Archive for the ‘International Creative Class’ Category

Zoltan Acs
by Zoltan Acs
Fri Oct 2nd 2009 at 9:02pm UTC

The Global Entrepreneurship Index

Friday, October 2nd, 2009

Many things are interesting, but one of the most interesting is how people use creativity to become more innovative. I call this entrepreneurship. People in all countries are creative and want to make a better life for themselves and their families. How well are they doing?

Over the past few years, my colleagues at the Global Entrepreneurship Monitor have developed a way to measure this activity, and to suggest ways in which countries can improve on their performance. The Global Entrepreneurship Index is a tool that allows countries to understand how your country is doing on a wide range of indicators. You can download a copy for free. While lots of indexes exist, for almost everything, they very seldom allow you to actually see how to improve your current position.

Last week at a conference in Istanbul I presented the index to an audience and suggested how the world would be able to improve its well-being by following along. The results were interesting and over the next few weeks, I will be presenting a step-by-step report on the index, how it works, how it can be improved, and how it can improve lives.

I have been involved with GEM for almost a decade and have helped move this organization toward its present global position. I hope that this new index will propel it to a new level.

CCE Editor
by CCE Editor
Mon Sep 28th 2009 at 7:39am UTC

Guest Blogger: For the Love of Japan

Monday, September 28th, 2009

This post comes to the Creative Class Exchange courtesy of guest blogger Scott Sognal, policy researcher and novice blogger.

Japan’s Liberal Democratic Party, which held power almost continually for 50 years, was well suited to a world based upon Taylorist mass production. They created the Japanese system of “jobs for life,” cross-shareholding between banks and firms, and pay rates based upon seniority – all of which delivered rising living standards more or less equally across the nation.

However, since the “Bubble Economy” finished in 1990, globalization has forced Japan’s economy to partially open too, exposing the chronic weaknesses inherent in the old system.

But the Liberal Democratic Party continued to bury Japan under highways and bridges that weren’t needed (eloquently described in the book Dogs and Demons) simply to buy the votes of its rural and blue collar power base, while running up a massive national debt.

The rigid education system delivers math and science skills needed for mass production – but not the creativity, imagination, and people skills required by the creative economy. Young Japanese people are no longer offered jobs for life on a large scale, but are stuck in a world of unstable, temporary work as “freeters” (more about the freeter lifestyle).

Japan’s recent election of the Democratic Party of Japan is the first time that Japan’s “lost generation” has stood up to be counted, with a turnout of around 70 percent. The DPJ listened to these people; many of the new DPJ politicians are younger than those they replaced and female. In many areas, this desire for change was so strong that entire cities were carried by the DPJ.

Young Japanese people are attracted to Tokyo, Yokohama, Osaka, Nagoya, Kyoto, and Fukuoka, where they can escape the formal social straitjackets of their home towns and be somewhat anonymous. This does not account for the whole change by any account, but I think it might have some correlation to the graphs shown on the Creative Class website outlining people who are “open to experiences.” A report released by the National Institute of Population and Social Security Research predicted that almost half of Japan’s 47 prefectures will see their populations fall by more than 20 percent over the three decades from 2005. With job seekers flocking to the capital, Tokyo is expected to account for 11.5 percent of Japan’s total population in 2035, up from 9.8 percent in 2005, the report said. But internal migration is drying up – in 2008, only Nagoya and the areas directly around Tokyo showed net inward migration.

Japan’s rapidly aging population, which has been shrinking since 2005, raises issues that all countries should pay attention to. Its birthrate is around 1.3 children per woman, but it has been falling for decades (pdf). Many of Japan’s youth are voting with their feet for a Creative Class lifestyle – but there is a large gap in the average age of prefectures. What happens when entire regional economies hollow out, and local governments cannot afford to support the remaining elderly citizens?

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.

Alex Tapscott
by Alex Tapscott
Thu Jun 11th 2009 at 12:55pm UTC

The Iranian Election: Youth, Facebook, and a Call for Change

Thursday, June 11th, 2009

The Iranian Presidential Election will be held this Friday. Against seemingly insurmountable odds, Hossein Mousavi, a moderate and progressive candidate (by Iranian standards) has emerged as a serious contender to the incumbent Mahmoud Ahmadinejad.

While his “Green Revolution,” at first seemed nothing more than a Sisyphean struggle by a group of young moderate Iranians against a totalitarian and despotic government – destined for failure despite their greatest efforts – the winds of change have dramatically and suddenly tipped in Mousavi’s favor and, at this point, it’s anyone’s race.

