Insight – Rise Revisited: Creativity Index

Ten years ago, Richard Florida, Director of the Martin Prosperity Institute, released The Rise of the Creative Class. This best-selling book shed light into changing economic, geographical and demographic trends within the United States, shifted by the growing role of creativity. Ten years later, The Rise of the Creative Class Revisited has been released, complete with updated statistics, several new chapters and Florida’s reflections on the impact of creativity over the past ten years. To celebrate the release of the new book, the Martin Prosperity Institute will release a series of four Insights, providing discussion of the new statistics, maps and analysis.

Vital to the original version of Rise, and included in many other Martin Prosperity publications, working papers and Insights is the use of the Creativity Index. The Creativity Index is Richard Florida’s “overall measure of regional economic potential”. It combines the three T’s (Talent, Technology and Tolerance) to create the index. The three T’s are made up of indexes such as: visible minority, foreign born and gay/lesbian population share for Tolerance, a Tech-Pole index and patents per capita for Technology and Creative Class occupational share and educational attainment for Talent, amongst others. All of these indexes that make up the Creativity Index have been updated, as has the Creativity Index itself.

With the revisions to the book and the updates to all of the numbers and measures, the Bohemian Index was excluded from the Tolerance Index and the Creativity Index. This change was not made from any underlying change in ideas or theory. In fact, the important role played by artists, designers, musicians and others in “bohemian” occupations in building a successful regional creative economy has been affirmed over the past ten years. However, dropping the “long form” Census and replacing it with the American Community Survey has resulted in more frequent data, but has also reduced the ability to estimate the Bohemian Index at a regional level for all US metros with a degree or reliability. So, although an updated Bohemian Index is included in the book, the Boho Index has been (unfortunately) dropped from the revised Creativity Index.

The Creativity Index is a measure designed to capture a metropolitan region’s economic potential and embodies a mix of things that allow the city to succeed in the creative economy. As most things change, the top performers as displayed in Rise Revisited are not exactly the same as ten years ago. The city that was found to have the highest Creativity Index in Rise Revisited is Boulder, Colorado. Boulder is a liberal city with a beautiful landscape, great art and a highly successful business and technological economy, which also scored top ten in the 3 T’s. The rest of the top ten are San Francisco, then Boston, a three-way tie for fourth by Seattle, San Diego and Ann Arbor, then Corvallis, Durham, greater Washington DC and then tenth is Trenton. Some other notable scores are San Jose (12th), Austin (16th), and Minneapolis (18th).

There are a number of interesting results of the Creativity Index scores, outside of the top ten. When looking at the top ten most populated metros it was found that only three (Boston, Washington and Atlanta) finished with a Creativity Index score in the Top 20. Some surprise scores were New York’s Creativity Index rank of 31st in America, while Miami is one of the largest metros in the US, but ranked 63rd. California is the state that has the most metros with Creativity Index scores within the top ten and top forty. When looking at the map below, it is clear to see that coastal California and the northeastern states of the US are the regions with the higher creativity scores. These are the regions, most fit to succeed in the creative economy, so it is no surprise that the metros of these regions have some of the highest annual GDPs. There are also pockets in states such as Texas, Florida, Washington and Missouri (Seattle, WA ranked 5th; Austin, TX ranked 17th; Kansas City, MO ranked 41st and Gainesville, FL ranked 43rd).

Exhibit 1: The Creativity Index for Top 20 Metros, 2010

Creativity Index for Top 20 Metros, 2010

Many factors go into the Creativity Index. The three T’s are factors that loom largely in the Creativity Index, and the top ten creative metros generally have high rankings in these categories as well. Seattle was found to be the metro with the highest Technology ranking, beating out San Jose. Durham North Carolina has the highest Talent ranking, once again with San Jose in second and much higher than New York, Los Angeles and Chicago. The most tolerant metros were found to be San Diego (1), Napa, CA (2) and Santa Rosa, CA (3). Boulder Colorado, which is the most Creative metro, was found to be top ten in each of the three T’s ranking.

