Wednesday, March 04, 2015

Global London and the Geography of Prosperity

Globalization appears to be tearing apart Britain. Second-tier cities must find their inner London and pull the country back together.

Theme: Globalization and economic development

Subject Article: "Disunited Kingdom: London in a world of its own."

Other Links: 1. "Pay gap between London and rest of UK narrows."
2. "Manchester: UK’s new order? The city’s extraordinary resurgence is the best model for closing the north-south economic divide."

Postscript: For me, globalization is all about the Rust Belt. The typical narrative blames globalization for the decline of manufacturing. The Rust Belt is the Rust Belt because globalization avoided the region. Where you find poverty, you won't find globalization.

Monday, March 02, 2015

A Great Migration Can Be Hazardous to Your Health

While migration leads to greater wealth, the destination may shorten your life.

Theme: People develop, not places

Subject Article: "African Americans who fled the South during Great Migration led shorter lives, study finds: Scholars find blacks' health suffered, despite economic benefits of move."

Other Links: 1. "Why aren’t blacks migrating like they used to?"
2. "How Oregon's Second Largest City Vanished in a Day: A 1948 flood washed away the WWII housing project Vanport—but its history still informs Portland's diversity."
3. "Retro Indy: Indiana Avenue."
4. "Will Boston’s crazy snowfalls make people leave? An endless winter has everyone threatening to flee for good. Who might really go—and how it could shift the population."

Postscript: Hinting at my next post, from "The Next Great Migration":

Certainly not everyone can just pick up and go, nor is expatriation a panacea for all that afflicts black America. But at a time when middle-class blacks remain unemployed at twice the rate of whites, and black college graduates have the same chance of being hired as high school-educated whites, the economic case for staying put is not airtight.

One solution would be to increase applications by black students to foreign undergraduate and graduate programs. Years ago, I worked briefly as a consultant for Sciences-Po, one of Paris’s famed grandes ├ęcoles, encouraging American high school students and their parents to pursue an English-language education abroad. Sciences-Po was an attractive offer for anyone — a world-class degree and alumni network for less than $2,500 a year. It should have been particularly appealing to blacks since, as Bloomberg recently reported, blacks rely far more on student loans and are less likely to pay off debts after graduation. Studying abroad would sharply decrease this burden (my alma mater, Georgetown, now costs a staggering $65,000 a year), and also provide an entree into expansive new job — and marriage — markets, too.

Yet it’s a strategy that is severely underused. I don’t think I convinced a single black student to attend Sciences-Po. And even though 15 percent of American postsecondary students are black, we account for only about 5 percent of those who study abroad. This is a shame.

Emphasis added. Such a lack of geographic mobility portends economic exclusion. I see a strong link between African-American poverty and neighborhood isolation. Inbreeding homophily, as observed in immigrant groups, leads to a lack of labor market knowledge. The ultimate result is structural under-employment and chronic inequality.

Friday, February 27, 2015

University as Real Estate Developer

Property value displaces tuition as a revenue stream for higher education.

Theme: Eds and meds economic development

Subject Article: "UC Berkeley studies international education campus in Richmond."

Postscript: Concerning revenue, higher education is enduring trying times. Concerning regional economic development, universities are at the center of a new global economic era. We're not paying enough attention to higher education. But when we do, we are asking the wrong questions. I'll be writing a lot more about these issues in the near future.

Wednesday, February 25, 2015

Lisbon, the Bangalore of Europe

The call center boom in Lisbon, Portugal, provides another example of how brain drain promotes economic development.

Theme: People develop, not places.

Subject Article: "Lisbon call center boom draws EU 'guest workers.'"

Other Links: 1. "The Great Creative Class Migration."
2. "Brain Drain Is Economic Development."
3. "The Geography of Melancholy."
4. "Imagining Rooted Cosmopolitanism."
5. "Young ‘ex-pats’ worth luring back home, conference attendees told."

Postscript: Just when I think policy is catching up to migration patterns, along comes "NY economic czar nominee says retaining youth is key to Long Island's future":

"We're losing young people," Zemsky told about 100 people at a meeting of the Long Island Association business group. "If you lose young people, unless you can change the laws of biology, you have population decline."

