Monday, 14 February 2005

Richard Florida

Speaker: Richard Florida
We started the year with a host of fresh ideas from the best-selling author and business thinker, Richard Florida at the first BOSS Club of 2005. Richard Florida is the author of the 2002 best-seller The Rise of the Creative Class, which received The Washington Monthly's Political Book Award for that year and was later named by Harvard Business Review as one of the top breakthrough ideas of 2004.

The New York Times called it "an important book for those who feel passionately about the future of the urban centre."

Cities and regions across the United States and the world have embarked on new creativity strategies based on Florida's ideas.

His new book, The Flight of the Creative Class, which examines the global competition for creative talent, will be published by Harper Business in March 2005.

Florida is currently the Hirst Professor in the School of Public Policy at George Mason University and a non-resident Senior Fellow at the Brookings Institution. Previously, he was the Heinz Professor of Economic Development at Carnegie Mellon University, and has been a visiting professor at MIT and Harvard University's Kennedy School of Government. He is the founder and principal of two companies: the Creativity Group, an innovative communications and strategies team; and Catalytix, a strategy consulting firm.

Florida earned his Bachelor's degree from Rutgers College and his P h.D. from Columbia University. He lives in Washington, D.C.


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Transcript

Richard Florida at BOSS Club, Sydney, February 14, 2005

This is an edited transcript of the talk given by Richard Florida, author of The Rise of the Creative Class and The Flight of the Creative Class.

I was looking at the latest BOSS magazine and I saw my good friend Malcolm Gladwell. I think about Malcolm's phrase about a “tipping point” or an inflexion point and I think the world really is at one now and I think that in Australia you're at one now. That inflexion point that we're at now is about the competition for talented and creative people. You're in a position to move up the ladder very quickly. You've done very well over the past couple of decades, but you're in a position to move up the ladder very quickly.

About two years ago, I was at the Knowledge Wave conference in Auckland, New Zealand – people often ask me what I've learned since I wrote The Rise of the Creative Class and I didn't know I'd learned it then, but I learned something during that trip two years ago that really plays a big role in what I've learned since writing The Rise of the Creative Class.

So we had a nice time in Auckland and I went down to Wellington to meet the Mayor of Wellington, and these guys had arranged a visit with Peter Jackson. We went around to Peter's place and we had this wonderful lunch and then somebody said, "Do you want to go to this place called Weta Studios?" You know, here I was writing on the competition for talent and how regions grow, about places like San Francisco and Boston and Austin, Texas.

So here I am in Wellington, New Zealand and I walk into this place called Weta Digital and we go for a tour and I start hearing all of these different accents. I hear accents from New Zealand and Australia and I hear European accents and I hear Eastern European accents and I see people and I hear American accents, and we walk by this wall and there's a map of the world and the map of the world has pins stuck in it and I'm like: What the hell is this map of the world with the pins stuck in it?

And they said, well, they're the people who work here, the countries from where they come, and I asked Peter, "Isn't this all about, you know, New Zealand people?" "No. We've been able to attract here in Wellington at our little studio people from France and from the Soviet Union and from Asia and lots of people from Australia and of course great people from New Zealand and all these people from your country, and we get them not only from the film industry in Hollywood but we attract them from the University of California at Berkeley, or MIT where they're doing software programming".

To make a long story short, he said, "We really consider Wellington to be a great talent magnet. In fact it's so good and so beautiful and so lovely, we find that we can do our work better here because it's free of all of those distractions that come along with doing our work in Los Angeles", and I just left that alone.

Then things started to change in my country. That's what this phrase The Flight of the Creative Class is about. But it began to dawn on me that this talent exchange or this ability to compete for talent, the way in which cities or companies compete for talent - it wasn't just that San Francisco was beating my former hometown of Pittsburgh or Boston was beating Cleveland or Seattle was winning out against Cincinnati.

