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We study decision-making by a regional authority (RA) that uses enterprise zones to attract members of the creative class---referred to as entrepreneurs---to its region. The enterprise zones provide a local public good (LPG) 𝐿 to entrepreneurs who become members. First, we compute the utility maximizing number of entrepreneurs 𝑁 to attract and the optimal provision level of the LPG. Second, if the LPG 𝐿 is chosen optimally, then, given 𝑁, we determine an expression for the utility of an entrepreneur. Third, we calculate how much an entrepreneur would be willing to pay to become a member of an enterprise zone and then discuss the potential existence of an efficient and revenue-neutral equilibrium. Finally, we comment on some theoretical difficulties stemming from the twin facts that the number of enterprise zones created and the number of entrepreneurs attracted to these zones have to be integers.

A lacuna in the extant literature and our desire to contribute to the theoretical literature on how tax/subsidy policies can be used by regions to attract the creative class together provide the motivation for this paper. The paper’s basic contribution is that it is the first to theoretically analyze competition between two regions (1 and 2) for mobile creative capital, the key attribute possessed by the creative class. Both regions produce a final good using creative and physical capital. In the first case, physical capital is immobile and only region 2 uses tax policy to attract the mobile creative capital. We compute the equilibrium returns to creative and physical capital, we specify a key condition for creative capital in the aggregate economy, and we show which of three tax policies gives region 2 the highest income. In the second case, creative and physical capital are mobile and both regions pursue tax policies to attract mobile creative capital. Once again, we compute the equilibrium returns to creative and physical capital and then describe the optimal taxes for the two regions given that they wish to maximize regional income.

This study examines the impacts of the U.S. shale boom on local patenting at a commuting zone level. I expect that the shale boom will negatively affect patents because shale development may crowd out labor and capital investments in other non-energy industries. My findings show that a one standard deviation increase in non-vertical drilling well density decreases patent intensity by 3.6% of the mean. Areas with higher drilling densities have lower levels of patented innovation compared to their counterfactuals. I also provide suggestive evidence on potential mechanisms. I find that the share of creative class workers decreases in high drilling density areas. This paper contributes to the existing literature related to the “natural resource curse.” I provide new evidence based on local patenting, which is an important indicator for regional innovation and long-term economic growth.

This study examines the effect of agglomeration and localized knowledge spillover on reward-based crowdfunding outcomes in the United States. By examining art projects specifically, we can measure how creative projects benefit from agglomeration or clustering, measured by the proportion of individuals employed in creative class jobs. We find that crowdfunding success among metro and non-metro counties is not homogenous, and that clustering among Creative Class or Bohemia Class workers leads to greater fundraising amounts. Our findings also suggest a mitigating effect of knowledge spillover, as projects originating from high natural amenity counties without high concentrations of Creative Class or Bohemia Class workers raise less money, supporting the Localized Knowledge Spillover Theory of Entrepreneurship.

We study optimal income redistribution in a region that is creative in the sense of Richard Florida and thereby extend aspects of the recent analysis in Batabyal and Beladi (2017). Using the terminology of these researchers, members of the creative class are either artists or engineers. This bipartite grouping stems from the manner in which creative capital is acquired by the artists and the engineers. Specifically, we show that when the savings rates of the artists and the engineers comprising the creative class satisfy a particular inequality, it is possible for a regional authority (RA) to uniquely redistribute income between these two groups in a way that achieves the so called “golden rule” stock of physical capital.

Creativity is now seen as the new currency in a global world. It is considered the best intangible resource. That's why many studies assess the importance of creativity as a key driver for economic development. However there is no assessment framework that covers all cities' creative aspects. In addition; there are no clear creative city actions in the strategies of the Egyptian public institutions. Consequently; this paper discusses creativity of cities and how to assess it. It is based on an inductive methodology where the creative city concept is explored studying its characteristics. Then the paper adopts analytical and comparative approaches to analyze and compare five indices that assess creativity of cities. As a result of these two approaches; the paper concludes a framework consisting of five main environments of a creative milieu; their characteristics and main dimensions to assess them. Accordingly; the developed framework is applied on the Egyptian context; Cairo city; to recognize the city's creative assets; and learn how to exploit them to increase city's creative products. The paper follows a qualitative approach; it doesn't give absolute numbers for the creative city qualities, it only gives a checklist for a city to become creative; and explains some qualities of the creative city concept and strategies.

