Creative Class

Seeking Alpha comments on why railroads will make us richer:

“Along the northeastern corridor, there are cities that made the jump from industrial to post-industrial economy fairly successfully, namely, those that had developed knowledge-intensive industries like finance or technology even as industry was beginning to leave center cities. In between these successful cities are interspersed others that were heavily reliant on industry, and which didn’t fare nearly as well over the past half century (Baltimore is the best example).

“But where the industrial core in the Midwest has seemingly entered an irreversible decline, rotting industrial hubs along the northeast corridor hit a bottom and began to recover over the past decade. Baltimore continues to lose people, but its economy is fairly stable, and much of the city has seen significant redevelopment.

“The reason for the turnaround is proximity to thriving markets. The ability to take advantage of certain aspects of the Washington metropolitan market has strengthened Baltimore. Similarly, New York has generated economic opportunity for much of the northeastern corridor, touching off redevelopment in Connecticut, New Jersey, and Pennsylvania. One of the chief lessons of economic geography is that a good way to get rich is to be near other rich places; remoteness is costly. If we could shift all the cities in the Midwest closer to each other, and then pick them up and move then nearer to the northeastern corridor, we would go a long way toward restoring the economic viability of many Midwestern cities.

“We can’t literally do that, but we can effectively accomplish something similar by improving physical links within the Midwest and between it and other regions. We could decongest highways and airports with congestion charges, for instance, and plow the proceeds into high-speed passenger and freight rail connections among Midwestern cities and between the Midwest and the northeastern corridor (as well as healthy Canadian metropoles. Richard Florida makes the case here).”

Absolutely. Amtrak and its Acela have played important roles in the economic transformation not just of Baltimore but of Philadelphia and, I would argue, Washington, D.C. Not to be overly controversial to my Beltway-area friends and colleagues, but there’s no getting around the fact that better rail connections have (at least in part) enabled the region’s resurgence as in effect a “suburb” of NYC. A whole raft of companies that might have located in the NYC region have been able to locate in greater Washington, D.C. instead, taking advantage of its talent pool, relative lower housing costs, and quality of life. There has been a veritable mass migration of journalistic talent to the region. And my own figures on industry and occupational location show a surge not just in media jobs generally but in broadcasting - specifically, the kinds of jobs which were once more highly clustered in and around NYC. And, of course, the effect of the Metro system on redevelopment in the city and in Arlington is well understood.

So, transportation infrastructure plays a big role in economic development by opening up new spaces and by allowing for the redevelopment of old spaces in more intensive ways. There’s not many transport technologies that promise to do that today for mega-regions straddling major cities except high-speed rail. High-speed rail is a technology that “fits” the geographic scale of mega-regions and can help spur more intensive development of them.

The point about the industrial Midwest and Canada is spot on. Momentum is building in Canada for a high-speed rail link from say Windsor (just above Detroit) through Toronto over to Ottawa and onto Montreal and Quebec City. This would be a way of gluing together Canada’s largest mega-region and spurring in-fill development along its corridors. With greater Toronto growing and immigrants continuing to flood in, it would stretch out the development frontier, while building size and scale across the entire corridor over time.

There are near constant calls to “do something” for the great industrial Midwest that “built America.” High-speed rail is a much better way to go than any auto or other bailout. High-speed rail holds the potential to link declining cities along the Great Lakes corridor and tie them into the more vibrant economies of Chicago and even Toronto. Baltimore has bounced back in part because of its links to and cost advantage over D.C.; The same can be said of Philadelphia and NYC, or Providence and Boston.

Of course high-speed rail will not magically save declining places. The greater Detroit region for example needs to shift its economic base away from autos and toward the research and technology capabilities of area universities (like the University of Michigan in nearby Ann Arbor and Michigan State in not-too-far-away Lansing); and by leveraging the commercial capabilities of its world-class design and popular music industries:  (How to stem the flow of top commercial talent like Jack White to Nashville?) But it can also be repositioned as a suburb of sorts for Chicago and potentially even Toronto. (My wife, who is from greater Detroit, and I make the drive regularly in under four hours). The Toronto to Windsor link may be the key here; Windsor is across the river from downtown Detroit and can be easily connected via subway.

Milwaukee-Chicago is a no-brainer. Pittsburgh and Cleveland can be tied in too. Perhaps, over time, Pittsburgh could even be connected to greater Washington, D.C. (When I lived in Pittsburgh I made the drive to D.C. in roughly four hours). High-speed rail would make this quite manageable especially in jobs that are flexible and require only intermittent commutes.

