Lessons from Corporate Innovators

Richard Florida — Author, Thought-Leader & Researcher

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Episode 12: Richard Florida — Author, Thought-Leader & Researcher

After the last two episodes interviewing two individuals I’d never met but respected from a distance (Beth Comstock & Jeff Sutherland), this week is a little different. I sit down with Dr. Richard Florida — someone who has shaped my career very significantly and I’ve known for over 17 years.

Richard is one of the world’s leading urbanist. He’s a researcher and professor. He has written multiple best-selling books. He wrote the forward to my book “The Science of Growth” but our connection goes back to when he was a professor and I was a research fellow at Carnegie Mellon.

Richard thinks deeply and while his area of expertise is often looked at as focusing simply on location and how cities shape culture, life and work. I believe his research has wide-reaching implications around a bunch of topics. Including how corporations should look at innovation.

Our conversation was after a multi-hour brunch at a local restaurant in Miami Beach. I jump around some trying to hit some of the highlights from things we’d already discussed, plus make sure to cover a few points on his research that I think corporate executives should spend more time thinking about. Hope you enjoy this week’s episode of Agile Giants!

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Sean Ammirati: 00:08 Welcome to Agile Giants: Lessons From Corporate Innovators. I’m Sean Ammirati your host. Co-Founder and director of the Carnegie Mellon corporate startups plan and partner at the early stage venture capital fund, Birchmere Ventures. Each week I’m going to talk to guests who are experts at creating startups inside large corporations. I believe fundamentally a startup within a company is the same as one inside the proverbial garage. A group of entrepreneurs trying to make the world a better place using new ideas and inventions. However, I also believe some of the techniques and processes are just inherently different. This podcast is going to explore the similarities and differences.

Sean Ammirati: 00:56 First of all, for one more week up front I wanted to mention I’ll be at the IRI conference in Pittsburgh Pennsylvania — April 29th to May 2nd 2019. I mentioned last week that I’ll be leading 3 discussions throughout the conference. One other note, when I’m not in sessions I am planning to record some episodes of Agile Giants live why from the show. If you’re in town for the event and interested in recording an episode of Agile Giants, please let me know and once again you can learn more and register for IRI by visiting iriannual.com.

Sean Ammirati: 01:30 Okay, after the last 2 episodes interviewing Jeff Sutherland and Beth Comstock. Individuals I have respected from a distance for a long time and finally had a chance to meet through the podcast. This week is a little different. On episode 12 of Agile Giants, I sit down with Dr. Richard Florida. Richard is one of the world’s leading urbanist. He’s a researcher and professor serving as a University Professor and Director of Cities at the Martin Prosperity Institute at the University of Toronto. He’s also a Distinguished Fellow at NYU and Visiting Fellow at Florida International University. I’ve known Richard for 17 years. He most recently wrote the forward to my book “The Science of Growth”, but we first met at CMU right when his book which went on to become quite a bestseller “The Rise of the Creative Class” was first coming out. Richard has shaped my career significantly. He thinks deeply and while his area of expertise is often looked at as focusing simply on location and how cities shape culture, life and work. I believe his research has wide-reaching implications around a bunch of topics. Including how corporations should look at innovation. Our conversation was after a multi-hour brunch at a local restaurant in Miami Beach. I jump around some trying to hit some of the highlights from things we’d already discussed, plus make sure to cover a few points on his research that I think corporate executives should spend more time thinking about. I hope you enjoy Episode 12 of Agile Giants.

Sean Ammirati: 03:08 All right, we got quite a treat today on Agile Giants. I’m joined by Richard Florida. Richard is probably someone who shaped my career as much as almost anybody I’ve ever worked with, certainly top 3 influences for sure. One of the things that Richard is probably best known for is this ark over the last 20 years he’s been talking about from “The Rise of the Creative Class” to the most recent book that came out “The New Urban Crisis”. We’ll include links to both books in the show notes. But Richard maybe you can start just framing out this theory and mega trend that you’ve been chronicling from rise to urban crisis.

Richard Florida: 03:40 But first because you were so kind to mention how I was influential to you, I have to say how influential you were to me. I think I met you Sean when you were still an undergraduate. Is that correct?

Sean Ammirati: 03:50 That’s right.

Richard Florida: 03:51 And at that time when “Rise of The Creative Class” was published. This was probably before 2002. It had to be somewhere between 2000 and 2002. Even though I was teaching at Carnegie Mellon I was still using their old clogy email platform. I had no idea what a website was and no idea what a blog was. I think it was you Sean who built the first website I ever had and moreover I still remember when somebody said, your books is doing well, it’s appearing on blogs. I think I asked you what is a blog. I know that sounds technologically illiterate. That was such as the landscape so, no Sean you were incredibly influential to me.

Richard Florida: 04:29 I don’t know where this … You know I’m now old enough and at a point where I have to think about where these things came from. I really do think “Rise of the Creative Class” was shaped by two intersecting trends.

