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Richard Florida’s Creative Class: Why creativity is the new economy and what it means for YOUR community

/ October 23, 2015 /

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Richard Florida’s Creative Class: Why creativity is the new economy and what it means for YOUR community

Richard Florida’s idea of the “creative class” as the foundation for the “new economy” represents his raison d’être for the next economic age of development. Over the past 10-years or so, his idea of creativity has been the lightening rode for policy makers to make changes and for academics to critique and evaluate. Regardless of the position expressed by either the policy makers or academics, there is one thing that is clear: his idea of a “creative class” as the engine for economic development, growth, and diversity has given rise to a lively debate on where and how our living spaces, our communities, and our economies will evolve, unfold, and, potentially, prosper.

Before we continue, it’s important to understand the “creative class” concept. This concept provides the foundation for understanding the implications within the broader framework of social capital and, according to Florida, the rise of the creative economy. When we think of the “creative class”, we think of cultural industries, the arts, industries that we identify with as being “creative”. While these are a component of the “creative class”, the people make up a broader range of industries:

  • they are people whose economic function is to create new ideas, new technology, and new content; and
  • they are people in science, engineering, architecture and design, education, arts, music and the entertainment industry.

The creative class also includes what Florida terms the “creative professionals”: those in business and finance, law, health care and related industries who are engaged in complex problem solving that requires a high degree of independent judgement and education.

The creative class, as we have seen, is not a homogeneous group; they are a broad range of people from different industries and sectors. There is also another dynamic: according to Florida, tolerance of diversity in the area of ethnicity and sexual orientation is essential. Based on the description of the “creative class”, there is a wide range of professions and other social factors that determine membership. If we look deeper, though, it appears that there is common element to defining the “creative class”. Membership requires education, social diversity, cultural diversity, and, in the case of the industry classification, independent judgement and the ability to create new ideas, new technologies, and new content.

As you think about your own communities and the role that either the “creative class” plays out or other forms of human capacity provide direction for community public policy processes, it is important to evaluate Florida’s creativity hypothesis through a critical lens. If we understand the foundation of his hypothesis, the ideas he presents, and consider the claims and arguments, we can provide a more thorough assessment of where his idea fits within the broader human capital dimension.

In order to understand the impact of the “creative class” on economic development, it is important to recognize the origins of his ideas. The thesis of Florida’s work stems from an evaluation of what he calls “periods of crisis” and the subsequent “opening up of a new round of growth and prosperity” for societies.

According to Florida, the 1880s, the 1930s, and the 1990s & early 2000s, represent significant “rounds of innovation” and “creation of new technologies”. During the 1870s, there was the first global depression, termed the “Great Depression”. The succeeding decade of the 1880s, was coined the Second Industrial Revolution because of increased technological advances in transportation that resulted in an economic boom for Western nations. The 1930s, as we know, was the 20th Century’s “Great Depression”, an age where manufacturing, agricultural, and financial markets saw significant decline. In the 1990s & early 2000s was a time of the “tech boom”, “the era”, the rise of the knowledge industries and area. These periods of history form the basis for the continuous evolution of economic development growth and prosperity.

The common link with each period is with the notion of creativity, the “real source of economic wealth”. At each stage of creative evolution, Florida suggests that this growth and prosperity germinates within large urban areas and their adjoining suburbs, towns, and small municipalities to build new technologies, build new enterprises, to build new public goods, and to build new ways of living. He calls these “great conurbations”. The city, the “great conurbations” have evolved into the “social and economic organizing unit”: they are the new engines of the “creative age”. By linking each of these historical “periods of crisis” and their subsequent “rounds of innovation” and “creation of new technologies”, creativity is the new economy, our new economic epoch for the 21st Century.

Florida’s ideas relating to the creative class are based on the connectivity with urban areas, “great conurbations” in cities. This connectivity exists because, urban populations are growing rapidly, comprising the majority of the world’s population, and according to Florida, employment in creative occupations has been growing considerably faster than the overall economy (Donald, Gertler, & Tyler, 1) .

