Ed Glaeser asks: “If the world is so flat, then why are cities growing so quickly, especially in the third world?” He explains:
In the developing world, urbanization has often taken the form of exploding populations in megacities. Mumbai’s population increased to 19 million in 2007 from 10.8 million in 1985. Bangalore, the urban symbol of the flat world, has had its population double over two decades, to 6.8 million today from 3.4 million in 1985.
The growth of these cities and the continuing strength of older urban areas – like New York, London and Paris – is no accident. Globalization and new technologies attract people to big cities, by increasing the returns to urban proximity …
Globalization and technological change have increased the returns to being smart; human beings are a social species that get smart by hanging around smart people.
This powerful clustering force – identified by Jane Jacobs and Robert Lucas, among others – is making the world more geographically concentrated everyday.
Figuring out ways to adjust to it – especially how to address the huge costs being borne by people and places being left behind – remains one of the most pressing domestic and international public policy questions of our time.
In a recent issue of the American Interest related to The Ends of Growth, we argue that, “Our focus on economic growth is misplaced and our leaders’ conception of the U.S. economy is misplaced. No wonder were in such a mess.” Defining Prosperity suggests that both republicans and democrats have an outdated understanding of our political system. The republicans have an absence of principle and the democrats have an obsolescence of purpose.
The next America needs to have an understanding of what America is. Economic growth, or its absence, is merely an indicator on the dashboard of our ongoing national journey. The engine that propels American capitalism forward is entrepreneurship; the fuel is opportunity; the work of foundations recycles the energy of society, making progress and widespread prosperity sustainable.
This century – the global century – will rest on sustainable development in global cities driven by entrepreneurs and fueled by venture capital. However, what will make this happen is the reconstitution of wealth on a global scale the likes of which has never been seen.
Wealthy individuals from around the world will have to learn from the American model that entrepreneurship leads to wealth, wealth needs to be given back to create opportunity for the next generation. The entrepreneurship-philanthropy-opportunity cycle is the inner dynamic of American capitalism and the source of its prosperity. The strengthening of it in the global economy is our most important job today.
In the research that I’ve done connecting the history of ideas with respect to modern economics, modern urban form, and modern urban youth cultural production and reproduction, I’ve had to bring together several disciplines to animate a single narrative. In academia however, there’s still something of a reticence to remix culture when dealing with disciplines, so it’s been tricky. That having been said, kudos to my local university library for ordering a book that I have been waiting for for quite some time: Urban Informatics.
Taking a long view of urban informatics, the simultaneous urbanization and global economic integration we are currently experiencing can best be seen as a refinement of the city as a system for information processing. In the pre-electronic era, face-to-face proximity and the clustering of functions was the most efficient means of replicating, transmitting and searching for information in social and economic networks. Over time, new tools augmented this function, but in a sense the city itself is our original and greatest information technology.
So it’s the idea that once the shape for the city emerged, bringing us into our current spatial relations, and technology advanced, that there was another layer of connectivity and expression that was also emerging. To understand the way that this new digital layer helps us express and improve our old analogue tendencies requires what is called a “transdisciplinary” approach.
It combines members of three broad academic communities: the social (media studies, communication studies, cultural studies, etc.), the urban (urban studies, urban planning, architecture, etc.), and the technical (computer science, software design, human-computer interaction, etc.)
In a final, very evocative comparison from Townsend’s foreword:
To use a crude analogy, if aerial photography showed us the muscular and skeletal structure of the city, the revolution in urban informatics is likely to reveal its circulatory and nervous systems. I like to call this vision the “real-time city”, because for the first time we’ll see cities as a whole the way biologists see a cell – instantaneously and in excruciating detail, but also alive. This is in contrast to the way astronomers see a heavenly body – as it was, some time ago, light-years in the past.
