Thomas Friedman And Richard Florida Are Wrong

I point out the false dichotomy between flat world and spiky town because this perspective is conventional wisdom. Geography still matters, and all that jazz. Yes, geography matters. It isn't dead. But this either Thomas Friedman or Richard Florida game won't explain much of anything, such as the prospects for Edmonton developing a nanotechnology cluster:

This story happens to be true. But fans of Thomas "world is flat" Friedman will recognise its type from his New York Times OpEds. Friedman is fond of such globalisation parables, often snatched from receptionists or taxi drivers. As Richard Florida (pdf) and others have pointed out, we should not overlook the world's spikiness. Geography matters, even, or perhaps especially, when it comes to science and innovation. This is why we are so fascinated by Silicon Valley. If we follow Friedman, Silicon Valley could be anywhere, and yet the businesses and universities that populate it show no signs of upping sticks.

Emphasis added. Maybe we shouldn't follow Friedman or Florida. Also, perhaps we shouldn't look at this issue through the lens of geography. I prefer economics and Enrico Moretti's book, "The New Geography of Jobs". Yes, I notice a book about economics has the word "geography" in the title. I'll get to that part in a minute.

During a long economic cycle, the economy diverges. Key economic activity concentrates in a few locations. The world is getting spiky. That's the upward part of the economic cycle. The downward part is convergence. The key economic activity is diffusing to other [more cost effective] places. The world is getting flat.

Evidence is mounting that the world is getting flat, in terms of the long economic cycle Moretti calls the Innovation Economy. California and New York are converging. Other cities are catching up to Silicon Valley. The coming tech boom in London:

As the internet evolves, many in business and government see London playing a central role in what comes next.

“It is all the great cities of the US in one,” says Joanna Shields, who left the top European job at Facebook to oversee our Government’s Tech City Investment Organisation four months ago. Like Washington DC, she explains, London is the seat of national government. Like New York, it has financial services and thriving art, fashion and media scenes. Like LA, it has creative industries. Like Chicago and New York, it has an advertising world. And technology is playing an increasingly meaningful role in all of these sectors.

Noting that more than a third of London’s population was born outside the UK, Shields says the city is “the most global city in the world. Everything you need is there.” ...

... “London is inexhaustible,” says Santiago Matheus, who in 2011 set up Method Design Lab, a programme run in conjunction with London’s Central Saint Martins School of Arts and Design. “Even when things are really choppy London keeps flying, because you have the government, the media, the creatives, the finance ... At any one time, even if two or three of those are struggling, the others keep the engine going. That’s what makes London the capital of the Western world.”

Rohan Silva, senior policy adviser to the Prime Minister, agrees. “A lot of  the US companies we talk to say part of the reason they want to be in London is that the workforce here is not just international, but more outward- looking. So you can hire people in London and then a year later say, ‘Hey, we want to open an office in Beijing’. London people are very likely to be up for moving to Beijing and setting up an office there.”

Now we need to bring back the lens of geography in order to explain the above paradox, if you buy the Friedman-Florida dichotomy. The world is getting flatter in spiky town. I'd love to discuss the part of the passage about London's talent advantage I emphasized. That's another post for another day. Why London and not Edmonton?

Independent of the long economic cycles are knowledge flows. Knowledge is exchanged via the talent migration between major centers of knowledge production. There is a peculiar geography to this flat world. Only a handful of places are in play. This has major implications for economic development policy for resource cursed metros such as Edmonton. You don't have to be Silicon Valley or London to get a piece of the innovation action. For nanotech, see Albany, New York.

The world is flat and spiky at the same time. Better yet, a flatter world allows places to become more spiky. Which is to say, there is hope for Edmonton regardless of what is going on in Silicon Valley.