84 / Rotman Management Spring 2017
self-interested corporate behaviour. As we began to delve into
this area of study at the Martin Prosperity Institute we used
public data, quantitative analysis and economic theory to help us
understand the nature of our problem. But, we soon saw that the
traditional approach to this analysis would only get us so far.
MPI Director [and former Rotman School Dean] Roger
Martin, in particular, pushed hard on this point. If we used all
the same tools and approaches that have been tried before, he
argued, we would be all too likely to come to the same abstract
and unactionable policy prescriptions that have failed to gener-
ate meaningful change up until now. Roger wanted us to shift our
perspective, from thinking about theoretical, idealized people to
designing for real, actual people.
The first step, then, was to find out more about the core
‘customers’ of democratic capitalism — the citizens of its largest
and, up until now, most powerful exemplar: The United States.
We were primarily interested in the self-defined ‘middle class’,
for whom the real median income has remained unchanged
since 1990, because they are the heart of America’s electorate.
They are also in the midst of a profound shift, when it comes to
their work.
We already knew that disruptive change was underway,
as argued in a 2015 working paper by the MPI’s Roger Martin,
Richard Florida, Melissa Pogue and Charlotta Mellandar
[which was excerpted in our Fall 2016 issue: “Creativity, Clus-
ters and Why Your Barista Has Mixed Feelings About You”]. The
paper looked at the structure of the U.S. economy using a combi-
nation of two well-established lenses: Michael Porter’s indus-
try clusters work and Prof. Florida’s Creative Class occupational
perspective.
To summarize, per Porter, industries can be understood as
dividing into two large groups: traded clusters and local industries.
Traded clusters, as the name suggests, consist of industries that
sell beyond local markets. These industries tend to cluster to-
gether in select regions and countries, providing those jurisdic-
tions with higher wages, increased innovation, higher productiv-
ity and a stronger economy. Examples of traded clusters include
oil and gas production and biotechnology. Local industries, by
contrast, are broadly distributed across jurisdictions and serve
only their local markets, and these industries — for example, re-
tail and social services — have lower wages and productivity.
Prof. Florida also divides the economy into two parts, but
he focuses on two categories of occupations: creativity-intensive
jobs (which have a high-degree of independent judgement and
decision-making) and routine-intensive jobs (which do not). Cre-
ative Class jobs tend to be higher paid and also cluster in specific
cities and regions.
In their working paper, Martin, Florida et al. demonstrated
that the most well-paid jobs are creative occupations in traded
industries. No surprise. Just think of product developer in Palo
Alto or a research scientist in Boston. This group — which makes
up just 14 per cent of the economy — earns almost 80 per cent
higher wages than the national average. Creative workers in local
industries do okay, too: Accounting for almost 25 per cent of jobs,
these workers earn 36 per cent more than the average worker.
The news is less good for those with routine-intensive jobs, who
earn below-average wages, despite making up the majority of the
U.S. workforce.
Moreover, the authors noted a troubling shift: While cre-
ative-intensive jobs had grown as a percentage of the overall
economy in the years between 2000 and 2012 (from just over 36.3
to 38 per cent), they were not growing nearly fast enough to make
up a majority of jobs any time soon. Worse, there was a shift in
routine-intensive work, from traded industries (which included
traditional well-paid manufacturing jobs) to local industries—the
mainly service-sector jobs that pay about 35 per cent less than the
average (see Figure One).
We knew we needed to understand these workers more
deeply, as something other than a number in a spreadsheet. So,
we used tools from Design Thinking, paired with the Martin-
Florida framework to help structure the task. In the fall of 2015,
we set out to conduct lengthy, ethnographic interviews with two
dozen or so Americans working in jobs that were well-represent-
ed in each of the four quadrants. For instance, food preparation
and serving related occupations make up a sizable portion of
routine-intensive local industry jobs, as do protective service oc-
cupations. So, we interviewed a casino server in St. Louis and a
firefighter in Miami. Routine jobs in traded industries are often
in transport and production, so we spoke to a truck driver for a
multinational logistics company and a production supervisor
at a large manufacturing firm. On the creativity-intensive job
side, local industry workers we spoke with included a nurse andPeople with routine-intensive jobs, who earn below-average wages,
make up the majority of the U.S. workforce.