The New American Dream.docx

The New American Dream.docx

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TheNewAmericanDream

TheNewAmericanDream

TheeconomywillprosperagainwhenmoreAmericanscandotheworktheylove.Thepartythatrealizesthisfirstwins.

By RichardFlorida

Thedebateoverthenation'seconomicpolicieshasbecomesovacuousandoutoftouchthatit'salarming.TheRepublicanslookeerilylikethepartyofCalvinCoolidge,withataxcutoncorporatedividendsmasqueradingastheircatch-allsolutiontoastalledeconomy.TheDemocratshaveatleasttriedtohelp,withtaxcutsforlower-incomepeople,assistanceforstateandlocalgovernments,andextendedunemploymentbenefits.Butsuchfixesaremerelypalliatives.

Itistimeforachange.Themarketcrash,theensuingrecession,theworseningsocietalinequality--thesearenotnormalcyclicaldownturnsorgrowingpains.Weareinacrucialtransitionalstage.Thenatureofoureconomyischanging;thenatureofwhatpeoplewantfromoureconomyischanging.Awholenewsystemforcreatingwealthistakingshape,anewkindofcapitalismthatispowerfulandfullofpromise,butfarfromfullyformed.Yetneitherpartyisproposingmeasuresthatmighthelpitalongbecauseneitherappearstograspwhat'sgoingon.

Thekeyfactorgoinglargelyunheededistheriseofcreativityasthecentralforceinoureconomy.Withoutgreatwavesofnewproducts,technologiesandindustries,oureconomywouldbarelyhavegrownsincethedarkdaysofthe1970sandearly1980s.WithoutconstantinnovationnoneofourindustrieswillavoidthegrimfatethatbefellfactoriesandofficesacrosstheUnitedStates.Innovationdoesn'tcomemagicallyfromaninvisiblehand.Itcomesfrompeople.Everyinnovation,beitthePalmPilot, MyBigFatGreekWedding,orthetweaksthatmakeachemicalplantrunbetter,canbetracedtohumancreativity--topeoplehavingideasandfindingbetterwaysofdoingthings.

Inrecenthistory,thenumberofpeopledoingcreativeworkhasexploded.Thoseincreativeoccupations--fromengineersanddesignerstoartistsandwriterstohigher-endplanners,analysts,managers,andother"creativeprofessionals"--nowcomprisemorethan30percentoftheworkforce,upfromabout10percentin1900andonly20percentasrecentlyas1980.Creative-sectorworkerstodayoutnumberblue-collarworkers.Andthecreativesectoroftheeconomyaccountsfornearlyhalfofallwageandsalaryincome--$1.7trilliondollarsperyear.Theriseofthecreativesectorhasalsochangedthewaypeoplework,aswellastheirexpectations.TheAmericanDreamisnolongerjustaboutmoney.Betterpay,anicehouse,andarisingstandardoflivingwillalwaysbeattractive.Butmyresearchandothers'showanotherfactoremerging:

ThenewAmericanDreamistomaintainareasonablelivingstandardwhiledoingworkthatweenjoydoing.Infact,manypeoplearewillingtotradeincomeforworktheyenjoy.I'veinterviewedcountlessprofessionalswholeftsecurejobsforriskiernewventures,oftenatlowerpay,notforashotatastock-optionbonanzabutforachancetodoworkthatexcitesthem.

I'veseenitonthelowerrungsoftheeconomicladderaswell.Whileunionsandpoliticiansbemoanthelossof"good"manufacturingjobs,suchasmachine-tooloperator,stateslikePennsylvaniahaveactuallyhadahardtimefillingthosejobsthatremain,evenascosmetologyschoolsfillupwithworking-classkidshopingtobehairstylists.Thehairsalontypicallypayslessandoffersfewerbenefitsthanthemachineshop--butit'sseenasmorecreativeandstimulating.Thepointisnotthatweshouldalljoinstartupsorbecomehairstylists.ItissimplythatwhatgrowingnumbersofAmericanswanttodayistheverysamethingneededtostrengthenoureconomy.Notjustmorefinancialopportunity,butmorecreativeopportunity.

Yetbothpartiesdisregardthesedynamicsandputforth"oldeconomy"solutions:

taxcuts,financialincentives,andfiscalpump-priming,alongwithfinancialsafetynets,tariffs,andotherfavorstoprotectbigfirms.I'veseensimilarmeasuresfailinnearly20yearsofresearchonstateandlocaleconomicdevelopment.Desperatetokeepfirmsandindustries,andtolurenewones,manycitiesandregionsbledthemselveswithtaxcuts,buildingprojects,andothercostlyincentives.Toupholdtheirsinking"majorleague"status,manysquanderedscarcepublicfundsondramaticgestureslikenewstadiums,whichdivertedthepublic'sattentionbutaddedlittleornothingtotheirregion'screativecapacity.Theresultwascounterproductive:

Existingfirmsandindustriesdownsizedtheirpayrollsanyway,whilegrowthflourishedinplacesliketheSanFranciscoBayAreaandBoston,whichactuallyhadhighercostsbutbettercreativeclimates.Todaywearereprisingthisflawedstrategyatthenationallevel.Therealkeytodrivingtheeconomyforwardand"completing"ouremergentcreativesystemdoesn'tlieinfinancialincentivesalonebutinsummoninginnovation--humancreativity.

