Download The Rise of the Urban Creative Class in Southeast Asia

THE RISE OF THE
URBAN CREATIVE CLASS
IN SOUTHEAST ASIA
Cities
The Cities Project at the Martin Prosperity Institute focuses on the
role of cities as the key economic and social organizing unit of global
capitalism. It explores both the opportunities and challenges facing
cities as they take on this heightened new role.
The Martin Prosperity Institute, housed at the University of Toronto’s
Rotman School of Management, explores the requisite underpinnings
of a democratic capitalist economy that generate prosperity that is
both robustly growing and broadly experienced.
THE RISE OF THE
URBAN CREATIVE CLASS
IN SOUTHEAST ASIA
Richard Florida
Melanie Fasche
Contents
Executive Summary
6
Introduction9
The Creative Class in Southeast Asia
12
Talent in Southeast Asia
14
Technology in Southeast Asia
17
Tolerance in Southeast Asia
20
The Global Creativity Index in Southeast Asia
24
Creativity and Prosperity in Southeast Asia
26
Economic Output per Person in Southeast Asia
26
Competitiveness in Southeast Asia
28
Entrepreneurship in Southeast Asia
30
Human Development in Southeast Asia
33
Inequality in Southeast Asia
35
Urbanization and Global Cities in Southeast Asia
38
Global Cities in Southeast Asia
42
The Urban Productivity Ratio in Southeast Asia
48
The Global Cities Index in Southeast Asia
50
Conclusion52
Research, Variables, and Data
54
References57
About the Authors
4
59
The Rise of the Urban Creative Class in Southeast Asia
Exhibits
Exhibit 1
Southeast Asian Countries and Cities and their Asian and International Benchmarks
11
Exhibit 2
The Creative Class in Southeast Asia
13
Exhibit 3
Education in Southeast Asia
15
Exhibit 4
The Talent Index in Southeast Asia
16
Exhibit 5
Innovation in Southeast Asia
18
Exhibit 6
The Technology Index in Southeast Asia
19
Exhibit 7
Ethnic and Racial Tolerance in Southeast Asia
21
Exhibit 8
Tolerance toward the Gay and Lesbian Community in Southeast Asia
22
Exhibit 9
The Tolerance Index in Southeast Asia
23
Exhibit 10
The Global Creativity Index in Southeast Asia
25
Exhibit 11
Economic Output per Person in Southeast Asia
27
Exhibit 12
Economic Output per Person and the GCI in Southeast Asia
28
Exhibit 13
Competitiveness in Southeast Asia
29
Exhibit 14
Competitiveness and the GCI in Southeast Asia
30
Exhibit 15
Entrepreneurship in Southeast Asia
31
Exhibit 16
Entrepreneurship and the GCI in Southeast Asia
32
Exhibit 17
Human Development in Southeast Asia
34
Exhibit 18
Human Development and the GCI in Southeast Asia
35
Exhibit 19
Inequality in Southeast Asia
36
Exhibit 20
Inequality and the GCI in Southeast Asia
37
Exhibit 21
Urban Population in Southeast Asia
39
Exhibit 22
Urbanization Level in Southeast Asia
40
Exhibit 23
Economic Output per Person and Urbanization in Southeast Asia
42
Exhibit 24
Population of Global Cities in Southeast Asia
43
Exhibit 25
Metropolitan Economic Output in Southeast Asia
45
Exhibit 26
Metropolitan Share of Total National Economic Output in Southeast Asia
46
Exhibit 27
Metropolitan Economic Output per Person in Southeast Asia
47
Exhibit 28
The Urban Productivity Ratio in Southeast Asia
49
Exhibit 29
Global City Index in Southeast Asia
51
5
The Rise of the Urban Creative Class in Southeast Asia
Executive Summary
Southeast Asia is at the center of a significant economic transformation. The region, which spans Cambodia, Indonesia, Malaysia, the
Philippines, Singapore, Thailand, and Vietnam, is undergoing rapid
growth and urbanization. By 2030, Southeast Asia’s urban population
will swell by an estimated 100 million people, growing from 280
million people today to 373 million people.
This report examines the intersection of urbanization and the rise of
the new creative or middle class in Southeast Asia. In particular, it
assesses the connection between the rise of the creative class and urbanization in seven Southeast Asian countries and their major cities.
These include Cambodia (Phnom Penh), Indonesia (Jakarta), Malaysia (Kuala Lumpur), the Philippines (Manila), Singapore, Thailand
(Bangkok), and Vietnam (Ho Chi Minh City). We benchmark the
development of these Southeast Asian nations and cities against others in Asia — including China (Beijing and Shanghai), Hong Kong,
India (Delhi and Mumbai), Japan (Tokyo), and South Korea (Seoul),
as well as other advanced nations like the Australia (Sydney), Canada
(Toronto), and United States (New York).
6
The Rise of the Urban Creative Class in Southeast Asia
Our research informs the following key findings: • Indonesia and Cambodia occupy a fourth tier
of development. While Indonesia’s share of
the creative class keeps up with that of ThaiSoutheast Asian nations fall into four tiers of
land and Vietnam, its performance on the
economic development.
Global Creativity Index falls back. Cambodia’s creative class share of four percent of its
• Singapore occupies the first tier, ranking
workforce is just half of Indonesia’s. While its
third in terms of the share of its population
creative economy development is still nascent,
who work in the creative class occupations
with per person economic output of $869,
and ninth on the Global Creativity Index,
Cambodia ranks among the world’s “low-inwith levels of development and of the creative
come” nations. Just a fifth of Cambodia’s popclass similar to the most advanced nations of
ulation is urbanized, much lower than other
the world. Singapore generates $51,149 in
Southeast Asian nations.
economic output per person, making it one
of the richest and most developed nations in
the world — ahead of Canada and the United Urbanization will continue to increase substanStates. Singapore’s biggest constraint is its rel- tially across the region. By 2030, urban areas in
atively low level of tolerance, especially of the Southeast Asia are projected to grow by anothgay and lesbian community, which may lim- er 100 million, with a total urban population
it its ability to attract and retain talent from of 373 million, putting the region ahead of the
other nations, and compete with the largest United States. By 2030, Malaysia is projected
to have an urban share of more than 80 percent,
and most open countries in the world.
• Malaysia and the Philippines occupy a second similar to the current level or urbanization in
tier with economies that are developing rap- Canada and the United States. Indonesia and
idly and a substantial middle class. The cre- Thailand’s urbanization levels are projected to
ative class makes up a quarter of Malaysia’s grow to more than 60 percent. Urbanization is
workforce and a fifth of that of the Philippines, projected to slightly grow in the Philippines to
approaching the levels of advanced nations. 46 percent, while Vietnam is projected to sigThey rank among the top 50 or so of the nificantly urbanize and cross 40 percent. Camworld’s nations both in terms of their share of bodia is expected to grow to roughly a quarter
creative class workers and their performance of the population.
on the Global Creativity Index. Malaysia
has a level of economic output per capita We also examined the size and status of the
($9,748) which places it among the world’s region’s largest cities and metro areas. The re“upper-middle income” nations. Roughly gion has two mega-cities with populations bigthree-quarters of its population is urbanized, ger than 10 million: Manila and Jakarta. Four
not far off from that of the United States and others have populations between five and 10
million: Bangkok, Ho Chi Minh City, Kuala
other advanced nations.
• Thailand and Vietnam fall into a third tier. Lumpur, and Singapore. By 2030, four cities
The creative class comprises roughly 10 per- in Southeast Asia are projected to have populacent of their workforces. They rank among tions greater than 10 million with Bangkok and
the second half of nations globally both in Ho Chi Minh City joining Manila and Jakarta.
terms of their share of creative class workers Kuala Lumpur will have a population close to
10 million while Singapore will be approaching
and the Global Creativity Index.
seven million.
7
The Rise of the Urban Creative Class in Southeast Asia
Southeast Asia’s cities and metros reflect the
region’s tiered development pattern.
Singapore occupies the top tier. It ranks as the
fourth most advanced global city in the world
behind only New York, London and Tokyo and
one of the most prosperous and advanced cities on the planet, ranking just below New York
City with more than $66,000 in economic output per capita, greater than Tokyo, Toronto,
Seoul and Hong Kong.
Kuala Lumpur occupies a second tier with
economic output per capita of $28,000, considerably greater that either Shanghai or Beijing. With $172 million in total economic
output, it generates more than half of Malaysia’s
GDP and is a bigger economy than Stuttgart
or Stockholm.
Ultimately, our research suggests that urbanization is leading to economic development
across the region and its nations and cities.
That said, the level of economic development
across the region and its cities is highly uneven,
mirroring the broader pattern of uneven development between the advanced nations and
cities of the Global North and the struggling
nations and cities of the Global South. The
region spans Singapore, one of the most affluent and urbanized places on the planet, and
Cambodia one of the very poorest. While some
areas of Southeast Asia are urbanized and developed, others have yet to make this transformation. The question is whether urbanization
can continue to propel economic development
in the region’s less developed cities and nations
or whether some will fall victim to urbanization without growth.
Bangkok and Manila fall into the third tier, with
economic output per person of roughly $20,000
and $15,000 respectively. Bangkok’s economic
output of more that $300 billion accounts for
more than three quarters of Thailand’s total
GDP, making it a bigger economy than Miami
or Frankfurt. With nearly $200 billion in economic output, Manila accounts for nearly twothirds of the Philippine’s GDP, and is a considerably bigger economy than Stockholm.
Jakarta and Ho Chi Minh City occupy the
fourth tier with economic output per person of
around $10,000 and $8,700 respectively. With
total economic output of more than $300 billion, Jakarta’s economy is bigger than Toronto,
while Ho Chi Minh City with $71 billion in output is just slightly smaller than Turin or Oslo.
8
The Rise of the Urban Creative Class in Southeast Asia
Introduction
Southeast Asia is at the center of a significant economic transformation. As its economies expand, its middle and creative classes grow,
and its population moves to cities, the region — which spans Cambodia, Indonesia, Malaysia, the Philippines, Singapore, Thailand, and
Vietnam — is at the center of the world’s third great wave of urbanization. The first great wave took place over the nineteenth and
twentieth centuries in the advanced nations of the West, helping to
propel economic development, the growth of a middle class, and rising living standards. A second wave is currently underway in China.
Today, more than half of the world’s population
— 3.9 billion people — live in urban areas and
more than 70 percent of global economic output comes from cities and urban areas. Each and
every week, some 1.4 million people flock to
urban areas. By 2030, 65 percent of the world’s
population — almost five billion people — will
live in cities. By that time, Southeast Asian’s urban population will swell by an estimated 100
million people, growing from 280 million to
373 million people. Across Asia as a whole, two
billion people will be urbanites by 2030, and
the region will account for 40 percent of global
economic output. The twenty-first century, it
seems, will be a distinctly creative, urban, and
Asian century.
In the West, urbanization has gone hand in hand
with economic development and the rise of an
affluent middle class. But, today’s middle class
is no longer made up of the blue-collar working
class. Rather, it is populated by the professional
9
and knowledge workers who make up the creative class.1 The creative class, which makes up
between a third to more than 40 percent of the
workforce in advanced nations, spans workers
in science and technology; arts, culture, design,
media and entertainment; business, finance,
and management; and the professions of healthcare, education and law. In the United States,
where the creative class makes up a third of
the workforce, it accounts for half of all wages,
more than $2 trillion dollars and three-quarters
of all discretionary purchasing power. Across
the world, the creative class is strongly clustered in urban areas.
