A city stuck in a poverty trap faces the same challenges. It is trapped by its past. The only way to move a city from a bad equilibrium to a good one is with a big push: a coordinated policy that breaks the impasse and simultaneously brings skilled workers, employers, and specialized business services to a new location. Only the government can initiate these big push policies.
In short, Moretti advocates industrial policy on steroids. And the TVA, however successful it might have been, was not dealing at all with knowledge or innovation industries.
The New Geography of Jobs
We do have a few examples out there today of at least partial big push type efforts, both private and public. New York and Chicago both have put major efforts into trying to build tech hubs from scratch. Both of these places were already talent hubs, however. Billionaire Dan Gilbert is trying to do a sort of one man big push in downtown Detroit and Zappos founder Tony Hsieh is trying something similar in Las Vegas. These two both have money to spend and also have clout in their communities to bring others along with them.
These will be interesting to watch.
The New Geography of Jobs - Enrico Moretti - Google книги
Where Moretti does provide some hope is in a observations about the genesis of clusters that already exist. In our Seattle example, Gates and Allen were the superstars. Tony Hsieh may yet prove to be the superstar for Vegas. The superstar theory is especially applicable to biotech.
Tons of cities have great academic medical centers and such. According to researchers, it was the presence of superstars that drove this. As Moretti notes:. What really explains the location and success of private biotech companies is the presence of academic stars — researchers who have published the most articles reporting specific gene-sequencing discoveries…The data suggest that the magnetic effect of academic stars is impressive.
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Zucker and Darby estimate that stars are more important than proximity to venture capital firms or the effects of government spending…. Success in high technology, especially in its formative years, comes down to a small number of extraordinary scientists with vision and a mastery of breakthrough technology. Looking at stars would then appear to be the best bet. As the Seattle example showed, a couple of stars showing up at the right time can literally change the entire economic trajectory of a failing region. Saskia Sassen, for example, takes a very different view based on structural changes from globalization increasing demand for advanced producer services linked to historical economic functions in select global cities.
This was not a superstar phenomenon, though we see tremendous innovation. So hiring the top biotech guns right now might not be the best idea. Also, one can perhaps only recognize stars in retrospect. I think again of the story of Mark Andreessen, who was in Illinois but ended up getting run out of town.
While I think Moretti had a lot of great things to say, I think he missed a few points as well. Vertical cities are producing stunning growth in output and wages, but very few jobs.
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The horizontal cities are producing lots of new jobs, but little or no per capita output or wage growth. Moretti describes both the Bay Area and Austin has tech innovation hubs, yet these cities have staggeringly different profiles. For all its tech growth, the Bay Area has added almost no net new jobs since 4. Meanwhile Austin doubled its employment. On the other hand, the Bay Area grew per capita personal income much more strongly than Austin.
In fact, during the s, Austin actually suffered a severe erosion in relative incomes, as its PCPI dropped from He does hit on how restrictive housing policies drive up prices in places like California, and thus effects the purchasing power of those high salaries. But I would like to have seen more on the different philosophies of places like SF and Boston vs. Austin and Raleigh-Durham. Moretti himself seems to side with the global city crowd, being a bit enamoured of the vertical style economy.
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Rather, they are like boutiques, specializing in a narrow, high end niche. Certainly America can, and perhaps should, sustain a few such places. The Bay Area may be the creative capital of the world. New York is New York. But these are not templates to follow. Moretti also focuses in on fairly obvious examples like Silicon Valley and Detroit.
As a research economist, I would have expected some more interesting choices. It seems a bit superficial when it comes to examples, and may actually mislead some people. For example, Fargo, North Dakota has been doing very well thanks to not just the energy boom more on that later but also because Microsoft has a huge operation there reputedly its second largest in the US because of the purchase of Great Plains software. America is littered with places apart from the obvious that are doing well, and more exploration of these would have given the book more depth.
As it is, it can seem a bit superficial. This superficiality shows up, for example, in the way Moretti highlighted companies that do acquisitions ostensibly just to acquire the talent. He cited the example of Sam Lessin, founder of drop. The idea was that Facebook really wanted Lessin because he was just an amazing talent.
However, as Gawker reported , Mark Zuckerberg had a longstanding relationship with Lessin going back to when Zuckerberg was still in college. He managed to cover trends like urban manufacturing, but overlooked fracking? Even George Monbiot has thrown in the towel on peak oil.
I wonder too whether the trends Moretti cites, while valid over a 40 year cycle, are less true today. One way economists measure clusters is by using a metric called Location Quotient. This measures the concentration of employment in a particular industry in a specific industry relative to America as a whole. But the math works for lots of things.
So we can look, for example, at literal clusters of talent by looking at the location quotient of college degree attainment. Here is a map of changes in the location quotient for college degree attainment from to This is certainly interesting. Out of 51 metro areas with more than a million people, Austin ranked 50th on this metric.
San Jose and San Francisco were 42nd and 43rd respectively. Get access to the full version of this article. View access options below. You previously purchased this article through ReadCube.
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