industrial cluster

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pages: 606 words: 87,358

The Great Convergence: Information Technology and the New Globalization by Richard Baldwin


3D printing, additive manufacturing, Admiral Zheng, agricultural Revolution, air freight, Amazon Mechanical Turk, Berlin Wall, bilateral investment treaty, Branko Milanovic, buy low sell high, call centre, Columbian Exchange, commoditize, Commodity Super-Cycle, David Ricardo: comparative advantage, deindustrialization, domestication of the camel, Edward Glaeser, endogenous growth, Erik Brynjolfsson, financial intermediation, George Gilder, global supply chain, global value chain, Henri Poincaré, imperial preference, industrial cluster, industrial robot, intangible asset, invention of agriculture, invention of the telegraph, investor state dispute settlement, Isaac Newton, Islamic Golden Age, James Dyson, knowledge economy, knowledge worker, Lao Tzu, low skilled workers, market fragmentation, mass immigration, Metcalfe’s law, New Economic Geography, out of africa, paper trading, Paul Samuelson, Pax Mongolica, profit motive, rent-seeking, reshoring, Richard Florida, rising living standards, Robert Metcalfe, Second Machine Age, Simon Kuznets, Skype, Snapchat, Stephen Hawking, telepresence, telerobotics, The Wealth of Nations by Adam Smith, trade liberalization, trade route, Washington Consensus

When trade gets freer, but nothing happens to the freeness of spillovers, the freeness combination moves horizontally in the diagram. If it goes far enough, it crosses the stability boundary and, as explained in the NEG discussion, all industry clusters in one region (in the North to be concrete). The diagram, however, is not just about industrial clustering. It also has a growth takeoff in the background. At a point like 1700, the dispersion of industry conspires with the high cost of moving ideas and the result is that neither region is growing. Innovations are scarce and spillovers are difficult so the furnace of modern growth—innovation and innovation-spurring knowledge spillovers—it not yet lighted. When industry clusters, as it is at the point 1990, the furnace ignites and growth takes off in the North. What happens when knowledge spillovers get freer internationally?

While shipping got cheaper, the costs of moving ideas and people fell much less. This unbalanced reduction of separation costs triggered a chain of causes and effects that eventually produced enormous income differences between today’s developed nations (called the “North” for short) and today’s developing nations (the “South”). First, markets expanded globally but industry clustered locally. As history would have it, industry clustered in the North. This Northern industrialization fostered Northern innovation, and since ideas were so costly to move, Northern innovations stayed in the North. The result was that modern, innovation-fueled growth took off sooner and faster in the North. In just a few decades, the resulting growth differences compounded into the colossal, North-South income asymmetries that define the planet’s economic landscape even today.

The details are in the next chapter, but the basic ideas are simple to explain with the diagram—starting with the diagram’s southeast box (“industrial clustering”). The clustering—that is to say, agglomeration—of industry in a nation promotes new thinking and new inventions (shown in southwest box, “Industrial innovation”). The innovation then strengthens the nation’s competitiveness in the sector (shown in northwest box, “Comparative advantage”). The next step—according to the principle of comparative advantage—is that the heightened comparative advantage leads to more exports and more production. The crank comes around full circle when this extra production generates additional industrial clustering. The basic Ricardian logic focuses on the “who exports what” question. The answer ultimately rests on its assumption of national competencies that are taken as given.

pages: 112 words: 30,160

The Gated City (Kindle Single) by Ryan Avent


big-box store, carbon footprint, deindustrialization, edge city, Edward Glaeser, income inequality, industrial cluster, labor-force participation, low skilled workers, manufacturing employment, offshore financial centre, profit maximization, rent-seeking, Silicon Valley, Thorstein Veblen, transit-oriented development, Tyler Cowen: Great Stagnation, Veblen good, white picket fence, zero-sum game

In the years to come, thousands of new businesses will open, revolutionary new business models will be developed, and untold sums of money will be spent and earned. But it's not necessarily clear how all of this will happen. Cities are a crucial part of the experimental process of figuring it out. Technological communities within early industrial clusters solved critical problems and developed the techniques and ideas that powered the industrial revolution. Technological communities in later industrial clusters developed the hardware and software that brought us today’s IT. And technological communities in future industrial clusters will figure out how best to apply these and newer technologies to business models in order to earn money, raise productivity, and boost economic growth. These experiments don’t need to begin as grand enterprises. Connections among ambitious individuals within cities have facilitated the development of online self-publishing, thereby launching lucrative personal brands.

In the 20th century, falling shipping costs made it profitable for factories to pack up and move to cheaper areas. But the human-capital dependent sectors like finance and design remained and continued to drive New York’s economy. Long after the original source of New York’s success waned as an economic engine, the city remains a global economic juggernaut. New York’s port doesn’t keep the financial sector centered in Manhattan. Proximity to other financiers matters now. Industry clusters, like New York’s old textile business and its present financial sector, are one of the striking features of industrialized economies. They pop up across industries, locations, and time periods. There's Dalton, Georgia, the carpet capital. New York, financial, media, and fashion capital. There are tech concentrations in Silicon Valley, outside Boston, and in the Research Triangle of North Carolina.

pages: 242 words: 68,019

Why Information Grows: The Evolution of Order, From Atoms to Economies by Cesar Hidalgo


Ada Lovelace, Albert Einstein, Arthur Eddington, assortative mating, Claude Shannon: information theory, David Ricardo: comparative advantage, Douglas Hofstadter, Everything should be made as simple as possible, frictionless, frictionless market, George Akerlof, Gödel, Escher, Bach, income inequality, income per capita, industrial cluster, information asymmetry, invention of the telegraph, invisible hand, Isaac Newton, James Watt: steam engine, Jane Jacobs, job satisfaction, John von Neumann, New Economic Geography, Norbert Wiener, p-value, Paul Samuelson, phenotype, price mechanism, Richard Florida, Ronald Coase, Rubik’s Cube, Silicon Valley, Simon Kuznets, Skype, statistical model, Steve Jobs, Steve Wozniak, Steven Pinker, The Market for Lemons, The Nature of the Firm, The Wealth of Nations by Adam Smith, total factor productivity, transaction costs, working-age population

Other approaches focus not on the role of individuals but on the properties of regions or of the networks of firms that locate in these regions. One strand of this literature focuses on industrial clusters associated mostly with the Harvard Business School professor Michael Porter (see, for example, Michael E. Porter, On Competition [Boston: Harvard Business School Press, 2008]). This literature, however, can also be traced back—albeit in a more rudimentary form—to Alfred Marshall’s nineteenth-century work on industrial districts (for example, Principles of Economics [London: Macmillan, 1890]). Porter discusses industrial clusters in terms of demand conditions, specific factors, strategy, and related industries. With the last item he emphasizes the importance of local value chains, echoing somehow the work of Alfred Hirschman on backward linkages (for example, Albert O.

Approaches emphasizing the role of regions include those of economic geographers, who have contributed to explaining differences between regions in terms of properties of these regions. This work includes the institutional literature explaining differences in the composition of industrial clusters based on differences in features of a location, in particular their social and formal institutions. (See, for example, Francis Fukuyama, Trust: The Social Virtues and the Creation of Prosperity [New York: Free Press, 1995]; AnnaLee Saxenian, Regional Advantage [Cambridge, MA: Harvard University Press, 1996]; and Daron Acemoglu and James A. Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty [New York: Crown Business, 2012].) For instance, an argument explaining differences between the composition and success of two industrial clusters in terms of the culture of the people located in them (religion, family orientation, etc.), or the formal rules that are in place, would fall into the categories of theories based on social or formal institutions, respectively.