Paradoxically, what powers knowledge-based economies is not knowledge. Rather, it is their capacity for creativity. Creativity transforms knowledge into valuable ideas and products, resulting in innovation and entrepreneurial activity. Previous research has stressed the relevance of creativity as a geographically-bounded source of spillovers where the culture provides an important stimulus. However, what specific kind of culture is actually needed and under which conditions it arises, remains both unknown and controversial. A rising stream of research has focused on the amenities offered, such as operas, museums and theaters, and how they affect local creativity and entrepreneurial outcomes – yet, with mixed results. This paper fills this important gap in the literature by positing that rather than mainstream culture it is subcultural life that explains why some places emerge as creative hotspots while others do not. We utilize explorative factor analysis to compare the impact of different proxies measuring subcultural amenities against measures which have traditionally been used to reflect "mainstream" culture on startup rates in German cities. Our findings confirm that the co-presence of subcultural amenities is positively associated to entrepreneurship. By contrast, mainstream culture has no significant impact on local startup rates. These findings make an important contribution to the recent controversy within the regional studies literature and provide insights and guidance for thought leaders in policy and urban planning.

We study some measurement issues that arise when analyzing the long run behavior of the jth creative region’s time t log output per creative class member (yj(t)) when this region is part of an aggregate economy of j = 1, …, N creative regions. We focus first (second) on absolute (relative) convergence. In the absolute (relative) convergence case, the N creative regions are similar (dissimilar) in that they all have the same (different) balanced growth path (BGP) level of log output per creative class member denoted by yBGP (yjBGP). In the absolute convergence case, we analyze how to estimate the speed of convergence parameter (σ) and then discuss the relationship between the variance of yj(t) and that of yj(0). In the relative convergence case, we study the error associated with estimating σ using the methodology of the absolute convergence case. Finally, suppose yjBGP=a bXj where Xj is an explanatory variable such as creative capital and a and b are positive constants. Here, we study how to estimate b from our knowledge of the coefficients of a related cross-region growth regression.

The creative capital possessed by the members of the creative class in region j is either acquired through education or present innately in these members. Therefore, the creative infrastructure (CI_j) in the jth region is the sum of a part (CI_j^E) representing creative capital obtained through education and a second part (CI_j^I) denoting creative capital present innately in the creative class members. A researcher wishes to estimate the true relationship between the jth region’s log income per creative class member (y_j ) and its creative infrastructure (CI_j ). He has data on CI_j^E but not on CI_j^I. We study whether an ordinary least squares (OLS) regression of y_j on a constant and CI_j^E will produce an unbiased estimate of the impact of CI_j on y_j in two cases. In the first case, CI_j^E and CI_j^I are uncorrelated. In the second case, CI_j^E and CI_j^I are positively correlated.

The key for competitiveness and growth relies in entrepreneurship and its creative destruction. While questioning what drives entrepreneurship and creativity scholars have recently highlighted the role of culture. Culture defines a set of shared characteristics, values, institutions and thoughts, thus, shapes people willingness to get involved in creative problem-solving and how they share knowledge and perceive market risk and chances. Since the 1990s a vast body of literature has dealing with the role of culture in entrepreneurship and creativity within different contexts or levels of analysis, e.g. management studies, on firm level, cross regions or within national systems. This paper critically reviews the current state-of-the-art of cultural studies in entrepreneurship while shedding some light on a perspective that yet has been underdeveloped by scholars, that is the role of subcultures in entrepreneurial and creativity milieus. We provide first evidence from the 69 largest cities in Germany that the presence of a vibrant subcultural scene, measured as indie record labels, artists, vegans and alternative medical treatment, has a positive impact whereas traditional culture measured by number of museums, displays no significant influence on creativity and new venture creation. Results aim to guide policy makers towards designing regional and local development agendas and complement recent academic discussions within the field of creative milieus and entrepreneurship ecosystems.