The future growth of Southeast Asia turns on
two key issues which are at the center of this report. The first is whether urbanization can continue to propel economic development. In the
twentieth century, Western urbanization went
hand in hand with economic development and
rising living standards. This pattern repeated
The Rise of the Urban Creative Class in Southeast Asia
itself in China, helping the nation to become a
leading world economy. It remains to be seen
whether this path to growth and prosperity will
hold for Southeast Asia. The second revolves
around the future growth of the new urban
creative middle class. While some Southeast
Asian nations have already developed a sizeable
creative class, in others, such a middle class is
just beginning to emerge.
This report examines the intersection of urbanization and the rise of the new middle class, or
urban creative class, in Southeast Asia. In particular, it assesses the connection between the
rise of the creative class and urbanization in
seven Southeast Asian countries and their major
cities. These include Cambodia (Phnom Penh),
Indonesia (Jakarta), Malaysia (Kuala Lumpur),
the Philippines (Manila), Singapore, Thailand
(Bangkok), and Vietnam (Ho Chi Minh City).
We benchmark the development of these Southeast Asian nations and cities against others in
Asia — including China (Beijing and Shanghai),
10
Hong Kong, India (Delhi and Mumbai), Japan
(Tokyo), South Korea (Seoul), as well as other
advanced nations like Australia (Sydney), Canada (Toronto), and the United States (New York).
Exhibit 1 highlights Southeast Asian nations and
metros that are the focus of our study and the
benchmarks to which we compare them.
The remainder of this report is structured in
three main parts. The first section examines
how the Southeast Asian nations stack up in
terms of the creative class and key indicators of
the “3Ts of economic development” — Talent,
Technology, and Tolerance. The second section
looks at the relationship between the creative
class and the creative economy and the competitiveness and prosperity of Southeast Asian
nations. The third section turns to urbanization and the rise of global cities in Southeast
Asia. The concluding section summarizes the
main findings and their implications for the future economic development and rise of an urban creative class in Southeast Asia.
The Rise of the Urban Creative Class in Southeast Asia
CANADA
UNITED
STATES
Toronto
New
York
City
Beijing
Seoul
JAPAN
CHINA
Tokyo
Shanghai
Delhi
SOUTH KOREA
INDIA
HONG KONG
Mumbai
VIETNAM
THAILAND
Bangkok
CAMBODIA
Phnom Penh
Manila
Ho
Chi
Minh
City
PHILIPPINES
MALAYSIA
Kuala Lumpur
SINGAPORE
INDONESIA
Jakarta
AUSTRALIA
BENCHMARK
COUNTRY
SOUTHEAST ASIAN
COUNTRY
Benchmark City
Southeast Asian City
Sydney
Exhibit 1: Southeast Asian Countries and Cities and their Asian and International Benchmarks
11
The Rise of the Urban Creative Class in Southeast Asia
The Creative Class in Southeast Asia
Today, the creative class makes up anywhere from one third to 40
percent of the workforce in advanced nations.2 The creative class
can be thought of as the middle class of the post-industrial economy.
The creative class is paid to think and create, engaging in complex
problem solving that generates new ideas, technology, and products,
whereas the working and service classes apply physical and routine
skills to their work. Nations and cities that are able to attract and
retain the creative class are more competitive.
We measure the creative class based on the
kind of work people do. To do so, we utilize
data from the International Labour Organization (ILO), identifying occupations spanning
computer science and mathematics; architecture, engineering; life, physical, and the social sciences; education, training, and library
science; arts and design work, entertainment,
sports, and media; and professional and knowledge work occupations in management, business and finance, law, sales management, and
healthcare.3 A creative class level of roughly 30
percent of the workforce indicates the development of a large, vibrant, new middle class in the
postindustrial economy.
Exhibit 2 shows how the Southeast Asian nations
stack up in terms of the share of their workforce that make up the creative class and compares them to the international benchmarks.
12
Aside from Singapore, Southeast Asian nations
lag behind the West in terms of the development of their creative or middle class. Singapore’s share ranks among the leading nations
in the world. With nearly half (47.3 percent)
of its workforce in the creative class, Singapore
is third out of 139 countries worldwide, ahead
of the United States (32.6 percent) and on
par with Australia (45.0 percent) and Canada
(43.9 percent). The remaining Southeast Asian
nations trail far behind. Malaysia is next with
24.1 percent, 49th in the world followed by the
Philippines (21.3 percent, 56th), Thailand (9.9
percent, 81st), Vietnam (9.8 percent, 82nd),
Indonesia (8.0 percent, 86th), and Cambodia
(4.0 percent, 90th).
The Rise of the Urban Creative Class in Southeast Asia
VIETNAM
THAILAND
PHILIPPINES
CAMBODIA
SINGAPORE
MALAYSIA
INDONESIA
Singapore
Australia
#9 – Canada
#24 – Hong Kong
#34 – United States
#49 – Malaysia
#56 – Philippines
#64 – Japan
#78 – South Korea
#81 – Thailand
#82 – Vietnam
#86 – Indonesia
#90 – Cambodia
47.3%
45.0%
43.9%
37.2%
32.6%
#3 –
#6 –
24.1%
21.3%
18.7%
12.0%
9.9%
9.8%
8.0%
4.0%
0
10
20
30
40
50%
Creative Class Share
Exhibit 2: The Creative Class in Southeast Asia
Note: Data are not available for China and India
Source: International Labour Organization (ILO), Labour Statistics, 2010 to 2012.
13
The Rise of the Urban Creative Class in Southeast Asia
Talent in Southeast Asia
Talent or “human capital” is a key driver of economic development and rising living standards.
During the 1950s and ’60s, when manufacturing was flourishing in advanced economies, the
thinkers like Peter Drucker and Fritz Malchup
noted the importance of knowledge workers
in future economic development.4 Paul Romer
formalized the role of knowledge and technology in his theory of endogenous growth.5
A large body of research has demonstrated the
close connection between talent and economic
growth at both the regional and national levels.6
The Talent Index in Southeast Asia
The Talent Index in Southeast Asia combines our
measures of the creative class and educational
attainment into a single measure (see Exhibit 4).
It is a broad measure of the development of an
educated, knowledge-based middle class.
Here again we can see the substantial differences across Southeast Asian nations. Again
Singapore is among the leading nations with a
talent score of 0.937, fifth out of 139 countries
worldwide. This is in line with Australia (0.963)
and the United States (0.941), and ahead of
Canada (0.889) and Hong Kong (0.767). The
In addition to the creative class, talent can be Philippines (0.552, 65th) and Malaysia (0.522,
measured in terms of education or education- 69th) are nearly on par, followed by Thailand
al attainment. Our measure of educational at- (0.396, 84th), Vietnam (0.233, 104th), Indonetainment is one that is commonly employed in sia (0.207, 108th), and Cambodia (0.137, 118th).
cross-national analysis. It is called the “gross tertiary enrollment ratio.” As defined by the World
Bank, tertiary education refers to post-secondary institutions such as universities, colleges,
community colleges, and technical training
institutes. The gross tertiary enrollment ratio
measures those involved in tertiary education
compared to the age group spanning five years
after leaving secondary school.7 It is another
indicator of the growth of an educated middle
class. Exhibit 3 lists the shares of gross tertiary
enrollment for the Southeast Asian nations and
their international benchmarks.
Aside from Singapore, gross tertiary enrollment
ratios for Southeast Asian nations lag behind
those in the West. Thailand has a gross tertiary enrollment ratio of 51.3 percent, 46th out
of 139 countries worldwide, a little bit behind
Hong Kong (59.1 percent), but substantially
below Australia (83.1 percent), and the United
States (94.3 percent). The remaining Southeast
Asian nations are much further behind. Malaysia is next with a ratio of 36.6 percent (66th),
followed by Indonesia (27.9 percent, 74th) and
Cambodia (15.0 percent, 89th).
14
The Rise of the Urban Creative Class in Southeast Asia
VIETNAM
THAILAND
PHILIPPINES
CAMBODIA
SINGAPORE
MALAYSIA
INDONESIA
South Korea
United States
#6 – Australia
#36 – Japan
#37 – Hong Kong
#46 – Thailand
#66 – Malaysia
#74 – Indonesia
#77 – China
#79 – Vietnam
#82 – India
#89 – Cambodia
100.0%
94.3%
83.1%
#1 –
#2 –
59.8%
59.1%
51.3%
36.6%
27.9%
24.8%
23.8%
22.1%
15.0%
0
20
40
60
80
100%
Gross Tertiary Enrollment Share
Exhibit 3: Education in Southeast Asia
Note: Education is measured as gross tertiary enrollment. Data are not available for Singapore, the Philippines, and
Canada. The latest figure for Canada is 58.8% for the year 2000.
Source: World Bank, World Development Indicators, Gross Enrollment Ratio, Tertiary, 2010–2012.
15
The Rise of the Urban Creative Class in Southeast Asia
VIETNAM
THAILAND
PHILIPPINES
CAMBODIA
SINGAPORE
MALAYSIA
INDONESIA
#1 – Australia
United States
#5 – Singapore
#14 – Canada
#32 – Hong Kong
#50 – South Korea
#58 – Japan
#65 – Philippines
#69 – Malaysia
#84 – Thailand
#87 – China
#92 – India
#104 – Vietnam
#108 – Indonesia
#118 – Cambodia
#3 –
0.000
0.963
0.941
0.937
0.889
0.767
0.630
0.593
0.552
0.522
0.396
0.378
0.344
0.233
0.207
0.137
0.200
0.400
0.600
0.800
1.000
Talent Index
Exhibit 4: The Talent Index in Southeast Asia
Source: International Labour Organization (ILO), Labour Statistics, 2010 to 2012; World Bank, World Development
Indicators, Gross Enrollment Ratio, Tertiary, 2010–2012.
16
The Rise of the Urban Creative Class in Southeast Asia
Technology in Southeast Asia
Technology has long been recognized, alongside
talent, as a key driver of wealth and progress.
Both Karl Marx and Joseph Schumpeter noted
that advances in technology generate new industries and spur economic growth.8 Technology
development is a good indicator of a nation’s
overall level of economic development. We utilize two measures of technology: a measure of
innovation (patent applications) and of research
and development (R&D expenditure). Both are
from the World Bank’s World Development
Indicators.9
R&D in Southeast Asia
R&D investment is a measure of technological
capacity or innovation effort. We use the conventional measure of total R&D expenditure
(including the private and public sectors) as a
share of economic output or GDP.10 Singapore
again leads the Southeast Asian nations with 2.1
percent of economic output devoted to R&D,
ranking 13th in the world, slightly higher than
Canada (1.8 percent), but significantly lower
than the United States (2.8 percent), Japan (3.3
percent), and South Korea (3.7 percent).
The Technology Index in Southeast Asia
Innovation in Southeast Asia
Exhibit 5 shows how the Southeast Asian nations The Technology Index in Southeast Asia comand their international benchmarks rank on our bines innovation and R&D investment into
measure of innovation, based on patent applica- a single index. It provides a benchmark for a
country’s overall level of technological developtions per million people.
ment. Exhibit 6 shows how the Southeast Asian
Singapore again stands among the world lead- nations stack up on this measure.
ing nations, placing third out of 139 countries
with 1,878 applications per one million people. Singapore again ranks among the world’s leadSingapore’s number of patent applications is ers, with a score of 0.933, ranking sixth, comhigher than in the United States (1,644), Aus- parable to South Korea (0.991), Japan (0.978),
tralia (1,144), and Canada (1,026), and compa- and the United States (0.951). Four Southeast
rable to Hong Kong (1,797), but trails behind Asian nations occupy a middle level. Malaysia is
South Korea (3,606) and Japan (2,691). The next in line with a score of 0.763, 24th worldrest of Southeast Asia trails substantially be- wide, followed by Thailand (0.612, 38th), Viethind. Malaysia is next in line with 229 patent nam (0.531, 45th), and the Philippines (0.482,
applications per million people (22nd). Thai- 53rd). Indonesia and Cambodia are further
land is next with 63 patent applications per behind with scores of 0.415 (67th) and 0.304
million people (51st) followed by Vietnam with (87th).
