Creative Class

There’s a great post by Edward Glaeser (in the Economix blog of the New York Times), titled “New York, New York: America’s Resilient City.”

In it, he describes how New York has managed to avoid the decay that has afflicted many large older cities, and, after a brief downturn in the 1970’s, came roaring back as arguably the most influential single city in the world.

His explanation? In a word - “smart people.”

“New York still has an amazing concentration of talent. That talent is more effective because all those smart people are connected because of the city’s extreme population density levels. Historically, human capital — the education and skills of a work force — predicts which cities are able to reinvent themselves and which ones are not. Those people who are continuing to pay high prices for Manhattan real estate are implicitly betting that New York’s human capital will continue to come up with new ways of reinventing the city. “

Glaeser continues, describing why dense cities succeed…

“They thrive by enabling us to connect with each other, which then promotes learning and innovation. The current downturn will only increase the returns to being smart, and you get smart by hanging around smart people. As long as New York continues to attract and connect those people, the city will continue to thrive.”

Now here’s what every city planner wants to know. Is this replicable? Can this success be engineered or encouraged, and are the effects measurable in 10 years, 20 years, a lifetime?

Does anyone have successful examples of campaigns and projects to replicate this resilient infrastructure? Or perhaps, examples of some cautionary unsuccessful attempts?

Best wishes to everyone for a creative and fruitful New Year!

Few things are more important in capitalism, or any society for that matter, as the incentive structure. If the incentive structure is right, people will move into productive activities. If it is not they might become unproductive or, even worse, destructive. During 1980, the business community engaged in unproductive, or what we call rent-seeking activities. These take from Peter and give to Paul. During the 1990s, the U.S. was involved in one of the most productive periods in its history with large numbers of people engaged in productive activites (ICT revolution) that created new wealth. During the 2000s, a set of unfortunate events created an incentive structure that destroyed instead of creating wealth. This destructive entrepreneurship was caused by ideology, changes in the tax laws, and lax regulation. The outcome - trillions of dollars in wealth lost. This form of destructive entrepreneurship is the legacy of the past decade when investment did not flow into productive activities. In fact, it was destructive. How to change the incentive structure to get us back to a productive form of enterpreneurship is a million dollar question for which there are no easy answers.

I’m a member of the Net-Generation, people born between 1978 and 1997. At first glance, my cohort seems tailor-made for a decentralized and “flat world,� so we shouldn’t care so much about the place where we work. After all, the internet, like no other technology, has lowered geographical and temporal barriers for communication and collaboration, and N-Geners, like no other generation, are the most comfortable and capable working, learning, and communicating online. Case in point: I recently found myself collaborating on a project with two college pals on Skype (the free online video phone application): one in Palo Alto, California, the other in Alaska, while also chatting and sharing photos with a friend who was in an internet café in rural Vietnam.

However, while technology has lowered barriers and allowed people all over the world to participate in the global economy, it’s a mistake to suggest now that ‘place’ is no longer important for today’s emerging creative workers. Indeed where one works matters now more than ever.

Whether interested in finance, law, politics, computer programming, consulting, or medicine, young friends and colleagues of mine are drawn inexorably to the epicenters and major nodes of their respective fields; in cities, suburbs, and exurbs that also happen to score very high on the creative class index. This is certainly true for my friend in Palo Alto, a city straddling the area between San Francisco and Silicon Valley. He is a talented computer programmer working for an internet start-up. But what about my friends in Vietnam and Alaska, you ask? Did Google just open a server farm in Juno? Is rural Vietnam the new Silicon Valley? Why do your friends want to live there? Truth is they don’t.