I have taken the liberty of expanding this example substantially, since in Wiener’s book it is not mentioned in a very straightforward way and furthermore is woven into a weird Cold War political argument. Norbert Wiener, The Human Use of Human Beings: Cybernetics and Society (Boston: Houghton Mifflin, 1950). CHAPTER 6: THIS TIME, IT’S PERSONAL 1. The question of which industries locate where and why has given rise to at least four theoretical streams of literature: the literature on industrial clusters, the “new economic geography” (which is the neoclassical stream of this literature), the economic geography literature focusing on institutions and culture, and the evolutionary economic geography literature. One could argue that these different strands of literature reflect academic alliances and divisions, but I will describe them not in terms of academic divisions but in terms of how they conceptualize sources of economic advantage and the patterns of industrial diversification and specialization found in different locations.

The Metropolitan Revolution: How Cities and Metros Are Fixing Our Broken Politics and Fragile Economy by Bruce Katz, Jennifer Bradley

3D printing, additive manufacturing, Affordable Care Act / Obamacare, British Empire, business climate, carbon footprint, clean water, cleantech, collapse of Lehman Brothers, deindustrialization, demographic transition, desegregation, double entry bookkeeping, edge city, Edward Glaeser, global supply chain, immigration reform, income inequality, industrial cluster, intermodal, Jane Jacobs, jitney, Kickstarter, knowledge economy, lone genius, Mark Zuckerberg, Masdar, megacity, Menlo Park, Moneyball by Michael Lewis explains big data, Network effects, new economy, New Urbanism, Occupy movement, place-making, postindustrial economy, purchasing power parity, race to the bottom, Richard Florida, Shenzhen was a fishing village, Silicon Valley, smart cities, smart grid, sovereign wealth fund, the built environment, The Death and Life of Great American Cities, the market place, The Spirit Level, Tony Hsieh, too big to fail, trade route, transit-oriented development, urban planning, white flight

On top of that, the Fund began to insist that its grantees connect with one another and collectively set broader goals for the region’s economic competitiveness. The Fund asked its grantees to create a logic model (increasingly common in the not-for-profit realm) “to show organization’s system/network collaboration work at two levels: 1) the level most applicable to your organization’s mission (e.g. the formation of a bioscience/information technology/ advanced energy industry cluster); and, if applicable, 2) the level pertaining to the overall economic competitiveness of the region (e.g. across economic intermediaries and/or other government, private or public sector partners, regardless of specific economic development focus).”28 The state of Ohio also provided a nudge, because it was increasingly insisting that entities apply for grants as members of a collaboration rather than individually.

Still others can be found in traditional exurban science parks like Research Triangle Park in Raleigh-Durham that are scrambling to urbanize to keep pace with workers’ preference for walkable communities and firms’ preference for proximity to other firms and collaborative opportunities. Innovation districts arise in disparate geographies with different economic drivers. But all of them draw from the best innovations in both industry cluster and place-making strategies to create well-defined communities packed with resources for firms, entrepreneurs, innovators, researchers, and residents. The theory behind business clusters is that the geographical concentration of interconnected firms and supporting institutions leads to more innovation and production efficiencies, shared inputs, 06-2151-2 ch6.indd 114 5/20/13 6:53 PM THE RISE OF INNOVATION DISTRICTS 115 thicker labor markets, and collective problem solving; the theory behind walkable urbanism is that dense, mixed-use neighborhoods with cultural, recreational, and retail amenities will attract highly educated, innovative, entrepreneurial individuals and benefit the neighborhood’s existing residents.

GDP by 2020 in order for America to maintain its position as a global leader in innovation.33 Respected business leaders such as Felix Rohaytn have been consistent champions of a national infrastructure bank that would use public resources to leverage private sector capital for a wide range of needed investments.34 Andrew Liveris, the CEO of Dow Chemical, has called for significant investment in STEM (science, technology, engineering, and mathematics) education and improved skills-training programs at community colleges so that workers can learn the skills necessary for high-paying advanced manufacturing jobs in the United States.35 Indeed, the common thread through all the stories captured in these pages is the virtuous cycle between idea generation, the commercialization of innovation, the iterative evolution of tech-driven advanced industries, the improvement of work skills to staff these productive sectors, and the export of our competitive products and services to the rest of the world. This kind of economy does not arise in a vacuum or because of the isolated actions of exceptional entrepreneurs. As our brief history of federalism shows, smart investment in the right kinds of public goods fuels the growth of advanced industry clusters and, by extension, the rest of the economy. In many respects, the question is not what to invest in, but how. In a fiscally constrained environment, where will the resources come from? One answer is to cut to invest.36 The federal tax code is replete with provisions that subsidize excessive consumption rather than production and wasteful rather than sustainable growth. The worst offender, the federal mortgage-interest deduction, is scheduled to grow steadily over the next five fiscal years.

pages: 271 words: 77,448

Humans Are Underrated: What High Achievers Know That Brilliant Machines Never Will by Geoff Colvin


Ada Lovelace, autonomous vehicles, Baxter: Rethink Robotics, Black Swan, call centre, capital asset pricing model, commoditize, computer age, corporate governance, creative destruction, deskilling,, Freestyle chess, future of work, Google Glasses, Grace Hopper, industrial cluster, industrial robot, interchangeable parts, job automation, knowledge worker, low skilled workers, Marc Andreessen, meta analysis, meta-analysis, Narrative Science, new economy, rising living standards, self-driving car, sentiment analysis, Silicon Valley, Skype, Steve Jobs, Steve Wozniak, Steven Levy, Steven Pinker, theory of mind, Tim Cook: Apple, transaction costs

You might expect that it would cause people to make fewer phone calls, since they can easily speak to more people in person, but actually it causes them to make more calls. Or you might suppose that near-universal global connectivity would make physical proximity irrelevant, but as these researchers observe, “metropolitan Tokyo has roughly the same population as Siberia,” and while Siberians have the Internet and mobile phones, we don’t see a lot of innovation originating there. Research on industry clusters reinforces the point. Companies in the same industry—especially industries that rely most heavily on creativity and innovation—often locate in the same area. Besides Silicon Valley, famous examples include high-tech clusters in Research Triangle, North Carolina, and Austin, Texas. Everyone in those industries agrees that an important reason for locating in clusters is to make exchanging ideas easier.

. , 119–20 Hopper, Grace, 183 Howe, Robert, 24 Howze, Hamilton Hawkins, 100–101 Hughes, Chris, 51 humanities, 208–9 humans, 53 blank-slate view of, 38–39, 181 creativity in, 165–67, 175–77 as in charge, 42, 126 mechanical imitation of, 42, 80 and people-only work, 43–44 social interactions of, see social interactions and relationships universal qualities of, 39–40, 145 Humphrey, N. K., 38 IBM, 31, 211 Deep Blue, 30, 40 Watson, 1–3, 9–10, 18, 19, 161–63, 166 Industrial Revolution, 4, 10, 11, 53, 212 industry clusters, 173–74 Infor, 72 information technology, 6, 16–18, 48, 49, 53, 54, 72, 121, 184, 199–203 innovation, see creativity and innovation Intel, 5, 45 Intelligence Science Board, 134 Internet, 52, 62, 167, 171, 173 IQ, 123 of teams, 122–25, 178–80, 188–89 Iraq, 50–51, 113, 200–201 Battle of 73 Easting in, 107–11, 112 combat robots in, 23 Operation Desert Storm in, 107, 108 iRobot, 24, 41 irrational behavior, 25, 48–49, 132–35, 137, 140, 155 Isaacson, Walter, 131, 132 Jennings, Jean, 183 Jeopardy!