Here was little tiny Wellington, a place of 800,000 people in a pretty remote corner of the world competing aggressively for the best people in this digital film-making industry. A light bulb went off in my head that this competition for talent is really something that's quite global and that in fact what's really new about the global economy is not a trade in goods and services or a trade of investment or flows of capital: what's really important is the movement of people.

If you think about what made my country, the United States, a great country, it wasn't that we had more raw materials than anyone else, it wasn't that we had a bigger market than anyone else, it wasn't that our ports were better than anyone else’s and it certainly wasn't that Americans were any more ingenious than anyone else. We just happened to be, for the past hundred years, a place that welcomed the world's best and the brightest.

Now I said we're at a tipping point, a change point, an inflexion point. Well, two or three things have happened and that's sort of a growth in my idea since The Rise of the Creative Class to The Flight of the Creative Class.

The first thing is that lots of countries and cities and regions around the world have gotten smart. They started to say: We'd like to attract the best and brightest and we're going to make a pitch to do that. And simultaneously, in the wake of September 11th and with our current administration we have become quite restrictive.

So the real point of my work is that this ability to grow and to prosper and to compete has become much more wide open. And let just make this really plain before I launch into the two or three core ideas: I was in Helsinki, Finland, last week - it's a marvellous place, by the way, if you haven't been you should go, and very competitive in this age - and I was talking to some Finnish people who were young, in their mid-twenties, and they said, yeah, we totally understand what you're talking about because it's not like we're going to move from Helsinki to another Finnish city, or it's not even like we're going to move from Helsinki to Stockholm or Helsinki to Copenhagen.

When we look at the world we have friends in New York and Chicago and Paris and London and Sydney and Melbourne and everywhere else. When we look at our potential locations, they're all over the world. So what we're really dealing with is a competition for people at a world scale.

Now if you think about that, what's driving that competition for people is that the nature of what powers our economy has changed. Somebody said today Australia is a resource-based economy, and I just said: No, it's not - Australia is a creative economy. The United States is a creative economy. United Kingdom is a creative economy. France is a creative economy. Peter Jackson and New Zealand are creative. Canada is a creative economy. You're not a resource economy.

A couple of statistics from the new book: You have a workforce of about 9 million people. Depending on how you define the creative class, if you take in a narrow definition or a broad definition, you have between 3 and 4 million people in that workforce of 9 million that work in the creative economy. About 50 per cent of all the wages and salaries paid to people in this country come from the creative economy, about 50 per cent of your total economy. If you take this city or Melbourne, and to a lesser extent Brisbane and Perth, you've got 50, 60, 70 per cent of those local economies in the creative economy.

In fact the shift that we've seen over the past 20 years is a shift that's bigger, as big or bigger as the shift from an agricultural economy to an industrial economy. Your economy, my country's economy, advanced economies have all shifted from industrial economies to creative economies. You know in Australia and the United States 100 years ago maybe 5 or 10 per cent of the workforce worked in the creative sector, that's science, technology, engineering, arts, culture, aesthetics, design and the knowledge-based professions, finance, health care and law.

In 1950 maybe 10 per cent. Between 1980 and today we've seen an explosion in this creative economy. We have increased the share of the workforce in the creative economy from about 10 or 15 per cent to 30 or 40 per cent and in this sense we are at the dawn, we are really at the dawn of a whole new economic system, and that's very important because these economic systems, as the new book talks about, not only create great possibility for wealth and a great possibility for productivity and for innovation and technology and all of the things that have made our towns and cities more prosperous, but they also create great contradictions and problems.

Just as the industrial economy 100 years ago - with electricity and chemicals and autos and steel - created great possibility and great productivity and great innovation, but also concentrated wealth in the hands of just a few people, created great class divides, created all sorts of problems with income and equality, created all sorts of problems with housing affordability, so too does the rise of the creative economy.