Mega-region hubs are becoming more economically central to our spiky world. There’s no getting around this. Chicago has in effect sucked up scads of economic functions that used to be done by other second- and third-tier Midwest cities. On the east coast, Baltimore and Philadelphia and, yes, Washington, D.C. have prospered because of transit connections, including relatively fast rail, which has allowed them to grow by hiving off pieces of economic activity attracted into the world city orbit of New York.

What we are seeing is the further deepening of the spatial division of labor: Suburbia is being stretched in a process of ever more intensive and expansive geographic development.

There’s a lesson there for the industrial Midwest and for other regions of the country, North America, and the world. Those places that positon themselves for this new era of spiky, geographic growth and which have the infrastructure that connects them to major centers will prosper, while those that do not will likely fall behind even further.

The Obama administration recently pledged $8 billion for high-speed rail. While just a fraction of the overall stimulus package and just a drop-in-the-bucket of what is needed to build a real national high-speed rail network, the funds generated considerable hub-bub and, for some, outright jubilation among regionalists, environmentalists, energy efficiency advocates, and those who have long fought for improved U.S. rail transit. It also has encouraged a mad political scramble for funds as regions position for federal monies. In Canada, there is a mounting drumbeat for high-speed rail connecting Windsor, Toronto, Ottawa, Montreal, and Quebec cities and also for connecting Vancouver to Seattle.

For starters, here’s a map of proposed U.S. high speed rail projects:

It’s clear that the U.S. and North America lag far behind countries like Japan with its Shinkansen or France with the TGV on high-speed rail connectivity.

But how to base decisions on what routes get funded? How to avoid a purely political outcome and create a framework for investing in high-speed rail that makes the most economic sense?

Here’s a map of North America’s mega-regions:

The largest of North America’s mega-regions is the great “Bos-Wash” mega-region initially identified by the geographer Jean Gottman. It stretches down the east coast corridor encompassing the east coast cities of Boston, New York, Philadelphia, Baltimore, and Washington, D.C., and is home to more than 50 million people and produces more than $2.2 trillion in economic activity. Its economic output is greater than that of the UK and France and more than double that of India or Canada. The second biggest, which Gottman dubbed “Chi-Pitts,” covers more than 100,000 square miles and is home to 46 million people, producing $1.6 trillion in economic output. Taken together, America’s mega-regions produce more than three-quarters of its economic output and the lion’s share of its innovations (see the table below):

In the main, the proposed routes map pretty well to U.S. mega-regions. Given the fact that megas are dense and interconnected centers of population and economic activity, it makes sense to develop high-speed rail connections within mega-regions first, and later develop connections between contiguous ones, say for example down the east and west coasts or across the Great Lakes region.

The table below, compiled by Patrick Adler at the Martin Prosperity Institute, shows the distance between key cities and then compares the driving times (calculated on Google) to current top high-speed rail speeds (from Transportation Quarterly):

Philadelphia becomes a veritable suburb of NY, its commute time shrinking from nearly two hours to slightly more than a half hour. Washington-NYC and Boston-NYC become hour-and-a-half trips. San Diego becomes a bedroom suburb of Los Angeles. And commute times shrink considerably across Cascadias’ main cities: The time to get from Portland to Seattle shrinks to just over an hour, while travel between Seattle and Vancouver is reduced to less than an hour. It would take just slightly longer than an hour and a half to get from Charlotte to Atlanta. And commutes between Dallas and Houston and Dallas and Austin shrink to an hour and a half or less.

Better high-speed rail connections promise considerable economic efficiency gains. And they also promise to relieve the psychological burdens of commuting by car. Research by behavioral economists like Nobel prize-winner Daniel Kahneman finds that long car commutes are among the things that most adversely affect our happiness.

But there is an even bigger and more fundamental reason to connect our mega-regions through high-speed rail. As I recently argued in The Atlantic, our current economic crisis promises to powerfully reshape America’s geography. There will be winners and losers, and a new economic geography will emerge in time.

Geographic expansion, as I noted there, is a fundamental axis of economic recovery and development. Recovery after the Long Depression of the 1870s was in part powered by the rise of the large-scale industrial city that grew up around raw materials, ports, and railroads, expanding outward along its early street-car lines. While many see the rise of Keynesian spending (particularly World War II spending) as key to U.S. recovery from the Great Depression of the 1930s, post-war recovery was propelled by the rise of another era of geographic expansion - the rise of the Sunbelt and the massive growth of auto-oriented suburbia. Demand for cars surged to move workers between home and work. And suburban houses all had to be filled with the refrigerators, washing machines, dryers, television sets, and consumer appliances rolling off America’s assembly lines. This post-war auto-oriented “fordist” development model worked to ensure that mass production and mass consumption could grow together fueling the expansion of America’s great golden era.

