This is a wonderful book. R. Florida counters the theories of the
The World Is Flat: A Brief History of the Twenty-first Century. At the beginning, he outlines how just 40 Mega-Regions dominate the World economy. While those account for just 17% of the World's population, they generate two thirds of its GDP and over 85% of its innovation (measured by patents and scientific papers). Additionally, the GDP of those Mega-Regions are growing faster. So, the concentration of economic power in those centers is accelerating. He calls this the "clustering effect." Thus, the World is not flat. It is spiky and getting spikier. Risk taking, creative, and talented people represent the "creative class" a concept he introduced in
The Rise of the Creative Class: And How It's Transforming Work, Leisure, Community and Everyday Life. The creative class members have strong incentives to cluster where the action is (the Mega-Regions). He demonstrates how the main economic scale has shifted from Nations to Mega-Regions and MSA level. The first two Mega-Regions (greater Tokyo and the D.C., New York, Boston corridor) both generate GDPs greater than $2 trillion. They would rank as the 3d and 4th largest World economies second only to the U.S. and Japan.
With other eminent social scientists, he studies the allocation of human resources in the U.S. in many ways. He shares the resulting maps of: a) the U.S. Mega-Regions, b) areas by % of college graduates, c) areas by income, d) areas by % belonging to creative class, e) areas by home prices. He uses similar color coding for each of those five maps that focuses on those different variables. And, the five different maps are very alike. It is as if you are seeing the same map five times, but with different legends. Thus, the high income, educated, creative class clusters within the Mega-Regions of the West Coast and the North East.
Next, R. Florida introduces the reader to the Big 5 Factor psychological model with the factors being: extraversion, agreeableness, neuroticism, conscientiousness, and openness to new experience. He invites the reader to take the test at a mentioned website. My whole family took it. And, it was fun and revealing. The website captures the anonymous psychological profiles and zip codes. From this data, Florida and his colleagues create a map of personality types that shows where the conscientious types live, etc... Now, we can add a sixth dimension to the map: Openness. Thus, it is the open-minded, high income, educated, creative class that all clusters in the Mega-Regions of the West Coast and North East. And, that's where the most expensive real estate markets are.
R. Florida analysis states that society is increasingly sorting itself by location. His analysis reminds one of
Bell Curve: Intelligence and Class Structure in American Life (A Free Press Paperbacks Book) where Hernstein and Murray indicated that society is increasingly stratified by cognitive abilities. Thus, accountants, lawyers, doctors, and investment bankers all have increasingly higher cognitive abilities vs a few decades ago. The same happens within the mentioned Mega-Regions of the West Coast and North East. Individuals with higher capabilities and income opportunities migrate to those areas and bid up local real estate values. Others find themselves priced out and move out of those "Superstar Cities" leaving room for other creative class achievers to move in further bidding up real estate prices. The creative class achievers need to move to those Superstar Cities to fulfill their potential. R. Florida has all those specialized regions mapped out in Figure 7.3: The New Geography of Work. If you want to be an investment banker you need to be in Manhattan. If you are engaged in hi tech you need to be in Silicon Valley.
R. Florida's work relates closely to another of Murray's book
Human Accomplishment : The Pursuit of Excellence in the Arts and Sciences, 800 B.C. to 1950 where Murray develops a regression model estimating how many luminaries lived at any one time in a specific country. The variables included GDP, human capital (top notch universities), networks (# of political and financial centers), and population of largest city (clustering). R. Florida explains how, why, and where people cluster. Murray explains the historical implication of clustering (# of luminaries in various fields at a specific time period).
In the last few chapters R. Florida focuses on the best places to live for various stages of life. He finds that a few cities perform well on many criteria. The San Francisco Bay Area performs well in 20 different categories. Boston is second ranking well in 13.
Within those last chapters, R. Florida shares many interesting insights. He finally addresses the relationship between likelihood of moving and life stages; a 25 year old is three times more likely than a 45 year old to move. This entails that cities that loose the young adults are loosing talent permanently. Once a college grad leaves town, he is unlikely to come back. Young college grads cluster in just a few cities. Those are the winners in the competition for talent. Empty nesters over 65 are likely to move further than their counterparts a decade younger. Where the Boomers will move as empty nesters will impact real estate prices and culture. He anticipates a mild generation conflict between Boomers and the younger creative class that will inhabit the same communities.
Generations: The History of America's Future, 1584 to 2069is an excellent book that further covers generation conflicts.
He shares other interesting statistics. The real jobless rate for black male high school drop out in their 20s including those in jail was 72% in 2004. Within this same group more are in jail then working. On another topic, chance of a high school graduate marrying a college graduate shrank by 43% between 1940 and the late 70s. People mate increasingly within equal education level. This is causing a rise in household income inequality as education is highly correlated to income.
If you find this review interesting, you'll find the book fascinating.
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