Great Big Thank You to Radio NZ for letting us run this transcript of this interview with Richard Florida from Nine to Noon on Monday.

Presenter (Linda Clark): Richard Florida is an American thinker who recently came to New Zealand to take part in the Knowledge Wave conference. You may have read about him because he created a bit of stir advocating that encouraging gays to your town would help the local economy grow. Great Big Thank You to Radio NZ for letting us run this transcript of this interview with Richard Florida from Nine to Noon on Monday.

Presenter (Linda Clark): Richard Florida is an American thinker who recently came to New Zealand to take part in the Knowledge Wave conference. You may have read about him because he created a bit of stir advocating that encouraging gays to your town would help the local economy grow.Well. At least that's how it was reported. It is Richard Florida's view that creativity is the key to prosperity and switched-on cities he says do whatever they can to attract creative people. He's written a book about this - it's called The Rise of the Creative Class and he joins me now. Nice to have you on the programme.

Richard Florida: Hey , it's great to be with you guys today.

Presenter: When you talk about creative people, you are talking about painters and musicians but you're not only talking about painters and musicians are you ?

Richard Florida: No, the way we define the creative sector of the economy, it's about a third of the US workforce. It's of course painters and musicians and poets and other kind of culturally and aesthetically creative people but it's scientists and engineers and people who work in research and development and also people who work in kind of the traditional knowledge-based professions. That's about a third of the US workforce. but more than that, when we look at the contribution economically of these people say in terms of wages and salaries and incomes, in the United States it's about 50% of all wage and salary income and in our major metros it's almost 60 to 66% of wage and salary incomes so it's quite a large and economically effective group of people.

Presenter: And yet - I mean you call them a class but they don't. These people don't necessarily identify themselves as a group of people with common interests, do they?

Richard Florida: No, the reason we call them a class is because they contribute to the economy in a very basic way. The source of all wealth in advanced industrial economies is no longer raw materials or natural resources, it's no longer physical labour. It's human creativity and you know, the exampleIalways use is not a semi-conductor of software, it's my eyeglass. My dad made eyeglasses for a living in the 40s 50s and 60's and they were plastic kind of clunky things and now you look around at just anybody's eyeglasses, you know. My dad's eyeglasses sold for about $8, 9, 10 dollars US but now people's glasses sell for $100 or $200 or $300 or $400 or even more so for eyeglasses. In wine, you know, in food, in restaurants, all of them make money off creativity, no longer off this kind of material or utilitarian things. So the reason the creative class is a class is because we do the same thing economically. But, just like the working class, you know, 150 years ago, didn't think they had a common identity. We were welders or carpenters or blacksmiths or people who worked in factories. The creative class too doesn't think it has a common identity but that identity is forged in the relationship to the economy.

Presenter: Well yes, although a lot of the people that you talk about as being part of that creative class, well, they sound like spoilt yuppies really?

Florida: Well I mean, I think this is the one thing that we're going to have to figure out in our society, is this tension between kind of you know what, if you look at the creative class and want to make this very simple-minded, we have the, you know, the bohos, the bohemians, the geeks and the techies and the yuppies and each of those people thinks of them in a very different way. But when I was doing my interviews and focus groups for the book, one of the things people came up and said, we don't want to be classified that way. We really are creative people and in part of our life we can be a yuppie and in part of our life we can be a bohemian and in part of our life we can be a technology geek but the real key is, that we're just really creative people. So that's going to be - you know, that's what the creative class has to figure out for itself. if not you know, we'll just keep drifting along the way we are.

Presenter: You write in your book that jobs come to people and when you talked at the knowledge conference here, that was the idea, that if you have creative people in your city, then jobs and businesses will put themselves there to make use of those creative people. that isn't actually the New Zealand experience?