pages: 497 words: 144,283

Connectography: Mapping the Future of Global Civilization by Parag Khanna


1919 Motor Transport Corps convoy, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, 9 dash line, additive manufacturing, Admiral Zheng, affirmative action, agricultural Revolution, Airbnb, Albert Einstein, amateurs talk tactics, professionals talk logistics, Amazon Mechanical Turk, Asian financial crisis, asset allocation, autonomous vehicles, banking crisis, Basel III, Berlin Wall, bitcoin, Black Swan, blockchain, borderless world, Boycotts of Israel, Branko Milanovic, BRICs, British Empire, business intelligence, call centre, capital controls, charter city, clean water, cloud computing, collateralized debt obligation, commoditize, complexity theory, continuation of politics by other means, corporate governance, corporate social responsibility, credit crunch, crony capitalism, crowdsourcing, cryptocurrency, cuban missile crisis, data is the new oil, David Ricardo: comparative advantage, deglobalization, deindustrialization, dematerialisation, Deng Xiaoping, Detroit bankruptcy, digital map, diversification, Doha Development Round, edge city, Edward Snowden, Elon Musk, energy security, ethereum blockchain, European colonialism, eurozone crisis, failed state, Fall of the Berlin Wall, family office, Ferguson, Missouri, financial innovation, financial repression, fixed income, forward guidance, global supply chain, global value chain, global village, Google Earth, Hernando de Soto, high net worth, Hyperloop, ice-free Arctic, if you build it, they will come, illegal immigration, income inequality, income per capita, industrial cluster, industrial robot, informal economy, Infrastructure as a Service, interest rate swap, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Isaac Newton, Jane Jacobs, Jaron Lanier, John von Neumann, Julian Assange, Just-in-time delivery, Kevin Kelly, Khyber Pass, Kibera, Kickstarter, labour market flexibility, labour mobility, LNG terminal, low cost carrier, manufacturing employment, mass affluent, mass immigration, megacity, Mercator projection, Metcalfe’s law, microcredit, mittelstand, Monroe Doctrine, mutually assured destruction, New Economic Geography, new economy, New Urbanism, off grid, offshore financial centre, oil rush, oil shale / tar sands, oil shock, openstreetmap, out of africa, Panamax, Parag Khanna, Peace of Westphalia, peak oil, Pearl River Delta, Peter Thiel, Philip Mirowski, Plutocrats, plutocrats, post-oil, post-Panamax, private military company, purchasing power parity, QWERTY keyboard, race to the bottom, Rana Plaza, rent-seeking, reserve currency, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Scramble for Africa, Second Machine Age, sharing economy, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, six sigma, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, South China Sea, South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, Stuxnet, supply-chain management, sustainable-tourism, TaskRabbit, telepresence, the built environment, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, Tim Cook: Apple, trade route, transaction costs, UNCLOS, uranium enrichment, urban planning, urban sprawl, WikiLeaks, young professional, zero day

It is no longer foreordained that tropical countries will suffer unproductive agriculture and labor, nor that landlocked countries must underperform: Singapore and Malaysia are thriving modern economies near the equator, while Rwanda, Botswana, Kazakhstan, and Mongolia are landlocked countries enjoying unprecedented growth and development. A country cannot change where it is, but connectivity offers an alternative to the destiny of geography. Supply chains are thus a form of salvation for the bottom billions in developing countries, whose governments now bend over backward to attract them. To that end, the rise of special economic zones—districts or cities designed to attract investment into specific industry clusters—is the single most significant innovation in how dozens of countries are run since the creation of modern states. SEZs are both local anchors and global nodes. It is yet another sign of the shift from a political to a supply chain world that cities are increasingly named not after people or scenery—think Jefferson or Ocean View—but instead for what role they play in the global economy: Dubai Internet City, Bangladesh Export Processing Zones Authority, Cayman Enterprise City, Guangzhou Knowledge City, Malaysian Multimedia Super Corridor, and about four thousand more.

Urban purists have nostalgic visions of all cities resembling Jane Jacobs’s Washington Square Park. But while there is much to be adapted from neighborhoods that promote pedestrian civic life, many cities must urgently catch up to the present (and future) before they can become reflections of the past. CHINA’S SUPERSIZE SEZS No country has as many SEZs, new cities, and megacities as China. While SEZs have powered China’s export sector and growth, many were designed as single-industry clusters that proved vulnerable to global economic fluctuations—remember Dongguan, China’s Detroit. Just two coastal clusters of provinces centered on Shanghai in the east and Guangdong in the south have less than a quarter of China’s population but have been responsible for 80 percent of its exports. Over the next two decades, however, as China moves an estimated 300 million more people (especially non-hukou*2 registered migrants) into new districts of megacities (and entirely new cities) in interior areas, it wants to make sure that none are either too congested or too sprawling and all are large enough to be self-sustaining.

Investors, insurers, and asset managers have moved in a similar direction. Socially responsible investment funds actively screen a combined $4 trillion portfolio, looking beyond parent companies deep into their tens of thousands of suppliers to measure compliance with environmental standards. The Dutch fund manager RobecoSAM has co-developed a suite of Dow Jones Sustainability Indices covering two dozen industry clusters and issuing detailed reports on the practices of corporate leaders and their exposure to energy supply disruptions. Global reinsurance giants such as Swiss Re and Zurich Insurance insist that clients build sustainability into their supply chains or risk having their policies canceled. These are the pillars of an emergent “regulatory capitalism” that mixes government sanction and financial pressure to raise supply chain standards.

pages: 379 words: 113,656

Six Degrees: The Science of a Connected Age by Duncan J. Watts


Berlin Wall, Bretton Woods, business process, corporate governance, Drosophila, Erdős number, experimental subject, fixed income, Frank Gehry, Geoffrey West, Santa Fe Institute, industrial cluster, invisible hand, Long Term Capital Management, market bubble, Milgram experiment, Murray Gell-Mann, Network effects, new economy, Norbert Wiener, Paul Erdős, peer-to-peer, rolodex, Ronald Coase, Silicon Valley, supply-chain management, The Nature of the Firm, The Wealth of Nations by Adam Smith, Toyota Production System, transaction costs, transcontinental railway, Vilfredo Pareto, Y2K

The Third Way An indication of Chuck’s understanding of the problem at the time we started working together is given in the following: Helper, S., MacDuffie, J. P., and Sabel, C. F. Pragmatic collaborations: Advancing knowledge while controlling opportunism. Industrial and Corporate Change, 9(3), 443–488 (2000). Sabel, C. F. Diversity, not specialization: The ties that bind the (new) industrial district. In Quadrio Curzio, A., and Fortis, M. (eds.), Complexity and Industrial Clusters: Dynamics and Models in Theory and Practice (Physica-Verlag, Heidelberg, 2002). Coping with Ambiguity Perhaps the clearest exposition of the conundrum faced by firms in ambiguous environments, and their need to be both adapted and adaptable, is that by David Stark in his work on heterarchies: Stark, D. C. Recombinant property in East European capitalism. American Journal of Sociology, 101(4), 993–1027 (1996).

No, really (working paper, available on-line, 2000). Rogers, E. The Diffusion of Innovations, 4th ed. (Free Press, New York, 1995). Romer, P. Increasing returns and long-run growth. Journal of Political Economy, 94(5), 1002–1034 (1986). Sabel, C. F. Diversity, not specialization: The ties that bind the (new) industrial district. In Quadrio Curzio, A., and Fortis, M. (eds.), Complexity and Industrial Clusters Dynamics Models in Theory and Practice (Physica-Verlag, Heidelberg, 2002). Sachtjen, M. L., Carreras, B. A., and Lynch, V. E. Disturbances in a power transmission system. Physical Review E, 61(5), 4877–4882 (2000). Sah, R. K., and Stiglitz, J. E. The architecture of economic systems: Hierarchies and polyarchies. American Economic Review, 76(4), 716–727(1986). Sattenspiel, L., and Simon, C.

