Creative Class

Nashville is the Silicon Valley of the music industry – a concentrated cluster of musical talent,  venues, studios and all the inputs required to make music.  So it’s no surprise the city take the music business seriously.  In May 2009, the mayor launched a Music Business Council (h/t: Ian Swain -my MPI colleague, music project collaborator and DJ).  To signal the initiative’s importance, he sits on the council whose members not only include label execs and entertainment lawyers, but also musicians like Emmylou Harris and Jack White. The Council’s goals extend all the way from supporting and expanding the presence of music festivals in Nashville to aiming to develop the best music education program of any public school system in the world.

GOOD links this map from a new report on state obesity from the Trust for America’s Health.

A quarter or more of all adults are classified as obese in more than two-thirds of states. The fattest states are all in the South. Colorado, California, Montana, and Mid-Atlantic and New England states have the lowest rates of obesity.

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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…)

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.

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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Housing prices continue to reflect the geographic reordering of The Great Reset. The newly released Case-Shiller Home Price Index shows a very uneven housing market, with significant recovery in some places and continued decline in others. While the National Index is up 2 percent over the first quarter a year earlier, it is down 3.2 percent from the end of 2009. The map below, created by Zara Matheson of the MPI, shows the year-over-year change in home prices for the 20 metro areas covered by the Index.

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A week or so ago, I looked at the hardest-working versus highest-earning states using data from a new study (PDF) from the Bureau of Labor Statistics. The study by Dante DeAntonio used data from the Current Employment Statistics – a monthly survey of more than 400,000 U.S. business establishments – to generate estimates for employment, hours, and earnings for U.S. states. My MPI colleagues and I were curious about how data would play out for U.S. metropolitan regions, so we contacted DeAntonio and he graciously supplied the data. (more…)

My paper with MPI colleagues Charlotta Mellander and Kevin Stolarick is out in the new issue of Environment and Planning A. Its full title is “Music scenes to music clusters: the economic geography of music in the U.S., 1970 – 2000.” Here’s the abstract.

Where do musicians locate, and why do creative industries such as music continue to cluster? This paper analyzes the economic geography of musicians and the recording industry in the U.S. from 1970 to 2000, to shed light on the locational dynamics of music and creative industries more broadly. We examine the role of scale and scope economies in shaping the clustering and concentration of musicians and music industry firms.

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We know a great deal about the clustering of human capital and of creative class jobs and how they drive regional economic growth. But only recently have economists and economic geographers begun to explore the skills that underpin the clustering of talent and creative-knowledge jobs.

A brand new paper with my MPI colleagues Charlotta Mellander, Kevin Stolarick, and Adrienne Ross examines the distribution of three key skills across U.S. metropolitan areas: physical skills, cognitive skills, and social skills.

Here’s the abstract:

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Here’s one hot off the press.

A new paper with Jason Rentfrow and Charlotta Mellander looks at the role of post-industrial structures – that is, the creative class and human capital as well as values toward openness and tolerance – on the happiness of  nations.  Our main hypothesis is that  these structures and values shape happiness in ways that go beyond the previously examined effects of income. Here’s more from the abstract:

Drawing from previous theory and research, we measured post-industrial structures in terms of higher-level education and the share of the workforce engaged in knowledge-based/creative work. Post-industrial values were measured in terms of acceptance of racial and ethnic minorities and of gays and lesbians. Our measure of happiness is derived from a large-scale global survey of life satisfaction conducted by the Gallup Organization. We controlled for income in our analyses and divided our sample into high- and low-income countries to explore whether income has different effects on countries at different stages of economic development.

Our results indicate that post-industrial structures and values have a stronger effect on happiness in higher-income countries where the standard of living has surpassed a certain level. Income, on the other hand, has a stronger impact on happiness in low-income countries. Thus, we propose that when income rises beyond a certain level, a new system of post-industrial values centered on education, creativity, and openness become better predictors of happiness than income.

The full paper is here.