"You're doing really well," Richard Florida gushed to an audience of business types and government officials at a downtown Montreal hotel two weeks ago. "You've inherited one of the best ecosystems for this kind of creative economy in the world."

Florida, an urban consultant and professor of economics at Carnegie Mellon, was there to tell the audience what they had paid to hear: that Montreal was one of the most promising cities in North America and that, if its creative potential was properly harnessed, it would reap untold benefits. It's easy to be cynical when faced with a speech that so closely resembles a pep talk, but Florida's conclusions aren't pulled out of thin air. He and his colleagues have just completed a nine-month study of Montreal's economic health, and they're impressed with what they found. After decades of near stagnation, Montreal is among the top five North American cities for job growth over the past five years, and ranks second on the continent in terms of "super creative" employment-meaning people who work in education and training, arts and culture, and technology.

But what's so important about education, technology and the arts? It goes back to Florida's wildly successful 2002 book, The Rise of the Creative Class. In it, Florida documented the emergence in the twentieth century of a new "creative class" of workers, defined as people "engaged in science and engineering, research and development, and the technology-based industries; in the arts, music, culture, aesthetic and design; or in the knowledge-based professions of health care, finance and law." According to Florida, the creative class now makes up 30 percent of the American workforce but accounts for half of all income earned. Meanwhile, the manufacturing and service sectors' shares of the economy, along with their portion of the nation's income, continue to decline precipitously, as manufacturing jobs flee to Asia and service-sector employment is usurped by Canada and India.

According to Florida, the creative class now makes up 30 percent of the American workforce but accounts for half of all income earned.

The future, then-at least according to this theory-lies in attracting the lucrative, high-earning creative class. But how? Florida argues that this group is drawn to open, tolerant cities that appeal to a wide variety of lifestyles. To measure a city's openness, Florida and his researchers compile a series of indicators, such as the number of patents issued per capita and the cost of living.

The media, though, have focused most of their attention on Florida's city rankings, including the infamous "gay index," which looks to the number of gay couples in a city as a measure of its tolerance. As a result, they've largely neglected Florida's fundamental message: that cities must move away from funding corporate tax breaks and big-ticket white elephants designed to stimulate the economy. (In one recent example, Washington, DC, convinced the Montreal Expos to settle down by offering to build a new ballpark, raise business taxes and sign over all potential profits to the team's future owner, all on the public dime.) Instead, says Florida, cities need to promote grassroots innovation and small-scale creativity, conditions that have spawned some of the biggest business successes of the past twenty years. "Human creativity," he writes, "is the ultimate source of economic growth. Every single person is creative in some way. And to fully tap and harness that creativity we must be tolerant, diverse and inclusive."

Increasingly, Florida is interested in applying his theories to Canadian cities, especially Montreal, Toronto and Vancouver. With more immigrants than most American cities, high concentrations of the most creative types of employment, government funding for small business and the arts, low crime, good public schools and a large urban middle class, Canada's biggest cities seem well poised to take advantage of the trends Florida describes.

Montreal in particular has caught Florida's eye. While outside perception of its language and politics continues to be an obstacle (Florida admits to having had low expectations before he started his research here, then to being pleasantly surprised), it boasts the fundamental ingredients for a creative city: Over half the population is bilingual, and nearly a quarter speak three languages; with four large universities, it has almost as many students per capita as Boston; and it is home to a thriving collection of grassroots arts and cultural projects that benefit from public support (for instance, the federal government's Canada Music Fund, the tax credit given to art spaces and Quebec's Société de Développement des Enterprises Culturelles). That might sound like the kind of fluff a Board of Trade would publish, but you have to admit that Montreal is doing something right. Along with rapid job growth in recent years, the city has attracted a number of prominent companies, including the French video-game firm Ubisoft, which last week announced its intention to double its number of Montreal employees.

