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Attracting the Talent

February 8, 2013

The Creative Class Is Key to Current Economic Development Trends

 

In today’s evolving economy, the road to prosperity requires an on ramp for the creative class. This well-educated, highly skilled, well-paid group of people, who think for a living, will drive roughly half of all U.S. job growth through 2018, according to author and scholar Richard Florida.

The question for cities is how to steer the creative class— especially its young core — in their direction. Florida, professor at the Rotman School of Management at the University of Toronto, believes he has the answer. “In the global hunt for talent, I expect we will see a stronger emphasis ... than ever before on the importance of quality of place,” he says.

Florida ought to know. As author of the 2002 best-seller “The Rise of the Creative Class,” he defined this growing legion of 35 million workers and has followed his first book with several related titles, including his latest, “The Great Reset.”

The Cliff Notes version of Florida’s work: Prosperous cities typically have a burgeoning creative class and are characterized — not coincidentally — by the “three Ts” of talent, tolerance and technology.

The recession has only strengthened Florida’s opinion. “If you look at regions that have fared better than others, you will notice they have a large percentage of creative workers,” he says

Something else that sets many of these regions apart? They exhibit qualities of place that both satisfy the desires of creatives and reflect key principles — density, walkability, mixed-use, access to transit, concern for the environment — of smart growth.

“There’s definitely a strong correlation between those principles ... and what the (creative class) is looking for,” says Molly Foley, lead consultant with Next Generation Consulting, a Madison, Wis., market research firm. “We live in a time where talent is what drives economic prosperity and talent is clustering in communities that offer... the amenities they value.”

No community makes that case — and demonstrates the power of placemaking — better than Arlington County, Va. The Washington, D.C., suburb didn’t set out to become a model for attracting the creative class when it began planning a string of transit-based urban villages 30 years ago, but guess what? “We inadvertently became the headquarters for the creative class,” says Terry Holzheimer, director of Arlington Economic Development.

Step one of Arlington’s plan routed a new Metrorail line through a decaying commercial corridor rather than along a freeway. Step two placed five stations, each a half mile apart, up and down the line. Step three rezoned the land around the stations to increase density, ensure a mix of office and residential uses and reserve the ground floor of buildings for retail. Step four brought grocery stores to each of the five locations.

Arlington overlooked only one thing, “We didn’t give a lot of thought to who was going to live there,” Holzheimer says. Although it took time, Arlington ultimately proved to be fertile ground for the creative class. “We never consciously did it, but we created the Petri dish for it to grow by creating these urban villages,” Holzheimer says.

No doubt Arlington profits from its proximity to Washington, D.C., which is an employment magnet for creatives from across the country. But that only partly explains why Business Week magazine recently called Arlington “the best place to weather a recession in the U.S.” The big key to Arlington’s prosperity was creating vibrant urban villages — and attracting the creative class— through placemaking, Holzheimer says.

Although the creative class is not defined by age, cities salivate most over young creatives. “The 25-34-year-old demographic is to economic development what bandwidth is to the Internet,” says Angelos Angelou, CEO of Angelou Economics, an Austin, Texas, consulting firm serving technology companies and communities seeking to attract them. “It is the economic capacity of the future.”

Attracting young creatives is as much about offering the right quality of life as it is about employment. “They will move to a city they like without a job in confidence they will find a job when they get there,” Angelou says.

Employers are mindful of that when deciding where to locate. “Companies pay attention to the young demographic, particularly technology companies,” Angelou says. “Those cities that are attractive to young professionals are attractive to businesses at the same time.”

In many places, the challenge is more about retaining existing talent than attracting new talent. “They have the pipeline (of young creatives), but they don’t have the infrastructure, they don’t have the perks and they may not be aware of how important that demographic is to economic development,” Angelou says, in describing communities and cities looking to develop and keep a talent base.