Richard Florida: 04:41 One as a little boy growing up in and around Newark, New Jersey I saw my city decay and decline. At the same time my dad who worked in the eyeglass factory Victory Optical in the ironbound section of Newark, that factory which was a bustling, hiving, thriving factory when I was a little kid ultimately was mismanaged as my dad would say by a combination of engineers. Engineering and MBA hubris. It was managed into de-industrialization, so I think as a really young kid I was trying to make sense of the decline of urban areas and de-industrialization. Where what happened I went to off to Ohio State as a professor and my professors in graduate school, those at MIT and at Columbia had been talking about de-industrialization and the decline of American industry and what we called the decay of so called Fordism. This old mass production industrial system. At Ohio State I met a guy named Martin Kenny.

Richard Florida: 05:39 He’s a fabulous rural sociologist and Martin had written a book. His thesis became a book from Yale University press on the biotech industry and Martin also had an interest because he had a Japanese partner, significant other woman. He also had this great interest in Japan. At Ohio State we started 2 projects that would become very important to this. One was a project looking at venture capital flows. Now this is 1984, so think about this. We were looking the first ever really academic study of venture capital flows and we actually went up to Harvard business school library, got all the old copies of venture capital journal, Xerox them and took them that back and made a database. We then went out and this … I am so sorry I never taped them. We took notes, we then went out and interviewed all great venture capitalist. Art Rock, Jean Kleiner. I could go on and on. All of the people … Tommy Davis. All the people who built the modern VC industry Silicon Valley and in Boston.

Richard Florida: 06:40 We did several studies of that which we can come back and talk about. At the same time we noticed that Honda was building a factory in Marysville. That was the opposite of de-industrialization, it was re-industrialization. We were very interested in this combination of … This new model of innovation which was taking place outside of big companies in these industrial districts or social structure of innovation in places like Silicon Valley and also very interested in these new systems of work which were tapping workers brains and kaizan, or continuous improvement, happening in Japanese factories. I think all that was background for what would become Rise of the Creative Class much later and of course as you know because we met I moved to Pittsburgh in, 1987 I then saw the mass of the deindustrialization of Pittsburgh. The attempt to rebuild Pittsburgh around University industry collaboration and all these great programs that Pittsburgh was embarking on.

Richard Florida: 07:30 But at the same time as you know because you’ve been at Carnegie Mellon all these great minds at Carnegie Mellon, all these people building the baseline technology, all the talent going to these companies but yet very little of it at that time was gluing itself to Pittsburgh so that’s where the idea for Rise of the Creative Class came from it was this idea that there was something going on in cities that was attracting talent in technology and in Pittsburgh although it was an incredible place with this incredible generator called Carnegie Mellon, the stuff was all flowing away and at that point I kind of came up with the idea that it’s not just the corporate innovation that matters it’s not just the business innovation is not just the workplace practices it’s the place itself. I don’t know Sean, I don’t know where that idea came from. I often say it was puzzling over Lycos move from Pittsburgh to Boston.

Richard Florida: 08:17 This great startup company, internet organization and search company. I don’t know. It’s like one of those things that just hits you. I remember Herb Simon was still alive and he was still our colleague Carnegie Mellon and I remember him saying to me once. If you find an idea that no one else seems to have come to and it’s the intersection of several disciplines you’ve probably found something that’s important. I went over to meet with Herb and he said, in my day Richard artificial intelligence in computing and information technology were big subjects and that’s where I applied my interest, but now this kind of stuff that you did or Jane Jacobs did about cities and he kind of said I’ve always liked cities, I’ve always walked to work, I lived in Squirrel Hill and walked to Carnegie Mellon. If I was a young person now, it was just a way of encouraging me. I’d work on the cities thing.

Richard Florida: 09:03 I think that out of that soup if you will, if that intermixing of factors came this crazy idea and of course the Rise of the Creative Class was not my idea, it was my editor at Basic Book saying, hey Florida you’re talking about these knowledge workers, you’re talking about these professional people, you’re talking but these artists and designers, you have these statistics that show a 3rd of Americans work in the field. You have a class here, call it a damn class, don’t make up funny words. At that point I think I just said, let’s call it something. The creative class and just to button this down, I fully expected like the other 4 or 5 books I wrote. Breakthrough Elusion, Beyond Mass Production and others that book to be read by both of my parents, my brother, you and a couple of colleagues and of course what happened was quite to my surprise the book found an audience and an audience that was unsuspected for me.

Richard Florida: 09:56 I had written a book for city builders and economic developers, the audience it found was kind of young people in creatives and artist and techies who literally identified with the book. It wasn’t the audience I was targeting but … And the rest as they say is history.

