Unemployment in Denmark.

( 2006-2008 ) Crazy decrease of unemployment in Denmark

Unbelievable. I always heard that unemployment rate could never be below 3.5% or so, because that is frictional unemployment. But during these last months is going quite low. I guess is because the way they measure it at Statistics Danmark. Or is sound proof of my macroeconomic class 101 about the Phillips Curve, that is the direct realationship between a high employment and high inflation.

Three scholars

During these week for different reasons I have found articles and books written by Zoltan J. Acs. I have to admit, that I have not read his work too much (until these last days), but I’m currently overwhelmed with his work. Right now, I’m reading his latest book “Entrepreneurship, Growth and Public Policy” (2008) in which he compiles various articles. 

I know I have read things from him, but I guess I’m now in the process that any research goes through, rediscovering authors. 

Another book, that I have in my desk and it’s an interesting reading, (less academic than the previous), is another 2008 book. “The Illusions of Entrepreneurship: The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live By”. This book is written by Scott A. Shane. Many things he writes I have already studied and know, but is a nice way how he puts it. He writes very well too.

I’m also deeply grateful to all the material than my former professor and the secondary supervisor of my master thesis, has on his website. I need to write him, I don’t think he knows I started a phd. He’s Dr. Philip Shapira. One of the smartest teachers I’ve ever had. His notes are coming at handy when I start teaching soon.   

p.s. Today is 8-8-8, and it was the opening ceremony of the Beijing Olympics.

Who’s Your City. By Richard Florida.

I just read the book “Who’s Your City” by Richard Florida (2008). He basically builds upon the theories he explained in his last books (2002 and 2005) and recent articles. For the record, I have to say that since I read “The Rise of the Creative Class”, as a mandatory reading for an Economic Development Class at Georgia Tech, I did not like his “theories”. However, the more that I read from him I think he has some very good points.

I already watched a video of a recent presentation, so many things he said were familiar to me. I put a link to the website of the book. Here I’m writing some of the things that I considered while I was reading the book. I will later share other ideas about the book.

 

This is NOT a book review.

Because the book was published in 2008, it was nice to read updated information. The idea of the mega-region or megacity is very compelling. I’m sure that anyone reading his book has to believe that, if interested in innovation, there is not a chance to avoid living in a big metropolis. Besides, “the share of the world’s population living in urban areas increased from just 3% in 1800 to 14% in 1900. By 1950, it had reached 30%. Today, this number stands at more than 50%. In the advanced countries, three-quarters of people live in urban areas.” (p. 18-19, quoting UN reports)

Although I do not fully agree with his explanation about the economic growth theory (p. 61-67), I found it very useful. He explains how the economy is tied to geography since prehistorical times. He quotes A. Smith, D. Ricardo, A. Marshall, Schumpeter, R. Solow, P. Romer and finalizing with Jane Jacobs. I have read some of each one, but I have never read anything from Jacobs, so I think her book “The economy of cities” is going to be in my list, although for now, the insights of Florida will do.

 

People: Rooted or Mobile?

Another thing of the book I liked was the concept of the people who are rooted or mobile. Something that really shocked me was that 40 million people in the U.S. who move every year; 15 million make significant moves of more than 50 or 100 miles (p. 6) Of the people who move, 52% of them do it to find new housing (up/down grade, etc.). Another 26% say the move for family reasons and a 15% of the Americans move on account of work (p.83-84). Florida says “Still the notion that we move for job persists, despite evidence of the contrary. Ever since I became interested in the question of how people choose where they live and work, I’ve routinely asked my students where they plan to go after graduation”.

After reading this I wonder how big the difference in Europe is. How many million Europeans travel more than 100 kilometers a year? My first thinking is that only a tiny fraction of the American 15 million. I also wonder how many of them don’t do it for job purposes. However, I keep finding more and more younger people who might break this European historical trend. For example, my younger brother and wife just graduated from the university, I asked them where they would like to move, and they had consistent answers with what Florida describes. My brother would like to move in Paris, but not to hypothetical well paid job in Teruel, Spain. In fact not only my brother, many other students here in Denmark that I asked, want to move to cool places, referring to Copenhagen, Berlin, London. For the record my sister in law would like to move back to her native city, which explains the value given to live close to family and friends. This relates to the 2007 study by Powdthavee, which says that you should make 85,000 GBP a year, just to make up for the lack of unhappiness you feel from being far from family and friends (p.87)

 

Do you really want your city to grow?

Florida also addresses one of my doubts, that is, when cool places keep attracting people, there is a moment when certain population of the creative class — the ones that are not well paid, that is musicians, bohemians, etc, against engineers, architects, etc. –  can not afford to live in a more demanded area. Then what happens; can still this city be creative? He answers “escalating real state prices can inhibit innovation” (p. 140).

