Contrast the above with the latest geographic pattern to be undermined thanks to the collapse of the last round of globalization, the California cul-de-sac. The circle of trust that enabled strangers to quickly develop a neighborhood or community is the next Rust Belt:
“We had the perfect little cul-de-sac back here, our own little world,” said Eloisa Sanchez, the woman on the porch. “We’re afraid of what’s coming.”Since January, The New York Times has made regular visits to the fraying neighborhood to chronicle — in print, photographs and video — how, in one small place, the foreclosure crisis has reshaped the view of homeownership as a cornerstone of the American dream. The continuing economic fallout has brought a reckoning for those who believed that home equity would always rise, financing lives beyond their means, while also creating unexpected opportunities for people previously on the sidelines of homeownership.Over the last two years, half of Beth Court has been in foreclosure, and homes whose owners took out thousands of dollars in equity during the bonanza years are now worth less than half the price paid for them.
What's coming won't favor Joel Kotkin's suburban sprawl or Richard Florida's urban center of innovation. Both Kotkin and Florida are describing the same landscape, the world of Reagan-Thatcher globalization. These were the dominant patterns of living and working, perfectly aligned with the economics of the time.
What will be the new geography of globalization? The primary concerns will be talent shortages and aging demographics. I've found workforce development strategies to be useful for understanding a particular era of globalization. Just for convenience, I'll term the industrial era as "Globalization I". Arguably, there are epochs of globalization before it. But I haven't looked at those geographies. "Globalization II" was born in the 1980s, the decade of the Rust Belt. And we are now entering "Globalization III".
Cultivating talent locally is characteristic of Globalization I. Attracting talent from elsewhere is the hallmark of Globalization II. As for Globalization III:
It goes without saying that no matter how much talent a company might have, there are many more talented people working outside its boundaries. Yet all too many companies focus solely on acquiring talent, on bringing talent inside the firm. Why not access talent wherever it resides?
Replace the word "company" with "region" and I think you get the point. As we figure out the logistics of network innovation, more geographic arbitrage opportunities will emerge. Proximity will still matter, but not in a 20-minute rule kind of way. The winners of Globalization III will be the places that have done the best job of talent export. If Chicago rose with Globalization II, then so will Pittsburgh with Globalization III.