by Rob White
One of my favorite authors on policy topics in economic development and the growth of the innovation economy is Richard Florida. His books on the “Creative Class” and their role in shaping the American economy now and in the future paint a very positive picture for Davis and the Sacramento region.
His work is quite accessible and is relatively easy to digest considering much of it is based on data-driven and statistical analysis. Some of his more timely work is published in the magazine he co-founded, The Atlantic Cities.
On February 25th, The Atlantic Cities published an article by Florida titled “Where the Good and Bad Jobs Will Be, 10 Years From Now”. This article was forwarded to me by several colleagues that noted the Sacramento Region having a very positive future based on the analysis in the article.
Though the article’s focus is primarily centered on the idea that future job growth in America will be based mostly in the service sector, the data from the article demonstrates that Davis and the Sacramento Region have a brighter future.
The article is based on research from Charlotta Mellander and Zara Matheson of the Martin Prosperity Institute at the University of Toronto’s Rotman School of Management. As described in the article Mellander’s “analysis comes from the Bureau of Labor Statistics’s (BLS) latest ten-year projections, which provide a broad picture of what America’s workers will be doing in the future.” The analysis “used these BLS baseline projections to project job growth for all of America’s 350-plus metros over the next decade.”
The foundational graph in the article “shows the growth of jobs in America across three broad occupational classes – the creative class, service class, and working class – over the past half century. The trend could not be clearer. Working class jobs, which include those in factory production, construction and transportation, have declined from half the workforce to about 20 percent.”
“High-paying, knowledge-based creative class jobs in science and technology, business and management, the professions, arts, media, and entertainment have increased from just 15 percent of jobs to more than a third. Lower-paying service jobs in fields like retail sales, food prep, and personal care have increased from 30 percent to nearly half of all jobs.”
“These basic trends will continue over the next decade. Between 2012 and 2022, the U.S. will add 15.6 million new jobs, according to BLS projections, with the overall workforce growing by 10.8 percent from 145 to 161 million. Of these, 5.6 million will be high-wage, creative class positions. The creative class will grow by 12.5 percent, the highest rate of all groups. The country will add another 7.4 million low-wage, low-skill service jobs, a 10.5 percent growth rate.”
“Finally, the country will add 2.7 million blue-collar, service-class jobs – with most of that growth in construction and transportation jobs. The overall working class job market will grow 9.1 percent. Of these, just 75,000 will be in direct production work; the high paying factory jobs that provided the backbone of the middle class a generation ago will see a growth rate of less than 1 percent. By 2022, production workers will make up just 5.5 percent of the American workforce.”
So what does this specifically mean for Davis and the Sacramento region? The article goes on to breakdown the data by metro areas and is graphically presented in maps that track job growth in each of the three areas – the creative class, service class, and working class.
The research indicates that Davis and the Sacramento region will experience an overall increase in employment of between 10.8 percent and 11 percent for the decade spanning 2012 to 2022. Though not the fastest job growth depicted, it is a significantly higher than that projected for most of Central California and is on par with that projected for the Bay Area at large.
Florida states “The news is both good and bad. Though they are not distributed evenly across the country, creative class jobs are generally growing faster. In a few places that are projected to see overall lower levels of job growth, including much of the South and some of the old Rustbelt, creative class jobs are actually growing faster than they are in other regions. But in many economically vibrant coastal metros, this creative class job growth goes hand in hand with low-skill, service-class job creation.”
When breaking down the growth by class, the fastest growth by percentage will be in the Creative Class for the region (12.7 percent to 13.2 percent), which will significantly exceed the Bay Area. And interestingly, our region is slated to experience a 9.8 percent to 12.8 percent increase working class employment. This includes construction, transportation and factory jobs and may be partly reflected in the growth of sustainable manufacturing in Davis and the surrounding communities. This includes Davis-based companies like FMC Schilling Robotics and DMG Mori.