Richard Florida: I think it is the New Zealand experience actually. I mean if you look at your great success in film-making. I mean Peter Jackson didn't make Lord of the Rings in Hollywood. In fact I spent a half day with Peter and the one thing he said is he couldn't have made Lord of the Rings in Hollywood. So in that sense the jobs and lots of jobs, came to Peter. I mean one of the things we've found over the past 20 years in the United States is that we have something that we call the talent exchange, that creative and talented people are no longer (confined by location). Gateway Computer had its headquarters in South Dakota and nobody would go to work there so they had to move to California. People are picking the places they want to live in and making those moves and companies. You know, I mentioned the CEO and chairperson of Hewlett Packard, Carly Fiorina telling the governors in the US, we don't need tax incentives, we don't need financial aid packages, we don't need big infrastructure projects. We put our company facilities where the talented people are. I think that's now happening on a global scale and talented and creative people are now saying you know - and the thing that benefited the United States really over the course of the 90s was the fact that it attracted talented and creative people, the best and the brightest people from all over the world. I think right now that we see this talent exchange occurring globally and those countries and regions within countries that can attract talented and creative people will be the winners and those that can't will be the losers, so I think absolutely as this knowledge and creative-based economy becomes even more important, the location decisions of people are really going to matter and the places that can capture these folks' imaginations, the places they want to be in, are going to be the winners.

Presenter: Well yeah, you mentioned Peter Jackson and there's no doubting his success and the fact that he has created an industry around his talent and the talent of what was.. what started out as a small bunch of friends, but in New Zealand isn't he the exception that proves the rule? We have this enormous population imbalance as you will have seen when you came here, and the reason we have this population imbalance is that the jobs are north of Hamilton and, for whatever reason, people have felt the need to move up to go where the jobs are?

Richard Florida: I think that we definitely see a trend that larger metro areas, in your case you know, Auckland and maybe a few other metros, maybe the Wellington metro, I mean they're the ones that have the critical mass. but I think.. I mean if you think back 30 or 40 years ago and you look at Australasia as a whole, you look at New Zealand and Australia and say could these two places have become creative centres of the world economy? And look at.. Well, just take the film and artistic industries. You know, my other guess is that given trends in the world economy and instability in the world economy, that New Zealand and Australia are destined to become science and technology centres for the Pacific rim because they're nice places to be and you guys have the great good fortune to be English speaking countries that are open to foreigners. I think that what we're seeing in the last decade and in the decades to come are going to be a reshuffling of creative assets. I don't think the US has the.(lock on this). I said this at the Knowledge Wave.. I don't think the US has the lock on this stuff at all, especially as we become overly security conscious and clamp down on our borders, restrict the flow of information and tell immigrants to go elsewhere. I think the countries that are going to be really particularly competitive in this new age are Canada, New Zealand, Australia and maybe a couple of the cities of the UK.. like.. of course London and Dublin but I don't see the US having a lock on this any more and I think New Zealand, when you think of it in the context of Australasia, that the whole has enormous competitive advantage. You know, you're clean, you're green, you're a nice place to be and you're open. I mean you know, looking around Auckland the thing that.. the thing that's quite surprising to any Yank is the fact that Auckland is such an incredibly diverse city and not only in terms of its population but in terms of its lifestyle offerings, its restaurants, its cultural offerings. I mean that's the thing that's quite amazing, is how absolutely diverse Auckland is and I think if New Zealand remains a committed.. in contrast to what some of your political leaders think, if New Zealand remains committed to being open to immigration and open to diversity and harnesses this energy of people around the world, I think you have a wonderfully productive future to look forward to.

Presenter: So does a country this small need to offer tax breaks and other kind of financial incentives to get the jobs to come here if we have the creative people?