Iran’s state-controlled media has given Mr. Mousavi no air-time, the government has banned his party from hosting peaceful rallies in sports stadiums and other public venues, and those rallies which have occurred spontaneously in the street have been met with hostilities from government officials. Still, his candidacy built momentum.

So how did Mr. Mousavi, whose supporters promise “a new greeting to the world,” emerge as a serious contender to Mr Ahmadinejad despite a state-wide government campaign to quell his movement? The answer: FACEBOOK. Mousavi’s supporters – mostly young people and educated urban dwellers – have taken to the Web, garnering support and enthusiasm on Facebook and on blogs, posting videos of their candidate on YouTube, and organizing impromptu street rallies by mass-texting fellow supporters literally on the fly. The result: a highly organized, energetic, and sophisticated force for change.

Mousavi supporter Emad Mortazavi, a 24-year-old sociology student, said, “Last week, there was suddenly this feeling that it was possible, that Mousavi could get enough votes. Social-networking sites and text-messaging have played a big role in spreading the message.”

In typical form, Ahmadinejad blocked Facebook in May in an attempt to silence his opposition, but to no avail (it was opened back up three days later). In the end, Iran’s youth proved more tech-savvy than anyone in Ahmadinejad’s government.

In an uncanny mirror image of the U.S. election last year, it appears the Net-Generation – people born between 1980 and 1996 – may once again anchor the winning candidate by embracing progressive attitudes and exploiting the power of the internet to collaborate and organize for their candidate. Evidence of a seismic demographic shift, the precipitous rise of Mousavi proves that young Iranians are a force to be reckoned with.

The AFP reports:

“With more than 60 percent of Iranians born after their nation’s Islamic revolution in 1979, the under-30 vote will be crucial in next week’s election in which hardline President Mahmoud Ahmadinejad is being challenged by three fiercely critical rivals.

Several analysts predict a high urban youth turnout in favour of former premier Mir Hossein Mousavi…Tehran has been gripped by a new fashion frenzy ahead of the June 12 vote, with scores of teenagers and 20-somethings sporting green wristbands, scarves and T-shirts.”

Iranian youth ultimately face many of the same problems as young people in Canada, the U.S., and Europe. In a time of economic turmoil they want a candidate who can answer their questions and who can appeal to their better instincts; not some religious zealot who spends most of his time demonizing the Western World and threatening the extinction of its neighbors. The DailyKos writes,

“The economy is a key issue, and many young people with college degrees cannot find jobs or acceptable living arrangements in Tehran and other major cities…the ruling elites cannot ignore the desires of such an enormous percentage of the nation for long. Iran is in for some major shifts due to demographics alone.”

Tomorrow, the Iranian people will take to the polls. The sun may rise Saturday morning on a very different looking Middle East.

Wendy Waters
by Wendy Waters
Mon May 25th 2009 at 9:41am UTC

Global Experience and Productivity

Monday, May 25th, 2009

Hiring people with international living experience may become a priority in future creative workplaces. According to recent psychology research reported in The Economist, people who have lived abroad are better problem-solvers than those who have never lived anywhere but in the USA.

[Researchers] presented 155 American business students and 55 foreign ones studying in America with a test used by psychologists as a measure of creativity. Given a candle, some matches and a box of drawing pins, the students were asked to attach the candle to a cardboard wall so that no wax would drip on the floor when the candle was lit. (The solution is to use the box as a candleholder and fix it to the wall with the pins.) They found 60% of students who were either living abroad or had spent some time doing so, solved the problem, whereas only 42% of those who had not lived abroad did so.

A follow-up study with 72 Americans and 36 foreigners explored their creative negotiating skills…. where both negotiators had lived abroad 70% struck a deal …. When neither of the negotiators had lived abroad, none was able to reach a deal.

Just having traveled abroad was apparently not enough to improve a person’s likelihood of solving the problems. Also, the researchers claim they found a way to filter out factors like the possibility that better problem-solvers are the ones more willing to live abroad.

As creative talent remains in short supply, improving the problem-solving skills of employees will be a priority at many companies. If further research in this area continues to support the findings, we may see employers who need a creative workforce – with top problem-solving skills – seeking to hire people with experience living abroad (which, of course, includes immigrants who by definition have done so). A global firm may even offer to give people that experience early in their careers, stationing people outside their home countries.

Or, as another recent Economist article reports, right now some companies are offering jobs to people – next year. What if they helped them to live and volunteer abroad in the meantime? Perhaps paying a small stipend. They’d score the double bonus of securing talent for when the economy rebounds and improving the problem solving skills of that talent.

Have you lived abroad? Do you think it improved your problem-solving skills?

