Menus Subscribe Search

Follow us


Burgh Diaspora

cleveland-river

The west bank of the Flats and the Cuyahoga River in downtown Cleveland. (Photo: Public Domain)

Connecting Neighborhoods, Not Nations: Small Geographic Scales of Globalization

• March 18, 2014 • 10:02 AM

The west bank of the Flats and the Cuyahoga River in downtown Cleveland. (Photo: Public Domain)

The financial crisis turned the world upside down.

Globalization doesn’t connect nation states or urban regions. Via talent migration, globalization connects neighborhoods. Richard Florida with some numbers detailing the economic geography of globalization in the United States:

America’s wealthiest neighborhoods are also concentrated in a relatively small number of metros across the country. … Nearly a quarter of them are in the New York metropolitan area. Another ten percent (102) are found in Greater Washington, D.C. The Bos-Wash corridor — including D.C., Baltimore, Philadelphia, New York, Hartford, Providence, Worcester, and Boston — accounts for 41 percent. On the West Coast, greater L.A. (including Orange County) is home to 9 percent, and the Bay Area as a whole (the Combined Statistical Area that includes Oakland and San Jose) accounts for another 6 percent.

To repeat, 41 percent of America’s wealthiest neighborhoods are concentrated along the East Coast from Boston to Washington, DC. Citing another Richard Florida statistic, the economy of the Bos-Wash corridor is larger than Germany’s (currently the fourth biggest economy in the entire world). But the scale of megalopolis obscures how globalization has changed from a game of bigger is better to a dance with someone you know and trust. The financial crisis turned the world upside down:

The recent financial turmoil has shattered many of the previous assumptions in the 21st-century banking world. It has become painfully clear that moving credit risk round the world in complex chains did not make the system safer and more efficient – as bankers once claimed.

So, as bankers reel in shock, this poses an intriguing new question: will recent experience now force a rethink of assumptions in non- financial spheres too? After all, in recent years so-called “Davos man” has taken it for granted that globalisation, free market capitalism and innovation were all thoroughly good things. But as faith wilts, might business leaders rethink their dependency on, say, cross-border manufacturing supply chains, too?

There are hints of a change afoot. This week, for example, Gerard Kleisterlee, chief executive of Philips, the electronics group, told the Financial Times he expected large companies to move away from far-flung globalised supply chains. He blamed the shift on “green” issues, explaining “a future where energy is more expensive and less plentifully available will lead to more regional supply chains”.

Emphasis added. We no longer trust in numbers. Too big to fail is too big to do business. Boutique globalization:

Blair Effron, one of the founders of the independent investment bank Centerview Partners, says the rise of boutiques has been predicated on their ability to work closely with a much smaller client base. “We are around our clients all the time, not just when they are doing transactions, and try to go as deeply as we can to understand their businesses.” …

… “The balance sheet plays less of a role in deals, which means advice and human capital have become a more wanted quantity,” says Ashley Serrao, a banking analyst at Credit Suisse.

The tilt towards seeking advice from specialist M&A advisers rather than defaulting to one bank for all a company’s financial needs points to an increasingly fragmented professional services landscape. In the case of the banking sector, it also illustrates the migration of talent from bulge-bracket lenders to smaller operations, removed from the regulatory and political wrangling that has dogged big banks since the start of the financial crisis.

The talent migration from bulge-bracket lenders to smaller operations mirrors the real estate refugee’s relocation down the urban hierarchy. The scale of commerce withdraws to the neighborhood. Financial capital follows human capital along lines of trust:

“I cannot scale my business because I cannot hire enough of the quality of people needed,” says Mr Studzinski. “In a boutique you don’t have the balance sheet and product suite to fall back on, so you need people who already have serious, trusted relationships who can bring in business and a network from the start – that’s a rare person.”

Globalization is not dead or dying. Globalization is diffusing from centers of agglomeration. The agents of diffusion are talent itself, gentrifying Cleveland neighborhoods with international social capital amassed in Brooklyn.

Jim Russell
Jim Russell is a geographer studying the relationship between migration and economic development.

More From Jim Russell

A weekly roundup of the best of Pacific Standard and PSmag.com, delivered straight to your inbox.

Recent Posts

October 24 • 4:00 PM

We Need to Normalize Drug Use in Our Society

After the disastrous misconceptions of the 20th century, we’re returning to the idea that drugs are an ordinary part of life experience and no more cause addiction than do other behaviors. This is rational and welcome.


October 24 • 2:00 PM

A Letter to the Next Attorney General: Fix Presidential Pardons

More than two years ago, a series showed that white applicants were far more likely to receive clemency than comparable applicants who were black. Since then, the government has spent hundreds of thousands of dollars on a study, but the pardons system remains unchanged.


October 24 • 12:00 PM

What Makes You So Smart, Middle School Math Teacher?

