Best of CoBiz: The creative class

Richard Florida became well-known with his book The Rise Of The Creative Class, which paints a picture of changes in the makeup of our society that are having profound effects on the way we work and live. He divides our society into three main sectors: manufacturing, service and the creative. Each sector is experiencing changes which will provide opportunity for some and challenges for others.

The Manufacturing Sector
We all know about the manufacturing sector: Jjobs are moving away from traditional manufacturing sectors to new parts of the world in search of lower production costs. This sector includes occupations in manufacturing, construction, transportation and repair and maintenance.

In the last 20 years in the U.S., we have seen the manufacturing sector decline from 17.3 million jobs to about 11.6 million today, a decrease of 33 percent. Today the manufacturing sector accounts for 9 percent of total non-farm employment. Many of these jobs have been replaced by technology and lower cost labor in foreign lands.

In the Florida model, the manufacturing sector will continue this trend and they will become increasingly susceptible to general economic swings. The US is still a manufacturing powerhouse and until just recently accounted for the largest percentage of world manufacturing output, a position now held by China (19.4 percent vs. 19.8 percent). This sector which for generations built the American middle class is becoming less of a factor in our economy and the world.

The Service Sector
Florida’s view of the economy includes a service sector that he describes as “low end, typically low-wage and low-autonomy occupations…food service workers, janitors, groundskeepers, personal care attendants, secretaries and clerical workers”. This sector has been growing rapidly and is a major part of our economy.

A quick look at some key service sector statistics shows that in the last 20 years that administrative and waste services, administrative and support services, and temporary help services have grown by 39.5 percent, 39.7 percent, and 48.2 percent respectively. Employment in these areas of the service sector decreased 9.8 percent, 10.2 percent, and 15.6 percent in the period from January 2008 to January 2011 where total employment reached its high versus a decrease of 7 percent for total US private employment.

Many people engaged in the service sector use these jobs as a stepping stone to move into the creative part of the economy. Service workers are subject to the volatility in the economy and are the first ones to go when the economy turns down but they may also be the first ones to be hired when the economy turns up.

Not all is bad for employees in the service sector. Florida cites companies such as Zappos that has turned service jobs into stable, rewarding and long-term careers. He argues that we need to figure out a way to make service jobs pay better by increasing service sector productivity much in the same way we grew our manufacturing productivity in the 1980’s – an interesting idea and challenge!

The Creative Sector
The creative class consists of creative, good paying, rewarding jobs that are growing in numbers and are less susceptible to swings in the economy. By Florida’s estimates, the creative class now accounts for over 30 percent of the total workforce an increase from 25 percent in 1991.
When one thinks of the creative class, artists and musicians come to mind but it is much, much more. The creative class consists of workers in:

• Science and math
• Engineering, software and architecture
• Education, training and libraries
• Management, finance, technical
• Legal and accounting
• Healthcare
• And of course, artists, designers, entertainers and the media

In the last 20 years, employment in education and health services, computer systems and design, management and technical consulting services, performing arts and spectator sports have grown 42.9 percent, 72 percent, 69.3 percent and 30.3 percent respectively. In the period from January 2008 to January 2011 employment for these occupations changed +6 percent, +3.2 percent, +2.4 percent and -2.2 percent respectively versus a 7 percent decrease in total US private employment.

In Florida’s view, the creative class will be the key drier in the future to make a growing and vibrant economy. His model is fairly simple, creativity breeds innovation, innovation breeds entrepreneurship and entrepreneurship creates jobs. Florida developed an index of creative areas in the U.S., and Colorado ranks in the top 10!