Sean Ammirati: 10:12 Yes, absolutely. I do remember that ride well. You went on to then write the New Urban Crisis that kind of continued to update your thinking around this. One of the things that you’ve observed through this lens of cities though that I think is interesting is that the world hasn’t become flat at all, it’s actually becoming incredibly spiky. I would argue as it related to innovation that’s become incredibly spiky as well. That there’s a small subset of the economy that’s doing all the innovation and I think that’s just as dangerous as some of the other trends around the spikiness. I’m curious, see I think part of what you’re really good at is I think you’re this person with this great expertise in cities and business that how people work but you’re also … You understand how society works, you’re almost a sociologist in disguise.

Richard Florida: 10:58 Indeed.

Sean Ammirati: 10:57 I’m curious with this lens that you have into how people work, why do you think innovation has been relegated to the the spiky small group instead of everybody? I mean your father in the eye glass factory was saying everybody is creative, everybody is innovative. That’s not being talked about today.

Richard Florida: 11:17 I think there’s two things going on. I do think innovation and creativity are a social or inner subjective process and I think the creation of knowledge and new ideas comes from lots and lots of people and every single human being is creative, but that knowledge is expropriated by a very small group of people, in a very small group of places. Who as you know actually attract it. The reason people were leaving Pittsburgh not because they didn’t like Pittsburgh, maybe they didn’t, but they were being pulled into this vortex called the social structure of innovation. Where the venture capitalist were where the serial entrepreneurs were. Where there was mechanism for creating value, surplus value a Marxist whatever you are. There’s a mechanism for a harnessing that and creating value and profit.

Richard Florida: 11:55 I think what’s happened of course is the world has become even spikier than I have expected. When Tom Friedman wrote that book the world is flat I then wrote this response in the … This is 2005, in The Atlantic called “The World is Spiky”. We looked at three or four things. We looked at the distribution of population, which of course is very clustered and concentrated but that’s not nearly as concentrated as the distribution of economic output, which is even more clustered and concentrated because productivity is concentrated, which is the distribution of scientific if you look at where great universities are the creation of science that’s even more skewed and spiky and then as you said the commercial innovation is the spikiest of all. Of course we have brilliant people liked Steve Case who I love who’s a great guy talking about the rise the rest.

Richard Florida: 12:42 But the fact of the matter is innovation is even spikier than it ever has been and I think there’s a couple dimensions of this. One, I think in the past that most of it was concentrated in the San Francisco Bay area and in greater Boston, Austin, Texas, and Seattle, a few other places in the suburbs. What we’ve seen is that a kind of a migration of a large part of that into urban centers and big cities. New York has become a massive player in commercialization of new technology innovation. San Francisco has far surpassed the Silicon Valley in the creation of new start ups. But also big cities elsewhere in the world. London, Beijing, Shanghai, Berlin have become players so in a way … As this technology has globalized a little bit it’s concentrated more and more even the biggest cities. The other thing is that we find very, very little evidence and I feel mad about this because I want the rise of the rest to happen and I’m dedicating a large part of my life to this.

Richard Florida: 13:40 I love places like Pittsburgh or Nashville or Omaha were Bettonville, Tulsa. Jed Kolko this great economists from Harvard who was at Trulia and now is at Indeed, this hiring company, there’s a new study that will come out next week, I’m going to write about it. He just looked at the distribution of tech employment. I looked at the distribution of start ups. There’s very little evidence that any of that is disseminating. That San Francisco, The Bay Area, Boston, Austin, Seattle, New York look like the leaders and they look like … In Jed’s words “they’re consolidating their lead” which which is really scary. One thing I sometimes say is The Rise of the Rest really has been San Francisco, New York and London and I’m being silly and being glib but it’s not like a lot of this stuff … Even though the Pittsburgh and the Tulsa’s and the Omahas have increased their volume of VC funding of startup, their share has declined.

Richard Florida: 14:38 It seems to me that if anything innovation is becoming spikier and that capitalism, this kind of knowledge capitalism is concentrating assets in a relatively small group of people and in a relatively small set of places.

Sean Ammirati: 14:53 Yup and I think that’s the problem. That’s a very, very big problem. I think the problem with the Rise of the Rest, with all due respect to Steve who I think is a great guy with wonderful intentions is as soon as you make it an us and them and a leader and a follower all of a sudden it’s not the rest. Pittsburgh doesn’t need to Xerox what Silicon Valley has done. Pittsburgh need this reach down, find some courage and stay okay, how do we make ourselves the best Pittsburgh ever, instead of how do we do it poor carbon copy of San Francisco.

Richard Florida: 15:27 I think Pittsburgh is one of the few places. Even know that hasn’t really registered in a remarkable, well first of all Pittsburgh’s transformation is remarkable going from the depths of the steel crisis. I was just re reading something I wrote 1992 called the Moravian report. Don’t ask me why I was re-reading this but it was kind of a blueprint for Pittsburgh’s remaking. 150,000 jobs lost. A region in crisis. Small communities can’t even fund their police department. Lord God, Pittsburgh did a remarkable job of repositioning itself around it’s great universities, around technology and the stuff that you and I observed, no one could have predicted. They might have said software engineering or robot, nobody would have predicted that driverless cars. We would see tanks driving around, DARPA funded tanks driving around the parking lot. No one would have predicted that that could become its own industrial sector and many others. I think Pittsburgh and Nashville are probably … Nashville around music and some other things are 2 of the only places that give us some exemplar of a place they can do it. But again it’s been very small.

