The Creative Class: How Talent, Technology, and Tolerance Drive Economic Growth

The Economic Impact of Human Capital

Economist Robert Lucas argues that cities would be economically unviable were it not for the productivity effects associated with endowments of human capital. National growth studies find a clear link between the economic success of cities and their human capital, measured by the level of education.

The Perspective of Creative Capital

From the perspective of the theory cited above, economic growth occurs in places where the population possesses a high level of education. Through interviews conducted by the author, we observe that highly educated individuals are not merely following jobs; they are attracted to places that are inclusive and diverse.

Creative people drive regional economic growth and prefer innovative, diverse, and tolerant environments. The distinctive feature of the creative class is that its members perform work that creates new, meaningful forms.

Trends in the New Geography of Creativity

Richard Florida has identified specific tendencies regarding the new geography of creativity:

• The creative class is migrating toward specific locations known as creative centers.
• Creative centers tend to be the economic winners of our age.
• These centers are not thriving due to traditional economic factors alone.
• Creative individuals are not moving to these locations for traditional reasons.

The New Geography of Creativity

These shifts are leading to powerful migration trends and a new emerging economic geography. In major creative centers, the creative class represents more than 35 percent of the labor force. Despite these advantages, large regions have not monopolized the market; several smaller regions, such as those in Michigan and Wisconsin, host some of the nation’s largest concentrations of the creative class.

Technology, Talent, and Tolerance

The key to understanding the new economic geography of creativity and its effects on economic performance lies in what Richard Florida calls the 3Ts of economic development: technology, talent, and tolerance. To attract creative people, generate innovation, and stimulate economic development, a place must possess all three.

The 3Ts explain why some cities fail to grow: they are often unwilling to be tolerant and open enough to attract and retain the best creative talent. A region must integrate the 3Ts to effectively stimulate economic growth and innovation.

The Role of Diversity

Economists have long argued that diversity is vital for economic performance. Places that are open and have low entry barriers for individuals derive a creative advantage from their ability to attract people from a wide range of backgrounds. More open and diverse environments are likely to attract the talented and creative individuals who drive innovation and growth.