Kevin Stolarick Innovation in the Creative Age: Why Tapping Everyone’s Creative Potential is Vital.

Kevin Stolarick

Innovation in the Creative Age:

Why Tapping Everyone’s Creative

Potential is Vital

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1. The Rise of the Creative Class2. Ontario in the Creative Age3. Innovation across the Board4. Benchmarking Ontario & Hamilton5. Connectivity and the Mega-Region

Brief Overview

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The Rise of the Creative Class

Understanding Economic Activity

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Understanding Economic Activity

Regional (Smith, Marshal)

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Understanding Economic Activity

Regional (Smith, Marshal)

Industrial(Porter)

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Understanding Economic Activity

Regional (Smith, Marshal)

Industrial(Porter)

Education, Skills(Glaeser)

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Understanding Economic Activity

Regional (Smith, Marshal)

Industrial(Porter)

Education, Skills(Glaeser)

Occupational(Florida)

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Understanding Economic Activity

Regional (Smith, Marshal)

Industrial(Porter)

Education, Skills(Glaeser)

Occupational(Florida)

BOTH

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Knowledge to Creativity

•Knowledge•“Human Capital”•Education Levels•Regional Stock

•Creativity•Creative Capital•Occupations•Regional Flows

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Why Occupations?

•Among all people who either work in the IT industry or work in an IT occupation (or both):–50.2% work in an IT occupation but not in the IT industry–25.7% work in the IT industry but aren't in an IT occupation–Only 24.1% work in an IT occupation in the IT industry

IT IndustryIT Occupations

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What is it about Pittsburgh?

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The “4Ts”

Technology

Regional Growth

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The “4Ts”

Talent

Technology

Regional Growth

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The “4Ts”

Talent

Tolerance(Inclusiveness)

Technology

Regional Growth

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The “4Ts”

Talent

Tolerance(Inclusiveness)

Technology

Territory Assets(Amenities)

Regional Growth

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The “4Ts”

Talent

Tolerance(Inclusiveness)

Technology

Territory Assets(Amenities)

Regional Growth and

Prosperity

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What is the Creative Class?

What You Do (Job Occupation)

vs.

Where You Work (Industry)

10 Year Job Growth Estimate• Working Sector 10%• Service Sector 14%• Creative Sector 20%

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Who Works in Creative Class?

Creative Class: TAPE

T = Technology and R&D Innovation

A = Arts and Culture

P = Professional and Managerial

E = Educating and Training

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U.S. Creative Class

•30 (% of the workforce)•40 (million people)•50 (% of the wages)•70 (% of the discretionary income)

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The Rise of the Creative Class

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The Rise of the Creative Class

Creative

Service

Working

Farming

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U.S. Creative Economy

Knowledge Service Working

Workers (Talent) 40,379,520 59,769,270 31,949,350

% of Workforce 30.5% 45.1% 24.1%

% of Wages 48.8% 30.4% 20.6%

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Who are the 40,000,000?

Occupations Workers Salary ($B)

TComputer and mathematical 3,076,200 213.0

Architecture and engineering 2,430,250 160.9

Life, physical, and social science 1,231,070 73.4

Healthcare practitioners and technical 6,713,780 416.5

A Arts, design, entertainment, and media 1,727,380 79.6

PManagement 5,892,900 541.7

Business and financial operations 5,826,140 349.6

Legal 976,740 83.4

Sales and related occupations 4,298,620 147.7

E Education, training, and library occupations 8,206,440 371.9

Total 40,379,520 2,437.7

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U.S. Creative Growth

Occupations Growth (20042014)

New Jobs(000; by 2014)

T

Computer and mathematical 30.7% 1,389

Architecture and engineering 17.1% 876

Life, physical, and social science 16.4% 531

Healthcare practitioners and technical 25.8% 3,047

A Arts, design, entertainment, and media 14.9% 851

P

Management 11.3% 2,757

Business and financial operations 19.1% 2,163

Legal 15.9% 336

Sales and related occupations 9.6% 408

E Education, training, and library occupations 20.0% 3,558

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Canada & Ontario’s Creative Economy