42 patent applications per million (64th), the
Philippines with 34 patent applications (72nd),
Indonesia with 24 (81st), and Cambodia with
almost 3 (96th).
17
The Rise of the Urban Creative Class in Southeast Asia
VIETNAM
THAILAND
PHILIPPINES
CAMBODIA
SINGAPORE
MALAYSIA
INDONESIA
South Korea
#2 – Japan
#3 – Singapore
#4 – Hong Kong
#5 – United States
#7 – Australia
#8 – Canada
389
#11 – China
#22 – Malaysia
229
#51 – Thailand
63
#64 – Vietnam 42
#71 – India 34
#72 – Philippines 34
#81 – Indonesia 24
#96 – Cambodia 3
3,606
#1 –
0
2,691
1,878
1,797
1,644
1,144
1,026
1,000
2,000
3,000
4,000
Patent Applications per Million People
Exhibit 5: Innovation in Southeast Asia
Note: Innovation is measured as patent applications per million people
Source: World Bank, World Development Indicators, Patent Applications, 2010 to 2012.
18
The Rise of the Urban Creative Class in Southeast Asia
VIETNAM
THAILAND
PHILIPPINES
CAMBODIA
SINGAPORE
MALAYSIA
INDONESIA
South Korea
#2 – Japan
#4 – United States
#6 – Australia
#6 – Singapore
#13 – Canada
#14 – China
#24 – Malaysia
#32 – Hong Kong
#38 – Thailand
#45 – Vietnam
#52 – India
#53 – Philippines
#67 – Indonesia
#87 – Cambodia
0.991
0.978
0.951
0.933
0.933
0.888
0.880
0.763
0.679
0.612
0.531
0.491
0.482
0.415
0.304
#1 –
0.000
0.200
0.400
0.600
0.800
1.000
Technology Index
Exhibit 6: The Technology Index in Southeast Asia
Source: World Bank, World Development Indicators, Patent Applications, 2010 to 2012; World Bank, World Development Indicators, Research and Development Expenditure, 2010 to 2012.
19
The Rise of the Urban Creative Class in Southeast Asia
Tolerance in Southeast Asia
Tolerance is the third T of economic development. It provides the broader context for both
technological innovation and attracting and
retaining talent. Nations that are open to newcomers, immigrants, minorities, and gays and
lesbians signal that their community is open to
all types of people. A growing body of research
shows that openness to diversity can enhance
a region’s competitiveness.11 We employ two
measures of tolerance: tolerance toward ethnic and racial minorities and tolerance toward
gays and lesbians, both from Gallup’s World
Poll surveys.12
Ethnic and Racial Tolerance
in Southeast Asia
Exhibit 7 shows the ethnic and racial tolerance
of Southeast Asian nations compared to their
international benchmarks. It is based on Gallup surveys of the share of people who say that
their community is a good place for ethnic and
racial minorities.
Singapore (89.8 percent) tops the list, ranking
sixth in the world, ahead of the United States
(82.7 percent), about the same as Australia
(88.3 percent), but behind Canada (90.8 percent). Indonesia is next (72.3 percent, 63rd),
followed by Vietnam (71.8 percent, 66th), Malaysia (68.4 percent, 75th), and Cambodia (64.4
percent, 85th). Closing out the list are the Philippines (56.1 percent, 102nd) and Thailand
(31.2 percent, 127th).
All of the Southeast Asian nations lag on this
measure of tolerance. The Philippines tops the
list (59 percent, 23rd in the world), far behind
Canada (81 percent), Australia (72 percent), and
the United States (70 percent). Thailand is next
(27 percent, 54th), followed by Singapore (25
percent, 57th), Cambodia (22 percent, 62nd),
Vietnam (16 percent, 75th) Malaysia (6 percent,
104th), and Indonesia (2 percent, 125th).
The Tolerance Index in Southeast Asia
The Tolerance Index in Southeast Asia combines
these two measures into a single index. Exhibit 9
lists the Southeast Asian nations and their global
benchmarks on this measure.
The Southeast Asian nations lag behind the
world. Singapore tops the list (0.761, 23rd
in the world), considerably behind Canada
(0.989), Australia (0.945), and the United
States (0.901). The Philippines is next in line
(0.528, 53rd), followed by Vietnam (0.465,
73rd), Cambodia (0.434, 78th), Malaysia (0.313,
100th), Thailand (0.309, 104th), and Indonesia
(0.278, 115th).
Tolerance toward the Gay and Lesbian
Community in Southeast Asia
Exhibit 8 shows how the Southeast Asian nations
and their global peers stack up on tolerance to
the gay and lesbian community. Again our measure is based on Gallup surveys of the share of
people who say that their community is a good
place to live for gay and lesbian people.
20
The Rise of the Urban Creative Class in Southeast Asia
VIETNAM
THAILAND
PHILIPPINES
CAMBODIA
SINGAPORE
MALAYSIA
INDONESIA
Canada
Singapore
#9 – Australia
#20 – United States
#52 – Hong Kong
#54 – Japan
#58 – South Korea
#63 – Indonesia
#66 – Vietnam
#75 – Malaysia
#85 – Cambodia
#90 – China
#92 – India
#102 – Philippines
#127 – Thailand
90.8%
89.7%
88.3%
82.7%
74.0%
73.8%
73.0%
72.3%
71.8%
68.4%
64.4%
62.4%
59.8%
56.1%
#3 –
#6 –
31.2%
0
20
40
60
80
100%
Ethnic and Racial Tolerance Share
Exhibit 7: Ethnic and Racial Tolerance in Southeast Asia
Note: Ethnic and racial tolerance is measured as the percent of survey respondents reporting that their community is a
good place for racial and ethnic minorities.
Source: Gallup Organization, World Poll, 2014.
21
The Rise of the Urban Creative Class in Southeast Asia
VIETNAM
THAILAND
PHILIPPINES
CAMBODIA
SINGAPORE
MALAYSIA
INDONESIA
Canada
Australia
#9 – United States
#23 – Philippines
#26 – Hong Kong
#46 – Japan
#54– Thailand
#57 – Singapore
#62 – Cambodia
#75 – Vietnam
#81 – South Korea
#81 – China
#90 – India
#104 – Malaysia
#125 – Indonesia
81%
72%
70%
#2 –
#8 –
59%
57%
34%
27%
25%
22%
16%
14%
14%
11%
6%
2%
0
20
40
60
80
100%
Gay and Lesbian Community Tolerance Share
Exhibit 8: Tolerance toward the Gay and Lesbian Community in Southeast Asia
Note: Tolerance toward the gay and lesbian community is measured as the percent of survey respondents reporting that
their community is a good place to live for gay and lesbian people.
Source: Gallup Organization, World Poll, 2012.
22
The Rise of the Urban Creative Class in Southeast Asia
VIETNAM
THAILAND
PHILIPPINES
CAMBODIA
SINGAPORE
MALAYSIA
INDONESIA
Canada
Australia
#11 – United States
#23 – Singapore
#30 – Hong Kong
#39 – Japan
#53 – Philippines
#70 – South Korea
#73 – Vietnam
#78 – Cambodia
#96 – China
#100 – Malaysia
#104– Thailand
#108 – India
#115 – Indonesia
0.989
0.945
0.901
#1 –
#4 –
0.000
0.761
0.717
0.631
0.528
0.471
0.465
0.434
0.338
0.313
0.309
0.302
0.278
0.200
0.400
0.600
0.800
1.000
Tolerance Index
Exhibit 9: The Tolerance Index in Southeast Asia
Source: Gallup Organization, World Poll, 2012, 2014.
23
The Rise of the Urban Creative Class in Southeast Asia
The Global Creativity Index
in Southeast Asia
Each of the 3Ts is important to broader economic development and rising living standards.
However, a single T alone is not sufficient to
sustain economic growth and prosperity. An
economy needs to perform well on all 3Ts to
develop a strong creative economy. The Global Creativity Index in Southeast Asia combines
the 3Ts of economic development into a single
index, providing a benchmark for the level of
overall creative economy development for 139
nations. Exhibit 10 ranks the Southeast Asian
nations in terms of their overall level of creative
economy development.
Second Tier: Malaysia and the Philippines
occupy a second tier with rapidly developing
economies and a substantial middle class similar to China. The creative class makes up a
quarter of Malaysia’s workforce and a fifth of
the Philippines, approaching the levels of advanced nations. They rank among the top fifty or so of the world’s nations both in terms
of their creative class and performance on the
Global Creativity Index. While the Philippines
scores almost equally on all 3Ts, Malaysia’s
biggest constraint, similar to Singapore, is its
low level of tolerance, especially of the gay and
lesbian community, which will certainly limit
Again, we see the wide variation among South- its ability to attract and retain talent from other
east Asian nations. Singapore ranks among the nations, and keep up with the most open naworld leaders, with a score of 0.896, ninth out of tions in the world.
139 countries worldwide, ahead of Hong Kong
(0.715) and Japan (0.708), but slightly behind the Third Tier: Thailand and Vietnam fall into a
United States (0.950) and Canada (0.920). The third tier. The creative class comprises roughly
remaining Southeast Asian nations fall further 10 percent of their workforces. They rank among
behind. The Philippines is next (0.487, 52nd) the second half of nations globally both in terms
followed by Malaysia (0.455, 63rd), Vietnam of their creative class and Global Creativity In(0.377, 80th), Thailand (0.365, 82nd), Cambo- dex performance, outcompeting India. Thaidia (0.213, 113th), and Indonesia (0.202, 115th). land’s biggest constraint to creative economy
development, similar to Singapore and Malaysia,
Ultimately, our analysis of the creative class, is its low level of tolerance, while Vietnam’s bigeach of the 3Ts of economic development, gest constraint is its lower level of talent.
and the overall Creativity Index suggests that
Southeast Asian nations fall into four tiers of Fourth Tier: Indonesia and Cambodia occupy a
economic development and development of fourth tier of development. While Indonesia’s
creative class keeps pace with that of Thailand
their middle class.
and Vietnam, the country falls back due to its
First Tier: Singapore occupies the first tier, rank- performance on the Global Creativity Index.
ing third on the creative class and ninth on the Indonesia’s biggest constraint to creative econoGlobal Creativity Index, with levels of economic my development, similar to Singapore, Malaysia,
development and of the creative class similar to and Thailand, is its low level of tolerance. Fithe most advanced nations of the world. Singa- nally, Cambodia’s four percent share of creative
pore’s biggest constraint is its relatively low lev- class workers is just half of Indonesia’s, and its
el of tolerance, especially of the gay and lesbian creative economy development is still nascent.
community, which may limit its ability to attract
and retain talent from other nations and compete with the most open nations in the world.
