Richmond Style Weekly  - May 5,  2004

Getting Hip 

How does Richard Florida’s “Creative Class” hold up in Richmond? 

by Scott Bass

he enormity of Capital One Financial Corp.’s local layoffs won’t truly hit home until sometime after the company slips the pink to an estimated 2,500 employees, according to news reports last week. For now, the job cuts may offer a lesson in economic development.

That the company is outsourcing telemarketing jobs to India is no big surprise — Capital One has a cadre of workers there already. But last week’s news carried a bit of a twist: The company may send 600 to 800 technology jobs to Indian shores, as well. This isn’t sweatshop labor, but jobs that pay $80,000 a year in the United States.

This doesn’t jibe with the teachings of Carnegie Mellon business professor Richard Florida, author of the best-selling urban development tome “The Rise of the Creative Class.” In it, Florida preaches that cities in the “New Economy” win by luring young, creative professionals — led by technology workers like those at Capital One.

In Richmond and in cities across the country, politicians and development officials have seized onto Florida’s theory, applauding his findings and initiating a wave of changes in urban-development policy.

The resulting battle cry for struggling cities everywhere: It’s not tax breaks and redevelopment incentives that lure businesses, it’s the people — young, hip people, probably in their 20s. Architects, engineers, musicians and computer programmers. People who supposedly move to cities with nice restaurants, coffee bars and a happening nightlife, cities like Austin and San Francisco.

There’s only one problem: Florida’s ideas may not hold up.

Capital One’s downsizing illustrates a gaping hole in his theory, critics contend. Much of Florida’s research is rooted in the go-go Internet rush of the late 1990s, when companies were beholden to a limited pool of college graduates and computer whiz kids who got to pick and choose whom they worked for — and where. Today, leaders of Florida’s “creative class” aren’t always so irreplaceable.

Florida argues that instead of focusing on traditional business-building tools — luring companies with tax cuts and redevelopment incentives — cities in the New Economy win by focusing on three T’s: technology, talent and tolerance.

As his theory goes, today’s technology-driven economy makes transportation and proximity to business services less important factors in deciding where companies locate. Instead, they follow the “creative class.” If cities want to secure brighter futures, they must attract residents who are young, earn lots of money and like to live in an urban setting.

Florida’s “creatives” are loosely defined as almost any professional who holds a college degree, but more strictly defined as “unattached” 20- to 30-year-olds, those who fill such roles as scientists, writers and computer techies. This group makes up 30 percent of the workforce, Florida says, and includes oft-overlooked gays and bohemians who prefer cities that tolerate alternative lifestyles and offer a vibrant nightlife.

Florida’s book, released in 2002, hit a nerve with the media and urban planners across the country. It touched off eureka moments nationwide, as cities pushed aside their old recruitment strategies and started focusing on building entertainment districts, bike trails and museums. Richmond was one of those cities.

But in the last year, Florida’s strategy has also kicked off a flurry of criticism.

Joel Kotkin, a professor of public policy at Pepperdine University, says Florida’s fallacy rests in drawing wrongheaded conclusions from the dot-com boom. Many of the creative class bulwarks Florida studied between 1997 and 2000 — cities such as San Francisco, Boston and New York — haven’t seen much growth after the bust, despite being home to scores of hip professionals, gays and bohemians.

“In this case, you have people who don’t understand that this isn’t the late 1990s,” says Kotkin, adding that the same cities, such as San Jose, which benefited from the Internet rush are now struggling to replace lost jobs.

Kotkin, who authored Inc. Magazine’s recent ranking of the Top Cities in America for doing business, found when measuring plain old job growth the strongest regions didn’t rank highly on Florida’s Bohemian Index. Measuring recent labor statistics, Kotkin found most of the country’s economic growth in cities with strong suburban communities such as Atlanta, which ranked No. 1; Riverside-San Bernardino, Calif., which some consider the sprawling antithesis to urban renewal; and No. 3 Las Vegas, which ranks No. 117 on Florida’s list. (Richmond ranked No. 66 on Florida’s list, No. 17 on Kotkin’s.)