For the service class, our region will be one of the slowest growing metros in the country (4 percent to 7.5 percent). This is counter to the projected national trend where “almost 40 percent of metros are projected to see working class job growth higher than the national average of 9.1 percent.”
When accounting for the projected percentage splits by class for each metro in 2022, the Davis and Sacramento region class shares are expected to fall into the following brackets: 28.9 percent to 35.2 percent for the creative class; 49.5 percent to 52.2 percent for the service class; and 10.8 percent to 18.1 percent for the working class. The service economy is still expected to dominate our region, but our projected growth rate in the creative class should set us on a path to a more balanced workforce.
This is reflected by Florida in the statement that “high-paying, knowledge-based creative class jobs in science and technology, business and management, the professions, arts, media, and entertainment have increased from just 15 percent of jobs to more than a third.”
I encourage you to read the full article and to also read some of Florida’s other work. I have found the ideas, concepts and analysis presented in Florida’s work to be helpful in create working models and frameworks for economic development in general, and the Davis innovation economy in particular. Perhaps you have authors or researchers that you find helpful that you can share? I look forward to the dialogue and input. You can always reach me at rwhite@cityofdavis.org.
Thanks Rob. Very thought provoking, but not too surprising. This labor-demographic shift has been occurring for some time. Good jobs contribute directly to the vitality of a community and there are limited numbers of them. The Sacramento region, and Davis is particular, is poised to attract and retain a strong percentage of these assuming we can overcome the power of the stasis.
A book I recommend is “The Future and its Enemies” by Virginia Postrel.
Quote:
“In The Future and Its Enemies: The Growing Conflict Over Creativity, Enterprise, and Progress,first published in November 1998, Virginia Postrel explodes this myth, embarking on a bold exploration of how progress really occurs. In areas of endeavor ranging from fashion to fisheries, from movies to medicine, from contact lenses to computers, she shows how and why unplanned, open-ended trial and error – not conformity to one central vision – is the key to human betterment. Thus, the true enemies of humanity’s future are those who insist on prescribing outcomes in advance, circumventing the process of competition and experiment in favor of their own preconceptions and prejudices.
Postrel argues that these conflicting views of progress, rather than the traditional left and right, increasingly define our political and cultural debate. On one side, she identifies a collection of strange bedfellows: Pat Buchanan and Ralph Nader standing shoulder to shoulder against international trade; “right-wing” nativists and “left-wing” environmentalists opposing immigration; traditionalists and technocrats denouncing Wal-Mart, biotechnology, the Internet, and suburban “sprawl.” Some prefer a pre-industrial past, while others envision a bureaucratically engineered future, but all share a devotion to what she calls “stasis,” a controlled, uniform society that changes only with permission from some central authority.
On the other side is an emerging coalition in support of what Postrel calls “dynamism”: an open-ended society where creativity and enterprise, operating under predictable rules, generate progress in unpredictable ways. Dynamists are united not by a single political agenda but by an appreciation for such complex evolutionary processes as scientific inquiry, market competition, artistic development, and technological invention. Entrepreneurs and artists, scientists and legal theorists, cultural analysts and computer programmers, dynamists are, says Postrel, “the party of life.”
Rob and Frankly
Good discussion.
And I would agree that the “dynamists” are the key to the future since virtually the only guarantee in life is that there will be change. This however, is not synonymous with all change being “good”. All changes, or lack of change for that matter comes with a complex set of pros and cons. Change in itself, while inevitable, does not mean that all change is desirable. Thus any individual or organization selling “change” without a careful analysis of the risks and benefits of that change, no matter how beneficial they may perceive it to be, is ignoring the complexity and thus the balance necessary to ensure a healthy and prosperous future.
But Tia – you are echoing the perspectives of a stasis to a large degree. You are failing to honor and respect and laude the “invisible hand” of forward progress by basically saying “the devil is in the details”, and until you are satisfied with those details, your vote is to continue and stall.
