Oz

Volume 32 Article 11

1-1-2010

It's all about what you do

Kevin Stolarick

Follow this and additional works at: https://newprairiepress.org/oz

This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Recommended Citation Stolarick, Kevin (2010) "It's all about what you do," Oz: Vol. 32. https://doi.org/10.4148/2378-5853.1481

This Article is brought to you for free and open access by New Prairie Press. It has been accepted for inclusion in Oz by an authorized administrator of New Prairie Press. For more information, please contact [email protected]. It’s all about what you do

Kevin Stolarick

In the Spring of 2001, I sat in home. Countries, states, and regions human being has the potential to be occupations. While that accounts for Richard Florida’s kitchen poring over need to compete for talent at least as creative. The creative class, however, less than a third of the workforce, the a list with him. “Yes, no, no, obviously, much as they have been competing to consists of people who are paid to creative class earns almost half of the …, of course, nope, nada, none of attract firms and industries. Today’s think or to apply their talents to a total wages being paid. those, don’t think so, …, Yes, what economy is driven by creativity, and specific task. It can be divided into These broad calculations are based do you think? …” Item by item, we the holders of that creativity or “the two components, the “super creative on occupational categories and looked through the Bureau of Labor creative class” drive regional prosperity core”, or those workers whose output is therefore inclusion in the creative class Statistic’s Standard Occupational (Florida, 2002). completely dependent on intellectual is based on current paid activity rather Codes’ occupation titles and identified We are living not only in a activity, and “creative professionals”, than on any individual characteristic the creative class. We already knew knowledge-based, but in a creative whose work is primarily related like educational attainment. The super about knowledge workers and economy. Today, more people than to intellectual activity but closely creative core includes occupations human capital, but we were looking ever before are being paid to think. In associated with a specific domain. such as architects and engineers, for something else. We were looking the developed world, these creative (Definition based on work the author artists and designers, computer for people who were being paid to workers earn roughly half of all wages completed with Florida). and mathematical occupations or think. We called them the creative that are being paid. Their creativity Based on these definitions just educators. The creative professionals class because creativity implies action is generating innovations that are over 30 percent of the total U.S. are, for example, those working in – it’s something that you do – not just driving the economy – innovations in workforce would belong to the management, business and finance, a characteristic, like education that technology, in design, in production creative class. The “working class”, law or certain segments of the you happen to possess. We preferred processes, in service provision. These which includes construction, trades, health care industry (e.g. doctors). creative over knowledge because innovations are a precondition for and manufacturing, accounts for Not everyone in those occupations knowledge, too, implied something increases in productivity, economic approximately 24 percent, and the is necessarily creative and there are static and had so often been conflated growth and thus ultimately a “service class”, which are typically low- obviously creative people in other with “white collar” that we needed society’s prosperity. The creative wage, service-oriented jobs, comprises occupational categories. Nonetheless, something new. And, knowledge workers, however, have become a the remaining 45 percent. This these labor force statistics permit for workers didn’t really include many highly mobile economic resource implies that about 40 million people some rough estimates about the size of the artists, designers, and others and in fact the Creative Class tends in the United States work in creative of the Creative Class. whose work included the pure creative to cluster in a relatively small number and innovative products that were of metropolitan areas, or creative the hallmark of the new economy we hot-spots around the world – such wanted to describe. as Greater London, Ile de France or Florida’s The Rise of the Creative Silicon Valley. The ability to attract and Class was released in 2002 and gained retain these members of the creative a popularity that continues to grow. class has become a major determinant Measures like “creativity index” and of competitiveness for countries and “gay index” and “melting pot index”, regions. especially being applied to individual regions, garnered both practitioner and Defining and Measuring the media attention. In Florida’s modern Creative Class creative economy, knowledge and innovation are the key. Those who The Creative Class can broadly be generate those advances are both defined as comprising those workers more mobile and more demanding whose productive output depends of the place they are willing to call on thinking rather than doing. Every Figure 1 47 Figure 2 Figure 3 Figure 2 shows the relationship between the creative class and the more larger, not only does their Creative from elsewhere. And, while having between the creative class and traditional measure of human capital, Class grow larger at the same pace as an employment opportunity used to the super creative core for the 61 the percentage of college graduates. the rest of the population – the Creative be the only thing needed to attract metropolitan areas in the U.S. with Although closely related with Class grows even larger. Many potential someone to a region, it is clearly no a population above one million. Not traditional human