My Alaska friend was working for Mark Begich, a Democrat, who defeated the incumbent Senator (and convicted felon) Ted Stevens. If ever there was an appropriate time to say “got out of there like a bat out of hell,� Jeff’s escape from Alaska after the big victory was it. Jeff is passionate about politics, and he is now in Washington, D.C. looking for full time work. Truth is he would rather struggle for a little while in D.C. than be instantly employed anywhere else. After all, every politically engaged young person he and I know wants to be in the U.S. Capitol and, as a result, a burgeoning social scene of smart, creative, and ambitious young people has flourished there. Dave, my friend in Vietnam just graduated from McGill’s School of Management and is wandering Southeast Asia barefooted and bearded trying to ‘find himself,’ but really he’s just on vacation. Like me, he will soon find himself up to his elbows in financial statements and spreadsheets. He is returning to Toronto to work at a boutique private equity group. Jeff was drawn to the epicenter of the political world. Dave, a former business student with an entrepreneurial streak, will return to Toronto- Canada’s financial capital, because he knows the city offers great opportunity for a person with his interests (it also helps that he is a die-hard Leafs fan). In both instances, the where did not merely influence their decisions, it determined them. If anything, their stints in Alaska and Vietnam simply reinforce the notion that the Creative Class, and young people in particular, travel and move throughout the world with increasing ease.

Though not identifying it as the “Net Gen� specifically, Richard Florida presciently foresaw the emergence of a new generation of the “Creative Class� in The Rise of the Creative Class, a theme that has surfaced in ensuing works. His experience interacting with students at Pittsburgh’s Carnegie Mellon University revealed that young people are drawn to certain hubs, crowding together in thriving and diverse places where like-minded individuals share lifestyles, cultural tastes, and work interests. While the moniker ‘Creative Class’ is not generation-specific, by 2018, when all members of my cohort will be of working age, the Net Generation will, simply put, dominate the creative class. As Boomers retire and Generation Xers fill the ranks of senior management, there will be an overwhelming demand for these young, highly educated people. Attracting them to companies and regions where they can thrive and prosper will be the next great imperative for today’s corporate leaders and politicians.

I encourage everyone to share your thoughts and opinions with me.  If a conversation begins, I will be happy to engage in it with you.

Maybe what we’ve been calling culture war has actually been class war.

In RISE, Richard posits the Creative Class as an entity that’s not yet self-conscious and is tied to the new creative (i.e., high tech, etc.) economy. I think the emergence of the creative economy and creative class have been met with resistance in the form of class warfare. We tend to think of class warfare in terms of rich vs. poor, but this is between the classes of the old economy vs. the creative class.

It’s played out in America’s politics as the old economy warriors took over parts of the Republican Party with anti-intellectual, anti-science, anti-elite rhetoric and used them to resist change. Those in the old economy used the culturally conservative demonization of the 1960s to organize against the emergence of the creative class which is intellectual, scientifically oriented, and tends to be highly educated. People tied to the resource-based, Fordist economy, whether Rust Belt working-class “Reagan Democrats” or oil barons, have been fighting against the new social and economic realities. The Bush administration, with its giveaways to resource-based corporations and resistance to science has been a last bastion of resistance. The automakers attempt for a bailout is another symptom of this reaction.

The battle lines haven’t always been clear because the nature of the war hasn’t been well understood by either side. We have to be careful about making assumptions or ascribing value judgments. Newt Gingrich and Karl Rove were clearly part of the creative class, regardless of which side they’re on. Tom Delay and John Dingell were clearly not. Both Clintons, Al Gore, and Obama are clearly creative class. By G.W. Bush’s job description he should be, but not his nature, so he’s hard to define. Bush Sr. and Bob Dole were essentially non-combatant leftovers from an earlier era. It’s hard to say about Reagan or McCain, who fell into both camps.

Obama seems to have captured the Creative Class vote, and may create Judis & Teixeira’s “Emerging Democratic Majority” if his policies succeed in supporting the new economy. The Republicans are faced with going the way of the Whigs unless they can abandon the class warfare and open up to the new economy and the creative class.

Civic Analytics ponders the questions and crunches the numbers.

Richard Florida was one of Donny Deutsch’s featured guests - aka big thinkers - on his CNBC Collaboration Now series which aired on November 9. Beginning with a brief definition of the Creative Class, they went on to discuss how collaborative tools, technologies, and approaches inspire economic growth into the future.

