The chart, from the blog Empirical Reality, shows SP Tech 1500 companies by location & founding date  (via vwadhwa, @ngoggans).  We’ve all known the Silicon Valley is important, but its dominance over time is striking.

Social media is redefining the landscape of everything we do, from the way we connect to family and friends, how brands and celebrities capture attention, to the way business and journalism function. Hundreds of millions of people across the world use social networks like Facebook, Twitter, and LinkedIn. If any technology promised to shatter the constraint of geography, overcome distance, and flatten the world, social media would be it.

But a quick look at the map below, from the NetProspex 2010 Social Business Report, shows this is not the case at all, certainly not for the United States.

The map shows the 50 leading social media cities in the United States. It is based on data collected by NetProspex on social media adoption and used by more than two million business professionals.

The level of geographic concentration is pronounced, though the leading social media metros are not surprising. San Francisco and San Jose, Silicon Valley, top the list, with New York City, Austin, Boston, Seattle, Denver, Salt Lake City, L.A., and Atlanta rounding out the top 10.

But what are the characteristics of America’s leading social media centers? What factors are associated with its greater adoption and use in certain kinds of metros?

With the steady statistical hand of Charlotta Mellander, I decided to take a look at a range of factors that might be associated with geographic centers of social media. We examined key factors like economic development and income; clusters of high-tech industry; the human capital; creative class vs. working class job structures; the presence of artists, musicians, designers, and other artistic creatives; and openness to diversity and tolerance for immigrants and gays and lesbians (see the note on sources at the end of this post). We ran a basic correlation analysis and generated a series of scattergraphs plotting social media centers against these factors.

The chart above summarizes the key findings of our analysis. These are preliminary, exploratory analyses that simply point to associations between variables. We don’t make any claims about the direction of causality, and we acknowledge that intervening variables may come into play. So what do we find?

Economic Development and Income: It stands to reason that the adoption of the use of social media at the city level would rise alongside local incomes and the overall level of economic development. And that is what we find. Social media is associated with both economic output and income. The correlations for each are substantial (in the range of .6 and .7).

High-Tech Industry and Innovation: It also stands to reason that social media would be more commonly used in places with higher levels of high-tech industry and higher rates of innovation. And again that is what we find. The correlation between social media centers and concentrations of high-tech industry is about the same as for economic development (ranging from .6 to .7). While social media at the city level is correlated with the rate of innovation, measured as patents, the correlation is more modest (about .4).

Human Capital: Social media use is also associated with higher levels of human capital, measured as the share of adults with a bachelor’s degree or more education (with correlations in the range of .55 to .6).

Creative Class vs. Working Class: The class structure of the economy also seems to play a substantial role. Social media centers are also associated with higher concentrations of creative class jobs in fields like science and technology; business, management, and finance; arts, culture, and entertainment; and health care and education (with correlations in the range of .55). Social media centers are also significantly associated with artistic and cultural creatives specifically (with correlations ranging from .525 to more than .7). On the other hand, places with a larger blue-collar working class labor force tend to have lower concentrations of social media (with correlations ranging from .-3 to nearly -.4).

Openness to Diversity: I’ve long argued that openness to diversity – measured either as openness to foreign-born people or to gay and lesbian populations – reflects a place that is open to new ideas generally and enables outsiders to mobilize resources efficiently around these new ideas and firms. Open places benefit from low barriers to entry to talented people, and benefit from their ability to capture a greater flow of creative, innovative, and ambitious people. Both measures are closely associated with social media centers. Social media centers are closely associated both with the Gay Index – a measure of the proportion of gays and lesbians in a metro area (with correlations ranging from .62 to nearly .7) – and the share of foreign-born people in a metro (with correlations of .6 and higher).

While social media allows us to connect instantaneously to people all over the globe, the geography of its professional use in the United States is concentrated. The leading social media metros in the U.S. are richer, more technologically advanced, have higher levels of education and higher levels of the creative class, and are more open to diversity of all sorts. The geography of social media thus both reflects and reinforces the increasingly uneven and spiky nature of America’s economic landscape.

