Tag Archives: Creative class

The Rise of the New Artisan Class

Botanical etching made by oak and mimosa leaves

Botanical etching made from oak and mimosa leaves. Photo credit: Tracery 157

Cathy Vaughn took the big leap a couple of years ago of going into business for herself as an artisan working in copper. While fabricating trellises, tryptics, candelabras and chinoiserie, she developed a new technique, which, as far as she knows, is a first — creating images upon copper plate from the chemicals found in leaves. The result has been a series of extraordinary images, as seen above, that look as if they could have been lifted from a modernist New York art gallery.

She arranges leaves upon the copper, wraps them in cellophane and sets them aside for about two weeks. Leaves from different species of trees have different chemical signatures, which interact with the copper to leave a wide array of colors. Art meets science as Vaughn arranges different species of leaves in varying patterns to create novel effects.

cathy_vaughn

Vaughn in her studio. Photo credit: Tracery 157

It’s too early to tell if the “botanical etchings” will become a big moneymaker, Vaughn told me at a recent arts and crafts exhibit in Richmond, but early signs are encouraging. I’m no art critic, and I’m not even a fan of modernist art, but I found many of her creations visually arresting, even beautiful. Given the fascinating narrative behind her creations, I would venture to predict that she will enjoy considerable success — not just in Richmond but far beyond.

Richmond is hardly unique in having a vibrant arts community — Charlottesville and Staunton craftsmen were well represented at the particular event I attended — but the arts and crafts movement is growing. Many Richmond-area artists have a connection with Virginia Commonwealth University’s school of the arts, while others with a graphic arts background come from the advertising/ marketing sector. Budding artists are supported by a soft infrastructure: numerous art galleries, an artists’ guild, the Art Works and Plant Zero artists’ studios and the Richmond Visual Arts Center.

It’s easy to be dismissive of arts & crafts as an engine of economic growth — the term “artsy fartsy” suggests eccentricity and dilettantism — but a fundamental shift in consumer preference to “mass customization” suggests that artists, craftsmen and the so-called “makers” are a rising economic force. Not only will the revival of artisan create employment opportunities in a slow-growth economy, there is an inherently egalitarian aspect to the movement. Artists, craftsmen and makers are self-employed. They could become the new yeoman class of the post-industrial economy.

An analogy that I draw, and other observers readily accept, is with the beer industry. A couple of decades ago, three or four monster brewing companies dominated the U.S. beer market. The main competition came from major foreign brands. Then the micro-brewery phenomenon took off as consumers revolted against the sameness of the national brands and embraced the individuality of home brews, with their novel tastes, feisty branding and personal connection with consumers. The Brewers Association counted 1,871 microbreweries, 1,412 brewpubs and 135 regional craft breweries in 2014. That year saw the opening of 615 new breweries and only 46 closings. Craft brewers provided 115,469 jobs, an increase of almost 5,000 from the previous year.

The efflorescence of the beer industry is matched, in Virginia at least, with a veritable explosion in the number of wineries, not to mention artisinal producers of meats, cheeses, breads, seafoods, pastas, dressings, sauces, and confections. The Virginia’s Finest website lists 43 categories of made-in-Virginia products from herbs and honeys to soups and nuts.

The revolt against mass standardization is nothing new. The so-called “arts and crafts” movement originated in the late 1800s in reaction to machine production, and it never disappeared. But arts and crafts appear to be undergoing a resurgence, fueled by the growing hunger for unique, hand-crafted products and the rise of the Internet as an inexpensive distribution and marketing channel. In the future, inexpensive 3-D manufacturing will open up new fields for creative expression and the invention of entirely new products.

The rise of the arts-and-crafts economy is something devoutly to be wished for. Politicians will be tempted to jump on the bandwagon and “help” by doling out subsidies of some kind or another. Arguably, the fastest way to kill the movement is to make it dependent upon government largess. However, public policy probably can contribute to the movement by enabling artists, craftsmen, artisans and makers to form co-ops and mutual assistance societies to provide for common needs such as health care, disability insurance and the like. Tax policy should cease discriminating against the self-employed by extending the same tax breaks for health care provided to corporations, labor unions and other large entities.

For the most part, though, we just need to leave the artisans alone. They are creative people, and we should trust them to figure out what’s best for themselves.

Yes, Richmond Is a True Foodie Town

The Roosevelt restaurant in Church Hill.