Richard Florida: 16:35 I do agree with you that I think we do have ourself in this “us versus them” and I think that it’s helped to polarize not only our economy polarizing politics. That’s what The New Urban Crisis was really about. A book you mentioned was about this divide in our society, not only between socio economic classes but between parts of our country and parts of our city regions. That divide was creating a lot of resentment and anger and people just had enough. By the way I don’t think this is something new. I think what we’re dealing with and what I’ve been trying to do with my whole career is a massive transformation of capitalism. I think the last time this happened we had Karl Marx around and Adam Smith and others to write about the transition from agrarian feudal society to an industrial society and you think about the social and psychological and geographic destruction that caused.

Richard Florida: 17:28 The rise of all the isms. Socialism, communism, fascism met Civil War in the United States mass workers’ movement revolutions in France and Russia. Mass depressions, two world wars. In my view this shift from a physical economy to a knowledge economy is actually bigger. I know that sounds crazy but for the first time work were no longer basing our economy in raw materials and physical labor we’re basing our economy on knowledge. On the knowledge generated out of people’s mind. It’s not a manual labor it’s mental labor. That disjuncture, that disruptions so big that yeah it’s causing a massive concentration of Wells, yeah it’s causing a massive geographic concentration of innovation and knowledge capabilities. It makes sense, I’m in a way actually impressed. Look we can do a lot more but part of me says how are we managing this as well as we are. I don’t want to seem like an apologist there’s lots more we have to do, but I’m kind of amazed the thing hasn’t fallen apart.

Richard Florida: 18:29 Don’t get me wrong, the populist backlash in the right and the left is a challenge. Not only with Trump and now the left variants of Trump. I lived in Toronto I saw Rob Ford the original populist emerge. These are all challenges but you know the whole thing hasn’t broken down. I guess my hope is now is the time we have to do some deep introspection about this us and them and figure out a way to push this thing forward.

Sean Ammirati: 18:53 Yeah, I think these are real challenges, they’re hard challenges and you can’t trust 5 CEOs and 4 mayors to solve the problem. It’s a bigger problem than can be solved by a small small number of people. I want to talk about this Amazon thing for a minute because I think you were way ahead of everybody else on what was going on with HQ2 and the disaster that that ultimately became. I feel like the challenge was announced and you immediately stepped up as a thought leader on it. A lot of other people finally figured it out but it took a lot of us a lot longer than you did to figure it out. You’ve done a nice job, I think articulating what mayors should have done and should do going forward in situations like that. But you also speak to a lot of CEOs. What should CEOs of these other companies when this kind of disaster is going on?

Richard Florida: 19:42 First of all, before Amazon HQ2 another tech company came to me and said we’re thinking of this idea of an RFP and I said that’s loony, don’t do it.

Sean Ammirati: 19:52 They should send you a large check right now. [laughing]

Richard Florida: 19:54 I said you know where you want to go. They didn’t know but I said you know. I said you have to go around a major airport, you have to go around major universities, you have to go around a major talent center. You think there are hundreds of places but the reality is there’s less than a dozen. They took that advice very seriously.

Richard Florida: 20:12 Actually, I was not opposed to the Amazon HQ2 when it started, even though I didn’t like the idea of an RFP. I was actually on the board of Toronto Global at the time. A good friend of mine who was chairing it asked me to go on the board. And we put together the bid for Toronto, which is spectacular bid. We offered no incentives. We offered to build up our workforce. A guy named Ed Clark was the former CEO of TD Bank and an amazing man actually put it together. We made it public. We made that bid public, the bid book. Everything the day it was it turned in. What turned me around is looking at what many American cities were doing.

Richard Florida: 20:46 First the fact that they were hiding this. This is tax payer money. And secondly when I … I couldn’t believe when I started to hear somebody is offering a billion and something leaked out of New Jersey, my original home state. It was a report in the newjersey.com which said that Governor Christie was offering billions. I think it was 3 billion. It was a leaked report from the meeting. I just said to myself, this is just awful. By the way I actually like Amazon is a company. I think they were one of the first companies to realize the power of urban location. I wrote about this in Rise of the Creative Class. It was the first company to really locate an urban center, I think in delivering value to me as a customer, I mean I often say I’m probably in the top 0.001% of prime customers with two little kids, we get boxes everyday.