 

Here lays a conundrum of urban development. Many small cities dream to grow, in fact they are loosing population and they’re afraid they will disappear. All of them dream of glorious past times when the city was in the map. They want their young people to stay, their population to grow and the employment to thrive. However, no matter what they do they keep getting small. Then in the other hand we have other small cities, that for x or y reasons they keep getting bigger and bigger, growing and growing. For example, the project that I’m involved in is Frederikshavn, a provincial city in north Denmark, that has been decreasing in importance during the last decades. I compare this city with my hometown, Alcalá de Henares. A city that has been growing to a tremendous rate. People are happy that there is more money in the city, and unemployment is low. In the case of Frederikshavn, the housing is extremely cheap, while in Alcala is extremely expensive, this gets accentuated comparing by their income averages. That is, I guess that in Frederikshavn people use 25% of their income in housing while in Alcala the expense more than a 50%. But is there a limit? Perhaps we have already reached it. Policy makers in each city have a tremendous role to keep the city alive (Florida explains this in the section “leaders of squelchers” p. 180-181).

It’s a question to analyze if a city really wants to grow or not. I think this should be the first question for a running mayor. Do you want the city to grow? At what cost?

 

In a city like Frederikshavn, they would love to see their houses prices rise. But what happen when people keep moving in, and moving in and housing prices became prohibitively expensive? In certain way that’s what happened to me. I had a nice consulting job in Alcala, close to my family, but my wife and I were not willing to pay  300.000 Euros for a small two bedroom apartment. Many people like me, either leave the city or live there struggling. Therefore a city should be careful with what they ask for. Population pyramids, immigration and industrial trends need to be considered.

 

Something between own and rent

Florida considers that the idea of homeownership might belong to an expired industrial era (p. 142-143). Everyone says that renting is throwing the money out of the window, while buying a home is probably the hardest decision to take in someone’s life –“where”- (although it impact you more, choosing what to study right after high school –“what”-  or falling in love with someone –“who”- , does not seem very analyzed decisions). Buying a house limits yours mobility.

 

He follows “The creative age may well require alternative forms of housing – something between ownership and renting”. It’s quite interesting that this type of housing already exists in Denmark, this is cooperatives or Andelsbolig (Andel means “a part of something” and Bolig means apartment or house). I found this type of housing an excellent option and we have been seriously looking at several andelsbolig. To the best of my knowledge this form of housing does not exist neither in Spain, Germany, USA nor Latin America. I wish they had this type of housing more widespread everywhere. I think Florida got it right on this one.

 

Another main subject of the book that I can mention is the “Geography of Happiness”, an exciting subject, although obviously somewhat shaky. I also enjoyed reading about the different rankings for places where to live.

I will later use some of its argument, quotations and bibliography for my work. I’m grateful for his work.

A textbook to teach: Global Economy

Frontpage of one the books I will use

My supervisor gave me the first book that I will be using to teach this Autumn Semester. I will be teaching things related to geography. Because of my background in Business and Economics I will be teaching in the geography group more things related to Economics. 

It’s not the first time I teach. I was an Spanish teacher for more than 2 years in Spain, in my early university years. That was a side job, not related with my studies but it was fun and well paid for a few hours. Then at the School of Public Policy at Georgia Tech in the Autumn semester 2006, I was also a TA (Teaching Assistant) for a class that combined Science, Technology and Politics with Hans Klein. But anyways although I a little experience teaching, now I’m really excited.

I think this is one the better things for a PhD fellow to be able to teach other students. Now I need to learn by heart the first 6 chapters.  It’s going to be cool.

Oh, next week I will be in Spain for vacations. I have been really missing it this week with the running of the bulls in Pamplona. Now, let me tell you, that’s a real experience!!

The Tordenskiold Festival 2008. More than 30.000 people visited.

An important area of my research is to look at cultural and engaging activities for the city of Frederikshavn. The activities that the city has carried during the last years have been pretty cool and innovative. One of them has been the Festival of Tordenskiold.  I will quote supervisor who explains about it:

The Festival of Tordenskiold started in Frederikshavn in 1998 and has been organised as an annual summer festival in the city since that year. From a humble start in 1998 in 2007 more than 25,000 people visited the festival which had 1000 local participants and activists. The historical core of the festival is a sea battle in the year 1717 in which Tordenskiold participated as a twelve year old boy. The festival is constructed as scenery at the harbour, with the water as an important element. A theatre play involving sailing ships, rowing boats, guns and canons and the wharf, as well as people dressed up in XVIII century clothes as king and nobles, soldiers and mariners, represents the culmination of the festival. Many people dress up as XVIII century peasants, vendors and street performers and serve food, sell arts and crafts and give little performances of different kinds during the two days of the festival. Sailing ships from different countries visit the harbour during the festival. The visiting ships are actors in as well as part of the scenery of the festival and the theatre play. Some of the ships are also attractions, inviting people to experience their beautiful interior. Only since 2004 the city council has put the festival on the budget with a salary for a coordinator. Until then it was run by volunteers and based on private donations. (Lorentzen, January 2008)
 

Well this last weekend the 2008 Festival received more than 30.000 people. Which is a great sign that the Festival is doing better every year. Unfortunately I didn’t go, as it coincide with my moving to my new place. I feel bad about it, next year I will go 100% sure. Anyways, it seems people did not miss me to have great fun…

Oh, I forgot to tell you. Torden, in Danish means Thunder, and Skiold, Shield. From what I understand is the title that it was given to this brave guy (Peter Tordenskiold) who defended the city. That was in 1717.