pages: 356 words: 91,157

The New Urban Crisis: How Our Cities Are Increasing Inequality, Deepening Segregation, and Failing the Middle Class?and What We Can Do About It by Richard Florida

affirmative action, Airbnb, basic income, Bernie Sanders, blue-collar work, business climate, Capital in the Twenty-First Century by Thomas Piketty, clean water, Columbine, congestion charging, creative destruction, David Ricardo: comparative advantage, declining real wages, deindustrialization, Donald Trump, East Village, edge city, Edward Glaeser, failed state, Ferguson, Missouri, Gini coefficient, Google bus, high net worth, income inequality, income per capita, industrial cluster, informal economy, Jane Jacobs, jitney, Kitchen Debate, knowledge economy, knowledge worker, land value tax, low skilled workers, Lyft, megacity, Menlo Park, mortgage tax deduction, Nate Silver, New Economic Geography, new economy, New Urbanism, occupational segregation, Paul Graham, Plutocrats, plutocrats, RAND corporation, rent control, rent-seeking, Richard Florida, rising living standards, Ronald Reagan, secular stagnation, self-driving car, Silicon Valley, sovereign wealth fund, superstar cities, the built environment, The Chicago School, The Death and Life of Great American Cities, the High Line, The Wealth of Nations by Adam Smith, Thorstein Veblen, trickle-down economics, Uber and Lyft, universal basic income, upwardly mobile, urban decay, urban planning, urban renewal, urban sprawl, white flight, young professional

Two key kinds of clustering take place in cities. First, and most obviously, is the clustering of certain firms and industries. The nineteenth-century economist Alfred Marshall identified the gains that occur when competing firms agglomerate. Paul Krugman won his Nobel Prize in part for his insights into the ways that clusters of firms shape our economic geography and power economic growth. Big, populous cities develop thriving industry clusters, such as finance in New York and London, motion pictures in LA, fashion in Milan and Paris, and technology in San Jose. But second, and perhaps even more importantly, skilled and ambitious people cluster in cities. Jane Jacobs originally showed how the clustering of diverse groups of people and skills power urban economies. The Nobel Prize–winning economist Robert Lucas formalized her insights about talent clustering into a theory of economic growth based on what he called human capital externalities.

population lost by, 30 as Sunbelt city, 192 Hoyt, Homer, 127–128 Hulchanski, David, 133 human capital, 21, 103, 208 immigrants, 21, 212 inclusionary zoning, 201–202 income basic minimum, 202, 208–210 housing costs as share of, 199, 221 inequality, 49, 82–87, 90–94, 112, 114, 116, 218 per capita, 220 raising, 202 redistribution, 209 segregation, 100–103, 100 (table), 101 (table), 102 (table), 111, 219 tax, negative, 202, 209–210 India, 41, 44 (table), 45, 170, 173 industry clustering of, 21, 33 deindustrialization and, xii, 5 globalization of, 18 See also high-tech industry inequality. See economic inequality infrastructure connectivity and, 181–183 investment in, 11, 28, 65, 183, 185, 189–190, 195–199, 212 politics and, 195 innovation, 15, 17, 45–46, 186, 193 economic growth and, 8, 10, 25–26, 55, 155, 166, 191, 200, 205, 215 economic inequality and, 49–50, 93 higher-paying service jobs promoting, 206 Integration Segment on Sustainable Urbanization, 167–168 investment gentrification shaped by, 65–67, 72 infrastructure, 11, 28, 65, 183, 185, 189–190, 195–199, 212 in parks and green spaces, 66 people-based, 11, 207–210 place-based, 11, 207–210 poverty tackled by, 11, 207–210 in schools, 66, 207–208 in transit, 28, 190, 196–201, 214 See also venture capital investment Istanbul, 41 Jackson, Kenneth, 190 Jacobs, Jane, 21, 178, 193 Jefferson, Thomas, 190 job growth, suburban crisis and, 160–161 journalism jobs, location of, 68–69 Kaine, Tim, 185 Kalen, Rob, 46 Kenney, Martin, 43 Khrushchev, Nikita, 151 knowledge hubs, 50, 123–124, 142, 157, 171 defined, 6 future of, 215 gentrification of, 56, 68 inequality in, 82, 85, 87–88, 109, 112 renters in, 200 knowledge-based economy, xv See also urbanized knowledge capitalism Kolko, Jed, 62 Krugman, Paul, 21, 189 LA.

pages: 443 words: 112,800

The Third Industrial Revolution: How Lateral Power Is Transforming Energy, the Economy, and the World by Jeremy Rifkin


3D printing, additive manufacturing, Albert Einstein, barriers to entry, borderless world, carbon footprint, centre right, collaborative consumption, collaborative economy, Community Supported Agriculture, corporate governance, decarbonisation, distributed generation,, energy security, energy transition, global supply chain, hydrogen economy, income inequality, industrial cluster, informal economy, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Isaac Newton, job automation, knowledge economy, manufacturing employment, marginal employment, Martin Wolf, Masdar, megacity, Mikhail Gorbachev, new economy, off grid, oil shale / tar sands, oil shock, open borders, peak oil, Ponzi scheme, post-oil, purchasing power parity, Ray Kurzweil, Ronald Reagan, Silicon Valley, Simon Kuznets, Skype, smart grid, smart meter, Spread Networks laid a new fibre optics cable between New York and Chicago, supply-chain management, the market place, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, transaction costs, trickle-down economics, urban planning, urban renewal, Yom Kippur War, Zipcar

Cambridge: Cambridge University Press, p. 133. 9.Ibid., p. 145. 10.Harl, K. (2001). Early Medieval and Byzantine Civilization: Constantine to Crusades. Encarta Online Encyclopedia. Retrieved from 11.ICF Consulting. (2005, July). Alamo Regional Industry Cluster Analysis. San Francisco: Author; Laitner, S., & Goldberg, M. (1996). Planning for Success: An Economic Development Guide for Small Communities. Washington, DC: American Public Power Association. 12.ICF Consulting. (2005, July). Alamo Regional Industry Cluster Analysis. San Francisco: Author. 13.Laitner, J. A., & Goldberg, M. (1996). Planning for Success: An Economic Development Guide for Small Communities. Washington, DC: American Public Power Association. 14.Ibid., p. 12. 15.Ibid. 16.Ibid., p. 13. 17.Clinton, B. (2010, September 19).

pages: 215 words: 55,212

The Mesh: Why the Future of Business Is Sharing by Lisa Gansky


Airbnb, Amazon Mechanical Turk, Amazon Web Services, banking crisis, barriers to entry, carbon footprint, Chuck Templeton: OpenTable, cloud computing, credit crunch, crowdsourcing, diversification, Firefox, fixed income, Google Earth, industrial cluster, Internet of things, Kickstarter, late fees, Network effects, new economy, peer-to-peer lending, recommendation engine, RFID, Richard Florida, Richard Thaler, ride hailing / ride sharing, sharing economy, Silicon Valley, smart grid, social web, software as a service, TaskRabbit, the built environment, walkable city, yield management, young professional, Zipcar

No wonder that, even in the United States, walkable cities and neighborhoods designed along the lines of European “café society” have become more desirable. Real estate listings feature “walk scores.” There’s even a noticeable reverse migration from American suburbs back to the cities. Urban areas with greater density are also fertile ground for clusters of related Mesh businesses to take root and grow. Michael Porter at Harvard studies industry clusters, such as shoes in Milan, publishing in New York, film in Mumbai, and technology in Silicon Valley. In the Harvard Business Review he writes, “Clusters are important, because they allow companies to be more productive and innovative than they could be in isolation. [Clusters] reduce the barriers to entry for new business creation relative to other locations.” The proximity of businesses in an urban cluster speeds up sharing of expertise and labor pools, makes opportunities easier to spot, and promotes cooperation around common market goals.

pages: 196 words: 57,974

Company: A Short History of a Revolutionary Idea by John Micklethwait, Adrian Wooldridge


affirmative action, barriers to entry, Bonfire of the Vanities, borderless world, business process, Corn Laws, corporate governance, corporate raider, corporate social responsibility, creative destruction, credit crunch, crony capitalism, double entry bookkeeping, Etonian, hiring and firing, industrial cluster, invisible hand, James Watt: steam engine, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, knowledge economy, knowledge worker, laissez-faire capitalism, manufacturing employment, market bubble, mittelstand, new economy, North Sea oil, race to the bottom, railway mania, Ronald Coase, Silicon Valley, six sigma, South Sea Bubble, Steve Jobs, Steve Wozniak, strikebreaker, The Nature of the Firm, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade route, transaction costs, tulip mania, wage slave, William Shockley: the traitorous eight

