Creative Class War

Last March, I had the opportunity to meet Peter Jackson, director of The Lord of the Rings trilogy, at his film complex in lush, green, otherworldly-looking Wellington, New Zealand. Jackson has done something unlikely in Wellington, an exciting, cosmopolitan city of 900,000, but not one previously considered a world cultural capital. He has built a permanent facility there, perhaps the world's most sophisticated filmmaking complex. He did it in New Zealand concertedly and by design. Jackson, a Wellington native, realized what many American cities discovered during the '90s: Paradigm-busting creative industries could single-handedly change the ways cities flourish and drive dynamic, widespread economic change. It took Jackson and his partners a while to raise the resources, but they purchased an abandoned paint factory that, in a singular example of adaptive reuse, emerged as the studio responsible for the most breathtaking trilogy of films ever made. He realized, he told me, that with the allure of the Rings trilogy, he could attract a diversely creative array of talent from all over the world to New Zealand: the best cinematographers, costume designers, sound technicians, computer graphic artists, model builders, editors, and animators.

When I visited, I met dozens of Americans from places like Berkeley and MIT working alongside talented filmmakers from Europe and Asia, the Americans asserting that they were ready to relinquish their citizenship. Many had begun the process of establishing residency in New Zealand.

Think about this. In the industry most symbolic of America's international economic and cultural might, film, the greatest single project in recent cinematic history was internationally funded and crafted by the best filmmakers from around the world, but not in Hollywood. When Hollywood produces movies of this magnitude, it creates jobs for directors, actors, and key grips in California. Because of the astounding level of technical innovation which a project of this size requires, in such areas as computer graphics, sound design, and animation, it can also germinate whole new companies and even new industries nationwide, just as George Lucas's Star Wars films fed the development of everything from video games to product tie-in marketing. But the lion's share of benefits from The Lord of the Rings is likely to accrue not to the United States but to New Zealand. Next, with a rather devastating symbolism, Jackson will remake King Kong in Wellington, with a budget running upwards of $150 million.

Peter Jackson's power play hasn't been mentioned by any of the current candidates running for president. Yet the loss of U.S. jobs to overseas competitors is shaping up to be one of the defining issues of the 2004 campaign. And for good reason. Voters are seeing not just a decline in manufacturing jobs, but also the outsourcing of hundreds of thousands of white-collar brain jobs -- everything from software coders to financial analysts for investment banks. These were supposed to be the "safe" jobs, for which high school guidance counselors steered the children of blue-collar workers into college to avoid their parents' fate.

But the loss of some of these jobs is only the most obvious -- and not even the most worrying -- aspect of a much bigger problem. Other countries are now encroaching more directly and successfully on what has been, for almost two decades, the heartland of our economic success -- the creative economy. Better than any other country in recent years, America has developed new technologies and ideas that spawn new industries and modernize old ones, from the Internet to big-box stores to innovative product designs. And these have proved the principal force behind the U.S. economy's creation of more than 20 million jobs in the creative sector during the 1990s, even as it continued to shed manufacturing, agricultural, and other jobs.