The creative contribution to regional development, where creative people and industries choose to position themselves and how to attract and retain them, continues to be debated. There are many occupations that comprise 'creatives' ranging from managerial, sales, marketing and human resources to the arts, entertainment, publishing and broadcasting. Each of these occupational groups is unlikely to have the same locational opportunities and preferences or effect on regional development. The particular focus of this paper is the bohemian class, a group of creatives that is of particular interest, given the unique and well-documented contribution they can make to an economy. Our findings suggest that diversity and tolerance have different impacts on different occupational types. This highlights the importance of a more disaggregated approach to exploring the determinants of creative workers' locational choices.

We analyze inefficiency and inequality associated with the use of creative capital to produce a final good. We first study a case in which the creative capital units are perfect substitutes in the production of the final good. We show that the equilibrium outcome is inefficient and that there is too little application of effort. Second, we define an indicator of inequality and show that an increase in inequality enhances efficiency and that it is possible to achieve complete efficiency. Third, we focus on the case where the individual creative capital units are perfect complements and show that the equilibrium outcome is inefficient with too little effort application. Finally, we contend that our theoretical results provide a possible rationale for the observed income inequality in cities and regions in which the activities of the creative class constitute a large part of all economic activities.

In the political economy of place, cities can be thought of as a global commodity marketed to the “creative class” and high-skilled immigrants, while privileged suburban spaces are protected by place stratification. The spatial assimilation literature shows that assimilated immigrants and minorities move to white, Anglo suburbs, resulting in some succession. Is there a positive association between spatial assimilation and gentrification? How have populations in gentrifying neighborhoods and those experiencing spatial assimilation changed? This study answers these questions using standard panel data techniques and propensity score matching to analyze normalized Census data from the National Neighborhood Change Database (1970-2010). Gentrification and spatial assimilation are correlated: the former increasing, the latter plateaued. Whites declined in both types of neighborhood. Gentrifying neighborhoods see no influx of immigrants, except Hispanics. There appears to remain more barriers to spatial assimilation than to gentrification, a finding consistent with place stratification theory.

Entrepreneurship has become a legitimate approach to stimulating economic growth and development. Over last few decades from the invention of the PC through the dot.com boom-and-bust of the 1990s to nearly universal digitalization, worldwide Internet expansion, and the smart phone, entrepreneurs have proven their value in bringing new products to markets via the creation of new ventures. Unfortunately, only 7% of entrepreneurs are major contributors to the creation of new products and markets. The sustainability as well as growth of markets and economies requires a greater contribution from entrepreneurs. To help solve the growing economic gap including the rapidly shrinking middle class, this article proposes a synergy between entrepreneurship and the emerging Creative Class; clusters of highly talented and mostly college-educated young professional who work in the creative industries. This proposal contrasts with the Industrial-Age perspective where major corporations were the principal source for invention and market innovation. Few would disagree that today’s major corporations have changed to be more nimble and responsive to markets and the public but more is need as markets and economics experience some radical paradigm shifts. Scholars have recently confirmed the significant social, cultural, and economic impact of the Creative Class, but present urban planners devise separate strategies to stimulate Creative Class and entrepreneurship. This article proposes a strategy to include both types of social, cultural, and economic participants.

As with other “typical” cities in the Midwest, Indianapolis often is overlooked in academic studies, but has much to offer the research, practice, and policy communities interested in entrepreneurship and its benefits (Motoyama et al., 2013). Our study supports the idea that Indianapolis - specifically, the greater Indianapolis/Carmel metropolitan area - represents an attractive place for business in its unique way (Max, 2013).Of special interest for regional competitiveness is a subset of companies: high-growth firms, also called gazelles, which make disproportionate economic contributions especially to job creation (Haltiwanger, Jarmin, and Miranda, 2013; Kolko and Newmark, 2007). Most research on high-growth firms focuses on their contributions to the regional and domestic economy, whereas few studies have examined the role of regional environment for high-growth firms (see Motoyama and Danley, 2012; Motoyama, 2015; Neumark and Wall, 2006).This study focuses on the regional environment for high-growth firms in the Indianapolis/Carmel area.Highlights of our findings are:• High-growth companies in Indianapolis were able to survive and grow largely without external angel or venture capital investments, two financial forms conventionally associated as the sources of growth. Most of the companies were initially financed by the founder/s, with personal funds being the most common mechanism. In addition, several entrepreneurs used bootstrapping of some kind.• High-growth firms in Indianapolis face challenges in recruiting and retaining the right talent. This is particularly the case for entry-level, recent college graduates and for technology-specific skilled talent.• However, there appears to be a “boomerang effect,” which draws many former residents back to the region after they have lived elsewhere, often for personal reasons such as raising children or being close to family.• High-growth firms in Indianapolis do not generally have strong direct business ties with other companies in the region, including with vendors and customers, nor do they have significant direct competition in the region.• The locational choice of high-growth entrepreneurs appears to be “by chance,” as opposed to a deliberate choice. Many people interviewed were already in the region and did not move to Indianapolis specifically for the purposes of starting or growing a company, but they also touted its many advantages.• Taking these findings together, people start businesses where they live. In other words, talented people in a region, such as entrepreneurs and technical experts, do not choose the place to start a business. This is in contrast to the currently dominant theories of the creative class. • Other regional advantages identified in interviews include market size, locational advantage of proximity to other major markets, and a “Midwestern work ethic,” which seems to imply a hardworking attitude without job-hopping.• Findings on the overall ecosystem are mixed. Most interviewees reported a generally positive overall environment, but not overwhelmingly so, and several interviewees indicated no effect or a negative impact of the overall ecosystem.