Richard Florida: No. I think that's a great mistake and I think you know, there is going to be tremendous pressure on you to do that but absolutely not. I think if I had to say what New Zealand needs to do, stick to your knitting, continue to make your place as beautiful and as interesting as you can. I think there's a couple of things you need to do. One, I think at the margin, the more money you could invest in higher education and in the universities and in making those universities quite.. I mean they're excellent, don't get me wrong, but quite globally competitive, increasing the flow of people and you know, one of the great things about New Zealand is so many New Zealanders travel. Increasing your connectivity to the rest of the world I would say, before tax breaks, making sure that your air service is accessible and easy and there's a multiplicity of flights going to major strategic destinations, US, Europe, Asia, I would say before you do tax breaks it's that connective tissue that's going to matter. And I think, think about your strategic condition in the context of you know, the general Pacific rim and Australasia. I think that.. I really believe that.. I mean you know, with the US behaviour now in the world which I think most of us, most thoughtful Americans are very concerned about, it's going to be very hard to recruit people here, it's going to be hard to bring foreign talent, harder to bring foreign talent into the United States. Companies are going to have to figure out places to put their research and development and innovation centres. Some of those may go in Europe but for the Asian case, I mean I think New Zealand and the Australian neighbours are the place to stop. It's not going to go to Japan and China. you're very well positioned to capture a lot of economic value added in the creative. It's not just in film but I think in technology. No, and you don't need tax incentives to do that. What I think you need is to bolster your.. just do what Peter did, you know, bolster your research, your innovation, your creative capabilities, your higher education capabilities, design capabilities and that will strengthen your ability to compete but what my sense is that the future looks really.. you know, really bright for you guys.

Presenter: Well, Peter Jackson wants tax breaks.

Richard Florida: Oh, I know. I mean we had a big debate about this, don't get me wrong, and I think that -

Presenter: I mean at the moment he's stamping his feet and threatening to go if he doesn't get tax breaks?

Richard Florida: You know, and I don't want to comment specifically on that case but in general I think that you know, tax breaks are a mistake and what I might offer to anyone trying to build creative capabilities is other ways to build up capabilities without giving a tax give-away and I'm not sure what they may be but I'll bet you there are other ways to bolster your film and music scene and to make those infrastructures more robust without giving tax breaks because clearly the way New Zealand is competing already is on cost advantages but you don't want to bankrupt yourself. I mean so many cities in the US have bankrupted themselves you know, trying to attract industries by giving tax breaks that now they can't balance their budgets. and you know, I think that one of the things that came through loud and clear at Knowledge Wave, you know, whether it was Paul Roma or I or the thoughtful people, is that you're not going to compete any more based on the business climate. That's a given and you have a good business climate. The way you're going to compete on a creative basis is on the people climate. So at the margin I think you want to spend your money on bolstering and enhancing that people climate, not bankrupting yourself by giving you know, everyone who asks for it a tax break and you know, if it was just Peter, that's probably one thing but it's not. Once it starts you set a domino effect in motion, that everybody says you know, if I'm going to come to New Zealand I need the tax breaks. I think your government has taken the right tack in saying you know, we're not going to give tax give-aways and we're going to try to do the best we can with what we have and we're going to build up our capabilities and I think that's paying off for you guys.

Presenter: One of the by-products of this new class you talk about, the creative class, is a wider disparity of incomes, isn't it?

Richard Florida: Yeah.

Presenter: Which in a country like New Zealand which has prided itself on its egalitarianism, I mean we all know it's a myth now, but that is a source of discomfort here?

Richard Florida: Well, one of the things I say in this paper called “The New American Dream”, you know, which listeners can get on our website, creativeclass.org, published in the Washington Monthly, it says that inequality is not the product of bad capitalists and it's not the product of unions being dismantled. Those things are all happening of course. What's really happening is the rise of this new creative sector of the economy, like the rise of the industrial sector of the economy before it, is creating a lot of wealth on the behalf of regular people, technology workers, engineers, scientists, yuppies and that the status of those people, particularly if they're couples, whether they're in straight couples or in gay couples, is getting further and further away from the regular person. So I say in this article, one of the great obligations of the creative class is to make sure that it doesn't run away from everybody else in society, particularly you know, the service sector or the service class, the people who wait on us and make our food and wait on us in grocery stores and in restaurants and take care of our clothing and clean our homes. I mean there's no inexorable reason that they have to be impoverished. In fact I think one of the great challenges in society is how we make sure that those people have more than a living wage, have an ability to live productive and.. and in fact, have the ability for them and their children to be part of the creative, part of the economy themselves. So I think this inequality thing is a big, big deal and unfortunately my country as much as it has been a technological leader, you know, right in the very heart of this whether it's the Silicon Valley or Austin Texas or Seattle or Washington or Boston and Cambridge and Massachusetts, that's where the inequality is. It's happening right in the belly of this creative part of the economy and I think that something.. you know, certainly the Bush administration wants to run away from that and even some of our democratic politicians want to run away from, is something that we're going to have to address.

