Category Archives: Martin-Florida Report

Ontario’s long-term economic future

Return on investment from early childhood education

People like to talk about “investing” in education. Too often you get the feeling that objective criteria still don’t really play a big part in how to spend education dollars. Here’s a chart that helps us see where that investment can really pay off:

University of Chicago economist (and Nobel Laureate) Dr. James Heckman uses a cost-benefit approach to demonstrate that investing in programs for very young children provides far greater economic benefits to society, as compared to formal or remedial programs for older youth or adults. In fact, Heckman’s detailed research shows some powerful advantages to extending ECE and pre-school education. Some key benefits are summarized in the 2009 Martin-Florida Report as follows:

  • Caregiver trust, which leads to higher confidence, less rigid approaches to problem solving, and higher levels of curiosity later in life
  • Language acquisition skills, which are important for verbal conflict resolution and curbing aggressiveness
  • Appreciation of relative quantities, which helps in later higher-order, non-rote mathematics
  • Symbol recognition, which is essential to advanced verbal and quantitative processes

This is an argument that should appeal to social conservatives. Spending more on early childhood education is a fiscal choice that shows prudence. It’s a way to reduce expenditures on  more costly social programs, while building a solid base of human capital to support economic growth in the next thirty years.

The 3Ts – Technology, Talent and Tolerance

If the Martin-Florida Report is the blueprint, then the papers now being published are the working drawings. The latest document, authored by Richard Florida, Charlotta Mellander, and Kevin Stolarick, is Talent, Technology and Tolerance in Canadian Regional Development. This is an academic article which synthesizes a number of concepts previously articulated by the authors and their colleagues.

Of the three Ts, technology is arguably the oldest, in terms of academic research. Economic development studies have recognized the effect of technology since at least the 1950s. Talent, or human capital, is a somewhat newer area of study.  Human capital was originally taken to refer to educational attainment. The authors have themselves been instrumental in modifying the definition of human capital, to include a broader measure of what makes individuals able to contribute to economic development.

Tolerance is the new member of the triumvirate. Originally born out of Jane Jacobs’ work on diversity, tolerance has come to include openness to immigration, the concentration of gay populations, and an acceptance of global economic activity. Richard Florida’s concept of the Bohemian Index has been widely absorbed by real estate agents in many parts of North America.

The research findings are complex and involve many interdependent variables. As I read them, tolerance plays a significant role in attracting clusters of talent, and talent is an important factor in determining where economic development will take place. These two elements are demonstrated to have an important role in Canada’s (and Ontario’s) economic strength. Interestingly, the role of technology is perhaps not as strong as it could be. The authors suggest that the effect of technology on regional incomes is strongest with the creative class, but that there is a weak link between technology and universities.

The findings underscore a main argument of the Martin-Florida Report: that governments, while reflexively tempted to “preserve what we have during this time of uncertainty,” should move towards long-term investment in infrastructure and education. For a discussion of the main report, see my earlier blog entry.

The Martin Prosperity Institute now has a full listing of resource papers associated with the Martin-Florida Report, available here:

http://www.martinprosperity.org/research-and-publications/publication/ontario-in-the-creative-age-project

Just check down the side of the page for the list of Working Papers already released.

Review of Martin-Florida Report

Ontario in the Creative Age, the report by University of Toronto professors Roger Martin and Richard Florida, was received last week by the Ontario Government. This report has received a significant amount of media coverage. The key ideas in the report will be extremely useful in enabling us to have good discussions about economic growth, and they deserve to become more familiar.

 

The authors set out their thesis that our economy is in an epochal transition, similar to the move from an agrarian to an industrial economy.

 

What we’re witnessing is a replay of the employment decline in farming, forestry, and fishing occupations in the first half of the twentieth century. Around 1900, fully 42 percent of Ontario workers were tilling the soil, cutting trees, or hunting and fishing for our food. Because of massive productivity improvements in the agricultural and resource sectors, today we are able to meet the basic consumption demands of Ontarians and untold numbers around the world with only 2 percent of our work force. (P. 7)

 

Their analysis of job trends is based on the concept of “routine-based” jobs versus “creativity-based” jobs. While the concept of “routine-based” is fairly easy to grasp, the definition of “creativity-based” has been more challenging to explain. In essence, however, Martin and Florida have marshaled impressive statistical evidence for two facts: first, that the need for “routine-based” work is shrinking and will continue to shrink; and, second, that the future prosperity of our society depends on our ability to encourage the accelerated growth of the “creativity-based” economy in Ontario. In other words, if we are not proactive, we will fall behind. Continue reading