As I was taking all of this in, I began to think about articles like this about smartphone use in classrooms, and stats like this letting us know that over 50 percent of the world not only lives in cities, but that over 50 percent uses a cellular phone, the implications of this digital nervous system that has been emerging began to get more broad. I began to wonder how it would affect expression, particularly with respect to the urban arts.
Just a will, a Wiimote, flash technology and German ingenuity, and graffiti’s gone digital.
The implications are pretty clear: once we break down some disciplinary silos and get this circulation going, the future will certainly be an interesting place.
Richard Florida will discuss economic competitiveness, demographic trends, and cultural innovation at the Global City Forum in Abu Dhabi on April 7. Over 1,000 urban decision-makers from 250 cities will be gathered at this event.
Global City is the only international forum where public and private leaders exchange best practices and share sustainable urban strategies. This unique networking platform dedicated to mayors, urban planners, decision-makers and leaders, will be held in Abu Dhabi in April 2009 – for the first time in the Middle East.
What do you consider the greatest challenges of globalization and sustainability that face your city?
Rana and Richard Florida and event organizers, Reed Exhibitions
Global City, Abu Dhabi - Emrites Palace
Richard's representative from Abu Dhabi
Richard giving the morning keynote
Mr. Eid AlMazroi advisor to the chairman of the Department of Planning and Economy, Rana & Richard Florida
The fall of U.S. and British banks has been swift and thorough-going as these maps from the Financial Timesshow. In 1999, U.S. banks were far and away the dominant players in global finance. Today, Chinese banks have a market capitalization as big as U.S. and British banks combined. Worldwide, bank capitalization as a share of global GDP has declined from around 12 percent to less than five percent. In the UK, bank capitalization has crashed from more than a quarter of GDP to less than five percent.
Bonus:Click here for a list of the world’s 50 safest banks.
Globalization, it’s commonly thought, has made the economies of major countries more integrated. New research by economist Kamil Yilmaz uses a global “spillover index” to gauge how much the economic shocks in one country spillover to other countries, tracking this spillover or integration effect from 1960 to today (pointer via Mark Thoma).
Since September 2008, the index has jumped higher than ever, ashis chart (above) shows, leading Wilmaz to conclude:
The spillover plot as of December 2008 shows how current global recession starkly differs from past recessions. Since the collapse of Lehman Brothers, in a matter of four months all major industrialized economies of the world are pulling each other down, with the US playing a leading role. There is a desperate need for coordinated policy action to stop the free fall in industrial output around the world. G20 countries should agree to increase the size of fiscal stimulus packages and coordinate the way these policies are implemented. Obviously, these policies cannot be expected to have full impact unless the US government comes up with a feasible plan to clean up the balance sheets of its banks from toxic assets.
What are the odds of this actually happening? And what might be the mechanism for achieving such a coordinated global response?
In the New York Times, Alex Kotlowitz visits my home town of Cleveland, Ohio to find that it is all boarded up. I grew up in Cleveland right in the middle of it just a few miles from the famous Cuyahoga River. Cleveland was a modest town with lots of blue collar workers in scores of industries. The city had a very large and very substantial housing stock. Over the years, as industry declines, the creative class fled, and as technology evolved the city declines. When a city like Cleveland declines it leaves behind something, and that something is an abandoned housing stock. Cleveland now has between 10,000 and 15,000 abandoned and boarded up houses. Of course this is not new. When I was growing up in Cleveland, the whole east side of the city was abandoned, houses were torn down, and the Cleveland Clinic expanded in much of the space, the rest was left abandoned like my old neighborhood.
This is in part a legacy of industrial restructuring, the sub prime mortgage problem, and the long term subsidy to housing dating back to the great depression. Whatever the cause it seems to be well picked up by Richard in his article in the Atlantic. Cities come and go. In an article by Phil McCann and I we show that this has been the case for over 1,000 years and is nothing new. Baghdad 1,000 years ago was the most important city in the world.