The Roosevelt restaurant in Church Hill.

Richmonders like to think of Richmond as a serious “foodie” town. But we tend to be parochial and prone to self-delusion, so I do wonder if we’re just kidding ourselves. Well, our friends at WalletHub have ranked 150 American cities for foodiness — combining 18 metrics of affordability (weighted 30%) and diversity, access & quality (weighted 70%). Lo and behold, Richmond ranks 11th in the nation, entirely upon its quality rank (10th best in the country), and not its affordability (a mere 66th).

According to WalletHub’s methodology, Richmond is the top foodie town in the vast swath of America south of Rochester, N.Y. (No. 9), north of Tampa, (No. 8) and west of Cincinatti (No. 6). Our major league sports scene may stink, but our restaurants are terrific.. Eat your artichoke hearts out Washington (No. 26), Charlotte (No. 92), and Hotlanta  (No. 23).

The other Virginia cities listed by WalletHub are better than average: Virginia Beach (No. 46), Norfolk (No. 53), Chesapeake (No. 65), Newport News (No. 71).

The top-ranked foodie city in America: Portland, Ore. The worst: Moreno Valley, Calif.

I’m no gourmet, so discount my opinion accordingly…. My favorite restaurant for both food and ambiance is The Roosevelt in Church Hill. But it’s a tough call — there are many great restaurants in this town.

Big City Advantage in Innovation Not What It Used to Be

agglomeration

Image credit: “Cities and Ideas,” National Bureau of Economic Research.

by James A. Bacon

Maybe the Internet is allowing innovation and creativity to break free from the confines of geography after all. Economists conventionally argue that large metropolitan areas are better incubators of inventions and innovations than smaller cities and rural areas. However, a new study, “Cities and Ideas,” by Mikko Packalen and Jay Bhattacharya, finds that the relationship between city size and inventiveness is not as strong as it once was.

I partially jest when I refer to the impact of the Internet. In the 1990s, starry-eyed dreamers theorized that the Internet would enable people to plug into global commerce from a mountain cabin or small town coffee shop. As rural America continues to empty out and population migrates to the bigger cities, that promise now seems a cruel joke. But something is changing. As Packalen and Bhattacharya demonstrate, big cities are far less dominant than they were a century ago. Furthermore, the geographic de-concentration of invention long preceded the rise of the Internet. Other trends — the proliferation of telephones, the spread of roads and the automobile, the rise of land-grant universities in out-of-the-way places — may have played equally critical roles in diffusing the capacity for invention.

Scholars first theorized about the correlation between city size and innovation, which they called an “agglomeration effect” in the 1920s. There was a solid basis for the theory then — large cities were the dominant incubators of innovation; rural areas were backwaters. But even as agglomeration-effect theory became more deeply rooted among scholars studying urban geography, the reality upon which the theory was based was steadily eroding.

To measure invention, Packalen and Bhattacharya built a database of U.S. patents between 1836 and 2010, identifying the inputs for each patent from previous patents, how old those inputs were, and where the inventions took place. The study gives great weight to the age of the patents, distinguishing between patented inventions that draw upon new ideas and inventions that draw upon older ideas. The authors explain:

If we find that inventors in large cities build on fresh ideas more often than inventors in smaller  cities, the evidence would quantify a specific benefit to locating inventive ideas in large cities. On the other hand, if we find that inventors in large cities are no more likely to try out new ideas in their work than inventors in smaller cities, the evidence would suggest that location may be largely irrelevant for inventive performance.

The dominant theory in academia today is that size and density matter. The bigger and denser a metropolitan region, the greater the number of people who can interact on a face-to-face basis. Proximity to other people allows innovators to conceive, discuss and test new ideas, and commercialize them in the marketplace. As can be seen in the chart above, which compares idea inputs of patents between cities in the 95th and 50th percentiles (large versus midsized cities) that was certainly true a century ago. But the dominance of big cities has declined, despite a few ups and downs, since then. Today, adjusted for the margin of error, there is very little difference at all.

Bacon’s bottom line: I am not equipped to dissect the statistical methodology employed to reach these conclusions, although I do have a couple of questions. Why the focus on the newness of the ideas behind the patents? Are patents based on newer ideas necessarily more consequential than those based on older inputs? Why not measure the frequency of patents? Surely the number of patents, adjusted for population size, is also an important indicator — perhaps the most important indicator — of inventiveness.

