Paul Holmes 21 Jul 2002 // 11:00PM GMT
As the 20th century drew to a close and our national obsession with the transformative power of technology was at its peak, the idea took hold that geography was no longer important. The ability to bring people from all over the country together via teleconference, for example, meant people did not have to be together in order to work together
For public relations firms—particularly those outside major markets like NewYork—this was good news. Aided by technology, a firm in Kansas City could pitch a client in Cleveland and not have to worry about opening a satellite office hundreds of miles away from its headquarters. And there was no longer any reason for firms thousands of miles away to open up a New York office to stay in touch with major national media.
That was the theory. The practice was a little different, as agencies pitching for a major piece of Microsoft business found out in the late 90s. Here was the world’s largest high-tech company, creator of many of the technologies that were supposed to liberate us from the constraints of geography, demanding that any firm that pitched its business had to promise to open an office in Seattle, within miles of its corporate headquarters.
If clients would not permit PR agencies to ignore geography, employees were forcing them to think about it more seriously. Firms in particularly fierce competition for workers relocated or opened satellite offices to make themselves more attractive. And if the competition for talent is not as fierce now as it was when the economy was at its peak, most agencies recognize they still need to do whatever it takes to appeal to potential employees.
There is support for that view in a new book by Richard Florida, professor of regional economic development at the Heinz School of Public Policy and Management at Carnegie Mellon University. In The Rise of the Creative Class, Florida argues that a new social class has emerged in America over the past decade, one that makes up 30 percent of the population—in addition to people in the arts and music, the creative class includes those in science and technology and advertising and PR—and has the potential to transform American life the way the rise of the bourgeoisie transformed European society more than a century ago.
Not surprisingly, given his background, Florida comes at the issue from the perspective of cites and states looking for ways to improve the business climate, and he is convinced most of them go about it the wrong way.
Says Florida, “One of the oldest pieces of conventional wisdom in this field says the key to economic growth is attracting and retaining companies—the bigger the company, the better—because companies create jobs and people go where the jobs are.
“During the 1980s and 1990s, many cities in the United States and around the world tried to turn themselves into the next ‘Silicon Somewhere’ by building high-tech office parks or starting up venture capital funds. The game plan was to nourish high-tech startup companies or, in its cruder variants, to lure them from other cities. But it quickly became clear that this wasn’t working.”
Florida points to the example of Lycos, a Carnegie Mellon spin off company that abandoned its native Pittsburgh and moved to Boston.
“All too often,” he says, “the technologies, the companies, and even the venture capital dollars flowed out of town to places that had a bigger and better stock of talented and creative people. In a curious reversal, instead of people moving to jobs, I was finding that companies were moving to or forming in places that had the skilled people.”
Florida’s research suggests that regional economic growth is driven by the location choices of creative people—the holders of creative capital—and that those people prefer places that are diverse, tolerant, and open to new ideas. It differs from the traditional human capital theory of economic development in two respects: first, it identifies one class of human capital, the creative class, as being key to economic growth; and second, it identifies the underlying factors that shape the location decisions of these individuals.
As Florida studied the subject further, he came across some interesting correlations. He found a strong correlation between the location of innovative high-tech firms and cities at the top of the Bohemian Index—a measure of the density of artists, writers and performers in a particular region. And, in a finding that seems likely to send right-wing politicians into a frenzy of denial, he found a strong correlation between successful high-tech communities and cities with heavy concentrations of gay people. (And yes, the correlation held true even when San Francisco was taken out of the equation.)
The correlation appears to be led by corporate America, which now realizes, Florida says, that it has to harness previously marginalized creativity.
“Capitalism has expanded its reach to capture the talents of heretofore excluded groups of eccentrics and nonconformists,” says Florida. “In doing so, it has pulled off yet another astounding mutation: taking people who would once have been viewed as bizarre mavericks operating at the bohemian fringe and setting them at the very heart of the process of innovation and economic growth… The creative individual is no longer viewed as an iconoclast. He—or she—is the new mainstream.”
Thus Florida refutes the prediction by “techno-futurists” that the wired era would make location and community irrelevant.
“The creative workers I talk with say they are vitally important,” says Florida. “These people insist they need to live in places that offer stimulating, creative environments. Many will not even consider taking jobs in certain cities or regions—a stark contrast to the organizational age, when people moved to chase jobs…. I meet creative class people who use location as their primary criterion in a proactive sense: They will pick a place they want to live, then focus their job search there.”
Obviously this has serious implications for PR firms that work in the economic development sector. Cities and states today spend millions of dollars on advertising and public relations programs designed to attract business. Most of that advertising targets corporations. If Florida is correct, it should be targeting employees—particularly creative employees—instead.
One state that has taken at least some of Florida’s advice is Pennsylvania, which in May of last year launched a new campaign under the “Stay Invent the Future” banner.
