False Economy - Alan Beattie [35]
A century of cheap internal-combustion engines meant people could propel themselves and their goods over long distances at ever lower cost. Cheap transport pushed Americans away from Cleveland and Detroit and toward the cheap land and warm weather in sprawling low-density Sunbelt cities like Phoenix, which has grown by one-third to 1.5 million people in the last fifteen years. Most of those twenty cities named above are bywords for industrial decline. Only six make today's top twenty. And of America's sixteen biggest cities in 1950, only four have a larger population today than then, even though the national population has since doubled.
On the face of it, the twenty-first-century revolution in information technology (IT) and digitization ought, perhaps, to have completed the job. Telecommuting can remove the need to transport people to the workplace, or even have a physical workplace at all. And yet several of the cities that seemed to be dying in the 1970s—New York, Chicago, London—have since enjoyed remarkable revivals.
In a sense, what they have done is to recreate the spirit that inspired the city-states of medieval and early modern Europe. Globalization, and particularly the digitization of information, means that cities have again begun to owe more to their ability to convene international markets than to their direct links with local economies.
For the elites in many highly specialized industries, such as advertising, it would appear that face-to-face contact with clients and with each other remains essential. The most digitized and computerized industries—media, software, and financial services—huddle in expensive urban or suburban enclaves like Silicon Valley and Wall Street. In central London's Soho, a small and highly specialized industry of postproduc-tion movie companies continues to cluster. If you don't drink with other producers in the pubs in Soho, you miss out on the best work. New York is the only one out of the sixteen largest cities in the northeastern or midwestern states whose population is larger than it was fifty years ago.
Similarly, there is no particular reason why anyone at all, apart from government officials, should live in Madrid. The city sits forlornly in the middle of a high plateau—remarkably, it is the highest capital in Europe—which is brutally hot in summer and chilly in winter. Yet by retaining a critical mass of corporate headquarters and financial services it has fought off the challenges of more superficially glamorous second-tier cities like Barcelona.
Agglomeration is replacing the location of natural resources and physical trade as a main reason for living in cities. Even entirely new industries generally create an urban cluster rather than spreading themselves around evenly. The southern Indian city of Hyderabad went from 1 to 7 million inhabitants in a couple of decades when the IT industry appeared out of the ether. The immigrants who work in many growing industries, also, move to where similar immigrants already live, creating a self-reinforcing dynamic.
But because clustering could take place anywhere, the competition between cities has become more acute and the difference between successes and failures more evident. When Chicago was the only big port on the southern west coast of Lake Michigan, it had a natural local monopoly. When the importance of physical trade declined, it became merely one of the many cities—along with Detroit, Cleveland, Milwaukee—that could have become the commercial and finance hub of the Midwest. Chicago had not just to coexist with the competition but to beat it—notably by expanding its commodity-trading business and holding it in the face of competition from the likes of New York.
In the same way that modern technologies often result in winner-take-all companies or products (Microsoft Windows, for example), a limited number of cities will specialize in one industry. Tokyo, Hong Kong,