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Last
week, I stumbled
into Keith Simmons, CEO of XTerra Wetsuits, seller of
high-performance wetsuits for triathletes. Sipping
coffee and reading the newspaper outside a neighborhood
Starbucks, he was
back in town for a couple of months after having
moved to San Diego. Although the XTerra headquarters
remained in Richmond, he'd moved his personal residence
to the West Coast to be near the center of his industry.
The
story was instructive for anyone interested in why the
CEO of one of Richmond's coolest companies--a young man
who was born here and retains a strong affection for the
community--would feel compelled to move across the
country. But his tale was downright fascinating to me,
as I was, at that very moment, grappling with the
controversial thesis
presented in Richard Florida's new book, "The
Flight of the Creative Class." In this follow-up to
his wildly influential, "The Rise of the Creative
Class," Florida argued that the
United States risks losing its economic competitiveness
because it is losing its dominance as the world's major
magnet for creative talent.
I
don't believe in karma, but it's hard to think of any
other explanation for why I would have bumped
into Simmons that day. I’d profiled XTerra
in the inaugural edition of Bacon’s
Rebellion nearly three years ago as a company well
adapted to the global economy. As coincidence would have
it, in that same issue I'd also published a lengthy
review of “The Rise of the Creative Class,”
which had proven enormously influential in my own
thinking.
XTerra,
I’d argued then, was the prototype of the successful
American enterprise of the future. Although the company
outsourced manufacturing to the Far
East, it
handled product development, sales and marketing, and
global logistics management from its office in
Richmond. As
long as companies like XTerra stayed at the forefront of
innovation, I’d suggested, Virginians had little to
fear from globalization and outsourcing.
Florida’s
thinking at the time seemed very much in sync with my
own – indeed he was two or three steps ahead of me.
Florida, now
a professor at George Mason University, transformed the
way people think about economic development with a
series of interlocking insights. First, he recognized
that a fundamental change had taken place in American
society in the 1990s: Americans had become job hoppers.
No longer seeking secure, long-term employment with a
single company, moving wherever the company relocated
them, they were far more likely to select where to live
based on lifestyle considerations. Secondly, he
understood that this change profoundly altered economic
development in the Knowledge Economy: Finding it
difficult to get employees to move to them, companies
increasingly moved to the employees. Thirdly, Florida
contended that the metropolitan areas with the most
appeal to the “creative class” – those
occupations whose members accounted disproportionately
for artistic, scientific and entrepreneurial innovation
– demonstrated significantly higher rates of income
growth than the regions spurned by the creatives. Fourthly, he suggested that the defining
characteristics of regions that attracted the creative
class were openness to newcomers and tolerance of ethnic
and cultural diversity. Creative communities are marked by large numbers of immigrants, bohemians and
gays.
Florida’s
thinking dovetailed with much of my own, and I began
systematically applying his ideas to my coverage of
economic development issues in Virginia. Indeed, I would
dare say that few have done more to proselytize his
ideas in the Old Dominion than I have. But his new book
takes his ideas in a direction which, though a logical
extension of his first book,
I find unconvincing. U.S. cities, he says, are losing
their competitive edge as foreign cities from Toronto to
Dublin are getting more aggressive in the recruitment
and retention of creative talent. One of the major
reasons, he suggests, is a rising tide of intolerance,
especially on the part of increasingly militant cultural
conservatives.
Florida's
alarums have some merit, but they overstate the case and
oversimplify the dynamics of why creative people
relocate. Keith Simmons, as it turns out, doesn't fit
his model. Simmons didn't move to the San Diego area
because it was a cool place to live, although he
obviously thinks that it is. He moved there because it
was the central crossroads for his industry. He found
himself traveling there so frequently for business that
he figured he might as well live there. The decision
proved to be a good one, he told me: Almost everyone he
needs to confer with comes through San Diego at one
point or another.
Florida
gives short shrift to the "cluster"
phenomenon, in which businesses--and business
leaders--within the same industry--tend to congregate in
close proximity to one another. Investment bankers in
New York City. Film producers in Hollywood. Government
system integrators in Northern Virginia. In the
Knowledge Economy, companies aren't just looking for
undifferentiated "human capital" or members of
the "creative class." They're seeking
proximity to people with highly specific knowledge, people who can share insight into emerging
markets, new technologies, novel business models of the
industry they're in. Although some people undeniably
select a place
to live because they find the lifestyle attractive, many
others choose a community because it's a center of their
particular industry or profession. For Keith Simmons,
the compelling reason to move to San Diego was related
to business. He was seeking access to specialized
knowledge and information that he was more likely to
find there than on the East Coast.