One of the things that we haven't learned and I'd like you all to think about is that it's not enough to just build a creative economy. In fact if you look at the places that have the most vibrant creative economies, whether it's Sydney or Melbourne, San Francisco or Boston, Austin, Texas or Seattle, those places also tend to have the highest rates of income inequality, the greatest problems of housing affordability. In a sense the task before us is not only to build a creative economy, but think about it: What happened with the industrial economy is it stalled, it broke down. We lapsed into depression. What you had to do was make the industrial economy not only more productive and prosperous, but much more inclusive.

So the creative economy is a great engine, but the real thing that we have to understand is that it is not just this 30 or 40 per cent of us who are so fortunate and God blessed that we have landed positions in the creative economy, whether a scientist or a technologist, whether an artist or musician, whether we work in the knowledge-based professions, we're a real estate developer, a banker or a lawyer -but there's 60 to 70 per cent of people who are not in this creative economy.

In the United States we talk about political polarisation. We talk about the fact that our country is polarised into red patches that vote for Republicans and blue patches that vote for Democrats and we're a 50-50 split country. We're a country divided by class. We're not a country divided by Republicans and Democrats.

There are the people who are in the creative economy and feel relatively comfortable for that and have an open-minded view and tend to be rather progressive and are supportive of gay rights and women's rights and open towards immigration and they cluster in our great urban centres like San Francisco and New York and Boston, and then there are the people that are being left behind, and for all of you who want to blame the right - I don't know how many of you - for all of you who may want to blame the Right and say the problem is George Bush, or someone else, I have this for you to think about: The blame goes equally on both sides, and this comes from somebody who is an enormous supporter of John Kerry and an enormous and enormous supporter of Bill Clinton.

In fact in any period of rapid economic transformation, in any period of rapid economic transformation, the role of the Right or conservative forces is always to make the case that the past was better and that we don't have to adapt to this rapid change, so keep the immigrants out, the hell with gay rights, we'll retract in the United States, we're moving backward on women's rights, we want to go back to a 1950s kind of society.

It's the job of the left or progressive forces in a society to make the case for a more inclusive future and the great failing, by the way, I would believe, of building a creative society is that nowhere in the world have progressive political forces made the case for a more open and inclusive creative society the way Franklin Roosevelt in my country and great political leaders in your country said - that regular working class people deserve to have good jobs with good pay and be able to afford houses and education for their kids. So that's the second point.

The third point, related to that, is that creativity is something that is in every human being. This is really important. Creativity isn't something that just artists and scientists and engineers and entrepreneurs - and you get into these debates everywhere. How do we attract the biotech sector, how do we build our IT software cluster, how do we do these leading edge industries? And then it gets funnier: Oh, we want to attract the creative class people, so what we need to do is have more coffee shops and nightlife venues and ultimate frisbee fields. The point is that every single human being is creative.

The real thing about the creative economy is that to be successful and to fully flourish it can't just tap the creative energy of 30 or 40 per cent of people who are advantaged like us, it has to tap the creative energy of every single human being and that's the great failure of our time. In fact there is no one anywhere in the world, and Lord knows no one in my country, who even wants to talk about this.

They'll talk about the software industry or the biotech industry or creating a music scene, but nobody wants to talk about what it really takes to tap an artist, that creative energy. The reason it's so important is because creativity doesn't know anything about gender, doesn't know anything about race, it doesn't know anything about ethnicity, it doesn't care where you're from, what your family is like, what your sexual orientation is. Creativity cuts across and in fact annihilates all of these social categories we've imposed upon ourselves, so the advantage in the creative age comes to those cities, regions and countries that are the most open.

Now my first book got me into trouble, of course, because in that book I argued that in fact the real locus of the creative economy isn't the industrial corporation, isn't the mega company, the real locus of the creative economy is in fact place. Geographic places, regions and cities are the organising unit of the creative age, and I argued that what made places competitive was not the number of latte bars they have, nor the amount of sunny days, nor the size of the ocean breakwaters. What really mattered to places was how open they are to the creativity of their people.

