"Let me tell you, I am not a student of tolerance, or arts and culture, or things like that. I came to those things as a student of economic development."
-Professor Richard Florida, August, 2003, in the speech above, speaking in San Diego, and promoting his 2002 book, The Rise of the Creative Class. He was then teaching at Carnegie Mellon University in Pittsburgh.
In the previous chapters, I've shown why I think the two ultra long term concepts mentioned, The Toffler's Third Wave theory, and P.R. Sarkar's Law of Social Cycle, really help to explain the big picture that's underlying our seemingly crazy, chaotic, fast changing world today. I believe we are in a decades-long transition period, where the remaining remnants of the Industrial Age society are breaking down, and new systems, industries, and businesses are being born. Those new businesses and systems are parts of the rapidly building Information Age. Paralleling that continuing transition, we are in the midst of a major populist uprising where the big business and government worlds have reached peak corruption in many places, and the working people are saying, "OK, that's IT! We've had enough." The shit is hitting the societal fan, to use the technical term, and that fan is dialed up to 11. Those are the super long term trends that have led to today's world, in my opinion.
Early in in this mash-up book/blog thing, I told you there are three theories that help put our current weird society, here in the U.S., in context. The third concept comes from one time Carnegie Mellon professor, Richard Florida, and was first explained widely in his 2002 book, The Rise of the Creative Class. Professor Florida now lives in Toronto, Ontario, Canada, and heads the Martin Prosperity Institute, in the Rotman School of Management, at the University of Ontario.
Like the previous chapters, this chapter is my understanding of Professor Florida's work, and how I think it pertains to the big picture I see happening. The Creative Class concept has great depth, and many nuances, now explained in five books and numerous articles, speeches, and interviews, over 18 years. In this chapter I'm just hitting some of the major themes, that I believe really explain huge trends happening in our world right now, sort of a current layer of trends, on top of the longer term trends I've mentioned before. As with the other concepts, I highly recommend digging deeper into Richard Florida's work, if you find this chapter interesting.
One of Professor Florida's big insights was that human creativity is now the driving force in our economy, in our high tech enabled world. The continuously evolving stream of emerging technologies opens up new possibilities all over our society. But it takes a person with an idea, and then a small group to take that idea and build it into a new business, an industry, a new social organization, or system, of some kind. Technological breakthroughs are great, but there's human creativity that invents the initial technology, then invents products with the new technology, and more human creativity that finds new uses, and new directions to take and use that creativity.
"The person with a new idea is a crank... until the idea succeeds."
-Mark Twain
In 1975, Young Bill Gates had an idea, to build a world where there was a computer on every work desk, all running Microsoft Software. That idea made no sense to anyone in 1975. We are in that world now, where there are work computers are everywhere, and a vast number (including the one I'm using now), run Microsoft software. Forty-five years after the company started, it's a $1.42 trillion dollar company. Also in 1975, Steve Wozniak wanted to create a really cool personal computer. His buddy, Steve Jobs, wanted to create a personal computer that everyday people could easily learn to use. Another crazy idea at the time. Their visions turned into Apple Computers. Apple is now a $1.41 trillion company. Mark Zuckerberg and his Harvard classmates wanted to use the internet to get laid. They invented a website, The Facebook, which became the Facebook social media platform we all know today. Facebook now is a $618.5 billion company, less than 20 years after its founding. (This blog just got banned by Facebook today, oddly enough). You get the idea. The idea is, as we all have heard many times, everything starts with an idea in one person's head. Now, more than ever, new ideas and human creativity drive our economy.
The Rise of Professor Richard Florida
Richard Florida, as a young professor in economic development, was hired by Carnegie Mellon University, in 1987. CMU brought him on board to assist in the effort to help Pittsburgh, Pennsylvania recover economically, after losing more than 150,000 manufacturing jobs in the 1980's. Carnegie Mellon, located in Pittsburgh, was graduating very high caliber computer scientists and tech people. But those people kept moving to other places. Very few, if any, of those high caliber computer and tech-oriented people, stayed in Pittsburgh after graduating. To thrive economically once again, Pittsburgh needed those key people to stay in the area, brainstorm, start new tech companies, and put their brains to work in Pittsburgh. Finally, when Carnegie Mellon tech spin-off company, internet search start-up, Lycos, moved to Boston, Professor Florida knew something new, and big, was happening.