24
The Rise of the Urban Creative Class in Southeast Asia
VIETNAM
THAILAND
PHILIPPINES
CAMBODIA
SINGAPORE
MALAYSIA
INDONESIA
#1 – Australia
United States
#4 – Canada
#9 – Singapore
#21 – Hong Kong
#24 – Japan
#31 – South Korea
#52 – Philippines
#62 – China
#63 – Malaysia
#80 – Vietnam
#82– Thailand
#99 – India
#113 – Cambodia
#115 – Indonesia
0.970
0.950
0.920
0.896
#2 –
0.000
0.715
0.708
0.660
0.487
0.462
0.455
0.377
0.365
0.292
0.213
0.202
0.200
0.400
0.600
0.800
1.000
Global Creativity Index
Exhibit 10: The Global Creativity Index in Southeast Asia
Source: Richard Florida, Charlotta Mellander, and Karen M. King, The Global Creativity Index 2015, 2015.
25
The Rise of the Urban Creative Class in Southeast Asia
Creativity and Prosperity in Southeast Asia
We now know how the Southeast Asian nations stack up on various
metrics of talent, technology, and tolerance. But how does this effect
their prosperity and economic growth?
To get at this, we compare the performance of these Southeast Asian
countries to other nations of the world on key measures of competitiveness and prosperity. Specifically, we compare their rankings on
the Global Creativity Index (GCI) to five key dimensions of prosperity: economic output per person, economic competitiveness, entrepreneurship, human development, and inequality.
Economic Output per
Person in Southeast Asia
Economic output per person is a basic mea- of the World Bank’s “lower-middle income”
sure of a nation’s economic development and nations. Cambodia ($869, 116th) is among the
provides a clear indication of the development “low-income” nations.14
of a middle class.13 Again, we see a wide divergence among Southeast Asian nations (see Exhibit 12 shows the relationship between ecoExhibit 11).
nomic output per person and the GCI.
Singapore leads the region with $51,149 in
economic output per person, making it the
10th richest nation in the world — ahead of
Canada ($50,555, 11th) and the United States
($49,989, 12th), and slightly lower than Australia ($60,447, 7th). The rest of the Southeast
Asian nations trail substantially behind. Malaysia ($9,748, 53rd) and Thailand ($5,158, 75th)
have levels of economic output per person,
which places them among what the World Bank
calls “upper-middle income” nations. Indonesia
($3,323, 88th), the Philippines ($2,360, 96th),
and Vietnam ($1,544, 101st) occupy the ranks
26
The fitted line slopes strongly upward, indicating a positive relationship between the two.
The correlation between them is 0.65, indicating a substantial connection. Singapore is
in the upper-right hand corner along with the
United States, Canada, and Japan. Malaysia,
Thailand, and the Philippines are clustered toward the middle of the graph alongside China.
Indonesia and Cambodia are toward the lower left-hand corner, indicating a lower level of
development. Singapore, Malaysia, Thailand,
and Indonesia are above the fitted line, indicating a higher level of economic output per
The Rise of the Urban Creative Class in Southeast Asia
VIETNAM
THAILAND
PHILIPPINES
CAMBODIA
SINGAPORE
MALAYSIA
INDONESIA
Australia
Singapore
#11 – Canada
#12 – United States
#18 – Japan
#26 – Hong Kong
#31 – South Korea
#53 – Malaysia
#73 – China
#75– Thailand
#88 – Indonesia
#96 – Philippines
#101 – Vietnam
#103 – India
#116 – Cambodia
$60,447
$51,149
$50,555
$49,989
$45,290
$34,800
$23,587
#7 –
#10 –
$9,748
$5,325
$5,158
$3,323
$2,360
$1,544
$1,487
$869
0
25,000
50,000
$75,000
Economic Output per Person
Exhibit 11: Economic Output per Person in Southeast Asia
Source: World Bank, World Development Indicators, GDP Per Capita, 2010–2012.
27
The Rise of the Urban Creative Class in Southeast Asia
person than their GCI scores would predict,
while the Philippines, Vietnam, and Cambodia
are below the line, suggesting a lower level
of economic output per person than their GCI
scores would predict.
their international peers stack up on economic
competitiveness.
Singapore tops the list with a global competitiveness score of 5.65, ranking second in the
world ahead of the United States (5.54, third),
Competitiveness in Southeast Asia
Japan (5.47, sixth), and Hong Kong (5.46, sevCompetitiveness is a key indicator of the qual- enth). Malaysia (5.16, 20th) also does well with
ity of institutions, policies, and other factors a competitiveness score comparable to Canathat determine a country’s productivity and da (5.24, 15th) and ahead of Australia (5.08,
economic output. More competitive nations 22nd), South Korea (4.96, 26th), and China
are likely to increase their productivity and (4.89, 28th). Thailand (4.66, 31st), Indoneeconomic output over time. Our measure of sia (4.57, 34th), the Philippines (4.40, 52nd),
competitiveness is based on the Global Com- and Vietnam (4.23, 68th) have lower competpetitiveness Index, developed by Harvard itiveness scores, roughly comparable to India
University economist Michael Porter.15 Exhibit (4.21, 71st). Cambodia takes last place among
13 shows how the Southeast Asian nations and Southeast Asian nations with a score of 3.89
12.0
Economic Output per Person*
Japan
South Korea
10.0
Singapore
Australia
Hong Kong
United States
Canada
0.800
1.000
Malaysia
Thailand
China
Indonesia
8.0
Philippines
Vietnam
India
Cambodia
6.0
4.0
0.000
0.200
0.400
0.600
Global Creativity Index
Exhibit 12: Economic Output per Person and the GCI in Southeast Asia
Note: *Logged.
Source: The GCI is from The Global Creativity Index 2015, 2015; Economic output per person is from the World Bank,
World Development Indicators, GDP Per Capita, 2010–2012.
28
The Rise of the Urban Creative Class in Southeast Asia
VIETNAM
THAILAND
PHILIPPINES
CAMBODIA
SINGAPORE
MALAYSIA
INDONESIA
Singapore
United States
#6 – Japan
#7 – Hong Kong
#15 – Canada
#20 – Malaysia
#22 – Australia
#26 – South Korea
#28 – China
#31– Thailand
#34 – Indonesia
#52 – Philippines
#68 – Vietnam
#71 – India
#95 – Cambodia
5.65
5.54
5.47
5.46
5.24
5.16
5.08
4.96
4.89
4.66
4.57
4.40
4.23
4.21
3.89
#2 –
#3 –
0.00
1.00
2.00
3.00
4.00
5.00
6.00
Global Competitiveness Index
Exhibit 13: Competitiveness in Southeast Asia
Source: World Economic Forum, Global Competitiveness Report 2014–2015, 2015.
29
The Rise of the Urban Creative Class in Southeast Asia
and ranks 95th, comparable to Namibia, Serbia,
and Mongolia.
Exhibit 14 shows the relationship between competitiveness and the GCI. At 0.78, the correlation between the two is substantial. Again,
Singapore is in the far upper right-hand corner
alongside the United States and other advanced
nations. Malaysia, the Philippines, and Thailand
are in the middle of the chart, similar to China.
Indonesia, Vietnam, and Cambodia are further
down. All of the Southeast Asian nations —
Cambodia, Indonesia, Malaysia, the Philippines,
Singapore, Thailand, and Vietnam — are situated above the fitted line, indicating that they
have a higher level of competitiveness than their
GCI scores would predict.
Entrepreneurship in Southeast Asia
Entrepreneurship is a critical factor in innovation and economic growth. In advanced countries like the United States, start-up companies
have played a vital role in generating new industries like semiconductors, personal computers, mobile phones, biotech, and social media
that power economic development. In emerging countries like those of Southeast Asia, entrepreneurship can help generate economic
development and the development of a broader middle class. We measure entrepreneurship
via the Global Entrepreneurship Index, a broad
measure of entrepreneurial activity across
130 countries.16 Exhibit 15 ranks the Southeast
Asian nations and their international peers on
this metric.
6.0
Singapore
Global Competitiveness Index
Japan
Malaysia
5.0
China
Indonesia
United States
Hong Kong
Canada
South Korea
Australia
Thailand
Philippines
India
Vietnam
4.0
Cambodia
3.0
2.0
0.000
0.200
0.400
0.600
0.800
1.000
Global Creativity Index
Exhibit 14: Competitiveness and the GCI in Southeast Asia
Source: The GCI is from The Global Creativity Index 2015, 2015; Economic competitiveness is from the World Economic
Forum, Global Competitiveness Report 2014–2015, 2015.
30
The Rise of the Urban Creative Class in Southeast Asia
VIETNAM
THAILAND
PHILIPPINES
CAMBODIA
SINGAPORE
MALAYSIA
INDONESIA
United States
#2 – Canada
#3 – Australia
#10 – Singapore
#28 – South Korea
#33 – Japan
#40 – Hong Kong
#53 – Malaysia
#61 – China
#68– Thailand
#85 – Vietnam
#95 – Philippines
#98 – Cambodia
#104 – India
#120 – Indonesia
85.0
81.5
77.6
#1 –
0.0
68.1
54.1
49.5
45.9
40.0
36.4
32.1
28.8
27.7
26.3
25.3
21.0
20.0
40.0
60.0
80.0
100.0
Global Entrepreneurship Index
Exhibit 15: Entrepreneurship in Southeast Asia
Source: Zoltán Ács, László Szerb, and Erkko Autio, 2015 Global Entrepreneurship Index, The Global Entrepreneurship
and Development Institute, 2015.
31
The Rise of the Urban Creative Class in Southeast Asia
100.0
Global Entrepreneurship Index
United States
Canada
80.0
Australia
Singapore
60.0
South Korea
40.0
Malaysia
Thailand
Cambodia
Indonesia
20.0
India
Japan
Hong Kong
China
Vietnam
Philippines
0.0
0.000
0.200
0.400
0.600
0.800
1.000
Global Creativity Index
Exhibit 16: Entrepreneurship and the GCI in Southeast Asia
Source: The GCI is from The Global Creativity Index 2015, 2015; The global entrepreneurship ranking is from Zoltán
Ács, László Szerb, and Erkko Autio, 2015 Global Entrepreneurship Index, The Global Entrepreneurship and Development Institute, 2015.
association. Singapore is in the upper righthand corner, but this time just slightly below
the United States and other advanced nations.
Malaysia, Thailand, the Philippines, and Vietnam occupy a middle position, somewhat close
to China, while Cambodia and Indonesia are
further down. Singapore, Thailand, and Cambodia are roughly on the fitted line indicating
that their levels of entrepreneurship are more
or less in line with what their GCI scores would
predict. Malaysia is above the fitted line, indicating a higher level of entrepreneurship than
its GCI score would predict, while Vietnam
Exhibit 16 shows the relationship between en- and Indonesia are below it, indicating a lower
trepreneurship and the GCI. The correlation level of entrepreneurship than their GCI scores
between the two is 0.83, indicating a very close would suggest.
Singapore (68.1, 10th) has the highest entrepreneurship rating ranking, ahead of Asian peers
like Hong Kong (45.9, 40th), Japan (49.5, 33rd),
and South Korea (54.1, 28th), but behind leading
advanced nations like the United States (85.0),
Canada (81.5), and Australia (77.6) who occupy the top three spots. Malaysia is a fairly distant
second (40.0, 53rd) ahead of China (36.4, 61st).
Thailand is next (32.1, 68th) followed by Vietnam (28.8, 85th), the Philippines (27.7, 95th),
and Cambodia (26.3, 98th), and behind India
(25.3, 104th) and Indonesia (21.0, 120th).
