Tag Archives: Creative class

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


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


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


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


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.


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.

In Praise of Organic Tourism

Which would you rather have in your community.... massive crowds of drunken, puking college kids like Fort Lauderdale....

Which would you rather have in your community…. massive crowds of drunken, puking college kids like Fort Lauderdale….

by James A. Bacon

Promoting tourism is a major part of Virginia’s economic development strategy for good reason. Tourism supports jobs, expands the tax base and helps pay for amenities — restaurants, arts, cultural institutions — that can be enjoyed by the whole community. But it can create problems, too, such as crowding, traffic congestion, noise and tacky, haphazard development. Handled poorly, tourism actually can degrade a community’s quality of life.

It is critical to differentiate between mass-market tourism and what Edward T. McMahon, writing in the May issue of Virginia Town & City, calls “responsible” tourism. Mass market-tourism is all about putting “heads in beds.” It is high volume, high impact but low yield. Think Fort Lauderdale, the “spring break capital” of the United States, which attracted millions of college kids who slept six to a room and spent money on little but beer and t-shirts.

... or a recreational amenity like the beautiful Virginia Creeper Trail?

… or a recreational amenity like the beautiful Virginia Creeper Trail?

“Mass market tourism is … about environments that are artificial, homogenized, generic and formulaic,” writes McMahon. By contrast, “responsible tourism is about quality. Its focus is places that are authentic, specialized, unique and homegrown. … Think about unspoiled scenery, locally owned businesses, historic small towns and walkable urban neighborhoods.”

The challenge for Virginians, suggests McMahon,  a senior resident fellow at the Urban Land Institute, is to promote tourism without losing our soul. There is more to building a tourism industry than spending marketing dollars to lure visitors. It involves making destinations more appealing. “This means identifying, preserving and enhancing a community’s natural and cultural assets, in other words protecting its heritage and environment.”

Tourism that arises organically from the history, culture, architecture and natural assets of a community, I would argue further, make our communities more desirable places to live. They improve the quality of life and economic opportunity in ways that transcend the tourism sector. In effect, they become magnets for human capital.

McMahon proffers nine recommendations:

  1.  Preserve historic buildings, neighborhoods and landscapes. McMahon quotes travel writer Arthur Frommer: “Among cities with no particular recreational appeal, those that have preserved their past continue to enjoy tourism. Those that haven’t receive almost no tourism at all. Tourism simply won’t go to a city or town that has lost its soul.”
  2. Focus on the authentic. “Communities should make every effort to preserve the authentic aspects of local heritage and culture, including food, art, music, handicrafts, architecture, landscape and traditions. responsible tourism emphasizes the real over the artificial. It recognizes that the true story of a place is worth telling, even if it is painful or disturbing.”
  3. Ensure that hotels and restaurants and compatible with their surroundings. “Tourists need places to eat and sleep. Wherever they go, they crave the integrity of place. Homogenous, “off the shelf” corporate chain and franchise architecture works against the integrity of place and reduces a community’s appeal as a tourist destination.”
  4. Make your story come alive. “Visitors want information about what they are seeing, and interpretation can be a powerful storytelling tool that can make an exhibit, an attraction and a community come alive.”
  5. Protect community gateways: control outdoor signage. “Protecting scenic views and vistas, planing street trees, landscaping parking lots all make economic sense, but controlling outdoor signs is probably the most important step a community can take to make an immediate visible improvement in its physical environment. Almost nothing will destroy the distinctive character of a community faster than uncontrolled signs and billboards.”
  6. Enhance the journey as well as the destination. Getting there can be half the fun. Encourage the development of heritage corridors, bike paths, rail trails, greenways and scenic byways.
  7. Get them out of the car. If you design a community around cars, you’ll get more cars, but if you design a community around people, you’ll get more pedestrians. It is hard to spend money while you are in a car.”
  8. Create a “trail” with neighboring communities. “Few rural communities can successfully attract out-of-state or international visitors on their own, but linked with other communities, they can become a coherent an powerful attraction.” McMahon points to the example of Journey Through Hallowed Ground, which promotes nine presidential homes, numerous Civil War sites, more than 30 historic Main Streets and other historical and natural attractions.
  9. Ask yourself, “How many tourists are too many?” “Tourism development that exceeds the carrying carrying capacity of an ecosystem or that fails to respect a community’s sense of place will result in resentment by local residents and the eventual destruction of the very attributes that attracted tourists in the first place. Too many cars, tour buses, condominiums or people can overwhelm a community and harm fragile resources.”

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The New Wave of Wealth Creation: ThinkGeek

Photo credit: Washington Post

Photo credit: Washington Post

GameStop, the digital gaming retailer, has just paid $140 million to purchase Fairfax-based ThinkGeek, an online retailer of apparel and gadgets to the “geek” market segment entranced with nerdy cultural icons from Star Trek to Minecraft, from Doctor Who to Game of Thrones. The company peddles products as diverse as “Rebel Fighter silk ties” to mini-refrigerators mimicking Han Solo embedded in a block of carbonite.

The company was formed by four Fairfax residents in 1999 as a side project but grew steadily and organically, reaching sales of $112 million by 2012, according to Wikipedia. The founders sold the company to an outside owner relatively early in the game, so it doesn’t seem likely that the original founders made much, if anything, from the deal.

Still, I love the ThinkGeek story because it typifies the kind of subterranean wealth that is being created in the United States economy. Other than the nerds who patronized the website, who’d ever heard of ThinkGeek before? Who knew it was based in Fairfax, Virginia? Who imagined that the enterprise was worth $140 million?

