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The Conference Board Review® Article
America's best and brightest are leaving . . .
. . . and taking the creative economy with them.
By Richard Florida
Richard Florida is author of The Rise of the Creative Class and Cities and the Creative Class, Heinz Professor of Economic Development at Carnegie Mellon, and a visiting scholar at the Brookings Institution. Kevin Stolarick conducted much of the technical analysis reported here; Jesse Elliott assisted with writing and editing.
In March 2003, I met Peter Jackson, director of the Lord of the Rings trilogy, at his film complex in lush, green, otherworldly Wellington, New Zealand. Jackson has done something unlikely in Wellington, an exciting, cosmopolitan city of 900,000 whose reputation hasn't caught up to its rising status as a global cultural capital. He has built one of the world's most sophisticated filmmaking complexes. And he did it in New Zealand for a reason.
Jackson, a Wellington native, realized what many American cities discovered during the 1990s: that paradigm-busting creative industries could single-handedly change the way cities flourish while driving dynamic and widespread economic change. With the allure of the Rings movies, Jackson recognized that he would be able to attract a diverse array of creative talent from around the world. And sure enough, during my visit to Wellington I met dozens of Americans from places like Berkeley and MIT, many of whom had begun the process of establishing residency in New Zealand and relinquishing their U.S. citizenship for what they saw as greener creative pastures.
Think about it. The film-production industry symbolizes America's international economic and cultural might. Yet Rings, the single greatest project in recent cinematic history, was internationally funded and crafted outside of Hollywood.
As a result, regardless of how many tubs of popcorn American theaters sell to moviegoers, the lion's share of economic benefits from the Rings trilogy-the creation of jobs, new companies, even new industries-is likely to accrue not to the United States but to New Zealand. In an equally mighty display of economic irony, Jackson plans to use Wellington as a base for his $150 million remake of King Kong-ironically, a landmark early symbol of Hollywood's power.
Tale of Two Pincers
The loss of U.S. jobs to overseas competitors is shaping up to be one of the 2004 campaign's defining issues, and for good reason. Americans are seeing not just a decline in manufacturing jobs but also the outsourcing of hundreds of thousands of white-collar jobs. But the loss of these jobs is only the most obvious-and not even the most worrying-manifestation of a much bigger problem. Other countries are now encroaching more directly and successfully on what has been for almost two decades the heart of our economic success: the creative economy. Better than any other country in recent years, America has developed innovative technologies and ideas that spawn new industries and modernize old ones. These creative industries, employing scientists, artists, designers, engineers, financiers, marketers, and sundry entrepreneurs, have generated more than 20 million U.S. jobs since the 1990s and currently account for fully half of all U.S. wages and salaries.
We developed these new technologies and ideas largely because we were able to energize and attract the best and the brightest-not just from within our country but from around the world. During the 1980s and '90s, talented, educated immigrants and smart, ambitious young Americans congregated in and around a dozen U.S. urban regions. These areas became hothouses of innovation, the modern-day equivalents of Renaissance city-states. Creative professionals fed off each other's knowledge, energy, and capital to create new products, new services, and whole new industries: cutting-edge entertainment in Southern California, new financial instruments in New York, computer products in Austin and Northern California, satellites and telecommunications in Washington, D.C., software and innovative retail in Seattle, and biotechnology in Boston.
Now the rest of the world has taken notice of our success and is working hard to reproduce it. The present surge of outsourcing is the first step, the first pincer of the claw. The more routine aspects of what we consider brainwork-writing computer code, analyzing X-rays, etc.-are being lured away by countries like India and Romania, which have lower labor costs and educated workforces large enough to do the job. Though socially alarming and economically disruptive, history teaches us that such outsourcing is manageable if we are able to substitute a new tier of jobs derived from the cutting-edge technologies and ideas coming out of our creative centers.
What should really alarm us is that our much-admired capacity to adapt is steadily being eroded by a different kind of competition-the other pincer of the claw-as metropolises in other developed countries transform themselves into magnets for higher value-added industries. They're doing it by a variety of means, from government-subsidized laboratories to partnerships between top local universities and industry. Most of all, they're attracting foreign creative talent, including our own. The result is that the sort of high-end, high-margin creative industries that used to be the United States' province and a crucial source of our prosperity have begun to move overseas. Indeed, based on a creativity index that my colleagues and I developed, Sweden actually tops the United States, with Finland, the Netherlands, and Denmark close behind. And other countries, especially Ireland, are becoming more competitively creative at a faster rate than the United States.
Cities in other parts of the world are beating our own on measures of new talent, diversity, and brainpower. Places like Brussels are fast becoming creative-class centers to rival Boston, Seattle, and Austin. Vancouver and Toronto are also set to take off; both city-regions have a higher concentration of immigrants to help drive their creative economies than New York, Miami, or Los Angeles do. And as creative centers, Sydney and Melbourne rank alongside Washington and New York.
Many of these places also offer to highly mobile creative talent such further inducements as spectacular waterfronts, beautiful countryside, and great outdoor life. They're safe. They're rarely at war. They're transforming themselves into creative centers that draw talent from all over-including your metropolitan area and mine.
Comments? Write a letter to the editor.
Return to the September/October 2004 The Conference Board Review® issue.
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