Friday, August 01, 2008

Thinking in Rust Belt Terms

I'm fond of using the word "parochial" when writing about the Rust Belt and its shrinking cities. The scale of economic conflict isn't even as large as state versus state or city against city. The turf wars between urban centers and their surrounding suburbs are just as toxic. One member of the media in Toledo has taken to heart Richard Longworth's call for Midwestern cooperation as one way to combat the woes of globalization:

Longsworth [sic] challenges the Midwest to fight, waking up to the reality of a global economy. While he has numerous examples of dying cities, he also names several places that have held their own. It's the result of a number of factors, including luck, but none of them include waiting for the state and federal governments to ride to the rescue.

I won't name them all here — you should read the book — but chief among them is cooperation. Not just between cities and states, but the entire Midwest. A plant moving into Iowa should be considered a gain for Ohio — if only because the plant didn't move to California or China. If the Midwest could work together, it could market each state's strengths, linking a powerful battery of universities and research centers. Toledo could maintain its position as a leader in alternative energy, automotive manufacturing and a promising freight center — but the entire Midwest could be selling it as such. We could do the same for other areas.

Putting aside for a paragraph the reasonable mega-regional skepticism, there is no benefit to each Rust Belt city trying to improve its own urban economy in the same sectors as its neighbor. The current zero-sum game is a non-starter. However, we still need to build the infrastructure that would allow one city to benefit from the success of another. While that is a tall order, that's no reason to embrace the status quo. Perhaps mating dinosaurs is a horrible idea, but cutting a shrinking pie into more pieces is suicide.

Taking the Urbanophile to task, I quibble with the following assertion:

When it comes to talent, there are certainly benefits to having more of it. But I don't see any particular benefits to mega-regionalism here. What would they be? Idea exchange? Possibly, but there is no particular geographic advantage to that. I can exchange ideas with anyone. If I were a struggling Midwestern city, I'd probably be more concerned about building connections to successful places and to the overall global economy than I would be to my failing neighbor next door. Believe me, if a good idea comes up, people will find out about it. The Youngstown shrinkage experiment is a good example of that.

When it comes to the exchange of ideas, geography matters a great deal. Otherwise, as Richard Florida often remarks, talented people wouldn't crowd into increasingly expensive cities. The assumption is the world of knowledge transfer is flat. That's a false premise. The global flow of ideas isn't anything like a currency market.

How does knowledge, particularly the tacit kind, manage to travel long distances?


The Urbanophile said...

I think geography is great if you're local. But if you're still not co-located, what's the difference between 250 miles away or 2500?

And it isn't so much that I don't think Midwesterners should share ideas as that in the world we live in, you've got to be more active in building connections nationally and globally. Chicago isn't succeeding because of its regional connections but its connections to other world cities.

Jim Russell said...

In terms of the exceptions to the proximity rule, there is no difference between 250 or 2500 miles. In fact, I read a recent study that put the limit of effective knowledge transfer (i.e. spillover) at 10 kilometers.

See related blog post (Null Space):

Venture capital is limited by the same geography, which is part of the reason why innovation is so spiky (i.e. concentrated in a few select locations around the world).

AnnaLee Saxenian has done a lot of research on the importance of social capital in a knowledge economy. Check out her book "The New Argonauts."

I'm skeptical of mega-regions that are so large as to be culturally incoherent. Better urban networks can be built along the migration lines of the diaspora. Regarding my conception of a workable critical mass region, I'm looking at areas of significantly shared historical geography that could spread the reach of venture capital.

Taking a cue from Saxenian, I'm looking at the strongest pathways of inter-urban migration as underexploited economic assets. Interestingly, migration tends to follow the proximity rule. Most moves are short distances. What emerges from such a study is a large region of human capital exchange.