It was for much the same reason that the Internet business found a natural home in northern California. The late 1990s saw an unprecedented number of young Valley firms going public. In 2000 alone, some $20 billion of venture capital was pumped into the region. By then, the Internet bubble was already bursting. Even allowing for that (and all the Valley’s other drawbacks, such as high house prices, terrible traffic, and unrelenting ugliness), the region still counted as the most dynamic industry cluster in the world. By 2001, Silicon Valley provided jobs for 1.35 million people, roughly three times the figure for 1975, its productivity and income levels were roughly double the national averages, and it collected one in twelve new patents in America.21 Silicon Valley changed companies in two ways. The first was through the products it made. At the heart of nearly all of them was the principle of miniaturization.

pages: 209 words: 80,086

The Global Auction: The Broken Promises of Education, Jobs, and Incomes by Phillip Brown, Hugh Lauder, David Ashton


active measures, affirmative action, barriers to entry, Branko Milanovic, BRICs, business process, business process outsourcing, call centre, collective bargaining, corporate governance, creative destruction, credit crunch, David Ricardo: comparative advantage, deindustrialization, deskilling, Frederick Winslow Taylor, full employment, future of work, glass ceiling, global supply chain, immigration reform, income inequality, industrial cluster, industrial robot, intangible asset, job automation, Joseph Schumpeter, knowledge economy, knowledge worker, labour market flexibility, low skilled workers, manufacturing employment, market bubble, market design, neoliberal agenda, new economy, Paul Samuelson, pensions crisis, post-industrial society, profit maximization, purchasing power parity, QWERTY keyboard, race to the bottom, Richard Florida, Ronald Reagan, shareholder value, Silicon Valley, sovereign wealth fund, stem cell, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, Thomas L Friedman, trade liberalization, transaction costs, trickle-down economics, winner-take-all economy, working poor, zero-sum game

Notes to Pages 92–105 177 7. Robert Hayes and William Abernathy, “Managing Our Way to Economic Decline,” Harvard Business Review (July/August 1980): 70. See also Robert Reich, The Next American Frontier (New York: Penguin, 1984); Bennett Harrison and Barry Bluestone, The Great U-Turn (New York: Basic Books, 1988); Lester Thurow, Head-to-Head (London: Nicholas Brealey, 1993); William Lazonick, “Industry Clusters versus Global Webs: Organizational Capabilities in the American Economy,” Industrial and Corporate Change, 2 (1993): 1–24. 8. Hayes and Abernathy, “Managing Our Way to Economic Decline,” 68. In Fordist plants, although there had been a clear division between those who did the company’s thinking and those who did the company’s producing, the former often had experience of the industry in which they had based their careers. 9.

The Techno-Human Condition by Braden R. Allenby, Daniel R. Sarewitz


airport security, augmented reality, carbon footprint, clean water, cognitive dissonance, conceptual framework, creative destruction, Credit Default Swap, decarbonisation, facts on the ground, friendly fire, industrial cluster, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Isaac Newton, Jane Jacobs, land tenure, life extension, Long Term Capital Management, market fundamentalism, mutually assured destruction, nuclear winter, Peter Singer: altruism, planetary scale, prediction markets, Ralph Waldo Emerson, Ray Kurzweil, Silicon Valley, smart grid, source of truth, stem cell, Stewart Brand, technoutopianism, the built environment, The Wealth of Nations by Adam Smith, transcontinental railway, Whole Earth Catalog

Though definitions and dates are somewhat loose, major waves stand out, powered by technological clusters: railroads and steam technology from about 1840 to 1890, steel, heavy engineering, and electricity from about 1890 to 1930, automobiles, petroleum, and aircraft from about 1930 to 1990, and information and communication technology, with its computerization of the economy, from about 1990 onward (although, as we will discuss, this may be just the tip of the iceberg). And with each wave of innovation came disturbing and unpredictable institutional, organizational, economic, cultural, and political changes. Specialized professional managerial systems and associated industrial efficiency techniques ("Taylorism") characterized the heavy-industry cluster; the automotive cluster could not have occurred without a petroleum industry and a mass consumer credit system; a far more networked, flexible industrial and financial structure began to evolve during the information cluster, and so on. The railroad story makes several general principles of technological evolution crystal clear. First, because technological systems can and often do destabilize existing institutions and power relationships, they will be opposed by many who see their place in the world and their worldviews under siege and who quite rationally seek to resist.

pages: 327 words: 103,336

Everything Is Obvious: *Once You Know the Answer by Duncan J. Watts


active measures, affirmative action, Albert Einstein, Amazon Mechanical Turk, Black Swan, butterfly effect, Carmen Reinhart, Cass Sunstein, clockwork universe, cognitive dissonance, collapse of Lehman Brothers, complexity theory, correlation does not imply causation, crowdsourcing, death of newspapers, discovery of DNA, East Village, easy for humans, difficult for computers, edge city,, Erik Brynjolfsson, framing effect, Geoffrey West, Santa Fe Institute, George Santayana, happiness index / gross national happiness, high batting average, hindsight bias, illegal immigration, industrial cluster, interest rate swap, invention of the printing press, invention of the telescope, invisible hand, Isaac Newton, Jane Jacobs, Jeff Bezos, Joseph Schumpeter, Kenneth Rogoff, lake wobegon effect, Long Term Capital Management, loss aversion, medical malpractice, meta analysis, meta-analysis, Milgram experiment, natural language processing, Netflix Prize, Network effects, oil shock, packet switching, pattern recognition, performance metric, phenotype, Pierre-Simon Laplace, planetary scale, prediction markets, pre–internet, RAND corporation, random walk, RFID, school choice, Silicon Valley, statistical model, Steve Ballmer, Steve Jobs, Steve Wozniak, supply-chain management, The Death and Life of Great American Cities, the scientific method, The Wisdom of Crowds, too big to fail, Toyota Production System, ultimatum game, urban planning, Vincenzo Peruggia: Mona Lisa, Watson beat the top human players on Jeopardy!, X Prize

See Watts (2003, Chapter 9) for an account of Toyota’s near catastrophe with “just in time” manufacturing, and also their remarkable recovery. See Nishiguchi and Beaudet (2000) for the original account. See Helper, MacDuffie, and Sabel (2000) for a discussion of how the principles of the Toyota production system have been adopted by American firms. 30. See Sabel (2007) for more details on what makes for successful industrial clusters, and Giuliani, Rabellotti, and van Dijk (2005) for a range of case studies. See Lerner (2009) for cautionary lessons in government attempts to stimulate innovation. 31. Of course in attempting to generalize local solutions, one must remain sensitive to the context in which they are used. Just because a particular hand-washing practice works in one hospital does not necessarily mean that it will work in another, where a different set of resources, constraints, problems, patients, and cultural attitudes may prevail.

pages: 523 words: 111,615

The Economics of Enough: How to Run the Economy as if the Future Matters by Diane Coyle


accounting loophole / creative accounting, affirmative action, bank run, banking crisis, Berlin Wall, bonus culture, Branko Milanovic, BRICs, call centre, Cass Sunstein, central bank independence, collapse of Lehman Brothers, conceptual framework, corporate governance, correlation does not imply causation, Credit Default Swap, deindustrialization, demographic transition, Diane Coyle, disintermediation, Edward Glaeser, endogenous growth, Eugene Fama: efficient market hypothesis, experimental economics, Fall of the Berlin Wall, Financial Instability Hypothesis, Francis Fukuyama: the end of history, George Akerlof, Gini coefficient, global supply chain, Gordon Gekko, greed is good, happiness index / gross national happiness, Hyman Minsky, If something cannot go on forever, it will stop - Herbert Stein's Law, illegal immigration, income inequality, income per capita, industrial cluster, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jane Jacobs, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, knowledge economy, labour market flexibility, light touch regulation, low skilled workers, market bubble, market design, market fundamentalism, megacity, Network effects, new economy, night-watchman state, Northern Rock, oil shock, Pareto efficiency, principal–agent problem, profit motive, purchasing power parity, railway mania, rising living standards, Ronald Reagan, selective serotonin reuptake inhibitor (SSRI), Silicon Valley, South Sea Bubble, Steven Pinker, The Design of Experiments, The Fortune at the Bottom of the Pyramid, The Market for Lemons, The Myth of the Rational Market, The Spirit Level, transaction costs, transfer pricing, tulip mania, ultimatum game, University of East Anglia, web application, web of trust, winner-take-all economy, World Values Survey, zero-sum game

