Interview with Richard Florida, author of The Rise of the Creative Class

we covered the #Techlash, its urban consequences, Toronto and Montréal

photo credit: Zanetti Photography

J’ai eu le plaisir d’interviewer Richard Florida, auteur de The Rise of The Creative Class et de The New Urban Crisis, sur le #Techlash et ses conséquences. Voici une version texte de notre entretien:

I had the pleasure of interviewing Richard Florida, author of The Rise of The Creative Class and The New Urban Crisis, on the #Techlash and its consequences.

Here’s a text version of our interview:


Frederic Guarino: Professor Florida thank you very much for your time and I want to jump into my first question. You and I’ve been trading tweets on the historical perspective of this techlash, do you see this as in the vein of the Standard Oil trust busting or something more tailored like Microsoft 1998 ?

Richard Florida: Thank you for doing this important podcast and thank you for having me on. I think it is a little bit of both. But it’s more like what happened during really the Industrial Revolution and the rise of the Great Wave of trusts and and that trust busting effort that that confronted Standard Oil and others. We did a roundtable conference with some of the fellows at the Martin Prosperity Institute. Roger Martin, who was a consultant at Monitor before he became Dean of the Rotman School said that this very much reminded him of the efforts that were targeted not only at Microsoft but at AT&T and the tech companies had to be aware but I think this is something bigger.

Those were big things don’t get me wrong. This is a mounting backlash on Big Tech. Facebook is the clearest example. But it’s building with Amazon, with Alphabet or Google, maybe less so with Apple and certainly with Uber and Airbnb. Trump is going after Amazon in a big way. You look at how fast things have come upon Facebook. These companies are seeing their popular support erode.

I do think the market power of these Big Tech companies is something we haven’t seen since the great wave of Industrial Revolution companies, the Standard Oil companies, the big automobile companies, the great railroad companies, the big banks. There was an industrial revolution which led to this enormous concentration of market power a little more than a century ago. There is now a knowledge economy revolution — a new economy. We’ve actually looked at in our Institute the changing nature of corporate headquarters and even as late as 1980 there were a lot of industrial concerns in there, now it’s just the who’s who of high technology companies.

I think this burgeoning backlash looks more like that of the Industrial Revolution than things we’ve seen more recently.

Frederic Guarino: I think that’s very interesting because it seems to me that there is a lack of historical knowledge in the media, among politicians and very few look back to history as a guide. There’s a ahistorical nature of Silicon Valley and it’s almost like the Mark Zuckerbergs of the world have never opened a history book and they’re just discovering this for the first time. Do you think they are being naive or just extremely hubristic ?

Richard Florida: Both. I think we are now becoming aware of the hubris and the naivete of these folks. This libertarian utopianism — the whole idea is part of the founding myth of Silicon Valley and comes out of kind of the hippie culture and the counterculture. It was bound up in the Whole Earth Catalog, in the early hacker movement and Stewart Brand and The Well and the Grateful Dead and all of this. That somehow this new technology created by hippies as part of the counterculture would overturn society, that these were different kinds of companies. They cloak themselves in progressive values. They were from the Bay Area, from Seattle, from the West Coast. People didn’t have to wear a suit and a tie. They could have long hair, they could have spiky hair, they could have tattoos, they could wear earrings. Al things I wrote about in Rise of the Creative Class. They were gay friendly and lesbian friendly. They were liberal in terms of their political outlook.

But I think it was more gloss than substance. They really believed this idea that markets would change the world. And they were so far seeking and far-seeing and omniscient they would help change the world. Maybe some of the things they did were good and important part of progress. But, boy oh boy, they’ve just opened up a whole can of worms. It’s like history coming around again. I’m reminded of Marx’s quote about how history comes around the first time as tragedy and the second time as farce.

In previous times of great historical change and economic crises, America was in a fortunate position to always elevate a transformative leader. During the Civil War, the United States had Abraham Lincoln. During the Great Depression, the US elected FDR. But, during this great period of crisis and change the United States elected Donald Trump, one of the most backward-looking figures in its history. So, the United States in the midst of this Great Reset stuck with the absence of the federal government, without a functioning brain.

I think that is part of what is causing the tech backlash. If the US had a functioning federal government run by somebody like Barack Obama or Hillary Clinton or even Mitt Romney on the Republican side, I think people would be saying let’s look to the federal government to help us think through these problems that we’re seeing in the West Coast and the Bay Area, in Seattle.

With Trump in office, the backlash against these companies has become worse because in many ways without a federal government to protect people, people are just pointing the finger and saying “you’re to blame,” “you didn’t help me out.” I think the tech backlash is at least in part a reaction to the hubris and naivete of these companies, but also in part a reaction to the election of Trump in the absence of any kind of federal protections.