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Share of creativity-oriented jobs is increasing

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-Creative jobs are more common in larger cities-Eastern Ontario somewhat higher mainly due to Ottawa

Creative Ontario

34.7%

37.5%

37.0%

43.9%

26.4%

26.6%

26.0%

27.8%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

Ontario

Eastern Ontario

Ontario

Eastern Ontario

Ontario

Eastern Ontario

Ontario

Eastern Ontario

TO

TA

LC

MA

CA

RU

RA

LPercent of labour force

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32

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Creative Jobs as a Percent of Total Employment

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Service Class Jobs as a Percent of Total Employment

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Working Class Jobs as a Percent of Total Employment

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Agricultural Jobs as a Percent of Total Employment

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Ontario in the Creative Age

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Ontario Government asked Roger Martin and Richard Florida to…

• Undertake a study of the changing composition of Ontario’s economy and workforce

• Examine historical changes and projected future trends affecting Ontario

• Provide recommendations to the Province on how to ensure Ontario’s economy and people remain globally competitive and prosperous

Ontario Budget, March 2008

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This Work Was Completed by....

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Ontario’s distinctive advantage can be created through actions on four fronts

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Harness the creative potential of Ontarians

• Increased creativity in all jobs

• Be the world’s first jurisdiction where creativity-oriented occupations account for half of all jobs

• Strengthen creativity skills through our education system

• Market Ontario as a creative province

• Make diversity a cornerstone of economic prosperity

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Share of creativity-oriented jobs is increasing

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New jobs will be in creativity-oriented and routine-oriented service occupations

Ontario has less creative content than US peers in 36 of 41 clustered industries

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Nearly 80 percent of jobs in Canada are in services industries

Unemployment is higher in routine-oriented occupations especially in early 90s recession

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Broaden our talent base

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•Make Ontario the talent province

•Strengthen our managerial capacity

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Workers draw on three sets of skills

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Earnings rise with increases in occupations’ analytical skills

Earnings rise more with increases in occupations’ social intelligence skills

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Earnings do not rise with increases in physical skills

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Ontario under values increases in analytical and social intelligence skills

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Clustered industries draw more on creativity-oriented occupations than dispersed industries

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Creativity-oriented occupations in clustered industries generate highest earnings

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Establish new social safety nets

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•Make early childhood development a high priority

• Invest in skills development for recent immigrants

•Consider wage insurance for longer tenure workers

Wage differences are much less prevalent in Ontario than in peer states

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Returns to investment are highest for early childhood development

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Build province-wide geographic advantage

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•Make the mega-region as strong as it can be

• Invest in connectivity

Ontario out performs US peers on Tolerance but under performs on Talent and Technology

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Workers in creativity-oriented occupations are concentrated in small number of city regions

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Harness the potential of the mega-region and connect the disconnected parts of Ontario

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Innovation across the Board

Innovation Cycle (one of many)

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UniversitiesGovt LabsR&D LabsGaragesSupply

FamilyFriendsFoolsAngelsVCDemand

DesignManufacturingMarketingConsumersReal Product

Innovation Success: Balanced

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• Innovation does not come from technology– Except in Terminator movies

• Innovation comes from talented, skilled people– In the “Creative Class”– Not the entire group

•People are mobile

•Success balances new and needed– “the new” – e.g., Apple– “the needed” - e.g., Medical Devices

The Source of Innovation

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Self-Employed

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•Getting to 50% Creative• “Industry Agnostic”•Creativity is not Industry-specific•Service Class (low wage)– Increase value of work– Learning from

– The Four Seasons– Best Buy– Toyota– Others

Innovation for All

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Benchmarking Ontario & Hamilton

Benchmarking Ontario (and its Regions)

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Ontario

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Technology

“A high technology base is both a necessary condition for and a result of a region having a strong creative economy.

Being known as a "high-tech" region helps to attract the creative workforce, which, in turn, generates new technologies making the region even more high-tech.”

