Creative Class

Across the world, two in 10 households have access to the Internet at home, according to a just released Gallup survey. Internet access at home was far greater in more economically advanced countries: Nearly eight in 10 people (78 percent) in countries where gross domestic product (GDP) is more than $25,000 have Internet access at home. Home Internet access drops off steeply in less affluent, less developed nations, according to the Gallup survey, especially in countries with less than $10,000 in per capita GDP. The survey is based on telephone and face-to-face interviews with approximately 1,000 adults, aged 15 and older in 116 countries, and was conducted in 2009.

The map above, by Zara Matheson of the Martin Prosperity Institute, shows the percentage of households with Internet connectivity, highlighting the top 10.

(more…)

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…)

At the heart of effective economic development is regional cooperation. In 2004, the Department of Labor launched WIRED Initiatives across the U.S. to improve regional efforts for talent development and effective economic development strategies. For over a year, leaders from the Wired65 region, an area spanning 26 counties and two states, have been been working to improve the area’s economic competitiveness and quality of life.

For this feature in our Creative Capstones series, we interviewed Debbie Wesslund, program manager for the Wired65 region, about the area’s efforts to launch Kix.com – The Kentucky Indiana Exchange, an interactive community platform to facilitate networks for employment opportunities and discussions about regional challenges.

Creative Class Group (CCG): Tell us about Wired65. What communities make up the region?

Debbie Wesslund: Wired65 is an initiative that brings together civic leaders in a 26-county, bi-state area around the need to support its human capital – or “talent.” This region is anchored by the Louisville, KY MSA and the Elizabethtown, KY MSA. The Ohio River divides the states of Indiana and Kentucky, but the economy reaches across county and state lines, forming a region with a strong sense of place and sharing talent. (more…)

Silicon Valley has always been a safe haven for risk-takers, entrepreneurs, and big thinkers. But, it is also home to one of the most innovative public-private partnerships in the country: Joint Venture Silicon Valley.

As the fourth feature in our series, Creative Capstones, we interviewed Russell Hancock, president of Joint Venture Silicon Valley, to learn more about Silicon Valley, Joint Venture, and the organization’s current initiatives to “build the next (and greener) Silicon Valley.”

Creative Class Group (CCG): Tell us about Silicon Valley. What makes it a special place to live?

Russell Hancock: We’re  a sun-kissed land with countless amenities, but I love Silicon Valley because it is an amazing collection of people. They’re talented, they’re creative, they’re from all over the world, and they are doing innovative things. The culture here is all about risk-taking and there’s a high tolerance for failure, and this has made it possible for innovation to blossom here more than most any other place you might name. You can feel it when you’re here – the buzz and the energy – and it brings out the best in people. In Silicon Valley everything seems possible – inventing a better mousetrap, inventing a new energy future, making a niftier gadget, planning communities that have fabulous urban designs… there’s a sense that if you can’t do it here, you can’t do it anywhere. (more…)

It’s commonly thought that even though globalization was shifting manufacturing jobs from America to lower-cost, more efficient, off-shore competitors, the U.S. retained a vast lead in high-end innovation. But are the powerful forces of globalization now leading to the off-shoring of America’s innovation and R&D? New statistics from the National Science Foundation (via Mike Mandel) certainly point in that direction.

Way back in 1990, I wrote a book titled The Breakthrough Illusion with Martin Kenney that argued that the U.S. had developed a powerful capacity for venture capital-backed innovation, but that the actual manufacturing  and production of those innovative new products – and the jobs that flow from that – was increasingly being shifted off-shore.

A couple of years later, I was invited to be part of a Council of Competitiveness group that was looking into the future of American research and innovation. After completing a round of interviews with the R&D directors of leading U.S. and foreign companies and looking into the data, I reported my provisional conclusions saying I was convinced that R&D was becoming much more globalized and that U.S. R&D in particular was being “externalized”  – more and more of it taking place outside the wall of big companies with their own R&D labs. My results were met with stunned silence and disbelief. “The U.S. was still the unquestioned leader in R&D, and had little to fear” was the prevailing attitude.

