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The Creative ClassA Key to Rural GrowthDavid A. McGranahan, dmcg@ers.usda.govTimothy R. Wojan, twojan@ers.usda.gov

The creative-class thesis—that towns need to attract engineers, architects, artists, and people inother creative occupations to compete in today’s economy—may be particularly relevant to ruralcommunities, which tend to lose much of their talent when young adults leave for college, theArmed Forces, or “city lights.”

The creative class lives mostly in urban settings, but is also found in rural areas with mountains,lakes, and other rural amenities.

Nonmetro counties with higher proportions of people in creative class occupations tended tohave higher rates of patent formation and manufacturing technology adoption in the 1990s—and higher rates of job growth in 1990-2004.

The names are familiar—California’s Silicon Valley, North Carolina’s Research Triangle, and Boston’shigh-tech Route 128 Corridor. Over the past several decades, research has shown how university researchfacilities, high-tech firms, and other creative endeavors have sparked significant growth in these and otherurban economies. While high-tech firms and major research and development (R&D) activities are not typically located in rural areas, talent and creativity are needed throughout the U.S. economy—in the creationof new types of products and in the adoption of new production and information technologies and new marketing strategies.

ERS researchers explored the importance of the “creative class”—people in highly creative occupationssuch as business ownership and top management, science, engineering, architecture, design, arts, and entertainment—for rural growth in the 1990s (see box, “How Is the Creative Class Measured?”). They foundthat the creative class was present in rural areas, particularly in high-amenity areas, and that its presence wasassociated with measures of creativity, such as patent awards and technology adoption, and with growth injobs during 1990-2004. Many rural analysts have declared that the era of smokestack chasing is over; the creative-class analysis suggests that chasing talent is a viable alternative for sparking local growth.

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The Creative Class Theory

Many economists and geographerspoint to high-tech firms, research anddevelopment (R&D) activity, and patents

as sources of new economic growth, butregional scientist Richard Florida focuseson people, arguing that the knowledge andideas requisite for economic growth are

embodied in occupations involving highlevels of creativity. These occupations con-stitute the “creative class,” the ultimatesource of economic dynamism in today’s“knowledge economy.”

The geographic mobility of the cre-ative class is central to Florida’s thesis. Heargues that people in these occupationstend to seek a high quality of life as well asrewarding work, and they are drawn tocities with cultural diversity, active streetscenes, and outdoor recreation opportuni-ties. Good local universities alone will notlead to local economic dynamism as grad-uates may move to more attractive placesupon obtaining their degrees. In this con-text, the key to local growth is to attractand retain talent, as talent leads to furtherjob creation.

While developed with major metro-politan areas in mind, the creative-classthesis seems particularly relevant to ruralareas, which lose much of their young tal-ent as high school graduates leave, usuallyfor highly urban environments. These

Richard Florida’s measure of creative class, discussed in his book, The Rise of the CreativeClass, included occupations that he judged to entail high levels of creativity. In practice,this turned out to be virtually all occupations where incumbents tend to have high lev-els of schooling. ERS analysts refined the creative class measure in two ways. First, theyused O*NET, a Bureau of Labor Statistics data set on skills generally used in occupa-tions, to identify occupations in Florida’s list that typically involve “thinking creatively.”This skill element is defined as “developing, designing, or creating new applications, ideas, relationships, systems, or products, including artistic contributions.”

Second, the analysts screened out as many occupations as possible that typically requirehigh levels of creativity (such as schoolteachers, judges, and medical doctors) but whosenumbers are proportional to the residential population they serve. These refinements resulted in an estimated creative class share of the workforce of 21 percent in 1990 (23 percent in metro areas and 14 percent in nonmetro areas), a muchsmaller share than the 30 percent found using Florida’s original measure. While by nomeans perfect, the amended measure is closer than Florida’s original measure to the conceptual meaning of creative class. Using Florida’s original measure, 1990-2004 jobgrowth in nonmetro creative class counties was 30 percent, much lower than the 44 percent found using the revised measure.

How Is the Creative Class Measured?

Rural counties high in natural amenities attract creative-class workers

Sources: USDA, Economic Research Service and Census of Population, 2000.

Legend

Metropolitan area(with urbanized core), 1993

Counties ranked in topquarter in creative class, 2000

Pitkin, CO

Cook, MN

Tompkins, NY

Llano, TX

Jefferson, IA

rural areas, especially, need to attract tal-ented young families, midlife careerchangers, active retirees, and others tomaintain their talent base and therebytheir economies. Given that rural earningstend to be lower than urban earnings,especially for those with a college degree,rural quality of life would seem an essen-tial part of that attraction.