In the south, social capital was confined within extended families or other small groups, so the town as a whole suffered from the fact that mutual assistance was confined within small subsets of its population at the expense of the rest. In other contexts, urban gangs or terror cells have strong social capital internal to their membership, which translates into weak social capital for the wider social entities in which they live, whether their estate or their nation. Strong social capital will improve the way economic markets operate. One example is the way specialized industrial clusters develop in a particular place, where access to market and the availability of employees to hire are part of the explanation, but so are social factors such as the way people in different firms might exchange know-how about their areas of expertise, or move from one job to another via word of mouth. Sometimes, social capital can stop markets from working properly, however. For example, people might decide they will only do business deals with members of their golf club, or their ethnic group, even if that isn’t objectively the best deal.

pages: 356 words: 103,944

The Globalization Paradox: Democracy and the Future of the World Economy by Dani Rodrik


affirmative action, Asian financial crisis, bank run, banking crisis, bilateral investment treaty, borderless world, Bretton Woods, British Empire, capital controls, Carmen Reinhart, central bank independence, collective bargaining, colonial rule, Corn Laws, corporate governance, corporate social responsibility, credit crunch, Credit Default Swap, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, Doha Development Round,, endogenous growth, eurozone crisis, financial deregulation, financial innovation, floating exchange rates, frictionless, frictionless market, full employment, George Akerlof, guest worker program, Hernando de Soto, immigration reform, income inequality, income per capita, industrial cluster, information asymmetry, joint-stock company, Kenneth Rogoff, labour market flexibility, labour mobility, land reform, liberal capitalism, light touch regulation, Long Term Capital Management, low skilled workers, margin call, market bubble, market fundamentalism, Martin Wolf, mass immigration, Mexican peso crisis / tequila crisis, microcredit, Monroe Doctrine, moral hazard, night-watchman state, non-tariff barriers, offshore financial centre, oil shock, open borders, open economy, Paul Samuelson, price stability, profit maximization, race to the bottom, regulatory arbitrage, savings glut, Silicon Valley, special drawing rights, special economic zone, The Wealth of Nations by Adam Smith, Thomas L Friedman, Tobin tax, too big to fail, trade liberalization, trade route, transaction costs, tulip mania, Washington Consensus, World Values Survey

Domestic markets were protected to attract investors seeking a large consumer base, in addition to those that looked for cost savings. Weak enforcement of intellectual protection laws enabled domestic producers to reverse engineer and imitate foreign technologies with little fear of prosecution. Cities and provinces were given substantial freedoms to fashion their own policies of stimulation and support, which led to the creation of industrial clusters in Shanghai, Shenzhen, Hangzhou, and elsewhere.24 Many of the Chinese companies created through government efforts failed. Accounts of industrial policy in China point to the low productivity and low-technology absorption of many state enterprises and to the lack of coordination (across national ministries as well as across different levels of government) that characterizes Chinese policies.25 But as in Japan a century earlier, state-led efforts played an important role in training workers and managers and in creating demonstration effects.

pages: 407 words: 109,653

Top Dog: The Science of Winning and Losing by Po Bronson, Ashley Merryman


Asperger Syndrome, Berlin Wall, conceptual framework, crowdsourcing, delayed gratification, deliberate practice, Edward Glaeser, experimental economics, Fall of the Berlin Wall, fear of failure, game design, industrial cluster, Jean Tirole, knowledge worker, loss aversion, Mark Zuckerberg, meta analysis, meta-analysis, Mikhail Gorbachev, phenotype, Richard Feynman, Richard Feynman, risk tolerance, school choice, selection bias, shareholder value, Silicon Valley, six sigma, Steve Jobs, zero-sum game

., & Olav Sorenson, “The Red Queen in Organizational Development,” Industrial & Corporate Change, vol. 11(2), pp. 289–325 (2002) Belussi, Fiorenza, “The Generation of Contextual Knowledge through Communication Processes: The Case of the Packaging Machinery Industry in the Bologna District,” In: Fiorenza Belussi, Giorgio Gottardi, & Enzo Rullani (Eds.), The Technological Evolution of Industrial Districts (Economics of Science, Technology & Innovation), ch. 15, pp. 341–366, Norwell, MA: Kluwer Academic Press (2003) Belussi, Fiorenza, Alessia Sammarra, & Silvia Rita Sedita, “Entrepreneurship and Innovation—Organization Systems and Regions,” Paper Presentation for 25th Celebration Conference, DRUID, Copenhagen (2005) Boari, Cristina, “Industrial Clusters, Focal Firms, and Economic Dynamism: A Perspective from Italy,” Paper No. 37186, Washington, DC: World Bank Institute (2001) Boari, Cristina, Guido Fioretti, & Vincenza Odorici, “Rivalry and Learning among Clustered and Isolated Firms,” In: Edoardo Mollona (Ed.), Computational Analysis of Firms’ Organization and Strategic Behaviour, ch. 8, pp. 171–192, New York: Routledge (2010) Boari, Cristina, & Andrea Lipparini, “Networks within Industrial Districts: Organising Knowledge Creation and Transfer by Means of Moderate Hierarchies,” Journal of Management & Governance, vol. 3(4), pp. 339–360 (1999) Boari, Cristina, Vincenza Odoricia, & Marco Zamarian, “Clusters and Rivalry: Does Localization Really Matter?”

pages: 349 words: 95,972

Messy: The Power of Disorder to Transform Our Lives by Tim Harford


affirmative action, Air France Flight 447, Airbnb, airport security, Albert Einstein, Amazon Mechanical Turk, Amazon Web Services, assortative mating, Atul Gawande, autonomous vehicles, banking crisis, Barry Marshall: ulcers, Basel III, Berlin Wall, British Empire, Broken windows theory, call centre, Cass Sunstein, Chris Urmson, cloud computing, collateralized debt obligation, crowdsourcing, deindustrialization, Donald Trump, Erdős number, experimental subject, Ferguson, Missouri, Filter Bubble, Frank Gehry, game design, global supply chain, Googley, Guggenheim Bilbao, high net worth, Inbox Zero, income inequality, industrial cluster, Internet of things, Jane Jacobs, Jeff Bezos, Loebner Prize, Louis Pasteur, Marc Andreessen, Mark Zuckerberg, Menlo Park, Merlin Mann, microbiome, out of africa, Paul Erdős, Richard Thaler, Rosa Parks, self-driving car, side project, Silicon Valley, Silicon Valley startup, Skype, Steve Jobs, Steven Levy, Stewart Brand, telemarketer, the built environment, The Death and Life of Great American Cities, Turing test, urban decay, William Langewiesche

Even more extraordinary is the tale of a woman hoping to pick up a friend from the local train station in Belgium who instead trustingly drove 800 miles to Zagreb, Croatia. * A roundabout is the European answer to a traffic circle, typically smaller and with no traffic lights. * Specialized cities had also been widely thought to be hubs of innovation. The great economist Alfred Marshall had described the advantages of industrial clusters. “When an industry has thus chosen a locality for itself, it is likely to stay there long: so great are the advantages which people following the same skilled trade get from near neighborhood to one another,” he wrote in Principles of Economics in 1890. “The mysteries of the trade become no mysteries; but are as it were in the air.” Jane Jacobs agreed with most of that analysis: ideas did spread, and they did so street by street.

