The great economic reset we are in the midst of extends even to Americans’ choices of places to live. The popularity of sprawling auto-dependent suburbs is waning. A majority of Americans – six in 10 – say they would prefer to live in walkable neighborhoods, in both cities and suburbs, if they could. Writing in The Wall Street Journal a few months ago, I noted how changes in our economy and demography are altering “the texture of suburban life in favor of denser, more walkable, mixed-use communities.” Christopher Leinberger has shown the positive effects of walkability in cities, towns, and suburbs; the architects Ellen Dunham Jones and June Williamson have detailed ways that older car-oriented suburbs can be retrofitted into more people-friendly, mixed-use, walkable communities. And walkability pays. According to research by Joe Cortright, housing prices have held up better in more walkable communities.Walkscore.com, the online group that rates walkable neighborhoods, provides detailed data on walkability for 2,500 cities and 6,000 neighborhoods across the United States. Nate Berg of planetizen used their data to come up with a new way to rate and rank America’s most walkable cities and metros. The chart below shows his results. The first column shows how metros stack up on walkscore.com’s overall walkability index. The second lists Berg’s calculation based on the number of neighborhoods in these metros that have above-average walk scores. (Details on Berg’s methodology are here.)

Most Walkable Metros

Source: Nate Berg of planetizen, based on walkscore.com data.

Either way you slice it, San Francisco tops the list, followed by the East Coast communities of the Bos-Wash corridor: NYC, Boston, Philly, and D.C. Seattle and Portland do well, as does Chicago. Somewhat surprisingly, L.A. scores reasonably highly on both metrics.

With the steady statistical hand of my colleague Charlotta Mellander, we examined the correlations between this new walkability data and key economics and demographics of metro areas.

Source: Bureau of Labor Statistics, U.S. Census, American Community Survey, and Nate Berg of planetizen, based on walkscore.com data.

As before, we found significant associations. Walkable metros had higher levels of highly educated people (.44) and of the creative class (.46). Perhaps more significantly, they also had higher incomes (.64) and higher housing values (.55), more high-tech companies (.58), and greater levels of innovation (.4).

Walkability is more than an attractive amenity — it’s a magnet for attracting and retaining the highly innovative businesses and highly skilled people that drive economic growth, raising housing values and generating higher incomes.

Fiat is looking to follow Mini’s lead when it comes to customization for consumers. “The personalization is something that customers want.” The design centers inside the dealership will be a lot like the ones you’d find in a new subdivision, with lots of choices. “Those are all of the different 14 interiors, exteriors,” Soave said, “but you can mix and match, and that’s part of the deal.”  … these design centers are not strictly up-sell areas. Depending on the shopper, though, they can be.

The full story is here.

On a hillside in a Rio slum, artists are working to transform the community – not just to beautify it – by tapping the incredible local creative energy. The video above (via CNN International’s Urban Planet series) shows how residents of the Santa Marta slum are transforming their community itself into a work of art. Led by two Dutch artists and the energy of local creatives, the main square has become an artwork itself. A CNN story provides more background on the  project.

The project is the brainchild of Dutch artists Dre Urhahn and Jeroen Koolhaas, who visited Rio’s favelas for the first time in 2005 to shoot hip hop videos. People who come to the favela today say, ‘Wow, how pretty.’ It doesn’t have that image of an ugly favela.

They created the Favela Painting project. “We wanted to do something that would give them an opportunity to become painters and that would call attention to the outside world to their situation,” he said.

They first painted “Boy Flying a Kite,” an enormous mural covering the sides of three buildings. Then residents painted a cement hillside with fish leaping in a river, which caught the eye of the local media.”If you are able to get a positive message out about this place in the newspaper, then your project is a success. And we did. So that was very inspiring,” Urhahn said.

Next, Urhahn and Koolhaas put Santa Marta on the drawing board.They found residents excited about the idea of a facelift for their community, a slum tamed by police and showing signs of a newly acquired purchasing power … Brazilian paint company Coral, a subsidiary of Holland’s AkzoNobel, offered to help with raw materials and training for locals.

