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Creative Class = Economic Growth?


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The road to riches?

Richard Florida has built a thriving career on the theory that the "creative class" drives urban economic growth. But critics increasingly say his ideas just don't add up.

By Christopher Shea, 2/29/2004

THE ECONOMY MAY have been flat for the last two years, but Richard Florida is soaring. The Carnegie Mellon business professor's 2002 book "The Rise of the Creative Class" connected with something in the public psyche. It heralded the arrival of a new breed of American worker: educated, ambitious, hip, probably a mountain biker, ready to dump a job whenever hit with the slightest urge for a "life shift." These workers differ from the old Organization Man in many ways, but this difference is crucial: Creative-class members want not just decent jobs and good schools but "authentic" neighborhoods, Thai food, a happening arts scene, and -- most importantly -- proximity to other "creatives."

Florida's jaunty New Economy tome, a bestseller, set in motion his thriving career as an urban-development guru. Even in the post-boom era, civic leaders are seizing on the argument that they need to compete not with plain old tax breaks and redevelopment schemes, but on the playing fields of what Florida calls "the three T's: Technology, Talent, Tolerance."

The mayor of Denver announced last fall that he'd bought copies of "The Rise of the Creative Class" for his staff and, inspired by his reading, engaged an $80,000-a-year public-relations expert to "rebrand" the city as a more creative metropolis. After perusing the book, Michigan governor Jennifer M. Granholm put on a pair of sunglasses and boasted that, thanks to Florida's ideas, Detroit,Dearborn, and Grand Rapids would soon be "so cool you'll have to wear shades." She has asked the mayors of 250 Michigan cities and towns to form "Cool Cities" advisory boards to brainstorm about hipsterization strategies. Additionally, Michigan is spreading seed money to startups in the life sciences, high-tech automotives, and homeland security.

Florida consults with Granholm free of charge, but he gives about 50 paid speeches a year and also owns a consulting company, Catalytix, that has helped Providence, R.I., measure its "brain drain" and is now assisting upstate New York with a revitalization plan. (Some suggestions: Promote outdoor sports, create "support mechanisms" for artists, and have local families "adopt college students" so they'll stay in the area after graduation.) Last spring, he appeared with leaders of Massachusetts arts groups at a two-day conference in Framingham aimed at making the case for increased state arts funding as an engine of economic growth. Last month, he met with Hillary Clinton's staff to discuss the upstate New York plan.

Now, just as the paperback of "The Rise of the Creative Class" is appearing in bookstores, Florida is internationalizing his argument. In the current Washington Monthly, he argues that places like Brussels, Sydney, Wellington (think "Lord of the Rings"), and Dublin are giving American creative-tech centers a run for their money by hustling for mobile intellectual talent. Meanwhile, he writes, the Bush administration threatens to touch off a "creative class war" with innovation-busting policies like the ban on stem-cell research and increased scrutiny of foreign graduate students.

At the same time, an anti-Florida tsunami is gaining momentum. A growing number of urban-policy commentators question his advice that mayors concentrate on luring "singles, young people, homosexuals, sophistos, and trendoids," as Joel Kotkin, a journalist and professor of public policy at Pepperdine University, put it in the magazine American Enterprise last summer.

Florida is taking political hits from the right and the left -- and battling back on his lavish website, CreativeClass.org. "There is just one problem: The basic economics behind [Florida's] ideas don't work," writes Steven Malanga in the Winter 2004 issue of the conservative City Journal. And in the latest issue of the waggish leftist journal the Baffler, based in Chicago, writer Paul Maliszewski calls Florida's city-revitalization theory "so wrong and backward that it reads like satire." Florida has "mistaken the side effects of a booming economy," he writes, "for the causes of growth." After all, "Potemkin bohemias" are not going to get old steel cities humming again.

. . .

