Innovation Economy Diverging Or Converging?

The world is spiky, not flat. Geography matters more than ever. If you believe that, then you should heed the advice of Enrico Moretti. Go where the well-paying jobs are already clustering. But what if you believe that the world is getting flatter? You listen to Andrew Yang:

But while Venture for America boasts about how it catalyzes entrepreneurship, it’s also primed to have an indirect impact on the cities where its fellows are based. Cluster theory would suggest the smartest graduating seniors should all head to Boston or San Francisco where the salaries tend to be higher and a pre-existing entrepreneurial network is strong, but Yang sees things differently. “If you are a young person who wants to have an opportunity to start a business, these are cities are more fertile. And if you start a company in Cleveland instead of Silicon Valley, you can become quickly visible to leadership and local institutions.” Venture for America’s six host cities in 2012 — Cincinnati, Detroit, Las Vegas, New Haven, New Orleans, Providence — all could use the kind of economic boost that growing, small businesses provide.

But it’s not just the cities that are benefiting. These cities have what Yang calls a high “resources-to-talent ratio.” In other words, young entrepreneurs who might get lost in the shuffle in New York would more likely stand out in Cincinnati. Even without a broad employment base, cities like Detroit and New Orleans have companies and foundations with deep personal and financial resources that can help lift up talent.

Cities participating in Venture for America could stand to gain much-needed population. Venture for America’s ultimate goal is to create 100,000 jobs by 2025. If spread across the country evenly, that number would barely move the needle in any one city. But if Yang continues to focus on cities like Baltimore, Cleveland and Pittsburgh — all of which are in the running for VFA’s expansion in 2013 — the program could have a big impact. Indeed, while many cities are now growing faster than their suburbs, that’s not the case in Baltimore, Cleveland, Cincinnati or Detroit.

Emphasis added. Moretti is describing divergence. Yang is touting convergence. The only critique I have of Moretti's book ("The New Geography of Jobs") is that it doesn't consider the prospect of the Innovation Economy peaking (i.e. moving from divergence to convergence). There are cities on the fence. Which club will they join, the Innovation Economy winners or losers?

Yang contends that there is an advantage to be had outside the winner's circle. I think he's right and I'm seeing evidence in migration patterns. You can have all of New York City for the price of Philadelphia. That trend is picking up speed. The convergence is quickening.