Minds on the Move; The world might be flat, it's true, if it were not for cities drawing in talent like 'IQ magnets.'.

Byline: Richard Florida (Florida is the Hirst Professor in the School of Public Policy at George Mason University and the author of "The Flight of the Creative Class: The New Global Competition for Talent.")

In March of 2003 I met Peter Jackson, director of "The Lord of the Rings," in his hometown of Wellington, New Zealand. Jackson did something unlikely in Wellington, a city of roughly 400,000: he built an advanced filmmaking complex--a "global talent magnet," he called it--to attract the best cinematographers, sound technicians, computer-graphics artists, model builders and editors.

Jackson's studio in tiny Wellington hasn't factored into recent debates over global competition, but it should. Though most experts are preoccupied with the rise of India and China--which offer huge markets, capable work forces and cost advantages--they overlook the shift away from old industrial models to one built on knowledge, innovation and creativity. Creative-sector occupations--in science and technology, art and design, culture and entertainment--have grown since 1980 from 12 percent of the work force to between 30 and 40 percent in most advanced countries today. This makes talent the fundamental factor of production, and attracting such talent the central battle in global competition.

It's not just Wellington that has stepped up its efforts to skim off talent. China and India are aggressively luring back their own top scientists and entrepreneurs. Canada, Australia and many European nations are bolstering efforts to capture leading graduate students and creative types. And while technology makes it possible to do creative work just about anywhere, this is not, in fact, leading to what Thomas Friedman has called the "flattening" of the world economy.

The cutting edge of the world economy is concentrating on a relatively small number of regions--places that Bill Gates has aptly dubbed "IQ magnets." The productivity and creativity gains that spring from clustering talented people in one place are feeding the growth of creative hubs, from established capitals like New York and Tokyo to centers of science and technology (Boston, San Francisco), powerful ...