit Toronto City Hall to address the city’s economic development committee on how to best position in light of the economic crisis. I didn’t think it would be a newsworthy event, but guess what…

The National Post opens with my favorite headline in a a long while: “Richard Florida goes to City Hall quotes Karl Marx.” Here’s the story:

Quoting Karl Marx, cab drivers and his factory-worker father, celebrity intellectual Richard Florida went to Toronto city hall today to tell councillors that improving the lot of service-sector workers is key to the city’s prosperity.

Toronto’s economic development committee invited Prof. Florida, an American academic and author now at the University of Toronto’s Rotman School of Management, to enlighten on the way out of the current global financial crisis.

Although Prof. Florida’s emphasis on the creative class – workers in intellectually driven fields like the arts, technology, film, communications, engineering, science and research – have drawn criticism for being elitist, today he focused on a different class of worker. He compared the situation of workers from the hotel, restaurant, retail and customer service sectors to the lot of exploited factory workers at the turn of the 20th century.

Because of their outsized presence in Toronto’s workforce, he posited that improving their incomes, work conditions and happiness could be the key to Toronto’s future prosperity – just as the rise of the unionized labourer became the foundation of the middle class in post-war North America. “Those jobs are local and hard to outsource offshore,” he said. “We really, really, really have to think about how to upgrade that work.”

After his presentation, the committee decided to request a report from city staff on a possible creative stimulus package – to nurture the growth of creative industries – and to hold a summit with service workers in the fall…

Prof. Florida noted he doesn’t like the words “crisis” or  “depression” or even “recession” to describe the current downturn. He prefers the term “great reset” – which he coined and will appear in a forthcoming book…

Prof. Florida encouraged the metropolis to think even further afield. The axis of Montreal, Ottawa, Toronto Waterloo and Chicago is what he called a “mega-region” that has the potential to be a world powerhouse. Toronto and Waterloo – a hotbed of technological and scientific discovery – are natural partners in particular, Prof. Florida said.  Waterloo has the ideas that lead to upstart industries with the help of venture capital, he said, while Toronto is the kind of place those knowledge industry professors want to locate.

The Toronto Star picks up on the “creativity stimulus.”

Stimulus plans for building roads and sewers are fine recession projects, but Toronto could use a “creativity stimulus” package, too, says urban guru Richard Florida. Florida, who has argued that attracting and nurturing a “creative class” is a key component to building successful cities, appeared before Toronto’s economic development committee today.

“Why not consider us the first city that does a creativity stimulus?” Florida asked councillors …  “Why not think about a creativity stimulus, and not just for advantaged people, but for all people?” he asked. “What about giving all those young people who want to use their creative energy and talent a way to do it?  “That is as important as physical infrastructure building, and maybe over time more important – especially for young kids; especially for kids who may be getting dis-attached from school.”

Toronto has paid a lot of attention recently to big institutions such as the art gallery and museum, he said, but creative people need support, just as the institutions do.  Toronto should be thinking about “creativity incubators,” as it does about business incubators, he said. Business incubators generally provide start-up businesses with cheap space and expert advice, often giving them a boost before they’re turning a profit.

Councillor Kyle Rae (Ward 27, Toronto-Rosedale) hailed Florida’s idea, and asked staff to research the idea. He said the city might consider giving a boost to creative residents in Toronto’s priority neighbourhoods – areas of low income and high unemployment.

UPDATE: The always insightful John Barber of the Globe and Mail provides intriguing perspective.

In this economy, many organizations engage in downsizing as a cost-cutting measure or a means of increasing productivity. Apparently, such programs have mediocre rates of achieving the goals set by the downsizing.

In a Watson Wyatt survey (according to an article by Bob Nelson, Ph.D and author of the intriguingly entitled book, Managing for Dummies):

• Only 46 percent of companies who downsized met their expense reduction goals.
• Only 33 percent met profit objectives.
• Only 21 percent enhanced shareholder return-on-investment by doing so.