Richard Florida: 21:37 What worried me is how Amazon which has done so many other good things didn’t wake up. It’s so interesting because I admire Jeff Bezos in so many ways, how he let this thing get out of control. It could have been very easy for him to say no, we don’t want incentives, we want a competition based on the merits, we want a competition that’s about inclusion. We’re going to be your partner but he never did. I know that’s because he was distracted. By the way I noticed that this was run by the real estate unit in Amazon, the head of economic development resigned. Very quietly and he actually sent me a note, saying he didn’t quite say I think you are right but you know what you’ve been saying has been interesting to me and by the way I’m leaving Amazon. I think that I’ve tried to advise mayors, I called a lot of mayors. I called a lot of governors. Because I’m old enough and I have a little bit of … I’ve known these people for a long time.

Richard Florida: 22:28 Nobody would stand up, no one would say I’m going to say no to this. I said one of you, just one or two of you just say let’s do this the right way you can have a lot. I think now businesses are scared. I think what happened not only with the HQ2, what happened in New York. I was writing just that weekend in the daily news that said let’s come to the table, let’s put this together. De Blasio, Cuomo, Bezos. Get together, do this right, invest in affordable housing. They pulled out. I think this has created a vacuum where we’re now not the big tech has made plenty of mistakes but this added fuel to the fire. Now we’ve got a situation where communities are saying big tech is a big problem and so I think companies have to buck up and I think the CEO’s of these companies have to realize that if they wanted to business with communities they have to become real partners in community development.

Richard Florida: 23:22 Something you and I haven’t talked about. I’m developing a piece for a major business periodical that will be remain nameless because they haven’t accepted it. Basically because most of my field has been advising mayors like you said, most of my field has been advising communities. They’re actually no business school courses. I teach a course in the Rotman School on this. But you look at Harvard Business School or the Sloan School or whatever, people don’t … I’ve been thinking that site selection and community management have to be a corporate function. Actually what I’m trying to argue is that corporations need a chief location officer. They have a CIO, they have a CFO they have whatever. COO. The corporations need a chief location officer and they need a management because actually location is a key part of corporate strategy. It’s not taught in business school. It’s not just selecting location, it’s about selecting location and managing location and that means instead if real estate skills that means a set of corporate strategy skills and that means a set of economic development skills.

Richard Florida: 24:23 In this piece I’m developing that’s the argument I’m making. That corporations now have to understand, and I think Sean to be honest I’m trying to parse so it’s not fully development. I actually think older companies like the Prudential a company I know well in Newark, that stayed in new York for 100 years. Some of the banks, even some of the big 3 because through the school of hard knocks they’ve had to develop some these capabilities, I actually think it’s the big tech companies that have been very self aggrandizing, have a lot of hubris that say we know what we’re doing. I think they’re the ones that need this the most but I do think the business has to wake up to the fact that they can’t just go into a community and push folks around. Right now they have to think about communities.

Richard Florida: 25:06 People have deep emotional attachments to where they live. They have to think about communities as their partner and if they want to be in a community how to invest in that community and be part of that community rather than just think that we’re locating there and it’s a great thing.

Sean Ammirati: 25:18 I think actually these big large established companies are better at that. They’re inherently better at that. What they don’t understand that the tech companies understand is how to capitalize creative thinking, right. Because when you’re born as a digitally native company you know how to do the capitalization around it. The large companies, these legacy companies, they don’t know how to do that. If we could teach them how to do that they’d end up I think actually making innovation helpful for everybody not just innovation helpful for the young 20 somethings. Which I think is actually that big tech backlash.

Richard Florida: 25:52 You know, there is a great essay that I read. I wrote “The Breakthrough Illusion” why American makes the breakthroughs and doesn’t follow through. I wrote that book in 1990. There was an essay written at the time by guy named Henry Eergas. Henry was at the OECD and the essay he wrote was called shifting verses deepening and here’s what he said. In the United States throughout its whole history we’ve shifted our economic structure. We’ve always invented … We’re Schumpetarian to our core. We’ve always invented a new group of start up companies that pioneered new industries. In Japan or Germany he argued that they deepen. They get better in steel they get better in autos they get better in electronics and I think what happened in the United States is these Silicon Valley like tech response was to built this venture capital thing and the social structures innovation and build-up these new companies divorced from our old industrial structure.

Richard Florida: 26:43 Yeah, I think that’s been a cost. That’s what I wrote in The Breakthrough Illusion. This is 1990. We make the breakthrough and don’t follow through. I think that divorce has made us incredibly innovative. We’ve defined this new technological knowledge based revolution but we never diffused it backs to our industrial structure. The other thing is all those older companies had to figure out how to treat employees decently. The new companies because they were new and didn’t realize that employees were important could treat employees pretty crap. The knowledge employees, they give stock and that was different but the baseline employees. I think-

Sean Ammirati: 27:15 They don’t call them employees. The art is not to … If you make them a contractor, you can treat them however you want.

