Ontario think tank zeroes in on importance of the creative class to weathering downturn

Ontario's growing concentration of workers that comprise the so-called creative class may help the province weather the recession better than the previous economic downturn of 1991. Yet members of the creative class in Ontario are paid significantly less than their counterparts in US peer states and are used less intensively by their employers, casting doubt on the ability of Ontario cities to retain them.

These and other findings are based on the latest research to emerge from the new Martin Prosperity Institute (MPI) at the Univ of Toronto's Rotman School of Management. The research is part of a project the MPI is conducting for the Ontario government, entitled Ontario in the Creative Age: Toward an Economic Blueprint.

MPI has been issuing ongoing updates on its research and connecting it to the global economic crisis and its impact on Ontario. While much attention has been paid to the dramatic losses in the manufacturing sector, MPI research shows that the worst of the recession's impact could be softened by the growing presence of the creative class. Over the past 25 years, the portion of the Ontario labour force defined as the creative class — high autonomy occupations such as doctors, artists, senior managers, nurses and architects — has expanded from 26% to 30%.

Those in the creative class earn 38% more than all occupations, as opposed to the service class. This is the biggest component of the labour force, increasing from 41% to 46% in the same time frame, yet these workers are paid 22% less than average. The working class represents 22% of the labour force (down from 26%) and earn 17% less on average, while the farming, forestry and fishing class account for just 2% of workers.

change in attitude urged

With so much riding on the success of the creative class, the low value placed on them in Ontario relative to US peer states is raised as an issue of considerable concern. While judges in Ontario make 84% more than their counterparts in US peer states, many professions are paid less. Fashion designers, family doctors and ad managers are respectively paid 54%, 20% and 15% less.

"If Ontario employers don't pay enough for highly skilled creative workers, they will be unable to compete in retaining the creative class and their skills," states a new MPI research update. "The trend is nonetheless clear: creative class workers are usually paid less than their U.S. counterparts ... The gap between Ontario and peer state creative class wages widens at the higher end of the pay scale."

creative density

The MPI also weighs in with insight aimed at urban planners. Its research shows that cities with a higher density of creative workers are more innovative when measured by number of patents. While acknowledging that many innovations are never patented, they defend the measure as a "widely used and accepted proxy for innovation'. Research concludes that higher creative density accounts for 31.7% of the difference between patent-rich and patent-poor cities.

A study of 240 US metropolitan areas indicates that "cities with the highest density and the highest concentration of creative people produced over 6 times more patents than spread-out cities with the fewest creative people".

Formerly called the Centre for Jurisdictional Advantage and Prosperity, the MPI was funded in the 2007 provincial Budget with $20 million up front followed by $6 million annually for the next five years (R$, April 24/07). The funding was key to attracting renowned author and researcher Dr Richard Florida from Carnegie Mellon Univ, Pittsburgh PA, to Toronto where he became MPI's director and a professor of business and creativity at the Rotman School.

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