June 18, 2012

The false promise of cyberspace

Aaron Renn makes an interesting argument in City Journal:
Many of Chicago’s woes derive from the way it has thrown itself into being a “global city” and the uncomfortable fact that its enthusiasm may be delusional. Most true global cities are a dominant location of a major industry: finance in New York, entertainment in Los Angeles, government in Washington, and so on. That position lets them harvest outsize tax revenues that can be fed back into sustaining the region. Thus New York uses Wall Street money, perhaps to too great an extent, to pay its bills.
Chicago, however, isn’t the epicenter of any important macro-industry, so it lacks this wealth-generation engine. It has some specialties, such as financial derivatives and the design of supertall skyscrapers, but they’re too small to drive the city. The lack of a calling-card industry that can generate huge returns is perhaps one reason Chicago’s per-capita GDP is so low. It also means that there aren’t many people who have to be in Chicago to do business. Plenty of financiers have to settle in New York, lots of software engineers must move to Silicon Valley, but few people will pay any price or bear any burden for the privilege of doing business in Chicago.

In my day, Chicago was the probably the best place to be if you were in the consumer packaged goods marketing services business. But, you didn't have to be there. You could be anywhere there was a big airport with lots of direct flights to other cities.

I wonder whether wealth is becoming ever more squeezed into single industry-dominant cities? Despite the rise of cyberspace, industries seem to be flocking at least as much as ever to a single city. For example, the term "Silicon Valley" was coined around 1971 and within a few years, important people around the world were saying to each other: We should be the New Silicon Valley. Vast efforts went into these projects, and, yet, the main outcome has not been two, three many Silicon Valleys, but that Silicon Valley's one traditional competitor for tech startups, suburban Boston's Route 128 has fizzled out. In the 1970s to 1990s, people normally grouped Route 128 with Silicon Valley, but now almost nobody does anymore.

Lots of theories have been put forward for why Route 128 was crushed by Silicon Valley, such as the more staid culture of Boston or Massachusetts' stronger enforcement of non-compete provisions in  employment contracts. Perhaps, though, the essential reason was that the way things work these days is that it's best to have just one hub for an industry, and Silicon Valley had better weather than Route 128.

But, also consider magazines. Most journalism comes out of New York and Washington D.C., but for a century and a half, the Atlantic Monthly was based in Boston. And why not? There are a lot of highly literate people in Boston. And this had the beneficial side effect that the kinds of topics that the Atlantic worried about ("genteel foreboding" was its calling card), were not always the same things as what the rest of the gang in NY and DC were currently worried about. Then, about a decade ago, the magazine was moved to D.C. 

This isn't a solely modern phenomenon. The headquarters of American automobile manufacturers were widely spread out a century ago, but then consolidated in Detroit by about a half century ago as Studebaker of South Bend, IN died out.

To get to the top, you have to be, physically, where the top people are. 

I think this is tied into the much discussed growth of inequality. Notice two contradictory trends in modern life: the growth of economic brusqueness, with MBAs feeling ever less regret about pulling the trigger on big layoffs, outsourcing, and insourcing versus the growth of Sensitivity and Niceness in daily life.

How do people reconcile these two trends? Well, I don't think they do. Instead, they tend to be more brusque toward the people they only deal with as numbers on a spreadsheet, and more sensitive and nice toward people whose names they can associate with a face. 

The career advice implications are unsurprising: now, more than ever, you want to get a job where you go out to lunch with the powerful people.

Update: Commenter Bostonian cites a study confirming this intuition:
This article from the Review of Financial Studies is consistent with what Steve writes. 
Trade-offs in Staying Close: Corporate Decision Making and Geographic DispersionAugustin Landier
Stern School of Business, New York University
Vinay B. Nair
Wharton School, University of Pennsylvania
Julie Wulf 
Abstract 
We investigate whether the geographic dispersion of a firm affects corporate decision making. Our findings suggest that social factors work alongside informational considerations to make geography important to corporate decisions. We show that (i) geographically dispersed firms are less employee friendly; (ii) dismissals of divisional employees are less common in divisions located closer to corporate headquarters; and (iii) firms appear to adopt a “pecking order” and divest out-of-state entities before those in-state. To explain these findings, we consider both information and social factors. We find that firms are more likely to protect proximate employees in soft information industries (i.e., when information is difficult to transfer over long distances). However, employee protection holds only when the headquarters is located in a less populated county, suggesting a role for social factors. Additionally, stock markets respond favorably to divestitures of in-state divisions.