Once
I began questioning one of Florida's key premises, I
began questioning others. Indeed, upon reflection, I
have found that many of his arguments unravel completely
-- and the best evidence against them comes from his own
book! Despite its flaws, which I enumerate below, "The Flight of the
Creative Class: The New Global Competition for
Talent" remains must reading. Florida addresses
issues that no one else has thought of before. Even if
we do not find his
answers persuasive, there is no ducking his
questions.
The
reason the United States is the world's dominant
economy, Florida argues, is that it has been an
extraordinarily open and tolerant society. That openness
has been reflected in wave after wave of immigration,
each of which brought new cultures, new perspectives and
new energy to our shores. It is no accident that the
great economic boom of the 1990s coincided with the
influx of some 13 million new immigrants--the greatest
tide of immigration in U.S. history.
But
Florida sees threats to that openness in the highly
polarized politics of the 2000s, and he sees increasing
competition for talent abroad. The much decried out-sourcing of
manufacturing and call-center jobs to India and China is one threat, though a highly
overrated one. "What should really alarm us,"
he writes, "is that our capacity to create ... new
technologies and industries is being eroded by a
different kind of competition--competition for
higher-skilled, more highly educated global
talent."
Other
countries are increasing spending on R&D, investing
in their universities and opening their borders.
Meanwhile, homeland security concerns in the post-9/11
era are making it more difficult for foreign students to
enter the country. Applications at U.S. universities are
down, while applications at foreign universities are up.
Because such a large percentage of engineers and
scientists working in the U.S. is foreign born, our
industries are highly vulnerable to such shifts.
For
the first time in a long time, Florida writes, the U.S.
is losing foreign talent. The total number of foreign
scholars declined in the 2002-2003 academic year for the
first time in almost a decade. Visa applications for
students fell by 74,000 between 2001 and 2003, from
400,000 to 326,000. American colleges saw the smallest
increase in the enrollment of international students in
2003 in a decade.
Florida
finds that a growing intolerance is chilling the
traditional climate of openness. "Washington has
stunned scientists across the world with its disregard
for consensus scientific views when those views conflict
with the interests of favored sectors," he says,
citing disagreements on the issue of global climate
change as an example. Also, he notes, "Washington
has inspired the fury of the world, especially of its
educated classes, with its "my way or the
highway" foreign policy.
Homeland
Security concerns are a special problem. Because of the
difficult foreign scientists have getting visas, fewer
scientific meetings and conferences are being held in
the United States. Many foreigners feel
"humiliated" by being fingerprinted,
photographed and otherwise harassed by U.S. immigration
officials.
America
may even face a brain drain of its own best and
brightest. Conservative concerns about
the ethics of stem cell research drove stem-cell
researcher Roger Pederson from the University of
California-San Francisco to residency at Cambridge
University. Similarly, Florida quotes an anonymous entomologist as
follows: "Over the last few years, as the
conservative movement in the U.S. has become more
entrenched, many people I know are looking for better
lives in Canada, Europe and Australia. .. From bloggers
and programmers to members of the National Academy I
have spoken with, all find the zeitgeist alien and even
threatening."
Laments
another
creative class member
from New Mexico: "Once upon a time, America
was large enough to hold a beautiful multiplicity of
opinions, but that's no longer true." Florida
allows as how that opinion may not be entirely accurate,
but he finds it heart-breaking nonetheless. "The
fact is," he says, "an increasing number of
America's citizens are beginning to feel there is
no place for them here."
The
"tolerance" issue plays a central role in
Florida's thinking. He touts the "three t's"
of modern economic development: Talent, technology and
tolerance. In "The Flight of the Creative
Class," he focuses overwhelmingly on tolerance, and
he finds a bogeyman in America's Religious Right.
Says he: "More and more ... our own people and
foreigners alike have come to associate American
religion, rightly or wrongly, with its more
fundamentalist strains."
He
contrasts America's tolerance and diversity unfavorably
with that of Canada and Australia, which he pegs as two
emerging powerhouses of the global creative class, as
well as the
Scandinavian countries and, surprisingly, even Germany
and Japan.