Notes on Data and Sources: Social media metros is from the NetProspex 2010 Social Business Report based on data on social media use by more than two million business professionals. The variable is logged in the scattergraphs above.

Economic Output is gross domestic product per capita and is from the Bureau of Economic Analysis. High-Tech is based on the Milken Institute’s Techpole measure – regional high-tech intensity compared to national high-tech intensity updated with current data. Innovation is patents per capita and is from the U.S. Patent and Trademark Office.

Creative class includes the share of workers in science and technology; business, management, and finance; arts, culture, media, and entertainment; and health care and education. Working class includes the share of blue-collar workers in production occupations, maintenance, construction, and transportation. Bohemian Index is the share of adults in artistic and culturally creative occupations. These variables are from the Bureau of Labor Statistics.

Human capital is the share of adults  with a bachelor’s degree and above. Gay Index is the share of adults that are gay and lesbian and is based on research developed by Gary Gates and his collaborators. Foreign-born is the share of adults who were born outside of the United States. These variables are from the U.S. Census American Community Survey.

That’s the title of an important new study by my Martin Prosperity Institute colleague Kevin Stolarick. Economists have long used the firm as their basic unit of analysis. But Marx long ago said it was the kind of work people do that not only defined their class position but is what really propelled the economy. The study makes the case for the emerging field of “occupational organization” as a complement and counterpoint to the more established field of industrial organization. Here’s the abstract.

Industrial Organization studies the behavior of firms, markets and economies through the lens of industry.  With the transition to a knowledge or creative economy, occupation has become an equally important consideration for understanding regional economies and markets. Industry alone is no longer a sufficient discriminator to understand regional markets and structures.  This paper discusses the rising importance of occupation as a unit of analysis for understanding regional economies and economic structures. However, occupation does not supplant industry as occupation alone is also not sufficient.  Rather, an understanding of the organization of occupations and industries across regions and occupations within industries is required. The study of Occupational Organization is needed.

The full study is here.

Across the world, two in 10 households have access to the Internet at home, according to a just released Gallup survey. Internet access at home was far greater in more economically advanced countries: Nearly eight in 10 people (78 percent) in countries where gross domestic product (GDP) is more than $25,000 have Internet access at home. Home Internet access drops off steeply in less affluent, less developed nations, according to the Gallup survey, especially in countries with less than $10,000 in per capita GDP. The survey is based on telephone and face-to-face interviews with approximately 1,000 adults, aged 15 and older in 116 countries, and was conducted in 2009.

The map above, by Zara Matheson of the Martin Prosperity Institute, shows the percentage of households with Internet connectivity, highlighting the top 10.

The study notes the connection between home Internet connectivity and both urbanization and economic development. “Populations in the most connected countries also tend to be highly urbanized, reducing the cost of extending Internet delivery modes – whether phone and cable lines or wireless towers – to a high proportion of residents. Two of the most connected populations in the world – residents of Singapore and Hong Kong – are entirely urban,” the study reports, adding that: “Internet access is clearly a function of economic development; as recent trends in China demonstrate, demand for electronics and online services grows as living standards rise along with disposable income levels.”

Home Internet connectivity is indeed a function of economic development, as my analysis with Charlotta Mellander finds, but it is also related to the transition from industrial to post-industrial societies.

Source: World Development Indicators for 2006.

Home Internet connectivity is closely associated with economic output measured as gross regional product per capita according to our analysis, with a correlation of .89. It is also closely correlated with total factor productivity (.87), the UN Human Development Index (.84), and the Global Competitiveness Index (.84) – various measures of the level and extent of economic development.

Source: World Development Indicators for 2006, calculations by Charlotta Mellander.

