I just read a piece by Frank Bures that outlines all the reasons that Richard Florida is just plain wrong about his ideas of the profitability that comes with creating a “Creative Class” heaven of a city. I’d posted a couple of blogs about Portland in relation to Florida’s ideas in the past but neither of those mentioned the research that Bures’ piece brings up showing how wrong Florida’s idea are.
A few select quotes from the piece:
What was missing, however, was any actual proof that the presence of artists, gays and lesbians or immigrants was causing economic growth, rather than economic growth causing the presence of artists, gays and lesbians or immigrants. Some more recent work has tried to get to the bottom of these questions, and the findings don’t bode well for Florida’s theory. In a four-year, $6 million study of thirteen cities across Europe called “Accommodating Creative Knowledge,” that was published in 2011, researchers found one of Florida’s central ideas—the migration of creative workers to places that are tolerant, open and diverse—was simply not happening.
Perhaps one of the most damning studies was in some ways the simplest. In 2009 Michele Hoyman and Chris Faricy published a study using Florida’s own data from 1990 to 2004, in which they tried to find a link between the presence of the creative class workers and any kind of economic growth. “The results were pretty striking,” said Faricy, who now teaches political science at Washington State University. “The measurement of the creative class that Florida uses in his book does not correlate with any known measure of economic growth and development. Basically, we were able to show that the emperor has no clothes.” Their study also questioned whether the migration of the creative class was happening. “Florida said that creative class presence—bohemians, gays, artists—will draw what we used to call yuppies in,” says Hoyman. “We did not find that.”
I asked Florida if he had done one of these to test his theory, but he said he was “not aware of any Granger causality tests.”
But the test has, in fact, been done by Mel Gray, who teaches economics at the University of St. Thomas, and the results cast doubt on the idea that a flourishing artistic environment will cause economic growth. “It’s important to get some evidence one way or another,” Gray told me. “I spent a sabbatical in North Carolina, and both Raleigh and Durham have established these Offices of Creativity, and they’re all doing this without a huge amount, if any, evidence that it makes that big a difference. We’d like to clear the air here, if we can. The test was really designed to see if we could figure out what causes what. Was it growth that caused the arts, or the arts that caused the economic expansion?” Gray did the test with data from a handful of metro areas, but the results were inconclusive and didn’t show a clear effect one way or the other. So he decided to do it again with a bigger dataset for a more robust conclusion. This time he assembled data for fifteen cities spanning thirty seven years—from 1969 to 2006—and ran the numbers again, a project which he just finished this spring. “To my knowledge,” Gray says, “this is the only extended time series analysis that’s been carried out on this.” Over those thirty seven years, Gray found that spending on the arts caused economic growth in four of the fifteen metro areas: New York City, Atlanta, Dallas, and Minneapolis-St. Paul. In New York, the growth impact was short term, dissipating after four years. In Atlanta, it was longer term, appearing only after eight years. In both Dallas and the Twin Cities, the effect was short and long term. In the other eleven cites, arts spending had no clear effect on growth. “It really depends on potential factors unique to each city,” said Gray. “I’m tempted to acknowledge that we’ve been successful in the Twin Cities with our strong arts community. But I don’t think you can just recreate that by changing budget allocations in another city. There’s more to it than that. Fostering the creative environment may pay off. But there are so many other factors that it’s not clear there is a guaranteed payoff.”
Again, as part of the theme for my post about Sports economics and the “savior demographic” it seems that Florida is giving far too much credit for a phenomenon which has no causative connection with profitability. Other critiques of Florida’s work may be found in my Portland is where young people go to retire: The Curse of the Creative Class post.
The changing culture, or rather, the ability of the changing culture to effect economic change seems to have been greatly exaggerated. With the increased purchasing power of the ‘older’ demographics, and given the fact that filling concert halls (or sports stadiums) will never bring enough ticket revenue to cover operating expenses, this obsession with youth culture could very well bankrupt larger performance oriented organizations.