New
creative centers are popping up around the world.
Florida cites Tokyo and Osaka, world-class
centers of anime, movies, music video and video games;
Wellington, New Zealand, home to Peter Jackson, the
director of the Lord of the Rings trilogy, and emerging
competitor to Hollywood; Helsinki, Finland, headquarters
to telecom leader Nokia; London, Milan and Paris, all
centers of fashion, design and luxury brands. Dublin,
Singapore, Seoul, Taipei, Tel Aviv and even Beijing all
make his list of cities to watch.
Florida
makes a number of keen observations with which I
agree. He has done us all a service by documenting
the negative impact of Homeland Security policies on the
flow of talent into the country. He also makes important
points about the dark side of Creative Class prosperity
as seen in unequal incomes, unaffordable housing and
spreading traffic congestion. (The latter two are issues
that we have explored in some detail in Bacon's
Rebellion.) I'll also give Florida credit for not
playing partisan favorites. There is little evidence, he
says, that either political party understands the trends
he is elucidating, much less the remedies that are
required--a point that I have made myself on more than
one occasion.
But
I must take issue on a number of Florida's key
arguments. The first is
the supposition that "intolerance" emanates
primarily from the religious right. I am not an
evangelical, much less a fundamentalist. Indeed, I would
call myself a Darwinist. My theological views could
not possibly be more farther removed from those of Jerry
Falwell or Pat Robertson. However, I'm not blind to the
indignities heaped upon fundamentalists daily.
I see dogmatism and intolerance on all sides. To my
way of thinking, the secular left has been far more
successful in imposing its stamp on public institutions
than the religious right, successfully chasing harmless expressions
of religion -- from creches to displays of the 10
commandments -- out of the public sphere. Indeed, I
would go so far as to say that the left has
largely extirpated the expression of traditional popular
culture, in its religious forms, from schools and
government of most communities.
Many in the
religious right feel every bit as persecuted as
Florida's creative-class correspondent from New Mexico
who whined about the "multiplicity of opinions"
being under threat--which, by the way, is a hysterical,
overwrought comment in itself. Please show me just one
person in this country who is unable or unwilling to
express an opinion!
Let's
look a little closer at some of the sentiments that
Florida himself holds. President
George W. Bush may have cut federal funding for certain
types of stem cell research, but it's not as if he banned
all
stem cell research. Privately funded R&D continues
in the United States without the slightest impediment. By contrast,
look how the supposedly enlightened Europeans have
treated research on genetically modified foods. While they
apparently have no qualms about tinkering with the
genetic code of human embryos for the purposes of
experimentation, the Europeans find alteration of the genetic
stock of a wheat seed to be a veritable crime
against nature. As a consequence, R&D in the
genetic engineering of food, one of the great hopes for
feeding mankind, has all but ceased in Europe and
largely relocated to the United States.
As
for the global warming that Florida cites, scientific
opinion is not as unanimous as he supposes--despite the
fact that the policy elites of Europe have, whether
through the control of research funding or other means,
imposed a doctrinal rigidity
reminiscent of the Catholic Church. By way of support, I
need cite only the ostracism of the Danish scientist
Bjorn Lomborg when he dared stray from the prevailing
environmental orthodoxy in his book, "The Skeptical
Environmentalist: Measuring the Real State of the
World." Florida ignores the reality that the Europeans cling to their own
secular dogmas as tightly as the
fundamentalists embrace creationism. The stifling effect
is much greater, of course, because the Greens have far
more power in Europe than the creationists in the United
States could ever dream of.
As
for the closing of the American mind, Florida might
benefit from consulting the viewpoint of political
conservatives. A recurring theme--and a well documented
one, at that--of conservative commentary is that the
doctrinaire thinking
on most U.S. campuses emanates from the left, not the
right. To paraphrase Florida, these perceptions may not
be entirely accurate. But "the fact is, an
increasing number of America's citizens are beginning to
feel there is no place for them here." Let me
rephrase that. A large number of American conservatives
aren't just beginning to feel that way--they've
felt that way for a long, long time.
