I am reading an article by Richard Florida in The Atlantic that suggests that the financial crash will not only alter economic policy, the business landscape and personal finances, but also where people live.
Florida is the guru of the “creative class” theory of economic development. He preaches that the world’s smartest, most talented young professionals gravitate to cities that cater to them. He came to Tacoma in 2006 to help the city work on initiatives to enhance Tacoma’s creative appeal.
In his piece for The Atlantic, Florida opines that the financial meltdown will have disparate geographic effects. “Some cities and regions will eventually spring back stronger than before. Others may never come back at all.”
What caught my eye was his suggestion that New York, a global financial center, isn’t likely to be as affected as lesser financial outposts like Des Moines, Iowa, that depend even more heavily on financial jobs. (In Des Moines, they make up 18 percent of the total employment.)
Des Moines, you will remember, is the old stomping grounds of Tacoma City Manager Eric Anderson. He and others are hoping to do for Tacoma what succeeded in Des Moines – becoming a Mecca for financial services companies. The Tacoma City Council last year created an International Financial Services Area in Tacoma’s downtown in the hopes of keeping Russell Investments and attracting more Russell-like companies.
Had we jumped on that bandwagon sooner, Tacoma might have been in direr straits. Financial services jobs – which represented almost 5 percent of Tacoma’s total employment in 2007 compared to Des Moines’ 18 percent – are indeed desirable in good times. But when you live by the market, you also die by it.
That doesn’t mean the strategy is necessarily doomed. As Florida notes, some of smaller financial centers are using the crisis as an opportunity to grow their market share. And others might not be in as bad as shape as, say, older manufacturing regions in the interior of the country and newer Sun Belt communities whose booms relied on the housing bubble.