The document discusses theories of how places attract talented people and spur economic growth, including theories around social capital, human capital, and creative capital. It analyzes how places high in technology, talent, and tolerance ("the 3 Ts") are better able to attract creative class workers who power innovation and growth. Test results showed communities with diversity and high-tech industries grew faster than traditional social capital communities.

1. Industrial & Labor Geography 2007
Cities and the Creative Class
City & Community
Richard Florida
Nikolaos Spyropoulos
Departement of Geography
17 september 2007
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2. Why Geography Is Not Dead
The end of Geography theme developed in the turn of 19th
century when technologies such as telegraph and automobile
emerged.
”Geography and real estate, however, will remain, well real.
Cities will flourish, and the value of a distinctive place, such as
a wilderness area, or a charming hill vilage, will only increase”
”People will inhabit places, but increasingly the economy
inhabits a place”
Kelly: New Rules for the New Economy(1998)
It appears that place (not just space) is essential to economic
life as being an incubator of creativity, innovation and new
industries.
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3. Agglomeration and Cluster Theories
Place remains important as a locus of economic activity
because of the tendency of firms to cluster together.
Firms cluster together in agglomerations to gain productive
efficiencies.
Examples:
Detroit Automotive Industry
Silicon Valley Microprocessor Industry
Mexico Electronics & Auto-Parts
Singapore Disk-Drive makers
Japan Flat Panel Display Producers
New York City Broadway Theater District
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4. Agglomeration and Cluster Theories
WHY DO FIRMS CLUSTER?
1. Capture efficiencies generated from tight linkages between
firms.
2. Positive benefits of co-location.
3. Face to face contact.
More importantly:
Firms cluster to gain advantage of talented people who power
innovation and economic growth. Mobilizing that talent gives
a strategic advantage for companies in a time driven economy.
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5. The Social Capital Perspective
As Robert Putman says in his work regional economic growth
is associated with tight-knit communities where people and
firms form and shape strong ties.
In his view:
People have become more Decline of social capital
disconnected from one
to another
Basis of prosperity Society has become
less trustful and less
civic-minded.
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6. The Social Capital Perspective
Florida’s point of view:
People try to get away from People want to pursue
such environments (e.g. church, their own lives and
political parties, recreational prefer weaker bonds
leagues) than strong ones.
Social structures that
Modern societies differ from older were important in earlier
ones in terms of generating economic years now work against
prosperity. prosperity.
Older communities are being exchanged for more inclusive and
socially diverse arrangements.
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7. The Social Capital Perspective
These new socially diverse communities are more effective at
generating economic growth and attracting high-tech to a
place.
Social capital can either
• Reinforce belonging and community or
• Shut down newcomers, raise barriers to entry and retard
innovation.
Places with dense ties and high levels of traditional social
capital promotes stability, while places with looser networks
and weaker ties promote novel combinations of resources and
ideas.
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8. Human Capital & Urban-Regional Growth
The traditional view of city growth suggests that a city is
developing if:
Is near to transportation Has natural resources
routes.
(Cost-related factors)
The proponents of human capital theory argue that the key to
regional growth lies in endowments of highly-educated and
productive people (creative people).
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9. Human Capital & Urban-Regional Growth
Human capital is the central factor in regional growth.
Clustering of human capital is the ultimate source of regional
agglomerations of firms.
Reap the advantages Take advantage of
of common labor pools. common networks
Fact:
Places with a greater number of talented people grew faster
and were better able to attract more talent.
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10. The Creative Capital Perspective
From the perspective of human capital, economic growth occur
in places which have highly educated people.
Why creative people cluster in certain places?
• Economists and social scientists pay attention to how
companies decide where to locate.
• However people are not making career decisions based on
place of job but are drawn to places that were inclusive and
diverse.
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11. The Creative Capital Perspective
Creative People
• Are the main reason of regional economic growth.
• They prefer places that are innovative, diverse and tolerant.
• They shape the location decisions instead of saying the
opposite.
Creative Class
The distinguishing characteristic of these people is that its
members engage in work whose function is to “create
meaningful new forms”.