Presenter: But how do you address that because there is no evidence ever that creating wealth for one group of people in society.. that having created wealth for one group of people in society, that that wealth trickles down. It just doesn't?

Richard Florida: Well, here's what I would say. The 90s were the 20s, so all of us all around the world but particularly in the United States and certainly ..[indistinct] that in New Zealand, have lived through the 20's. In both eras we created new industries and new technologies, new ways of doing business and in both eras we thought that the stock market would somehow magically take care of everything and those eras the stock market went up like a rocket and down with you know, a great force of collision. Now we're living through an era that looks to me and to other I think reasonable people, a lot like the 30'. What happened in the 30s is we built industrial urban societies, we undertook a set of initiatives by industry and by government and on the part of unions to boost the wages of industrial workers, to allow them to form unions, to make housing more accessible and affordable through a lower interest mortgage loans and longer term. We built highways and schools and invested in universities and in arts and culture. You know, now in our societies we just turn our heads and say we need tax incentives to bolster the business climate. No. We need to invest in the core elements that will make a creative society and one of the things I say in this article that I wrote about inequality, we have to massively increase the market for creative activity and the opportunities for creative people so that you know, kids who want to be dj's or artists or painters or be involved in technology, that there are opportunities for them to do it and get paid well. There's no reason why an auto worker or a steel worker job became a good job. A hundred years ago they were terrible, poorly paid jobs. People organised and made them good jobs. Well, we have the same task in front of us. The only thing is that virtually none of our national level politicians anywhere in the world even want to consider this. Now, that said, in both Auckland and Wellington as well as in city after city across North America, mayors and city council people and citizens and residents are undertaking to try to lift themselves up by their own bootstraps and say you know, I can make my local economy a creative place so maybe it's got to start very, very locally, that we begin to work to create more and more opportunities for creative people but that's really the key and it's going to take a long time for us to figure out how to do that.

Presenter: But valuing one kind of work, it doesn't matter whether in one generation it was the motor mechanic and in this generation it's you know, the web designer and the next generation it's goodness knows what, as you soon as you value one kind of occupation and one set of skills and you pay it more highly, another occupation falls down the scale, doesn't it?

Richard Florida: And what I'm saying is, we have to harness the creative energy and one of the things I say in the book and I said at Knowledge Wave, it's not that we just have to value the wages of the creative class. There's 38 million Americans who have the great good fortune to be paid well to be creative. We have to harness the creative energy of every citizen. We can't waste that human talent any more, and the countries that are going to be the prosperous and successful ones are not the ones that have gigantic inequality but the ones that value and harness and reward the creative.. and I don't mean a welfare programme.. that reward the creative energy of everyone and allow many more people to get in on this creative bargain.

Presenter: But that's never in.. I mean let's call this creative class you know, the new establishment for a moment, it's never in any establishment's interest to let everybody in, so this class you talk about, I mean the reason they can be creative and they can have these wonderful jobs is because they've got.. back home they've got you know, women doing their cleaning and their washing and washing their windows and someone walking their dog and someone else is doing the gardening. They don't want the cleaner, the window washer, the dog walker to be allowed to be creative because if they were creative then they wouldn't have..