capital measures explanations have been offered, but longer enough. Other factors like unexpectedly, those places that have such as number of academics, the nothing has clearly demonstrated the creative agglomeration effects and a high concentration of one generally creative class is a better measure of underlying mechanism and causality regional amenities have become have a high concentration of the the “talent in use”. First, by being based at work. Clearly, larger urban centers important factors in creating growing other. The two measures are strongly on current occupation rather than have more than their “fair share” and prosperous regions in today’s correlated, but the correlation is not former training, the creative class is of Creative Class workers. Many of Creative Economy. Human capital can perfect. In Las Vegas, for instance, the capturing more recent information whom have moved to those regions no longer be measured simply as a fixed difference between the two is about about the state of talent in a region. 13.6% (creative class: 18.5%; creative Second, it only includes those on core: 4.9%). In Washington DC, the whose work a market value is placed creative class even outnumbers the (i.e. a salary). College graduates may super creative core by over 24% be underemployed while those without (creative: 41%; creative core: 16.9%). an academic degree may be doing For the 61 regions, on average, adding highly qualified work. As university the creative professionals to the super drop-outs Bill Gates, Steve Jobs and creative core adds another 19% of the Michael Dell would be excluded from total workforce to the creative class. traditional human capital measures, Both the super creative core and the even though they are icons of the creative professionals are unevenly creative economy. distributed across the country and The Creative Class is drawn to cities around the world and, while related, and larger urban areas. Figure 4 shows a high concentration of one does not the relationship between the share of guarantee a high concentration of the a city region’s workforce that is in the other. Creative Class and the total population 48 Figure 3 shows the relationship of the region (logged). As cities get the same trend can be observed in It is now widely recognized that other developed economies. regional competitiveness and growth depends largely on the concentration Occupational and Industry of skills, innovations and the systemic Clusters linkages between firms, institutions and people (i.e. clusters). Cultivating Over the last 50 years, geographers such regional ecosystems of economic and economists have come a long actors has become the cornerstone way from attributing regional growth of regional and national economic primarily to exports and trade. Solow development strategies. A seminal (1956) noted the effect of technology work in this regard has been Porter’s on economic growth. Ullman (1958) (1998) analysis of industrial clustering, noted the role of human capital in his where he outlined the dense linkages work on regional development. Jacobs across industries that generate new (1961, 1969) emphasized the role of products and encourage the exchange cities and regions in the transfer and of ideas. While newfangled in its diffusion of knowledge; as the scale approach, the importance of clustering and diversity of cities increase, so do was already formalized some 100 years Figure 4 about four million in 1900 to over 40 the connections between economic ago by Alfred Marshal (1890) in his “stock” or “endowment” that region million today, and is expected to count actors that result in the generation of discussion of “industrial districts” possesses – instead it must be seen over 50 million a decade from now. The new ideas and innovations. Romer’s that possess something “in the air” as a “flow” that moves from place to creative, service and working classes (1986, 1987, 1990) endogenous growth sparking perpetual innovation and place as the individuals who own their continue to grow in absolute terms. model connected technology to human productivity. Indeed, as Porter argues, human capital find the region that best The anticipated growth rate between capital, knowledge, and economic regional economic growth cannot meets their current needs. now and 2020, however, is larger for the growth. Invention in the neoclassical be attributed to the mere sum of The various creative professions creative class (20%) than the service framework was no longer exogenous, individual economic activities but also can be grouped into four broad class (14%) and working class (10%). but a purposeful activity demanding to synergies between firms, knowledge- categories that can be remembered Figure 7, illustrates the changing real resources. Lucas (1988) further spillover, supply-chain linkages and by the mnemonic T-A-P-E: Technology composition of the U.S. workforce and developed and explicitly identified other clustering effects. and Innovation, Arts and Culture, the continued transformation towards the role of human capital externalities The clustering of members of the Professional and Managerial, a creative economy. While the relative in economic development. Building creative class is not only important Education and Training. Figure 5 shows shares of the agricultural and working on Jacobs’ and Romer’s work, Lucas for regional growth because their raw the (2006) composition of the creative classes continue to decline, the service (1988) highlighted the clustering effect labor is a factor of production. More class in the U.S. The largest numbers class share will remain fairly stable. of human capital, which embodies importantly they increase productivity of individuals are in Education and The share of the U.S. workforce in the the knowledge factor. He recognized because of the human capital they Health care while the greatest total creative class, however, continues to the role of great cities, which localize hold. Hence, more recent productivity