67 comments:

Whiskey said...

That dynamic Steve is pre-revolutionary. It means basically the middle class gets hollowed out, no progression or even staying the same unless one moves to NYC and becomes one of the few (jobs get cut every year as computerization takes over) Masters of the Universe jobs in finance, or entertainment in LA (lawyer, agent, real estate broker high end) or VC guy in Silicon Valley.

That pretty much leaves most people out.

Although the counter-argument is that much of finance has moved off Wall Street onto Connecticut based hedge firms, like Blackrock and so on. Or Newport Beach CA's Pimco.

That part, people moving out to disconnected exurbs, is harder to measure. It puts more emphasis on merit based hiring, rather than nepotistic place-connected networks. Chicago for example is home to Groupon. The company decided to move there because it wanted to be away from Silicon Valley (I suspect to keep their best people from being poached).

Computer Software is still mostly artisan based, i.e. a few highly skilled people beat an army of mediocre skilled people. For a lot of other things, that may not be the case: resource extraction, mass manufacturing.

I think the dominance of a few cities / regions only matters where you must have great skill in key people; certainly most major companies are distributed all over the place. Apple for example has 700,000 Chinese workers making stuff, about 17,000 global retail sales people, and about 700 people in their HQ. I would not say the premise of cyberspace is false, only just for the firms that need the best people.

IHTG said...

I consider this to be a tragedy. A "spread out", cyberspace culture is also a culture where immigration is less salient. If Western elites' lifestyle did not require them to migrate to cosmopolitan cities, they might be less enthusiastic about the idea of human migration in general.

Bostonian said...

This article from the Review of Financial Studies is consistent with what Steve writes.

Trade-offs in Staying Close: Corporate Decision Making and Geographic Dispersion
Augustin Landier
Stern School of Business, New York University
Vinay B. Nair
Wharton School, University of Pennsylvania
Julie Wulf
+ Author Affiliations

Harvard Business School, Boston
Address correspondence to Julie Wulf, Harvard Business School, Soldiers Field Road, Boston, MA 02163, or e-mail: jwulf@hbs.edu
Abstract

We investigate whether the geographic dispersion of a firm affects corporate decision making. Our findings suggest that social factors work alongside informational considerations to make geography important to corporate decisions. We show that (i) geographically dispersed firms are less employee friendly; (ii) dismissals of divisional employees are less common in divisions located closer to corporate headquarters; and (iii) firms appear to adopt a “pecking order” and divest out-of-state entities before those in-state. To explain these findings, we consider both information and social factors. We find that firms are more likely to protect proximate employees in soft information industries (i.e., when information is difficult to transfer over long distances). However, employee protection holds only when the headquarters is located in a less populated county, suggesting a role for social factors. Additionally, stock markets respond favorably to divestitures of in-state divisions.

JEL codes
G34 J63 R30

Anonymous said...

It has some specialties, such as financial derivatives and the design of supertall skyscrapers,

Does Chicago really "specialize" in the design of supertall skyscrapers? That is, are there lots of skyscraper design and architecture firms headquartered there? I thought most top architecture firms were located in NYC?

Anonymous said...

Although the counter-argument is that much of finance has moved off Wall Street onto Connecticut based hedge firms, like Blackrock and so on. Or Newport Beach CA's Pimco.

Most investment banks and financial firms aren't located on Wall St. or downtown Manhattan anymore. Some are. But many have moved uptown to midtown Manhattan.

But this isn't really a "counter-argument". They're all in the same general area of Manhattan and Fairfield County, Conn. Lots of financial employees work in Manhattan and live in Fairfield Cty, lots of hedge fund employees who work in Fairfield Cty. have apartments in Manhattan, etc.

Anonymous said...

Chicago just seems prole. It's in the Midwest. The accent there sounds really prole-ish too. It seems really into sports and greasy food. No glamour or art.

bjdubbs said...

When I worked on route 128, the sales force had a turnover of about 50%. Those weren't all firings, but many of them were. As a colleague said to me, "You realize they go to lunch with the exact same people they fire every other week?" It doesn't stop anybody.

Anonymous said...

I wonder whether wealth is becoming ever more squeezed into single industry-dominant cities?