Noah Davis talks to Vern Williams about what makes middle school—yes, middle school—so great.


October 24 • 10:00 AM

Why DNA Is One of Humanity’s Greatest Inventions

How we’ve co-opted our genetic material to change our world.


October 24 • 8:00 AM

What Do Clowns Think of Clowns?

Three major players weigh in on the current state of the clown.


October 24 • 7:13 AM

There Is No Surge in Illegal Immigration

The overall rate of illegal immigration has actually decreased significantly in the last 10 years. The time is ripe for immigration reform.


October 24 • 6:15 AM

Politicians Really Aren’t Better Decision Makers

Politicians took part in a classic choice experiment but failed to do better than the rest of us.


October 24 • 5:00 AM

Why We Gossip: It’s Really All About Ourselves

New research from the Netherlands finds stories we hear about others help us determine how we’re doing.


October 24 • 2:00 AM

Congratulations, Your City Is Dying!

Don’t take population numbers at face value.


October 23 • 4:00 PM

Of Course Marijuana Addiction Exists

The polarized legalization debate leads to exaggerated claims and denials about pot’s potential harms. The truth lies somewhere in between.


October 23 • 2:00 PM

American Companies Are Getting Way Too Cozy With the National Security Agency

Newly released documents describe “contractual relationships” between the NSA and U.S. companies, as well as undercover operatives.


October 23 • 12:00 PM

The Man Who’s Quantifying New York City

Noah Davis talks to the proprietor of I Quant NY. His methodology: a little something called “addition.”


October 23 • 11:02 AM

Earliest High-Altitude Settlements Found in Peru

Discovery suggests humans adapted to high altitude faster than previously thought.


October 23 • 10:00 AM

The Psychology of Bribery and Corruption

An FBI agent offered up confidential information about a political operative’s enemy in exchange for cash—and they both got caught. What were they thinking?


October 23 • 8:00 AM

Ebola News Gives Me a Guilty Thrill. Am I Crazy?

What it means to feel a little excited about the prospect of a horrific event.


October 23 • 7:04 AM

Why Don’t Men Read Romance Novels?

A lot of men just don’t read fiction, and if they do, structural misogyny drives them away from the genre.


October 23 • 6:00 AM

Why Do Americans Pray?

It depends on how you ask.


October 23 • 4:00 AM

Musicians Are Better Multitaskers

New research from Canada finds trained musicians more efficiently switch from one mental task to another.


October 22 • 4:00 PM

The Last Thing the Women’s Movement Needs Is a Heroic Male Takeover

Is the United Nations’ #HeForShe campaign helping feminism?


October 22 • 2:00 PM

Turning Public Education Into Private Profits

Baker Mitchell is a politically connected North Carolina businessman who celebrates the power of the free market. Every year, millions of public education dollars flow through Mitchell’s chain of four non-profit charter schools to for-profit companies he controls.


October 22 • 12:00 PM

Will the End of a Tax Loophole Kill Off Irish Business and Force Google and Apple to Pay Up?

U.S. technology giants have constructed international offices in Dublin in order to take advantage of favorable tax policies that are now changing. But Ireland might have enough other draws to keep them there even when costs climb.


October 22 • 10:00 AM

Veterans in the Ivory Tower

Why there aren’t enough veterans at America’s top schools—and what some people are trying to do to change that.


October 22 • 8:00 AM

Our Language Prejudices Don’t Make No Sense

We should embrace the fact that there’s no single recipe for English. Making fun of people for replacing “ask” with “aks,” or for frequently using double negatives just makes you look like the unsophisticated one.


October 22 • 7:04 AM

My Politicians Are Better Looking Than Yours

A new study finds we judge the cover by the book—or at least the party.


October 22 • 6:00 AM

How We Form Our Routines

Whether it’s a morning cup of coffee or a glass of warm milk before bed, we all have our habitual processions. The way they become engrained, though, varies from person to person.


Follow us


Politicians Really Aren’t Better Decision Makers

Politicians took part in a classic choice experiment but failed to do better than the rest of us.

Earliest High-Altitude Settlements Found in Peru

Discovery suggests humans adapted to high altitude faster than previously thought.

My Politicians Are Better Looking Than Yours

A new study finds we judge the cover by the book—or at least the party.

That Cigarette Would Make a Great Water Filter

Clean out the ashtray, add some aluminum oxide, and you've (almost) got yourself a low-cost way to remove arsenic from drinking water.

Love and Hate in Israel and Palestine

Psychologists find that parties to a conflict think they're motivated by love while their enemies are motivated by hate.

The Big One

One company, Amazon, controls 67 percent of the e-book market in the United States—down from 90 percent five years ago. September/October 2014 new-big-one-5

Copyright © 2014 by Pacific Standard and The Miller-McCune Center for Research, Media, and Public Policy. All Rights Reserved.