Some summer reflections and vacational thoughts that I’d like to share …

In his book The rise of the creative class, Richard Florida tells us that countries that will lead the way in the future will be those that nurture  the conditions for a “creative class”to flourish: from painters and artists to bioeng researchers and state-of-the-art software developers. It won’t be China or India, according to Mr. Florida,  that will set the path; it will be local cities -not even countries- that create conditions to attract the business leaders of today and tomorrow.

Talented and creative professionals tend to decide where they set their home based on a number of factors: from the quality of leisure options (access to the sea, ski resorts, night life, networking with other creative people, entertainment, …) – at an earlier stage in their professional lives – to quality of education for their kids and culture offering (at a later stage). Professional options, freedom of speech and access to nature are also factors that rank high.

His conclusion is that knowledge-economy companies tend to choose the location of their operations based on the available “creative class” individuals; and not the other way around – people relocating to the Silicon Valleys of today.

Interesting conclusions that found the basement for new reflexions on the dynamics of the knowledge economy. Apparently City Council policies gain more relevance since they are the responsible for creating the right environment and conditions to attract the creative class.

In the end is the talented professionals that get to decide what cities they will choose to establish and they will elevate some environments – cities – over the others. Here’s Cushman & Wakefield’s European Cities Monitor for 2009, where 500 senior executives from leading European companies share their views on leading business cities:

(*) Source: Cushman & Wakefield, Europan Cities Monitor, 2009

Barcelona is and has been a reference in business cities in Europe. After London, Paris and Frankfurt (major economic hubs), it finds a place ahead of other major economic capitals.

Local economic environment not being a particular strength of the city, freedom of expression, access to nature (sea and mountains – Pyrenees), weather conditions over the year and access to leisure (balance between culture and social events) are key to this high rankings.

These factors are not going to change in the coming years; so the “creative class” will continue to be attracted to the city and help it consolidate its place in the European business map.

Would you agree? – Toughts?

My latest conference about interim management options in the Merger & Acquisition area with some best practises and examples had some media impact. Here’s the note from the Diari de Sant Cugat.

Nota de Premsa Diari de Sant Cugat

There is something structurally broken in the labour marketplace in Spain. On one end, we have one of the most worker-protective legislations in the world (not yet as protective as the French or German, though …) On the other end, we have one of the worst unemployment rate in Europe, close to 20%. How are we going to fix this situation?

Reality is that regulations are not working and are not doing what they are supposed to do, which in this case is protect the employment. Companies that have human resources needs are not using salaried employees as their main sources. There are several items that have led to this point:

1. Corporations have taken advantage of the global economy situation to seek massive cost reductions through layoffs. It has been an opportunity for them to make those changes that were needed without taking social responsibility for it: It’s just the economy, fool! … and at the same time, they have saved the Social Image of the firm.

2. Once they have gone through this major relief and got rid of labour passives … who would want to make the same mistakes again? Why should they hire salaried employees and incorporate these so-difficult-to-eliminate-when-not-needed fixed costs?

General acceptance is that the less the salaried work force looks interesting to the employer, the more of a structural damage will be done to the labour force in the coming years … right! … Or wrong?

Officials mention that unemployment rate will probably not go down for a couple of years, but climb well up above 20%.

Well, the way I read those numbers is very different. Flexibility of the resources is a key strategy that main consulting firms are advising their clients. I’d add the flexibility of human resources to the mix. This strategy has been discussed in one post before.

Today, on the labour side, professionals are facing less opportunities on the salaried or traditional side and more and more on a temporary basis. These professionals would be willing to convert to temporary assignments in exchange for a better share of the profits of their work. Better retribution would also compensate them for the un-security of their career choice.

On the employer side, if there is no work, there is no fixed costs; and when there is work there is a benefit to be gained and employers will need to compensate for the flexibility and pay a premium, which should be seen as “sharing the profits”.

I also consider this mechanism to be more efficient in distributing the generation of wealth as well as a solution to the current situation of the Spanish labour dysfunction.

Potential roadblocks are sometimes self-imposed like the comfort of a permanent-job-for-life mind-set. Some others really have to do with the employability of the workforce. The brick and mortar policy of the last governments on power has not helped much in this sense.

For those with a good professional track, employability should not be an issue and, from my point of view, the sooner they embrace this job market change, the sooner they will start gaining from shared profits.

Thoughts?