Tigrao, or Big Tiger, was a drug dealer before he got involved with the project.

“It gave me a different outlook on life, showing me that an honest job can be a good thing,” he said. “If Coral had 30 or 50 more job openings, I’m certain they would pull another 50 people off that wrong path.”

They created a massive artwork covering 34 buildings that has attracted foreign and local tourists and boosted the self-esteem of residents. “Color brings status,” said Carlos Piazza, AkzoNobel’s communication director for Latin America. “What divides the city, the formal city, from the informal city? Painting, that’s it.” If donations come in, an entire favela could be next — a monument created by the people who live in it for the entire city.

Research universities increasingly function as a key hub institution of the knowledge economy – from Stanford University’s role in Silicon Valley to MIT’s role in greater Boston’s Route 128 high-technology complex, from the University of Texas in Austin to the rise of the North Carolina Research Triangle, not to mention Carnegie Mellon’s role in Pittsburgh’s regeneration. But what are the world’s leading centers for university research?

To get at this, my MPI team and I used the recently released Academic Ranking of World Universities (ARWU) to chart the locations of the world’s leading 500 research universities by the city and metro region where they are located. The map below, by the MPI’s Zara Matheson, shows the geography of academic research centers across the world.

The U.S. is home to four of the top five centers: Boston-Cambridge in first place, followed by Los Angeles, New York City, and San Francisco. Other leading U.S. research centers among the top 25 include: Chicago (6th), Durham-Chapel Hill (11th), Pittsburgh (13th), Trenton-Central New Jersey (14th), New Haven (17th), Ithaca (18th), San Diego (19th), Philadelphia (20th), Seattle (21st), Madison (22nd), and Baltimore (23rd).

But a number of foreign centers rank quite high. London (5th), Paris (7th), and Zurich (8th) all rank ahead of San Jose/Silicon Valley (9th). Cambridge, England is 10th, Munich 12th, Stockholm 15th, Oxford 16th, and Tokyo 24th. Toronto, where I teach, ranks 28th.

For the time being, the U.S. remains in the lead, but foreign centers appear to be gaining ground. And this trend may be accelerated by the mounting budget problems facing many states and research universities as well as cutbacks in research funding and growing anti-immigrant sentiment in some quarters of the United States. Great Resets like the current one have given rise to significant shifts in the locus of scientific research talent in the past. And this was a large part of the reason the United States eclipsed Europe on this front during the last Great Reset.

But what’s even more striking about the map is the degree of geographic concentration on the East and West Coasts of North America, Western Europe, and just a few spots in Asia and Australia/New Zealand. The concentration of the knowledge and scientific assets in just three major mega-clusters – the East Coast/Great Lakes, West Coast of North America, and in Europe – is astounding. And it is likely to reflect significant geographic advantages in research and knowledge-generation for them.

It’s a given that scientific talent is highly mobile. But distance still plays a role. All other things equal, it is both easier for and more likely that leading scientists and researchers will move within these clusters - say between Boston and New York, or even Chicago and Toronto; much the same is true among, say, L.A., San Francisco, and Seattle. And collaboration within them is surely easier as well. This kind of proximity creates considerable short- and long-run advantages both for the universities and research centers within the cluster and the cluster as a whole.

This would seem to imply that ongoing efforts to upgrade research universities, attract top scientific talent, and build world-class research environments in China, India, the Middle East, and other parts of the world are likely to face significant uphill battles. And that established mega-clusters are likely to enjoy significant advantages into the foreseeable future.

This is the longer, unedited version of my column in today’s Wall Street Journal.

Remaking our sprawling suburbs, with their enormous footprints, shoddy construction, hastily put up infrastructure, and dying malls, is shaping up to be the biggest urban revitalization challenge of modern times—far larger in scale, scope and cost than the revitalization of our inner cities.

What a dramatic shift. Just a couple of decades ago, the suburbs were the locus of the American Dream. More than their sprawling, large-lot homes and big wide lawns, their shopping malls, industrial parks, and office campuses accounted for a growing percentage of the nation’s economic output.  A good many of them formed into Edge Cities—satellite centers where people could live, work, and shop without ever having to set foot in the center city.

