An Empirical Assessment of Richard Florida's Creative Class Theory in the United States from 2001-2020
Washington III, John A.
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Richard Florida's Creative Class Theory made a significant mark on economic geography. Upon initial publication in 2002, reviewers lacked sufficient data to test this theory in the contemporary economy. However, 20 years have elapsed. Statistical analysis of an operationalized creative class theory in relationship to growth in real per capita GDP does not show a statistically-significant, positive relationship. In fact, depending on the variable, most analysis shows either no statistically- significant relationship or a statistically-significant and negative correlation. Instead, in keeping with endogenous growth theory and the arguments of Glaeser, presence of non-manufacturing high-technology economic activity, overall levels of higher education, and immigration bear a substantial, positive, and statistically-significant relationship to growth in real per capita GDP. While Florida's theories consider these variables, Creative Class Theory depicts them as part of a broader construct with significant cultural components. The present analysis does not find evidence to support this theory in all of its details. However, the broader construct of "talent, technology, and tolerance" contributing to economic development remains valid. However, its components vary significantly from Florida's model. Findings suggest policy focus on generating creativity through culture may create less benefit than policies focused on increasing education supply, attracting and retaining educated workers, attracting and growing technology firms, and encouraging immigration. Additional research is needed to identify specific policies.
General Audience Abstract
Why do some cities grow and others do not? Regional leaders have long sought to identify levers to help strengthen their economies. In the 21st century United States, most economies do not revolve around farming or manufacturing. Instead, technology and professional services represent some of the most significant sectors. A disagreement exists in the scholarly literature as to how to accelerate these industries development in different places. Scholars agree education, innovation, and diversity represent important drivers. Views differ as to how to define these ideas. In the early 2000s, an urbanist named Richard Florida advanced his "Three T's" model: talent, technology, and tolerance. He focused on a group called the "Creative Class". These creative thinkers were supposed to attract technology firms to a city. Those creative thinkers were thought to like places with specific cultural characteristics. This study examines 20-years of economic data to evaluate his theory. It confirmed talent, technology, and tolerance do matter for economic outcomes. However, it finds a different way to define these ideas. Rather than "creativity", education levels represent the most important talent factor. In terms of technology, it confirmed the importance of economic output in information, professional services, and scientific services. Regarding tolerance, the most important correlation to economic growth comes from immigration from outside the United States. It did not find support for focus on a bohemian cultural milieu (among other factors). Future research should focus on what factors (such as quality of life, infrastructure, access to capital, and federal regulation) can help enhance these effects.
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