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Kevin Stolarick, research director of the Martin Prosperity Institute at the University of Toronto's Rotman School of Management. (Fernando Morales/Fernando Morales/The Globe and Mail)
Kevin Stolarick, research director of the Martin Prosperity Institute at the University of Toronto's Rotman School of Management. (Fernando Morales/Fernando Morales/The Globe and Mail)


Can decaying buildings lure top talent? Add to ...

Kevin Stolarick talks to communities and regions about how to attract the creative class - people who get paid to think. Research director of the Martin Prosperity Institute at the University of Toronto's Rotman School of Management, Dr. Stolarick says the first step is understanding what you've already got.

In a global economy where intellectually skilled workers offer the only competitive advantage, Canadian cities and towns want to boost their tax base by fostering creative clusters. But whether the industry of choice is IT, fine arts or biotech, building a cluster from scratch is difficult, Dr. Stolarick warns.

"I always say the hardest thing in the world is to attract the first immigrant to your community, and the easiest thing is to attract the second one. And the same is true for these industries. If you have the first one, that's fabulous, and if you have some already, there's something you can do with it."

For Dr. Stolarick and his colleagues at the institute, which studies the role of location and city-regions in economic prosperity, this is well-worn territory. (The institute's director, Richard Florida, wrote the bestseller The Rise of the Creative Class.) But understanding the many factors that made Austin, Tex., a magnet for creative types is tricky, Dr. Stolarick says. "Even looking back, it's hard to figure out what all of those conditions were and how things happened."

To succeed in today's economy, communities need a much more different infrastructure than they did 20 years ago, notes Brock Dickinson, principal of economic development consultancy Millier Dickinson Blais, based in Hamilton, Ont.

"It isn't about the cheapest taxes or the best sewage system to service industrial land," Mr. Dickinson says. "It's about the kinds of things that will draw the most qualified, most talented, most creative people to a community."

As Dr. Stolarick explains, the postwar standard for economic development was chasing smokestacks and the jobs they brought. Now that communities have caught on to the value of amenities and "quality of place," though, there's a misconception that Starbucks and bike paths are bigger lures than jobs. "You still need both," Dr. Stolarick says. "The job itself is no longer enough."

To complicate matters, employees no longer simply move to the place where a company is located. Increasingly, Mr. Dickinson says, the reverse happens: Companies in fields such as IT choose a location for its talented work force. "Because it [varies from]industry to industry, there's almost a different calculation that has to go on for the economic developer."

Last year, Millier Dickinson Blais did some work for the city of Burlington, Ont., which was trying to secure foreign investment in four different industries. For some of them, Burlington tailored its marketing case to employees rather than employers. "In some of the other industries, they were emphasizing the operating costs for the business, the impact of real estate pricing and that type of thing," Mr. Dickinson says.

One cornerstone of a long-term plan for establishing creative clusters is an inventory of existing activity. That means looking at data from official sources, Dr. Stolarick says, but also getting a truer picture by talking to people from a range of industries. "Ask the ones who are doing what you want and what you want more of, and say, 'What can we do to help get more of you?'"

Mr. Dickinson says the communities he deals with often fixate on the same target industries - advanced manufacturing and life sciences are two examples - so they're competing with thousands of other players. His firm helps them articulate their value proposition to potential investors.

For instance, Millier Dickinson Blais worked with Squamish, B.C., and Ontario's Niagara region to explore opportunities for attracting video game developers. Squamish's value proposition was outdoor recreation, while Niagara's was theatre and other cultural amenities. Their appeals were very different, so they spoke to different components of the industry, Mr. Dickinson says.

Many communities are striving to improve their quality of place, a powerful draw for creative workers. Mr. Dickinson cites Ontario's rural Prince Edward County, which has emphasized culinary culture by doing things such as introducing artisanal cheese-making to dairy operations. Still, expecting quick results is unrealistic, Mr. Dickinson cautions. "They've had some success, but it's one of those strategies that really unfolds over the longer term."

As for tax and other financial incentives, Mr. Dickinson says the U.S. experience shows that the costs can outweigh the benefits. "If you end up giving away a lot of the tax base in order to attract investment, it becomes a zero-sum game."

It may be overlooked, but one key incentive for creative clusters is older buildings that entrepreneurs can convert. "At a certain point you want to take advantage of something that is decaying or running down, and let new use adapt to opportunity," says Gordon Price, director of the City Program at Simon Fraser University, and a former Vancouver city councillor. "And you may not be able to put that into a plan."

Also, an older stock of rental housing gives young, creative people an affordable place to live. "If you push them too far from places where you're hoping to generate a creative cluster, it's neither fair to them nor likely to succeed," Mr. Price says.

Communities also need to remember that there's no such thing as attracting a company. Instead, Dr. Stolarick advises, they should think about how to appeal to the CEO. "Do you have a place that she wants to be and she wants to bring her family?" he says. "If you don't have that, no matter how hard you try, you're going to have a really difficult time getting her to move her firm."

Mr. Dickinson says it's crucial to search for lone eagles - entrepreneurs who can set up shop anywhere, thanks to modern communications technology. It also helps to be lucky. Take British expat Jeremy Wellard, founder and CEO of Lunenburg, N.S.-based HB Studios, a developer of hit titles for video game publisher Electronic Arts Inc. Mr. Wellard liked the seaside town so much that in 2000, he made it the site of his new company.

"There's very little that Lunenburg could have done pro-actively to lure that kind of individual there, except to try to create the right atmosphere and the right environment," Mr. Dickinson says. "So when that lone eagle did come along, it was the kind of place they would choose to settle down and start their business."

What not to do

Kevin Stolarick, research director of the Martin Prosperity Institute, on three mistakes communities make when trying to build creative clusters.

Looking for a silver bullet: "Everybody always goes after this stuff and says, 'All we need is a cultural centre of some kind,' or 'Gee, if we only had high-speed broadband access, or a convention centre, or more hotel space, or a bigger airport.' It takes a shotgun, and not a rifle. There's a hundred little things - some of which will be successful, and some of which won't."

Naming conventions: "They think that all they have to do is come up with a snazzy name or a snazzy title or a brand, and that the brand doesn't actually have to be true to what the city really is. And if it's not, it doesn't work."

Jumping on the bandwagon: "They say, 'Oh, here's what somebody else is doing… I really don't know if it will help, but other people are doing it, so it must be good.' And so there's an awful lot of bandwagon-ism."

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