SAN FRANCISCO - Well before anyone thought of this place as the center of the tech economy, the Bay Area built ships. And it did so with the help of many parts of the country.
Douglas fir trees logged in the Pacific Northwest were turned into lumber schooners here. Steel from the East, brought in by railroad, became merchant vessels. During World War II, workers assembled military shipswith parts from across the country: steam turbines from Schenectady, N.Y., and Lester, Pa.; gear winches from Tacoma, Wash.; radio equipment from Newark; compasses from Detroit; generators from Milwaukee.
Most of these links that tied the Bay Area’s prosperity to a web of places far from here have faded. Westinghouse closed the Pennsylvania plant. General Electric downsized in Schenectady. The Milwaukee manufacturer dissolved. The old Bethlehem Shipbuilding yard in San Francisco will soon be redeveloped. And its former parent company, the Bethlehem Steel Corporation in Bethlehem, Pa., went bankrupt in 2001.
The companies that now drive the Bay Area’s soaring wealth — and that represent part of the American economy that’s booming — don’t need these communities in the same way. Google’s digital products don’t have a physical supply chain. Facebook doesn’t have dispersed manufacturers. Apple, which does make tangible things, now primarily makes them overseas.
A changing economy has been good to the region, and to a number of other predominantly coastal metros like New York, Boston and Seattle. But economists and geographers are now questioning what the nature of their success means for the rest of the country. What happens to America’s manufacturing heartland when Silicon Valley turns to China? Where do former mill and mining towns fit in when big cities shift to digital work? How does upstate New York benefit when New York City increases business with Tokyo?
The answers have social and political implications at a time when broad swaths of the country feel alienated from and resentful of “elite” cities that appear from a distance to have gone unscathed by the forces hollowing out smaller communities. To the extent that many Americans believe they’re disconnected from the prosperity in these major metros — even as they use the apps and services created there — perhaps they’re right.
“These types of urban economies need other major urban economies more than they need the standardized production economies of other cities in their country,” said Saskia Sassen, a sociologist at Columbia who has long studied the global cities that occupy interdependent nodes in the world economy. New York, in other words, needs London. But what about Bethlehem, Pa.?
Such a picture, Ms. Sassen said, “breaks a past pattern where a range of smaller, more provincial cities actually fed the rise of the major cities.” Now major cities are feeding one another, and doing so across the globe.
Ram Mudambi, a professor in the Fox School of Business at Temple University, offers an even more unnerving hypothesis, in two parts: The more globally connected a city, the more prosperous it is. And as such cities gain global ties, they may be shedding local ones to the “hinterland” communities that have lost their roles in the modern economy or lost their jobs to other countries.
Richard Longworth, a distinguished fellow with the Chicago Council on Global Affairs, fears that exactly this is happening in Chicago. The metropolitan area long sat at the center of a network of economic linkscrisscrossing the Midwest. They connected Chicago to Wisconsin mill towns that sent their lumber there, Iowa farmers who supplied the city’s meatpackers, Michigan ice houses that emerged along the railroads transporting that meat to New York.
“These links have been broken,” Mr. Longworth said. Of course, some remain. And antipathy toward prosperous big cities is not a new theme in history. “But this is different: This is deeper,” Mr. Longworth said. “It is also, as far as we can see, permanent, simply because the economy that supported the earlier relationships has gone away and shows no sign of coming back.”
The Rise of Global Cities
For much of the 20th century, wages in poorer parts of the country were rising faster than wages in richer places. Their differences were narrowing, a product of migration between the two and gains from manufacturing that helped lift up regions that were once deeply poor. Then around 1980, according to work by the Princeton researcher Elisa Giannone, that convergence began to stall.
Cities full of highly educated workers like Boston, San Francisco and New York began to pull away. And that pattern, Ms. Giannone finds, has been driven entirely by what’s happening with high-skilled workers: When they cluster together in these places, their wages rise even more. That widens inequality both within wealthy cities and between wealthy regions and poorer ones.
“Big changes have been happening over the last 30 years,” Ms. Giannone said. “Now we’re actually seeing the impact of them.”
Those changes have come from multiple directions — from globalization, from computerization, from the shift in the United States away from manufacturing toward a knowledge and service economy. These trends have buffeted many smaller cities and nonurban areas. The uncomfortable political truth is that they’ve also benefited places like San Francisco and New York.
“The economic base has shifted in a way that highly favors cities — and big cities — because it’s now based on knowledge, on idea exchange, on agglomeration,” said Mark Muro, the policy director of the Metropolitan Policy Program at the Brookings Institution. (...)
For all of the talk of how globalization has cost America manufacturing jobs, it has created American jobs, too — but the high-paying ones have tended to go to such cities.
Ms. Sassen argues that a global economy has created new kinds of needs for companies: accountants specializing in Asian tax law, lawyers expert in European Union regulation, marketers who understand Latin America. Global cities must connect to other global cities to tap these resources, which have become more valuable to them than lumber and steel.