pages: 372 words: 89,876

The Connected Company by Dave Gray, Thomas Vander Wal


A Pattern Language, Albert Einstein, Amazon Mechanical Turk, Amazon Web Services, Atul Gawande, Berlin Wall, business process, call centre, Clayton Christensen, commoditize, complexity theory, creative destruction, David Heinemeier Hansson,, factory automation, Googley, index card, industrial cluster, interchangeable parts, inventory management, Jeff Bezos, John Markoff, Kevin Kelly, loose coupling, market design, minimum viable product, more computing power than Apollo, profit maximization, Richard Florida, Ruby on Rails, self-driving car, shareholder value, side project, Silicon Valley, skunkworks, software as a service, South of Market, San Francisco, Steve Jobs, Steven Levy, Stewart Brand, The Wealth of Nations by Adam Smith, Tony Hsieh, Toyota Production System, Vanguard fund, web application, WikiLeaks, Zipcar

Not enough closure and the group will lose the trust and cohesion that makes it function as a group. This combination of dense clusters with strong ties with brokers who maintain loose connections between them leads to many performance benefits, including collaboration, creativity, and shared patterns of work. High clustering in business alliances leads to innovation, which is one of the reasons you will find industries clustering together in geographic regions, like technology in Silicon Valley, publishing in New York, and clothing in Milan. The value that comes from these activities is known as social capital. Like every other form of capital, social capital represents stored value—in this case, relationship value—that can be translated into meaningful and tangible benefits. Scale-free Networks Networks constantly change and evolve.

Starstruck: The Business of Celebrity by Currid

barriers to entry, Bernie Madoff, Donald Trump, income inequality, index card, industrial cluster, labour mobility, Mark Zuckerberg, Metcalfe’s law, natural language processing, place-making, Ponzi scheme, post-industrial society, prediction markets, Renaissance Technologies, Richard Florida, Robert Metcalfe, rolodex, shareholder value, Silicon Valley, slashdot, transaction costs, upwardly mobile, urban decay, Vilfredo Pareto, winner-take-all economy

This argument misses the real point of these micro versions of stardom, which is that they exist in their own social and economic stratospheres. 4. Relative celebrity emerges through similar channels as other forms of clustering. Within the economic geography literature, scholars have noted that particular social and economic phenomena occur when a concentration of like-minded labor pools, industries, and resources locate, whether Detroit’s auto industry or Silicon Valley’s technology sector. For an analysis of this phenomenon in industrial clustering, see the original treatise, Marshall’s Principles of Economics. For a more contemporary analysis of clusters, see Porter, “Clusters and the Economics of Competition.” The small-world network phenomenon in the fields of mathematics, physics, and sociology demonstrates similar patterns to those found in relative-celebrity social groups. In small worlds, people within a network are not necessarily physically proximate but most can be reached by every other person within the network through a few small steps.

pages: 484 words: 131,168

The Big Sort: Why the Clustering of Like-Minded America Is Tearing Us Apart by Bill Bishop, Robert G. Cushing


1960s counterculture, affirmative action, American Legislative Exchange Council, assortative mating, big-box store, blue-collar work, Cass Sunstein, citizen journalism, cognitive dissonance, David Brooks, demographic transition, desegregation, Edward Glaeser, immigration reform, income inequality, industrial cluster, Jane Jacobs, knowledge economy, mass immigration, meta analysis, meta-analysis, Milgram experiment, music of the spheres, New Urbanism, post-industrial society, Post-materialism, post-materialism, Ralph Nader, Richard Florida, Ronald Reagan, Silicon Valley, stem cell, Steve Jobs, superstar cities, The Death and Life of Great American Cities, union organizing, War on Poverty, white flight, World Values Survey

They weren't southern field hands or Appalachian coal miners gone to Detroit, Chicago, or Cleveland after being displaced by automated cotton pickers or continuous mining machines. Rather, they came to Portland because this was where they wanted to be, where they could live among their own kind. The English economist Alfred Marshall examined the agglomeration of industries in nineteenth-century England—textile manufacturers in Manchester and cutlery makers in Sheffield—and observed the economic advantages when industry clustered. Textile manufacturers in Manchester shared knowledge about the latest weaving techniques and markets. Skilled spinners were ready for hire because the business of mills and textiles was part of Manchester. "Great are the advantages which people following the same skilled trade get from near neighborhood to one another," Marshall wrote. "The mysteries of the trade become no mysteries, but are, as it were, in the air, and children learn many of them unconsciously."1 Jeff Parker channeled Marshall when he explained why he had moved to Portland and Mercury Studio from Chapel Hill, North Carolina.

pages: 437 words: 113,173

Age of Discovery: Navigating the Risks and Rewards of Our New Renaissance by Ian Goldin, Chris Kutarna


2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, Airbnb, Albert Einstein, AltaVista, Asian financial crisis, asset-backed security, autonomous vehicles, banking crisis, barriers to entry, battle of ideas, Berlin Wall, bioinformatics, bitcoin, Bonfire of the Vanities, clean water, collective bargaining, Colonization of Mars, Credit Default Swap, crowdsourcing, cryptocurrency, Dava Sobel, demographic dividend, Deng Xiaoping, Doha Development Round, double helix, Edward Snowden, Elon Musk,, epigenetics, experimental economics, failed state, Fall of the Berlin Wall, financial innovation, full employment, Galaxy Zoo, global supply chain, Hyperloop, immigration reform, income inequality, indoor plumbing, industrial cluster, industrial robot, information retrieval, Intergovernmental Panel on Climate Change (IPCC), intermodal, Internet of things, invention of the printing press, Isaac Newton, Islamic Golden Age, Khan Academy, Kickstarter, labour market flexibility, low cost carrier, low skilled workers, Lyft, Malacca Straits, mass immigration, megacity, Mikhail Gorbachev, moral hazard, Network effects, New Urbanism, non-tariff barriers, Occupy movement, On the Revolutions of the Heavenly Spheres, open economy, Panamax, Pearl River Delta, personalized medicine, Peter Thiel, post-Panamax, profit motive, rent-seeking, reshoring, Robert Gordon, Robert Metcalfe, Search for Extraterrestrial Intelligence, Second Machine Age, self-driving car, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Skype, smart grid, Snapchat, special economic zone, spice trade, statistical model, Stephen Hawking, Steve Jobs, Stuxnet, TaskRabbit, The Future of Employment, too big to fail, trade liberalization, trade route, transaction costs, transatlantic slave trade, uranium enrichment, We are the 99%, We wanted flying cars, instead we got 140 characters, working poor, working-age population, zero day

They will add 1.3 billion inhabitants through 2030—compared with an increase of just 100 million dwellers in existing big cities.47 We know these new crossroads only vaguely, if at all. They include some 150 regional hubs of 5–10 million inhabitants like China’s Changsha, Brazil’s Joinville and Mexico’s Veracruz; a few hundred midsize growth cities of 1 to 5 million, like India’s Ahmedabad and Russia’s Sochi—often built around local natural resources or industrial clusters; and thousands of smaller boomtowns few of us could find on a map, such as Hengshan, Leibo, Kuchaman City, Konch, Caxias, Timon, Escobedo and Abasolo. China leads the urbanization story. Between 1982 and 1986, the dismantling of state-planned agriculture released surplus workers from their rural posts. China’s urban population catapulted from about 200 million to almost 400 million people in four short, hectic years of transformation.48 China’s next urban boom began after 1992: Deng Xiaoping embarked on his historic Southern Tour of China’s southeast coastal region (during which he may have proclaimed, “To get rich is glorious”), solidified pro-market reforms as Communist Party dogma, and prompted an export-driven expansion that lured rural labor to the coast.

