The Knowledge Worker and the Local Economy

Old Town New World Conference

October 23, 2009

What experts say:

“The wireless revolution is ending the dictatorship of place in a more profound way.” (The Economist, 1999 as quoted in Who's Your City, p. 18)

“By its very nature, the emerging postindustrial economy – based primarily on information flows in an increasingly seamless net – frees location from the tyranny of past associations...Increasingly, companies and people now locate not where they must but where they will.” (Kotkin, The New Geography, p. 5)

“Ultimately this leads to a notion that, over time, our compelling connections will be not with our physical neighbors but with those with whom we share business, cultural, or other interests. The “cities of the future,” argues William Mitchell, are by nature antispatial: “The worldwide computer network – the electronic agora – subverts, displaces and radically redefines our notions of gathering place, community and urban life.” (Kotkin, The New Geography, p. 6)

Conclusions

Place doesn’t matter – work can be performed anywhere. The lowest-cost producer wins.

If Place doesn’t matter, then cities and regions possessing specialized skills and resources in support of a key industries (Detroit, New York, Hollywood, etc.) may be threatened.

Key relationships (“communities”) will be based on digital communications not spatial relationships.

What will be the role of cities in the Knowledge Economy?

The Location Paradox

Place Doesn’t Matter Certain places are experiencing

unprecedented levels of growth in population, incomes and wealth

What is the solution to this paradox?

“Superstar Cities”

“In truth, the importance of geography is not dwindling to nothing in the digital era; in fact, quite the opposite. In reality, place – geography – matters now more than ever before. If people, companies, or industries can truly live anywhere, or at least choose from a multiplicity of places, the question of where to locate becomes increasingly contingent on the peculiar attributes of any given location.” (Kotkin, The New Geography, p. 6)

“The reality is that globalization has two sides. The first and more obvious on is the geographic spread of routine economic functions such as simple manufacturing or service work (for example, making or answering telephone calls). The second, less obvious side to globalization is the tendency for higher-level economic activities such as innovation, design, finance, and media to cluster in a relatively small number of locations.” (Florida, Who's Your City, p. 19)

“Creative people and companies cluster because of the powerful productivity advantages economies of scale and knowledge spillovers such density brings...geographic concentration remains a prerequisite for cutting-edge innovation.” (Florida, p. 30)

“When people – especially talented and creative ones – come together, ideas flow more freely, and as a result, individual and aggregate talents increase exponentially: the end result amounts to much more than the sum of the parts. This clustering makes each of us more productive, which in turn makes the place we inhabit even more so – and our collective creativity and economic wealth grow accordingly...the multiplier effects that stem from such talent clustering [are] the primary determinant of economic growth.” (Florida, p. 66)

The World Is Not Flat

Population Distribution

Economic Activity in a Spiky World

Innovation in a Spiky World

Star Scientists in a Spiky World

Most of world’s production (value creation) takes place in a few dozen mega-regions

The Top 40 Mega-Regions

Share of the World’s:

Population EconomicActivity

Patents Scientists

18%

66% 86% 83%

The Top 10 Mega-RegionsMega-Region Population

(millions)Population

RankEconomic

Output ($Billion)

Innovation/ Patents (Rank)

Star Scientists

(Rank)

1. Greater Tokyo

55.1 4 $2,500 2 24

2. Bos-Wash 54.3 5 $2,200 8 2

3. Chi-Pitts 46 9 $1,600 9 14

4. Am-Brus-Twerp

59.3 3 $1,500 22 18

5. Osaka-Nagoya

36 14 $1,400 7 22

6. Lon-Leed-Chester

50.1 6 $1,200 25 10

7. Mil-Tur 48.3 7 $1,000 34 23

8. Char-Lanta 22.4 18 $730 16 9

9. So-Cal 21.4 22 $710 13 4

10. Frank-Gart

23.1 17 $630 21 12

“The world economy of the future is likely to take shape around an even smaller number of mega-regions and specialized centers, while a much larger number of places will see their fates worsen as they find themselves struggling just to stay in the game.”

(Florida, p. 75)

Winners and Losers

Among mega-regions Within mega-regions

– Detroit and Cleveland (Chi-Pitts mega-region)– Buffalo (Tor-Buff-Chester mega region)

What about places like Rock Hill, Gastonia, Hickory and Spartanburg?

West Bend, Wisconsin(Population 30,000, 39 miles from Milwaukee)

“Despite the fact that work can be done nearly anywhere, only a handful of cities are benefiting from global digitization. For example, simply being able to work from West Bend, Wisconsin, does not mean that employers and their next generation work force want to. This is not to dismiss West Bend’s charm: one of the authors of this article was raised there and loves to visit. However, West Bend, like many formerly vibrant towns, is losing young talent and becoming a bedroom community to Milwaukee, its closest Next Cities™ regional neighbor.” (Area Development Online, “Where are the Next Cities?”)

“Young knowledge workers said that where they lived was more important than where they worked.” (Area Development, “Where are the Next Cities?”)

What’s important to young knowledge workers?

