The American Creative Class and Globalization - Term Paper Example

The American Creative Class and Globalization 2009 Executive Summary The creative class includes people with non-traditional professions like artists, scientists, film makers, actors, software developers and so on. While in the 1950s to about the 1980s, the American economy grew on the basis of manufacturing development, the 1990s and 2000s have seen a resurgence of the creative class that has not only thrived themselves but has also contributed to the phenomenal growth and globalization. The analysis of the American creative class shows that clusters of development have emerged in cities that were earlier considered as the backwaters. These cities not only have witnessed high economic growth but also significant development of the creative class. Since this class is intricately linked to information technology and communication, the growth of the creative class and globalization go hand in hand. Introduction The creative arts contribute to the economic and cultural infrastructure of a region, city or country as much as the production of tangible goods and services do. Artists and writers have for long moved to set up clusters like for example Venice (for the arts) or Paris (for literature and arts) but only in the recent decades creative industries that are more driven by profits than pure artistic tendencies that lead to such clusters. Besides, the clusters may be in dramatically different locations that arise on the strength of economics rather than any creative specifications. As a result, it has been seen that the creative class, including artists, entrepreneurs, software professionals and scientists, have contributed to the development of new industries and skills that enable globalization. In this paper, I will discuss the concept of the creative class and its effect on globalization and new economy. The concept of creative class Richard Florida, in his path-breaking book, The Rise of the Creative Class (2001), defines the “creative class”, defined as the highly educated, creative workforce who contributed greatly to the corporate profits in varied fields like technology, entertainment, journalism, finance, arts and even manufacturing. Florida notes that new agglomerations have developed in cities like Seattle, Austin and Washington D.C., typically centers of new economy growth, in preference to old economy behemoths like Pittsburgh despite the latter having better museums and universities. Different lifestyles, diversity and the urge to belong to similar-minded people who work and think alike have drove hordes of young and bright people to such cities that were earlier thought to be the backwaters. The creative class is distinctive in that the members do not fit into the typical hierarchies of white-collared and the blue-collared, do not find it necessary to change into different personalities in terms of dress or cultural mores (casual dress and networking through baseball during workdays are fine) and do not necessarily have to fit into job stereotypes (a secretary can be as creative as the software coder). The concept of creative industries emerged in the 1990s when many new professions related to art gained economic recognition. As Caves (2000) defined, creative industries are “goods and services” related to “cultural, artistic or simply entertainment value”. All sorts of creativity including book publishing, theater, opera, symphonies, films, television, fashion, toys, music recordings and art galleries are all creative industries. According to Caves, creative industries are different from the tangible industries in seven counts: 1) demand forecasts cannot be made hence are more risky, 2) workers are more concerned about originality and are not necessarily market-driven, 3) skill-intensive and may require high level of coordination, 4) products are characterized by uniqueness and original variety, 5) artists are ranked and may not be substitute of each other even in the same field, 6) products are usually related to time and 7) products are protected by copyright acts and the creators may collect rent for prolonged periods. Caves discusses various creative industries and the changes in the trends. For example, Hollywood studios have moved from long-term contracts to individual fee-based contracts that have changed the premise of the creative industry. While guilds protected the earlier contract systems, the new systems have to be guarded by many more agreements. The demand for the creative industries has also changed from simple word-of-mouth to buzz, certifications, reviews and advertisements in various creative media. Hence, a network of creative industries interacts to generate demand for each. Costs are high in creative establishments like galleries, theaters and so on. Symphony and opera artists may work on fixed fees or individual contracts and the establishments may have to raise the expenses by interacting with other creative establishments. The creative class and knowledge growth The geographies of the creative class depend on the acquisition of knowledge and innovation by small firms at a particular location that drive more firms and creative people towards these cities (Knudsen et al, 2007). Hence, it is suggested that innovation and knowledge