With millions of homes underwater or in foreclosure, our suburbs and exurbs have taken some of the most visible hits from the great recession. In a stunning reversal, big cities like New York, Boston, Washington, D.C., Chicago, San Francisco, and Seattle have become talent magnets at the same time, drawing ambitious people, empty-nesters, young-families, and even a growing number of offices back to their downtown cores. As inner city neighborhoods are being gentrified, blight and intransigent poverty are moving out to the suburbs, where one third of the nation’s poor now reside—1.5 million more than in cities, according to a Brookings study. And suburban poverty populations are growing at five times the rate of those in cities.

I myself am a card-carrying, dyed-in-the-wool urbanist; I’ve lived in inner-cities for most of my adult life. But I believe my urbanist fellow travelers are making a big mistake when they impugn suburbanization wholesale. Suburbs don’t always grow at the expense of cities; suburbanization and urbanization alike are parts of a larger process. Studies reveal that, counterintuitively, suburbs don’t draw most of their populations from the inner city, but grow by attracting people from small towns and rural areas further out, as well as immigrants from foreign countries, more than 50 percent of whom bypass cities and settle directly in the suburbs of larger metro areas, according to research by Brookings’ Audrey Singer.

Great metropolitan areas are like economic suns; their gravitational appeal is irresistible. Suburbs and cities are mutually dependent; they blur into each other at the margins. And the most successful suburbs share many attributes with the best urban neighborhoods: walkability, vibrant street life, density, diversity.

Density, the clustering of people and firms, is a basic engine of economic life—for cities, suburbs, and nations. When interesting people rub against each other, they spark new ideas; the clustering of economic assets and activities accelerates the formation of new entrepreneurial enterprises and dramatically increases overall productivity.

The idea that such clustering only happens in Manhattan-style urban centers is shortsighted and parochial—it’s characteristic of Silicon Valley too, and Nashville, whose cluster of musicians, composers, studios, publishers, and record companies has made it the most concentrated center of commercial music-making in the world. But we need more of it and too many of our suburbs and exurbs don’t have much of it at all. The key to our suburbs’ renewal is not beautification but densification. As our suburbs become more clustered, they’ll become more economically energetic—with benefits for us all.

Renewing our suburbs is part and parcel of broader economic recovery. The very act of restoring them—of retrofitting them for the new ways of living and working that our emerging new economic order requires–will help bring back prosperity overall.

Sources: Map by Zara Matheson of the Martin Prosperity Institute. Data from Christopher Leinberger.

~ ~ ~

Though some of our most stressed suburbs might have passed the tipping point— like those brand new unsaleable houses on the far-out fringes of L.A. that were bulldozed to the ground not too long ago, double-paned windows, granite countertops, whirlpool baths, and all—most of them aren’t going to fade away. Just over half of Americans live in the suburbs, and the great majority of them are content to stay. More than two-thirds (68 percent) of suburbanites are “satisfied” or “very satisfied” with where they live; 57 percent rated their communities as the “best” or “near-best,” according to a survey I conducted with the Gallup Organization and report in my book Who’s Your City? A separate Pew survey identified the group of Americans that is most satisfied with their living choices as college-educated suburbanites–62 percent of whom said there was no better place for them to live.

Even before the recession, our changing demography had begun to alter the texture of suburban life in favor of denser, more walkable, mixed-use communities. Ozzie and Harriet stereotypes notwithstanding, the average age of marriage has been rising, households have gotten smaller, and single people now outnumber marrieds. Only about one in five American households consists of two parents with children living at home, according to data from the U.S. Census Bureau. Many baby boomers who are in their empty-nester phase are looking to downsize, and younger Americans faced with a stagnant economy are putting off having families a little longer and are staying put in their apartments or moving home with mom and dad.