And we measured that in some ways that people thought were controversial. We measured the number of immigrants in a community and said places that are open to immigrants would have an advantage, they would be open.

Places that were open to artists and designers and musicians, because we think vibrant music scenes have a lot to say about how you mobilise the creative energy of your people and allow them to form these entrepreneurial combinations called rock and roll bands and then find markets for their sounds, so places that had a high score on our bohemian index did well, and that didn't get me in that much trouble, but then of course when we said if you really wanted to look at how open a place was you looked at how accepting it might be towards the gay population, and when we developed our gay index and found that the association between places that were open and tolerant to the gay population also tended to be the kind of places that attracted lots of creative people, and not only attracted creative people, were actually able to mobilise and utilise their own creative energy.

Well, in my country, given current events, all hell broke loose, as we say. In the past two years I've been accused of promoting a gay agenda - having a gay agenda, undermining the American family and of seeking to bring about an end of Judaeo-Christian civilisation as we know it.

Whether you like it or not, right now at this moment the most open society in the world. Now that may come as a shock to you but if you look at it, the United States has about 11 per cent of our population made up of immigrants. The Canadians, who I would say are the leader, the new world leader, the emerging new place, has about 18 per cent of its population composed of immigrants and you are now approaching 23 per cent of your population composed of immigrants.

And if you look at students - what's really important is your ability to attract foreign students.

The high tech economy in the United States is built off two groups of people: Indian students and Chinese students. We wouldn't have one if there weren't Indian students and Chinese students who came to our universities and developed technical degrees and built all of these fabulous companies, from EBay to Google to Hotmail to Sun Micro Systems. But the point is that this openness to people, different kinds of people from different countries and different cultures and different sexual orientations, is very important.

As the US becomes less attractive or less open to these flows of talent you actually have a much more competitive and multi-polar world emerging. The competition is among great cities across the world, but the competition that's emerging is among cities like your great cities, like Canada's great cities - Toronto, Montreal, Vancouver - like the great cities of Scandinavia, in particular Stockholm, Copenhagen, Helsinki and others, of course London and Dublin are doing well.

What's also going on and what's very interesting is for years we took it for granted that the best Chinese kids and the best Indian kids would come to our countries and for the first time those two countries are making a hell-bent effort to attract and retain their own people. So the world is getting to be a much more competitive place and driving that is the increasing locational mobility of people, and this is going to continue and accelerate because, as we go around the world and we talk to young people, as I mentioned with the young Finns, there isn't a sense that there's any geographic border.

When I graduated college, believe it or not, very few of my friends left the New York metropolitan region. I mean New York was a great city, don't get me wrong, it was a great place to be, but I had very few friends who even moved to the west coast. The next generation after me had friends who lived all over the United States. But now young people in their 20s today have global friendship networks.

Let me just end with what I think is important for you to remember as you think about the future of your own place, your own cities, own regions, companies.

The way I like to boil this down, and I think this is important, is that what really makes a place exciting and competitive and thriving in this creative age is that they do what I like to call the three Ts of economic development. For years economists said: If you want to grow your economy you have to be a technology leader.

It is important, but alone it won't get you where you need to go. I know that because for 20 years I lived in Pittsburgh, Pennsylvania, which invented technology after technology, has one of the greatest computer science universities in the world, and that technology moved everywhere else but Pittsburgh.

But you've got to do technology and you've got to have great universities and you've got to be innovative, but without the second T - talent - the ability to attract talent, to retain talent, but as I said mobilise talent, not just from the great 10 or 15 or 30 or 40 per cent of us who are in entrepreneurships, science and technology and the arts, you have to really begin to harness that energy of the other 60 and 70 per cent, which brings me to the third T and the T that I can tell you that most political leadership and a good deal of business leadership is scared to talk about, they want to push it under the rug. It's tolerance.

Technology, talent and tolerance.

