[MUSIC] If you think about where cities come from. Our first human settlements kind of grew up around areas that the soil was fertile and you could plant crops. Or around natural waterways and ports and harbors. And that's the way we settled, and we built these bigger and bigger communities. And we developed trading routes. And then we had this sort of massive event called the Industrial Revolution. We took raw materials and we combined them with human labor power. And we built these giant factory centers. They often said industrialization went hand-in-hand with urbanization. That's surely what I learned when I was in undergraduate school. And so our cities, say since the year 1870 or 1880 or certainly since the 1900s, grew up around industries. Our whole theory of cities is, there was a central area of offices and towers. And around that developed an area of factories and warehouses and around that came kind of working class housing and the after. I guess in the 1950s and sixties, we had the development of more roads, cars, suburbs got bigger and certain industry moved out. But for all that time, our cities really were bounded, created by these kind of hard assets. Either where there was raw materials, or where these giant ports and factory complexes were located. [MUSIC] But you probably know, certainly if you lived in the advanced countries, that over the past 30 years or so, we've seen de-industrialization. Our economy's no longer powered by factories. Factories have moved not only to the suburbs, they've moved to other countries. They move to Mexico or China or wherever. In fact, in a place like the United States, this is kind of an interesting statistic. Only about 20% of the workforce today is engaged in blue-collar work of any kind. And only about 5 or 6% of the work actually makes thing in factories. And you have to think about, well, what kind of happened to cities? And what happened is that cities became less powered by these physical attributes and much more powered by knowledge, by ideas, by where people located. [MUSIC] I was actually on sabbatical leave at Harvard. And I went to my office one day and I picked up the copy of The Boston Globe, the local paper. And the headline in the business section was that one of the companies that was a Carnegie Mellon startup. It was a company called Lycos, early internet search company. This was about the late 90s or early 2000s. Why it had moved. It had moved from Pittsburgh to Boston, and for the life of me, I couldn't figure that out. So I called people I knew at the company back at Carnegie Mellon, and the answer that came back really surprised me. Lycos was moving from Pittsburgh to Boston not because Boston was cheaper. In fact, Boston was more expensive. Real estate was more expensive, people were more expensive, taxes were higher. There were no bribes or incentives that were used to attract this company. In the words of the people at Lycos, the reason they were moving is because the people they needed to grow the business were more readily available in Boston than they were in Pittsburgh. And that's when I decided really to write this book and begin to try to think about why economic development in cities were not just powered by companies, and by transportation routes and by infrastructure. Why cities were powered by people. And I remember, almost as if it was yesterday. I went to the library, and at that time we actually went more to the library, it wasn't the age of Google and the Internet. And I was browsing these shelves in the library and I saw this book, it's called the Handbook of Creativity. It was written by a famous psychologist named Robert Sternberg. And the opening line of that book, I'm not going to get it perfectly, but it was something like, if you come across a great artist or a great musician. Somebody, like Andy Warhol or Pablo Picasso or Louis Armstrong or John Coltrane or Jimi Hendrix. If you come across a great business builder, someone like Steven Jobs or Bill Gates. A great entrepreneur, a great CEO, a great politician. You have come across a person with the same attributes, a creative person. Marx and the other classical economists, they made an argument that it wasn't just physical labor that powered the economy. Yes, it was people working in factories that were important and using their skills. But the argument they were making is that what separated people from other species was the fact that we use our physical abilities, right, our artisanal abilities, our physical skill, our hands and our backs, to make things. And that's what separated us from other species on the Earth. But when you think about it, it's not really our physical attributes that separate us. So that's when the idea hit me that what we were doing is not just moving to a knowledge-based city, or an innovation city, or a high-tech city, or information city. That what we were moving from was an industrial city to something new. And it was a creative city. It's not just the knowledge that we acquire as human beings. It's not simply the information we create or the technologies we build. It's really the creativity which is sort of inextricably a part of us. At the turn of the 20th century, more than 50% of people in the advanced countries worked on farms. A growing number of us began to work in factories. Less than 5% of us were members of this creative class. That's scientists, technologists, innovators, professionals in business and management, law, and healthcare, and then artists, cultural creatives, designers. By the year 1950, we had become a fully working class, industrial society. Now 50% of us worked in factories. The number of people who worked on farms had actually declined to about 5 or 6% of the workforce. Less than 10% of us were members of this creative class. It's really beginning in 1980 that we see this big shift. Between 1980 and now today, in those 35 or so years, the knowledge base, the creative class, the artist, the musicians, the professionals, the techies, kind of explode. And in an advanced country today, like the US and Canada, a third of our workforce are members of this class. But if you take a country like Singapore, or Hong Kong, or the Scandinavian countries, it's already over 40%. Now if you zoom in from there and you look at big cities, San Francisco, Boston, London, Amsterdam, it's well over 40%. And as you go closer to the urban cores of those cities, it's 60 or 70 or 80 or 90% of the workforce. In an advanced country today, we have 5 or 6% percent of our people making things, another 15% percent or so doing blue-collar work, and about 1 or 2% doing agriculture. So this creative class, which is a third of the workforce overall, but more than that in big cities, is really the driving force of our time. That third of the workforce accounts for more than half of all wages and salaries paid and about three-quarters of all discretionary income. It's kind of the trend-setting class. I was writing this book, The Rise of the Creative Class, and it had, like, a dozen different titles. And my editor at the time said, I was doing all of this analysis of the rise of different kinds of knowledge workers and what was happening. And he said, you know, Richard, you've identified a new class. Think about what you've done. You've just identified a group of people who literally are different from the old working class. So basically, my father was a member of the working class. He worked in a factory and like millions upon millions of other people in America and Canada, across the world, he used his physical ability. What I was talking about was the rise of a new group of people who tended to live in cities, who were using their minds, and their intellect, and their creativity. [MUSIC]