The traditional model for economic development, throughout the Industrial Age, was for city and regional leaders to schmooze major corporations. City leaders would woo big business companies with tax incentives, new infrastructure proposals, and basically big, legal bribes. When a city got a major industrial company to build a new factory in their town, like a Ford or GE manufacturing plant, the business would create hundreds or thousands of new jobs. Good workers from all over would come to the new plant, make the city their home, and the local economy would jump into high gear. Professor Florida, after Lycos moved to Boston, realized something much different was happening in the 1990's, in the surging high tech business world of the Dot Com era.
Digging into the question of why a Carnegie Mellon spin-off would leave the city where it spun off, Florida and his team learned that Lycos moved to Boston because they were having a hard time quickly attracting the talented people they needed to build the company, as fast as they needed. Boston, already a high tech hub, had a large pool of the right types of tech, creative, and marketing people that Lycos needed to hire. Florida went on to find out the same was true of other high tech companies. Instead of the workers moving to where the good companies were, he learned the tech companies were moving to where the good tech people were located. That was a complete reversal of how business, and economic development, had worked in the Industrial Age.
The Rise of the Creative Class
As his research continued, Richard Florida and his team found a whole new class of working people. At the urging of his book editor, he dubbed this group of highly creative workers "The Creative Class." This group consists of scientists, engineers, high tech workers, artists, musicians, poets, novelists, journalists, teachers, professors, researchers, developers, and professionals in law, finance, and health care (as Professor Florida explains at 17:25 in the speech above). As he continues to explain above, the Creative Class made up less than 5% of the workforce in 1900, and less than 10% of the workforce in 1950. In 1980, the Creative Class made up about 15% of the workforce. By the early 2000's, the Creative Class had grown to about 35% of the U.S. workforce, and accounted for over 50% of the total wages and salaries paid. The Creative Class not only came up with most of the ideas for whole new businesses and industries, they were rapidly growing as a group, as the manufacturing jobs disappeared, lost to new technology and outsourcing.
Professor Florida's research showed the Creative Class was growing rapidly, and that class held a huge chunk of the better paying jobs in the U.S., as we headed into the 21st century. The members created the new high tech companies, and other growing areas of the economy. Another major trend soon emerged. High tech companies cluster in certain areas, regions that became the new tech hubs. "Silicon Valley," initially the area between San Jose and San Francisco, California, is the best known, and emerged as the dominant tech hub worldwide. Now it encompasses the whole San Francisco Bay Area. The other major tech hubs in 2002 were (and still are) Boston, Seattle, Los Angeles/Southern California, New York City, Washington D.C., Austin, Texas, and the Raleigh Research Triangle. The growing and emerging high tech businesses of the Dot Com era of the late 1990's clustered primarily in those regions, and not much of anywhere else.
So the next question became, "Why do the tech companies cluster in those regions, and avoid pretty much everywhere else?" Richard Florida and his research team got a bit of grant money, and started researching why computer science and tech people decided to live where they lived. The reasoning was, if the growing tech companies of the 1990's were going to where the people were, why were those tech people clustered in certain regions, and largely absent in others? It turned out that these tech people were highly creative people, and those highly creative people gravitated to cities that already had other highly creative people.
"Creative people like to be around other creative people."
-Richard Florida
The creative tech people of the 1990's (and since) moved to regions that already had highly creative people, particularly good music and art scenes. The tech people questioned also said they wanted to move to a place that had several tech companies. So if these tech workers left one job, they wanted to be able to easily find another job nearby. They wanted an exciting city where they could see a great band over a few beers, or attend a hip art show, and just be able to socialize with other highly creative people. It was completely counterintuitive then. That was at a time when the internet, early cell phones, and laptops were allowing people to live and work almost anywhere, and work over the web. Yet, highly creative people, suddenly more important to the economy than ever, at a time when they could work from nearly anywhere in the world, were actually clustering in certain cities more than ever. And the new, fast growing, high tech companies were moving to those tech hubs, where the good computer science, tech, creative, and marketing people were clustered.