Isn't that one of the points Charles Murray was making in Coming Apart with his super-zips analysis?

- A Solid Citizen

DaveinHackensack said...

Arguably, it wasn't Silicon Valley that crushed Boston, but NYC. Tech start-ups have been booming in NYC in recent years.

BTW, an interesting fact about NYC mayor Bloomberg that doesn't get a lot of attention: he still owns approximately 85% of his eponymous tech company (compared to the <1% of Apple Steve Jobs owned when he passed away). That's pretty rare, and it's the result of not having to take much outside investment to get it rolling.

Andrew said...

Chicago's natural dominant business is transportation/logistics.

But no railroads and just United are headquartered there, even though Boeing and GE transportation have recently moved in.

Geoff Matthews said...

You'll still find software companies dotted around the country, but the real dynamism does seem to be in the San Fran area.
Problem is, that's an expensive place. Someone's going to figure out that if they go to AZ or TX or NC, they could cut operating expenses with minimal loss of talent.
Of course, if the required talent is in the top 1%, and its disproportionately found in San Fran, then that's a problem . . .

JerseyGuy said...

Steve,
One of your commenters touched upon this in a previous post. As many of these super cities increasingly suck up all of the country's top performers, there has been an incredible dysgenic effect on fertility. As someone who is in his late 20s and works on New York (although I am looking to transfer offices to the suburbs), I've noticed that many of my peers are simply not growing up. Having a child before 30 is simply unheard of. Hell, people are not even settling down before their early 30s. Everything is expensive (food, housing, transportation, etc.) so people put off their most basic human instincts for as long as possible. This is the same in Boston, DC, Chicago, San Francisco, etc.

What is going to force people to grow up?

Dahinda said...

I wouldn't write Chicago off just yet! And it seems that most of the people posting on the articles about Chicago on this site have never been, and know nobody, from Chicago. It seems like they are either voicing all of the propaganda that is out there about Chicago or just making stuff up off the top of their heads! Chicago is "prole?" WTF!

dearieme said...

"Most true global cities are a dominant location of a major industry: finance in New York, entertainment in Los Angeles, government in Washington, and so on." The concept of a 'true global city" may be capable of several definitions, but not many, surely, would apply to Washington? Some definition of "dreary company town" might.

Drunk Idiot said...

This is a really good post. It identifies an issue I've thought about for a while, but haven't really seen anyone address up to this point.

Back in the halcyon days of the late 90s, when the internet was the new gold rush, it seemed like technology would make it commonplace for industries, and even companies, to be dispersed over wide swaths of geography. A cousin of mine, for example, was employed by a prominent Washington, DC area university that got heavily into online education before it was commonplace. He moved his family to his wife's hometown in the rural Midwest because the internet freed him from having to physically be in DC.

At the time, it seemed like that kind of thing would become commonplace. But it never happened. Instead, it seems to have become all the more important to be in New York or Washington (or Silicon Valley for tech), despite the widespread availability of technology that lets people communicate face to face and transmit virtually unlimited volumes of information from just about anywhere in the world.

Technology has had no effect on the old adage that it's not what you know, but who you know that matters.

Anonymous said...

But of course Washington DC could be located anywhere by governmental fiat. So why no move large parts elsewhere. Move the supreme court to Pittsburgh.

Anonymous said...

"Chicago just seems prole. It's in the Midwest. The accent there sounds really prole-ish too. It seems really into sports and greasy food. No glamour or art."

Chicago has some of the top restaurants in the country, the Art Institute and the Museum of Contemporary Art, and what town is not into sports? Even in Paris, London, and Vienna people are "really into sports!"

Anonymous said...

Chicago is "prole?" WTF!
I lived in Chicago for nine years. It feels very provincial. Michigan avenue might be 'nice' looking but the people walking down it are just not as elegant as Milan or NY - even a small city like Santa Barbara (80,000) feels 'bigger' than chicago.
Chicago feels like a second city.

Anonymous said...

it's the result of not having to take much outside investment to get it rolling.
I strongly suspect that one of the reasons for BLoomberg's massive turn over of public land is ethnic nepotism in return for earlier favors granted to Bloomberg.

Anonymous said...

Chicago has some of the top restaurants in the country, the Art Institute and the Museum of Contemporary Art,,
and some great architecture, but it still feels provinicial

Anonymous said...