Not at all Frankly
I am merely pointing out that “change” and “progress” are not synonymous. “Progress” carries a positive connotation that “change” does not. There are people on both sides of any change debate that do not seem to perceive that there are advantages and disadvantages to any action ( or lack thereof). Likewise, “stasis” is not synonymous with “stagnation”. There are times within any dynamic system when stasis may temporarily be superior to change.
What makes human systems different is that we have the ability to judge the pros and cons of each proposed change ( or lack thereof) and therefore have a responsibility to do so, and will surely pay the price for our inability or unwillingness to do so.
This is always a matter of perspective. One example that you and I often get into is that of cars. Cars have advantages. They are convenient. They let us get to where we want to go with what we want to take with us quickly. They have traditionally had disadvantages in that they have been creators of smog and are major contributors to a generally unhealthy sedentary lifestyle.
I would love to see the complete demise of the smog producing internal combustion engine. Does that mean that I want to go back to horse and buggy ? Of course not. What it means is that I would promote alternatives that are cleaner and healthier at every opportunity. Is that stasis ? I don’t think so.
I think the difference (in abstract) is the failure of some to have enough confidence in the equalizing tug and pull of the pursuit of human self interest in a dynamic system of free enterprise. We debate in extremes to make our points, but the challenge is one of balance. Because we cannot have economic anarchy. But that is not what any capitalists desire or demand. We also cannot have more state-run industry than is minimally necessary. But this latter point is something that the left does not agree with. I think you and others with similar political views would be more at ease having more of our economy owned and controlled by government. Your support of ACA is an example of this. Your support of a Davis POU is an example of this.
Getting back to the car point, my sense is that you would support significant increased public policy that aims to reduce the use of cars. And for those that remain, we should force less of them to be fossil fuel based. But I think the balance has already tipped too far toward state control. What Postrel writes “an open-ended society where creativity and enterprise, operating under predictable rules, generate progress in unpredictable ways.… note the “predictable rules” comment. Dynamism and its derived economic system of capitalism demand and expect rules. But not so many rules that it tips toward a stasis state. That stasis state of creativity-stifling rules to attempt to dictate outcomes from a point of central control… it destroys opportunity. It tips the balance away from the benefits derived from a robust and rigorous more free and more predictable economy. It then becomes an public-side addiction to add even more rules and controls to try and make up for what has been lost. The disingenuous, but effective, justification is that people are hurting and the government needs to do something. Then the technocrats gain more power and we begin and out of balance spiral downward into slower or no growth and an overall lower standard of living. Look around for examples of this. They are all over the globe.
The thing that appears to be lost of you, or else known to you but resulting in some personal unease, is the bigger-picture benefits of a more free and free-flowing dynamic economic system. You lament sprawl and pollution and more people and traffic. But you don’t balance those concerns with the human impacts with the loss of economic opportunity and a more robust economy. I see you being out of balance. You probably see me being out of balance. That is the argument here. Do we go your way, or go my way?
Here is what I say… I think we have seen enough of your way to know that we are now tilted too far in that direction. The city is heading toward insolvency while we have copious bike paths, 5000 acres of preserved farmland, etc., etc., etc. Yet we are still spending $1 million on POU studies and $1M on becoming a platinum bike city instead of spending any significant money and effort on developing our economy. Again, it points to an obsession of sorts. Some irrational fear-driven pursuit of continued liberal-progressive ideas at the expense of having anything that resembles a healthy economic ecosystem.
What I would like to see from you and others holding your views is simply some acknowledgement that you have had your way and have accomplished much in your demands for a liberal-progressive agenda… and a recognition that our economic ecosystem is unhealthy and we need to address it with some urgency. But instead what I get is a demand for more and more data to help satiate your fears of impacts… that frankly, I believe, will never be satiated.
IMO, you need to have some epiphanies related to our out of balance condition and the need to start supporting economic development and growth.
