US public policy guru Professor Richard Florida is warning developed economies that they urgently need to address their ‘talent deficit’ in order to boost growth and prosperity.

Professor Florida, Hirst Professor of Public Policy at George Mason University, and the keynote speaker at this year’s CMI Summit on Creative & Enterprising Places, has publicly voiced his concern that developed nations are facing a decline in their creative workforce that could significantly impact their economies.

Writing in the Financial Times last month, Florida says that many economic commentators in the US are currently concerned about the “twin deficits” in America’s domestic budget and foreign trade. But according to him, the decline in the existing creative workforce is potentially far more damaging to the US economy – as it is to other developed economies such as the UK, Germany and Japan.

For decades, he says, these countries have taken for granted a growing share of what he calls “the global creative class” – made up of scientists, engineers, entrepreneurs, artists, musicians and entertainers, and knowledge-based professionals in fields such as law, finance and medicine. The creative class, he adds, accounts for between 30 and 40 per cent of the workforce in the advanced nations. In the US, he argues, it earns 50 per cent of all wages and salaries - as much as the manufacturing and services sectors combined.

But now, he says, developed nations are facing a talent deficit that could adversely impact their growth and prosperity.

“This talent deficit is now growing for two reasons. First, around the world, a large share of the existing creative workforce is ageing and set to retire. Second, the advanced countries are not producing the talent they need in critical areas of science and technology,” he says.

This, of course, is a key matter of policy concern in the UK where there has been a 30% reduction in the number of university physics departments since 1994, and where HEFCE, for example, has a programme of support for the ‘strategically important and vulnerable subjects’ of science, technology, engineering and maths.

In the current political climate, the tensions caused by terrorist attacks are leading to a culture of immigration restriction and growing social intolerance. But Florida warns that we must not forget how vital foreign talent and immigration is to our economic prosperity. He points out that many of the leading developed nations are now virtually dependent on immigrants entering the workforce, and not just in low-skill jobs, but for critical high-skilled occupations such as software and information technology and biotechnology.

Economies that wish to succeed in the growing global competition for talent, must act now, he says.

“Aggressively recruiting foreign students and highly skilled workers must be coupled with increased investment in education to develop and harness creative talent. Most of all, politicians and business leaders in the advanced nations must develop concrete strategies that enable people to see clearly how they can benefit from the global creative economy. Only by doing so can they overcome the growing opposition to foreign talent and immigration. If they fail to adapt their countries in such a way, the traditional powers will begin to see their industries suffer, their economies stall and their societies fracture. At that point, they will have far more to worry about than just a talent deficit.”

• Richard Florida’s opinion article ‘A dire global imbalance in creativity’ appeared in the Financial Times on July 19 2005. Richard Florida, author of The Rise of the Creative Class (Basic Books) and The Flight of the Creative Class (Harper Business), will deliver the keynote speech at CMI’s Summit in Manchester on 25th October. Manchester is an apt location for this year’s Summit, entitled “Enterprising and Creative Places”, having been recently named as the UK’s most creative city. Florida’s groundbreaking The Rise of the Creative Class used the “bohemian index” to measure the appeal of American cities to the new creative class, a key indicator of a city’s economic health. Ranking the UK’s 40 largest cities according to Florida’s three creativity indicators (ethnic diversity; proportion of gay residents, and number of patent applications per head), Manchester comes out on top, streets ahead of London. Cambridge was excluded from the rankings because of its small size, but would certainly score highly because of its diverse student population and high concentration of patent applications. "Creative, innovative and entrepreneurial activities tend to flourish in the same kinds of places that attract gays and others outside the norm," says Florida. "When people with varied backgrounds and attitudes collide, economic growth is likely."
• For more information on the Summit and to book your place, please go to: www.cambridge-mit.org/summit