Part of my studies for my 'Master of Creative Enterprise' in the subject 'Creative Industries'

1. The Rise of the Creative Class
EDED21002 Creative Industries
Assignment 1 Term Two 2013
Robert Puffett S0228769

2. Housekeeping
• This presentation is based mainly on the work of Dr Richard Florida and his book,
‘The Flight of the Creative Class: The New Global Competition for Talent’ published
in 2005
• It is a follow up to his best seller, ‘The Rise of the Creative Class: And How It's
Transforming Work, Leisure, Community and Everyday Life’ published in 2002
• This best seller courted controversy when it was published and since then Dr
Florida has answered many of the criticisms in, ‘The Flight of the Creative Class’, as
well as in the media in general
• Where possible in this presentation I have endeavoured to make comparisons with
the Australian context, but the theories and research are mainly based on the U.S
context
• Despite this, due to our many similarities in with the U.S. in socio-economic terms,
we can learn a lot from the U.S. experience
• Dr Richard Florida is a Doctor of Philosophy in Urban Planning and is currently the
Director and Professor of Business and Creativity, The Martin Prosperity Institute,
Rotman School of Management, University of Toronto

3. Contents
1. What is the Creative Class?
2. Super Creative Core & Creative Professionals
3. The Creative Age
4. Creative Capital
5. The 3 T’s of Economic Growth
6. The third ‘T’ – Tolerance
7. Controversies
8. Chicken or Egg / What Kind of Growth?
9. W.L. Gore & Associates, Inc. – A Creative Company
10.Flight of the Creative Class
11.China and India are not the competition (yet)
12.A New Creative Compact / Personal Opinion
13.References

4. What is the Creative Class?

5. • As defined by Dr Richard Florida
• Members of the creative class do a
wide variety of work in a wide variety
of industries: Technology and R&D
Innovation; Arts and Culture;
Professional and Managerial;
Education and Training
• Not a class in the traditional sense,
they share characteristics of creativity,
individuality, difference and merit
• The distinguishing characteristic of the
creative class is that its members
engage in work whose function is to
create meaningful new forms
• They are the outsiders who felt
different at school, and regardless of
sexual orientation or ethnic
background, they seek diversity in a
company or a community.
• To the creative class, acceptance of
diversity is a welcome sign to their
individuality

6. Super Creative Core & Creative Professionals
• The Super Creative Core: Produce new forms or designs that are easily spread and
useful to many, such as product design that can be made, sold and used
extensively; theorem or strategy formulation that has wide applications; or music
composition that can be repeatedly performed
• Members include artists, entertainers, actors, designers, and architects. As well as
scientists and engineers, university professors, poets and novelists
• It also includes the ‘thought leadership’ of modern society: non-fiction writers,
editors, cultural figures, think-tank researchers, analysts, and other opinion-makers
• The Creative Professionals: Beyond the core group are the creative professionals
who work in many of the knowledge-intensive industries including the high-
technology sectors, financial services, the legal and healthcare professions, and
business management
• While their basic job description requires a high degree of formal education and
subsequently a high level of human capital, they are often engaged in creative
problem solving by drawing on their extensive body of knowledge
• Taking standard approaches and thinking for themselves, they find unique
solutions, sometimes radical solutions, to find methods or products that solve
problems that are widely useful

7. The Creative Age
“Our economy is morphing in new ways every day, from an older industrial system founded on
raw materials to a creative economy bound only by the limits of human talent and imagination.”
Richard Florida
The % of world population living in urban areas
• 1800 3%
• 1950 30%
• Today 52%
• The Industrial Age - Approx. 1760
• The information Age – 1980’s
• The Creative Age – Now
The Creative class as a % of the U.S. Workforce
• 1900 10%
• 1980 20%
• 2007 30%
The late 20th century saw an enormous release
of all types of human creativity
% of U.S. wealth generated by the sectors of the
workforce
• Creative 47%
• Service 30%
• Manufacturing 23%

8. Creative Capital
• Economists have long thought in terms of ‘human capital’, that is formal education
levels
• The most conventional measurement of this is the % of people with bachelor’s
degrees
• This overlooks the extraordinary achievements of those who did not attain a tertiary
qualification e.g. Bill Gates, Steve Jobs, Mark Zuckerberg
• Actual skills are a better indicator to quantify creative capital
• A population’s literacy is a much better indicator, a skill gained in and out of the
classroom
• Studies have shown that a population’s literacy is linked to labour productivity and
long term economic growth
“By our very nature, each and every person is endowed with an incredible capacity for
innovation, a by-product of the innate human capability to evolve and adapt. Creative
capital is thus a virtually limitless resource.” Richard Florida

