Location Choices of the Creative Class in Finland with a Special Focus on Helsinki
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Location choices of the Creative Class in Finland with a special focus on Helsinki JMYD29V12 Master Thesis in Economics (Two Years) Author: Veronica Fossa Tutors: Charlotta Mellander, Özge Öner, Pia Nilsson Jönköping, September 2012 Acknowledgements This thesis is the product of an intense time spent in Helsinki, amongst people who like me are in love with this city and believe in its potential. Thanks to this thesis and the interviews I conducted I managed to meet many of these people who have been really helpful for my research and have allowed me to discover hidden gems and see Helsinki with new eyes. My thanks go to Professor Charlotta Mellander, my supervisor, who has kept my feet in the ground and always reminded me what economics is about. Also has provided an organized structure to my work when my diffusive writing style had taken me too far away. PhD candidate Özge Öner, also my supervisor, for her guidance, especially on the quantitative part. Research Director oft he IDBM program Toni-Matti Karjalainen from Aalto Uni- versity School of Economics for his precious comments and insights about crea- tivity in Helsinki; Researcher Miikka J. Lehtonen from Aalto University School of Economics, for the brainstorming on the blackboard when I felt really lost, Aku Alanen from Statistics Finland for the encouragement to keep on working with figures and his in depth knowledge about the creative sector in Finland. I want to thank my parents and my brother for their endless support, emotional and financial, despite the big distance that separates us. My parents, Maurizia and Antonino, have always encouraged me to study, take challenges and ex- plore the world even though this would have meant to have their daughter far away from them. Last but not least, I am very grateful to my friends in Sweden for the great time spent with them at Jönköping International Business School. They have enri- ched my life with new experiences, knowledge and fun. A big thank also goes to my friends in Finland for the time spent at “kauppis”, the endless writing process at Aalto Hub and the great time spent together exploring Helsinki. JMYD29V12 Master Thesis in Economics (Two Years) Title: Location choices of the Creative Class in Finland with a special focus on Helsinki. Author: Veronica Fossa Tutor: Charlotta Mellander, Özge Öner, Pia Nilsson Date: [2012-09-04] Subject terms: creative class, human capital, cities, Finland, Helsinki, knowledge concentration Abstract We are currently living in an age of creativity, in which new economic realities based on knowledge and embracing new technologies and new ways of pro- duction are emerging. Hence, cities around the world compete in order to attract and retain the highly educated and talented individuals who drive these activi- ties, establishing the so-called creative class. Few studies have investigated the location of the creative class in Finland although many studies regarding Ameri- can and European cities are available. Presently, with great attention drawn to Helsinki due to appointment by the International Council of Societies of Industri- al Design (ICSID) as World Design Capital 2012, a study related to the location choices of the creative class in Finland and especially Helsinki is worth conduct- ing. The first part examines the knowledge concentration in Finland showing that the educated people are mostly concentrated in the south of the country where the biggest cities are also located. However, in Finland although talent is positively related to the size of the municipalites, many small towns manage to have a high share of Human and Super Human Capital. The second part focuses on the location choices of the creative class in Helsinki. This class recognizes Hel- sinki’s advantages in terms of opportunities, however they also note that cultural amenities are not decisive when they designate their place to live and work. The decision is rather based on a combination of several factors such as social life and working possibilities. Table of Contents 1 Introduction ................................................................................................ 1 1.1 Purpose ................................................................................................. 2 1.2 Disposition ............................................................................................. 2 2 Theories and concepts .............................................................................. 3 2.1 Creative clusters .................................................................................... 3 2.2 Cities ..................................................................................................... 4 2.3 Human Capital ....................................................................................... 5 2.4 The Creative Class: the key driver force for economic development .... 6 3 Historical Background ............................................................................... 9 3.1 The city of Helsinki ................................................................................ 9 3.2 Structural view over the creative individuals´ location choices in Helsinki ...................................................................................................... 10 4 Empirical analysis .................................................................................... 13 4.1 Hypotheses ......................................................................................... 13 4.2 Methodology ........................................................................................ 13 4.3 Quantitative analysis ........................................................................... 14 4.3.1 Data collection .............................................................................. 14 4.3.2 Dependent Variables .................................................................... 14 4.3.3 Explanatory Variable ..................................................................... 15 4.3.4 Descriptive Statistics ..................................................................... 15 4.3.5 The Regression Model .................................................................. 15 4.4 Qualitative Analysis ......................................................................... 16 4.4.1 Sampling ................................................................................... 16 4.4.2 Interview design ........................................................................ 17 5 Findings .................................................................................................... 18 5.1 Quantitative analysis ......................................................................... 18 5.1.1 Regression analysis .................................................................... 21 5.2 Qualitative Analysis ............................................................................. 25 5.2.1 Hypothesis 4: Helsinki is the choice based on living conditions ... 26 5.2.2 Hypothesis 5: Helsinki is the choice for working conditions .......... 29 6 Recommendation for further research .................................................. 32 7 Conclusion ............................................................................................... 33 List of references ........................................................................................... i List of Appendix ......................................................................................... viii Appendix 1: Questionnaire ........................................................................ viii Appendix 2: List of interviewees ................................................................. ix Appendix 3: Shares of Human and Super Human Capital .......................... x Share of Human Capital .............................................................................. x Share of Super Human Capital ............................................................... xviii i Graphs Graph 1: Plot of the relation between share of Human Capital and Popula- tion…………………………………………………………………………………….22 Graph 2: Plot of the relation between share of Super Human Capital and Popu- lation…………………………………………………………………………………...23 Maps Map 1: Districts of Helsinki………………………………………………………….11 Map 2.1: Location of the top 10 cities in Finland in the Human Capital Share………………………………………………………………………………..…20 Map 2.2: Location of the top 10 cities in Finland in the Super Human Capital Share……………………………………………………………………………….....21 Tables Table 1: Location choices of artists and ICT professionals within Helsinki (Mustonen, 2010)……………………………………………………………............11 Table 2: Description of variables……………………………………………………14 Table 3: Descriptive statistics…………………………………..…………………..15 Table 4: Shares of Human Capital and Super Human Capital………………….18 Table 5.1: Top 10 cities with the largest positive residuals from the relation be- tween Human Capital and Population………………………………………...…...24 Table 5.2: Top 10 cities with the largest positive residuals from the relation be- tween Super Human Capital and Popula- tion……………………………………...................................................................25 ii ”Cities are the greatest creations of humanity” Daniel Libeskind iii 1 Introduction We are currently living in an age of creativity, in which the driving forces of the economic development and regional competitiveness are not only technological and organizational, but also human (Peck, 2005; Petrov, 2007). In the contemporary world, creativity has be-