Richard Florida
by Richard Florida
Fri May 22nd 2009 at 1:00pm UTC

Class and Entrepreneurship

Friday, May 22nd, 2009

We all know the power of an Apple or a Google to create new business models and generate massive new wealth. But, long ago, the great economist Joseph Schumpeter argued that the formation of new entrepreneurs lies behind the great “gales of creative destruction” which set in place new firms and industries and revolutionize old ones.

The last couple of days, we’ve looked at how class effects economic growth and innovation. We now look at the relationship between class and entrepreneurship. In the graphs below, Charlotta Mellander compares countries’ performance on the Global Entrepreneurship Index developed by economist Zoltan Acs to shares of the creative class and working class.

Again, the results speak for themselves. Entrepreneurial countries are creative class countries. Those with high percentages of the creative class have higher scores on the Global Entrepreneurship Index.

The opposite is true of countries with a large share of the working class. Their scores on the Global Entrepreneurship Index are considerably lower.

Source of all graphics: Martin Prosperity Institute

Richard Florida
by Richard Florida
Wed May 13th 2009 at 7:46pm UTC

Learning from Toronto

Wednesday, May 13th, 2009

En route to obtaining his back-dated, life-long Canadian citizenship, Will Wilkinson, one of the sharpest young policy minds around, dropped by to visit at the Prosperity Institute. Back home state-side, he wrote this terrific essay on why Toronto’s largely successful experiment in immigration – its global-straddling ethnic mosaic – is a big smack upside the head for notions that immigration is eating away at core “Anglo-Protestant” values and institutions a la the late Samuel Huntington.

Here is what Toronto is not: Toronto is not dirty, dangerous, or poor. Toronto is not a hell of lost liberties or a babble of cultural incoherence or a ruin of failed institutions. Yet a popular argument against high levels of immigration suggests it should be.

In his 2004 book Who Are We?: The Challenges to America’s National Identity, the late Harvard political scientist Samuel Huntington warned that “the United States of America will suffer the fate of Sparta and Rome,” should its founding Anglo-Protestant culture continue to wane … So we must take care to protect our precious cultural patrimony from the acid of “denationalizing” economic and cultural globalization. We must keep outsiders out.

Successful societies (so this argument goes) owe their liberty and prosperity to distinct institutions which, in turn, depend on the persistence and dominance of the culture that established and nurtured them. Should that culture fade—or become too diluted by the customs, religions, and tongues of outsiders—the foundation of all that is best and most attractive about that society cannot long last.

But somebody forgot to tell Toronto! Nearly half the denizens of Canada’s most populous metropolis were born outside the nation’s borders—47 percent according to the 2006 census, and the number is rising. This makes Toronto, the fifth biggest city in North America, also the most diverse city in North America. Neither Miami, nor Los Angeles, nor New York City can compete with Toronto’s cosmopolitan credentials.

Here is what Toronto is: the fifth most livable city in the world. So said the Economist Intelligence Unit in a report last year drawing on indicators of stability, health care, culture, environment, education, and infrastructure. … Toronto is wealthy, healthy, well-educated, and much safer than any sizable American city. In 2006, its murder rate was 2.6 per 100,000 residents, which makes it less than half as deadly as Des Moines. The most culturally mixed city on the continent truly is one of Earth’s closest approximations of urban paradise …

The United States, this fabled land of immigrants, has fallen dismally far behind countries like Australia and Canada in openness to immigration … That cultural fragility argument is false, and it deserves to die.

Toronto, which has an Anglo-Protestant heritage as strong as any, has proved it dead wrong. In fact, Toronto shows that a community and its core institutions can not only survive a massive and growing immigrant population but thrive with one. Multicultural Toronto and cities like it prove that the institutions of liberal modernity are robust. Life within them is so good that people the world over flock to them. And newcomers do not take these institutions for granted. They have a stake in seeing them last. They can and do make them stronger …

Maybe someday an American city will place in the top 10 on the list of the world’s most livable places. Maybe—if it becomes more like Toronto.

Wilkinson hits several nails directly on the head here. In Flight of the Creative Class, I argued against Huntington and offered that Canada’s and Toronto’s mosaic principle may well prove to be one of the core enduring principles of the emerging creative economy. It surely looks more robust than America’s fabled melting pot principle under the stress of economic crisis.

Just quickly: one of the guiding principles of our Prosperity Institute is to develop seamless comparable rankings of North America - at least U.S. and Canadian states, provinces, cities, metropolitan areas, and mega-regions. Wilkinson and I spent a good deal of time talking about what if we just take away the “jurisdictional border” in our analysis. What if just start writing about North America’s provinces, states, and cities? How might than improve the quality and robustness of our understanding?

