issue 1 - Roland Berger

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p food for thought business trends Technology, talent and tolerance Star political scientist Richard Florida proposes a radical rethink of regional policies. His research suggests that creative minds only settle in diverse, metropolitan areas that foster uninhibited human interaction. This quality may become decisive for companies selecting their business locations. : Bestselling author Richard Florida loves to cause a stir. “A town without rock bands, gays and tattoo studios will experience decline sooner or later,” says Florida, a professor of economic development at George Mason University, located in Fairfax, Virginia. In saying this, he stands in marked opposition to most mayors and urban planners. They often dismiss people’s creative potential and focus merely on attracting companies with strong growth. In Florida’s view, this is a shortsighted strategy, as evidenced by the dramatic drop in importance of Pittsburgh, the “steel city.” The city’s decision-makers failed to complement its industrial past with an innovative infrastructure and lively culture. “The result is that the creative class there no longer feels inspired and is moving elsewhere,” says Florida. By “creative class” Florida means all the professional groups in which intelligence, inspiration and innovation are prerequisites for success. These include artists, media creatives and star chefs, as well as architects, scientists, attorneys and physicians. Florida places special emphasis on creative 12 think: act
30 percent of all workers in the united states are part of the creative class food for thought f “ Cities need to develop into appealing places for talented and creative people. They need to be tolerant, diverse and open.” Professor Richard Florida managers who abandon traditional thinking and continuously reinvent their businesses. “Besides being highly educated, these individuals are also united by a great willingness to move and are forever seeking new stimuli and inspiring work environments,” he says. Florida concludes that cities offering the best living environment for trendsetters can expect to have the highest level of prosperity. His reasoning: This group of individuals guarantees sustained growth with high added value. In his many talks, the political scientist has already referred to the fact that this trend transcends nations’ borders. That is a brief first taste of the theme of his next book, titled The Flight of the Creative Class, which IT TAKES THE RIGHT MIX OF MINORITIES TO DEVELOP A VIBRANT ENVIRONMENT will be published next spring. In it he discusses the migration of the US intelligentsia to more tolerant countries. In contrast to traditional thinkers, who point to errors in the system, Florida attributes this migration to the laws of the free market. His thesis is that global supply and demand also determine where creative people settle. It is therefore no longer enough, he says, to concentrate solely on good schools and safe streets. Instead, policy-makers should create the conditions for a lively urban milieu that assures a maximum degree of tolerance, diversity and openness. “That’s the only way to foster creativity and a fertile intellectual environment,” he says. Florida claims these two factors are the key drivers of economic growth. In other words, emerging, low-wage markets will not be the first to prosper; rather, benefits will flow to the regions best able to tap the creative potential of their inhabitants and draw talent from around the world. “Location now determines how people and job profiles match up, and it will become the central organizational unit of the creative age, replacing the company in that function,” he says. Florida’s vision of the cities and regions of the future is based on three pillars: technology, talent and tolerance. What is important is a distinctive lifestyle that delivers a rich cultural existence, best supported by high investment and the influx of people operating outside the mainstream. “In our focus groups we’re always hearing that people want to move to a place where they can simply be themselves,” reports Florida from his consulting experience. “That’s something particularly important for inspired, entrepreneurial people.” Based on these insights, he has drawn up a map of creative cities in the United States. The following characteristics were quantified and compared with one another: the number of inhabitants belonging to the creative class, the number of homosexuals, the economic power of high-tech industries, and the number of patent applications per capita. The findings: Apart from some smaller cities in the Rocky Mountains that can be counted as creative locations, the phenomenon is primarily connected with large cities. Vibrant, inspiring environments emerge where there is a large concentration of people who together constitute an enthralling mix of minorities. Other key factors are cultural attractions and universities, RICHARD FLORIDA, 47, was a professor of economic development at Carnegie Mellon University in the former steel town of Pittsburgh, Pennsylvania before moving to George Mason University in Fairfax, Virginia, in the summer of 2004. Next spring Florida will publish The Flight of the Creative Class, in which he examines the worldwide competition for creative talent between cities and regions. Florida studied at Rutgers College and earned his PhD at Columbia University. In addition to his academic career, he heads two companies that he founded: the communications company Creativity Group and the consulting firm Catalytix. described by Florida as “creativity hubs.” At the top of the list are West Coast metropolitan areas such as Seattle, Portland, San Francisco, and the latter’s neighbor, Silicon Valley. Ambitious cities such as Minneapolis and Austin, which first developed a lively subculture and then began to prosper, also rank highly. In stark contrast to these are cities of the Old South such as Memphis and New Orleans. According to Florida’s criteria, these are the least creative. THE UNITED STATES COULD FORFEIT ITS POSITION AS A LEADING POWER IN THE CREATIVE SECTOR Florida rates European cities such as Dublin, Amsterdam, London and Munich very highly. They have managed, he argues, to become clusters for talent and technology. In these innovative regions live creative people attracted both by the high degree of tolerance and by local acceptance of innovative elites from in-country and abroad. The pay-offs of such modern life-styles take years to materialize. However, success is in the offing thanks to the energies that are releasing inspiration and wellbeing. Consider Berlin. “The city is a creative center with plenty of room for a tremendously diverse group of people willing to take risks,” says Florida. Still, the German capital is seeing competition from further north. Florida’s Creativity Group recently expanded its analysis to 14 European countries. The figures suggest that the epicenter of competition with the United States is moving from traditional strongholds such as Great Britain, Germany and France to Ireland and Scandinavia, where the creative class has been growing at a peak annual rate of 7 percent since 1995. In terms of creativity, Sweden has already overtaken the United States. And if America fails to pay attention, Florida concludes, it could forfeit its position as a leading power in the creative sector. think: act 13
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