But other factors also appear to be at play. It is not just the level of economic development that matters, but its nature and type, notably the transition from older, industrial-style economies and societies to newer, post-industrial ones, as I noted in a previous post. Post-industrial economies are distinguished by more highly educated populations or higher human capital levels; higher levels of knowledge-based, professional, and creative class jobs; higher levels of innovation and R&D; higher levels of entrepreneurship and business formation; and a shift toward more open-minded and tolerant values – what Ronald Inglehart has dubbed “post-materialist values.” My recent research with Charlotta Mellander and Jason Rentfrow finds evidence that post-industrial socioeconomic structures and post-materialist values matter to the happiness of nations, especially of the most advanced nations, in addition to the effects of income and the level of economic development.

Source: Based on average level of education by Barro and Lee, 2001.

Home Internet connectivity is closely associated with the level of human capital (.73 ) and with the percentage of the workforce that are members of the creative class (.71).

Source: International Labour Organization 2000-2006 (an average).

Home Internet access is also closely associated with the level of innovation measured as patents (.86), research and development efforts (.89), and entrepreneurship (.69).

Source: USPTO, 2000-2006.

Home Internet connectivity is also closely correlated with happiness (.67) and slightly less so with more open and tolerant attitudes toward gays and lesbians (.48) and racial and ethnic minorities (.3).

Source: Gallup World Poll, 2008.

This is just a preliminary first-cut analysis. I point out that correlation does not imply causation and other intervening factors likely come into play. We hope to look at all of this in further analysis with more advanced statistical techniques. But, for now, we can say that while income and the level of economic development play an important role in home Internet connectivity, it is also related to the type and nature of economic development and the values it engenders. There is something in the nature of post-industrial economies that appears to work in addition to the effects of income. Perhaps it is that people with higher levels of education encourage people to be more connected. Or perhaps people in knowledge-based jobs feel they have to be more connected or their jobs require them to be connected at home as well as at work. Whatever it is, it is clear that not just the level of economic development, but the nature and type of development and the attitudes it brings into play matter to many facets of life today, from overall happiness and well-being to being connected online at home.

Economists and geographers have looked at the role of scale economies in shaping industries and also in the the clustering or agglomeration of economic activity. Princeton University economist William Baumol identified the role of economies of scope – for example, when large companies leverage shared research and development or marketing capabilities across their product lines or even used the same assembly lines to make different products. The theory of scope economies has been influential in economics and business studies but has not really been applied or discussed in economic geography or regional terms.

A new study with my Martin Prosperity Institute colleagues Charlotta Mellander and Kevin Stolarick explores the role economies of scope in shaping geographic outcomes, advancing a concept we call geographies of scope. Here’s the abstract:

The geographic clustering of economic activity has long been understood in terms of economies of scale across space.  This paper introduces the construct of geographies of scope.  We distinguish between geographies of scope and the more commonly understood notions of economic diversity or geographic spillovers. Following research by Baumol and others (e.g. Baumol et al.., 1982) who define economies of scope as the efficiencies gained from sharing common inputs (from leveraging R&D or marketing departments across products to producing two products on a single assembly line), we argue that geographic economies of scope are driven by substantial, large-scale geographic concentrations of related skills, inputs and capabilities.  We examine this through an empirical analysis of the entertainment industry across U.S. metropolitan areas from 1970-2000. We use a variety of statistical techniques to probe for the effects of collocation of key related entertainment segments while controlling for the effects of scale or region size. The findings of our regression analysis indicate that geographies of scope (or collocation among key related entertainment subsectors and inputs) explain more of the economic geography of entertainment than does our scale variable (population size), though our regressions over time suggest the role of scope is decreasing.  Furthermore, we find that the entertainment sector as a whole and its key subsectors are significantly concentrated in two superstar cities – New York and Los Angeles – far beyond what their population size (or scale effects) can account for, while the pattern falls off dramatically for other large regions. Thus we find that scale economies are a necessary but insufficient factor for explaining the economic geography of entertainment: The rest of the explanation comes from scope economies – that is, the large-scale concentrations of related skills, inputs and capacities in geographic space.

The full paper is here.

