New York, London, Hong Kong.
Silicon Valley/San Francisco, Los Angeles, Denver, Seattle, Boston, Washington, DC.
These are special places in the world, all would reasonably acknowledge, but I’m fascinated by the question, "Why?" Why these places, why now; more interestingly, will they remain "special?" Odds-on or odds-off? Do cities where unusual concnentrations of talented, educated people tend to self-perpetuate or self-destruct? And, what did they do to deserve or accomplish their relatively privileged positions to begin with?
Now, courtesy of The Atlantic,we have not a whole answer but some intriguing data.
We’ve seen geography-changing migrations before: For starters, the mass immigration from Europe of the early 20th-Century, the influx of rural southern blacks into northern industrial cities in the post-WWII era, and of families in general out from cities to suburbs and exurbs, and now the immigration (legal and illegal) from Asia, Africa, and South America.
But this is another pattern of migration, one driven by intellect and talent rather than ethnicity or nationality. It’s a realignment, reduced to its simplest, of the well-educated vs. the less well-educated, and the increasing concentration in a few "special" places of—to recur to The Atlantic‘s analysis—college graduates. And it’s been going on for at least the past 40 years. Visual aids are outstanding at clarifying how this works.
Here’s the distribution, by county, of college graduates compared with the national average. As of 1970 (below), the average was 11 college grads/100 residents; lighter orange indicates fewer than average, darker red indicates greater than average (from, since you asked, -20 less than average at the very latest to +39 more than average at the darkest red):
And 30 years later in 2000, when the national average was 24 college grads/100 residents, and the low/high band remains the same:
To my eye, the change is striking, almost inconceivably dramatic. First of all, there was almost none of the lightest orange on the 1970 chart (-10 to -20 college grads/100 vs. the national average) whereas the 2000 chart shows, guessing, half the total area of the country consisting of that cohort. Second, and at the opposite end of the spectrum, whereas the pockets of deep red were minuscule and widely dispersed in 1970, tiny islands here and there almost at random, by 2000 the deep red begins to demarcate and match what a clear-sky night-time photograph of the US from a satellite looks like with white-light concentrations at major urban centers and darkness in the rural countryside.
In case you were wondering, the statistics on post-graduate degrees follow the trend: For example, in Washington, DC and Seattle, more than 20% of adults had an advanced degree in 2004, vs. 4% in Detroit and 2% in Newark.
So much for the facts. What’s going on?
As The Atlantic posits, this is part of it:
"The physical proximity of talented, highly educated people has a powerful effect on innovation and economic growth—in fact, the Nobel Prize–winning economist Robert Lucas declared the multiplier effects that stem from talent clustering to be the primary determinant of growth. That’s all the more true in a postindustrial economy dependent on creativity, intellectual property, and high-tech innovation."
So far, so obvious, but what’s the exact mechanism for this virtuous circle (virtuous, at least, if you live in a red zone)? Again:
"Places that bring together diverse talent accelerate the local rate of economic evolution. When large numbers of entrepreneurs, financiers, engineers, designers, and other smart, creative people are constantly bumping into one another inside and outside of work, business ideas are more quickly formed, sharpened, executed, and—if successful—expanded. The more smart people, and the denser the connections between them, the faster it all goes."
Finally, note what used to be important but no longer is: Sheer size. In earlier decades, economic growth and population growth went hand-in-glove, and economic growth meant greater opportunities more or less across the board for the resident population.
Today, the key is not where the largest numbers of people are but where the largest numbers of highly-skilled, flexible and adaptive, people are. And in turn, the economic, psychic, and cultural returns on having large aggregations of diversely skilled, highly educated, people who are willing to exercise career mobility and acquire new capabilities, are outsized.
Does what we see today portend what we’ll see tomorrow? The short answer is that incumbency in this particular race is more powerful than in the most corruptly gerrymandered Congressional district. So if your firm has a preponderance of offices in the red zone, consider yourself blessed. If not,….