But fordism has come smack up against its limits. It’s cheaper to produce many industrial goods off-shore, and the geography of post-war suburbia stretched to its breaking point. It may well be impossible for sustained recovery to come from breathing life back into the banks, auto companies, and suburban-oriented development model. A new period of geographic expansion - or what geographers term a “new spatial fix” - may well be needed to spur a renewed era of economic growth and development.

The history of capitalist development is the history of the more expansive and intensive use of space. Post-war suburbs, the rise of larger metropolitan areas, the development of multi-nodal regions with edge cities as well as downtown cores are part and parcel of this process of geographic development. It’s a mistake to consider suburban sprawl a backward step (as some do), and to see only more compact urban style back-to-the-city development as a path to the future. The rise of the mega-region is the cornerstone of a new, more intensive and more expansive use of space.

New periods of geographic expansion require new systems of infrastructure. Ever since the days of the canals, the early railroad, and streetcar suburbs, we’ve seen how infrastructure and transportation systems work to spur new patterns economic and regional development. The streetcar expanded the boundaries of the late 19th and early 20th century city, while the railroad moved goods and people between them. The automobile enabled workers to move to the suburbs and undertake far greater commutes, expanding the geographic landscape still further.

Mega-regions, if they are to function as integrated economic units, require better, more effective, and faster ways move goods, people, and ideas. High-speed rail accomplishes that, and it also provides a framework for future in-fill development along its corridors. Just as development filled in along the early street-car lines and the post-war highways, high-speed rail will encourage denser, more compact, and concentrated development with growth filling in along its routes over time. Spain’s new high-speed rail link between Barcelona and Madrid not only massively reduced commuting times between these two great Spanish cities, according to a recent New York Times report, it has also helped revitalize several declining locations along the line.

It’s time to start thinking of our transit and infrastructure projects less in political terms and more as a set of strategic investments that are fundamental to the speed and scope of our economic recovery and to the emerging shape of the economy, society, and communities of the future.

Portland got word yesterday that the Feds will provide $75 million for expansion of our central city streetcar line to the East Side. Doubly good news here because it will provide orders for the new United Streetcar company, a subsidiary of Oregon Iron Works in Portland’s suburbs. The only U.S. streetcar manufacturer, United, is hoping for orders from around the country.

I thought I’d see if I could find other new rail transit announcements in other cities and didn’t find much, just one announcement of funding for light rail in Phoenix. But I expect there will be others soon, between the Stimulus and the new budget. I did find this list of current projects.

The Portland Streetcar announcement didn’t show up in my Google search, nor in the current projects list, nor on the U.S. Department of Transportation. So there may have been other local announcements. Does anyone know of new projects in your town?

Richard delivered the keynote to an enthusiastic audience at the final day of the Festival of City - Enterprise in Maniago. Afterward, we enjoyed the local flavor at a restaurant made famous by a visit by Bill Clinton. Il Rifugio is surrounded by a natural park in the Friuli Venezia Giulia region. Our dinner guests included well-known sport clothing manufacturer, Lotto - Andrea Tomat and President of Confindustria Veneto Region, Professor Alberto Felice De Toni, and Filiberto Zovico, Director of Festival delle Città Impresa.

Beautiful mountains of Friuli Venezia, enroute to Maniago

Richard accepting a gift from event organizers

Rana Florida, Richard Florida, Filberto Zovico

Richard and Rana Florida enjoying dinner with event organizers at a mountain side restaurant in Friuli Venezia

Richard and Rana departing by water taxi to the Marco Polo International Airport

Emma Rothschild in the New York Review of Books (h/t: Brian Knudsen):

An enduring bailout, or a new deal for Detroit, would be different. It would be an investment in ending the auto-industrial society of the late twentieth century. This would involve innovation in public transportation, and in the infrastructure that would enable people to work at home or close to home. It would engage the information industries in making public transport more convenient, more enticing, and more secure. It would be open to the sorts of improvements that have been suggested in the expansion of rail and bus transportation in China, Japan, and France, for example, and in India by the information technology services companies.^[18] It would be an investment, even, in the old promise of “automotive” freedom, of owning a car but not having to use it, and of being able to go anywhere at any time, in Asia as in America. The improved public transport would be used for routine travel, such as the “work, school, and medical/dental trips” on which public transit use is already concentrated, according to the National Household Travel Survey. The new hybrid vehicles, in a post-auto-industrial society, would be available for the other trips that the survey describes as “family, personal,” or “social, recreation, eat meal.”^[19]

UCLA’s Eric Morris, writing over at Freakonomics makes the case for pricing our roads.