The recession accelerated this process of change. Much has been made of the shift to a so-called “new normal” where consumers scale back on debt, purchase less material things, spend more time with family and friends, and seek greater meaning in their lives. It may sound like the wishful thinking of crunchy granola, ivory tower pundits —only it really is happening. Even builders and realtors have taken notice. According to an eye-opening 2009 survey commissioned by Builder magazine, home buyers are no longer willing to drive to the furthest edges of developments to buy the biggest house they can afford. In fact those are precisely the kinds of homes that are not selling.  Real estate development expert Arthur C. Nelson predicts that we will have a surplus of as many as 22 million large-lot homes by the year 2025.

Today’s buyers—surprising numbers of them single women— are looking for smaller houses closer-in, with access to parks and cultural amenities. There is a rapidly growing market for super-energy efficient homes under 1,300 square feet – quite a departure from the 5,000-6,000 square foot McMansions of just a few years past. “We are entering a new era of home building, where buyers look for spiritual satisfaction rather than material gain,” the Builder study concludes. Not the kind of language we’re used to hearing from the construction industry.

While most suburbanites are happy with where they live, growing numbers are increasingly unhappy with how much time they’ve been spending in their cars. More than half of Americans would prefer to walk more and drive less, a 2003 national survey reported, and more than a third would prefer to live in walkable communities, according to research by Jonathan Levine of the University of Michigan and his collaborators. Commuting by car is not only time-consuming and expensive, according to research by the Nobel prize winning economist Daniel Kahneman, it is also one of life’s least enjoyable activities. Most suburbanites don’t want to move to the city; they’d like the best aspects of city life—its liveliness, its amenities, its walkability—to come to them.

Sources: Analysis by Patrick Adler; graphics by Michelle Hopgood of the Martin Prosperity Institute. List of walkable suburbs from Christopher Leinberger. Human capital refers to adults with a bachelor’s degree or more; travel time to work is one-way travel from work to home. Human capital, income, and travel time to work data from the U.S. Census Bureau.

~ ~ ~

Walkable suburbs are some of America’s best places to live; they provide a model for renewal for their sprawling, spread-out siblings. Relatively dense commercial districts, with shops, restaurants, and movie theaters, as well as a wide variety of housing types, have always been a feature of the older suburbs that grew up along the streetcar lines of big metro areas. A 2007 study by suburban redevelopment expert Christopher Leinberger found more than 150 walkable places in America’s 30 largest metro regions–places like Hoboken, Montclair, Maplewood, and Princeton in New Jersey; Stamford and Greenwich, Connecticut; Brookline, Massachusetts; Bryn Mawr, Pennsylvania; and Royal Oak and Birmingham, Michigan, outside Detroit. Newer versions of walkable suburbs can be found in regions that developed later, like Palo Alto in the heart of Silicon Valley; Santa Monica; Boulder, Colorado; Coral Gables, Florida; Decatur outside Atlanta; and Clayton near St. Louis.

These are the places where Americans are clamoring to live, where housing prices have held up even in the face of one of the greatest real estate collapses in modern memory, as Leinberger documents in his book, The Option of Urbanism. The desire for walkability can be measured in dollars and cents. Houses in walkable neighborhoods command higher prices than houses in more distant, less dense locations. A recent study by urbanist Joe Cortright for CEOs for Cities analyzed the sales of 90,000 homes in 15 major metros. In 12 out of 15 of them, walkability commanded a premium—sometimes of hundreds of thousands of dollars in places like the D.C. suburbs.

With help from my colleague Charlotta Mellander, I examined the economic relations of walkability (as ranked in Leinberger’s research and by the walkscore index) across 40 or so other U.S. metropolitan regions. We found that metros with walkable suburbs had greater economic output, higher incomes, and higher housing prices; higher levels of human capital, higher membership in the creative class; higher levels of patented innovations and of high-tech industries and employees; not to mention higher levels of happiness.

It goes both ways. On the one hand, skilled, affluent people prefer walkable neighborhoods, especially when they have young families. Many move from denser city neighborhoods, like Georgetown or Adams Morgan or Capitol Hill, to places like Bethesda, or from Manhattan or Brooklyn to Montclair or Westport or Greenwich, because they can gain security and access to good schools without having to give up amenities they left behind in the city. Whether they move to these suburbs specifically because of their walkability, their urban virtues of mixed use and generally medium-scale density ensure that the innovation and productivity-enhancing effects of clustering continue to be available to them. Just as they did in the city, people bump into each other in coffee shops and other such Third Places; they discuss projects and make deals. This sort of thing is legendary, from Silicon Valley to Nashville’s Music Row.