Technology has had no effect on the old adage that it's not what you know, but who you know that matters.

In theory anyone can interact with anyone else online. That should facilitate all sorts of business relationships - Im sure it does.

Maybe its a leveling effect, since anyone can know anyone those all end up with equal value. But relationships that are based on real life contact then become all the more important?

Anonymous said...

Auto production was concentrated in Detroit long before Studebaker went under. It really happened in the 1920s. Before that there were several smaller concentrations of auto production (New York and Connecticut being one), but Detroit was always the largest because of its position on the Great Lakes where huge quantities of iron ore could be easily unloaded. And Detroit was filled with machine shops and other businesses that facilitated automaking long before automobiles were made. There were other centers of automotive activity, but they were mainly accessory manufacturers. Many of these were in Los Angeles and some midwestern cities like Cleveland etc. But Detroit was an early winner because everything the automakers needed was already there in 1900. Really only Nash and Studebaker resisted the move. And that meant that every unit cost them more to manufacture.

Anonymous said...

I remember Paul Graham wrote something like, face-to-face is very high bandwidth.

Anonymous said...

Michigan avenue might be 'nice' looking but the people walking down it are just not as elegant as Milan or NY - even a small city like Santa Barbara (80,000) feels 'bigger' than chicago.

Exactly. The people are fatter, less fashionable, dress worse, tackier, etc.

Though this goes for every city in the US except for NYC. If you're in NYC for a while and then go to another city, you'll immediately notice that people dress more poorly, are more sloppy, less fashionable, have less "cool" clothing, are seasons or even years behind on fashion, etc. This isn't surprising though since NYC is home to the fashion industry and the clothing stores get the new fashions before anywhere else and it filter first to the people living there before the rest of the country.

Anonymous said...

There's a book by an Italian economist at Berkeley called Enrico Moretti that explains this phenomenon well. It explains why certain American cities are succeeding and others falling behind way better than other theories, like those put forth by Richard Florida.

Moretti points out in his book that it would seem logically that the advent of the internet would have led to the decline of Silicon Valley, since now work can be done from anywhere and there are many cheaper locales. But what happens is that both employers and employees are drawn to "thick labor" markets. And that's why with the new tech boom of social networking companies is taking place in Silicon Valley (often with companies that moved there after being hatched someplace else).

Anonymous said...

It saddens me that cyberspace didn't live up to its potential. I really did imagine that college towns, nestled in the woods of Pennsylvania, or Colorado, or Massachusetts, would become little Silicon Cells where happy college students could meet there mates, live affordably, and have families.
Alas, college students and faculty are such dimwits and leapfroggers, that they would probably invite diversity into the commune and self-destruct.

Anonymous said...

The advantage hubs have is support staff. Although people like to think of Steve Jobs as the man, the reality is that there were a bunch of Wozniaks walking around that could take Jobs flights of fantasy and make them real.

At Apple today there is an engineer who on his spare time built a Lego Babbage calculation engine and an antikythera mechanism. Having a horde of people like that in one place (you need a horde in case one dies or quits) is not easy, but it is probably essential to actually producing a viable product. My guess is Boston just does not have enough of those people in the same place. So it may not be the geniuses that need to be in the same place, it is their support staff that cannot be easily reproduced.

That said, it is a bad sign that San Jose is bankrupt. The collapse of Detroit, which some like to assume is a story of African American demographics, may actually be a story of a rapacious government eating the goose that was laying the golden eggs (the auto industry). Maybe with today's Asian elite, white people are the drag on resources some claim blacks are in Detroit.

Anonymous said...

I was born and raised in the San Francisco Bay Area, but have lived in many places since. Chicago is a city that I have only visited a few times, but every time it manages to take my breath away. It is always a surprise... so gigantic, so tall, so impressive.

But always a surprise! After a moment's thought, of course, I remember those experiences, but Chicago is not a city that comes to mind very often... nothing like New York or Los Angeles or Washington... and that's true despite the fact that Chicago made a much stronger impression on me than New York City did.

Eric said...

Problem is, that's an expensive place. Someone's going to figure out that if they go to AZ or TX or NC, they could cut operating expenses with minimal loss of talent.

The big advantage the valley has is money for startups. There's a network effect for VC activity - companies start there because they have access to all the VCs, and VCs operate there because so many companies start there. And people who hand out millions of dollars on long shots want to meet you face-to-face.

