Monday, May 7, 2018

Arts As A Driver Of Innovation; May 1, 2018

Hello Everyone:

Welcome to a fresh week on the blog.  On this sparkling Monday we have some news.  Over the weekend Mr. Donald Trump's latest addition to his legal team, former New York City Mayor Rudolph Guiliani, managed to make things worse for his client.  First, he admitted that the president's personal lawyer, Michael Cohen, paid other women to stay quiet about their alleged relationships.  During an interview, Mayor Guiliani blurted out that the president could invoke the Fifth Amendment-the right against self incrimination then patted himself on the back for a well done media appearance.  Insert eye roll and head shake.  While we are on the subject, there was a report that the president used Black Cube to get incriminating information on two former national security aides for former-President Barack Obama.  The goal was to use whatever information to undermine the Iran Nuclear deal.  Black Cube was the same investigation agency that disgraced Weinstein Entertainment head Harvey Weinstein used to get information on his intended victims.  Whatever.  Shall we talk about the rural creative class?  Please.

Conventional wisdom holds that contemporary American urban areas are centers of innovation and rural areas, not so much.  This has foundation in the fact that innovation and creativity tend to cluster in a small number of cities and metropolitans areas, it's a big mistake to think that they somehow skip over rural."  This observation was made by Richard Florida in his CityLab article, "The Rise of the Rural Creative Class."  Interesting thought from the originator of the term "creative class" and long time advocate of urban life.  Let us explore this subject a little more.

Mr. Florida's observation is based on a series (; Sept. 2017; date accessed May 7, 2018) of studies conducted by Tim Wojan (Ibid) and his colleagues at the United States Department of Agriculture's Economic Research Service (; date accessed May 7, 2018) tracing the rural innovation mechanism.  Mr. Florida reports, "Their findings draw on a variety of data sets, including a large-survey that compares innovation in urban and rural areas call the Rural Establishment Innovation Survey (; date accessed May 7, 2018)."  REIS is based on about 11,000 businesses with a minimum of five paid employees in sectors that produce goods and services that are or can be traded internationally--in rural (i.e. non-metropolitan) and urban (metropolitan) areas.

REIS divided the businesses into three main categories.  "Roughly 30 percent of firms are substantive innovators, launching new products and services, making data-driven decisions, and creating intellectual roperly worth protecting; another 33 percent are nominal innovators of their products and processes; and 38 percent show little or no evidence of innovation, so are considered to be non-innovators ."

The REIS team generated a table (; May 1, 2018), "Substantive, nominal, and no innovator rates by metro and single unit status."  This table tracks the breakdown for rural and urban area.  As expected, businesses in urban locations are more innovative but, here is the rub, not by much.  According to the table, about "20 percent of rural firms are substantive innovators, compared to 30 percent of firms in urban areas."

To wit, the urban-rural schism vis-a-vis innovation may be more the result of the "of the relative size of firms than geography."  The next chart, "Substantive, innovator rates by metro status, establishment size, and patent-intensive industries:" Rural areas have a slight edge in overall substantive innovation for large firms (100 or more employees), however urban areas have an edge in the rate of substantive innovation for small- and medium-sized firms. The reason for the rural innovation edge is that they are reduction of patent-intensive industries like chemical, electronics, automotive or medical equipment, while urban areas exhibited higher degrees of service innovations.

Richard Florida observes, "Of course, innovation concentrates and clusters in certain rural areas, just as it does in cities and metros."  He cites a 2007 study (; April 2007; date accessed May 7, 2018) conducted by Tim Wojan and a team of collaborators that identified about 100 rural creative centers, like Woodstock, New York, and the area around Telluride and Silverton, Colorado.  These rural creative hubs are typically close to or have a strong connection to a major metropolitan area; are home to a major university or college; or have a considerable amount of attractive natural amenities.

Comparatively speaking, urban arts district are generally found in high-density, mixed-use neighborhood with a lot of pedestrian traffic, whereas, rural arts districts evolve round natural, physical, recreational amenities.  A 2017 study by the National Endowment for the Arts (; Nov. 15, 2017; date accessed May 7, 2018) determined that the "likelihood that a rural county will contain a performing arts organization is nearly 60 percent higher if the county overlaps with a forest or national park."  Swan Lake by a lake.

The main difference between the rural and urban arts districts is, obviously, the distance a person has to travel: "Rural arts organizations reported that 31 percent of their visitors travel 'beyond a reasonable distance' to visit, compared to 19 percent in urban areas."  This fact is illustrated by a chart from the NEA, "Percent of arts organization, by distance that visitors travel and by rural/urban status of the organization : 2014." ( May 1, 2018)  

Be that as it may, the arts may be an even more driver of rural innovation than they are to urban innovation.  Mr. Florida writes, "While my own research has drawn a connection between the arts and clusters of innovation high-tech startus in urban areas, Wojan and his colleague Bonnie Nichols' data suggests (; Feb. 28, 2018; date accessed May 7, 2018) an even stronger connection between arts and innovation in rural areas."  Further, according to the NEA paper (; Nov. 15, 2017), the possibility that a rural firm will be a substantive innovator increases from 60 percent in rural counties with no performing arts venues to almost 70 percent for counties that are home to two or three, and nearly 85 percent if a rural county is home to four or more arts organizations.

Additionally, the number of firms that are considered highly innovative sharply increases in conjunction with performing arts organizations in rural areas.  This is illustrated by a chart, "Probability of being classified as a design-integrated or a substantive innovator, by number of performing arts organization in the same rural county: 2014." ( May 1, 2018)

Finally, Tim Wojan and his colleagues study found a strong statistical correlation between the arts, innovation, and economic development in rural areas.  This led them to conclude that the arts have direct impact on rural innovation, not a byproduct that help attract and retain talent.

Of course, we really did not need a study to quantify the role of the arts as an economic engine.  Throughout American cultural history, artists and creative types have sought out rural areas to drive their inspiration: the Hudson River School painters (; date accessed May 7, 2018), Ralph Waldo Emerson, Bob Dylan and The Band developing their music in Woodstock (; date accessed May 7, 2018).  The point is, the arts are not merely a result of the pretty scenery; they function as a key driver for innovation, leading to economic development, and ultimately to a greater standard of living.  Therefore, conventional thinking that urban areas are creative and rural areas are not, no longer holds.    

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