Watch the show here.

Barack Obama rode to his resounding victory on the enthusiasm of two constituencies, the young and African Americans, whose support has driven his candidacy since the spring. Yet arguably the biggest winners of the Nov. 4 vote are located at the highest levels of the nation’s ascendant post-industrial business community.

Obama’s triumph reflects a decisive shift in the economic center of gravity away from military contractors, manufacturers, agribusiness, pharmaceuticals, suburban real estate developers, energy companies, old-line remnants on Wall Street and other traditional backers of the GOP. In their place, we can see the rise of a different set of players, predominately drawn from the so-called “creative class” of Silicon Valley, Hollywood and the younger, go-go set in the financial world.

These latter business interests provided much of the consistent and massive financial advantage that the Illinois senator has accrued since early spring. The term “creative class” was popularized by former George Mason professor Richard Florida, who used it to describe those with both brainy business acumen and a very liberal cultural agenda borrowed from the bohemians of the ’60s.

I’m dumb-struck. The rest here.

One of the reasons for studying the creative class, and the super-creative core especially, is that many social, economic, consumer, workplace, and cultural changes begin there and filter out to broader segments of society.

In Rise, Richard begins the book with his famous time-traveler thought experiment. Young people with tattoos and piercings were one of the elements of the modern workplace that would have thrown our time traveler off. Is this still the case?

According to WSJ writer Ann Zimmerman, tattoo parlors are coming to a mall near you! There are a handful of entrepreneurs trying to make tattoo parlors “less edgy” and easier to get to by locating them in suburban malls! From the article:

So far, some traditional mall customers have responded well to the tattoo parlors. Geralyn Stanley, a 32-year-old high-school art teacher and mother of two young girls, wanted a tattoo but was leery of patronizing traditional parlors. When she came across the white-tiled, rock-music-playing Tattoo Nation in the Woodbridge Center Mall, she felt more at ease - so much so that she has gotten three tattoos in the past year. On one visit, she brought along her mother, a 52-year-old librarian, who got her first tattoo.

I am not sure what this means as we already know there are plenty of members of the creative class living in suburbia (including art teachers and librarians), but there is something here isn’t there? There is something going on when tattoo parlors locate between a Disney Store and a Gap Store.

An interesting side note in the story is that some tattoo artists are resistant to working in such environments -  until they find out about health insurance, paid vacations, and retirement plans.

From time to time (more often in this current financial crisis), I wonder if living in the center of a mega-region in the urban core is worth it. Traffic everywhere, expensive real estate, long lines for everything from a sandwich at Potbelly’s to checking out at a supermarket. It seems to wear me out every few months.

Over the past 12 years I have lived in D.C. (twice), London, San Francisco, and Chicago. All incredible places and strong creative class centers but, as I have experienced, not always easy places to live. I cannot be alone can I? Is Scranton, PA my “Green Acres“?

The WSJ had a nice piece by Kevin Helliker over the weekend on Scranton, PA’s revival; including increasing population and improving quality of life. From the piece:

But life in Scranton is more nuanced than the cliché of a once-powerful industrial center in decline. The population here is growing for the first time in 60 years, following a decades-long exodus that halved the city to barely 70,000 people. Its architecturally distinctive downtown, long vacant, is undergoing a dramatic renovation. And tourism is spiking, thanks in no small part to “The Office,” NBC’s hit show about the Scranton branch of Dunder Mifflin, a fictional New York-based paper company. The century-old “Electric City” sign - dark for decades - shines again above the town square.

There’s a distinctly white-collar movement behind Scranton’s comeback. A return of college-educated natives from cities like New York and Philadelphia is fueling a population rise and a civic makeover. Bringing them back are the very small-town qualities many once wanted to escape: the likelihood of meeting acquaintances and relatives on the streets. The embrace here of modest ambition. The deeply held belief - only heightened by ridicule from the outside world - that Scranton matters.

