Creative Class

About two-thirds of the nation’s 381 metro regions are deemed to be in recession and another 20 percent are at risk, according to these maps from Sunday’s New York Times.

But regions with high scores on my creativity index, a measure of long term economic potential based on the 3 Ts – technology, talent and tolerance – are much more resilient than others on average, according to an analysis by Charlotta Mellander and Patrick Adler of our MPI research team.

Not surprisingly, many, if not most, of the “contracting” metros are older industrial centers, like Buffalo, Detroit, St. Louis, and Cleveland; or service, retirement, or tourist centers like Miami and Phoenix. Their median score on the creativity index score is rather low (.598). The “at-risk” metros include a mix of older industrial metros and some creative performers like San Diego and San Francisco. Their median creativity index score is .698.

Metros with high creativity index scores dominate the list of the “expanding” metros – Seattle, San Jose, Austin, Washington, D.C., Boston, and Raleigh, along with resource-oriented metros in Texas and Oklahoma. The median creativity index score for these metros is .750.

We then conducted a statistical correlation analysis between the Moody’s economic rating and the creativity index. The correlation was positive (0.36) and statistically significant.

These challenging economic times present both opportunities and potential pitfalls for corporate workplace management. The opportunities come from reduced client or customer demands. When a business is growing rapidly or a customer base is expanding quickly, there is little time to focus on whether the workplace is appropriate for the tasks being done or as efficient as it could be.

While slower times mean reduced revenue, they also can offer a time to consolidate gains and think about the future. Writing in Workplace Magazine, Naseem Javed argues that this is the perfect time for companies to focus more on innovation (generally, not necessarily in the workplace).

Normally, in busy, booming days, Canadian businesses along with senior executives become so convinced of success that they begin to forget about real innovation. The best ideas of innovation come through depressive, recessionary cycles. What better times to re-engineer, redesign and rethink the entire business processes, overall strategies and most importantly the prime business model itself?

Although Javed is not referring to workplaces specifically, his observations apply. This is a time when shifting some employees from their regular tasks to designing a better workplace is not as likely to affect the short-term bottom line.

A workplace aligned with employee and corporate needs will pay dividends long term. As workplace specialists Kevin O’Donnell and Wolgang Wagener of Cisco write in the introduction of their book:

A company’s work environment is one of the largest determinants of culture and worker productivity. By better aligning the work environment with the needs of the worker, space is reduced while productivity is improved.

Although the economic slowdown may temporarily ease the talent shortage for some companies or in certain cities, only the short-sighted ones will believe this is a sustainable new reality. Demographics shift irrespective of economics. And the knowledge economy – that thrives with a creative, collaborative, and innovative workplace – will not disappear.

As the world emerges from this economic slowdown – whether in six, 12, or 24 months – those companies with the environments best suited to make their employees as productive as possible will benefit disproportionately. Not only will their people be more productive than competitors, but they will also be well placed to attract talent from the competition who have not aligned the workplace to their employees’ needs.