‘Our economy has fundamentally changed’: Richard Florida on why tech scenes are thriving - Technical.ly

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Apr. 30, 2015 8:31 am

‘Our economy has fundamentally changed’: Richard Florida on why tech scenes are thriving

Economic development is now about cultivating ecosystems of companies and talent, says the popular urbanist. Attracting one big firm — “big-game hunting” — is out.

Richard Florida speaking in 2010.

(Photo by Flickr user Ed Schipul, used under a Creative Commons license)

The ecosystem metaphor that has become so popular to describe the many inter-locking organisms and organizations that make a tech community thrive may be incomplete. Because, as popular urbanist academic Richard Florida puts it, ecosystems don’t stand alone, they’re influenced by and attached to others.

Seeds from one ecosystem find their way to another. So perhaps the solar system metaphor should get more play. Look at how it fits in this current iteration of an innovation corridor growing in the U.S. Northeast.

“New York is the world’s most powerful city, and it’s the sun around which the rest of this region revolves,” said Florida, best known for popularizing an economic development agenda with his 2002 book The Rise of the Creative Class. He summons the old BosWash corridor oumega-region that Florida says is due to have its day.

"It's a game I like to call 'Who is your city?' You have to make the best decision for you."
Richard Florida

And Florida says that’s happening because urbanity and the web are giving rise to innovation clusters of technologies and innovations in unexpected places. To thrive, New York’s financial, business and cultural sectors need access to and support from an ever-larger engine of ideas, and our human desire to be near to each other is creating a patchwork of connected ecosystems.

You could commercialize technology from a Philadelphia university, hire a cheaper dev team in Baltimore, get an investor from Boston, retain a marketing firm from D.C., and then join your sales team in New York for your plans to go public.

Of course, you might also involve actors and organizations from around the world, but there remains a stubborn human preference for the quick train ride to meet someone in person, said Florida. So these satellite systems appear to be developing around the country and the world, even if civic pride keeps some from seeing it. (It’s something he said in our latest Technical.ly Podcast.)

In all the lazy and baseless exhortations from politicians that they want to create a new Silicon Valley in their respective cities, there is rarely any understanding of the longstanding regionalism that encompasses that holy of holy innovation lands, the Bay Area, let alone its likely unrepeatable historical origins.

Florida shared the joke you may have heard before on how an economic development executive might explain to a politician how to make a new Silicon Valley: “Take two-parts research university and one-part venture capital and shake vigorously.”

So no, Philadelphia will not become the Silicon Valley of anything. Neither will D.C., nor Baltimore or any other of the countless cities of varying sizes that have grown very proud of their fledgling tech communities. Not even New York City, the much celebrated cultural capital of this country, will in short order flip the order in preference of tech-entrepreneurial risks. That’s OK because there is lots of work to be done.

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From an economy built on manufacturing things to one exporting ideas, “our economy has fundamentally changed,” Florida said.

Economic development in the 20th century was “big-game hunting,” in which tax incentives lured companies to move and bring their associated jobs — the people were very nearly irrelevant. Now, with a clustering of the creative economy where talent represents a region’s strongest asset, the people might reign supremely.

This is very good news for those with the skills to succeed but has thus far remained very bad for those who fall short — they labor in the retail sector or may represent a growing contingent on disability, a shadow American welfare state.

The hope is that the clustering of ecosystems can create thriving mega-regions with their own specialties that will create unforeseen opportunities for more types of people. There is risk in this too, as entrepreneur and impact investor Jon Gosier has warned against the fallacy of “trickle down techonomics.”

“But you need an economy first to talk about people getting involved in the economy,” Josh Sevin, an economist at the Economy League of Greater Philadelphia, said at a recent event at Philly’s tony Union League.

Equity is an issue Florida has taken heat on.

For his part, Sevin, the economist, who was speaking at an event on the creative economy, said he preferred that phrase over the “creative class,” which he fears can stoke fears around gentrification.

If we’ve learned anything from the great suburban flight of the 20th century, we know rapid movements of educated people tend to leave poorer people worse off. Recently there’s been a spate of research challenging the idea that people of color are pushed out of their neighborhoods when new creative class members join, but promoting homeownership and stakeholdership for communities in flux are vital.

On a more macro scale of equity, Florida said he fears that as other mega-regions are popping up in the country — think of the possibilities of far greater Chicagoland or a more united Gulf Coast — this movement of people will still create losers.

“Density, diversity and urbanity have always been associated with innovation,” he said. From the earliest art on cave walls to early tools to early forms of Democracy to the Industrial Revolution, they all took place in “the densest areas of their time,” Florida said.

By contrast, the suburban outgrowth of the 20th century in the United States was aberrant, Florida said, an outcome of American wealth that allowed us to “order ourselves so inefficiently.”

So, places without a strategy for attracting and retaining the knowledge workers that drive the creative economy — a great research university, elements of urbanity, capital — may fare poorly in the coming decades. Florida said he worries about the core Rust Belt and even the once bustling Sun Belt.

People will migrate. Some will make the “great migration to Brooklyn,” but others choose other parts of its satellite system that fit their lifestyle — good thing because it may be the only way to relieve the real estate pressure is to promote a satellite system that supports the sun.

Think of Delaware native and entrepreneur Wes Garnett choosing college town Madison, Wis., because he can still have an impact there. There’s already talent clustering and he can be near to the Chicago environment he loves.

“In any one of these communities you can make a go,” Florida said, summoning the name of another of his books. “It’s a game I like to call ‘Who is your city?’ You have to make the best decision for you.”

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