The Effects of the Creative Class on Economic Development

 “Arts and culture are essential to attraction and retention of talent,” said Bruce Katz, Vice President and Founding Director of the Metropolitan Policy Program at the Brookings Institution during his opening remarks. The event — jointly hosted by Brookings and the National Endowment for the Arts (NEA) — was titled “The Arts, New Growth Theory, and Economic Development.” A group of prominent economists and academics presented research papers delving deeply into various data to shine a light on questions around the “creative class” and its effects on economic development.

Does a vibrant cultural landscape attract and retain a talented workforce? Do arts and culture spur economic growth or does economic growth spur arts and culture? Do “creative clusters” have an effect on business innovation? The research attempted to answer these questions, but some of the studies were more conclusive than others. Here are a few of the insights that I gleaned:

Professor Bob Root-Bernstein of Michigan State University presented a study showing that science and technology professionals are much more likely to also practice arts and crafts than the general public. The research also suggested that investing in arts and crafts builds innovative and entrepreneurial capacity over a lifetime. That study — combined with one presented by Professor Stephen Sheppard of Williams College which showed that wealthier, more highly educated people tend to be more supportive of the arts — suggests that talented workers, whom business so desire, demand a vibrant cultural landscape and thus want to live in places where that landscape exists. PDFs: Slides | Paper

The chicken-or-egg question of whether arts and culture spur economic growth, or vice versa, came up repeatedly over the course of the day, but there was no conclusive answer. Perhaps it’s a virtuous cycle in which artists blaze new paths that lead to growth in marginalized urban areas, and cultural programs help to attract a talented workforce so essential to growing businesses, while at the same time the wealth generated by economic growth creates new cohorts of arts enthusiasts willing to support culture in their community.

In both Boston and Chicago I’ve lived in neighborhoods that evolved from the margins to hot-spot over a number of years, and in both cases this began as artists moved in for the affordable live/work space. Eventually galleries sprouted up, then cafés and boutiques, and inevitably chain stores and loft condo-conversions. This phenomenon can be seen repeatedly across many cities. There are of course downsides to this sort of gentrification, but that’s a topic for another time.

Assistant Professor Jenny Schuetz of the University of Southern California spoke about the SoHo and Chelsea gallery clusters in New York City. Her study fell short of pointing to artists as the initial drivers of those developments, but it seems clear that SoHo was one of those locations to which artists came looking for affordable live/work space in the early ‘70s. Chelsea’s development was apparently driven by the need for larger spaces to store artworks. The vast amount of affordable warehouse space was first used for storage and then began to open up to the public as gallery space. The combination of those galleries and the new Highline trail — an architectural and urban design marvel built on an old raised train bed — has turned Chelsea into another one of those hot-spots, as fabulous new restaurants and shops flock to the new destination. PDF: Paper

Mr. Katz took the concept of culture as trail-blazer a step farther by suggesting that cultural exchange between cities is critical as a platform that can lead to broader trade. World Business Chicago recently gave life to this idea when some of our business development directors traveled to Moscow in partnership with the Chicago Symphony Orchestra (CSO) in order to make business connections. The CSO’s immense cultural stature made the international inroads that gave our business ambassadors a firm platform to work from.

Then there’s the innovation question. Rocco Landesman, Chairman of the NEA, in his opening remarks said that Mr. Katz was one of the first people he met with upon his arrival in D.C. and was excited that they found a way to collaborate on this event in order to underscore the relationship between the arts and the “real world.” The crowd chuckled as Mr. Landesman alluded to the fact that the arts and artists are often not taken seriously as economic drivers. The popular perception of artists is that they don’t like or understand business. In reality though, artists are entrepreneurs by necessity, and if not running their own creative business, they’ll often wind up as embedded creative professionals working in industries outside a creative cluster. As Creative Director at an economic development agency, I would consider myself in this category.

But what does constitute a creative cluster anyway? Designers often develop new products as entrepreneurs at innovative startup businesses that wouldn’t necessarily be seen as part of a creative cluster. Aren’t the software coders developing new tools not also creatives?

According to Alan Marco, Deputy Chief Economist at the
 U.S. Patent and Trademark Office, 5% of inventors are also designers, while 40% of designers are also inventors. I found this to be an interesting stat, but in the end, both designers and inventors are innovators. They’re ideas people looking to solve problems. They have the potential to create the products of the future. This cross-talk between creative clusters and other industries is part of an innovation ecosystem that will lead to future economic growth.

Mr. Katz also pointed out the impact that visual design has had on our everyday lives over the past few years. Perhaps the most evident example of this is in the powerfully simple user interfaces that Apple builds in to their extremely popular devices. But this aesthetic is seeping into every area of design as the public becomes increasingly accustomed to aesthetic and functional beauty. Products should make life more pleasant. The technology behind it should be transparent.

Since the opportunities for creative problem solvers seem to be growing exponentially, we’d be wise to prepare the workforce of tomorrow to think creatively. Unfortunately, it seems that more often than not, our current educational system rewards those who learn standardized test answers more than those who develop their own questions.

Clearly, creatives play a big role in driving economic growth, but there’s been very little research done in this area, which is why this Brookings/NEA event was so interesting. All of this original research taken together shows that the study of culture’s affects the economy is an important one. Some of the research presented seemed inconclusive but there was one common theme among the presenters: this it just the beginning; much more work needs to be done in this area.

Video and audio recordings of the entire event are available online ->