“What I would like to see from you and others holding your views is simply some acknowledgement that you have had your way”
You are right. We do see things very much the same way. In my opinion, the rapid growth side has had much of its way. My evidence is the number of new companies which I have listed a number of times with no acknowledgment from you, or any other rapid growth advocate that this growth has even occurred. I do not oppose more economic growth. I just want a full accounting of the likely pros and cons before any project is accepted, and I want some acknowledgment of the desired upper limit of growth rather than the open ended statement made by Rochelle Swanson that we should “grow as much as we can “.
Tia,
Wondering if we might inquire as to the rate of growth of your employer and your industry? How about prospects for growth of your industry? How about the pressures such growth places on the region to accomodate such growth? Just sayin – its worth consideration. Has it been good for your career? Has it been good for the region?
Great questions Doby.
Tia, one of the things that Kaiser considers when it considers business opportunities / healthcare delivery opportunities is how the core competencies of Kaiser match the particular business expansion opportunity. As Davis looks at an Innovation Park, it is important that we follow the same process as the addition of businesses to that multi-location Innovation Park environment present themselves. If an opportunity does not synergize with and leverage those core competencies then it is best to pass on the opportunity. However, if the synergies and leverage opportunities make Kaiser a stronger presence in an existing market (delivery area) then that opportunity will no doubt get serious consideration.
Doby
You are asking the wrong question of me. I chose Kaiser for a number of reasons, none of which had anything to do with its potential for growth. So when you are enquiring about Kaiser, yes, it has grown. And its growth has pros and cons.
My actual philosophy is not in alignment with that of Kaiser. As I have posted many times, I favor a single payor system. I believe that medicine should be a collaborative process within the region, not a fee for service competitive model. If UCD, Sutter, Kaiser and Dignity would set aside the competitive model and focus on how best to provide optimal care for all members of the communities in our region instead of trying effectively to “one up” each other, imagine how much impact our combined efforts could have on the health of individuals and our communities for much less cost. This is the model that I would like to see in our medical community and in many other areas of endeavor where I feel that collaboration would suit progress much better than would competition.
Tia,
Thanks for clarifying. Sorry, I wasn’t aware of your many posts on the subject. No doubt there is room for more efficient/cost effective delivery of health services.
But I think we were talking about initiatives intended to produce more and better well-paying jobs in the community.
Our hospitals have done much for the region in this regard. Thanks.
Rob,
Nice article. Clearly there does exist a bright future for those who are willing to embrace new opportunities.
It’s not just like saying any job is better than no job, although there is something to be said for having a job. We are talking about jobs and opportunities with the potential for positive global impact beyond merely helping the individual and prospects for the community and the university.
The real question, however, still remains – when is the City Council going to embrace the notion that it wants staff to proceed with its fact finding mission and provide the necessary resources to facilitate such an effort? When is the City Council going to provide direction to staff to comeback with a report containing sufficient substance that the Council can feel justified in making an informed decision about how best to move forward in in the sphere of economic development?
We have $400,000 to borrow and spend on a long-term negotiation with PG&E, because we think we can see some opportunity in that initiative – yet we can’t figure out how to multitask on the issue of pursuing a framework for discussion and analysis of a corresponding pursuit of potential economic development initiatives?
It is one thing to pursue a 25 year long discussion of the Nishi Project – clearly an effort long overdue. But the Nishi Project is only one facet of any strategy to engage the potential and clear the pathway for new technology employers to find a home in Davis.
Matt talks about a chicken and egg condition. A truly successful innovation center demands a supporting base of suitably engaged employers for its support and its sustenance and in order to prosper. But more importantly, there must be suitably zoned property to welcome such employers if they are interested in locating in Davis.
And then, we are right back to the fundamental questions of what would that look like and why would that be good for our town?
How much longer do we want to wait to be able to begin that dialogue? What is gained by waiting? What are we waiting for?