Multicultural Cities: Toronto, New York, and Los Angeles by Mohammed Abdul Qadeer


affirmative action, call centre, David Brooks, deindustrialization, desegregation, edge city,, Frank Gehry, game design, ghettoisation, global village, immigration reform, industrial cluster, Jane Jacobs, knowledge economy, market bubble, McMansion, new economy, New Urbanism, place-making, Richard Florida, risk tolerance, Silicon Valley, Skype, telemarketer, the built environment, The Chicago School, The Death and Life of Great American Cities, the scientific method, urban planning, urban renewal, working-age population, young professional

Los Angeles County’s economy has lesser concentration in services (63.0% of employment in 2009) than New York, but manufacturing had a higher share (11.3% in 2009), inherited from defence industries established during the Second World War. Table 5.2 shows that trade (17.6%), education and health, services (16.1%), and entertainment (Hollywood) and food (11.4%) were the leading industries in 2009. Los Angeles has an industrial cluster of information, defence, biomedical, and environmental technologies, which is an emerging driver of its economy and a platform for international trade. It has the biggest American port and is the connecting point for the Pacific trade. This is the framework of opportunities within which ethnic entrepreneurship and economic participation operate. Ethnicity and the Urban Economy Photo 5.1 Chinese shopping arcade inside Pacific Mall, Markham (Toronto) (courtesy Susan Qadeer) 99 100 Multicultural Cities The Latinization of Los Angeles is the storyline of its transformation under the influence of immigration.

Culture and Prosperity: The Truth About Markets - Why Some Nations Are Rich but Most Remain Poor by John Kay


Albert Einstein, Asian financial crisis, Barry Marshall: ulcers, Berlin Wall, Big bang: deregulation of the City of London, California gold rush, complexity theory, computer age, constrained optimization, corporate governance, corporate social responsibility, correlation does not imply causation, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, Donald Trump, double entry bookkeeping, double helix, Edward Lloyd's coffeehouse, equity premium, Ernest Rutherford, European colonialism, experimental economics, Exxon Valdez, failed state, financial innovation, Francis Fukuyama: the end of history, George Akerlof, George Gilder, greed is good, Gunnar Myrdal, haute couture, illegal immigration, income inequality, industrial cluster, information asymmetry, intangible asset, invention of the telephone, invention of the wheel, invisible hand, John Meriwether, John Nash: game theory, John von Neumann, Kenneth Arrow, Kevin Kelly, knowledge economy, labour market flexibility, late capitalism, light touch regulation, Long Term Capital Management, loss aversion, Mahatma Gandhi, market bubble, market clearing, market fundamentalism, means of production, Menlo Park, Mikhail Gorbachev, money: store of value / unit of account / medium of exchange, moral hazard, Myron Scholes, Naomi Klein, Nash equilibrium, new economy, oil shale / tar sands, oil shock, Pareto efficiency, Paul Samuelson,, popular electronics, price discrimination, price mechanism, prisoner's dilemma, profit maximization, purchasing power parity, QWERTY keyboard, Ralph Nader, RAND corporation, random walk, rent-seeking, Right to Buy, risk tolerance, road to serfdom, Ronald Coase, Ronald Reagan, second-price auction, shareholder value, Silicon Valley, Simon Kuznets, South Sea Bubble, Steve Jobs, telemarketer, The Chicago School, The Death and Life of Great American Cities, The Market for Lemons, The Nature of the Firm, the new new thing, The Predators' Ball, The Wealth of Nations by Adam Smith, Thorstein Veblen, total factor productivity, transaction costs, tulip mania, urban decay, Vilfredo Pareto, Washington Consensus, women in the workforce, yield curve, yield management

Chandler ran Coke for twenty-five years before becoming mayor of Atlanta in 1916. 12. For an elaboration of the relationship between competitive advantage and firm capabilities, see Kay (1993). 13. This example was used in Ricardo's Principles ofPolitical Economy (1817). 14. Own estimates from world trade statistics. 15. Own estimates from Swiss trade statistics. 16. Porter (1990) has repopularized the emphasis on industrial "cluster" noted by Alfred Marshall a century before. Chapter 8: Assignment ••••••••••••••••••••••••••••••••••••• 1. This account of the history of the Portrait ofDr. Gachet is based heavily on Saltzman (1998). 2. Gachet ( 1994). 3. Van Gogh's brother, Theo, was an art dealer who died soon after the painter, and Thea's sister effectively commercialized van Gogh's work: Gachet was first sold in 1897 for 225 francs.

pages: 598 words: 172,137

Who Stole the American Dream? by Hedrick Smith


Affordable Care Act / Obamacare, Airbus A320, airline deregulation, anti-communist, asset allocation, banking crisis, Bonfire of the Vanities, British Empire, business process, clean water, cloud computing, collateralized debt obligation, collective bargaining, commoditize, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, David Brooks, Deng Xiaoping, desegregation, Double Irish / Dutch Sandwich, family office, full employment, global supply chain, Gordon Gekko, guest worker program, hiring and firing, housing crisis, Howard Zinn, income inequality, index fund, industrial cluster, informal economy, invisible hand, Joseph Schumpeter, Kenneth Rogoff, Kitchen Debate, knowledge economy, knowledge worker, laissez-faire capitalism, late fees, Long Term Capital Management, low cost carrier, manufacturing employment, market fundamentalism, Maui Hawaii, mega-rich, mortgage debt, negative equity, new economy, Occupy movement, Own Your Own Home, Paul Samuelson, Peter Thiel, Plutonomy: Buying Luxury, Explaining Global Imbalances, Ponzi scheme, Powell Memorandum, Ralph Nader, RAND corporation, Renaissance Technologies, reshoring, rising living standards, Robert Bork, Robert Shiller, Robert Shiller, rolodex, Ronald Reagan, shareholder value, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Steve Jobs, The Chicago School, The Spirit Level, too big to fail, transaction costs, transcontinental railway, union organizing, Unsafe at Any Speed, Vanguard fund, We are the 99%, women in the workforce, working poor, Y2K

With a competitive advantage from these illegal labor practices, confirmed by an outside audit inspection, Foxcomm, Apple’s biggest supplier in China of iPads and iPhones could undercut and beat out American rivals. “The speed and flexibility is breathtaking,” said one Apple executive. “There’s no American plant that can match that.” Many other American firms found the pull of China’s low-cost, moderately skilled workforce and its state-supported industrial clusters irresistible. With overseas production based in China shipping goods home to American consumers, U.S. multinationals were contributing to America’s record $273 billion trade deficit with China, triple the level a decade earlier. From 2001 to 2010, right after Washington approved free trade with China, the red ink was overwhelming. We Americans bought $1.928 trillion more in goods from China than we sold to China.

pages: 870 words: 259,362

Austerity Britain: 1945-51 by David Kynaston

Alistair Cooke, anti-communist, British Empire, Chelsea Manning, collective bargaining, continuous integration, deindustrialization, deskilling, Etonian, full employment, garden city movement, hiring and firing, industrial cluster, invisible hand, job satisfaction, labour mobility, light touch regulation, mass immigration, moral panic, Neil Kinnock, occupational segregation, price mechanism, rent control, reserve currency, road to serfdom, Ronald Reagan, stakhanovite, strikebreaker, the market place, upwardly mobile, urban planning, urban renewal, very high income, wage slave, washing machines reduced drudgery, wealth creators, women in the workforce, young professional

A report on the British motor industry did concede that it would not be a seller’s market for ever and identified Germany in particular as a potential future competitor of ‘permanent importance’, but that competition would not come from the Volkswagen, which the report reckoned ‘by British standards’ to be ‘uncomfortable and noisy’. Despite increasingly persistent, disobliging complaints from abroad that British cars were becoming a byword for unreliability, it would take a lot to shake the industry’s complacent assumption that British was still best.11 It was an industry clustered in five main places. Each had significantly different characteristics, but in all of them the conveyor-belt assembly line – ‘the track’ – was the relentless, remorseless, unforgiving nerve centre of operations. Dagenham was the British home of Ford – a Detroit in miniature since the early 1930s. The works put a premium on continuous, integrated production and included a blast furnace, coke ovens, a powerhouse, iron and steel foundries, and fully mechanised jetties for loading and unloading that reached out into the Thames.