32
The Rise of the Urban Creative Class in Southeast Asia
Human Development in Southeast Asia
Human development — the overall advancement of people through education, living standards, and length of life — is a key factor in
determining the wealth of nations. To measure
it, we utilize the United Nations Development
Program (UNDP)’s Human Development Index (HDI), which takes into account the ability
to live a long and healthy life, the acquisition
of knowledge, and the ability to have a decent
standard of living. The HDI is measured annually on a scale between 0 and 1.0, with higher
scores indicating higher levels of human development.17 Exhibit 17 arrays Southeast Asian nations and the global benchmarks on this metric.
Singapore tops the list among Southeast Asian
nations with an HDI of 0.901 and ranks within
the top 10, almost on par with Canada (0.902,
eighth) but behind Australia (0.933, second)
and the United States (0.914, fifth). It is followed by Malaysia (0.773, 62nd) and Thailand
(0.722, 89th), and ahead of China (0.719, 91st),
all of which the UNDP classifies as countries
with “high human development.” Indonesia
(0.684, 108th), the Philippines (0.660, 117th),
and Vietnam (0.638, 121st) are ahead of India
(0.586, 135th), and followed by Cambodia
(0.584, 136th), which are all classified as countries with “medium human development.”
Exhibit 18 shows the relationship between human development and the GCI. The correlation
between the two is 0.78, indicating a close relationship. Malaysia, Thailand, and Indonesia are
situated well above the fitted line, indicating
that their human development is higher than
the GCI would predict. This potentially reflects
their move up the value chain of manufacturing.
33
The Rise of the Urban Creative Class in Southeast Asia
VIETNAM
THAILAND
PHILIPPINES
CAMBODIA
SINGAPORE
MALAYSIA
INDONESIA
Australia
United States
#8 – Canada
#9 – Singapore
#15 – Hong Kong
#15 – South Korea
#17 – Japan
#62 – Malaysia
#89– Thailand
#91 – China
#108 – Indonesia
#117 – Philippines
#121 – Vietnam
#135 – India
#136 – Cambodia
0.933
0.914
0.902
0.901
0.891
0.891
0.890
0.773
0.722
0.719
0.684
0.660
0.638
0.586
0.584
#2 –
#5 –
0.000
0.200
0.400
0.600
0.800
1.000
Human Development Index
Exhibit 17: Human Development in Southeast Asia
Source: United Nations Development Program (UNDP), Human Development Report 2014. Sustaining Human Progress:
Reducing Vulnerabilities and Building Resilience, New York, 2014.
34
The Rise of the Urban Creative Class in Southeast Asia
1.00
Human Development Index
South Korea
0.80
Hong Kong
Japan
Australia
United States
Singapore Canada
Malaysia
Indonesia
Thailand
China
Vietnam
0.60
Cambodia
Philippines
India
0.40
0.20
0.000
0.200
0.400
0.600
0.800
1.000
Global Creativity Index
Exhibit 18: Human Development and the GCI in Southeast Asia
Source: The GCI is from The Global Creativity Index 2015, 2015; The Human Development Index is from the United
Nations Development Program, Human Development Report 2014. Sustaining Human Progress: Reducing Vulnerabilities
and Building Resilience, New York, 2014.
Inequality in Southeast Asia
Inequality — the economic gap between the the world, comparable to Hong Kong (0.537,
rich and the poor — has surged across the world. 10th). Malaysia (0.434, 33rd), the Philippines
We measure it based on the Gini coefficient, the (0.434, 34th), and Thailand (0.407, 49th)
conventional metric for income inequality. It is also have high levels of inequality, comparable
measured on a 0 to 1 scale where higher values to China (0.424, 41st) and the United States
indicate higher levels of inequality.18 Exhibit 19 (0.411, 44th). Vietnam (0.366, 64th), Camboshows levels of inequality for Southeast Asian dia (0.353, 76th), and Indonesia (0.346, 82nd)
have lower levels of inequality, and are comnations and their global benchmarks.
parable to Australia (0.349, 79th) and Canada
Singapore (0.464, 25th) has the highest level (0.338, 87th), but higher than India (0.336,
of inequality in Southeast Asia and one of the 89th), Japan (0.321, 110th), and South Korea
highest levels among the advanced nations in (0.302, 111th).
35
The Rise of the Urban Creative Class in Southeast Asia
VIETNAM
THAILAND
PHILIPPINES
CAMBODIA
SINGAPORE
MALAYSIA
INDONESIA
Hong Kong
Singapore
#33 – Malaysia
#34 – Philippines
#41 – China
#44 – United States
#49– Thailand
#64 – Vietnam
#76 – Cambodia
#79 – Australia
#82 – Indonesia
#87 – Canada
#89 – India
#100 – Japan
#111 – South Korea
0.537
0.464
0.434
0.434
0.424
0.411
0.407
0.366
0.353
0.349
0.346
0.338
0.336
0.321
0.302
#10 –
#25 –
0.0
0.1
0.2
0.3
0.4
0.5
0.6
Inequality
Exhibit 19: Inequality in Southeast Asia
Source: World Bank, World Development Indicators, Gini Index, 2004–2013; Central Intelligence Agency (CIA),
The World Factbook, Distribution of Family Income — Gini Index, 2011–2014.
36
The Rise of the Urban Creative Class in Southeast Asia
70.0
60.0
Hong Kong
Inequality
50.0
Singapore
Malaysia
Philippines
China
Thailand
40.0
Cambodia
Indonesia
India
United States
Australia
Vietnam
South Korea
30.0
Japan
Canada
20.0
10.0
0.000
0.200
0.400
0.600
0.800
1.000
Global Creativity Index
Exhibit 20: Inequality and the GCI in Southeast Asia
Source: The GCI is from The Global Creativity Index 2015, 2015; Inequality based on the Gini coefficient is from the
World Bank, World Development Indicators, Gini Index, 2004–2013 and The CIA World Factbook, Distribution of
Family Income — Gini Index, 2011–2014.
Exhibit 20 shows the relationship between inequality and the GCI. Here, the line slopes
more gently and downward to the right, indicating a negative association between the two.
The correlation is -0.25, indicating a modest
negative relationship between inequality and
the GCI. In other words, more developed nations that score higher on the GCI, are overall more equal. Singapore is on the far right
hand side of the graph, near Hong Kong and
above the United States and other advanced
nations. The Philippines, Malaysia, Vietnam,
and Thailand occupy a more middle position
similar to China, with Cambodia and Indonesia further down, similar to India. Singapore,
Malaysia, the Philippines, and Thailand are sit-
37
uated above the fitted line, indicating that their
levels of inequality are higher than their GCI
scores would predict. These countries can be
said to have a low-road path to inequality and
economic development, similar to that of the
United States, where higher levels of creative
economic development go along with higher
levels of inequality. Vietnam, Cambodia, and
Indonesia are situated below the fitted line, indicating that their level of inequality is lower
than their GCI score would predict. This is in
line with the high-road path taken by Scandinavia and Northern European nations as well as
Japan and South Korea, where higher levels of
creative economic development go along with
lower levels of inequality.
The Rise of the Urban Creative Class in Southeast Asia
Urbanization and Global Cities in Southeast Asia
Urbanization, economic development, and the rise of the middle class
have historically gone hand in hand. As the nations of the West urbanized during the nineteenth and twentieth centuries, their economies
developed and their urban middle classes grew.
Up until now, the world has gone through two great waves of urbanization. The first occurred in the West, and the second is the more
recent urbanization of China. Southeast Asia promises to be the third
great wave of urbanization. The region’s urban population has grown
from 82 million in 1980 to 280 million people in 2015 and is projected to increase to 373 million by 2030. Southeast Asia’s 280 million
urbanites are comparable to that of the United States, who the region
is projected to overtake in the next decade and a half.19
Urbanization Levels in Southeast Asia
Next we look at the share of the population that
lives in urban areas, the so-called urbanization
rate.20 Urbanization is a key factor in the rise
of a middle class, with higher rates of urbanization typically signalling a larger urban middle
With 137.4 million urban residents, Indonesia class. Exhibit 22 shows how the Southeast Asian
accounts for almost half (49 percent) of South- countries and their global benchmarks stack up
east Asia’s urban population. It is followed by in terms of their urbanization rates, or share
the Philippines (45.2 million), Thailand (34.0 of population that is urban, in 1980, 2015, and
million), and Vietnam (31.4 million, about the projected out to 2030.
same as Canada), Malaysia (22.9 million, about
the same as Australia), Singapore (5.6 million),
and Cambodia (3.2 million).
Urban Population in Southeast Asia
Exhibit 21 shows the growth of the urban population in Southeast Asian nations and their global
benchmarks in 1980, 2015, and projected out
to 2030.
38
The Rise of the Urban Creative Class in Southeast Asia
VIETNAM
THAILAND
PHILIPPINES
CAMBODIA
SINGAPORE
MALAYSIA
INDONESIA
China
India
United States
Indonesia
Japan
Philippines
South Korea
Thailand
Vietnam
Canada
Malaysia
Australia
Hong Kong
Singapore
Cambodia
779.5
419.9
265.4
137.4
118.6
45.2
41.0
34.0
31.4
29.4
22.9
21.4
7.3
5.6
3.2
0
200
2015 Population
(Figure in millions)
310.1
1980
Population
400
600
800
2030
Population
(Projection)
1,000
Population (millions)
Exhibit 21: Urban Population in Southeast Asia
Source: United Nations, World Urbanization Prospects, 2014 revision, Urban Population at Mid-Year by Major Area,
Region and Country, 1950–2050, 2014.
39
The Rise of the Urban Creative Class in Southeast Asia
VIETNAM
THAILAND
PHILIPPINES
CAMBODIA
SINGAPORE
MALAYSIA
INDONESIA
Singapore
Hong Kong
Japan
Australia
South Korea
Canada
United States
Malaysia
China
Indonesia
Thailand
Philippines
Vietnam
India
Cambodia
100.0%
100.0%
93.5%
89.4%
82.5%
81.8%
81.6%
74.7%
55.6%
53.7%
50.4%
44.4%
33.6%
32.7%
20.7%
0
20
40
60
80
2015 Level
(Percent)
80.1%
1980
Level
2030
Level
(Projection)
100%
Urbanization Level
Exhibit 22: Urbanization Level in Southeast Asia
Source: United Nations, World Urbanization Prospects, 2014 revision, Percentage of Population at Mid-Year Residing in
Major Area, Region and Country, 1950–2050, 2014.
40
The Rise of the Urban Creative Class in Southeast Asia
Topping the list is Singapore where 100 percent of the population is urbanized. The citystate is ahead of Japan (93.5 percent), Australia
(89.4 percent), Canada (81.8 percent), and the
United States (81.6 percent). Malaysia, where
three-quarters of the population is urbanized,
is next, not far off that of the United States and
other advanced nations. About half the population is urbanized in Indonesia and Thailand,
and 44 percent of the population in the Philippines is urbanized. A third of the population
of Vietnam is urbanized while just a fifth of the
population is in Cambodia.
Exhibit 23 shows the association between urbanization and economic output per person.22 The
fitted line slopes upward, indicating a positive
relationship between the two, and the correlation is 0.82, indicating a substantial association
between urbanization and economic output per
person. Singapore is in the upper right hand
corner, alongside the United States and other
advanced nations, followed by Malaysia. Thailand, Indonesia, and the Philippines are toward
the middle of the graph, similar to China, with
Vietnam and Cambodia lower down toward
the bottom left. Singapore and Malaysia are
located below the fitted line, indicating that
These urbanization rates are projected to grow their levels of urbanization are slightly higher
considerably by 2030. By that time, Malaysia is than their levels of economic output per person
projected to have an urban share of more than would predict. The Philippines and Indonesia
80 percent — similar to the current level of are located on the line. Thailand, Vietnam, and
urbanization in Canada and the United States. Cambodia are located above the line, indicating
Indonesia and Thailand’s urbanization levels are that their levels of urbanization are a bit less
projected to grow to more than 60 percent, not than their level of economic output per person
far behind that of China (68.7 percent). Urban- would predict.
ization is projected to slightly grow in the Philippines to 46 percent, while Vietnam is projected to significantly urbanize and cross 40 percent
while urbanization in Cambodia is expected to
grow to roughly a quarter of the population.