If America’s oldest suburbs have been its most resilient, they are not its most typical. Many of the inner-ring suburbs that boomed after World War II started out with more modest endowments of human and physical capital; some of them have since lapsed into significant disrepair. But as the metro areas continued to expand, many of these places have seen their land values rebound because they’re closer in. Ferndale, Michigan, just outside of Detroit, has gone far to revitalize itself by promoting its art scene, building affordable housing, and by marketing itself as gay friendly. Arlington, Virginia, has added density by building mixed-use high-rise complexes at its 11 Metrorail stations while encouraging the development of independent businesses in its older neighborhoods. It is a place of exhilarating contrasts, with funky coffee shops, vintage clothing stores, and places to hear indie bands close upon gleaming office towers and chain restaurants. Bellevue, Washington, just across from Seattle which has been retrofitting  and adding density and mixed-land use to its downtown for some time, recently launched a major core-building initiative, the “Bel-Red Area Transformation,” a 900-acre urban infill project that will bring mixed-use development, light rail, new streets, parks, and open spaces to a disused stretch of highway.

But not all of America’s suburbs have the option of developing compact cores along streetcar lines or transit; not all are filled with old, wonderful housing stock that is ripe for gentrification, not all of them are filled with the kinds of mega-talented techies and visionaries who are flocking to Silicon Valley. Many are sprawling, relatively characterless places, with spread out  populations living in cookie-cutter houses on large lots, who commute long distances to work. These suburbs have to rebuild from the bottom up.

In Phoenix, Arizona, three abandoned strip malls, clustered at the corner of 40th and Campbell Streets, have been converted into a restaurant, an upscale grocery, a chic bakery, and a cocktail bar. It’s called Le Grande Orange and it has become a huge attraction, both for customers and local home buyers, who want to live within walking distance of it.

National Harbor, a mix of hotels, residential units, marinas, parks, stores, and indoor and outdoor entertainment venues, is being built on the footings of two previous failed projects in Prince George’s County, Maryland. When completed, it will extend along a mile and a quarter of the Potomac.

Two professors of urban design and architecture, Ellen Dunham-Jones of Georgia Tech and June Williamson of City College of New York, have literally written the book on the challenges and opportunities that our failing suburbs present—Retrofitting Suburbia: Urban Design Solutions for Redesigning Suburbs. Documenting strategies of redevelopment, re-inhabitation, and re-greening, they focus on what to do with superannuated or abandoned malls and suburban office and industrial parks.

As Americans take their business to larger and larger “mega-malls,” the smaller, older ones are left to languish. A 2001 PricewaterhouseCoopers study found that one in five malls were dead or dying – 7 percent were effectively dead and another 12 percent were vulnerable and likely to fail in the near future. But these troubled malls have become the sites of a wave of renewal. Outside of St. Paul, the parking lot that surrounded a dead shopping center built on land fill was turned back into wetlands—which in turn attracted new “lakefront” townhome development. In Lakewood, a suburb of Denver, Colorado, a dead mall on a single 103-acre superblock is being transformed into Belmar—22 urban blocks with parks, bus lines, restaurants, stores, and 1,300 new households—the downtown that Lakewood never had. Eight of the 13 regional malls in the Denver area are now planning or have completed makeovers.

But perhaps the biggest retrofit of all is happening in Tysons Corner, Virginia, the virtual archetype of an auto-dependent, sprawling edge city. Located near the junctions of three major highways, it boasts 25 million square feet of office space and four million square feet of retail space (including one of the largest malls on the East Coast). Though only 18,500 people live there, its population swells to 120,000 every day. Decades ago, developers hailed it as the wave of the future—one of hundreds of new stretched out, auto-dependent satellite centers that would render our old downtown commercial centers obsolete.  But for all the jobs it supports, stores it houses, and tax revenue it generates, Tysons Corner has been losing out of late. Its perpetual traffic gridlock and its lack of human energy have caused homebuyers to choose other places; some of the companies that were headquartered there have even moved back into the District of Columbia.