In this note, we analyze a stylized creative region that is populated by members of the creative class. The representative individual in this region possesses a constant relative risk aversion (CRRA) utility function. The existing creative capital is used to produce a final consumption good and to conduct R&D. We first derive the equilibrium level of creative capital that is allocated to the R&D sector. Next, we show how this level is affected by changes in the parameters and in some of the model constants. Finally, we discuss the policy implications of our comparative statics results.

We theoretically analyze unbalanced growth in an urban economy arising from the preferences of the creative class concerning the relative desirability of agricultural, manufacturing, and service goods. We study two cases. In the first case, the production functions for the three categories of goods are identical. Our analysis leads to four results. First, we compute the equilibrium physical to creative capital ratios and the relationships between the neutral productivity shifters and the output prices. Second, we show that agricultural and services consumption are a constant multiple of manufacturing consumption. Third, we note that under certain conditions, an equilibrium in which all sectors of our urban economy grow at a constant rate does not exist. Fourth, we show that a constant growth path (CGP) equilibrium exists in which, across the three sectors, the pattern of consumption changes and there is a reallocation of creative capital. In the second case, the production functions for the three categories of goods are dissimilar. In this more realistic setting, we study generalizations of the previously described four results.

One of the basic principles of successful place marketing and branding is the thoughtful analysis of target groups needs and preferences. Many authors show favour to the city residents as the core target group. The residents may also be segmented into the smaller groups, and in some cases successful strategies are targeted to the needs of this very specific group of citizens. One of such groups – the so-called creative class – became very popular among practitioners as a primary target group for place marketing and branding. The purpose of the paper is to compare creative and non-creative class in terms of their preferences of particular attributes, which describe a city as a whole.Design/methodology/approach: To answer research questions we describe the city in the terms of its attributes and measure preferences over these attributes (part-worths) with the help of specific conjoint analysis technique: hierarchical information integration (HII) approach, proposed by Louviere (Louviere, 1984). This technique is targeted to solve conjoint tasks with a large number of attributes. To describe the city we have chosen 4 sets of attributes (Urbanity and Diversity; City Comfort and Safety; Economic Development and Job Chances; City Facilities). Each set contains 4 attributes and each attribute has 2 or 3 levels of quality. HII approach implies building orthogonal experimental design for each set of attributes. Special bridge design is used to combine these sets. Then estimations of part-worths are calculated on the basis of linear additive model of total utility.Findings: Using the proposed analytical methodology we have measured part-worths of the above-mentioned attributes and modelled residents’ preferences as trade-offs among multiattributive alternatives on the sample of 129 respondents (61 - creative class representatives and 68 – non-creative class representatives). Simultaneously we have estimated the perceived quality level of each attribute for the city of Perm, Russia. Then we compared the preferences of different target groups using these estimations.Limitations: The results provide the evidences particularly interesting for the non-capital cities of Russia for the more effective process of city marketing, targeting and strategic development. Practical implication: The finding may be applied in the sphere of strategic planning of city development, when marketing approach is used and the core target group is the creative class.

