Over the past ten or so years, the field of economic geography has acquired breathtaking cultural authority. Not surprisingly, the discipline’s rising prominence has paralleled our national reckoning with globalization, which has disoriented and dislocated untold numbers of people (by 2008, for example, the percentage of the world’s population living in cities had swelled to 50 percent; in 1950, it was less than 30 percent). National and urban boundaries have proved to be no match for the rapid movement of global capital and the scale of the financial and corporate institutions directing it. Competing with the old political sovereignties are new economic regions fanning out from cities. It is no coincidence that on the heels of the World Trade Organization protests in Seattle in 2000 came the launch of the Journal of Economic Geography, the first US venue devoted to scholarship on the subject since 1925.
In The New Geography of Jobs, Enrico Moretti joins Edward Glaeser, Richard Florida and a host of other high-profile academic geo-economists who have turned the metrics-based technical research demanded by their field into books for a larger audience. Moretti’s book has been widely celebrated—Forbes calls it the most important read of 2012—as have Glaeser’s Triumph of the City (2011) and Florida’s several contributions, beginning with The Rise of the Creative Class (2002). And like them, Moretti, who teaches economics at the University of California, Berkeley, charts the cultural and geospatial shape of the “post-industrial” US knowledge economy brought about by the market deregulation that began in the 1980s.
Examining long-term structural trends over the past thirty years, Moretti argues that innovation will continue to fuel American prosperity as never before. Assuming that low-skill manufacturing jobs have been offshored for good, he argues that “human capital” has become the coin of the realm, because it alone adds value in the ever faster-churning pace of “globalization and technological progress”—twin wheels of fortune that Moretti treats as fixed axioms. Indeed, the very “fate” of the nation, he claims, hinges on serving the needs of “talent”: the most creative, patent-hatching, high-tech “breakthrough” innovators, as well as those who take the risks of financing them. Chief among their needs, according to Moretti and others, is geographic proximity: to function optimally, “smart people” must be located near one another to toss around ideas in their labs and over lunch. Their ensuing “knowledge spillovers” are most fertile when industries cluster, making it possible for, say, nanotechnology experts to have face-to-face contact with other experts in the nanotechnology “ecosystem,” which critically includes venture capitalists who observe the “twenty-minute rule,” or the drive time they insist is required for “active monitoring, nurturing, and mentoring of new businesses.”
All this fevered networking has spawned what Moretti calls “brain hubs,” cities that attract high-tech talent and spin off entrepreneurial start-ups in “an almost magical economics of job creation.” These metros are poised to grow, too, or to experience “agglomeration,” because both employers and employees thrive on the multitude of supply-and-demand choices offered by “thick labor markets.” Size begets size. “This is bad news,” Moretti states flatly, for smaller industrial cities, which “are destined to experience a reduced inflow of well-educated professionals and will therefore miss out on the innovation sector, thus becoming poorer over time.”
Moretti has a term for these geo-economic developments: the Great Divergence. Ten years ago, the prevailing wisdom held that the new information and communications economy would bring about greater “locational freedom,” and that innovation jobs would spread evenly throughout American communities, with high-tech employers eventually drawn to the lower land values of weaker-market cities. But as it turns out, he argues, it is harder to disperse innovation evenly than it is to relocate manufacturing, thanks to the rare complexities of its ecosystem (i.e., talent’s need to exchange ideas with other smart people). Rather like the “assortative mating” that divides the world into “power couples” and—what to call them?—schlubby down-market couples, innovation does not share the wealth geographically. Instead, the United States is undergoing a big urban sort into “Three Americas,” separate and unequal: brain hubs, shrinking former manufacturing centers and “cities that could go either way.” And their divergence from one another is proceeding at an accelerating rate, replacing segregation by both race and class. Echoing Richard Florida’s Who’s Your City?, Moretti observes that one’s economic prospects are therefore tied increasingly to where one lives.