For six decades Scranton lost an average of a thousand residents a year, many bound for college. The return of even a fraction of them - along with their families - could confer substantial economic benefits. “There was a diaspora of Scrantonians, and now we’re inviting them back,” says the Chamber’s Mr. Burke. The group has a campaign called Rediscovering Scranton, which includes a Web site with testimonials from returning natives.

A population rise of about 3,000 in the last two years, to about 75,000, has given hope that the long exodus is over. School enrollment is up to 10,000 from 8,500 seven years ago. And downtown is buzzing with the sounds of construction. A Radisson hotel is in the city’s old train station. Other recently vacant buildings now house advertising agencies, architectural firms and financial offices, many started by professionals who have returned.

Precisely how many natives have heeded the call isn’t known. But many returnees seem to orbit in a large circle of other returnees, as the case of Ms. Dempsey illustrates. At her firm she employs an architect who moved back to Scranton from New York City, and a designer who moved here with his boyfriend - a Scranton native who has started a wine bar in town. One of Ms. Dempsey’s siblings, a fashion designer, quit a job at Burberry Group PLC in New York City to join a Scranton-area technology firm, while a brother-in-law left a Wall Street investment bank for a Scranton software startup.

I have never been to Scranton and don’t know if I would like Scrantonians (Helliker mentions “returnee sorting” in the pulled quote above), but the pace of life and the size as presented in the article sounds very appealing after 12 years near the center of global mega-regions. Anybody else up for moving to Scranton?

One of the reasons that we are investigating the campus as an entrepreneurial environment is that in its most ideal form there is huge diversity on campus (i.e., age, race, field of study, nationality, political viewpoints, personal preferences, socio-economic background, etc). This diversity is believed to bring many advantages.

The social and economic benefits of diversity are discussed at length in Richard’s writing and others - I am partial to Jane Jacobs’ ideas in The Economy of Cities.

WSJ writer Hannah Karp’s story, From Bloomingdales to Bloomington, tells of a new diversity at Indiana University’s main Bloomington campus where a large influx of students from the Northeast is changing life on campus. From the story:

In Indiana University’s Assembly Hall last Friday, a remarkably large chorus hailing from private high schools in the Northeast was singing the school’s ode to the “Cream and Crimson” in a pronounced New York accent.

It’s a striking byproduct of one of the most competitive college admissions sessions ever — an influx of East Coast prep-school students in Indiana. Indiana University welcomed about 260 students from the greater New York City area to the limestone lecture halls on its lush, leafy campus last week, up 12.5% from last year. Another 175 came from New Jersey, up 25% from 2007, and 50 hail from Connecticut. While the numbers of students matriculating from in-state and other parts of the country are steadily increasing as well — the school had some 500 more students accept admission offers than it had planned for — the last three years have been marked by unprecedented growth from the Northeast.

The droves of East Coast students descending on Bloomington are ruffling some feathers among the 61% of students who call Indiana home.

Upperclassmen say the tension begins to build from day one of freshman year, as most East Coasters request to live in the same cluster of dorms and send in housing deposits to guarantee their spots long before committing to the school. Jess Berne, a freshman from New York’s suburban Westchester County who had also applied to Penn State and the University of Wisconsin, sent in her housing deposit to Indiana as soon as she was admitted in October, at the school’s recommendation, eight months before she decided to actually enroll. She also requested to room with a fellow New Yorker, Becky Davies, whom she met on Facebook.

The story is interesting/funny (a father of a NY student thinks something is not quite right in Bloomington because people are so friendly) and anecdotal, but leads one to wonder whether diversity works ‘positively’ with open, accepting minds leading the way new understanding and ideas? Or does diversity work because of ‘friction’ and new outputs are the result of worlds colliding?

Are these ‘new imigrants’ to Bloomington having the same effect on campus as Eastern Europeans or Latin Americans have on US cities when they arrive in large numbers? Any thoughts?