Nelson’s article goes on to say that because downsizing isn’t typically effective at meeting corporate needs, one round of layoffs tends to beget more. (This would suggest that if your employer has recently done a round of layoffs, you should probably dust off the resume and start updating.)

Downsizing tends not to help companies improve or return to profitability because they don’t take into account the perspective of (top) employees, according to Nelson. Here are a few traps employers can fall into:

• Believing survivors will be thrilled just to have jobs, and will forgive anything else.
• Believing that if anyone subsequently quits, it will be the weak and poor performers.
• Assuming that employees take what management is saying at face value.

Having been at a company that collapsed during the dot-com crash, and another that downsized following the 1991 recession, I recall management making all of these incorrect assumptions, and more.

As corrective advice, Nelson stresses the need to communicate excessively with employees during any downsizing and involve them directly in decisions. He also points out that lots of praise and recognition is free and goes a long way.

As the creative economy flattens hierarchies in day-to-day activities, any situation that creates an “us” versus “them” mentality would be especially toxic to productivity and longevity. Conversely, getting everyone involved might present some alternative solutions.

Is your organization looking for alternatives to downsizing? Or falling into the traps described by Nelson?

Richard Florida will address the economic impact of the creative class on Thursday, April 23, at The Johns Hopkins University Applied Physics Laboratory’s Kossiakoff Center in Laurel, Maryland. The event is sponsored by the Howard County Economic Development Authority. Said Pam Klahr, president and CEO of the Howard County Chamber of Commerce:

“The chamber is delighted to present this internationally acclaimed author and innovator to our community. Working with this diverse partnership to assure that we reach all segments of the county for this unique opportunity has been exciting.”

Richard’s message is critical to Howard County as the community develops plans for Columbia’s Town Center.

How has the rise of the creative class impacted your community?

In a recent issue of the American Interest related to The Ends of Growth, we argue that, “Our focus on economic growth is misplaced and our leaders’ conception of the U.S. economy is misplaced. No wonder were in such a mess.” Defining Prosperity suggests that both republicans and democrats have an outdated understanding of our political system. The republicans have an absence of principle and the democrats have an obsolescence of purpose.

The next America needs to have an understanding of what America is. Economic growth, or its absence, is merely an indicator on the dashboard of our ongoing national journey. The engine that propels American capitalism forward is entrepreneurship; the fuel is opportunity; the work of foundations recycles the energy of society, making progress and widespread prosperity sustainable.

This century – the global century – will rest on sustainable development in global cities driven by entrepreneurs and fueled by venture capital. However, what will make this happen is the reconstitution of wealth on a global scale the likes of which has never been seen.

Wealthy individuals from around the world will have to learn from the American model that entrepreneurship leads to wealth, wealth needs to be given back to create opportunity for the next generation. The entrepreneurship-philanthropy-opportunity cycle is the inner dynamic of American capitalism and the source of its prosperity. The strengthening of it in the global economy is our most important job today.

Writing in The Nation, Jeff Chang makes a powerful case for it.

“[T]he creativity stimulus” goes far beyond job creation and even economic development. Culture is not just something conservatives wage war on. The arts are not just something liberals dress up for on weekends. Creativity can be a powerful form of organizing communities from the bottom up. The economic crisis gives us a chance to rethink the role of creativity in
making a vibrant economy and civil society. Artists as well as community organizers cultivate new forms of knowledge and consciousness. One of the unsung stories of the past twenty-five years is how both have used creativity to inspire community development and renewal. Creativity has become the glue of social cohesion in times of turmoil.

He notes that creativity was a key hinge-point of Obama’s victory and that a creative communities approach is transformational, post-partisan, and progressive.

Deeply rooted in the communities that made Obama’s victory possible, these centers understand their work as transformational. Their communities are the most vulnerable to assaults on creativity, but they are also incubators of the most innovative ideas and movements of our time. This “creative communities” approach has created a vigorous and vital alternative to neoliberal and neoconservative versions of change.

I could quibble and say that Chang is mistaken when he refers to me as a “boom era theorist” uncritically reflecting the framing of my argument (largely by social conservatives) “as attracting new chai latte-sipping bourgeois into decaying parts of town.” Rather the core principle of my work is that every single human being is creative.

