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March 8, 2009
Richard Florida in How the Crash Will Reshape America in The Atlantic updates his creative economy account in the context of the global financial and economic crisises. He says:
Economic crises tend to reinforce and accelerate the underlying, long-term trends within an economy. Our economy is in the midst of a fundamental long-term transformation—similar to that of the late 19th century, when people streamed off farms and into new and rising industrial cities. In this case, the economy is shifting away from manufacturing and toward idea-driven creative industries—and that, too, favors America’s talent-rich, fast-metabolizing places.
By talent -rich, fast-metabolizing places Florida means well-educated professionals and creative workers who live together in dense ecosystems, interacting directly, generate ideas and turn them into products and services faster than talented people in other places can. Places like New York with finance and media, Los Angeles with film and music, and Silicon Valley with hightech are all examples of high-metabolism places are examples.
With reference to the US Florida says that the financial/economic will likely find its fullest bloom in the older, manufacturing regions whose heydays are long past and in newer, shallow-rooted Sun Belt communities (the Gold Coast in Australia) whose recent booms have been fueled in part by real-estate speculation, overdevelopment, and fictitious housing wealth.
Florida says that the Rust Belt in particular looks likely to shed vast numbers of jobs, and some of its cities and towns, (from Cleveland to St. Louis to Buffalo to Detroit in the US) will have a hard time recovering, then adding
This decline is the result of long-term trends—increasing foreign competition and, especially, the relentless replacement of people with machines—that look unlikely to abate. But the job losses themselves have proceeded not steadily, but rather in sharp bursts, as recessions have killed off older plants and resulted in mass layoffs that are never fully reversed during subsequent upswings.
The implication is the challenge that many Rust Belt cities share is managing population decline without becoming blighted. The task is doubly difficult because as the manufacturing industry has shrunk, the local high-end services—finance, law, consulting—that it once supported have diminished as well, absorbed by bigger regional hubs and globally connected cities.
Will cities like Adelaide subsist on tourism and on the pension checks of their retirees? Its option, like Pittsburg, is to redevelop its core to attract young professionals and creative types, and by cultivating high-growth services and industries.
This depends on how it makes the transition to the new economy. The economy no longer revolves around simply making and moving things---it depends on generating and transporting ideas. The places that thrive today are those with the highest velocity of ideas, the highest density of talented and creative people, the highest rate of metabolism. Velocity and density are not words that many people use when describing the suburbs. The economy is driven by key urban areas; a different geography is required.
Florida argues the coming decades will likely see a further clustering of output, jobs, and innovation in a smaller number of bigger cities and city-regions. Consequently, properly shaping that growth will be one of the government’s biggest challenges. This means, for Florida, needing to ensure that key cities and regions continue to circulate people, goods, and ideas quickly and efficiently.
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We heard a lot of this old/new economy stuff 20 years ago. Back then Victoria was widely predicted to have the ghost towns of the future.
Sure innovation will be important in future - it has been for 150 years; being slow to adapt to electricity, the automobile, refrigeration and the telephone didn't exactly reward firms that refused to change - but only a comparatively small number of people will be employed in those kinds of worklaces. Most will work like they do now, in service industries like health care, education, aged care, child care, construction and retailing.
All these activities thrive in urban environments which is why the cities of the world will just keep getting bigger and bigger, even as plants that make things disappear offshore. Which is not to say there won't be some relocations here and there but they won't have a significant impact on the general population.