For decades, economists and other transportation thinkers have advocated imposing tolls that vary with congestion levels on roadways. Simply put, the more congestion, the higher the toll, until the congestion goes away.

To many people, this sounds like a scheme by mustache-twirling bureaucrats and their academic apologists to fleece drivers out of their hard-earned cash. Why should drivers have to pay to use roads their tax dollars have already paid for? Won’t the remaining free roads be swamped as drivers are forced off the tolled roads? Won’t the working-class and poor be the victims here, as the tolled routes turn into “Lexus lanes”? …

Ultimately, there’s no free lunch; instead of paying with money, you pay with the effort and time needed to acquire the good … [D]elay is an externality imposed by drivers on their peers … In the end, of course, everybody pays, because as we impose congestion on others, others impose it on us …

Markets work best when externalities are internalized: i.e., you pay for the hassle you inflict on others … Using tolls to help internalize the congestion externality would somewhat reduce the number of trips made on the most congested roads at the peak usage periods; some trips would be moved to less congested times and routes, and others would be foregone entirely. This way we would cut down on the congestion costs we impose on each other.

He’s absolutely right. It’s a big win-win really - better for individuals who can get from point A to point B faster (also, recall being stuck in traffic is one of life’s least enjoyable activities) and generate higher overall productivity by increasing mobility and connectivity, and replacing wasted (stuck-in-traffic) time with more productive endeavor. What better time to start than with the new stimulus package.

“Taken from Seputar Indonesia Daily Newspaper published on Sunday, 14 September 2008. This caricature was the complement of Ayu Utami column titled “Bangkitnya Kelas Kreatif” that inspired by the book titled The Rise of Creative Class by Richard Florida.”

My summer was quickly fading, filled with conference calls and meetings so I decided we needed a fun getaway. I struggled for a long time as to whether we should voluntarily take the risk on a flight to the east coast. Against my better judgment, I booked a connector from YYZ - Toronto to AUK - Nantucket with a connection in BOS-Boston Logan. YYZ to BOS, to my surprise, was smooth sailing - no delays, no thunderstorms. When we arrived in Logan, I was of course peeved that we had to screen security yet again for a connection. But the lines were short and the TSA agents upbeat and jovial (unlike the surly team at LGA). As I approached the gate, my heart jumped when I saw the size of the Cape Air flight. A tiny puddler with nine seats.

Cape Air - Welcome Aboard

I started to reroute us in my head. We could drive or take the ferry, I thought. But I was quickly escorted to the tiny plane and to the co-pilot seat where my legs were pushed up against the second steering wheel.  Any slight movement on my part and any one of the hundred year-old buttons and nozzles could have been accidentally hit.

My legs up against the do not touch buttons!

On my window, there was a small warning sticker with the following scribble, “Do Not Open Window!’

See crazy GPS!

All nine of us got on board, fastened our belts, and were off.  As we went tearing down the runway, the pilot held open his window held to allow for ‘air conditioning’ for the poor suffocating passengers in back, then quickly closed the window as we were airborne.

I could not look down on the beautiful body of water below for the entire duration of the flight as the turbulence was so bad it felt like we were dropping out of the sky. My only solace was the pilot’s cavalier attitude. Every time we fell down, I looked over to see a very bored pilot - which calmed my nerves.

With gas prices on the rise and airlines going bankrupt, remote locations are increasingly getting relegated to these third tier flights.  My advice for all you creative class travelers is to fly into a major city, then find other means of transport to get you to your ultimate destination.

“As far as airlines are concerned, you are no longer just a passenger. You are an opportunity to raise “ancillary revenue.” And when it comes to charging for things that were once free, the sky’s the limit. In just a few short months, the airlines have discovered to their glee that their customers are willing to pay for most everything from checked bags to soft drinks to pillows and blankets — and are doing so without much fuss. With that knowledge in hand, the airlines aren’t about to stop.”‘

Ryan Avent, drawing on the research of Ed Glaeser and his collaborators, suggests that higher energy and transportation costs may spur a great “unflattening.”

In recent decades, global trade patterns–that is the structure of
supply chains and mix of products shipped–have developed in a world of
more or less persistent declines in transportation costs (and, one
presumes, the expectation that those declines would continue). In the
same way, our domestic urban geography has evolved with certain
expectations about transportation cost trends in mind.

Some non-trivial portion of those transportation cost declines,
actual and expected, are likely not sustainable over the long-term.
Depending on just how off expectations were, we could see some
interesting changes in economic patterns. For one, I’d expect a global
squishing of supply chains and cities. For another, I’d expect the mix
of shipped goods to move toward high value items, which have a lower
ratio of shipping costs to sale price. That may mean a return of some
production jobs to service-oriented economies.

He’s got a very good point.