Douglas fir trees logged in the Pacific Northwest were turned into lumber schooners here. Steel from the East, brought in by railroad, became merchant vessels. During World War II, workers assembled military shipswith parts from across the country: steam turbines from Schenectady, N.Y., and Lester, Pa.; gear winches from Tacoma, Wash.; radio equipment from Newark; compasses from Detroit; generators from Milwaukee.
Most of these links that tied the Bay Area’s prosperity to a web of places far from here have faded. Westinghouse closed the Pennsylvania plant. General Electric downsized in Schenectady. The Milwaukee manufacturer dissolved. The old Bethlehem Shipbuilding yard in San Francisco will soon be redeveloped. And its former parent company, the Bethlehem Steel Corporation in Bethlehem, Pa., went bankrupt in 2001.The companies that now drive the Bay Area’s soaring wealth — and that represent part of the American economy that’s booming — don’t need these communities in the same way. Google’s digital products don’t have a physical supply chain. Facebook doesn’t have dispersed manufacturers. Apple, which does make tangible things, now primarily makes them overseas.
A changing economy has been good to the region, and to a number of other predominantly coastal metros like New York, Boston and Seattle. But economists and geographers are now questioning what the nature of their success means for the rest of the country. What happens to America’s manufacturing heartland when Silicon Valley turns to China? Where do former mill and mining towns fit in when big cities shift to digital work? How does upstate New York benefit when New York City increases business with Tokyo?
The answers have social and political implications at a time when broad swaths of the country feel alienated from and resentful of “elite” cities that appear from a distance to have gone unscathed by the forces hollowing out smaller communities. To the extent that many Americans believe they’re disconnected from the prosperity in these major metros — even as they use the apps and services created there — perhaps they’re right.
“These types of urban economies need other major urban economies more than they need the standardized production economies of other cities in their country,” said Saskia Sassen, a sociologist at Columbia who has long studied the global cities that occupy interdependent nodes in the world economy. New York, in other words, needs London. But what about Bethlehem, Pa.?
Such a picture, Ms. Sassen said, “breaks a past pattern where a range of smaller, more provincial cities actually fed the rise of the major cities.” Now major cities are feeding one another, and doing so across the globe.
Ram Mudambi, a professor in the Fox School of Business at Temple University, offers an even more unnerving hypothesis, in two parts: The more globally connected a city, the more prosperous it is. And as such cities gain global ties, they may be shedding local ones to the “hinterland” communities that have lost their roles in the modern economy or lost their jobs to other countries.
Richard Longworth, a distinguished fellow with the Chicago Council on Global Affairs, fears that exactly this is happening in Chicago. The metropolitan area long sat at the center of a network of economic linkscrisscrossing the Midwest. They connected Chicago to Wisconsin mill towns that sent their lumber there, Iowa farmers who supplied the city’s meatpackers, Michigan ice houses that emerged along the railroads transporting that meat to New York.
“These links have been broken,” Mr. Longworth said. Of course, some remain. And antipathy toward prosperous big cities is not a new theme in history. “But this is different: This is deeper,” Mr. Longworth said. “It is also, as far as we can see, permanent, simply because the economy that supported the earlier relationships has gone away and shows no sign of coming back.”
The Rise of Global Cities
For much of the 20th century, wages in poorer parts of the country were rising faster than wages in richer places. Their differences were narrowing, a product of migration between the two and gains from manufacturing that helped lift up regions that were once deeply poor. Then around 1980, according to work by the Princeton researcher Elisa Giannone, that convergence began to stall.
Cities full of highly educated workers like Boston, San Francisco and New York began to pull away. And that pattern, Ms. Giannone finds, has been driven entirely by what’s happening with high-skilled workers: When they cluster together in these places, their wages rise even more. That widens inequality both within wealthy cities and between wealthy regions and poorer ones.
“Big changes have been happening over the last 30 years,” Ms. Giannone said. “Now we’re actually seeing the impact of them.”
Those changes have come from multiple directions — from globalization, from computerization, from the shift in the United States away from manufacturing toward a knowledge and service economy. These trends have buffeted many smaller cities and nonurban areas. The uncomfortable political truth is that they’ve also benefited places like San Francisco and New York.
“The economic base has shifted in a way that highly favors cities — and big cities — because it’s now based on knowledge, on idea exchange, on agglomeration,” said Mark Muro, the policy director of the Metropolitan Policy Program at the Brookings Institution. (...)
For all of the talk of how globalization has cost America manufacturing jobs, it has created American jobs, too — but the high-paying ones have tended to go to such cities.
Ms. Sassen argues that a global economy has created new kinds of needs for companies: accountants specializing in Asian tax law, lawyers expert in European Union regulation, marketers who understand Latin America. Global cities must connect to other global cities to tap these resources, which have become more valuable to them than lumber and steel.
by Emily Badger, NY Times | Read more:
Image: Todd Heisler/New York Times
