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March 30, 2007

Mansion "The bigger the house, the worse the CEO" - so says this column by Dan Gross based on research by David Yermack of NYU and Crocker Liu of Arizona State University.

"Using property records, public databases, and search engines, Yermack and Liu were able to identify the primary residences of 488 of the 500 CEOs of the S&P 500. These guys—and they're almost all guys—are living large. The mean residence of a CEO was anything but mean: 6,145 square feet, 12 rooms, 5.37 acres of land, and a market value of $3.1 million. For the 164 in the sample who bought new houses after being named CEO, the mean house was even less mean: 6,635 square feet, 13.1 rooms, 6.13 acres, and a market value of $3.9 million. ... Then the professors examined the returns of the CEOs' stocks, and discovered that the bigger the home, the worse the stock performed. In 2005, the stocks of companies whose CEOs lived in larger homes (i.e., above the average for all CEOs) returned, on average, 3.35 percent less than companies whose CEOs lived in below-average homes. And the CEOs who lived in the biggest homes (at least 10,000 square feet or over 10 acres) underperformed their peers who inhabited more modest homes by 6.9 percent, on average. Next, they looked at stock returns for 164 companies whose CEOs bought new homes afterostensibly to raise cash to buy a house—just before their stock goes south. "ostensibly to raise cash to buy a house—just before their stock goes south. becoming CEO. Here, again, they found trouble, especially for CEOs who bought mega-homes on mega-plots. They found "a significantly negative stock performance following the acquisition of very large homes by company CEOs," on the order of 1.25 percent performance lag per month. ... What's more, when CEOs sold stock to finance the purchase of a home—as was the case in 32 percent of the instances—those stocks performed worse than companies where CEOs held on to their stocks. .... The data seem to indicate that a good number of CEOs are selling shares --ostensibly to raise cash to buy a house—just before their stock goes south."

The whole story is here

March 29, 2007

It’s simple.Tolerant regions attract talent.  All kinds of talent: immigrant, African American, young, gay, female, etc. Talented and skilled regions move to the front, while others stay stagnant or fall behind.

For this week’s “By the Numbers,” we take a look at females and the creative class. This measure is strong on many levels. It measures half the labor force – female vs. male – and has an underlying assumption/ evaluation of tolerance. We would bet: regions with a higher percentage of female creative class members have a more tolerant environment than others.

What’s our data source?  Rather than utilizing the typical BLS occupational data, we used census occupational data from the American Community Survey.  Unfortunately, the Census didn’t create occupational estimates for all metros, but we have the rankings for the metros that were included. 

In addition to female creative class members, we also include the rankings – top and bottom metros – for female educational attainment (% of population).  Check the numbers out!

Download By The Numbers: Females and the Creative Class

posted by Steven

Richard Florida

Complementary Skills

I don't often write about, or link to posts on, intellectual work, but Greg Mankiw hits the nail on the proverbial head here on research collaboration.

"Many econ grad students at Harvard, maybe most, are stronger in math than I am. In recent years, some of my coauthors (such as Ricardo Reis and Matthew Weinzierl) have been Harvard students with strong technical skills. My comparative advantage in the coauthorial quid pro quo is based on experience, intuition, writing skills, and a pretty good nose for interesting questions.One of the nice things about being a professor is that you can specialize in those things you are best at, and you can find collaborators that compensate for your weaknesses. In other words, being a professor is a lot easier than being a student."

This just in from the BBC (hat tip: Kevin Stolarick).

"The US has lost its position as the world's primary engine of technology innovation, according to a report by the World Economic Forum. The US is now ranked seventh in the body's league table measuring the impact of technology on the development of nations. A deterioration of the political and regulatory environment in the US prompted the fall, the report said. The top spot went for the first time to Denmark, followed by Sweden.Countries were judged on the integration of technology in business, the infrastructure available, government policy favourable for fostering a culture of innovation and progress and leadership in promoting the usage of the latest information technology tools."

The story is here.

Continue reading "Is the US Losing Its Technology Lead" »

We could not be more excited with our work with El Paso and the fantastic New Texico group.  Check out this feature piece in the New York Times on joint economic development between El Paso and Juarez and our work to create a binational downtown revitalization effort linking the two communities.

