CityReads│Four Keys to the City

CityReadsVol.77

Four Keys to the City

Why do some cities grow economically while others decline? Why do some show sustained economic performance while others cycle up and down? In Keys to the City, Michael Storper, one of the world's leading economic geographers, looks at why we should consider economic development issues within a regional context--at the level of the city-region--and why city economies develop unequally. Storper identifies four contexts that shape urban economic development: economic, institutional, innovational and interactional, and political. 

Michael Storper, 2013. Keys to the City: How Economics, Institutions, Social Interaction, and Politics Shape Development, Princeton University, Press.

Source：http://press.princeton.edu/titles/10022.html

Why do city-regions grow? Why do some decline? What differentiates city-regions that are able to sustain growth from those that are not? What are the forces that cause per capita income to converge or diverge, and under what conditions do they operate? Why are some city-regions so much more productive than others? What is the relationship of a region’s material-physical structure to its economic performance? What are the principal regularities in urban and regional growth, and what are the events and processes that are not temporally or geographically regular but instead affect pathways of development in irreversible ways?

In Keys to the City, Michael Storper, one of the world's leading economic geographers, attempts to address these questions.

Urban and regional development is a noisy and complex phenomenon. Its most significant causes cannot be understood through the tools of any single discipline or theory, even the “economic” ones.

Michael Storper looks at why we should consider economic development issues within a regional context--at the level of the city-region--and why city economies develop unequally. Storper identifies four contexts that shape urban economic development: economic, institutional, innovational and interactional, and political. The book is divided into four parts, which discusses the four toolboxes.

The Economic Context: "Jobs follow people" or "People follow jobs”

For the noisy and complex problem identified above, there will be no single “big-bang” model, but rather four analytic contexts, covering several disciplines: again, economic, institutional, innovation or interaction, and political or societal.

The economic context explored in chapters 2 through 5 concerns the geography of production, or where firms and jobs go, and the geography of individual household and worker locational choices.

I ask whether it is movements of people seeking quality of life or jobs/firms seeking production locations that set off major sequences of change in urban and regional development. The response is that city-regions develop mostly as workshops of firms, not playgrounds of individuals.

Even though London, New York, and Paris have central-city neighborhoods that are consumption playgrounds for the rich of the world, they are above all major productive hubs in the global economy. The vast majority of their people come to these cities in order to work. The world urban system—from its richest to poorest cities—is not a set of playground or amenity parks but instead of a vast system of interlinked workshops.

Cities are workshops, not playgrounds: economic development is fundamentally about the development of the productive forces of a region. The development of the region’s productive forces will largely determine its skill mix, population changes and income level.

Economic activities do two things: they develop in places, and they sort between cities and counties.

Activities exit from places when their agglomeration economies weaken. They cluster in places when they require the sharing of productive inputs, labor pools, or interaction for innovation.

A huge amount of urban policy is based on versions of the amenity theory of urban development, and its cousin, the “playground’ model. These approaches are misguided. The high-end versions of such policies are designed to attract the skilled, rich, or creative by providing them the environments that they supposedly crave. The low-end versions are designed basically to keep housing cheap. These policies are only relevant for attracting the limited populations that do not have to work: the wealthy and the retired. These policies tend to monopolize political attention and crowd out discussion of the most basic challenge for city-regions, which is how to generate income.

The Institutional Context: Winner and Loser Regions

Any major wave of fundamental changes in the drivers of urban economic development will consolidate around certain “winner” regions and generate a set of less successful places. There are many possible reasons for such selectivity: “first-mover accidents” (i.e., luck), institutions, the geography of innovation, and the deliberate actions or policies of states. Did New York become a great financial center by just being there first, or did Silicon Valley locate near San Francisco because one of its founders needed to be near his aging mother? Did something deep about the institutions and social structures of these places attract these industries to these locations? Was it their capacity to innovate, and what is that? Or did the actions of states and governments favor these places?

It is widely thought that “good institutions” have something to do with the economic development of nations—and increasingly, this notion is applied to city-regions. For the most part, development economics considers institutions in the capital I sense of Institutions (states, constitutions, rules, laws, and formal policies). But there is also a small i sense of institutions, as the organization of the key “groups” or “communities” in the economy—from elite networks to civic associations and neighborhood groups. I am interested in knowing how they interact, often in unintentional ways, to shape labor markets, schooling, attitudes, and even formal policies.

