The shifts from hunter-gathering to the age of agriculture, and from widespread farming to the Industrial Revolution, marked major transitions in human history and economic well-being. Now in the digital age, we are in the midst of another such transformation: into a so-called knowledge economy with an emphasis on the production and use of data and information.
The term “knowledge economy” was first coined in the 1960s to describe a shift from traditional economies to those in which the dissemination and use of knowledge are central. As academic institutions and companies engaging in R&D sprang up left and right — along with computer programming firms that developed everything from new software to better search engines to improved supply chain efficiencies – America began the shift toward an economy in which the brokers of know-how became integral to how we live, work, and earn. Information and communication technologies have become the mecca of economic progress, and every state in the union longs to have its own Silicon Valley of internet-based start-ups and innovative small businesses.
According to the World Bank, knowledge economies are defined by four qualities:
– institutional structures that provide incentives for entrepreneurship and the use of knowledge
– skilled labor availability and good education systems
– Internet and communications infrastructure and access
– An innovation landscape that includes academia, the private sector, and civil society
The 2012 World Bank Knowledge Economy Index ranked the world’s nations based on these pillars. Topping the list were Sweden, Finland, Denmark, Netherlands, and Norway. Rounding out the top 10 were New Zealand, Canada, Germany, Australia, and Switzerland. Ireland was #11 followed by the United States, which in the 2000 Index ranked 4th.
Recently, City Lab, in conjunction with the Martin Prosperity Institute, decided to take a look at the current state of the U.S. knowledge economy and creative class, which consists of tech workers, designers, artists, entertainers, and professionals in the fields of education, healthcare, and law. According to the report, which examined 51 metros across the U.S., this group today comprises roughly a third of the nation’s workforce and accounts for about half of all wages and salaries.
The map below shows the geography and concentration of the creative class back in 2000. Notice the light blue patch at the southern end of Nevada.
The City Lab/Martin Prosperity Institute table below shows the 10 metros where the creative class made up the highest and lowest concentrations of the workforce in 2000. San Jose (aka Silicon Valley) topped the list, followed by D.C., Boston, Austin and Raleigh.
At the bottom in 2000? Las Vegas, Riverside, Miami, Louisville, and Memphis.
Fast forward to 2014.
San Jose still tops the list, followed by D.C., Boston, and San Francisco, all of which were also on the 2000 list. Some cities have moved up; others, like Austin, ticked down. Seattle is still in the mix, but Raleigh has fallen out of the top ten. Newcomers to the list include Denver and Minneapolis-St. Paul.
Note that the top ten U.S. metros had a significantly higher percentage of the creative class in 2014 than they did back in 2000, with the top two metros – San Jose and Washington D.C. – surpassing 40 percent.
The bottom of the 2014 list is also similar to the one for 2000, including Las Vegas, Riverside, Memphis, Orlando, Louisville, and Miami. That said, the percentage of the creative class in these metros has also increased.
The following map charts the percentage change in the creative class from 2000-2014.
As our headline indicated, Las Vegas, which still ranks last in the creative class among 51 metros, has seen the most growth – a gain of more than 40 percent.
Next in line for growth are:
– Indianapolis with 24 percent
– Portland with 23 percent
– Salt Lake City with 22 percent
– Cincinnati with 21 percent
Milwaukee and Cleveland chalked up respectable 15-plus percent gains.
Of the leading creative class metros, only San Jose showed comparable gains to these cities. San Francisco saw only a 10 percent increase, and Boston saw only 9 percent growth.
The City Lab report concludes that the U.S. creative class—which tends to provide the highest paying jobs—appears to be growing across the board, with six metros including Las Vegas registered gains of 20 or more percent, another 11 showing gains of 15-20 percent, and 18 more with gains of 10-15 percent.
Welcome to the new age, Las Vegas, and may the odds be ever in our favor.