A study conducted by the Martin Prosperity Institute, a think tank led by Florida and affiliated with the University of Toronto, looked at the factors that cause people to remain in their current community. Based on a sample from a larger survey, the study concluded that place-based factors such as the physical appeal of the community and the ability to meet people and make friends mattered considerably more than economic conditions.

The question for cities with creative class envy is how to compete with places like Austin and Boston and other three T towns. “You can start by redeveloping your downtown,” Angelou says. “These folks are not likely to be living in suburbs. They want to be downtown and they want to walk to work and they want an active night life.”

They also want to be involved in the decisions that will shape their community. “This is a very civic-minded generation,” Foley says. “They want to feel like their voices can be heard and they can make a difference.”

An emerging concept called crowdsourcing is helping one developer hear those voices as it decides how to breathe life into 17 acres of mostly vacant land in downtown Bristol, Conn. The idea is to invite the public to participate in the planning process from start to finish — something that was possible only on a limited scale before the Internet made the whole world a focus group.

“What does the market want? That’s where crowdsourcing comes in,” says Brandon Palanker, director of new business development at Renaissance Downtowns, the New York firm chosen to lead the Bristol project. “Crowdsourcing isn’t studying the market. It’s engaging the market. It’s a back and forth.”

Crowdsourced placemaking is tailor made for engaging young creatives. They have both the will and the way — think Facebook and Twitter — to chat, blog and tweet about the qualities of place that appeal to them.

“The executives who are making decisions might not understand what a 23-year-old wants,” Palanker says. “You might think they want granite counters when what they really want is bike rack outside. If you don’t engage them in the conversation, you’re probably going to fail.”

Ultimately, whatever gets built must pencil out. However, simply listening to young creatives can be its own reward. “At the end of the day, if they feel they have ownership, you will have salespeople on the street that you don’t have to pay,” Palanker says. “

While quality of place is paramount to young creatives, cost of lifestyle is a growing concern. In the late 1990s and earthly 2000s, they flocked to big — but costly — cities like New York, Seattle and Chicago because the economy was booming and they were comfortable living on credit, Foley says. Now, they’re looking for cities that are large enough to offer the amenities they seek but not so hard on their wallets.

“We’re seeing an outmigration of talent from the major metros, Foley says. “The smaller, mid-size cities are well-positioned against the bigger cities.”

Availability of employment also has become a bigger factor. That’s because companies aren’t as eager as they once were anymore to follow young creatives to their cities of choice, says Foley.

“The cost of moving may not be feasible in today’s economy or they’re laying off more people than they’re looking to attract,” she says. “However, as we start to see the baby boomers retire in numbers starting in 2013, we probably will see a shift in companies starting to chase talent once again.”

In the meantime, cities might want to steal a page from Madison’s playbook. Home to the University of Wisconsin, it consistently ranks among the best cities for young creatives to live in. But it’s also committed to generating jobs.

“It’s a normal concern of any college town to retain their graduates,” says Kathy Bartels, a REALTOR® with Coldwell Banker Success in Madison. “There was a time where we were educating them and they were leaving. Now, we’re going after businesses to keep them.”

Madison’s main job engine is University Research Park, a place where basic science from the university is transformed into products and services — and jobs. “We know if they have good opportunities for employment in this city, they will stay. If they don’t, they’ll go to Chicago or Minneapolis,” says Mark Bugher, the park’s director.

Founded in 1984, the park grew slowly at first, but is now home to 32 buildings housing 100 companies employing 3,500-4,000 people with an annual payroll of $250 million. Work has started on a second phase that will add 54 buildings, doubling the number of tenants and generating 10-15,000 more jobs. And not just any jobs, but cool jobs with early stage tech companies that make young creatives drool. Average pay within the park: $64,000 a year.

“I would encourage any city that is looking to attract this kind of employee to ... create a robust environment for entrepreneurship and technology transfer,” Bugher says. “That’s the magnet that brings these kinds of employees.”