Metropolitan regions within countries have similar formal Institutions, but they differ greatly in the communities they have, and how these communities bridge together to form the overarching society of the region. These differences have a strong influence on how metropolitan regions perform over time in the way they capture, develop, or repel economic activities. In part II, I concentrate on the economic sociology of city-regions and especially on informal institutionalized action at the regional scale.

Institutions combine with economic geography to shape urban productivity. Dense urban economies are systems of intensive interactions—among firms, between firms and customers, and between workers, households, and firms, with all of this embedded in interaction with government, education and a wide variety of other organizations.

Winning in the development process depends on successful specialization and respecialization. In an open world economy, local economic development depends fundamentally on doing what it takes to maintain or improve the region’s position in the shifting economic-wide division of labor. The key element of any developmental process for a city-region is to specialize as favorably as possible.

Social Interaction: How to Develop Buzz City?

Economics and sociology are then heavily mobilized, in combination, in part III of the book, where I consider the local interaction context and its role in a globalizing world economic system by examining its role in the geography of innovation. Innovative sectors tend to be highly concentrated—agglomerated—in a relatively small number of cities, where their firms, talent pools, and knowledge are located. Why, for example, does information technology locate in San Jose, finance in London and Hong Kong, entertainment in Los Angeles, and pharmaceuticals in Basel? The location of these industries in certain cities (and countries, by extension) is key to where the high-skilled jobs are and the hierarchy of incomes.

Globalization and local interaction are two complementary sides of development. The globalization of technology, transport, and communication enhances local interactions at the same time that it replaces certain local functions with long-distance imports. But the winner regions have more growth of local interaction than the regions in other development clubs.

Particularly strong forms of local interaction amount to a form of local genius. Local genius is a highly desirable form of regional development, difficult to imitate but also difficult to nurture. Face-to-face contact is an especially strong form of local interaction. Demand is growing for face-to-face interaction, especially in certain kind of cities with multiple genius sectors. When many forms of local genius collide in a city, the resulting buzz affects their codevelopment.

The Political Context: Efficiency or Equity? 

City-regions also develop in part as a result of politics. They are shaped by national policies in different ways, and in turn, they enter into national political and social life in a variety of ways that are often not apparent to the naked eye. In the final section of the book, I look at cities and city-systems within the overall political-economic process and explore efficiency and equity in relation to territorial development.

Four broad mechanisms of politics are examined: the ability to create new city and regional authorities and governments, expressing the difference between more centralized and more decentralized societies; the rate of migration of firms and people from region to region; the role of land and land development in the economy; and the degree of differences in labor regulation and wages among regions. These four mechanisms influence important economic and geographical outcomes: the dynamics of reorganizing factors of production (labor, firms, and knowledge) across regions, which is one of the main components of innovation; the pattern of togetherness or separation of social groups; and the use of geographical  “exit” (mobility) versus the use of “voice and loyalty” to affect political and economic processes.

The viability of countries has long depended on their ability to hold the winners and losers of society together—in both people and place terms (winner and loser categories of the population, and winner and loser regions).

Given the reality of uneven development and turbulence, what—if anything—should public policy do?

Regional dynamics are deeply inscribed in the national development process. It is not possible for all city-regions to be at the top of the income hierarchy or stay there permanently. There can be wasteful forms of intercity competition, overlap, and redundancy in investments.

Justice, efficiency and cities. The stakes in city-region development are enormous—for how we live and our welfare. Determining the right mixture of efficiency and equity is the question of justice in relationship to development.

Yet there is virtually no real public conversation about urban efficiency and even less about its relationship to justice.

Conclusion：Economic geography, institutions, innovation, and justice: these are the keys to understanding city-region development. These keys to the city can be used to open up doors to better scholarship and practice.

Related CityReads：

（Click the title, or enter Official Account and reply number ）

CityReads ∣Notes On Cities

"CityReads", a subscription account on WeChat, 

posts our notes on city reads weekly. 

Please follow us by searching "CityReads"  

Or scanning the QR code  above