But Chang’s writing in The Nation is too important to get bogged down in that. I’m ecstatic that the  progressive left is beginning to see the value of creativity to connecting people and building the broad cross-class, cross-race, and cross-cultural cohesion so critical for broad social and economic transformation. I agree broadly with Chang’s argument. Creativity is key to our economic and social future; it’s the basic building block that ties us together; it is the way to upgrade and improve working and service class jobs. It provides a whole different road-map to a broad and shared prosperity beyond backward-looking bailouts and stimulus plans.

Perhaps, we’re beginning to see a turning point in the conversation about our economic future.

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.

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?

Adam Smith in the Wealth of Nations suggested over 200 years ago that what makes us human was the fact that we exchange. Dogs do not. Well, today we know that sometimes animals do exchange according to an article in a recent issue of the Economist Magazine (February 21, 2009 p. 80).

In a recent book, Richard Wrangham, an anthropologist at Harvard University believes that what makes homo sapiens unique is that their food is so often cooked. In a new book Catching Fire he explains that what makes us truly human is cooking food. We are the only species that cooks food. But what is really interesting is that cooking, especially meat, is what led to our big brains. Without cooking the human brain, which consumes 20-25 percent of the body’s energy, could not keep running. Without cooking, raw food cannot feed the brain. Cooking softens food and makes it easier to digest so even the tough stuff is easy to use. Cooking also increases the food digested in the small intestine from 50 percent to 95 percent.

What is really interesting is do we have a connection between cooking and the creative class? Most creative cities and regions we know have lots of gays, bohemians, and immigrants. But what role does cooking play in all of this? Do we not find that most of the creative places also have great eating places? Is this the immigrant connection? I do not mean the simple fast food restaurants, but really good cooking and good food. What is the connection between these two activities?

Does culture and therefore cooking and food also act as a part of the social capital that drives creativity and the creative class? Give me a good bowl of pasta, a nice bottle of wine, and the creative juices will start to flow because we are feeding the brain. Give us bad food and obesity develops, the brain does not develop, and we have no creative class.

Food for thought.

GM workers’ significant concessions (given in the hopes of keeping GM afloat) may go down as a key turning point in the history of the North American capitalist economy and society. Although tension remains, the changing tone of union-management discussion has been noticeable as both finally recognize the challenges their industry faces – and that their long-standing ideological battles are not helpful.

Having employees and employers at odds with each other in any organization is counterproductive – literally, it’s a productivity sink. Every few years or months, the threat of a strike creates new friction and tension in many organizations. Suspicion grows. Supervisors don’t trust managers who don’t trust key workers – hardly an environment in which collaboration, creativity, and innovation can flourish.

It is groundbreaking that the North American auto workers unions have had to face the fact that they are in the same boat as auto company management, executive, and shareholders. They will either sink together, or collectively create the life raft that will save all of them.

In other workplaces today, corporate hierarchies have lessened and many workers are also shareholders. Companies that thrive on creative activities have often worked hard to eliminate the tension between owners, managers, and workers, empowering many people as professionals to make major decisions. The demographically generated talent shortage has also helped many company owners to value employees’ contributions more strongly.

But, as much as many companies based on the brainpower of creative, talented people have tried to offer an alternative view, there has remained an underlying current in society that managers and owners are inherently exploiting workers (an idea that goes back to the 1850s and Marx, Engels, etc.). The media will treat isolated incidents of poor management as if it were more widespread. Strikes still happen in the public sector (very large in Canada), and the grievances become the lead story.

This severe economic downturn is exposing myriad problems within corporations and our broader economic system. The anachronistic idea that employees are somehow separable from the broader success of any company is one of these inconsistencies.

For the world economy to recover and flourish, this belief many need to end. And these concessions may go down as the tipping point for this change.

(Please note that I am not saying that unions did not play a valuable role in human history; just that a consequence of that role was a philosophy of antagonism that no longer serves most employees or society well).