Norisitalwaystruethatthefinancialcarrotwilllurethecreativerabbitoutofthehat.Atthesystemlevel,thedriveforfinancialgainencouragesinnovationinmanyways,butcanalsostifleitorwasteit--byfavoringquick-paybackappliedR&Doverbasicresearch;bydivertinglotsofcreativeenergyintonarrowchannelslikehigh-marginluxurygoods;bylettinginvestorgreedfuelspeculativebubblesthatburstandspoilthegameforeveryone.Andatthepersonallevel,moneyisvastlyoverratedasamotivatorofhumancreativity.ThereislittleevidencethatEdisonortheCuriestoiledattheirexperimentsforthechancetogetrich;Edisonwassometimes too eagertoplowmoneybackintomoreexperiments.WhatdrovetheWrightbrotherstoinventwasnotfinancialcompetition,butcreativecompetition:

theracetobefirsttofly.It'sthiskindof"competition"thattrulymotivatesmostscientistsandinventors,andevenfootballcoaches,artists,andrappers.Tokeepoureconomyvital,thebehaviorthatfundamentallyneedstobeincentivizedandsupportedisnotmoney-makingbutcreativeactivity.Whenmorepeopledothegoodworktheyenjoy,wealthwillfollow--nottheotherwayaround.Developingavisionforexpandingopportunitiesforcreativeworkisthegreatuntappedpoliticalopportunityforbothpartiesinthenewcentury.

Itisalsoaneconomicimperative.Othercountriesarecompetinginthecreativeeconomy.Irelandisnowtheworld'ssecond-leadingexporterofsoftware,whileFinland,withNokia,isaworldleaderincellphones.Japaneseautofirmswerefirsttoputhybridandfuel-cellcarsonthestreet.IndiaandIndonesiaarerisingpowersinhigh-techfieldslikesoftwareandbiomedicine.Accordingtostudiesbymyresearchteam,CanadiancitieslikeTorontoandVancouvernowsurpassmanyU.S.metroareasonmeasuresofcreativeactivityandpotential.Inacreativity-driveneconomy,leadsaretenuousandevensmallplayerscanquicklycometothefore.

Ournationmustkeepbuildingthecreativecapacitythathasmadeusstrong.Andwemustavoidthetrapsthatholdusback--includingthosethatspringfromtheemergingcreativeageitself.

ANationofDesigners

Creativity--theabilitytocomeupwithandimplementanewidea--hasalwaysbeentheprimesourceofeconomicgrowthandadvantage.Inprehistory,somepeoplelearnedthatcultivatingplantsandanimalsworkedbetterthanhuntingandgathering.IntheIndustrialRevolution,ideascarriedtheday.Andinthelate1800sandearly1900s,thevitalityofcapitalismwascorrectlycreditedbytheeconomistJosephSchumpetertothe"perennialgalesofcreativedestruction"thatsweptthroughit--periodicallysweepingoutoldwaysofdoingthings,sweepinginthenew.

Inthelater20thcentury,thepaceofcreativityquickenedwhiletheprofitfromroutinizedproductionplummeted.Anewversionofcapitalismbeganevolvinginwhichcreativitywasnotjustperennialbutconstant,inwhichrapid-fireinnovationandcontinuousimprovementwerethenorm.TheUnitedStatessurgedtoleadthisemergentsystem.Itdidn'thappenmerelybecausegovernmentstoodbackandletthefreemarketwork.Manyfactorscombinedtofostertheconditionsforhumancreativityandharnessitonawiderscalethanever.AfterWorldWarII,federalfundingforbasicresearchrampedupdramatically,asdidhighereducationthroughtheGIBill.Intheprivatesector,theventurecapitalindustryprovidedanewavenueforbringingresearchideastomarketandemployingbrightpeople.Thecombinationofthesefactorshasbeenpotent:

It'sbeencalculatedthatthehigh-techcompaniesspunoutfromjustoneuniversity,MIT,wouldnowconstituteanationwiththe24th-largestGDPintheworld.

Therewereotherfactors.Inthe1990s,U.S.firms（belatedly）adoptedtheJapanese"creativefactory"methodswherebyworkerscontributeideasforimprovingproductivityandquality.Outsourcingplayedarolebyleadingtocreativespecialization:

Afirmcanfocusondesigningchipsorclothingandcontractotherstodothemanufacturing.Lastbutnotleast,theUnitedStatestookthecreativeleadbybeinganopenanddiversesociety.Immigrantsflockedhereandfueledourgrowth:

Nearly30percentofnewbusinessesinSiliconValleyinthe1980sand1990swerestartedbyforeign-bornpeople.Ourfreedomofexpressionhasallowednewartformstoflourish--fromrockmusictoindependentpublishingtodigitalmedia--andallowedartisticandtechnicalcreativitytocommingle.Theresultwasasustainedoutpouringofhumancreativeactivity,ineveryformimaginable.

Also,asVirginiaPostrelandothersargue,designor"aesthetics"hasbecomeincreasinglyimportanttowhatsells.TheUnitedStatesmakesfewerandfewerproducts--andsellsfewservicesontheworldmarket--thatarecommodit