salaries are paid to Managers and grow. These projections are based on human capital and information, create measures take into account a region’s Health care practitioners. estimates from the U.S. Bureau of Labor knowledge spill overs, and become human capital stock. Florida’s (2002) Figure 6 shows the change in Statistics. The fastest growing creative engines of economic growth. Cities “creative class” and Glaeser’s (2003) the creative, service, working, and occupations are in computer and reduce the cost of knowledge transfer, “skilled city” focus on the talent or agricultural classes in the U.S. from health care while the largest number so ideas move more quickly, in turn supply contributions to regional 1900 to 2006 and the estimates through of new jobs will be added in education giving rise to new knowledge more growth. While Porter’s earlier industry- 2020. The creative class has grown from and health care. Generally speaking, quickly. based model focuses on the demand 49 the IT industry are not working in understand numerous other industry an IT occupation. Not quite one-in- and occupational clusters. four people working in either the IT By linking occupation and industry or an IT occupation actually industry, this analysis helps to are in an IT occupation at a company develop an understanding that is that is in the IT industry. especially important in today’s global While only a single industry and economy. It is no longer sufficient to occupation was specifically addressed evaluate a region’s manufacturing by this analysis, it is worth noting base and potential for outsourcing, several things. First, this particular off-shoring, or global competition industry and occupation combination solely on the basis of industry. The is one that has been the continued occupational mix must also be taken focus of much economic development into consideration. For example, Los activity. Second, across the entire Angeles has significant employment in U.S. the IT industry employs people the automotive industry. But, no one in 337 (of 509 unique) occupational who understands that industry in Los code groups. . And, for the U.S. IT Angeles would argue that it is the same occupations show up in 243 (of 266 as Flint, Michigan or Oshawa, Ontario. Figure 5 unique) industry code groups. While By also looking at the occupational side of the labor market, these more policy. only a “single” cluster, it is clear from mix, it becomes clear that many of Los recent contributions focus on the Across the U.S. in 2000, the these results that with only 11 IT Angeles’s “auto workers” are designers supply that makes such industrial Information Technology Industry occupations and 5 IT industries, 326 and programmers -- not assembly growth possible. After all, skilled accounted for approximately 2.0 non-IT occupations and 238 non- line workers. In the same way, much and creative individuals are a highly million full-time employees, about IT industries cross-fertilize in some of Detroit’s automotive employment mobile resource and thus the factors 1.8% of the total workforce. However, capacity with IT, using IT skills in non- has shifted from significant shares in determining the supply-side are critical at exactly the same time, Information IT industries. Yet this nuance would manufacturing occupations to people for economic development. What is Technology Occupations accounted not be picked up by employing either working in management, accounting, driving these clusters is not only the for 3.4 million full-time employees, occupational or industrial analysis. marketing, etc. The transition from industry, but also the people and their about 2.8% of the total workforce. The This technique could easily be used to manufacturing employment that is still skills and occupations. occupational number was actually Understanding a regional economy even higher since the industry count only from an industry perspective or includes the self-employed while the only from an occupational perspective occupational data excludes the self- does not provide a comprehensive employed. Clearly, the IT industry analysis of local economic dynamics. and the IT occupations are not the This analysis, which jointly considers same thing. The latter provides a broad the distribution of occupations skill base to multiple industries. Using within industry and industries Census PUMS data which includes across occupations, provides deeper both industry and occupation for insight into a regional economy with individuals, we find that over 50% of possibilities for how such results could those working in an IT occupation aid in more nuanced place and skill are not working in the IT industry. 50 specific development and industrial And, over 25% of those working in Figure 6 based on people actually assembling different industries. Since “Oz” is primarily an products to advanced manufacturing architecture journal, and I’m more of or manufacturing employment based Why it’s all about what you do an economic geographer or regional mostly on “home office” activities can scientist (what I do), I probably should only be discovered and understood by As our economy changed from say something about architecture. looking at the occupational mix within deriving value from making and Well, I won’t. You’re smart people; the specific manufacturing industries. doing to thinking and designing, a you’re part of the Creative Class; If the actual manufacturing activities whole lot of underlying structures you’re the ones who are going to have already been moved to lower and assumptions have changed with give physical form to these new cost labor markets, the remaining it. It’s not about having accessible (predominately urban) spaces that will “manufacturing industry” employment transportation or ready access to be inhabited increasingly by people is more likely to be the higher value, raw materials – today’s successful focused on what they are doing rather more highly paid occupations that regions are the ones