Creative Class

Richard recently appeared on Big Think to share his ideas on how the Creative Class is impacting the way businesses think.

“Now more than ever, companies need unconventional thinking to work within the new rules set by the economic recession. Richard Florida has persuasively demonstrated how artists, scientists, engineers, writers, musicians and more can revitalize an entire city from urban decay. With today’s companies dealing with a deep recession, what can members of the Creative Class do for businesses?”

Check out the interview here.

I thought in my first blog post for CCE I should give props to Richard for helping me get to this point. I first met Richard in 2003 when he came to speak in Tampa, Florida for the first time. I had read TROCC at the suggestion of my wife (at the time), Michelle Bauer, who was the executive director of the Tampa Bay Technology Forum. They were part of a unique coalition of groups that brought Richard to Tampa.  Also key in the process were the Tampa Chamber of Commerce, the Arts Council, and Workforce Tampa.  Getting these four entities to agree on one speaker truly was historic!

TROCC and Richard’s talk got me excited about ideas in a way that I had not been excited by ideas since college. It spoke to how I worked, how I thought about my life and my community. I suspect I am not alone in this capacity. I got to know Richard and his former associate Rod Frantz and we became friends, conspirators, and colleagues.  Creative Tampa Bay was founded in 2004 and took up the mission of developing the creative economy in the region. I became its second president and within two years I had the honor of sharing a stage with Richard in Perth, Australia, where we talked about the impact of his work on communities like mine.

Richard’s work shifted the direction of my own work and has led me to other incredible thinkers and practitioners in this arena such as Charles Landry, John Howkins, and Carol Coletta. In true creative class fashion, I have been able to create my own career and am doing work I love.  Richard had a direct influence on that, and for that, I will always be grateful.

Yesterday, I posted on the new Prosperity Index that ranked Finland first, Canada seventh, and the United States ninth. Last evening, my colleague Charlotta Mellander took a quick look at some factors that might be associated with a high ranking, running some simple statistical correlations. The most highly correlated factors (all with a correlation coefficient above .75): total factor productivity, human capital, the creative class, GDP per capita, and entrepreneurship. The Prosperity Index was highly correlated with the UN Human Development Index (at nearly .9) and reasonably so with a Gallup’s measure of subjective well-being or happiness (just a hair under .75).

An intriguing new study by Brent Eastwood finds that both income and employment are associated with levels of economic freedom and the creative class, but less with social capital, across U.S. metros. Here’s the abstract.

The need to sustain economic growth has dominated urban policy in the U.S. for decades. Feeling pressure to meet this need, city and state governments have rushed to adapt economic policy concepts that are untested by researchers or need an updated examination. This article explores the effects of social capital, Creative Class Theory, and “Economic Freedom,” on U.S. urban economic growth. It tests a 272 metropolitan statistical area (MSA) sample and their scores on Florida’s (2002) Creative Class Index, Rupasingha et al.’s (2006) Social Capital Index, and Pacific Research Institute’s “Economic Freedom Index.” The author measures economic growth using the percent change from 2000 to 2004 in Total Employment and Total Personal Income for each MSA in the sample. The data show a highly significant and positive relationship for economic growth among MSAs with high Creative Class ratings and high Economic Freedom scores. The social capital variable had insignificant and or negative relationships as an explanatory variable for economic growth. (EastwoodNet.com; Applied Research in Economic Development, vol. 6, issue 1, 2009)

Read more here (pdf).

Creative jobs are not only a big factor in the success of urban areas, they help to power growth in rural areas too. New research by my colleagues at the Martin Prosperity Institute examines the role of creative jobs in the economic development of rural communities in Ontario.

In the decade 1996 to 2006, creative class jobs led job growth in rural Ontario at 22 percent, considerably ahead of working class jobs which grew at 13 percent and service class jobs which expanded by nine percent. Over the same period, agricultural and resource jobs fell by 20 percent.

A summary of the research is here.

The U.S. unemployment rate is 9.7 percent, the highest in some time, but the burden of unemployment is  spread unevenly across the economy. Production workers face a 15.1 percent unemployment rate, while unemployment among construction and extraction workers stands at 17 percent. But unemployment among management and professional workers is only 5.4 percent. Researchers at the Martin Prosperity Institute (MPI) previously identified long-run differences in the unemployment rates faced by industrial workers and knowledge, professional, and creative workers.

New analysis by the MPI team tracks unemployment among management and professional – or creative class – workers from 1983 to the present. While unemployment among creative class workers as a whole is far below the rate faced by production and construction workers, there is considerable variation in unemployment among the various occupations, professions, and job types that make up the creative class.

