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February 15, 2006
Expanding the Creative Class
One of the often cited dangers of our economic trajectory to the I-Cubed Economy is the creation of a society of have and have-nots. Those with the skills/talent/knowledge to succeed will prosper in this "brainwork" economy while those involved in less intellectually challenging (and more physical types) of activities will not. The great middle class, created by well paying manufacturing jobs, will disappear.
But that scenario need not occur. As I have often argued, all jobs require some creativity and level of tacit knowledge. It all depends on how we structure the activity. If we "dumb-down" jobs, we will loss the creative potential of the workers engaged in that activity; if we "smart-up" jobs, we open the door for greater innovation and productivity.
As Richard Florida has said, the next big challenge for the Creative Society is to bring in those millions of workers who are struggling in this economy. Now Florida has written a more extensive discussion of that idea in Newsweek - "The Secret to Future Growth":
Equally important [to the creative sector] will be the continued expansion of the service economy, where more than 5 million new jobs will be added, including retail salespeople, customer-service representatives, janitors, waiters and landscapers. Because these jobs pay a third of those in the creative economy, and half of those in the declining manufacturing sector, this trend is generally seen as a danger sign, a signal that the labor market is cleaving into two classes: high-skilled, high-paying creative work and much-lower-paying service work. The general consensus is that the only way to raise wages for these jobs would be with massive government intervention.
But a new generation of service companies is discovering that increasing pay and improving working conditions can add significantly to the bottom line. A good example is Best Buy, which employs 90,000 people and is the largest specialty retailer of consumer electronics in the world, with annual sales of some $25 billion. Taking a page from Toyota's much-lauded management system, employees are encouraged to improve upon the company's work processes. Small changes suggested on the salesroom floor—a teenage sales rep's reconception of an Internet phone-calling display, or an immigrant salesperson's proposal for ways to target advertising and service to non-English-speaking communities—have been implemented across the company, generating millions in added revenue. Best Buy likes to grow from within so motivated employees are able to move quickly from in-store sales to retail management, where pay increases substantially
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This retail revolution provides a model for turning service work into stable middle-class jobs. Thriving companies such as Best Buy, Starbucks, Whole Foods, REI, and the Container Store dominate lists of the best places to work. Many of them are increasing pay and benefits and making their work environments more stimulating. At the Container Store, for example, the typical hourly worker earns $29,277 a year, or 50 percent more than the U.S. retail industry average. They're doing this not out of altruism, but to increase productivity and profit.
Of course there is more to do. The service economy, particularly fast-growing personal-service fields like haircutting and landscaping, is dominated by small and medium-size companies who are unable or unwilling to upgrade pay and working conditions. The "on-ramps" that better-paying service jobs can provide remain too few and far between. The leaders in Davos must understand that economic competitiveness hinges on developing the full creative capabilities of the store clerk and the landscape laborer, as well as the computer scientist and the architect. And they should look beyond the tech sector for models.
Many of these are what I call "tangible service" jobs -- jobs that primarily involve the physical manipulation of matter rather than "intangible service" jobs which primarily involve the manipulation of information. There is no reason, however, that physical manipulation of matter needs to be separated from use of information and knowledge, especially tacit knowledge. The Taylorist model of physical production is not necessarily the best.
Already we can see that a number of these jobs are part of the creative economy -- depending on how you structure them. For example, a barber might be seen as a traditional service job; a high-priced hair stylist is certainly part of the creative economy. So expanding the creative economy is a much a mindset problem as an economic one. People must realize that the phrase "our employees are our most important asset" is more than a nice slogan -- and that it applies to everyone, from the CEO to the janitorial services. Once that mind shift occurs, the creative economy will expand rapidly.
Posted by Ken Jarboe at February 15, 2006 3:04 PM
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