Thursday, July 21, 2011

Busting Industry Clusters

To make an abstraction, economic development is either place-based or people-based. I'm an advocate for the latter approach and a staunch critic of the former. I know many will bristle at the dichotomy as a false one. Remember, it is an abstraction. I'm writing this post as a reaction to a Brian Kelsey (Civic Analytics) Tweet:

Agree? Interested in #econdev thoughts. Industry clusters: The modern-day snake oil by @wadhwa

Vivek Wadhwa is the author of The Washington Post opinion piece in question. Like an abstraction, Wadhwa employs a polemic. The problem with Michael Porter's cluster theory:

A recent analysis of 1,604 companies in the five largest Norwegian cities underscores what’s missing from this prescription for a knowledge economy: people. The prerequisite for a regional innovation system is knowledgeable people who have the motivation and ability to start ventures. To succeed, these people need to be connected to one another by information-sharing networks. Basic infrastructure is always needed, but fancy science parks and big industry are just nice to have.

There is always a danger of going too far in the other direction (i.e. towards people-based economic development). In regards to cluster theory, we've tended to forget about talent. Thanks to folks such as Richard Florida, the shift away from conventional thinking is on. Ironically, that's also the problem. Amassing the Creative Class is still a place-based prescription.

This seems to suit most urbanists, who focus more on form than inhabitants. People get lost in the aesthetic shuffle. Cool city initiatives make the status quo (e.g. real estate interests) happy. This is business as usual with a slightly different spin. Your funding isn't going to be cut.

What if building networks and deepening connectivity were to be priority #1? There is still a place-based element to this economic development approach. Form begets function and people are back in the picture. But I'm not going to move to your city because of the nifty urban planning (e.g. Portland, Oregon). I'm interested in the network.

I'm finally settled in the Northern Virginia area, moving here from Longmont, Colorado. I reside in Leesburg, a short jaunt from downtown. I love the walkable neighborhoods and the proximity to a wide variety of amenities. I most value the regional network. I could just as easily live in the middle of suburban sprawl and benefit. I'm still plugged into the DC energy and innovation. In just a few weeks, my serendipitous encounters here have exceeded anything I ever experienced in my 10+ years living in Greater Denver (Boulder and Longmont).

Yet the intolerance here is palpable. I was told to avoid Herndon because it is overrun with illegal immigrants. The commute, as many know, is horrendous. The ubiquitous McMansions developments are uninviting, a blight on the landscape. That many of them are gated communities doesn't help. Suburban tech parks are spread out all over NOVA. If there is a density dividend, I haven't seen it. Economic clustering? Perhaps you are referring to the hydra-like growth of international cuisine at stripmalls. We eat cosmopolitan way out here in the exburbs.


Andy said...

So basically, we urbanists should value good planning for its own sake, as opposed to concocting arguments that it's good for talent attraction?

Jim Russell said...

I value urban planning for what it can do to help achieve the goals that Wadhwa posits as better than the economic clustering approach. For example, addressing the commuting problem in NOVA. Better knowledge networks will attract/retain talent. Also, see my post yesterday about talent retention and brain drain.

MSL said...

The author of that rant focuses on San Francisco, but the map of out migration shows people going to Houston, Dallas, Phoenix, Atlanta, and all over Florida. Most people would consider all of those to be pretty sprawling places. Why did he not address that at all? It seems he is only looking at the one data point that confirms his own viewpoint. Confirmation bias anyone?