At the heart of effective economic development is regional cooperation. In 2004, the Department of Labor launched WIRED Initiatives across the U.S. to improve regional efforts for talent development and effective economic development strategies. For over a year, leaders from the Wired65 region, an area spanning 26 counties and two states, have been been working to improve the area’s economic competitiveness and quality of life.

For this feature in our Creative Capstones series, we interviewed Debbie Wesslund, program manager for the Wired65 region, about the area’s efforts to launch Kix.com – The Kentucky Indiana Exchange, an interactive community platform to facilitate networks for employment opportunities and discussions about regional challenges.

Creative Class Group (CCG): Tell us about Wired65. What communities make up the region?

Debbie Wesslund: Wired65 is an initiative that brings together civic leaders in a 26-county, bi-state area around the need to support its human capital – or “talent.” This region is anchored by the Louisville, KY MSA and the Elizabethtown, KY MSA. The Ohio River divides the states of Indiana and Kentucky, but the economy reaches across county and state lines, forming a region with a strong sense of place and sharing talent. The region includes both rural communities and urban areas, with strong economic sectors like transportation, distribution, and logistics; health care; manufacturing; and agriculture evident throughout. The area is home to a vibrant arts scene, from Louisville’s orchestra, ballet, galleries, and theater, to quality regional sports and entertainment attractions. Tourism is a strong sector as well, including Bourbon County, horse racing, historical places, natural beauty, and water recreation among the draws.

CCG: Why is the Wired65 region a special place to live? What makes the region a unique, authentic community?

Wesslund: This community is authentic because citizens share resources across political boundaries and work together to support the economy. No community can exist on its own, and regional leaders recognize the importance of leveraging assets and celebrating successes. An example of community is the collaboration among regional post-secondary institutions – HIRE (Higher Income Requires Education) – where they collaborate around initiatives to increase the education attainment throughout the region. Tuition reciprocity across state lines was an early successful initiative.

CCG: Describe the efforts of Wired65.  What initiatives have been accomplished as a result of the engagement?

Wesslund: First, Wired65 spent months on developing a regional competitiveness strategy, which lays the groundwork for long-term regional collaboration. A comprehensive assessment of the strengths and challenges of the region, the TIP Report: Regional Competitiveness Strategy, laid out broad goals in talent and economic development:

• Fix the education pipeline: Focus on smoothing transition points within the P-20 education system. Make learning relevant to growth industries and make the connection between education, income, and prospects for the future.
• Prepare for “21st century” jobs: Provide cutting-edge vocational training in high school and better align post-secondary programs with the needs of local business.
• Create a talent magnet: Promote the region as a world-class destination for 21st century talent by highlighting the region’s educational, innovation, and research assets.
• Invest in priority sectors: Invest in economic and workforce development projects that strengthen the region’s priority sectors – health care, life sciences, logistics, human resource management, energy technologies, advanced manufacturing, agriculture, entrepreneurship, and tourism.
• Focus on quality of place: Take a regional view and use the region’s quality of place as a recruitment and retention tool for knowledge workers.

Next, it invested grant funds in projects that lined up with these goals, and had the best potential for regional impact. These initiatives were diverse – career education in high schools, entrepreneurship training, student invention contests, marketing local agriculture, health care training, IT training, regional leadership development, and more.

Finally, the Wired65 leadership is working to sustain this regional collaboration through continued commitment of time and identification of new resources.

CCG: Explain Kix.com. What role will the website play for the region?

Wesslund: Kix.com is a web-based portal committed not only to helping regional job seekers find employment and employers find talent, but to connecting an entire region and turning it into a online community. It’s a “town square” where employers, educators, job seekers, students, entrepreneurs, government officials, and others can come together to talk and share ideas and insights that help people in our region grow and prosper. It gives users access to a wide range of jobs, resumes, training opportunities, and valuable tools. It has a rich resource of labor market information and employer growth projections. It also features constantly updated content on regional events and news items from the region, particularly related to job growth, employers, and education.

CCG: What makes Kix.com different from other online community platforms?