Where Is the Creative Class?

The creative class is predominatelyurban. In both 1990 and 2000, two-thirdsof the “creative-class counties,” thoseranking in the top quarter in the propor-tion or residents employed in creative-class occupations, were metropolitan eventhough nonmetropolitan counties aretwice as numerous. Metropolitan creative-class counties are found across the coun-try, but especially in the major urbanareas.

In 2000 (as in 1990), about 260 or 11percent of nonmetro counties ranked ascreative-class counties. Regional differ-ences are more pronounced than withmetro creative-class counties; NewEngland and the mountain areas of theWest have higher shares of rural creative-class-counties than the Midwest andSouth. Consistent with the thesis thatquality-of-life considerations stronglymotivate the creative class, counties highin natural amenities are most likely to becreative-class magnets. Pitkin County,Colorado (which contains Aspen), forexample, had the largest creative-class pro-portion of all nonmetro counties in both1990 and 2000.

Counties dominated by colleges anduniversities also ranked high in creative-class proportions. Tompkins County, NewYork, for example, has Cornell University.Jefferson County, Iowa, a Midwestern cre-ative-class magnet, is home to MaharishiInternational University. As a draw forTranscendental Meditation adherents, thecounty has attracted many urban profes-

sionals who have started or work for morethan 100 software development and pro-fessional service firms located there. Mostof the nonmetro creative-class counties inlow natural-amenity areas have colleges oruniversities.

Mountain landscapes and universi-ties are not required to attract the creative

class to rural areas. Llano County does notcontain a large college or university but isin the Texas Hill Country near Austin andborders on two large lakes. Robust growthin the number of artists in the county dur-ing the 1990s is representative of “artistichavens” emerging in select rural counties.Cook County, Minnesota, is a hiking and

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Nonmetro creative-class counties are more prevalent where amenities are high

1

Percent creative-class county

6050403020100

Natural amenity scale(Standard deviation units from mean)

-1 to 0 0 to 1 1 to 2 Over 2-3 to -1

Counties ranking in top quarter of all counties in creative-class share of total employment. Over 10 percent of population age 18 and over is enrolled in college or university. Scale scores based on topographic variation; area in lakes, ponds, or oceans; warm, sunny winters; and cool, dry summers.Sources: USDA, Economic Research Service and Census of Population, 2000.

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canoeing area, but it also has the oldestactive artist colony in Minnesota. With aplayhouse and a music association, it iswhere “culture merges with woods andwater” (Grand Marais Chamber ofCommerce).

Do Areas With More CreativeClass Show More Creativity?

A critical link in the creative-classargument is that places with a higher con-centration of creative occupations actuallyhave more creative activities. One often-used measure of local creativity is the ratioof patents to employment or population.The 1990s patent rate (number of patentsin 1990-99 per 1,000 employed in 1990)

was, on average, much higher in metro(4.9) than nonmetro counties (1.7)—notsurprising given the urban location ofresearch universities and R&D activities.However, within nonmetro areas, theaverage patent rate was twice as high increative-class counties (3.3) as in othercounties (1.5). Creative-class countiestended to generate more patents whetheror not universities were present. Thus,while the aforementioned Tompkins andJefferson Counties were in the top quarterof all counties ranked by patent rate, sowere Llano and Pitkin Counties (althoughnot Cook County).

The adoption of new technologiesand ideas is a natural spinoff of knowl-

edge and creativity. Rural economies havefew firms making high-tech products, butthe incorporation of these products in pro-duction and communications is importantfor competitiveness. While no economy-wide indicators of adoption are available,the 1996 ERS Manufacturing Survey meas-ured the adoption of advanced productionand information technologies and newmanagement practices. A scale of 16 adop-tion items—ranging from computer-assist-ed design to satellite communications toself-directed work teams—indicatesadvanced technology use. Those establish-ments using nine or more practices wereconsidered “high adopters.” Branch plantsaside (their technology use is likely to beinfluenced by their headquarters), estab-lishments in nonmetro creative-classcounties were more likely to be highadopters (20 percent) than establishmentsin other nonmetro locations (15 percent).Creative-class presence also made a differ-ence in metro counties.

Counties with high proportions ofcreative-class residents appear to havemore creative activity with regard topatents and technology adoption. It is notclear, however, if this simply reflects self-selection (that is, people who invent and/or adopt new technologies and prac-tices may tend to locate in high-amenity,creative-class settings) or if high creative-class environments engender morepatenting and technology adoption.