Professor Richard Florida, and his team, in the late 1990's and early 2000's, found that traditional economic development tactics were going out the window with the rise of high tech and computer based technology companies. A city with traditional resources, like good railway and interstate highway access, but no serious creative scenes or creative culture, could offer a high tech company any tax incentives, infrastructure improvements, or flat out bribes they wanted. If the city didn't have a large number of high caliber tech people already, the city would not get a major tech company to locate there.
On a personal note, when Professor Florida published The Rise of the Creative Class in 2002, I didn't hear of the book. I was living in Orange County, California, in one of the main tech hubs, Southern California. I was not involved in the tech world at all. In the highly creative and highly entrepreneurial culture of Southern California, attracting creative people was not an issue, they were all over the place. When my personal situation went down hill, in the lead-up to The Great Recession, I went to stay with my family, then living in central North Carolina. It was then I discovered how bad the job situation was in much of the country.
Later, in 2009, I read an article in the local weekly entertainment paper, and it mentioned the city trying to attract "the creative class" Richard Florida had written about. So I read his book, The Rise of the Creative Class. Having spent my young adult years working in the BMX freestyle and skateboard industries, I was used to working with highly creative and entrepreneurial people, and familiar with how little local scenes of skateboarders, BMXers, and other action sports people, promoted their sports and grew their scenes. Those scenes ultimately spread, businesses and media was created, and these action sports are now worldwide. While Professor Florida was studying these trends in the tech world, I was watching them happen firsthand, in BMX, skateboarding, and other action sports. So when I read The Rise of the Creative Class, in 2009, everything he was saying made perfect sense, I had already seen it happen in my own world of action sports.
In the mid and late 90's, Florida and his team dug deeper into why tech workers chose to live where they did. The large number of tech people polled by Professor Florida and his team frequently mentioned another thing that surprised the interviewers. Tech people not only looked for art and music scenes, and other highly creative people, when looking for a potential place to move. These tech people also looked for weird people, they looked for punk rockers, or people with piercings and tattoos (still fairly unusual then), and they looked for a visible gay community. This surprised the researchers. So they asked why those things were important. The tech workers said they, themselves, were creative, and odd by normal standards. By looking for the unusual people, the weird people, and a visible gay community in a city, they could tell if that city was tolerant of people outside the norm. The tech workers wanted to move to a place where they could be themselves, and not have to worry about being harassed or ostracized for being weird and unusual. The tech workers wanted to move to cities where they could let their freak flag fly, so to speak. With that in mind, it's easy to see why places like the San Francisco Bay area, or Austin, Texas (city slogan: "Keep Austin Weird") became high tech hubs.
In effect, as high tech rose from obscure "computer geeks" in garages and basements, into multi-billion dollar (and now some trillion dollar) industries, and the foundation of today's technical and communications infrastructure, there was also a migration happening. A large number of the really smart, highly technical, and highly creative people from across the U.S., and around the world, world migrating to the tech hubs listed above. There was a brain drain happening across the rest of America. A sizable number of the creative and talented tech people were leaving mid-sized cities, small towns, and rural America, and moving to Silicon Valley, or Seattle, or Austin, or the other tech hubs. They were going to the big cities where there were already good art and music scenes, where there were established tech companies, as well as new start-ups. They were going to places that were far more tolerant of weird and unusual people. They were going to places that were fun, exciting, vibrant, creative, and had lots of tech jobs and opportunity. Many of these highly intelligent, highly creative, mostly young people, were leaving more conservative cities, towns, and rural areas. So the more conservative areas, cities and towns, already hit hard by the loss of high paying manufacturing jobs, also lost many of their smartest and brightest young people. That was the same problem Professor Florida saw happening in Pittsburgh, in his early years at Carnegie Mellon.