The great political sociologist Seymour Marty Lipset long ago wrote that the only way to truly understand America was to study and live in and understand Canada. He could not be more right.

Richard Florida
by Richard Florida
Wed Apr 15th 2009 at 6:03pm UTC

Ensuring Canada’s Economic Future

Wednesday, April 15th, 2009

Just back from a terrific event, Rotman School Dean Roger Martin and Canadian pollster Michael Adams discussed how Canada can prosper during and after the economic crisis. Martin summarized work led by Jim Milway of the Institute for Competitiveness & Prosperity and our own Martin Prosperity Institute which identifies Canada’s prosperity gap vis-a-vis the U.S. and other advanced nations. Adams summarized the latest polling data on Canadian opinions on the crisis, the state of capitalism, and hot-button issues like immigration. My Rotman colleague Ajay Agrawal discussed his research on the relationship between immigration flows and innovation. McKinsey’s Sacha Ghai outlined the findings of Breaking Away from the Pack, a recent study of corporate performance in Canada. Read the full report here; a short oped by Martin and Milway here.

Zoltan Acs
by Zoltan Acs
Wed Feb 11th 2009 at 10:20am UTC

Trying to Get a Handle on All of This

Wednesday, February 11th, 2009

Measurement abounds! Stocks are down around the world over 50 percent from a year ago, GNP growth is down a little, unemployment has doubled but from a very low base, bank stocks are in the toilet. But how can we get a handle on what is actually happening around the world that represents a real number and not just financial.?

The Baltic Dry Index (BDI) is a number issued daily by the London-based Baltic Exchange. The index provides “an assessment of the price of moving the major raw materials by sea. Taking in 26 shipping routes measured on a time charter and voyage basis, the index covers Handymax, Panamax, and Capesize dry bulk carriers carrying a range of commodities including coal, iron, ore, and grain.”

The index is a good measure of future manufacturing output since many of the inputs that go into manufacturing are dry goods. Over the past year the index has fallen from 10,000 to just over 1,500! This sudden collapse in shipping prices and increase in capacity is one indicator of the depth of this crisis. It more than other indicators suggests that the economic recession is far from over and will most likely deepen.

What to do about this is clearly expressed in the major concerns today about trade protraction and bigger than thy neighbour policies that bought on the Great Depression of the 1930s.  We world needs to keep trade routes open and avoid protectionism as much as possible. For if we are not able to keep trade going the world will no longer be flat, or spiky. It will be chopped up.

Zoltan Acs
by Zoltan Acs
Mon Feb 9th 2009 at 5:36pm UTC

A Retrospective

Monday, February 9th, 2009

It has been over six weeks since my last post to the Creative Class site. I have moved to London and from my new vantage point the world seems a little distant. However, I also now see the world a little more clearly, and what I see is not pretty.  We have had war, elections, financial meltdown, recession etc. What is now clear to me is that whatever your historical perspective, the present situation is different from anything we have lived through. So we are looking at either a 60 or a 100 year event. Take your pick.

That is a long time, even for an economist, who is used to thinking in the long run. What is clear and becoming clearer every day, is that yes growth will return, but it will not happen for a long time. How long? I do not know, but it can be years and years. What is clear to me at this point is that the problem is about the very fabric of society in the U.S. and the U.K. and its global connections. This is not just a housing problem or just a credit problem or just a “Detroit” problem. This is a problem that was years in the making and will take years to unravel. However, how to unravel it is not clear to anyone that i can find.

A few things I know. First, the problem is not a lack of growth. Stimulating the economy to have more growth that we cannot pay for is not the solution. It will just create more problems down the road. Second, the banks are bankrupt. At three percent, capitalization losses are greater than the available capital. How to fix this without giving away the house will take creative energy. Third, the problem is global, and it stems from global flows of technology, goods, and capital of the past decade. The world was flat. This may be the hardest to correct.

How to think about solving the problem is the interesting question. It must start with an examination of the whole question of growth. “Has growth come to an end?” is the wrong question. The right question is “What is the end of growth?” The lack of growth is a mere indicator of what is wrong. The engine that propels America forward is entrepreneurship; entrepreneurship creates wealth; the wealth it creates becomes the fuel to create opportunity. As President Obama stated in his inaugural address: “The success of our economy has always depended not just on the size of our gross domestic product, but on the reach of our prosperity; on our ability to extend opportunity to every willing heart – not out of charity, but because it is the surest route to our common good.”

The present economic crisis is widely understood to have revealed a dangerous imbalance in the relationship between business and government that further fueled the lack of opportunity for most. Without opportunity stability itself disappears. This will take the creative talent of the international community to solve.

Getting it right will not be easy.