Urbanization and Economic
Development in Southeast Asia
Urbanization is a factor in economic development and the development of a large middle class. In the advanced nations, both have
occurred in tandem over the past century or
so. But economists worry that this historical
relationship may be weakening. We may be
entering a new phase of development where
urbanization is not necessarily associated with
higher levels of economic growth and a rising
middle class. This has been referred to as “urbanization without growth.”21
41
The Rise of the Urban Creative Class in Southeast Asia
12.0
Economic Output per Person*
Canada
United States
Australia
Singapore
Japan
Hong Kong
10.0
South Korea
Malaysia
China
Thailand
8.0
Vietnam
Indonesia
Philippines
India
Cambodia
6.0
4.0
0
20
40
60
80
100%
Urbanization Level
*Logged
Exhibit 23: Economic Output per Person and Urbanization in Southeast Asia
Note: *Logged.
Source: Economic output per person is from the World Bank, World Development Indicators, GDP Per Capita, 2010–
2012, and urbanization is from the World Bank, World Development Indicators, Urban Population, 2010–2012.
Global Cities in Southeast Asia
In the globally connected knowledge economy,
global cities are key to the economic success of
nations. Cities like New York, London, Tokyo,
and Paris play a substantial role in the wealth
and innovativeness of their respective nations.
How do the Southeast Asian nations stack up as
global cities?
and Jakarta with 10.3 million. Four others
have populations between five and 10 million:
Bangkok (9.3 million), Ho Chi Minh City (7.3
million), Kuala Lumpur (6.8 million), and Singapore (5.6 million).
In 2030, four metros in Southeast Asia are
projected to have populations greater than
Exhibit 24 lists the seven largest global cities in 10 million. Manila will grow to 16.8 million
Southeast Asia along with their internation- people, followed by Jakarta (13.8 million),
al benchmarks according to their population Bangkok (11.5 million), and Ho Chi Minh City
sizes in 1980, 2015, and their projected sizes (10.2 million). Kuala Lumpur will have a popfor 2030.23
ulation close to 10 million (9.4 million) while
Singapore will be approaching seven million
(6.6
million).
Two metros in Southeast Asia have more than
10 million people: Manila with 13.0 million
42
The Rise of the Urban Creative Class in Southeast Asia
PHNOM
PENH
BANGKOK
MANILA
HO CHI MINH CITY
KUALA LUMPUR
SINGAPORE
JAKARTA
Tokyo
Delhi
Shanghai
Mumbai
Beijing
New York
Manila
Jakarta
Seoul
Bangkok
Hong Kong
Ho Chi Minh City
Kuala Lumpur
Toronto
Singapore
Sydney
Phnom Penh
38.0
25.7
23.7
21.0
20.4
2015 Population
(Figure in millions)
18.6
13.0
10.3
10.1
1980
Population
9.8
9.3
7.3
7.3
6.8
6.0
5.6
4.5
2030
Population
(Projection)
1.0 million
1.7
0
10
20
30
40
Population (millions)
Exhibit 24: Population of Global Cities in Southeast Asia
Source: United Nations, World Urbanization Prospects, 2014 revision, Population of Urban Agglomeration with
300,000 Inhabitants or More in 2014, by Country, 1950–2030, 2014.
43
The Rise of the Urban Creative Class in Southeast Asia
Economic Output of
Southeast Asian Metros
Population is a key measure of size. But cities
can be large and poor, small and affluent, or
anywhere in between. So it is useful to look at
the economic size of Southeast Asian metros
based on their economic output or metropolitan GDP.24 Exhibit 25 compares Southeast
Asia’s metros to their global benchmark metros
on this metric. Southeast Asia’s metros reflect
the region’s tiered development pattern. Singapore occupies the top tier with economic
output of $366 billion, more than Milan ($313
billion). Jakarta is next with metro output of
$321 billion, followed by Bangkok with $307
billion, more than Toronto ($276 billion), Miami ($263 billion), or Frankfurt ($230 billion).
Manila and Kuala Lumpur occupy a third tier
with $183 billion and $172 billion in economic output respectively, more than Stockholm
($143 billion) and Stuttgart ($158 billion). Ho
Chi Minh City occupies a fourth tier with $71
billion in economic output, slightly less than
Turin ($78 billion) and Oslo ($74 billion).
percent) and much greater than for Toronto
(15.5 percent), New York (8.1 percent), Shanghai (5.7 percent), or Beijing (4.9 percent). It is
safe to say that the economies of the Southeast
Asian nations literally turn on the performance
of these cities and metro areas.
Economic output provides a gauge of overall
economic strength, but economic output per
person provides an even better gauge of productivity and of the development of a middle
class. Exhibit 27 lists the seven major Southeast
Asian cities according to their economic output
per person.
With $66,864, Singapore has the highest economic output per person among Southeast Asian
metros. It numbers among the world’s richest
places, higher than Hong Kong ($57,244), significantly higher than Sydney ($46,344), Toronto ($45,771), and Tokyo ($43,664), but lower
than New York City ($69,915).
The remaining metros are quite a bit behind.
Kuala Lumpur is next with a per person economic output of $28,076, less than half of
Singapore, though it is higher than Shanghai
($24,065) or Beijing ($23,390). It is followed by
Southeast Asia’s leading metros account for Bangkok ($19,705), Manila ($14,222), Jakarta
strikingly high levels of their country’s eco- ($9,984), and Ho Chi Minh City ($8,660).
nomic output, much higher than cities and metros in the advanced Western nations. Bangkok
accounts for more than three quarters (75.9
percent) of Thailand’s economic output. Manila
accounts for almost two-thirds (64.2 percent)
of all economic output in the Philippines and
Kuala Lumpur (50.8 percent) half of Malaysia’s
economic output. Jakarta (36.1 percent) and
Ho Chi Minh City (38.2 percent) account for
more than a third of their country’s economic
output. This is about the same as Tokyo (35.2
But, how important are these metro areas to
their overall national economies? We get at this
by looking at their share of national economic
output as shown in Exhibit 26.25
44
The Rise of the Urban Creative Class in Southeast Asia
MANILA
BANGKOK
HO CHI MINH CITY
KUALA LUMPUR
SINGAPORE
JAKARTA
Tokyo
New York
Seoul
Shanghai
Beijing
Hong Kong
Singapore
Jakarta
Bangkok
Delhi
Toronto
Sydney
Manila
Kuala Lumpur
Mumbai
Ho Chi Minh City
$1,617
$1,404
$846
$594
$506
$416
$366
$321
$307
$294
$276
$223
$183
$172
$151
$71
0
400
800
$100 billion
1,200
1,600
$2,000
Economic Output (billions)
Exhibit 25: Metropolitan Economic Output in Southeast Asia
Note: Economic output is metropolitan GDP in purchasing power parity terms. Metropolitan GDP is not available for
Phnom Penh.
Source: Brookings Institution, 2014 Global Metro Monitor, 2015.
45
The Rise of the Urban Creative Class in Southeast Asia
MANILA
BANGKOK
HO CHI MINH CITY
KUALA LUMPUR
JAKARTA
Bangkok
Manila
Seoul
Kuala Lumpur
Ho Chi Minh City
Jakarta
Tokyo
Toronto
Sydney
Delhi
New York
Mumbai
Shanghai
Beijing
75.9%
64.2%
60.0%
50.8%
38.2%
36.1%
35.2%
15.5%
15.4%
11.7%
8.1%
7.4%
5.7%
4.9%
0
20
10.0%
40
60
80%
Metropolitan Share of Total National Economic Output
Exhibit 26: Metropolitan Share of Total National Economic Output in Southeast Asia
Note: Economic output is metro GDP in purchasing power parity terms. National GDP is at purchaser’s prices in current
US dollars. Metro GDP Data is not available for Phnom Penh. Singapore and Hong Kong are city-states where metro
and national GDP are essentially the same by definition.
Source: Brookings Institution, 2014 Global Metro Monitor, 2015; World Bank, World Development Indicators, GDP,
2014. GDP is in current US dollars.
46
The Rise of the Urban Creative Class in Southeast Asia
MANILA
BANGKOK
HO CHI MINH CITY
KUALA LUMPUR
SINGAPORE
JAKARTA
New York
Singapore
Hong Kong
Sydney
Toronto
Tokyo
Seoul
Kuala Lumpur
Shanghai
Beijing
Bangkok
Manila
Delhi
Jakarta
Ho Chi Minh City
Mumbai
$69,915
$66,864
$57,244
$46,344
$45,771
$43,664
$34,355
$28,076
$24,065
$23,390
$19,705
$14,222
$12,747
$9,984
$8,660
$7,005
0
25,000
50,000
$10,000
$75,000
Metropolitan Economic Output per Person
Exhibit 27: Metropolitan Economic Output per Person in Southeast Asia
Note: Metropolitan economic output is not available for Phnom Penh.
Source: Brookings Institution, 2014 Global Metro Monitor, 2015.
47
The Rise of the Urban Creative Class in Southeast Asia
The Urban Productivity Ratio
in Southeast Asia
Another way to capture this city-based edge is
through a measure we call the “urban productivity ratio.”26 Basically, this measure compares
the productivity of cities to that of their nation.
Specifically, it is a ratio of the per person economic output of a city to that of its nation. The
higher the ratio, the greater the difference
in productivity between a major city and the
country as a whole. In the United States and
the advanced nations, the most productive cities have urban productivity ratios between 1.5
and 2.0. Exhibit 28 lists the urban productivity
ratios for the seven key Southeast Asian metros
and their global benchmarks.27
48
Comparing the urban economic output per
person to the national economic output per
person reveals the differences in living standards and economic development levels between metros and the rest of the country. All
Southeast Asian cities have significantly higher
economic output per person than their country.
Manila and Ho Chi Minh City’s economic output per person are six times higher than that of
their countries. Bangkok’s is almost four times
higher than Thailand’s, while Jakarta and Kuala Lumpur’s are three times higher than that of
Indonesia and Malaysia.
The Rise of the Urban Creative Class in Southeast Asia
MANILA
BANGKOK
HO CHI MINH CITY
KUALA LUMPUR
JAKARTA
Delhi
Manila
Ho Chi Minh City
Mumbai
Shanghai
Beijing
Bangkok
Jakarta
Kuala Lumpur
Seoul
New York
Tokyo
Toronto
Sydney
8.6
6.0
5.6
4.7
4.5
4.4
3.8
3.0
2.9
1.0
1.5
1.4
1.0
0.9
0.8
0
2.0
4.0
6.0
8.0
10.0
Urban Productivity Ratio
Exhibit 28: The Urban Productivity Ratio in Southeast Asia
Note: Metro Economic output is not available for Phnom Penh. Singapore and Hong Kong are city-states where metro
and national economic output are essentially the same by definition.
Source: Brookings Institution, 2014 Global Metro Monitor, 2015; World Development Indicators, GDP Per Capita,
2010–2012.
49
The Rise of the Urban Creative Class in Southeast Asia
The Global Cities Index
in Southeast Asia
But how do Southeast Asian cities compare to
the great global cities of the world?
