Duluth/Superior looks to Richard Florida for guidance

At its May 23 annual meeting at the Duluth Entertainment Convention Center, the foundation brought renowned economist Richard Florida, architect of the “creative class” concept, as its keynote speaker. The event drew a crowd of 600 and kicked off what Florida called an “extraordinary catalytic effort.”

Its partner in this effort is the Knight Foundation, another philanthropic group active in the market because of the former ownership ties of newspaper dailies in Duluth and Superior.

The Knight Foundation has engaged Florida and his Creativity Class Group with its “creative communities” initiatives in three urban areas: Duluth/Superior, Charlotte, NC and Tallahassee, FL.

The Duluth/Superior foundation recruited 31 local volunteer “catalysts” for a year-long study and organizing effort. The 31 were chosen from a pool of 70 applicants to represent a community cross-section: businesspeople, educators, artists, and philanthropists.

Sampson said the initiative attempts to put Florida’s principals into action. Florida said his organization provides the “data, tools and framework.”

“The people of the Twin Ports region are some of the most energetic and capable I’ve ever encountered,” he said in an e-mail to BusinessNorth after his May 23 address.

But before civic leaders rush to embrace his theories they may want to consider that Florida himself has written that the creative class brings a host of problems — increased cost of living, economic inequality, congestion and stress.

Second, a good deal of skepticism abounds over his theories, variously described as “trendy,” “new age,” even “snake oil.” The backlash may be inevitable given Florida’s popularity. But his critics include academics challenging his methodology.

“These concepts, all of them fuzzy at best, or mis-specified at worst, are variously appealing to chambers of commerce and mayors and other civic boosters,” writes Ann Markusen, PhD, professor of urban and regional affairs at the University of Minnesota Humphrey Institute.

The crucial creative class

“The key factor of the global economy is no longer goods, services, or flows of capital, but competition for people,” Florida writes. No nation or city, he reasons, can hold onto people except by persuading them to stay.

His “creative class” is the fastest growing economic class, making up a third of the economy and producing nearly half of the wages. It’s broadly defined as workers creating meaningful new forms: Among them are scientists, engineers, professors, architects, designers, artists and musicians.

Florida has spent most of his academic life analyzing census data to determine how a community can grow its creative class. His answer: Emphasize the ‘four T’s’ — technology, talent, tolerance, and territory.

Florida concludes the best anchor for technology is a large research university, and from that base, hi-tech spin-offs will draw even more creative people. But without the other T’s, the creative class may get their education here then move on.

Florida believes cities need to support vibrant music and arts communities to hold the creative class. He argues communities should spend their limited funds on the arts community, rather than sports stadiums and malls. He urges against tearing down old buildings and destroying the “authenticity of the city.”

As for tolerance, Florida urges communities to welcome and support gays, bohemians, and immigrants, because culture and diversity attract the creative class. His analysis of census data consistently shows gay and creative people congregate in the same regions.

If talented workers are discouraged from moving into a region because they are “different,” they will simpy go elsewhere. Florida warns that U.S. pre-eminence in science and technology is threatened because the creative class increasingly finds other countries more inviting.

As for territory, Florida believes the creative class picks attractive places to live. Thus amenities such as Lake Superior, the Lakewalk, bicycle paths, and hiking trails give Duluth/Superior an edge, he said.

While many in the arts community are delighted with Florida touting their importance, others are wary. Writes national arts commentator Ann Daly: “Of course, there has been beneficial fallout from the Florida phenomenon. Art and culture have become freshly relevant to city planners and politicians. But whether that has translated into anything tangible is arguable. In any event, I fear that, when the haphazard efforts to ‘implement’ creativity fail to produce the predicted economic magic, art and culture’s shining star will fall as quickly as it rose.”

Creative revolution’s downside

Sampson said attracting a creative class brings “prosperity for all.” But as Florida has found, the prosperity benefits the well-educated and leaves lower-income people and the enormously expanded service class worse off.

“Inequality is highest in the creative epicenters of the U.S. economy,” he writes.

“As a nation, the United States now faces levels of income inequality unseen since the 1920s. The creative economy produces two kinds of jobs: high-paying creative occupations and lower-paying, less secure service jobs.”

He takes that emerging divide a step further. “Why should we be concerned about rising inequality? Simple: Inequality equals creative waste. A good deal of research has shown that high levels of inequality actual retard rather than spur economic growth.”

The most creative regions, such as New York City and Orange County, CA, are among the least affordable. Housing becomes unaffordable first to the poor, then to artists and students, and eventually to new entrepreneurs, associate professors, and other members of the creative class itself.

The creative regions also are more prone to congestion, traffic jams, and long commutes. Subways and rail transportation can alleviate the problem but the mass transit systems are often inadequate.By and large, people in creative economies don’t seem to be very happy. “With the elimination of larger institutional and social support structures, the creative economy downloads stress and anxiety directly into individuals,” Florida writes. “The incidence of stress and anxiety disorders is markedly higher — across all income and all class groups — in regions with high Creativity Index scores.”

Florida has few solutions, suggesting these problems need to be worked out — creatively.