Exhibit 2: The Creativity Index for Top 20 Metros, 2010

Creativity Index for Top 20 Metros, 2010

Occupational Share also affects the overall Creativity Index of a city as the higher Creative Class (CC) share, the better affected a city’s index will be. Not surprisingly the vacation destination Myrtle Beach, SC had the lowest CC share, and also not surprisingly, the city with the largest CC share was Durham. The top ten CC share metros also include San Jose (2), Washington DC (3), Ithaca (4), Boulder (5), Trenton (6), Huntsville (7), Corvallis (8), Boston (9) and Ann Arbor (10). In terms of total population employed in CC jobs, New York has the most with 2,903, 800 people, followed by Los Angeles and Chicago, as expected. Pascagoula, MS has the highest Working Class Share with 39.7%, and the highest Service Class share was much higher in Myrtle Beach, SC with a Service Class share of 64.9%. Houston was one of the metros with a balanced share of the three main occupations embodying a breakdown of 33% Creative Class, 24% Working and 42% Service Class. The national occupational breakdown was found to be 32% Creative Class, 46% Service Class and 22% Working Class.

Next week, in the series of Rise Revisited Insights, the Martin Prosperity Institute will take a look at the analysis of inequality throughout the United States as discussed in the book.

For more information or to purchase The Rise of the Creative Class Revisited, by Richard Florida, click here.

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The Martin Prosperity Institute at the University of Toronto‘s Rotman School of Management is the world’s leading think-tank on the role of sub-national factors — location, place and city-regions — in global economic prosperity. We take an integrated view of prosperity, looking beyond economic measures to include the importance of quality of place and the development of people’s creative potential.

 

Towards a Broader Conception of Economic Competitiveness

The economic crisis has challenged popular conceptions of economic growth, both in terms of the definition and the measurement of it. While engendering growth and bolstering competitiveness remains high on political agendas, immediate attention has shifted to creating jobs, lifting wages, addressing inequality, and fostering long-term, sustainability prosperity.

A new report from the Martin Prosperity Institute, “Creativity and Prosperity: the Global Creativity Index,” addresses the challenge of nurturing sustainable economic development head-on, shifting the dialogue from a narrow focus on competitiveness and growth to a broader focus on creativity, prosperity, and well-being.

We first introduced the Global Creativity Index (GCI) in 2004. One again, the Index assesses the prospects for long-term prosperity across 82 nations according to a combination of underlying economic, social, and cultural forces. We refer to these forces as the 3 Ts of economic development: Technology, Talent, and Tolerance. The Index also compares the GCI to a series of other metrics of competitiveness and prosperity, from conventional measures of economic growth to alternative measures of economic equality, human development, and happiness and well-being.

The Global Creativity Index strong correlates with other measures

We compared the 3 Ts metrics with the GCI to established measures of economic and social progress. The GCI is closely associated with conventional measures of economic output and economic competitiveness, and it is also associated with broader measures of human development and life satisfaction (or happiness). Nations that score better on the 3 Ts not only have higher levels of economic output but also higher levels of human development and happiness. We also find that the GCI is associated with greater economic equality; nations that score higher on the GCI have less inequality. Our findings suggest that there are two distinct paths available to greater economic competitiveness. On the one hand, there are nations like the United States and the United Kingdom, who exhibit high levels of economic output and competitiveness alongside higher levels of inequality. On the other hand, there are a greater number of nations like Sweden and Norway, where high levels of economic output and competitiveness occur alongside far greater equality. This suggests that there exists a high-road path to sustainable prosperity, where the fruits of economic progress are broadly shared.

The data in this report covers 82 nations for the period 2000–2009.

Download this Insight (PDF)

The Martin Prosperity Institute at the University of Toronto’s Rotman School of Management is the world’s leading think-tank on the role of sub-national factors—location, place and city-regions—in global economic prosperity. We take an integrated view of prosperity, looking beyond economic measures to include the importance of quality of place and the development of people’s creative potential.

