The Bull City’s Rising Creative Class

Sarah ChanEcon 145 Urban EconomicsProfessor Charles Becker

New Social OrderRichard Florida’s The Rise of the Creative Class

Emergence of a new social class of workers

Locational decisions of the creative class

Implication for firms:“Keep your tax incentives and highway interchanges, we will go where the highly-skilled people are” (Hewlett-Packard CEO Carly Fiorina)

Implication for policy makers:Focus on strategies based on developing amenities to pull in human capital instead of firm targeted strategies

What is the Creative Class?Three main groups:

Creative Core Creative Professionals

Bohemians

Create new forms of knowledge that are widely useful and readily transferable

Engage in creative problem solving by applying complex knowledge in unique ways

Cultural and artistic occupations; key factor in attracting the other 2 creative class categories

Scientists, engineers, higher education, research and development related occupations

Legal professions, financial services analysts, business professionals

Writers, performing artists, creative and entertainment industries

Density Distribution across US Cities

“ Great coffee shops, crowded bookstores, a lively music scene, well-designed buildings, thriving art galleries, successful design firms, exciting museums and theatres, opportunities for arts participation - these are elements we find in the communities that drive the new economy.” (Durham Arts Council, Creative Vitality Index Presentation 2010)

Durham’s shifting paradigm: from the warehouse-oriented tobacco and textile manufacturing district, toward a high-tech creative economy

How has Durham’s infrastructure kept up with the demands of its ‘creative’ residents and workers?

Durham’s Creative Economy

Importance of Amenities

Downtown Durham Master Plan

The most common activities that people came to Downtown to engage in once a week or more were: Dining (30.4%), Recreation (20.9%) Government (16.6%) and Entertainment (13%).

The most common destinations in Downtown were Restaurants (25.5%), Brightleaf Square (23.9%) and the Farmer’s Market (20%).

89% reported that more Casual Dining businesses would change the frequency with which they visit downtown. Specialty Foods (85.2%) Fine Dining (69.1%) Nightlife (67.4), and Art Galleries (66.2%) also rated highly.

With the exception of Festivals (54%), and Nightlife (38%) survey respondents indicated they largely seek entertainment and recreation options outside of Downtown Durham; Raleigh was a destination for Museums and Performing Arts.

While the Downtown tax base has increased, it is still primarily reliant upon commercial uses for revenue.

American Tobacco Campus- Mixed use

American Tobacco Campus

American Underground:Basement space for start-ups designed to house up to 70 small entrepreneurial high tech companies

Joystick Labs, Launchbox Digital and entrepreneurship organization CED, previously located in the RTP

Firms transitioning from a manufacturing and industrial framework to viewing their workers as members of the creative economy

Premium on proximity to upscale housing, entertainment, restaurants and bars

Implications for Research Triangle Park:Does ATC compete with or complement RTP? Firms locational decisions

First revision of Master Plan since 1959

Allow for high-density mixed use retail and residential development

Empirical ModelTest a simple econometric model, to identify the factors across 30 cities that may account for the presence of the creative class.

Control for sprawl and sun as “sun, skills and sprawl” are cited as the three factors that largely determine regional growth (Glaeser)

Υ=α+βiχi+βjχj+ε

Y is the dependent variable of % change in creative employment from the period 2004-08;

βi : Amenities (% change in) βj : Economic Factors

Restaurants Creative Employment

performance venues, museums Unemployment rate of college graduates

Nightlife establishments Average wage of creative class

Employment of bohemians

Sample of Metropolitan Statistical Areas

Greensboro-High Point, NC Atlanta-Sandy Springs-Marietta, GA

Greenville-Mauldin-Easley, SC Birmingham-Hoover, AL

Knoxville, TN Charlotte-Gastonia-Concord, NC-SC

Oxnard-Thousand Oaks-Ventura, CA Dallas-Fort Worth-Arlington, TX Riverside-San Bernardino-Ontario, CA Durham, NC

AnalysisHow does Durham compare with other cities?

Does the increase in Durham’s restaurants, nightlife, and arts venues have robust relationship with the increasing presence the creative core and professionals?

IMPLAN Data studyThe use of North Carolina 2007 IMPLAN data, as a proxy for Durham, to calculate regional economic benefits from the creative industries

An input-output (I-O) model to examine regional industrial structures and exploring existing and potential regional industry linkages.

Creative Industry Effects

Industry Description

Industry Size ($)

Output Multiplier

Labor Income

Multiplier

Employment Multiplier

Performing arts companies

109,604,800 1.621854 1.600741 1.162359

Spectator sports companies

1,445,611,000 1.733099 1.482970 1.455445

Promoters of performing arts and sports and agents

226,212,900 1.693592 1.665243 1.275621

Independent artists- writers- and performers

114,981,300 1.631798 1.456954 1.265995

Advertising and related services

1,614.237000 1.677224 1.516070 1.602570

Motion picture and video industries

2,552.889000 1.741640 1.616655 2.831606

Sound recording industries

662.443700 1.838782 2.416061 1.670667

Policy ConsiderationsTarget industries for expansion within creative industries

Revitalization of downtown Durham with a focus on the ‘soft’ amenities

Creating lifestyle options, in the form of entertainment, nightlife, and culture to attract talent

Creative class “vote with their feet” (Florida, et. al. 2006) choosing to locate in communities that serve their lifestyle needs

Problems of increased tax burden?

Gentrification leading to out-migration of ‘bohemians’

Durham Arts Council:Investment in the arts industries, provide support

Creative Vitality Index and Local Arts Index commissioned to strengthen rationale for arts investment

Durham Performing Arts Center (DPAC)

The EndThank you!