Stick a fork in New York State if Zemsky becomes the economic development czar. He's not qualified for the position.

Monday, February 23, 2015

The Geography of Divergent Immigrant Fortunes

In Britain, Bangladeshis fare better than Pakistanis. The intensity of inbreeding homophily explains the difference.

Theme: Immigration and economic development

Subject Article: "Breaking out: In Britain, Bangladeshis have overtaken Pakistanis. Credit the poor job market when they arrived and the magical effect of London."

Other Links: 1. "Perception, Policy, and Migration."
2. "Geography of Isolation."
3. "Inbreeding Homophily."
4. "Migrant Networks and the Spread of Misinformation."

Postscript: From "Armenian and Azerbaijani Migrants in Turkey Both Want to Make Money":

Salomoni has also focused on the plight of Armenian and Azerbaijan migrants in Turkey and his latest paper on the issue is entitled “Just Beyond the Border: Azerbaijani and Armenian Migrants in Turkey.” ...

... One difference is that the bulk of Armenians are located in Istanbul, whereas Azerbaijanis are scattered throughout the country. Of course, there are Armenians in Antalya, Izmir and Ankara, but very few. On the other hand, while there are many Azerbaijanis in Istanbul, there are also many in Izmir and especially Igdir and Kars.

I'd be interested to learn if the Armenian migrants are doing better economically than the Azerbaijanis, which may bolster the argument The Economist is advancing (i.e. geography is destiny).

Friday, February 20, 2015

Silicon Valley Is Already Dead

Waterloo's tech boom went bust, revealing the rise of the intangible economy.

Theme: Economic restructuring

Subject Article: "The Battle of Waterloo: The life, death, and rebirth of BlackBerry’s hometown."

Other Links: 1. "Software Stepping In Where Steel Left Off."
2. "Rust Belt of Silicon Valley: San Jose Is Dying."
3. "The Rise of the Intangible Economy: U.S. GDP Counts R&D, Artistic Creation."
4. "An introduction to the economy of the knowledge society."

Postscript: From "An Introduction to the Economy of the Knowledge Society":

A related characteristic of economic growth, that became increasingly evident from the early twentieth century onwards, is the growing relative importance of intangible capital in total productive wealth, and the rising relative share of GDP attributable to intangible capital (Abramovitz and David, 1996; Abramovitz and David, 2000). Intangible capital largely falls into two main categories: on the one hand, investment geared to the production and dissemination of knowledge (i.e. in training, education, R&D, information and coordination); on the other, investment geared to sustaining the physical state of human capital (health expenditure). In the United States, the current value of the stock of intangible capital(devoted to knowledge creation and human capital) began to outweigh that of tangible capital (physical infrastructure and equipment, inventories, natural resources) at the end of the 1960s.

The two main categories of intangible capital aptly describe the two pillars of the legacy economy, eds and meds. In Pittsburgh, the production and dissemination of knowledge underwrites the current economic boom. In Cleveland, the sustaining the physical state of human capital is propelling Northeast Ohio down the same path Pittsburgh has tread. In Boston, the global center of the legacy economy, both categories of intangible capital thrive in world class institutions.

Wednesday, February 18, 2015

Globalization Giveth and Globalization Taketh Away

French cuisine is dying. Don't blame globalization.

Theme: Globalization and innovation.

Subject Article: "Bitter times for French haute cuisine: Globalisation knocks the home of Michelin off the throne of good food."

Other Links: 1. "New York state plans to spend $28 million to create nanotechnology lab in Salina."
2. "Ross Perot’s 'giant sucking sound” coming from the corporate drain.'"
3. "Gannon University: Engineering and Business."
4. "Gung Ho (1/10) Movie CLIP - Japanese Board Meeting (1986)."
5. "Good News: Globalization Crushing Family Farms."

Postscript: I initially intended to point out how the subject article conflated globalization with migration. But the culinary dominance of Tokyo confounds that narrative. Migrants aren't pouring into Japan and sparking food innovation. The pathways are forged in the other direction, the historic diffusion of Japanese culture via out-migration. In terms of knowledge transfer, migration is a two-way street even if the flow of people is predominantly one-way.