Tuesday, September 14, 2010

Knowledge-Based Economic Development

Proclaiming the death of distance, end of history, or annihilation of space makes for a provocative polemic. The rhetoric can also send us on a wild goose chase. We need to rethink geography, not throw it out. The location of natural resources considered along with transportation infrastructure is a good model for the manufacturing economy. What about the knowledge economy?

Agglomeration economies has been the abstraction of choice. As for amenities (e.g. pleasant climate), we've already exhausted its explanatory power. The natural resource is talent and transportation has yielded to connectivity. I ask proponents of high-speed rail to keep that in mind.

If I remember my geopolitics correctly, Nigerian crude makes excellent heating oil. We tend to think generically about fuel and thus misunderstand the way the world works. "No Blood for Oil" is an ignorant bumper sticker slogan. The propaganda demonstrates a poor understanding of geography. Blame Canada.

Likewise, not all skilled labor is the same. Different regions cluster different kinds of talent. The Federal Reserve Bank of New York lays out the economic geography:

These knowledge-based clusters provide a useful system for organizing metropolitan areas based on the region’s economic identity and the types of cognitive skills used by workers. Many places with a long history of manufacturing (e.g., Canton, Ohio; Windsor, Ontario) are clustered in a group of Making Regions, while places such as Boston, Raleigh-Durham, Ottawa, and San Francisco make up a cluster of Innovating Regions. Regional analysts and policymakers can use these clusters to identify “peer groups” with similar knowledge profiles for the purposes of benchmarking or comparing the types of government programs and infrastructure available to support closely-related economic activities. For example, officials from Athens, Georgia, would likely benefit more from a site visit to State College, Pennsylvania—a fellow Teaching Region—than from trying to emulate the policies that are effective in nearby Atlanta. Likewise, officials in Athens would be better off using State College and other Teaching Regions as benchmarks to gauge changes in regional economic indicators.

This benchmarking approach should look familiar. Your metro cohort is as unfamiliar as the economic geography Brookings presented in the "State of Metropolitan America" report. We've dispensed with regional geography (industrial economy) and embraced network geography (knowledge economy). The point being that the region as a basic unit of geographic analysis isn't a given. As our international political economy shifts, so should our paradigms of geography.

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