Once you start somewhere it's expensive to move, and your employees don't want to move to BFE even if it's cheaper, because they feel more secure where the job market is robust.

Assistant Village Idiot said...

The city-state and sphere of influence may be a more stable financial structure than the nation-state. It may yet reassert itself.

Aaron in Israel said...

Yeah, but Route 128 inspired the 269th greatest song of all time. (That's according to Rolling Stone; I'd rank it way higher than that, but I guess they're the experts.) What did Silicon Valley ever give us that was artistically comparable to that?

Anonymous said...

"Maybe with today's Asian elite, white people are the drag on resources some claim blacks are in Detroit."

So, in San Jose, after its ruination, we'll be left with a wasteland, of abandoned buildings being stripped of metal by a 90% white population, where Asians won't dare to tread.

Anonymous said...

Houston is the oil and gas industry dominant city. True to the cited study, when re-trenching started in the mid to late eighties, large division offices in cites like Denver, New Orleans, Midland-Odessa, etc. were cut back and consolidated into H-town.

With regard to the advantages of staff to upper management face time, I am dubious. Most people work for large companies where contact with high-level management is fleeting, at best.

My experience is that personal relationships do help at the mid-management level, where high level decisions are implemented. Typically, upper mangement decrees,say,cutbacks in salary budget or head count, which are then delegated to mid level management to carry out.

Finally, I will say that when you have an industry dominant city, clearly that is the "place to be" if you are pursuing a career in that field. Not because you get to go out to lunch with powerful people. Really, I think its simpler: that where most of the jobs are in your field. You get know people and they know you from working together and then going your separate ways, or from dealing with each other at different companies.Even without dedicated effort, a natural network develops.

This means you get calls from people who know you when opportunities open up. It means that you can put out feelers when you get the itch. It means that you are located in the best job market in your field if you get RIF'd.You also stand in better stead than out of towners for jobs since you are conviently located for job interviews and do not come sadled with relocation costs. On a personal level, you are not faced with having to uproot your family if you are already there.

Anonymous said...

"The city-state and sphere of influence may be a more stable financial structure than the nation-state. It may yet reassert itself."

The nation-state requires a nation. If a nation gets balkanized then eventually it will break up up into regional micro-nations and city-states.

Anonymous said...

Route 128 was rather specialized in a technical sense. They were centered around minicomputers--companies like DEC, Wang, Prime, and the like. The minicomputer industry got wiped out by Unix-based workstations and PCs. Boston's technical breadth wasn't strong enough to survive the death of that industry.

In the early 90's Silicon Valley wasn't doing all that well, either. The PC industry had hit a slowdown and the area's defense industry, which was a major consumer of technology, got nuked. But they managed to hop onto the internet and recovered.

Silicon valley is nice because you can make a few calls and in a week put together a team with a CFO, venture capital, programmers with exactly the type of experience you want, and some managers that have done startups before. I think SV is riding for a fall, tough. Costs are out of control. Soon after a company gets big they start moving things elsewhere. I wouldn't be terribly surprised if someplace like Austin managed to put together a competing center in another decade or so.

Anonymous said...

"Most investment banks and financial firms aren't located on Wall St. or downtown Manhattan anymore."

Interestingly, some high frequency financial trading is geographically constrained. The time windows for executing trades is so small that the data centers need to be located close to the exchanges. Milliseconds of network latency make the difference in being able to execute a strategy or not.

Anonymous said...

http://youtu.be/Zshr6VmiPzw

flashmob

Anonymous said...

Chicago just seems prole. It's in the Midwest. The accent there sounds really prole-ish too. It seems really into sports and greasy food. No glamour or art.

Wow, I get the feeling it's been the same commenter who's really been hammering the meme that Chicago is "provincial"?

Food? Charlie Trotter, and dozens of other fine dining establishments that are quite well-regarded by European gourmands. The result of Midwestern agricultural abundance colliding with southern European immigration.

Art? Well, okay, Chicago doesn't have someone as ground-breaking in the field of beauty and truth as say, Damien Hirst in London, but besides that, it is top-drawer. We just need some northsider to throw a cow into a vat of formaldehyde and Chicago will have arrived.