Because of this brain drain, the struggle for all of the cities and towns outside of the major tech hub regions, was to attract high tech businesses. While the tech hub cities often struggled to find good people for high paying tech jobs, most of the cities across the U.S. (and some other countries) struggled to find businesses, any businesses, to put their all of their citizens to work. Hundreds of small towns and cities tried to figure out how to get a Google, an Apple, or a group of emerging tech start-ups, that might be the next Facebook, to locate in their city.
Richard Florida's book, The Rise of the Creative Class, became a hit among civic leaders across the U.S. (and world), in all those towns and cities trying to attract high tech to their area. I watched this happen in central North Carolina. Money was put into redeveloping downtown areas, local arts, music, and craft scenes were supported. Murals were painted (Richmond, Virginia is a hotbed of incredible murals, for example). Microbreweries were opened. Old factories and warehouses were converted into hip, new business districts. A lot of good things happened in dozens, more likely hundreds, of small towns and cities. A huge part of these improvements in cities and towns across the United States were inspired, to some extent, by Richard Florida's first book, The Rise of the Creative Class. A lot of civic leaders worked to attract those Creative Class workers that Richard Florida wrote about. Florida.
With the reaction to his initial book, The Rise of the Creative Class, Richard Florida saw cities trying to attract "The Creative Class." In his follow-up book, The Flight of the Creative Class, he addressed one major thing many people missed.
"Every single human being is creative"
-Richard Florida
The research, writing, and work of Professor Richard Florida, over the past three decades, has shown us that high tech has changed the game in the regional battle for economic development. High tech companies now tend to locate, or move to regions, where the highly talented people are already located. That's a reversal of the traditional, Industrial Age, economic development techniques and strategies. Richard Florida found an entire new class of workers, now comprising about 35%, or more, of working Americans. This group, The Creative Class, is made up not only of artists, musicians, writers, designers, and traditional "creative people," but also scientists, engineers, teachers, professors, researchers, developers, and professionals in law, finance, and health care. All of these people have to make decisions and use their creativity, to some extent, daily.
Professor Florida also found that these talented Creative Class people, being creative by nature, like to live in a city or region that already has scenes of highly creative people, places with vibrant art, music, and other creative scenes. Because the high tech companies locate where these people are, they tend to cluster in a small number of tech hub cities. The primary cities/regions are: The San Francisco Bay Area, Seattle, Boston, Los Angeles/SoCal, New York City, Washington D.C.,
Austin, Texas, and the Raleigh Research Triangle. This clustering of high tech companies has caused a brain drain of the best and brightest tech people from rural areas, small towns, and mid-sized cities across the U.S..
Another aspect of this clustering is that the higher paid tech and other Creative Class workers tend ot drive up real estate prices in tech hub cities. This makes for higher house and rental prices for other people. This makes life harder on the lower paid service workers in those regions, and those regions tend to have a higher level of income inequality. So while most smaller cities across the country struggle to find businesses to put their people to work, tech hubs often have trouble finding enough good people for the jobs. This also means that most of the U.S. economy is centered in a small number of big cities, and had largely left much of America behind, economically. Richard Florida's later books and thinking have worked a lot on these other issues that are part of the Creative Class phenomena.
In the near term, and the mid term, the major tech businesses, and most well funded start-ups, will most likely continue to cluster in those tech cities listed above. Yes, there are some smaller towns and cities with much smaller, but growing tech scenes. But the majority of high tech companies will most likely stay concentrated in the places they're at right now.
I think there's another major event coming soon that will act as a major catalyst for levels of change faster than our now "normal" level of fast change. I think we are entering the decade of massive breaking down and rebuilding, because of the event I see coming soon, and that's the subject for the next chapter.
This chapter compiled and written by Steve Emig, based on the work of professor Richard Florida, and his research teams over the years.
Any political views expressed in this chapter, or the others, are mine (Steve Emig), and not those of the people whose work I'm referring to.
Blogger's note- 9/12/2023- I have not changed anything in these posts since I originally wrote them in 2019-2020, except these notes at the bottom. I even left in the typos I missed originally. As of late summer 2023, I'm doing most of my writing on Substack. Check it out.
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