You can be as technologically great as you want, you can invent things and have patents and have high tech companies, you can be a place that generates a lot of talent, but if you're not tolerant … Let me define tolerant. I explicitly define it in The Flight of the Creative Class. Proactively inclusive. Not enough to just tolerate people and say that you're fine over there in the corner, proactively inclusive.

When all those three things come together, that's when you get a great economic advantage, when you can do all three Ts.

Now Australia ranks third in the world on our measure of the global creative class. You have between 30 and 40 per cent of your workforce in the global creative class. When we look at the three Ts, so you're doing pretty good in this darn talent measure, but when we look in these three Ts and put them all together and come up with a composite index you fall from third to thirteenth. So there's something in those three Ts that isn't where it needs to be and the weaknesses aren't in the talent T but they're a little bit in the tolerance T, a little bit in the technology T, so in thinking about your future as a country you've got to think about this change in the world economy, you've got to think about this change in the way cities and regions compete, but most importantly you've got to think about where this country wants to go.

The reason I'm kind of being a little bit preachy about this: I'd feel a lot better if my country wasn't in such dire straits. If we weren't doing the kinds of things we are doing, I would say, okay, well, you know, maybe San Francisco or Seattle will emerge, but they're not, and we're becoming more restrictive and more closed. And I talk to a lot of people my age.

I don't know how it is here, but a lot of people my age are awfully darn cynical and pessimistic and I think it's awful to be cynical and pessimistic because actually I think this new creative economy creates great hope and the hope is that for the first time in human history we can align our economic development with the development of human beings, that because this human creativity is the key economic factor we can align our economic growth with the further development of human creative capabilities, our innate creativity, but that is not going to happen magically.

In fact that's not happening now and it's not happening now because there is no one out there to show the way, to do what Franklin Roosevelt did, to say that we can move from an industrial economy to an industrial society or a creative economy to a creative society. One of the things that I would hope is that in some place in Australia or perhaps some place in Canada or perhaps some place in Scandinavia, that there will be some places in the world that begin to chart this path. It’s not enough to invest in technology, not enough just to build your talent base, you have to become a place that does all three Ts, that's proactively inclusive, and that actively goes out there and taps and harnesses the creative energy and creative capabilities of each and every single human being.

QUESTIONS:

Q: When you talk about the most creative people you're really talking about the most creative rich people. It's the Chinese kids from the cities, not the Chinese kids from the villages. We've got the potential to change all that by putting our education on TV because of skills shortages or any other broadband medium. Don't you think we need a national communications policy?

RICHARD FLORIDA: I certainly think you're right about education and it's interesting, since we had a very long conversation about this today, about skills and skills shortages. We need an education system for the creative age, not an education system for the industrial age. I love being in university but most of my days I spend banging my head against this podium and we're not set up. We're set up to generate skills that are applied in traditional industrial settings. That's what we're set up to do. We're not set up to teach people how to be creative. In the book, in the last chapter of the new book, we talk about what a creative education system would do and it would enable people of very different learning styles. Not just rich kids who've been trained how to read and do mathematics, but all kinds of kids and kids with different learning styles and people with different styles, their creativity can be harnessed

You know, it's great that there's a professor up in front of the class who lectures ….it's somehow like books weren't invented and there was no internet and no way to move material around on your computer. We need an education system that moves away from this mass production system and actually allows people to learn the way we really learn, which is by engaging and doing.

Q:Do you believe Australia's biggest export is people and (do you think) Australians will (increasingly) return or stay overseas for different lifestyles?

RICHARD FLORIDA: Well, I actually think it’s not a brain drain but brain circulation . I think one of the reasons I like this place a lot is not only because there's some nice water and it's sunny, it’s actually because I feel very at home here and I think the reason I feel at home here is not simply because we share a language. It's actually because Australians know what it's like to be a stranger. Like in Pittsburgh where I lived, no one had ever left Pittsburgh - ever - so you could never make a friend because they had their friends that they grew up with since they were knee-high, but many people here - not everyone, but many people here - have travelled and they know what it's like to be an outsider or a stranger.