9. The 3 T’s of Economic Growth
• A high technology base is a
condition, as well as a result, of a
strong creative economy in a region
• An established hi-tech region
attracts a creative workforce that
spurs further technological progress
• A hi-tech region has an above
average concentration of hi-tech
companies, along with
demonstrable growth of those
companies
• Innovation is another marker of a hi-
tech region, shown by a higher
number of patents per 1000 people,
along with demonstrable growth of
patented innovations
Technology: “The making, modification,
usage, and knowledge of tools,
machines, techniques, crafts, systems,
and methods of organization, in order to
solve a problem, improve a pre-existing
solution to a problem, achieve a goal,
handle an applied input/output relation
or perform a specific function” Wikipedia

10. Talent: Growth is a consequence of
human capital. Urbanised and denser
urban areas create stronger innovation
and productivity growth, due to the
interplay of people’s creative nature in
their day to day occupations.
• People don’t cluster where the jobs
are, they cluster where there is
creativity
• As much as there is a need for a
business climate, people also need a
people or creativity climate
• The physical environment also plays a
major part in attracting creative
workers
• A region must have abundant and
high quality amenities and
experiences
• These include good housing,
education, health care, climate,
transport, recreation and culture

11. The third ‘T’ - Tolerance
“Truly successful societies go out of their way to be open and inclusive, and the places
most likely to mobilize the creative talents of their people are those that just don’t
tolerate differences but are proactively inclusive.” Richard Florida
• Research has found that places that allow artists, alternative life-stylers, immigrants
and LGBT’s, also experience high-quality economic growth
• In the U.S. research by Giovanni Peri at the University of California, with Gianmarco
Ottaviano of the University of Bologna, showed that multicultural urban
environments made U.S. born citizens more productive
• The skills of immigrants and the native born citizens complemented each other
through reciprocal learning of each others skills of problem solving, creativity and
adaptability
• Immigrants also provided different services that increased the total value of
production
• Tolerance also spurs growth and innovation, it is what Ronald Inglehart calls
‘postmaterialist’
• Traditional or materialist societies, and their associated economic thinking, are
organised as a zero sum trade off, that is to gain something you don’t have, you have
to give something up

12. • Whereas in the creative age, where
knowledge is mostly free, ideas can
be used again and again, undergo
different iterations, and be used in
unique and various ways
• Studies have shown that economies
that are post material and tolerant,
and with people with new ideas and
interested in self-expression, and who
go beyond commonly accepted
boundaries and buck at authority, will
share knowledge, as well as take
advantage of it.
• It has also been noted that materialist
economies are not as open to new
ideas, and in extreme cases quite
hostile to them.

13. Controversy
• Dr Florida’s book, ‘The Rise of the Creative Class’, prompted much controversy and
criticism from all sections of society
• He has been accused of eroding traditional family values, promoting a gay agenda,
even undermining Judeo-Christian civilization
• He maintains his goal has always been to identify the key factors that drive economic
growth
• He states he is, “a political independent, fiscally conservative, socially liberal, and a
believer in vigorous international competition and free trade.”
• He believes his research has been politicised and cast in an ideological light from both
sides of the political spectrum
• Some conservatives say he is another big spending liberal, who thinks social legislation
and government provided amenities will create jobs, rather than shrinking government
and cutting taxes
• On the left his research is seen as almost cult like, akin to Soviet communism ideology
• He staunchly maintains that the numbers speak for themselves and the connection
between creativity and economic development must remain non-partisan
• He favourably cites other academics who believe those opposed to his research and
theories, usually have a vested interested in the old order, even when it is to the
detriment of a region or economy

14. Chicken or Egg
• Another criticism levelled at Dr Florida is that it is
jobs first, then the location, not the other way
around
• Dr Florida disagrees with this conventional economic
thinking and cites studies, as well as his own
research, that shows that people pick a location
more than a job.
• He does point out that it is both job and location that affect a persons decision
• He cites an example of the run down neighbourhoods of SoHo in New York City, which
could easily be applicable to Newtown or Surry Hills in Sydney or Fitzroy in Melbourne
• First came the artists, the alternative life-stylers, and the immigrants, then the gays and
singles, with families , professionals, business and retail last
What
kind of
Growth?
• Another criticism of Dr Florida’s work is his ranking of creative cities
• Using different sets of statistical analyses critics have asserted his
rankings are wrong, regarding what type of cities create the most
jobs
• What he shows is that while less creative cities may produce more
jobs, they are not necessarily the type of jobs that will advance
economic growth in the short and long term