Pepperdine's Joel Kotkin, who runs his own consulting business, says he first had his doubts about Florida's work when he read a Florida paper yoking together the Bay Area's gay-friendliness with its success as a tech incubator. "I started to think, `San Jose is 40 miles from San Francisco and those are really different worlds,"' he says.

Then Kotkin was startled when the leaders of gray Midwestern cities began to ask him for advice on how to lure 25-year-old gay college graduates to their regions. "I'd say, `What do you mean? You don't have a snowball's chance in hell.' " Furthermore, Kotkin dismisses Florida's idea of a 38-million-strong "creative class" -- some 30 percent of the US working population -- that lumps together everyone from ballerinas to software coders to accountants. "I don't see how they are more creative than bricklayers," he says.

In publications ranging from Metropolis to Blueprint, the magazine of the Democratic Leadership Council, Kotkin has been arguing that right now workers and businesses -- including tech firms -- are more interested in affordable housing and labor costs than they are in the availability of lattes. Besides, he argues, tech people actually *like the suburbs.

Kotkin also takes issue with Florida's metrics. According to Florida, for example, San Francisco (#2), Boston (#4), and Portland (#6) are all among America's most creative cities -- past and future powerhouses. But in the current issue of Inc. Magazine, Kotkin presents a list of the "10 Worst Metro Areas" in which to do business, which uses a more blunt measure: job creation in 2003. Boston, New York, and San Francisco, in this view, are the "lost bubble children of the 1990s": pricey and overreliant on tech.

The top big-city job creators last year, meanwhile, were Atlanta, Riverside-San Bernardino, Las Vegas, San Antonio, and West Palm Beach -- none of which are superstars according to Florida. Kotkin is especially hot on Riverside-San Bernardino, California's "Inland Empire" -- a hipster urbanite's idea of sprawling hell on earth, but one which has attracted some 660,000 new residents since 1990.

In his City Journal article, Stephen Malanga adds some fresh attacks on Florida's statistics. Florida's list is self-contradictory, he argues: The Top 10 creative large cities increased their jobs base by 17 percent over the past decade, while his 10 worst (a roster of shame that includes Oklahoma City, New Orleans, Las Vegas, and Memphis) grew by 19 percent. The best remedies for downcast cities, Malanga argues, are the good old conservative ones: Cut taxes and slash onerous regulations.

. . .

But Florida sticks to his guns in the face of these critiques, arguing that his ideas sit squarely in the economic mainstream. He points to a long line of respectable research -- by the Nobel Prize-winning economist Robert Lucas and the Harvard sociologist Daniel Bell, among others--citing the rising importance of "human capital" as America de-industrializes. Some cities may bind businesses in excessive red tape, but in the end American cities can't compete -- among themselves, or worldwide -- on cost alone. "Why does New York have to play the same role in the world economy as Bangalore, or Oklahoma City?" he asks.

As for Kotkin's alternate list of hot spots, Florida says: "I will take any day Boston and San Francisco and New York over Las Vegas and Des Moines and the rest of Joel's cities." The latter group, he points out, just end up manufacturing and distributing what the more "creative" cities have invented.

Can hard numbers resolve this debate? According to Harvard economist Edward Glaeser, there are grains of truth -- and great dollops of hype -- in both Florida's and Kotkin's views. Florida is onto something -- but only in the industrial Midwest and East, where "skills are close to destiny," he thinks. (He defines skills largely as a college degree, without all the extras Florida adds.) College-educated workers, he points out, helped Boston reinvent itself after factories were shuttered.

But nationally, Glaeser believes other factors are driving growth: People want to live in sunny, dry climates and -- to the horror of smart-growth advocates everywhere -- they actually like car-centered cities. In place of Florida's "Technology, Talent, Tolerance," Glaeser proposes a different recipe: "Skills, Sun, Sprawl."

. . .