Chicago now has by all transatlantic opinion the best theatre in North America (much more innovative than the Disneyfied Broadway)...and American theatre now outclasses Europe's. Whatever is at Steppenwolf tonight is almost certainly better than what is playing six hours earlier at the Comédie-Française.

Really though, to come back to someone like Damien Hirst: what do these Europhilic Chicago-bashers think European high culture is like these days? It's non-stop trashy, ugly vulgarities, fueled by Scots-Irish oligarchs from Russia and their financier enablers from the City to Basel. Someone Steve quoted a few years ago said it right: the whole "35-hour work week that allows Europeans to be so much more civilized and human than prole Americans" meme is getting stale. Where are all the sonnets, all the piano concerti, and all the brilliant plays that Europeans supposedly have all the time now to have had created?

Anonymous said...

https://www.facebook.com/photo.php?fbid=389918147733216&set=a.119506304774403.17273.114364638621903&type=1&theater

Who's taking all these iconic photos of Obama and spreading them all over? Its so Hollywood. No such for Romney.
Obama need not do anything but pose.

beowulf said...

"I wonder whether wealth is becoming ever more squeezed into single industry-dominant cities?"

Jamie Galbraith's new book makes precisely this point.
“He explains that the dramatic rise of inequality in the U.S. in the 1990s reflected a finance-driven technology boom that concentrated incomes in just five counties [New York; three counties in Northern California associated with the Silicon Valley; and King County, Washington], very remote from the experience of most Americans- which helps explain why the political reaction was so slow to come."
http://www.oup.com/us/catalog/general/subject/Economics/MacroeconomicTheory/?view=usa&ci=9780199855650
http://www.blogger.com/comment.g?blogID=9430835&postID=7201982334331657611

Anonymous said...

"firms appear to adopt a 'pecking order' and divest out-of-state entities before those in-state"

Do the same considerations apply to multinationals? I'd suggest it helps where governments can exert pressure - the French govt made it plain to Renault that Eastern Europe plants should go before French ones.

But when Kraft took over UK-based Cadburys, they immediately started closing UK sites and moving production abroad.

beowulf said...

"As many of these super cities increasingly suck up all of the country's top performers, there has been an incredible dysgenic effect on fertility."

Google affordable family formation, that Malcolm Gladwell is brilliant.... Just kidding Steve!
http://www.theamericanconservative.com/articles/value-voters/

Speaking of Gladwell, Mark Ames cheerfully kicked the crap out of him a couple weeks ago...
http://www.nakedcapitalism.com/2012/06/malcolm-gladwell-unmasked-a-look-into-the-life-work-of-americas-most-successful-propagandist.html

Anonymous said...

I always thought that Chicago's pre-emininent industry was meat-packing.

But seriously, the big city as aworking phenomenom in the western world of the 21st century has had it.
Cities, as agglomerations of millions of people really need a source of internal wealth generation to exist, somehow wealth has to be generated within those city limits to actually employ and justify those millions, or else you just have an ant-hill of paupers, who are even worse off than paupers in the countryside, who at least can eat local produce.
The west's big cities all gre up in the 19th and early 20th century, when the actually had factories, docks, railheads etc that provided employment. Now these have gone, there's nothing to justify the city's existence hence you just have rookeries full of paupers. Just look at how many residents of NYC, London, New York etc etc depend on social security for existence - the proportions are enormous, bt mostly hidden. there is simply not the wealth generation there to support them, they are are being warehoused in a limbo existence with taxpayers money.

Anonymous said...

The city-state and sphere of influence may be a more stable financial structure than the nation-state. It may yet reassert itself.

Maybe. But city states took over the surrounding countryside, merged with other city states and before you know it - back where you started.

The only comparable example are Singapore & HK. Both constrained by other factors. HK is being absorbed by China and would Singapore not expand into Malaysian territory if the opportunity arose? Would it self-limit?

jody said...

dallas and houston are more important than chicago now as well, not just the usual NYC, LA, DC, san fran collection. boston is where a lot of thinking happens. miami is considered a "global city", but really it's just a ghetto for third world islanders with some of the lowest high school graduation rates and highest NAM population rates in the US. there isn't even a good university in all of florida, the fourth largest state.

atlanta never rose to that level of prominence although they did a good job of becoming more important. charlotte is nice as a banking center. got hit hard by the recession though.

detroit, pittsburgh, and cleveland have crashed from their peaks 50 years ago. pittsburgh made a moderate recovery. philadelphia was once even the nations capital, but now philadelphia proper is a slum. new orleans was recently wiped out, though it's location as a shipping center is why it remains.

phoenix and las vegas could not exist without modern infrastructure technology, which is why those cities are only about 100 years old. take away the tech and everybody would leave and you're back to mostly unoccupied desert.