He points to Minneapolis/St. Paul as a community that has attracted a creative class and takes care of its lower income people.But by many accounts, the Twin Cities is not doing so well in this regard. Homelessness and foreclosures are up and affordable housing has disappeared in a wave of condo-mania there. According to a national study by NeighborWorks America, housing affordability plunged more than 40 percent in the Twin Cities between 1995 and 2005.

Asked whether the Twin Cities remains the ideal in this regard, Florida replied, “I think it is. Certainly more so than say Silicon Valley, Boston, or Austin where income inequality is much higher. Duluth and the Twin Ports has the potential to do even better in this regard.”While Minneapolis/St. Paul is “about as good as it gets for a large U.S. metro,” Florida said “places like Toronto or Stockholm seem to be addressing this more effectively on a global scale.”

To avoid what he calls “the creative class war,” Florida advises: “Be sustainable and inclusive. Make sure to tap and harness the creativity of all. The Twin Ports must focus on providing access, support and opportunity for every citizen.” (See "Florida on the Twin Ports’ service sector" at the end of this article.)

Florida’s research flaws

Markusen of the Humphrey Institute shares Florida’s belief that art is important to the economy. But she also believes his statistical analyses are poorly done and his conclusions often wrong.

“Florida’s ‘creative class’ is neither creative nor a class,” said Markusen in an interview.

Florida bases his statistics on occupation. There are many creative people, as Florida’s own anecdotes tell, on the factory floor or in the service class. But he does not include them in the statistical analysis he uses to convince people of his arguments, she said.

“Florida’s creative class is defined by high levels of education,” Markusen said. “The other claims he makes are unsubstantiated.”

Markusen cites the work of Harvard University’s Edward L. Glaeser, who analyzed Florida’s work, after removing the effect of “years of schooling.” He found no correlation between gays, artists, musicians, scientists, inventors and other creative types and those regions where cutting edge work in science and technology most often occur, including New York City, Austin, TX, San Francisco and Minneapolis.

Glaeser says Florida is “fundamentally right” about the growing role of creativity in the economy and that “if cities want to succeed they need to think about providing lifestyle, or consumption, advantages to their residents.”

But he doubts Florida’s urban development prescription. “I would be awfully suspicious of suggesting to mayors that the right way to fuel economic development is to attract a larger gay population. There are many good reasons to be tolerant, without spinning an unfounded story about how Bohemianism helps urban development.”

He adds, “Mayors are better served by focusing on the basic commodities desired by those with skills, than by thinking that there is a quick fix involved in creating a funky, hip, Bohemian downtown.”

In another study Glaeser found that the old paradigm is not dead, at least when it comes to manufacturing. He looked at why businesses locate near each other and concluded that being close to goods and customers and having a large labor market are equally important to having a creative class.

Markusen said no research shows vibrant arts communities attract hi-tech and well-educated people. In fact, the reverse may be true, as artists gravitate to populations that appreciate and pay for their work.

Furthermore, the hi-tech community is not necessarily tolerant or diverse. “Out west they often live in gated communities, which are very homogenous,” Markusen said.

Florida himself has acknowledged, “The creative class looks like the United Nations without all the black faces.”

Markusen writes, “Because the causality is so confusing and class members so conflated (lumped together), policymakers don’t know what to make of creative class arguments either.

“Most mayors waving the banner of creativity use it to showcase their anchor arts institutions and make claims about urban amenities, mostly directed at tourists. But if there is no cohesive, mobile group of creative professionals driving urban development, urban leaders must fine-tune their policies to diverse interests. No simply strategy will suffice.”

She writes, “Advocates of ‘the creative city’ should be asked to define their terms and articulate the precise groups and behaviors, including political, that they claim are innovative and generative of urban development.”

Florida on the Twin Ports’ service sector

In response to BusinessNorth’s question on how Duluth/Superior can attract a creative class while addressing the resulting economic inequalities, Florida wrote the following:

The region can take the lead in upgrading the service sector. In the last century, our society took steel, auto and factory work and turned them from bad, dangerous jobs into good high-wage careers. We have to do the same for the personal-service sector jobs that pay poorly now, have low benefits and often don’t offer health care.

These jobs are being created en masse in the Twin Ports and around the world in such fields as lawn care, home care, housing remodeling, personal service, massage therapy, cosmetology, hair cutting and interior design. These port-of-entry jobs into the creative age are the exact equivalents to the blue-collar job my father once held, and they make up 40 to 45 percent of our total economy.

For examples, the Twin Ports’ business community can look to the success of international leaders for the service industry — such as Starbucks and Best Buy — offering competitive wages and benefits to all associates.

In addition, the region should also support and grow creativity to where it springs naturally from people and everyday acts. This sounds simple, but it can be extraordinarily difficult for established political, social and economic interests in a community to “make way” for those with new ideas.

I like to think in terms of initiatives and projects rather than “master plans.”  Concentrating too much on planning will often kill the vital human spark from which so much invention and innovation comes. The Twin Ports needs to be careful, when mapping out an economic development strategy, to allow and support everyone’s participation.