acquisition, which is essential for globalization, predates the formation of the creative class. The possibilities of proximity, knowledge spillovers and interaction with intellectual capital are what encourage the creation of a creative class in a city. Innovation and diversity rather than specialization drive regional economic growth (Jacobs, 1969, cited in Knudsen et al, 2007). In the creative industries, knowledge is the basic capital that in turn creates capital that produces goods and services. This is the innovation system that encompasses the education system, science, research and development and various other intangibles. Hence, the arts and the creative industries are part of a creative system that is self-sustaining. In contrast to the traditional growth theories that have capital accumulation as the key to progress, innovation is the primary driver to growth in the post-industrial creative industries-led growth process. Hence, the new growth theory is based on the premise of knowledge that is a function to a set of institutions like the education, scientific community and so on. Here, knowledge is not only a function to investment for knowledge but to such interactions. Although technology and engineering knowledge is the basis of growth in the modern context, the arts play no mean a role since these are the representational form of all experimentation. In contrast to the earlier times, when the arts were necessarily a mode of entertainment, in the modern economy, the arts provide new ideas in the context of social changes and reality. Hence the creative industries are not only means to introduce new innovations but to bring about completely new ideas. The creative system then forms three phases of evolution – origination, adoption and retention of ideas, which is in contrast to the materialistic economic evolution theories (Potts, 2008). The creative class and economic growth in America In Florida’s theory, the development of the creative class that consists of writers, artists, designers, engineers, analysts and planners, all of whom can be creative in their own way, is crucial for America’s sustained growth. Florida says that America has thrived in the past on the strength of diversity and tolerance to a divergent set of ideas and cultures driven by immigration. In the more recent times, however, this strength of the country is eroding as America is growing less tolerant to foreigners, particularly in the post-Sept 11 scenario and the emergence of other countries that are attracting or retaining the creative class for varied reasons. One primary reason of diminished flow of creative class is the exigency to reduce costs in the backdrop of global recession in the early 2000s, which boosted the trend of outsourcing. This has led to globalization and the development of clusters of creative class in other developed countries like the United Kingdom and developing countries like India and China where a strong creative class could bargain on the strength of low costs in comparison to than in the United States (Florida, 2004). Various studies on geography, economics, planning and policy have found that the creative industries are as important as tangible manufacturing industries for globalization and economic development (Potts, 2008). Over the recent years, creative industries have followed the trends of economic growth, perhaps at twice the rate. Much of this growth has been the result of phenomenal growth in information technology and communication industries that have had a spiraling effect on the cultural economics. But, since creative industries are in the nature of luxury goods, a reversal of economic trends may just as well bring about a recession in the creative industries. The current global meltdown may have just such an effect. However, it must also be remembered that much of the boom in the creative industries are the result of ICT (information and communication technology) which is far less reversible than economic trends. Hence the inherent intangible value of the creative industries may hold the growth momentum for a considerable longer period of time. Besides, globalization and liberalization of economic flows that began in the 1980s and are in no sign of reversal have had a profound impact on the creative industries. Such a point of view follows from a standard model in which the creative industries represent an industrial sector that is akin to manufacturing and mining. But, Potts (2008) contends that creative industry is not a typical industry that has tangible value. Instead, it is part of an innovation system that is characterized by a post-industrial system in which services and inter-connected play a far greater role than capital or managerial entrepreneurship. Creative industries, or art-related industries, like museums, performing arts, photography, radio, television, films, design and publishing, advertising and many such industries have grown to be major drivers of economic worldwide. In the United States, 548,000 organizations, out of 12.8 million active businesses in the US in 2004, were found to be employed in art-related businesses (Ruben, 2005). In the country’s 20 largest metropolitan areas, there were 10,000 art institutions in each, validating Florida’s theory that creativity drives innovation and