Why young people move: “…while economic growth is important, highly educated young adults place a “higher priority on quality of life factors.” (The Young and the Restless by Joe Cortright and Carol Coletta, quoted by Florida, p. 228)

With the aging of the Baby Boom generation, the number of workers aged 35-44 is actually declining. “In light of these trends, the next generation of knowledge workers will be able to leverage their reduced work force numbers to influence where businesses locate or relocate knowledge work. Unlike previous generations of knowledge workers, who chose where to live based on the availability of job opportunities, the next generation will decide where to work based on where they want to live. The next generation can, in the words of The Wall Street Journal, “pick a place to live and then find a job.” (Area Development, “Where are the Next Cities?”)

Only a handful of cities had a net in-migration of young knowledge workers, while 90 percent of America’s cities suffered a net loss. In other words, cities that can attract and retain these highly mobile young knowledge workers will reap economic gains.” (Area Development Online, “Where are the Next Cities?”)

“The likelihood that one will move peaks at around age twenty-five and then declines steeply…For cities and regions, it means that places that attract young people end up being the winners in the nationwide competition for talent. (Florida, p. 227)

“So, one place that’s a big draw for recent college graduates is the classic college town. (Florida, p. 242)

“When people rated their city’s openness to various groups, guess which group came in at the bottom of the list? …young recent college graduates looking to enter the job market… Nearly 45 percent of survey respondents said that their communities were either “bad” or “very bad” places for recent college graduates while just 7.3 percent said they were “very good.” (Florida, p. 177)

“University cities represent a key engine for our nation’s economic emergence. But perhaps more importantly, they serve as vibrant centers of liveability, built upon partnerships between higher education institutes and civic institutions; between academic researchers and businesses, and between students and the community.” (Michael Scott, Newgeography.com, 00979)

Tenets of Place In the Knowledge Economy

Talented, creative people can choose to live and work anywhere

Talented, creative people tend to cluster in diverse, compact urban places that encourage informal interaction and exchange of ideas and which provide desired lifestyle amenities.

Clusters of talented, creative people enhance productivity, innovation (and wealth creation) in the communities where they reside

The ability of communities to attract recent college graduates based on lifestyle considerations is critical to economic growth.

The presence of universities is an important determinant of where young, creative people cluster.

Creating an Environment for Young Knowledge Workers

1. Cost of lifestyle

2. Employment opportunities

3. Vitality (air and water quality, green space, recreation)

4. After hours (places to go, things to do)

5. Learning (educational opportunities)

6. Around town (walkability, transit, commuting)

7. Social Capital (diversity, crime, civic engagement)

Source: Next Generation Consulting, www.areadevelopment.com

How should our economic development programs change for success in the knowledge economy?

Some initial ideas…

The College Town Action Plan: Create a dynamic social, cultural, living and

working environment in Old Town Rock Hill that is appealing to college students and young professionals.

Create knowledge economy economic development strategies (including public policy initiatives as needed) focused on attracting, educating and employing talented young professionals in the Rock Hill community.

1. Renew partnerships with Winthrop to focus on the knowledge economy

The College Town Action Plan: Identify resources as well as potential partnerships

and collaborations to invest in plans, infrastructure and amenities that support the development of knowledge economy businesses in the vicinity of the Winthrop campus (including Cherry Road and the Textile Corridor).

Create social, cultural, transportation and development linkages between the Winthrop campus and downtown Rock Hill that promote and physically represent the interaction between the University and the community.

2. Refocus downtown development efforts on creating an environment that is attractive to students and young professionals

Housing Arts Events Inexpensive dining Entertainment

Internships, fellowships, artist in residency, entrepreneurship support

Support in job placements “Campus Philly”

3. Create strategies for retaining Winthrop graduates in Rock Hill

“Campus Philly is a 501(c) 3 non-profit organization fueling economic growth by encouraging college students to study, explore, live and work in the Greater Philadelphia tri-state region.”

Web design, graphic design? Financial services? Marketing services? Visual and performing arts? High tech manufacturing and prototyping? Telecommunications?

4. Develop economic clusters:

5. Capitalize on Outdoor Recreation

Cherry Park Manchester Meadows Tennis Center Cycling and Outdoor Center of the

Carolinas Bicycle and pedestrian trails

Can Rock Hill become a center for the knowledge economy?

“Ultimately, the viability of place…relies on the measure of

commitment among individuals, especially those who are in a

position to lead.”

(Joel Kotkin, The New Geography)

The End

What matters most to singles in choosing a place to live?

1) “The number of other singles”

2) “Great job prospects”

(Forbes survey of best places for singles, quoted in Florida, p. 227)

What determines which cities will succeed?

“Knowledge workers are highly mobile, and are tending to be more loyal to their peer communities than to an employer… The key to success is the understanding that an attractive work environment alone is not sufficient to attract, retain and grow an increasingly global, and mobile, knowledge workforce. A total environment that integrates key elements of living, working and learning is needed.

(Murray and Greenes, “From the knowledge worker to the knowledge economy: Six billion minds co-creating the future”, www.emeraldinsight.com)

“For recent college graduates, one obvious choice is to stick around where you went to school, at least for a year or two. Most young graduates eventually move on, but many do choose to stay for at least a while – to engage in research, hang out with friends, or take advantage of a school-related job opportunity.” (Florida, p. 241)