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Technology

• High Technology:–Concentration of high-tech

companies–Growth of high-tech companies–Tech-Pole (North American)

• Innovation:–# of patented innovations per

1,000 people–Growth in patented innovations

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Ontario

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Talent

“The concentration of people in the Creative and Super Creative Classes, has a stronger relationship with economic growth.

Creative people don't just cluster where the jobs are. They cluster in places that are centers of creativity and also where they like to live.

Places need a people climate -- or a creativity climate -- as well as a business climate.”

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Talent

• Talent Index (Bachelors Degree and above)

• % Super Creative (scientists,engineers, artists, musicians, designers)

• % Knowledge Workers(super creative + professionals)

• Brain Drain/Gain Index (BDGI)

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Ontario

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Tolerance / Inclusiveness“Diversity has become a politically charged buzzword. To some it is an ideal and rallying cry, to others a Trojan-horse concept that has brought us affirmative action and other liberal abominations.

Creative Class people use the word often, but not to press any political hot buttons. Diversity is simply something they value in all its manifestations.”

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Tolerance / Inclusiveness

• Mosaic Index (% foreign born)

• Gay/Lesbian Index (% gay & lesbian population)

• Boho Index (% culturally creative)

• % Visible Minority• % Interracial Marriage• Composite Diversity Index (CDI)

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Ontario

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Territory Assets

“What Creative people look for in communities are abundant high-quality amenities and experiences, an openness to diversity of all kinds, and above all else the opportunity to validate their identities as creative people.

Places are valued for authenticity and uniqueness … Authenticity comes from several aspects of a community … It comes from the mix … Authenticity is the opposite of generic.”

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Territory Assets (Quality of Place)• Economy/Growth• Housing• Culture• Climate• Education• Healthcare• Recreation• Dis-amenities

– Crime, Weather

• Transportation– Connectedness

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Benchmarking Ontario’s 15 Metro Areas (CMAs)

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Hamilton CMA

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Technology“A high technology base is both a necessary condition for and a result of a region having a strong creative economy.

Being known as a "high-tech" region helps to attract the creative workforce, which, in turn, generates new technologies making the region even more high-tech.”

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Talent“The concentration of people in the Creative and Super Creative Classes, has a stronger relationship with economic growth.

Creative people don't just cluster where the jobs are. They cluster in places that are centers of creativity and also where they like to live.

Places need a people climate -- or a creativity climate -- as well as a business climate.”

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Tolerance / Inclusiveness“Diversity has become a politically charged buzzword. To some it is an ideal and rallying cry, to others a Trojan-horse concept that has brought us affirmative action and other liberal abominations.

Creative Class people use the word often, but not to press any political hot buttons. Diversity is simply something they value in all its manifestations.”

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Creativity Index“The key to understanding the new economic geography of creativity and its effects on economic outcomes lies in the 3T's of economic development: Technology, Talent, and Tolerance.

Each is a necessary but by itself an insufficient condition: To attract creative people, generate innovation and stimulate economic growth, a place must have all three.”

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Creativity Index

• Technology

• Tolerance (Inclusiveness)

• Talent

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Connectivity & Mon-Tor-Loo (Tor-Buff-Chester)

“Urban” Policy

Urban policy

is not

social policy.

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“Urban” Policy

Urban policy

is not

social policy.

Urban policy

is

economic policy.

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“I can see the cities...”

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Tor-Buff-Chester?

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GGH Creative Class

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•Be Big•Look Big•Innovation & City Size (Santa Fe Institute)•“Middle child”–Bos-Wash–Chi-Pitts

•Speed flow of–People–Products– Ideas

Mega-Region & Connectivity

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1. The Rise of the Creative Class2. Ontario in the Creative Age3. Innovation across the Board4. Benchmarking Ontario & Hamilton5. Connectivity and the Mega-Region

Review

• Innovation• Creative Age• Tapping• Everyone’s• Creative Potential• Is Vital

Summary

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Thank You

Kevin Stolarick

kms@rotman.utoronto.ca

www.martinprosperity.org