Are Central Cities More Creative? Exploring the Locational Decisions of Creative Industries

Recently, a major focus in urban economic development has been attracting creative industries and creative workers to cities as engines to drive economic growth. Since the second half of twentieth century, however, American metropolitan areas have seen accelerated trends of employment decentralization. As metropolitan workforces continue to suburbanize, should urban policy makers worry about retaining creative industries? How do location patterns and growth trends in creative industries compare to other industries?

In a paper titled “Are Central Cities More Creative? The Intrametropolitan Geography of Creative Industries,” researchers Ric Kolenda and Cathy Yang Liu explored the intra-metropolitan (center cities vs. suburbs) distribution of creative industries and the resulting economic effects.

To frame their study, Kolenda and Liu address two opposing trends in industry location: employment decentralization and the center-city concentration of creative industries. Previous literature showed regional and industry differences in metropolitan employment concentration. According to research by Ed Glaeser and Matthew Kahn, cities specializing in manufacturing are likely to have more suburbanized employment, while those specializing in services tend to be more centralized. Furthermore, idea-intensive industries and those employing a highly educated workforce are likely to locate in central cities. The authors also explored the previously studied rationale for creative industries to cluster in central cities: creative industries demand openness to diversity, social capital for networking, a concentration of immediate consumer demand, and institutional infrastructures, all of which can be more easily accessed in central cities.

Kolenda and Liu investigated three categories of creative industries—information; professional, scientific, and technical services; and art, entertainment, and recreation—across forty US metropolitan areas from 1998 to 2002. The findings demonstrated the positive economic impact of creative industries. In 2002 the average creative job in a central city paid $57,356 per year, compared to the average central city job that paid only $40,000.

The authors also studied the concentration and decentralization effects of creative jobs around central cities. They categorize cities into three types: creative flight cities, where both the number and share of creative jobs in metropolitan areas are declining; creative sprawl cities, where creative jobs in central cities are increasing, but at a lower rate than their suburban areas; and creative engine cities, where creative jobs in metropolitan areas grow at a higher rate than suburban areas in both relative and absolute terms. The authors found regional differences in the decentralization of creative industries: western regions were found to be decentralizing at a more rapid pace than eastern regions.

Creative engine cities like Los Angeles, Miami, and Santa Ana-Anaheim are helping to boost regional economies from city center outward. For those cities the growth in creative jobs in central cities is driving employment in all other sectors across the region. This finding may provide policy makers with a potentially powerful tool. Encouraging creative industries to locate in central cities can foster economic development over a whole region. Creative sprawl cities can benefit suburban economies but incur a trade-off as creative industries spread out of city centers. In creative flight cities local metropolitan areas can look to policies that encourage social interaction and attract a more diverse population to encourage new creative industries to locate there.

Aside from potential policy implications, the study of the spatial distribution of creative industries may also provide clues to creative workers and entrepreneurs about where to live and locate new creative businesses. As the economic role of America’s creative class continues to grow, urban economic policy and the decisions of creative workers and businesses will go a long way toward shaping the future of American cities.

Feature photo: cc/jurvetson