Florida

Three Ts and a P from Florida, the Man

The most interesting career-related reading I've done so far this year has been in several books by Richard Florida, an urban theorist who's currently on the faculty of the University of Toronto. His ideas have already influenced some of what I wrote recently in 200 Best Jobs for Renewing America (JIST Works, due out in September).

The germ of his idea came to him when he was at the University of Pittsburgh and a couple of startup high-tech companies surprised him by relocating to the Boston area. Real estate and prevailing wages are considerably more costly in Boston than in Pittsburgh, so what was the advantage of the relocation? He investigated why the firms had moved and did additional research on where companies tend to locate. He concluded that companies have to locate where their workers want to live, and workers in creative occupations are attracted to locations that combine the "three T's": technology, talent, and tolerance.

Let's look at that statement about the workers one idea at a time. Who are the workers in creative occupations? In The Flight of the Creative Class, Florida cites a 2004 book by the economists Frank Levy and Richard Murnane, The New Division of Labor, in which the authors used the Dictionary of Occupational Titles to analyze what kinds of work have been growing in recent decades. Levy and Murnane found that work has split into five types--expert thinking, complex communication (which includes management), routine cognitive tasks, routine manual tasks, and non-routine manual tasks--and that almost all of the job growth in recent decades has been in work of the first two types. Florida estimates that these creative workers account for only 30% of the workforce but generate 45% of the wealth in our economy.

(For those of you who like to think in terms of the Holland hexagon as a way of classifying workers and their work, I might add that these creative jobs seem to be on the right and lower left sides of the hexagon: Investigative, Artistic, and Enterprising.)

Few observers of economic development will disagree that technology is an important engine of growth. Most of the fastest-growing regions of the United States are centers of technology, once you remove those that were growing primarily because of the housing bubble (and the current recession has, in fact, removed these regions from the list of those growing fast). Talent is another term for what economists call "human capital," the stock of knowledge and skills embedded in the people who are available for work.

So far, these requirements for growth can theoretically be brought to bear anywhere in the world, in keeping with the "flat world" ideas of Thomas Friedman of the New York Times. Richard Florida adds two considerations, however, that contradict Friedman's ideas. One is the necessity of tolerance, the third T. Creative people, Florida argues, are attracted to locations where they can express themselves freely and where they are not boxed into traditional roles. As a thought experiment, he asks what would have happened if Steve Jobs and Steve Wozniak, with their 1972 long hair, beards, and sandals, had attempted to enter the Mellon Bank in Pittsburgh to get financing for their new invention, the personal computer. Clearly, the San Francisco region was much more welcoming to oddball innovators--and it remains the world's center of high-tech R&D. In his research, Florida uses measures he calls the "bohemian index" and the "gay index" for rating communities and has demonstrated a high correlation with recent economic growth. The presence of recent immigrants also indicates tolerance and shows a high correlation with growth.

The other factor Florida cites as important is proximity: That is, creative people want to be where other creative people are. As creative people mix, they find opportunities for collaboration and competition, both of which raise everyone's creative energy level. Once creative people start to settle in communities where the three T's are present, this draws still more creative people. Eventually you have a creative hub for one or more industries, such as San Jose for high tech, Nashville for music, Hollywood for movies, New York for communications, or Milan for fashion design.

These three-T combinations tend to happen in cities, or in some cases in suburbs that are part of an urban region that combines the three T's. My own guess is that small towns fail to attract talent and technology because of a lack of tolerance. John Mellencamp's line stating that in a small town "people let me be just what I wanna be" has always rung false for me. Florida points out that some cities, such as Pittsburgh (where he worked for many years) also lose talented workers because of provincial attitudes.

As birds of a creative feather keep flocking to cities with the right mix of technology and tolerance, the resulting density of creative people attracts still more, while the regions of the country that lack the necessary mix experience a brain drain and therefore a declining economy.

Richard Florida is not uncritically admiring of these trends. He notes that the regions with the greatest concentration of creative workers also have the greatest amount of income inequality. For every software designer, editor, financial manager, or public relations specialist, you'll also find nannies taking care of the children, kitchen workers in the city's fine restaurants, garbage collectors, and gas station attendants doing noncreative work for low wages--and paying rents driven sky-high by the creative workers.

He argues that we must find a way to unlock the creativity in every worker, but it is hard to imagine how this can be achieved for every work role that our society creates. Some jobs cannot be easily offshored or replaced by automation, yet they admit very little room for creativity. He notes that the class divide is not being helped by the political polarization of recent years. And he does not paint the creative class in completely rosy colors. He points out that they take on a lot of risk that used to be borne by the industrial corporation and therefore live with a great amount of stress. One source of stress I'm seeing right now is the fact that many creative workers and the regions where they cluster are particularly sensitive to downturns in the economy.

Dr. Shatkin can be reached at laurence@myself.com