Richard Florida: 27:21 Yeah, I think that cost us. That caused some of the disruption. That said if you asked me I’d rather have the United States hand right now. With all the problems of this place, you ask me could I have China’s hand, could I have Europe’s hand, I would take the US hand and bizarrely I believe … I know we have plenty of problems. We’re polarized, we’re divided, our congress is dysfunctional. I actually think United States is more relatively advantage now than before. If I look back at the turn of the last century when my dad was born, Germany and Japan and England were pretty formidable competitors. People talk about China, I just don’t see it. I think the United States with these how many, 200 and 380 metropolitan areas and dozens of big cities. It’s an incredible place and we’re still attracting the best and the brightest, and we still have great Universities.

Richard Florida: 28:18 I have this weird thing, as critical as I’ve been that actually America’s best days are ahead. I know that sounds bizarre in this gloom and doom Bernie Sanders was Donald Trump. I actually think America’s best days are ahead of it. Now if I look … I say this a different way. I say there is a tale of 2 Americas. In national America it’s the worst of times in local America it’s the best of times. I’ll tell you when I go to Pittsburgh or Philadelphia or Tulsa, or Bettonville, or Milwaukee or Indianapolis. I just reviewed a paper. I’m going to write about this at city lab. Maybe we’re up this will be out. When we’re up. These clinical scientist and economist at Stanford, Princeton, Dartmouth did an incredible study. They studied 8 metropolitan areas, a wide variety of them. Different Sunbelt rust belt superstar and not superstar. They use very detailed survey data to look at how polarized the citizens were on national issues versus local issue.

Richard Florida: 29:13 On national issues, these citizens were ripping each other’s heads off. There were strong left and strong … On local issues complete unity. It was amazing. No polarization. There was a little bit around charter schools that left people saying I want public schools and the right people saying I want charter schools. A little bit around unions but nothing like this amplification and what they found is like a 95% of issues around local no difference. That’s telling me something. That this incredible thing we have going on in America. That America is being rebuilt from the bottom up and decaying from the top down and I think I still have a very good feeling. I know I’m probably an outlier in that, a very good feeling about where the United States is headed.

Sean Ammirati: 29:57 I think there could be reasons for optimism, but I think we’re at a point where we need … the next 5 years are meaningful. Before I ended up calling it The Corporate Startup Lab at Carnegie Mellon I was going to call it the Creative Restoration Lab.

Richard Florida: 30:12 I love that.

Sean Ammirati: 30:13 As a take on creative disruption. But if these companies don’t figure out how to do that and we continue to let 20 something dropouts who got engineering degrees that have literally no liberal art, they just don’t know how to think about what they’re doing. That’s not sustainable.

Richard Florida: 30:28 If you look the lag times between the rise of new economic orders and the rise of supportive social and policy infrastructures to spread their benefits. These are long lags. Let’s put the birth of the industrial revolution in the 18th century, say that it became developed in the 19th century. It wasn’t until the 1930s, ’40s and 50s that we enacted these social compacts. People like my dad had a good … My dad told me he had a shitty manufacturing job in 1930. 1934 when he started. He had a great manufacturing job when he came back from the war. The policy infrastructure that made that job good took a long time to develop. I think you’re right.that right now we’re in the moment of chaos and crisis. I do think though there is enough steering mechanism that says … Even look I could go on about our robber baron winner takes all and all of this. I actually think there’s an increasing awareness that we have to fix it. There’s increasing awareness among elites. Not at the mass elites.

Richard Florida: 31:36 Yeah, we might not get there in five years. It might take longer. You and I might not see it, but I think our kids will see it. If we don’t, holy, who will? If we don’t pick up this ball, who’s going to fix this?

Sean Ammirati: 31:49 The problem is that the world is changing too quick. That pace that you talked about may have worked at a slower pace. The pace is just too fast today.

Richard Florida: 31:58 You hope that there would be a response and the only thing I can say is I do think the national level can’t do it. I’ve been a bog advocate. It’s been the hardest thing I’ve ever done, saying that we have to start to devolve power to the local … By the way, I don’t think in America we’re all going to agree on things. I have a particular perspective on gun control that maybe my brothers that are right to me don’t. I have particular perspective on gay rights and women’s reproductive rights. Others may not share. I have a particular perspective on public spending for transit. The great thing in America is we can get to choose where we live. We don’t have do invoke …. You know. We don’t have to just keep bashing each other on the head, we can be … I’m good friends, incredibly good friends and enjoy people who have different viewpoints than I do.

Richard Florida: 32:42 Why would I want to bash them over the head with mine. That’s what I think you’re right. What’s so scary about this time is the pace of change is so fast and the potential for something to go wrong. That said I am heartened by the fact that really bad stuff hasn’t happened yet. I do think … I don’t want to sound like Steven Pinker but who I actually admire in many ways. I do think the trajectory of the logic of history is more on our side that against us.

Sean Ammirati: 33:11 I could talk to you forever about all this. I do one of ask you to pick up one more thread on that though because I do think this also influences how we teach and prepare people for these jobs. You made the comment that you have one class in University of Toronto on this but there’s there’s not a ton of education around this. If you had a magic wand and you could actually prepare professionals for this, what would you end up creating for them?