15. W.L. Gore & Associates, Inc. - A Creative Company
“Communication really happens in the car pool” W.L. (Bill) Gore
• From Fast Company magazine to Fortune magazine
to London’s Sunday Times, W.L. Gore & Associates,
Inc. has consistently been named as one of the most
innovative companies in the world
• Despite not having as many patents as IBM or the
R&D budget of Microsoft, it has a long history of
product and process innovation
• It’s innovation is resilient and doesn’t rely on one
individual or a select few
• Bill Gore noted while working before he started
‘Gore’, that the car pool was the only place to talk
freely in a hierarchical company
• Bill observed that when there was a crisis at a
conventional company, a taskforce was
established and the rules are thrown out, this is
when a company takes risks and makes
breakthroughs
• So Bill threw out the rules and created a company
with little hierarchy and few ranks and titles

16. • At ‘Gore’ there is direct 1 on 1 communication, anyone
can speak to anyone
• The company is organised into small task forces, limited
manufacturing teams of 150-200 at most, so that
everyone can get to know each other and what they are
working on, this means they know who has the skills and
knowledge required to get something done
• Teams are housed in separate facilities that are
autonomous
• New employees, ‘associates’, are given a mentor, not a boss
• As a new associate, Diane Davidson realised after starting, “your team is your boss,
because you don’t want to let them down. Everyone’s your boss, and no one’s your boss.”
• There are no standard job descriptions, instead commitments can run across many roles
• People become leaders by attracting followers who are drawn in with the leaders passion
and built up credibility. It is natural leadership, not designated from on high
• Gore encourages spending approximately 10% of an associates time on untested new ideas
• Gore puts R&D technologists, salespeople and production workers in the same building, so
an entire team can work together
• An untested new idea, a side project, is done entirely out of self motivation, no permission
is sought, there is no oversight
• Official support is only sought when the product is ready to go to market

17. • While the company creates unique and valuable
products, it isn’t enough
• Breakthrough products need breakthrough marketing
• An example of this is the now famous label attached to
all it’s Gore-Tex products that states, “Guaranteed to
Keep You Dry”
• Copied by Intel with it’s sticker on PC’s that states,
“Intel Inside”
• Gore consists of 4 divisions – Fabrics, Medical, Industrial, and Electronic Products
• There is some hierarchy with a CEO & President, divisional leaders, and support function
(HR, IT) leaders
• Without ranks or positions, as an associate your role morphs over time to match your
skills
• Compensation is tied to contribution and decided by a committee
• Everyone after 1 year gets 15% of their salary in stock, which they can cash out upon
leaving
• As a private company there is a patient longer term view, thus innovation has been
sustained over the years
• As Brad Jones, Industrial Products division leader states, “The gap between Gore and
other companies has narrowed. But we're still different. Companies may have fewer layers
today, but they still have pyramids and reporting structures. You can still feel the
difference in an organization when the only person speaking in a meeting is the top
person. It's easier to compare us to a startup company.”

18. Flight of the Creative Class
“We are seeing one of the greatest migrations in human history,
as talented, innovative, and entrepreneurial people concentrate
perhaps in twenty or twenty-five Mega-regions worldwide.”
Richard Florida
• It has been argued that globalisation has made the world flat, what Richard Florida
argues is that the world is flat and spiky
• The spikes are the creative centres, cities/regions that are powerhouses of innovation
and economic growth, places not only in the U.S. but throughout the world
• For example a region like New York has an economy comparable with Russia or Brazil
• While the U.S is still dominant with creative cities/regions such as San Francisco, New
York, Boston and Austin. Toronto and Vancouver, Berlin, Stockholm and London, as well
as Tokyo, Seoul, Taipei and Sydney also deserve a mention
• Creative countries based on number of patents granted include the U.S., Japan,
Germany, Taiwan, South Korea, Israel and Canada
• Though still developing, China and India have had an impact with 30% of Silicon Valley
start-ups founded by Chinese or Indians
• So the creative class worldwide, estimated at approximately 150 million, have a choice of
many varied locations to live and work