Is the Rural Creative ClassAssociated With Local Growth?

The creative class was highly associat-ed with growth in rural areas in 1990-2004. Other nonmetro counties grew rela-tively slowly in the 1990s, but creative-class nonmetro counties tended to gainjobs over the period at a faster rate thantheir metro counterparts.

While rural creative-class counties maygrow because of the presence of the cre-

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High creative-class nonmetro counties gained jobs faster than other nonmetro counties

County type Low/middle

Creative class counties, 1990

Percent change in jobs, 1990-2004

MetropolitanNonmetropolitan Not adjacent to metro High-amenity county Recreation county Not recreation county Percent college graduates

31181626321616

Ranked in top quarter of all counties.Source: Bureau of Economic Analysis, Regional Economic Information System files.

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Andy Sacks, GettyImages

ative class, it is possible that the amenitiesthat attracted the creative class wereresponsible for the higher job growth increative-class counties in the 1990s.However, whether considering high-ameni-ty, recreation, high-education, or otherattributes, counties with a high proportionof creative-class residents generally had jobgrowth rates that were twice as high ascounties with less creative class presence.

A larger ERS analysis, which included2,145 nonmetro counties in the 48 con-tiguous States, took into account a numberof other possible influences on the loca-tion of the creative class and its relation-ship with rural growth during the 1990s.The analysis included measures of land-scape and climate, settlement density andcommuting, industry structure (farming,mining, manufacturing, business services,and recreation), racial/ethnic composition,labor market characteristics, age structure,and—to capture regional influences—aggregate job growth in the surroundingcounties. This analysis found that boththe level and change in the creative classwere linked directly to job growth.

The presence of the creative classmay itself create amenities. For instance, aplace that has attracted artists and design-ers may appeal to people who like artistic

communities. And, the influence may beindirect—people may be drawn to a com-munity by the restaurants, stores, andother consumer services that develop inresponse to the consumption patterns ofthe creative class. However, ERS analysisshowed that both the 1990 creative-classproportion and the 1990-2000 creative-class growth were more highly related tojob growth than population increases dur-ing the 1990s, suggesting that the centralinfluence of the creative class is a moreeffective use of local resources and oppor-tunities and hence greater growth in jobs,which facilitates population growth.

The creative-class analysis suggeststhat rural growth depends greatly on theattractiveness of rural communities, theirlandscapes, and their climates. Visits towebsites of chambers of commerce andlocal development organizations in ruralareas show that many rural communitiesare advertising their quality-of-life ameni-ties to prospective businesses and resi-dents. However, economic evaluations ofthe impact of public and private invest-ments on growth still rarely consider qual-ity-of-life factors. The creative-class studysuggests rural growth impacts cannot beunderstood without taking these factorsinto consideration.

Despite an urban affinity, the creativeclass—perhaps more able and apt thanothers in the workforce to choose whereto live based on quality-of-life considera-tions—can be drawn out of cities to high-amenity rural locations. Their activities, inturn, appear to generate new jobs andlocal growth. Rural areas lack the businessand consumer services available to urbanbusinesses and residents, but rural areas tend to have the upper hand in land-scape, which may service the creative temperament.

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ERS Data on Creative Class Codes,www.ers.usda.gov/data/creativeclass-codes/

“Recasting the Creative Class To ExamineGrowth Processes in Rural and UrbanCounties,” by David A. McGranahan andTimothy R. Wojan, Regional Studies41(2007): 41:2 (April 2007)

Natural Amenities Drive Rural PopulationChange, by David A. McGranahan, AER-781, USDA, Economic Research Service,September 1999, available at:www.ers.usda.gov/publications/aer781/

“Ambient Returns: Creative Capital’sContribution to Local ManufacturingCompetitiveness,” by Timothy R. Wojanand David A. McGranahan, Agriculturaland Resource Economics Review, 36:1(April 2007)

“The Emergence of Rural Artistic Havens:A First Look,” Timothy R. Wojan, DaytonM. Lambert, and David A. McGranahan,Agricultural and Resource EconomicsReview, 36:1 (April 2007)

“Understanding Rural Population Loss,”by David A. McGranahan and Calvin L.Beale, in Rural America, Vol. 17, Issue 4,Winter 2003, available at:www.ers.usda.gov/publications/ruralamerica/ra174/ra174a.pdf

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Andrew McFarlane