To Clarify

Just to be clear, I don’t claim that Richard intended at any point to enter the culture wars, or to advocate for a political viewpoint. And as a theorist, I am not taking a position on the quality or conclusions of his empirical analysis. His argument combines empirical claims of certain observed regularities with theoretical claims of the plausibility of certain connections and causal relationships. I am addressing myself primarily to the theoretical claims.

Richard writes:

Why do some places end up with higher concentrations of human capital than others? This is the real question my work poses and tries to answer. It seems to me that a very simple and plausible answer is a place’s openness to diversity. I refer to it technically in my work as a place’s having “low barriers to entry” for human capital.

There are many, many ways in which individuals and groups can vary, and thus there are many kinds of diversity. There are also many ways to react to each kind of variation; there is not just “open” or “closed.” So I am skeptical that geographic regions have a general property of “openness to diversity.” Rather, certain regions that you have in mind are “open” in certain kinds of ways to certain kinds of variations. Beyond that, in most relevant business contexts I do not see a plausible causal connection between such “openness” and local innovation.

Yes, for a region to do well the local culture must seem inviting and friendly to the high quality people in relevant industries. So Silicon Valley would not be as productive if the area were not as friendly to the culture of hackers, including supporting their typical work hours, habits of dress, and so on. But that is very different from saying that the region *caused* hackers to be innovative.

Also from this issue

Lead Essay

  • In this month’s lead essay, Richard Florida, bestselling author of Rise of the Creative Class, argues that the old industrial era has given way to a new creative era. Science and technology, art and design, and culture and entertainment have superceded natural resources and industrial infrastructure as the key to economic success. Talent is now the key factor of production and winners in global economic competition will be those who can best deploy and attract it. However, the creative economy is a source of increasing inequality both within and between nations. Florida argues that the key to bridging the gap between the creative and service sectors is to harness the creativity of service sector workers to make their jobs both higher-paying and more satisfying.

Response Essays

  • In his reply to Florida’s lead essay, George Mason economist Robin Hanson argues that creativity matters less for economic growth and the future of work than Florida thinks. According to Hanson, Florida’s emphasis on creativity distracts us from the prospect of a truly revolutionary change to work and economy just over the horizon: rapidly exponential growth driven by smart machines. “An economy with intelligent machines could grow very rapidly indeed,” Hanson argues, “and induce rapidly falling human wages.” Will we be prepared if we’re busy making the Creative Class comfortable?

  • MIT economist Frank Levy agrees that creativity is more important than ever in a world where computers and foreign workers can do routine work less expensively than domestic workers. This shift, Levy says, requires better education in problem-solving. But education can only do so much. The gains from rising labor productivity are going largely to the wealthy, Levy argues. Unless policies and norms are reinstated that spread those gains more widely “all of the nation’s institutions will be at risk.”

  • While agreeing with much in Florida’s essay, UCLA economist Edward Leamer suggests that the key to understanding the future of work isn’t creativity, but talent. “Is a personal computer like a forklift or a microphone?” Leamer asks. Forklifts are forces for equality, washing out individual differences in ability. Microphones, on the other hand, amplify difference in ability and talent. If training cannot create talent, but can only enhance it, the gains to training will be highest for the talented, and it will not be possible to close the talent and wage gaps by offering more training to the less talented.