Ideas Fuel Cities

An article by David Leonhardt in ‘Key’, the real estate magazine of the New York Times, looks at why residency rates in mega-cities of New York and Los Angeles aren’t decreasing at the same rate of newer cities even though technology now allows people to live and work in cheaper and arguably more attractive surroundings like Vermont. Apparently it’s because the cities are full of ideas. The economics columnist writes:

Despite all the ways that technology has made distance matter less, geography matters more. It may be easier to transport an individual job from New York to Vermont, but the value of being in New York is actually greater than it used to be.

“The essence of cities is physical proximity,” explains Edward Glaeser, a Harvard professor who specializes in the economics of geography. “They’ve always had the advantage of making the movement of people easier, the movement of goods easier and the movement of ideas easier.” What has changed over the last few decades, Glaeser says, is that good ideas — be they in finance, entertainment, technology — have become much more valuable. The best ones can be turned into products that are soon being sold all over the world, thanks to globalization, FedEx, the Internet and a host of other forces. But it’s still much easier to come up with a good idea when you are surrounded by a lot of other people working on the same problems as you are.

NY Times