So I guess what I'm saying is the ability to circulate people into the world but bring them back, and maybe not forever, maybe to circulate people in and out ( is useful).

What the Canadians have given us in North America is the break with this ridiculous concept of a melting pot, this notion that we have a melting pot society where everyone shares the same attitudes. The Canadian construct, which I'm sure you're familiar with, is that of a mosaic society where each person and each different kind of person can come and bring their cultural and ethnic and sociological and sexual orientation and lifestyle attributes and still be quite welcome. This idea of a mosaic society is a very powerful tool and I believe one of the key organising principles for the creative age.

Q: I'm curious - with your book - to pursue one of the lines that came up, which was that you're in the creative class as long as you're not black.

RICHARD FLORIDA: Well, the new book deals with issues of income and equality and housing affordability and the class divide in society and I think it's not even a racial thing. What we're doing is dividing - I think this divide is as palpable here as it is in the United States, let me be quite frank. Your society is dividing into a set of creative economies and a set of places being left behind and I'll bet that is reflected in the increased level of political polarisation you may observe here.

So I think it's really a class divide, not just a racial divide, although there's a strong racial component to it. Talk about African-Americans in my own country, they're arguably the most creative group of people in the United States. So it's not just a discriminatory thing and it's not just something that's morally unjust, it's just plain stupid. It's just plain stupid to say that we would somehow suppress that when it is such a part of our cultural and creative energy.

Q: I'm very encouraged to hear what you say because I think that we are starting to see people encouraged and involving themselves in the arts. However, it is still true I think that it's electorally not seen as very important; there are no votes in it and so frequently the arts sector finds itself outside the main game. My question to you is: How do you see that shift in values really taking place because there is tons of talent in this country in artistic life and yet perennially I think the arts world would say it's a great struggle getting the resources together to keep building a healthy and viable artistic life here.

RICHARD FLORIDA: Well, three quick responses: One is that one of the things you have to do in addition to being an open society and having a creative education system, in addition to those two things which we talked about, is you've got to build your creative infrastructure …. Create an Office of Creativity. I mean it's absolutely necessary. The whole thing about science, engineering and innovation and splitting-off the scientific and innovative creative people from artistically creative people is (ridiculous). Create an office of creativity. That means that the arts and culture have to get the level of investment that the sciences and engineering get because they're an important part of that. You know, it doesn't matter how good the stuff works, if it's not artistically and culturally and aesthetically engaging, no one is going to buy it. No one is going to buy it. So it's not just for an arts world sake, it's from an economic growth point of view as well as for an arts world sake.

The other thing is that art and culture and creativity is very threatening to certain people and I think that's what's happening. There is a huge reaction. What did the critics of my work say? These are not critics on the right, these are mainstream Democrats - mainstream Democrats - who said Florida promotes an agenda which is pro-yuppie, pro-artsy bohemian and pro-gay, and what we need to do is attract the suburban family back to our party. My response is: are you, crazy, to make that exclusionist argument? But I think to many people in the more conservative part of the world, they see the arts as threatening. They see the arts as somehow undermining the existing order.

The case that we have to make for the arts is that the arts can be part of this more inclusive, proactively inclusive creative society, and that means it's not only arts for an elite. The great person who understood this better was our great mayor of Chicago, Richard Daly, who said: I'm not only going to support the downtown arts and the high culture, I'm going to make sure that every low income African-American neighbourhood has a theatre and an arts group and an arts troupe and musical support and I'm going to democratise it, so that's what I think we need to do and make the arts something that many, many more people and creativity can gather around because, if not, you're only going to suffer more and more cutbacks because people who are in power see this increasingly as threatening.

