Richard Florida – The Role of Great Cities

January 19, 2013

Once again, the Abu Dhabi campus of New York University has convened an excellent presentation and I was one of the fortunate few who was able to attend, bringing a couple of friends from Dubai with me. Richard Florida is an urban theorist that I have followed since he published The Rise of the Creative Class when I studying for my Masters. A gifted orator; he was able to hold the attention of the audience for more than an hour without notes or powerpoint slides before following up with answering questions.

His talk was on the role of cities in powering economic development. The world has crossed a threshold and now more than half the global population live in cities. Soon it will be three-quarters. Urbanisation will be rapid with fewer resources than current cities. He posed and then repeated that the grand challenge of our time is to work out how we can tackle this next wave of urbanization and build the next wave of great cities.

Economic growth is based on 1) technology 2) knowledge as the accumulation of human capital and 3) urbanization. Florida made a point about Thomas Friedman’s thesis of the world being flat. While the world may be flat for simple business processes and manufacturing that could occur anywhere, knowledge development requires people to cluster together and this occurs best in cities. The world has actually become spikier with the people living in cities anywhere in the world more alike than ever. However, the people outside cities are very different.

Cities derive their economic power as the speed up the pace of life. The needs of cities have a faster metabolism than other places. Mega regions that combine cities have increasing importance. It is not just Mumbai but the region between Mumbai and Bangalore. The 40 largest ones in the world only have 18% of the world’s population but generate two-thirds of the economic output and 90% of the world’s innovations. In this instance, Dubai and Abu Dhabi (and the other emirates up to RAK) form such a megalopolis.

Florida also discussed how Michael Porter’s and the approaches of other classical economists around the theory of the firm might be fine to drive efficiencies and create cheaper goods, but they are not suitable for creating new work where technological innovation is required. This needs cities to effectively function. The industrial revolution created wealth through physical assets and where location was important. Policy in this period tended towards investment attraction where transparency, favourable tax arrangements and good infrastructure were important. It is about helping firms rather than cities. Cities need a good people climate to attract and retain talent and the main talent cluster is universities. But great cities also need energy as the creative class can pick where they want to live. They want economic and civic and social opportunities; a place which Florida termed a mating market! Not all clusters or areas of technological development function effectively. Cities need a buzz – an energy which comes from these opportunities.

Florida spoke of his three T’s of technology, talent and tolerance (the latter is an openness and diversity with arts/bohemian lifestyles that generate the spark within cities). He added a fourth that I had not heard of before which is quality of place (note not quality of life). Universities are a hub for that and quality of place is about generating an idea capital. Quality of place is about what is there (natural factors and built environment), who is there (those artists and bohemians again that provide the spark) and what is going on (which creates the energy).

Florida then talked about how great cities have a hierarchy of needs. At the bottom is basic opportunity through the labour market and then basic services of infrastructure and safety. Town planners are very good at succeeding in developing these factors. But beyond these basics are valuing openness and diversity (his third T of tolerance) and then at the apex, an aesthetic character of place (his fourth unnamed T). He quoted Jane Jacobs many times – such as new ideas require old buildings so you have to look for the authentic.

In responding the questions, Florida mentioned that Abu Dhabi and Dubai are wonderful living experiments in city building. They have the ability to leverage off each other by being complementary. If Abu Dhabi and Dubai wish to attract and retain talent then they need to change the mobility of the workforce so that people don’t just live in the city for 4 or 6 or 7 years but will gain permanence and emotional attachment to the city.

Since the presentation, I have been thinking about the approach of Dubai and Abu Dhabi towards this topic. They are indeed complementary with differences in business approach. Abu Dhabi has large amounts of public resources through oil wealth that can be invested while Dubai is more reliant on private sector investments to grow its economy. At this stage, Dubai has more of the qualities associated with Florida’ depiction of cities as somewhere the creative class wants to live. Dubai is home to many younger people with an active nightclub, artistic and sporting scene. Corporate headquarters of many companies have become established in Dubai’s Free Zones, attracting talented people from around the world to come to Dubai. It has strong business links with India, Pakistan and Iran. Abu Dhabi is developing its infrastructure but it is yet to become a place with artist/bohemian lifestyles or with an aesthetic quality of place. This may well come with developments on Saadiyat Island for example with the Louvre and Guggenheim but the key will be whether these translate into attracting the cultural capital of emerging artists.

The importance of the education sector cannot be underestimated. Apart from providing the local human capital, its quality and capacity is a major element in the shopping list of items that need to be met too attract and retain knowledge workers in the creative class.