“The two cities function symbiotically,” said Bob Cook, president of the nonprofit economic development corporation. “And that is a reflection of the two countries functioning symbiotically. In 2006, we had $55 billion of U.S.-Mexico trade crossing through this border, 18 percent of all U.S.-Mexico trade. There are 267,000 people employed in manufacturing in the El Paso- Juárez region.” Production sharing in the El Paso-Juárez region, while nothing new, has become increasingly complex. High-tech parts are manufactured in the United States and abroad, then shipped to Juárez for assembly and trucked across the border to El Paso, which has 55 million square feet of distribution space, before being dispersed throughout the United States. Many international corporations — based in Europe, North America, Japan and, increasingly, China and Taiwan — build their own plants. For instance, Electrolux, a Swedish appliance manufacturer, is expanding its Juárez campus by more than a million square feet to assemble refrigerators. ...“Juárez 30 years ago was 30,000 people,” said Sergio Bermudez, president and chief executive of Bermudez International. “Now it’s a million and a half. With El Paso, there are 2.4 million people. The future growth of both the U.S. and Mexico is along the border.” ...To further strengthen this connection, the cities of Juárez and El Paso worked together to design a master plan for redeveloping both downtowns, including an 11-block binational arts district connected by the main bridge. The first major developers under this master plan are expected to be announced within weeks."

The full story is here.

March 28, 2007

Richard Florida

Density Matters

Georgetown Here's a great piece on density, and how to measure it, by Terry Holzheimer,  Director of Economic Development for Arlington Virginia and a Ph.D from our program via Planetizen).

"Density is a complex concept that includes measured density, perceived density and crowding of a given area. While the term is often described as objective, it is also relative. What do measures of jobs per acre, or population per acre, feel like to employees or residents of a neighborhood? How do the places in which we live and work measure up and compare? Can objective, numeric measures really reflect the "urban-ness" of a place? If so, which is a better presentation of that "urban-ness"? Numeric measures of density or relative perceptions of low, medium and high densities?

In an attempt to help answer these questions and quantify urban density and intensity, I have analyzed specific formulas of measurement for the density of regional activity centers, along with growth projection data, to better understand current and future trends about urban development. While I have used date from my own area -- Greater Washington, D.C. and Northern Virginia -- as an example, these approaches can be applied to any major metro region.

The full story is here and a longer report is here.

March 27, 2007

Richard Florida

Resilient Regions

The MacArthur Foundation has announced its support of a new research network on resilient regions. Click here for the website and here for a research report.

March 26, 2007

Dc The Greater Washington Initiative has just released its major study of the region's knowledge workers, talent-base and creative economy.  Driven by Steven Pedigo and involving detailed research on the region's occupational mix, it is the first ever detailed looked into the talent base of a region. And they're using it to change the way economic development is done - shifting the focus from tax cuts and incentives to leveraging talent and lifestyle to attract companies, generate jobs and deepen the region's economy. The Washington Post writes:

"When it comes to its reputation as a major economic hub, Washington doesn't get the respect it deserves.At least, that's what they say at the Greater Washington Initiative, an affiliate of the Greater Washington Board of Trade that promotes local business. Despite the region's disproportionately high number of educated workers, high-tech companies and financial institutions, they say, too many people still view Washington as a government town. So GWI researchers gathered labor statistics, singled out professions and chose five other major metropolitan areas for comparison. What they say they learned, and plan to release tomorrow in a study called "Human Capital," is that compared with New York, Los Angeles, Boston, Chicago and San Francisco-San Jose, Washington has the highest concentration of so-called knowledge workers."

In fact, the paper devoted four separate stories to the study: here, here, here, and here. The Washington Post is hosting an on-line discussion with Pedigo today at 1PM. More on that is here.

0odalesssko Make Money Not Art has an interesting interview with Swedish designer and "fashion theorist" Otto von Busch,  who dubs "marginal actors in the fashion field “fashion renegades” since their production process is "similar to hacking." They add onto things, borrow and tweak, deconstruct and remake key trends. He argues that:  "There has lately been a lot of talk about “creative industries” but it will be a serious mistake to consider these activities as industries or even production facilities. We instead tried to see them as co-creators. ...We need to rethink our economic operating system in many ways if we want this low-level to blossom and be the ground for a “new economy”. The copyright and music sharing debates we see now is only the tip of the iceberg."

Click here to read the interview.

March 25, 2007

I try not to comment on politics in my former home town. But I can't let the recent editorial hit-job by the Post-Gazette on Councilman Bill Peduto's decision to leave the race for mayor slide. I am proud to call Bill  my friend. But far beyond my personal feelings, he is far and away the finest policy thinker and political visionary in Pittsburgh I have come across. He has devoted his entire life to the community which he cares about deeply. He is a real force for change - a truly good man. I have not talked to him about his decision to leave the race, but I know how hard it must have been for him to give up his calling and dream. He has said he did not want to make the race go negative. I believe him. I am sure the political establishment was all over him to get out as well.  The facts will come out over time, and I trust Bill to be honest about his reasons. For the Post-Gazette to attack this ultimately personal decision using the words and tone it does is just unconscionable. It is a case of squelching of the highest magnitude - a nasty, negative, despicable journalistic mugging.  The paper's leadership and editorial board should be ashamed of themselves. They owe Bill and the entire city of Pittsburgh an apology.

Click here for the editorial, or read it after the jump. John McIntire's running commentary on the story is here.

Continue reading "Below the Belt Journalism" »