Creative workers in arts, design, and entertainment occupations consistently face higher unemployment rates and significant spikes during recessions. In contrast to other creative fields, the unemployment rate for arts, design, and entertainment workers sometimes runs higher than the overall unemployment rate.

Computer, sciences, and engineering professionals experience lower rates of unemployment than arts, design, and entertainment workers. But the lowest rates of unemployment and the most stable employment are found in meds and eds occupations – health and education – where unemployment stays consistently low, even during downturns.

The full analysis is here.

Yesterday, we looked at the relationship between drug use and economic patterns. We saw that drug use was associated with both higher levels of state economic output as well as higher levels of unemployment.

Today, I turn to the relationships between drug use and economic class. My colleague Charlotta Mellander charted the relationships between drug use and the percentage of a state’s economy that is made up of two classes: the creative class – that is, people who work in knowledge-based, artistic, and professional occupations; and the working class – those who work in production, transportation, and construction jobs.

While the associations between drug use overall are weak, the patterns for marijuana and cocaine are significant. Take the creative class: Both marijuana and cocaine use are positively and significantly related to states with higher concentrations of the creative class.

Correlation coefficient: 39**

Correlation coefficient: 36**

Now look at the results for the working class, where the pattern is reversed. Both marijuana and cocaine are negatively and significantly related to the concentration of working class jobs in state.

Correlation coefficient: -.35**

Correlation coefficient: -.36**

Note: * indicates statistical significance at the .05 level; ** indicates significance at the .01 level.

The U.S. economy has shed 7.2 million jobs since the onset of the recession. But the economic pain of unemployment has not been spread equally, according to a new analysis by my colleagues at the Martin Prosperity Institute.

The graph below, compiled by Ulrich Atz, tracks the unemployment rate for three broad groups or classes of employment – the working class, the service class, and the creative class from 1971 to May 2009.

The report finds that:

Unemployment for all three groups has spiked since the onset of the recession.  But the downturn has hit hardest on working class. . . The working class has been hard hit by every downturn since 1971. Working class unemployment spiked from 6.2 percent in 1973 to 14.5 percent in the 1975 downturn.  It spiked again from 7.7 percent in 1979 to 16.8 percent in 1983.  It reached 12.0 percent in 1992.

In contrast, the unemployment rate for the creative class has hardly ever reached the 4 percent mark.  Unemployment rates among the working and service class are typically about 3-4 and 2-3 times respectively the rate of those in the creative class.

A closer look at monthly data (available starting in 2000) reveals that unemployment rates among the working and service classes typically move together while creative class unemployment lags the other two by several months.

The full analysis is here.

Creativity is changing the way in which cities approach economic development and formulate policy. Creative metropolises base their economic development strategies, at least partly, on building communities attractive to the creative class worker. While there are countless examples of high-tech regions transforming into creative economies, traditionally industrial cities have received much less attention in this regard.

In a recent article with Monica Megyesi, we study Baltimore to assess the potential of transforming a traditionally industrial region into a creative economy. It analyzes Baltimore’s performance on dimensions of talent, tolerance, technology, and territory both as a stand-alone metropolitan area and in comparison to similar industrial metropolises.

This case study concludes that Baltimore has the opportunity to capitalize on the creative economy because of its openness to diversity, established technology base, appealing territorial amenities, and access to the largest reservoir of creative talent in the USA: Washington, D.C.

While a decade ago it seemed that you can transform an industrial city, today it looks bleaker than ever. Baltimore is a case in point. The rise of the creative class and the international creative class has driven a wedge between the members and nonmembers of the creative class. The evidence is to be found in the rise in inequality in income and wealth.

Without resetting the goal posts to create opportunity, America faces an uncertain future. It appears that without investing in the education and training of the non-creative class, the U.S. is on a long-run decline. How we reform, invest, and deliver educational services remains one of the most daunting challenges for the U.S. in the 21st century.

CCG recently finished up a Creative Community Leadership Project in Noosa, Australia. The program was a true success with the original group of catalysts championing several successful initiatives. 

As the program moves forward into the second year, it will operate under a broader umbrella – the Sunshine Coast Regional Alliance. The program’s goal will be to build off of Noosa’s success and extend the Creative Community project to the entire Sunshine Coast.

Read more about the coverage here:

Noosa Journal – Now it’s over to you…

Noosa News – Change of name is a Sunshine Coast merger

Sunshine Coast Daily – Handover stretches benefits of alliance