But now a major retrofit is in motion, led by its major developers and land-owners who seek to make it more walkeable, denser with a more integrated mix of uses, and more connected to the city via transit. When the D.C. Metro announced plans to build an extension to Dulles Airport that would pass through Tysons Corner, the biggest debate was not about whether or not it was needed, but whether or not to bury it underground – an expensive proposition, but one that would free up land for even more integrated mixed-use development. On June 22, 2010, the Fairfax County Board of Supervisors adopted a comprehensive plan that would transform the town from “a sprawling suburban office park” to a “24-hour urban center where people live, work, and play.” There is a certain irony in this. America’s archetypal Edge City is seeking to reinvent itself as a place whose hallmarks will be walkability, green construction, access to public transportation, and abundant public amenities, like parks and bicycle trails—something that sounds very much like a real city. And, what’s also pretty astonishing is it has competition. Nearby edge cities in Crystal City and White Flint have proposed similar transit-based retrofits of hundreds of acres. It is something that needs to happen—and that is starting to happen—across more and more of our suburbs.

There are countless other opportunities for reclamation, all across America. Disused golf courses can be transformed into parks and nature sanctuaries; abandoned car dealerships can be landscaped and developed as new, mixed-use neighborhoods. Whole commercial corridors, as Dunham-Jones and Williamson put it, “are being retrofitted in ways that integrate rather than isolate uses and regenerate underperforming asphalt into urban neighborhoods.” Developers are decking over the parking lots at commuter rail stations and building high- and mid-rise office/commercial/residential complexes atop them; they are cutting streets through formerly walled-off corporate campuses and adding restaurants, stores, and public spaces. While the recession has slowed down most of the suburban renewal projects, it’s provided further impetus for community service and regreening efforts. Abandoned big-box stores are being made over into senior centers and schools and libraries—amenities that are just as essential for neighborhoods as eateries and boutiques. Most of these retrofits, of course, are a far cry from the organic authenticity of “real cities,” Dunham-Jones and Williamson note, but they build community and lay the groundwork for still further redevelopment. Writ large and multiplied across hundreds of other metros, they are remaking the way Americans live and laying the groundwork for future economic prosperity. This type of strip commercial redevelopment will be the major development feature of the next generation.

~ ~ ~

The drive to renew our far-flung suburbs may seem like a tall order for a recession-weary nation, but it’s a lot less farfetched than someone in 1950 saying that those old decrepit urban warehouse and factory districts would turn into some of America’s most vibrant and expensive neighborhoods someday. Not to mention that remaking the suburbs, where so many Americans live, is far, far more important to our overall economic recovery and broader quality of life.

Historically, America’s economic growth has hinged on its ability to create new development patterns, new economic landscapes that simultaneously expand space and intensify our use of it. Our rebound after the panic and long depression of 1873 was forged by our transition from an agricultural economy to an urban-industrial one organized around great cities and their early streetcar suburbs. Our recovery from the Great Depression saw the rise of massive metropolitan complexes of cities and suburbs. The drive to remake our suburbs today, to turn them into more vibrant, livable, people-friendly communities—and, most important, to create the strategically located pockets of density required for innovation and productivity growth—may provide our own troubled era with the fix that it so desperately needs.

That’s the title of this Wall Street Journal story on a new Rockefeller Foundation Initiative to support the creative class.

To assure the city remains the cultural and creative leader of the world, the Rockefeller Foundation is giving more than $3 million to support local artists and arts organizations.

More than 400 applicants vied for a chance to receive two-year grants, ranging from $50,000 to $250,000. Eighteen winners were chosen, including Bowery Arts & Science, to project the works of poets onto walls and buildings in city neighborhoods and the City University of New York Institute for Sustainable Cities in partnership with Artist as Citizen, to create an online atlas that traces the city’s environmental transformation and maps out the future of the city’s environment …

“It’s a new business model that builds the financial resilience of the arts sector while maintaining the artistic capacity,” says Judith Rodin, president of the Rockefeller Foundation.