The most biting attack on Florida comes, ironically, on class grounds. When Pittsburgh razes an old factory, the Baffler's Paul Maliszewski charges, Richard Florida gets teary over the loss of future loft apartments, while the steelworkers who've lost their jobs over the last quarter-century are acknowledged "only in passing and as statistics." In Florida's new utopia, the working class exists only to "serve the creatives, cleaning up their mess." In a C-SPAN exchange acidly described by Maliszewski, entrepreneurs with "idle minds and comfortable bodies" whine to Florida that unions and taxes are hampering their deep creative visions.

Florida, who has posted a lengthy rebuttal to the Baffler on his website, calls this attack "really weird." He says he is constantly telling city fathers that they need to harness the creative power of all their citizens, rich and poor. "What we have to do is open up membership in the creative class to a much greater group of people," he says, until it eventually includes "everyone."

So schools need to get better, for starters. Admittedly, that's not quite as catchy as the soundbites Florida was generating two years ago, but at least it's one even squares can get behind.

From The Boston Globe

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Interesting article. IMO, as long as a city does what it takes to take care of its residents, it will be okay. I wouldn't pay much attention to Florida or any of these other guys concerning economic development. If a city slash taxes, remain affordable and open minded, then you'll grow.

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The problem is that when you are a struggling city like Detroit, you cannot afford to cut taxes. The city has now lost more than half of its population. The latest estimates have the city's population at 918,706. The city can't pay for an infrastructure built for 2.2 million people when the city has only 918,706 people. Detroit isn't exactly open minded, so that doesn't help any either.

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For a struggling city like Detroit to rebound, it ultimately needs to change its attitude towards economic development. Its needs to streamline the governmental approval process to get projects (ie. casinos) built faster, and it needs to be more open to handing out tax breaks and incentives to new relocating or expanding companies that bring high paying jobs or high profile projects (ie. Book-Cadillac) into the city. Regardless of your economic state, you have to spend a little money before you reap the benefits that in the long run will far exceed the break you gave in the first place.

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Detroit does need to change its attitude towards economic development, and it is slowly doing that. It has tried to streamline the buildings permits process, especially with the numbers of buildings permits being issued in the city these days. The city has also tried to streamline the demolition permit process as well. With regards to encouraging companies to locate there by providing tax breaks, well, that is easier said than done when the city is facing a $263 Million loss this year. If the city had a farily balanced budget that would be one thing, but when it's as bad as it is right now, that's another thing.

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I understand, but there are other ways to give tax breaks without giving up money up front. I'm pretty sure the city owns a lot of vacant buildings. Maybe they could give some land away to a developer willing to spend his money to build something useful on it. Or they could waive property taxes for a project for a cetain amount of years based on how many jobs they create. While it seems like this only benefits the developer, 10 years down the road when all of the nearby land is developed the city will be in much better shape.

This is what happened in downtown Lakeland 10 years ago. Two large department stores moved to a suburban mall and downtown went down the tubes. Since nobody wanted the vacant buildings, the department store companies gave the city ownership. The city then in turn sold each block wide building for $10 each to Publix and Watkins Motor Lines for them to renovate and use as offices. That bought 1,000 well paid jobs to downtown and the result was new restaurants, retail & service businesses to serve those employees. Now 10 years latter downtown is healthy and the city no longer gives out incentives.

To make a long story short, although the city didn't gain much in immediate profit for practically giving away the large buildings, the area's property values went up when others renovated spaces around the companies to serve their employees.

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IMO the labelling of particular career types - or even more so, particular people - as being more "creative" is absurd; everybody wants to demonstrate their creativity in their own way, but are ultimately limited by their economic powers. And associating that with "homosexuals, sophistos, and trendoids" is not only being too PC by calling gays extra creative but also by associating wealthy, elite, "sophiscated and trendy" people as the cornerstones of the economy. Replace that way of describing wealth with "corporate CEOs", and you've got something that's not really different except it appeals to an audience that isn't as "liberal". And "Skills, Sun, Sprawl"? :ph34r:

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