Anonymous said...

Maybe Singapore is the future?

Anonymous said...

"Santa Barbara (80,000) feels 'bigger' than chicago"

All I remember about my visit to Santa Barbara was being threatened by a bunch of Mexican guys. Also, those who think that New York isn't "prole," I am sorry but a city of 8 million Vinnie Barbarinos does not seem too sophisticated to me!

DaveinHackensack said...

"It saddens me that cyberspace didn't live up to its potential. I really did imagine that college towns, nestled in the woods of Pennsylvania, or Colorado, or Massachusetts, would become little Silicon Cells where happy college students could meet there mates, live affordably, and have families."

Well, Google now has an outpost in Pittsburgh (though not as big as its huge office in Manhattan). And Dwolla is one VC-backed startup that's based in Iowa. Interestingly -- and perhaps because it's not based in Silicon Valley -- it's also one of the more ambitious and original startups.

Peter A said...

Where are all the sonnets, all the piano concerti, and all the brilliant plays that Europeans supposedly have all the time now to have had created?

The sonnets, concerti and plays all followed the Jews to the US. When the Jews leave, all the high culture tends to fade away. The UK and France are arguably exceptions, but most of German and Russian high culture was very dependent on having Jews around. The lack of real high culture in formerly intellectual (and heavily Jewish) cities like Vienna, Prague or Budapest is shocking. More and more true in Moscow as well.

Peter A said...

miami is considered a "global city", but really it's just a ghetto for third world islanders with some of the lowest high school graduation rates and highest NAM population rates in the US.

Despite that Miami is still a "global city". It is still THE financial and business hub for Latin America. Which may tell you something about the quality of life in most Latin American cities...

Observing from the Sidelines said...

For all the Chicago skepticism on display here, the city always does very well in those “global city” rankings:

http://en.wikipedia.org/wiki/Global_city

pat said...

I think it's simpler than that.

IBM was the dominant maker of mainframe computers. They were located in New York. Next DEC was the dominant mini computer company. That's when Boston and its environs became the focus of computing.

Lastly Fairchild's spin offs launched the micro computer era in Silicon Valley.

Mainframe, mini and micro. Three generations. Three geographical areas.

Albertosaurus

Anonymous said...

I'm not the previous commenter. I agree that Midwesterners, and hence Chicagoans (as the Midwest is the hinterland that supplies Chicago with population), are fat, and hence look "provincial." And less fashionable than New Yorkers.

Not sure how important that is, in the grand scheme of things though. Palo Alto looks pretty provincial. Nerds aren't known for their fashion sense.

Abe Froman, sausage king said...

I take exception to your remark that Chicago is not the center of any industry

Norville Rogers said...

Miami was really dominant for a while in the cocaine industry

Jeff said...

I have worked in the suburbs of DC, Miami, West Palm Beach, San Diego, Seattle, Indianapolis, Chicago, Akron, and Tampa over the last 12 years. I would say the highest quality workers were in DC or Chicago suburbs. The only reason the city proper is not a mecca is because of the black population and the associated crime it offers up. If not for the blacks, Chicago would be a world class city within 15 years. The city is beautiful and magnificent and the underlying "civilizing" architecture (universities, training colleges, transportation networks) are all in place. The only problem is the black population.

sunbeam said...

This makes me think of what Jane Jacobs wrote.

One thing not mentioned here is China. Yeah, you pretty much have to mention them for everything I guess.

I've encountered in my life an odd notion that oriental people in general aren't "creative," and that will be an advantage the US and specifically it's tech industry will have forever.

Usually people mean electronics and computer applications when they say this, though there are many other industries and technologies that require brainpower and creativity, and aren't doing as well in the US now.

Never mind that just about every computer company has a ton of orientals employed. Never mind millenia of technical advances made by China in particular. I've heard some people say it is because these orientals are special, and have been Americanized or something.

Whatever the truth of this, I think a lot of people's heads are in the sand on this matter. I try to keep up with science news and I have to note that increasingly science items even in the US seem to be researched by people with oriental, and eastern european and russian names.