Is tolerance important for modernization? What can one say about the relationship and causality between tolerance and modernization? It is assumed that an increase in tolerance, expressed as a tolerant attitude towards homosexuality, gender equality, and a decrease in xenophobia, has a significant impact on modernization. Here modernization is understood in a 'narrow' sense, referring to economic and technological modernization. The author uses the 'cultural modernization' approaches of R. Inglehart and the 'creative class' concept of R.Florida. Based on data from 55 countries, the author concludes that tolerance does have a significant impact on modernization, with gender equality being the most predictive factor and proving to be important in three groups of compared models (Index of Modernization, Innovation Index, and Investment Index). A tolerant attitude towards homosexuals and a decrease in xenophobia play a less significant role. Gender equality is an important predictor for modernization because women are in the majority – not the minority – and lowering entry barriers for women leads to their inclusion in a post-industrial economy. The results show that this is extremely important for economic modernization.Two distinct patterns of modernization are revealed: A tolerant model and a catching-up model. The former model focuses on innovation, high levels of tolerance, and strong institutions, while the latter focuses on investment, a lower-level of tolerance, and weak political institutions. Institutions do matter – they seem to be a causal mechanism in the relationship between tolerance and modernization. Institutions play a significant role in the tolerant model, where a post-industrial economy is associated with a post-industrial society. However, some countries try to build a post-industrial economy without building a post-industrial society, putting the main emphasis not on innovation, but on higher investment rates.

Decentralisation in Indonesia has brought different impacts to regions following its development path dependence and institutional arrangements. This study aims to understand the role of both path dependence and institutional arrangements in the process of developing a creative city. This paper studies the city of Bandung development to unfold the system that supports its role as a creative city. The paper found that path dependency as historically centre of creative studies and emerging creative class has accelerate the city’s new economic activities.

Saving for retirement is fraught with risk and uncertainty. For those not privileged by participation in a defined benefit pension plan, the issue is made complex and problematic by the failure of inherited decision rules: the options available are variable in terms of their costs and possible consequences, there is considerable uncertainty surrounding the anticipated outcomes of different options, and it is quite unclear whether conventional savings instruments are better or worse than simply relying upon housing and property. In this paper, the problem of saving for the future is conceptualised and then interrogated against respondents’ views and opinions as reported in the Money section of The Sunday Times. Those interviewed are representative of a distinctive segment of the UK working population (the creative class) and face, perhaps more than most, the prospect of being largely responsible for their retirement income. Due regard is paid to the age and reported incomes of respondents in relation to their professed intentions just as consideration is given to their apparent risk predispositions. It is noted that many respondents preferred property over pensions across the four years considered - from the peak of the bubble through to the onset of the age of austerity. An interpretation of this preference is offered, emphasising the localisation of risk apparent in many people's perceptions of the value of property as against the abstract, often global perceptions of risk associated with the performance of pension products.

Ever-increasing population and ever-proliferating demand for variety and choice together with a marked preference in favor of deliberate under-utilization of resources as well as deprecation of thrift have exposed the available reserves of natural resources to the danger of depletion. The culture based on the market economy has made the people concerned only about producing and consuming more, with their eyes closed to the indiscriminate exploitation of resources and dumping of the obnoxious byproducts into the environment. There is now abundant scientific evidence that humanity is living unsustainably. The environment is gradually becoming more overstressed; trophic chains and various biogeochemical cycles in the nature are being interrupted; ecological services are becoming disturbed. People now are transforming ecosystems throughout the world at a faster and more extensive pace than any other time in human history. In this milieu, this paper observes that bringing human use of natural resources within sustainable limits will require a major collective effort. There is a need to sensitize the people, especially the supposed and potential ‘creative core’, to direct their efforts to a serious thinking and action to change our present preoccupation with an unsustainable development towards sustainable development. The roles of other stakeholders and volunteer-involving organizations are no less important. sustainable development requires changes in institutions, more specifically the habits of thought and action, to opt for and adopt the new paradigm of development, to change the taste and liking regarding consumption, to think of social priorities and obligation vis-à-vis the personal ones and so on. Attitudinal changes, the alteration of the world view and the habits of thought, are only possible by a proper and holistic educational planning and an efficient governance of the academia, the government departments and the law-making and law-protecting framework of our society. The paper highlights the role of the ‘creative core’ and good governance, but the intelligentsia, especially in the less developed nations where social consciousness is dominated by the myopic personal agenda, will not be effective unless the monitoring of the entire program of development is efficient. The people must, therefore, come forward. But, while social consciousness is weak and dormant, this requirement pushes us into the vicious circle. This vicious circle is the real trap and obstacle to sustainable development.

