The Panacea Patrol

A fresh idea about how to stimulate local economies is fueling a debate about whether it can solve all problems.
October 2004
William Fulton
By William Fulton  |  Columnist
Director of the Kinder Institute for Urban Research at Rice University and former mayor of Ventura, Calif.

When I was attending junior college in my hometown, I was a devotee of our drama instructor. This fellow was, in a way, our town artist. He lived a bohemian lifestyle. He had a French last name. And two or three times a year, he would mount a theatrical production that everybody in town would come to see.

The problem was that his taste wasn't the same as everybody else's. In this little factory town, the shop-floor managers, the doctors and the teachers came expecting to see "Carousel." What the drama teacher kept delivering was "Waiting for Godot."

In those days, my teacher was regarded as, well, annoying. But one generation's pain in the neck is the next generation's economic development asset. Today, the drama teacher would be regarded as a critical part of our town's "creative class," in Richard Florida's phrase. In other words, he would be part of the infrastructure that would attract and keep the cool, creative people who will form the basis of the 21st century American economy.

In the past two years, every economic development manager in America has heard about Florida's "creative class" idea. The theory is simple. America's metropolitan economies of the 21st century will be driven by emerging high-tech industries (such as biotechnology). This economic growth is driven largely by hip, almost bohemian, creative types. And this creative class prefers interesting and diverse urban places to the suburbs.

Since Florida's book "The Rise of the Creative Class" was published two years ago, he and his colleagues at Catalytix, his consulting firm, have roamed the country spreading this gospel and advising various cities and metro areas how to cash in on the creative class.

Now, predictably, the creative class backlash has started. In particular, Joel Kotkin, the iconoclastic urban pundit from Los Angeles, has taken the side of grunt cities. Kotkin claims that creativity is not a big job generator nationwide, and most cities are simply setting themselves up for failure and disappointment if they pin their hopes on the creative class.

Furthermore, Kotkin claims, even the creative types who drive the high-tech economy do not necessarily want to live a hip urban lifestyle. It was Kotkin, after all, who coined the memorable term "Nerdistan" to describe the supposedly boring but economically powerful suburbs--the Irvines and Sunnyvales--where high-tech engineers transform the world.

What we have here is a "panacea" battle--a new idea about how public policy can stimulate the economy, and a debate about whether or not this new idea can solve all problems.

This is familiar territory. Years ago, when I first started writing for this magazine, I was informally known around the office as the "panacea editor." It was my job to go check out the latest economic development fad--automobile assembly plants, convention centers, festival marketplaces, cineplexes--and write a story about whether it was a panacea.

In all cases, of course, the current fad was not a panacea. Neither, however, was the fad worthless. Most of these ideas work for some cities. And so it is with the creative class theory. The trick, as always, is to figure out where and how to use the idea so that it will work.

While every city in America has some kind of creative class, it's equally true--as Kotkin points out--that not every city can be a magnet for creative workers and creative work. But how deep is the market for the creative class? What kinds of cities will succeed in implementing the Florida theory, and what kinds will fail?

The depth of this market depends on what kind of economy America has over the next decade or two. If the U.S. can retain production jobs, then grunt cities will thrive with or without a creative class. But the long-term flow of production jobs to lower-cost countries seems like an irreversible trend. To thrive, most American cities will have to be centers of thinking rather than making.

The need for a more idea-based economy doesn't necessarily mean that Youngstown's future rests on the creative class, or that all denizens of Nerdistan will want their neighborhoods to be like Greenwich Village. And it most definitely doesn't make Florida's idea a panacea.

But it's likely that all American cities will rely on knowledge workers for most of their economic growth. And that means nurturing at least some of the urban assets that knowledge workers need. In some cities, this may mean downtown loft condominiums with coffee bars on the ground floor. But it also means the laborious day-to-day task of organizing the city's knowledge-based assets (universities, highly skilled workers and research labs) to take advantage of opportunities in the world economy. Even in a creative city, there is no substitute for hard work.