More than two-thirds of arts organizations in New York plan to reduce their budgets this year and 42% may cancel or postpone programs, according to a May study from the Alliance for the Arts, a nonprofit research group.

Stepping into stem the losses are organizations like the Rockefeller Foundation and the Open Society Institute, which recently awarded $11 million to performing arts groups.

“Even before the recession, New York was losing ground as the world’s creative capital,” Ms. Rodin says. “The stakeholders of the arts and culture in New York do not want to see that happen.”

The full story is here.

The Judgment Call section of today’s Financial Times asks:

Last week, Volkswagen chairman Ferdinand Piëch announced the company was interested in buying Alfa Romeo, the Italian brand. While at Fiat, chief executive Sergio Marchionne says the company is “Italian based but not an Italian company.” In the era of global business, does a company’s national identity matter?

Here’s my answer:

It depends who you are talking about.

For companies, nationality is becoming less important. Their products have to be in the major markets, no matter where they are. You need to source stuff where the capabilities and the prices are right. One thing I learned way back in the 1980s and 1990s, when I was studying the globalisation of auto manufacturing, is that it’s often harder to upgrade and transform existing plants at home than it is to set up not just new factories but whole new work systems in new places. For unions, nationality matters because factory jobs are tied to locations: it’s not as though existing workers can be transported abroad. Workers can benefit when foreign companies invest in new countries and generate new jobs overseas but often those companies prefer to operate without unions. Countries, meanwhile, worry that globalisation will hollow out their economies.

Domestic companies, politicians believe, are more inclined not just to create jobs but to invest in national projects. Maybe so, but foreign companies have considerable interest in making their offshore locations more productive and engaging local employees and communities more effectively. Corporate nationality is losing ground to globalisation. Those that try to prop it up only stand in the way of their own progress.

The rest is here.

My article, “Talent, Technology and Tolerance in Canadian Regional Development,” with Kevin Stolarick and Charlotta Mellander is out in the fall issue of The Canadian Geographer.

Here’s the abstract:

This article examines the factors that shape economic development in Canadian regions. It employs path analysis and structural equation models to isolate the effects of technology, human capital and/or the creative class, universities, the diversity of service industries and openness to immigrants, minorities and gay and lesbian populations on regional income. It also examines the effects of several broad occupations groups—business and finance, management, science, arts and culture, education and health care—on regional income. The findings indicate that both human capital and the creative class have a direct effect on regional income. Openness and tolerance also have a significant effect on regional development in Canada. Openness towards the gay and lesbian population has a direct effect on both human capital and the creative class, while tolerance towards immigrants and visible minorities is directly associated with higher regional incomes. The university has a relatively weak effect on regional incomes and on technology as well. Management, business and finance and science occupations have a sizeable effect on regional income; arts and culture occupations have a significant effect on technology; health and education occupations have no effect on regional income.

The full study is here.

Have a gander at this mind-boggling chart put together by Mike Mandel.

It shows the share of real growth of private fixed assets – stuff like machinery, factories, technological equipment, and, yep, housing. Or, as Mandel puts it: “All the privately owned productive assets of the country – for the decade spanning 1999 to 2009.”

That decade, Mandel points out, saw the slowest growth of any decade of the post-war period. What’s worse, more than half of it was made up of housing. Technology broadly accounted for just 14 percent of the increase. ”[T]he net real increase in housing fixed assets was more than triple the net real increase in IT fixed assets,” Mandel concludes. “That may help explain why we are in such dire straits now — plenty of new homes, not enough investment in IT.”

And that is why we need to Reset the economy away from housing – which played its role in driving the old industrial economy – and toward new technology, knowledge, skills accumulation, and broad human capital development required to drive the emerging creative economy.

Forget the stimulus: This is broad structural adjustment that begs for Washington’s attention.

Video of Richard Florida’s talk at yesterday’s The Economist Ideas Economy event in NYC.