Q: You were talking about three Ts as a measure of success and things that we need to focus on. The technology T for Australia, whether it's biotech or whether it is some other form of technology, the problem to me appears to be that the infrastructure that finances that technological innovation here especially says the market here is too small to justify the risks associated with spending all this money, so we need to move it offshore and usually it means if you can't cut it in the US then it's not going to work. So your suggestions for how we change the view or the attitudes of the venture capitalists, the equity people who might otherwise support great innovation here?

RICHARD FLORIDA: Well, this is changing quickly and, as I mentioned today, I don't know how we're going to do biotechnology in the States if we can't do research on stem cells. I mean Harvard is literally going to have to move its biotechnology research stuff. If Governor Romney has a ban on stem cell research at Harvard that means either Harvard is going to not do stem cell research and lose every one of its good people because their good people aren't going to sit there and say, "I'm going to twiddle my thumbs", they're going to go where they can do the research. I think the research and scientific climate in the United States has tipped. It can come back, sure, but I think the rules that held for the '80s and '90s where the United States attracted the best and the brightest, had an open immigration policy, went after the best Indian, Chinese, European, Australian, Kiwi scientists in the world and stuck them all in the San Francisco Bay area and the Boston area, is over.

I can tell you, and I reported this today to IT people working on stuff here: Graduate students don't want to stay in the United States any more. I teach them. They want to get out. And I'm not just talking about Americans, I'm talking about the people who really matter, the Indians, the Chinese, the Europeans. I mean the US industry is not US people. Even the venture capitalists are not Americans any more, they're Indians and Asians and people who migrated, so that's tipped and the question is: Where can you create that ecosystem now?

Well, it might be Canada; it might be Australia; it might be Ireland; it might be Scandinavia. What I said today, I think the big advantage here is, even though you're a small country, if you look at the axis of technology in the world the axis of technology in the world tends to be in Asia and if you look at the technology make-up of the world stretching from San Francisco and LA across the Pacific, instead of the other way, then Australia is in a very good position and I would say as a global talent magnet for scientific and technical and artistically creative talent because in Asia, with all due respect, you're about the only open economy there is, so you have a very nice sweet spot. If you look at trends in foreign students, even our leading universities are now saying we're losing our top students to the UK, to Canada - our top foreign students - and to Australia. So it's changing fast.

Q: I've worked in the not-for-profit sector for the past 15 years and I think that the not-for-profit sector is a talent magnet where using your three Ts - technology, talent and tolerance - is just a given. What do you see as the importance of the not-for-profit sector wherever in the future?

RICHARD FLORIDA: The not-for-profit sector is the hub of the creative economy. We used to think it was business and private corporations. The places that generate this creative energy, a ton of that infrastructure - not all of it but a large and substantial percentage - is non-profit and I'm not going to talk even about the social agencies, which they're fabulous missions, but in technology and science most of it occurs in the non-profit sector. Not all of it, there's great stuff that goes into companies, but most of it in the universities and hospitals and research institutes and in the arts and culture sector I think it is pretty much a non-profit environment.

So as Peter Drucker said, the future of the knowledge-based society - he calls it knowledge-based and I call it creative - a large part of that rests in the non-profit sector. I believe that creative people are motivated intrinsically and from within, but part of the challenge is to make pay better in the non-profit sector so that people who want to work in the non-profit sector can do so and have career growth. Certainly in our economy the rates of pay are grossly - I mean much bigger than here - grossly different.

So what happens is people get excited about it, they want to do it and then sooner or later they have a family and go, oh my God, I've got to pay my bills. You know, we can suck up a lot of wealth in the creative economy working for companies and finance and venture and high tech and even academia, but sooner or later we're going to have to figure out ways to allow more and more people to share in the productivity and affluence that the creative economy brings, in a non-profit sector.

Q: My question was more a request for comment as well. With the emergence of the creative economy and so forth it seems to be very much aligned with generation X, Y, Z, baby boomer, et cetera. Is there any sort of generational study or relationship between what you're talking about and those factors and also, the second sort of part of the question is, with unemployment being so low in Australia, the war for talent is seriously on. How do you marry up, I guess, where the convincing needs to happen in the real economy?

