Creative Class

Cities and regions across America and the world have made significant efforts to attract and retain young college graduates over the past decade or so.  This has been driven by growing awareness that the ability to attract human capital, as well the ability to attract companies plays a key role in economic competitiveness. And since young adults are the most mobile members of the population – people in their mid-20s are three to five times more likely to move than middle aged folks – the ability to attract them early in life can pay big, lasting dividends.

A new study by Brookings demographer William Frey examines trends in the migration decisions of young adults and college grads (as separate groups) over the years 2007 – 2009. His findings are especially interesting and relevant, since they cover the period since the onset of the economic crisis and reset.

The economic crisis has caused a significant decline in migration, with the mobility of Americans hitting record lows. Young adults and college graduates have not been excepted, Frey finds, with a growing number of them staying put or moving back with their parents. That said, the mobility of both college grads and young adults remains considerably higher than for Americans as a whole, according to Frey’s analysis.

But where have young adults and college grads been heading since the economic crisis?

To answer this, Frey charts the migration trends of both young adults and college grads across America’s 52 largest MSA’s, those that are home to more than one million people, using newly released Census data for the 2007-2009 period.

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Smart people of the highly educated sort that economists refer to as “human capital” are key engines of economic growth and development. More and more, they have been clustering in a relative handful of big cities. A recent post by Aaron M. Renn, who blogs as The Urbanophile, charts the changing density of college educated people across U.S. metro areas. His analysis builds on an earlier analysis by Rob Pitingolo (I blogged about it here) which introduced a measure of human capital density.

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Last Friday, my list of America’s Brainiest Cities ran over at The Daily Beast. Boulder topped the list, which comprised a mix of larger knowledge-intensive metros like Washington, D.C., Boston, Silicon Valley, San Francisco, Austin, and Seattle, and college towns like Ithaca, Charlottesville, Madison, Iowa City, and Durham, North Carolina, among others.

The map above, prepared by Zara Matheson of the Martin Prosperity Institute, shows the performance of all U.S. metros on our Brainiest Metros Index developed with my colleague Charlotta Mellander. The index is based on three variables: (more…)

After a long drive up to the shores of Lake Michigan, I opened my laptop to check up on a day or so of lost e-mail, and in my in-box were a slew of messages reporting on the passing of Chris Freeman. It’s apt that I sit here writing this feeling the cool breezes off the gorgeous clear blue lake on this magnificent August day thinking back on his work and life.

Chris Freeman was one of the greatest thinkers and scholars of innovation and the dynamics of the capitalist economy. Born in 1921, the same year as my own father, Freeman not only studied capitalist innovation and dynamics, he lived them. As a young boy, he watched the world lapse into depression, he watched England be eclipsed as an economic power, and he watched the tremendous power of innovation propel post-war growth and prosperity. He saw the rise of the corporate R&D lab and the bureaucratization of innovation that Schumpeter had written about, and then he saw the surge in entrepreneurial venture capital financed innovation in the late 20th century. He witnessed firsthand the bursting forward of innovation in great bunches and bundles, pushing capitalism forward and changing its stripes as it did so. But he was never, ever a technological determinist. Throughout his work, he called attention to the complex and nuanced interplay between technology and organization in shaping both economy and society.

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Via Marginal Revolution

Clusters of smart people of the highly educated sort that economists refer to as “human capital” are the key engine of economic growth and development. The standard way economists measure this is to take the percentage of people in a country, state, or metropolitan area with a bachelor’s degree or higher. Jane Jacobs argued that the clustering of talented and energetic in cities is the fundamental driving force of economic development. In a classic essay, “On the Mechanics of Economic Development,” the Nobel prize-winning, University of Chicago economist Robert Lucas formalized Jacobs’ insights and argued that human capital, or what can be called Jane Jacobs externalities, are indeed the key factor in economic growth and development. Still most scholars measure human capital in terms of population, not in terms of its geographic concentration.

So I was intrigued by this fascinating analysis by Rob Pitingolo (h/t: Don Peck) which takes this question head on. To get at the issue of human capital clustering, Pitingolo compiled a neat measure of what he calls “educational attainment density.” Instead of measuring human capital or college degree holders as a function of population, he measures it as a function of land area – that is, as college degree holders per square mile.  As he explains:

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Creativity ranks as the number one most important leadership quality for business success, according to a new study by IBM. The study is based on personal interviews with some 1,500 corporate and public CEOs across 60 nations and 33 industries. The table below (via Fast Company) summarizes the key results of the IBM research.

Fast Company quotes Steven Tomasco, a manager at IBM Global Business Services, being surprised by this new finding, noting that it’s “very interesting that coming off the worst economic conditions they’d ever seen, [CEOs] didn’t fall back on management discipline, existing best practices, rigor, or operations. In fact, they [did] just the opposite.”  Indeed!

Great Resets are also talent resets. America profited greatly from influxes of talented inventors like Nikola Tesla and entrepreneurs from Andrew Carnegie to Intel founder Andy Grove. And foreign-born entrepreneurs and technologists form the backbone of many high-tech fields and are the driving force behind one-third to one-half of Silicon Valley companies.

But talent resets also extend to arts and culture. In fact, America’s ability to attract foreign artistic and creative talent was central to its post-war rise as a major creative center. A new book by Dorothy L. Crawford (h/t Dan Silver) documents how European artistic and creative talent fled Nazism and took root not just in New York City but in Los Angeles, revolutionizing the creative climate there; the Nazi regime propelled a veritable slew of German musicians to emigrate to the L.A. region, where they set about revolutionizing modern classical music and film composition. This review by Lindsay Hansen shows the influence of Schoenberg:

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The ability to attract talent is key to the prosperity of nations. And it is particularly important during Great Resets which are underpinned by major shifts in talent across cities, regions, and nations. (more…)

Here’s my interview with BusinessWeek’s Michelle Conlin:

Richard Florida: The U.S. Is Facing a ‘Talent Shift’

The bestselling author worries about the consequences of so many American-educated MBAs starting their careers in Asia

Richard Florida, the author of the bestselling books The Rise of the Creative Class and The Flight of the Creative Class, is a preeminent thinker about human capital and its importance for business. His new book, The Great Reset, due out in April, argues that a true recovery will require a complete break from the consumption lifestyle and a move towards a new economic model that is actually sustainable.

Florida is the director of the Martin Prosperity Institute and a professor of business and creativity at the University of Toronto’s Rotman School of Management. Bloomberg BusinessWeek talked with Florida about how many American-educated MBAs are no longer beginning the Grand Tour of their careers in the U.S.

Bloomberg BusinessWeek: Some of the best and brightest American-educated kids are seeing their future—in Asia. Does this worry you?

Richard Florida: From the beginning, I’ve been worried about this talent shift. Two things are happening. Countries such as Canada, Australia, and New Zealand are going after our best and brightest. In China and India, the best and the brightest are staying. One of the biggest tools foreign companies have is our business schools. All these great companies are coming to recruit. This shift is happening in real time right in front of our eyes. I see it in the Rotman School where I teach.

What are you seeing there?

I did the commencement address this year. I was blown away. In enormous numbers, the students were going to China, to India, to the Middle East. To a person, they said they found much more opportunity and possibility for career advancement over there. My jaw dropped. I literally could not believe how many kids.

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