 

 

 

 

China’s Creative Economy: From East to West and North to South

In August of 2010, China made economic history when it became the second largest economy in the world, over taking Japan in the process. As the largest emerging economy in the world, with a total GDP that surpasses that of Brazil, Russia and India combined, China has become a formidable political and economic force. While at this point in time China is still largely seen as the “world’s factory,” the country is beginning to show signs of an emerging post-industrial, creative economy in many of its most developed regions. This finding is emphasized in a recent report by the Martin Prosperity Institute titled: Understanding the Creative Economy in China. This development of a knowledge and creative-based economy in China will be of significance to policy makers, politicians, and economists alike in the coming decades as the country is expected to continue to grow and maintain its new authority as the second largest economy in the world.

The creative economy has become the focus of economic development practitioners and policy makers in the 21st century. Just as the knowledge economy shaped economic development in the later part of the 20th century, the creative economy dominates competitiveness today. The logic expressed behind the creative economy proposes that it is not simply the possession of knowledge and creation of new knowledge that drives economic growth, but more importantly, the creative ideas and products that come out of such knowledge that drive continued economic prosperity. Within a creative based economy, growth is driven by the presence and ingenuity of the creative class; an occupational group comprised of individuals employed in occupations where they are paid not only to think, but to create. The creative class as an occupational group includes people employed in management, finance, law, healthcare, science, engineering, architecture, design, education, arts, music and entertainment.

Exhibit 1: China’s Creativity Index by Region, 2008

Exhibit 1 maps the Creativity index for all 31 provincial level regions in China. The Creativity index is derived by combining the results from three different indexes, each measuring a separate characteristic of the creative economy. The three indices used to derive the Creativity index are: the Talent index, Tolerance index, and Technology index. The map shows how ‘creativity’ is distributed across the country. It reveals that the most creative regions in China tend to be found along China’s eastern and northern provinces, while the least creative regions tend to be found in China’s most western and southern provinces. According to the creativity index, the top four creative regions in China are Shanghai (0.97), Beijing (0.95), Tianjin (0.91) and Guangdong (0.81). The resulting pattern displayed on the map by the Creativity index in China mimics the pattern that is found when we map more traditional economic measures such as GDP and wages. As is expected, some of the most creative regions in China are also the most productive.

As the evidence presented by the map suggests, the development and growth of China is occurring in a pattern from East to West and North to South. This is further supported by the changing composition of some of China’s leading provincial level regions. In China’s most creative regions, the regional economy has become one driven by services, a defining characteristic of regions in many leading post-industrial nations. Between 1978 and 2008, the contribution of the service industry to total GDP and its share of total employment grew significantly in Beijing, Shanghai and Tianjin, China’s three leading Municipalities.

One of China’s economic goals has been to direct growth to and promote economic activity within its central and southwestern regions. The designation of Chongqing as a Provincial Municipality in 1997, placing it in the same category of provincial status as Beijing, Shanghai and Tianjin, was done with the direct intention to accelerate economic development and substantially improve China’s western regions. Currently, Chongqing is continuing to underperform compared to other major eastern cities because of the large rural areas that were brought under its political jurisdiction when it gained Municipality status. The rural areas in Chongqing are 10 times as big as Shanghai and 5 times as big as Beijing. However, despite the fact that Chongqing has a fair bit of substantial ground to cover in order to catch up with many eastern provinces, the new Municipality has the potential to help eventually draw growth to the west.

China’s economy appears to be progressing in a similar fashion as many developed countries have already done, moving from agriculture and subsistence farming to manufacturing and eventually achieving a dominant service industry. However, what is unique is that this pattern of development is occurring unevenly across the country, guided by both political and geographic parameters, and displaying a curious pattern of varying intensity. With the establishment of Chongqing and China’s general desire to relocate manufacturing to inland provinces in central and western China, this will allow a strong service, and more importantly, creative economy to emerge in many provinces across the country. Overall, this general trend is important for policy makers and politicians to watch closely as China continues to emerge as a global power and potentially economic leader in the decades to come.

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The Martin Prosperity Institute at the University of Toronto’s Rotman School of Management is the world’s leading think-tank on the role of sub-national factors—location, place and city-regions—in global economic prosperity. We take an integrated view of prosperity, looking beyond economic measures to include the importance of quality of place and the development of people’s creative potential.