Nowhere was
this Liberal Lysenkoism more prominently on display than in Harvard
earlier this year when
remarks by President Larry Summers--enumerating a
variety of hypotheses to explain why female scientists might be
under-represented on the faculty of one of the nation's
most liberal universities--precipitated a faculty
revolt. Despite massive evidence culled from the fields
of neuro-physiology and experimental psychology that
genes may influence the cognitive abilities of
the sexes, the subject is taboo in Harvard. It's not
sufficient merely to disagree with anyone who may
suggest such apostasy, the entire discussion must be
shut down. As a consequence, I would imagine, many
scholars pursuing such promising lines of inquiry are
steering clear of Harvard.
Bottom
line: The leading lights of Florida's creative class, both in the U.S.
and Europe, may celebrate ethnic and cultural diversity,
but they aren't exactly beacons of intellectual
diversity. When it comes to dogma and doctrine, Harvard
is a match for Bob Jones University any day.
There
is another problem with Florida's worship of tolerance.
In keeping with his penchant for dreaming up
catchy phrases, I call it the "tolerance
trap." This dilemma can be seen most clearly in the
Netherlands, a nation that is by common acknowledgement
extraordinarily tolerant and open in
its attitudes towards everyone from immigrants and gays,
prostitutes and heroin addicts. The Dutch culture of tolerance
worked as long as everyone valued tolerance as a virtue. But what happens when the
"tolerant" majority admits members of
an "intolerant" minority? That's exactly what
has happened in the Netherlands. Not only do hundreds of
thousands of North Africans, now composing a tenth of
the population, stubbornly refuse to assimilate, they
repudiate the liberal values of their hosts. When a
fundamentalist Muslim assassinated the controversial
filmmaker Theo Van Gogh, the Dutch experienced
a sea change in attitudes and a backlash against the immigrants.
As
radical Islam spreads throughout Europe, other countries
are facing similar challenges. Many Europeans are
pessimistic. The fertility rate of native, white
Europeans is bringing about a slow-motion demographic collapse.
Aging European populations desperately need a servant
class, which is filled partly by Eastern Europeans,
partly by Third World Muslims. As the Muslims grow in
in numbers, some observers anticipate the day a
half century from now when Muslims achieve a majority. How
open and tolerant will European society be then? A lot
of people aren't waiting to find out. In a reverse
migration that Florida neglects to mention, wealthier,
better educated elements of European society are
hedging their bets, buying real estate and otherwise
investing in the United States.... just in case.
Consider it the invisible flip side to the post-9/11
migratory changes that Florida chronicles.
Finally,
I would observe, Florida's own data suggest that there
are many paths to prosperity, many routes to building
human capital. Florida cites Iceland as a creative-class
success story. Am I missing something? How ethnically
and culturally diverse is Iceland? He also notes that
Japan ranks No. 2 on his "Global Creativity
Index". Japan is one of the most homogenous,
tightly knit societies on the face of the earth!
Clearly, the Japanese are a brilliant, creative people,
but it's implausible to claim that they owe their
creativity to their openness to foreigners. By all
reports, Japan culture remains exceedingly difficult for
outsiders to penetrate.
Likewise,
Florida gives creativity kudos to Singapore. This is a
society that only a few years ago administered a public
caning to a young foreigner convicted of vandalism, a
place where citizens can be fined for dropping chewed
bubble gum on the street. I read an article not long ago
describing a government initiative to encourage all
citizens to be more zealous in attending weddings on
time! The system of patriarchal authoritarianism is
hardly an exemplar of Florida's tolerance and openness.
Yet, somehow, since World War II, Singapore has engineered one
of the most extraordinary advances in living standards
in human history!
In
his first book, Florida made a seemingly persuasive case
about the crucial role of openness and tolerance when he limited his
purview to American cities. But now that he has opened
up his analysis to the global competition for talent, he
shows how untenable his argument is. The flaws in his
logic are too enormous to be explained away.
Even
so, Florida has
made an important contribution to the study of economic
development by opening a new vein of inquiry. There is
a global competition for talent, and Americans cannot
take their traditional dominance for granted. Every
American community needs to develop strategies for
building a competitive edge--whether it's improving the
quality of education, recruiting young creatives out of
college, or building specialized industry clusters that attract
entrepreneurs like Keith Simmons.
Those
of
us in more conservative communities can relax on the
cultural front. The lesson that emerges from the data in
Florida's books is that we can be
successful without selling our souls and becoming
something we are not. But we must remain unremitting in
our commitment to build our human capital. The
competition is real, and it isn't going away.
--
May 23, 2005
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