that can attract than firms focused on what they are are less likely to move and are more and retain the raw material of the making. I’ve given you the story. I’ve difficult to transition out of the region Creative Age – talented, highly skilled outlined its history and talked about simply based on lower labor costs. Just people. And, those skills are easily the significant changes and the new evaluating on employment within transferred among a collection of foci of the Creative Economy. Now, the industry without taking into different industries. Regions can no it’s your turn. It’s all about what you consideration the mix of occupations longer find success from attracting a do… will not reveal a meaningful picture steel mill or a car plant. Instead, they of the situation. These distinctions need to attract Research Scientists, are enormous when in the process of Computer Programmers, and Graphic References policy making targeting a particular Designers. industry. Car manufacturing tax breaks Over the past few decades, Catalytix, Inc. (K. Stolarick) “Regional Creative Scorecard” (2002). Currid, E. and Stolarick, K. (2008) “The Occupation-Industry Mismatch: New Trajectories for would no more help Los Angeles than people had already internalized this Regional Cluster Analysis and Implications for Economic Development”, Urban Studies. art and design school subsidies would transition without notice or remark. Feldman, Maryann P., (2000) “Location and Innovation: The New Economic Geography of Innovation, help Flint, Michigan. And yet, from a Introductions at cocktail parties or Spill overs, and Agglomeration”, The Oxford Handbook of Economic Geography, Gordon Clark, macro perspective, both regions would over coffee switched from talking Meric Gertler, and Maryann Feldman, eds. (Oxford University Press, Oxford,UK) Florida, R. (2002) The Rise of the Creative Class, New York: Basic Books. be prime targets for auto production about where you work to what you do. Florida, R. (2004) The Flight of the Creative Class, New York: Harper Business. industrial policy. The geographical People increasingly focused on their Florida, R. (2008) Who’s Your City? New York: Basic Books. distinctions in the production process occupation and decreasingly talked Florida R., Mellander C., and Stolarick K. (2008) “Inside the Black Box of Regional Development - and its vast implications for growth about their company or industry. Partly Human Capital, the Creative Class, and Tolerance”, Journal of Economic Geography. Glaeser, E. (2003) “The Rise of the Skilled City”. Harvard University. has been seminally documented by this came about from the transition Glaeser, Edward L., H. Kallal, J. Scheinkman, and A. Shleifer, (1992) “Growth in Cities”, Journal of Massey (1984). away from the lifetime employment Political Economy, Volume C, 1126-1152 This analysis points to another model where a single employer Inglehart R. and w. Baker (2000) “Modernization, Cultural Change, and the Persistence of Traditional important component of current would hire someone “from cradle to Values”, American Sociological Review, Vol. 65, No. 1, 19-51. Feb., 2000. Jacobs, J. (1961) The Death and Life of Great American Cities, New York: Random House. economic development strategy. grave”. Related was the increase in Jacobs, J. (1969) The Economies of Cities, New York: Random House. Because firms go where skills are, contingent and independent contract Lucas, R. (1988) On the Mechanics of Economic Development, Journal of Monetary Economics, being aware of both the industries and consulting based work. Individuals 22: 3-42. and the skills that drive regional were no longer employed – they got Marshall, A. (1961, Originally 1890). Principles of economics. London and New York: Macmillan for the Royal Economic Society. development presents possibilities a short term contract. While partly Porter Michael (1998) “Clusters and the New Economics of Competition,” Harvard Business Review, for other types of industry growth a cost-saving measure on the part November-December 1998, pp. 77-90. – particularly when the tides of of savvy employers, this was also a Porter, M. ( 1990) The Competitive Advantage of Nations, (Free Press, New York, NY) globalization and innovation can response to the risk associated with Romer, P. M. (1986) Increasing returns and long-run growth, Journal of Political Economy, 90 (October): 1002-37. change competitive advantage at rapidly changing technologies and a Romer, P. M. (1987) Crazy explanations of the productivity slowdown, NBER Macroeconomics a rapid pace. Skill strengths allow a fickle customer base. When everything Annual, 2: 163-202. region to seek out new opportunities is a trial product, employers don’t Romer, P. M. (1990) Endogenous technical change, Journal of Political Economy, 98(5): S71-S102. and industry attraction outside of their need to lock-in skills for years – they Solow, R. (1956) A Contribution to the Theory of Economic Growth, Quarterly Journal of Economics, 70: 65-94. primary cluster, a point that Jacobs just need specific skills for the next Stolarick, K. “Technology, Talent and Tolerance: The “Soft” Factors of Regional Growth,” Weiche (1969) made long ago. We speculate few months. Whatever the causes, Standortfaktoren [roughly translated, “The Value of Regional Factors”], Friedrich Thiessen, Oleg that our results may contribute to job the shifting economy resulted in Cernavin, Martin Fuhr, and Martin Kaltenbach editors, Duncker and Humblot, Berlin, 2005. training and educational attainment occupation becoming much more Stolarick, K., Florida, R. (2006) “Creativity, connections and innovation: a study of linkages in the Montréal Region”, Environment and Planning A, 38:10, 1799 – 1817. policies aimed at creating a local skill prominent than it had been in the Ullman, E. L. (1958) Regional development and the geography of concentration, Papers and base that can be used in a variety of past. proceedings of the Regional Science Association, 4:179-98. 51