Monday, May 10, 2010

Reinventing Richard Florida: Fishing With Strawberries

Aaron Renn reviews Richard Florida's new book, "The Great Reset". At the heart of the controversy (any good book review should have one) is the excoriation of Florida written by Alec MacGillis. Adding another voice to the critique, Tim Logan (St. Louis Post-Dispatch) strikes a more balanced posture:

In his new book, Florida acknowledges this; indeed, he takes it quite a bit further. The economy, he argues, is quickly sorting into “mega-regions.” Yes, the Boston-Washington corridor, but also Char-lanta, Hou-Orleans, and Cascadia (from Portland to Vancouver). In these places, jobs and talented people are pooling and feeding off of each other to drive growth. They have diverse economies with high “metabolisms.” They sprout ideas. Florida predicts an “intense clustering of jobs, innovation and productivity in a smaller number of big cities.” And, he says, we need to encourage this, to help these cities compete on the global stage. This means funneling talent in their direction, by giving people more flexibility to move. And it means letting go of dying industries elsewhere, like, say, auto manufacturing.

This sounds great, if you’re Chicago, Atlanta, or San Francisco. In Florida’s view, these are essential nodes of the global economy, magnets for talent, and wellsprings of opportunity. They’ll bloom even more. But for cities that now seem less essential, his view is bleak. There’s little talk in The Great Reset of how creativity might spark a Rust Belt revival, for example, or help carve a niche for smaller, out-of-the-way towns. Florida calls Detroit one of his favorite places, and says he’s “heartbroken” over its plight. But he predicts it and other blue-collar cities face a generation of decline.

The vitriol stems from the distancing of this new vision from the Creative Class enterprise. Lou Glazer (Michigan Future) explains:

But if our analysis is right, its not something that small metros and rural areas can do. They simply don’t have the assets – density being the most important – to create, retain and attract either knowledge-based enterprises or college educated adults at scale. So the new Florida analysis is likely right. That there are many places across the country that are unlikely to succeed– no matter how many resources they throw at it – to create places where talent will concentrate. Florida deserves the criticism that he sold many communities – including in Michigan – an unrealizable growth strategy.

What I think is wrong with his new analysis is that he also seems to writing off many big metros. The fact that Michigan’s three largest metros are not now talent magnets nor do they have the assets needed to become one, doesn’t mean that it can’t change. As we explore in our next annual progress report, Pittsburgh has gone from a declining industrial region to a flourishing knowledge economy. If they can do it, so can our three largest metros.

Michigan adopted the Cool Cities mantra and now Florida is leaving the state for dead. Or, so it would seem. Back to Aaron Renn's take:

I was eager to see what what he’d say of the Rust Belt. There’s been a lot of talk such as that of MacGillis that Florida has said many Rust Belt cities are hopeless, but I hadn’t actually seen him write it anywhere. In this book, Florida clearly recognizes the challenges facing struggling manufacturing towns. And he doesn’t sugar coat the fact that further troubles are likely for many of them, and that turning around places like Detroit will be a generational effort at best. This may sound harsh, but unfortunately it is likely true, especially for smaller cities that don’t have the critical mass of human capital and infrastructure to operate effectively in the knowledge economy.

But he definitely does not say it is hopeless, and in fact talks about some positive examples, such as Pittsburgh. The Pittsburgh story is based around investments in educational infrastructure, grass roots neighborhood, initiatives, and a long time frame. The roots of the Pittsburgh turnaround are decades old. He thinks this is the path others will need to take.

A couple of an points I want to highlight. Renn and Logan have a different understanding of Florida's prescription for Detroit (and other struggling Rust Belt cities). Rich should try to clarify what he proposes. Also, note that Glazer and Florida agree on Pittsburgh as a model. There is a beautiful symmetry putting Pittsburgh at the center of Florida's makeover. Some of you may remember that the flight of young creatives from the campus of Carnegie Mellon University to the hip city of Austin stood as a metaphor for talent migration. Pittsburgh was Loserville:

While I was interested in the change in corporate recruiting strategy, something even bigger struck me. Here was another example of a talented young person leaving Pittsburgh. Clearly, my adopted hometown has a huge number of assets. Carnegie Mellon is one of the world's leading centers for research in information technology. The University of Pittsburgh, right down the street from our campus, has a world-class medical center. Pittsburgh attracts hundreds of millions of dollars per year in university research funding and is the sixth-largest center for college and university students on a per capita basis in the country. Moreover, this is hardly a cultural backwater. The city is home to three major sports franchises, renowned museums and cultural venues, a spectacular network of urban parks, fantastic industrial-age architecture, and great urban neighborhoods with an abundance of charming yet affordable housing. It is a friendly city, defined by strong communities and a strong sense of pride. In the 1986 Rand McNally survey, Pittsburgh was ranked "America's Most Livable City," and has continued to score high on such lists ever since.

Yet Pittsburgh's economy continues to putter along in a middling flat-line pattern. Both the core city and the surrounding metropolitan area lost population in the 2000 census. And those bright young university people keep leaving. Most of Carnegie Mellon's prominent alumni of recent years---like Vinod Khosla, perhaps the best known of Silicon Valley's venture capitalists, and Rick Rashid, head of research and development at Microsoft---went elsewhere to make their marks. Pitt's vaunted medical center, where Jonas Salk created his polio vaccine and the world's premier organ-transplant program was started, has inspired only a handful of entrepreneurs to build biotech companies in Pittsburgh.

Over the years, I have seen the community try just about everything possible to remake itself so as to attract and retain talented young people, and I was personally involved in many of these efforts. Pittsburgh has launched a multitude of programs to diversify the region's economy away from heavy industry into high technology. It has rebuilt its downtown virtually from scratch, invested in a new airport, and developed a massive new sports complex for the Pirates and the Steelers. But nothing, it seemed, could stem the tide of people and new companies leaving the region.

Read that last sentence again. What does it have to do with attraction? The narrative is about losing people to someplace else. My problem with the creative class approach to economic development is the selling of brain retention strategies. Truth be told, Pittsburgh already had it figured out. The program didn't have much to do with becoming the next Austin, which is good news for other Rust Belt cities.

Which brings me to fishing with strawberries:

As O'Reilly tells it, the banker chastises him with a metaphor. "You don't fish with strawberries," the banker says. "Even if that's what you like, fish like worms, so that's what you use."

At first, O'Reilly accepts this advice. Who can argue with the idea that customers should get what they want? But as he thinks it over, he begins to see things differently. "[A] small voice within me said, with a mixture of dismay, wonder, and dawning delight: 'But that's just what we've always done: gone fishing with strawberries,' " he writes. " 'And it's worked!' "

Before "The Great Reset", Richard Florida fished with worms. Communities wanted a working brain drain plug. He [in theory] delivered. I think that's the crux of the controversy and why some people are mad. Now, Florida is fishing with strawberries. But will the cities still bite?

No comments: