UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN CREATIVITY, SOCIAL MEDIA AND ECONOMIC GROWTH IN ATLANTIC ARC Southampton (UK), march 2010 Miguel Ángel Pesquera Pablo Coto-Millán Pablo de Castro CREATIVITY, SOCIAL MEDIA AND ECONOMIC GROWTH IN SPAIN

UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN Index of contents 01 Review of economic growth literature 02 The Creative Class Theory 03 Model: Creativity and economic growth

UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN Index of contents 01 Review of economic growth literature 02 The Creative Class Theory 03 Model: Creativity and economic growth

UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN Classical theories of economic growth: Smith, Ricardo, J.S. Mill, etc  Why do some economies grow while others remain stagnant?  How the growth process affects every section of society.  How the process is, if ever, expected to end.

UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN Neo-classical growth theory “Balanced” growth : Automatic mecanisms competitive pricing Technical progress Endogenous Exogenous Capital accumulation Factor productivity Result of a work activity aimed at idea generation

UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN The convergence issue   - convergence takes place if the economies with lower per capita income grow more quickly than the economies with greater per capita income.   -convergence focuses on income dispersion in different economies throughout time, in such a way that if the dispersion decreased we would be dealing with this type of convergence.

UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN Index of contents 01 Review of economic growth literature 02 The Creative Class Theory 03 Model: Creativity and economic growth

UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN Creative Class  The methodological approach of Richard Florida constitutes a relevant landmark in the future of Regional Economy.  It is based on the existence of a group of people, called “Creative Class”, characterized by high levels of creativity and innovation.  Cities and regions with high creative class rates and which develop their work within the most creative occupations, will grow at faster rates than the rest.

UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN Creative Class “Creative Class” “Engage in complex problem solving that involves a great deal of independent judgement and requires high levels of education or human capital”. 1. Science and engineering; 2. Research and development; 3. Technology-based industries; 4. Aesthetic and design industries; 5. Culture, arts and music; 6. Knowledge-based professions of health care, finance and law.

UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN Talent, Technology and Tolerance  Talent, that regions, cities or countries must have, attract or retain through setting the appropriate conditions that satisfy all types of expectations and lifestyles and offer permanent incentives to creative people.  Technology, associated with research and substantial investments in new companies and businesses.  Tolerance, is the third T to shape creativity. It is important because it shows the ability of a nation or region to attract and mobilize creative talent.

UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN Index of contents 01 Review of economic growth literature 02 The Creative Class Theory 03 Model: Creativity and economic growth

UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN Talent, Technology and Tolerance. Richard Florida Talent Technology Output Tolerance Structure of the relationship between talent, technology, tolerance and growth

UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN Introduction  Technology and talent have long been considered as the driving forces of economic growth:  Solow (1957); Jacobs (1961,1969); Romer (1986); Lucas (1988); etc  Empirical evidence: Barro (1991); Glaeser (1995, 1998, 1999 and 2000); Simon (1998); Rauch (1994); Young (1995); Eaton and Eckstein (1997); Black and Henderson (1999); Simon (1998); Glendon (1998); Shapiro (2003) and Florida (2002,2005,2006).

UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN Introduction 2. Key topics : Improving the measurement and evaluation of human capital Geographical distribution of human capital and creative class universities amenities tolerance and openness to diversity

UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN The case of Spain Structure of the relationship between talent, technology, tolerance and growth Creative Talent Amenities Technology Economic Growth University Tolerance (Diversity) Territory Population Innovation

UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN The case of Spain Model: (1) (2) (3´) (3) (4) (4´)

UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN Independent variables  Talent The synthetic index of talent has been considered, obtained from the percentage of population with university studies and of two alternative measurements of human capital. These measurements are the population employed in creative jobs and the population engaged in super- creative jobs.

UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN Independent variables  Technology A technology variable is included to take into account the independent effects of technology on regional growth. In addition the effect of each of the indicators used to obtain the technology index is studied: high tech, high tech manufacturers, telecommunications, IT services, patents, and connectivity.

UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN Independent variables: Tolerance For this variable, the synthetic tolerance index has been used, as well as the three indicators contained in it: diversity, integration and artists. - Amenities Several measurements are used to establish the non- market factors. They are essentially measurements of quality of life or amenity: recreation or leisure amenities, measured by the total number of museums per capita and an index of the provincial educational and cultural level created by the Servicio de Estudios de la Caixa, Anuario de la Caixa.

UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN Independent variables: Tolerance - University Variable that measures the number of university degrees offered in each province. - Territory In order to measure the effect of the territory, we use the natural environment and average temperature index, as provided by the Anuario de la Caixa.

UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN Provisional results, equation 1 Talent: The production of talent is significantly influenced by certain factors such as: amenities, university and diversity It is worth noting the positive role played by universities in the concentration of talent which allows and facilitates both technological innovation and regional growth

UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN Provisional results, equation 2 Technology:  The production of technology is strongly associated with creative talent and traditional human capital  Factors such as diversity show their influence.

UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN Provisional results, equation 3 Innovation:  Innovation is closely linked to creative talent and traditional human capital.  Diversity and amenities are strong explanatory factors.

UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN Provisional results, human capital vs creative capital Human capital vs Creative capital:  Conventional measures of human capital based on educational attainment are improved by other definitions based on measures of occupancy, such as creative population.

UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN Provisional results, equation 4 Economic growth (I):  The estimations corroborate the existence of absolute and conditional  convergence.  The estimations also verify the existence of interregional  -convergence for Spanish provinces;  General Creativity Index has a positive coefficient which is 99% significant with regard to economic growth.

UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN Provisional results, equation 4 Economic growth (II):  Talent (mixed index), technology and innovation and tolerance (diversity) have a positive and significant effect on regional economic growth;  There is evidence of the existence of population-based effects of scale.

UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN Provisional results, conclusions Provisional conclusions (I):  The economic growth of Spanish regions takes place through a process based on the following stages:  During the first stage, non-market institutional and exogenous factors such as University, diversity and amenities positively affect the production of talent.  During the second stage, the concentrations of talent generate innovation, with diversity also being relevant.

UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n Santander. SPAIN Provisional results, conclusions  Provisional conclusions (II):  Lastly in the third phase, greater levels of talent, innovation and technology lead to greater levels of economic growth;  The effects corresponding to the measurements of talent based on the creative class are superior to those corresponding to the measurements based on educational levels;  To sum up, the results obtained indicate that the structure of relationships between the abovementioned institutional and exogenous factors, such as University and diversity, talent, innovation, technology and regional economic growth, is of great complexity.