Commentary of the Day - July 2, 2001:  Technology and Tolerance - Is It a Gay Thing?

Except for a brief article in Business Week by Theresa Forman, the mainstream press has largely overlooked the recent report by Richard Florida of Carnegie Mellon University and Gary Gates of The Urban Institute, which claims that "the leading indicator of a metropolitan area's high technology success is a large gay population".

The report, which is entitled "Technology and Tolerance: The Importance of Diversity to High-Technology Growth" examined a number of factors associated with regions of the country that had received high rankings in the Milken Institute's "Tech-Pole Index".  As Florida and Gates describe, the "Tech-Pole Index" ranks metropolitan areas on two criteria.  One is the percentage of the output of the nation's high-tech industry that is contributed by the particular area; and, the other compares the percentage of high-tech output in the particular area to the percentage of high-tech output for the nation as a whole.  The combination of these two criteria purports to identify regions that contribute significantly to the nation's high technology output.  For example, San Francisco, Boston, Seattle, Washington, DC, and Dallas capture the top five rankings in the Tech-Pole Index, while Buffalo, New Orleans, Honolulu, Memphis, and Louisville ended up at the bottom of the list of top 50 technology areas.

Florida and Gates find that three factors correlate strongly with high rankings in the Tech-Pole Index.  "... The leading indicator of a metropolitan area's high technology success is a large gay population."  Close behind are high concentrations of "bohemians" (writers, designers, musicians, and other artists), and high concentrations of foreign born residents.  Florida and Gates suggest that "... gays can be thought of as canaries of the knowledge economy because they signal a diverse and progressive environment that fosters the creativity and innovation" needed to stimulate the growth of high-tech industry.  They attribute the high correlation between "bohemians" and high-tech growth to the fact that areas with high numbers of "bohemians" are "... those with an appreciation of amenities that support and showcase creativity and artistic expression".  Finally, they attribute the high correlation between foreign born residents and high-tech success to the fact that "... leading high-tech centers are places where people from virtually any background can settle and thrive".

Upon first reading the report the Irascible Professor was somewhat surprised by Florida and Gates' findings.  However, upon reflection, the results make some sense.  The "new economy" is not just a "knowledge economy" it is an "idea economy".  Those areas of the country that are open to new ideas are the areas that  are most likely to produce thriving "new economy" businesses.  The IP is well aware that correlation does not imply causation.  Florida and Gates are quick to point out, and the IP heartily agrees, that high concentrations of gays, bohemians, and immigrants don't necessarily guarantee that a region will experience growth in high technology industry.  However, the conditions that foster the growth of high technology industry are likely to be the same conditions that attract these groups to an area.

Florida and Gates' report suggests that the presence of high quality colleges and universities is not enough to guarantee a high ranking in the "Tech-Pole".  However, almost all the urban areas that rank in the top 15 spots on the Tech-Pole are home to not just one high quality university, but to a concentration of educational institutions including one or more major research universities and/or government research laboratories.  The only exception might be Dallas, which has a number of fine colleges and universities but none that could be considered major research institutions.  However, the remainder of the top 15 areas (San Francisco, Boston, Seattle, Washington, DC, Los Angeles, Chicago, Atlanta, Phoenix, New York, Philadelphia, San Diego, Denver, Austin, and Houston) all host major research institutions in their environs.  The same cannot be said of the regions that score in the bottom 15 of the Tech-Pole (Cleveland, Miami, Rochester, Albany, Nashville, Greensboro, Oklahoma City, Las Vegas, Norfolk, Richmond, Buffalo, New Orleans, Honolulu, Memphis, and Louisville).  While there are good colleges and universities in all of these areas, most are not of the same rank in research as those found in the top 15.

To be sure, a top-quality research institution in an isolated location may not be enough to secure a high ranking in the Tech-Pole.  For example, Ithaca, NY, State College, PA and Princeton, NJ all can boast of top-notch research universities in their cities, but none of these locales has flourished as a high-tech center.  On the other hand, Austin, TX has managed to parlay the presence of the premier University of Texas into the foundation for high-tech growth.  The difference is that Austin has encouraged the growth of just those elements that attract a diverse population of educated and entrepreneurial individuals.

To the IP the lesson is clear.  High technology industries flourish where they have a ready supply of talented individuals.  If you want to put your area on the high-tech "map" start with at least one top-notch research institution, foster the growth of a lively arts and music scene, and throw in some decent night life.  Then provide a welcoming atmosphere to a diverse population of intelligent and creative people.