This exposition reviews trends for working with creativity in a knowledge-intensive economy and applies them as a case-in-point to the everyday work of educators. It focuses on creativity as a highly sought after resource in a knowledge-intensive economy and the identification of drivers and inhibitors to creative work. It will be argued then, that making space for creativity in the workplace of educators - and not just on the periphery - but central, valued and embedded in professional practice - requires careful and purposeful consideration in the nurturing and design of a better future for education.The literature points to the increasing importance of intangibles as a driver of growth in a global knowledge-driven economy. This calls on educators to be responsible for knowing themselves well and be reflexive practitioners in order to have productive and creative professional working lives. Richard Florida names educators as one of an elite creative core of professions essential to a knowledge-driven economy. The educator too is unique in shaping golden capital - that is human, social and intellectual capital - for future generations in that they influence, encourage and promote - through their own work - the human, social and intellectual capital of the next generation. Florida’s creative class also includes people in science and engineering, architecture and design, arts, music and entertainment whose economic function is to create new ideas, technology and/or creative content. They share a common creative ethos that values creativity, individualism, difference and merit and see every manifestation of creativity - technology, cultural and economic - as interlinked and inseparable.The creative process is, and always has been, social and inherently difficult to measure. Forms of organization are necessary to harness and support creative endeavours. Florida looks at both meanings of organization, in terms of organiz-ing (demographics and geography) as well as The organization (providing professional and amenable workplace settings) for the creative class. By doing so he focuses on the issue of global competition for talent. With an already evident skills shortage affecting educators, the teaching profession has again become globally competitive. Florida gives examples of cities throughout the world that are attracting workers not only by the abundance of specialized work but also because these cities cater for lifestyle and cultural tastes of the workers they are seeking. To value staff then for their golden capital and their capacity to be creative and contribute ideas for the sustainability of their organization rather than just be seen as expendable units of labour is at the very heart of legitimising creativity in teachers’ work. In broader terms it is also mark of where we are on the journey of engagement towards appropriate knowledge-intensive era professional practice.

The “creative economy” creates buzz. But can it be created? Grit City (a.k.a. Tacoma, Wash.) tried to find out. The local Chamber of Commerce was the first group to work with Richard Florida, author of Rise of the Creative Class, and his Creative Class Group in an effort to grow a creative economy. The Chamber recruited 30 community members from business, government, the arts, education, and the non-profit sector to work for one year to address this issue. Florida’s Creative Class Group provided participants the background in the creative economy necessary to build on the existing economy’s strengths and form new competencies. They also provided some support as the community members developed and implemented plans to improve the creative economy. While tangible outcomes were few, the year-long experiment raised awareness about the creative class and its importance to the economy. The year also fostered connections between education, business, the arts, and the community that continue to develop as Grit City moves towards a stronger creative economy.The paper provides an overview of Florida’s creative class theory, then describes the process Tacoma used to promote a creative economy, from the initial building blocks, to the selection process of participants, to the participants’ preparation and charge, to the outcomes of the process. From this foundation, the paper explores how cities can engage people, business, government, and the non-profit sector to create a stronger creative economy.

Industrialization transformed the agrarian landscape of Europe and US into a land of glass & steel with bellowing chimneys dotting cities & country side. This massive transformation of economy catalyzed drastic, often calamitous, changes in social structure, attitudes and beliefs. Similar upheaval is underway, this time transforming industrial economy into creative economy. This brings to the fore the basic question "what is creativity" and are we ready for the new economy?

We analyze the regional distribution and the effect of people in creative occupations based on data for more than 450 regions in eight European countries. The geographic distribution of the creative class is highly uneven. The creative class is not attracted to highly urbanized regions per se, but rather a climate of tolerance and openness seem to be rather important factors. We find that the creative class has a positive and significant effect on employment growth and new business formation at the regional level. Human capital as measured by creative occupation outperforms indicators that are based on formal education.