In ad hoc work environments, the ability to marshal and coordinate highly idiosyncratic, often freelance talent -- usually under time pressure -- can make the difference between success and failure. Therefore, companies would do well to reside close to businesses and professionals that can be called on to perform highly specialized tasks. To put together critical creative teams, the 21st-century organization must go to urban centers where reservoirs of talent are concentrated.
Businesses establish themselves in expensive places like Manhattan, Boston, or San Francisco not because of traditional "business climate" factors such as cost but because of two critical, and frequently linked, elements: access to qualified labor and perceived quality of life. Industries that attract highly mobile workers such as animators, graphic artists, or software writers increasingly need to offer them a place that is appealing and exciting and gives off the requisite buzz.
"In today's labor market you don't tell people how they want to live -- they tell you."
--Matthew Burkley Zefer, Boston
The buzz factor helps Zefer Corp., a leading Internet-consulting firm based in Boston's cyberdistrict, determine the location of its offices. As the company has expanded to 650 employees, it has opened offices in areas where the company feels the best talent is available, such as lower Manhattan, San Francisco's South of Market, Chicago's Bucktown, and Pittsburgh's Cultural District.
In the future, notes Zefer CEO Matthew Burkley, those workers will have even greater power to determine companies' locations, in large part because they are in such demand. As the sophistication of information increases, skilled employees become freer -- and have more leverage -- to choose their environment. Many of the most valued creative workers prefer to live in cities and have helped restore the old neighborhoods where they settle. "In today's labor market you have to be where your team members want to be," explains the 28-year-old Burkley. "You don't tell people how they want to live -- they tell you."
Typically, suggests Burkley, young people want a neighborhood filled with people like them, with the requisite clubs, bars, art galleries, and restaurants. Such conditions are critical for companies like Zefer and like @radical.media, which has put its other offices in such hip places as London, Sydney, and Santa Monica.
One important effect of buzz is on the "suits" who are frequently the clients of such knowledge-value businesses. Jen Arterbury, a 29-year-old cofounder of Boom Design, in Chicago, originally saw her niche in developing flyers for the underground clubs that proliferated in the Bucktown and Wicker Park areas. That led to some work for major record labels but gradually also attracted the attention of large traditional ad agencies -- some of which, she says with a smile, once "thought we were all slackers."
The key, Arterbury suggests, lies in the notion that suits perceive creative neighborhoods and companies like hers to possess a sense of cutting-edge style not found in "the Loop," Chicago's downtown. James Squires of Squires & Co. has found the same advantages in Deep Ellum, which is where he relocated his ad agency 12 years ago against considerable employee resistance. Today Squires says his urban location is a plus in recruiting employees for his 17-person agency and also appeals to his more conservative corporate clients, who enjoy the area's funky ambience and vibrant nightlife.
Ultimately, the cultural, demographic, and physical imperatives suggest that knowledge-value neighborhoods will not just survive but also expand, and not only in New York or Boston but also in urban centers across the country. Although they have lost many industries, the emergence of such neighborhoods suggests that urban spaces remain virtually unchallenged as incubators of artfulness and cultural innovation.
"It all falls back to community," suggests Jon Kamen, sitting back in his sunlit office. "The communities we surround ourselves with are in the cities. You are what you eat and what you are exposed to. You go where the creative talents are."
Shifting patterns in corporate structure are only abetting the new urban trend. Historian Manuel Castells says that one of the fundamental characteristics of "informationalism" has been a "shift from centralized large corporations to decentralized units made up of a plurality of sizes and forms of organizational units." Since the Internet and other advanced communications can link various aspects of a task, the need to do them all in one place has diminished. Larger companies may control more cash than smaller ones do but tend to distribute their workload across a broader network of suppliers that are more artisanlike.
At the same time, Castells points out, "electronic networks" enable small companies to tap into "global reservoirs of information" that previously were accessible only to large companies. As a result, a major client of a business like @radical.media does not feel that the graphics technology or marketing information available at the small firm is in any way less sophisticated than that back at its own headquarters. Technology not only allows easier access to a company located in a different place but also equalizes companies' ability to do sophisticated work.
What's more, says Concrete Media's Cohen, the old warehouse and industrial districts have allowed the new-media companies to stamp themselves with their own character -- one consciously distinct from the old buttoned-down corporate culture of midtown Manhattan or the outer suburbs. He says, "When you are at the forefront of an economic revolution -- and that's where we are -- I don't think you want to be in a salaryman's neighborhood."
Joel Kotkin is a contributor to Inc . and author of, among other books, the forthcoming The New Geography: How the Digital Revolution Is Reshaping the American Landscape (Random House, November 2000). Additional reporting for this story was provided by Mary Kwak.
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