The question is how do we deal with the housing abandonment in this country. For a large part of the problem is that we have an overstock of housing that no one will ever use. Should we start the write off of the trillions of dollars worth of old abandoned, or nearly abandoned housing, wipe the slate clean and just move on? Perhaps as Richard suggests we should just abandon the support for home ownership, eliminate the tax subsidy, and use the savings to clean up and abandoned housing mess.
In a recent article in the Washington Post,Reid Hoffman has suggested that the way out of this crisis is not with a stimulus to the “same old same old” but a return to the 1990s when small firms and entrepreneurship led the way to technological change through innovation from start-up firms. In fact, that trend started in 1982 and lasted for over 20 years as year after year new start-ups brought us the wonders of inventions that changed our lives for the better. Can this work again this time in green energy, sustainable development, and plug-and-play cars?
This is a good question but during the last quarter of the 20th century the economy was growing, we had a robust financial system, and technological innovation. Today, we have a mini-depression that may turn into a major one. The stimulus package and the financial bailout were needed to stabilize the economy and the financial system and it’s nowhere near finished.
I support policies to promote entrepreneurship but this is a long-term strategy. Do we really believe that immigrants are the way to solve our economic problems? Will they return again? We should start to lay the groundwork for entrepreneurship but it is not a short-term solution to our financial problems but a solution to our long-term challenges.
If the economic crisis deepens, which areas of the world are most vulnerable to political turmoil and instability, and what form might that take? Is there any danger that the current economic crisis could unleash additional forces of violent extremism and upheaval above what we already face, and perhaps on a par with those spawned by the economic turmoil of the 1920s and 1930s?
Money quote: The United States is now the great creator of failed states.
And this:
Our global system is really a network. We like to champion Net-strengths: how networks degrade gracefully, node by node; how a network can lose many nodes and still function. But networks can also be surprisingly vulnerable: threats race from periphery to center, and can spread quickly to everywhere.
But there is another network fragility. Our civilization of modernity is dependent on a surprisingly small constellation of “creative cities” (Richard Florida), just as was the world of late antiquity (Peter Brown). A global system that depends on the economic and creative exchange between just 40 nodes, or city clusters worldwide, represents a fragile network — especially in the face of what lies ahead.
A mature global system already under stress and visibly ineffective on defense thus can be overstressed by exogenous shock. Shocks lead to both deglobalization and decompression.
Deglobalization means the system cores pull away from each other, look inward, and hunker down. Decompression follows as trade declines and networked relationships attenuate. As deglobalization and decompression gain momentum and become self-reinforcing, there will be more and more abandoned places. It is there — as it is now — that new identities and ideas spread and root.
For the first time in over a decade, the DOW closed below 7,000. For a little history, the DOW was around 1,000 in 1982 and then steadily rose to 14,000 over the course of 25 years. We have now returned 50 percent of that and the future does not look very good for getting it back anytime soon. The Nikai in Japan fell from 30,000 in 1989 to just around 7,500, losing more than 75 percent of its value in 20 years.
What is happening is that we are at the end of an era. It is the end of highways, sprawl, cheap everything, and we are also at a the end of globalization as we knew it.
How to move forward is the $64,000 question. What is clear is that we are just thrashing around, like a whale beached on the shore. There is no one around to put us back in the water. Perhaps the best solution would be for someone to slay the whale. In the Farrow Islands, when a whale beaches they come out with knives, jump on its back, and hack it to death. They have a big dinner of whale meat. In California, they call out a team of doctors to examine it and then it dies anyway. No dinner!
The problem is that everyone (read: economists) studied the 1930s and how to get out of the depression. People forgot that what got us into the 1930s depression was the 1920s! What got us into this depression is the 2000s (leverage, borrowing, housing investment, deregulation) – they were just like the 1920s. One thing is clear, the best way to heal this event is perhaps just to wait it out and not spend trillions and trillions to try and save it. We will heal in due time.
