Richard Florida has a phenomenal article on how the current crisis will shape the geography of American cities. Recent growth has focused around growth in increasingly suburban cities clusters and the feedback loop that this created and about how the kind of sustainable economic growth that we want for the future will be about communicating and spreading ideas. But first things first, let us look at a typical housing boom city:
As prices rose, more people moved in, seeking inexpensive lifestyles and the opportunity to get in on the real-estate market where it was rising, but still affordable. [...] Cities grew, tax coffers filled, spending continued, more people arrived. Yet the boom itself neither followed nor resulted in the development of sustainable, scalable, highly productive industries or services. It was fueled and funded by housing, and housing was its primary product. Whole cities and metro regions became giant Ponzi schemes.
The big increase in suburbanization was a product of the World War II era, young men returning from the war, starting families, buying houses in cheaper areas, stores opening to sell to this new market, factories also moving to make use of the cheaper space and plentiful labor, creating jobs, attracting more workers, … This is where it gets interesting:
But that was then; the economy is different now. It no longer revolves around simply making and moving things. Instead, it depends on generating and transporting ideas. The places that thrive today are those with the highest velocity of ideas, the highest density of talented and creative people, the highest rate of metabolism. Velocity and density are not words that many people use when describing the suburbs. The economy is driven by key urban areas; a different geography is required.
This is pretty intuitive to anyone who works in the knowledge economy but I think it is an extremely important observation to keep in mind as we think about how to prepare the country and the economy for the future. Cities, especially well designed ones, offer places where people can gather and communicate and where ideas spread quickly. While the Internet has given us more and more tools for rapid communication nothing can really replace face to face conversations and brainstorming.
Florida goes on to talk about how government should encourage renting instead of homeownership and how homeownership makes our society less nimble, but I want to focus on the large point of building environments in which people can communicate better. There are many environmental and health benefits to properly designed living spaces, but there is also an economic benefit. As we try to determine how to create the sustainable economic growth for the decades ahead we need to remember that government can help create the right environment for entrepreneurship and growth but is very bad at picking the winners. We need to focus on creating environments in which people can work together to start successful new business, big and small, incremental and revolutionary, and make them accessible to more people.
Palo Alto proves that you don’t need the look of a typical city to foster an atmosphere that encourages communication and innovation. We just have to do a better job of connecting “suburbs to cities and to each other, and allowing regions to grow bigger and denser without losing their velocity.”