In Kotkin's view, it's the suburbs-and suburban Sunbelt metropolises-that now drive economic growth, because of their high birth rates, low taxes and family-friendly environments.

Florida has a lot of fans but just as many detractors. Joel Kotkin-a Los Angeles-based writer and consultant whose latest book, The City: A Global History, will be released this April-is one of them. He doesn't believe the creative class is as big as Florida makes it out to be. Sure, at least part of the American workforce consists of "hip, cool, single, culture-oriented" people, Kotkin says, "but it's not remotely close to 30 percent. [And] if the creative class isn't defined by bohemians, what is it? If it's just the migration of educated people, they're moving to the suburbs, to the Sunbelt." In Kotkin's view, it's the suburbs-and suburban Sunbelt metropolises-that now drive economic growth, because of their high birth rates, low taxes and family-friendly environments. "All of these artistic cities started out with an incredibly vital economy," he says. "Everything else followed afterwards."

In a recent Washington Post op-ed, Kotkin declared inner-city living to be a "niche lifestyle preferred mostly by the young, the childless and the rich." The real action, he said, is now in suburbia and smaller cities like Fresno, California. Some have compared Kotkin's views to those of David Brooks, the New York Times columnist who reduces the American city to a playground divided between such cliques as urban, latte-sipping hipsters, Volvo-driving, liberal inner-suburbanites and-Brooks' darlings-the exurban Patio Man and Realtor Mom, who revel in their frontier paradise with childlike innocence. Unlike Brooks, however, Kotkin has grounded his arguments in real research rather than simply hackneyed caricatures. But Florida is quick to counter Kotkin's findings with his own figures, pointing out that the regions that rank highest in his "creativity index" generated 35,000 jobs between 1999 and 2002 while the lowest-ranked lost 400,000 jobs. Florida also criticizes Kotkin for "divisive thinking" for implying "that a place must either be family-friendly or gay-and-bohemian-friendly, but can't be both."

What this all comes down to is fostering an environment where as many different kinds of people as possible can thrive.

Still, Kotkin-who places himself in the progressive tradition of former New York mayor Fiorello LaGuardia-worries that Florida's findings might be used by cities as a way to neglect mounting infrastructural and social problems: "It's almost like we've taken the ephemeral and put it in front," he says. "It's a way of people saying we cannot deal with urban education, urban infrastructure. New York doesn't need another art museum; it needs a subway that works." Kotkin is an advocate of what he calls "sewer socialism": sound investment in efficient transportation, good schools and reliable public services. "If public-school education was better in [American] cities, it would make a huge difference," he remarks. Above all, he concludes, city governments should listen to their citizens, fixing what makes them unhappy and building on what satisfies them.

Unfortunately, the debate over the creative class increasingly resembles a Fox News shouting match. Florida is portrayed as a big-government lackey who advocates reckless spending on museums and symphony halls, while Kotkin is accused of pandering to a social-conservative agenda. "I blame the media for this," Kotkin says. "There's less intelligent discussion about [cities] and more soap opera." He continues, "It would be of more use to have a discussion on these issues and see what comes out of that rather than have a cartoonish debate."

Ultimately, though, Florida seems to have the momentum. It's easy to dismiss his ideas as a vacuous cash grab that nets big bucks for his research firm and big losses for cities, but that doesn't do justice to his basic message that cities need to invest in people and street-level innovation, not incentives for big corporations or baseball teams. Kotkin is absolutely right when he says that cities must first of all invest in the infrastructure and public services that will maintain a healthy and heterogeneous population. But that's only part of the story. A tolerant and creative environment is also necessary in order to stimulate the out-of-the-box thinking that makes some cities such dynamic places.

What this all comes down to is fostering an environment where as many different kinds of people as possible can thrive. Innovation comes from the ground up, not the top down: that's what cities need to understand.

When not wandering our streets, Christopher DeWolf is the editor of Urbanphoto.net. The Urban Eye appears every second Wednesday.