Sometimes things don't turn out the way you expect, but I'd say there is a good chance Silicon Valley will one day be Route 128 to some some city in China. And I wouldn't expect it to take more than a decade, maybe two.

There are some other industries, or more properly commercial endeavors that could experience the same fate.

One is the entertainment industry. I have to wonder whether an english language channel similar to the BBC ones produced by Brazil couldn't get some serious viewage. Hollywood hearts T&A. Brazil is T&A.

The increasing share of the population that is hispanic might contribute to this (yeah I know about the Portugese language). As for non-hispanic me I could watch the Mardi Gras channel, a long, long time.

Bollywood might get some play too. But I doubt we ever will have enough Indians over here to make it big.

Another industry I'd think could be vulnerable is the financial industry. They make a lot of money off the US, but also a whole heckuva lot doing... international things. I really don't see what stops China from doing the same kind of stuff if they want to. It's not like they don't have lots of money to put into it.

Just my 2 cents.

Anonymous said...

Lastly Fairchild's spin offs launched the micro computer era in Silicon Valley.

SV was up and running well before Route 128 and DEC and the minicomputers had a big impact. Fairchild was founded in 1957 and its many spinoffs established the SV business model. DEC got going about the same time but didn't have as much of an immediate impact, particularly in the venture capital business model and high labor mobility between companies.

Fairchild et al were selling into several industries, including mainframes and minis and defense. By the time the PC revolution came around the business model was old hat; there was a deep technical bench and a culture of startups.

As time went by the silicon part of silicon valley has become much less important. Not many factories are still in the area. As old industries like defense died, the technical talent moved to networking and software. Actually, I'm not sure that's true; the old defense workers didn't necessarily move into the new industries.

helene edwards said...

Not sure how important that is, in the grand scheme of things though. Palo Alto looks pretty provincial.

All of America is 'provincial' now - being cool with gay marriage qualifies you as sophisticated.

Anonymous said...

Bollywood might get some play too. But I doubt we ever will have enough Indians over here to make it big.

For a while in 90s SWPLs in the UK went through a phase of pretending to watch/like Bollywood films.

A long dead fad now.

Anonymous said...

I have long advocated moving the nation's capital to Kansas City. Put it right on the state line, starting with the Bendix bomb plant on Bannister that will be razed in the next few years anyway. It's bi-inconvenient for bicoastals and is too cold in the winter, too hot in the summer, and the pollen attaks your sinuses. Pols would have little to do besides work.

Turn the current White House, Congress and Pentagon into museums and make the rest a penal colony.Bulldozing San Quentin and a couple other places in California and making it upscale residential will finance the whole move.

Anonymous said...

There's a chapter in PJ O'Rourke's "Parliament of Whores" where he compared (in his libertarianish way) Silicon Valley bordertown Fremont, Calif. to its "statistical sister city" the capital of Bangladesh. The more memorable part of the essay was a funny tour of Dhaka's manufacturing sector.

Anonymous said...

Helene, Boston was first on the gay marriage bandwagon, and there's no more a provincial berg in America!

Anonymous said...

I didn't expect the hefty comments to peter out so quickly on this topic. I'm left yearning for more input. Maybe some of the causalities of the unkept promise, you know - the bright homebodies from flyover country, should chime in. I'd love to hear from Justin Knapp, you remember Justin, don't you?
http://en.wikipedia.org/wiki/User:Koavf

Anonymous said...

How many clever coast dwellers share Justin's profile?
Hey, he's a neighbor:

http://www.blogger.com/profile/03670945149409774818

Anonymous said...

I am from Evanston (view Chicago from north). Chicago is defintely prole. A very divided city (middle age-old largely jewish upper class with downtown/Metra jobs-so it seems in lawyering, corporate, advertizing, merc, etc., then hipster class, then black and white proles, art students at Columbia, drug dealing based black neighborhoods on bombed out westside, and then an army of quiet, Mexican migrants who have spanish-dominated much of the city now, the southside is black and no one goes down there). Prole, indeed minus the wbez employees at navy pier). Just my take in reply to "Dahinda".

Mr. Anon said...

"Anonymous said...

Chicago just seems prole. It's in the Midwest. The accent there sounds really prole-ish too."

Yeah, whereas Noo-Yawkers all sound so posh.