19. China and India are not the competition (yet)
• Centres of creative industry are no longer the sole province of the U.S.
• Hollywood films are now made in Canada, Europe, Australia, New Zealand and
throughout the world
• International students after an English speaking education have a wide range of
options for overseas studies with Universities in Europe and Asia also offering
courses in English.
• Software is not only created in Silicon Valley
• The U.S. advantages of an open society and open to immigration are being eroded
by countries with larger immigrant populations. In the U.S. it is approximately 10% of
the population, Canada is 18%, Australia is 22%
• In the U.S. the creative class is approximately 30% of the population, it is a third of
the workforce for Ireland, Belgium, Australia and the Netherlands. If you were to
take into account technicians, it is over 40% in 8 European countries
• Based on Dr Florida’s Global Creativity Index (CGI), which is based on his 3 T’s of
economic Growth, the U.S. ranks fourth behind Sweden, Japan and Finland
• Other similar measures to the CGI rank the U.S. 6th, 7th, or not even in the top ten

20. A New Creative Compact
• Dr Florida has called for ‘A New Deal’ much in the same vein as FDR’s New Deal post the
Great Depression. A series of domestic economic programs that focussed on relief,
recovery and reform that spurred growth and raised the living standards of all Americans
• Called the ‘New Creative Compact’ it has six key principles:
1. Invest in developing the full human potential and creative capability of every single
human being
2. Make openness and diversity and inclusion a central point of the economic agenda
3. Build an education system that spurs, not squelches, creativity
4. Build a social safety net for the creative economy
5. Strengthen cities, promote density, clustering, and concentration
6. From growth for growth’s sake to true prosperity: Measure what really matters.
Personal Opinion
As a member of the creative class and a first world citizen, I
agree with Dr Florida’s 3 T’s of economic growth. We have
moved on substantially from the industrial age and are
beginning to move on from the information age, into a
creative age, or what some authors such as Dan Pink call the
conceptual age. We are at an interesting junction in human
civilisation and Dr Florida’s new creative compact is the map
we need to follow.

21. References
Bures, F (2012) The Fall of the Creative Class http://thirtytwomag.com/2012/06/the-fall-
of-thecreative-class/
Deutschman, A (2004) The Fabric of Creativity
http://www.fastcompany.com/51733/fabric-creativity
Florida, R (2013) Did I Abandon My Creative Class Theory? Not So Fast, Joel Kotkin
http://www.thedailybeast.com/articles/2013/03/21/did-i-abandon-my-creative-class-
theory-not-so-fast-joel-kotkin.html
Florida, R (2012) The Creative Compact http://www.huffingtonpost.com/richard-
florida/the-creative-compact_b_1614218.html
Florida, R (2007) The Flight of the Creative Class: The New Global Competition for Talent,
USA, HarperCollins
Florida, R (2013) Values of the Creative Class
http://www.fastcompany.com/1741581/values-creative-class
Florida, R (2012) What Critics Get Wrong About the Creative Class and Economic
Development http://www.theatlanticcities.com/jobs-and-economy/2012/07/what-
critics-get-wrong-about-creative-class/2430/
Hesmondhalgh, D (2007) The Cultural Industries: 2nd Edition, London, Sage Publications

22. References cont.
Isaac, C (2011) Forbes 400: The Self-Made Billionaire Entrepreneurs Who Said No To
College http://www.forbes.com/sites/worldviews/2011/09/23/forbes-400-the-self-
made-billionaire-entrepreneurs-who-said-no-to-college/
Kotkin, J (2013) Richard Florida Concedes the Limits of the Creative Class
http://www.thedailybeast.com/articles/2013/03/20/richard-florida-concedes-the-
limits-of-the-creative-class.html
Pink, D (2006) A Whole New Mind: Why Right Brainers Will Rule The Future, New
York, Riverhead Books
Stolarick, K (2009) Overview of the Creative Class and the “3Ts”
http://www.slideshare.net/mpian/overview-of-the-creative-class-theory-and-the-3-ts
The Next (2013) The Rise of the Creative Class: Why cities without gays and rock bands
are losing the economic development race. The Next
http://www.thenext.ca/files/read-rise-of-the-creative-class.pdf
The World Bank (2013) Urban Development: Sector Results Profile - Harnessing
Urbanization for Growth and Poverty Alleviation
http://www.worldbank.org/en/results/2013/04/14/urban-development-results-
profile
Wikipedia (2013) Creative class http://en.wikipedia.org/wiki/Creative_class
Wikipedia (2013) Technology http://en.wikipedia.org/wiki/Technology