While it takes some technological competence to run an online retailer, most of its technology can be purchased off the shelf. Other core competencies are logistics and fulfillment and, most important, the ability to market creatively to a demographic niche. The Fairfax County Economic Development Authority didn’t have to recruit ThinkGeek to move to the county — it got off the ground there because that’s where its four founders lived. It stayed in Fairfax because it could easily recruit tech-competent employees there. I’m willing to bet that no one offered ThinkGeek any “incentives” along the way.

Those of us who think about what it takes to create more prosperous, livable and sustainable communities need to ask ourselves this question: What can we do, if anything, to foster the growth of more ThinkGeeks in Virginia?


Measuring Diversity

Source: WalletHub

by James A. Bacon

A popular body of thought today hails “diversity” as one of the United States’ great strengths. That may be difficult to imagine at the moment, with race relations more strained than at any time since the school busing controversies of the 1970s, but the idea has much to recommend it. Innovation, argued Frans Johansson in his book “The Medici Effect,” comes at the intersection — the intersection of cultures, the intersection of academic disciplines, the intersection of industries. Insofar as the world is evolving into an innovation-driven economy, metropolitan regions that entertain a wide diversity of perspectives arguably have greater potential for artistic, cultural and entrepreneurial innovation.

WalletHub, a compiler of imaginative geographical rankings, has devised an intriguing set of metrics to compare the diversity of 230 sample U.S. cities based upon their rankings in a larger group of 350 cities. (Interestingly, Washington, D.C.-based WalletHub counts Arlington, a county, as a city.) The twelve metrics used in 2015’s Most Diverse Cities in America index fall into four broad categories: economic class diversity; ethno-racial & linguistic diversity; economic diversity; and household diversity.

By way of explanation, the compilers of the diversity rankings write:

Rapid diversification is one of the main drivers of our economic success. In recent decades, waves of immigration as well as financial and social mobility have not only changed the face of America but also ushered in a wealth of fresh perspectives, skills and technologies.

And thanks to its ever-expanding diversity, the U.S. remains forward-looking and extremely adaptable to change. According to the United Nations Industrial Development Organization, economies generally fare better when they openly embrace and capitalize on new ideas. Conversely, those relying on old ways and specialized industries tend to be more susceptible to the negative effects of market volatility.

There is no question that cultural diversity breeds innovation. A classic example is the interaction of many musical styles rooted in local American cultures — from African-American blues, white Appalachian bluegrass, Cajun zydeco — that gave rise to jazz, country, rock n roll, soul, rap, punk and many more musical styles. Musically, the U.S. is the most innovative country in the planet, with no peer. On the other hand, some might take issue with the notion that socio-economic and educational diversity — another way of describing inequality — is a boon to innovation. Likewise, one could argue that industry diversity is a hamper to innovation; innovation is most likely to occur in regions with powerful industry clusters like those seen in the Silicon Valley (digital), New York (financial) or Los Angeles (film).

It would be interesting to run correlations between WalletHub’s diversity metrics and metrics of economic performance to find which factors show the strongest relationships. Complicating any such analysis is the fact that, while WalletHub is measures the diversity of “cities,” cities are embedded in larger metropolitan areas, which may or may not share the same diversity characteristics.

With that important caveat, it is interesting to view the diversity of Virginia cities:

diversity_rankings(For a detailed breakdown of all 12 metrics, click here.)

If there is a strong correlation between diversity and innovation, Hampton Roads cities should be the economic dynamo of Virginia. Let’s just say that that’s a stretch. Likewise, Arlington is the least diverse “city” in the state — just too darn many affluent and well-educated residents. Yet somehow it manages to have one of the highest incomes of any jurisdiction in the U.S.

Frankly, I don’t find the data terribly useful in their current incarnation. But I give WalletHub credit for its creativity in dreaming up new metrics. I hope the company recycles this feature in 2016 in a format that compares metropolitan regions rather than core cities. For wonks like me, the data could prove endlessly fascinating.

In Praise of Whimsical Statuary

Yes, it’s true, London has more statuary per square mile devoted to dead kings, lords, generals and admirals than any other city on the planet. (One cathedral, Westminster Abbey, has more statuary than entire states in America.) It’s all very serious and patriotic, and of considerable interest to foreign visitors. Perhaps the most best known monument is that of Lord Nelson, victor of the battle of Trafalgar. Needless to say, monument space in a premier locale like Trafalgar Square is very precious — you can’t turn it over to just any old run-of-the-mill military hero like the dudes who led the Burma campaign or won the battle of Omdurman.

How is it, then, that a skeletal horse stands upon one of four plinths at such a revered location? Moreover, how is that the skeletal horse is bedecked with an electronic ribbon with a digital ticker tape-like display of the London Stock Exchange? Apparently, the work by Ekow Eshun, a German artist, is a commentary on the relationship between money, power and history. I’m not certain exactly is what is implied, but I’m sure it’s not meant to be flattering to those in power. Thus, has public art evolved from celebrating national institutions to questioning them.

DunamisI suppose one reaction to such art would be to declare it symptomatic of our civilization’s self-loathing — a sign of decay. There’s probably some sense to that view. But I have a second reaction. I find the statue amusing. It makes a nice change of pace from dead heroes. Google “whimsical statues in London” and you’ll find an extraordinary variety of creative works, such as the one at right of a jester holding up an elephant by its trunk. It’s all part of “cool Britannia,” part of what makes London such a fun, exciting, world-class city.

Virginia could use a few such public works itself. Of course, public art requires public spaces to display it. And Virginia suffers from a paucity of quality public spaces. Try putting this kind of art in a shopping center or subdivision. There aren’t many suitable locations. But if we want to build the kind of communities that inspire creativity and innovation, we need to open ourselves to the display of creative work even if, from time to time, it challenges the nexus of money and power. We want to see more wealth-creating entrepreneurs, and challenging the nexus of money and power is exactly what entrepreneurs do.