To get at this, we developed a Global Cities
Index by combining four key indicators and
rankings that cover: (1) their economic output,
(2) the strength of their banking and finance
industries, (3) their overall economic competitiveness, and (4) their quality of place.28 The
ranking in Exhibit 29 provides an approximation
of a metro’s position in the global urban hierarchy today and projected for 2025, compared to
their global benchmarks.
Singapore takes the top spot among South
Asian global cities. It ranks fourth, with a score
of 381.2 and closely behind and New York
and Hong Kong, but ahead of Tokyo, Toronto,
Seoul, and Sydney. The second tier includes
Kuala Lumpur (218.1, 39th) and Bangkok
(197.9, 50th) which are behind Shanghai (292.5,
18th) and Beijing (264.5, 26th). Jakarta (141.0,
65th) and Manila (112.1, 75th) comprise the
third tier, on par with Mumbai (141.0, 64th)
and Delhi (122.4, 70th) and still within the top
25 percent of all 338 cities. Ho Chi Minh City
(58.4, 145th) occupies a fourth tier, but still
within the top 50 of all 339 cities. Phnom Penh
is not yet recognized as a global city. The rankings are similar in our projections out to 2025.
50
The Rise of the Urban Creative Class in Southeast Asia
MANILA
BANGKOK
HO CHI MINH CITY
KUALA LUMPUR
SINGAPORE
JAKARTA
New York
Hong Kong
#4 – Singapore
#5 – Tokyo
#11 – Toronto
#13 – Seoul
#14 – Sydney
#18 – Shanghai
#26 – Beijing
#39 – Kuala Lumpur
#50 – Bangkok
#64 – Mumbai
#65 – Jakarta
#70 – Delhi
#75 – Manila
#145 – Ho Chi Minh City
397.5
382.0
381.2
368.9
339.2
331.7
328.2
292.5
264.5
218.1
197.9
141.0
141.0
122.4
112.1
#1 –
#3 –
0.0
2015 Score
300.3
2025 Score
(Projection)
50.0
58.4
100.0
200.0
300.0
400.0
Global Cities Index
Exhibit 29: Global City Index in Southeast Asia
Note: Data are not available for Phnom Penh
Source: The Global City Index is based on the following sources (the Appendix provides further detail on it): Brookings
Institution, 2014 Global Metro Monitor, 2015; Z/Yen Group, Global Financial Centres Index 15, 2014; A.T. Kearney,
2014 Global Cities Index, 2014; The Economist’s Hot Spots 2025, 2013.
51
The Rise of the Urban Creative Class in Southeast Asia
Conclusion
class keeps up with Thailand and Vietnam, its
performance on the Global Creativity Index
falls back. Cambodia’s four percent share of
creative class workers is just half of Indonesia’s,
while its creative economy development is still
Singapore occupies the first tier. With $51,149 nascent. With per person economic output
in economic output per person it is one of rich- of $869, Cambodia ranks among the world’s
est and most developed nations in the world “low-income” nations. Just a fifth of Cambodia’s
— ahead of Canada ($50,555) and the United population is urbanized, much lower than other
States ($49,989). Singapore’s biggest constraint Southeast Asian nations
to continuing strong creative economy development is its lower level of tolerance, especially of Our research also examined the status of the rethe gay and lesbian community, which will cer- gion’s largest cities and metro areas. The region
tainly limit its ability to attract and retain talent has two mega-cities with populations bigger
from other nations, and compete with the most than 10 million: Manila and Jakarta. Four
others have populations between five and 10
open nations in the world.
million: Bangkok, Ho Chi Minh City, Kuala
Malaysia and the Philippines occupy a second Lumpur, and Singapore. By 2030, four cities
tier with economies that are developing rapid- in Southeast Asia are projected to have poply and a substantial middle class. The creative ulations greater than 10 million. Manila and
class makes up a quarter of Malaysia’s work- Jakarta, plus Bangkok and Ho Chi Minh City.
force and a fifth of that of the Philippines, ap- Kuala Lumpur will have a population close to
proaching the levels of advanced nations. They 10 million while Singapore will be approaching
rank among the top 50 or so of the world’s na- seven million.
tions, both in terms of their share of creative
class workers and performance on the Global Southeast Asia’s cities and metros also reflect
Creativity Index. Malaysia has a level of eco- the region’s tiered development pattern.
nomic output per person ($9,748) which places
it among the world’s “upper-middle income” Singapore occupies the top tier. With economnations. Roughly three-quarters of its popula- ic output of $66,864 per person, it is one of
tion is urbanized, not far off that of the United the most prosperous and advanced cities on the
planet, ranking just below New York City and
States and advanced nations.
ahead of Tokyo, Toronto, Seoul and Hong Kong.
Thailand and Vietnam fall into a third tier. The It ranks as the fourth most advanced global city
creative class comprises roughly 10 percent of in the world behind only New York, London
their workforces. They rank among the lower and Tokyo.
half of nations globally both in terms of their
Kuala Lumpur occupies a second tier with ecocreative class and Global Creativity Index.
nomic output of $28,076 per person, more than
Indonesia and Cambodia occupy a fourth tier Shanghai ($24,065) or Beijing ($23,390). This
of development. While Indonesia’s creative is considerably nearly three times bigger than
This report has examined the rise of an urban
creative class in Southeast Asia and its cities. It
finds that Southeast Asia can be divided into
four tiers of development.
52
The Rise of the Urban Creative Class in Southeast Asia
Malaysia as a whole ($9,748). With $172 mil- ing the broader pattern of uneven development
lion in total economic output, more than Stutt- between the advanced nations and cities of the
gart ($158 million) or Stockholm ($143 million) Global North and the struggling nations and
it generates more than half (50.8 percent) of cities of the Global South. The region spans
Malaysia’s GDP. Kuala Lumpur is three times Singapore, one of the most affluent and urbanas productive as Malaysia. It ranks 39th on the ized places on the planet, and Cambodia one of
the very poorest.
Global City Index, not too far behind Beijing.
There are two big takeaways that flow from our
research which bear on the future growth of
the middle class and the further economic development of Southeast Asia. The first is whether urbanization can continue to propel economic development and the rise of a new middle
class. In the twentieth century, Western urbanization went hand in hand with economic development and rising living standards. This pattern
repeated itself in China, helping the nation to
become a leading world economy. It remains to
be seen whether this path to growth and prosperity will hold for Southeast Asia. While some
areas of Southeast Asia are urbanized and affluent, many others have yet to undergo this transJakarta and Ho Chi Minh City occupy the formation. These less-developed parts of the refourth tier with economic output per person of gion appear to be suffering from “urbanization
$9,984 and $8,660, which while lower than the without growth,” urbanization is failing to lead
other Southeast Asian cities is still considerably to greater economic growth and the rise of the
larger than for Indonesia ($3,323) or Vietnam middle class. Today, many Southeast Asian cities
($1,544). With total economic output of $321 face the challenge of transitioning from centers
billion, Jakarta is a bigger economy than To- with eroding manufacturing and service based
ronto ($276 billion), while Ho Chi Minh City economies to more propulsive urban creativitywith $71 billion in output is just slightly smaller and knowledge-based economies.
than Turin ($78 billion) or Oslo ($74 billion).
Both account for more than 35 percent of their The second revolves around the future growth
respective national economies. Productivity in of the new creative middle class. While some
Jakarta is three times higher than for Indone- Southeast Asian nations have a sizeable creative
sia as a whole, while it is more than five times class, in others it is just beginning to develop. It
higher in Ho Chi Minh City than for the Viet- is harder today to develop a middle class based
on blue-collar manufacturing. The urban midnamese economy.
dle class is either developing slowly or failing
So is urbanization helping to propel economic to develop in some Southeast Asian nations and
growth in Southeast Asia or not? The answer, cities. This will continue to be a critical chalfrom our research, is a qualified yes. That said, lenge for the region, its nations, and cities for
the level of economic development across the the future.
region and its cities is highly uneven, mirrorBangkok and Manila fall into the third tier,
with economic output per person of $19,705
and $14,222 respectively, considerably greater
that for Thailand ($5,158) or The Philippines
($2,360) as a whole. Bangkok’s economic output is $307 billion, more than Miami ($263 billion) or Frankfurt ($230 billion), and accounts
for more than three quarters of Thailand’s total
GDP. Manila generates $183 billion in economic output, more than Stockholm ($143 billion),
which makes up nearly two-thirds of the Philippine’s GDP. Bangkok is nearly four times more
productive than Thailand as a whole, and Manila
six times more productive that the Philippines.
53
The Rise of the Urban Creative Class in Southeast Asia
Research, Variables, and Data
This appendix provides detail on the variables,
indexes, and data sources used in this report.
For the most part, these data cover the seven
Southeast Asian nations and 139 nations for the
period of 2010 to 2012. We sometimes use different years for different variables and utilize
running averages, depending on the availability
of data.
Creative Class: The creative class is calculated as
the share of a country’s labor force that is engaged in creative, knowledge-based, and professional occupations spanning computer science
and mathematics; architecture, engineering;
life, physical, and the social sciences; education,
training, and library science; arts and design
work, entertainment, sports, and media; and
professional and knowledge work occupations
in management, business and finance, law, sales
management, and healthcare. The Labour Statistics are from the International Labour Organization (ILO), covering the years 2010 to 2012,
except for Singapore and New Zealand, where
the values are for the period 2004–2007.
Educational Attainment: This variable is based on
a measure of “gross tertiary enrollment.” Tertiary education includes universities, colleges,
community colleges, technical training institutes, and other post-secondary institutions.
Specifically, we use the conventional measure
of the “gross tertiary enrollment ratio” which
is the ratio of all those involved in tertiary education compared to the age group spanning five
years after leaving secondary school. The data
are from the World Bank’s World Development
Indicators for the period 2010 to 2012.
Talent Index: The Talent Index combines these
two variables in a single index based on the
54
rank of each. The correlation between the creative class and educational attainment variables
is 0.64.
Innovation: The variable for global innovation is
based on patent applications per million people.
The data are from the World Bank’s World Development Indicators for the period 2010–2012.
R&D Investment: This variable measures R&D
investment as a share of economic output or
GDP. It includes R&D expenditures for basic
research, applied research, and experimental
development. The data are from the World
Bank’s World Development Indicators for the
period 2010–2012.
Technology Index: The Technology Index combines these two variables into a single measure.
It is based on the ranks of the variables; a country must have a value for at least one of the two
variables in order to create a technology index
score. The correlations between R&D investment and global innovation is 0.57.
Tolerance Toward Ethnic and Racial Minorities:
The variable is based on the survey question
“Is your city or area a good or bad place to be
in for ethnic and racial minorities?” from the
Gallup Organization’s World Poll. The World
Poll survey is based on approximately 1,000 interviews per country (adjusted for population
size) which are conducted in approximately 150
countries. The sample represents roughly 95
percent of the world’s adult population and is
stratified proportionally, with the distribution
of the population across cities and rural areas of
different sizes. The target population is all civilian, non-institutionalized, and ages 15 years
or older.
The Rise of the Urban Creative Class in Southeast Asia
Tolerance toward the Gay and Lesbian Community:
This is based on the survey question “Is your
city or area a good or bad place to be in for gays
and lesbians?” from the Gallup Organization’s
World Poll.