Those questions aside, “Cities and Ideas” would seem to provide hope for America’s small towns and rural regions. In this blog, I have frequently written about the tremendous disadvantages facing smaller communities when competing with big cities for human capital and corporate investment. The odds seem hopelessly stacked against the little guys. But if it turns out that it’s just as easy to keep up with the latest technology in Small Town USA as it is in Big City USA, a lot of people — and that includes me — may have to adjust their thinking.

A New Metric for Under-Employment

underemployment

Source: Chmura Economics & Analytics. Positive numbers represent the degree to which supply exceeds demand for three levels of educational attainment. High = B.A. or higher. Medium = Associate’s degree or some college. Low = high school graduate or lower.

by James A. Bacon

It is common knowledge that the official United States “unemployment” figure needs to be taken with a grain of salt. It does not include discouraged workers who have dropped out of the workforce. It does not reflect the increase in part-time employment, some of it involuntary. And it does not reflect underemployment in which Americans work in occupations beneath their level of educational qualification.

My friends at Chmura Economics & Analytics have developed a fascinating technique for measuring under-employment by comparing educational attainment with the skill requirements demanded by the region’s occupational mix. It’s not perfect, as the Chmura team is the first to acknowledge. But it provides a defensible estimate of the amount of slack in the economy nationally, and in each of the U.S.’s 381 metropolitan statistics areas (MSAs).

The underemployment number is a two-edged sword. On the downside, the higher the level of underemployment, the greater the extent to which the nation’s (or a region’s) human capital is not being put to work. Just as investment in buildings, capital equipment and infrastructure represents economic waste if it is under-utilized, it is an economic waste if human capital is under-utilized. As Chmura puts it, “Workers who are underemployed and not necessarily contributing as much as they could to the labor market, represent potential lost productivity, wages, and tax revenue for the region.”

Ironically, underemployment tends to be higher in MSAs with the higher-performing economies, such as Washington, San Francisco, Boston, Raleigh and Boulder, Colo. Why would that be? Perhaps, Chmura suggests, it’s because these are MSAs are desirable places to live where workers are willing to trade off the full utilization of their skill sets in exchange for lifestyle amenities. Thus, the MSA with the highest underemployment in the country turns out to be Barnstable Town, Mass., with its scenic Cape Cod waterfront.

On the upside, a high underemployment rate can be an economic development bonus — it represents a deeper labor pool available to new employers than is evident in the unemployment number alone. If under-employed workers can be to work utilizing their most remunerative skills, they can give a big boost to a regional economy.

To my mind, the most remarkable figure in the table above is the high level of underemployment for higher educated workers in the Washington metro. Does that 12.5% under-employment mean that, even after factoring in higher housing prices and hideous traffic congestion, better-educated employees consider Washington to be a more desirable place than anywhere else in Virginia to live and pursue a career? Perhaps. It also could reflect momentary slack in the labor market due to sequestration-related cuts in federal spending. Perhaps the economy hasn’t been depressed badly enough or for long enough to drive people away.

Either way, the Chmura data provides considerable insight and raises lots of fascinating questions.

Housing Affordability for Millennials

millennial_affordability

by James A. Bacon

As the global epicenter of technology innovation, Silicon Valley creates a massive amount of wealth — but the housing supply, hemmed in by geography and zoning regulations, is incredibly restricted. The resulting housing crunch is so severe that Millennials are hard pressed to live there. The median income for Millennials in the San Jose metropolitan area is the highest of any of the 50 largest metropolitan regions in the country — $53,000. But the median home value of $925,000 requires an income of $133,000 to pay a mortgage (not to mention a 20% down payment). The earnings gap, according to a new housing index published by Bloomberg, is $80,000!

If Millennials are the life-blood of creativity and innovation for metropolitan economies, the cost of housing could be Silicon Valley’s Achilles heel. The housing supply is so out of whack, as it is in neighboring San Francisco, that, as much as Millennials are drawn to the excitement and glamour of working at companies like Apple and Google, they simply can’t afford it unless they’re willing to live five or six to an apartment.