Members of this class are:
• Scientists, Engineers, University Professors.
• Poets, Actors, Designers, Entertainers.
• Analysts, Think Tank Researchers, Opinion makers.
Typically highly educated people and thus high level of human
capital.
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12. The Creative Capital Perspective
Patterns of the Creative Class:
• Creative Class is moving away from traditional corporate
communities to a set of places called “creative centers”.
• Creative centers tend to be the economic winners of our
age.
• Creative centers are succeeding largely because creative
people live there. All forms of creativity can flourish there.
• Creative class is looking for places that can provide high
quality experiences and above all the opportunity to validate
their identities as creative people.
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13. Technology, Talent and Tolerance
The new geography of creativity is based on those three factors
(the 3T’s as Florida says).
Members of the “creative class” take roots in places that
possess all three of these factors.
Definitions:
Tolerance Talent Technology
Openness, Holders of bachelor A function of
Diversity degree and above innovation &
high-tech
concentration
in a region
Fact:
Talented people are drawn to places that offer tolerant work
and social environments.
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14. Technology, Talent and Tolerance
Human capital theorists have shown that economic growth is
closely associated with concentrations of highly educated
people.
However studies of relationships between talent and
technology, between clusters of educated and creative people
and concentrations of innovative and high-tech industries have
shown that:
• High technology and innovation are closely related with
locations of the creative class.
• Regional economic growth is highly related to those 3Ts.
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15. The Role of Diversity
Economists argue that diversity is important to economic
development, but they usually meant diversity of firms and
industries.
The place as space of diversity
Places with low entry barriers Open and diverse places
gain advantage by attracting are likely to attract greater
talented people. numbers of talented people
that power innovation and
growth.
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16. Testing The Theories
Three major theories of regional growth (R. Cushing):
1. Social Capital
2. Human Capital
3. Creative Capital
Social capital Human & Creative capital
Little explanation of Better at accounting such growth.
such growth.
Fact:
Creative communities are centers of diversity, innovation and
economic growth while social capital communities are not.
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17. Testing The Theories
Putnam in his work pointed out 13 different kinds of social
capital like:
• Political involvement
• Civic leadership
• Giving & volunteering
• Protest politics
• Faith based institutions
Cushing’s research method:
Tech-Pole Index Innovation Index
Talent Index
Bohemian Index
Gay Index
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18. Testing The Theories
Results from this Analysis:
• Classical Social Capital Communities. Dakota, Bismarck,
Alabama.
1. Putnam’s theory places.
2. High score in social capital, low score in innovation and diversity.
• Organizational Age Communities.
1. Corporate dominated societies. Cleveland, Detroit.
2. Average social capital, political involvement.
3. Low levels of diversity, innovation and high-tech industries.
• Nerdistans. Silicon Valley, Los
1. Fast growing regions Angeles, Houston.
2. High-tech industry.
3. Above average diversity.
4. Low social capital and political involvement.
• Creative Centers.
San Francisco,
1. Large urban centers. Chicago, Boston,
2. High levels of innovation and diversity. Denver.
3. Average social capital and political involvement.
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19. Testing The Theories
Further results:
• High social capital communities showed a strong preference
for “social isolation” and “security & stability”.
• Low social capital communities had the highest rates of
diversity and population growth.
• There is no evidence (based on statistical data) that social
capital leads to regional economic growth. Instead the
effects were negative.
Cushing concludes that:
“Creative capital model generates equally impressive results as
the human capital model and perhaps better”
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20. Conclusion
• In the past city has been viewed as the center of physical
production and trade, agglomeration of finance, service and
retail activities.
• Understanding the city as an arena of consumption and for
entertainment-a city that competes for people as well as for
firms, a city of symbols is a huge research opportunity for
sociology and geography.
• There is a huge change from industrial-organizational
system of capitalist economies to new knowledge based and
human creativity systems.
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21. ? Questions
•How do we measure creativity and can we say that there is
“bad” as well as “good” creativity inside a firm?
•How do we maximize our creative assets? (is education
enough)?
•How can we built a “creative city”? How can we attract
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creatives to our city?
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22. 17 september 2007
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