Income Inequality: This variable is based on the
standard measure of income inequality — the
Gini Coefficient. The Gini Coefficient ranges
from 0 to 1, with higher values indicating higher levels of inequality. The data are from the
World Bank’s World Development Indicators
Global Creativity Index: The Global Creativity and is an average for the years 2004–2013, and
Index is a composite index based on the three the Central Intelligence Agency (CIA)’s The
overall indexes for talent, technology, and tol- World Factbook Distribution of Family Income
erance. We rank each by giving the highest val- — Gini Index, with values mostly for the years
ue to the top performer. We then add the ranks 2011–2014.
together and divided by three. In cases where a
value for only two of the three variables was Urban Population: Urban population refers to peoavailable, these two were added and divided by ple living in urban areas as defined by national
two. To create the overall index score, we di- statistical offices. This data is from the Unitvide the average score of the 3Ts by the number ed Nations’ World Urbanization Prospects, 2014
of observations overall.
revision. The variable is Urban Population at
Mid-Year by Major Area, Region and Country,
National Economic Output Per Person: This variable 1950–2050.
is based on the conventional measure of economic output based on gross domestic product Urbanization: Urbanization refers to the peror GDP. We use the average for the years 2010 centage of people living in urban areas and citto 2012 and all values are expressed in US dol- ies. The data is from the United Nations’ World
lars. Data are from the World Bank’s World De- Urbanization Prospects, 2014 revision. The varivelopment Indicators GDP Per Capita, 2010–2012. able is Percentage of Population at Mid-Year
Residing in Major Area, Region and Country,
Economic Competitiveness: This variable is based 1950–2050.
on the Global Competitiveness Index developed by Michael Porter for the World Econom- Urbanization and Economic Development: The data
ic Forum.
are from the World Bank’s World Development
Indicators, GDP Per Capita, for 2010–2012, and
Entrepreneurship: This variable is based on the Urban Population, 2010–2012.
Global Entrepreneurship Index. The index is
based on measures of entrepreneurial attitudes, Population of Global Cities: The data is from the
activity, and aspiration.
United Nations’ World Urbanization Prospects,
2014 revision. The variable is Population of UrHuman Development: This variable based on the ban Agglomeration with 300,000 Inhabitants
United Nations Human Development Index, a or More in 2014, by Country, 1950–2030.
composite measure which aims to capture three
dimensions of human development: health and Metropolitan GDP: Economic output is metromeasured life expectancy, education level, and politan GDP in purchasing power parity terms.
standard of living.
The data are from Brookings Institution’s 2014
Global Metro Monitor, 2015.
55
The Rise of the Urban Creative Class in Southeast Asia
Metropolitan Share of Total National Economic Out- Research Travel: This research is informed by
put: The metropolitan share of the total nation- field work, site visits, and in-person converal economic product is based on metro GDP sations with regional experts and senior level
from the Brookings Institution’s 2014 Global executives in Hong Kong and at the New Cities
Metro Monitor, and the World Bank’s World De- Summit 2015 in Jakarta.
velopment Indicators, GDP, for 2014. GDP is
in current US dollars. It is important to note
that the methodology of calculating the GDP
values differ in both sources.
Metropolitan GDP Per Person: The data for metropolitan GDP per person are from the Brookings
Institution’s 2014 Global Metro Monitor, 2015.
Urban Productivity Ratio: The urban productivity
ratio measures the difference in productivity
between per person metropolitan economic
output based on data from the Brookings Institution’s 2014 Global Metro Monitor, and the
World Bank’s World Development Indicators GDP
Per Capita, 2010–2012. The higher the ratio,
the greater the difference is in productivity between the city in question and the country as a
whole. It is important to note that the methodlogy of calculating the GDP values differ in both
sources.
Global City Index: The Global City Index is based
on the following measures: (1) Economic Power
is based on economic output and economic output per capita from the Brookings Institution’s,
2014 Global Metro Monitor; (2) Financial Power is
based on Global Financial Centres Index 15 which
measures a range of factors related to a city’s
banking, finance, and investment industries;
(3) Competitiveness is based on A.T. Kearney’s
2014 Global Cities Index, which tracks elements
of business activity, talent, and competitiveness; and (4) Competitiveness and Quality of
Place based on The Economist’s Hot Spots 2025.
We calculate a city’s overall score as the sum
of their scores on the individual indices which
range from 1 to 100 with 100 being the highest
score. We provide two rankings, for 2015 and
for 2025.
56
The Rise of the Urban Creative Class in Southeast Asia
References
1
Richard Florida, The Rise of the
of Economic Growth,” Quarterly
Creative Class: And How It’s TransJournal of Economics, 152, 1992,
forming Work, Leisure, Community
pp. 407–37. Edward L. Glaeser,
and Everyday Life, New York: Basic
“Are Cities Dying?,” Journal of
Books, 2002; Florida, The Rise of the
Economic Perspectives, 12, 1, 1998,
Creative Class — Revisited, New York: pp. 39-160; Edward L. Glaeser,
Basic Books, 2012.
Albert Saiz, “The Rise of the Skilled
City,” NBER Working Paper No.
2 Richard Florida, Charlotta
10191, 2003.
Mellander, and Karen King,
The Global Creativity Index 2015,
7 World Bank, World DevelopMartin Prosperity Institute, 2015.
ment Indicators, Gross Enrollment
Ratio, Tertiary, 2010–2012.
3 International Labour Organization (ILO), Labour Statistics, 2010
8
Karl Marx, Capital, London,
to 2012.
England: Swan Sonnenschein, Lowrey, 1887; Joseph Schumpeter, The
4 Peter F. Drucker, The Age of
Theory of Economic Development,
Discontinuity: Guidelines to Our
Cambridge, MA: Harvard University
Changing Society, New York: Harper
Press, 1934; Schumpeter, Capitalism,
& Row, 1969; Drucker, Post-Capitalist
Socialism and Democracy, New
Society, New York: HarperCollins,
York: Harper and Brothers, 1942, pp.
1993; Fritz Machlup, The Production
81–86; Schumpeter, “The Creative Reand Distribution of Knowledge in
sponse in Economic History,“ Journal
the United States, Princeton, NJ:
of Economic History, 7, 2, 1947, pp.
Princeton University Press, 1962.
149–159; Robert Solow, “A Contribution to the Theory of Economic
5 Paul Romer, “Increasing Returns
Growth,” The Quarterly Journal of
and Long-run Growth,” Journal of
Economics, 70, 1, 1956, pp. 65–94.
Political Economy, 90, 1986,
pp.1002–37.
9 World Bank, World Development Indicators, Patent Applications,
6 See, Robert J. Barro, “Economic
2010 to 2012.
Growth in a Cross Section of Countries”, Quarterly Journal of Economics, 10 World Bank, World Develop106, 2, 1991, pp. 407–443; Barro,
ment Indicators, Research and DevelDeterminants of Economic Growth:
opment Expenditure, 2010 to 2012.
A Cross-Country Empirical Study,
Cambridge, MA: The MIT Press,
11 Ronald Inglehart, Culture
1997; Robert Lucas, “On the MeShifts in Advanced Industrial Society,
chanics of Economic Development,”
Princeton University Press, 1989;
Journal of Monetary Economics,
Ingelhart, Modernization and
22, 1988, pp. 3–42. N. Gregory
Post-Modernization, Princeton
Mankiw, Paul Romer, and David
University Press, 1997; Scott E.
Weil, “A Contribution to the Empirics
Page, The Difference: How the Power
57
of Diversity Creates Better Groups,
Firms, Schools, and Societies, Princeton University Press, 2007; Richard
Florida, Charlotta Mellander, Kevin
Stolarick, “Inside the Black Box of Regional Development: Human Capital,
the Creative Class and Tolerance,”
Journal of Economic Geography,
8, 2008, pp. 615–649.
12 Gallup Organization, World Poll,
2012 and 2014.
13 World Bank, World Development Indicators, GDP Per Capita,
2010–2012.
14 The World Bank, World
Bank Country and Lending Groups,
accessed January 15 2016.
15 World Economic Forum,
The Global Competitiveness Report
2014–2015, Geneva, 2014.
16 Zoltán J. Ács, László Szerb,
and Erkko Autio, 2015 Global
Entrepreneurship Index, The Global
Entrepreneurship and Development
Institute, 2015.
17 United Nations Development
Program (UNDP), Human Development Report 2014. Sustaining Human
Progress: Reducing Vulnerabilities and
Building Resilience, New York, 2014.
18 World Bank, World Development Indicators, Gini Index, 2004–
2013; Central Intelligence Agency
(CIA), The World Factbook, Distribution of Family Income — Gini Index,
2011–2014.
The Rise of the Urban Creative Class in Southeast Asia
19 United Nations, World
Urbanization Prospects, 2014
revision, Urban Population at
Mid-Year by Major Area, Region
and Country, 1950–2050, 2014.
27 Brookings Institution, 2014
Global Metro Monitor Map, Washington DC, 2015; World Bank, World
Development Indicators, GDP per
capita, 2014.
20 United Nations, World Urbanization Prospects, 2014 revision,
Percentage of Population at Mid-Year
Residing in Major Area, Region and
Country, 1950–2050, 2014.
28 Brookings Institution’s, 2014
Global Metro Monitor, Washington
DC, 2015; Z/Yen Group, Global
Financial Centres Index 15, 2014; A.T.
Kearney, 2014 Global Cities Index,
2014; The Economist’s Hot Spots
2025, 2013.
21 Remi Jedwab and Dietrich Vollrath, “Urbanization without Growth in
Historical Perspective,” Explorations in
Economic History, 58, October 2015,
pp. 1–21.
22 World Bank, World Development Indicators, Urban Population,
2010-2012; World Bank, World Development Indicators, GDP Per Capita,
2010–2012.
23 United Nations, World Urbanization Prospects, 2014 revision,
Population of Urban Agglomeration
with 300,000 Inhabitants or More in
2014, by Country, 1950–2050, 2014.
24 Brookings Institution, 2014
Global Metro Monitor Map,
Washington DC, 2015.
25 Brookings Institution, 2014
Global Metro Monitor Map, Washington DC, 2015; World Bank, World
Development Indicators, GDP, 2014.
26 Richard Florida, “Why Big Cities
Matter in the Developing World,”
CityLab, January 14, 2014.
58
The Rise of the Urban Creative Class in Southeast Asia
About the Authors
Richard Florida
Richard is Director of Cities at the Martin Prosperity Institute at the University of Toronto’s Rotman School of Management. He is also Global Research Professor at New York University, and a senior editor for The Atlantic, where he co-founded and serves as Editor-at-Large for CityLab.
Melanie Fasche
Melanie is a Postdoctoral Fellow with the Cities team at the Martin Prosperity Institute at the University of Toronto’s Rotman School of Management. She is leading the research project on “Urbanization and the rise of
the creative/middle class in Southeast Asia”.
Acknowledgements
All research projects are team efforts, but this one especially so. Charlotta Mellander
developed and carried out the creative class analysis for Southeast Asia and provided
ongoing support with the overall data analysis. Karen King supported the research
travel and the overall data analysis. Greg Spencer also supported the overall data
analysis. Taylor Blake created the maps and Michelle Hopgood created the graphics.
Ian Gormely and Aria Bendix lent their hands to editing this report. Sharukh Ahmed,
Jessie Huang, and Grace Chen provided research assistance. Vass Bednar and Jamison
Steeve oversaw and guided this project.
Martin Prosperity Institute
Rotman School of Management
University of Toronto
105 St. George St., Ste. 9000
Toronto, ON M5S 3E6
wmartinprosperity.org
[email protected]
t416.946.7300
f416.946.7606
© January 2017
ISBN 978-1-928162-11-7