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Whittaker Report

Attracting the Creative Class: Part II

By Katie Terpstra

Last month, we discussed author Richard Florida’s theory that creativity is the driving force behind economic growth and that “cities should stop worrying about attracting companies and start worrying about attracting members of this class.” This article has generated some feedback and as a follow-up we wanted to share with you what Mr. Florida refers to as the Creativity Index.

Mr. Florida created this index in order to measure a city’s ability to both attract the creative class and “to translate that underlying advantage into creative economic outcomes in the form of new ideas, new high-tech businesses and regional growth.” His Creativity Index looks at four equally weighted factors: the creative class share of the workforce, high tech industry, innovation, and diversity.

Below are his rankings of the top ten “creative” cities in the United States, grouped into three size categories.

Large Cities Creativity Rankings

Populations of 1 million or more

1. San Francisco

2. Austin

3. San Diego

4. Boston

5. Seattle

6. Chapel Hill

7. Houston

8. Washington

9. New York

10. Dallas

10. Minneapolis

Medium-Size Cities Creativity Rankings

Populations of 500,000 to 1 million

1. Albuquerque

2. Albany, NY

3. Tucson, AZ

4. Allentown, PA

5. Dayton, OH

6. Colorado Springs

7. Harrisburg, PA

8. Little Rock, AR

9. Birmingham, AL

10. Tulsa, OK

Small-Size Cities Creativity Rankings

Populations of 250,000 to 500,000

1. Madison, WI

2. Des Moines, IA

3. Santa Barbara, CA

4. Melbourne, FL

5. Boise City, ID

6. Huntsville, AL

7. Lansing, MI

8. Binghamton, NY

9. Lexington, KY

10. New London, CT

For further information, go to

i-OP: An Innovative Approach to Measuring Your Community

By Mark James & Pete Julius

A common problem pesters many economic development organizations dedicated to a business retention strategy: understanding the needs and values of their own communities. Gathering information from hundreds of local businesses or stakeholders requires significant time and resources. With advances in technology, this daunting task has become much easier. One of the technology solutions to this communication problem is the use of web-based surveys.

One of the most advanced and powerful web-based survey and communication tools is named i-OP. i-OP has developed a Java-based applet that allows for a virtual dialogue via the Internet. This extremely sophisticated web tool sends out an email notification to local businesses and invites them to part take in a survey. From there, respondents can direct the interaction by responding to only those questions pertaining to them, while the applet virtually directs them to other questions based on their response. In this more conversational interaction, respondents are asked for more detail on issues they feel are important, not just a stock set of questions, appropriate or not.

Sophisticated results emerge for the local economic development organization. Response graphs are automatically produced on each question, cross tabulations can be run, and other data such as average time to complete and responses to open-ended questions are automatically provided.

This technology makes what used to be a long, drawn-out process into a rather simple and innovative approach to understanding a local community. In addition, community leaders can conduct the survey at their convenience – making it a tremendously useful tool for both parties. Should you want to consider using i-OP in your program, please contact Mark J. James with ED Solutions, Inc. at or 614.792.9102.


Measuring Innovative Companies

By Leigh Howe

How do you identify innovative companies?  Using R&D intensity, patent information, and other financial information can help you pinpoint companies that are not only innovative but also successful.

R&D intensity.  R&D spending as a percentage of sales revenue is also known as R&D intensity.  High intensity is expected from companies that live by innovating.  Drug companies generally lead the way with an average of 12.8% of sales revenue devoted to R&D.  A quick measure of the importance a company places on innovation can be made by comparing its R&D intensity with the industry average.  But the money invested in R&D measures only the importance a company places on innovation, not how well it innovates.

Paying attention to patents.  Look at the patents that a company is granted, along with analyzing R&D spending.  New knowledge as registered in patents is the direct product of R&D spending. Taking patent research one step further, CHI Research of Haddon Heights, New Jersey, counts patents, calculates patent growth rate, and then quantifies the value of patented technologies.  For an annual fee, researchers and investors can get CHI’s monthly “Investor Tech-Line” which reports on 350 leading U.S. patent producers.   Each report places companies on a “current impact index” by checking how often their patents are cited in all U.S. patents.  A recent article in MIT’s Technology review shares some of CHI’s research in the Patent Scorecard 2002.

Spot the companies that match their R with their D.  Just because a company spends a lot of money on research doesn’t mean they are able to develop their inventions into commercial success.  Michael Murphy of Technology Investing Online suggests looking at earnings and debt along with R&D expenditures to determine those companies that have effective R&D spending.  Murphy looks for at least 50% of a company’s revenue to come from products introduced in the last three years. 

One more tip.  Do not look highly upon those companies that cut R&D in a downturn.  While short term savings are realized, reducing R&D hurts long-term revenue growth.

For more information:

  • MIT Technology Review Patent Scorecard:
  • Bloomberg Personal Finance:
  • Forbes:
  • Technology Investing Online:

Featured Website:

By Jeff Vedders

An interesting web site we came across recently was The McKinsey Quarterly at 

The McKinsey Quarterly is an on-line journal with articles on business strategy, published by McKinsey & Company, a management consulting firm out of New York.  Its articles cover corporate functions such as marketing and operations, and information on major industries such as automotive, computers and electronics, and financial services.

The site archives articles as far back as 1995.  This is a great site to use to get a sense of some of the issues that companies face internally (for example, strategy) as well as industry-wide issues.