Wesslund: It is a place where “real time” collaboration can take place. It combines elements of navigation (how to find your way around the labor market), information (updated content on current items of interest in the region – ones that might not show up in other media sources), communication (social networking among users, along with direct access to a wide range of services), and education (direct links to education providers for class-size or online education). No other site that we are aware of combines all of these elements the way the Kix.com site does.

CCG: Is there anything else you would like to share?

Wesslund: We are very encouraged by the first month of usage, as large numbers of employers and residents are finding their way to the site. We are also interested in looking at users that are showing up from other states, as this is already beginning to give us intelligence about where we may want to focus some of our energy in attracting even more talent to our region.

Visit Wired65.org and Kix.com for more information.

Silicon Valley has always been a safe haven for risk-takers, entrepreneurs, and big thinkers. But, it is also home to one of the most innovative public-private partnerships in the country: Joint Venture Silicon Valley.

As the fourth feature in our series, Creative Capstones, we interviewed Russell Hancock, president of Joint Venture Silicon Valley, to learn more about Silicon Valley, Joint Venture, and the organization’s current initiatives to “build the next (and greener) Silicon Valley.”

Creative Class Group (CCG): Tell us about Silicon Valley. What makes it a special place to live?

Russell Hancock: We’re  a sun-kissed land with countless amenities, but I love Silicon Valley because it is an amazing collection of people. They’re talented, they’re creative, they’re from all over the world, and they are doing innovative things. The culture here is all about risk-taking and there’s a high tolerance for failure, and this has made it possible for innovation to blossom here more than most any other place you might name. You can feel it when you’re here – the buzz and the energy – and it brings out the best in people. In Silicon Valley everything seems possible – inventing a better mousetrap, inventing a new energy future, making a niftier gadget, planning communities that have fabulous urban designs… there’s a sense that if you can’t do it here, you can’t do it anywhere.

CCG: Describe Joint Venture: Silicon Valley Network. What is the organization’s role in economic development? What makes the organization different from a traditional economic development organization?

Hancock: Joint Venture is an unusual creature, and was highly experimental at the time of its founding. Now the Joint Venture model has been proven many times over, and is embraced as the region’s clearinghouse for information and the central gathering place for the region’s leaders. It works by bringing together the leaders of our Valley across every major sector – we have mayors and city managers on our board, and they are seated alongside CEOs and senior business leaders. They’re joined as well by the college and university presidents, by labor leaders, foundation chiefs, and a host of other heads of community-based organizations. There’s no other group in Silicon Valley that bridges all the sectors in the way that we do.

Our mission is to fix the Valley’s problems, simple as that. Anything that relates to our vibrancy and vitality, to our quality of life, and to the business climate becomes our issue. And this is also our approach to economic development. We’re not a traditional economic development group, if by economic development you mean printing glossy brochures with flattering pictures and trying to recruit companies to locate here. Our approach is to identify and fix the region’s problems, so this will continue to be a great place to innovate, to start and grow a company.

CCG: Joint Venture just released its “State of the Valley Index.” What were some of the key findings? How will regional leaders use the document in positioning the region for future growth?

Hancock: The Index is filled with bad news, actually. We’re hemorrhaging jobs, our incomes are dropping, we’re not seeing as much venture capital formation, we’re not attracting as much federal funding as we once did. But there’s no sense of panic around here. People feel like we’re participating in a downturn that is national and global, and that we’re going to find a way to innovate out of it. People throughout Silicon Valley make heavy use of our Index, but it’s fascinating because everybody uses it in their own special way. It’s sort of like a Rorschach test – people seize on different indicators and go off on their own rants. It’s all good because it creates a rich and wonderful dialogue across the region.

CCG: We understand Silicon Valley was one of the first to launch a “Climate Prosperity Project.” Tell us about the program and its accomplishments/milestones to date.