In a way reminds me the ideas shared by Gilmore and Pine, in their last book Authenticity (2007), about celebrating key dates for a place.

Google Trend speaks, researchers listen.

The other day I met Google Trends, a powerful tool. I think still some unprecise, but it can bring useful info. I started looking at some of the keywords of my research interest, like “innovation” & ”entrepreneurship”,  

We can comment a few things. First, people are more interested in “innovation” than “entrepreneurship”. Even if some of us, keep saying that “Entrepreneurs or Intrapreneurs, We Couldn’t Innovate Without Them” (Mary Key, today). Second thing is that Copenhague and Singapore, are the  most interested city/regions in the world about innovation (Google dixit). Third thing, is that entrepreneurship is much more googled in developing countries. Which makes sense as they have the highest entrepreneurial rates in the world, and are the ones kicking Europe and US. Last thing to point out, that always in Christmas, people don’t care about these things, that’s funny to see in the graph. I always like to see things from a multilevel perspective.  

The experience economy

I looked at other words, but probably the most interesting is “experience economy“. Notice, that Aalborg (or Ålborg), it’s ranked as the number one place in the world more interested in this concept. My supervisor got quite excited when yesterday I saw her that. Of course that is not only my Department that has been interested in this subject, other in Aalborg also do.

So if you are interested in this issue, stay tuned. In fact, the word in the street says we will soon open a website about it.  

The Committee on Culture of the Danish Parliament visit us.

This afternoon the CCDP or Kulturudvalget in Danish, came to visit us. Here in the official website of the Parlament explains about their trip. It was very interesting to meet this people. I was the only foreign, so everything was in Danish, which it was hard for me to follow as my command in Danish is still shaky
So 10 people from this Committee came and we were 4 academics, my supervisor, another professor and two PhD’s (including me).
My supervisor talked more in general about the experience economy and the projects done in Frederikshavn. The Comittee was very interested, and they asked many questions. My coworkers were very glad how the meeting went.
H.P. my fellow PhD student, also made a presentation they liked. I’m including my presentation, it’s a very small one and it had to very fast as the time was almost consumed, but at least you can see a little of what I talked about.
For me it’s very interesting how these people in the goverment, from different parties, are interested and get engaged in what people are doing in their “Kingdom”. I’m very happy to be in a project that it’s important, not only at local/regional level, but national too.

Well it seems today SlideShare does not work. So I will updated it in another time. I have recently updated the RSA Presentation, today I saw 106 people had view the presentation since I put it, too bad no one has left any comment.

My presentation at the conference.

Here is the power point presentation I prepared for the conference. It was really exciting and I meet many great people in the conference. It’s so exciting to find that many other academics are studying these issues. I also enjoyed the atmosphere of Prague.

In my presentation there were 3 other presentations, and I got 3 or 4 questions that I loved to answer. Many never heard about the “experience economy” so it was nice to see their faces.

Richard Florida at Googleplex

Richard Florida visits Googles headquarters to discuss his book “Who’s Your City?: How the Creative Economy Is Making Where to Live the Most Important Decision of Your Life.” This event took place on March 28, 2008

This is an hour presentation. It has been fantastic listening to him. There are many things that I could comment about it. I like the idea of the importance of taking decissions on where to live. I have been also surfing Florida’s site Who’s Your City, and I specially enjoyed the maps sections.

I have to say that the two main critics I had about him have him addressed. The first one, is that the there is no correlation on this issues, as he says in the economic phenomenon things are very complex, ”association” better fits the term. The second thing, is that while looking at the new megaregions, he’s using number of patents to measure innovation. Which I consider with too many flaws, specially at the international level, but in the video he said something: “Using number of patents is quite a rude thing to do, it could have been done better…” 

That by the way, is something that I commente on his blog. I wonder if I could ever influence a 0.01% him? That would be cool.

The Creative Economy UN Report

I was talking with some colleagues and professors from MIKE, one of my old professors aware of my research handed the new “Creative Economy. UN Report 2008“. I was pretty impressed, a United Nations report?

It’s hard to believe that in so little time the “Creative Economy” concept has got such relevance. In fact, I had to check inside that they were really talking about the Creative Economy, as Richard Florida put it. As I said before I’m not a great fan of Florida, but of course I think I understand the importance of this “economy”. I mean everything in a city it’s not about infrastructures, local policy makers should understand that people also look for “cool experiences”.

In 13 November 2006, I dedicated a post titled “The Creative Class; in USA, Europe, Denmark, Spain and Aalborg“, that was in a temporary class blog some students used during a semester abroad. I mentioned that I was doing a study in Spain in the top 10 metropolitan regions using Florida’s methodology to find the most creative ones. The most important result for me was that there is not causality, between ”creative economy” and “the economy”, and that ”creative class” and ”non-creative class” flock together. That is cool places, or big metropolitan places, equally attracted “creative” and “non-creative” people.

We could say that maybe this is what happens in Spain. But I ask you: How well do you know Florida’s methodology? and, Have you ever attempted to do a city comparison study with it?. If you have done it, I will be 100% interested in hearing from you. If you have not done it…