RICHARD FLORIDA: Well, I think both your comments or questions are on point. Clearly in the long run we're in much better shape because if you look at any surveys of attitudes and values among young people, and by young people I mean people who are about twenty years younger than me, so in their 20s, they are much more in line with gay rights, diversity, openness than people in my generation and the generation above.

Now I've not done research on this, but there's a great book by a guy named Leonard Steinhorn, he's a professor in the United States, it's called The Greater Generation, and what he reveals in that book is that actually the real thing that the baby boom generation did was open up the space, have - what did we used to call it? A generation gap we used to call it in the '60s, you know, with these very conventional or traditional values and open up space for younger people to very much pursue their dreams and to be who they want to be, regardless of what their sexual orientation, ethnicity, gender happens to be, and he argues in that book that the baby boom has a lot more in common with generation X and Y and much less in common with this older group.

Not to make an ageist argument, but if you look at the people who get this, not only young people. Lots of women get it, gay people get it, African-American people get it, but there's a group of people who don't get it and in my humble words in my book I call them the squelchers. And really what happens in any town, as my idol and mentor Jane Jacobs told me, what happens in any town is that lots of people are creative and lots of people want to see these changes happen.

Lots of people want to make this happen because we'll all have this creative energy, and then we come to the squelchers who I think were the second group of people you mentioned who say: We can't do it this way; no, that's not part of our values; that's not the way it's done in Pittsburgh, Melbourne, Sydney Australia, Brisbane The more you can move the squelchers out of the way or go around them, the more successful you will be and in that sense you can accelerate this because I really believe that it is not enough to just wait for them. I moved to Washington DC because I don't believe it's enough to wait for them to go away. I think you have to actually voice your concerns or else they may not go away.

Lord knows, I'm going off, Lord knows I never thought this would happen. As an American, I never in a million years could believe what has happened in my country could happen, so when the squelchers get control of stuff they can do a lot of damage in a hurry, but it's very much incumbent upon all of us to make our voices heard and to cultivate that broader support, especially among younger people.

Q: I want to ask you about the place of national culture in your argument. What constraints do you see on your argument, given for example, a fairly nationalist view coming out of the People's Republic of China? What about nationalism and culture?

RICHARD FLORIDA: This is when I get really nervous, and not because of your very appropriate question, I mean when a new economic system emerges with this kind of disruptive force. We're in a world economy where not only capital and investment in goods flow but where people flow, and people are flowing like never before across borders and between countries. When that happens a counterforce emerges and in the United States that counterforce is Samuel Huntington.

I think your point is very much on target and the issue is this nationalistic response, which is not only in China but it's clearly in the Middle East - hello - it's clearly on the rise in the United States, we are becoming an incredibly nationalistic country. It is very terrifying because in an age where we could be much more globally connected and globally prosperous and part of a global community, at that very moment these forces of nationalism are reasserting themselves… ..Now let me tell you what the positive side is. What I see as so positive.

We're going through the greatest economic transition of the past 500 years. We haven't yet had a world war because of it. The major advanced countries aren't pointing nuclear arms at one another and, sure, what's happening now is tragic and we have to stop it. The advanced countries should just stop killing people. We can't do this. Morally and economically and socially it's completely unacceptable. But still given the transformation we are going through we don't - we're not looking at mutual annihilation.

In that sense, I'm amazed that our national cultures are adapting as well as they are, so at the same time that I agree with you …. what keeps me getting up every morning and going to work and having these talks is the fact that our national cultures seem adaptive enough, hopefully adaptive enough, and if we have leadership in countries like your country or Canada, and hopefully in my country again, which says that a national culture can absorb people from the world, I think we've got a hopeful future because the other one is too much of a nightmare for me to even imagine.

Venue

Four Seasons Hotel, 199 George Street, Sydney