Hancock: Our Climate Prosperity project is doing nothing less than bringing America to a new energy future. We see it as Silicon Valley’s biggest opportunity in decades. In other words, our view is that global warming isn’t a crisis, it’s an opportunity, to innovate, to make money, and to use the market to change our consumption patterns and end our dependency on oil. We’ve assembled a council of Silicon Valley’s best and brightest coming out of the cleantech sector, and we’ve matched them with counterparts in the public sector, and the meetings are inspiring because everybody is on the same page, asking the same question: How can we do this better, faster? How can we accelerate these changes and facilitate their emergence in Silicon Valley? Then, how can we scale what works in Silicon Valley to the entire nation? Our biggest accomplishments to date are forming the nation’s largest renewable energy power purchasing program, building a new association for the battery technology cluster, making a serious run at DOE funding for an energy retrofit program on commercial buildings, and pulling together a consortium of tech companies who want to make the nation’s best smart grid.

For more information about Joint Venture and its current initiatives, visit www.jointventure.org.

It’s commonly thought that even though globalization was shifting manufacturing jobs from America to lower-cost, more efficient, off-shore competitors, the U.S. retained a vast lead in high-end innovation. But are the powerful forces of globalization now leading to the off-shoring of America’s innovation and R&D? New statistics from the National Science Foundation (via Mike Mandel) certainly point in that direction.

Way back in 1990, I wrote a book titled The Breakthrough Illusion with Martin Kenney that argued that the U.S. had developed a powerful capacity for venture capital-backed innovation, but that the actual manufacturing  and production of those innovative new products – and the jobs that flow from that – was increasingly being shifted off-shore.

A couple of years later, I was invited to be part of a Council of Competitiveness group that was looking into the future of American research and innovation. After completing a round of interviews with the R&D directors of leading U.S. and foreign companies and looking into the data, I reported my provisional conclusions saying I was convinced that R&D was becoming much more globalized and that U.S. R&D in particular was being “externalized”  – more and more of it taking place outside the wall of big companies with their own R&D labs. My results were met with stunned silence and disbelief. “The U.S. was still the unquestioned leader in R&D, and had little to fear” was the prevailing attitude.

Fortunately, over time, we’ve come to understand that R&D no longer just takes place in giant R&D labs, and that innovation occurs in many types of organizations and places, from university labs to small startup companies, independent inventors and entrepreneurs to global labs. My former colleague Wes Cohen , now an economist at Duke University, and Daniel Levinthal developed the construct of “absorptive capacity“ to explain this shift; firms have to be able to absorb as well as create new knowledge and innovation. As the former director of R&D at Hewlett Packard once told me: “My predecessors used to be able to create all the new information and knowledge they would ever need inside our labs. But now, there is so much information out there, everywhere across the world, I need people who have the networks and ability to absorb it wherever it comes from and synthesize and make it useful to our operations.”

Still, so much of R&D and innovation remain a puzzle, largely because we don’t have very good data about it. So I was delighted to see economist Mike Mandel’s post on newly released statistics on the off-shoring of R&D by U.S. corporations.  There’s been a lot of speculation about this, as Mandel notes, but not a lot of good statistics and hard facts. “The economy  is driven by innovation, but we knew very little about who was doing the innovating and where,” he writes. “In particular, we had absolutely no idea how much R&D was being offshored by U.S.-based companies.”

Now, the National Science Foundation’s Business R&D and Innovation Survey provides new data on the off-shoring of R&D by U.S. companies. It turns out that U.S. manufacturers conduct about a fifth of their total R&D in other countries. Still, as the chart below shows, the numbers for certain industries are, shall we say, non-trivial. Almost 40 percent of auto R&D now takes place outside the U.S., a third of R&D related to textiles and electrical equipment, and about a quarter of R&D in chemicals, computers, and peripherals.

In these key sectors of the economy, innovation appears to be following production off-shore. I recently spent an evening with the founder of a leading high-end road bike company. He told me that when he started the company, some high-end road bike frames were still being made in North America, but more and more of the manufacturing was shifting to lower-wage off-shore locations, principally in China. Over time, virtually all manufacturing would shift there. But still, the high-end design and engineering was performed in the U.S. Not so anymore, he said: Now virtually all the design and engineering of high-end road bike frames had also followed manufacturing off-shore.