(more…)

It’s been hard to justify high-speed rail (HSR) projects in terms of conventional cost-benefit analysis. But, it may be time to rethink – and broaden  - the way we think of the benefits of HSR. HSR’s benefits are usually thought of in terms of lowering transport costs by reducing problems like gridlock, pollution, and travel time. But the real benefit of HSR may turn on its ability to expand economic growth, according to a new analysis by my colleagues at the Martin Prosperity Institute.

There are three main mechanisms through which high-speed rail can help expand the economy, according to the MPI study. First, HSR expands the labor pool available to firms, bringing talented workers from nearby centers within commuting distance and thus expanding the quantity and quality of available employees. Second, HSR makes more jobs available to workers without making them have to relocate and move to a new home. Third, HSR extends the benefits of other expensive, productivity-enhancing infrastructure such as airports across broad regions. International airports, major research universities, and reference libraries are all more financially viable and internationally competitive when they serve a larger population. High-speed rail allows them to build the scale they need to achieve world-class excellence and also spreads their high costs across a wider population.

The MPI report is here.

From The Economist, December 30, 2009:

The rich world’s quiet revolution: women are gradually taking over the workplace

At a time when the world is short of causes for celebration, here is a candidate: within the next few months women will cross the 50 percent threshold and become the majority of the American workforce. Women already make up the majority of university graduates in the OECD countries and the majority of professional workers in several rich countries, including the United States. Women run many of the world’s great companies, from PepsiCo in America to Areva in France.

Women’s economic empowerment is arguably the biggest social change of our times.

From another article in the same issue:

The rich world has seen a growing demand for women’s labor. When brute strength mattered more than brains, men had an inherent advantage. Now that brainpower has triumphed the two sexes are more evenly matched. The feminization of the workforce has been driven by the relentless rise of the service sector (where women can compete as well as men) and the equally relentless decline of manufacturing (where they could not). The landmark book in the rise of feminism was arguably not Ms Friedan’s “The Feminine Mystique” but Daniel Bell’s “The Coming of Post-Industrial Society”.

Or perhaps Rise of the Creative Class is a landmark book for demonstrating why women have increasingly found a fit in the wage-earning world.

Your thoughts?

(Thanks to colleague MW for drawing my attention to the article.)

Geoff Flood, CEO of T4G Ltd., has 230 employees who develop enterprise software solutions for large organizations. Gordon Pitts of the Globe and Mail recently interviewed him.

Asked about why he has chosen to have development centers in Toronto, Vancouver, and Halifax, he answers:

We have a strategy of locating where smart people want to live. All of these cities, Toronto included, fit that bill. There is a limit to the technology resource in the country, and we need to go where bright people want to live and can thrive.

…

For example, our largest customer is in Atlanta and the work is being done in Halifax. It is a good export business; it’s good for the talent in Halifax.

Isn’t that the opposite of the old Canadian model whereby people move to where the work is – whether Fort McMurray or any mining town?

We’re in a business where we can live anywhere and work anywhere, and we don’t really care where it happens. It’s 24/7, it’s fast-paced but if you can do it in your kitchen, we don’t have a problem. We provide communities that have a great living environment with the chance to add new workers.

In Vancouver’s case, haven’t you got some contracts, as well?

We don’t typically look for the customers in the local city. We think it is better to be in the export business and compete on a larger scale, but it’s really nice if you can work at home.

Shouldn’t you be in India, where you can slash costs?

Most people would think there is some sense to doing that. But at this point the pendulum is swinging back. I don’t think the cost advantage is there in the way it might have been 10 years ago. Even for low-cost commodity kinds of work, we’re on about par. And we want to do the hard stuff, the creative stuff, and you tend to find more of the resources to accomplish that in North America.

…

We have to be better and so do they. The global competition is wonderful, and it’s something we need to be able to work with. But in the area where we work, we have a competitive advantage.

Flood also mentions being interested in harnessing the talent of Saskatoon and Lethbridge. Seems that rather than going abroad, he’s finding pockets of talent in smaller centers.

Could this be a model for future economic and business development?