Richard Florida: 33:35 I think the whole way we educate just the word education is wrong. I have two little kids so my wife thinks I’m insane and maybe I am. I’m like do we really have to send them to school. Really honestly I never learned a thing in school, so that’s telling me something. School was a place to go, meet kids, hang out, form a band. I learned on my own. That’s telling me something. I think this whole system we built it in the mass production era because books were expensive, the teacher had the book, the professor had the book, you read it to the people they took notes. Now we don’t need that. It seems to be people … Human beings are pretty good at learning. What I’m so interested in is I have a lot of friends who are PhD’s who are fine. I have a lot of friends who built business, who never wen to college, who built service businesses. People were successful in hair salons. They’re just as smart as me and my PhD friends. There’s no difference. They’re really smart, engaged people.

Richard Florida: 34:35 I think the whole model is broken. Where I would start is that education or learning has to enhance creativity not squelch it. Ken Robinson has talked about how we continuously squelch the creativity out of people. It has to be tied to what people believe they’re going to derive meaning and purpose and passion from. I think we have to rebuild it from the ground up. Now I don’t use my own kids as guinea pigs but it really … I have to question what is this system for? Then we can go on and on, you look at the recent college bribery scandal. I joked to my wife instead of putting away a rainy day fund for the kids education, why don’t we just have our bribe funds set up now so we can bribe their way. Something I never thought would ever happen. People they’re looking at this as a aren’t even … They’re looking at this a status good. I really think that we have to rebuild it from the ground up and I think it means engaging people in what they love and whatever it is that they love that has to be the thing they can pursue .

Richard Florida: 35:29 I’m so frustrated by this. I don’t know a way out of it, I’m at University professor but I think the system we have now is probably one of the most broken elements in our society, especially when human capability is the core driver of our economy.

Sean Ammirati: 35:47 Just push on this for one more minute. What about professional call it MBA, call it whatever you want. What would you do for that type of training?

Richard Florida: 35:55 Here I teach a class. I teach probably 30 or 40 students. I go in there and I build a really interesting class that’s around simulation and experience and reality of bringing guest lectures. I do the best I can and my students are still on their devices, they’re texting one another, they’re looking online and they’re sort of engaged. I guess I’m having some effectiveness but it seems like a horribly inefficient way for me to engage people. The way I like to engage people is to adopt them, to work with them on projects, to be an apprentice model. A mentor or apprentice model. That seems to really transmit knowledge. I look at these programs, these professional certificate programs and I go what value are they … I don’t want to … Because they pay my salary. I’ve taught in city planning programs. I’ve taught in public policy programs. I’ve taught in MBA programs.

Richard Florida: 36:47 I don’t know what value we’re adding. I certainly don’t think in what I’m doing I’m doing a very good job of transmitting what I know. To be honest, to be really honest I think I can transmit all the knowledge I have to you in about this amount of time. Maybe we could do this twice, but after we do it twice, it’s just going to become redundant. What am I doing the other 10 or 20 times and what am I doing in this stilted classroom environment trying to make it represent the real world. It seems like the whole thing is so badly broken and the students are not engaged. Some of them are but the students or like, this is kind of boring. It seems to me that there has to be a better way to do this and I think it’s around doing stuff together.

Sean Ammirati: 37:30 That’s right. The word you use I think is key there is the apprentice model. Maybe this, you’d only need to do twice but if he could do 9-month apprentice model with people that could be incredibly powerful. It could change … That’s honestly what …. That was really our working relationship, we actually did stuff together and I learned from it and how you looked at.

Richard Florida: 37:49 In every person I made a meaningful difference in their life and it’s not been many has been that way. There have been people that we’ve worked on projects, worked on research, worked on … I dot think this model at Carnegie Mellon that you’re a part of that Carnegie Mellon has done a very good job of the so called project classes. Architects all them studios. I can tell you when I was working on Rise of The Creative Class it wasn’t the lecture classes that were, it was doing his project classes and these project classes for folks listening in where you get a group of interested students. It could be 10 or 12 it could be more, it could be 30. Basically you take on a problem, in our case we took on many problems, but the ones that I remember well was how do we shift the downtown of Pittsburgh more to the area around Oakland and the Universities. How would we create a real environment of technological innovation around there. How would we position Pittsburgh’s innovation infrastructure.

Richard Florida: 38:39 Those were eye opening to me because as Herb Simon said, they are the kind of environment where you end up learning more for the students than they learned from you. I’m not really teaching. I produce truly an inverted classroom I’m guiding, I’m using my expertise in the field to help them do eye opening things and they’re using their energy and smarts to bring new issues to the table. Maybe what I’m saying is if you could reinvent professional education away from classroom based learning which of course is very cost effective, but to these projects and instead of doing 4 or 5 classes the young people are doing one project per term or one project per mini term. Maybe it’s an 8 week, project or a 6 week project. Those projects are doing multiple skill development.