Westlund & Caledoni-Lundberg provide a list of factors related to the creative class and their links to urban areas. A region must have the following factors in order to be attractive to the creative class:

  • a large, dense labour market that facilitates job mobility;
  • a lifestyle with a broad supply of leisure activities; cafes and other meeting places for social interaction;
  • diversity and tolerance of different ideas, lifestyles, cultures, and ethnicity;
  • the region’s/places’ authenticity in the form of own culture; and
  • the region’s/place’s identity which have increased in importance when other forms of identity have decreased (Westlund & Calidoni-Lundberg, 11)

The factors of a city or region represent low social barriers, loose ties, and “validation of identity”, the cornerstone of Florida’s idea for “plug & play” communities. His notions of “plug & play communities” are based on the loose social capital that is required to create “bridging social connections rather than bonding social connections”. These diversified communities with loose networks and various lifestyles are what support the new economy, the creative economy. By valuing creativity, the creative class grows, formulating a “new class geography” with a common ethos that values creativity, individuality, difference, and merit . If a community or region possesses these conditions, the “creative class” will choice these locations, resulting in economic growth. And economic growth will occur in these locations because, as Florida emphasizes, the creative class is the main driver of the creative economy and as a predictor of urban fortunes.

These ideas presented by Richard Florida’s creative class and creative economy have been praised and ridiculed, depending on the position and vantage point. At the heart of his approach is the validation of the connectivity between the creative class and economic growth and prosperity, and innovation and technology. Assessing the connectivity of these elements, the most obvious critique of Florida’s ideas relate to a comparison with Joseph Schumpeter’s creative destruction or “nature’s law” which says, “the rise and growth of one thing generates from the decline and decay of another”. Schumpeter’s notion of creative destruction is grounded in the idea that the “strategic element in entrepreneurial activity was “innovation”; that is the application of new ideas in technique and organization which would bring about changes in the production function” apply to the theory of economic development.

Richard Florida’s idea of a creative class and creative economy appears to be a reframing of Joseph Schumpeter’s creative destruction. Florida’s idea of the creative class is a destruction of industrial forms of labour production with the creative forms of labour innovation and ideas. The rise and growth of the creative class is a result of the decline and decay of the service and industrial labour force. In Florida’s words, “the distinguishing characteristic of the creative class is that its members engage in work whose function is to “create meaningful new forms” (Florida, 3). Adding to this comparison is Hoyman & Faricy’s position that Florida’s creative class theory is “woven together from seemingly unrelated past research on diversity, human capital, and cultural elements of economic growth” . They further argue that the “theory rests on the presence and attributes of people—rather than businesses—as being the key to economic success”.

While Richard Florida’s “creative class” concept gives us ideas to consider, it is important to recognize that he has also resurrected old ideas on creative destruction, highlighted historical shifts in economic development during periods of crisis, and reinforced Adam Smith’s idea that labour activity remains the crucial factor of production in creating value. The difference between these ideas, events, and conceptual foundations and Florida’s “creative class” concept is that he sees the current “creative economy” as a shift from industrial production to creative production.

As you try and reconcile the most appropriate framework to address the social and human capital needs in your community, it is imperative to look from within to determine the level of human capital, the social bonds or bridging, and potential opportunities to build and sustain your economies. In other words, build from a position of strength and emphasize your advantages. Not every community is a Toronto, a New York, a Paris, or a London. But each community can build upon its own unique cultural, human, and social capital to increase it’s tolerance to diversity, improve the level of technology for the community, and enhance the human talent available for employment and economic opportunities.

Cited Works:
Donald. B., Gentler, M., and Tyler, P. 2013. Creatives After the Crash. Cambridge Journal of Regions, Economy, and Society 6, 3-21.
Florida, R. 2002. The Rise of the Creative Class: Why cities without gays and rock bands are losing the economic development race. Washington Monthly, May 2002.
Hoyman, M. & Faricy, C. 2008. It Takes a Village: A Test of the Creative Class, Social Capital, and Human Capital Theories. Urban Affairs Review 2009 44:311.


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