Kotkin says real jobs are moving to regions that are attractive to families, offer affordable housing, good transportation and a diverse economy. Regions that appeal to one small sector of the work force, such as Florida’s creative class, tended to not fare as well in Kotkin’s research.

“What’s driving this is not hip and cool, but job opportunities and relatively affordable housing,” Kotkin says.

Richmond weighs approach

Florida didn’t respond to an interview request from Style. But on his Web site and in recent articles he fires back that Kotkin distorts the message of his book. He says the creative class isn’t exclusive to gays and bohemians, nor does he suggest that cities adopt a narrow-minded approach to development by neglecting families.

Lucy Meade, director of business development for Richmond Renaissance, says Florida’s message serves an important objective: It brings young professionals to the table. These are the people moving to the city, and Florida forced government officials to listen to what these young people are saying.

“He empowers people who maybe think that they aren’t as important,” says Meade, who heads Renaissance’s creative class initiatives, including an event scheduled for May 27 at Plant Zero called “The Rise of the Creative Class — What Richmond’s Doing Right!” Meade says, “It’s a little bit of civic engagement.”

The creative class isn’t just young and hip, Meade contends. It’s a diverse group and includes everyone from artists, musicians, inventors and researchers “to the professionals every day who do what they do better.”

That’s one of the problems with Florida’s creative class, some say. At 32 million strong, creative professionals range from accountants to science teachers to software decoders, typically between 25-35 years in age, Florida says.

John Accordino, an urban studies professor at Virginia Commonwealth University, says Florida’s book underscores an important shift in the economy. There are more knowledge workers than ever before, he says, but they span a wide range.

“If you want to attract industries that attract high wages, you want an economic development policy that attracts or at least doesn’t repel these kinds of jobs,” he says.

Accordino says Florida places too much emphasis on the so-called cool component. “Do these people value counterculture, tattoos? Not necessarily,” he says of the creative class. “I think the evidence for that is a little bit weaker.”

Instead of trying to create hip districts, Kotkin says cities need to focus on another, more pressing problem: What happens when that hip 25-year-old turns 30, gets married and has children? Creative or not, statistics show that they leave the city for more family-friendly suburbs. That’s when priorities shift away from rock ’n’ roll to safe neighborhoods and good schools.

“You cannot mistake a subset of what is important to cities as its essence,” Kotkin says. “We tend to obsess about 5,000 people instead of 500,000. Perhaps the real question is, What are the implications of having a nomadic city population?”

Finding a balance

The key, say local economic development officials, is not to take Florida’s message as the last word. The city shouldn’t look at entertainment districts and fancy bars as the only key to economic stability.

“It’s a component of the outreach marketing that we do. It’s not exclusive,” says Greg Wingfield, president of the Greater Richmond Partnership, the Richmond region’s leading economic-development agency.

“I would say that we recognized early on that Florida … and the research he was doing matched up nicely with our demographics and culture,” Wingfield says. “So why not build on that foundation?”

When Florida spoke in Richmond in January 2003 at the Greater Richmond Chamber of Commerce’s annual economic forecast, he was just coming into vogue. Back then, a Florida speech cost $10,000. Today, it runs about $25,000.

Richmond was becoming a magnet for the creative class long before Florida came to town, Wingfield says. The loft-apartment craze in Shockoe Bottom and the housing booms in Jackson Ward and Church Hill were already underway.

Jim Dunn, president and chief executive of the Greater Richmond Chamber of Commerce, isn’t taking everything Florida teaches as gospel. In fact, the chamber is in the throes of shifting its attention to business retention, he says, working to help local businesses already here expand and improve operations.

“We don’t want to put all of our eggs in one basket,” Dunn says.

As for the Capital One layoffs, Richmond will likely absorb those cuts without much fuss because of an already diverse local economy, officials say. Two weeks ago, Infineon Technologies announced it would be investing another $1 billion in its local semiconductor factory in Henrico next year, adding another 800 jobs.

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