Richard Florida: Then the creative age won't flourish. Then we will stay in this stillborn period until some society or some culture or some country figures out how to tap into that creative energy. And that doesn't mean that people won't have to walk the dog and till the garden.. I mean in fact we see many creative people.. what's interesting, preferring to do gardening work or to work in supermarkets or to work in coffee bars rather than work in the old organisational age stultifying, boring, you know, company men jobs. So.. but I think the key is to make sure that those jobs pay well and that people who do them have the opportunity, whether in those jobs or in their spare time or what-have-you, have the opportunity to be creative. But one thing that will be for sure and it's clear in the United States, if there is this split between the creative jobs, the service jobs and the industrial jobs, society won't move forward because this will reflect itself in a political split which is quite clear. I mean I just wrote an article and your listeners could go online to the Washington Post today, I just published an article in Sunday's Washington Post on the split in American culture and politics. Our nation's creative centre's politically look completely different than the rest of the country and just because we have progressive and innovative things going on in the creative centres, I think exactly as you said, people who live in rural areas or in some suburban areas, are saying to hell with this. And the backlash we're getting in the United States against immigrants, against gays, against so-called the yuppies and creative people, is going to destroy our ability to create wealth. It's not just going to hurt those groups, it's going to destroy the country's ability to create wealth. Now, I look at our friends in Canada and see what they're trying to do by building a more creative society which is a mosaic and welcomes people in, and I see how they've got a chance of you know, becoming quite competitive. But I think some societies are going to figure this out and they're the ones.. it's not India and China, you know, with a billion people that are the countries to watch out for in the creative age, it's smaller, more nimble societies who figure out how to tap and harness the creativity more broadly which are going to be the tough competitors. And you know what I say to your listeners? Remember, England ran the world from an island. You know, you don't necessarily have to be a big gigantic populous country to be successful in this age, You've just got to be good at tapping the creative talents of everybody.

Presenter: Well, ultimately then, you're talking about a values system too, aren't you?

Richard Florida: Yes, and I think what I'm saying is that just like in manufacturing we learned.. you know, the Japanese really taught us that we could no longer treat shop floor workers like dirt and even if we paid them ok, not value their contributions and you know, there would be a manager and an engineer lauding over them, telling them what to do. What the Japanese said is no, we can have all of these people on the factory floor contributing their knowledge and intelligence and suggestions and making the system work more effectively. Well, in the creative age we have to tap and harness more creative talents more broadly, in the service sector, in the arts, in culture and engineering, in communities, and the societies that do that.. Let's see, I think the change in the values is not something that's just you know. It's not just a good thing to do. I think it's the economically efficient thing to do and so sooner or later a society or a community or a city or a region will figure this out. I'm not saying it will be next year, I'm not saying it will be five years, it may be two decades from now but they are going to be the economic competitor. The ones that figures out how to more broadly tap and harness this creative talent are going to have a huge economic edge.

Presenter: Well, how has business reacted to this idea?

Richard Florida: Well, it's been very interesting. You know, just like the cities are split, so is the business community. You know, there are companies across the United States, in the world that exemplify this and there are companies across the United States and the world that are asking us to help them, are consulting from catalysts to help them and they're not just high-tech companies, they can be companies that make things as mundane as kitchen and bath fixtures and toilet bowls because those companies are realising the competition in sinks and faucets and toilets is about how you make more attractive and aesthetically pleasing kitchen and bath fixtures. So I think companies are gradually moving around to this view and I think you know, the most progressive companies are doing it but it's clear, a company these days doesn't compete.. think about the cars that people want to buy or the shoes that people want to wear or the faucets that people.. and lamps that people want in their homes. They are all increasingly creative, high design, aesthetic content products so companies have to figure out how to harness that energy and provide those products, so they've got to have environments that allow these creative people to make a difference.
Presenter: but business is traditionally very good at co-opting sort of bright ideas like this and then somehow diluting them in the actual application?