According to Bloomberg, housing is unaffordable for thirteen of the 50 largest U.S. metros. The biggest affordability gaps are on the West Coast, but Boston, Washington and New York are on the list as well. Young people are willing to tolerate sub-par living conditions for a while, especially while they are single. One of my daughters shared a tiny rental apartment with four roommates while living in Jackson,Wyoming, which, due to its awesomeness, has similar affordability issues. But she rented her own place when she moved back to Richmond. And now that she is getting married, she and her fiance have no trouble affording a comfortable starter home in a nice neighborhood near the University of Richmond. When educated Millennials are ready to get married and start families, the idea of sharing a house with four or five roommates is not a serious option.

At the opposite end of the spectrum are metros like Detroit, Buffalo and Cleveland where housing is easily affordable — but job opportunities for Millennials are scarce. If your goal is to recruit and retain educated Millennials with the hope of stimulating the creative economy, it appears that the sweet spot is the middle of the affordability range in which jobs are available and housing is affordable.

Millennials consider many other factors when choosing where to live, to be sure. Larger metros have appeal because the supply of potential mates is larger. They also look for coolness, hipness and authenticity, indefinable characteristics that are difficult to measure but definitely apply to places like San Francisco, New York, Austin and Portland. But once young people have found their mates, the size of the mating pool is no longer a consideration. And once they have children, hipness no longer looms as large.

Metros like Richmond and Virginia Beach will have difficulty competing with San Francisco and New York in luring single Millennials right out of college. But the comparative advantage shifts dramatically in their favor when Millennials are ready to settle down. In the competition for talent, the best bet for downstate Virginia communities is to target educated Millennials at that life-stage. How to target them is quite another question. It’s a question that Virginians need to give more thought to.

Taxation and the Creative Class

science_stars

Urban geographer Richard Florida has famously argued that members of the “creative class” — scientists, entrepreneurs, artists and other professions who contribute disproportionately to economic growth — gravitate to metropolitan regions marked by the three “t’s” — technology, talent and tolerance. Now new research suggests that he may have to add a fourth “t” — taxes.

A National Bureau of Economic Research paper, “Taxation and the International Mobility of Inventors,” studies the effects of taxation on the international mobility of inventors, with an emphasis on the superstars who have the most, or most valuable patents. The results suggest that a 10 percentage-point cut in a nation’s top tax rates is associated with about a 1% increase in the number of domestic superstar inventors. The number is even higher for the number of foreign inventors — a 10 percentage-point increase drop is associated with a 38% increase for this group. Inventors who have worked for multinational firms appear to be most likely to respond to tax differentials.

Another study, “The Effect of State Taxes on the Geographical Location of Top Earners: Evidence from Star Scientists,” finds that tax sensitivity is even greater when accounting for cross-state location of top corporate scientists in the U.S.; there is little effect on academic or government researchers.  “Overall, we conclude that state taxes have a significant effect on the geographical location of star scientists and possibly other highly skilled workers. While there are many other factors that drive when innovative individual and innovative companies decide to locate, there are enough firms and workers on the margin that relative taxes matter.”

Sad to say, Virginia doesn’t even rank in the list of the ten states with the largest populations of star scientists. But if we’re serious about wanting to attract corporate research here, personal tax rates are a factor that must be considered.

— JAB

Richmond as Center of Musical Creativity

New York, L.A. and Nashville are undisputed leaders of the music industry in the United States, while Austin, Seattle and New Orleans garner widespread recognition as important second-tier cities. But Urbanful has highlighted nine other U.S. cities with thriving music scenes where “new local bands sprout every day, and, best of all, you can still catch a raucous live show at a hole in the wall for $10.”

One of those is Richmond. Writes Urbanful:

The Virginia capital has long been a hotbed for a wide variety of musical genres, from metal (GWAR, Lamb of God) to punk and hardcore (Municipal Waste, Strike Anywhere) to folk (Aimee Mann, Pat McGee Band) and D’Angelo (he deserves his own genre). Today, music lovers can head to venues like The Camel, The Broadberry and The National for rowdy shows featuring local bands.

I have to confess, I have never heard these bands. I’m not sure I would particularly enjoy their music. (I’d rate the D’Angelo song highlighted above as so-so at best.) But I also recognize that I am no arbiter of musical taste. Indeed, if anything, I’m Geiger counter for dorkdom. The more I like a song, the more radioactive it is likely to be among the magistrates of hipitude. Still, I think it’s cool, or should I say, swell, that Richmond is recognized as a center of musical creativity.