At least, ban their use in meetings suggests a Forbes article this week.

Sometimes the cure is worse than the disease. To avoid wasting time in meetings, hardcore multitaskers sit there with their faces glued to their BlackBerrys, reading e-mails while they follow the discussion with one ear. But all they are doing is making the meeting longer for everyone else.

“Being busy and being productive are not the same,” says Denise Landers, a time-management consultant based in Houston. “I definitely believe that banning BlackBerrys from a conference room would lead to shorter and more effective meetings. We simply cannot multitask and perform at 100%.”

….

Another recent study, this one by the University of Texas at Austin, offers hope. Titled “The Social Influences of Electronic Multitasking in Organizational Meetings,” this report concludes that people don’t multitask because they have to; they multitask simply because they can. They see other people reading e-mail during meetings, so they do it too. But if the office culture discourages multitasking during meetings, they will stop, and focus on the issue at hand.

Even deeply ingrained habits are subject to change over time, Crenshaw notes. As every fan of Mad Men knows, smokers once routinely lit up during meetings. Now they don’t. The same thing can happen to multitasking.

“I view myself as an evangelist,” he says. “It’s going to take probably another decade of talking about this before people get the message.”

Does your workplace have a Blackberry policy? Do you?

Where I work people rarely if ever use a Blackberry while in a meeting, unless to look something up or to take a quick glance to ensure no emergencies have arisen (a few colleagues need to be available 24/7 to put out virtual “fires”). If the senior people and mentors follow this policy, it seems others stay in line.

Social media, communications technologies, and more flexible workplace attitudes have been driving changes to the way we view our personal and professional lives.

A recent Knowledge at Wharton article examines the evolving etiquette as well as challenges surrounding the rise of mobile technologies, such as the Blackberry, as well as social media websites like Facebook and LinkedIn.

As Facebook, Twitter and 24-hour Blackberry access blur the lines between business and personal lives, managers and employees are struggling to develop new social norms to guide them through the ongoing evolution of communications technology. Wharton faculty and other experts say the process of creating rules to cope with the ever-expanding reach of modern communications has just begun, but will be shaped largely by individuals and organizations, not top-down decrees from a digital Emily Post. Generational differences in the approach to openness on the Internet will also be a factor in coming to common understandings of how and when it is appropriate to contact colleagues, superiors or clients.

The article then details some dilemmas – where do you stand?

1.  First, is there a time when “work” should stop and “personal life” should take over?  From the Wharton article:

For example, a Blackberry can allow parents to attend their childrens’ soccer games while remaining in contact with colleagues at the office in case an emergency comes up. But, [Nancy Rothbard] adds, “you have your Blackberry at your kid’s soccer game. That’s another … line you may be crossing.”

2.  Is it healthy to blur your personal self and professional self ?

…says Wharton marketing professor Patricia Williams, “There is the self we are for our friends, a self for our family [and] a professional self. What’s interesting is the degree to which we are comfortable playing all of those ’selves’ at one time.”

“I’ve heard people say that Facebook is for personal friends and LinkedIn is for professional contacts,” Williams notes. “But many of my Facebook friends are my colleagues – people who work just down the hall – and I don’t have a problem with that. I do, however, have some discomfort being ‘Facebook friends’ with my students, because it gives them access to my personal self that’s not normally available to them.”

3. Are younger people, today’s children up through college students, growing up with no separation between these different “selves”?  And what will this mean for the way we work?

Typically, business norms evolve through official policy disseminated by organizations and by “reality” that bubbles up from the organization’s grassroots. [Wharton Professor Monica McGrath] asks “The question is: How accessible do you want to be? [Today,] young people want to be very accessible, and in an international corporation you are expected to be available [around the clock]. Time zones mean nothing. The norms will continue to develop based upon generational leadership.”

To sum up, I expect that the line between personal and professional will become increasingly blurred. First, knowledge work is highly collaborative and it’s hard to work with people who you don’t like – therefore, people will forge friends through collaboration at work. Second, younger generations will have grown up with limited separation between their different personas.

How do mobile and social media technologies enhance or detract from your personal and professional life?