Richard Florida: yeah, I think one of the things.. let me give you an example. I just came back from Austin Texas actually where your Minister of Cultural Affairs was there. we were both there for the South by South West Music Film and Interactive meeting and we actually had a great little meeting in Austin so that was pretty cool, but one of the things that's happened in Austin which is a centre of our high-tech revolution is that there's pretty high rates of unemployment, about 7%. Well, where is all that unemployment? It's in two places: computer hardware manufacturing and semi-conductor manufacturing. Austin actually is creating more software companies today than it did at the height of high-tech boom and the music, film and all of those industries are also booming. So what I'm saying to communities is that communities that believe that somehow big business and big industry and big manufacturing plants are going to make them economically well off, they're wrong. What's going to happen is, those communities that empower creative people to start their own businesses, that give artists and musicians the skills to be independent and to make money from their music and art, that encourage people to start entrepreneurial ventures, high-tech and otherwise, they're going to have much more diversified stable economies because the people are going to be able to adapt. The places that become dependent like my home town of Pittsburgh did on big companies and big industries, those are the ones that are extraordinarily vulnerable to cyclical downturns. So yes, business has a hard time adapting and big companies in particular have a hard time adapting. So communities need to make themselves very robust and diverse and not worry about.. but companies.. I'll tell you, you know, the one thing I just want to say Linda is that in general, if you look at the difference between companies and governments, companies are able to do this far more flexibly and nimbly and are doing this at a far greater rate than government agents and so I think companies are actually ahead of most of our public policy environments and really the key is that government has to catch up with companies, not visa versa.

Presenter: Well I mean, you touched on this a little earlier but you know, as diversity of population and migration is one of the ways you inject this into your own... a country like New Zealand injects this into its own mix, I mean that ‘s always difficult for governments. You saw that here in New Zealand while you were here. They are points of tension and politicians are hard-wired to respond protectively to those points of tension?

Richard Florida: They've got to get over this and let me tell you why. my city, Pittsburgh, has the lowest rate of immigration of any major metro in the United States. It's also the only major metro that hasn't grown in five decades. Now, look at.. let's not take the.. Silicon valley, a third of all businesses, the great high-tech mecca.. a third of all businesses founded in the 1990's are founded not by an American but by a foreign-born person. Look at Canada. what do our friends in Canada figure out? They're a country about ten times.. a little bit less than ten times bigger than New Zealand, a big country. They've got to grow from 36 million people and you know what, they're not having kids. You know, like most of the advanced industrial nations, Canadians aren't having enough kids even to reproduce themselves. Well, how are they going to grow? They're going to go out and attract immigrants. Now, that's a no-brainer actually because it's the only way the country is going to add people, not lose people. So the country says we're going to go out and attract people, we're going to go out and attract immigrants from all over the world but how are we going to do that? We're going to call our society not a melting pot, we're going to call it a mosaic and we're to say, if you come to Canada, you can be a Canadian but you can retain your own cultural identity, whether you're a Somalian, whether you're a Chinese, whether you're an Indian, whether you're a New Zealander or whether you're from the United States, if you happen to be straight or gay. And then what we're going to do is we're going to bolster our cities, not just Toronto and Vancouver, we're going to have an urban strategy that makes all of our smaller communities much more exciting and liveable places. It seems to me that the Canadians have got something spot on right there. You know, and the folks in New Zealand, certain of your political leadership and we know who they are, says you know, we want it just to be New Zealand for the New Zealanders. Good luck, you've got a big country that needs to grow, there's only.. and what's so impressive I think about Auckland is the fact is that you are so open to immigrants and that the Australians have been so open to immigrants and I think yeah, there's tensions there but political leadership is going to address that and say this is the only way we're going to be successful and grow our country over the next several generations. We're not just going to make it a great place for.. and you are, I mean like us, I mean New Zealand and Canada and Australia and the United States are immigrant nations to begin with so we've got to make.. we've got to build on that legacy and I think that's why you know, these countries have the ability to become the world's leading creative centres and one of the things that's so controversial about my work but so important is that it says you know, well, you can h