1. The Bull City’s Rising Creative Class Sarah Chan Econ 145 Urban Economics Professor Charles Becker

2. New Social Order Richard Florida’s The Rise of the Creative Class Emergence of a new social class of workers Locational decisions of the creative class Implication for firms: “Keep your tax incentives and highway interchanges, we will go where the highly-skilled people are” (Hewlett-Packard CEO Carly Fiorina) Implication for policy makers: Focus on strategies based on developing amenities to pull in human capital instead of firm targeted strategies

3. What is the Creative Class? Three main groups: Creative CoreCreative ProfessionalsBohemians Create new forms of knowledge that are widely useful and readily transferable Engage in creative problem solving by applying complex knowledge in unique ways Cultural and artistic occupations; key factor in attracting the other 2 creative class categories Scientists, engineers, higher education, research and development related occupations Legal professions, financial services analysts, business professionals Writers, performing artists, creative and entertainment industries

4. Density Distribution across US Cities

5. “ Great coffee shops, crowded bookstores, a lively music scene, well- designed buildings, thriving art galleries, successful design firms, exciting museums and theatres, opportunities for arts participation - these are elements we find in the communities that drive the new economy.” (Durham Arts Council, Creative Vitality Index Presentation 2010) Durham’s shifting paradigm: from the warehouse-oriented tobacco and textile manufacturing district, toward a high-tech creative economy How has Durham’s infrastructure kept up with the demands of its ‘creative’ residents and workers? Durham’s Creative Economy

6. Importance of Amenities

7. Downtown Durham Master Plan The most common activities that people came to Downtown to engage in once a week or more were: Dining (30.4%), Recreation (20.9%) Government (16.6%) and Entertainment (13%). The most common destinations in Downtown were Restaurants (25.5%), Brightleaf Square (23.9%) and the Farmer’s Market (20%). 89% reported that more Casual Dining businesses would change the frequency with which they visit downtown. Specialty Foods (85.2%) Fine Dining (69.1%) Nightlife (67.4), and Art Galleries (66.2%) also rated highly. With the exception of Festivals (54%), and Nightlife (38%) survey respondents indicated they largely seek entertainment and recreation options outside of Downtown Durham; Raleigh was a destination for Museums and Performing Arts. While the Downtown tax base has increased, it is still primarily reliant upon commercial uses for revenue.

8. American Tobacco Campus- Mixed use

9. American Tobacco Campus American Underground: Basement space for start-ups designed to house up to 70 small entrepreneurial high tech companies Joystick Labs, Launchbox Digital and entrepreneurship organization CED, previously located in the RTP Firms transitioning from a manufacturing and industrial framework to viewing their workers as members of the creative economy Premium on proximity to upscale housing, entertainment, restaurants and bars Implications for Research Triangle Park: Does ATC compete with or complement RTP? Firms locational decisions First revision of Master Plan since 1959 Allow for high-density mixed use retail and residential development

10. Empirical Model Test a simple econometric model, to identify the factors across 30 cities that may account for the presence of the creative class. Control for sprawl and sun as “sun, skills and sprawl” are cited as the three factors that largely determine regional growth (Glaeser) Υ = α + β i χ i + β j χ j + ε Y is the dependent variable of % change in creative employment from the period 2004-08; β i : Amenities (% change in) β j : Economic Factors RestaurantsCreative Employment performance venues, museumsUnemployment rate of college graduates Nightlife establishmentsAverage wage of creative class Employment of bohemians Sample of Metropolitan Statistical Areas Greensboro-High Point, NCAtlanta-Sandy Springs-Marietta, GA Greenville-Mauldin-Easley, SCBirmingham-Hoover, AL Knoxville, TNCharlotte-Gastonia-Concord, NC-SC Oxnard-Thousand Oaks-Ventura, CADallas-Fort Worth-Arlington, TX Riverside-San Bernardino-Ontario, CADurham, NC

11. Analysis How does Durham compare with other cities? Does the increase in Durham’s restaurants, nightlife, and arts venues have robust relationship with the increasing presence the creative core and professionals? IMPLAN Data study The use of North Carolina 2007 IMPLAN data, as a proxy for Durham, to calculate regional economic benefits from the creative industries An input-output (I-O) model to examine regional industrial structures and exploring existing and potential regional industry linkages.

12. Creative Industry Effects Industry Description Industry Size ($) Output Multiplier Labor Income Multiplier Employment Multiplier Performing arts companies109,604,8001.6218541.6007411.162359 Spectator sports companies 1,445,611,0001.7330991.4829701.455445 Promoters of performing arts and sports and agents 226,212,9001.6935921.6652431.275621 Independent artists- writers- and performers 114,981,3001.6317981.4569541.265995 Advertising and related services 1,614.2370001.6772241.5160701.602570 Motion picture and video industries 2,552.8890001.7416401.6166552.831606 Sound recording industries 662.4437001.8387822.4160611.670667

13. Policy Considerations Target industries for expansion within creative industries Revitalization of downtown Durham with a focus on the ‘soft’ amenities Creating lifestyle options, in the form of entertainment, nightlife, and culture to attract talent Creative class “vote with their feet” (Florida, et. al. 2006) choosing to locate in communities that serve their lifestyle needs Problems of increased tax burden? Gentrification leading to out-migration of ‘bohemians’ Durham Arts Council: Investment in the arts industries, provide support Creative Vitality Index and Local Arts Index commissioned to strengthen rationale for arts investment Durham Performing Arts Center (DPAC)

14. The End Thank you!