Said then-Governor Tom Ridge, “Employers across the Commonwealth, such as the companies here today, tell us they want to stay in Pennsylvania—but they need talent to grow. Students, from our great universities, colleges and other schools tell us they want to stay in Pennsylvania—but they’re unaware of the opportunities we have to offer.
“To ensure Pennsylvania’s standing as a leader among states and a competitor among nations, we must link Pennsylvania’s young people with the Pennsylvania employers who need them. We must show them that Pennsylvania has the exciting job opportunities they seek, with the world-class companies they want to work for, and the world-class quality of life they already know. Pennsylvania is the ideal place to work, play and raise a family, and it is time—now—to put ‘Brain Gain’ into action!”
But if Florida’s theories are correct, Pennsylvania has it only half right. The promise of good jobs alone won’t be enough to keep talented creative professionals in the state.
Florida’s theories also call into question one of the most disturbing trends of recent years, the eagerness of municipalities to bribe companies to relocate to (or in some cases, stay in) their areas. If Florida is right, that money might be better spent building the kind of amenities that creative people crave: theaters and museums and parks.
He quotes Hewlett-Packard chief executive Carly Fiorina, who told the nations governors, “Keep your tax incentives and highway interchanges; we will go where the highly skilled people are.”
An example of a city that has grasped both the need to appeal to workers rather than companies, and the benefits of appealing first to their lifestyle preferences, is Austin. While Austin started by bolstering its technology base in the 80s and 90s, it also invested heavily in talent, building up the University of Texas and attracting federal and state research dollars. Finally, the city emphasized its unusually tolerant culture.
Says Florida, “The city has made considerable investments in its lifestyle and music scene—right down to the clubs and bars of Sixth Street.” And it expects companies to make the same commitment: “When one high-tech company, Vignette, expanded into a new facility in downtown Austin, a part of its deal was to establish a $1 million fund to support the local music scene.”
Florida quotes former mayor Kirk Watson: “Austin has benefited from a convergence between technology and our laid-back, progressive, creative lifestyle and music scene. The key is that we continue to preserve the lifestyle and diversity, which enables us to lure companies and people from places like Silicon Valley.”
Florida’s hometown of Pittsburgh provides a stark contrast. The city has launched a multitude of programs to diversify its economy away from heavy industry to high-tech, says Florida. Explaining the exodus, he quotes a student who planned to leave the city as soon as he graduated. He had one question for those who urged him to stay in Pittsburgh: “How would I fit in here?”
One problem is that when cities do try to attract people rather than companies, they focus on the wrong people.
Says Florida, “If you ask most community leaders what kind of people they’d most want to attract, they’d likely say successful married couples in their 30s and 40s—people with good middle to upper income jobs and stable family lives. In fact, this is what many companies actually do by emphasizing services like good school systems, parks, and strict (read exclusionary) zoning for single-family housing.”
Meanwhile, young people are neglected. Young workers have typically been thought of as transients who contribute little to a city’s bottom line. “But in the creative age,” says Florida, “they matter for two reasons. First,they are workhorses. They are able to work longer and harder, and are more prone to take risks. Second, people are staying single longer.”
One of the things that seems to particularly alarm those who don’t like Florida’s advice is his emphasis on diversity, and particularly on homosexuality. So he goes to great lengths to explain that the correlation between successful technology centers and a large gay population does not imply that a high percentage of technology workers are gay, but rather that they are attracted to certain cities by the same atmosphere of tolerance and diversity that allows gay communities to flourish.
Beyond the economic development sector, Florida’s research into the creative class has broad implications for public relations firms everywhere. For one thing, it suggests that location will continue to be vitally important, if not for the traditional reasons. If you buy the premise that public relations firms differentiate themselves on the basis of their people, then firms in regions that successfully attract the creative class will have a considerable advantage.
That’s good news if you are headquartered in cities such as San Francisco, Austin, Boston, San Diego and Seattle (which come out at the top of Florida’s “creativity index”) but less good news for firms in cities such as Memphis, Las Vegas, Buffalo, and New Orleans.
Of course, firms in every location can benefit from understanding how to attract more creative people, and the advice Florida gives to economic development professionals applies to company recruiters too. He points to three values that define the new creative class:
Individuality: “Members of the creative class exhibit a strong preference for individuality and self-statement. They do not want to conform to organizational or institutional directives and resist traditional group oriented norms.”
Meritocracy: “The creative class favors hard work, challenge, and stimulation. Its members have a propensity for goal setting and achievement. They want to get ahead because they are good at what they do.”
Diversity and Openness: “Members of this class strongly favor organizations and environments in which they feel anyone can fit in and get ahead.”
The Rise of the Creative Class by Richard Florida is published by Basic Books.