I want to make clear, I’m not passing any normative judgment on this: I continue to believe firmly in the gains to specialization and trade. And with its great universities; startup companies; venture capital-financed model of innovation; ability to attract global scientific, technical, and entrepreneurial talent; and innovation ecosystems like Silicon Valley, the U.S. retains tremendous competitive advantages in high-end innovation in new, cutting-edge industries. But it’s important to have the facts in hand. And they tell us that the U.S. is no longer the only innovative place on the planet.

Add to this out-sourcing fact one other: According to other NSF statistics, about half of all U.S. patents come from foreign inventors. You quickly see how globalized innovation has become. It’s now more important than ever the U.S. remain an open, absorptive economy that can attract the world’s best and brightest people and their ideas. America’s ongoing restrictionist posture, which I detailed in Flight of the Creative Class, remains a big mistake, and we need to take venture capitalist John Doerr’s maxim about stapling a green card to the green card of every foreign graduate of our universities more seriously than ever.

One more thing: Given these global realities it’s less likely that an economic strategy based around “shifting” the U.S. economy to new and “better” – that is higher-tech, higher-value economic sectors – can alone power sufficient economic development and employment growth. The U.S. economy – and many of the most advanced economies around the world - now face the conundrum that innovation and production in goods-producing industries will be insufficient to generate employment growth and rising living standards. New job upgrading strategies will be necessary. As I argue in The Great Reset, really, the only place left to look and the place we have to begin is to start upgrading the more than 60 million low-end service jobs in everything from retail sales to home-health care and restaurants and turn them into more innovative, higher-wage, family-supporting jobs.

It’s been hard to justify high-speed rail (HSR) projects in terms of conventional cost-benefit analysis. But, it may be time to rethink – and broaden  - the way we think of the benefits of HSR. HSR’s benefits are usually thought of in terms of lowering transport costs by reducing problems like gridlock, pollution, and travel time. But the real benefit of HSR may turn on its ability to expand economic growth, according to a new analysis by my colleagues at the Martin Prosperity Institute.

There are three main mechanisms through which high-speed rail can help expand the economy, according to the MPI study. First, HSR expands the labor pool available to firms, bringing talented workers from nearby centers within commuting distance and thus expanding the quantity and quality of available employees. Second, HSR makes more jobs available to workers without making them have to relocate and move to a new home. Third, HSR extends the benefits of other expensive, productivity-enhancing infrastructure such as airports across broad regions. International airports, major research universities, and reference libraries are all more financially viable and internationally competitive when they serve a larger population. High-speed rail allows them to build the scale they need to achieve world-class excellence and also spreads their high costs across a wider population.

The MPI report is here.

From The Economist, December 30, 2009:

The rich world’s quiet revolution: women are gradually taking over the workplace

At a time when the world is short of causes for celebration, here is a candidate: within the next few months women will cross the 50 percent threshold and become the majority of the American workforce. Women already make up the majority of university graduates in the OECD countries and the majority of professional workers in several rich countries, including the United States. Women run many of the world’s great companies, from PepsiCo in America to Areva in France.

Women’s economic empowerment is arguably the biggest social change of our times.

From another article in the same issue:

The rich world has seen a growing demand for women’s labor. When brute strength mattered more than brains, men had an inherent advantage. Now that brainpower has triumphed the two sexes are more evenly matched. The feminization of the workforce has been driven by the relentless rise of the service sector (where women can compete as well as men) and the equally relentless decline of manufacturing (where they could not). The landmark book in the rise of feminism was arguably not Ms Friedan’s “The Feminine Mystique” but Daniel Bell’s “The Coming of Post-Industrial Society”.

Or perhaps Rise of the Creative Class is a landmark book for demonstrating why women have increasingly found a fit in the wage-earning world.

Your thoughts?

(Thanks to colleague MW for drawing my attention to the article.)