Forget the Creative Class, economist says. Let's Get Back to Basics

Economists such as James Koch find Richard Florida, author of The Rise of the Creative Class, hard to stomach.

Koch, the lead author of the State of the Region Report 2014, is the canary in the coal mine. 

He has issued dire warnings, year after year, that the region must diversify its economy, that it must shift its attention to other industries instead of relying too much on Department of Defense dollars.

His Cassandra warnings have even more relevance today because of sequestration, the government shutdown and America’s IOU of $14 trillion.

Yet the region is co-dependent on DoD dollars, despite these warnings and despite efforts by a few business and community leaders to wean us from government largess.

While Koch chides local governments for public-private partnerships – not only Norfolk for its generous investment in hotels, conference centers and Waterside – he takes a pot shot at Florida, the guru of urban philosophy, who has spawned a generation of evangelical proselytizers. 
The last chapter of the State of the Region addresses Florida’s “creative class” philosophy – that the creative class is responsible for a city’s arts, culture and growth. (My apologies for perhaps taking his idea out of context.)

Koch entitled this chapter, “OK, Now What should We Do? Is it Tichard Florida’s “Creative Classes” or Instead “Back to Basics that Should Guide our Regional Economic Growth?

Koch debunks Florida’s hypothesis that “Regional economic growth is powered by creative people, who prefer places that are diverse, tolerant and open to new ideas. Diversity increases the odds that a place will attract different types of creative people with different skill sets and ideas.”

Places with diverse mixes of creative people are more likely to generate new combinations. Furthermore, diversity and concentrations work together to speed the flow of knowledge, Florida said.

“Greater and more diverse concentrations of creative capital [in turn] lead to higher rates of innovation, high-technology business formation, job generation and economic growth,” Florida said.

Cities whose economies should have exploded, such as New Orleans, based on Florida’s theory, haven’t while the economy of Mormon-influenced Salt Lake City (Obviously not diverse) have exploded.

Koch offers different solutions to growing the region’s economy.

·        Invest in education, Koch says, not only in K-12, but also in the region’s three community colleges.

• Improve the region’s transportation system. Koch also says the region’s system should be “rationalized” – meaning, if you want mass transit, including light rail, it should be a regional strategy.
• Encourage research and development.
• Don’t burden travelers with excessive tolls, because jobs and housing are connected are connected by a network of bridges and tunnels.
• Be careful about the burden of tax rates and regulatory policies, which could make the region an expensive proposition for outside investors.

Yet Florida and Koch are not that far apart in philosophy, although they apply different words to describe their opinions.

Florida’s article of 3,700 plus words in The Atlantic, Ghost Towns and Boom Towns, addresses why some towns have gone bust and others have boomed. Knowledge hubs (or university towns) and energy hubs have done well while towns lacking such characteristics have survived and thrived.

Florida avoids the “creative class” in the article; the word “creative” is only used three times in the entire article.

In many respects, Florida and Koch are saying the same thing, although their delivery is the difference between a professional opinion maker and marketer of ideas and an economist.