Author: Richard Florida

Publisher: Basic Books

Pub. in: December, 2003

ISBN: 0465024777

Pages: 434

Measurements: 8 x 5.4 x 1.3 inches

Origin of product: USA

Order code: BA01415

Other information: ISBN-13: 978-0465024773

The National Bestseller in the US.

Richard Florida is one of the most original thinkers explaining how the world works. Others are better known such as Thomas Friedman. But, not many are more insightful. I got to R. Florida's work in reverse. I read his most recent book first Who's Your City?: How the Creative Economy Is Making Where to Live the Most Important Decision of Your Life. I enjoyed this book so much; I read this earlier book second. It is just as interesting.

If you are in the workforce, you will identify with Florida "Creative Class." He analyzes all the economic, social, cultural, and psychological trends associated with the emergence of this Creative Class. The world he depicts is recognizable because it pictures the working world we live in.

He observes two major emerging trends: first people sort themselves by his defined classes (creative, working, service) and by places. Second, the Creative Class represents the economic winners. Wherever they cluster, places thrive. This work supplements Hernstein and Murray's observations in Bell Curve: Intelligence and Class Structure in American Life (A Free Press Paperbacks Book) that people sort themselves by cognitive abilities. R. Florida supplements that this cognitive stratification has a geographical component.

There is nothing fuzzy about his `Creative Class' concept. It is based in precise definition of census job categories (IT, engineer, lawyer, scientist, business, finance, health care, arts, etc...) from the Bureau of Labor Statistics. Appendix Table 2 shows that the Creative Class grew from 10% of the workforce in 1900 to 30.1% in 1999. During the same period, the Working Class shrank from 35.8% to 26.1%, and Agriculture shrank from 37.5% to 0.4%.

With the rise of the Creative Class, innovation in the U.S. has grown exponentially. In the third chapter "The Creative Economy," the author shows graphs disclosing the very rapid growth during this period in R&D, patents, and number of scientists. R. Florida shows how the U.S. in 1999 was the world leader in the majority of Creative Class sectors such as R&D, software, Media, film, fashion, and art. This is because of the U.S. competitive advantages such as first class universities, research, and venture capital financing. Also, those factors are supported by a tolerant culture that he measures at the MSA level with his Gay Index and Bohemian Index. He states that the U.S. hi-tech centers (San Francisco-San Jose, Seattle, Boston) were first culturally tolerant cities that fostered out-of-the boxes concepts generated by any weirdoes that came by. He describes Steve Jobs, Steve Wozniak, and Bill Gates in such fashion. Their ideas would have not succeeded in traditional locations.

R. Florida views creativity as the main economic engine. It is more important than labor, land, or capital. He refers extensively to the major economists who studied the economic impact of creativity before him, including Joseph Schumpeter who came up with the concept of creative destruction seventy years ago as depicted in The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle (Social Science Classics Series). He explores this concept more extensively in "Who's City Are You?" where he shows that 40 Mega Regions with only 17% of the World's population generate two thirds of the World's GDP and over 80% of its innovations. Nevertheless, R. Florida was already onto this concept back in 2002. Three years before Thomas Friedman wrote The World Is Flat R. Florida already knew it was not. Instead, it is really spiky with most of the economic and creative activities concentrated in just a few regions. His analysis of how the world works is more insightful than Friedman's.

Human capital is the central factor in regional growth. Investment in higher education predicts subsequent growth better than investments in physical infrastructure like roads. Regional economic growth is driven by the choice of the Creative Class. Where they decide to live, places will thrive. It is crucial for a city to develop a people climate that attracts the Creative Class in addition to a business climate. City leaders waste tax credits on stadiums that do not contribute to economic growth instead of applying them to university research, local neighborhoods and communities, music scene, and start up incubation. Two cities that have done an outstanding job in this area are Austin and Dublin in Ireland. One city, among many others, that did not is Pittsburgh.

He uncovers strong positive relationships between his Bohemian and Gay Indices and economic growth, hi-tech sector growth, and population growth. He advances his theory of the three Ts. Economic growth and innovation flourish in places that are tolerant, attract talent and in turn attract technology. However, he divulges that such places are not ethnically diverse. He notices an absence of African American. However, earlier in the book he mentions that Asians and Indians (from India) are more than well represented in such hi-tech enclaves including San Francisco and Silicon Valley. Thus, his findings on diversity depend on what ethnic group he focuses on.

R. Florida captures other interesting cultural features of the Creative Class. The members of this class are into sports such as biking, kayaking, hiking, instead of football and baseball. They are into experiencing nature at their own pace (often intense) instead of waiting around for a ref to make a call. He states that in certain hi-tech circles mountain biking has become a required social skill. R. Florida being also a touring biker indicates he chronically meets the top echelon in human capital (college professors, surgeons, entrepreneurs, lawyers) when biking. Also, he observes a high correlation between a city's fitness rank and its Creativity Index.

When combining this book with his subsequent "Who's City are You?" Richard Florida explains a whole lot of what is going on from the local to the international level. His theory is scalable like a beautiful intellectual fractal.

(From quoting Gaetan Chen, USA)

Target readers: A must-read for those who care about the future of their cities and regions.