hence economic growth. Creative industries build regional identities and become the bedrock of all economic development henceforth. Not surprisingly, Florida notes that the creative class is strong in cities that have experienced strong economic growth in the recent past, like greater Washington, D.C. region, the Raleigh-Durham area, Boston, and Austin. Although creative class had always been strong in clusters, like for example in Greenwich Village, college towns like Madison and Boulder, and manufacturing centers like Pittsburgh and Detroit, but these were not directly correlated with economic growth then (Florida, 2002). In some cities like Chicago, however, the traditional working class and the creative class co-exist and provide an interesting case study. Typically, the creative industries as well as the creative class thrive in cities where there is low entry barrier for people and firms, where firms can easily set up facilities and people can migrate to and form social networks at ease. Also, the job market needs to be thriving for the creative industries to flourish. Florida (2002) has developed the creative index by which he measures the ability of American cities to attract talent. The creative industries have given birth to prominent creative classes in many cities. For example, the creative industries are found to be the lead employment generator in Los Angeles. A study found that in 2005, the creative industries provided 894,000 direct ad indirect jobs in the city, $140.5 billion in sales revenue and $3.4 billion in state taxes. Although Hollywood provided 37.5% of the jobs in Los Angeles area, other creative industries like fashion, toys, entertainment, architecture, art galleries, communication arts, digital media, visual and performance arts and furniture played no mean a role in economic growth in the area. Among all American cities, Los Angeles had the highest number of creative establishments. Besides, a large number of artists, singers and writers are self-employed and are not covered in these statistics (Otis, 2007). In Florida’s theory, the assimilation of the arts and even subversive culture has the potential to increase productivity in mainline sectors, thus promoting economic growth. Policymakers have woken to the challenge of promoting creative establishment to retail talent. For example, in Phoenix AZ, which has little historical attractions that can enthuse art-inclined talent, the city fathers are promoting art establishments downtown. In San Antonio, SX, the Main Plaza, with the City Hall and the courthouse, is being developed to retain the technology workers in biomedical companies, AT&T, Microsoft and Rackspace. Denver has been improving the community programs. These cities are following the footsteps of the most successful ones to develop the creative class – like San Francisco Bay Area, Boston, Austin, Washington DC and Seattle (Donahue, 2008). The aim of the creative industries is to enhance the creative class so that talent, which is composite of technology and the arts, can be driven. In this case, the most successful organization perhaps is Google Inc. The lobby in the headquarters at Mountainview has a piano, lava lamps and live projections of searches made on its search engine across the world. Inside the office, workers share clusters with couches and coffee tables. Employees are not expected to be at the workstations but may split their time between the exercise room, the massage room, the play room, the café or even outside. The company strives to increase productivity by allowing workers to be casually dressed, working in cordial atmosphere. Flexible schedules, though not less work hours and amenities like childcare keep them more than happy (Donahue, 2008). Conclusion Thus, creative industries are not isolated segments in a country’s social and cultural map. Instead, it has direct linkages with the economic growth, though not in tangible terms. Empirical evidence suggests that cities with higher creativity index, a term coined by Richard Florida to denote the culture attraction of the city, higher is the ability to retain talent and enhance the creative class. Thus the development of the creative class and globalization are a two-way phenomenon, each affecting the other. Works Cited Florida, Richard, The Rise of the Creative Class, February 5, 2001 http://www.washingtonmonthly.com/features/2001/0205.florida.html Florida, Richard, Creative Class War, Washington Monthly Review, January/February 2004, http://www.washingtonmonthly.com/features/2004/0401.florida.html Florida, Richard, The Flight of the Creative Class: The New Competition for Talent, Collins Business, 2007 Knudsen, Brian et al, Urban Density, Creativity and Innovation, May 2007, http://creativeclass.com/rfcgdb/articles/Urban_Density_Creativity_and_Innovation.pdf Florida on Florida: Future Prosperity Depends on Creative Industries, Cultural Quarterly, Summer 2005, http://www.broward.org/arts/publications/cq/2005/summer%202005/pubcqcur_florida.pdf Potts, Jason, Art & Innovation: An Evolutionary Economic View of the Creative Industries, http://www.abp.unimelb.edu.au/unesco/ejournal/pdf/art_innovation_11.pdf Caves, Richard, Creative Industries: Contracts between Art and Commerce. Cambridge, MA: Harvard University Press, 2000. Read More