Richard Florida: 39:23 It seems to me that’s a much better way of preparing somebody. It’s almost the same thing in academia. Why you have people writing thesis when they should be writing academic articles. In fact in some disciplines are doing that I think you’ve to align education to what the job is. I’ll give you another example. Conservatory education in music is not terrible. Right here in Miami we’re talking about that, where we are today Miami Beach, there’s a New World Symphony. That New World Sympathy is organized by a guy named Michael Tilson Thomas. Basically he brings in young people for 2 year fellowships. learning this 20th century classical music, new world music. Instead of having up a large incumbent faculty, they bring together composers, violinist, flutists, whatever, pianist from all over the world. They have some local faculty but they bring in the best and the brightest.

Richard Florida: 40:17 They work with these kids for 2 years, teach them how to play this music, compose this music, conduct this music and then send them out to symphonies. That’s a very different model than book learning. I think that’s where we have to go. The funny thing is it seems like our professional education institutions are retreating from that and the disconnect because of course social science become so pseudo scientific, the disconnect between the academic world and the real world is becoming ever larger.

Sean Ammirati: 40:46 Last question I want you to put your economic development hat on. You spoke recently at the Drive Conference in Canada. Your talk instead of talking about I think what most people would have expected you to say, which was the start of economy you called it the scale of economy. I think that’s more than just a word choice. I think there’s a lot of brilliance there. As you’re talking to these people you are tying to build their economies in these Tulsas and Pittsburghs and all these other places. How would you advise them to think about these economies that they’re building?

Richard Florida: 41:13 I learned this idea of scale up from you Sean. The way I think about it is I think one thing that’s good up until Amazon HQ2. We got away from this trying to draw big companies in. In an economic development we got to the idea that we have to build our own, build our own start ups, build up our capital base, make investments in local quality of life. That’s a great thing, that’s where economic development comes from. I learned that from Jane Jacobs. But the one thing that’s hard to do is scale this up. Not that it’s easy, it’s easier to build a small enterprise. A friend of mine who’s much smarter than me said, taking your company from a million a year to 10 million. From 10 million a year to 100 million year. From a 100 million a year to a billion a year. He’s like from a billion a year to 5 billion a year, it’s the hardest thing you can ever do.

Richard Florida: 41:59 I don’t have any idea about what how to do it, but I can tell you it seemed really hard to me. The places that have been really successful seem to be very good at it. That’s what the Bay area figured out. Not just how to create little companies but how to scale them and maybe that’s where we have to get and that’s really hard. I don’t have the answer for that but I think for the economic development community as much as companies need to learn economic development, the economic development community has to get beyond where it is now and say what we’re trying to do is build economies at scale. That means going back to what you said you can’t just be the next Silicon Valley you have to figure out something new. The best example I can give is Nashville. Nashville figured out that it had a real advantage in music. Musicians don’t get paid a lot.

Richard Florida: 42:49 Los Angeles and New York were becoming … And London were becoming the centers of music were becoming incredibly expensive and musicians were really struggling. The other thing they realized is what Los Angeles and New York and London were doing were adding celebrity. To create value in music because musicians are hard to live there, you just put celebrity around it. You create hit making factories. Nashville said no. Good musicians want to live here. People who are really technically good and I’m a guitar … Way better than I’ll ever be. The best musicians in the world. The best drummers, the best keyboardist, the best peddle board players, the best guitar players. Because they can afford this and they love music. We can scale this thing. We can figure out a way to create recording studios and to use our radio thing and our venues. Did Nashville do that by fear? No, but they created the enriched environment.

Richard Florida: 43:39 If you look at the so called location questions which measure your region share of some activity compared to the national, all the increase in location question doesn’t come to New York, it doesn’t come in London, it doesn’t come in LA, it comes in Nashville. That’s just a good example of figuring out a niche an open niche, an opportunity and building something that scales. Then what happens in Nashville is it goes for country music to indie rock, to pop rock. At the end of the day, Kathy Lee Gifford, when she leaves the Today’s Show Kathy Lee Gifford says where I’m I going to go? Well, I’m going to move to Nashville. Because it has this enriched environment I want to be in. I think that’s one … There’s not a lot of examples I could say but Nashville was one good example of how to do that.

Sean Ammirati: 44:19 Yup. I think that’s exactly right. This has been amazing. Thanks for the time Richard, this has been a lot fun and I appreciate everybody listening in.

Richard Florida: 44:25 Thank you Sean it’s a pleasure being with you. We need to do this more.

Sean Ammirati: 44:39 Absolutely.

Sean Ammirati: 44:39 I hope you enjoyed this episode of Agile Giants. If so, consider sharing it with a friend. If you think it’s worth 5 stars, which I hope you do, please go to iTunes and rate it so that others can find this content as well.

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