Frederic Guarino: I think it’s a very interesting point that isvery seldom made so I thank you for for making it. Now in direct link to this, since you’re the originator of the Creative Class what do you foresee as potential immediate or midterm urban development effects because of the tech clash in San Francisco, but also New York, and potentially Toronto.

Richard Florida: Look at Amazon. In many way, it’s kind of a model tech company. In my book, Rise of the Creative Class, I cited them a a model of an urban tech company. They were perhaps the first large tech company to seek out an urban location. Initially they were in old hospital building in Seattle and later they took over a neighborhood Paul Allen (the Microsoft co-founder) had acquired and developed in South Lake Union.

But now they are increasingly viewed by many as anti-competitive. This terrible HQ2 process which is the worst thing I’ve seen in economic development in my career. Pitting cities against cities to extract incentives and creating a race to the bottom among communities across the United States and Canada. And, then not allowing them to disclose what they’re doing to their residents and taxpayers, making these communities sign non-disclosure agreements. It’s just awful.

I’m of two minds on these big tech companies. On the one hand, they have such monopolistic or quasi-monopolistic, or if not monopolistic, such extraordinary market power that they have made the Bay Area and Seattle predominant tech locations knowledge hubs. In my own work I showed the increasing dominance of the Bay Area, the area had about 22 percent of venture capital-backed startups in 1995 and now it’s 45 percent. On the other hand, their demise might be the one thing that could actually reset and strengthen these existing knowledge hubs. It may be the case that having these large companies are in effect weakening you know driving up housing prices making things less affordable, and sucking up huge amounts of talent. It could well be that that limiting the market power of these big tech companies might reinforce the position of the Bay Area, Seattle, and the New York- Boston-Washington ACELA corridor by tilting the playing field toward newer entrepreneurial companies.

My take on this is that the incumbent tech centers are likely to be the ones that are with us for a while. I don’t think we’re going to see new entrants in the United States.

I think there’s a mythology about the “rise of the rest,” like Pittsburgh, Nashville or wherever. That mythology is just confronted by the reality and the data that not one of these “rise of the rest” places attracts more than a half a percent of all venture capital-backed startups in the United States.

The question of Toronto is a different question. I do think if the Trump administration was to stay in power or Trump-leaning Republicans were staying in power for a while, that the restrictions on immigration will grow and the sense of the United States is a rogue or pariah nation will grow, and the gun violence in the United States, in its schools, will continue. And that could tilt talent away from the US. I’m an American and spend a lot of my time in the United States and you hear people saying — not necessarily Americans but foreign-born people in the United States: “I’m out. I’ve had it. The place is too conservative; it’s a pariah nation. I don’t like living here. I don’t like raising my kids here.”

I can give one example: where I teach at the University of Toronto is considered to have one of the best artificial intelligence units. It’s why Google established a lab in Toronto. It’s why tech companies have been flocking from the United States and elsewhere to Toronto. It’s the reason Toronto has a leg up in artificial intelligence. The University of Toronto attracted a guy named Geoffrey Hinton from Carnegie Mellon where I used to teach in the early 1980s. And the reason Hinton, who’s British, went to the University of Toronto is he didn’t like Ronald Reagan. And he also didn’t like the fact, that in the United States, his research was funded by the Defense Department. So he decided to go to Toronto and he built his artificial intelligence career there. And now he’s one of the leading lights in the world.

What we may see is a shift in talent and technology outside the US to new centers in Canada, Europe, Asia or others parts of the world.

That said, as someone who lives in Toronto and loves the city, it also has an uncanny ability to screw itself over. We saw it with the election of Rob Ford, four years of squandered opportunity. And now we’re seeing it with the rise of Doug Ford. This would certainly chill any advantage Toronto and Ontario have in attracting US and other talent and companies. If Doug Ford wins the election, you can imagine all sorts of loony things happening, like transit investment cutbacks, cutbacks in the funding for great universities, cutbacks to cities.

What I worry about is just when everything seems to be looking bright for Toronto will Torontonians and Ontarians end up electing a mini-Trump, the brother of the original populist and squandering the advantage it has been handed.

Frederic Guarino: Not to worry I’m in Montréal and we’re all ready to take over from Toronto as a brother city.

Richard Florida: It looks pretty bright for Montréal. I did a study of Montréal about 10 or 15 years ago in which we were already looking at the music scene and the creative scene and the rise of bands that were not then popular like Arcade Fire. Montréal has always been in many ways Canada’s most innovative and creative city. It had other things happen to it — we all know the history. But I do think given its proximity to the United States, its proximity to the New York-Boston-Washington Corridor and its housing prices which, even though they are more expensive than they were, remain relatively affordable.

And, given the fact that Montréal also has some leading lights in artificial intelligence which is a next wave technology, and a great urban fabric, I think Montréal could be yet another place that could be part of a more global rise of the rest.

Frederic Guarino: thank you very much for your time today and I look forward to more interesting conversations in the near future !

Richard Florida: thank you it’s great talking with you likewise.