From innovation springs prosperity. This is the economic geography of today. Places with a high concentration of college degrees also boast the highest per capita incomes. But many metros aren’t so fortunate. Ironically, according to Paul Krugman, Americans are moving the wrong way. The mass migration streams from rich areas to poor, where the rents aren’t too damn high. Because innovation is a slave to extreme distance decay, prosperity occurs where the rich like to live. But what if innovation weren’t so dependent on close proximity? What if, indeed:
[Multinational enterprises] face an important constraint in expanding their geography of innovation – that of producing and transferring knowledge across borders. It has been 20 years since the classic study by Jaffe et al. (1993) on the localization of knowledge flows, as measured by patent citations. In the broader literature on spatial agglomeration, results from this study were interpreted as evidence that knowledge flowed more easily across spatially proximate – rather than spatially distant – agents. In other words, knowledge spillovers are largely local in nature. In subsequent work, Agrawal et al. (2006) examine the role of social relationships in facilitating knowledge flows by estimating the flow premium captured by a mobile inventor’s previous location. They find that knowledge flows to an inventor’s prior location are approximately 50% greater than if they had never lived there and conclude that social relationships, not just physical proximity, are important for determining flow patterns.
The “classic study by Jaffe et al. (1993)” dominates the discourse. For innovation, proximity is everything. “Agrawal et al. (2006)” falls on deaf ears. We must have innovation districts.
For all the hand-wringing about being in a super dense global city, a study of historical creative migration yields a surprising (if you haven’t read Agrawal et al. or its subsequent literature) geography:
Other findings show that despite the dependence of the arts on money, cultural centers and economic centers do not always coincide, and that the population size of a location does not necessarily point to its cultural attractiveness.
Emphasis added. OK, I’m highlighting the exception instead of the rule. However, “cultural attractiveness” is the variable in play. On the wings of migrants come innovation. Or, so Hurricane Katrina might have me believe:
The hurricane and its aftermath made plain the federal government’s inability to accommodate its most disadvantaged citizens, as well as the implications of hyper-segregation and concentrated poverty in our cities. But it also provided a rare opportunity for the most marginalized families: Although those displaced had little say in where they would end up, Katrina catapulted some low-income African American families out of neighborhoods characterized by high levels of poverty and into new, non-poor, and racially integrated ones with greater opportunities for socioeconomic mobility. Most survivors were relocated to cities such as Baton Rouge, Dallas, and Houston. Despite the nightmarish situation these evacuees traversed, new research suggests that hurricanes have the potential to facilitate long-run improvements in the economic and social standing of some of the country’s most vulnerable populations.
I’m sandbagging this one in hopes you will at least read the article. Migration, regardless of race, ethnicity, gender, or sexuality (not to mention class), can be a poverty-buster. As Michael Clemens taught me, migration is economic development.